§ 8.37 p.m.
§ Lord Jacques
My Lords, I beg to move that this Bill be now read a second time.
Long-term unemployment—that is to say, unemployment of more than one year—is at an unprecedented scale in our society. It is much higher both in absolute terms and as a percentage of the labour force than it was between the two world wars. For example, in 1933 long-term unemployment was approximately half a million. It was equal to 3.3 per cent. of the labour force. In 1986 it was more than one and a quarter million and it is 4.9 per cent. of the labour force. That is the problem we have to face—not unemployment as a whole, but long-term unemployment. That is what causes both the poverty and the demoralisation. Detachment of so many people from the daily discipline of having to go to work and receiving an income at the end of the week inevitably has far-reaching effects, both social and economic. When a worker is unemployed in the first place he has some clothes in the wardrobe, some food in the pantry; he has some savings, he has a tax refund, he gets some redundancy pay and he gets unemployment benefit.
However, in due course that all disappears, the clothes get worn, the foodstock, savings and redundancy money are depleted. There are no more tax refunds and unemployment benefit is withdrawn after a year. Many people are dependent upon the Social Security benefit that they receive. It is long term unemployment which is causing the severe poverty that we are experiencing.
288 Unemployment also has a severe effect of demoralisation. The first effect of unemployment is boredom, but in time that boredom becomes increasingly burdensome. The unemployed person thinks that it is his own personal failure and begins to lose his self-respect. He loses the self-discipline which is associated with going to work every day. In some cases there is an erosion of the skills which he used in his work. His own health and the health of his family is affected. He finds it increasingly difficult to get work because money is needed for stationery and postage for job applications, and the fares to go for an interview and also to be decently dressed for that interview. If someone has been unemployed for years then he probably does not have that money.
Unfortunately, the employer is prejudiced, and one can understand this. Employers feel that a person who has been unemployed for so long must be inadequate, or may have lost the discipline of work, and is more likely to have had an erosion of skills. Employers feel that taking him on involves an additional unnecessary risk. Employers have plenty of risks without taking on any more with their eyes wide open. Consequently, the long term unemployed have fewer and fewer interviews for employment and then begin to lose hope.
It is very easy to get into long term unemployment if you are made redundant at the same time as many other people, as occurred for example, in 1980–82. When many people are made redundant at the same time and the upturn comes very slowly, then there is a far greater likelihood of becoming long term unemployed than if you had been made redundant at some other time. It is easy to glide into long term unemployment, but very difficult to get out of that situation because of the natural prejudice of the employer. My Lords, help is needed. The long term unemployed have to be helped if there is to be any future for our country. If no help is given, then it is upon our heads because there will be serious economic and social repercussions.
In January 1986, a little more than a year ago, the House of Commons Employment Committee reported that the case for special provisions for the long term unemployed was completely unanswerable. They set forth recommendations that there should be a job guarantee scheme. They outlined the scheme that they recommended. Since that time the Employment Institute have published a pamphlet by Richard Jackman and others, spelling out in detail the problem of the long term unemployed, and putting forward remedies. In that latter document there is an account of the way in which Sweden have guaranteed employment for some years. In Sweden the unemployment benefit is roughly about 80 per cent. of earnings and is payable for 10 months. Before the period of benefit expires, the labour marketing board contacts the recipient of the benefit and interviews him with a view to offering him either training or a job. He is guaranteed either training or a job. If he completely refuses training or a job then he loses his benefit, but not the benefit for his dependants.
I may be criticised, but I can see nothing wrong in that provided that the job which is offered is a suitable one and is paid at the usual rate. If the recipient is of the opinion that it is not a suitable job, there should be 289 proper machinery for him to appeal. Provided there is such machinery for appeal, I can see nothing wrong in stopping the recipient's benefit if he refuses both the training or a job. In Sweden employment is guaranteed largely in three ways. The labour marketing board uses local authorities and other public bodies. They are asked to suggest suitable jobs which need to be done. In so far as that public body employs long term unemployed nominated by the marketing board, then the labour marketing board pays 75 per cent. of the wages for six months. In the case of private employers, the board pays 50 per cent. of the wages for six months. For those who need and are offered training the recipient receives full employment benefit which, in Sweden, is 80 per cent. of earnings or thereabouts. In that way there is guaranteed employment. For example, in 1984 unemployment in Sweden was recorded as 3 per cent., but they had 5 per cent. in special schemes, as I have explained, because they had guaranteed employment rather than guaranteed benefit.
I suggest that we should have a similar scheme. Noble Lords who are interested should look at the House of Commons Employment Committee report where the scheme is outlined. Richard Jackman's pamphlet published by the Employment Institute gives a further scheme in much greater detail. For my part, I should adopt a very simple scheme. I would finance the Manpower Services Commission and expect it to guarantee the employment. It would say to public bodies, "If you employ long term unemployed such as we recommend to you then we will pay the whole of the wages to that individual for one year".
