HC Deb 26 June 1996 vol 280 cc263-81

[Relevant document: The Second Report from the Employment Committee of Session 1995–96 on The Right to Work/Workfare (House of Commons Paper No. 82). and the Second Special Report from the Education and Employment Committee containing the Government's Reply thereto (House of Commons Paper No. 585.]

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

9.35 am
Mr. Greville Janner (Leicester, West)

I greatly welcome the opportunity to put before the House the recommendations of the Employment Select Committee concerning workfare. I do so with some trepidation because we have, as it were, risen from the grave. The Government having consigned us for ever to oblivion, we have emerged again to entertain the House a little. Still, this is a subject of great importance to the country, to the House and to every hon. Member in the House.

I pay special tribute to all the members of the Select Committee on Employment for the work that they did on this report; and I thank the hon. Member for Crosby (Sir M. Thornton) in particular for all that he has done to enable this debate to take place, and for so kindly allowing me to open it. I am the departed Chairman of the old Committee; he is the newly installed Chairman of the new and reincarnated Committee, which incorporates the old one.

The problem of unemployment is one of vast consequence. It is the greatest single cause of economic misery in this country. It is a disaster for millions of people and for their families, and the Employment Committee was united in seeking ways to deal with it.

At this point I pay tribute also to a man whom I would wish to call my hon. Friend, because he is both honourable and my friend: the hon. Member for North Norfolk (Sir R. Howell). Thinking about tonight's football match, I wonder whether he would be more comfortable on the right wing, where he has been used to spending his time, or on the left wing, to which some of us feel he has moved. For he is the progenitor of ideas that are far from orthodox on the right. I note that he shakes his woolly, farmer's head—to no avail. He is a man of integrity and of ideas, and this one is his baby. Once I have outlined what the debate is about, I shall leave it to him to advance the united views of the Committee.

We start from the premise that the need for jobs is huge. We start from the Government figure of just over 2 million unemployed people—nearly double the number when they came to office. It is, however, an unreal figure because it excludes 10 categories of people. They include those who have left the register because they have simply given up and no longer feel that there is any hope of jobs for them. Another category is of people who work just one hour or more part time and who, like millions of others, leave the register when they get part-time jobs. People desperate for work will take part-time jobs because there are no full-time jobs. I would be astonished if there were fewer than between 3.5 million and 4 million people who want full-time jobs today but cannot find them.

The Minister of State, Department for Education and Employment (Mr. Eric Forth)

I thought the hon. and learned Gentleman might get on to this nonsense early in his speech—he is in typical form. If he approves of the International Labour Organisation—I do not but I suspect that he does—and if he agrees with the labour force survey method of counting the unemployed, which is the ILO-approved method—

Mr. Frank Field (Birkenhead)

You do not.

Mr. Forth

I do not, but I suspect that the hon. and learned Gentleman does. If he approves of either or both, how does he explain their figure of about 2.2 million or 2.3 million for unemployment in this country?

Mr. Janner

The Government have no idea how many millions of people are unemployed, nor how much it costs—and they do not care, as they have said in their response to the Committee's report. The Government do not know how many people with part-time work want full-time work—they have never tried to find out and they do not want to know. They do not know how many full-time students would be at work if they could get a job—and they do not want to know. They have no idea how many people in a family wish to work but cannot find a job. What is more, the Minister and Government members laugh about it—that is a disgraceful attitude. The Government think that it is funny that people are unemployed.

The Committee produced a unanimous report—Conservative and Labour members agreed—which outlined ways to look at the problem. But what was the Government's reply? I shall tell hon. Members my definition of unemployment: it is a "recession" when someone else is out of work, it is "depression" when you are out of work and it is "recovery" for the country when the Government are out of work. That is when we will have hope.

The Committee—which was led by the hon. Member for North Norfolk—said that we need to know the cost of unemployment. The Secretary of State for Education and Employment—an expert in mathematics—started off by telling us that the cost was about £9,000 per head, but then she lowered the figure to about £3,000 per head because she decided to leave a few things out of the statistics.

What was the Government's reply? They said that it is not necessary to produce the figures and that that will not help. I know that that view is not held by the hon. Member for North Norfolk, nor by any other member of the Committee. When one wants to cost something out, to find out how to remedy a wrong, and to know what steps to take—whether in business, in commerce or in government—one must know the present cost. The approach of the so-called Government in this regard has been amazing.

What is the cost of unemployment? We know that it costs misery for millions of people. Unemployment is at the heart of the insecurities of our constituents and the constituents of the laughing Minister, who would not find this at all funny—they either do not have jobs or, if they do have jobs, they feel insecure about their future. Our constituents know—even if the Minister does not—that the number of jobs, the number of people at work, in this country has dropped by 5 per cent. since the Government came to office. That is another indication that the Government's fiddle on figures is the Stradivarius of political life.

We need to know the cost of unemployment—not just in misery, but in pounds and pence. We need to know the cost of people who are unemployed and receiving benefit, but who wish to work—that is not funny. We need to know the cost of people who wish to be at work and who would be paying tax if they were employed, but who are not—that is not funny. We need to know the cost of people who are unemployed and who would be paying national insurance if they were employed, but who are not—that is not funny. And, above all, we need to know the cost of the loss to the country of all the efforts of these people.

The Committee made some modest suggestions, such as extending existing schemes and looking not at compulsion—because Labour Members on the Committee would not have accepted that—but at ways in which the community could help people to work. We should pay people to be at work, not pay them not to be at work. This must make sense, provided that we can do it without destroying real jobs. All we asked was that the Government look at this. The puny, nasty, inadequate, insubstantial and impertinent document that the Government have seen fit to put before us is unworthy of the Government—even though they thought that the Committee would never be able to answer back. This is our chance to answer back.

