§ Order for Second Reading read.
§ Madam Speaker
Before I call the Secretary of State, hon. Members will observe that a money resolution is applicable to the Bill. They will recall that, under the Sessional Order passed on 19 December, the Question on the money resolution must be put forthwith immediately after Second Reading. In those circumstances, I am prepared to allow hon. Members to refer to the content of the money resolution if they so wish during the Second Reading debate.
§ 5.6 pm
§ The Secretary of State for Employment (Mr. Michael Portillo)
I beg to move, That the Bill be now read a Second time.
The Bill provides for the introduction of the jobseeker's allowance, providing a single allowance to replace unemployment benefit and income support for unemployed people. The legislation before the House will improve incentives to work, remove barriers that discourage people from leaving benefit, and focus the efforts of jobseekers on looking for work.
We shall also focus the benefit on those who need it most. Those who have worked and made contributions will be entitled to benefit, regardless of their means, for six months. Two thirds of those who are unemployed leave benefit within six months. Those who are still unemployed after six months and those who do not qualify for contributory benefit or who have dependants will be eligible for the benefit on an income-related basis for as long as they need it without a time limit.
The Labour party's main attack on the Bill has been that the contributory benefit should be available for 12 months. But on this morning's "Today" programme, the hon. Member for Peckham (Ms Harman) was asked three times to say that a Labour Government would extend it to 12 months. Three times she dodged and ducked the question. She criticises and carps but will not say that she would do any different, were she in Government. That is not principled opposition but mere. whining on the sidelines of politics.
This Second Reading debate provides an opportunity for the House to consider both the Bill and its context. The context is that, since December 1992, unemployment in Britain has fallen markedly. It is down by 500,000 to less than 2.5 million. The fall has been sharper in Britain than in any other major European Union country.
§ Mr. John Whittingdale (Colchester, South and Maldon)
Will my right hon. Friend confirm that he has no intention of introducing a new measure of employment, as suggested by Mr. Philip Bassett in The Times? Has he any idea where those stories have come from?
§ Mr. Portillo
I am happy to confirm to my hon. Friend that I have no intention of introducing any new measure of employment as was proposed in The Times. My hon. Friend raises an interesting point. A fax has come into my possession which was sent by Mr. Philip Bassett to Mr. 48 Ed Milliband. It contains the draft of an article alleging that the Government were thinking of introducing a new measure of employment, and it was sent to Mr. Milliband to be cleared and vetted. Mr. Ed Milliband is the research assistant of the hon. Member for Peckham (Ms Harman).
It is perfectly clear that Mr. Philip Bassett of The Times is in the habit of taking stories suggested to him by the Opposition and submitting them to the Opposition for vetting before they are published in The Times. Not surprisingly, in his fax Mr. Philip Bassett says:I'd be grateful if you could of course keep it under your hat.
§ Mr. Portillo
I got it because it was inadvertently sent by Mr. Philip Bassett not to the fax number of Mr. Ed Milliband, but to that of my hon. Friend the Under-Secretary of State, the hon. Member for Amber Valley (Mr. Oppenheim).
§ Ms Harriet Harman (Peckham)
Before the Secretary of State goes any further down this disgraceful line of argument—[Interruption.] If Conservative Members are interested in the facts I will put them to the Employment Secretary and he can confirm them. He should apologise to Philip Bassett because there was no question of him sending that material for me to approve it, vet it or check it. I ask the Minister to accept my assurance on that. Mr. Bassett simply sent it to me because it was an exclusive and he asked me to comment on it for the following day's paper. The Secretary of State is clearly so desperate that he is clutching at straws. Why does not he address the real issue of the unemployment that he has created? He is a disgrace. [Interruption.]
§ Mr. Portillo
The hon. Lady doth protest too much. The fax states:Ed—This is a copy of what I've written so far, though I may fiddle about with it later. But it will be something like this. It mostly looks at the position, rather than the politics.The Times does not fax copy in advance for me to comment on, but apparently it does so for the Labour party.
It is time to return to the serious subject of unemployment because 2.5 million people without work is far too many. The Government never forget that unemployment is a waste. Worse than that, it is a cause of great unhappiness and difficulty. Therefore, reducing unemployment is a high priority for the Government.
§ Ms Angela Eagle (Wallasey)
The Secretary of State says that unemployment is a waste. In that case why does he think that it is sensible to penalise the unemployed by cutting their benefit? A quarter of a million people will be worse off as result of the cuts, but they are only the victims of the economic cycle. It is not their fault that they are out of work but the fault of economic forces and the Government's incompetence.
§ Mr. Portillo
A large number of people will be better off because in future they will get the back-to-work bonus. People will benefit from the £10 allowance that will be available to couples before any benefit is deducted in 49 respect of their earnings. We are prepared to change the welfare system so as to update it. The hon. Lady's party is afraid to change anything or to admit to any policy.
§ Mr. Richard Burden (Birmingham, Northfield)
Will the Minister comment on the Bill's provision which would mean that if a newly unemployed person took part-time work benefit would be deducted pound for pound if that person earned more than £5 a week? Will he contrast that with the case of Mr. Bryan Townsend, the chairman of Midlands Electricity? He gave up the job and got a pension of about £2,000 a week. He then went back to the job part time and he gets £165,000 a year for that on top of his pension. Does not the right hon. Gentleman see a contradiction in the way in which the Government whom he represents treat people who already have money compared with those who have nothing?
§ Mr. Portillo
The Government will treat everybody equally. We are concerned to see that people make their way back into work, possibly by climbing the ladder of part-time work. That is why the Bill introduces a back-to-work bonus which will encourage people to build up a credit of the benefit that is deducted from them when they take part-time work. They will be able to have a lump sum of up to £1,000 when they leave benefit to go into full-time work. The hon. Gentleman should support that by voting for the Bill.
§ Rev. Martin Smyth (Belfast, South)
We are concerned about the unemployed and welcome the fact that in the past two years unemployment has been decreasing. Four years ago the Select Committee on Social Services drew attention to the place of carers and the concept of care for them. As one who has been aware of their problems over the years, will the Minister take the opportunity, through the Bill, to examine the case of carers who have been penalised after having to leave work to look after their parents and others, because when a carer's parents die the carer is not entitled to unemployment benefit? Will the Minister look at the scheme to see how such people could be looked after?
§ Mr. Portillo
The hon. Gentleman raises an important point for which there is much sympathy in the House. I do not want to attempt an off-the-cuff answer. In Committee hon. Members will want to look at that matter. In respect of sanctions, the position of carers will be different from that of other people. They will be in the protected group, and I am sure that the hon. Gentleman welcomes that assurance, although I know that it does not go as far as he would like me to go.
Higher public spending is not the answer because we cannot spend our way out of unemployment. Higher taxes or borrowing and higher interest rates and inflation would result and those would destroy jobs. The Labour party has to learn that real demand in the economy cannot be increased by increasing public spending. However, it can be done as the Government are doing it—by providing the conditions for sustained recovery.
Underlying the Bill is the recognition that in itself economic growth is not enough. The feature of European unemployment over recent decades is that it has risen from one recession to the next. Even in periods of recovery the totals have not fallen very far. We must sort out the structural problems that impede job creation or diminish the incentives for unemployed people to take work.
50 I want to secure through the Bill and other measures economic growth that brings more jobs and lower unemployment, not economic growth that improves life only for those who have work but does nothing for those who do not. We have to make it as easy as we can for one person to offer work to another. Recently that has meant resisting a number of proposals from Brussels which were fully supported by Walworth road. Those proposals would have made it more expensive to employ people and would have imposed on employers liabilities and obligations that would be bound to make them wary of taking on new people.
Another part of what we have to do is to examine incentives. Most people without a job want more than anything else to be able to work. The Bill is designed with those people in mind and they have nothing to fear from it.
§ Mr. Portillo
I had hoped that the hon. Lady was rising to say what policy she intended to reverse. My colleagues and I in the Government are addressing a problem on which there is meant to be agreement across the House. How do we find a benefit system that the country can afford—a system that is equitable?
The hon. Lady speaks of relief for mortgage interest payers. She knows that such relief is not universal today, and that it is not applicable to people who receive unemployment benefit. It is available only to those in receipt of income support. In future, people can make their mortgages secure by taking out insurance which is available in the private sector. The hon. Lady, however, would rather struggle on with a state system which is inadequate, and which is misleading people into believing that their mortgages are protected rather than placing any reliance on the private sector.
Why, when people are able to protect their mortgages with insurance, should the taxpayer of all people be responsible for insuring those mortgages? Has the hon. Lady no concept of individual responsibility—of the fact that, if someone can afford to take out a mortgage, that person should also consider how to protect the payments? The hon. Lady believes in the Commission on Social Justice and in the new welfare state; why will she not admit that, in one corner of the welfare state, there is an opportunity for individuals to take some responsibility? Why will she not admit that the taxpayer should not be the first port of call? The hon. Lady is, as ever, silent.
Over the years leading up to the Bill, we have examined a range of policies to see how they affect motivation, and how they have helped or hindered people in their quest for independence and the ability to provide for themselves. We reformed income-related benefits and introduced family credit: our objective was to ensure that more people would be better off in work than receiving out-of-work benefits, and that those with families would be encouraged to take and keep jobs.
We have recently introduced, or announced, further changes to ease the way back to work. It is now possible, on family credit, to spend up to £40 a week on child care without affecting entitlement to benefit. We have also looked hard at the help that we can give people to help them over the "job hump"—the difficulties that they face 51 when they find a job after being out of work for a long time. We have introduced the jobfinder's grant, which puts cash in people's hands to help them with bus fares, clothing or the tools that they need for the new job.
We have adjusted the benefit system to ease the transition into work. People who find a job after a long period of unemployment will receive the same amount of housing benefit for the first four weeks of work as they received when they were out of work. We are also tackling employer discrimination against the long-term unemployed. We have experimented with workstart—payments to employers who take on the long-term unemployed to encourage them to give those people a chance to prove themselves. The Bill extends that idea by waiving for one year the national insurance contributions that employers would have to pay on newly recruited employees who had been out of work for two years or more.
§ Sir Ralph Howell
Given the success of workstart, under which the state saves at least £30 a week for every person who is employed, why has the system not been made universal?
§ Mr. Portillo
Let me explain an important difference to my hon. Friend. With workstart, we are giving long-term unemployed people who would otherwise face discrimination a chance to prove themselves in the world of employment. I do not believe that spending public money creates more jobs; it cannot do so, because that money is raised from taxes that other people pay. I do believe, however, that we can help to provide opportunities for people who have been out of the labour market for some time—people whom employers would otherwise not be willing to consider. That is good for those people, and good for the performance of the labour market; but I do not draw the conclusion that we can endlessly spend money and make the state the employer of last resort. I shall explain that more fully later.
§ Mr. Campbell
Is it true that a bonus will be given to people who work in careers and dole offices as an incentive to remove claimants from the dole queues?
§ Mr. Portillo
I am pleased to have the opportunity to say that that is not so, although it has been alleged that there will be a target for sanctions.
The Bill introduces a further incentive to help people into jobs—the back-to-work bonus. Income-related benefits are paid to unemployed people to help them when they have insufficient income. Naturally, if they secure part-time work, the money that they earn reduces their need: that must be reflected in the payment of less benefit.
Part-time work, however, is sought by some as an effective ladder leading back to full-time work, and is valuable in maintaining morale while that search goes on. 52 We should therefore encourage people on benefit to take part-time jobs if they are more readily available than full-time jobs. The back-to-work bonus will allow people to build up a credit equal to half what they lose in benefit, and to receive a lump sum of up to £1,000 when benefit is replaced by a full-time job.
Having taken those and other steps to help people back into work, and to ensure that they can be confident of being better off when they are in work, we must now examine the conditions of entitlement to benefit. Let us be clear about the principles. Benefits are paid to help people to deal with contingencies that prevent them from providing for themselves—retirement, disability, sickness or involuntary unemployment.
Since the original introduction of unemployment insurance, it has always been understood that benefit is payable only to people who want to work but cannot. It was presumed that such people would be seeking work, and would take it if it became available. Beveridge was concerned by the effect of the availability of a cash benefit on people's self-reliance, and it was explicit in his report that benefits for unemployed people should be paid only to those who were seeking work. That report stated:The correlative of the State's undertaking to ensure adequate benefit for unavoidable interruption of earnings, however long, is enforcement of the citizen's obligation to seek and accept all reasonable opportunities of work, to co-operate in measures designed to save him from habituation to idleness, and to take all proper measures to be well.
§ Mr. Frank Field
Will the Secretary of State also tell the House that, although Beveridge carefully laid down those safeguards for public money, he added that claimants who fulfilled the conditions would receive benefit until they obtained jobs?
§ Mr. Portillo
I am not aware that that has ever been accepted. Certainly it has not been accepted in the living memory of any Opposition Member. National insurance benefits for unemployed people have been time-limited for as long as any Opposition Member can remember. I admit that the time limits have changed from time to time, but the benefits have not been in perpetuity during the lifetimes of Opposition Members.
The principles that I have read out remain good and valid today. No one has a God-given right to decide to be idle and to live off others, and there is no novelty in saying that today. The taxpayer has every right to expect those seeking work to do so with vigour, and to demonstrate their desire to work by taking actions that are likely to improve their ability to find and hold down jobs—attending courses, undergoing training or actually working in programmes of activity financed by the Government.
To describe that as "workfare" strikes me as loose talk. To me, "workfare" means that the state will be the employer of last resort, committing itself to provide work for any who are without it. That implies a bigger role for the state than I am willing to contemplate. I do not shy 53 away from saying that financial provision is there for those who need it because they cannot support themselves, but they must be able to demonstrate that by their willingness to work. That can include being required to take work that is offered to them on penalty of losing their benefit; if that spells workfare to some, so be it.
I aim to see the world as it really is. Much of what we have already done sets out to tackle the practical disincentives to taking a job which real people face. That is realism. We must also be realistic, however, about the ways in which the system can be abused and no good is done to anyone by ignoring that problem.
The Bill makes explicit much that has until now been implicit. It re-establishes clear principles, in particular the clear conditionality of benefit that was there at the creation of the welfare state. At the heart of the Bill is the proposed jobseeker's agreement, under which the jobseeker will make a commitment to pursue actions that will be most likely to lead to a job. The Employment Service will provide the opportunities that will be of benefit to the jobseeker.
The jobseeker's allowance will provide a better service for unemployed people. There will be, as far as possible, a single set of rules and a single claim form. It will, generally, be delivered from one office—the local job centre.
§ Mr. Portillo
I shall give way to the hon. Gentleman because he is so distinguished, but I must make progress.
§ Mr. Dewar
I positively melt, but I shall recover. My question to the right hon. Gentleman is short. He said that the jobseeker's agreement is the core of the Bill and obviously, therefore, it is an important change. Will he please explain to me precisely how the new powers in relation to agreements, duties and obligations of both the applicant and the Employment Service have changed the existing position?
§ Mr. Portillo
The most important change is that the signature on a jobseeker's agreement will be necessary for the triggering of a claim. The claim will not be valid without there being a jobseeker's agreement. I think that I have answered the hon. Gentleman directly. That is an important change. No claim will exist until a jobseeker's agreement has been signed.
The Employment Service has developed a range of active employment measures that experience has shown—
§ Mr. Portillo
People have been signing on for as long as any hon. Member can remember. They will sign a jobseeker's agreement. They will commit themselves to a programme of activity and the Employment Service is giving to them the range of opportunities that is available. I do not see how the hon. Gentleman can object to any of that.
The Employment Service has developed a range of active employment measures which experience has shown can dramatically improve a person's chances of getting a job. Last month, the service helped 174,000 people—a new record—to get into jobs. It assesses people's needs at restart interviews—nearly 4 million each year. People may then be referred to job clubs, where nearly half are successful at finding work, or to the job interview 54 guarantee scheme, where again nearly half find a job. The job plan workshop scheme and new restart courses have enabled more than 90 per cent. of attendees completing the course to apply for a job, employment, training programme or other sort of help. Of course, there are also the training programmes provided through the training and enterprise councils, including programmes tailored for people with disabilities or other special needs.
Many of those programmes have been tried first on a pilot basis to ensure that we maximise their effectiveness before they are used to help people on a national scale. We want to have the flexibility to try new ideas with pilot schemes. The Bill has, therefore, a carefully defined power to run local pilot schemes, but it rules out piloting any trial schemes that would involve reduced rates of benefit.
With the very substantial improvement that the Employment Service has made in the help that it can offer, we are in a better position than ever to tailor effective assistance to each person's need. 'The Employment Service has a track record of service and of success in helping people into work.
The vast majority of people will, therefore, accept the jobseeker's agreement as a fair and just agreement, but the Bill provides a back-up power. It enables the Employment Service to issue a direction to a person to undertake activity that reflects the person's needs and abilities. That will be necessary only if the jobseeker refuses to do reasonable things aimed at him becoming more employable and sanctions would follow only if the direction were ignored.
§ Mr. Portillo
No. I must make progress.
Of course, directions and sanctions must be reasonably applied. Jobseekers must not be subject to arbitrary demands and there must be safeguards. There will be. Decisions on sanctions will be subject to independent adjudication and to the same appeals structure as we have today.
Some people who lose their benefit because of sanctions will be able to claim hardship payments. Vulnerable groups such as the ill, pregnant women, people with children or people with caring responsibilities will be protected. Healthy, childless people will have no access to hardship payments if they fail the basic conditions of entitlement and they will have no access to hardship payments for two weeks if they break rules once on benefit.
The economy is generating jobs and we are making sure that unemployed people get the chance to take them. We are willing to make changes to our system of provision because the welfare state must be kept up to date. The Labour party claims to be concerned with reform and with the critical question of affordability. The welfare state costs every working person in this country £15 each working day. Yet the Commission on Social Justice proposes additional expenditure of £7 billion a year, which would require higher taxes and would destroy jobs. Conservative Members understand that the business of government requires decisions and requires choices. The hon. Member for Peckham complains about the Bill, but her refusal to commit her party to reverse it shows that Labour is not serious but vague, vacuous and dishonest.
55 The Government have three main aims in the Bill—to help people into jobs, to deliver a better service to people while they are unemployed and to achieve better value for the taxpayer. It is part of our policy to encourage jobs through economic policy and through labour market reforms. The Bill is about jobs, about supporting people while they look for work, about encouraging them to compete for jobs and about helping them into jobs. For all those reasons, I commend the Bill to the House.
§ Ms Harriet Harman (Peckham)
The Bill demonstrates just how out of touch the Government have become with the concerns and interests of ordinary British families. Insecurity among the work force is increasingly recognised as a central economic and social problem. Even the deputy chairman of the Tory party, John Maples, admitted in his secret memorandum that people feel insecure at work. They feel constantly under threat of losing their jobs and believe that the Government are doing nothing to help them, yet the Government have not listened and will not learn.
Despite the somewhat warmer words of the Secretary of State for Employment—I thought at one point that he was on the brink of a U-turn—we must focus on the Bill's provisions because, of course, the Bill will not help to reduce unemployment or to put people back to work. It will make people who are out of work, and even people who are in work, feel more insecure and more fearful.
§ Mr. Gary Streeter (Plymouth, Sutton)
If the hon. Lady feels strongly that the Bill is wrong, why will not she commit herself to reversing it if the Labour party come to power?
§ Ms Harman
Our particular concern is the deepening of the poverty trap and the cut in the period of non-means-tested unemployment benefit from 12 to six months. I shall not anticipate the contents of our election manifesto in some two and a half years. I can tell the hon. Gentleman that we shall introduce a comprehensive range of measures that will deal with the problem of the poverty trap and will allow people to move from welfare to work and to undo the damage that has been done. The Bill does damage and deepens the poverty trap. If the hon. Gentleman is concerned about the deepening poverty trap, like Labour Members, his response should be to vote with us against the Bill tonight.
Unemployment is not, as the Government so often imply, a problem of a minority of lazy people refusing to work. It is a major problem. The Department of Employment's own figures show that nearly 11 million people—40 per cent. of the work force—have been out of work at some point in the past five years. Many of the remaining 60 per cent. who have been continuously in work live in households with people who have been unemployed. The families who have not been affected in some way by unemployment, which has swept through this country, are a rapidly diminishing minority. That is why the Government's attack on the unemployed in the Bill is of concern to people far beyond those currently on the dole.
56 For once, the Secretary of State for Employment has restrained himself from delivering his usual tirade about how excellently the economy is doing and how excellent the employment prospects of people are. Perhaps at last he recognises how abysmal the Government's record is.
I remind the House of what the Secretary of State failed to report as the background to the Bill. Britain has lost 40 per cent. of its manufacturing employment over the past 15 years and we are the only one of the top seven industrialised nations that has seen no rise in employment since 1979. The United States has seen a rise of 21 per cent., Japan a rise of 18 per cent. and Germany a rise of 8 per cent. The Government's record on employment creation is 17th out of 21 countries of the Organisation for Economic Co-operation and Development. That is a record of which the Government should be ashamed.
Unemployment is still almost 1 million higher than it has ever been under any post-war Labour Government. Unemployment among the unskilled is still rising while the Government are still cutting training for the unemployed. Long-term unemployment remains at almost 1 million—39 per cent. of all those unemployed. Our record on long-term unemployment is the second worst among the G7 countries. The number of very long-term unemployed—over two years—is still nearly 500,000; that is more than 100,000 higher than it was two years ago.
That is the real background to today's debate, not the fairyland that is so often painted by Ministers. The truth is that the Government have failed on unemployment and, as a result, we have a work force who are fearful and insecure. It is against that background that the Government propose the jobseeker's allowance.
The Secretary of State said that the heart of the Bill is the jobseeker's agreement. Of course it is not, and he does not believe that. The central measure in the Bill is to cut the entitlement to unemployment benefit from 12 to six months. That did not warrant much of a mention in the Secretary of State's speech, but it is clear that that measure will have the harshest and most dangerous impact.
§ Ms Harman
The hon. Lady failed to listen to my previous response. I have said clearly that I will not anticipate measure by measure what will be in our manifesto in two and a half years, and the hon. Lady would not expect me to do so. I hope that she will vote with us tonight, because I can assure her that we will have a comprehensive welfare-to-work programme, and we will vote against the deepening of the poverty trap that will occur as a result of the Bill.
§ Ms Harman
I shall give way in due course.
That cut in entitlement will make thousands of people much worse off. [Interruption.] I have answered the question twice. Hon. Members who are interrupting from a sedentary position about our manifesto promises should reflect on whether they have kept any of the promises contained in their manifesto. One thing that will be different in our manifesto is that we will keep our 57 promises. Perhaps Conservative Members will pipe down about manifestos for a few moments and reflect on their own betrayal.
§ Ms Harman
Of course the Government did not put in their manifesto that they would cut unemployment benefit or that they would increase national insurance contributions. In fact, quite the opposite: the Government promised that they would not cut benefits and help for the unemployed and that they would not increase national insurance contributions. The Bill does precisely those two things.
§ Mr. Portillo
I am a reasonable man. I understand that the Opposition cannot be expected to tell us every jot of what will be in their manifesto. Manifestos are published close to elections. However, the hon. Lady is launching an attack on the Bill. She said that her central onslaught is on the reduction of the contributory principle from 12 to six months. She said that that is at the heart of the Bill. She said that it is iniquitous and that she hates it. Therefore, she must be able to say that she would reverse it, otherwise she does not have a leg to stand on. That is the fact—she does not have a leg to stand on.