The kind of schemes that I would look for are these. Where there is the least unemployment, where there are new jobs available, I want to see hostels built so that workers from other areas can come and spend a little time in the hostel while they find a job. I want to see flats built. When a worker and his family have a job and cannot buy a new house because the amount they have received for their old house is so small, I want to see them get a flat which they can have for a couple of years until they find their feet and can get a place of their own in their new place of abode.
I want to see those authorities which are paying out huge sums for bed and breakfast accommodation to their citizens who are without homes build suitable hostels using the long-term unemployed to build them. I would expect the Manpower Services Commission to pay the whole wages for one year of such of the long-term unemployed as were used for that purpose. The cost of materials and the cost of supervision I would leave with the public body as its expense.
In the examples I have given the charge would be to the housing account. For example, at the present time we are told by the Audit Commission that 85 per cent. of local authority housing is in need of repair. There is a job for the long-term unemployed. It is calculated that for every seven workers who would be employed in that kind of job, five could be from the long-term unemployed.
The local authority would only have to find the supervision and the materials. The wages of the long-term unemployed would be paid for by the Manpower Services Commission. I would expect the same with 290 schools. Where the local authority has schools that need repair, it should set about repairing them and the Manpower Services Commission should pay the wages of the long-term unemployed who are used for that purpose.
I would expect the same with the health authority where there were hospital repairs to be done or even hospitals to be built. I would also expect health authorities which because of lack of money cannot employ sufficient orderlies, cleaners, catering staff or laundry staff, to go to the Manpower Services Commission to get the labour from the long-term unemployed, and the Manpower Services Commission should pay the full wage for one year. I would hope that the training would be such that many of them could be absorbed to take the place of the usual wastage that we get.
I would expect the same with the water authorities and the highway authorities. Let them find the jobs, and let the Manpower Services Commission pay the wages of the long-term unemployed for one year. By doing that you are bringing the long-term unemployed back into the labour market. So long as they are long-term unemployed and are outside the labour market, the employers are not interested in them. But by bringing them back into the labour market by giving them work for one year, they increase competition within the market, and consequently, if anything, it is anti-inflationary and not inflationary. I would expect the private employer to be subsidised to the extent of £40 a week, or £2,000 a year, which was recommended by the House of Commons Employment Committee.
Now let us look at the cost. Assuming that we have to get 750,000 re-employed in a year, which is the number generally agreed as being necessary, I would take 400,000 to be drafted into the public service—the local authorities, health authorities and so on. I would expect them to be paid the rate for the job. The rate for the job I would estimate to be about £120 a week or £6,000 a year. That cost would be £2.4 billion.
If the other 350,000 were in private employment and the private employer was subsidised at the rate of £2,000 a head a year, that would be £0.7 billion, so the total gross cost would be £3.1 billion. But there would be enormous savings in benefits. Seven hundred and fifty thousand people who had been receiving benefit would no longer receive it. If the whole range of benefits, including housing benefit, were no longer payable and were equal to £3,000 per head a year, that would give a saving of £2.25 billion. There would be a tax flow-back. Not merely tax but also national health contributions would be paid which had not previously been paid, and that would amount to £0.75 billion. The savings and the tax flow-back would amount to £3 billion against a gross cost of £3.1 billion. That means that the net cost would be £100 million per annum. To save us from the problems that we are going to have if we allow this long-term unemployment to continue, that is a cheap price.
I speak from personal experience. I have a relative who through no fault of her own was thrown out of work in the 1982 depression. She was fully trained, but because public bodies were taking on less staff she was unable to find work except temporary work. After a 291 year or two of unemployment she applied for a job for one year that was financed by the Manpower Services Commission. It was a job for the local authority but financed by the Manpower Services Commission, which paid the wages.
She did that job for a year. Unfortunately it was a one-off job, but within a matter of weeks, because she had come back into the labour market and was no longer in long-term unemployment, she was in good employment. After doing one year probationary service in that new employment she was confirmed in it and congratulated on the way she had learnt the job. There is an example of what the Minister did, and I want him to do the same on a much bigger scale than he has in the past. I also want him to pay the rate for the job.
I come now to the Bill itself. There are two substantive clauses. Clause 1(1) says:The Secretary of State shall by order made by statutory instrument require the Manpower Services Commission … to arrange that an offer of suitable employment be made by an employer",to those who have been out of work during the relevant period and are available for employment and make application in the prescribed form.
The second subsection says:The relevant period is three years … The Secretary of State shall consult regularly with the Commission with a view to reducing at the earliest opportunity the relevant period".The idea is that he will gradually reduce it to two years and then to one year, so that it covers all the long-term unemployed.