If the hon. Member for North Norfolk catches your eye, Madam Speaker, he will give the House the answer—as will my hon. Friend the Member for Birkenhead (Mr. Field), whose depth of knowledge and understanding of these matters is unrivalled in the House. I shall leave it to them to answer the Government. I ask the Government not to laugh at the unemployment rates, at the figures, at their failure to cost out unemployment in financial and in human terms, and at the report of the distinguished, but now defunct, Committee. It is a report of substance, importance and intelligence—the Government should act on it, not laugh at it.

9.45 am
Sir Ralph Howell (North Norfolk)

I thank my friend the hon. and learned Member for Leicester, West (Mr. Janner) for his kind remarks about me and for allowing the debate to take place. I became a member of the Committee approximately two years ago. Soon after I joined the Committee, it decided to study workfare and the right to work. I believe that the Committee did a good job in looking into the matter and trying to find a way to solve the problem of unemployment. Everyone agrees that unemployment is wasteful, soul destroying, degrading, unnecessary and unaffordable.

The hon. and learned Member for Leicester, West referred to the cost of unemployment—the cost is all important. The welfare state is costing too much in this country, and everywhere else. Therefore, it is unrealistic to try to make reforms that will cost even more. The reforms that the Committee recommended—reforms that I have pursued for many years—would save a considerable amount of public expenditure. The hon. and learned Gentleman's point on cost is relevant.

There should be an independent inquiry into the cost of the Right to Work Bill, which I have put forward with the support of the hon. Member for Birkenhead (Mr. Field), who is also a friend of long standing. The Bill was introduced with just one supporter last July.

Ms Angela Eagle (Wallasey)

Does the hon. Gentleman agree that the other part of the equation that we need to look at is the cost of the current level of unemployment and the cost of keeping those people doing nothing? Does he also agree that we tried very hard in our report to get the Government to give us an estimate of the cost? The cost ranged from a basic £10 billion a year—which is pure benefit payments—to as high as £24 billion.

Sir Ralph Howell

I shall refer to the details of the cost a little later in my speech. I beg the Government to take this matter seriously and to have an independent inquiry into the overall cost of the proposals—only then will we know whether they are practical. The Committee believes that we could save at least £5 billion per year, and probably considerably more.

It is obvious that the welfare state is out of control. In 1948, based on the Beveridge report, we set out on a welfare state system. However, the Beveridge report was never fully put into operation. If it had been, there would never have been any long-term unemployed. Beveridge said that after three months or six months—whichever was decided—benefit would cease and work would be offered. To be fair to the Attlee Government, they could not put the whole report into operation then because there were no unemployed. When unemployment did creep in, successive Governments should have done something about it.

We are in a extraordinary situation with the Right to Work Bill. An early-day motion has been supported by 70 of my hon. Friends, by 40 Labour Members, six Liberals and eight others, so we have cross-party support. We are causing the Front Benchers to think about the matter seriously. All three main parties have their heads firmly in the sand and they hope that the problem will go away, but it will not go away. The problem will worsen for as long as the welfare state is operated and we must stop spending money and receiving nothing for it in return.

Most people who are unemployed want to work. The cost of unemployment has already been mentioned and the Government admit that unemployment costs £13.5 billion a year. If we divide £13.5 billion by the number of unemployed—2.2 million-the cost is £6,000 a year each. If we also include the tax and national insurance of at least £1,000 that everyone would pay if they were earning £6,000 a year, the Treasury is losing at least £7,000 per person through unemployment. Society at large is getting nothing in return. Would not it be better for unemployed people to be doing something?

Unemployment carries further costs in stress, increased sickness, marriage break-up, crime and drug-taking and it is no good denying that there is a connection between crime and unemployment. Everybody should have an opportunity to work, everybody should have a right to work and everybody should have a right to the dignity of earning a living. We could deliver that and save at least £5 billion a year.

I shall explain how the Right to Work Bill would operate. The main obstacle is that the Government are determined not to accept a situation in which the state is the employer of last resort, but the state is the provider of last resort. Would not it be more sensible from everybody's point of view if the unemployed could do caring work, environmental work or minor infrastructure work—a variety of jobs that could be offered—for the general good of the nation? Fresh thinking is needed immediately.

The Bill states that the state should become the employer of last resort and should offer work to anybody who has no other work. That idea is not new. It was first introduced in the House in 1911 by Keir Hardie, who by that time was not top of the pops in the Labour party. A rehash of the Keir Hardie Bill was introduced again by a Member of Parliament named Enoch Edwards in 1912. My Right to Work Bill, 84 years later, comes from the opposite side of the House, although I am still as right-wing as I ever was. [HON. MEMBERS: "NO!"] We have formed a bridge across the House and it is time to accept that the state should be the employer of last resort.

We would ease into the new approach through workstart. I wish to pay tribute to my right hon. Friend the Secretary of State for Education and Employment, because the pilot workstart scheme was set up when she was in charge of the old Department of Employment. It has been highly successful in every respect, but sadly there has been no financial evaluation of it. I ask my hon. Friend the Minister of State to insist on an evaluation of the savings that must have been made by the workstart scheme.

Under workstart, the Government paid £60 to an employer who took somebody off the register for the first six months and £30 for the next six months. The average saving must have been about £75 a week on what the state paid someone to do nothing before. Workstart should be offered nationwide.

We should also introduce a non-worker payment. Some people will refuse to work and it should be possible to sack people from the right-to-work scheme if they try to abuse the scheme. The non-worker payment should be 25 per cent. of what is offered under the right-to-work scheme. We should also pay a parents' grant of £60 for the lower-paid. Any couple with an income of less than £180 a week would be eligible for a £60 grant, if one of them remained at home to look after their children.

