§ Order for Second reading read.
§ Mr. Speaker
In view of the late start to this debate and the number of hon. Gentlemen who wish to take part in it, I propose to limit speeches for Back Benchers between the hours of 7 and 9 o'clock to 10 minutes.
§ 5.2 pm
§ The Secretary of State for Social Security (Mr. John Moore)
I beg to move, That the Bill be now read a Second time.
This is not a long Bill, but it is no less important for that. I believe that it is our duty as a Government to keep the social security system under review, to adapt it to meet the changing needs and circumstances of the 1980s and to look ahead to the challenges of the 1990s. The world clearly does not stand still, and social security cannot do so either.
It is simply not good enough unthinkingly to retain arrangements which were adequate for the problems of the 1960s, or even less—as some Labour Members seem to wish to do—to cling to the shibboleths of the 1930s. This Government have the will to challenge those outdated attitudes and to advance social policy in this country. The Bill seeks to achieve just that.
In no area has the change in Britain over the last few years been more marked than in the labour market. New jobs in the new industries and services—the jobs of the future—are being created in growing numbers; employment prospects have been transformed; and unemployment, as a consequence, is falling dramatically in all parts of the country—the longest and most sustained fall since records began.
By introducing family credit earlier this year, the Government took a huge step towards removing perverse incentives for the parents of children either to remain in the shrinking pool of the unemployed or, once in work, to limit their efforts to do better. Yet month after month. firms report vacancies that they are finding difficult to fill. There are about 700,000 jobs on offer in a typical month, and these are not just jobs for those with specialist skills. Many of them need no special training.
Each and every one of those vacancies is an opportunity for an unemployed person to gain the self-respect and independence that comes from supporting themselves and their family by their own efforts. It is clearly, therefore, the duty of the Government to help them to realise that potential, not only for their own sake but for the good of the country as a whole. That is the imperative behind the major changes to unemployment benefit that the Bill will introduce.
There have always been conditions attached to receiving unemployment benefit. Most Members will agree that that is only proper. Unemployment benefit is for those who want to work, but who are temporarily unable to find a job. But how can one hope to find work without making any effort to look for it?
§ Mr. Moore
Perhaps the hon. Gentleman will permit me to continue for a while longer. I am conscious of the comments made by Mr. Speaker about the time available for this debate, but I shall give way shortly if the matter is pressing.
It is not right for those who are claiming benefits because of unemployment to receive them without doing everything reasonable to find work. I believe that most people would support that view. Indeed, many will be surprised, if not horrified, to learn that there is no such requirement in the legislation already. Let me make it quite clear that these powers do not exist at the moment. Claimants can currently argue that by attendance at a job centre and claiming benefit every two weeks, they have done all they need to satisfy the present requirements.
The vast majority of claimants—I stress this—do take the initiative in looking for work, but there is ample evidence that this is no longer true for everyone. As hon. Members will be aware, the 1987 labour force survey showed that 730,000 benefit claimants were not taking active steps to seek work and that no fewer than 360,000 claimants did not even pretend to want a proper job of work at all.
§ Mr. Frank Haynes (Ashfield)
The Minister is bragging about the number of people he is helping with income support. Will he now admit to the number of people he has robbed of money from the point of view of income support? [Interruption.] I wonder why the Minister for Social Security, the new junior Minister, seems to be bawling his head off over this.
Is the Secretary of State aware of the number of constituents who come to my surgery to complain about this matter? One of them told me last Saturday that he and his wife had lost £14 a week. Let us hear about cases such as that and about the people the Government have robbed of money.
§ Mr. Moore
I shall endeavour to continue to illustrate what the Government are introducing in the Bill. I shall continue to address my remarks to the key elements of the Bill concerning the 700,000 unfilled jobs about which I was speaking, some 140,000 of which are in London.
A report about the London labour market compiled in the summer of last year—I am sure that, with their diligence, Opposition Members will have studied it with great care—showed that employers reported receiving job applications from long-term unemployed people for only about one fifth of recent vacancies. Over 25 per cent. of the claimants interviewed had not looked for work in the previous week, and of those, nearly half had not looked for work in the previous four weeks, and 5 per cent. had never looked for work at all. This is a sad and wholly unacceptable picture. The Government are determined to ensure that unemployment benefits are paid only to those who are genuinely unemployed.
In the course of 1988, my right hon. Friend the Secretary of State for Employment took a number of steps to ensure that people claiming unemployment benefit were satisfying the current requirement to be available for work. In particular, unemployed people are now called to a restart interview every six months for as long as they remain out of work. As part of that interview, they now have to complete a questionnaire which is designed to 716 establish that they are still available for work. Despite the existing powers, it was clear from these initiatives that a number of claimants are simply not looking for work.
§ Mr. Tony Banks
I appreciate that the Minister is trying to prove to the House that unemployed people are largely workshy and shiftless—[Interruption.] Whatever Conservative Members may think, that is precisely what it sounds like to the Opposition. Is the right hon. Gentleman aware that a number of things militate against people taking jobs in London? First, many of them are low-paid jobs. Secondly, accommodation is not available because of the cuts in council house building and the decreases in housing benefit. Thirdly, fares in London have just gone up by 12 per cent. He must understand that all those factors militate against people going to find those jobs that are available.
§ Mr. Moore
If the hon. Gentleman had studied the report to which I was referring, he would not have made such an absurd attempt to reinvent the GLC. It is quite wrong, as I was saying, that these people should continue to be supported at the expense of working people paying contributions and taxes.
Nor is it doing any service to claimants or their families to allow them to drop out of the world of work when so many vacancies are available. Therefore, clauses 7 and 10 of the Bill will ensure that benefit claimants must show that they are seeking work actively. What exactly they have to do will depend obviously on circumstances such as the local job market and the claimant's capabilities.
§ Mr. Moore
Perhaps the hon. Lady will permit me to continue for a little longer.
Employment service staff will give advice and question claimants periodically. They may suggest alternative or additional courses of action. If there is doubt about whether a claimant is doing all he can, the independent adjudication officer will decide whether benefit is to continue. But the local staff in employment service offices will have the powers that they need, following the passage of the Bill, to help those people into work.
§ Mr. Tony Marlow (Northampton, North)
Will my right hon. Friend make it quite clear, as we have had an intervention from the Opposition, that the main thrust of Labour party policy on this subject seems to be that those who could work and are not prepared to work should receive hard-earned taxpayers' money to support them in their idleness?
§ Mr. Moore
My hon. Friend knows that he and the Government are far more closely in touch with the general public on this matter. The general public are conscious of the opportunities that are available. However, I must continue
The second major element of my proposals for unemployment benefit ensures that claimants cannot continue indefinitely pricing themselves out of any job they might realistically be expected to get. It is of course quite right that newly unemployed people should be able to concentrate their efforts on finding employment in their usual occupations and at wages similar to the ones they have been used to receiving, but it would be quite wrong for unemployed people to be able to continue to restrict their search to jobs that are beyond the rates of pay that 717 they can realistically now command. Clause 9 will therefore make provision for a permitted period during which unemployed persons can seek jobs of a kind and in a wage range familiar to them.
The length of the permitted period will be decided on an individual basis but would depend on the skills of the individual and the sort of employment available locally. But we do not think it right that it should extend beyond a maximum of 13 weeks.
But even after the permitted period we have no intention of forcing people, on pain of losing benefit, to accept jobs which are genuinely unsuitable. "Good cause" for declining a job is well set out in case law, as hon. Members know. It covers factors such as health, family circumstances, religious beliefs, travelling difficulties, and so on.
Let me stress again that the only significant change that the Bill will make to reasons for refusing jobs which fall under the general heading of "good cause" will be to limit the period for which the wages on offer can be a factor. It will remove the temptation for unemployed people to continue indefinitely to delude themselves about the wages that they can command.
§ Mr. Jim Lester (Broxtowe)
One of the principal employment problems for some people is the fact that temporary jobs are on offer. Those jobs are perfectly good, and well paid, but they are temporary from the beginning, lasting perhaps for three months or six months. Under the existing law, if someone takes such a job, at the end of the temporary period that person would again be newly unemployed and therefore would lose many of the benefits that had been accumulated previously. Is care being taken to ensure that people will not be forced to take temporary jobs when at the end of the temporary job they will be in a worse position?
§ Mr. Moore
I am glad that my hon. Friend raised that point, given his experience of such matters. I was going on to say that clause 9 also introduces a further measure to encourage unemployed people to broaden their job search and their efforts to find work. That is a very similar point to that raised by my hon. Friend and I am sure that it will be welcomed in all parts of the House.
As my hon. Friend said, after a lengthy period of unemployment, a person may often be unsure of his capability. Taking up any employment may well constitute something of a risk. He may fear to try an unfamiliar job because, as my hon. Friend said, if he takes a job which simply does not work out and leaves voluntarily he may be disqualified from unemployment benefit. We therefore intend that anyone who has been out of work for at least 12 months can be sure that he can leave a job voluntarily without fear of disqualification, provided he has given the job a fair trial.
That concession will apply not only to those who have been signing on for 12 months but to those who, for instance, have been out of work for the same period due to sickness.
§ Mr. Moore
I shall complete my point. Despite attempts to get me to give way, I shall try to proceed a little.
718 To counter abuse, the concession will apply only once in any 12-month period, and only to people leaving a job, after a decent trial of six weeks or more, but not to anyone leaving after 12 weeks once they have had more than ample opportunity to realise that the job was not right for them.
Overall, these measures are expected to reduced the roll of the unemployed by as many as 50,000. That is entirely to be welcomed. Claimants stand to gain absolutely nothing from unemployment when there are jobs as an alternative.
The Bill will also be breaking important new ground in other areas.
§ Madam Deputy Speaker (Miss Betty Boothroyd)
Order. The Secretary of State has made it clear to the occupant of the Chair and to the House that he is not prepared to give way for the present.
§ Mr. Moore
I have given way more times than most Opposition Front Bench spokesmen—[Interruption.] I wish that the rabble on the Opposition Benches would occasionally listen. As I said earlier, Mr. Speaker rightly drew our attention to the limited time. I shall continue, if I may.
It is our aim to bring about equal treatment between men and women in social security and occupational pensions. Clause 19 takes a further important step in this direction by tackling discrimination in occupational schemes. They will no longer be able to deny access to occupational pensions or pay lower benefits on the basis of sex.
Our Community colleagues are dealing with such discrimination across Europe as a whole. The measures in the Bill therefore also implement the EC directive on the issue. The legislation will apply to schemes from 1 January 1993. Broadly it will override any difference of treatment. in occupational pension schemes, whether that difference relates to entitlement to membership, to the contributions that members and employers pay, or to the benefits members receive. There are, however, special safeguards for those absent from work for maternity or for family reasons.
Schemes will also be able to make changes to come into line with the requirements before the overriding provision takes effect. We are introducing powers to enable the Occupational Pensions Board to authorise such modifications specifically to achieve that.
Many schemes still have different pension ages for men and women. The equal treatment directive contains a derogation which excepts such differences from its scope. We intend to take advantage of that in our own legislation, but the scope of the derogation has only recently been clarified following responses to a consultation paper we issued in the summer. We will therefore bring forward a suitable amendment during the passage of the Bill to take. advantage of the derogation in the light of that advice.
§ Mr. John Watts (Slough)
Will the amendment deal with the problem faced by schemes which already have a common retirement age of 60 for both men and women 719 and which currently pay a higher rate of benefit to men for the five years before they become entitled to state retirement pension, and reduce it to the same level as women thereafter? As I understand it, under the Bill as drafted that would be precluded. That seems to be a kick in the teeth for companies with schemes that have not discriminated on grounds of sex or age for many years.
§ Mr. Moore
My hon. Friend is referring to the Mars case, as I recall from past discussion with him. The Bill should ensure that the exception covers all schemes, but we are discussing the matter. As I said earlier, that is why I have drawn the attention of the official Opposition to the particular point that definition as to the breadth of the derogation is a slightly complex legal matter. That is why I apologise again for having to table an amendment in Committee that brings the derogation forward. I know that it will be more helpful if we get it right.
A short but important clause in the Bill, clause 2, abolishes from April next year the Treasury supplement to the national insurance fund. When the national insurance fund was established in 1948, it was funded on Beveridge's "tripartite principle", roughly equally by employees' contributions, employers' contributions and general taxation—the Treasury supplement. At the time, that subsidy from taxation was essential. Contributions were flat rate and could have covered the contributory benefits and pensions met from the only national insurance fund if they were set at rates too high for a substantial number of people to afford. Since 1975, contributions have no longer been flat rate, but are levied as a proportion of earnings.
The tripartite principle is already effectively a dead letter. The rationale behind it has gone, and the supplement has been shrinking steadily as a proportion of the fund's income from about one third in 1948. It now stands at only 5 per cent. We consider that there is now no need for it at all. The £26 billion of expenditure from the fund is fully covered by contributory income, and the abolition of the supplement will have absolutely no effect on that expenditure.
The Bill also addresses another feature of the benefit system which dates back to 1948. When someone is injured, for example in an accident, he may become entitled to social security benefits. But if he can establish that some other party was liable, he may also receive compensation through the legal system for those identical injuries. But how should each form of payment take account of the other?
The courts have ruled repeatedly in recent years—the latest occasion being in November last year—that an injured person should not get this windfall from double payments, once in compensation and again in benefits. What that means at present is that payments of a range of benefits simply and directly reduce the amount of compensation to be paid to injured people by defendants. The injured person gains nothing from this arrangement, but ordinary people paying taxes and contributions are effectively subsidising defendants and their insurers.
There are a number of other benefits—those listed in the Law Reform (Personal Injuries) Act 1948—for which different arrangements were made. The 1948 Act made a compromise based on the assumption that, because of the industrial injuries scheme not many people would claim damages. In those cases, compensation is reduced by 50 720 per cent. of the value of the benefits to be paid by the state over five years. So in those cases too, the taxpayer or contributor is effectively subsidising defendants and their insurers. The law is manifestly ripe for review.
The National Audit Office, endorsed by the Public Accounts Committee, highlighted the inconsistency of this mixture of 50 and 100 per cent. offsets. It also drew attention to the overwhelming objection to these offsets. In the words of the report, under the present systemthe wrongdoer can have the cost of his negligence partly or fully met by public funds".
In seeking to reform the law, we have adopted two principles, both endorsed by the Public Accounts Committee. The first is that accident victims should not be compensated twice. The second is that the party responsible for the accident should not be able to escape part of that liability at the expense of the taxpayer. That cannot be right. It could also undermine incentives to improved safety standards.
Clause 18 provides the framework for a straightforward scheme. The value of benefits paid as a result of an injury up to the point of the legal settlement will be deducted from the compensation which is due for the same injuries. That sum will then be paid to the Department. If, for example, £5,000 compensation is agreed or awarded and the injured person has already received £1,000 in benefits for his injury, he will be paid £4,000, and the other £1,000 compensation will be paid to my Department. Further, hon. Members will wish to note that the amount recovered from defendants will not include any sums in respect of benefit payments made after the date of the settlement of the claim and that recoveries will be made only in the case of compensation payments above a certain level—possibly £1,500.
I emphasise that benefit entitlement is not affected in any case. Nevertheless, recoveries to the taxpayer from compensation paid by those liable for personal injuries is estimated to be about £55 million a year.
The Bill contains other modest but useful amendments clarifying and consolidating existing legislation and making it more relevant to today's circumstances. Clause 4 brings social security legislation more into line with family law by extending the liability of non-custodial parents to maintain children in full-time education up to the age of 19.
Clause 21 reorganises the numbers and functions of war pensions committees, which have remained broadly unchanged since 1921.
The Bill strengthens the link to recent work in the test for requalifying for unemployment benefit in clause 8 and takes account of the mushrooming of personal pensions in the abatement of unemployment benefit which operates for other occupational pensioners aged 55 and over in clause 6. It also introduces in clauses 1, 3, 11 to 17, 20 and 22 to 29 other, largely technical, amendments relating in particular to national insurance contributions and to housing benefit.
§ Mr. Janman
My right hon. Friend has listed what the Bill does, but one thing that the Bill does not do is get rid of the loophole whereby a person can continue to receive benefit because he has turned down a vacancy that has 721 arisen as a result of an industrial dispute. Why has my right hon. Friend decided not to close that loophole? Will he consider closing it in Committee?
§ Ms. Short
I am grateful. I shall take the right hon. Gentleman back a bit, because I tried to intervene earlier. The Secretary of State relies on a study of the London labour market of which perhaps he is giving a distorted impression, but it relates only to the London labour market. The Secretary of State must be aware that, if one analyses vacancies across the country, one sees that there are far fewer vacancies for unemployed people in the rest of the country than in the London area.
The right hon. Gentleman went on to say that whether people will count as actively seeking work will depend on the state of the local labour market. I want to ask him most seriously what distinction he will make in an area of high unemployment with few vacancies. Will he spell that out, because it is causing enormous worries across the country and the right hon. Gentleman owes us an explanation?
§ Mr. Moore
One reason that I did not do so was the character of the preceding intervention.
I draw the hon. Lady's attention to the fact that, if she had listened carefully to me, she would know that I did not start by drawing attention to the survey "The London Labour Market", although it was a factor. I drew attention to the 1987 labour force survey, which was a national survey. However, the hon. Lady is right to say that different areas of the country have different employment opportunities.
Clearly, as a consequence, the system and the ways in which the system operates must be handled differently. The adjudicating officer—and the clerks in the unemployment benefit offices—will be given the opportunity to have powers consequential upon all the other "good causes". These are already well established in case law. One factor will be the character of the job opportunities in the local area. Therefore, I can reassure the hon. Lady on that point. Simply because I was quoting some of the most recent data in London should not lead the hon. Lady to concern herself that all judgments will be on the same basis. They cannot be, because they must vary depending on the character and the needs of the area.
To return to what I was saying, clause 5 also carries out the intention I announced in my uprating statement to introduce legislation to extend the upper age limit for payment of mobility allowance from 75 to 80. This is an interim measure until we have the opportunity to give full consideration to the large volume of information which has been collected during the surveys carried out by the Office of Population Censuses and Surveys.
We are well aware of the important part mobility allowance plays in improving the quality of life for severely 722 disabled people. That extension will be a valuable help to the oldest recipients of the allowance to make plans for meeting their future mobility needs in the knowledge that payments will be made for five years longer than under the present arrangements.
To sum up, this is a Bill which promotes, I believe, a more coherent social security system and one which takes account of a changing world. It reflects the environment of a modern labour market and creates conditions of still greater flexibility to vitalise the economy of the 1990s. It challenges difficult issues where the easy course might have been to let matters run—like the differing treatment of men and women in pension schemes; like the outdated funding of the national insurance scheme; or the anomalous and unacceptable relationship between benefits and awards of damages.
Above all, the Bill embodies our vision of the social security system: one which gives full support to those who cannot support themselves; which stands on a firm link between benefits and contributions paid in work; and which encourages people to take on their full responsibilities to support themselves and their families by their own efforts. On that basis, I commend the Bill to the House.
§ Mrs. Margaret Beckett (Derby, South)
This is, if I dare use the phrase, a curate's egg of a Bill. There are elements in it which at first sight appear to merit at least a cautious welcome, bitter experience having taught us to beware social security Ministers apparently bearing gifts. There are also elements that concern us, and at the centre of the Bill there is a set of proposals that are potentially the most catastrophic that we have seen yet from this Government.
Two elements that we can welcome are the lifting of the age barrier for mobility allowance and the moves, following an EEC directive, towards equal treatment for men and women in occupational pension schemes. However, we shall want to probe the Government's full intentions in Committee. Nor do we object to the Government rectifying a few of their many mistakes—such as in the uprating of the reduced earnings allowance paid, as it is, only to those disabled by industrial injury or disease. We well remember that in 1986 thousands of those so disabled saw their benefit frozen as they reached retirement age, with a saving to the Government, at their expense, of millions of pounds per year. Not content, in 1988 the Government cut their payment by 75 per cent. at retirement, with a further saving of £10 million per year, and individual losses for the majority of recipients on reaching retirement of almost £20 per week. Against that background, we entirely agree that these disabled people should not be inadvertently cheated by mistake of a few pence extra on the amount that the Government still permit them to retain.
We shall want to examine other aspects of the Bill in more depth, although perhaps it is right to place on record our strong reservations about the proposals on the treatment of damages awarded by the courts—whatever the defects may be of the present law—to which the Secretary of State drew attention, and which were apparently rejected by all those consulted, including the CBI, the Law Society, the TUC and the Industrial Injuries Advisory Council. Such unanimity has not been seen since 723 the Government's initial proposals for family credit to be paid through the wage packet—and look what happened to that.
Other proposals we whole-heartedly oppose. First is the decision to scrap the three-day contract on which national insurance was established by raising the entire cost of national insurance benefits—such as pensions for the old, the sick and the widows—from national insurance contributions. The Government are shifting the burden again towards those on low or average pay, while the wealthy not only do not pay their fair share: they do not even pay the same share as the less well-off. From any Government this blatant exploitation of the less well-off to benefit the much better off would be damaging, but from this Government, who use the excuse of what they call the burden of national insurance contributions to cut the State earnings-related pension scheme—indeed, to try to abolish it—it is rank hypocrisy. Everyone who pays national insurance contributions and everyone who draws retirement, invalidity or widow's pension has been cheated by the Government, because money raised in earnings-related contributions has not been paid out in benefits.
The Government have made a steady and increasing profit out of the national insurance scheme—some £3,000 million last year alone. They are able to abolish the taxpayers' contribution to the scheme not because of prudent management or because of any growth in employment or because the economy is booming, but because they have been prepared to defraud pensioners.
That brings me to the proposals that form the centrepiece of the Bill. It would be misleading to call it the heart of the Bill, because it could not be put forward by a Government who retained a heart. The Minister's description of the Bill made it sound quite innocuous, technical and inoffensive, designed to help people back into employment—what a pity that it is not so.
Careful examination of what is proposed shows that the Government have moved on from merely wishing to blame unemployment on its victims. They are now prepared to harass and to hound them to an extent which is without precedent in our employment or social security law. The Secretary of State was, perhaps, not clear on this point, but existing law allows for people's availability for work to be tested if it is called into question. However, the Government have decided to resurrect a test for willingness to work that was abolished in 1930, which makes it somewhat extraordinary for the Secretary of State to call us the people who were relying on the shibboleths of the thirties.
§ Mr. John Redwood (Wokingham)
Does the hon. Lady believe that people claiming unemployment benefit should look for work and should take a job if one is offered, or that they should not?
§ Mrs. Beckett
That is an extraordinarily silly question and is quite unworthy of the hon. Gentleman, who is supposed to be one of the intellectuals on the Conservative Benches. Of course we do not believe that people should not try to find work. We are conscious of the feelings that many unemployed people have when they cannot find work. That is not the point, as the hon. Gentleman knows.
724 Quite harsh tests already exist—even more harshly employed by this Government—to test people's willingness to work. The Government are reintroducing a test from the 1920s, which, indeed, was abolished in 1930. As I believe was generally accepted at the time, the test was introduced not to help people to find work, to which it was quite irrelevant, but to limit the costs of supporting the unemployed. Those who introduced it then had three excuses not available to their successors today. First, as it was a new test, they had by definition no experience, as we have now, of how it might work in practice. Secondly, they were facing one of the most grave economic crises in our history, whereas the Government tell us that our problems today are of overweening success. Thirdly, and perhaps most serious of all, they introduced the test alongside safeguards intended to prevent its unreasonable use. The test in this Bill has not only had those safeguards removed, but the entire onus of the test is reversed. Let no one say that the Conservative party has learnt nothing in the 60 years since the test of genuinely seeking work was abolished—it has learnt how to make it harsher.
I have not the smallest doubt that, during these debates, we shall be told that we exaggerate or that we misunderstand how the test will work. I shall remind the House, therefore, of how in 1930 William Beveridge described it, even in its original and, by today's standards, safeguarded form. He said when referring to the test:The condition will not, it may be hoped, ever rise from its dishonoured grave.Clearly, we should regard the Secretaries of State for Social Security and Employment as first and second gravedigger, prepared to resurrect the 1920s test not just with full but with increased rigour.