The second substantive clause says that the Secretary of State will make a report to Parliament annually. This is a problem we have to face up to. I commend the Bill to your Lordships.
§ Moved, That the Bill be now read a second time.—(Lord Jacques.)
§ 9 p.m.
§ Baroness Seear
My Lords, I should like to give general support to the Bill the Second Reading of which has been moved by the noble Lord, Lord Jacques, and the terms of which are in many ways in line with proposals which have been put forward by the Alliance parties.
The reason I support the Bill is that we have to face the fact that actually there is not one unemployment problem in this country, but two. First, there is the problem of the very large number of people who enter the pool of unemployment but who move out again in a relatively short time. It may be two months, three months or four months. It is a disagreeable experience. It is wasteful, but it is not disastrous or tragic. That of course represents the great mass of the unemployed and we sometimes forget that a very large number of people, even when unemployment is at its worst, are in fact getting jobs. As is frequently pointed out to us here, there is reason to suppose that the position may be improving at the present time. One very much hopes that it will continue to improve.
But those people are quite different from the long-term unemployed; and the serious unemployment 292 problem in this country is undoubtedly that of the long-term unemployed. That represents a quite different type of problem from that concerning those people who move into the pool and then move out again in relatively short periods. Among the long-term unemployed there are again two quite different groups—each very important in its own way but quite different in the problems it presents and each needing to be tackled as a matter of considerable urgency.
First, there are those under 25. As we know, the people between 18 and 25 have really carried the brunt of unemployment in terms of percentages. There is still something of a legion of the lost between the ages of about 19 and 25—the people who were too old to have taken part in the Youth Training Scheme and so get the advantages offered, and who now, having got beyond that age, increase very rapidly the numbers of unemployed in that age group.
They are of course a particularly serious and threatening group because unless they are either got into training or employment fairly soon the chances of their having any kind of a satisfactory working life are pretty dim. Something is being done—and we must be glad of that—by means of the job training scheme, which is particularly geared to deal with this group. It is a beginning but it is a very small beginning. It reflects the fact that the problem is being recognised, but I would suggest that it is not being dealt with, as yet, on the scale which is necessary.
The other group who make up a large number of the long-term unemployed are of course the people over the age of about 50, who have very little in the way of skills or competences to sell in the labour market and who, once they have lost a job, have very little chance of getting back into employment.
These two groups in their different ways present very serious challenges to all the rest of us in human, social and economic terms. In human terms, the kind of additional problems experienced by people suffering from long-term unemployment are familiar to the House but they should not be minimised. We have to remember the problems they face. Inevitably young men under the age of 25, with nothing whatsoever to do and very little money to spend, are liable to get into trouble and to cause society trouble. They probably add to the groups of people who fill the prisons, as we have heard in the previous debate. It is almost inevitable (is it not?) that if you have large numbers of young men—and young women too: but this affects young men more—in that position they are going to find something to do. and that is not likely to be very satisfactory to society.
So far as concerns older people, as the noble Lord, Lord Jacques, said, we know the kinds of consequences that flow from long-term unemployment. Your Lordships may recall a study that was done, which showed tragically that these people were those who in a way were life's non-survivors in many different spheres. They were the people who had never acquired skills; they were the people who had not done much at school; they had never taken any training; their health record was below standard or below average; and, sadly, they were also people who were to a disproportionate extent living alone and whose personal relationships had been less successful than those of most people.
293 So you have this group of people with very little hope and very few resources. They present a problem in human terms and in social terms. I am sure that nobody in this House would wish to ignore them. I do not pretend for one moment that it is easy to deal with them, but I think we would all agree that the situation is serious.
In economic terms, I should like to pick up a point touched on by the noble Lord, Lord Jacques, and which in fact has been highlighted by the London Business School report either earlier this week or at the end of last week. It is a point which has been made by other people too: that in reality the long-term unemployed are not in the labour market. They do not compete for jobs. When it is asked why unemployment has not had the effect of controlling wage increases the answer seems to be that a considerable number of the unemployed simply are not in the labour market and therefore the normal market forces are not working in having the effect of restricting the power of labour to push up wages.
These people—they are a considerable number—simply are not there applying and competing for the jobs that are available. Therefore those who are in the market competing are in a stronger position to push up pay than would otherwise he the case. If, by encouragement and training, people can be brought back into the labour market they contribute to the general market position of labour, which is very much healthier than having them excluded in the way that they are at the present time—and excluded in social terms. If we continue in this way and do not take some quite specific action to deal with the problem we shall develop this under-class of people—such a class has already developed in the United States and is developing in parts of this country—who simply do not feel that they belong to our society at all. In many ways, they have been excluded. They feel excluded; they feel that they owe nothing; and they behave as if they owe nothing. That is not a healthy state of affairs.