Those are the provisions of the Right to Work Bill which has received support from both sides of the House. The Bill would not introduce American-style workfare. So often when this matter is discussed, the media talk of American-style workfare, but we would offer a real job to everybody who wishes to work so that everybody can have the opportunity to earn a living.

I shall spell out the financial terms. Everybody would have the right to work for 40 hours at £3 an hour, giving a maximum of £120 a week. That would also mean that every couple would have access to £240 a week, so virtually no social security payments would be necessary to maintain any couple, married or not. Everybody would have the opportunity to earn £120 and that would get rid of the stigma of social security payments. There would be no fraud and no need for fraud squads for the simple reason that, unless people reported to work, they would not be paid. People could put in whatever amount of time they wished, up to 40 hours a week. I ask my hon. Friend to consider that as a way forward in Europe. I believe that the Government are right to opt out of the social chapter which is causing immense problems.

Mr. Ken Eastham (Manchester, Blackley)

Is there not a slight contradiction in the hon. Gentleman's remarks? A few moments ago he argued the case for a minimum wage of £3 an hour, but the Government say consistently that they oppose the introduction of a minimum wage under the social chapter.

Sir Ralph Howell

The figure of £3 an hour would not be a minimum wage in a statutory sense—anyone who wanted to could work for less—but it would probably develop into one. I have no hang-ups about that, although perhaps the Government do. I am glad of the hon. Gentleman's intervention as it allows me to admit that I have pitched the figure at a low level. I have been talking about £3 an hour for about three years and perhaps it should be a little higher now. However, for the sake of convenience and so as not to confuse the issue, it is advisable to continue talking about £3 an hour. That would be easy to phase in and it would be less likely to upset the Government. I cannot understand why the Government have a problem with the idea of a minimum wage. We spend more than £2 billion supporting the low-paid, so we are bringing wages up to a statutory minimum in any event.

Returning to my earlier point, I think that the Government are correct to oppose the social chapter as it is now drawn. The Germans, the French and everyone else in Europe who is suffering as a result of the social chapter will find in time that they can no longer support it in that form. I ask the Government to take my proposals seriously. Would it not be better for Britain to rewrite the social chapter instead of sniping from the sidelines? This country has taken the lead many times before—I hope that we shall do so again today in the football—and it is time to rethink the question of the welfare state. Almost all countries copied our welfare system in the late 1940s, but it is no longer viable. It is unsupportable and it is time to rethink the whole system.

I believe that the legislation would remove unemployment and the fear of unemployment—which is probably worse than the original problem. It would be a fresh start and it would give us something to hope for. I ask my hon. Friend the Minister to persuade the Secretary of State for Education and Employment to take the proposals seriously and see whether she can adopt them.

10.3 am

Mr. Frank Field (Birkenhead)

While listening to my hon. and learned Friend the Member for Leicester, West (Mr. Janner), who opened the debate, I recalled a comment by Jeremy Thorpe. Speaking about the other place, he said that here was evidence of life after death. The Government have wound up the Employment Select Committee, but its former Chairman opened our debate today. Hon. Members and their constituents are grateful to him for carefully nurturing the Select Committee, for opening the agenda and for encouraging hon. Members to exchange ideas and to produce reports that are relevant rather than politically correct.

My association with the hon. Member for North Norfolk (Sir R. Howell) goes back a long way. At one time I was in receipt of Cabinet papers about child benefit. The last Labour Government had slight difficulties introducing that benefit and, because I was worried that the special branch would raid my office and take those papers from me, I destroyed them. If I had not done so, I would have been able to look up the exact dates of two events.

The first was when my hon. Friend—which is how I regard the hon. Member for North Norfolk—attended a breakfast with the Child Poverty Action Group at the Tory party conference. Sir Keith Joseph—as I learnt more about him, I became fonder of him—was hosting that breakfast. The hon. Member for North Norfolk was advancing ideas similar to those in the legislation that he and I promoted during the last parliamentary Session and suddenly Sir Keith Joseph leant across the table and said to the hon. Gentleman, "But, Ralph, you are promoting communist ideas." The hon. Gentleman, in a totally proper, English manner, gently reminded his shadow colleague that he was not particularly interested in labels but in practical proposals to combat an evil.

At that meeting I first became aware of the hon. Gentleman's real feeling for those people who, for all intents and purposes, have been cast on the scrapheap. He was angry on their behalf that we should run our affairs so carelessly and forget about them because we think that we have done our bit by paying them dole money. I remember also the way in which he challenged Sir Keith Joseph at that meeting by reciting a list of jobs that needed doing in his constituency. He pushed his shadow spokesman on to the back foot by saying, "Is it not more sensible to put aside labels—whether we are communist or right-wing? Instead of spending large sums keeping people idle, should we not think of ways of spending some, if not all, of that money employing people in tasks which would give them dignity, which would add considerably to the well-being of the local community and which the Government could enter in the national income figures and would lead to an increase in national wealth?" That was my first encounter with the hon. Gentleman.

Mr. Forth

I am provoked to rise to my feet by the hon. Gentleman's passing and ritualistic reference—it was not a casual reference, as nothing about the hon. Gentleman is casual—to scrapheaps and to people being cast aside. The hon. Gentleman must visit jobcentres, as I do, and talk to the very dedicated staff. He must know that everyone who has the misfortune of losing his or her job is treated as an individual by caring jobcentre officers and officials and offered a wide range of possibilities. How does he square that reality with his reference to scrapheaps and to people being cast aside?