Prior to the test's abolition in 1930, someone was required to show that he was seeking work in "suitable" employment—not any old employment, but "suitable" employment, which is a word removed completely from the test in the Bill. In the 1920s, they did not leave it at that. They defined the context of suitability, and did so in terms that, clearly, the Conservative party of the 1920s found less unacceptable than the Conservative party of today. Without losing benefit, people could refuse to seek or to take a job with lower wages or worse conditions in their own area. Even a job elsewhere had to be on offer at fair terms and conditions for that area. Account was taken of the likelihood and the danger of skill impairment and the prevention of a return to his normal employment if someone was forced to take any job.
Most important of all—this brings me to the question raised by the hon. Member for Broxtowe (Mr. Lester)—they could be pressed, even against these safeguards, to take only full-time work. The sting in the tail of clause 9 is that any or all of the pressures that it imposes can be used to push someone against his will or his best interests into part-time or temporary work. Yet despite those qualifications, in practice the test became hated and discredited, because it was a test of a willingness to work which was divorced from whether there was any work.
This Government of prosperity, in any case, want no truck with any safeguards. They refer to such things as fair wages and conditions. One can be drummed out of the Brownies for using words like that in today's Tory party. Indeed, the Government have reversed the entire import of that part of the law. Far from it being the norm, the standard, to take account of the nature of the job on offer, under clause 9 the norm, the standard, is that the wages 725 and conditions on offer are entirely irrelevant. They are to be ignored in deciding whether someone has good cause for not seeking or for refusing a job, although some flexibility may be allowed against that general rule.
The Government have shown signs—one must be fair to them—of what they no doubt regard as generosity. The Secretary of State said it was right to give people time to find a similar job, if they can. The Government will give them time, but within a maximum, of course—they would not want to run the risk of this gracious gesture being misused in any way by the ungrateful. The Government are prepared to wait as long as 13 weeks—about three months—before this legislation will be brought into play.
Of course, to be fair to him, the Secretary of State identified that as the maximum. No doubt it will be only really deserving cases—those who have full consideration given to the length of time that they have been employed previously, to their experience, to the range of opportunities open to them, which are the Government's criteria—who will receive the full 13 weeks. If they have been unwise enough to write to the DSS or, perhaps, the Home Office for work, they probably would not even receive an acknowledgement within 13 weeks.
§ Mr. Peter Thurnham (Bolton, North-East)
The hon. Lady quoted Beveridge, but she was rather selective. If she had looked further on in the report, she would have seen that Beveridge suggested that 13 weeks was the longest period in which people should draw benefit before compulsorily attending a training centre. Did not Beveridge say that the danger of providing benefits, which are both adequate in amount and indefinite in duration, was that men, being creatures who adapt themselves to circumstances, may settle down to them?
§ Mrs. Beckett
I did not hear the end of the hon. Gentleman's remarks, because my hon. Friend the Member for Livingston (Mr. Cook) was speaking to me, but I am told that I did not miss anything.
I concede the hon. Gentleman's point that Beveridge referred to that period. However, even allowing for the words of Beveridge, it still appears to us that it is wrong for the Government to resurrect this basic, harsh condition, which he so condemned, and to continue to use that as the test against which those 13 weeks would be set. Nothing that the hon. Member for Bolton, North-East (Mr. Thurnham) has said invalidates that basic point.
I remind the House that, after the maximum period of 13 weeks grace, the person involved can be forced not just to take lower paid work or work in less favourable conditions, but temporary or part-time work. I am especially alarmed about that because, as Ministers know all too well, although I doubt that they have drawn it to the attention of their Back Benchers, the present benefit system offers possible substantial penalties in the withdrawal of benefit rights from those who choose to work on a part-time or temporary basis only. The short title of the Bill should be, "Heads I win, tails you lose." It will have devastating impact.
The period of grace against the test in the Bill, which will not exceed 13 weeks, is not a period of grace. It is a sop, a token gesture, a period of consideration before compulsion begins to apply. It is all too short a time for many to adjust to the loss of their jobs, especially if that job loss is now to be combined with job searching against a harsh deadline. If the deadline pressures people into a 726 mistaken decision and into a job which they soon want to leave, they will face the loss of all rights to unemployment benefit and, at most, a reduced rate of income support, probably for six months, because they have voluntarily left work.
Those who leave work voluntarily cannot benefit from the trial period allowed in the Bill, because it is for the long-term unemployed only. The Secretary of State referred to that trial period in answer to his hon. Friend the Member for Broxtowe, although it was irrelevant to the question. I notice, however, that the maximum trial period allowed forces the long-term unemployed to make a decision to leave—if they make that decision at all—before they are allowed, under clause 8, to requalify for unemployment benefit.
Under clause 7 there will be a list—not an exhaustive one—of examples of the steps that each claimant will be expected to take every week. In some circumstances someone may be deemed to be seeking work—for example, when they have a job, but have not started it. I appreciate that, otherwise, the Government may have looked slightly silly. The fact that such a common-sense matter must be specifically allowed for shows how rigidly the Government mean the Bill to operate.
Week in and week out, the claimant must show that action has been taken to look for work. I noted what the. Secretary of State said to my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) about not forcing people dependent upon local labour market conditions to take unsuitable work. If that is the Secretary of State's view, however, it is hard to see why the Government have gone to all the trouble in clause 9 to remove all references to suitable work. I do not believe that the Secretary of State's remarks make any difference. It may not mean that someone will be disallowed benefit depending on the local labour market conditions, but I do not believe that those conditions will make any difference to the way in which the test will operate or to the way in which claimants will be forced to make statements about what they have done every week.
I want to emphasise the word "claimant". Whatever terms the Government may use to justify the provisions in the Bill and whatever they sound like, it may well be that the person affected is not receiving a single penny piece from the state. There are many unemployed people who must be available for work—that is the term now—but who have used up their entitlement to unemployment benefit or who cannot receive income support perhaps because their partner is in work. They must sign on to receive their pension credits. That person may have worked for 30 years and it may be their first experience of being unable to find work. They tend to describe their situation as being "thrown on the scrap heap". Because people need between 30 and 40 years of contributions or credits—a large share of a lifetime's work—to receive a full state pension, the person unemployed after 30 years of work will be caught by the legislation.
Let us consider the core resentment that the Bill will rightly earn. The overwhelming majority of those people without work are decent men and women who have no choice about being without work. They include many whose health is impaired by sickness or injury who have been ruled "fit for light work" to save money on disability benefits. No consideration has been given or will be given to whether light work is available or whether any employer would hire such people to do it. We are also talking about 727 many who have been made redundant at what they thought was a fairly young age until they discovered that employers think otherwise. If one is as young as one feels, those people feel old before their time.
The Bill puts all the pressure on the unemployed and does nothing to address the attitudes they face from employers. It ignores the fact that, on the Government's figures, there is no work for at least two out of three or, more probably, five out of six of those whom the Bill will force on to the treadmill of a tiring, depressing and utterly fruitless job search.
The Government and the Secretary of State have drawn heavily on the Department of Employment survey of the London labour market, although I recognise that the right hon. Gentleman also referred to the national survey and what it said about how often people look for jobs. The Government have ignored, however, other elements of the former survey. It suggested that people without work were realistic in their expectations of the wages that they may command. That means that the major switch in law represented by clause 9, which pushes people towards low-paid work, is unjustified. It is not the unrealistic demands of the unemployed that are keeping them out of work, but lack of work.
The surveys also drew attention to the attitudes of employers and their reluctance to recruit those who have been out of work for more than six months, whatever their qualifications or experience. It showed that many employers, even in boroughs with high levels of unemployment, did not know that such a pool of labour was available. We have heard nothing about what the Government are doing about the attitudes, ignorance and prejudice of employers.
The survey also reported:Most benefit claimants … are keen to work".That judgment reinforces similar reports previously published over the years by the Manpower Services Commission. The report suggested that, at most, a minority might not be actively looking for work. Even then, the Government have not considered that, among that minority, there may be many who have good cause to believe that active search for work would merely add to the mountain of rejections and humiliations that they have already suffered because of their age, colour or disability.
Unless the Government take action, on a scale commensurate with that in this Bill, to change the attitudes of such employers, they know that the search on which people will be sent will serve no purpose except to pander to the prejudices of those who have never suffered unemployment and never expect to do so.
I am reminded of the observations made in 1929 by William Jones KC, spiritual ancestor of the Secretary of State. He described how the then law was applied to the Rhymney valley to pressurise men into tramping substantial distances to look for work in neighbouring valleys. He said:We know it is useless for the men to go over the hill, because the first thing they are told is 'We have our own unemployed here: go back to your own valley.' We know that, but we do not tell the men.
As in the days of William Jones 60 years ago, so now. The Bill is not designed to help people back into work, it is intended to prod and goad them and to bring the 728 unlucky ones—when there is not enough work, there will be many of them—up against their failings and failures over and over again, week after week after week.
§ Ms. Short
What my hon. Friend has said so powerfully is true. Does she agree that the real strategy underlying the Bill is to force people to take lower-paid work? We have all heard the Government proclaim the prosperous boom, but 40 per cent. of our work force earn low pay. The Bill will mean more of that, as well as more of the humiliation that my hon. Friend has described.
§ Mrs. Beckett
My hon. Friend is entirely right, because, unless that was so, it hardly accounts for the way in which the Government have ignored that part of the Department's survey or explains why they have also retained the provisions that take no account of pay.
§ Mr. Tony Favell (Stockport)
Is it the policy of the Opposition that the unemployed should be obliged to look for work? If so, how does the hon. Lady propose that that should be done?
§ Mrs. Beckett
First of all, I am not entirely sure whether the hon. Gentleman has been here while I have been speaking but, if he has, he will have heard me say, first of all, that yes, of course we agree that people should be seeking work, and indeed, most of them are. Is the hon. Gentleman contending that most of them are not, and is that the policy of the Conservative party? That certainly appears to be the policy behind this Bill.
Secondly, I have already said—again, if the hon. Gentleman had been listening, he would have heard—that we believe that the existing tests of willingness to work are quite sufficient, and indeed, can be quite stringent and can debar people whom we think should not be debarred. There is no need for those tests to be further strengthened.
My hon. Friend, as I say, mentioned that she believes that the Government's intention is to drive people into more low-paid jobs, and I have no doubt that that is the case. I have no doubt also that it is the Government's wish and intention to drive still more people off the unemployment register. I have no doubt that it will drive some of them off the register, even if they have to sacrifice their pension credits, and, ultimately, their full pension. I have no doubt either that it will drive some of them nearly crazy.
The financial memorandum suggests that money will be saved. The only estimate of the cost in people is that of the staff who might be required. There is no estimate of the distress, the illness, the divorces or the suicides. Let me remind the House again of the justification the Government offers. They claim that there are 700,000 unfilled vacancies and over 2 million unemployed people registered. The Government know, of course, only of 250,000 actual vacancies, which they multiply by guesswork to get an estimate of the overall picture. Independent estimates suggest that it is more like 3 million people who are pursuing those 250,000 or 700,000 vacancies. Certainly there is no question that there are remotely enough vacancies for the number of unemployed people, however they are fiddled or calculated, although to listen to Ministers and some Government Back Benchers one might think there were more vacancies than there are people unemployed.
The purpose and the effect of this Bill is to foster the idea that all that is needed for the unemployed to find work 729 is for them to look harder for work, although the Government's own figures show that many of them cannot possibly find it. For the long-term unemployed especially, who cannot get work, some adjustment to the reality of their position is not just desirable; it is vital. That is how they hold together the remnants of their self-respect, their dignity, their pride, perhaps even their sanity. Heaven knows this Bill is doing enough to encourage a climate of opinion that denies them the respect of others, and the reality for most of them remains that there is no work, and nothing in this Bill changes that one iota.
§ Mr. Ron Leighton (Newham, North-East)
Is my hon. Friend aware that there is no such thing as a stack of vacancies? There is a flow of vacancies; vacancies flow in and filled vacancies flow out. Most of the vacancies are filled in a couple of weeks or so and most of the vacancies go to employed people who are switching jobs. The unemployed do not get these vacancies, because of the recruitment policies of employers, and even in the London survey, if the Minister will read the foreword written by the Secretary of State, he says that only "a small minority" of the unemployed are not seeking work.
§ Mrs. Beckett
My hon. Friend is entirely correct, and I am most grateful to him for making those points. I would only say that what I am addressing is the Government's arguments rather than the reality. Of course it is bad for people to despair and for people to give up hope, and certainly one must wish that the long-term unemployed receive encouragement, but it is also bad for them to be forced continually to jump hurdles at which they are bound to fall. This Bill does not offer a helping hand to the unemployed; it shows them a mailed fist. Unemployment itself has a shattering effect on the lives of many who face it. It is an unexploded grenade, and in this Bill the Government are pulling the pin.
§ Mrs. Marion Roe (Broxbourne)
The Government's social security programmes have an impact on the lives of millions of people: on the unemployed, on the elderly, on the families and also on the young, and social security spending, we all know, has risen inexorably since the foundation of the welfare state. Today, it represents the largest single item of Government expenditure, accounting for one pound in three of public spending. The average taxpayer currently contributes about £11 a week to social security spending.
It is crucial that spending on this scale is effective. Equally, it is essential that our social security programmes not only provide immediate help for those who are in need, but that they do not have perverse and unwelcome long-term effects. It is right that our social security system should evolve to ensure that it does not institutionalise dependence on the state, that it does not create barriers to enterprise and wealth creation, and that it does not undermine the family.
The Bill represents another very important stage in the evolution of the social security system. It builds on the 1986 reforms and underlines the Government's commitment to a system of benefits which provide help where it is most needed, at the same time as reinforcing the principles of individual responsibility and self-help. Understandably, much attention has focused on the changes to the rules governing unemployment benefit, and these changes will, 730 I believe, be almost universally perceived outside this Chamber as being long overdue and common-sense adjustments.
The man on the proverbial Clapham omnibus would be the first to subscribe to the notion that the very minimum the state can expect from those out of work in return for the payment of benefit is that they actively go about finding work. The idea that the state should perpetually subsidise those who seem happy to remain unemployed indefinitely not only offends the average person's view of what is fair; we all know that a system which allows such a state of affairs to persist is fundamentally flawed since it actually creates dependence and robs individuals of responsibility for themselves.
Equally important principles are at stake elsewhere in this Bill. Clause 4 on liable relatives is a case in point. The savings that will accrue from this change are relatively small, although by no means insignificant, but of far greater importance is the fact that, by obliging single parents to take responsibility for their children while they are in the sixth form, we are bringing the treatment of single-parent families into line with family law. Why should a single parent receive more favourable treatment from the state in this matter than a couple with children?
There is no reason why the taxpayer should be forced to underwrite the maintenance of 16 to l9-year-olds in full-time education simply because they come from a single-parent family. Responsibility for the welfare and maintenance of children will in a free society always rest principally with parents; that basic rule applies equally to couples and to single-parent families.
The family is the cornerstone of our society, the basic and most essential unit, and it would be wrong to allow a system to persist which discriminates in favour of single-parent families and thereby against couples with children. Equally, we should not tolerate a system which enables parents to evade their basic responsibility as parents, and we should be aware that the very knowledge that the state will provide for children may remove an obstacle to fathers deserting their families.
Some, of course, will claim that these changes are designed to punish one-parent families in pursuit of minor cost savings, but I for one do not regard £2.5 million as small change. It is more than enough to pay for an extra 100 policemen on the streets of our inner cities or to fund important medical research.
The real purpose of clause 4 is to create a benefit system that encourages responsibility and self-reliance, a system that does not unintentionally provide incentives for fathers to abandon their children, and it is of course essential that the state provides help to the needy single-parent families, but it is even more important that the very availability of those benefits does not encourage illegitimacy and the break-up of families. The happiness and well-being of children depends to a far greater extent on their family background and on the love and care of their parents than on the availability of cash benefits from the state.
The primary aim of our social security system should be to use benefits to help to build a stable and loving environment in which children can be raised. The provision of benefits cannot be seen as a substitute for parental love and responsibility. It is precisely for that reason that the clause is to be welcomed.
Perhaps the main themes of the Bill are fairness and economic efficiency. Nowhere are those concepts better illustrated than in clause 19, which implements the EC 731 Council directive on equal treatment for men and women in occupational social security schemes. I was very pleased to hear the welcome given to this clause by the hon. Member for Derby, South (Mrs. Beckett) on behalf of the Opposition. I know that that change will be welcomed by millions of working women throughout the country. In the last 10 years we have managed to shed so many of the outdated stereotypes of what women can and cannot do. Women are achieving more than ever: in the professions, in business and—dare I say it?—also in politics.
Clause 19 of the Social Security Bill will bring to an end discrimination in employment-related schemes. Sensibly, it will also stop indirect discrimination against women in pension and other benefit schemes. Such discrimination is often unintentional and usually the result of custom and tradition, but it is no less damaging or unfair than more overt forms of discrimination. Benefit schemes which discriminate against women as a result of their family or marital status are unfair to women, and also represent an obstacle to the smooth operation of the labour market.
At a time when the number of young people in the labour market is contracting—when employers will increasingly have to consider employing older people, especially married women—our economy simply cannot afford to place obstacles in the way of the employment of women. All such barriers are a disincentive to women to seek work and an impediment to the creation of prosperity and jobs.
Clause 19 will also ensure that women who take maternity leave do not lose benefit entitlement as a result. In future, women who take leave to have a baby will, for the purposes of calculating benefit levels, be treated exactly as though they had been at work. That is a very sensible reform which will help women to reconcile the competing pressures of children and work.
§ Mrs. Roe
Perhaps the hon. Gentleman will allow me to finish the point; then I shall give way.
I know that many women who take maternity leave are immensely irked when they discover that the period of their absence is treated, for the purposes of calculating pensions, as though they had been on a prolonged holiday. Any woman who has had children would tell us otherwise.
§ Mr. Corbyn
I agree with the hon. Lady that much of this legislation acts as a disincentive to women to return to work and that it discriminates against them. Does she also agree that one of the major problems over women returning to work is the lack of pre-school child care facilities in this country, which has the worst record of any country in western Europe? Does she not believe that the Government ought to address that problem?
§ Mrs. Roe
I believe that parents have a responsibility to consider the welfare of their children. I started a new career in middle age, having first reared my family. Parents must consider the welfare of their children. Women who stay at home to look after their children do a very important job.
There is one further item of unfinished business that relates to pensions and the equality of treatment between men and women—the equalisation of the pension age. 732 Those of us who believe in giving women a fairer deal in matters of employment and social security legislation recognise that the argument works both ways.
On the pension age, women should understand that the principle of equality may require them to retire later than at present. I know that the Government have accepted the principle of equalisation, but the implementation of that principle is less than straightforward. I hope that my right hon. Friend the Secretary of State will reassure the House that the Government's proposals will be very carefully worked through. The Government should not be rushed into a crucial decision that will affect the lives of generations of workers and pensioners.
The 1986 social security reforms dragged our lumbering benefits system into the late 20th century. That great reform showed that it was possible to provide help for those who are in genuine need without eroding the responsibility, initiative and enterprise upon which the happiness of individuals and families so greatly depends. This Bill represents a further important adjustment to the operation of the social security system. By making social policy operate in a much fairer fashion and by reinforcing the paramount importance of individual responsibility, these changes will promote what Opposition Members are fond of calling economic efficiency and social justice. I prefer to call it prosperity and happiness. Therefore, I fully support the Bill.
§ 6.5 pm
§ Mr. Frank Field (Birkenhead)
We are discussing a renegotiation of responsibilities between the individual and the state. I disagree fundamentally with one of the points that the hon. Member for Broxbourne (Mrs. Roe) made at the beginning of her speech—that if all of us were travelling on the back of an omnibus to Clapham common this Bill would strike us as fair. It would strike us as unfair —not for the reasons that have been put forward so far in the debate but because the renegotiation between the state and the individual is, under this Government, only one way. The Bill changes the duties and responsibilities of the individual to seek work. It does nothing about the duties and responsibilities of the state to ensure that work is available for the individual.
Because I want to develop that theme briefly, and because some of it may be controversial, let me begin by referring to a point that unites both sides of the House of Commons—that the vast majority of the unemployed are seeking work to the very best of their ability. I believe that I speak on behalf of the vast majority of the unemployed in Birkenhead when I say that they see nothing wrong with the idea that their superhuman efforts to find work should be matched by every other unemployed person. However, the question that we have to ask ourselves is how we are to treat those people who genuinely cannot find work.
My hon. Friend the Member for Derby, South (Mrs. Beckett) referred to the abolition of a hated rule in the 1930s. I go back to the negotiations that Margaret Bondfield had with the TUC and the employers. The TUC was not soft on this issue. It did not wish the message to go out that it was feather-bedding a tiny minority who did not wish to seek work. The TUC thought that it was perfectly proper that the test should be applied, but in the final resort the real test, and the only test, was to present someone with a job. That is the test that we should be implementing today. I should happily vote for it.
§ Mrs. Audrey Wise (Preston)
Would my hon. Friend care to add to that test the condition that the job should be properly remunerated, and that decent human conditions should be provided?
§ Mr. Field
If we were to insist on decent human conditions, large numbers of my constituents would not be in work, given the circumstances in which they have to work. However, I was taking it for granted that both sides of the House agree that the statement should stand that Lord Joseph made to this House—that nobody should be forced to take a job that makes him financially worse off.
Before my hon. Friend the Member for Preston (Mrs. Wise) intervened, I was about to make the point that, given the emphasis that this Government have placed on tightening up on the tiny minority of people who are not using all their energies to find work, they ought to be appearing before us today in sackcloth and ashes.
Since 1979, we have seen a number of Government reforms that have made it more difficult for people to find jobs. That is why I spoke against the Government's measures to break the link with signing on in a place where the job vacancies were advertised. The Government pushed through that reform for the simple reason that it enabled them to cut the size of the Civil Service. When they brought forward proposals to abolish the re-establishment centres, I spoke and voted against them. I thought it wrong that there was not that final sanction.
When the Government come forward with these measures, I suppose we should be pleased that there will be much rejoicing in heaven over those sinners who repent today. However, it is interesting to note the means by which they bring forward their reforms, which, as my hon. Friend the Member for Derby, South pointed out, given the Government's track record, gives us cause for concern about how people will be treated if they cannot find work.
This renegotiation between the state and the individual, which is all on one side, is an incomplete renegotiation and a half measure. I want to spend my couple of minutes emphasising the other side of that contract that must be drawn up between the state and the individual. I wish to go on record as saying—I fight elections on this platform—that unemployed people have a duty to use everything in their power to find work. The vast majority of my constituents do that with considerable skill. However, if we are not to make a mockery of people when they put in that affort, the other side of the contract is to say, "Yes, the state's responsibility must match that of the individual," but the Bill is totally silent on that matter.
We should ask the Government for three measures if we are satisfactorily to renegotiate the deal between the state and the individual and the responsibilities of each as we approach the 1990s. First, support services should exist for people who actively seek work, as the vast majority of our unemployed constituents do. Year by year, the Government have cut the size of those services. Let me give the House one example which shows that—the effort that the Swedish Government put into helping people find work compared with this Government. Obviously, there is a different ratio between the number of unemployed here and in Sweden, but the Swedish Government employ 20 times more staff than the British Government in trying to make sure that people are trained and suitably placed in work. We should welcome the beginnings of this 734 renegotiation, but let us also be clear about the full, comprehensive terms on which we want that contract renegotiated.
Secondly, what will happen to those of our constituents who put everything into their employment training course to make it a success, if there is no job at the end of that course Will the Government say that they can go back on benefit? Will they think of some other way of roughing up those people? Will they say, "You have now done your duty. Our responsibility is to provide you with some form of work and we will provide that form of temporary work"? I should like the Minister to answer that point when he winds up this evening.
Thirdly, we must consider full employment. The Minister made much of Pamela Meadows's report. Perhaps I should say that he did not make much of it, as he waved it about and then quoted from another survey about the tightness of the labour market in parts of London. When Opposition Members try to put full employment back on the political agenda, we start from the basis that there is full employment in some areas of the country and in some trades, so we are not talking about a crude Keynesian policy of inflating demand in an attempt to move back to full employment. We are asking for much more selective—or, as the Government would like us to argue, more targeted—measures.