§ Ms Harman
It is interesting that the Secretary of State is spending less and less time trying to justify his proposals, because he obviously does not believe in them, and is spending more and more time asking us what we intend to do when we form a Government. He will find out what we intend to do. He will see our comprehensive welfare-to-work proposal in our manifesto. He will then be watching us from the Opposition Benches as we implement programmes that end the poverty traps that he has created.
Make no mistake, this cut in entitlement will make much worse off the thousands of people facing the very real money worries that come with unemployment. The Government have admitted—and their own figures show—that at any one time 90,000 people will lose entitlement to benefit altogether because they are not entitled to means-tested jobseeker's allowance. That is not necessarily because those people are well off or can afford the cut in income; they may be disqualified from benefit because they have a partner in work on a low income or because they have savings or redundancy payments just above the £8,000 limit.
Let us look at the example of an unemployed man with a wife who works more than the 24-hour threshold or who has just received a redundancy payment over the £8,000 limit. Under the old system, during the first 12 months of unemployment, based on national insurance contributions, he would have received £2,300. Now, despite the increase in national insurance contributions, that figure will be cut to under £1,200—a cut of £1,100. That is a serious and shameful cut.
The pernicious nature of the Bill is not confined to the proposal to means-test after six months instead of 12.
§ The Secretary of State for Social Security (Mr. Peter Lilley)
Those are precisely the circumstances in which 58 those with mortgages who find themselves unemployed do not at present receive any help. That is the system that the hon. Lady wishes to maintain. Why?
§ Ms Harman
We are saying that the Government are putting up national insurance contributions—[Interruption.] Conservative Members may laugh, but people think that this is a serious matter. The Government are putting up national insurance contributions, they are cutting unemployment benefit and, at the same time, introducing new measures to cut the help to home owners who become unemployed. We think that that is wrong.
Our objection to the Bill is not confined to the proposal to means-test after six months. Entirely characteristically, the Government have used the Bill to smuggle in a raft of other measures that will hit hardest those who can least afford it. The Bill will cut the level of benefits paid to young people. In addition to cutting the length of time for which young people can claim, the level of contributory benefit that young people receive will be cut by one fifth. For a young unemployed person out of work for 12 months, the benefit will be cut by at least £500 over that year, even where he or she is still entitled to means-tested benefits.
The Bill will cut the benefits of those with partners who are unemployed. The current rules provide for contributory payments for dependants, but the new rules will mean that from day one payments for dependants will be means-tested. For example, under the current system, a man with a non-working wife who has savings or redundancy payments just over the limit receives £3,822 in the first 12 months of unemployment. As a result of the earlier switch to means testing and the new rules on dependants, that will be cut to £1,200—a reduction of over £2,500—despite the fact that national insurance contributions will have gone up.
What it all adds up to is that, at any one time, 250,000 people will have their benefit reduced or cut altogether. That is what the Bill is about. In addition to the cults in benefit, unemployed home owners will face the extra problem of mounting debt from mortgage interest payments. It is clear to everyone that the Bill will inflict misery on many unemployed people, but what justification has the Employment Secretary offered? He has effectively offered three justifications, all of which turn out to be bogus.
The first justification, which reflects the true nature of the Employment Secretary, is that benefits need to be made less generous to persuade the unemployed to get out and find work. He believes that the unemployed are a feckless group who refuse to look for work. He said:Too broad a benefit system can undermine the morale of those who receive help.The past 15 years are a testament to the failure of that strategy. The Government have consistently cut benefits since 1979, but unemployment is now more than double the 1979 level. If cutting benefits put people back into work, we would have full employment by now. Evidence from abroad also shows that there is no simple equation that proves that cutting benefits means that people find work. It does not work like that.
The vast majority of the unemployed are not out of work because they are work-shy. They are out of work for three reasons: jobs are not available; they cannot earn 59 enough to make it worth moving from benefit into employment; or they lack the skills for existing vacancies. That is the true position.
§ Ms Harman
The hon. Member for Stratford-on-Avon said:If we are to reduce dependence, what really matters is the availability and accessibility of adequately paid jobs.The hon. Member for Chingford (Mr. Duncan Smith) tried to intervene earlier and I shall now accept his intervention if he will indicate to me in advance that he intends to apologise to his constituents for the fact that in the past five years unemployment in his constituency has risen by 137 per cent. If he does not intend to take the opportunity to apologise afforded by my allowing him to intervene, I shall not give way. Will he apologise to his constituents for his broken manifesto promises?
§ Mr. Duncan Smith
I have no intention of apologising. The hon. Lady attacked the Government because she believes that they are cutting benefits, but at the same time she says that there is a 50:50 chance that a Labour Government would accept that. I am not asking her to explain, but will she say whether she believes that social security spending is too high or too low?
§ Ms Harman
That is a very easy question to answer: social security spending on unemployment is far too high. The Government have pushed it up, not by making benefits more generous but by making more people unemployed. The Government's failure to understand that the difficulties with public finances have been created by their economic failure means that they cannot hope to solve the problem.
§ Ms Harman
Far from helping people back to work, the jobseeker's allowance, by increasing means testing, will force people out of work and on to benefits. It will exacerbate the deep poverty traps in the benefit system, especially for the wives of men who become unemployed. Unemployed people cannot claim income support if their partners are working more than the hours threshold. That means that many families will be better off if, when the husband loses his job, the wife gives up hers and the whole family go on to benefits.
At one level, the Government have recognised the problem by increasing the hours threshold from 16 to 24, which is welcome, and by introducing the back-to-work bonus, which is unobjectionable. However, while taking that action, which is designed to get some people out of the poverty trap, they are at the same time putting more 60 people into the poverty trap. Under the current system, those who work part time or for low pay and whose husbands become unemployed are able to work for 12 months without any fear that their continuing to work will make their families worse off. When that period is reduced to six months, many people will find that they, too, have to give up their job because, if they carrying on working, the whole family will be worse off.
Many families who might have escaped the poverty trap over a 12-month period because the unemployed husband was able to find work in that time will now hit the poverty trap at six months. Simply by reducing the length of time during which one can claim non-means-tested benefit, the Government are ensuring that the number of people forced to give up employment and go on to benefit will increase. Therefore, instead of helping the unemployed to move from welfare to work, the jobseeker's allowance will shift people from work to welfare. In defence of his proposal, the Employment Secretary does not argue that that is not the case but simply mutters, "Will you reverse it?" Our answer is my explanation why we shall vote against the Bill tonight.
The second justification is that the measure will supposedly target benefit on those who most need help. Although it is clear to everyone—the Government have admitted it—that 250,000 unemployed people will lose out under the Bill, it is not clear to anyone who precisely will be the beneficiaries of the supposed targeting. Where are they?
The third justification is that benefits need to be cut because too much is spent on the welfare state. Perhaps I could explain to the former Chief Secretary that the reason why public spending has increased, and indeed why it increased while he was Chief Secretary, and that taxes have gone up, also while he was at the Treasury, is not that the lives of the unemployed are being made more comfortable but that there are so many more of them. Two and a half million people have been forced into dependency on benefits. It is the Government's failure on unemployment and on law and order which has driven up public spending. Instead of dealing with such problems, they are, as usual, making the unemployed pay for their—the Government's—failures.
The jobseeker's allowance is another example of broken Tory promises. As my hon. Friend the Member for Wallasey (Ms Eagle) said, during the election the Tories promised not to increase national insurance contributions, but within a year they had done exactly that. They are now cutting the amount of money that people get in return for their national insurance contributions. No one voted for this cut—[Interruption.] The hon. Member for Dover (Mr. Shaw) has not read or not understood the Bill if he believes that it is not about cuts. The Employment Secretary himself justifies the Bill on the basis that it will cut public spending.
No one voted for this cut in benefits, just as no one voted for the increase in national insurance contributions. This cut was not in the Tory manifesto, nor were the other tax increases and cuts in provision. It is no wonder that John Maples found that people no longer placed any trust in the Government. People pay more, but they get less. The central elements of the jobseeker's allowance are the hallmark of the Conservative approach to unemployment over the past 15 years—socially unjust, economically flawed and politically duplicitous.
61 Although the major portion of the Bill reflects the same old dogma of the past 15 years, other measures in it mark a belated admission by the Government that their employment policy has not worked. It was when dealing with those aspects of the Bill that the Secretary of State for Employment sounded most uncomfortable. In particular, the Government have at last recognised that long-term unemployment is not a problem that will be solved by the market; it needs particular action by, and particular attention from, Government. The Government have at last responded to Labour's suggestion that they should offer special incentives for employers to take on the long-term unemployed.
The problem is that, although the Government have accepted the principle, their measures are wholly inadequate. The national insurance holiday for employers who take on those who have been unemployed for two years or more will offer employers just £6 a week. Employers have already made it clear that that is simply not enough and that it does not offer an incentive.
What is more, the national insurance holiday will not be introduced until April 1996. Why should the two-year unemployed have to wait to become unemployed for three and a half years before they get this measly incentive? The message is clear. People will have to wait until April 1996 for the meagre and inadequate incentives to employers to take on the long-term unemployed. When it comes to helping the long-term unemployed, the Secretary of State does so with reluctance and delay. Cuts can be brought in straight away, but incentives, even small ones, take that much longer. The truth is that, whatever the window dressing in the Bill, it is about cutting benefits and making people more insecure about the prospect of unemployment.
Although the Tories think that grinding people down with fear and poverty makes them work harder, we take a different view. We believe that Britain can succeed only with an employment policy that attacks unemployment rather than the unemployed, and that aims to make our work force, on whom our economic prosperity relies, confident and secure, and not fearful and insecure.
There are immediate measures that the Government could and should have included in the Bill to ensure that people get back to work immediately and to modernise our infrastructure. Why do the Government still refuse to begin the phased release of the £5 billion of capital receipts? Why do they not take action to ensure that public-private projects are turned from announcements into action?
There is also a package of measures that the Government could and should have put into the Bill to deal with the particular problem of long-term unemployment. The long-term unemployed are, of course, not a single homogeneous group. There are young people, for example, who have never worked and who need the opportunity to get further qualifications. There are people who have worked all their lives, but have been made redundant in declining industries and need retraining. We propose a £75 a week tax rebate for employers who take on the two-year unemployed. That proposal, backed up by the minimum wage, would ensure that everyone who reached two years of unemployment was given the chance of work.
I now come to the minimum wage. It is intriguing that the Secretary of State for Employment has remained curiously silent about the minimum wage, although he is, 62 supposedly, the cutting-edge, leading ideologue of the Tory party against the minimum wage. He did not say anything about it in employment questions and he did not even mention it in his speech. Could it be that he dare not mention the minimum wage because of his embarrassment at the fact that the Government, having carried out consultation about minimum wages in farming, decided to keep the agricultural wages board because there was general agreement, which the Cabinet was forced to accept, that it was fair, that it did not cost jobs and that employers and employees wanted it?
§ Mr. Portillo
I am part of the Government decision to maintain the agricultural wages board. I have, however, a question for the hon. Lady. At what level will Labour set the minimum wage?
§ Ms Harman
We are not—[HON. MEMBERS: "Answer."] I am about to answer the question, despite the fact that the answer given by the Secretary of State clearly shows all of us that he does not support the decision to keep the agricultural wages board. Despite the fact that he is Secretary of State for Employment, the Government have overruled him. They have been forced to accept our arguments on the minimum wage. I am confident that we shall now hear a great deal less about the minimum wage from the Secretary of State.
We will not set the level of the minimum wage two and a half years before the next election. What we will do is to make it clear that we will introduce a minimum wage, as the rest of Europe and America have, because it is fair, because it protects good employers and because, of course, it does not cost jobs.
Savings in benefits from our programme of a £75 incentive to employers would mean that, although in the first year it would cost £100 million, it would actually save money in the second year. Given that the Government have accepted the principle of tax rebates to get the long-term unemployed back to work, it seems that the most plausible reason for their failure to do anything worth while for the long-term unemployed is the opposition of the Secretary of State for Employment, whose support for the national insurance contributions holiday is lukewarm, to put it mildly.
Unemployment is not only a terrible experience for those who are out of work; it hangs like a cloud over those who are in work, creating a sense of insecurity among people at work. Increasingly, that is recognised by everyone except the Government. Insecurity is not just bad for those who experience it; it is bad for our economy. Is the Secretary of State shaking his head? We know that he is concerned to see the issue raised in opinion poll after opinion poll. We know that he is concerned that everyone, from the Trades Union Congress to the Confederation of British Industry, mentions that insecurity at work is a real problem. Of course, he does not want to do anything about it because he does not believe that the Government have any role in the labour market. All the evidence shows that an insecure work force are not as productive as a confident, secure and well-motivated work force. Our 63 more successful companies know that and our international competitors, whose economies are doing better than ours, know that, too.
Security is also about people having the skills required in today's world of work. That means that people in work and people out of work need proper training. The Secretary of State talked in employment questions about training in work. British businesses do not invest as much in training as our international competitors. In France, three quarters of all employers invest more than 2 per cent. of their payroll costs in training. In the United Kingdom, only one third of employers do so. That is why other countries have a more competitive work force and a more productive economy. That is why we believe that, as part of tackling unemployment, the Government must take action to ensure that all businesses make a fair contribution towards training all the people in their work force.
It is scandalous that, when skill shortages are increasing and unskilled unemployment is rising, the Government are cutting the training budget. The Secretary of State claims to believe in high skills, yet he is cutting the training budget by 12 per cent. over the next three years. Indeed, according to the Government's own figures, they are now spending barely half as much on training for each unemployed person as Labour was in 1979. Contrary to Tory philosophy, we believe that the Government have an important role to play in helping the unemployed back to work, and the Bill does not do that; in ensuring that people have the skills they need, and the Government are not doing that; and in promoting the security and confidence of people at work. That is certainly not happening.
Last Friday, from the pulpit of Liverpool cathedral, the Secretary of State for Employment—
§ Ms Harman
I shall not comment on that. Last Friday, from the pulpit of Liverpool cathedral, the Secretary of State gave the nation a sermon and, with messianic fervour, he made some promises. He promised fairness, he promised tolerance, he promised liberty and he promised to restore the British people's dignity and self-respect. He promised not only economic prosperity but spiritual prosperity. He talked of his vision of a sense of national well-being in a contented nation. Then, he stepped out of the pulpit, into the Department of Employment, and he has brought to the House a Bill that will make the unemployed worse off. No wonder the British people feel that they cannot trust this Government and that they cannot believe anything that the Government say. The gap between the rhetoric and the reality is nowhere more stark than in the Bill and we will vote against it.
§ 6.9 pm
§ Sir Ralph Howell (Norfolk, North)
I welcome those parts of the Jobseekers Bill which will help to simplify the benefits system. That desperately needs doing and I am sure that the Bill will be successful in that direction. I hope very much that the Bill will make it easier for people to move from unemployment into work. That is also a very worthy part of the Bill. While most people recognise that most of the unemployed desperately want to work, a large section of people are claiming benefit and 64 working in the black economy. The Bill will be successful, to a limited degree, in helping to solve that problem.
However, I am very disappointed that a great opportunity totally to reform the welfare state has been wasted. We have made a thorough mess of the welfare state—[HON. MEMBERS: "Hear, hear."]—all of us, including the Opposition. The Opposition are more responsible for that than anybody else. We have failed to put the Beveridge report into operation. The hon. Member for Birkenhead (Mr. Field) was wrong when he said in his intervention that Beveridge said that benefits should go on indefinitely. He did not. Beveridge said that after three months or six months unemployment benefit would cease and work would be offered. That is exactly what should happen.
I am also very disappointed to hear the Secretary of State say that he is opposed to the state being an employer of last resort. The state is the provider of last resort. As the provider of last resort, we are spending well over £20 billion, perhaps as much as £30 billion, on supporting the unemployed on the condition that they do nothing whatever to help society generally. It is time that we thought this thing through. We should go back hundreds of years to 1601, when it was the duty of the local authorities to find work for everyone in their locality. In 1911, Keir Hardie introduced a Bill—the last sensible Bill to have been introduced by the Labour party—to offer and establish the right to work. Heaven help those who did not take the opportunity to work given in Keir Hardie's Bill.
What sense can there be in spending £20 billion or £30 billion while getting nothing whatever in return, while seeing the country become scruffier and scruffier because we cannot afford to paint schools and so on and while being less and less able to afford carers when their services could be used to keep elderly people in their own homes much longer than is otherwise possible? We should re-think the whole matter. The Bill damns itself in as much as we will save only £200 or £300 million here or there, which is negligible and within the margin of error. That means that we will do very little, even in solving the problem of fraud. All in all, we should raise our sights considerably.
I shall refer to the workstart programmes and the North Norfolk action pilot scheme, which the Department of Employment has declared to be highly successful. We have been piloting workstart for—I believe—18 months. Why on earth do not we make it universal? Every person who took part in workstart saved the taxpayer £30 a week. I simply cannot understand what is causing the blockage. The North Norfolk action pilot scheme was expected to cost the taxpayer another £750,000 to put 100 people to work for 18 months—costing the Government £5,000 a year more for each participant. But, in fact, the scheme proved to be successful because of the number of people who were called in for interview and who then disappeared from the unemployment register because it became a little too hot for them when they were offered work.
We will never solve the problem of fraudulent claims until we have a proper work test and we shall have a proper work test only when work is offered. Then, we could save millions of pounds and have a much tidier and better country than we have at the present time.
65 Part of our problem is that we have such a weak Opposition. Why are the Opposition so silent on subjects such as how much we spend on unemployment? When he was Chief Secretary, my right hon. Friend the Secretary of State told me that the cost of unemployment was £13.2 billion. That was in 1992–93. For the year 1993–94, according to the Department, that figure has risen to £14.3 billion—an increase of 8 per cent.—while unemployment was either falling or static and while inflation was just over 2 per cent. So, we have an ever-rising bill.
However, that is not the true cost of unemployment. The predecessor of the former Secretary of State declared that the cost of each unemployed person in the country was £9,000 a year, which, taken altogether, is somewhere in the region of £25 billion to £30 billion. The time has come for an independent inquiry to find out exactly how much unemployment costs and whether we could do something better than spend all that money, which is a total waste and gets us nowhere.
I have no time for those people who are claiming unemployment benefit who should not be claiming it; those people who work in the black economy. The black economy, as we all know, is huge. But, there is something off about insisting that people go on writing letters and re-writing their curriculum vitae month after month and so on when we all know that we are providing no work for them and that there will be no further work as a result of insisting on those practices. That seems like forcing people to play bagatelle on a board which does not have any holes and it is rather a cruel exercise. I urge the Secretary of State to do what he can to adjust the Bill as soon as possible and to bring in measures which will offer work. The time has come when we should seriously consider introducing a Bill on the right to work.
§ Mr. Greville Janner (Leicester, West)
It is always a privilege to participate in a debate with the hon. Member for Norfolk, North (Sir R. Howell). He can be relied upon to produce a pungent, independent and articulate approach. What astonishes me so often, knowing his approach, his background and his party, is how often I agree with what he says and how often his colleagues disagree with him.
I want to begin with the right to work. I have always believed that people are entitled to work. In a decent country, a person is entitled to a home, a good place to live, food, clothing, education and health.
§ Mr. Janner
By a decent, civilised society and that is why I am in politics. We should try to provide in society the right for people to work. The hon. Member for Norfolk, North is correct. He was also correct to use the word "cruelty" in respect of the effect of unemployment on people's lives.
It is cruel to say to people, "We will give you training for work" when there is no work for them to do when that training is finished. It is cruel to say, "You have paid your taxes and national insurance; you have contributed so that 66 you may get unemployment benefit" when the length of time when people will receive that benefit is to be cut in half.
§ Mr. Janner
Because it will not destroy jobs; because it has not destroyed jobs in Europe; because disabled people have a right to decent treatment; because people have a right to minimum holidays and because this is the only uncivilised part of the European Community which refuses to recognise those basic decent rights for which we stand in this place. That is why.
I am looking forward to a Labour Government so that we may join Europe in the social chapter and ensure that the rights of our people—of the disabled, women and people who do not have a right to minimum holidays—
§ Mr. Janner
If I were to wake up and find that, I would do so with joy because we should be serving our people in this country. We do not have much time to do that.
The Secretary of State said that there is no God-given right to be idle and to live off others. Indeed. No Opposition Member would wish anyone to be voluntarily idle, to be lazy or scroungers and not to work and to live off others. However, from my very long experience, I know that the vast majority of unemployed people are desperate for work. The vast majority of the unemployed are anxious to work. They may have got themselves off the register because they are sick of looking. They may have left the register because of the way in which it is organised, but, in my view and in that of the hon. Member for Norfolk, North, they have a right to work.
Our job, whether it is on the Employment Select Committee where we work together, whether it is in this House or in our constituencies, should be to find more work for people. I examined the Bill to discover whether it would create jobs. If any part of it would create jobs, I would support it, but I discovered that it does not do that.
The Bill will not produce more jobs. To have a Jobseekers Bill without producing more jobs is a contradiction in terms. It is like the old story of military intelligence. If one wants a jobseeker's allowance, one must provide jobs so that the people who are seeking jobs can find them.
When the Bill was published, I read its name because Governments of all parties organise names so that Bills and Acts will smell right to the public. Unemployment benefit is a benefit that people have earned through their work. A jobseeker's allowance is what the Government will allow people to have. There is a difference in terminology as there is in the smell of it.
The hon. Member for Norfolk, North was right. It is very expensive in terms of human cruelty and suffering to keep people out of work. It is also very expensive in terms of money. A person in work has the opportunity to serve and the chance to earn a living, to pay taxes and national insurance and to contribute towards others who cannot work, perhaps because they are disabled. Many people cannot work through no fault of their own.
67 As the hon. Member for Norfolk, North said, we must see how we can help find more jobs. We must make work available.
As a lawyer, I examined the Bill to see how the Government define job seeking. It is very interesting because the Government do not do that. The Bill states thatFor the purposes of this Act, 'available for employment' and 'actively seeking employment' have such meaning as may be prescribed";not such meaning as the Government now give them, but as they may prescribe in regulations, just as people will get such money as the Government may allow. Regulations are not primary legislation. The Bill will become an enabling statute. This horrendous rubbish continues:Regulations may prescribe circumstances"—they do not have to, they may—in which, for the purposes of this Act—".Now, for your pre-dinner enjoyment Mr. Deputy Speaker, please listen and see whether you can understand this:
In other words, the Government can do whatever they like. They can make regulations as they see fit which will no doubt be passed at midnight and even the Government rebels will join them. The Government can prescribe.
- "(a) a person who is not available for employment is to be treated as available for employment;
- (b) a person who is available for employment is to be treated as not available for employment;
- (c) a person who is not actively seeking employment is to be treated as actively seeking employment; or
- (d) a person who is actively seeking employment is to be treated as not actively seeking employment."
We do not know what the Government are going to do, but we do know that what they do will not be fair. They will not make it fair for young people. Why should the Government always make life worse for young people who do not have jobs? Why should the unfairness be loaded on people who leave school or universities who cannot get jobs? Why should the burden of the jobseeker's allowance be placed on 18 to 24-year-olds? Why should it be placed on unemployed people whose partners do not work? Why should this Government of all Governments place the burden on people with £8,000 or more in savings, which they may have as redundancy pay, so that they will, at best, have their income halved? Why place burdens on those people?
The Bill does not add jobs or give incentives to jobs. It does not create work. It does not even create incentives to work. It reduces the amount of money that the state will pay in benefits, but it does not reduce that amount in the one way acceptable to the hon. Member for Norfolk, North and myself which is reducing it by having people at work so that they do not have to receive the benefit and so they are paying taxes and national insurance. That is the way to reduce the burden. It should not be reduced by making life harder for the unemployed.