Mr. Field

I invite the Minister to join my hon. Friend the Member for Wallasey (Ms Eagle) and me on a visit to Birkenhead jobcentre. If the Minister looks at the jobs advertised there, he will see that most employers are so ashamed of the wages that they can get away with offering that they do not state those wages—if there are wages attached to the job, as many of the positions are on a commission basis only. We must draw a distinction between the dedication of the jobcentre staff—to whom we pay proper tribute—and the Government who believe that they cannot do anything, beyond the measures that they currently employ, to expand the job base.

The debate is about whether there is a set number of jobs and how those jobs are determined. It raises the big issues of our time. Does training by itself represent an adequate response to the problem and will it enable Britain to go up market and reach a position of full employment? Should we be more active in the labour market—given the fact that the market cannot adjust itself—in using people's skills and in matching them to the work that must be done? My hon. Friend the Member for North Norfolk has been raising that issue for the 30 years that I have known him, and it is what the Bill is about. He gently pressed the Government to recognise how their response to the measures that he proposed will appear to people outside: casual and lacking in concern.

Mr. Ian McCartney (Makerfield)

I was in Yorkshire last week and had passed on to me, anonymously, the concerns of staff members of the Employment Service about the jobs that they are forced to offer. From the list of jobs that I was shown, one was for a warehouse assistant, full-time—£10 plus benefits. Another was for a full-time agent working in the local community—commission only.

Mr. Field

On the first job that my hon. Friend mentioned, it is probably illegal to offer work under those conditions, given the requirements for income support. We shall leave that aside. That is not a reflection on the dedication or the concern of the staff of the Employment Service. It just shows how the labour market will adjust to the circumstances. All of us have witnessed the rise in unemployment in our constituencies and the fall in real wages. Most employers, knowing what they can get away with, use the jobcentres and do not even say what the wage will be.

My second meeting with my hon. Friend the Member for North Norfolk was when he wrote a pamphlet for the Low Pay Unit, an organisation that I worked for, on the unemployment trap. In the days before we were as dependent on means-tested benefits as we are today, he was a prophet calling attention to the way in which ordinary people have to make rational decisions about their well-being and that of their family, and how for a growing number of people then—now a huge number—the trade-off, if there is any, between working and not working is small.

That is the background to my association with my hon. Friend and thus my willingness to sponsor with him the Right to Work Bill, not because we agreed on every proposal after we had discussed it, but because we both believed that it was an opportunity that the Government could seize to show that they were serious about dealing with the issue. We did not think that it would be the great panacea or that it would be achieved in the timetable that we had set in the Bill. We included the timetable because we were anxious to show our constituents that we had a sense of urgency about the issue, because many of them had been without work for many years.

I am here to support my hon. Friend in his request for two things: first, for the Government to get an independent and serious costing of the proposals. Given the way in which they have handed out contracts—I shall not say "to their friends"—the Government believe in job creation. They have handed out contracts to inquire into this and that, and to report on this and that, for which I am grateful, as that is, as my hon. Friend the Member for North Norfolk knows, what job creation is about. We now ask, as a sign of the Government's true faith, that they consider seriously every proposal given to them, as a means of tackling the evil of unemployment.

The second request is for a real costing of unemployment. Let us leave aside whether the total is 2 million or 4 million. Let us leave aside the number of workers who will come into the labour market who are not registered as unemployed but who would be there if jobs were available. There are armies of workers who, because they do not receive benefit, do not register as unemployed, but that does not mean that they do not want work and would not work if it was available. The Minister turns his nose up at these proposals, but anybody who wanted to indulge in rational debate and was confident of his position would have commissioned both of these studies a long time ago. Not to do so would suggest to the House and, more importantly, our constituents, that the Government do not want to know the information, because it would make their position less tenable.

I am pleased to be able to speak in the debate. It is a pleasure to follow my hon. and learned Friend the Member for Leicester, West. I pay tribute to the way in which he chaired the Select Committee on Employment and the way in which he encouraged a thousand ideas to blossom in it. He did not feel it necessary to take a Stalinist line on what the truth is, or to say that every report must come down on the small area of agreed truth. I think that the report will be considered as a landmark, because it will show that we have moved away from the heady days of the 1980s, when we believed that markets could solve everything. No one is saying that we do not believe in markets. The House is saying that we want markets to work where they can work. Where they cannot work, where millions of people want to work but cannot, we have a duty to try to find ways of extending work opportunities to them which are useful and beneficial, raise their status and add to the national well-being.

I applaud my hon. Friend the Member for North Norfolk for the way in which—despite all the rebuffs that he has received, often from his own side—he has never lost sight of the anger and despair of a large number of our constituents. Even though they might put on brave faces for some public events and seem as if they do not care about work, as if they have managed to sort their lives out and are happily getting on with things, they feel real despair at having a label put on them as unemployed and therefore having no useful role to play in Great Britain today.

10.17 am
Ms Angela Eagle (Wallasey)

I support many of the comments that have been made today. It is important that we have been given the chance to debate the extremely interesting and thoughtful report from my hon. and learned Friend the Member for Leicester, West (Mr. Janner), who chaired the Select Committee on Employment, on which I had the honour to serve.

The report contains certain recommendations, but the Committee considered in detail some of the things that we thought that the Government should consider given the persistence of mass unemployment in this country. When we considered mass unemployment, one thing of which we were well aware was that it includes an increasing number of the long-term unemployed. Many of the policy prescriptions that we considered were not aimed at people who go through a short period of unemployment and then move back into the labour market. They clearly do not need the same support and help as those who become long-term unemployed, in a labour market in which the pace of change accelerates ever more rapidly, when the skills that they may have had become obsolete when they have been away from the labour market for a long time and lost much of their confidence.