My constituents and those of many of my hon. Friends believe that the Government can make some moves to ensure that we move back to full employment in those areas that are now hard hit by unemployment. The Government can control where they place their jobs and contracts. We want to see much more effort than we get even from this Secretary of State. He is better than most Secretaries of State when it comes to moving Government jobs out of areas of high employment to areas of low employment.
We need to see those Government jobs moved into areas of high unemployment and so begin to underpin the local economy, so that the private sector can build on that. The private sector does not come to Birkenhead in the numbers that we would like, for the simple reason that so many other areas in Merseyside are much more attractive. The private sector will not come until we raise the level of money and demand in that local economy that attracts them.
This begins to lay the basis of a move back to full employment. I speak as someone in favour of renegotiating the contract betweeen the state and the individual with which this Bill deals. I criticise the Bill, as do other Opposition Members—and, I hope, Conservative Members—because it is a partial measure which does all the renegotiation on the individual side and does nothing to deliver on the state side.
The state needs to come up with three moves if it is to match the changes that we want in respect of the individual. First, we want to see placement services and help for people trying to find work, to match those, for example, in Sweden. Secondly, we want a reply from the Government about what will happen to those of our constituents who have gone through the mill, including ET. Will they be kicked back to the dole queues afterwards or will the Government come up with schemes of work for them? Thirdly, areas such as the one that I represent desperately need their economies underpinning, and that 735 will come only from the Government. If the contract were renegotiated on those terms, many of us would feel much happier than we so far feel about the measure.
§ Mr. Bob Dunn (Dartford)
It is always a great pleasure to follow the hon. Member for Birkenhead (Mr. Field). I have listened with great interest to his comments, both in this House and in the media, for many years. Many Conservative Members respect him for the things he says and the activities he pursues with great vigour and determination in the House and elsewhere. I might go so far as to place it on record that he has as many friends on this side of the House as he has enemies on that side. We listen with great interest to what he says.
Neither the hon. Gentleman nor the hon. Member for Derby, South (Mrs. Beckett), who is appropriately dressed in pink for this occasion, referred to the taxpayer, the economy and the changes that need to be made, bearing in mind the demographic changes that lie ahead, to which my hon. Friend the Member for Broxbourne (Mrs. Roe) referred.
I am delighted to take part in this debate, for a number of reasons. This is the first occasion that I have had since my translation from Government to the Back Benches to take part in a major policy debate. On this occasion, I have the strange feeling of being able to say what I believe and to believe what I say.
§ Mr. Dunn
The hon. Lady must contain herself.
I remember many occasions at the Dispatch Box when I thought that if I had the choice of being here or in France, I would rather be in France. The second reason why I am delighted to be here is that I wish to pay tribute to my right hon. Friend the Secretary of State for Social Services and his ministerial team for introducing this important and much-needed measure which addresses our social security system and seeks to bring about much-needed reform through a radical policy which I hope will be the first of several initiatives in this area over the years.
The encouragement of individual freedom and the maximisation of opportunities for individual success, while taking account and care of those who through no fault of their own are going through temporary or permanent difficult times, have always been a cornerstone of the philosophy of this party and this Government. It is refreshing to have a fresh re-emphasis and reaffirmation of it in this Bill.
That we can discuss these reforms against the background of a successful economy is undoubtedly an enormous advantage. Because of the success in and of our economy, it has been possible to provide social security expenditure at levels 40 per cent. above inflation. From listening to the speeches of Labour Members, this Bill and the trend that I hope it will start on the subject which it addresses is clearly a point of philosophical division between us.
This is the parting of the ways and must be so. We see the legislation as targeting and focusing help on those in need. Clearly it will provide a better service to British 736 people by making the benefits system easier to understand and, for those who work within the system, easier to administer. Moreover, it will encourage greater independence in personal pension provision, which I fully welcome. Of those advantages, the most significant is the first—the proper targeting of help for and support of those in need.
I welcome several clauses. I welcome clause 3, which requires employers to keep a record of the earnings on which their employees have paid national insurance contributions. I know from constituency experience that, when employers fail to keep proper records, it can cause enormous anxiety to those approaching retirement who feel that there may be a gap between what they know they have paid and the information that the record offices have. The clause brings that into the open and destroys a gap in the system.
I welcome clause 4 because it deals with liable relatives and provides an extension of liability. I hope that, on Report, we shall see that the Standing Committee has given long and determined thought to the question of one-parent families and the attitude of those who, having created children, decide to leave the family and throw the children on the state. The House must welcome the clause. I hope that the Committee will make it clear to those who may wish to take that opportunity at some time in the life of their family that they must take account of their personal responsibilities, having created the children in the first place.
I welcome clause 5, which extends the upper age limit for the payment of mobility allowance from 75 to 80. All hon. Members will welcome that provision, and I congratulate my right hon. Friend on it.
I welcome clause 9, because it requires a person claiming unemployment benefit to show that he or she is actively seeking work. I welcome it because it will enshrine in law that which most people believe is the case but which is not the case—that benefit should not be paid if there are opportunities to gain work which are not being actively pursued by those seeking benefit. I think I am right in saying that this is not an original provision, as some of our colleagues in the Commonwealth—for example, Labour Australia—follow such a provision—
§ Mrs. Beckett
I am grateful to the hon. Gentleman for giving way, and I apologise for not having given way to him, but I shall do so another time. I am not surprised that the hon. Gentleman raises the issue of what is done elsewhere, because it is included in the Central Office brief. However, that brief does not tell him that, although some such provision, which could loosely be described by the same words as are in the Bill, exists in the countries to which he referred, in none of those countries does it operate in any way, shape or form as it is intended to do under this Bill.
§ Mr. Dunn
I am interested to hear that the hon. Lady is in receipt of Central Office briefs. Her educational stocks must be piling up rapidly. From what she says, at least it 737 seems that she agrees that the principle behind the provision is being followed in part or in full by other countries. She said so.
§ Mrs. Beckett
No. The hon. Gentleman will remember that the Government are reluctant to make glib comparisons between one social security system and another—for example, on pension levels. I said that some of those different countries use the word "actively" in their legislation and some have various tests, but that in not one does the provision operate in the same way or to the same extent as it is intended to under this Bill. The comparison is invalid, although I recognise that it is not the hon. Gentleman's fault, because he has been misled.
§ Mr. Dunn
I am grateful to be so informed, as befits two former Education Ministers arguing across the Floor of the House—but for them to do so can hardly be salutary, educational or beneficial. At least the hon. Lady pointed out that there is a principle abroad that is being followed, and I welcome her support. She may make her interpretation of what happens abroad, as indeed I do.
In her speech, to which I listened with great interest, the hon. Lady did not answer the point ably made by my hon. Friend the Member for Wokingham (Mr. Redmond), and perhaps I may make it again. If a person is offered a suitable job for which that person is suitably qualified and turns it down, is that person, under Labour policy, still to be entitled to benefit?
[HON. MEMBERS: No.]
§ Mr. Frank Field
The answer to the question is that that person would not be entitled to benefit. In what the hon. Gentleman might have thought to be a rhetorical question but which we were only too pleased to answer, the hon. Gentleman asked whether the test will be that people will be offered actual jobs.
§ Mr. Dunn
I did not ask an answer. I asked a question. I am not in the business of asking answers, but I want answers to my questions. The whole point of tonight's debate is not only to give the Bill support, but to find out what Opposition Members think—not that there are many of them present. We are not much further forward. They have told us that such a person will not be entitled to benefit, but my hon. Friend asked whether they should be entitled to benefit, and we can check that in Hansard. Some Opposition Members may think that such a person should be entitled to benefit.
§ Mr. Dunn
When I am in full flow, I like to finish my comments. If I may finish them, I shall give way because the hon. Lady has been patient and has been listening to the debate carefully.
My hon. Friend the Member for Wokingham made the point that claimants should not be entitled to benefit if they refuse a job for which they are suitably qualified. I make the point that Opposition Members are of the opinion that such claimants should be entitled to benefit in that situation.
§ Ms. Short
I believe that the hon. Gentleman is being sincere and does not understand the legislation's existing framework or the Labour party's position. Under existing law a claimant must be available for and positively seeking work; otherwise, benefit will be disallowed. The Bill goes beyond that. It will force the unemployed into schemes 738 that do not suit them or which are not good for their futures. It will compel them to accept jobs at levels of pay far below those that properly reflect their qualifications and skills. Current law says that claimants must be available for and take suitable jobs. Does the hon. Gentleman understand that? He is defending the Bill by describing the legislation that it replaces.
§ Mr. Dunn
The hon. Lady suggests that I do not understand Labour party policy. Nor does she, and nor does any right hon. or hon. Member understand what Labour party policy is. It is clear that tonight we have the re-emphasis of Tammany hall philosophy. The Labour party loves to have, across the community, tied interest groups at the behest of, and subject to influence from, the centre. We saw that in our debate on council house sales and on the educational reforms to which I was a party, and of which I was a supporter. We saw it also in the matter of share ownership and the involvement of workers in industry.
§ Mr. Dunn
In time, the Labour party will come to accept those reforms as essential. As they accept the sale of council houses, at least some educational reforms, and the concept of worker involvement in industry, so will they accept the purposes and provisions contained in the Bill and in other legislation.
I make one final point to the hon. Member for Birkenhead. The people who resent social security abuses are not Surrey stockbrokers or the retired people of Fylde, but the ordinary people living on housing estates and in communities. They are decent people living according to an economic regime, who see others taking advantage of that regime. That is the fundamental distinction between our understanding of the whole social security system and that of the Opposition.
I am delighted to be resurrected, and again to be back on the Back Benches, and I am delighted to be here in support of the Bill.
§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)
I am puzzled by the turn that the debate has taken, and two points made by the hon. Member for Dartford (Mr. Dunn), confused me even more. Speaking for myself and for a number of my own right hon. and hon. Friends, I give the hon. Gentleman a categorical assurance that if claimants turn down suitable jobs, they are disqualified from receiving benefit. I also reassure the hon. Gentleman that we are just as interested as he is in rooting out genuine abuses, because anyone who abuses the system does so at the cost of other claimants. The hon. Gentleman seems to criticise the Opposition for taking the opposite point of view. However, our criticism of the Bill does not relate to either of those two aspects. The House should accept that that is so, and let the debate move on to more pertinent issues. 739 What also puzzles me about the debate is that Ministers on the Treasury Bench vigorously shake their heads when Opposition Members take the point that the existing law gives the Government the power to tackle those who are workshy, or whatever one likes to call it. I adduce in evidence the very good Library brief on. the Bill, from which I shall quote—and people on the Treasury Bench will, I hope, spend some time clearing up this point:At present, Section 20 of the Social Security Act 1975 disqualifies claimaints who, 'without good cause', either 'refuse' or 'neglect to avail' themselves of 'suitable employment'. It also disqualifies people who 'without good cause' fail to follow reasonable official advice about finding suitable employment or people who turn down approved training places.
§ Mrs. Beckett
Perhaps the hon. Gentleman will also bring to the attention of the hon. Member for Dartford (Mr. Dunn), who seems somewhat bewildered, the fact that the Social Security Act 1975, with its stringent provisions, which we support, was passed by a Labour Government.
§ Mr. Kirkwood
It was passed, albeit before my time, in 1975, and is the parent of the principal Act that the present Bill seeks to amend.
The Library brief, dealing further with the matter of a claimant actively seeking work, comments:An influential Commissioner's Decision [Ref.R(U) 5/80] [Item 11] stated that availability is not a passive state in which a person may be said to be available provided he is sought out. Rather it implies that the claimant takes some active steps to draw attention to his search for work. The DSS treat this as a generally applicable rule.Either it does or it does not. In all my constituency work, I have operated on the basis that power is available to the Department.
I am astonished that the Government, and the Secretary of State in his opening remarks, appear now to refute that. There has been a great deal of shaking of heads, with the Government saying, "No, it is nothing to do with us. We cannot control people who are workshy and who abrogate their responsibilities." But the power for the Department to act already exists, and if it is not being used, I want to know why. If that power is not being exploited as it should be, that is the Government's fault. The principal reason why the Bill is unnecessary is that it gives the Government "additional" powers when, even if they do not know it, the Government already have them.
The hon. Member for Birkenhead (Mr. Field) was right to say that the Bill fundamentally redraws the state's powers and responsibilities in respect of individual unemployed claimants. Another fundamental point, which the Secretary of State glossed over in his introduction, is the abolition of the Treasury supplement, which has been until now a fundamental and integral part of the Beveridge reforms. However, when opening the debate, the Secretary of State simply waved it aside, saying that the rationale for it had gone.
A figure of £1.75 billion has been taken out of the national insurance contribution fund, which finances maternity payments, unemployment, pensions and other benefits. A sum of £1.75 billion has disappeared just like that, because the rationale for it has gone. Just imagine what could be done with that substantial amount of money. The Secretary of State could have reduced employers' or employees' contributions, which might 740 incidentally have created more than a little employment. If he did not want to do that, he could alternatively have increased benefits.
Right hon. and hon. Members know from their constituency casework of the difficulties that many claimants are having. It is not good enough for the Secretary of State to say that because the rationale for the Treasury supplement has gone, under clause 2, £1.75 billion will go out of the window just like that. The House should carefully consider the implications of that fundamental change and the consequences it will have for right hon. and hon. Members' constituents. When the Government took office, the Treasury contribution was about 18 per cent., but since 1980 it has been whittled away. The change was announced in the Autumn Statement—this came as no surprise—that it was now down to zero. The House should not accept such a fundamental change lightly.
The House should also be reminded that according to the financial memorandum in the Bill, the savings from clauses 7 to 10 will be £100 million. Fortuitously for the Government, 50,000 benefit and unemployed claimants will come off the register, too.
Changing the tests for work has some deeply worrying consequences. The hon. Member for Birkenhead made an important point about this. He said that it was a given fact, derived from Lord Joseph's statement at the time the legislation was introduced in 1975, that claimants would never be forced to accept work that would remunerate them less than the benefit they were receiving. I hope that that is true, but I turn it now into a question.
Is it true that there are circumstances in which an unemployed benefit claimant could be required to take a job under the terms of this Bill that would bring him less money in his hand than he got in benefits before being required to take it? Perhaps the hon. Member for Birkenhead will put me right about this. I do not think that the House should consider the Bill further without this being established one way or the other.
§ Mr. Frank Field
I hope that we shall get a clear answer when the Minister winds up, as he did not respond immediately. Perhaps it was foolish of me not to push the point; when I said that claimants would not be forced to take jobs that made them worse off, the Secretary of State agreed with me, and I assumed that it would be good to have that clearly put on the record before the Bill went into operation.
§ Mr. Kirkwood
I am grateful to the hon. Gentleman, and I am sure the Minister will respond to his point one way or the other—
§ Mr. Kirkwood
One lives in hope. We have real worries about the legislation and its consequences.
People should accept suitable jobs that they are offered, but what will happen to the families of these claimants if benefit is withdrawn entirely? Will they be entitled to social fund loans, for example? Have the Government thought about that? Given the Government's record in this area, the Opposition parties are worried that the Government are drifting towards insisting on work, training or some other required service or activity in return for benefit—a move towards workfare. I believe that the Minister has 741 confirmed in written answers that that is not the Government's intention, but some of us are beginning to worry that it may indeed be their long-term intention.
Finally, clause 13 authorises the Government to pay out of the Consolidated Fund the money that was properly allocated to transitional payments. I am still worried about this. The Secretary of State earlier gave me some reassurance about the proportion of people who will gain no increase in benefit at all this April as a result of the changes brought in by the 1986 Act. I was grateful for that, but claimants in my constituency do not really know what the uprating will mean until they receive their Giro cheques.
I fear what will happen in April: there will be frustration and anger. If the Government were sensible, they would make some provision. The Secretary of State was forced to do so with the housing benefit transitional payments, which I welcomed. Machinery should be put in place to ensure that all claimants will get at least 50 per cent.—I pluck the figure out of the air—of the benefit they would expect to receive from the normal operation of the uprating formula this coming April as an additional transitional measure over some years.
The Secretary of State raises his eyebrows at that. The Consolidated Fund provision is £37 million, falling to £14 million in 1991–92. It must be possible to obtain some additional transitional protection in April. I am certain that, when the time comes, I shall be proved right about this.
We cannot support the Bill as it stands. It is muddle-headed, mean and confused. It has missed an opportunity to provide the benefits that unemployed people in particular deserve. I agree with the Secretary of State that the intention should be to give everyone the opportunity to increase his or her potential; this Bill misses the chance to do just that.
§ Mr. Timothy Kirkhope (Leeds, North-East)
First, I want to praise the Bill in general. It is extremely progressive, and worthy of a Conservative Government. Tonight, however, I shall confine my remarks to unemployment benefits and entitlements.
It is difficult to discuss these matters calmly and objectively when faced with a Labour Opposition who seem to live 50, 60 or more years in the past. As the Secretary of State rightly said, the flexibility to meet new circumstances is essential, and we now live in the late 1980s, not the 1920s or 1930s. We must adapt everything to meet the challenges that lie ahead.
Over the years, we have held many debates on unemployment, and I suppose that we would all agree that it is unfortunate that we need to discuss the issue so often. But is is a sad fact of life throughout the developed world that there has always been unemployment to a greater or lesser extent, so we should always use opportunities such as this to restate our deep concern for all who, through no fault of their own, are unemployed.
The hon. Member for Derby, South (Mrs. Beckett) spoke about divorce and other domestic problems arising from the Government's proposals to ask unemployed people to seek work. I say that those who are unemployed through no fault of their own deserve our especial concern because they are the ones who often suffer the problems of divorce, depression and the like. We must find ways of 742 alleviating those problems. Temporarily, we do so through state assistance, but in the longer term what is most important to those people is the prospect of work.
Over the years, Conservative Governments have done much by providing an economy with growth, which improves the prosperity and hence the prospects of work for more people in this country. Our attitudes to the unemployed have been very progressive—we now have the restart arrangements, a great number of training places and much encouragement for training. More has been done by this Government in these areas than by any other.
We are discussing here the voluntarily unemployed more than the involuntarily unemployed—people who make themselves unemployed and do not try to seek work. Beveridge and 1930 have been mentioned. Opposition Members should remember the Unemployment Bill of 1933. No one in the House at that time thought that many people would not be keen to have work if work was available. So it is disappointing to hear Opposition Members suggesting that things are so much different now.
Of course we must bear in mind demography and the declining birth rate. It is also important to remember the need that employers will have for employees in the 1990s. We shall be desperately short of people to perform all the important jobs in this country then.
Almost an army of people sitting at home are voluntarily unemployed, contribute nothing to their country, and consume resources that others provide for them. We know that unemployment is an unacceptable phenomenon, but there must be a clear differentiation between those who are willing to work and those who are unwilling. Some people have been unemployed for a long time, whereas many others have become unemployed recently and are the short-term unemployed. Some people, regrettably, have been actively unemployed and remain actively unemployed. If such people put the same activity into finding new work as they put into being unemployed, the country would be far better served.
We have done much to help those who genuinely want to work. I have already referred to restart and training schemes, and it is right that we have a more enlightened and flexible view of those who are genuinely keen to find a job. There are, however, a large number of people who need greater prompting—not "prodding", but prompting —hence the need for a change in the regulations. To the layman, the idea of benefit being paid by the state to someone who is capable of working but who chooses to avoid it is an anathema.
There are those who through misfortune and inadequacy are not motivated sufficiently to look for a job. Is it not right that there should he help and encouragement for such people to fulfill themselves by working? We praise those who assist the physically and mentally disabled to find some useful work by trying to protect them from becoming—
§ Mr. Ian McCartney (Makerfield)
What reply would the hon. Gentleman give to one of my constituents who was blinded in one eye and partially sighted in the other eye after an industrial accident at Gullick Dobson's in Wigan? The company could not provide long-term alternative employment and, sad to say, he was put on the dole. He was interviewed for the restart programme and refused benefit. He has worked all his life and fought in the second world war. Having been blinded in one eye, and being partially sighted in the other, he was interviewed for 743 the restart programme, but now he has no benefit because of the actions of the Social Security Minister. What answer can the hon. Gentleman give?
§ Mr. Kirkhope
I am sure that the hon. Gentleman is right to be concerned about that case, as we all would be. I am trying to point out that a great number of organisations and individuals do their very best to find work for the disabled and seek to ensure that they do not become locked in the isolation of their disability.
Of course, there are some people who, despite all attempts, unfortunately are still unable to work and who would give their hind teeth for the possibility of obtaining work. I remind the hon. Gentleman and other hon. Members that, unfortunately, there are some who are not prepared to look for work, and that is an affront to people like the hon. Gentleman's constituent, who is, no doubt, very sorry that he cannot work; I, too, am very sorry that he cannot work. It is right to have an enlightened approach to such people. However, those who are actively avoiding work should be obliged to look for it just as actively if they want to receive benefit. Surely that is a fair suggestion and one which most people in this country would support. Everyone should do their bit to help.
§ Mrs. Beckett
Whether or not the people of this country would agree with that proposition is irrelevant. The Bill states that the workshy and those desperately seeking work alike will be punished every week of their lives. That includes the constituent of my of my hon. Friend the Member for Makerfield (Mr. McCartney). They will be punished because they will have to prove every week what they are doing to look for work, even when there is no work. If the hon. Gentleman does not call that punishment, he knows nothing about the unemployed.
§ Mr. Kirkhope
The hon. Lady does not understand the Bill, which does not seek to punish anybody. It will merely ask people to indicate that they are actively looking for work. What is wrong with that? Clearly, the hon. Lady misinterprets the proposal. The result of more people working will be greater prosperity for everybody and the old dependency culture mentality, which the hon. Lady and her party seem to be perpetuating, will change. That mentality has been brought about by decades of Socialist paternalism and that is precisely why the Labour party opposes the proposals. Dependency on the state is inherent in all its policies. We seek greater initiative and a willingness to work as a result of that initiative.
At present, the regulations are sloppy and open to abuse. Disqualification from benefit for those who turn down offers of employment is based on the premise of such refusal being without good cause and in relation to suitable employment. The word "suitable" has been referred to by other hon. Members. Anyone can claim that an offer is unsuitable—perhaps the work is hard or involves other inconveniences. It is a veritable lawyers' paradise. The removal of the word "suitable" is sensible and will ensure that fractious or unreasonable refusals are eliminated.
Clauses 7 and 10 relate to the applicant for unemployment benefit receiving it only when he or she is available for and actively seeking work—as opposed to simply being available—and are particularly important. There are many examples—no doubt other hon. Members 744 can point them out—of employers desperately looking for workers to fill jobs. In practice, questions are raised about the efforts made by an applicant to find employment, but active steps are not conclusive evidence of effort.
Some Opposition Members appear to have misunderstood that point. We need to include the word "active" because it shows a different approach to the problem and more commitment to finding work. Availability alone, however, is open to much misinterpretation in a legal sense. Self-imposed restrictions have been limited by regulation, but can result in someone not being available. Of course, it is important that there should be differences in adjudication in different parts of the country and different circumstances, and the Bill allows for that.
The changes confirm the Government's intention to ensure that the needs of employers for workers are met by the available supply as far as possible. That will allow many more people to use their skills and talents, which are being wasted at present, and which are almost encouraged by the Labour party to be wasted. I commend the Bill to the House.
§ Mr. Jeremy Corbyn (Islington, North)
I have been a Member of the House for almost six years. We seem to have a Social Security Bill about this time of year every year. Every year, Ministers arrive at the Dispatch Box and inform us that the previous year's Bill is inadequate in some way. I should have thought that, after almost 10 years in office, the Government would have got it right by now. Perhaps they are not really satisfied that they have yet created the nasty atmosphere and degree of central control and punishment of the poor people in this country, particularly the long-term unemployed, that they seek.
The way in which Conservative Members have been talking about unemployment implies that it is something to do with weather cycles or that it is completely beyond the control of humankind. In reality, unemployment is nothing of the kind. It is due to an economic system that seeks to rely on people being unemployed or working for very low wages.
The Government promote an economy that creates an enormous amount of wealth for a small number of people, who are well rewarded. There are more millionaires in this country than ever before. But there are also more people sleeping on the streets of London than there have been at any other time this century, and more people scraping ends together every week with decreasing facilities from the state to help them and increasing problems of health, malnutrition and emotional difficulties. That is true for large numbers of very poor people in this country and the Bill should address those serious social problems.