I should like to take up a point made by the noble Lord, Lord Jacques—it is the central point of this Bill—about the kind of employment that should be offered to the long-term unemployed. The MSC has already done a very considerable amount through the community programme. I would not however advocate that we extend the community programme for this purpose—for one very important reason. I am connected with the working of the community programme. I am deeply concerned, because of the no-substitution conditions which attach to the community programme and because work can only be done on the programme which would not otherwise be done, we are reaching a point at which we shall have the tidiest towpaths and the cleanest graveyards that anybody could possibly imagine, while houses badly in need of repair and school roofs that are falling in are not being attended to. I beg your Lordships not to accept the easy option of wanting to expand the community programme unless you can change the conditions under which it operates.
It is surely vital if we are to do this that, as people are brought back into effective employment, it is employment that meets real needs. I am not saying 294 that the community programme does not meet real needs but many activities are of very low priority, and there are many other things that need to be done. There are housing repairs, hostels, the sharp end of the social services—let us remember that women should be included in this as well as men—and work connected with community care on which I do not wish to expand. Those are high priority jobs. Inevitably, after a number of years of the community programme and with its extension, jobs that are not now of high priority will become lower in priority rather than higher. So, using the approach of the noble Lord, Lord Jacques, would be very much better.
In passing, may I just underline the point that there are women in this category as well as men. They are often concealed because they are not drawing unemployment benefit. Many older women, in particular, never paid their contributions—because they were not permitted to—and therefore they are not eligible for benefit. This has come up in connection with the job training scheme and with the extension of the community programme. These women are genuinely looking for work but they do not rank as unemployed. Therefore, they are excluded from both the job training scheme and the community programme, because to rank as unemployed they have to be eligible for benefit.
If we continue with that restriction we shall be excluding from the labour market a number of women who really are seeking employment. We shall be excluding women who could be drawn very usefully into a number of aspects of the work which is plainly needing to be done and for which they would be well suited, if the conditions could be so laid down that it was not rigidly tied to the necessity that they should establish that they are unemployed by virtue of being eligible for benefit.
§ 9.13 p.m.
§ Lord Hatch of Lusby
My Lords, despite 19 changes in the criteria of the unemployed since 1979 which have removed 463,000 from the register, we still have admittedly well over 3 million unemployed in this country and probably 4 million. If we compare the percentage of unemployed in this country, which the Government admit is over 11 per cent., with any of our competitors—as I have put it so often to the Secretary of State—we are top of the league of unemployment and bottom of the league of those who are employed.
Of those 4 million, we are talking tonight particularly of 1.334 million long-term unemployed. Is this not a disgrace in this country? They are the people who have been unemployed for more than a year and, as the noble Lord, Lord Jacques, has pointed out—and I shall be interested to know whether the Minister agrees with him—it will take the creation of 750,000 new jobs a year if we are to reduce the number of long-term unemployed.
Among those long-term unemployed, as the noble Baroness, Lady Seear, has just pointed out, there are different groups, and I wish to mention two which seem to me to be worthy of particular attention and for whom we must take particular responsibility. In the group composed of those who are under 25 years old, 295 there are 1.333 million who are calculated to be unemployed. Those people are at the age when they are able to acquire the routine and practice of work. They may never do so because they have not had a chance at the time when they are most easily influenced.
Perhaps the Minister has seen the report of the charity Youth Aid which has analysed the new part-time workers. It points out that those workers are increasingly people under the age of 25 or even under the age of 19. It also points out that we are forcibly creating a new breed of journeyman who moves from one temporary job to another. What are the prospects of those young men and women in their future lives? What are their prospects for having a job of work or a profession which will give them a foundation for satisfaction throughout their lives?
The second category of which I shall speak is the older men and women who have given their lives to producing the wealth upon which the British people have depended throughout the century. They are then cast off. They are called redundant, and the Minister well knows that they have very little chance of ever getting a job again.
I should like to ask the Minister to reply to two specific questions. The first concerns the Restart programme which was announced by the Secretary of State. In that programme, what happens to the man or woman who is brought in for counselling, goes through the Restart programme as one of the long-term unemployed and then at the end of that period 296 does not get a job? It may be that the Government have already announced that. If so, I plead ignorance. However, I should like the Minister to make clear tonight what the position is. Does such a person return to the long-term unemployed list or is he then removed from it, thus reducing the proportion of the long-term unemployed? Are such persons still counted as the long-term unemployed or are they counted as short-term unemployed?
My second question was raised by my noble friend Lord Jacques during his opening speech. It concerns the rate for the job. In the Restart programme and in the Government's other programmes for providing employment, can the Minister say specifically that only the rate for the job will be applied? Can he guarantee that those who go into such schemes are entitled to the rate for the job?