The evidence that we took suggested that employers regard the long-term unemployed with suspicion, because they know that they have been away from the labour market. They are increasingly reluctant to hire such people, to whom our report paid particular attention. The Right to Work Bill—so ably supported by my hon. Friend the Member for Birkenhead (Mr. Field) and the hon. Member for North Norfolk (Sir R. Howell)—is one way of dealing with the problem, and many other ways are suggested in the report. One suggestion is the intermediate labour market—a halfway house mixing education with training in work experience. The Wise group in Edinburgh gave us some impressive evidence about that. It is a practical way of reattaching people who have become detached from the labour market, giving them back their confidence and reskilling them.

As the report points out, there are no panaceas, certainly on the supply side. There is only so much that we can do to return our labour market to its full capacity. Training and work combinations of the kind suggested by the Wise group are not cheap, but we believe that in the end they are very effective in getting rid of persistent long-term mass unemployment.

When taking evidence, we were struck by the Government's extraordinary reluctance to give us a basic statistic. We wanted to know the cost of keeping more than 2 million people—at some points in the past few years, the figure has risen to 3 million—permanently or semi-permanently on the dole. When we took evidence from the then Secretary of State for Employment, she told us that the cost was approximately £9,000 per head. Appendix 1 of the report gives our best estimate of the cost of mass unemployment—£8,400 per claimant—and we calculate that the total cost to the Exchequer is £24,000,315,000. That is a good deal of money, which is currently being wasted on passive support.

We must be able to do something more active and innovative—something that is more likely to return people to the labour market. The Government should not simply condemn the thousands of long-term unemployed in Wallasey—some of those whom I have met have been unemployed for 15 years, and have little chance of returning to the labour market as things stand-to continuing unemployment. Nor should the Government blame them for their predicament. That has been the Government's other main response: they have made benefit more conditional, telling people that they must do more in order to qualify, such as sending out CVs for jobs that do not exist.

Of course it is important to teach people how to write CVs; of course it is right to try to motivate them to search for jobs. But it is also important to make them employable—to equip them so that they have a reasonable chance of finding work, rather than forcing them to send out endless streams of CVs with no hope of ever succeeding. Having to deal with that kind of rejection is even worse than simply being stuck on the dole.

We want a much more innovative, caring and realistic approach to solving the problems of long-term unemployment than the Government have adopted. The report asks them to consider such an approach. We want them to pay special attention to the plight of the long-term unemployed, and consider how they can be reattached to the labour market. We have heard numerous arguments about the substitution and "deadweight" effects of job creation schemes, and I expect that we shall hear some from the Minister today, but such arguments do not apply nearly as much to the long-term unemployed as they might to someone who has only just lost a job and is still relatively close to the labour market.

I hope that the Minister will devote particular attention to that group, and will tell us what the Government plan to do to return them to a labour market from which many have been absent for a decade.

10.24 am
Ms Roseanna Cunningham (Perth and Kinross)

The Scottish National party welcomes many elements of the report. We especially welcome its emphasis on the long-term unemployed, to which a number of hon. Members have referred. Most of us agree that that is where the biggest difficulty arises, in terms of the lives of such people and the need to return them to work.

While I accept that the workstart programme has had some beneficial effects, I note that the Employment Committee was equally clear about the fact that it has not created many new jobs. Ultimately, it is the creation of new jobs that will solve the problem; workstart is only a partial solution. The Committee stresses the importance of training in employment, and the Scottish National party supports the idea of a national apprenticeship scheme, which would go some way towards achieving such a system.

We also support the Committee's second main recommendation. It calls for a full financial report on the effects of workstart, and for a much wider assessment that would include figures relating to the number of people who have remained in employment after the one-year workstart period. That ought to be the measure of long-term success.

We believe, however, that the key recommendation is the rather more controversial suggestion of a pilot scheme to try out the right to work-workfare principle, based on the Right to Work Bill. I shall say more about my party's views shortly, but let me say at once that the SNP is opposed to workfare in principle. We should need to look closely at any suggested pilot scheme. Words can be used to mean very different things, and I am concerned about some of the language in the report. There is talk of the pilot scheme being based on the 1995 Bill, but I am not sure what that will mean in practice.

For example, a crucial part of the Bill was the removal of any real choice. Those who refused a job would be entitled to only a quarter of the payments available to a person who was making himself available for work. I am not sure how that squares with the Committee's insistence that compulsion will not be necessary. It is, I think, agreed that most of the evidence suggests that compulsion is not a good idea.

Sir Ralph Howell

Surely we have reached a point at which we must choose between the right to be unemployed and the right to work. The hon. Lady and her party will have to make up their minds about what they want. I believe that, while the right to work would constitute a big step forward, defending the right to be unemployed is unacceptable.

Ms Cunningham

It is not a question of a right to unemployment. Of course everyone has a right to work, but the balance is changed considerably when an element of compulsion is introduced. In its evidence to the Committee, the National Council for Voluntary Organisations opposed any compulsive element in workfare, which it considered would ultimately have a detrimental effect on the whole attitude of the unemployed, especially their motivation and approach to learning and training. It might also have a detrimental effect on the labour market: employers might not be keen to take on reluctant workers, feeling that people were not there because they wanted to be there. Ultimately, it would encourage job substitution.

The 1995 Bill defined useful employment, which could not be refused without severe financial penalty, as caring, environmental or minor infrastructure work. Will that definition be the basis of the pilot scheme? If so, what sort of jobs will be covered? If they are associated with work that ought to be done anyway, they should be available not just in connection with the pilot scheme. The 1995 Bill also sought to abolish the right to income support and unemployment benefit after an initial three-year period, with persons not in employment having to register at a work centre. That gives rise to the issue of payment at £3 per hour, which effectively becomes the minimum wage. My party supports the minimum wage but, unlike Labour, we are not prepared to duck how much it should be. We do not regard £3 per hour as civilised and would not support a measure based on that amount. We approve the figure proposed by the Scottish Trades Union Congress and the TUC for England and Wales, which is in the region of £4.10 per hour.