I listened to the enchanting and typical intervention earlier by that somewhat eccentric and delightful hon. Member for Welwyn Hatfield (Mr. Evans). He was talking about scroungers. I have a feeling that that is the bedrock of Tory policy. They believe that everyone who does not have a job is a scrounger. They should go out and look at what is happening.
68 I want to cite a few examples from my constituency which I have served for so long. Male unemployment in my constituency today is 17.4 per cent. Yes, it has gone down and I am delighted about that, but still nearly one in five of males who want a job, even on the Government's method of assessing the figure, cannot get one.
On the great estates in my constituency, unemployment is much higher. Names that mean much in Leicester—for example, Beaumont-Leys, Braunstone, New Parks, Mowmacre, Stocking Farm—have 30 per cent. or 35 per cent. unemployment, I am told, because unemployment is in patches; it does not stretch. Saying that unemployment is 17.4 per cent. is like the doctor hurrying into the ward and asking the sister, "What is the average temperature of all the patients?"
The average unemployment among men is 17.4 per cent. and of women it is only 6.1 per cent. I wonder why. The answer, of course, is that they work part-time. If they are not employed, they go off the register; they are not unemployed. Even then, the level is higher than the national average. The national average of male unemployment is 11.1 per cent. One in 10 men are looking for jobs. They are not paying taxes or national insurance, and they are entitled to benefits. Female unemployment in Leicester, West is 6.1 per cent. and the national average is 4.8 per cent. There are women on the register who want work but cannot get it.
It is a rotten system and it will not be made fairer by the Bill. The Bill will not do much to help. It does one thing, perhaps: it shows some co-operation between two Departments, and that I welcome. I have always believed that Departments should work closely together and that if a decision by any Department creates unemployment, that Department should consult the Employment Secretary of the day. I am in favour of one-stop benefits—I hope that the system works. Those who are in schemes believe that it will not work, but I hope that it does, because that would reduce the burden. Otherwise, what a mess.
I conclude with a quotation from a book called "A Time To Serve" by Rev. Dr. John E. Brown who, happily, is the father of my hon. Friend the Member for Dunfermline, East (Mr. Brown). That book, which has just been produced, and which I strongly recommend because the writer is a distinguished cleric who has no doubt made speeches and sermons from Liverpool cathedral—I suggest that the Minister reads it—states:Lord you must have made a mistake in your calculations."—I was wondering whether he had the Government in mind—
Unemployed people find that time passes with immeasurable slowness. They have the same short time on this earth as we have. We should work to see that they have work. The Bill will not add to that possibility, and it should be rejected for that reason.
- "There is a big mistake somewhere.
- The hours are too short,
- The days are too short,
- Our lives are too short …
- we must not lose time,
- waste time,
- kill time,
- For time is a gift that you give us,
- But a perishable gift,
- A gift that does not keep."
§ Mr. John Sykes (Scarborough)
The year 1995 marks two special dates for me: one celebrates the founding of our family business 150 years ago and the other marks the 700th anniversary of Scarborough returning a Member of Parliament to Westminster, although not the same one. Of course, there has been a labour market in Scarborough and Whitby for much longer than that, and it has thrived without employment directives from Brussels. My experience of the labour market is limited to the practical day-to-day difficulties of running a company involved in manufacturing, retailing and agricultural property.
The Bill deals with the labour market. We in our business know the value of a flexible labour market, to which the Tory reforms of the past 15 years have made positive contributions—reforms that have benefited companies and employees alike. I talk with business colleagues who also value the Government's approach, some of whom have charge of their European subsidiaries in Europe. What began two years ago as a trickle of rumours across the English channel has now become a hard fact. Companies in Europe are now deliberately pursuing policies designed to minimise the employment of labour. All the passion exhibited by the hon. and learned Member for Leicester, West (Mr. Janner) will not alter that single hard fact, for it is manufacturers and companies in Europe—not he or the Governments of Europe—who provide jobs.
The Economist tells us that, despite a sharp increase in overall confidence in Europe, businesses throughout Europe expect to cut their work forces in the years that lie ahead, with one singular and significant exception. That significant exception is the first choice for Japanese and American firms when establishing a presence in Europe. That significant exception has one of the lowest unemployment figures in Europe and one of the best strike records since the 1890s. It is, of course, the significant country of Great Britain.
What is the other significant difference between Great Britain and the others? It is the absence of the social chapter and the existence instead of a flexible labour market. The Jobseekers Bill will continue and amplify that difference. It is part of the process of reform that is enabling the country to compete.
The Bill also deals with the provision of welfare. Sadly, Britain's welfare state remains a gold-mine for those who wish to take unfair advantage of it. One of the most unpleasant manifestations of that is the emergence of so-called badly run Department of Social Security hostels in seaside resorts. Young unemployed people migrate from towns and cities and claim a variety of benefits in an altogether more congenial town. Some come in search of work; others have no intention of lifting a finger.
It has become clear from experience that the work-shy can easily meet current conditions for receiving benefit by adhering to the letter of the law while taking parallel action designed to ensure that they never get a job. The sight of such able-bodied youths lounging on street corners, always with sufficient money for booze and fags, and, in some cases, drugs, is a slap in the face for the decent, hard-working majority.
In my factory, where take-home pay is up to about £300 a week, we have no trouble finding good, well-motivated workers, but it is frustrating to find new recruits who are playing the present system for all it is worth. One 70 22-year-old lasted three days with us, and he left saying that benefits of £160 a week were worth more to him. Presumably, he preferred to stay home watching videos. [Interruption.] Two others arrived on a Monday. [Interruption.] I regret to tell Opposition Members that I can speak from my experience of employing people. I expect that Opposition Members' experience of employing people extends no further than the research assistants who dominate the Palace of Westminster. I am talking about practical experience.
Two other people arrived on a Monday. [Interruption.] They took an hour off on Tuesday—we thought to sign off the dole. They did not come back until Wednesday, and then did so only to tell us that they found factory work tiring and to ask whether we would please sack them to make it easier for them to claim their dole. We refused to oblige, of course.
§ Mr. Campbell-Savours
The hon. Gentleman referred to his former employee aged 22, who left saying that he could gain more money if he was claiming benefit. What wage was the hon. Gentleman paying that young man?
§ Mr. Sykes
The hon. Member was not listening to what I was saying. It is always a pleasure to encounter the soft red underbelly of the socialist party from time to time. I was saying that the gentleman concerned received sufficient benefit to make it not worth his while to work. He preferred to stay at home watching videos. [Interruption.] I am afraid that, with the best will in the world, the hon. Gentleman must accept that there are such people. I am relating my direct experience to the House.
The Bill will make such young men start from their armchairs, if they are tuned into the parliamentary channel this evening, because they will be required to be available for any work that they can reasonably be expected to do. Others will be required to improve their employability. That is another aspect to which the hon. Member for Workington (Mr. Campbell-Savours) must turn his mind if he has not already done so.
Those young men will have to take steps, if appropriate, to present themselves acceptably to employers. Perhaps that will herald, at last, the last of the Mohicans. If they cannot be persuaded voluntarily to remove the rings from their noses the Bill will lead them—by their noses, as it were—into workfare projects, under which they will be obliged to put something back into the community.
The idea of workfare has widespread support in the country, and in many ways the Bill's mention of workfare is one of its most exciting aspects. I urge the Government to ensure that whatever scheme is chosen they make simplicity their byword, because an expensive and bureaucratic system will strangle workfare at birth.
For scroungers and for the feckless, the indolent and the work-shy—[interruption]—there is no good news in the Bill. They may even, rightly, face disqualification 71 from benefit. However, if Britain's welfare system has been a gold-mine for those who wish to take unfair advantage of it—[Interruption.]
§ Mr. Deputy Speaker
Order. The hon. Gentleman should pay a little more attention to the occupant of the Chair.
I recognise that hon. Members have not had the chance to use their voices much during the recess, but I should be grateful if they would reserve their comments until they have the Floor.
§ Mr. Sykes
I assure Opposition Members that I shall listen to them in silence.
If Britain's welfare state has been a gold-mine for those who wish to take unfair advantage of it, it is and will remain a blessed relief to those who genuinely need it. Elements in the Bill will be especially welcome to such people.
Near my home in Scarborough lives a hard-working family, all of whom are in work except the head of the household, who is 50 years old and desperate for a job. The tragedy is that he is almost always told, "Sorry, we are looking for someone younger." In my business experience I find older people reliable, skilled and experienced—I can even extend that description to the hon. Member for Workington.
My neighbour and many like him, who constitute the long-term unemployed, will be helped back to work by provisions and incentives such as a national insurance holiday for companies that give a job to someone who has been on the unemployed list for more than two years.
In Scarborough and Whitby we have our own powerhouse of a micro-economy. A wide range of dynamic companies have established themselves on the coast, providing jobs and prosperity. That is what counts. However, when most of my parliamentary colleagues think of Scarborough and Whitby they think of it as a nice place to go on holiday or to retire to. [Interruption.] The hon. Member for Workington is welcome any time.
Many part-time jobs have been created in tourism and nursing, which suits many of the families living in Scarborough and Whitby, who value the flexibility afforded by part-time work. There is especially good news in the parts of the Bill that help people who wish to engage in part-time work. A claimant's partner will be able to work for up to 24 hours per week without the claimant being disqualified from benefit. The measures that encourage people to leave benefit by taking part-time work as a prelude to full-time work will also prove helpful, as will many other measures in the Bill.
It is almost three years since I became a Member of Parliament—
§ Mr. Sykes
It may be too long for the hon. and learned Gentleman, but I expect to be here for an awful lot longer than he will be.
It is almost three years since I became a Member of Parliament, and in that time the Government have taken many important steps forward—the Trade Union Reform 72 and Employment Rights Act 1993, the Deregulation and Contracting Out Act 1994, and now the Jobseekers Bill. All are entirely consistent with the Government's overall strategy of sustaining and building on our achievements during the 1980s.
British business is now well equipped, with startling advantages in its ability to compete with the world. Opposition Members must not forget that it is the rest of the world with which we are competing. That is nothing to do with post-neoclassical endogenous growth theory or symbiotic relationships of one kind or another; it is straightforward common sense.
The closing years of the 20th century will magnify continental Europe's failure to create the right conditions for jobs. Its minimum wages, massive welfare systems, extreme employment protection laws, parental leave directives, works councils, directives on part-time work, working hours restrictions and social chapter are all profoundly misguided. Curse Europe's efforts to impose such conditions on the English.
I finish by reminding the House about my friends who run subsidiary companies in other European countries. One told me before Christmas that he could not afford to take on anyone else in Europe because of the cost of employing people. But I have saved the best example until last. A large company in my constituency has decided not to build a new factory in France, because of the cost of employing people there, and instead has doubled its production in Scarborough. Those are the hard facts, and in the end it is the hard facts that count. That is why hon. Members should vote for the Bill.
§ Ms Liz Lynne (Rochdale)
I welcome one or two features of the Bill, and I shall come to those later. I had been hoping for some positive measures, as had unemployed people throughout the country and many other hon. Members, but unfortunately the Bill is a sad disappointment to us all.
I had thought that the Secretary of State for Social Security had had a change of heart, especially when I read the speech that he delivered in Northern Ireland a few weeks ago, in which he seemed to take into account the problems of the low-paid and the unemployed, but after his speech yesterday I realised that that was a fallacy and that there had been no change of heart. I did not even expect a change of heart from the Secretary of State for Employment.
There is no denying that new legislation is needed, but the Bill represents a missed opportunity. The benefits system is too complex and it has too many poverty traps. The Secretary of State for Social Security admitted in the White Paper that the overwhelming majority of people make every effort to find work at the earliest opportunity, so why are these draconian measures needed? The Bill's aim was supposed to be to get people back to work; instead, it will do nothing but save the Treasury money.
Let us look at some of the specifics—for instance, the measures affecting 18 to 25-year-olds, who now get less income support than anyone else. I have never thought that that was fair, but instead of taking the opportunity to change it the Government have extended the disadvantage. When the jobseeker's allowance is introduced people under 25 who have paid national insurance contributions will still get less—£9.55 less, to 73 be precise—than everyone else. How are young people supposed to manage on less than anyone else? Do food, clothes and rent cost them less? Of course not; the proposal is totally unfair.
Cutting entitlement to the contributory benefit that is now called unemployment benefit from 12 months to six months will make thousands of people with savings ineligible for benefit. Liberal Democrats say that we will reverse that, and I should like to hear a similar guarantee from the Labour party. People who oppose the Government cutting the time from 12 months to six months should say what they would do if they ever took office.
I asked the Secretary of State for Employment how much it would cost to implement the jobseeker's agreement, and I received a written answer saying that the subject was still under consideration. I now ask the right hon. Gentleman, or whichever of his colleagues is to reply, to give me an answer to that question. We need to know. I know that the jobseeker's agreement is an extension of restart, but so much more weight will be put on the interviews. How much will it cost to train the interviewers? At present many people who go for restart interviews are humiliated and demoralised, and we do not want that to happen with the jobseeker's agreement. The Secretary of State said that the subject was still under consideration, but we need to know those figures now.
If the Secretary of State for Social Security thinks that people are really trying to find work, and the Secretary of State for Employment agrees with him, why is the Bill necessary? Why not concentrate on the long-term unemployed, and on providing proper training packages for people?
Will the training necessary for the jobseeker's agreement to work be available? For example, if an unemployed person gives the Government the guarantee that he or she will seek work, and the interviewer says that the person needs training to find a job, will the Government commit themselves to providing the training for which a need has been identified? I doubt it very much, because the training budget has been reduced from £1 billion to £782 million in the past five years. I should like some reassurance from the Secretary of State that training will be available if an unemployed person is identified as needing it.
At present, a person is allowed to study for 21 hours a week before losing benefit. The Bill provided a great opportunity for the Government to change that, and to make sure that people could study for longer, but the limit will remain at 21 hours. The Government talk about education and training. If they really believed in a properly educated and trained work force, they would ensure that people could study for longer than 21 hours.
Let us look at the problems that disabled people will face. With the new medical test for incapacity benefit, a lot of people will lose that benefit.
§ Mr. Barry Porter
I was much impressed by the hon. Lady's argument about extending the hours of study before a person loses benefit, but how much longer than 21 hours should the limit be? She cannot just leave it there.
§ Ms Lynne
It is obvious that someone who is studying will have better job opportunities after he has qualifications, so it is short-sighted to restrict the study 74 time to 21 hours. I will not say what the limit should be for everybody, but a person who is studying should be available for work at the same time. If a job opportunity comes up and he takes that job, he will of course cease his studies. The 21-hour limit is not feasible.
If disabled people lose entitlement to incapacity benefit, they may try to get the jobseeker's allowance. A jobseeker's agreement will then be drawn up, but what will happen if that disabled person cannot meet its conditions? Will he then be denied the jobseeker's allowance? I should like an assurance that disabled people will not fall through the gap between two benefits.
There are some good points in the Bill. The back-to-work bonus is welcome as far as it goes—it does not go far enough—as it gives people an incentive to return to work. I also welcome the jobseeker's grant and the year's national insurance holiday for an employer who takes on someone who has been unemployed for two years.
I also welcome workstart, which the hon. Member for Scarborough (Mr. Sykes) mentioned. I do not see why the Government cannot extend the pilot schemes across the country. Indeed, they could go further and introduce a proper benefits transfer scheme under which benefits could be given to employers who take on someone who has been unemployed for more than two years. That would get people back into work, and I am sure that that is what all hon. Members want.
We need comprehensive reform, not the piecemeal approach of the Bill. Instead of merging unemployment benefit and income support, the Government should merge family credit and income support. That would get people out of the poverty trap and create a new low-income benefit so that people would not lose benefit pound-for-pound when they get back into work. There would be a real incentive, and it would end the situation where the partner of a person who loses his job is sometimes better off going on the dole.
The Bill is punitive. It proposes some good measures, but the vast majority of it is punitive. It will not achieve the real objective, which is supposed to be to get people back to work. I am desperately afraid that some of the people who cannot meet their commitments under the jobseeker's agreement for whatever reason may be forced into starvation—I know that that sounds dramatic—and some could be forced into crime.
§ Mr. Alan Howarth (Stratford-on-Avon)
My right hon. Friend the Secretary of State for Employment, in his address in Liverpool cathedral last week, said how struck he had been—particularly since he went to the Department of Employment—by the need for public debate on ethical issues. I welcome that invitation. My right hon. Friend is a person of high seriousness, and he is regarded by many people as the standard-bearer for the Conservativism of the future. I hold him personally in the warmest regard, but I differ profoundly from him as to the course that the Conservative party should take. The Bill crystallises our differences.
Why have my right hon. Friends—I am not sure how many have been closely involved—introduced the Bill? They have not done it to achieve substantial savings in public expenditure. I do not doubt that the preliminaries to the Bill go back to 1993, when my right hon. Friend 75 was Chief Secretary. There was at that time a fiscal crisis, and no doubt my right hon. Friend took the view that a fundamental review of unemployment benefit and income support might yield substantial savings.
My right hon. Friend the Secretary of State for Social Security rightly insists that we attend to a problem that we must address on both sides of the Chamber. That is that the growth of social security expenditure is at least as fast as the growth of the economy. I would put it to my right hon. Friends that the policies to create more jobs that they are pursuing are very much the best way to tackle the problem.
Meantime, we have found that any savings that the fundamental review may yield from benefits will not be large. The Bill states that savings on benefit costs of £410 million in 1996–1998 will be offset by an increase in administrative expenditure of £280 million in three years.
Much as I welcome the closer integration of the Benefits Agency and the Employment Service in their practical operations, I do not think that that is the reason why the legislation has been brought in. I doubt whether primary legislation is needed to achieve much that can usefully be done, and the purpose of the Bill goes way beyond making the services more user-friendly.
My right hon. Friend rightly insists that a condition for the receipt of benefit should be that claimants must be available for work and be actively seeking work. That has not been in dispute, as he suggested, since the time of Beveridge.
§ Mr. Paul Flynn (Newport, West)
It might be as well—as Beveridge is so misquoted in the House—to recall that, when the actively seeking work principle was dropped in the 1930s, he said:May it never rise again from its dishonoured grave".
§ Mr. Howarth
I take the hon. Gentleman's point, but—as my right hon. Friend explained earlier—Beveridge certainly expected the exercise of active personal responsibility on the part of unemployed people.
The White Paper acknowledges that the overwhelming majority of people who become unemployed make every effort to find work at the earliest opportunity. That is the positive recognition which ought to animate policy. If we take care of the jobs, jobseekers will in the main take care of themselves.
The White Paper claims that the policy is designed to improve incentives, but I find that the Government's policy is contradictory in that regard. I welcome the concessions on earnings and hours of work on the part of partners before loss of benefit, the relaxation of the rules for trying a new job experimentally, the bonus to encourage people to progress through part-time work to full-time work, the improved transition to in-work benefits and the jobfinder's grant. Those measures complement other sensible initiatives on child care and nursery education. I also welcome the alteration of the rules governing employers' national insurance contributions for those who employ low-paid workers and people who have been unemployed for two years.
76 The Bill, however, moves in the opposite direction in an important sense. It serves to intensify the disincentive for work and saving by switching people on to means-tested benefits and into the poverty trap six months earlier than in the existing system. That seems perverse.
The true explanation of why the Government are introducing the legislation is to be found in paragraph 2.7 of the White Paper. It says:Changes are needed to make clear to unemployed people the link between their receipt of benefit and the obligations that places upon them.The purpose of the Bill is to establish an emphasis. It is to assert a set of values and a view of human nature, society and the role of the state.
My right hon. Friend the Secretary of State was candid in a carefully considered speech to the Conservative political centre in October 1993 when he sought to rehabilitate stigma from its decline at the hands of political correctness and argued that we needed in our public philosophy a renewed emphasis on right and wrong and on personal responsibility. In an address to Church at Work a month earlier, he said:too broad a benefit system can undermine the morale of those who receive help … By its choices, a government demonstrates its philosophy and shows its moral fibre.The argument about the effect of poor relief on the morale of recipients goes back at least as far as the debates on the 1834 Poor Law. On that occasion it was not the Tories but the Benthamites who argued that dependence on poor relief should be a "less eligible" and desirable condition and who required that paupers should be distinguished from the rest of society. It was Disraeli, the young future leader of the Tory party, who said of the new 1834 Poor Law that it wasboth a moral crime and a political blunder.Decisions on welfare are—or ought to be—among the most difficult that Governments have to take. As my right hon. Friend the Secretary of State observes from time to time, they involve issues of moral hazard. I put it to him that they do so not only for the poor but for the powerful and affluent. If Ministers are sometimes uncertain what to do—in all humility, how can they not be?—they should take a risk in the direction of generosity. It may be argued that that way lies fiscal perdition, but I would say that to be generous in this respect is a proper use of our money, which Ministers raise in taxes and hold in trust on behalf of us all. It is perfectly proper and also prudent to do so. We need to consider carefully whether targeting, taken over the life cycle, will save public expenditure.
The circumstances in which my right hon. Friends make those decisions are of giddying economic and cultural change. Employers are stripping out surplus labour and skills and keeping only the core. They call in outworkers as and when they need them. The cost of supporting spare capacity increasingly falls on households instead of shareholders. Those changes are, no doubt, exhilarating for the strong and ambitious. They are frightening for the less capable and the less fortunate.
Of course, my right hon. Friends are right to embrace change. There is no prosperous future for us in refusing to face the future. So the Government drive forward. Sometimes, even to their most affectionate supporters, they are reminiscent of Bakunin's chariot of revolution, rolling and gnashing its teeth as it rolls. My right hon. Friends vigorously dismantle the old and throw out historical lumber. Deregulation, flexibility, free trade, 77 contracting out, opting out and targeting are our nostrums. Radicalism is our watchword. In their eagerness for change, I trust that my right hon. Friends will not forget that it is the responsibility of Government to ensure that the victims of change are not destitute.
In Liverpool, my right hon. Friend the Secretary of State took to task some churchmen who had been, he suggested, seduced from individualism into collectivism. I observe to my right hon. Friend that the Church has always usefully reminded us that we are members one of another.
The dismantling of an old order is not the creation of a new one. As the old dies, the new struggles to be born. As Gramsci noted, in the interval morbid symptoms appear. They include systemically higher unemployment, and casualisation and insecurity extended across society. People are rendered derelict because their obsolete skills, or their lack of skills, mean that they cannot find employment. Inequality widens and the poorest households become poorer.
We are elected to Parliament and we serve in government with a responsibility to take care of our society. I do not believe that market forces are an invisible hand that of itself will create a worthwhile pattern out of all this. Adam Smith was a moral philosopher as well as an economist and he insisted on the need for what he called sympathy.
The Bill widens inequality and deepens impoverishment. It would reduce benefits paid to people unemployed over a year by between 20 and 70 per cent. The changes that it seeks to introduce in the benefits system would be prejudicial to families. That seems an aberration for the Conservative party. The changes would be particularly prejudicial to young families. Under the present system of income support, if both partners are below the age of 25, they receive a lower rate of benefit. Under the new arrangements, that will also apply to recipients of contributory benefit. I have never understood the rationale behind the lower rate of income support for 24-year-olds. If people are 24, their household costs are not thereby less than if they are 25. We need to think carefully about the effect of the changes on children. Poverty is most concentrated in families with children.
I have to say with sadness that I find the Government's policy too harsh. I also find it improvident. The traumas of poverty carry dire long-term consequences both for society and for the Exchequer. Those who are stigmatised and alienated from our society into the workhouse, so to speak—one might say that workwise is our modern workhouse—feel less sense of obligation to society. It is as well that we should consider at least the correlation between lawlessness and unemployment.