We in Parliament have a responsibility for those people—young people, old people and middle-aged people. However, we have a particular responsibility for the young people whose prospects are so grim and who form so large a proportion of the long-term unemployed. We also have a particular responsibility for older people who have given their lives and contributed throughout their working lives to the creation of the wealth which we enjoy. I suggest that that responsibility, resting upon us in Parliament, can only be carried out through legislation such as the Bill introduced by my noble friend Lord Jacques, which I wholeheartedly support. We must bring a little more dignity and a little more justice to the people of this country.
§ 9.19 p.m.
§ Lord Dean of Beswick
My Lords, I should like to begin by congratulating and complimenting my noble friend and colleague Lord Jacques on introducing this short but important Bill. I have known of his special interest in the unemployed of the United Kingdom ever since I began to cover employment and unemployment problems from the Front Bench of my party. I do not remember any occasion on which the subject was raised, by question or by any other means, when the noble Lord, Lord Jacques, was not involved.
In fact, one of the first major debates in which I took part in your Lordships' House was a two-and-a-half hour debate initiated by the noble Lord which he devoted with great fervour and passion to the subject of unemployment. It comes across from listening to the noble Lord that he has a special interest in the unemployed. I am not saying for one moment that other noble Lords do not have the same feeling, but the noble Lord has been able to manifest it on a number of occasions. I noticed that in moving the Second Reading of this short Bill he did not for one moment apportion political blame for the position in which we find ourselves. Part of the blame can be apportioned to the international recession over the past few years. Depending on one's political view, one can argue about how much of the present unemployment one can lay at the door of government, but I do not think that that is what the Bill is about. It is about trying to deal with the problems and here I must say that we differ a little from the Government.
I have had to say from the Front Bench on more than one occasion that though I and my party welcome the training initiatives, whether they are for young people or for mature people, they are not a substitute and never will be a substitute for real employment. For someone to be trained for two years and then go back to the dole queue is a cruel hoax and can have a terribly detrimental effect on the person involved. Very often we talk about the unemployed in terms of numbers, units and percentages; but to every person who is unemployed but wants to be gainfully employed his is 100 per cent. unemployment.
Some years ago, because of electoral consequences, I had the misfortune to be unemployed for a number of weeks. After leaving school at 14 years of age and never being unemployed before, I found myself in that position. I can tell noble Lords that it was a terrifying experience because up to that point I was not aware that I would be joining your Lordships' House. I can cite my own case as a mature person who up to becoming fully engaged in politics in 1974 was a highly skilled engineer—as good as anybody in my trade. I had spent my life at it and I never had any difficulty in earning a living or finding a job.
The noble Lord, Lord Jacques, touched on an important facet in his speech when he talked about mature people who lost their jobs and after a period of time lost motivation. That is the saddest part of the whole business. When a person has been used throughout his life to being employed and he is suddenly cast to one side through no fault of his own—it may be no fault of his employer or no fault of government because people have become unemployed 298 under various governments—it is a terrible situation. In most cases we are talking about the family breadwinner. Without being a male chauvinist pig, as it is termed, we are talking about the main wage earner or breadwinner.
I remember meeting some of my former bosses when I became a Member of another place. They said they would like to take me back into engineering because they had just invested £1 million in one machine at my old factory. It was the type of machine that in the days I was working I could have operated. Sadly, however, I had to say that in the two or three years between the time of my leaving engineering and becoming a full-time politician, technology had so leapt forward that I would have had to be retrained to work the machine. It was a different ball game. There is no point anyone trying to view it as anything else.
What worries and frightens me most about the unemployment figures—and this has been said in the Chamber by noble Lords on all sides of the House and by my noble friend Lord McCarthy who has just come into the Chamber—is the continuing decline in our manufacturing base. As I said, I place no political responsibility for that on anyone as the position stands at present. One could go back over a number of years and refer to the failure to re-equip industry 20, 25 or 30 years ago, but that does not answer the question. It is a sad fact of life that the manufacturing base is still in decline. I have to say here that a main component of that is not—I repeat, not—high wages. By any standards we still have considerably lower wage levels than our competitors.
My noble friend Lord Jacques mentioned various ways in which this problem can be tackled. There have been a series of debates over the years, motivated by reports from non-political or non-politically motivated bodies, regarding the infrastructure, about what has happened and is continuing to happen to our housing stock and on the deterioration of the fabric of our schools and hospitals. Most of them came to the same conclusion.
There was a debate only a few weeks ago in this House on Faith in the City, the report of the Archbishop of Canterbury's Commission. It came to the same conclusion as the Duke of Edinburgh's Commission almost two years ago. More and more responsible people who have no political axe to grind are saying that there is a case for using substantial additional sums of money to halt or correct the deterioration in the fabric of our nation in a physical sense.