In common with all other hon. Members who represent either industrial or inner-city constituencies, every day of the week I come across social problems that are the creation of the Government—a few Ministers in that Government are present this evening. Last Friday, for example, at my surgery—which was busy and long as it always is—I met a youngish couple with children. The husband works as a security officer in a west end office and his wife works as a school meals assistant in my constituency. Their total income for 80 hours of work between them is £110 a week. They have suffered cuts in 745 housing benefit and the loss of free school meals for their children, and they are now faced with the poll tax which will come in in 18 months.
That couple put their wage slips on the desk in front of me and said, "Mr. Corbyn, how can anyone be expected to live on this and bring up a family on it in this day and age?" Nothing in the Bill does anything for that family or offers them any hope. It is quite possible that one of them will lose his or her job: neither is in a very certain occupation. The stock market crash might mean that there was no longer any need for a security officer, and cuts in the school meals service could equally lose the wife her job. But all that the couple will be told by Conservative Members in such an event is that they are feckless, useless and workshy because they are not seeking work to an adequate degree, when the work is simply not available.
Although it may be too late, I ask the Minister to develop a sense of the purpose of his job and of his Department, and to say what the Bill is doing other than to promote low wages and a cut of roughly £100 million in public expenditure. I believe that that is what is really behind it.
During the recess, and for a long time before that when I unfortunately had to stay at home owing to illness, I was able to read a fascinating and wonderfully written book called "Ten Lean Years" by Wal Hannington. He described how, in the great crash of 1931—when people were already working for low wages and living in conditions of poverty, and when crisis after crisis hit the free enterprise economy—the Government blamed the unemployed for being out of work and for not looking for it adequately, and sought to cut their benefit time after time.
We have seen exactly the same process in all the present Government's social security legislation. It is dressed up in different words, but the Government are always trying to blame those who are making a desperate effort to lead a decent life, to bring up their children in the way they want, and to live in decent housing. Their benefits are cut, and their opportunities reduced and then taken away. But they are constantly told that they live in a successful country with an enterprise economy.
If this is a successful country with an enterprise economy, why are so many people sleeping on the streets of London? Why are so many people hitch-hiking around the country looking for jobs that are not there? Why are there so many long-term unemployed with no hope of getting work, because most of the employers taking on new people for most of the new jobs that are created do not take them from the long-term unemployed register? If they are lucky, people are taken from the short-term register, but usually those taken on are already in work elsewhere. Such issues should be dealt with, both in the Social Security Bill today and in the Employment Bill tomorrow.
We disagree profoundly with a number of clauses in this Bill. However, I want to talk particularly about people looking for work and whether work is available for them. We are always told that thousands of jobs are available. When pressed, London Tories reach for a copy of the Evening Standard and find that there are 100 vacancies for computer operators. But someone who has been a skilled worker in industry will probably not be able to take on a job as a computer operator: not many people have experience of such work. And so it goes on.
I looked at the figures for my borough. According to the Department of Employment, in September 1988—the 746 latest month for which the figures that I sought were available—there were 718 registered vacancies. That was in the London borough of Islington, just outside the ring of wealthy inner London, which contains considerable poverty.
I recognise that not all employers register vacancies, although I think that they should be compelled to; I think that every vacancy should be registered with the Department of Employment. But if the number of registered vacancies is multiplied by four, that means roughly 3,000 vacancies in the borough—and that is a very optimistic interpretation of the possible number of unregistered vacancies. I looked up the unemployment figures for the nearest equivalent period, November 1988. The number of registered unemployed in the borough was 11,297. That means that 11,297 people were chasing 718 vacancies.
A more accurate definition of unemployment is not those who are registered unemployed, because, owing to all the changes in regulations, many thousands have been forced off the register—not into work, but into poverty. According to figures produced by the unemployment unit, which calculates unemployment on the basis on which it was calculated when the present Government came into office, 16,022 people were unemployed at that time, searching for—according to the Department's figures—718 vacancies, but possibly as many as 3,000. That is still less than one vacancy per five unemployed people, even if we assume a skill match.
The way in which the Department's officials conduct restart interviews and the way in which people are forced to look for jobs that may or may not exist, or that may or may not be suitable for them, suggests an over-simplification of the problem and a fundamental misunderstanding of it. I do not know many people, if any, who like being unemployed and living on benefit; who like the indignity of not having a job to go to. But I know many people who deeply resent being humiliated at restart interviews every few months and being forced to answer endless detailed and frankly unpleasant questions, only to be told that they are not suitable for work. Many of those people simply cannot find work, because it is not there to be found.
We should examine the way in which the figures have increased. In 1985, payment was withheld from 53,000 people because they were deemed not available for work. In 1987, the figure doubled to 107,000. I do not know what the figures for 1988 or 1989 will be, but I bet that they will be a substantial increase on last year's figure. The basic thrust of all that the Government are doing is to force people off the register by any possible means so that they can claim, quite falsely, that prosperity is evenly spread throughout the country and that unemployment is genuinely falling.
What the Government also do—this is linked to other legislation that they have enacted—is remove all the mimimum wage legislation that they are able to remove, and refuse to support the idea of minimum wage legislation to guarantee minimum earning levels for all families. Instead, they remove all the safety nets at the bottom to force people into lower and lower levels of employment at lower and lower levels of remuneration, and indeed to subsidise employers to pay low wages. That is all that the Government seem to understand.
The other side of this is the increase in the time necessary for someone to re-qualify for benefit, from 13 747 weeks to 26. That adds up to roughly 50,000 more people being denied benefit, at a saving of £100 million for the Government. Why does the Minister not come clean at the outset and say that the purpose of the Bill is to save the Treasury £100 million—that the Government are stacking up the savings so that they can give bigger tax handouts in the next Budget to people who simply do not need them, showing disgraceful personal profligacy in a society riddled with debt, poverty and misery as a result of the Government's economic strategy?
I have looked through the Bill carefully. Some of it is ominous and nasty, particularly clauses 7, 8 and 9. Will the Minister tell us exactly what is meant by the reference in clause 12 to housing benefit money being withheld from local authorities that do not provide suitable information to central Government in the form in which it is requested? The clause may be perfectly innocent, but I doubt it. I suspect that this has something to do with further demands on local authorities related to rent levels or tenancies. I should be grateful if the Minister could explain.
I should also be grateful if the Minister could tell us why the Bill does not deal with the problems that have arisen from previous legislation. Many of us take seriously the operation of the social security system, and a number of reports have been produced which show in devastating detail the way in which DSS offices are run—the shortage of staff, the high turnover and the poor standard of service that the majority of claimants receive. The Minister has expressed his anxiety about that, and there have been some improvements; but there is a long way to go. Matters are not helped by continuous rumours and reports of the threatened closure of social security offices. If the DSS office in my constituency closes, it will result not only in the loss of a major employer of predominantly young workers but in increased inefficiency in the provision of services to the people in my community.
The attendance allowance scheme needs careful examination. I had a meeting this morning with the local branch of Mencap in my constituency. There are disturbing reports from a number of people with severely handicapped children or adults for whom they care who have been refused attendance allowances by the DSS. Those allowances have unfortunately been refused in a way which causes great hardship to those concerned.
Finally, I should point out that the social fund is becoming so restricted and tight that every office seems to be underspending, be it grant or loan, because the Government want it that way, so that in future years the social fund can be cut. There is not just an underspending on a lower figure but a gross underspending on a figure that was already too low because social fund officers are refusing benefits that are needed. The social fund needs to be expanded and opened up to help with removal expenses for workers buying tools or work clothes for new jobs for work related travel expenses or for crisis loans to cover workers starting new jobs who are without money for up to a month.
So many things could have been included in the Bill, but all it seeks to do is to punish the unemployed for being unemployed, to punish the poor for being poor and to seek this great retribution by getting them off the register and out of the Government's hair. We shall oppose the Bill.
§ Mr. Deputy Speaker (Sir Paul Dean)
Order. I remind the House that the 10-minute limit on speeches is now in operation, and I appeal for the co-operation of those hon. Members who are called during the next two hours.
§ Mr. John Redwood (Wokingham)
I cannot help feeling that the opposition to the work test for unemployment benefit is rather synthetic. The shrill tones of the hon. Member for Derby, South (Mrs. Beckett) seemed to be over the top. I cannot really believe that she has so mellowed in her attitude to the community charge that she now regards this measure as worse than the reform of local government finance.
The hon. Member for Islington, North (Mr. Corbyn) seems to believe that all people in Islington should obtain jobs in Islington and not look at the wider London market, which provides a rather better picture than the labour market in Islington.
About one third of the unemployed in Britain are in London, the south-east and East Anglia, and in all those parts of the country it is possible to find a job. One has only to walk down the high street to see the jobs on offer. They almost fall out of the shops. It is difficult to see why anyone should object to that test being applied strongly in those parts of the country. I accept the Opposition's arguments that in other parts of the country where jobs are not readily available, which is still, unfortunately, the case in some towns, although it is not universally true in the north any more, it will be necessary to administer the scheme with more local sensitivity. I fully accept the assurances of my right hon. Friends on the Front Bench that that will be the case.
I also welcome the clause that deals with the reform of the war widows pensions committee arrangements. I like the idea of fewer committees and of strengthened representation for the war widows. I put in another plea. I hope, that when war widows' pensions are next uprated, my right hon. Friend the Secretary of State will argue for a better than average uprating. War widows have not had a particularly good deal over the years since the two world wars. The Government have been trying to rectify that, but more could be done and it would be a nice touch if in next year's uprating war widows were given a better than average increase in recognition of their particular circumstances.
I wish mainly to occupy myself by looking at the proposals on occupational pensions. We have before us a proposal born of a Brussels directive and initiative which talks about the applications of the surpluses within occupational pension schemes by way of levelling up all schemes to the best practice whether it be for men or women so that the other sex can enjoy best practice. That is unexceptionable. In many ways it is welcome, but we must understand that we are talking either about an increased cost for employers or about the allocation of surpluses that still remain in funds thanks to years of good investment performance since 1981, despite understandable moves by the Treasury to limit the extent of the surpluses.
I hope that in Committee the Government will consider one or two other matters that could be dealt with when considering how to apply those surpluses. A far worse problem for members of occupational pension schemes than the imbalance in provisions between men and women lies in the indexation provisions. I am pleased to say that the Government introduced the first indexation measures 749 governing occupational schemes. They were right to see that occupational pension schemes could not hope to match all inflation at whatever rate and in whatever circumstances. They could be driven into bankruptcy.
But the first step—I hope that it was the first step—was a modest one and I should like to think that the Government are now contemplating a second step to increase the level of protection from inflation for those in occupational pension schemes. It is a cruel deceit if someone reaches retirement age, obtains an occupational pension at two thirds or one half of their retirement salary, and 10 years later discovers that it has been eroded by inflation because the indexation does not match the level of inflation that has been experienced.
Another problem that does grave damage to people's rights in occupational pension schemes arises when a person transfers from one scheme to another. It is wrong for some people in the occupational pensions industry to imply that a person who frequently changes his job is in some way unreliable and so should not be given protection by his occupational scheme. Again, I welcome the fact that the Government have taken steps to deal with that problem.
All hon. Members should support the Government. After all, we are inveterate job changers. Since the days of the younger Pitt is has been a rare occurrence to come here straight from school, so, by definition, hon. Members have to have a job first. If they are unfortunate, their rights will be removed when they enter the House because of the transfer arrangements from their outgoing occupational pension scheme.
§ Mr. Redwood
I am sure that it does. However, I can assure the hon. Gentleman that I have never worked for Central Office. I had a proper job in the commercial sector before I came here. I am not talking about my situation but about the situation of other people who have found when changing jobs that their occupational pension rights have been removed or limited by the way in which the actuarial calculations are made.
That relates only to final salary pension schemes. I welcome the moves towards money purchase that the Government have rightly instituted and which will remove all those problems, but many people will wish to remain members of a large number of final salary schemes. I hope that when looking at the application of the surpluses the Government will once again consider whether existing transfer arrangements are working properly or whether people moving from one job to another may in some ways be let down by the calculations of actuarial value and whether they are also finding it difficult to take the value out when they wish to move to a personal portable pension which may provide a better guarantee for them in terms of the amount of cash that is theirs.
Finally, I want to talk a little about the problems that arise in implementing the EEC's views on equality between men and women in the state pension scheme. I believe that the Government were looking favourably at a scheme which would involve a decade of retirement, and I recommend that to them. If we offered people choice whereby men or women could decide when, between the ages of 60 and 70, they wanted to retire, we would begin to make progress.
750 Employees would be offered choice subject to the rules of their employers, and agreement and negotiation with them. If they decided to retire at 60, they would receive lower pensions based on lower contributions. If they retired at 70, they would receive higher pensions, but, under the law of averages, it would be paid for fewer years.
It would be possible to calculate a system with no net cost to the Treasury. The problem would be that, in order to balance the fund, we would have to make worse the terms under which some women enjoy pension rights. It is not right for the Government to take away women's pension rights when they are in their 40s or 50s, and anticipating their retirement at 60. That would be a harsh blow. I would recommend an extended period of transition. Steps could be taken to balance the scheme for younger men and women. The group of women who had already made substantial contributions over the years and who would be offended by the sharp removal or reduction of their rights could pass through the system on an unequal basis.
I hope that, in the long term, the Government will move towards equality in the state scheme for men and women and will introduce the element of choice—on a no-cost basis if they wish—by allowing people to retire when they choose. That choice would be with the agreement of their employers, and their pensions would be adjusted in relation to their contribution record.
I shall support the Bill, but I hope that it will go further on occupational pensions.
§ Mr. John Hughes (Coventry, North-East)
I am grateful for the opportunity to speak, but that gratitude does not extend to hon. Members who have debased the office of Government, abused the stewardship with which they were entrusted, and used the protection of the House to steal from the poor.
The attitude and actions of those hon. Members have realised the fable of Pandora's box, as millions of impoverished people suffer poor health, inadequate diets, lack of housing and the rigours of the cold. Every age group is affected, and no one is sacrosant.
The Bill ignores the massive problems facing young people under the age of 18. They will suffer in order that the Government can continue to give handouts to their wealthy friends. The Government are driven by the need to make cheeseparing economies that hurt the poorest and most vulnerable.
In "Oliver Twist", the workhouse governors carped at the cost of keeping the orphan inmates, while those governors lived in the lap of luxury. How eager they were to see the children in their care farmed out to an employer who was more concerned to exploit their labour than provide a proper apprenticeship. The parallel is uncomfortably close to those 16 and 17-year-olds of today who no longer live at home and are now required to accept YTS placements if they wish to obtain the wherewithal to live. For many—the most disadvantaged—a scheme that was designed to be voluntary now has the compulsion of a prison sentence.
The Prime Minister is known to be a great admirer of the Victorians. Presumably, therefore, she believes that children—she includes 16 and 17-year-olds—must inevitably submit to the will of their parents. The Victorians 751 were brutally indifferent to young people. They were brutal in their treatment of their own children. The homes of the wealthiest were often places of misery and torment.
That tradition of domestic violence has survived today. Young people are often forced to leave home because of intolerance or the threat of violence—either physical violence or sexual harassment.
For the Prime Minister, as for the Victorians, those problems do not exist, or, if they do, it is only because the benefit system encourages them. The Prime Minister and the Government are blind to the fact—it has been reiterated by every agency concerned with the young homeless—that the pressure on some young people is so great that they leave home whatever the consequences.
The Government's policies force that most vulnerable group of young people who, at that traumatic time, need help and support, into grinding poverty. There is often a risk that they will have to commit offences to obtain even the most basic means of survival. An illustration of that occurred in Coventry, my own town. A young man, on his way to an appointment with a benefit advice agency, was arrested by the police for the theft of a loaf of bread. That young person may have been forced to steal that loaf of bread through sheer desperation.
One young person on a youth training scheme had to pay £10.50 for rent and rates and £3 towards the cost of travelling to the YTS placement, which was some distance away. His total travelling cost per week was £10. That person was left with only £16 from the £29.50 allowance. From that he had to pay £2.20 for a prescription for a chest infection, which under income support rules would have been free. From the remaining £13.80 per week that young person had to pay for fuel bills, food, toiletries and clothing. He had no proper shoes for winter and no proper coat. He was forced to leave home. He said:My father and I had such violent rows before I left that it nearly caused the break-up of my parents' marriage.
In a similar case, a young person was left with only £12.50 a week because a card meter had been installed to pay for a previous electricity bill. The first £3 per week went towards that bill and the standing charge before any electricity was provided.
Circumstances can be even more difficult for young people who are not on youth training schemes. All that is available for those youngsters is a bridging allowance of £15 per week for up to eight weeks in a year. It ignores the fact that YTS placements are subject to selection by the employer. Employers select according to their prejudice or preference and not according to social need. That reinforces the discrimination against black people and women, particularly pregnant women.
For example, a 17-year-old woman who was five and a half months pregnant had her income support stopped on 12 September. Since then she has been receiving £15 a week bridging allowance. She had been living with her aunt, but there were other people in the house and she had to leave to take a council bedsit. She had no furniture, no bedding, no cooker and no utensils, but she was not eligible for a community care grant because she was not on income support. The flat was all-electric and she had to pay by card meter at a rate of £6 per week. She was not receiving free milk because since April free milk tokens can be awarded only to claimants on income support. From her allowance she was supposed to find £3 towards her rates 752 and water rates. She could not obtain a YTS placement because she was within 11 weeks of her confinement. The Secretary of State was asked to use his discretion to top up her £15 a week allowance to the income support level, but he refused on the grounds that she was not experiencing "severe hardship".
That woman was well over halfway through her pregnancy, which is a time when most women would be experiencing extreme tiredness. She had a difficult pregnancy. For the sake of both her and the unborn child, she should have been eating a healthy diet rich in tissue-building proteins and containing a proper balance of vitamins and minerals. Such food is costly. The Secretary of State made his decision not to top up her allowance and it was a judgment against which there was no appeal.
Those are not isolated incidents. They are part of a pattern of exclusions which begins by excluding people from the unemployment figures. It excludes people from the opportunity of earning a livelihood, from decent housing and from having hope.
There is the case of a young woman who was unable to live with her parents. Her situation was so desperate that she was admitted to a hostel run by the Coventry young homeless project. Because she was in receipt of a bridging allowance awaiting a YTS placement, she was not entitled to assistance in paying the cost of her accommodation. She is awaiting a decision by the Secretary of State to see whether hers is a case of severe hardship.
There is the case of a woman, estranged from her parents and living alone for over a year, who has not managed, despite considerable efforts, to obtain a YTS placement, and her bridging allowance has now expired. Consider the case of a young woman whose parents are in receipt of income support. They have thrown her out of the house saying that they cannot afford to keep her. She too is awaiting the Secretary of State's decision.
The problem is obvious. It is obvious to television journalists from watchdog organisations who have interviewed a young woman who left home and was forced to beg on the streets and whose own father had advised her to "go on the game". Does the Secretary of State believe that that young woman left home prematurely?
The problem is obvious to foreign observers and to the royal family. Prince Edward was forced to comment on precisely this aspect of the Government's legislation. He pointed out that young people such as I have described were a prey to pimps and pushers and he said that legislation was depriving charities which had been set up to aid the homeless of the ability to provide temporary homes. In other words, they were being deprived of funds because of the small print.
If one is on income support or YTS allowance, one is entitled to an allowance of up to £70 a week to cover a hostel charge. But if one is not on such benefit—if one is in receipt of a bridging allowance—one is a sort of non-person; the Secretary of State does no recognise such a person. The problems are apparent to everyone, but are ignored by the Government, who hide their penny-pinching behind a smokescreen of sanctimonious rhetoric. There is now a Government tradition that every Minister responsible for social security camouflages the sweeping savagery of benefit changes. Frozen payments and cuts are concealed behind a multitude of conditions, qualifications 753 and subsections in the intricate, convoluted, crooked path that each Minister pursues in bringing about changes which completely disregard the suffering that they involve.
I recently attended a dance organised by the transport union in my locality. A young disabled woman was dancing, enjoying herself as much as any other dancer. She was able to join in and have fun only because she had been provided with a chair which cost £3,000. That chair had not been provided by the Government. They prefer to give the equivalent of 52 chairs a week to Sir Ralph Halpern of Burton as a tax handout. That reflects the priorities of this Government.
§ Mr. Simon Burns (Chelmsford)
We must not forget as we discuss this new Bill that the Government are spending a record amount, over £50 billion, on providing financial support and aid to the less well-off, the sick and the disabled. The constant carping and humbug from Opposition Members should be seen in that context. Social security has become a contentious issue in the last two years, but I must remind Members in all parts of the House that no one political party has a monopoly on compassion or caring. We are all concerned and wish to alleviate hardship among the poor, the sick and the disabled.
Where we differ from Opposition Members is that we believe that policies can he implemented to bring maximum help to those in the greatest need. I would point out as delicately as I can—so as not to cause synthetic howls of rage from Labour Members—that any discussion about how to apportion the record amounts of money now available for social security would be academic but for the fact that the Chancellor's economic policies have ensured the creation of wealth and the generation of tax revenue in such a way that public spending on social security has increased year by year in real terms.
On a less contentious note, I congratulate the Secretary of State on honouring the pledge he gave last November to raise the upper age limit for mobility allowance from 75 to 80. I am sure that that will be warmly welcomed by all, particularly as it is a benefit paid on top of other income and is non-taxable.
I shall concentrate my remarks on probably the most important part of the Bill—clauses 7, 9 and 10—which deals with the "actively seeking work" requirement for receiving unemployment benefit and disqualification for refusing employment. These clauses are long overdue, for it is ludicrous that taxpayers' money should be spent to support those who wilfully refuse employment. Why should an able-bodied person who makes no effort to find work draw unemployment benefit simply by signing on once a fortnight? That is clearly nonsense and I welcome the fact that, when the Bill becomes law, an unemployment benefit claimant will be required to show that he or she is actively seeking work.
I am also glad that the Bill will provide regulations setting out examples of what steps a claimant may take to show that he or she is seeking work. I predict that, as a result of this legislation, the unemployment figures will decrease further and will to a degree melt away like snow in summer because a cynical minority—and I accept that it is only a small minority—will no longer be able to exploit the existing rules.
I strongly recommend those who disbelieve that last statement to read the London labour market report which 754 was published last year and to which other hon. Members have referred. It graphically proves my point. While the situation in London is not exactly the same as that in other parts of the country, we must remember that the majority of the population of England lives in the south-east.
The report graphically shows thatthere is a wide range of vacancies which could be filled by many of those who are unemployed. Many of the unemployed have educational and training qualifications and a surprisingly large minority have high level qualifications. At the same time, many of the vacancies do not require special qualifications or experience and could be filled by unemployed people witout established skills.The final summary of the main findings of the report states unequivocally that unemployed people need to look more intensively and effectively for work. The findings show that, in the summer of 1988, there were 288,000 claimants in London and 150,000 vacant jobs. The co-existence of high levels of vacancies and unemployment could not be explained primarily in terms of a mismatch between the skills and experience of unemployed people and the type of vacancies available.
One quarter of the vacancies were for managerial and professional jobs; one quarter were for clerical jobs; 17 per cent. were for skilled or semi-skilled manual work; 18 per cent. were for retail and catering jobs and 14 per cent. were for unskilled manual work. At least one third required no previous knowledge or experience.
The report shows that many longer-term unemployed people in London are, in any case, well equipped to fill jobs which require experience or qualifications. Nearly 10 per cent. of those interviewed had previously held a managerial or professional job and 25 per cent. had held a skilled or semi-skilled manual job. Nearly 10 per cent. had a degree and over 50 per cent. had some sort of academic or vocational qualification.
It is significant, as the Secretary of State said, that 27 per cent. of the unemployed people interviewed had not looked for work in the previous week and that 45 per cent. of the group had not looked for work in the preceding three weeks. Nearly 5 per cent. of those interviewed had never looked for work since becoming unemployed. While four out of five people looking for work claimed to look at advertisements in newspapers at least once a week, only 55 per cent. of them visited their local jobcentres at least once a week.