§ Mr. Barry Porter
I have followed my hon. Friend's philosophical discourse with some interest. It has been intellectually stimulating. He seems to suggest that we should show more generosity. We all agree with that. Is not the dilemma that he has to face, and everyone regardless of party has to face, that by being generous and increasing the unit costs of labour, our industry would become less competitive than it otherwise would be and could not sell its products? That would cause more people to come out of work. That generosity would then increase and keep the circle going. There is the dilemma.
78 While any Tory of the old school—I hope that I can include both of us in that—would like to be as generous as possible, there is a practical difficulty. Unless someone can square that circle, there is no real or obvious answer.
§ Mr. Howarth
I was talking about the benefits system, not the minimum wage, although I would willingly discuss that with my hon. Friend. I suggest that if he has a moment, he should go to the Library and look at the research on that subject by Professor Card of Princeton university.
I wonder how people on income support can manage decently to feed their families and heat their homes. Under the proposals in the Bill, we would require some people on benefit to live in yet deeper penury. As matters stand already, if people, in the opinion of an Employment Service official, leave a job voluntarily or for reasons of misconduct, they are liable to a deduction from their income support of up to 40 per cent. That may last for up to 26 weeks.
For single people under 25, income support after a 40 per cent. deduction is £21.70 a week. I ask my hon. Friends to imagine what it must be like to try to live on £21.70 a week. In Liverpool, my right hon. Friend the Secretary of State said, towards the end of his address, that among other things,Britain stands for … the freedom of the citizen … to offer his labour and to withdraw it.I wonder whether he overlooked that feature of the benefits system when he used those words.
As it is, we are increasing the use of sanctions. Between April and September 1994, 40,000 people suffered sanctions of up to 40 per cent. for refusing to attend or complete a compulsory programme. That was an increase of two and a half times over the previous year. Disqualifications on the ground that claimants are not actively seeking work have trebled since 1990–91.
As my right hon. Friend knows, I am concerned about older claimants. It is a remarkable fact that 59 per cent. of people now aged between 55 and 64 are not in employment. That compares with 8 per cent. in 1977 and it is stark evidence of the insecurity and, in all too many cases, the impoverishment caused by technological change and the impact of a global, competitive labour market.
Under our present rules, which will be perpetuated through this measure, people under the age of 60 will have to seek work actively if they are to receive benefit. As my right hon. Friend told me when I put this consideration to him on a previous occasion, we must not give up on them, but I fear that, for that age group, the requirement actively to seek work will be a humiliating ritual associated with benefit dependency, rather than a functional feature of the labour market. It is as if one of us were to go into the pulpit and tell those older people, "Seek, even though ye shall not find."
We are introducing a further severity. If a single person, who is in good health, declines to conform with a jobseeker's direction, and if he does not agree with or accept the say-so of an Employment Service official, as my right hon. Friend explained when he opened the debate, he or she will not receive benefit for a fortnight and will have no means of subsistence. Paragraph 4.40 of the White Paper makes it clear that such people would not 79 even be eligible for a loan from the social fund. I was interested in that aspect in relation to what my right hon. Friend said in Liverpool:We must face the new moral and spiritual challenge of living in less adverse times".I am not sure that that particular circumstance was what he had in mind.
The hon. Member for Rochdale (Ms Lynne) rightly drew attention to the possible predicament of about 200,000 people who are eligible for invalidity benefit, for whom there is no work, and whose disability may not be severe enough to qualify them for the new, more stringently assessed, incapacity benefit, but who may find themselves unable to satisfy the availability and actively seeking work requirements to qualify for the jobseeker's allowance.
On a previous occasion, my right hon. Friend observed that it is the responsibility of the state to provide a comprehensive safety net for the needy. I very much hope that the interests of that group will be carefully safeguarded.
I am dismayed by the authoritarianism of the Bill. I am perplexed that it should be so. In Liverpool, my right hon. Friend said:The first duty of government … is to create conditions in which people can become what they want to become".This legislation is not consistent with that attractive spirit.
Last summer, about three times the number of people were required to go on compulsory courses than on vocational training after restart interviews. The Government's plans suggest that, in replacing job plan workshops with workwise and 1–2–1, they anticipate that about twice the number of 18 to 24-year-olds will go on compulsory courses. Perhaps that is our variant of workfare, which has its supporters among Opposition as well as Conservative Members. Enthusiasts for that system should realise that we need to be very self-aware as we explore those policies, to be sure that it is not a tendency to indulge the authoritarian personality that is tempting us forward, and that we are genuinely trying to find practical ways in which to help unemployed people.
The jobseeker's direction is the most authoritarian feature of the policy. It goes well beyond the existing official recommendation and provides that the state should be able to lay down detailed requirements of behaviour for our citizens. It provides vague, but extensive, discretionary powers for officials to require their fellow citizens to undertake activities that seem appropriate to them and to alter their personal ways and style. In Liverpool, my right hon. Friend said thatover-zealous intervention by the state underminespersonal responsibility".
§ Mr. Oliver Heald (Hertfordshire, North)
Does not my hon. Friend agree that, as a society, structural, long-term unemployment is one of the problems that we face? Countries that try to tackle that problem all end up with some element of compulsion. For example, Sweden is the most liberal regime and it is no doubt one of which he might approve, but after a year it requires an unemployed 80 person to take work. Most countries do so, but that is an element of what he is criticising. Surely an element of compulsion is necessary and has to be part of any scheme.
§ Mr. Howarth
I am not arguing against the condition about availability and actively seeking work. I have deep doubts about the wisdom of allowing the Employment Service to exercise dictatorial powers over unemployed people. I find that profoundly illiberal.
In Liverpool, my right hon. Friend observed how much better the democratic state is than the authoritarian variety—certainly, it at least allows us to question the policies.
I am confused by the Government's moral position. The centrepiece of the policy is the jobseeker's agreement—an undertaking whereby the unemployed person commits himself to be available, to seek work actively and to comply with requirements stipulated in return for benefit—the jobseeker's allowance.
The Conservative party has always attached importance to contract as a principle that marshals and orders the energies of free enterprise. It is in the nature of a true agreement, however, that it is made freely and not under duress, such as the loss of benefit.
The Government should also abide by their pre-existing contract. Unemployment benefit is an entitlement based on national insurance contributions, which lasts for 12 months. We are going to substitute for that the contributory jobseeker's allowance, which will be available for six months only. We are taking out the adult dependant's allowance. Similarly, we have been reducing contributory benefits for the long-term sick and disabled. Those cuts for the unemployed and for disabled people come in the wake of a 10 per cent. increase in employees' national insurance contributions.
My right hon. Friends insist that one should not have something for nothing, but nor should one have nothing for something. What is the Government's view of the contributory principle? Is it simply to be an illusion—a device for rationing benefit—or is it still to be a bargain between the Government, employers and our citizens for the provision of social insurance?
My right hon. Friends speak moralistically about the "job-shy", but if they rewrite the national insurance contract in their favour, they will undermine their moral claim on the unemployed.
None of us condones abuse of the benefits system. Nor should we condone abuse of the sanctions system. I commend my hon. Friends to read the latest annual report of the chief adjudication officer. He found that 39 per cent. of Employment Service adjudications in 1993–94 were unsatisfactory and that in no less than 92 per cent. of appeal decisions a claimant disputed the suspension of benefit. He therefore recommended that there should be aninvestigation of the reasons for the continuing poor standard.That report should be read in conjunction with the National Association of Citizens Advice Bureaux report issued in October, "Benefit of the Doubt", which describes how, in 1993–94, 180,000 people whose benefit was suspended erroneously had to subsist on reduced income support payments or even none. Many had to do so for months on end while waiting for their case to be heard.
81 Those failures in administration and justice are the real scandal. They dwarf the scandal of abuse by fraudulent claimants of benefit. I worry that present policy may make the position worse. I am sorry that my right hon. Friend the Secretary of State has just left the Chamber because, in response to the hon. Member for Blyth Valley (Mr. Campbell), he said that the Employment Service had not been incentivised to disqualify more claimants. The Employment Service agreement seems to show that a target is set of 135,000 challenges to claimants on the basis that they are not making themselves available for or actively seeking work. I am struck by the confidence of my right hon. Friends, therefore, in systematically encouraging the service to challenge more benefits, given the background of miscarriages of justice described by the chief adjudication officer.
My right hon. Friends' confidence in the capacity of the Employment Service and the Benefits Agency for wise administration is great. Clause 28 of the Jobseekers Bill establishes new offences. It says that a person is guilty of an offence if herefuses or neglects to answer any question or to furnish any information … under this Act.Regulations under this Act may provide for contravention of, or failure to comply with, any of their provisions to be an offence.A person guilty of an offence under … any regulations made under this Act, shall be liable … to a fine".Are the unemployed to be treated as criminals? They are our fellow human beings and should be able to count on our sympathy and support. What will it do to the morale of our society to proceed in this way? We must base our policy on a belief in human worth and good will. If we do not, we shall provoke a cynicism and demoralisation that will be truly ruinous.
What will it do to the public service ethos, to create arbitrary powers, systematically encourage officials to disqualify from benefit, sanction claimants even more severely than at present and criminalise them? Why should we do that? Is it to achieve candle-end economies for the Treasury—candle ends that might provide light and even some warmth in the households of the poor? Is it to appease the consciences of the affluent so that they can feel more comfortable, believing that those who are poor are feckless and fiddling the system? Are the poor so undeserving that they deserve this?
We need to deconstruct some of the Orwellian language in the Bill, such as "jobseeker's agreement" and "motivation courses". How can we compulsorily motivate someone? I am sure that those who work in the Employment Service are decent people—some will no doubt wish to minimise the harsher effects of the policy—but observation of history and human nature suggests to me that if people in their official capacity are given the power to control and punish their fellow citizens, in less than five minutes some of them start to abuse that power. It is fatuous to suppose that there is something so redeemingly British about our officials that it will not occur here.
The moral energy of Margaret Thatcher's Conservatism lay in her commitment to freedom and responsibility. The history of this Parliament is, perhaps most importantly, that of resistance to arbitrary power. When my right hon. Friend the Secretary of State spoke to Church at Work, he was dismissive ofhigh generosity with other people's moneyand 82collectivised charity".He said:High taxes erode personal values.But do low taxes enhance personal values? How much could the good Samaritan, my right hon. Friend's moral hero, achieve of himself and alone? The state is an agent and Ministers are trustees of a collective purpose on the part of us all to further certain things—a purpose that kindliness makes us share but mere individualism prevents us fulfilling. Do my right hon. Friends reject the view of lain McLeod, in another address to the Conservative political centre, that it is the task of a Tory to heal and unify?
The labour market is changing fast. There are few fixities in our national life, but one is the British sense of fairness. My right hon. Friend, like Saint-Just, desires only to act with due rigour and promote virtue. We are not, thank goodness, a nation of puritans or of rednecks. There is no constituency in this country for a kind of country-cousin Gingrichism. Republican virtue is alien to the Tory tradition. In 1945, voters ignored heroic leadership and were mindful of what they took to be the indifference of Conservative politicians in the 1930s to poverty and social injustice. After 1945, the Conservative party learnt the lesson. That precedent contains a warning for the party to which my right hon. Friend and I both belong.
§ Mr. Frank Field (Birkenhead)
No one would object to the measure that we are debating today if the country were in a position of full employment. But we are not in a position of full employment, so the task that we set ourselves in this debate is to try to understand the extent to which the Bill helps us to move back to a position of full employability.
Not for the first time, two Conservative Back Benchers have helped us to understand the failures of a measure before us to live up to the objective of full employability. This is not the first time that I have heard that elucidation from the hon. Member for Stratford-on-Avon (Mr. Howarth) and my hon. Friend—if I may call him that—the Member for Norfolk, North (Sir R. Howell). They have both underlined important points which I merely wish to underscore.
Above all, I want to emphasise a point made by the hon. Member for Norfolk, North about what unemployment does to people. He did not present it in a fairytale way as though there were only one type of unemployed person, but stressed the image of unemployed people who are nearly broken by the experience of unemployment and who, in a market economy, feel a lack of worth because they cannot contribute fully to the society in which they live. As he said, the picture is more complicated than that. But whatever I go on to say, we must never lose that image from our debates. All of us, especially those with industrial constituencies, see many people in our surgeries who say that they are playing the system. Although their mouths smile, their watery, wintry eyes tell a different tale about what unemployment does to them. It is extremely important to keep that image before us.
The hon. Member for Stratford-on-Avon asked what moral lessons we could draw from the Bill. I thought it extraordinary that a Secretary of State who had just 83 journeyed to Liverpool to talk from one of the most prestigious pulpits in that city should have scored a first in this House by introducing a measure concerning the unemployed. He told us that, ever since measures were first introduced here, conditions were attached to benefits. That is true, but it is only one of the issues about which we should remind ourselves at this time.
There have been many measures against unemployment, whether from Lloyd George and Churchill in the last Liberal Government, Chamberlain in the inter-war period, the coalition Government or from the Governments who followed in the post-war years. But before tonight no Minister has spoken about such a measure without relating it to the moral framework within which the Secretary of State thinks individuals should operate and the moral framework within which society operates.
It is no longer good enough to think that people outside believe that mention of incentive and the market system means that one has conducted an appraisal of moral systems and how they affect individuals and build up to affect the quality and tone of the society in which we work.
For a long time, it has seemed that the Government are brain dead when it comes to looking at the moral and physical impacts of their measures on the wider society. I shall recall just three. Millions of our constituents were taught by the poll tax that it pays to break the law. They were given individual tuition in the Thatcher seminars that one could get away with breaking the law and there were no penalties. Millions learnt that lesson, and they store it in their hearts and act on it. Before then, they were proud never to be lawbreakers. The Government pushed them into that position.
Just before the Christmas recess, an answer was sneaked out about the Child Support Agency. A third of a million people in the country were told, "Well done, lads, for breaking the law and for putting your two fingers up to the Government. Well done for saying that you will not abide by what we enact as the law of this country. We are calling the troops off. The dogs are off you. Don't worry, we will not seriously pursue you for maintenance."
What sort of lesson is that for the single mums who have been deserted, or for all the fathers who protest because they think that the agency has acted arbitrarily or is asking for too much money from them? What does it mean to them to see the Government reward people who hold two fingers up to the House? The Bill tells the country that it is all right to tear up contracts, because the measures that we pass are contracts with our constituents. When we pass national insurance measures and instruments we levy taxes on people and the agreement is that when they need it, they will get benefit. Now it is being said, "Never mind about that, lads and lasses. We are tearing up that agreement because we are the Government and we can do such things." The Bill may well get its Second Reading, but what will that teach the outside world about honour or about giving one's word or a commitment?
§ The Minister of State, Department of Employment (Miss Ann Widdecombe)
Surely the contract on national insurance is that the money which is taken under the national insurance heading goes into a fund and is used 84 only for specified purposes such as the provision of unemployment benefit and pensions. Can the hon. Gentleman point to one penny in that fund which has not been used for those purposes? Will he please acknowledge that the fund is used fully for those purposes and that when it is inadequate we use a Treasury supplement? Therefore, we have surely kept our side of the contract.
§ Mr. Field
I almost despair. The Minister is very able. Often, when that is said in the House, it is said condescendingly, but I do not mean it in that way at all. She knows perfectly well that that is a mind-boggling way of describing what we mean by legal contracts between Governments and those who are governed. We are not saying to people that should the national insurance fund fall into deficit, we may have to increase national insurance charges to meet the bill. What is on offer is the tearing up of a contract that is understood.
Successive Government measures have taught people to encourage the worst side of human nature, and that has the most profound effect on our society. The Bill does that in a further way because it increases the number of people who will be dependent on means-tested benefit. The Secretary of State's answer at Question Time was revealing. I asked him how many people, who thought that they had paid contributions to cover them should they become unemployed, would be pushed on to means-tested benefit now that he is tearing up the contract. He did not know.
The reason that the Bolsheviks so hated the novel "Doctor Zhivago" was that Lara was killed by them and they were so inefficient at going about their killing that they did not even know in which death camp they had done it. The Bill will push a whole army of new people on to means-tested benefits and the Secretary of State who is responsible for the measure does not even know how many will be pushed into that form of dependency.
What means-tested benefits are doing to the moral fibre of this country is important, and it registers in the country even if perhaps it does not register as fully as it should in the House. The problem is no longer marginal. Nearly 10 million households—I am not double counting—depend on one or other of the major means-tested benefits. That is almost half the country; when their dependants are added, it means that some 25 million people, almost half the population, have their standard of living determined to some extent, if not totally, by means-tested assistance. The Bill will increase that number.
When David Piachaud and I coined the phrase in the early 1970s about the poverty trap, I thought of it in a sort of passive way. I thought that people would be on benefit and would find it difficult to disentangle themselves. I now realise how simple that was and how much more complicated life is. Over the period since then, there has been a change in attitudes in respect of honesty, and it extends from the boardroom to the benefit office. Large numbers of people are denied the possibility of full-time, reasonably paid jobs and are offered only part-time jobs. They continue to draw benefits and work on the side. The evil of means-tested assistance is that it is spreading to those other groups who have learned under this Government how to break the law and that it pays to do so. Many people know that the way to survive is to do that.
85 The hon. Member for Norfolk, North was right when he said that some people were abusing the benefit system and that we should take specific measures against them. My charge against this measure, as against practically all the Government's measures in this field, is that it roughs up all claimants and assumes that they all cheat the taxpayer. The Government lack the courage or the willpower to target measures at those constituents with whom I strongly disagree because they commit fraud against fellow taxpayers. But the Government's measures do not do that.
There are general charges to be made against the Government, but there are also important lessons to be learned for the Opposition from this and similar debates. My hon. Friend the Member for Peckham (Ms Harman) was right to say that, at this stage of a Parliament, we would not give details about what would be in our election manifesto. But the lesson that I draw from a stewardship of Tory Governments that has pushed half the population on to means-tested welfare is that disengagement from that will take a long time. We must first be clear about how it is to be done, and it will then take many Parliaments to achieve it.
None the less, it is crucial that Ministers in a Labour Government do not give the sort of response that we have heard from Ministers in this Government, who have always adopted the "short fix" approach. They tend to say, "It looks good now; never mind the long-term consequences." That has led to the society that we now have.
There has been a dispute across the Floor of the House about what Beveridge did or did not say. Beveridge said that a back-up training or work scheme could not be administered at a time of mass unemployment; in those circumstances, control collapsed. Given that—despite what the Government have done to the figures—mass unemployment still exists, it seems proper to give those of our constituents who want to work the right to a job guarantee.
There is no need for compulsion: so many people want jobs that we shall never have to compel them to take what job opportunities exist. If we seriously believe what Conservative Members have said today—if we hate unemployment because it destroys self-worth—we shall judge the Bill a wretched little measure that will do little to deal with fraud, which is in any event a minor problem compared with mass unemployment, and even less to give our constituents who have waited long and hard in the queues for work a chance to add positively to a society to which, unbelievably, many are still proud to belong.
§ Mr. Gary Streeter (Plymouth, Sutton)
It is always a pleasure to follow the hon. Member for Birkenhead (Mr. Field), whose views I usually respect. I must, however, disagree with one thing that he has said this evening. He seemed to be saying that it was not possible for Governments to change, clarify or refine policies in mid-term; that could be done only if the change was set out in a manifesto and received the mandate of the population at a general election. Surely Governments must reserve the right during a five-year term to take the steps that they consider necessary to improve systems, focus resources and so forth.
86 Unusually, hon. Members have said a good deal about "morality" today. I believe that the nation's moral framework still stems from our Christian faith; I am proud to consider myself a committed Christian and I should be delighted to make a few comments about morality.
One reason why the nation's moral fabric is now in disarray is the diminution of our Christian faith since the second world war. If we are to establish a more coherent moral framework, we need to deal with the root problem—the issue of faith. Morality, however, is not just about being nice to people or spending more on welfare; it is not necessarily about acting collectively. There is another side to the morality coin. Morality is also about personal responsibility, about accounting for our lives, about commitment to family and other responsibilities and about not running away from those responsibilities. It is about taking responsibility for our own lives, and not living entirely as we wish.
Of course there is a societal element in morality, but it cannot be discussed only in those terms; individual responsibility is a huge factor. Although I do not agree with every word of it, I find just as much moral content in the contract that is now being discussed in America as in the report on social justice.
All sorts of people become unemployed. Some are genuine, good and decent people who are desperate to find work and ashamed that they do not have it; they hate the idea that they may have to take money from the state. We all know people in that category. But there are also people who are lazy—who prefer idleness to industry. Beveridge, of whom we have heard much this evening, recognised that. There are also those who are dishonest and will skilfully exploit any benefit system to their advantage: even as we speak, many hundreds—if not thousands—are involving themselves in the black economy while drawing benefit. Ideally, wise people would assess each individual on the basis of his needs and motivation and decide his benefit accordingly, but that is not possible in 1995. Hundreds of thousands rely on benefits and we therefore need a system to assess all those people, to draw lines in the sand and to create thresholds if the benefits are to be delivered.
Apparently, some Conservative Members believe that all those who are out of work are layabouts. That is far from the truth. Many of my relatives and long-standing friends in Plymouth have been out of work at times, and have been desperately keen to find work. In the 1980s we heard much from Conservative Members about opportunity and choice, but alongside those two fine words we should place the word "encouragement". We must find ways to encourage those who want to find work and improve their lives to escape and stand on their own two feet.
§ Ms Eagle
Many would agree with the hon. Gentleman's view that people should be encouraged to take jobs; indeed, I do not think that anyone would disagree. But how does he think that draconian benefit sanctions, which the Bill increases, encourage people to do anything? Do they not simply humiliate people?
§ Mr. Streeter
The hon. Lady does not address the real point. We need to approach the benefit system with both carrot and stick. The jobseeker's allowance is an incentive: it gives people a clear sense of what is expected from them and a clearly defined route through the benefit system, and tells them what they can and cannot achieve. 87 It gives them the encouragement of which I speak. However, we also need an arrangement that cracks down on those who wish to defraud the system. Opposition Members may think that Conservative Members believe that all unemployed people are layabouts, but we do not. Does the hon. Lady believe that all those people are good, honest and decent, and that they lie awake at night saluting the Union Jack and believing in the common good?
§ Mr. Streeter
So far this evening, I have not heard any Opposition Member—with the possible exception of the hon. Member for Birkenhead—suggest that there are people who defraud and exploit the benefit system, and have no intention of finding work. We must have a system to deal with those people. I wish that it were otherwise, but we live in the real world. We need systems that include targets, incentives and thresholds, and I believe that the Bill is a step in the right direction.
First, the Bill seeks to target help on those who really need it. There are people out there in the real world for whom we should do much more than we do. However, there are people for whom we do too much and who lean on the state when they should be standing on their own two feet. [Interruption.] Yes, both sorts of people are out there. Opposition Members agree that there are people for whom we should do more, but as soon as Conservative Members suggest that there are people—perhaps only two—who lean on the state when they should stand on their own two feet, Opposition Members say, "Oh, no. That is not acceptable as a thesis." One must see both sides of the coin to discuss this issue properly. That is what the Bill seeks to do—to target and to focus.
The Bill does not, of course, solve all the problems of targeting, but it is a step in the right direction. It is good that each claimant, who after all receives money from everyone else in the nation, should enter into a bargain with the taxpayer and should clearly understand what is required of him or her. Earlier, much mockery was made of the fact that people would have to sign an agreement. It is important, however, that they should have to sign up for a package of measures and rights. It means that they are personally engaged in the process, as they should be.