The document from which my noble friend quoted is yet again from another non-politically motivated group of people. It is from the Employment Institute, and is based on a very wide political spectrum. There are an ex-Conservative Prime Minister, an ex-Labour Prime Minister, ex-Labour Members of Parliament, trade union leaders and people from industry on it. A whole variety of people across the political spectrum have helped to produce the document or given evidence for it. It is produced by Richard Jackman and, as it states, by others. It comes to the same conclusion as have speakers in debates in your Lordships' House. It says what we have been saying for 299 two or three years—that we ought to be making a start. The waste of resources that is occurring when the money is available and could be used is absolutely appalling.
My noble friend Lord Jacques in his very interesting speech referred to the Swedish experience and the scheme there which has worked. It may be said that the situation in Sweden is not the same as in this country. Nevertheless, by using an agency—something like the Manpower Services Commission—Sweden has to a great degree eaten into what would have been a far more substantial and undesirable reservoir of unemployed people. I go along with him when he says that their system is quite correct in that after a period, when a person is interviewed and he refuses to take training or accept a reasonable job that is offered, there is a stipulation that he must take that employment. i was glad to hear from my noble friend something which I did not know before; namely, that that person's dependants are not deemed to be at fault and they continue to receive the benefit of government support in those countries.
My noble friend also referred to the House of Commons Select Committee and its report. It is late and I do not want to go too much into the details of that report. Nevertheless the Select Committee published an all-party report which indicated a course of action whereby, with government initiatives, a substantial impact could be made on reducing the number of unemployed from the present figure of over 3 million.
Training schemes are necessary. We have said that not in an over-political sense, because I do not think that it does any good whatsoever and only wastes time when one harks back to say that it was the last Labour Government's fault that these things happened; then one can say that it was the previous Conservative Government under Ted Heath that was at fault. One can go back to the Boer War and to the Crimea if one wants to lay the blame upon someone and knock down skittles.
However. I have said, and this has been emphasised by our chief spokesman on employment in a number of debates, that we totally accept that training schemes are necessary and fulfil a purpose. I end my speech as I commenced it. As far as I am concerned the hole in the fabric is that after two years a person can walk out of the door without having a job. It is a most difficult situation trying to explain to someone why that has happened.
Let me cite one industry as an example of what I mean. A few weeks ago in your Lordships' House an order was laid respecting the construction industry training board. I am talking off the cuff but I think I am correct in saying that the original scheme was lengthened from 12 months to two years. Caveats were entered by some of us who said that two years was not long enough. In a totally non-political sense, some of us said—and this was also said by Members on the Government Back Benches—that two years was not a sufficient time to produce a skilled craftsman in the building industry. Those comments have now been underwritten, because that is now held to be so by the 300 public sector building people, the people who man and manage the local authority building associations, and also by the Building Employers' Confederation and the Building Manufacturers' Association.
I do not want to go too far down that road but I understand that there is about £60 million in the kitty. I know that the Minister is sympathetic to suggestions that would achieve a useful result should this money be put to funding even a percentage of these people in order to give them three years' training so that they can reap the benefits and enter the trade.
I believe that there is a world of opportunity before us, but that there is a political philosophy that divides us. If I had to choose between a minimal reduction in income tax and leaving income tax alone and commencing a substantial public building programme in the widest sense, I have no doubt at all on which course my choice would fall and it is one which I believe in the long run would be of benefit to our nation.
I want once again to congratulate and compliment my noble friend Lord Jacques on moving the second reading of the Bill. I do not know where we go with it from here in a material sense, but I know that he has given us an excellent chance objectively to make not a political attack but once again to air our ideas on what we think may be achieved to deal with a problem which is most tragic and difficult for a large number of unemployed people. Despite recent press predictions, they do not see a light at the end of the tunnel. I and my party will support the Bill in principle.
§ 9.35 p.m.
§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)
My Lords, I am pleased to start putting the Government's view on the basis of what the noble Lord, Lord Dean of Beswick, said in concluding his speech. Whatever may happen to the Bill moved by the noble Lord, Lord Jacques—he knows the problems that a Bill of this nature faces—he has given us an opportunity tonight to have a short but well-reasoned debate on a matter that must be uppermost in everyone's mind.
We have had an opportunity to demonstrate the deep concern, knowledge and interest that this House has in the problems of long-term unemployed people. The Bill is aimed at helping this group. There is no disagreement between the Government and those who support the Bill about the plight of long-term unemployed people, about the difficulties that they face in breaking back into the job market and about how those difficulties increase as the period of unemployment lengthens. We all care about those problems and want to offer effective help.