Those figures show that many claimants, cushioned by an over-generous state, show a lack of intensity and effort in actively seeking work. First, it should be pointed out that some longer-term unemployed people are liable to lose touch with the labour market. That results in a lower level of motivation and therefore a limited job search.
Secondly, some unemployed people have become reconciled to being out of work and pursue or develop interests which enable them to use their time productively through leisure activities, voluntary work or study and thus dull their desire or willingness to seek work actively.
§ Mr. Burns
I hope the hon. Gentleman will forgive me, but I am very short of time.
Thirdly, there is the category of those who are claiming benefit but are also working. I am convinced that the black economy is a factor in determining the lack of job search by some claimants. There is no point in burying one's head in the sand and pretending that that problem does not 755 exist. Hon. Members do not have to simply take my word for it. The Departments of Employment and Social Security are equally convinced that there is a problem. That is why the Government have cracked down on dole fiddlers by markedly increasing the number of investigators. As a result of their work last year a record £65 million was saved for the taxpayers, 90,000 people withdrew their claim to benefit and 4,000 were prosecuted.
Part of the Bill attacks the very heart of state-subsidised indolence for a small minority. It will provide a powerful incentive for people to seek work and release valuable financial resources that can then be properly targeted on the genuinely needy, the sick and the disabled. For those reasons, I strongly support the Bill and look forward to the day when it receives Royal Assent.
§ Rev. Martin Smyth (Belfast, South)
During the speech of the hon. Member for Dartford (Mr. Dunn) there was a little discussion about literacy. However, he also displayed a problematic control of numeracy. He said that not many Opposition Members were present and that showed a lack of interest. At that time, there were 21 hon. Members on the Government Benches and 16 hon. Members on the Opposition Benches. I consider that that reflects the composition of the House.
I do not believe that the non-attendance of hon. Members in any way reflects a lack of interest in the Bill. As has been said, it affects us all in one way or another and we are concerned about it. Therefore, I am pleased to have been called to speak, despite the fact that the legislation generally does not apply to Northern Ireland. That means that there will be an Order in Council when we may be allowed to talk for an hour or so but will be unable to affect or change the legislation that will come before us on that occasion.
The Bill affects Northern Ireland. I do not doubt that in every community there are those who are workshy. But a young constituent of mine came to London and had employment in London. Then, because the landlord of the house in which he was living wanted to claim grants to upgrade the premises, he was put out and could not find alternative accommodation. Ultimately, he had to leave his job here and return to the unemployment register in Northern Ireland. Another constituent has been unemployed for three years. He has taken Government training courses, and on each occasion he has discovered that that affects his income support grant and he loses out by going on Government training courses to equip him for the job market.
Does the motivation behind Government thinking stem from the reply I received some months ago saying that the largest number of long-term unemployed is found in the south-east? Has the judgment of issues there, for whatever reason, been translated into an overall countrywide and national approach that will have an adverse affect on many people in regions where it is not possible to find work?
I wish to take up a point made by the hon. Member for Chelmsford (Mr. Burns). He mentioned those who had developed side issues or other interests. I understand what he meant when he said that they may not be looking for jobs with more remuneration, but we are living in an age when there will not be full employment, and there is a 756 tremendous need for people to use their spare time in a voluntary capacity to serve the community. We should not in any way discourage such work.
I welcome the Bill's proposals and I have tried to figure out how they might apply to Northern Ireland. The argument is that people are not looking for work. However, under impending legislation for Northern Ireland, a person is not allowed to go knocking at firms' doors and employers are not allowed to employ people who look for work in that way. They must advertise and carry out selection procedures. People are discouraged from looking for work in that way.
This morning, before leaving home I heard a short excerpt from a programme on BBC Northern Ireland. A local expert on social security was asked about the problem of take-up of income support and other grants. She said that she understood that the form in Northern Ireland is simpler than the form in Great Britain, but that nonetheless it was the first hurdle that applicants had to get over before receiving benefit. The Disability Income Group put that forward as one reason why there is not greater take-up of mobility allowance. One of the Government's obligations in the Bill is to simplify forms and procedures so that the people on whom they wish to target benefit genuinely receive it.
I have no objection to encouraging anyone who is workshy to seek work. In the depression in the 1930s, my father worked as a labourer on the railways for more than a year before he could get back to his own trade. I am not minimising the need to encourage some folk to seek work. Nonetheless, some people have been unemployed for many years for reasons beyond their control and we have to acknowledge that, even with massive retraining, some of them will never be equipped to do the work that they are mentally and physically capable of doing. They may have gone soft, they may not be capable of intellectual pursuits, they may be better suited to physical pursuits, or appropriate work may not be available to them.
In the time that remains, I should like to put on record, the fact that I welcome the extension of the mobility allowance. However, I draw the Government's attention to the lack of take-up and urge them positively to encourage it. I wonder whether the Government accept the criticisms of the campaign for equal state pension ages that they have ducked the issue again. I press upon them the encouragement of their own Back Benchers, who urged them to consider it. There are professions in which a man retiring at 60 will have a life expectancy of anything up to 15 years, but if he continues until 65 he will have a life expectancy in retirement of two years. In dealing with equal rights, we have to balance those issues.
Finally, I raise the issue of the lack of information. I understand from the recently published audit report on the DHSS in Northern Ireland that regional management information offices were created which seemed to create a fair amount of employment for that part of the Civil Service. However, since 1985 they have not come up with any dramatic figures, other than the escalating cost of keeping their people in jobs.
I am puzzled about whether we are tackling the problem from the right angle, but I am also puzzled about whether the Government have the statistics to guide them. I regret to say that, in September 1988, I received a letter from the Secretary of State for Northern Ireland which stated: 757As your second question about publication of low income statistics has implications for Great Britain, we have had to consult with the Department of Social Security before responding on the Northern Ireland dimension. I shall write to you again about this as soon as possible.It is now 10 January 1989, and even allowing for the Christmas break, it seems that there is a problem of communication as well as one relating to the statistics that would guide us to deal with the real problems that affect our people.
Accordingly, while welcoming some of the Bill, since we are excluded in principle, my colleagues will vote against it tonight.
§ Mr. Peter Thurnham (Bolton, North-East)
I am glad to follow the hon. Member for Belfast, South (Rev. Martin Smyth). We are all pleased that unemployment in Northern Ireland is decreasing, although it is still high. I believe that it is now below that in Eire, but it is twice as high as the percentage in Great Britain and must cost United Kingdom taxpayers many hundreds of millions of pounds because of the high level of benefits and the lower level of the operation of the economy there. I hope, and am quite sure, that the Government's measures will continue to work in the right direction in improving the economy of Northern Ireland.
I very much welcome the Bill. There have been some excellent speeches from Conservative Members but, I regret, some confused speeches and interventions from the Opposition. We have heard some extraordinary statements. The hon. Member for Birmingham, Ladywood (Ms. Short) tried to make out that the Government were promoting low wages, at a time when real take-home earnings are rising at a record rate. How can one make such a totally inconsistent statement—that the Government are promoting low wages when wages are far higher than they were when the Labour party was in government?
§ Mr. Thurnham
In a moment.
The hon. Member for Islington, North (Mr. Corbyn) said that the Bill punishes people. When the Labour party was in power, there were far more prosecutions for malingering. If we go back several years—one has to go back a long time to find a time when the Labour party was in power—prosecutions for malingering were running at over 20,000 per year. That was in the early 1970s and the figure had been 28,000 per year previously. The small handful of prosecutions now shows that this Government are not punishing people in the way that the Labour Government did.
§ Mr. Thurnham
Yes, I shall give way in a moment.
We have also heard that no work is available. I must draw the attention of Opposition Members to the great successes that job clubs are achieving. They are having a positive outcome for two thirds of the people who go to them. There are now over 200 job clubs in the north-west, and I am glad to say that six are in Bolton. Over half the 758 people who go to job clubs come out with a job. Therefore, I do not see how Opposition Members can say that no jobs are available.
§ Ms. Short
I should like to respond briefly to the hon. Gentleman's insult. He has obviously not desegregated the figures on the growth in wage levels. If he did so, he would see that, for the bottom 20 per cent., the growth is below average and, relatively, those people have been getting significantly worse off for a number of years. I invite the hon. Gentleman to look at the figures in detail.
§ Mr. Thurnham
There is no doubt that the greatest cause of poverty is unemployment. Only the Opposition could want unemployment rather than people getting into jobs and on to the earnings ladder so that they have a chance to increase their earnings. It is this Government who have created 1 million extra jobs.
Although the Bill is concerned mainly with unemployment benefits, it relates also to benefits for other groups. In his excellent speech, my hon. Friend the Member for Wokingham (Mr. Redwood) touched on the question of widows' benefits. I should like to remind my right hon. Friend the Secretary of State that I went to see my hon. Friend the Minister for Social Security about two widows in my constituency who I feel have been harshly affected. I believe that about 1,000 widows in the country as a whole have been harshly affected by the changes made last April to the conditions of widows who were just under the age of 45 and who had children who were just coming up to 18.
If my right hon. Friend the Chancellor finds that he has a small amount of money to give away in the forthcoming Budget, perhaps he could do something for that small number of widows who have been harshly affected and who, if they were to remain unmarried for the rest of their lives, would lose over £10,000. Although their chances of remarrying are significant, at a modest cost my right hon. Friend could do something to ameliorate the harshness of the circumstances in which that small number of widows have found themselves.
We also have the opportunity to review the working of the mobility allowance. My right hon. Friend the Secretary of State said that these changes are an interim measure. I shall be interested to know what he has in mind for beyond them. I have had to campaign strongly for a small number of mobility allowance cases in my constituency. The great point about the mobility allowance is that, once it has been granted, it should not be taken away except with the greatest possible thought. I am pleased that we have been able to extend it for those aged 75 to 80, although I wonder why we cannot extend it for life. This measure only puts off the problem for another five years because such people will have the allowance removed when they reach the age of 80.
The allowance affects only a small number of people at the moment, but it is reckoned that, by the end of the century, the 500 who receive the benefit now will rise to about 60,000. Obviously, the Government must do some thinking about the mobility allowance. We should consider whether we can replace it with a different sort of benefit altogether so as to help people to get out and about who otherwise would not be able to do so. The latest figures from the Office of Population Censuses and Surveys show—at least as I read them—the number of people who receive various benefits combined. I do not 759 know, for example, how many people who receive mobility allowance also receive attendance allowance. We should look at the workings of the whole scheme.
The Government have an excellent record on the payment of benefits to disabled people. Mobility allowance alone has risen in cash terms from £79 million in 1979 to £650 million this year. In real terms, that is an increase of 400 per cent. The figures for other benefits that are paid to disabled people show similarly large increases. The total figures are well worth looking at. The figures given to me by the Library show that, for this year, benefits for disabled people total £7.5 billion—a rise in cash terms from not much more than £2 billion in 1979. That shows the most enormous increase in payments to disabled people by this Government and shows which side of the House is helping disabled people, by creating an economy that can afford to make such payments.
The Bill relates primarily to the unemployed and to those who are seeking work. It is worth reminding ourselves that, in Japan, the definition of an unemployed person is somebody who has looked for work in the past week. Unemployment in Japan is currently only 2.5 per cent. and has decreased from a level of 3 per cent. two years ago when I was a member of the Select Committee on Employment and we visited Japan. Therefore, despite a strong currency, the unemployment rate there has dropped.
An interesting study was carried out by Professor Layard some years ago, although I do not agree with all his views. He looked at the effects of separating benefit offices and jobcentres and showed how, in the old days of labour exchanges, somebody who had been visiting regularly was selected and given priority when a job was going and was told to take the job and not to go back. Those were the days when there were prosecutions for malingering if people did not take a job. We should bear in mind exactly how the system used to work when looking at the changes that we are now bringing in.
I welcome the Bill and look forward to its implementation. I am sure that it will be considered carefully in Committee, including the question of how the "actively seeking work" test will be applied to disabled people. I am sure that the Bill will be of great benefit to all when it reaches the statute book.
§ Mr. John McAllion (Dundee, East)
The hon. Member for Bolton, North-East (Mr. Thurnham) appeared to suggest that low pay did not exist or, if it did exist, it was not a problem, because it was merely at the bottom rung of the ladder of earnings. I believe that his remarks were both ill-informed and insensitive and they show the extent to which any understanding of the problems of the poor does not exist in the minds of Conservative Members. That is the real reason for debating such a niggardly, disgraceful proposal as the one which is the centrepiece of the Bill. I refer, of course, to clauses 7, 9 and 10, which are recognised, even by Conservative Members, as the most important part of the Bill. We are told that those clauses are meant to tighten up the criteria for assessing whether a claimant's unemployment is genuinely involuntary.
I admit that I find it difficult to take seriously the phraseunemployment which is genuinely involuntary",760 because it suggests to me that there is such a thing as mass unemployment that is genuinely voluntary, which is what the Minister appeared to suggest when he opened the debate. He referred to as many as 360,000 people who choose to be unemployed. In fact, he was quite pleased when he told the House that there were as many as 360,000 people who choose to be unemployed. No doubt he will be equally pleased to say that the 2.9 million who are unemployed merely represent three times as many people as chose to be unemployed under Labour. That is a vindication of the Government's commitment to extend choice throughout the United Kingdom.
The idea that hundreds of thousands of people volunteer to subsist on £32.75 a week unemployment benefit, or £33.40 a week income support, is, of course, completely mad. There would not be many hon. Members who would volunteer to live on £32.75 a week. Indeed, after the salary increases awarded to hon. Members, we now earn the princely sum of £66 a day—£462 a week. Even those princely sums are not enough 0for some Conservative Members. They become part-time Members of Parliament, who sell themselves in the City of London as consultants or directors, and some earn as much as £100,000 a year outwith their parliamentary duties. One hundred thousand pounds is not enough for them, but £32.75 a week is too much for 360,000 unemployed people.
I find it deeply dishonest, even morally objectionable, that we should have a spectacle here tonight of wealthy men—they are mostly wealthy men—sitting in moral judgment on whether the poor people deserve the paltry sums which are given to them by the State on which to subsist from week to week. If nothing else, I hope that personal embarrassment will prevent many Conservative Members going through the Lobby tonight in support of this disgraceful Bill. However, I fear that personal embarrassment will not come into it and that hundreds of them will troop through the Lobby in support of a proposal that denies £32.75 a week to thousands of poor people—the very sum that such hon. Members would spend on a meal out with their wives or husbands.
The regulations are meant to test whether claimants are actively seeking work. The offence to refuse suitable employment without due cause no longer exists, but from now on just to refuse any employment without just cause is reason enough to stop someone's benefit. It appears to be an extension of the treatment which has been meted out to 16 and 17-year-olds by making the youth training scheme compulsory.
The Minister of State, Department of Employment wrote to me recently saying that YTS was not compulsory and that in fact youngsters have a choice—they can either take it or leave it. Of course, if they leave it, they will be denied any benefit or income whatsoever. What the Minister failed to understand is that, unlike him and his family, thousands of youngsters belong to families who do not know what it is to be comfortably well off and who need every single penny in their household budgets if they are to survive. If any Minister threatens to remove a youngster's £19.40 a week benefit, or his £25 a week YTS allowance, effectively he is removing choice from that family altogether.
In the same way as the YTS has become compulsory, by this Bill low-paid employment will too. If we take away £30-odd from people who are living in poverty, we remove 761 all choice from them, because they must accept whatever job is on offer for fear of losing their benefits. I believe that that is the real reason for the proposal.
Far from tackling the dependency culture or encouraging the enterprise culture, which we hear so much about from Conservative Members, the proposal will worsen the desperate situation of low-paid employment in the United Kingdom. The Government cannot expect any other commentary upon them other than that they are colluding with unscrupulous employers to worsen the critical problem of low pay throughout the economy, which of course, especially affects Scotland.
We have heard already a reference to an analysis of the London labour market. I shall draw the House's attention to another report which was issued recently by the Low Pay Unit and the Union of Shop, Distributive and Allied Workers, entitled "Sweatshop Scotland". The report presents disturbing evidence of a decline in the pay and conditions of many of Scotland's poorest workers. It also exposes the practices of certain unscrupulous employers, who are paying illegal wages. It shows that the Wages Act 1986 in Scotland has caused the wages and conditions of many Scottish workers to fall, without any corresponding increase in employment in the sectors affected. That is in spite of the fact that the Government pushed that Act through on the argument that, if wages came down and conditions worsen, employment would increase in those sectors. It shows, too, that, while these employers continue to pay illegal wage rates, the Government continue to turn a blind eye to their activities. There have been virtually no prosecutions of such employers.
I shall refer quickly to three examples of conditions of employment in Scotland. The first is a video shop in Clydeside, where the manageress, aged 20, is working 66 hours a week for £2 an hour—and not a penny of overtime. Secondly, there is a shop assistant in Argyllshire, aged 19, who works 78 hours a week. She does not receive a pay slip, but her net pay is £47 a week. Thirdly, there is a shoe shop in central Glasgow, where a 16-year-old female is working a 30-hour week for £1.44 an hour, with no paid holidays in her first year. Those are the kind of conditions already existing in Scotland and, once the Bill is passed, those conditions will spread even further.
Such defence as once existed against those conditions are being steadily eroded by the Government through the weakening of the wages councils, and probably their eventual abolition, as well as their failure to prosecute employers who fall foul of wages councils' regulations. The report rightly warns that a new servant class is emerging in Scotland, and the Government must accept their share of the responsibility for creating the conditions in which that has occurred.
The Chancellor recently described as poor those who had to live on half average earnings of £107 a week. How would he describe the woman who is working 78 hours a week for £47? She is taking home less than half the wages of what the Chancellor calls the poor. I suppose that one of the Government's successes has been to add new dimensions to the meaning of poverty in Britain today.
We are told that the three new clauses are expected to reduce expenditure by £100 million in a full year. Of course, that will be achieved by forcing tens of thousands into low-paid employment. What about the black economy—the tax avoiders and evaders, whom experts believe to be worth some 5 per cent. of the United Kingdom's gross domestic product or, in other words, 762 £24,000 million a year? Why do the Government not turn their attention to those instead of the unemployed? Why do they not have special task forces, White Papers and Bills to take on the tax avoiders and evaders instead of taking on the unemployed? Why are the rich not pressurised into paying what is due rather than the poor fiddled out of what is their right? Of course it is par for the course that the Government should choose to pick on the poor and unemployed. The poor have long despaired of any justice at the hands of the Government.
In 1979, unemployment was a terrible experience for anyone, but 10 years on, in 1989, it is much more so because of the direct actions of the Government. Their actions have led to the abolition of earnings-related benefit, the decline in the relative value of unemployment benefit and what it can buy for the claimant, the narrowing of eligibility for benefit whether through the Fowler reviews or the availability for work tests, and the Bill we are discussing.
The unemployed have become the Cinderellas of the welfare state. Their position has deteriorated dramatically without any of the outbursts of public indignation that have accompanied attacks on the Health Service or child benefits. One of the speakers at the annual conference of the Child Poverty Action Group, Professor Julian Le Grand, commented on why that should be so. He believes that the primary factor is the role of the middle class. He argued that the middle class had a substantial interest in various key areas of the welfare state—both as users arid as employers. The middle class could and would be mobilised in defence of those key areas, but unemployment is not one of them. In the main, unemployment affects the working class and the poorer members of our society. That is precisely why the Government have been at their most oppressive, unjust and vindictive in their attacks on the unemployed.
No doubt the Government have made the calculation that the unemployed can be safely discounted because the electoral arithmetic is such that they can be elected without the support of most unemployed people and even without seeking to concern themselves with giving them justice. It must be said that, so far, they have been proved right. But they are right only in so far as they enjoy minority support among the electors. Between 57 and 58 per cent. of United Kingdom voters and 76 per cent. of Scottish voters have rejected the Government's class-ridden policies and their ongoing war against the unemployed.
The Prime Minister and the Government have been able to sustain themselves in office simply because of the divided nature of the majority Opposition. The Government cannot count on that state of division continuing indefinitely, nor can they count on their supporters continuing to turn a blind eye to the attacks that the Government are making on the poor and the unemployed of our country.
The poor cannot look to the Government for justice, but they can look towards the majority of the people uniting together at the next general election to deliver justice to them by removing the Government from office.
§ Mr. Deputy Speaker (Mr. Harold Walker)
Order. I know that Mr. Speaker imposed the 10-minute limit on speeches between 7 and 9 o'clock, but looking at the number of hon. Members seeking to catch my eye, it might 763 be sensible to take a more relaxed view, although, of course, that must not be interpreted as an invitation to make lengthy speeches.
§ Mr. Michael Jack (Fylde)
Thank you, Mr. Deputy Speaker, for calling me to speak under the more relaxed conditions. It gives me an opportunity to reply to the hon. Member for Dundee, East (Mr. McAllion). I do not believe that there are Conservative Members who knowingly wish to disadvantage those who genuinely need help for any good reason. Let us consider the Government's record since they took power in 1979. They appreciated the structural problems that existed within the economy and the problems connected with employment training. They have steadily worked to put those matters right so that the problem of unemployment can be properly addressed.
When one considers social security one is inevitably struck by the fact that it is complex and requires practical treatment. The Bill addresses the complexities as well as the practicalities. My hon. Friend the Minister for Social Security should note, however, that I have spoken to people who work in social security offices and in job-centres, and they have made a strong plea that they should be heard. In many cases they have to make policies, such as those outlined in the Bill, operationally sound. Before we finally commit the Bill to the statute book, I hope that Ministers will find time to talk to the front-line troops about the operational aspects of the Bill. They must make certain that it can be operated with the compassion that all sides of the House would welcome.
Clause 2 deals with the ending of the Treasury supplement to the national insurance fund. I am delighted that the success of the economy, the buoyancy of incomes, and the growth of earnings have allowed the national insurance fund to yield an income above that which requires further support from the Treasury. If nothing else, it provides the opportunity for the Treasury to listen to the appeals of Social Security Ministers for additional funding to help work in other areas.
I am aware that, as we approach the end of the century, the demographic table suggests that the number of national insurance payers will decline. At present, there are 2.3 national insurance payers per claimant, but by the turn of the century, that figure will have declined to about 1.8 payers per claimant. I hope that the Bill will not be a hostage to fortune and that the national insurance fund will not run out of money.
I believe that the clauses that deal with the test for work introduce a dynamic into the efforts that people must make to find employment. It is not an occasional test, but a continuing test of the efforts that people make to seek work. Now I find it easier to support further developments of the test for work because of the other efforts that have been made to assist people back into work. Only last week I visited a number of people who had taken advantage of the Government's employment training scheme. I was struck not only by the quality of the training, but by the fact that some of the people on those schemes had been out of work for a considerable time. They had voluntarily agreed to go on the training course because they appreciated that it could lead them back into work.
764 Sad to say, those people who work in the various social security offices are aware of certain claimants who persistently find ways of avoiding the various tests and their implication—the eventual removal of their unemployment benefit. Many people in those offices feel a deep sense of frustration when they see genuinely able-bodied people who, for whatever reason, have chosen to ignore work and remain in receipt of benefit. The clauses answer a genuine plea from the public that the system be tightened up.
All too often it is forgotten that the taxpayer funds the system. Of the money spent by the Government, £1 out of every £3 goes towards social security. There is plenty of folklore, some with a factual basis, that suggests that there are people who have found a way around the system. The provisions of the Bill will tackle those people.
Much has been said about the black economy. That demonstrates that there are people willing to work, but not legitimately. Taxpayers who have accepted lower-paid work feel sore about people, for example those in the building trade, who do jobs on the side and pay no tax or national insurance contributions. The improvement in some of the tests of benefit will tackle that problem and will take a thorn out of the side of many working people who presently pay for the luxuries that a group, albeit a small one, enjoy.
Much effort has been put into employment training. there are posters around London at the moment advertising companies such as IBM, Sainsbury and Wimpey who make it clear that where there are no people for the jobs they will provide the right training.
The Bill introduces an element of activity into the tests to be given to those seeking unemployment benefit. I am glad that that dynamism has been introduced. Recently I spoke to a lady who was a restart counsellor. She was frustrated that she had little sanction other than bringing people back continually for further interviews when determining whether they were genuinely seeking work. I believe that clauses 7, 9 and 10 will properly address that frustration.