The 1995 Bill made an inadequate attempt to provide for parents, as it covered only parents of children under five years of age and a gross income of no more than £120 a week—not conditions to which we should agree, as they would cause great hardship.

Any success with workstart appears to be limited to the short term. Real employment must take the form of new, long-term jobs. The Wise group's intermediate labour market is welcome but will require sustained, consistent and prolonged Government investment—and that has not been forthcoming. A policy of full employment should not be discarded as being unattainable. If that objective is taken together with job creation, one could devise a fundamentally different approach to unemployment that would contrast sharply with present Government policy—which, in many cases, merely creates unemployment.

Mr. Forth

Will the hon. Lady tell the House what she means by full employment?

Ms Cunningham

There will always be structural unemployment, when a person chooses to leave a job to go to another and may be unemployed for a few weeks in between. There is no reason for the high number of unemployed people and lengthy unemployment that exist today.

As a first step, the transfer of housing capital debt to central Government and the release of funding for house building and renovation would immediately create work in the construction industry. Government policies that produce unemployment include privatisation, as with job losses in the gas industry, market testing and local government reorganisation. The abolition of wages councils should have led, by the Government's own logic, to employers taking on more workers, but that has not happened.

The emotive language used when debating the right to work-workfare is misleading, with constant references to the unemployed being paid to remain idle and the underlying assumption that most of them do not want to work. That is not my experience. The majority of unemployed people want to work but there are no jobs for them. It is significant that the Government decided last year to scrap the separate Department of Employment and to merge it with the Department for Education. Nowhere in the right to work-workfare proposals is there an assessment of the short-term and long-term needs of commerce and industry in respect of employee skills.

The Scottish National party supports as positive approaches the principle of lifelong learning and specific proposals such as an integrated training and employment scheme. We see no long-term solutions from the present Government.

10.35 am
Mr. Ernie Ross (Dundee, West)

As I know that my colleague on the Committee, my hon. Friend the Member for Manchester, Blackley (Mr. Eastham), wants to speak, I will be brief.

I suppose that in the preamble to his speech on the constitution tonight, the Prime Minister will indicate changes to parliamentary procedures that may give right hon. and hon. Members more time to consider measures before they come before the House, which would be welcome. All members of the new Education and Employment Select Committee were shocked that we managed to convince the Government to debate workfare. Other Select Committees will be keen to ensure that the hard work that they put into their reports will be recognised by the Government as a useful part of the democratic process and will be the subject of debates in the Chamber.

Although I do not know what will be the Minister's response to the debate, judging by his interventions we can guess that it will be negative. The Government reject not only the report's proposals but consistently criticise the performance of existing programmes that they initiated, such as workstart and the Wise project. The then Employment Select Committee was denied information by the Government, who denigrate schemes but offer no analysis as evidence to support the claim that workfare would not work. I refer not only to answering the famous question, "Is the cost of an unemployed person £8,000 or £9,000?" At one stage, the Secretary of State argued that a price could not be put on keeping someone unemployed because one would have to know the value of the job to which the individual could go. The Government were saying, "Social security scroungers do not want work but just benefits. They are a burden on the nation. Not only are they responsible for being in that position because they are unskilled and untrained, but we do not even class them as people. We do not know whether there are jobs for them to go to, so we cannot estimate the cost in respect of the individual and his family." The Government would be more believable if the Minister could provide an analysis of the workstart and Wise projects, which we failed to elicit from the Government's evidence to the Committee.

The hon. Member for Perth and Kinross (Ms Cunningham) said that the Scottish National party would view with concern any attempt to introduce workfare. Members of the Committee followed in the footsteps of the Secretary of State and went to the United States, which is the home of workfare. Despite the fact that the Committee split into small groups and scoured America, at least for the few days that we were there, we could find no evidence of workfare. Even the most Republican-minded right-wing states that tried to get people back to work discovered first, that people actually wanted to work, and secondly, that it cost money. Many of the unemployed in America, as in Britain, are women, so child care facilities were needed.

The message that we brought back from America is that there is no financial short cut to getting people back into work and that if we want to encourage women back into work, we have to provide child care facilities. Given the Minister's most recent performance before the Employment Committee, I do not hold out much hope that he will announce plans for child care in his speech today.

The report has been a worthwhile exercise, if only to bring to the attention of the wider population the fact that there are alternatives—Government-funded alternatives. I do not know just how many schemes the Government have started but then stopped before they have had a chance to make any impression. The Government will not convince the Opposition or, indeed, the hon. Member for North Norfolk (Sir R. Howell), that they are taking the right approach. Unless they are prepared to put their money where their mouth is and do an in-depth analysis of the success or otherwise of those schemes, the argument about the need for the Government to be pro-active in the labour market will continue.

10.40 am
Mr. Ken Eastham (Manchester, Blackley)

When we embarked on our study, which lasted 14 months, many members of the Select Committee already understood many of the factors involved, so there are no shocks in many of our conclusions.

I want to nail the folly that is evident in this Chamber almost every week, when members of the Government boast about low pay as though that is good for the workers and good for the nation. People know, in their heart of hearts, that that is not true. If people do not have purchasing power, they do not buy clothes, furniture or houses; there is a general rundown as a result of those poverty payments.

As was pointed out to me some years ago, when there was slavery in America at least the slaves were fed. Today, some working people in Britain receive such poor pay that they are denied a decent diet. Doctors talk about the malnutrition among the very poor in our society. [Interruption.] I wish that, on occasions, the Minister would be a little more serious when dealing with unemployment matters. He seems to think that it is a gala day and he just sits on the Bench laughing. He does not take seriously the misery of the unemployed. Oh, the hon. Gentleman suddenly looks up with great concern, but it is rare that he looks serious when we are discussing a serious matter.