The Bill attempts to provide a way back to the labour market for the long-term unemployed by means of a guaranteed job with an employer. The noble Lord, Lord Jacques, will recognise that the idea of a guarantee is not new. It has its attractions. In June last year, in another place, right honourable and 301 honourable Members debated at some length the Select Committee's recommendations which were intended to achieve a similar effect. My right honourable friend the Paymaster General and Minister for Employment outlined then the considerable financial and, more importantly, the practical difficulties of the job creation proposals which the Select Committee envisaged.
I have reservations about a guarantee on two counts. The first is the practicality of artificially creating jobs on the scale required without seriously disrupting the working of the economy and without displacing existing jobs. In effect, we may simply be reallocating unemployment from the three-year or any other group—the Bill provides for a different time-scale—to others, thereby creating new unemployment.
My second reservation is about whether this is the right approach to helping people who may have been out of work for three years and who may not be ready to step straight back into employment. I want to return to that point in a moment.
In expressing those reservations about the concept of a job guarantee, the Government accept the need to take effective action to tackle the problem of long-term unemployment. Our approach is to provide direct help to the long-term unemployed through a strategy which is effective and practical and which reinforces the Government's wider strategy for the economy. That wider strategy, as I and my noble colleagues have said on a number of occasions, is designed to improve the working of the labour market and to continue the pattern of low inflation and sustained economic growth. This, we believe, ultimately offers the best opportunity for everyone who is unemployed whether short-term or long-term.
It is in this context that we have developed an imaginative and comprehensive range of measures to generate employment, to support training and to help the long-term unemployed. I do not suppose that there are very many people now who have not heard of the Action for Jobs campaign that the Department of Employment launched specifically to ensure that people are aware of the range of opportunities available to them, opportunities on which we shall be spending over £3,000 million in 1987–88. The measures are all set out in the booklet.
Of the £3,000 million, £1,200 million will go on measures specifically designed to help long-term unemployed people, central to which is the Restart programme. I said earlier that I had reservations about whether a job guarantee is the best way of tackling the problem. Among the long-term unemployed there is a wide range of people with varying skills, varying abilities, aptitude and, indeed, motivation. It is not necessarily the right answer to offer them a job at an arbitrary three-year or other point that they may not be able to do. The noble Lord, Lord Dean of Beswick, described this graphically from his personal experience. Some may need to update their skills; others may need to acquire new ones; and still more may need to build up their confidence and self-esteem before they are ready to work again.
I know exactly what the noble Lord, Lord Jacques, meant in talking about loss of confidence and self-esteem. It just drains away. We have to have some measures to help them overcome this disability.
302 Our approach in Restart is to look at the individual. By "individual", I mean women as well as men across a wide age grouping. We want to assess with individuals their needs and help them through a range of options. Restart recognises that people who have been out of work need special attention—individual attention—to help them get back into the labour market.
Restart begins by inviting people into job centres for personal interviews to discuss the particular and personal problems that have held them back in their search for a job. Having identified most, though perhaps not all, of the problems, we are then able to offer them a wide range of opportunities from which a choice most appropriate to meet their needs can be made.
In reminding your Lordships of the eight main options currently available, I shall entitle them but not describe them because noble Lords are probably reasonably aware of them. Throughout all these options there is at least one common thread. It is that they seek to help people to help themselves back into the job market. The options are, first, not unnaturally, a suitable job; and, secondly, a place on the community programme. I take close account of what the noble Baroness had to say about community programmes and making them fit real needs. I know that she will understand that there are problems that we must overcome. It is interesting that 30 per cent. of those leaving the community programme go into jobs or a further training programme. Then there are places in a job club. These have been rather successful. More than half of those leaving the job club go into work.
Then there is the self employment scheme with the enterprise allowance scheme. Two hundred thousand people have set up in business with the help of that scheme. Other options are the Jobstart allowances, work on voluntary projects, a Restart course to help people assess what they are good at, and a range of training opportunities. We are finding that for many of the long-term unemployed the major obstacle to finding work is that they do not have the skills needed for today's industry. We therefore have a number of training opportunities available. Last month we announced the expansion of a scheme to reskill and to remotivate in particular the younger unemployed to help them compete effectively for jobs as the economy grows. The new job training scheme will help up to a quarter of a million unemployed people each year to acquire the new skills and qualifications they need while at the same time—and this is very important—helping industry to meet its skill requirements. It represents a massive investment in reskilling our workforce and a very big boost to the help we are giving long-term unemployed people.
My Lords, all these steps will have a significant impact in reducing long-term unemployment. They demonstrate the Government's determination to do as much as is practicable for this group of people. But we are not stopping here. We want to help prevent, as well as to cure, long-term unemployment. We shall from April be inviting everyone who reaches six months unemployment for a Restart interview. This is the answer to the noble Lord, Lord Hatch, who asked: what happens after that? We shall continue to give this support as long as it is necessary.