Clause 13 deals with transitional payments and obviously I am delighted that we are giving legal sanction to those payments, but I have to say that one of the sadnesses about the Bill is the fact that Ministers have not perhaps taken every opportunity to learn some of the lessons of the review of the 1986 Act. I felt that the Minister for Social Security gave the House a genuine reassurance that the effects of the 1986 Act would be closely monitored, but I do not want at this stage to detain the House with a series of examples about individual problems, save to say that I have come across some very difficult cases where I am certain that the transitional payment scheme was never designed to deprive people of help. Certain technicalities have come to light in the operation of these recently introduced measures and I pray that Ministers may just think it fit to use the opportunity of this Bill to address those matters.
Clause 15 is very interesting because it deals with the computerisation of the social security system, and I very much welcome that, because it begins to address some of the criticisms we have heard from the Opposition about the take-up of benefits. The one thing that the existing computerised systems of income support will do is to ensure that people get the benefit to which they are entitled, and the fact that clause 15 enables payments and 765 upratings to be made on computerised systems, without the need of intervention by senior civil servants in benefit offices, is to be welcomed.
But there's the rub, because inevitably computers require fewer people, and clearly some particularly well-qualified people in benefit offices are already thinking about their future in the service. It is also clear that to recruit good quality people into the social security system is becoming increasingly difficult, and while I support the technical nature of clause 15, I urge Ministers to examine the implications for personnel in the service.
Local authorities, anxious to find qualified people to implement the terms of the community charge, are already looking closely at the availability of people in social security offices who are doubting their future in the system. Many of these higher qualified staff understand the complexity of the system that we are seeking to amend, and I hope that in implementing clause 15 we will not allow good people to leave the service.
Clause 19 deals with pensions and equalising the opportunities for men and women. I warmly welcome the clause. I think that it follows up a theme that my right hon. Friend the Chancellor of the Exchequer showed in his Budget. He recognised the growing importance of the work that women do and gave them the promise of a separate tax status. Now the social security legislation is again recognising that there should be an equal opportunity for women in respect of their pensions. I worked for a company that, unfortunately, did not have that equal opportunity for pensions.
There is one element about which I am not entirely clear. It is right to equalise opportunities, but some young girls starting work quite relish the fact that their wage, which may be low initially, does not have a subtraction from it for a company pension scheme, because it may be their intention to work for a short time and then, after marriage, to leave work altogether. For them cash flow is one of the most important things, and I hope that, in framing the regulations that will enable the equalisation to take place, the Minister for Social Security will bear that point in mind.
Certainly, for women who are looking forward to a long period of work, pensions equalisation is a vital provision which I am sure we would fully support. But I am quite certain that its passage through the House will also occasion debate about the bigger and more difficult problem about the equalisation of retirement age for the sexes.
Finally, the Bill addresses some minor provisions affecting war pensions, and in particular war pension committees. I cannot let the opportunity pass without saying that it is perhaps sad that the Bill does not address the wider subject of the pensions paid to those who have formerly served in the armed forces. I know that Ministers are aware from much lobbying and many speeches at political conferences how strongly many people feel about this subject, and I take this opportunity to press them again to keep under review, as I know they are doing with their colleagues both in their Department and in the Ministry of Defence, the whole question of officers who retired before 1973 and the pension that their widows get, compared with the more generous treatment given to those who were widowed after 1973.
Hon. Members on both sides of the House have drawn attention to the fact that there is much in the Bill to 766 commend. It is a measure which should command widespread support, and certainly I know that clauses 7, 9 and 10 will be warmly welcomed by the general public.
§ Mr. John Battle (Leeds, West)
I think it is noted by many commentators now that this is a Government run on the basis of image and presentation. The Department of Social Security recently put out a new logo in the shape of what seemed to be a smiling mouth, which for many people in receipt of social security benefits is proving to be the empty grin of a Cheshire cat. If image and presentation are the key—they depend upon a keen sense of the instant present that the media insists we acknowledge—if one is addicted to image and presentation, memory becomes repressed and history is suppressed.
I was amazed to hear the hon. Member for Dartford (Mr. Dunn) make a plea for to be the first of a number of radical reforms. He has been in this House much longer than I have—I think throughout the whole of this Government's term of office. I am surprised that he has not noticed what has actually been going on in social security and, because of his remark, I would like to focus my comments on the background and intentions behind the Bill impression given by the Tory Members tonight is that there has been no major legislation in this area for years. I would like to ask them this: what about the great Fowler review, the "back to Beveridge" approach that this Government set in train in the last Parliament? What about the reform of social security documents published and set in motion in June 1985?
The Secretary of State stated plainly that the Bill embodies the Government's vision of the social security system. I absolutely agree. It is all of a piece I argue that it is not a question of tidying up, not just a piecemeal Bill that is catching one part of the legislation that seems to have fallen behind; it is all of a piece with the Government's approach to the economy and to social security which—add, includes the establishment of a low-wage sector within the British economy.
The Bill tries to drive those who are currently unemployed into that low-wage sector to keep it going. In the Green Paper "The Reform of Social Security" published in June 1985, there was an interesting emphasis:Most people not only can but wish to make sensible provision for themselves . State provision . should not discourage self-reliance or stand in the way of individual provision and responsibility . While it is one of the functions of the social security system to help those who are unemployed, it is self-defeating if it creates barriers to the creation of jobs, to job mobility or to people rejoining the labour force. Clearly such obstacles exist if people believe themselves better off out of work than in work; or if employers regard the burden of national insurance as a substantial discouragement to providing jobs . If we wish to encourage individuals to provide for themselves, then the social security system—public and private—must not stand in the way.
The Bill continues this Government's effective repeal of the social security system. The principle is to ensure that the social security system is out of the way so that the conditions outlined in the Green Paper of June 1985 can be established. There have been three Social Security Bill while I have been a Member of Parliament. This is yet another Bill to get the social security system out of the way.
The Green Paper on the reform of social security 767 concluded blandlyThe proposals will make it more worthwhile for individuals to work and to save.This may not be the right debate in which to comment on people's savings, which are remarkably low. Such a comment may be more appropriate to a debate that is to take place later this week. However, the Government are now insisting on driving people into temporary, part-time and low-paid work. The Bill provides an instrument for
The Green Paper of June 1985 contained only a brief reference to the unemployed in the proposals to review the social security system. They were passed over almost in silence, despite the pleading of many groups on their behalf. I recall that my hon. Friends pleaded for assistance to be given to the long-term unemployed and their families. They got a scant response from the Government. We are entitled to ask the Minister to explain why the change in the work test was not presented as part of the Fowler reviews. Why was it kept in the background, to be slipped in piecemeal as the full proposals in the Fowler reviews are exposed year after year? I find it hard to believe the statement in the Green Paper:The Government's proposals are not based on a grand design for a new state system".I believe that they are based on such a grand design.
Just before the publication of the Green Paper, in June 1985, two other Government documents were published in March by the Department of Employment. The first was a Government report entitled "Burdens on Business". It set out the terms for reducing the burden of Government regulations; PAYE, national insurance contributions, VAT, employment law, the health and safety regulations and the planning and trading standards were all to be repealed. The terms of reference of the report were:What are the areas in which reductions in compliance costs would make the biggest difference? What are the main obstacles to securing a substantial reduction in their costs? What areas of regulation should be amended?Its proposals includedabolishing or drastically relaxing Wages Councils control over young peoples' wages which price some of them out of their jobs.
In the same month, March 1985, the Department of Employment also published a booklet entitled "The Challenge for the Nation." It was even more explicit than "Burdens on Business" and contained proposals headed "Helping the Jobs Market." It proclaimed:The Government has acted to ease wage rigidities . More realistic levels of youth pay have been encouraged by the young workers scheme and the training allowance of the YTS.I remind the House that the young workers scheme gave employers £15 a week for every young person they were prepared to take on at a gross wage that averaged £50 a week or less. "The Challenge to the Nation" emphasised throughout that the biggest single cause of high unemployment is the failure of the job market. By that it meant that the labour market was the weak link. What this Government mean is made absolutely explicit in the introduction to that document:Improving the work of the labour market is particularly important. Jobs will be created to the extent that people are prepared to work at wages that employers can afford.No reference was made to what workers and their families can afford to live on, if they are given those wages. The question was simply whether they could be channelled into the low-wage economy.
§ Mr. Battle
I shall respond later in detail to the hon. Gentleman's question. Under this Government, the people on low pay now number 9.4 million—40 per cent. of the work force, a figure that is unprecedented in recent British history. They are on wages well below what is referred to in Europe as "the decency threshhold."
Since the Fowler review there have already been two Acts dealing with social security. It was claimed during the last Session that the whole system ought to be revamped. We shall soon have further legislation to abolish the wages councils. There have already been numerous attempts, by changes in the method of calculation, to reduce the number of unemployed people in Britain to a statistical fiction.
This Bill proposes to open up the labour market. It encourages people to take upthe growing number of jobs on offer",as the Government's own press release put it in December of last year. They propose to do that by reducing the protection for the unemployed, by proposing that the level of remuneration will not be "a good cause" for claimants refusing a job and by insisting that they demonstrate, somehow, "in conversation" that they are actively seeking work. The Government will penalise those who do not accept part-time, temporary and low-paid jobs.
The key shift in our economy is not simply between the employed and the unemployed. It is between those in relatively secure, reasonably—if not well—paidwork with prospects and those who are condemned to the part-time, temporary, low-wage economy.
I am reminded by the intervention of the hon. Member for Fylde (Mr. Jack) that many people in Britain live on a wage that is well below £132 a week, or £3.50 an hour. I invite Conservative Members to say whether they would be prepared to negotiate their benefits away for wages of less than £2 an hour, which is the rate at which many jobs in my constituency are now advertised. That hidden economic division is the basis of the assumptions that are made in the Bill. It is the basis of the assumption that the long-term unemployed have unrealistic wage expectations and that they are facing what the Government describe as "disincentive problems". I submit that to sustain current economic development the Government need actively to promote a two-tier economic structure—those in full-time, relatively well-paid jobs, with good tax reductions, and those in part-time, temporary and low-paid work.
Different standards apply. Those in the top sector get the benefit of tax cuts and more income as an incentive, but those at the bottom will find that even those benefits that they now have will be taken away. That is a classic example of the carrot for the top and the stick for the bottom. That is the reality that faces many of the 9.4 million people in our society who are currently on low pay.
The Government's economic development depends on the development of a part-time, temporary and low-paid sector. The Bill is about forcing the unemployed into that sector. That is what flexibility means when Conservative Members refer to it. There is no talk of a sense of contribution of work by people in our society. There is no talk of their having something to offer and some prospects. It is simply a matter of their being available for a few hours 769 a week, or they will get nothing. They may be accused of pricing themselves out of work, but the Government are intent on pricing the unemployed out of sight altogether.
§ Mrs. Gillian Shephard (Norfolk, South-West)
I am grateful to be called to contribute to this important debate, and I should like to comment on three of the proposals in the Bill.
In the first place, I welcome clause 19, which introduces the principle of equal treatment for men and women in occupational social security schemes. Something good can sometimes come out of Europe, as Labour Members might like to note. It is a useful move towards equal professional opportunities for men and women which will be much welcomed; we hope that it will be developed in other areas and in other legislation.
I should like to give a warm welcome, as Members on both sides have already done, to the extension of mobility allowance from age 75 to 80, which is again in principle of help that reflects the increasing numbers of very elderly people. It is an excellent move, and I am glad that Labour Members have welcomed that and other parts of the Bill.
Clearly, one of the most controversial parts of the Bill is contained in clause 7 and those other clauses that are to be taken with it. They amend existing legislation so that a requirement for entitlement to unemployment benefit is that a person must be "actively seeking" work and must also demonstrate that he is so doing. Hon. Members on both sides of the House have already pointed out that the current position is that claimants are required to be available for work. They should apply for jobs; they should respond to suggestions given by jobcentres; and they are required from time to time to confirm that they are available.
However, the very reason that those clauses are in the Bill is that the law needs enforcing. People working in jobcentres need to be given powers to ensure that it is being carried out. The law also needs this to take account—this is most important and has not been mentioned by Labour Members—of the vastly changed and changing employment situation in much of the country. It should be made clear at the outset that the majority of claimants—again, there is broad agreement here—are genuinely seeking work, but it must also he recognised, as my hon. Friend the Member for Fylde (Mr. Jack) said, that those working in jobcentres know the people who are not genuinely seeking work, who turn down job opportunities for a variety of reasons, sometimes not genuine reasons, and who continue to claim benefit. Some of those people are undoubtedly working in the black economy. It is as absurd to pretend that all abuse the system as to maintain that none do.
Some people have pointed out that the public understanding of the position is that it is not possible to claim benefit if the claimant is not actively seeking to find and take available work. I am not so sure that that is in fact the case, because, certainly in areas such as the one that I represent, where employment opportunities are many, the public are mystified when they see, side by side, unemployment statistics and job vacancies. I accept that there are regional variations and it would be foolish to pretend that they do not exist. They have already been recognised in the opening remarks of my right hon. Friend the Secretary of State who said that regional differences would be taken into account when the regulations were 770 being applied. However, meanwhile, in areas where there are good employment prospects, people feel that the numbers of unfilled vacancies sit oddly next to the statistics of the unemployed.
I should like to quote a specific example drawn from my constituency. A major employer, a food processor, based in one of my market towns, currently employs 600 people. The company wishes to expand its operations and to recruit at least 100 more people. I should point out, mainly because of the point made by Labour Members, particularly by the hon. Member for Leeds, Central (Mr. Fatchett), that the company pays above the average manual wage to the factory. Transport is provided, not from a central point, but from the doors of the people working in the factory. The work is done in shifts, which suits many people, including women. It is pleasant and there are good staff benefits.
In November, according to the statistics, the number of local people unemployed was 1,400; that is about 6.9 per cent. The company therefore undertook a major advertising campaign on local radio, in the local press and through the local jobcentre. As a result of this major campaign, the company received 44 inquiries, rather less than 2 per cent. of the 1,400 people unemployed. Twenty-six people attended for interviews, 20 were offered jobs, 17 started work, four left and two who accepted failed to turn up. The company therefore succeeded in taking 13 out of an alleged 1,400 people in the area, rather less than 1 per cent. One of the leavers commented that it was "harder work than staying at home"; that is undoubtedly true, but we must ask ourselves whether that is a good reason for turning down work.
I must also point out to Labour Members that the comments of the people working in the factory, when they learned of the numbers who attended and the numbers who stuck to the job, bear very little relation to the attitudes that we are assured by Labour Members are held. by many people. Many of the comments were not such that I could repeat them in this House.
§ Mrs. Beckett
That is the second time that the hon. Lady has referred to our remarks about the attitudes that we believe are generally held. Certainly I do not suggest that the attitudes that are generally held are anything other than those that she has described. That is a matter for sadness. It is my understanding and experience that those who have work, particularly people in low-paid work, frequently show little understanding of or interest in the position of those who are less fortunate. I do not for that reason think that those comments are invalid.
I would not in any circumstances suggest that the attitudes expressed by the hon. Lady or the attitudes quoted by the Secretary of State are not generally held. It is a different matter whether they are valid and represent the reality of the situation in most parts of the country in respect of the number of jobs available and the number of people seeking to take them. I feel sure that the hon. Lady is unwittingly misrepresenting what has been said by Labour Members.
§ Mrs. Shephard
I do not wish to misrepresent anything said by Labour Members, but, as mention has been made of the Clapham omnibus and the feelings of those people riding on it, I should point out that considerable resentment is felt by people in work if they perceive that 771 others, who have the opportunity of the same work, prefer to remain at home supported by the taxes of those people who are in work.
§ Dame Elaine Kellett-Bowman (Lancaster)
As they feel so strongly about this, can my hon. Friend inquire from the Opposition Front Bench why only three Labour Back-Bench Members are present to consider this?
§ Mrs. Shephard
I am sure that the House will draw its own conclusions.
My area is fortunate, as we have several companies wishing to expand and a buoyant job market but, as I am sure my hon. Friend the Minister will point out, there are many such areas in Britain and their number is increasing all the time. Given the job opportunities available, employers and the public are mystified that there should be at the same time unemployment—apparently 6 per cent. or so in my area—and unfilled vacancies.
Naturally, allowances must be made for inaccurate statistics—in a rapidly moving job market, it is difficult to keep track of statistics—but when suitable work is available, surely it makes good sense both for individuals and the economy as a whole, first that people should be encouraged to take that work and to demonstrate their wish to do so, and secondly, that unemployment benefit should be used for those in genuine difficulty. Again, there must be agreement on all sides on that.
The principle behind clause 7—that people should be encouraged to take available work and to demonstrate that they are actively seeking it—is broadly welcomed by the public. But care will be needed, and will undoubtedly be taken in Committee, in drafting regulations to ensure both that it will be more difficult for people in the black economy to claim benefits and that the regulations will not make life harder for unemployed people with genuine difficulties.
I wish to single out a particular group where special care will need to be taken—those people who are 50 or over. Despite a buoyant job market, those people often find it difficult to get work. I note that age is to be one of the good causes to be taken into account by the adjudicating officer, together with physical capabilities. It will be important for people over 50 who have had long work experience to recognise the particular difficulties that their age and even their physical capabilities may present for them in taking an unfamiliar job. If older people have been out of work for some time, they may suffer a lack of confidence about taking on unfamiliar work. A trial period of six weeks should help to ensure that no one will incur sanctions if the job genuinely does not work out.
Clearly, when the Bill comes into force, officers who organise job clubs and who are involved in restart schemes will have increased responsibilities in ensuring that people are helped to keep the necessary records and can keep up the search for work. That must be recognised in appropriate training for those officers.
In the interests of the economy as a whole and of the use of public money to help those genuinely in employment difficulties, and in the interests of unemployed people who may need encouragement to take advantage of a rapidly improving employment market in many areas, the whole Bill, and this clause in particular, deserve to be welcomed, as I believe they will be throughout the country.
§ Mr. Ron Leighton (Newham, North-East)
I wish to address my remarks to clauses 7 to 10, which tighten up the "availability for work" clauses and add to them.
The so-called justification for that is based on a survey of the London labour market carried out by the Department of Employment. The Government have either misunderstood or misrepresented it. It refers to 150,000 unfilled vacancies in London. I have studied the survey, and that is an estimate, not an accepted figure. I always distrust such nice, round figures, and I do not know how Ministers conjure them out of the ether.
That figure is incompatible with another figure. Table 18 of the report says that employers in London notify 45 per cent. of their vacancies to jobcentres. The Department of Employment figure for unfilled jobcentre vacancies in London is 35,000. If employers notify 45 per cent. of their vacancies, the total number of vacancies should be about 78,000, or 2.25 times the number notified to jobcentres, not 150,000. If the main conclusion of the report can be so wrong, we should be a little cautious about the remainder.
The Government are seeking to give the impression that there is a big stock of either 78,000 or 150,000 vacancies in London, and they claim 700,000 vacancies nationwide that are ready, waiting and available for the unemployed. But they suggest that the unemployed will neither look for nor take them. That is a complete illusion and a grotesque misunderstanding. There is no stock and any idea that a stock of unfilled vacancies exists is nonsense.
These figures are a measure of turnover, not of stock. Vacancies flow in and filled vacancies flow out. If the Minister will read the report—I doubt whether he has, but if he wishes to correct me he may do so—he will see that it acknowledges what I am saying. It states that 700,000 new employees are taken on each year in London. The annual vacancy outflow from London jobcentres is about 400,000 a year which is nearly 34,000 a month, so the truth is that it is not a stock, but a flow.
In the quarter to 2 September 1988, clerical jobs were filled after a median period of four weeks, retail jobs after 2.7 weeks, catering jobs after three weeks, building labourer vacancies after 3.2 weeks and general labourer vacancies after 4.2 weeks, so there is not a static figure, but a flow. There is no evidence of a large pool of vacancies remaining unfilled because the unemployed are unwilling to take them.
§ Mr. Leighton
No. I am grateful that the hon. Member for Fylde (Mr. Jack) is paying attention, but I should prefer it if he would lend me his ears rather than his prejudices, because there is the question of time to consider. If there is time later, I shall give way to the hon. Gentleman.
§ Mr. Leighton
I make such visits regularly. I extend to the hon. Gentleman an open invitation to accompany me on a visit to my local jobcentre, where I regularly review the results of restart interviews. I do so all the time. As 773 Chairman of the Select Committee on Employment, I suspect that I know as much about the subject as does the hon. Member for Fylde.
One crucial question to which no one has yet paid any attention is that of who fills the vacancies that occur. The truth leaps from the report that has been prayed in aid. I should be grateful if the hon. Member for Fylde, who just intervened, would pay attention. I thought that he was interested in this matter, but apparently he is not. If he is interested, I am anxious to enlighten him.
The truth of the matter, which leaps from the pages of the survey that has not been read by the Minister, is that most vacancies are filled by those who are already employed and who are merely switching jobs. Of those recruited to non-managerial or professionl jobs, for example, during the last 12 months, only 2 per cent. had been unemployed for six months or more. That demonstrates a huge employer prejudice against recruiting unemployed people. The report reveals that employers either did not know that long-term unemployed existed or were hostile to them. The unemployed fail to get jobs not because they are unwilling to take them but because of employers' recruitment practices and their reluctance to hire those who are currently unemployed.
The phenomenon of the discouraged worker is well known. I speak of the person who has been rejected so often that he or she wonders whether it is worth continuing to seek employment. Yet the report shows that 87 per cent. of unemployed had looked for work in the month preceding their interview. It reveals also that the unemployed do not expect high wages, and that they are willing to travel.
The Secretary of State for Employment is not present in the Chamber, although the Secretary of State for Social Security is on the Government Front Bench. If the right hon. Gentleman will examine the document that he has prayed in aid, he will see that in his foreword to it, the Secretary of State for Employment states that only a "small minority" of unemployed have never looked for work. It is wrong to formulate public policy and enact legislation for a minority rather than for the majority.
A core of vacancies is hard to fill, but that is because of skills or geographical mismatches. The unemployed, especially the long-term unemployed—most of whom are victims of Government policy—need and deserve help and understanding. They do not need, nor do they deserve, persecution and harassment. Many black people have higher qualifications than whites. They visit jobcentres more often than white people, yet they suffer twice the level of unemployment. I hope that the Minister will comment on that point.
There is a fundamental division of approach between Government and Opposition Members, but I hope that it does not include every Conservative Member. That division is between those, apparently including the Government, who believe that the poor and unemployed cannot find jobs because of their personal deficiencies—such as a lack of motivation and a willingness to live off the state—and those, like myself, who believe that there are several reasons why people remain so long on benefit. They include the absence of fair opportunities to compete for suitable jobs, a lack of skills, a lack of supporting services such as child care, discrimination and, most importantly, a shortage of jobs in the first place.
The first group want schemes and programmes to be compulsory for the reasons I have explained. Because we 774 know the unemployed better than they do, the second group, knowing that the unemployed want to work. want voluntary programmes that will win willing support and participation. Voluntary programmes enhance their participants' feelings of control over their own lives—the feeling that they have choices, which are usually denied to the poor.
Instead, the Government are going for conscription. Already YTS is compulsory. Now, other programmes are moving towards compulsion—that is what the Government are doing by changing and tightening the "availability for work" formula. No one in the House defends those who defraud the system, but that is already unlawful. This Bill threatens to police and prosecute people who are already disadvantaged enough. They need understanding and aid, and more effective, better staffed and more user-friendly employment services.
Employers need to be induced to send all their vacancies, not merely a small percentage of them, to jobcentres. Unemployed people need more trained counsellors to offer them quality training, advice and assistance. When people are unemployed through no fault of their own, they need to be made to feel valued members of society and to be helped and supported through a difficult period back into good and well-paid employment. Like others, the unemployed and their families have paid their rates and taxes and have their rights as citizens to these services.
This is an unworthy, mean, nasty, spiteful measure, which cannot conceivably be justified by an analysis of the survey of the London labour market.
§ 9.7 pm
§ Mr. David Wilshire (Spelthorne)
As two thirds of the Bill consists either of minor adjustments or of tidying-up measures, I am amazed by the stance of the Opposition on it. If only they would apply common sense, they would. support it. Instead, the usual prejudice and accusations have been trotted out, that the Government have a hidden agenda. As usual, the Opposition have claimed that the Government do not care about people in this country—
§ Mr. Battle
On a point of order, Mr. Speaker. The hon. Gentleman should make it clear that whereas some of us have been here throughout the entire debate, he has not—yet he has the audacity to cast a slur on what we have said.