§ Mr. Ian McCartney (Makerfield)
A constituent of mine is 23 years of age, has worked for the past seven years and has paid class I national insurance contributions. He has recently been made redundant. In an agreement with the Government, he made those contributions on the basis that, if he were made redundant, he would receive a level of benefit for 12 months. He now finds that he will receive that benefit not for 12 months but for six months and that, because he is under 25, the benefit will be further reduced, despite family and other commitments. Is not that a moral breach of an agreement with an individual who has made those contributions since he left school and who, through no fault of his own, has been made redundant in the past few weeks?
§ Mr. Streeter
I hope that the hon. Gentleman will join me and all hon. Members in hoping that, as unemployment continues to fall, his constituent will find a job. Two thirds of unemployed people find jobs within 88 the first six months of unemployment. We all know that the contributory scheme is not an investment programme. Through that scheme, we pay today for other people. We do not save for ourselves and for the future.
The second reason why I support the jobseeker's allowance involves the issue of simplicity. It is important to make the benefit system as simple as possible. I welcome the fact that we are merging income support with unemployment benefit and that we have one system, with, I hope, one centre dealing with benefit claims in most cases. That is far better than traipsing from one location to another and filling in other sets of forms. It is important to simplify the benefit system.
Thirdly, I welcome the measure because it gives increased accountability. The provisions state:As under the existing scheme, in order to receive jobseeker's allowance, benefit claimants will have to be available for, and actively seeking, work. The test will be extended to ensure that people who take steps deliberately which undermine their prospects of finding work will be penalised.I wish that there were not people who took steps deliberately to exclude themselves from work, but all hon. Members know that those people exist. We must make them more accountable to the system.
I also welcome the back-to-work bonus, which is part of this important package of measures. I believe in the concept of stepping stones and of helping people out of unemployment and full-scale benefit dependency and into part-time work to give them a sense of self-esteem. We should also help them go from part-time work to full-time work if that is what they seek. We must take one step at a time. The jobseeker's allowance will help that process.
A young lady works for my wife and me at our home just outside Plymouth. The hon. Member for Wallasey (Ms Eagle) will laugh and scoff because that young lady helps my wife with the horses that she owns and enjoys. I am sure that Opposition Members will not accept that it is right and decent for anyone to own horses. In their view, that is a pursuit of the aristocracy.
The young lady, a single parent, was unemployed for several years. She put a card in a local shop asking if anyone would employ her to work with horses. She was desperate to return to such employment. The months went past and no one employed her. My wife saw the card, made contact, had an interview and took her on 12 months ago on a small part-time basis. That small part-time job, however, has developed into a larger part-time job, which will, I hope, one day be a full-time job. It has helped the young lady to get back on her feet and to buy more for her children this Christmas. The benefit system, including family credit, has helped to support that family. We need that sort of system. It works in practice. Opposition Members may scoff at part-time work, but it is an important way back into work and an important stepping stone.
Of course there are people who want only a part-time job. I understand that 85 per cent. of people in part-time work want to work only part-time. Why? Perhaps it suits their family circumstances. Perhaps they feel that they want to spend some part of the day with their young pre-school children. Part-time work is important. How foolish it is for Opposition Members to wish to load burdens onto employers to ensure—it seems almost their wish—that they will cease to employ as many part-time people. How foolish it is to load on employers of such 89 workers all the employment rights that normally apply to full-time workers. What will be the result of that? Only a reduction in the number of part-time jobs available.
§ Mr. Edward O'Hara (Knowsley, South)
Does not the hon. Gentleman recognise the non-sequitur of which the Government are constantly and reprehensibly guilty—the fact that many people want part-time work does not imply that they do not want full-time work? For them, part-time work is no good.
§ Mr. Streeter
The hon. Gentleman will join me again in rejoicing over the fact that employment is falling so rapidly. Both full-time and part-time jobs are being created. I wish Opposition Members would stop criticising part-time jobs. As I said earlier, they are an important stepping stone into full-time work for people who want it. Some people may want part-time jobs perhaps as a second job for the household or to help them support their family.
The arguments on the minimum wage sound compassionate and excellent in theory. I have no doubt, however, that to impose a minimum wage of £4 a week on a guest house owner in, for example, Newquay for his receptionists, chamber maids and other employees—
§ Mr. Streeter
£4 a week is what some Opposition Members deserve. Imposing a minimum wage of £4 an hour can have only one result: employers will take on fewer employees. The idea of a minimum wage sounds excellent and compassionate in theory, but in reality it is cruel and callous.
Earlier in the debate, in an exchange between the hon. Member for Wallasey (Ms Eagle) and myself, I expressed the view that Opposition Members did not know what it was like to be employers and did not understand how the employment system worked. She says that she has employed people. I am grateful that she acknowledges that fact. I ask her to answer this question. Has she ever had to put her house up as collateral on a business loan? Has she ever lain awake at night worrying about how she will pay the wages that week for her part-time and full-time employees? Has she ever woken up at 5 o'clock in the morning in a cold sweat, worried about where the next order will come from? Until she can answer yes to those questions, she is not qualified to talk about what small businesses, companies and businesses go through in employing people.
The hon. Member for Wallasey scoffed at the fact that the national insurance contribution holiday for long-term unemployed people is only £6 a week. For many small businesses, £6 a week per employee is a significant sum and could mean the difference between taking a person on or not taking him on. Until she has experienced the workplace and been an employer in that business sense, she will have no understanding of that matter.
The Bill has my support. It is an important step in the right direction, but the most important thing that we can do for unemployed people is to create real jobs for them. These measures can be of benefit only within a dynamic economic framework and where there is economic growth. Therefore, is not it good news that we live at a time when there is sustainable economic growth with low inflation and low interest rates and when all the businesses 90 that I visit regularly in my constituency are talking about growth, growing order books, increasing exports and taking on new staff?
The most important thing that any Government can do for their citizens is to provide the economic framework in which jobs are created so that people can find remunerative work which enables them to provide for themselves and their family and to stand on their own two feet. That is the framework in which we are now living. The jobseeker's allowance is worthy of our support. ft is a further step towards targeting help to those who really need it and I hope that the House will support it.
§ 8.1 pm
§ Mr. Keith Hill (Streatham)
We have heard the Secretary of State for Employment claim that the Jobseekers Bill is about more jobs, benefit reform and better services for the unemployed. In reality, it is about the opposite of all those things. It is about job losses, greater dependency, an absolute loss of income for many unemployed people and fewer rights for them all. Far from creating more jobs, the Jobseekers Bill will force more people, especially women, out of work. They will be the partners of unemployed people who, under the present unemployment benefit, which is not means tested, may remain in full or part-time employment for the full 12 months of the benefit. That will change with the shrinking of the contributions-based jobseeker's allowance to six months and the loss of the adult dependency allowance and associated benefits.
On the Government's own figures at least 150,000 unemployed people will be obliged to switch over to the means-tested jobseeker's allowance in its first full year of operation. Their partners will follow them into unemployment as the clawbacks on family income under the means-tested jobseeker's allowance make work financially pointless for them. The inevitable consequence of the jobseeker's allowance will be a massive switch out of jobs and into dependency.
The Government proclaim the advantages of the Jobseekers Bill in terms of benefit reform and it is true that there will be some simplification of the procedures. However, what sort of benefit reform means forcing thousands of our citizens into benefit dependency and the loss or reduction of benefit for thousands more? What logic is it that penalises in particular the 18 to 24-year-olds who have paid national insurance contributions and who receive the same rate of unemployment benefit as all other age groups at present, but who will under the jobseeker's allowance find their benefit cut by 20 per cent? How can it be justified that those who have worked longest and saved the most should suffer most under the jobseeker's allowance?
Anyone who has been a conscientious, hardworking employee all his life but who experiences the catastrophe of unemployment had better beware. If one's savings and redundancy payments amount to more than £8,000—a modest amount at the end of a working life—the unemployment benefit that might be received under the current system will be reduced by half under the jobseeker's allowance. If one claims for a dependent relative, it will be cut by 70 per cent., leaving the princely benefit of £23 a week. In total, nearly one in three male claimants with working partners will lose all entitlement 91 to benefit at six months and nearly two out of three female claimants will lose out entirely after six months instead of 12.
Already in our society there is a pervasive anxiety about the threat of unemployment. That is understandable. What family has not been touched by it to some degree? At least those in work used to be able to reassure themselves that what they had paid for by way of national insurance contributions they would, in some measure, get back. They could also feel that their contributions justified their entitlement to benefit. It was a source of self-respect for the out of work which the Government are now undermining by their shrinking of the contributions-based benefit. The new and arbitrary powers of benefit sanctions conferred on minor officials in the Employment Service compounds this loss of respect by a further loss of rights for the unemployed.
The truth is that if one is out of a job, the Jobseekers Bill means a loss of income and a loss of rights. Those two losses mirror the political purposes of the Bill. It is a device to slash public spending regardless of the social cost. It is born out of the continuing Tory conviction that the unemployed have brought it on themselves. What will happen to the £270 million saved by the Bill? Will it be used to help unemployed people? Will it be used for more or better training? The idea is laughable. We all know that it will be put into a pot for electoral bribes later.
The Jobseekers Bill is dressed up as an attack on the work-shy. Yes, authentically work-shy there may be. The White Paper says:Experience shows … that a small minority seek to abuse the benefit system."Experience" is all very well, but who are those people and how many of them are there? The sparsity of the evidence is matched only by an excess of rhetoric such as we have heard in the Chamber tonight.
This year the Secretary of State for Employment—we all know about his vast experience in these matters—instructed the jobcentres to challenge 135,000 claimants about the genuineness of their search for jobs. He wants to take them off benefit. Last year his predecessor set the target at 69,000. Are we to understand that the number of the feckless unemployed has doubled in the past 12 months? It does not matter that every serious study of the unemployed shows that the overwhelming majority hate being out of work and are desperate for jobs. In Tory dogma, if one is unemployed, it is a personal failure and the workshy and the job hungry are all tarred with the same brush. If the Minister disagrees she should listen to the logic of my next observation.
Some of us, perhaps even the Minister, would say that if a person had been in regular employment for all or most of the two years or more before losing a job, it would create a reasonable presumption that such a person was committed to work. After all, what normal person, having worked consistently, would forfeit a regular pay packet to luxuriate on unemployment benefit of £45 or £46 a week, even for 12 months? Yet, such individuals who are out of work through no fault of their own will, under the jobseeker's allowance, pay the penalty for being unemployed by seeing the time in which they are entitled to benefit halved. Under the guise of tackling the work-shy, the Government are penalising the job hungry. The Government's message to the unemployed is that it 92 is their fault that they are out of work; the Government intend to take them by the scruff of the neck and rub their noses in it.
§ Mr. Heald
The basis of the hon. Gentleman's speech seems to be that these measures will not work, but I can recall that on previous occasions when the Government made suggestions to help the long-term unemployed back to work, the Opposition said exactly the same thing. How does he therefore explain the fact that 250,000 people have gone back to work in the past nine months?
§ Mr. Hill
I doubt very much that many of them were the long-term unemployed. It does not seem likely that compulsion and coercion are the way to get the long-term unemployed in particular back to work, although compulsion and coercion are the ethos of the measure that we are debating.
The Bill gives significant new powers to Employment Service officials to withhold benefit payments if claimants are judged not to be available for work or actively seeking work. In future, benefits may be stopped if claimants are deemed not to be taking stepsto present themselves acceptably to employers",to quote the White Paper. There is enormous scope for the use and abuse of arbitrary judgment in that phrase alone.
Still more threateningly, benefits may now be stopped for up to half a year if a person is considered to have left a job without good cause. The White Paper promised that the legal concepts involved in determining "good cause" would be defined more clearly by legislation. We now know, however, that the definitions do not appear in the Bill but are to be published subsequently in the form of regulations. It appears that a great deal is to emerge in regulations although this is a matter of human and legal rights.
The proposal means that the most permissive and possibly dangerous element of personal interpretation by minor officials will not be subject to parliamentary scrutiny. It is a deeply worrying development and has been made worse—
§ Mr. Frank Field
My hon. Friend said that it would not be subject to proper scrutiny. We shall not be able to change it—
§ Mr. Hill
It is a deeply worrying development which has been made worse by the additional anxiety that front-line jobcentre officials may in future be able to impose benefit sanctions without external adjudication. The fundamental importance of that safeguard is demonstrated by the fact that, in 1993, 44 per cent. of those appealing to the independent adjudication service had their benefits reinstated after they had been stopped by Employment Service staff. That safeguard is not in the Bill, but the Secretary of State for Employment reassured the House today that an independent adjudication procedure will remain in place. It is an essential concession and I invite the Secretary of State or the Minister of State to confirm that the procedure will now be inserted formally into the Bill.
93 Nevertheless, considerably wider powers for benefit sanctions will appear on the statute book. That is why the National Union of Civil and Public Servants, which represents many of the staff at the Benefits Agency and jobcentres, was absolutely right to warn that such staff will be seen increasingly not as the helpers but as the "policers" of the unemployed.
We can draw no conclusion other than that this measure will add to a climate of coercion and compulsion in the benefit system. It will force many people on to worthless training schemes or into low-paid, temporary or part-time jobs which will be useless for their long-term employment needs. If one asks what the jobseeker's allowance offers unemployed people, the answer is less chance of getting benefit and more chance of losing it.
The Bill will do nothing for the vast majority of unemployed people who sincerely want a job, but it will ensure that losing one's job will be a more painful experience than ever before. That is why the House should reject this mean-spirited and vindictive measure.
§ Lady Olga Maitland (Sutton and Cheam)
This has been a debate of considerable passion, but I was somewhat disappointed to hear the angry words of the hon. Member for Streatham (Mr. Hill). For him to describe the Bill as "mean-spirited" and "useless" strikes me as if he has overlooked the main issue, which is that the Bill will give the unemployed every possible opportunity to get back into work. It is the reverse of what the hon. Gentleman suggested.
When passions are running high, it is important to take a step back. While we care deeply about the plight of the unemployed, we do not help if we blind ourselves to reality and clear thinking. It is important to take an almost lateral view of the topic and look at it from the point of view of the unemployed person who is trying to get back into work and from that of the employer who wants to take him into his employ, whether part time or full time, or to undergo training.
I heartily welcome the Bill. Social security costs are escalating and if we do not take firm control now, whichever party happens to be in power in the next century will have a huge problem to solve and the entire community will be shouldering an unbearable cost.
We should examine with a clear mind ways to ensure fair play for all. A minority must not be allowed to take taxpayers for a ride. We have a black economy, and people are in fact stealing when they claim social security while at the same time earning cash in hand. That is to be condemned.
§ Mr. Flynn
Has the hon. Lady read the book written by the hon. Member presently in conversation with Madam Deputy Speaker? It is called "The Age of Entitlement" and contains a chapter entitled "The Demographic Myth" in which the hon. Gentleman says that the Government have exaggerated the number of elderly people in the next century because they wish to distort policies, as they are doing now? The book was written by the hon. Member for Havant (Mr. Willetts).
§ Lady Olga Maitland
Although I have the greatest respect for my hon. Friend the Member for Havant (Mr. Willetts), it does not necessarily mean that I have to concur with all his comments. I regret to say that I have not read his memorable book, but I shall.
94 The Bill aims not only to ensure fairness for the taxpayer, who has a responsibility to support those in need, but to encourage those who are out of work to get back into work. It aims to shift the reluctant, which is not always easy. I have talked to them. I can think of one young man who came to my surgery saying that he was a bartender. I said, "If you are not prepared to take work as a bartender, why don't you think of something else to do?" "Oh," he said, "I only want to be a bartender." More than that, he said, "I want to be a bartender only in a particular type of bar." That told me that he did not want to get back to work at all. When I pressed him on the point, he said that he was quite happy to live on a minimal amount because it came from the Government and required him to do nothing. That is unacceptable. It is absolutely right and appropriate that we should create a climate in which people who are young and able-bodied do not sit around because it suits them.
I find it rather depressing that we are now in a new climate in which people are polarised. There are those who are keen to work, who are part of the engine of this country and who are driving it along. We see that tremendous initiative and enterprise in all age groups. There is another, much smaller group—a very unattractive group—who are almost the professional unemployed. They take part in demonstrations, it does not seem to matter which. We saw them demonstrating outside Parliament against the Criminal Justice and Public Order Bill. We now see demonstrations about animal welfare taking place on the south coast. There is a group of people in that crowd who should be asked clearly and persistently, "What are you doing to try to get back to work? Are you actively seeking a job? Are you genuinely available for work?" I think that there are some who do not fit that category.
The wider picture is that there is undoubtedly positive movement in the job market today. As has been said earlier, the number of jobless has fallen by 45,800 since October. The figure has fallen by almost half a million since December 1992. More than that, in my constituency, the unemployment figure is now down by 3 per cent. and is only just above the level of the late 1980s.
§ Lady Olga Maitland
I shall come to that point later in my address. I can only say that the number of vacancies is rising excitingly.
§ Mr. McCartney
The hon. Lady referred to the jobless in her constituency. Does she accept that in the past five years, unemployment has risen by a staggering 164 per cent?
§ Lady Olga Maitland
I will not agree to the figure of 164 per cent., but I agree that there has been a rise in unemployment. The truth is that today, unemployment is down. More than that, I draw the attention of the House to a reply that I received from the Minister of State, Department of Employment. She tells me that the Employment Service has placed almost 2 million people in jobs in the past year, which is 16 per cent. more than in the previous year. That has to be a triumph and one on which we can build.
95 It is not just a matter of us getting more people back into work, although we must continue to strive to do so. We must also show considerable imagination. I congratulate the Government on having, to date, 15 different schemes and initiatives to help people back into work.
§ Lady Olga Maitland
I stand corrected. I understand that there are 23 different schemes, which is even better than I had expected. The schemes build on the £600 million package of work incentives which were announced last November.
I give the House a taste of the initiatives that have been put into motion. There is the travel-to-interview scheme whereby unemployed people can no longer say that they cannot go for an interview because they cannot afford the fare. That particularly applies when the interview is outside their home area.
I especially appreciate the job search seminars which offer coaching to unemployed people to help them develop their job-hunting techniques and interview skills. That is extremely important. Often people who are not very articulate do not know how to present themselves when they go out into the job market. Some of them barely have a clear idea of exactly what they can do and what they want to do. No employer will take on an applicant who turns up with a muddled approach and, perhaps, an untidy and messy appearance. If such applicants only had a bit of forethought, training and assistance, they could give a much better justification of their real skills.
I have great praise for the system of job clubs all over the country. I have seen them being effective in helping very demoralised people in inner-city areas, such as Tower Hamlets and Haringey. In my constituency as well, people get tremendous moral support from coming together, talking to other people in the same plight and getting one-to-one advice and support in their job applications.
I also pay tribute to my hon. Friend the Member for Norfolk, North (Sir R. Howell) for his work over a long period in encouraging workfare or, as it is known in this country, the workstart pilot schemes. I very much hope that one day I shall be able to visit one of the pilot schemes—I understand that all four of them are up in Norfolk—which are well worth seeing. The Secretary of State for Employment would be well advised to think carefully about how these schemes can be developed. Helping the long-term unemployed into work can only benefit everyone in society, not just the individuals concerned.
§ Mr. O'Hara
I have listened carefully to the hon. Lady's eulogy about efforts to put people back into work in her constituency. I happen to have some statistics here; one must put the matter into context. Unemployment in the hon. Lady's constituency has gone down by 19 per cent. in the past year, but by only 1 per cent. in the past three years. Indeed, in 1989–90, unemployment went up by 148 per cent.
§ Lady Olga Maitland
The hon. Gentleman still overlooks the fact that unemployment is down; he is 96 juggling with statistics. For the man who has managed to get a job, that job means a tremendous amount. The truth is that the Labour party would almost die rather than admit that schemes operated by the Government are a success.
I pay tribute to another Government scheme—the jobfinder's grant—under which up to £200 is provided to an applicant for tools for his trade. I understand from my local jobcentres that that could have quite a significant effect on those who are in manual work, whether painters and decorators or carpenters, and who have felt that a lack of capital support for buying essential tools has kept them out of the job market when they could easily be back in it.
We must, of course, understand the mood and morale of someone who is without a job. I have seen such people being deeply demoralised, especially those who, as has been said by hon. Members on both sides of the House, have worked for 20 or 25 years and who suddenly, in mid-life, are cut off in their prime. I have felt deeply when I have talked through those problems with people who have come to see me. I understand their feelings and I can feel their shock.
There is, however, another group whom we must take into account. We must teach them how to be more flexible in their approach to finding new work and how to be more imaginative. My hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) asked earlier how we could teach people initiative and enterprise. I believe that we can by raising people's confidence, self-esteem and self-worth, and by giving them the feeling that they count for something and that they are important. It is amazing how, once that framework is in their minds, they can leap over a mountain that they had not believed they could leap over. All that could be done is being done through the framework provided in the Jobseekers Bill. I find that the problems of apathy are very serious, especially among the young.
I shall digress for a moment on the subject of the young. The time has come when we should try to create a climate in which we educate the young not to start families until they know that they are on a job ladder. It is staggering to read cases, such as that recently reported in the newspapers of a young girl who had her first baby while she was aged 14, who is now aged 16 and is expecting her third child, while her partner—they are not married—is only 19. How could they possibly have thought that they were ready to support a family when there was no job on hand? They were clearly burdened with their domestic problems and it somehow escaped them that they would have a moral obligation, if they were to have a family, to ensure that they would be able to provide for their children. That is known as moral responsibility.
It would be a great help if, in bringing up young people through the education system, they were taught to understand that having children is an obligation of responsibility, which means ensuring that they accept training and, by the same token, ensure that they embark on a career and have a job structure before they start with the expenses of having children. Indeed, it denies children security if their parents willy-nilly bring them into the world without any thought or planning.
It is very important to recognise those people who have been caught in the benefit trap, who want to get out and want to get back to work. The Bill will do just that. The Bill especially delights me—it is a relief—because 97 through it the triplicate form-filling, the complicated administration of seeking support and getting back to work will come to an end and we shall be able to replace the out-of-date, confusing two-benefit system. That is right. It is long overdue. Undoubtedly, the measures in the Bill will be easier to understand and will streamline administration, which in turn will mean better targeting and improved services for the jobless. In the end, the individuals who are seeking help will feel that one-to-one relationship, which we want to build, so that they have a sense of commitment not only to agreeing to look for work but to those to whom they will be answerable.
I welcome the suggestion that people should sign an agreement demonstrating their commitment to returning to work. That is very important. It is very easy for people to slide into a benefits syndrome without realising that it takes two to tango—the providers of the benefit and the recipients. It takes two to recognise that they have a job to work together to get that unemployed person back into the work force. Signing an agreement emphasises that commitment. It would be of great benefit to build on the programme, which the Government have already started, of working out a planned job search and helping unemployed people with the whole mechanics of looking for work. Making the process more formal and more structured can only be to everyone's benefit.
I also welcome the stick and carrot approach. On the one hand, we have the stick, the commitment and the sanctions as they are applied, and on the other we have the carrot, the tax-free, back-to-work bonus, which will undoubtedly encourage people to leave the benefits system in the long term, particularly those who have been working part-time. The stepping stone of part-time work is an essential part of building up self-confidence, about which we should not in any way be embarrassed or shy. Staff in my local jobcentre are confident that the back-to-work bonus will take off and will work. They are, after all, the people at the coal face and can speak with authority.
