HC Deb 04 February 1987 vol 109 cc1116-22

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]

11.40 pm
Mr. Allan Rogers (Rhondda)

This issue has been in front of me and the Minister for at least a year. On 17 January 1986 I wrote to the Minister about one of my constituents who had been told that he could not receive benefit when he went to sign on for unemployment benefit because he was deemed to be a seasonal worker. When he came to see me, he told me of the derisory amount of supplementary benefit that had been offered to him because he was not entitled to unemployment benefit. He also told me that unemployed people in the Rhondda were being classified as seasonal workers. I did not understand what he told me then, but in the last year I have become an expert on seasonal workers, if only to rebut the lengthy answers that I have received from various Departments.

I took up this matter initially with the Department of Employment and asked why my constituent had been classified as a seasonal worker. In his reply the Under- Secretary of State at that time referred to the regulations covering seasonal workers and then tried to explain why somebody who lives in what was probably the most industrialised constituency in Great Britain should be so classified. My constituent had been able to work only for periods during the three previous years, and he was deemed to have established a pattern of work that meant that he was caught by this legislation.

The National Insurance Advisory Committee, which reported in accordance with section 138 of the Social Security Act 1975, refers to this problem. The committee concluded that in 1952 the regulations were in general working satisfactorily, although it had reservations about some of the case law. It recommended that the definitions should be redrafted to make it clear that the application of the regulations should not be restricted to periods comparable with the annual seasons (spring, summer, autumn and winter) and that, to avoid the pattern being confused by the effects of industrial recessions, the definition of seasonal worker should be limited so that it applied only to employment which was seasonal in consequence of factors inherent in the nature or conditions of the industry concerned. The report states that it must be a seasonal industry for people to be called seasonal workers. That is why it is odd that we have people called seasonal workers, although they are working in normal industrial activity. The report states that industrial recession limited the opportunities of employment at times when people were not employed. One of the conditions currently extant for people qualifying for benefit is that they must reasonably pursue employment during the periods when they are not engaged in the so-called seasonal activity.

I pointed out in my correspondence with the Minister that those conditions would be acceptable if alternative employment was available. In an area such as Rhondda, where there is over 30 per cent. male unemployment, people leave the register— indeed, they have been exhorted to do so—and obtain jobs. However, if they do so they fall into the trap of being deemed seasonal workers if they do that work for three years. That makes nonsense of the Department of Employment "availability for work" questionnaire, which is supposed to be a scientific measurement of the number of people who want to work.

My constituents are laid off, so they go to the Department of Employment and fill in the questionnaire to say that they are ready to work, and then they are classified as seasonal workers because they have worked only when there has been a slight upturn in the economy.

At a time of recession or low industrial and economic activity, any fluctuations in the economy are local and seasonal. One example—which does not apply to my constituency— is the fact that the Central Electricity Generating Board is contracting out maintenance on its power stations. That can be done only on a seasonal basis—when there is not much demand for electricity supply. The CEGB will shut down the power stations for maintenance work. If that happens over a three-year period and that is the only time that people can get jobs, because it is the only time the CEGB shuts down, they are classified as seasonal workers. That is why I was concerned about the issue.

I sought the debate almost out of frustration. My last letter to the Department was written on 12 November. Last Thursday, I was successful in obtaining this Adjournment debate and, out of the blue, on Tuesday 3 February I received an answer from the Minister apologising for the delay in answering my letter of 12 November. People might say that Adjournment debates are not useful. This debate has been useful, because it prompted a reply from the Minister after a three-month delay. In his letter, the Minister says: You will be interested to learn therefore that we have recently referred the question of the seasonal workers' regulations to the Social Security Advisory Committee. I was annoyed, because for a year I was in continual and active correspondence with the Department, and on 20 November— whether it was due to my pressure or other people's pressure, or perhaps I made the Department rethink the issue—the Department referred the matter to the Social Security Advisory Committee without the decency of letting me know that that had been done. If I had not applied for this Adjournment debate and the matter had not been raised tonight, I would not have received this information.

The deadline for submissions to the SSAC is 12 February. I received the information only this week. I am worried because trade unions, organisations and individuals who might want to submit evidence will not be able to do so. I hope that the Under-Secretary of State will extend the deadline.

In 1977, the last time the advisory committee sat, it received seven representations—five from employers and organisations connected with the fish and fish-processing industry, one from the TUC and one from one of its affiliated organisations. The problem has increased enormously since 1977. But if the dissemination of information and the demand for representations were the same then as they are now, it is no wonder that the advisory committee does not receive representations.

This important issue should be thoroughly aired and considered in the present context. Over the past year, I have said continually in my correspondence that the definitions in the social security regulations are valid only in the context in which they operate. Whereas they might well have been valid in the 1930s, 1940s or 1950s, and certainly in the 1970s, they are not valid today because the context of employment has changed. Unemployment is no longer running at 3 per cent. or 4 per cent.; it is much higher.