I want to raise a point about jobcentres. Perhaps the Minister would stop grinning for a moment. I want him to raise some of our concerns with the managers of jobcentres. I wish that this debate was televised so that 20 million people could see how the Minister is behaving; then he would get his ticket at the next general election.

During the past fortnight, I heard of the case of a man who had been out of work for months and was desperate to find a job. He went to a jobcentre, took a card advertising a vacancy and went to see the firm involved. He worked for it for two weeks, but never received any pay. He went back to the jobcentre but was told, "We gave you a card and you got a job." He is now on crisis loans because he cannot even get back on to benefits. He is living hand to mouth. I wrote to the manager of the jobcentre, but was told that his job was only to put a card on the wall and that he was not responsible for what happened. Somebody must take some responsibility. I believe that both the Government and jobcentre managers have responsibility.

Bogus jobs are being advertised. I can tell the Minister that I will be giving this case some publicity—[Interruption.] The Minister is a bit of a clown, sitting there puffing and blowing. It is an absolute disgrace that, although he is the Minister with responsibility for employment, he is scathing and casual about a serious matter that the House is debating for just an hour and a half.

It is a great myth that people do not work. People have been saying that for years, but over that time it has been shown quite conclusively that people desperately want to work. Being unemployed causes great misery. The workstart project referred to by the hon. Member for North Norfolk (Sir R. Howell) has some merit and we have seen one or two such schemes. It has certainly led to new thinking about what the Government could do. It is interesting to note that even the Confederation of British Industry said that employers could help to improve the skills match through work experience. That is commendable. No one could say that the CBI is a supporter of the Labour party; basically, it supports the Conservative party. However, it is singing the same tune as the Labour party and the hon. Member for North Norfolk.

I want to say a great deal more, but I realise that my time is up. I am grateful for the five minutes that I have had.

10.45 am
Mr. Ian McCartney (Makerfield)

On behalf of the Opposition, I welcome the report "The Right to Work/Workfare". I give a commitment that if, after the next general election, I am the Minister responsible for employment, I will take the report out of the bucket, dust it down and give a rather more adequate response to its recommendations.

Time does not allow us to deal appropriately with all the issues raised both in the report and by the hon. Member for North Norfolk (Sir R. Howell) in his Right to Work Bill. However, despite the inadequate time, it is important to set out clearly a range of issues on which the Labour party has given commitments. The nation's most important capital asset is its people—their knowledge, skills, endeavours and commitments. Under this Government, over a decade and more, a mass of talent has gone to waste. Since November 1990, when the Prime Minister took office, 11 million people have been unemployed at least once. Since the last general election, 8.7 million have been unemployed at least once. In my region, the north-west of England, 1 million people have been unemployed at least once since the last general election.

The numbers of long-term unemployed do not move down consistently or dramatically. Once a male becomes unemployed, he usually becomes long-term unemployed. Under this Government's training packages, it is almost impossible for him to return to a meaningful job. Of those who do manage to return, 50 per cent. are out of work again within a year. Last year, more than 400,000 of our fellow citizens who became unemployed but found another job were unemployed again by January this year.

It is not just a matter of losing a job; having lost it, it is almost impossible to find another one. When people do find jobs, they are usually short-term, insecure and part-time. Nine out of 10 new jobs created in the economy fall into that category. About 1 million full-time jobs have been lost since the start of the recession. Those jobs, in the main, have been replaced by part-time, insecure and low-paid work. It is no wonder that the country feels insecure when people have a one in three chance of losing their jobs. In the first quarter of this year, more than 50,000 jobs in manufacturing and in the key sectors of the construction industry were lost and there will be further losses between now and the end of the year. Yet despite those statistics, the Government say that the recession is over. The truth is that no one's job is secure; no one has the certainty of continuing employment.

The Government's deregulation policies have failed dramatically. They have failed in respect of our European competitors as we lag behind them in investment, training and competitiveness. We lag behind them also in our ability to develop our economy. There is a lack of capital investment in key sectors of the economy.

Let us take the construction industry as an example. It is incredible that, at a time of the highest level of homelessness for 30 years, more than 250,000 building workers are languishing on the dole. Capital assets worth £6 billion are locked in local authority bank accounts, yet the Government will not allow their phased release so that construction and infrastructure projects can go ahead, the construction industry can get back to work and public and private sector incentives to restructure the economy and our capital infrastructure can be provided. It is simple common sense to bring together those capital assets with people who are unemployed to create the types of jobs that we need in the construction industry. That is just one practical example of the significant steps that could be taken.

The Government have staggered from despair to counter-despair in trying to massage unemployment figures and the withdrawal of resources from training budgets. We are spending more than £1 billion less on training than we were at the start of the recession and 600,000 young people are in neither full-time education, nor training, nor employment. They are on the margins of society. Yet what do the Government offer? They offer pilot project work—not for 600,000 or 30,000 people, but for a mere 6,000. Eight weeks after the scheme was supposed to start, the Government still cannot tell us about contracts in relation to trainers: who is training, what type of work is it, and what access is there to pilot job opportunities?

In setting the contracts for the scheme, it seems that the Government are reducing the resources. In doing so, they are refusing access to training as a component of the pilot projects. The Minister smiles, but I hope that he will jump up in a moment to give me the answer that he has been unable to supply for the past eight weeks. If he does, it would be better late than never and I would congratulate him on doing so. The pilot project is supposed to be at the heart of the Government's drive to give people access to the labour market. Yet, in the contracts, which are to be announced, there is no training element. That is a complete nonsense. The work provided is skivvy labour, and there is no intention of promoting and developing real jobs.