We were talking earlier about the opportunities of getting people back into work. The good news is that there are more opportunities today than there have been in the past few years. Certainly in my constituency there are more jobs now in the retail trade; in shops. There are more jobs in clerical work. There are also more jobs in the building trade, which is very significant, although, admittedly, those jobs command slightly lower wages than they did in the past.
One word of advice that I would give to my right hon. Friend the Secretary of State is that although it is all very well getting the training schemes well established, as we have, we nonetheless need to match them with more work experience. That applies especially to school leavers who, at the moment, in some schools, are put on a two-week job opportunity or work experience scheme, which can work very well. Sadly, not enough schools are pushing that scheme hard enough. To give young people that first taste of the real world of work is an enormous help, not only in training, but because an employer can see that they have had some experience of an office environment.
I am disappointed that the Labour party is still absolutely dedicated to the idea of a minimum wage. It strikes me that that is a windmill which we will have to knock to the ground. Labour Members are raising people's expectations falsely and they are doing no favours to the 2 million people who will undoubtedly lose 98 jobs as a result of a minimum wage. I find it strange that even Labour Members have admitted that there are flaws in their own scheme. Indeed, the right hon. Member for Kingston upon Hull, East (Mr. Prescott), when he was interviewed by Brian Walden on London Weekend Television, said:I knew the consequences were that there would be some shake-out, any silly fool knew that".It would be wise if the Labour Government took heed of their own errors in the past. It should be remembered that every Labour Government for more than 60 years have presided over an increase in unemployment.
I trust now that Labour Members will support the Bill and realise, in their anxiety to get people back to work, that the Bill is undoubtedly the best possible chance for all people who are fearful, afraid, need help and need support. We have now got it for them.
§ Mr. Paul Flynn (Newport, West)
The Secretary of State referred in his speech to the living memory of hon. Members in the House. He may well have been thinking of the strange anniversary, on the seventh day of this month, which marked exactly 60 years since the Unemployment Assistance Board came into being. That board originated from a decision made by Ramsay MacDonald's Government of 1931 to limit the duration of unemployment benefit to six months. It is interesting to think that that system may well be coming back, because then many of the benefits were paid by local authorities.
That Government also introduced a system decreeing that unemployed people would have to undergo a means test. That may not be in the memory of many hon. Members, but it is certainly in the memory of my family, as my father was one of the people in that period who underwent that means test, having suffered from a war injury which meant that he never worked again. I remember how embittered he was throughout the rest of his life because, a short while after that means test, the War Department decided to change his pension from an amount which was attributed to his war wound—he was shot—to an amount which was aggravated by his war wound.
The bitterness felt by that generation is about to be reproduced. The Government at the time decided to nationalise the means testing of the unemployed. The Unemployment Assistance Board, which was invented by the then Chancellor of the Exchequer, Mr. Neville Chamberlain—who had his problems later on—applied itself to its task with such enthusiasm that, in the first month of its operation, it brought this country closer to revolt than at any time this century. Hundreds of thousands of families found their incomes savagely reduced. Hon. Members of all parties and from all parts of the country protested loudly.
After only four weeks of the new scheme, the Minister of Labour rose in the House to announce a standstill. The cuts made to that point were cancelled and arrears were paid. Until new regulations could be introduced, the Unemployment Assistance Board was to pay each unemployed person the amount payable under existing regulations or what that person received previously from the local authority. There was rejoicing in the valleys 99 because the valleys of south Wales were among the most generous and fair in respect of the amounts they paid in benefits.
Those events are worth recalling because the Government are embarking on a repetition of the actions of their predecessors. Once again, in April 1996, the duration of unemployment benefit is to be cut to six months. That is an exact replica of the earlier system. Benefit rates are to be cut and, once again, there will be a big increase in the number of unemployed people who are subjected to means testing.
We heard the myth from Conservative Members tonight. We heard it principally from the hon. Member for Sutton and Cheam (Lady Olga Maitland), who has just spoken, and from the Secretary of State, when he spoke on Radio 4 the other day. It was difficult to find any room for thought between the Secretary of State's populist rants. Conservative Members continue to talk about taxpayers' money and about a contract.
When the jobseeker's scheme was originally introduced, the Government said that the reason for it was that unemployment benefit was not much different from income support. They are absolutely right about that. The fact that an insured benefit has decreased to the level of the safety net has not occurred by magic.
What has happened is an extraordinary story. The main thrust behind Beveridge was not simply the fairness of a national insurance scheme. He was interested in the efficiency of such a scheme. As Beveridge pointed out at the time, a multiplicity of private insurance companies collected a few pence every week for all kinds of insurance benefit. Fifty per cent. of the premiums paid were dissipated or wasted. The scheme was very clumsy.
That is precisely what is happening now as the Government are trying to force people into highly inefficient private pensions and private benefits in respect of which there are two major problems: first, the schemes pay poor benefits, and 4 million people in personal pensions will curse this Government when they reach old age because they have been forced into such schemes; and, secondly, the people whom the Government are telling to take out schemes to insure their mortgages and to protect themselves from unemployment are the very people who cannot afford the premiums because they are at high risk.
Let us consider what has happened to unemployment benefit over a period when premiums have risen by 40 per cent. and 50 per cent. There has been a huge increase in premiums. However, while there should have been an increase in the rate of unemployment benefit in comparison to the rate in 1979, there has been a decrease for a family of 41 per cent., if we consider the figures in line with prices, and of 56 per cent., if we consider the figures in line with earnings—which is the best line to take.
The Government have taken an insured benefit; they have jacked up the premiums by a huge percentage, but they have cut the amount received by 50 per cent. When the Secretary of State was speaking this evening, I was speaking on the telephone, in a routine call, to a young man in my constituency. That young man was in despair. He had been through the system. He had been on the schemes and had done what the Government had told him to do. He tried to do a training course, but met obstacle 100 after obstacle. The latest obstacle related to a job as a professional driver in respect of which he faced an insurmountable premium for that scheme. He is one of the many people who have been through the whole gamut of lost opportunity and who have faced all those blank walls. Nothing in the Bill will help that young man.
The Bill is so mean that even the much-vaunted back-to-work bonus, which in principle is not a bad idea and has some merit, is to be affected. On 12 December, the Under-Secretary of State for Social Security, the temporary hon. Member for Monmouth (Mr. Evans), admitted that the Government were going to claw back money from the back-to-work bonus scheme. They are going to make a profit from it. They cannot keep their greedy little hands off it.
The whole point of the wretched scheme is to try to claw back money from the worst-off and to cheat them on national insurance to build up the bribe that the Government hope to offer in the next general election. Everyone knows what is happening. The Government have advertised the bribe so often that it will not work. They should learn that lesson.
§ Miss Widdecombe
I am intrigued by the hon. Gentleman's comments about the back-to-work bonus. Given that at the moment, over and above the disregard, we take away pound for pound and that, in future, we are going to give back 50 per cent. of the remaining earnings up to a maximum of £1,000, how are we profiteering from the back-to-work bonus?
§ Mr. Flynn
If the Minister reads Hansard of 12 December, she will see that the Under-Secretary of State for Social Security admitted that the change would produce savings for the Government. He said:Further information is currently being collected to allow this to be assessed."—[Official Report, 12 December 1994; Vol. 251, c. 535–56.]The Minister will have to ask her hon. Friend the Under-Secretary how that is to be achieved, because that is what he said.
The Government are treating the whole business as an attempt to disguise a cut in benefits and as a way to force the unemployed into the ritual humiliation described by the hon. Member for Stratford-on-Avon (Mr. Howarth). I crossed swords with the hon. Member for Stratford-on-Avon about the 1920s and Beveridge, but I discovered later in his speech that he knew precisely what the effects of the actively seeking employment test and the other tests were.
Beveridge said that the actively seeking work rule in the 1920s was a humiliating and futile experience. When it was used, unemployed people in south Wales could not receive benefits unless they proved that they had actively been seeking work. Unemployed people from Rhondd Fach had to cross the valley to the Rhondd Fawr and the unemployed from the Rhondd Fawr had to cross the valley to the Rhondd Fach. That simply used up shoe leather. However, they had to get a stamp. A member of the Labour Ministry at the time disguised himself as an 101 unemployed person and wrote a book on the subject called "The Myth of the Scrounger" in which he made the point that the only people who—[Interruption.]
§ Madam Deputy Speaker
Order. It is becoming difficult to hear the hon. Member because of other people's muttered interventions.
§ Mr. McCartney
On a point of order, Madam Deputy Speaker. The reason for the muttered interventions is that the hon. Member for Sutton and Cheam (Lady Olga Maitland) spoke for 25 minutes, keeping both Opposition and Conservative Members from taking part in the debate. She has now left the Chamber before my hon. Friend the Member for Newport, West (Mr. Flynn) has finished his speech, contrary to normal practice.
§ Madam Deputy Speaker
That is not a matter for the Chair, as I am sure the hon. Gentleman is aware.
§ Mr. Flynn
When that rule was changed, Beveridge said that it would never rise again from its dishonoured grave because of its futility and cruelty to the unemployed. As we have heard, seek and ye shall not find. That is precisely the theme of the Bill. Its title is meaningless in terms of its purpose. It is about a cut in unemployment benefit, and a vicious, thoroughly unjustified one. It is a breach of faith to millions of people, wrapped up and disguised in a confidence trick.
§ Mr. Nigel Evans (Ribble Valley)
I shall make a short contribution as I know that hon. Members are extremely keen to speak. I am grateful for the opportunity to contribute to this important debate.
I am proud to represent Ribble Valley, which has the lowest unemployment in Great Britain, but that does not mean that I am complacent. Just before Christmas, one of the factories in the village in which I live closed, making more than 100 people unemployed. Just before Christmas is never a good time to do such a thing, but it made the misery even more unbearable for families in the village. Although the vast majority will find jobs in 1995, some people may not. I must be extremely conscious that for each unemployed person in a constituency, irrespective of the level of unemployment, it is a personal tragedy for them and for their families.
I am also conscious of the point made by the hon. Member for Stratford-on-Avon (Mr. Howarth) about people who are getting on in years becoming unemployed; it becomes increasingly difficult for them to find work. We must direct more attention to people in their mid-50s who are looking for work. We have an aging population, and we must pay far more attention to the quality of people in their 50s who are looking for work. They still have a massive amount to contribute.
The jobseeker's allowance is a welcome simplification of the system. There was reference to the benefit reducing from 12 months to six months. The hon. Member for Rochdale (Ms Lynne) and others questioned whether Labour Members would reverse that position if they regained office. We simply could not obtain an answer from Labour Members. It is as though they are afraid to 102 make any commitment until just before the election, when they will pounce on the electorate and say, "This is what we are going to do." It is as though they are afraid chat any of their policies could possibly be costed between now and the next general election.
Opposition Members have suffered greatly in the past. We know that their figures did not add up, and I suspect that they will not add up in future. Opposition Members have decided to hide their commitments until the very last moment. They will have an opportunity toward the end of the debate to consider one of their famous U-turns and say whether they would reverse the legislation which I hope will be passed tonight.
The contract is important. It is between those who are employed and those who are unemployed, as well as many others. One side will contribute through their taxes to ensure that those who are unemployed are given opportunities to make a real contribution. It is important to have a job, just for the sake of self-worth and to give people a purpose to life and self-respect. Like most hon. Members, I believe that the vast majority of people want to work. We must give them that opportunity. We must give them a hand, not just a handout, because the latter does not give an unemployed person a more realistic chance of a job.
We have gone through a deep recession. People who survived the previous recession untouched have been hit by the next one. Businesses have gone through a particularly bad time. We have a record number of self-employed and small business people. They have made a real commitment. Many of them have their houses tied up in their businesses. If their businesses fail, they will risk losing their houses as well. Some of those people have suffered greatly. They work all the hours that God sends. They must consider how much it costs to employ people and how they will find the money to pay the wages bill at the end of the week or at the end of the month. They are our entrepreneurs. We must do as much as we possibly can to give them incentives to start and to give those who have started the opportunity to grow and to take on other unemployed people. It is our duty to ensure that those conditions exist.
It is not an easy option to start a business these days; it is a big risk. It is difficult to obtain capital in the first place. Woe betide businesses if they make a profit, because many Opposition Members think that that, is wrong and that those businesses should be taxed. Making a profit is a disincentive for Opposition Members. I hope that all hon. Members give credit to small businesses and the people who work hard and make their contribution. Conservative Members talk about ensuring that we will give every business man a chance. Opposition Members and others scoff, but we must ensure that such people are given a chance.
Opposition Members cannot have it both ways. They talk about giving people the opportunity for work and, in the same breath, they talk about the minimum wage, which will make more than 1 million people unemployed. They talk about limiting the working week and about piling social costs on to employers—all with good intentions, no doubt—but I hope that people will remember that each of those on-costs has a cost itself. It is a cost like a tax; it takes away opportunities for business people to invest and it takes away the incentive for them to put in greater hours and to take greater risks.
103 Opposition Members rush like lemmings to sign up to anything that comes out of Europe, backing any socialist claptrap that emerges from the cauldron which boils in Brussels. They have been to the socialist mountain top and they want to jump off and to take opportunity and hope with them. We must ensure that they do not have the chance to do that. The one great difference between socialists and Conservatives is that socialists talk about caring, yet all the policies that they want to introduce fly in the face of it. We Conservatives must get on with caring. We must deliver the goods, just as we have done over the past 15 years.
I was proud to serve on the Standing Committee that considered the Deregulation and Contracting Out Bill last year. It was an excellent start. We must ensure that the deregulation initiative has another thrust this year to ensure that the on-costs on businesses are stripped away so that business is given even more opportunity to invest and grow.
Given all the initiatives about which we have talked, opportunities for employment will grow in 1995. There was a fantastic start throughout 1994, and we must ensure that it continues. It is said that two thirds of those who become unemployed find work in the next six months. We must ensure that many more do so in 1995.
The one great thing that is always hidden when monthly unemployment statistics are produced and it is said that unemployment has fallen by 43,000 or 50,000 is the massive flow of people throughout the system who have either gone into or come out of employment. The days when one went into a job at 16 and stayed there for the rest of one's natural working life have gone. There is far more flexibility within the work force. We must recognise that. There are more opportunities to take not just one career but more than one career.
I applaud the work of the employment services. Last year, I visited the employment services in Clitheroe and in Preston. They are doing tremendous work to help people into employment. The contract between those who are seeking work and the Government is right. It will ensure that those who are unemployed receive exactly the right help that they will need to go into employment as soon as possible.
Like many other people, I also believe that—even if we put the question of fraud on one side—when people are simply not interested in finding work and just want to live off the state, we must clamp down as much as we can, because what those people do costs the country a great deal of money. It is also a massive disincentive and a slap in the face for all the people who get up early in the morning and go out and do a day's work—especially those who work at a job in which they have no great interest, yet who want to do that work for reasons of self-respect. We must ensure that others do not ride on their backs.
The many Government schemes already in operation to help people get back to work have already been mentioned. They exemplify what we must do. We must try to provide help for the people who need such help to get into work. With the jobseeker's allowance, people will get that help, and we shall ensure that the contract signed between the unemployed and the Government is fulfilled, so as to help everybody and to give everybody a better chance in 1996 when the proposals come into effect.
§ Mr. Malcolm Chisholm (Edinburgh, Leith)
I remember listening with incredulity when, in the 1993 Budget, the Chancellor of the Exchequer introduced the jobseeker's allowance as a measure to help the unemployed gain employment. It was a similar experience listening to the Secretary of State today. The Bill is not about helping the unemployed to gain jobs but about helping the unemployed to lose benefit, helping their partners to lose their jobs and helping the unemployed to lose the meagre rights and choices on training and employment that they already have.
The underlying economic rationale of the Bill, apart from public expenditure cuts to pay for next year's tax bribes, is to force the unemployed into ever-lower paid employment. And the Bill is shot through with the nasty social authoritarianism of the new Tory right, as typified by the two Secretaries of State who have been jostling for the lead role in introducing it.
The main mechanism to help the unemployed to lose their benefits is, of course, the six-month cut-off point; 30 per cent. of men and 57 per cent. of women will lose all right to benefit after six months because they will not qualify for the income-related allowance. The system is even worse for certain groups of people, such as the young. If a young person has a partner or is married, only 40 per cent. of the benefit that would have been paid under the old system in a year will be paid. Someone older who has received redundancy money and who has a dependent partner will receive only 30 per cent. of what would have been paid under the old system.
Things are no better for someone with a married partner. The increase in means-testing will drive many partners of unemployed people out of jobs. It will not be worth their while to work because if they do their partners will not be able to claim benefit. Again, women will probably be more adversely affected. What is more, like many people who cease to qualify for the jobseeker's allowance after six months, the people driven out of work in that way will not figure in the unemployment statistics, because there will be no reason for them to sign on.
Unemployed people are not only being cheated of unemployment benefit. It is worse than that; many of them will be denied jobseeker's allowance, too. One of the most alarming parts of the Bill appears in clauses 15 and 16, which describe how all sorts of new ways will be devised to deprive unemployed people of their legitimate benefit entitlements.
The first such concern is the length of time for which people may be denied jobseeker's allowance. Clause 15 twice mentions a period of between one and 26 weeks. We have also been told that hardship payments will be denied to many people who are disqualified, although I do not believe that that is mentioned in the Bill.
The second concern is about who will make the decisions. On the first day of this year The Observer contained an article about a leaked document from the Department of Employment suggesting that many decisions would be made by front-line Employment Service staff rather than being referred to an adjudication officer. I hope that the Minister will touch on that question in winding up. Given the number of wrong decisions now made, the proposal causes serious worry.
105 The third big area for concern is the increase in the number of reasons for imposing benefit penalties. The jobseeker's direction is the most notorious of those, and the aspect that has had most publicity is the idea that someone may be disqualified because of a jobseeker's direction relating to his or her appearance or behaviour. That is a good example of the social authoritarianism that I mentioned earlier.
There are many other reasons why people may be disqualified, some of which build on things that are already happening. People are already losing benefit if they refuse to go on certain courses, and that trend will be increased and intensified by the Bill. If people were being sent on real training courses it might not be so bad, but the training budget for next year is being cut by 20 per cent. and many of the courses that people will be forced to follow, on pain of losing benefit, are not genuine training courses.
The other big turn of the screw will be forcing people to take undesirable and unacceptable employment. Not many people lose benefit on the grounds of refusing employment, but the Bill explicitly states that many people will now lose benefit or incur penalties if they refuse to take a particular job. That is one of the underlying reasons behind the Bill. There are a number of undesirable jobs which people rightly do not want because of their appalling wages or conditions, but people will be forced into those jobs. As more people are driven into low-paid employment, the larger pool of people in low-paid employment will drive low wages even lower. That is the economic thinking behind the Bill.
I shall touch on other aspects of the Bill more briefly than I wanted to because other Members want to speak. One thing that has concerned me following constituency casework is the way in which people are unjustly disqualified from benefit because of alleged misconduct on leaving a job, and that will get worse following the Bill. At least a person has six months' disqualification followed by six months' unemployment benefit at the moment, but it appears in the Bill that that person will now get six months' disqualification followed by no benefit at all. There are appalling problems in the Employment Service in relation to that measure.
Recently I attended a social security appeal tribunal with one of my constituents almost one year after he had lost his job. He had had a six-month disqualification, and his appeal was at last heard 11 months after he lost his job. As happens in the majority of cases, it was discovered that he should not have had his benefit disqualified, and he got it back 11 months after losing his job. The Minister should look at that, and also at the good report from the National Association of Citizens Advice Bureaux about the matter which came out last month.
Another area to which I wish to refer is the tightening of the availability for work rules. Clause 6—I do not have the time to go into it in detail, but the matter was dealt with well by my hon. and learned Friend for Leicester, West (Mr. Janner)—suggests that the rules will become even tighter. At the moment, we are told that there is a target of 135,000 people having their benefit stopped this year for not actively seeking work.
Another constituent of mine recently had his benefit stopped, despite the fact that he was studying for only five hours a week. There is a technical rule which has been pushed through that someone who is paying more than £100 for fees—even if he is studying for only five hours 106 a week—will have his benefit stopped. Fortunately for my constituent, his fees were being paid through a bursary and I managed to challenge that ruling. But that is happening already, and clause 6 suggests that it will intensify. It is alarming that clause 6 states that "availability for employment" and "actively seeking employment"have such meaning as may be prescribed.We can only worry and wonder about what those meanings might be.
We need positive action from the Government to tackle the problems which the unemployed face. A minimum wage is a key demand, and others include a supply of appropriate jobs, high-quality training, the abolition of the 21-hour rule and reform of the earnings disregard regulations which hold a lot people out of employment. In the Bill, the higher disregard for the long-term unemployed is being abolished. We also need the preservation of the social insurance principle.
The Government are running out of steam when it comes to doing anything positive for the unemployed, but, unfortunately, they are not running out of steam when it comes to attacking the unemployed and driving the wages of people lower and lower. I hope that this will be one of the last bankrupt Acts of this bankrupt Government, who cannot go too soon.
§ 9.8 pm
§ Mr. Oliver Heald (Hertfordshire, North)
The hon. Member for Edinburgh, Leith (Mr. Chisholm) reflected some of the differences which we have seen all too often during past weeks in the Labour party. He said that having a jobseeker's direction on an issue such as appearance was ludicrous. I think that that was the word the hon. Gentleman used. Other Labour Members have said the same thing.
Yet who was it—only few months ago—who said of the jobseeker's direction:If it is simply a matter of dress, deportment and drawing up a good curriculum vitae, or trying to motivate people, no one could object."—[Official Report, 24 October 1994; Vol. 248, c. 635]?Yes, it was the hon. Member for Glasgow, Garscadden (Mr. Dewar). So again we see that the Labour party simply cannot agree on these issues. We have heard today in The Guardian about the differences over Europe. We have heard about the differences over clause IV and on education. On employment, we have heard the same story again today.
Britain has been able to deal more effectively with unemployment than other European countries because of the regime that the Conservative Government have put in place. Speaker after speaker has criticised the measures in the Bill and assumed that they will not work. However, the evidence is that the measures that the Government have put in place are working.
When I was elected in 1992 my constituency had higher unemployment than it does now. The same is true of the constituencies of most hon. Members. I can see Members on the Opposition Benches of which exactly the same is true. In my constituency unemployment has fallen by 1,000 in the past year alone. When we consider why that is and compare ourselves with our partners in Europe, the answer is clear. We have a competitive economy. We have a spirit of entrepreneurship. We have the lowest business taxes in Europe, the lowest on-costs, one of the 107 lowest levels of Government borrowing, low inflation and a good quality work force who have been highly trained as a result of the activities of the Government.
We often hear from Opposition Members about structural unemployment, but Britain is the only country in Europe which is successfully tackling that problem. Twenty million people across Europe are unemployed, but in Britain, uniquely, unemployment is falling. We have one of the highest levels of labour participation.
When we deal with an issue such as jobseeking and the unemployed, we have to recognise that people have responsibilities and duties as well as rights. I mentioned the hon. Member for Garscadden a moment ago. Let us have a little wisdom from him on this subject, too. He said on 22 October 1992, two years ago:I'm certainly not afraid to say we should go and look at the argument that there are responsibilities and duties, as well as rights, for those who are on benefit".I see that he agrees today that that is right.
Can we seriously argue that people have responsibilities and duties if we do nothing about it when people breach them? There must be some sanctions as well as incentives. I argue that the sanctions proposed in the Bill are the minimum required to enforce the rights and obligations that are imposed by the Bill.