To show how the context changes, I shall refer to the principal classes of claimants in 1935. In 1935, they included people who worked in holiday resorts— waitresses, servants in boarding houses and hotels, drivers and conductors, shop assistants, amusement and entertainment workers, pier, beach and swimming attendants, yacht hands and seamen on pleasure boats. In other localities, they included fishermen, fish workers, ice cream makers and vendors, bookmakers' clerks—I do not know why that last job is seasonal but I suppose that it is because there is a flat season and a season over the sticks—maltsters, brickyard workers, beet sugar workers and professional footballers. I mention the last group in particular to demonstrate how the context has changed. When the regulations were designed, some professional workers were classified as seasonal workers.

Time has moved on. My time to speak is rapidly running out. I have achieved a small success in getting the Minister to look at the regulations again. I am pleased that he will do so. I hope that he will accept in good spirit my criticism of the delays in replying to my letter and of the fact that I did not receive any notice that the matter would be referred to the Social Security Advisory Committee. I hope that the Minister will extend the deadline for the receipt of representations.

11.53 pm
The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Nicholas Lyell)

I am grateful to the hon. Member for Rhondda (Mr. Rogers) for raising this topic, which is pertinent, and for explaining his concern about his constituents and about the possible position of other people who face the same problem.

The hon. Gentleman drew attention to some problems that have attended the operation of the rules about seasonal workers since their inception as long ago as the days, not of recent recessions, but of the recession which preceded the second world war.

I am aware that the hon. Gentleman has written on a number of occasions about the problem affecting his own constituent, and the particular case to which he has referred has been considered, as he knows, by the appeal authorities on two occasions, the latest being a hearing by the social security commissioner on 26 January 1987, whose decision is still awaited. In view of the independent. role of these statutory authorities, it would not be appropriate for me to comment on the substance of the particular case.

I appreciate the genuine concern that the hon. Member has shown and I can best reply to the points he has made by explaining the real dilemma that the administration of these rules has presented not only to the present Government but to many Governments in the past.

Let me first explain briefly who is treated as a seasonal worker in the unemployment benefit system. The regulations say that a seasonal worker is a person whose normal employment is for part or parts only of a year in an occupation or occupations of which the availability or extent varies at approximately the same time or times in successive years; or any other person who normally restricts his employment to the same, or substantially the same, part or parts only of the year. A person is treated as a seasonal worker only after three years in such work. I shall return to that point later. I should make it plain that a seasonal worker is not automatically disentitled to benefit during his off season but has to satisfy an additional condition to qualify. Again, I shall return to that later.

Long before the Beveridge report, it was recognised that without special rules seasonal workers would be in a position to take advantage of an unemployment insurance system by claiming benefit payments for several months each year, year in and year out. This poses two problems. The first is cost, the burden of which would fall on other contributors. The second is a problem of principle. A person should not be able to receive unemployment benefit for days or periods on which he would not normally work, so effectively subsidising his income by means of a non-means-tested benefit.

It was to solve these problems that restrictions on the payment of unemployment benefit to seasonal workers were introduced as early as 1931 following the first report of the Royal Commission on unemployment insurance. In 1946—and the hon. Gentleman has rightly traced some of the history—a report of the then National Insurance Advisory Committee on benefit entitlement for these workers confirmed the need for additional conditions to be applied to seasonal workers. More recently, in 1977, a second report by the National Insurance Advisory Committee concluded that additional conditions continued to be necessary.

Unemployment benefit is not a means-tested benefit. it is available to all unemployed persons who satisfy the contribution conditions and are available for employment, unless specific rules exclude them. It is possible for persons receiving this daily benefit to be in employment on some days and unemployed on others. There are therefore a number of rules whose broad purpose is to ensure that this benefit does not become a non-means-tested supplement to normal income, perhaps as a consequence removing the incentive to enter more fully into the employment field. I fully recognise that one of the points that the hon. Gentleman is making is that that particular aspect does not apply in cases such as that of his constituent. Examples of these rules are those which prevent payment of benefit to persons who do not normally work on Saturdays or who customarily work for fewer than six days per week. The rules affecting seasonal workers are designed to achieve this same end but operate over a longer time scale. It would be inconsistent for persons who normally work for part of the week to be denied benefit while it was paid to those who normally work for only part of the year.

National Insurance contributions are intended to insure workers against the risk of unemployment, but it would amount to insurance against a virtual certainty if benefit were paid automatically to people whose work regularly involved spells of unemployment at or about the same time each year. The payment of unemployment benefit for regular periods each year without restriction to persons who have adopted a seasonal pattern of work would be unfair to the general body of contributors. This is because the payment of unemployment benefit in the normal course is limited to a total of 312 days in any single period. A seasonal worker would never exhaust his entitlement; it would be renewed after each season. It is not surprising therefore that advisory committees over the years— indeed, over the decades— have accepted the necessity for special rules to apply to seasonal workers.