303 The noble Lord will recognise that as soon as one goes on to a training programme, a community programme, or something of that nature, one is no longer available for work and therefore comes off the list. If it fails, one can go back for further counselling; one goes back into the market. Naturally we would want to continue the Restart counselling because it will have an impact at the outset and we wish to continue that.
§ Lord Hatch of Lusby
My Lords, will the noble Lord clarify the position? If one of the long-term unemployed goes through the Restart programme, and then does not get a job, does he return as a member of the long-term unemployed or does he go back into the general pool of employment? It is very important that we know whether the number of long-term unemployed will be artificially reduced in numbers by the Restart programme or whether, if he does not get a job at the end of the Restart programme, he returns to the category of the long-term unemployed?
§ Lord Lucas of Chilworth
My Lords, if he does not get a job and comes back for further counselling, even after some training he still has not had a job and is still long-term unemployed. That is the simple answer. The noble Lord, Lord Hatch, is trying to ascribe a motive which is far from our minds: that of reducing artificially a group of people. The matter is too serious for us to engage in the figure shuffling business. We are not in that business.
I want to reply to the specific question that the noble Lord, Lord Hatch of Lusby, asked me on the rate for the job. There are different schemes and each have different conditions. If I take the communtiy programme as an example, the participants are paid the local rate for the job subject to an overall average of £67 a week.
Perhaps I may make one point to the noble Lord, Lord Dean of Beswick. I shall certainly not engage this evening in a discussion on the manufacturing industry. He and I will have the opportunity of doing so in a week or two's time. But it is important to appreciate that we have 61 to 62 per cent. of our total available workforce in this country in employment of some kind. That is a very much higher proportion than in any of the Western industrialised countries. I accept that there is no satisfaction for the 30 per cent. or so who are not in work, but I do not accept that we are lagging behind. We have created over a million new jobs—different jobs for different people—over the past year or two. We have had a good discussion and I do not wish to be acrimonious.
Finally, the idea for the Bill has been developed out of concern for the problems faced by long-term unemployed people. We share the concern of the noble Lord, Lord Jacques, and we share his great desire to reach out to help this group. Ever since the noble Lord, Lord Jacques, headed the co-operative movement, so much of his work has been devoted to looking after people, and I see that concern represented in the Bill.
However, the Government are not convinced that an employment guarantee is the best way to tackle the 304 problem and it is for that reason that I have expressed reservations about the Bill. We remain committed to helping through the comprehensive package of employment, training and enterprise measures that we have on offer, and some of which I have described. We believe that those measures provide the more effective solution to the problem by encouraging people to take up the opportunites for returning to work which best match their individual needs.
§ Baroness Seear
My Lords, before the noble Lord sits down, I should like to take him up on one point. He encouraged me by saying that he considered people as individuals, male and female. Does the noble Lord appreciate that a great many women are excluded from these schemes because of the requirement that they should be eligible for unemployment benefit? Will the Minister look into that? It is a restriction. It was challenged in the community programme, but the challenge was lost. It means that many women who would like to come back into the labour market, and who would like to take part in the job training scheme, are excluded. It is a rather big question.
§ Lord Lucas of Chilworth
My Lords, the noble Baroness went a little further than I did, but I understand what she is saying. It is a real problem, and if we are serious about looking at the whole problem, then the whole problem is what we must look at. There may be answers; I do not know them. However, I shall certainly be happy to discuss the matter with my right honourable friend the Secretary of State to see what programme can be devised to best fit that group of people.
§ 9.52 p.m.
§ Lord Jacques
My Lords, I shall restrict my reply to two or three minutes in order that the next debate can proceed.
The noble Lord suggested that I wanted to employ the long-term unemployed in artificial jobs. As the noble Baroness, Lady Seear, pointed out, the position is exactly the opposite. The noble Baroness said that we do not want local authorities with tidy churchyards; we want to deal with housing which is badly in need of repair. In introducing the debate, I said that that was where I wanted the work done—not in tidying up this that and the other, but in doing work which at present is being neglected.
The second point I wish to raise is that the noble Lord said that some of the long-term unemployed may need training before they can be re-employed. That is correct: they may need training. All right, give them their benefit, give them an expense allowance, arrange for their training before work is found for them, but do not allow them to lie rotting which is what is happening at the present time.
I hope that the Minister will influence his right honourable friend that we need to do two things. First, if we are to get the support of industry in guaranteeing employment, we must pay the rate for the job. Secondly, we must do that on a far bigger scale than we are at the moment, otherwise, we shall never get there. My Lords, I commend the Bill to the House.
§ On Question, Bill read a second time, and committed to a Committee of the Whole House.