§ Mr. Speaker
I have only just come into the Chamber. The hon. Member for Spelthorne (Mr. Wilshire) gave notice earlier that he wanted to participate. I do not know whether he has been out of the Chamber.
§ Mr. Wilshire
I have been in and out during the debate for the simple reason that part of Heathrow is in my constituency, and matters to do with air crashes have kept me having to go in and out in the course of the day. So I make no apology for not having heard all the speeches. What I have heard has convinced me that once again the Opposition are talking nonsense. They ignore the abuses in this country, they ignore the waste, and above all they ignore public opinion. If they do not believe that, or will not take it from me, let them check the opinion polls, which prove how out of touch with public opinion the Opposition are on this matter. 775 It is important to set the Bill in its context. Twenty of its 29 clauses are routine—refunding contributions, helping individuals with housing benefits and streamlining war pension administration. These and other matters dealt with in 20 of the 29 clauses should receive the support of us all. The remaining nine clauses raise six issues that may divide us in Committee. I have no hesitation in saying that I support wholeheartedly all six major issues. As I am conscious of the time, I shall deal with only three of the six issues.
First, I shall speak about clause 4 and the matter of more parental support for children. Secondly, I want to deal briefly with clauses 6 to 10, which concern unemployment benefit and income support changes. Thirdly, I want to speak briefly about clause 18, which concerns the recovery of payments when damages have been awarded. I have chosen those three issues because they demonstrate to me—and, I believe, to everybody else—three basic truths about the Government's approach. The first truth is that the Government have values that are founded on clear principles. The second truth is that the Government are doing a great deal more, through the Bill, to help those who are in real need. Thirdly, the Bill shows that the Government are still busy reversing the Socialist excesses of the post-war years.
Clause 4 proposes that parents should be asked to make a bigger contribution towards their children's education. For me, that is another important step towards revitalising the concept of the family in this country. At present, there is blanket help for all children of divorced or separated parents, which has two effects. First, it makes it easier for a parent to walk out on a child and secondly, it undermines the role of parenthood. Those two effects lead in themselves to a further undermining of the family unit. Clause 4 has nothing to do with financial savings; money is not the issue being raised. Clause 4 seeks to encourage family life and stresses that parenthood is a matter of great responsibility, so people who can afford to do so must be encouraged and required to make a contribution to their children. I am reassured to see that, when such help cannot be afforded, there are provisions to make alternative arrangements through Government help.
The second issue with which I want to deal is covered by clauses 6 to 10. They have been discussed in detail and deal with changes in unemployment benefit and income support. The clauses address circumstances that the great majority of people in this country feel are unjust as they stand. Let us consider those who retire—I stress the word retire—early with a pension. Such people do not need and should not expect as much help as someone who is genuinely wholly unemployed. Let us also consider those who are not really seeking a job or are moonlighting. Such people exist, whatever the Opposition say, and do not need or deserve as much help as those who are desperate to find work and are doing everything they can. I shall respect the Opposition when they speak from their own experience.
§ Mr. Eric S. Heffer (Liverpool, Walton)
The hon. Gentleman can sit down. He talked about speaking from experience. I have been unemployed many times in my life—
§ Mr. Heffer
It is clear that Conservative Members have never experienced the humiliation of being out of work, losing their dignity and believing ultimately that they themselves, rather than the system, are responsible for unemployment. The system is responsible, so we have a responsibility to all those who are more unfortunate than ourselves.
§ Mr. Wilshire
I am very happy to speak from direct experience. In my constituency—which is just as valid an example as the other 649—a total of 934 people were unemployed when I checked yesterday, and there were 1,200 vacancies. Given those circumstances, the Government are absolutely right to act. My experience is just as valid as that of the hon. Member for Liverpool, Walton (Mr. Heffer). I make no apology. The circumstances to which I refer apply in a growing number of constituences. We have to ask why all those people are unemployed when there are more vacancies than there are people seeking work.
The third issue about which I wish to speak briefly is the recovery of payments when damages are awarded. This is dealt with in clause 18. Like others, I have been approached by the CBI—
§ Mr. Speaker
Order. One at a time. The hon. Member for Spelthorne (Mr. Wilshire) is not giving way.
§ Mr. Wilshire
It seems to me that if the CBI is against something we are probably justified in being in favour of it. But taxpayers' money should not be used to subsidise negligence, and double recovery of damages is wrong. I ask myself who is speaking against this, and I reply that it is those who would have to pay. The answer to them is simple: if they are not negligent, they will not have to pay anything.
Two-thirds of the Bill is relatively minor and deserves the support of us all. The remaining six issues are wholly in tune with public opinion and a sensible concept of a social security system. Anyone who votes against these measures will be ignoring the wishes of the overwhelming majority in the country. As I said at the outset, if Opposition Members will not believe me, let them read the opinion polls.
§ Ms. Clare Short (Birmingham, Ladywood)
I wish to confine my remarks to the core of the Bill. We all know that the Bill is about the new tests on availability for work. The tests move on from availability for work to actively seeking work, and are linked with the new provision that people must take a job at any level of income. That is the core; the rest of the Bill contains bits of reforms of one kind or another that were added on once that central strategic move had been made.
I object strongly and deeply to the style of the debate. The quality of our democracy has declined gravely and worryingly in recent years, and the quality of debate in the House is at such a low level that if most people in the 777 country who confront the issues that we discuss were to hear it our institutions would be brought into grave disrepute.
It is plain that Tory Members have received some kind of handout from Conservative Central Office. One after another—often they have not all been in the Chamber at the same time—they have churned out the same remarks. My hon. Friend the Member for Derby, South (Mrs. Beckett), who has obviously read the material concerned, gave some examples.
The line that Conservative Members have been taking is the "big lie" tactic. One after another they have tried to say that the Bill is all about reforming our social security system, which at present allows the minority who scrounge and defraud the system to get away with it. They say that they are imposing constraints to stop that, and that the Labour party is in favour of scroungers. They have said that over and over tonight, and have constantly challenged us to say that we are not in favour of scroungers.
If there were some level of objective rationality with which we had to comply in the Chamber, such junk would not be allowed. The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), who spoke for the alliance or the Democrats—I am sorry that I cannot keep up with the labels—put on record the existing framework of law. I do not know whether Conservative Members are at all interested, but the framework in the 1975 Act, which is the basic framework that has been in place in the post-war social security settlement, imposed on everyone a duty to seek work and to accept jobs that were offered. If they did not accept jobs that were offered, they had to take training. That framework used to be agreed between the parties and was part of Britain's post-war settlement.
Since 1979, under this new-Right Thatcherite regime, there has been a considerable tightening up on availability for work. There has been a tough new questionnaire. People have to prove that they are instantly available to start work and that they do not have dependants for whom they have to care. In my constituency, as a result of the collapse in the west midlands after 1979, many men started picking up their children from school, giving them tea and so on—something that they never used to do in the past. They say that one of the few enjoyments that have come from losing the job that they did for 20 or 30 years is seeing more of their children. If such people cannot make arrangements overnight to accommodate their children or their elderly parents, they are not available for work. People have to prove that they are willing to travel further and to accept lower wages. That tightening up has taken place under the Government.
Then the restart scheme was introduced along with another massive questionnaire. People were called in every six months. There was a menu of so-called opportunities, job clubs, schemes that did not lead to jobs and such a series of offers. People received letters saying that their benefit would be stopped unless they attended their restart interviews. Surveys show that the majority of people who go through that process think that they have to join a job club, community programme or employment training scheme or lose their benefit. All that is in place now.
The hon. Member for Roxburgh and Berwickshire read out the tribunal's interpretation of availability for work as "actively seeking work"; a person must take positive measures to seek work. All that is in place and thousands of people have had their money questioned. The unemployment benefit of 500,000 people has been called 778 into question because they were not available for work. Between July 1987 and June 1988, a total of 173,268 claims for unemployment benefit were referred because of doubts about availability. The figures have gone up and up as the Government introduced their stringent tests.
People are hounded now on availability for work in an unsavoury and nasty way. Most end up going in and out of rotten schemes, job clubs, short-term work, low-paid jobs, being laid off, or going into a scheme and out of a scheme. That is the reality for large numbers of people in Britain. So do not let this Chamber descend to such a level that the big lie is repeated time and again. Conservative Members pretend that everyone is in prosperous work and that only the scroungers will be threatened by the Bill. That is false. If we are to discuss new legislation, let us discuss it accurately.
If Tory Members do not know that the line that they are putting across is false, the people in need in their constituencies do not go to them. Some Tory Members could not have made the speeches that they made tonight if they had seen the kind of people that Labour Members see regularly in their constituencies. Either they know that their line is false or they do not help the people in need in their constituencies. There is poverty and low pay throughout Britain. Things are better in the south-east than in the rest of the country, but there is plenty of poverty and low pay in the south-east as well.
Why do we have the Bill? Is it just one of those nasty, knee jerk, Sun-level, Mr. Murdoch promises that have to be made at the Tory party conference, which is where the Bill was promised? We know that the Secretary of State's reputation was in difficulty at that time. We know that he had been ill, and we are sorry about that, but he came up with this promise to catch the scroungers. Is it just the result of prejudice and nastiness or is there a strategy underlying it?
Part of the Bill is the result of prejudice and nastiness, but there is a strategy underlying it. It is a serious strategy which affects Britain's whole labour market. Since the Government took power they have set about systematically dismantling a series of minimum protections—many put in place by Winston Churchill, who is supposedly the Prime Minister's hero—so that we did not have competition through ever-cheapening wages, the bad. employer throwing out the worst, and so on, in a downward spiral.
A series of historical protections that have existed for many years in our country have been deliberately and. systematically removed by the Government in order to encourage low pay which, they say, is better than unemployment. However, we know that areas of high unemployment have many people on low pay. The Government have just promised to look again at the very existence of the wages councils and to demolish yet another piece of protection. They have been enormously successful.
§ Ms. Short
I have been sitting in the Chamber all day. I will not speak for too long, but I want to make my speech. I will not take messages from my own Whip or from you, Mr. Speaker, to prevent me making the simple points I want to make. I have sat in the Chamber for a 779 significant number of hours. This is not a game to me. I really mean this. It is about real people's lives and the future of our country. I want to put my points on record.
The Government's strategy to dismantle the protection for low-paid workers has been supremely successful. We have more low-paid workers in our country than ever before. There has been an enormous growth in the number of low-paid workers. That is one of the major new economic records of the Government, who claim that they have created such monumental prosperity.
We now have 9.4 million workers—40 per cent. of those in work—who are paid less than the Council of Europe's decency threshold, at which we are all supposed to aim as a minimum. That means that that proportion of our people struggle between dependency on benefits and such low-paid work that they still live in poverty. They often find themselves out of work again because of the insecure conditions. That is the reality for nearly half our population.
The Bill and the further threat to the wages councils mean that even more significant numbers of people will live in poverty. The Government say, "Never mind, family credit is available. You can be subsidised if you are low paid." The problem is that only one third of those entitled take up the benefit. What is that subsidy? Apart from the poverty and lack of dignity, it is fantastically inefficient economically. That is a big benefit subsidy that goes to inefficient employers who pay low wages, seek to compete through a low wage strategy and do not invest or train. There is no future for that sort of economy post-1992.
The Government's strategy not only damages the interests of many people and their dignity in life but is massively dangerous to the future of our economy. With low-paid work, no training, high turnover of labour, no investment and a low-paid economy, we will not survive post-1992. The Government's strategy-the core of the Bill-is for more low pay, using the social security system to frighten people into accepting any old low-paid job. That is bad for people. There is no dignity and justice in it and it is bad for the economy.
I deeply regret that our country has sunk so low that such a Bill should come before the House and be debated at such a low level with the poor quality of the speeches made by Conservative Members.
§ Mr. Paul Flynn (Newport, West)
It is a pleasure although a daunting task to follow the impassioned and uniquely well-informed contribution of my hon. Friend the Member for Birmingham, Ladywood (Ms. Short).
We are grateful to have drawn the support of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) and some guarded comments from one Conservative Member over what we believe is one of the principal errors of the Bill. In clause 2, there is a subtle but massive shift in wealth, again in the wrong direction. An aging society with expensive medical needs is about to cut the Government's contribution to national insurance. That has been in place since 1911. The long-term cumulative effect will be as iniquitous and unjust as the income tax handouts to the super-rich in the 1988 Budget.
In 1945, the levels were set at 40 per cent. paid by the employer, 40 per cent. by the employee and 20 per cent. by 780 the Government. That was virtually intact in 1979. It would have amounted to £5.3 billion; that is the equivalent of the vast amount that is about to be moved as a burden from taxpayers to national insurance payers. It represents a further erosion of the hope of a fair, progressive taxation of equitable contributions on the basis of ability to pay.
A substantial redistribution has taken place already, moving the tax obligation from the wealthy to the less well-off taxpayer. By lessening the taxes paid by the rich, the more articulate and the influential, the Government have successfully fostered the illusion that they have reduced taxes generally. The truth is that, while in 1978–79 the proportion of GDP raised from taxes was 34 per cent., it now stands at 38 per cent.
The income tax cuts have been enjoyed by the higher paid, but for most people the reductions have been wiped out by increases in national insurance and VAT. National insurance payments are the least progressive contributions, hitting low earners as soon as their wages reach the princely sum of £41 a week, while top salary earners escape lightly with a flat-rate contribution. We are witnessing a further twist in the spiral that leads to the poverty of the unemployed and adds to the poverty of those on average wages and those in low-wage employment.
When Labour left office in 1979, Treasury contributions stood at 18 per cent. Almost annually the Tories have cut it to its present level of 5 per cent., while increasing the contributions that employees have to pay, from 6.5 per cent. to 9 per cent. The Government are hugging and congratulating themselves with joy at this prospect. But while they will be pocketing what the amount would have been had they maintained the rate—£5.3 billion that money, if we look at it another way, has been picked directly from the pockets of the pensioners and those on benefit because the level has not been maintained in real terms in the way it should have been maintained. One can see that that £5.3 billion is very near to the sum out of which the Government have cheated the pensioners over the years by severing the link between earnings and pensions. That stands at £6.3 billion.
§ Mr. Flynn
There is not enough time for me to give way. That money has been taken precisely from the deserving.
The "actively seeking work" rule has, rightly, received much attention in the debate. It is another piece of irrelevant malice exhumed from its putrid sepulchre. That has been done because baiting the unemployed is a favourite Tory sport. How Conservative Members roared their approval at the Tory party conference when they were promised that new barriers would be erected for the unemployed to scale. They would have been frozen into mute, white-faced shock if a crackdown on income tax evasion had been threatened. Several hon. Members, including the hon. Member for Chelmsford (Mr. Burns), have asked why the honest taxpayer should suffer the welfare cheat. Let us put it the other way round and ask why the claims of the honest claimant should be cut by the cheating tax dodger.
§ Mr. Flynn
No, I will not give way.
Those who cheat and abuse the system should be punished and pursued, and evidence has been given that 781 when in government, Labour brought many people to book—far more proportionately than are being brought to book now.
But who are the real scroungers? That, I believe, is what the hon. Member for Chelmsford would like to know. The estimates given to the Public Accounts Committee showed that 20 prosecutions were made against individuals for making false returns of income tax or false claims for personal allowances. The cost of income tax fraud is estimated at £5 billion. The cost of dole fraud is estimated at £500 million and the number of prosecutions for that has totalled 14,000, a ratio of one individual pursued through the courts for tax fraud for every 700 prosecuted for welfare deception—one prosecution for every £35,000 fiddled in dole compared with one prosecution for every £25 million fiddled in tax. There is an unanswerable case for better targeting on income tax cheats.
The hon. Member for Chelmsford rejoiced in the fact that there will be more inspectors to hound those who are cheating on the dole. No one disagrees with that pursuit. It is wrong that such cheating should be happening. But we ask for some fairness and even-handedness. There should be some attempt to deal with those who are robbing the country of very large sums of money through income tax evasion.
We have heard a great deal about the Conservative approach to assessing those who are cheating. The most enlightened figure that we have heard comes from the expert opinion quoted by the hon. Member for Roxburgh and Berwickshire, who said: "The man on the Clapham omnibus could tell her". That is a populist belief. But who will assess those who are actively seeking jobs? We know that the present laws insist that unemployed people have to make positive efforts to seek work. Those laws have existed for many years. They have been enforced vigorously and harshly through strict availability testing. We know that the Government must be planning something even worse than that.
We do not have to look in a crystal ball when we have graphic reports of what happened when the availability to work test in another form—the "genuinely seeking work" test—was enforced in the 1920s. Mr. John Hilton, an assistant secretary at the Ministry of Labour, made a tour to discover how the test was working. He went to labour exchanges and saw people being interrogated. They were asked, "When did you look for a job?" and they gave a litany of firms such as, "This week I went to Hatfields, to Gibbons and to Davies." They were asked, "Where did you go on Tuesday?" and, "What does the manager look like? Is he tall? Has he a moustache?" According to John Hilton, if the information given was true, every person would have been applying for those jobs 10 times a week. It would have meant that firms in Merthyr and in Sheffield would have had one person calling every minute of every day. The system encouraged those who could tell the tale. Those who were deceiving were successful and those who told the truth were punished. If this measure is introduced, it will have precisely the same effect.
My hon. Friend the Member for Newham, North-East (Mr. Leighton) eloquently pointed out the weaknesses in the statistics in "The London Labour Market" report. We should look to other statistics. A report by Harris Research used a much larger sample and showed that 73 per cent. of unemployed people sampled had looked for work in the previous week and 87 per cent. had looked for work in the four weeks prior to interview. The unemployed 782 in the London labour market survey were not questioned in depth about why they were not looking for work, but we know that those groups are mostly the quarterly unemployed who have had enough. They have reached the point where they can take it no more. We seek some assurances on this matter. In areas where the jobs famine is really chronic, the discouraged unemployed will be coerced into the endless charade of seeking jobs that pobably do not exist.
We have heard about the job clubs. They have made a valuable contribution in increasing the self-confidence of workers, pointing them in new directions and breaking down isolation. But if we take the magic of the job club and use the analysis published in the midlands, where only 134 job entries resulted from 30,000 speculative job applications, what kind of active job searching would we need to achieve the Government's target in London of 140,000 job entries? It would require 500,000 speculative visits to produce 6 per cent. of those jobs; 3,276,000 applications for advertised vacancies to produce 52 per cent. of those jobs; 4 million speculative telephone calls to produce another 17 per cent.; and 7,800,000 speculative letters to produce the other 25 per cent. of those jobs. That will not happen and cannot happen. We will not see that blizzard of job applications, that deluge of written letters and that bedlam of telephone calls which, in the Government's view, will create jobs. It cannot happen. However, we will see an endless procession of unemployed people having the sting of rejection added to the daily insult of unemployment that they face.
We have asked—we hope that we shall have a reply during the debate—about the comment of the hon. Member for Wokingham (Mr. Redwood) that the Bill will be interpreted sensitively. Opposition Members do not share that confidence, especially because of the way in which restart and other measures have been introduced.
However, there are some timely clauses and some sensible clauses that we are happy to support. There has been an accusation that we are clinging to the shibboleths of the 1930s, but the Government are taking us back to the 1920s and beyond. The Government have claimed that similar measures are in force in Eire, Australia, and New Zealand. We have checked and although I do not have time to go into details now, it is clear that as far as we know there are no such provisions in any of those countries.
The Bill will be seen as an unnecessary and pernicious attempt to reassemble part of the cruel dark world of the past. Parts of the Bill have been conceived in prejudice, ignorance and malice. It has been prompted by a brutal populism. It is unworthy of the statute book of a civilised country. The Bill should be consigned to where it belongs—the dustbin of history.
§ The Minister for Social Security (Mr. Nicholas Scott)
I congratulate the hon. Member for Newport, West (Mr. Flynn) on his first Front Bench appearance as an Opposition Social Security spokesman. His eloquence was impressive—his argument not quite so. I shall deal with some of the points that he put forward later. We welcome him to his new responsibilities.
The hon. Member for Derby, South (Mrs. Beckett) described the Bill as a "curate's egg", presumably acknowledging that it is good in parts, as did the hon. 783 Member for Newport, West. I prefer to describe it as an hors d'oeuvre with a variety of flavours, some appealing to all hon. Members but some appealing only to a few, or to Conservative Members only.
The Bill contains a considerable number of clauses, as does any Social Security Bill which tidy previous legislation or are merely technical amendments to the existing law. I make no complaint that those who have spoken for the Opposition have most frequently concentrated on those clauses with which they most disagree. That is why we are here.
However, I think all hon. Members warmly welcome one clause—and several have done so. I refer to the proposal to increase from 75 to 80 the age limit for receipt of mobility allowance. The House knows that, in the context of the OPCS survey into the extent, nature and circumstances of disabled people in this country, we are reviewing the whole structure of benefits for disabled people. If we had not taken this measure, the first people would have ceased to received mobility allowance in 1989. Obviously, that had to be avoided. The entire benefit will of course be reviewed in the context of the OPCS reports. My hon. Friend the Member for Bolton, North-East (Mr. Thurnham) drew particular attention to that. As I have said, we must await the outcome of the survey.
The hon. Member for Belfast, South (Rev. Martin Smyth) acknowledged the benefits of that benefit but urged us to pursue a take-up campaign. Obviously, I want to encourage the maximum take-up of any benefit available. It is worth noting in passing that in numbers, since 1978–79 when 95,000 people were receiving mobility allowance, until the current year when 540,000 people are receiving it, we have seen a sixfold increase in the numbers of claimants with a 500 per cent. increase in expenditure on this important and well-targeted benefit.
My hon. Friend the Member for Broxbourne (Mrs. Roe) set out the principles that she hoped would guide the evolution of the social security system. It is important to emphasise that no social security system can ever be set in concrete for a lengthy period. Society is dynamic and changes, and the social security system must change too.
My hon. Friend the Member for Broxbourne drew particular attention to the need for social security law for liable relatives to come into line with family law. She urged us, too, to do more to get absent fathers, who were liable to support their children, to provide that support. My hon. Friend the Member for Spelthorne (Mr. Wilshire) made the same point. I believe that it is a sensible and responsible way for the law to operate. I emphasise that no one will go down the route suggested in an early-day motion of pressing mothers into pursuing fathers to make the payment themselves. The practice of the Department of Social Security is to attempt to obtain the support for these children by sensible administrative measures, which is the path which we shall continue to pursue. Of course, if a voluntary arrangement is possible, that can often be the quickest and simplest way to achieve that support. However, no one will go down the route of pressing mothers in circumstances which could put them in, perhaps physical, and certainly emotional, danger.
My hon. Friend the Member for Leeds, North-East (Mr. Kirkhope) pointed out the looming shortage of manpower and skills and the need to motivate people to 784 seek employment. We shall return to that provision in this Bill, but it is worth saying that, by the development of in-work benefits, by increases in tax thresholds at the lower end and by tax levels, the Government have made a significant contribution in this area already.
My hon. Friend the Member for Dartford (Mr. Dunn), speaking, as he said, for the first time from the freedom of the Back Benches, drew attention to the links between the possibility of social security advance and the economic performance of the country. We are spending a massive £50 billion-plus on social security, which has only been possible because of the successful economic performance of the Government's policies. My hon. Friend, too, mentioned liable relatives and the mobility allowance. He welcomed what we were able to do here and supported the employment clauses, to which I shall return.
§ Mr. Corbyn
As the hon. Gentleman is talking about the great prosperity of this country, will he explain why tens of thousands of people have been denied any benefit under the restart scheme and many people have been denied any benefit under his social security regime? Should not that prosperity ensure that every family has a home and a reasonable income with which to maintain themselves?
§ Mr. Scott
The hon. Gentleman made that comment earlier and I shall deal with it when I come to those particular points. I must say that the successful economy was only made possible because at the beginning of our period of Government, we ensured that public expenditure was under control. That should be contrasted with what happened under the Labour Government when—in the words of Joel Barnett—the Labour Government spent the first two years spending money that they did not have.