I come to the matter of safeguards. The present legislation provides a number of safeguards to ensure as far as possible that persons are not unfairly treated as seasonal workers. The additional condition is not applied until a person has become a seasonal worker as defined in the regulations. By virtue of case law he is not treated as a seasonal worker until he has completed a three-year pattern of seasonal employment. It is of course possible for a person apparently to acquire a seasonal pattern of employment in any one year, but it would be unlikely that the same set of circumstances would operate fortuitously again during the following year. It would be most improbable that a similar pattern of seasonal work had operated for three years when that person was not truly a seasonal worker. It is that position that the hon. Gentleman asks to be reconsidered, and I understand his argument. As a further safeguard, all periods of less than seven consecutive days unemployment are ignored for the purpose of establishing the off season period, and unless the aggregate off season is greater than seven weeks the additional condition does not apply.

As I have mentioned, all claims to benefit from a person regarded as a seasonal worker are subject to an additional condition. In simple terms, benefit is not payable for any day in the off season unless the claimant has had, or can reasonably expect to obtain, a substantial amount of employment in the off season. That may be highly pertinent. The term "substantial amount of employment" generally means at least a quarter of the off season. A seasonal worker who has the misfortune to become unemployed during his on season is not required to satisfy an additional condition and is free to claim benefit in the usual way.

Now the pros of seasonal working. There are many circumstances in which the advantages that seasonal employment offers far outweigh any considerations of benefit entitlement for the off season. It can provide work during convenient periods of the year or hours of work that are particularly suited, for example, to individual commitments to families, hobbies and study; and it can sometimes be lucrative work so that the season can provide a good living for the whole year. There are people who choose, and have always chosen, seasonal work for those and all kinds of reasons. I think that there can be no argument that benefit should not be paid for the off season in these circumstances. The additional condition is not a disincentive for these people, but it prevents abuse of the system. In most cases earnings over the season, if supplemented by income-related benefits, exceed an income from benefits alone.

Now the cons of seasonal working. I recognise, of course, that there is another side to this coin, as has been so clearly explained by the hon. Gentleman. In some places seasonal employment may be the only work that is available locally. People genuinely seeking permanent employment may have little option but to accept seasonal employment for the period that it is available. The hon. Gentleman argues that that is not what would normally be thought of as seasonal employment of the sort that applies in the case which he has raised. I have no doubt that it is a matter that is under consideration in the case that is before the commissioner, and one that will be considered by the advisory committee.

After a few years these people are regarded as seasonal workers, and they may well experience a sense of injustice when the seasonal worker rules are applied to their claim to benefit. This sense of injustice, although understandable, is rarely related to hardship. I wish to reassure the hon. Gentleman that the seasonal worker rules are applicable only to claims for unemployment benefit. It is, as I know he recognises, open to any person affected by these rules to make a claim for supplementary benefit in the normal way, but he has pointed out that in the case of the constituent on whose behalf he has raised this debate that is not an adequate recompense.

There arc rules in the supplementary benefit system whereby substantial net earnings in the season—at least two and a half times the benefit requirements of the claimant and his dependents— may reduce and even extinguish this benefit in the off season. There is no rule such as applies to unemployment benefit to prevent payment of benefit altogether.

The dilemma which has faced successive Governments over the years is how to distinguish between those persons who have every intention of accepting work when the opportunity arises and those who are quite content and indeed choose to work for certain times of the year at their own convenience. The essential difference is in the intention of the individual, but benefit staff cannot be mind readers. It is desirable that there should be objective rules. Our intention is that those rules should work fairly. It has often been said that the acid test of an employment intention is the offer of a job. In areas where jobs are readily available such a test would be easy to apply. However, this approach is unlikely to be seen as satisfactory in a national context. Even in times of generally plentiful employment there are areas where jobs are harder to obtain than others and this always applied particularly in many areas where there is seasonal work. consequently, this test is not one which is easy to apply on a uniform basis and is not perhaps a solution to the problem.

Following representations made last year, including those of the hon. Gentleman and others, but especially in the light of debate in Committee on what became the Social Security Act 1986, my right hon. Friend the Secretary of State decided to refer the question of the operation of the additional condition applying to seasonal workers to the Social Security Advisory Committee. In particular, the committee was invited to consider those conditions in the light of labour market changes during the past 10 years. I am sure that the hon. Gentleman welcomes that.

In November the committee publicly invited comments and representations and said that it would accept these up to 12 February 1987. I appreciate the hon. Gentleman's point about shortage of time and I apologise to him for the fact that his letter was not given an earlier reply and that that reply, although in the pipeline, was immediately stimulated by the Adjournment debate.

The hon. Gentleman may wish to approach the Committee, but I undertake to send the committee a copy of the report of the debate and I will specifially draw its attention to the desirability of extending the time in which representations can be made. However, that will he a matter for the committee to decide. When the committee's report is received, I will carefully consider any recommendations to improve the working of the rules. Clearly, at this stage I cannot anticipate or make commitments on the outcome of that consideration.

The case that the hon. Gentleman has raised has brought the matter to the notice of the House and I assure him that it will be considered most carefully.

Question put and agreed to.

Adjourned accordingly at six minutes past Twelve o'clock.