First, the test of availability for work will be that people should actively seek work. That will be extended to ensure that people who take steps which deliberately undermine their prospects of finding work will be penalised. I should have thought that people who do not actively seek work should face a penalty. That is the basic contract between the taxpayer and the person involved. The person should be available for work full time for a minimum of 40 hours. If people expect to receive benefit full time, they should be prepared to work full time.
If Opposition Members criticise and say that it is wrong that people should be deprived of benefit if they are not making the effort that the Government require through jobcentres, what are they saying? They are saying that if people do not fulfil their obligations and duties, nothing should happen and people should be allowed to continue merrily without facing any sanction. That cannot be right.
Similarly with the jobseeker's direction, if the contract between the jobseeker and the Department, along with advice and guidance and the element of compulsion, does not succeed in helping the person back into work, why should there not be a direction to give that person the help and encouragement that is needed to get back into work?
Let us consider the argument that my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) employed. He described a situation in which many elderly people have been out of work for extended periods and said that one cannot force them to look for work. He is saying that, if one is elderly, one can be written off and that one need not be required to look for work. He was being ageist. Opposition Members may laugh, but older claimants should be encouraged. They should have the same opportunities and should be dealt with in the same way as any other claimant, on a level playing field.
When I recently visited my jobcentre—it is one of the new integrated centres, in which the advice and benefit services are provided in one place—it was pointed out that the centre actively encourages employers to consider 108 older applicants and that, if the latter do not receive the encouragement that the Government believe to be vital, we are doing neither them nor the taxpayer justice.
If the Government are prepared to make the effort through the jobcentres, elderly claimants should not say that they are not prepared to make the effort to find work because they believe that it is hopeless. It is wrong for hon. Members to argue that, unfortunately, it is impossible to find work if one is elderly. We often hear such arguments about education from Opposition Members. They say that in inner city areas the situation is hopeless, one cannot expect to achieve much and that there is no point making comparisons or publishing tables as the children will never succeed. They are using exactly the same argument for the elderly.
The Government, through the encouragement that they are giving jobseekers in the Bill, are attacking some of the main issues. I confess that I am an adviser to the Federation of Recruitment and Employment Services, which deals with the private recruitment industry. Its members have frequently pointed out to me that jobseekers are concerned that they do not receive adequate encouragement to take jobs and that it is easier for them to be dependent, even though they may not receive as much benefit, than to take a job. Some of the measures in the Bill will tackle that head on. For example, the back-to-work bonus available under the scheme will encourage people to leave benefit by taking part-time work as a stepping stone to full-time work.
§ Mr. Roy Thomason (Bromsgrove)
Does my hon. Friend agree that the package contains a range of incentives for all unemployed people to get back into employment and that it gives them a chance that the Opposition would deny? It extends the challenge and the chance to seek employment, which many people would not get under the present system. The Opposition are trying to sabotage people's efforts to gain employment. They are hurting the unemployed by resisting these measures.
§ Mr. Heald
I am grateful to my hon. Friend for pointing that out. Not only will the Bill simplify the benefits system, but, as he said, it will provide the unemployed with the opportunity to get back into work.
The back-to-work bonus scheme is one of the methods being used. In addition, let us not forget the employment-on-trial scheme, which will enable the claimant to take a job after three months of unemployment, without incurring any penalty if he voluntarily decides that the job is not for him within a period not exceeding four weeks. Many unemployed people facing the difficult decision to try a different area of endeavour will welcome that opportunity.
Much has been made of the fact that couples and individual spouses will have no opportunities under the jobseeker's allowance. But a strength of the new system is that the period in which a partner is allowed to work will be increased to 24 hours without loss of entitlement to benefit. The Bill will therefore make a considerable contribution to getting unemployed people back to work.
My constituency suffered the difficulties of cuts in the defence industry, as did some other constituencies. In Hertfordshire, a task force approach was taken, with the county council, the TEC, the local authorities, business clubs and so on working together to try to promote employment. That approach has succeeded and, now that 109 the business side is right, we need employees to get back to work with proper training so that Hertfordshire can continue to succeed as it has over so many years. Since I became a Member of Parliament, unemployment in my constituency has fallen and I believe that it will fall faster as a result of this measure.
§ Ms Angela Eagle (Wallasey)
Even the Bill's name is flawed. The switch from unemployment benefit to jobseeker's allowance is a cruel joke at a time of mass unemployment. It is Orwellian wordplay of the highest order. Unemployment benefit is compensation for being unemployed, paid for by national insurance contributions. The jobseeker's allowance is allowed to failed jobseekers who are encouraged to blame themselves for the position in which they find themselves.
Other aspects of the Bill are equally Orwellian and sinister. There is an authoritarian behavioural requirement for jobseekers, the exact details of which are not in the Bill but will be put before us in regulations at a later date. The compulsory jobseeker's agreement is a new twist in benefit sanction and is illiberal in what is meant to be a democratic state. In that respect, I associate myself almost entirely with the arguments put forward in the interesting speech of the hon. Member for Stratford-on-Avon (Mr. Howarth), who uttered many warnings to which his party should listen.
We have no information on the meaning of the "jobseeker's direction" or on what will be required of people unfortunate enough to be out of work. Will they be expected to cut their hair, lose weight or change the colour of their skin? After all, discrimination exists in the job market and we need reassurance from the Government about what people will be put through in order to keep the increasingly meagre benefits allowed by the Bill.
My objection to the Bill is that it is written and designed as if to deal with the most incorrigible recalcitrants who will never have work. Those regulations are then applied to everybody, regardless of their circumstances. The Bill assumes that unemployment benefit claimants, who are the victims of the Government's economic incompetence, are all lazy, work-shy shirkers who need to be forced into a job. The reality is very different. The vast majority of unemployed people are desperate to work and their mental health suffers on the dole. The benefits on which they live are now so low that they live on or below the poverty line. The Bill will worsen that—[Interruption.]
§ Madam Deputy Speaker
Order. I have had occasion before, although the hon. Member for Rutland and Melton (Mr. Duncan) was not present, to deal with sedentary interventions.
§ Ms Eagle
Thank you, Madam Deputy Speaker. As the hon. Member for Norfolk, North (Sir R. Howell) pointed out, the Bill has a massive hole in it. The Government abdicate their responsibility to create jobs for jobseekers and make a virtue out of it. They do not recognise the duty accepted by all previous post-war Governments to maintain a stable and high level of employment. On the contrary, they reward highly paid managers of privatised utilities for destroying a massive number of jobs.
110 In my constituency in Merseyside, 82,410 people are currently unemployed and there are 5,186 job vacancies. That means that 16 people are chasing each job. In my constituency there are 3,882 unemployed people and 157 vacancies, which means that 25 people are chasing each job.
I object to the Bill because it blames the 24 out of 25 people in Wallasey who are unsuccessful in obtaining those jobs. It punishes them for not succeeding, but as the simple application of logic makes obvious, only one out of the 25 can succeed in filling the vacancy. A better CV, a haircut or even gleaming teeth will not help the other 24 people to succeed.
The Bill is introduced at a time when structural changes in the labour market are obvious. There is casualisation, segmentation, further deregulation and reductions in pay, all of which create instability. People move in and out of employment and are sometimes stuck in unemployment and are punished for it.
The Bill contains no analysis of the reasons for unemployment and makes no attempt to meet the needs of the unemployed. It contains very large sticks with which to beat them. That is why it is so objectionable and why we should return to a system in which the unemployed are accorded fairness, dignity and rights. They should not be treated in this authoritarian and obnoxious way by a Government who have long ceased to care for their plight.
§ Mr. Donald Dewar (Glasgow, Garscadden)
The one thing that I can say about the hon. Member for Hertfordshire, North (Mr. Heald) is that, in his own way, he is quite engaging. His one characteristic in common, I think, with most hon. Members is that he does not take himself very seriously. If he is trying to argue that duties and responsibilities are never honoured unless there is a directly threatening sanction, he has a very miserable view of the human species which few of his hon. Friends would share.
I shall start with a complaint, although I do not want to make too much of it, and a rather remarkable circumstance. I picked up the Bill when it was first published and saw that it was presented—it says so on the back—by the Secretary of State for Social Security. The right hon. Gentleman is around the House. We saw him in the building and he even appeared briefly in the debate. However, he decided not to appear at the Dispatch Box, which I find a little puzzling.
One of my ingenious colleagues has suggested that the right hon. Gentleman is taking part in a job share: he is in ideological communion with the Secretary of State for Employment. They will do the job turn about, Tweedledum and Tweedledee, because they are intellectually indistinguishable. That is not entirely satisfactory. If this measure is important and a great Government showpiece it is somewhat discourteous to the House for the Secretary of State not to appear. I hope that I have put that in reasonable terms.
The Bill is depressing at a superficial level that is nevertheless worth mentioning. It is evidence of the depressing fashion for remote government. One can read the text with care and learn not a lot. Almost everything in the Bill is to be prescribed and will be done by regulations at a future and indeterminate date. Its 111 corpulent linguistic patterns are a delight to the insider. No doubt it is draftsman's padding of which he or she is proud, but it does not help the general public who may want to look at the measure. The simplest concept becomes complex. As something of a barrack-room lawyer in my own right, I ought to take great delight in, for example, clause 9(4), which deals with income and capital. It states:Circumstances may be prescribed in which—
There are acres, stricken page after stricken page, of similar verbiage.
- (a) a person is treated as possessing capital or income which he does not possess;
- (b) capital or income which a person does possess is to be disregarded;
- (c) income is to be treated as capital;
- (d) capital is to be treated as income."
We have been led through something of a moral maze today. I genuinely enjoyed the speech of the hon. Member for Stratford-on-Avon (Mr. Howarth), who pushed the boat out even further than he usually does in defining his distinctive position. I was intrigued to hear, from Conservative Members, Disraeli and Gramsci working in harness—even if it was in a good cause. It might be stretching it to say that the hon. Member for Sutton and Cheam (Lady Olga Maitland) entertained us for 24 minutes—she is not the most sympathetic figure on the Conservative Benches—but I look forward to the fulfilment of her very precise prediction that, under a Labour Government, she would find it necessary to knock down windmills. That will do very little for property values in Norfolk.
Then there was the Secretary of State. I had no idea that he had such a touching faith in—despite an incomplete knowledge of—the works of the late Lord Beveridge; I shall certainly remember that.
One stark fact, however, stands out from this interesting debate. The Bill is essentially about cutting public expenditure, reducing entitlement and undermining rights, and that is the essence of our objection to it. The core of the Bill is the cut from 12 to six months, about which the Secretary of State said very little. I can understand that—he wanted to concentrate on other matters, no doubt for good tactical reasons—but the cut is serious, in that it is unquestionably an attack on the contributory principle.
The Minister of State came to the Dispatch Box full of vim and vigour, but her intervention bore all the marks of the product of much time spent working on a bad case. It seemed that she had come up with something that she thought might just stand up, but it clearly did not.
People talk about the contract between Government and governed. We have heard a good deal about a speech that was made in Liverpool cathedral. Religious venues currently have a strange attraction for Conservative Front Benchers. The right hon. Member for St. Albans (Mr. Lilley)—not in his local cathedral, but addressing the Birmingham diocesan conference—recently discovered that there was a strong case for a minimum wage, in that he at least accepted that the principal cause—or, rather, economic cause; I must be precise—of social instability and marriage breakdown was the low wage paid to unskilled manual workers. That at least opened a chink for common sense.
112 If we believe, as these gentlemen do, in the contract between Government and governed, this exercise in Treasury expediency has a hollow, mean and unpleasant ring. Let me give an example of what I mean. One of the virtues seen by those with tidy minds in the Departments of Employment and of Social Security is harmonisation of benefit structures. When it comes to the treatment of those under 25 and over 25 respectively, their logic seems to suggest the importation of rules that are currently part of the income support structure to the new contributory jobseeker's allowance. If that had been applied to the coming year—it will come into effect in the year after that, but the pattern will be similar—a 24-year-old who had made exactly the same contributions as a man of 25 living at the other end of the street would receive £9.70 a week less than that man during the six-month period that is allowed.
I find that extraordinary. The Government's explanation is that someone of 24 earns less, expects less and therefore deserves less; but, as everyone knows, people of 24 eat as much and dress as expensively as older people, and the bills are every bit as big.
There is an interesting omission in the litany that is advanced to defend that proposal. We hear nothing about the "back to basics" philosophy. In the days before "back to basics" had a bad name, there was an additional argument: people would be persuaded, forced, encouraged, stimulated or motivated—all those nice euphemisms—to stay at home. That was the reason for such a substantial reduction.
I enjoyed the exchanges between the right hon. Member for St. Albans and the Select Committee on Social Security on 26 January, when the right hon. Gentleman was questioned by my hon. Friend the Member for Liverpool, Broadgreen (Mrs. Kennedy). On the split between 24 and 25-year-olds, he said that the rules werethe same for everybody in the sense that everybody under 25 will be treated the same and everybody over 25 will be treated the same.As an attempt at a reasonable defence, it is very sub Lewis Carroll but definitely in that league.
As I have explained, an income support rule on the 24 and 25-year-olds split has been imported into the contributory jobseeker's allowance. I must confess that I discovered that quite late in my exploration into these matters, but clause 1(4) contains an innocent looking provision on waiting days. A waiting-days concept will be introduced into the means-tested jobseeker's allowance. That concept was previously used only for unemployment benefit—the equivalent of the contributory jobseeker's allowance. I presume that the result of that will be that under part II of the Bill everyone who receives the contributory jobseeker's allowance will have to wait for a prescribed number of days before the benefit comes into effect; they will not receive it from the date of application, as they do now with the contributory benefit, which is being replaced.
It sounds complicated. It is a lovely proposal from the Treasury's point of view because it will save £40 million, as I heard in an answer to a parliamentary question. The proposal is the mirror image of what has been done with the 24–25 split. I deduce from that—I do not see any other deduction that I can make—that harmonisation is being pursued not in the interests of clients, justice or any other concept but simply to achieve the cheapest option. That 113 is harmonisation at the lowest common denominator. It tells us a great deal about the way in which the Government work and what they are trying to achieve.
We are told that the jobseeker's allowance will produce savings of £140 million in the first year and £270 million thereafter. It will be expensive to introduce. I say to the hon. Member for Rochdale (Ms Lynne), who waxed eloquent about the difficulty of getting a figure on the matter, that the financial memorandum printed at the front of the Bill states that the figure is £280 million over three years. We are told that there may even be 3,000, if not redundancies, at least redeployments in the Department of Employment. There is a great deal of disorganisation and a great deal of administrative expense. A fair degree of injustice and very minor savings will occur, even if one takes it from a Treasury viewpoint.
I ask the Secretary of State for Social Security to cast his mind back to the exchanges in the Select Committee on Social Security, this time with my hon. Friend the Member for Birkenhead (Mr. Field), who asked who would pay. The right hon. Gentleman replied:It is savings, so no one will be paying it.It is some sort of magic, painless, bloodless performance where savings are made for the Treasury and can be clawed out of the Budget, but no one pays. When rightly pressed by the chairman, the right hon. Gentleman was driven from that position. He said thatThose who least the need help of the taxpayerwill pay. We are talking about not a targeted benefit but a contributory benefit. It is not a relevant argument but it provides an interesting insight into the Secretary of State's view of the contributory principle that he pretends to defend. Almost 250,000 people will face the bill. They will be without the contributory jobseeker's allowance after six months at a cost of £180 million in 1997–98. Many will find themselves without an adult dependency increase. Again parliamentary answers tell us that no fewer than 5,000 will be forced on to means-tested benefits at any one time as a result. Spouses will have to give up work, very often to protect the husband's benefit. Of course, a large number of people will find that thrift has been punished because they have more than £3,000 in savings or perhaps £8,000 in savings, which takes them out of the jobseeker's system. After six months they will find that they are either bereft of benefit, forced on to means-tested benefits or left dependent on some other member of their family.
There is a massive inconsistency in" the Government's position and it is illustrated by the facts. This is a serious argument. The Government rail, in my view quite rightly, about the difficulties of means-tested benefit. At the same time, they deliberately introduce measures that force many people on to means-tested benefits. That happens under other legislation as well as the Jobseekers Bill. For example, under the Social Security (Incapacity for Work) Act 1994, 90,000 people in the first year and 190,000 in the second year will be forced on to means-tested benefits or on to the dole queues. The Government may make bigger and better savings, but there will be even greater misery, frustration and depression for the people who do not necessarily deserve that fate but who become the casualties of this sort of legislation. It will not do and the House should not vote for it.
There is another side to the argument. We are told that there is a stick and a carrot—that the Bill will help workseekers and encourage the work-shy. All that is 114 contained in a rather nice little blue pamphlet. It is a sort of canvassers' aide memoire which was distributed at the Conservative party conference. I suspect that the phrase "encourage the work-shy" is a euphemism.
Some have argued that all this talk is simply gesture politics, posturing and playing to the Conservative party gallery. They say that it is tough talking but that nothing will really change. We will have to wait and see. I have said repeatedly that I fear that there is a strong hidden agenda. To be fair to Ministers, it is not hidden very thoroughly or consistently. A Conservative party brief produced for this debate includes a section entitled:Tougher sanctions on the Work-Shy.It was interesting at Question Time this afternoon that, when faced with the neanderthal views—I use that phrase advisedly—of the hon. Member for Welwyn Hatfield (Mr. Evans), the Minister of State, the hon. Member for Maidstone (Miss Widdecombe), did not repudiate them but hurried to tell the hon. Gentleman that she hoped that the Jobseekers Bill would go at least some way towards allaying his fears. I do not want to live in a Britain where the fears, delusions and prejudices of the hon. Member for Welwyn Hatfield are pandered to. In fairness to the Conservative party, I am sure that on the boat out I will find not only the hon. Member for Stratford-on-Avon but many others as well, and quite right, too.
There are some good things in the Bill. There is the back-to-work bonus, but it does not make the transition to work any easier. It rewards those who are successful in finding work. It reinforces success but does not help those who do not have the equipment to be successful. For many of the most vulnerable it will be a case of perhaps jam tomorrow, but it is much more likely that it will be jam never.
The national insurance holiday for those who have been unemployed for two years is a peelie-wally little attempt to deal with a real problem. It is worth about £6 a week. That is the incentive. Surely the Government who invented the national lottery can do better than that.
The jobfinder's grant, the extension of family credit on a test basis, and the job trial extension are not in the Bill and will have to be considered on another occasion.
I know that I am running into the Minister's time and I make no apology for that given what happened earlier in terms of the allocation of time and the agreement reached behind the Chair. I believe that I am within my rights.
One of the favourite examples of self-deception and delusion that afflicts Conservative Ministers is that they carry with them the support of a large number of outside bodies with expertise. However, even they cannot imagine that that is true in this instance.
Carers' organisations are very worried about the lack of a right to the jobseeker's allowance for those who cease caring, perhaps because of the death of the person cared for. There were sympathetic noises from the Secretary of State for Employment, but I assure him that we shall return to the issue in Committee. I hope that his sympathy will extend to practical help when we get there.
The National Association of Citizens Advice Bureaux, the Royal Association for Disability and Rehabilitation, the Disablement Income Group and the coalition of young people on social security have condemned the Bill. Almost everyone involved has said that it will not do and that it is inappropriate.
115 I remember the speeches, which have been referred to, made by the Secretary of State for Employment. I remember his speech about the need to restore deference in our society so that everyone knows his appointed place and keeps to it. However, the other side of deference is stigma. My worry is that, whatever the intention of some people in the Conservative party, the end product will be an extension of stigma, with all its disastrous consequences for the unfortunate in society. Those who have suffered misfortune, which may be economic or health related, will find themselves in the dock, stigmatised as economic failures and seen by many less tolerant people as social outcasts. That should not be the House's intention. The Bill is not merely about Treasury expedience; it is a social philosophy that still has about it the smell of less eligibility, which is why we shall vote against it tonight.
§ The Parliamentary Under-Secretary of State for Social Security (Mr. Roger Evans)
The hon. Member for Glasgow, Garscadden (Mr. Dewar) made a valiant effort to sit on both sides of the fence. He wondered whether the Bill was tough or whether it was merely talk that would change nothing. He spoke of hidden agendas and ended with a fantastic peroration on the principles of stigma, which had nothing to do with the Bill. The mealy-mouthed concession in his closing remarks was that there were some good things in it, such as the back-to-work bonus.
I suppose that we should be grateful that the hon. Member for Garscadden was not quite as bizarre as the hon. Member for Newport, West (Mr. Flynn), who saw something sinister in the back-to-work bonus because it might save money in persuading people to go back to work.
Let us deal with the fundamental principles behind the Bill.
§ Mr. Evans
I shall not give way, as I have very little time.
The first principle of the Bill is to improve the operation of the job market, but we heard nothing about that from the Opposition parties. Secondly, when it came to improving the service to the unemployed by means of a uniform streamlined service, they grudgingly conceded that there might be something somewhere in the Bill that would achieve that end, but they based their miserable attack on the premise that anything involving streamlining was harmonisation on the worst possible basis.
The third principle is to improve value for the taxpayer, but that did not receive a single word of support from the Opposition, who ridiculed the considerable savings and treated them lightly. The smokescreen of an attack offered by the hon. Members for Peckham (Ms Harman) and for Garscadden was focused on the reduction of the period of receipt of contributory benefit from 12 to six months. It was spoken of as if it were a breach of faith or a breach of a private contract, which is absolutely absurd.
The contribution system of national insurance has always been a scheme regulated by statute, the terms of benefits of which have been altered over the years 116 by successive Governments—including Labour Governments—as circumstances have changed. That must be so, because the basis of the scheme involves a number of parties: it involves those who draw from the system from a given moment in time and those who contribute to it for the greater part of their working lives. Parliament is the guarantor that the scheme is operated fairly. The National Insurance Act 1946 introduced a 30-week period plus additional days if the number of contributions was more than 26. The National Insurance Act 1966, introduced by the Labour Government, introduced the period of 12 months, with an earnings supplement for up to 156 days.
The most startling reason for the change, which the Opposition have completely ignored in this debate, is the fact that the national insurance scheme depends on the number of those paying in and the number of those paying out roughly balancing. We know full well that, with the increased proportion of the aged in the population, there must be an adjustment, which will be the matter of a separate Bill on pensions.
The hon. Member for Makerfield (Mr. McCartney) said in an intervention that, somehow or other, there was a breach because nobody had been given notice of the change. This is not a proposal to come into force immediately, even if the House passes the Bill tomorrow. The proposal will not come into force until April 1996. Notice has been given. Nobody believes that even a private contractual arrangement cannot be altered when notice has been given. My hon. Friend the Minister of State rightly pointed out that the fundamental purpose of the national insurance scheme is that it is earmarked taxation. The promise is that the purposes for which the money is spent are those for which it is raised.
The savings involved are not trivial; this aspect of the Bill will save £180 million. The interesting challenge which, I have no doubt, will resound around the country over the next month and the next year, and when the next general election comes, is the question that the hon. Member for Peckham (Ms Harman) wholly failed to answer: if the Government's proposals are wrong, will the Labour party promise to reverse them? It is a simple question. Either this is a matter of principle, which is how it has been argued, or it is a minor, contingent matter depending on transient economic circumstances. Labour will not answer; it does not wish to answer because it wants the bills never to come in and it wants the country never to be aware of the costs. The hon. Member for Peckham asked—
§ Mr. Evans
No. I shall finish shortly. The hon. Member for Peckham asked where the winners, as opposed to the losers, would be under the Bill. I emphasise—[Laughter.] The cackling and the frivolity ignore the fact that the back-to-work bonus will benefit about 150,000 people. The employment-on-trial provisions will benefit about 200,000 people and the national insurance contributions holiday is expected to benefit about 120,000 people. The hon. Member for Garscadden mocked the fact that—
§ Mr. Evans
I shall not give way because the Opposition pressurised me on time.