Three areas of this Bill aroused controversy in the debate. The first was touched on by the hon. Member for Derby, South, who said that the proposals for the recovery of benefit from awards for personal injury had been opposed by those whom we consulted. I acknowledge that. Of course, those are the people who are operating the present system and I am not surprised that they raised doubts about this principle. However, I believe that the change that we are making in this area—by moving to recovery of those benefits from awards for personal injury —rests on two clear and indisputable principles. There should be no double compensation for the same injury, which is absolutely clear and has been supported by the courts consistently in recent years. Secondly, the taxpayer has no duty to subsidise those responsible, or their insurers, where an injury occurs.
I believe, too, that the costs on industry have been exaggerated in that area.
Let us consider employment costs rather than insurance premiums. A typical firm with about 1,000 employees might experience an increase of between 0.14 and 0.28 per cent. as a result of the changes. I believe that that burden can be sensibly borne by industry and commerce in the interests of achieving the two clear indisputable principles that I mentioned previously.
The decision to remove the Treasury supplement to the national insurance fund also drew some controversial comment. That move was welcomed by my hon. Friend the Member for Fylde (Mr. Jack) but opposed by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). It is important to establish the facts. The current rate of 785 supplement from the Treasury to the national insurance fund is 5 per cent. At the start, in 1948, that supplement was 33 per cent., but the move has been inexorably downwards in the intervening years. The current yield is some £1.6 billion and in the coming year it is estimated at £1.75 billion. The fund's income in the year 1988–89 will be £29.1 billion and that will produce a surplus of £2.7 billion. The end of the year balance will be about £9.9 billion, equivalent to some 20 weeks' benefit expenditure—about the same number of weeks' expenditure as existed in the last year of the Labour Government.
In essence, recent developments and the growth of the fund has meant that the Treasury supplement is no longer necessary to sustain the fund. It was necessary in 1948 to balance the books because the old flat-rate contributions had to be set at a level low enough to be affordable by all. Now that the contributions themselves are earnings-related, that situation has changed.
What is possible now and what was mentioned by my hon. Friend the Member for Fylde, is logical and has been desirable all along. We can pay contributory benefits with contributions—that is equal to about £26 billion of benefit expenditure—and leave the taxpayer to pick up the bill for the non-contributory and income-related benefits amounting to about £20 billion.
§ Mr. Kirkwood
Does the Minister accept that the increase in the national insurance contribution fund reflects the fact that people are earning more? An increase in earnings is bringing in more money. The Minister, however, is only protecting benefits, and the discrepancy is unfair,.
§ Mr. Scott
I do not believe that it is unfair, and if I had time I would debate this matter with the hon. Gentleman. We have fulfilled our pledge to protect benefits against inflation. Earnings-generated income into the fund has meant that the Treasury supplement is no longer necessary.
My hon. Friend the Member for Fylde asked about the long term—Keynes had a word to say about that—and if demographic changes make a change in the pattern necessary, it will be for the Government of the day to establish the most sensible way in which to deal with that change.
The most controversial and the most discussed aspect of our proposals relates to the employment clauses and the proposal that people should be actively seeking, and not merely available for work. The present basic conditions for unemployment benefit are that a person must be physically capable of work and available for it. Our proposal is to introduce the additional condition that a person must also show that he is actively seeking work. I believe that that is common sense and that it is widely supported in the country.
There is a clear split across the Floor of the House on this matter. I believe, however, that most people not only support our proposal, but believe that that is how the system operates at the moment. The hon. Member for Roxburgh and Berwickshire appeared to be under that illusion. He mentioned the decision on R(U)5/80 and he advanced that as evidence of the existing situation.
That judgment referred to the need to take active steps, but, since then, further decisions have defined more closely what is an active step. In one example a claimant had attended a jobcentre, had not even left his name and 786 address, and had gone away. The commissioners held, however, that that was sufficient to confirm his declaration that he was available and actively seeking work. That is nonsense, but that claimant had no obligation to do any more.
The other point that the hon. Gentleman raised was whether what we were proposing in this clause was a move towards workfare. I have three words to say about that: no, no and no. Our object is to encourage people into real jobs, not to force them into non-jobs. That is, and that remains, our conclusion.
§ Mr. Frank Field
When I raised this earlier, the Secretary of State nodded his head in agreement, and it would be useful to have it on the record. Are we right in thinking that, under the new rules, claimants will not be forced into jobs which pay them less than benefit? In other words, are the Government holding the Joseph line, which was precisely that?
§ Mr. Scott
If I may say so, commissioners' decisions have for many years past, under Governments of both persuasions, decided that it is legitimate for people to have to take a job which pays below the level of benefit they have been receiving. Under both Governments the commissioners have made this decision, so we are not changing this. What this Government have done, by the development of family credit, by our alterations to tax thresholds and other measures, is to make it almost impossible for anybody to be better off in benefit than in work.
§ Mr. Scott
I think the hon. Gentleman should read what I said in Hansard very carefully, and take it from there.
The hon. Member for Birkenhead (Mr. Field)—it was a timely intervention by him—talked about a con tract between the individual and the state. It is a fanciful concept, if I may say so, as he went on to say, to hold that the role of the state in this contract is to present the unemployed with a job. It seems to me that the unemployed themselves have a duty laid upon them to go out and actively seek work. What we can do as a Government is create a climate in which job opportunities expand, and we have created more job opportunities in the last 10 years in this country than any other country in Europe. We can encourage people to avail themselves o that opportunity, as we are doing in this Bill, and we can provide support services such as client advisers, counselling for the unemployed, job clubs, restart and employment training—now costing about £1.4 billion a year, and of high quality.
I believe too that as a Government we can make a contribution in moving jobs away from the areas of the country where the employment situation is tight and flourishing and away to the less developed parts of the United Kingdom. I very much hope that we will be able to do that, and I hope the hon. Gentleman will lend his support to us as a Government when some of the Luddites 787 in the London Labour party oppose it when we begin to move jobs in the social security system out of central London.
The hon. Member for Derby, South said that other countries did not have the provisions that we are putting forward. If I may, let me just tell the hon. Lady before I sit down what happens in Australia. In Australia, unemployment claimants have to register continuously with the Commonwealth employment service; they have actively to look for work; all claimants have to send fortnightly details of activity to their regional office; a claimant about whom there is a doubt as to whether he is making a real effort to find work must complete a work intention form, a questionnaire about his intentions and availability. If doubt still remains, a work effort certificate is issued by the mobile review team requiring claimants to provide signatures of employers he has approached. That is at least as tough as, and in my view tougher, than the proposals in this Bill.
I believe there is general support for what we are doing through the introduction of this clause and the clauses that are associated with it, and I believe that only the most perverse interpretation could describe this as punishment rather than encouragement of the unemployed into jobs. I believe this will encourage self-reliance and independence on the part of people in this country, and I make no apologies at all to the hon. Gentleman for Leeds, West (Mr. Battle) for making that a major thrust of this policy.
Most people actively seek work. We are talking not about the majority of unemployed people who are actively seeking work but about the minority of people who are not actively seeking work. My hon. Friend the Member for Norfolk, South-West (Mrs. Shephard) gave a clear example. Even the hon. Member for Newham, North-East (Mr. Leighton) had to admit that a minority of people exploit the system. Genuine claimants have nothing to fear from our proposals. I believe that they will be welcomed by the country as a whole, and I commend the Bill to the House.
§ Question put, That the Bill be read a Second time:—
§ The House divided: Ayes 292, Noes 230.791
|Division No. 28]||[10.00 pm|
|Aitken, Jonathan||Bonsor, Sir Nicholas|
|Alexander, Richard||Boscawen, Hon Robert|
|Amery, Rt Hon Julian||Boswell, Tim|
|Amess, David||Bottomley, Peter|
|Amos, Alan||Bottomley, Mrs Virginia|
|Arbuthnot, James||Bowden, A (Brighton K'pto'n)|
|Arnold, Jacques (Gravesham)||Bowden, Gerald (Dulwich)|
|Arnold, Tom (Hazel Grove)||Bowis, John|
|Ashby, David||Boyson, Rt Hon Dr Sir Rhodes|
|Aspinwall, Jack||Braine, Rt Hon Sir Bernard|
|Atkinson, David||Brazier, Julian|
|Baker, Rt Hon K. (Mole Valley)||Bright, Graham|
|Baker, Nicholas (Dorset N)||Brooke, Rt Hon Peter|
|Banks, Robert (Harrogate)||Brown, Michael (Brigg & Cl't's)|
|Batiste, Spencer||Browne, John (Winchester)|
|Beaumont-Dark, Anthony||Bruce, Ian (Dorset South)|
|Bellingham, Henry||Buck, Sir Antony|
|Bendall, Vivian||Budgen, Nicholas|
|Bennett, Nicholas (Pembroke)||Burns, Simon|
|Benyon, W.||Burt, Alistair|
|Bevan, David Gilroy||Butler, Chris|
|Biffen, Rt Hon John||Butterfill, John|
|Blaker, Rt Hon Sir Peter||Carlisle, John, (Luton N)|
|Body, Sir Richard||Carlisle, Kenneth (Lincoln)|
|Carrington, Matthew||Hawkins, Christopher|
|Carttiss, Michael||Hayes, Jerry|
|Cash, William||Hayhoe, Rt Hon Sir Barney|
|Chalker, Rt Hon Mrs Lynda||Hayward, Robert|
|Channon, Rt Hon Paul||Heathcoat-Amory, David|
|Chapman, Sydney||Heddle, John|
|Chope, Christopher||Heseltine, Rt Hon Michael|
|Churchill, Mr||Hicks, Mrs Maureen (Wolv' NE)|
|Clark, Hon Alan (Plym'th S'n)||Hicks, Robert (Cornwall SE)|
|Clark, Dr Michael (Rochford)||Higgins, Rt Hon Terence L.|
|Clark, Sir W. (Croydon S)||Hill, James|
|Clarke, Rt Hon K. (Rushcliffe)||Hind, Kenneth|
|Conway, Derek||Hogg, Hon Douglas (Gr'th'm)|
|Coombs, Anthony (Wyre F'rest)||Holt, Richard|
|Coombs, Simon (Swindon)||Hordern, Sir Peter|
|Cope, Rt Hon John||Howard, Michael|
|Couchman, James||Howarth, Alan (Start'd-on-A)|
|Cran, James||Howarth, G. (Cannock & B'wd)|
|Critchley, Julian||Howell, Rt Hon David (G'dford)|
|Currie, Mrs Edwina||Howell, Ralph (North Norfolk)|
|Curry, David||Hughes, Robert G. (Harrow W)|
|Davies, Q. (Stamf'd & Spald'g)||Hunt, John (Wirral W)|
|Davis, David (Boothferry)||Hunt, John (Ravensbourne)|
|Day, Stephen||Hunter, Andrew|
|Devlin, Tim||Irvine, Michael|
|Dickens, Geoffrey||Irving, Charles|
|Dicks, Terry||Jack, Michael|
|Dorrell, Stephen||Jackson, Robert|
|Douglas-Hamilton, Lord James||Janman, Tim|
|Dover, Den||Jessel, Toby|
|Dunn, Bob||Johnson Smith, Sir Geoffrey|
|Durant, Tony||Jones, Robert B (Herts W)|
|Eggar, Tim||Kellett-Bowman, Dame Elaine|
|Evans, David (Welwyn Hatf'd)||Key, Robert|
|Evennett, David||King, Roger (B'ham N'thfield)|
|Fairbairn, Sir Nicholas||Kirkhope, Timothy|
|Fallon, Michael||Knapman, Roger|
|Favell, Tony||Knight, Greg (Derby North)|
|Fenner, Dame Peggy||Knowles, Michael|
|Field, Barry (Isle of Wight)||Knox, David|
|Finsberg, Sir Geoffrey||Lang, Ian|
|Fishburn, John Dudley||Latham, Michael|
|Fookes, Dame Janet||Lawerence, Ivan|
|Forman, Nigel||Lee, John (Pendle)|
|Forsyth, Michael (Stirling)||Leigh, Edward (Gainsbor'gh)|
|Forth, Eric||Lennox-Boyd, Hon Mark|
|Fowler, Rt Hon Norman||Lester, Jim (Broxtowe)|
|Fox, Sir Marcus||Lightbown, David|
|Franks, Cecil||Lilley, Peter|
|Freeman, Roger||Lloyd, Sir Ian (Havant)|
|French, Douglas||Lloyd, Peter (Fareham)|
|Gale, Roger||Lord, Michael|
|Gardiner, George||Luce, Rt Hon Richard|
|Garel-Jones, Tristan||Lyell, Sir Nicholas|
|Gill, Christopher||McCrindle, Robert|
|Gilmour, Rt Hon Sir Ian||Macfarlane, Sir Neil|
|Glyn, Dr Alan||MacGregor, Rt Hon John|
|Goodhart, Sir Philip||MacKay, Andrew (E Berkshire)|
|Goodlad, Alastair||McLoughlin, Patrick|
|Goodson-Wickes, Dr Charles||McNair-Wilson, Sir Michael|
|Gorman, Mrs Teresa||McNair-Wilson, P. (New Forest)|
|Gorst, John||Major, Rt Hon John|
|Gow, Ian||Malins, Humfrey|
|Gower, Sir Raymond||Maples, John|
|Grant, Sir Anthony (CambsSW)||Marland, Paul|
|Greenway, Harry (Ealing N)||Marlow, Tony|
|Greenway, John (Ryedale)||Marshall, Michael (Arundel)|
|Gregory, Conal||Martin, David (Portsmouth S)|
|Griffiths, Peter (Portsmouth N)||Mates, Michael|
|Grist, Ian||Maude, Hon Francis|
|Ground, Patrick||Mayhew, Rt Hon Sir Patrick|
|Grylls, Michael||Mellor, David|
|Hamilton, Hon Archie (Epsom)||Miller, Sir Hal|
|Hamilton, Neil (Tatton)||Mills, Iain|
|Hampson, Dr Keith||Miscampbell, Norman|
|Hannam, John||Mitchell, Andrew (Gedling)|
|Hargreaves, A. (B'ham H'll Gr)||Mitchell, Sir David|
|Hargreaves, Ken (Hyndburn)||Monro, Sir Hector|
|Harris, David||Montgomery, Sir Fergus|
|Haselhurst, Alan||Moore, Rt Hon John|
|Moss, Malcolm||Sumberg, David|
|Moynihan, Hon Colin||Summerson, Hugo|
|Mudd, David||Taylor, Ian (Esher)|
|Neale, Gerrard||Taylor, John M (Solihull)|
|Needham, Richard||Taylor, Teddy (S'end E)|
|Nelson, Anthony||Tebbit, Rt Hon Norman|
|Neubert, Michael||Temple-Morris, Peter|
|Newton, Rt Hon Tony||Thompson, D. (Calder Valley)|
|Nicholls, Patrick||Thompson, Patrick (Norwich N)|
|Nicholson, Emma (Devon West)||Thorne, Neil|
|Norris, Steve||Thornton, Malcolm|
|Oppenheim, Phillip||Thurnham, Peter|
|Page, Richard||Townend, John (Bridlington)|
|Paice, James||Townsend, Cyril D. (B'heath)|
|Patten, John (Oxford W)||Tracey, Richard|
|Pawsey, James||Tredinnick, David|
|Peacock, Mrs Elizabeth||Trippier, David|
|Porter, Barry (Wirral S)||Twinn, Dr Ian|
|Porter, David (Waveney)||Vaughan, Sir Gerard|
|Portillo, Michael||Waddington, Rt Hon David|
|Powell, William (Corby)||Wakeham, Rt Hon John|
|Price, Sir David||Waldegrave, Hon William|
|Raison, Rt Hon Timothy||Walker, Bill (T'side North)|
|Rathbone, Tim||Waller, Gary|
|Redwood, John||Ward, John|
|Riddick, Graham||Wardle, Charles (Bexhill)|
|Roberts, Wyn (Conwy)||Warren, Kenneth|
|Roe, Mrs Marion||Watts, John|
|Rost, Peter||Wheeler, John|
|Rowe, Andrew||Whitney, Ray|
|Ryder, Richard||Widdecombe, Ann|
|Scott, Nicholas||Wiggin, Jerry|
|Shaw, Sir Giles (Pudsey)||Wilshire, David|
|Shepherd, Colin (Hereford)||Winterton, Mrs Ann|
|Shepherd, Richard (Aldridge)||Winterton, Nicholas|
|Sims, Roger||Wolfson, Mark|
|Skeet, Sir Trevor||Wood, Timothy|
|Smith, Tim (Beaconsfield)||Woodcock, Mike|
|Soames, Hon Nicholas||Yeo, Tim|
|Speller, Tony||Young, Sir George (Acton)|
|Spicer, Michael (S Worcs)|
|Stevens, Lewis||Tellers for the Ayes:|
|Stewart, Andy (Sherwood)||Mr. David Maclean and|
|Stradling Thomas, Sir John||Mr. Tom Sackville.|
|Abbott, Ms Diane||Caborn, Richard|
|Adams, Allen (Paisley N)||Campbell, Menzies (Fife NE)|
|Allen, Graham||Campbell, Ron (Blyth Valley)|
|Alton, David||Campbell-Savours, D. N.|
|Anderson, Donald||Canavan, Dennis|
|Archer, Rt Hon Peter||Carlile, Alex (Mont'g)|
|Armstrong, Hilary||Cartwright, John|
|Ashdown, Rt Hon Paddy||Clark, Dr David (S Shields)|
|Ashley, Rt Hon Jack||Clarke, Tom (Monklands W)|
|Ashton, Joe||Clay, Bob|
|Banks, Tony (Newham NW)||Clelland, David|
|Barnes, Harry (Derbyshire NE)||Clwyd, Mrs Ann|
|Barnes, Mrs Rosie (Greenwich)||Cohen, Harry|
|Barron, Kevin||Coleman, Donald|
|Battle, John||Cook, Robin (Livingston)|
|Beckett, Margaret||Corbett, Robin|
|Beggs, Roy||Corbyn, Jeremy|
|Beith, A. J.||Cousins, Jim|
|Bell, Stuart||Cox, Tom|
|Benn, Rt Hon Tony||Crowther, Stan|
|Bennett, A. F. (D'nt'n & R'dish)||Cryer, Bob|
|Bermingham, Gerald||Cummings, John|
|Blair, Tony||Cunliffe, Lawrence|
|Blunkett, David||Cunningham, Dr John|
|Boateng, Paul||Dalyell, Tam|
|Boyes, Roland||Darling, Alistair|
|Bradley, Keith||Davies, Rt Hon Denzil (Llanelli)|
|Bray, Dr Jeremy||Davies, Ron (Caerphilly)|
|Brown, Gordon (D'mline E)||Davis, Terry (B'ham Hodge H'l)|
|Brown, Nicholas (Newcastle E)||Dixon, Don|
|Brown, Ron (Edinburgh Leith)||Dobson, Frank|
|Bruce, Malcolm (Gordon)||Doran, Frank|
|Buchan, Norman||Douglas, Dick|
|Buckley, George J.||Dunnachie, Jimmy|
|Eadie, Alexander||Martlew, Eric|
|Eastham, Ken||Maxton, John|
|Evans, John (St Helens N)||Meacher, Michael|
|Ewing, Harry (Falkirk E)||Meale, Alan|
|Ewing, Mrs Margaret (Moray)||Michael, Alun|
|Fearn, Ronald||Michie, Bill (Sheffield Heeley)|
|Field, Frank (Birkenhead)||Michie, Mrs Ray (Arg'l & Bute)|
|Fields, Terry (L'pool B G'n)||Mitchell, Austin (G't Grimsby)|
|Fisher, Mark||Molyneaux, Rt Hon James|
|Flannery, Martin||Moonie, Dr Lewis|
|Flynn, Paul||Morgan, Rhodri|
|Foot, Rt Hon Michael||Morley, Elliott|
|Forsythe, Clifford (Antrim S)||Morris, Rt Hon A. (W'shawe)|
|Foster, Derek||Morris, Rt Hon J. (Aberavon)|
|Foulkes, George||Mowlam, Marjorie|
|Fraser, John||Mullin, Chris|
|Fyfe, Maria||Murphy, Paul|
|Galbraith, Sam||Nellist, Dave|
|Galloway, George||Oakes, Rt Hon Gordon|
|Garrett, Ted (Wallsend)||O'Brien, William|
|Gilbert, Rt Hon Dr John||O'Neill, Martin|
|Gordon, Mildred||Orme, Rt Hon Stanley|
|Gould, Bryan||Owen, Rt Hon Dr David|
|Grant, Bernie (Tottenham)||Parry, Robert|
|Griffiths, Win (Bridgend)||Patchett, Terry|
|Grocott, Bruce||Pendry, Tom|
|Harman, Ms Harriet||Pike, Peter L.|
|Hattersley, Rt Hon Roy||Powell, Ray (Ogmore)|
|Haynes, Frank||Prescott, John|
|Healey, Rt Hon Denis||Primarolo, Dawn|
|Heffer, Eric S.||Quin, Ms Joyce|
|Henderson, Doug||Redmond, Martin|
|Hinchliffe, David||Rees, Rt Hon Merlyn|
|Hogg, N. (C'nauld & Kilsyth)||Reid, Dr John|
|Holland, Stuart||Richardson, Jo|
|Home Robertson, John||Roberts, Allan (Bootle)|
|Hood, Jimmy||Robinson, Geoffrey|
|Howells, Geraint||Rogers, Allan|
|Hoyle, Doug||Rooker, Jeff|
|Hughes, John (Coventry NE)||Ross, William (Londonderry E)|
|Hughes, Robert (Aberdeen N)||Rowlands, Ted|
|Hughes, Simon (Southwark)||Ruddock, Joan|
|Illsley, Eric||Salmond, Alex|
|Ingram, Adam||Sedgemore, Brian|
|Janner, Greville||Sheerman, Barry|
|Johnston, Sir Russell||Sheldon, Rt Hon Robert|
|Jones, Barry (Alyn & Deeside)||Shore, Rt Hon Peter|
|Jones, Ieuan (Ynys Môn)||Short, Clare|
|Kilfedder, James||Sillars, Jim|
|Kinnock, Rt Hon Neil||Skinner, Dennis|
|Kirkwood, Archy||Smith, Andrew (Oxford E)|
|Lambie, David||Smith, C. (Isl'ton & F'bury)|
|Lamond, James||Smyth, Rev Martin (Belfast S)|
|Leadbitter, Ted||Snape, Peter|
|Leighton, Ron||Soley, Clive|
|Lestor, Joan (Eccles)||Spearing, Nigel|
|Lewis, Terry||Steel, Rt Hon David|
|Litherland, Robert||Steinberg, Gerry|
|Livsey, Richard||Stott, Roger|
|Lloyd, Tony (Stretford)||Strang, Gavin|
|Lofthouse, Geoffrey||Straw, Jack|
|McAllion, John||Taylor, Mrs Ann (Dewsbury)|
|McAvoy, Thomas||Taylor, Rt Hon J. D. (S'ford)|
|McCartney, Ian||Thompson, Jack (Wansbeck)|
|McCusker, Harold||Turner, Dennis|
|Macdonald, Calum A.||Vaz, Keith|
|McFall, John||Walker, A. Cecil (Belfast N)|
|McKay, Allen (Barnsley West)||Wall, Pat|
|McKelvey, William||Wallace, James|
|McLeish, Henry||Walley, Joan|
|McNamara, Kevin||Wardell, Gareth (Gower)|
|McTaggart, Bob||Wareing, Robert N.|
|McWilliam, John||Welsh, Andrew (Angus E)|
|Madden, Max||Welsh, Michael (Doncaster N)|
|Mahon, Mrs Alice||Wigley, Dafydd|
|Mallon, Seamus||Williams, Rt Hon Alan|
|Marek, Dr John||Williams, Alan W. (Carm'then)|
|Marshall, David (Shettleston)||Wilson, Brian|
|Marshall, Jim (Leicester S)||Winnick, David|
|Martin, Michael J. (Springburn)||Wise, Mrs Audrey|
|Wray, Jimmy||Tellers for the Noes:|
|Young, David (Bolton SE)||Mr. Nigel Griffiths and|
|Mrs. Llin Golding.|
§ Question accordingly agreed to.
§ Bill read a Second time and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).