We should consider the plight of young people. They are living in communities scarred by unemployment, where one in five non-pensioner households have no working member. Their self-esteem has been destroyed, they are living on the margins of society, and there is involvement in crime, drug and alcohol abuse and sexual exploitation. That should not be our young people's experience as we approach the millennium. They should be part of society, not forced to its margins. There should be community and peer support, a sense of belonging, access to social facilities, vocational guidance and support, training and jobsearch, meaningful links with responsible employers, work experience, job opportunities and the ability to move in the wider labour market to seek out better job prospects.

My hon. Friends the Members for Dunfermline, East (Mr. Brown) and for Sheffield, Brightside (Mr. Blunkett) recently proposed a comprehensive set of fiscal incentives to help the long-term unemployed and young people, which I commend to the House. They are priorities for an incoming Labour Government.

The Select Committee report is correct in its analysis about the failure in the United Kingdom labour market to provide access to long-term job opportunities. The Government have two choices: to continue to tax for failure to pay the huge benefits bill, or to begin investing in success. We need a Government who are committed to the latter, and to the provision of training and retraining opportunities, access to the labour market for the long-term unemployed and job security through training for young people entering the labour market for the first time.

The Government have a role to play with employers. They cannot stand idly by and allow the market to determine that we have a pool of long-term unemployed people of—depending on the cycle of the economy—between 2 million and 3 million. They are prepared to allow 500,000 people at any one time to live on the margins of society. The Government have a responsibility. If they will not take it, they should move over and let in a Government who will.

10.53 am
The Minister of State, Department for Education and Employment (Mr. Eric Forth)

This debate has been light on Members and heavy on cant and nonsense, which I suppose is no surprise given its nature. I counted as many as six Labour Back Benchers crowding the Chamber for a debate to which they claim to attach such importance. I counted one hon. Member from the Scottish National party and one Liberal Democrat. I say that because—[Interruption.] I have touched a raw nerve with Opposition Members, and so I should. Anyone who takes the trouble to read Hansard might think that, given the amount of emotional claptrap that we have heard from Opposition Members, the debate concerns many of them. I want the record to stand: ix Labour Back Benchers were present.

I experienced a brief moment of excitement when the hon. Member for Makerfield (Mr. McCartney) talked about Labour party commitments. He began with a rousing commitment and I made a note of his words. He said that, in contrast to the Government's response to the Select Committee report which we are discussing, his party, excitingly and dynamically, would give a…more adequate response". That is new Labour with knobs on if ever I saw it.

We are in exciting new territory in responding to all the problems that Labour Members have been ranting about this morning. The hon. Member for Makerfield said that he would list the Labour party's commitments in order to deal with all those problems. I am still waiting. I am being generous in saying that I counted one and a half commitments. The half that I identified was what I assume was a financial commitment—which I also assume the hon. Gentleman has agreed with the hon. Member for Dunfermline, East (Mr. Brown)—to increase training budgets. He did not put a figure on the commitment, so we shall have to hold our breath to see what will happen. We await a further episode to hear the commitments.

By the way, the hon. Member for Makerfield does not read his post very closely, because I wrote to him yesterday giving him the answer to the question that he reasonably asked about the providers of contracts for project work. I will not delay the House or use up even more of the very short time that I have available except to refer him to my letter of yesterday that gives him the information that he wants.

Uncharacteristically, the hon. Member for Birkenhead (Mr. Field) of all people made a rather infelicitous reference in which I am sure he said—we shall check the record—in passing that there had been an increase in unemployment in all our constituencies. That sparked me into looking at the movement of unemployment in the constituencies of this small but dedicated handful of Members who are present. I find that unemployment since December 1992—[HON. MEMBERS: "1979."] I did not hear the hon. Gentleman say 1979, but I shall happily talk about that. We all know that unemployment across Europe is significantly higher than in 1979 and that this country is performing a lot better. If I had more time, I would go into that at some length. I want the record to show that unemployment has fallen in Birkenhead by 1,300, in Makerfield by 1,300, in Leicester, West by 1,300, in Wallasey by 1,200 and in North Norfolk by more than 1,000.

The hon. Member for Wallasey (Ms Eagle) referred to increasing numbers of long-term unemployed people. That is also an inaccurate statement. I shall be charitable by referring to International Labour Organisation figures—hon. Members will not often hear me quoting them, but for this purpose I shall, since Labour Members find them more attractive—that show that long-term unemployment has fallen over the past year from 43 to 40 per cent. and the claimant count has fallen by more than 500,000 since the mid-1980s. The debate has regrettably been characterised by some inaccuracies from Opposition Members, on which I hope they want to reflect.

The hon. Member for Perth and Kinross (Ms Cunningham) trotted out the glib phrase about the concept of full employment which is frequently heard in these debates and on which we should dwell. Opposition Members have implied that, somehow, everybody could have a job if only the Government of the day did something different. There is no evidence from around the world to support that. Even in Japan, unemployment is 3 or 4 per cent. and rising. In the United States, it is 5 per cent. and steady, and in France, Germany and Italy, the countries most admired by Opposition Members—our partners in Europe whose models they would adopt—the unemployment rate is 11 or 12 per cent.

Mr. Ian McCartney

Will the Minister give way?

Mr. Forth

I cannot give way, because I am running out of time.

Opposition Members promote the idea of full employment without mentioning a number or a quantity. They should pursue that argument only if they are prepared to say exactly what they mean.

Mr. Frank Field

What about the report?

Mr. Forth

The hon. Gentleman should simmer down. I agreed to restrict my remarks to allow Opposition Members time to speak. That is what I have done. I am now replying to the points that were made in the debate. I know that is old-fashioned, but I thought that I would make an attempt.

Mr. Deputy Speaker (Mr. Michael Morris)


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