117 The hon. Member for Garscadden mocked and said that a £6 a week concession was meaningless to a small employer. That is not the case, as was shown by my hon. Friends the Members for Scarborough (Mr. Sykes) and for Hertfordshire, North (Mr. Heald). They have pointed out that there are very real incentives in the proposals. One should, perhaps, ask a further question, which was originally put by my hon. Friend the Member for Scarborough. How many of those who are seeking jobs—
§ Mr. Evans
No. I shall not give way. I have been pressurised on time unfairly and I propose to continue.
How many of those about whom there has been a great deal of talk have put their houses up on a bank guarantee? How many of the people of whom the Opposition spoke appreciate the difficulties of running small businesses, of maintaining solvency and of being able to provide the jobs that will promote prosperity?
The hon. and learned Member for Leicester, West (Mr. Janner) talked in the most classic, old-fashioned, socialist way about everyone having a right to work, and about everyone being entitled to a good place to live and a good education. All highly desirable, no doubt, but there was not the beginning of an understanding that such matters have to be paid for. There was not the beginning of an understanding that it is the members of the population who work who have to provide the earnings on which such standards can be maintained.
§ Mr. Andrew F. Bennett (Denton and Reddish)
On a point of order, Mr. Deputy Speaker. Will you confirm that it is a tradition of the House that Ministers give way at least once in their speeches and that if—[Interruption.]
§ Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)
Order. It is not possible for the Chair to rule on a point of order when what the hon. Member has to say cannot be heard.
§ Mr. Bennett
On a point of order, Mr. Deputy Speaker. Would you confirm that it is a tradition of the House that Ministers give way at least once during their winding-up speeches and that, if they do not, it tempts the House to behave in an unruly way and to consider—
§ Mr. Deputy Speaker
Order. That is a not a point of order for the Chair. The House has become unruly in the past few minutes of this debate and it must now settle down.
§ Mr. Evans
It is also the tradition of the House that the Opposition give the Minister a chance to speak. I was short-circuited. The point which the hon. and learned Member for Leicester, West was making totally failed to deal with the question that all those excellent matters of which he spoke have to be paid for.
118 The hon. Member for Rochdale (Ms Lynne) said that the only point of the Bill that she could see was that it would save money for the Treasury. That is not in itself a matter to be spoken of with such levity. May I give her—
§ Mr. Evans
I was about to assist the hon. Member for Rochdale on the specific matters which she put to me. On the question of training, 225,000 long-term adult places for training are expected next year and the Government have given their guarantee of providing training for all 16 to 17-year-olds. I give the assurance that the disabled will not fall—
§ Mr. Evans
To expect me to give way in the last four minutes of my speech is unrealistic. I am trying to answer serious points made by the Liberal Democrats. I am amused that the Labour party apparently does not think that the Liberal Democrats are worth replying to. I am very interested to hear that, but never mind. [Interruption.]
§ Mr. Deputy Speaker
Order. I hesitate at this late hour to intervene, but the House must now settle down and give the Minister the opportunity to reply.
§ Mr. Evans
I shall give way happily to the hon. Member for Peckham if she will answer the question which she has totally failed to answer at any stage of this debate: will she permit a future Labour Government, if ever such a Government should exist, to reduce and reverse what this Government are proposing in the Bill? That question will haunt her. Somehow, when it comes to a comment which the House may think would address the most material question, intervention comes there none.
My hon. Friends the Members for Plymouth, Sutton (Mr. Streeter), for Scarborough and for Ribble Valley (Mr. Evans) made the most important point that there must be a fair reciprocity of interests, a balance of interests between the taxpayer and the claimant. The talk by the hon. Member for Streatham (Mr. Hill) of a climate of coercion and compulsion is exactly the kind of grotesque exaggeration which has so harmed British politics in recent years. [Interruption.] It goes down in history—rather like privatising the national health service—as a load of fabricated nonsense.
One of the fundamental mechanics of the Bill, which my hon. Friend the Member for Hertfordshire, North in particular explained and defended, is that there should be a jobseeker's agreement. The purpose of that agreement is to assist the jobseeker. It is based on the present back-to-work plan. It is designed to spell out and set out the steps that the jobseeker will take, to which he agrees. 119 It is right that the individual jobseeker should be invited not only to discuss those terms with the person at the employment office but to agree them.
I am very concerned about the attack on the next stage of the mechanics of the Bill—the question of the direction. I can give the assurance that the direction will be subject to the ordinary process of adjudication, so the more fanciful fears expressed by some Opposition Members are wholly without foundation. The point is that a direction and some degree of compulsion are necessary to strike a fair balance between the taxpayer and the claimants. The work-shy are an unknown quantity, but they are thought to be one in six claimants.
§ Question put, That the Bill be now read a Second time:—
§ The House divided: Ayes 304, Noes 269.123
|Division No. 32]||[10.00 pm|
|Ainsworth, Peter (East Surrey)||Clifton-Brown, Geoffrey|
|Ailken, Rt Hon Jonathan||Coe, Sebastian|
|Alexander, Richard||Colvin, Michael|
|Alison, Rt Hon Michael (Selby)||Congdon, David|
|Allason, Rupert (Torbay)||Conway, Derek|
|Amess, David||Coombs, Anthony (Wyre For'st)|
|Arbuthnot James||Coombs, Simon (Swindon)|
|Arnold, Jacques (Gravesham)||Cope, Rt Hon Sir John|
|Arnold, Sir Thomas (Hazel Grv)||Cormack, Sir Patrick|
|Ashby, David||Couchman, James|
|Aspinwall, Jack||Cran, James|
|Atkins, Robert||Currie, Mrs Edwina (S D'by'ire)|
|Atkinson, Peter (Hexham)||Curry, David (Skipton & Ripon)|
|Baker, Nicholas (Dorset North)||Davies, Quentin (Stamford)|
|Baldry, Tony||Day, Stephen|
|Banks, Matthew (Southport)||Deva, Nirj Joseph|
|Banks, Robert (Harrogate)||Devlin, Tim|
|Bates, Michael||Dicks, Terry|
|Batiste, Spencer||Dorrell, Rt Hon Stephen|
|Beggs, Roy||Douglas-Hamilton, Lord James|
|Bellingham, Henry||Dover, Den|
|Bendall, Vivian||Duncan, Alan|
|Beresford, Sir Paul||Duncan Smith, Iain|
|Biffen, Rt Hon John||Dunn, Bob|
|Bonsor, Sir Nicholas||Durant, Sir Anthony|
|Booth, Hartley||Dykes, Hugh|
|Boswell, Tim||Eggar, Rt Hon Tim|
|Bottomley, Peter (Eltham)||Elletson, Harold|
|Bottomley, Rt Hon Virginia||Emery, Rt Hon Sir Peter|
|Bowden, Sir Andrew||Evans, David (Welwyn Hatfield)|
|Bowis, John||Evans, Jonathan (Brecon)|
|Boyson, Rt Hon Sir Rhodes||Evans, Nigel (Ribble Valley)|
|Brandreth, Gyles||Evans, Roger (Monmouth)|
|Brazier, Julian||Evennett, David|
|Bright, Sir Graham||Faber, David|
|Brooke, Rt Hon Peter||Fabricant, Michael|
|Brown, M (Brigg & Cl'thorpes)||Fenner, Dame Peggy|
|Browning, Mrs. Angela||Field, Barry (Isle of Wight)|
|Bruce, Ian (Dorset)||Fishburn, Dudley|
|Budgen, Nicholas||Forman, Nigel|
|Burns, Simon||Forsyth, Rt Hon Michael (Stirling)|
|Burt, Alistair||Forth, Eric|
|Butcher, John||Fox, Dr Liam (Woodspring)|
|Butler, Peter||Fox, Sir Marcus (Shipley)|
|Butterfill, John||Freeman, Rt Hon Roger|
|Carlisle, Sir Kenneth (Lincoln)||French, Douglas|
|Carrington, Matthew||Fry, Sir Peter|
|Cash, William||Gale, Roger|
|Churchill, Mr||Gallie, Phil|
|Clappison, James||Gardiner, Sir George|
|Clark, Dr Michael (Rochford)||Garel-Jones, Rt Hon Tristan|
|Garnier, Edward||Maitland, Lady Olga|
|Gill, Christopher||Major, Rt Hon John|
|Gillan, Cheryl||Malone, Gerald|
|Goodson-Wickes, Dr Charles||Mans, Keith|
|Gorman, Mrs Teresa||Marland, Paul|
|Gorst, Sir John||Marlow, Tony|
|Grant Sir A (Cambs SW)||Marshall, John (Hendon S)|
|Greenway, Harry (Ealing N)||Martin, David (Portsmouth S)|
|Greenway, John (Ryedale)||Mates, Michael|
|Griffiths. Peter (Portsmouth, N)||Mellor, Rt Hon David|
|Grylls, Sir Michael||Merchant, Piers|
|Gummer, Rt Hon John Selwyn||Mills, Iain|
|Hague, William||Mitchell, Andrew (Gedling)|
|Hamilton, Rt Hon Sir Archibald||Mitchell, Sir David (Hants NW)|
|Hamilton, Neil (Tatton)||Moate, Sir Roger|
|Hanley, Rt Hon Jeremy||Monro, Sir Hector|
|Hannam, Sir John||Montgomery, Sir Fergus|
|Hargreaves, Andrew||Moss, Malcolm|
|Harris, David||Needham, Rt Hon Richard|
|Haselhurst, Alan||Nelson, Anthony|
|Hawkins, Nick||Neubert Sir Michael|
|Hawksley, Warren||Newton, Rt Hon Tony|
|Hayes, Jerry||Nicholls, Patrick|
|Heald, Oliver||Nicholson, David (Taunton)|
|Heathcoat-Amory, David||Nicholson, Emma (Devon West)|
|Hendry, Charles||Norris, Steve|
|Higgins, Rt Hon Sir Terence||Onslow, Rt Hon Sir Cranley|
|Hill, James (Southampton Test)||Oppenheim, Phillip|
|Hogg, Rt Hon Douglas (G'tham)||Ottaway, Richard|
|Horam, John||Page, Richard|
|Hordern, Rt Hon Sir Peter||Paice, James|
|Howell, Rt Hon David (G'dford)||Patrick, Sir Irvine|
|Hughes, Robert G (Harrow W)||Patten, Rt Hon John|
|Hunt. Rt Hon David (Wirral W)||Pattie, Rt Hon Sir Geoffrey|
|Hunt, Sir John (Ravensbourne)||Pawsey, James|
|Hunter, Andrew||Peacock, Mrs Elizabeth|
|Hurd, Rt Hon Douglas||Pickles, Eric|
|Jack, Michael||Porter, Barry (Wirral S)|
|Jackson, Robert (Wantage)||Porter, David (Waveney)|
|Jenkin, Bernard||Portillo, Rt Hon Michael|
|Jessel, Toby||Powell, William (Corby)|
|Johnson Smith, Sir Geoffrey||Rathbone, Tim|
|Jones, Gwilym (Cardiff N)||Redwood, Rt Hon John|
|Jones, Robert B (W Hertfdshr)||Renton, Rt Hon Tim|
|Jopling, Rt Hon Michael||Richards, Rod|
|Kellett-Bowman, Dame Elaine||Riddick, Graham|
|Key, Robert||Rifkind, Rt Hon Malcolm|
|Kilfedder, Sir James||Robathan, Andrew|
|King, Rt Hon Tom||Roberts, Rt Hon Sir Wyn|
|Kirkhope, Timothy||Robertson, Raymond (Ab'dn S)|
|Knapman, Roger||Robinson, Mark (Somerton)|
|Knight, Mrs Angela (Erewash)||Roe, Mrs Marion (Broxbourne)|
|Knight, Greg (Derby N)||Rumbold, Rt Hon Dame Angela|
|Knight, Dame Jill (Bir'm E'st'n)||Ryder, Rt Hon Richard|
|Knox, Sir David||Sackville, Tom|
|Kynoch, George (Kincardine)||Sainsbury, Rt Hon Sir Tim|
|Lait, Mrs Jacqui||Scott, Rt Hon Sir Nicholas|
|Lamont, Rt Hon Norman||Shaw, David (Dover)|
|Lang, Rt Hon Ian||Shaw, Sir Giles (Pudsey)|
|Lawrence, Sir Ivan||Shephard, Rt Hon Gillian|
|Legg, Barry||Shepherd, Colin (Hereford)|
|Leigh, Edward||Shepherd, Richard (Aldridge)|
|Lennox-Boyd, Sir Mark||Shersby, Michael|
|Lester, Jim (Broxtowe)||Sims, Roger|
|Lidington, David||Skeet, Sir Trevor|
|Lilley, Rt Hon Peter||Smith, Sir Dudley (Warwick)|
|Lloyd, Rt Hon Sir Peter (Fareham)||Smith, Tim (Beaconsfield)|
|Lord, Michael||Soames, Nicholas|
|Luff, Peter||Speed, Sir Keith|
|Lyell, Rt Hon Sir Nicholas||Spencer, Sir Derek|
|MacGregor, Rt Hon John||Spicer, Sir James (W Dorset)|
|MacKay, Andrew||Spicer, Michael (S Worcs)|
|Maclean, David||Spink, Dr Robert|
|McLoughlin, Patrick||Spring, Richard|
|McNair-Wilson, Sir Patrick||Sproat, Iain|
|Madel, Sir David||Squire, Robin (Hornchurch)|
|Stanley, Rt Hon Sir John||Viggers, Peter|
|Steen, Anthony||Waldegrave, Rt Hon William|
|Stephen, Michael||Walden, George|
|Stern, Michael||Walker, Bill (N Tayside)|
|Stewart, Allan||Waller, Gary|
|Streeter, Gary||Ward, John|
|Sumberg David||Wardle, Charles (Bexhill)|
|Sweeney, Walter||Waterson, Nigel|
|Sykes, John||Watts, John|
|Taylor, Ian (Esher)||Wells, Bowen|
|Taylor, John M (Solihull)||Wheeler, Rt Hon Sir John|
|Taylor, Sir Teddy (Southend, E)||Whitney, Ray|
|Temple-Morris, Peter||Whittingdale, John|
|Thomason, Roy||Wiggin, Sir Jerry|
|Thompson, Sir Donald (C'er V)||Willetts, David|
|Thompson, Patrick (Norwich N)||Wilshire, David|
|Thornton, Sir Malcolm||Winterton, Mrs Ann (Congleton)|
|Thurnham, Peter||Winterton, Nicholas (Macc'fld)|
|Townend, John (Bridlington)||Wolfson, Mark|
|Townsend, Cyril D (Bexl'yh'th)||Wood, Timothy|
|Tracey, Richard||Yeo, Tim|
|Tredinnick, David||Young, Rt Hon Sir George|
|Trotter, Neville||Tellers for the Ayes:|
|Twinn, Dr Ian||Mr. David Lightbown and Mr. Sydney Chapman.|
|Vaughan, Sir Gerard|
|Abbott, Ms Diane||Clarke, Tom (Monklands W)|
|Adams, Mrs Irene||Clelland, David|
|Ainger, Nick||Clwyd, Mrs Ann|
|Ainsworth, Robert (Cov'try NE)||Coffey, Ann|
|Allen, Graham||Cohen, Harry|
|Alton, David||Connarty, Michael|
|Anderson, Donald (Swansea E)||Cook, Frank (Stockton N)|
|Anderson, Ms Janet (Ros'dale)||Corbett, Robin|
|Armstrong, Hilary||Corbyn, Jeremy|
|Ashdown, Rt Hon Paddy||Corston, Jean|
|Ashton, Joe||Cousins, Jim|
|Austin-Walker, John||Cunningham, Jim (Covy SE)|
|Banks, Tony (Newharn NW)||Cunningham, Rt Hon Dr John|
|Barnes, Harry||Dafis, Cynog|
|Barron, Kevin||Dalyell, Tam|
|Battle, John||Darling, Alistair|
|Bayley, Hugh||Davies, Bryan (Oldham C'tral)|
|Beckett, Rt Hon Margaret||Davies, Rt Hon Denzil (Llanelli)|
|Beith, Rt Hon A. J.||Davies, Ron (Caerphilly)|
|Bell, Stuart||Davis, Terry (B'ham, H'dge H'l)|
|Benn, Rt Hon Tony||Denham, John|
|Bennett, Andrew F.||Dewar, Donald|
|Benton, Joe||Dixon, Don|
|Bermingham, Gerald||Dobson, Frank|
|Berry, Roger||Donohoe, Brian H|
|Betts, Clive||Dowd, Jim|
|Blunkett, David||Dunnachie, Jimmy|
|Boateng, Paul||Dunwoody, Mrs Gwyneth|
|Boyes, Roland||Eagle, Ms Angela|
|Bradley, Keith||Eastham, Ken|
|Bray, Dr Jeremy||Enright, Derek|
|Brown, N (N'c'tle upon Tyne E)||Etherington, Bill|
|Burden, Richard||Evans, John (St Helens N)|
|Byers, Stephen||Fatchett, Derek|
|Caborn, Richard||Field, Frank (Birkenhead)|
|Callaghan, Jim||Fisher, Mark|
|Campbell, Mrs Anne (C'bridge)||Flynn, Paul|
|Campbell, Menzies (Fife NE)||Foster, Rt Hon Derek|
|Campbell, Ronnie (Blyth V)||Foster, Don (Bath)|
|Campbell-Savours, D N||Foulkes, George|
|Canavan, Dennis||Fraser, John|
|Cann, Jamie||Fyfe, Maria|
|Chidgey, David||Galbraith, Sam|
|Chisholm, Malcolm||Galloway, George|
|Church, Judith||Gapes, Mike|
|Clapham, Michael||George, Bruce|
|Clark, Dr David (South Shields)||Gerrard, Neil|
|Godsiff, Roger||Mahon, Alice|
|Golding, Mrs Llin||Mandelson, Peter|
|Gordon, Mildred||Marek, Dr John|
|Graham, Thomas||Marshall, David (Shettleston)|
|Grant, Bernie (Tottenham)||Marshall, Jim (Leicester, S)|
|Griffiths, Nigel (Edinburgh S)||Martin, Michael J (Springburn)|
|Griffiths, Win (Bridgend)||Martlew, Eric|
|Grocott, Bruce||Maxton, John|
|Gunnell, John||Meacher, Michael|
|Hain, Peter||Meale, Alan|
|Hall, Mike||Michael, Alun|
|Hanson, David||Michie, Bill (Sheffield Heeley)|
|Hardy, Peter||Michie, Mrs Ray (Argyll & Bute)|
|Harman, Ms Harriet||Milburn, Alan|
|Hattersley, Rt Hon Roy||Miller, Andrew|
|Henderson, Doug||Mitchell, Austin (Gt Grimsby)|
|Heppell, John||Moonie, Dr Lewis|
|Hill, Keith (Streatham)||Morgan, Rhodri|
|Hinchliffe, David||Morley, Elliot|
|Hodge, Margaret||Morris, Rt Hon Alfred (Wy'nshawe)|
|Hoey, Kate||Morris, Estelle (B'ham Yardley)|
|Hogg, Norman (Cumbernauld)||Mowlam, Marjorie|
|Home Robertson, John||Mudie, George|
|Hood, Jimmy||Mullin, Chris|
|Hoon, Geoffrey||Murphy, Paul|
|Howarth, Alan (Strat'rd-on-A)||Oakes, Rt Hon Gordon|
|Howarth, George (Knowsley N)||O'Brien, Mike (N W'kshire)|
|Howells, Dr. Kim (Pontypridd)||O'Brien, Bill (Normanton)|
|Hoyle, Doug||O'Hara, Edward|
|Hughes, Kevin (Doncaster N)||Olner, Bill|
|Hughes, Robert (Aberdeen N)||O'Neill, Martin|
|Hughes, Roy (Newport E)||Patchett, Terry|
|Hughes, Simon (Southwark)||Pearson, Ian|
|Hutton, John||Pendry, Tom|
|Illsley, Eric||Pickthall, Colin|
|Ingram, Adam||Pike, Peter L|
|Jackson, Glenda (H'stead)||Pope, Greg|
|Jackson, Helen (Shef'ld, H)||Powell, Ray (Ogmore)|
|Jamieson, David||Prentice, Bridget (Lew'm E)|
|Janner, Greville||Prentice, Gordon (Pendle)|
|Jones, Barry (Alyn and D'side)||Prescott, Rt Hon John|
|Jones, Ieuan Wyn (Ynys Mon)||Primarolo, Dawn|
|Jones, Lynne (B'ham S O)||Purchase, Ken|
|Jones, Martyn (Clwyd, SW)||Radice, Giles|
|Jones, Nigel (Cheltenham)||Randal, Stuart|
|Jowell, Tessa||Raynsford, Nick|
|Kaufman, Rt Hon Gerald||Redmond, Martin|
|Keen, Alan||Reid, Dr John|
|Kennedy, Charles (Ross, C&S)||Rendel, David|
|Kennedy, Jane (Lpool Brdgn)||Robertson, George (Hamilton)|
|Khabra, Piara S||Robinson, Geoffrey (Co'try NW)|
|Kilfoyle, Peter||Roche, Mrs Barbara|
|Kirkwood, Archy||Rooker, Jeff|
|Lestor, Joan (Eccles)||Rooney, Terry|
|Lewis, Terry||Ross, Ernie (Dundee W)|
|Liddell, Mrs Helen||Ruddock, Joan|
|Litherland, Robert||Salmond, Alex|
|Livingstone, Ken||Sedgemore, Brian|
|Lloyd, Tony (Stretford)||Sheerman, Barry|
|Llwyd, Elfyn||Sheldon, Rt Hon Robert|
|Loyden, Eddie||Simpson, Alan|
|Lynne, Ms Liz||Skinner, Dennis|
|McAllion, John||Smith, Andrew (Oxford E)|
|McAvoy, Thomas||Smith, Chris (Isl'ton S & F'sbury)|
|McCartney, Ian||Smith, Llew (Blaenau Gwent)|
|Macdonald, Calum||Snape, Peter|
|McFall, John||Soley, Clive|
|McKelvey, William||Spearing, Nigel|
|Mackinlay, Andrew||Spellar, John|
|McLeish, Henry||Squire, Rachel (Dunfermline W)|
|McMaster, Gordon||Steel, Rt Hon Sir David|
|McNamara, Kevin||Steinberg, Gerry|
|MacShane, Denis||Stevenson, George|
|McWilliam, John||Stott, Roger|
|Madden, Max||Strang, Dr. Gavin|
|Maddock, Diana||Sutcliffe, Gerry|
|Taylor, Mrs Ann (Dewsbury)||Wicks, Malcolm|
|Taylor, Matthew (Truro)||Wigley, Dafydd|
|Thompson, Jack (Wansbeck)||Williams, Rt Hon Alan (Sw'n W)|
|Timms, Stephen||Williams, Alan W (Carmarthen)|
|Tipping, Paddy||Wilson, Brian|
|Tyler, Paul||Winnick, David|
|Vaz, Keith||Wray, Jimmy|
|Walker, Rt Hon Sir Harold||Wright, Dr Tony|
|Walley, Joan||Young, David (Bolton SE)|
|Wardell, Gareth (Gower)|
|Wareing, Robert N||Tellers for the Noes:|
|Watson, Mike||Mr. Eric Clarke and Mr. Dennis Turner.|
§ Question accordingly agreed to.
§ Bill accordingly read a Second time and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).