§ 3.7 p.m.
§ The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish)
My Lords, I beg to move that this Bill be now read a second time.
The Bill introduces the jobseeker's allowance, a single allowance to replace the outdated system of unemployment benefit and income support for unemployed people. It will ensure that the efforts of jobseekers are focused on looking for work. The jobseeker's allowance will improve incentives to work and it will target benefit on those who need it most.
The allowance will be implemented jointly by the Benefits Agency and the Employment Service and will introduce a streamlined and more modem system of delivering benefits to unemployed people. Both the Benefits Agency and the Employment Service have made great improvements over the past few years in delivering benefits and jobsearch advice faster and more efficiently. The introduction of the new allowance will build on that and make further improvements in service.
The change will cut out the duplication caused by paying two benefits and reduce the number of offices with which most people have to deal. From April 1996 most people will be able to claim the jobseeker's allowance, obtain advice about their benefits and discuss jobseeking in the same office—the jobcentre. We provide an unprecedented range of programmes and services to keep people in touch with the labour market, to help them search effectively for work and to improve their skills. In 1995–96 there will be over 1.5 million opportunities on training and employment programmes.
Well over 40 per cent. of unemployed people attending jobclubs are successful at finding work. Almost half find jobs through the job interview guarantee scheme. The jobplan workshop and new restart courses have helped around 90 per cent. of course participants to apply for a job, training or other sources of help. And we continue to offer new initiatives. The jobfinder's grant will be extended to some 25,000 people this year who have been unemployed for two years or more: cash in the hand to people to help with bus fares, clothing or the tools they need for work when they first start a job.
Workwise and 1-2-1 will provide intensive jobsearch help to 18 to 24 year-olds who have been out of work for more than a year. And only last week we launched the new Jobmatch pilot to help long-term unemployed people who have been unable to find a full-time job to use part-time jobs as a stepping stone to full-time work. 12 With measures such as these the Employment Service placed more than 1.6 million people into jobs last year; and next year it aims to do even better, facing its toughest ever target of 1.9 million placings.
We are seeing unemployment falling—down by 600,000 since December 1992. For over a year and a half the number of people out of work has been falling at the rate of 1,000 a day—falling in all parts of the UK, falling among both men and women and in all age groups. In particular we have concentrated help on those people who do not leave the register within six months. That is where help is needed most since more than two-thirds of unemployed people leave unemployment within six months.
Again success is evident. The numbers of long-term unemployed people as a proportion of total unemployment are now lower than in the 1980s and far lower than in the majority of our European partners. More than a third of the fall in unemployment over the past year has been among those unemployed for over a year—the group long considered the most difficult to help. We want to support and reinforce this success.
The Government guarantee every young person who wants one a suitable youth training place. We are spending £676 million on youth training this year in England alone. It means there is no reason why young people need to be unemployed. We do not wish to encourage dependency on benefit at such an early age. Sixteen to 17 year-olds are, therefore, in general not entitled to claim benefits.
We recognise, of course, that there are circumstances when young people do need to claim benefits. We provide for them and will continue to do so. Young people who have recently left local authority care, for example, will be able to claim JSA for a period intended to allow them to overcome their temporary difficulties. And young people who are waiting for a suitable youth training place will he able to claim JSA if they would otherwise suffer severe hardship. The requirements to be available for and actively seeking employment will be tailored for young people in recognition of their need to focus on training.
The jobseeker's agreement will be a central feature of JSA. It will also make clearer the link between receiving JSA and looking for work. Each person will agree the steps they intend to take to find work and put them in the agreement. Their agreement will also contain information about the help that the Employment Service can provide to help them back to work. The jobseeker's agreement is the key to ensuring that jobseekers are treated as individuals and receive individual help. But let me explain that it will not mean individual terms and conditions for receipt of JSA. The agreement will set out what that jobseeker intends to do to meet the availability for work and actively seeking employment conditions. In the cases where the employment officer and the jobseeker cannot reach agreement it will be referred to an independent adjudication officer.
There has for many years been a provision whereby Employment Service staff can instruct unemployed people to take certain steps to get a job. We extend that approach in JSA. We believe that that is entirely reasonable. In any system there will always be a 13 minority of people who do not play by the rules: people who for no good reason reject the help and advice of the Employment Service; people who will try to avoid work by deliberately making a poor impression to a prospective employer. In these circumstances it is absolutely right that the employment adviser should use this provision. But as a protection, no unemployed person will lose benefit unless an independent adjudication officer decides that it is reasonable in the circumstances.
There has been no fundamental look at the system of benefits for unemployed people since the war. There are currently two benefits for the unemployed: unemployment benefit and income support; and they overlap. At any one time most unemployed people receive income support—a general benefit which is also paid to pensioners, lone parents and sick and disabled people, rather than unemployment benefit, which was designed for unemployed people. The rules are complex. Unemployment benefit was designed for an era when few worked on Sundays, people were compensated for days of unemployment and relatively few married women were in employment. Unemployment benefit excludes Sundays; income support does not; there are different earnings rules, different ways of calculating payments and different claim forms.
By contrast, the jobseeker's allowance will have a single set of rules and one claim form. The new allowance will provide financial support for unemployed people and their dependants according to their income and outgoings and this will be paid as long as they need it, provided they are available for and actively seeking work. Those who have paid national insurance contributions will receive a personal rate irrespective of their capital or partner's earnings for up to six months. We intend to make the structure of the benefit simpler, thus ensuring that unemployed people do not have to become unnecessarily involved in red tape.
One such change is for those who suffer a short spell of sickness. They will be able to remain in receipt of JSA for up to two short spells of sickness a year instead of having to change and make a new claim for income support or incapacity benefit. As the work towards implementation of JSA progresses we shall be considering other possible areas where we can further simplify and improve the service provided to unemployed people.
The vast majority of unemployed people make every effort to find work, but we need effective measures against the minority who do not. Social security law has always included penalties for those who break the rules. It is reasonable that those who pay taxes should not subsidise those who make no attempt to get a job.
The new system will make it crystal clear that those who do not meet their obligations will not receive benefit. However, we will protect vulnerable claimants: claimants with children, those who are sick or disabled or pregnant or who have partners in this position and those with caring responsibilities will be able to receive reduced payments if they would otherwise suffer hardship.
14 I turn now to work incentives. The jobseeker's allowance is part of a much larger package of incentives announced in the last Budget and social security statement. The package of measures included in jobseeker's allowance legislation underpins the Government's determination to remove barriers to finding work and helping every unemployed person to find a job quickly. In October 1996 we will introduce the back-to-work bonus. At present most unemployed people who work part-time lose benefit pound for pound, yet if earnings were kept in addition to benefit there would be little incentive to move off benefit into full-time work. So the tax-free back-to-work bonus represents a new incentive.
Jobseekers and their partners who take small amounts of work while on benefit can build up entitlement to a lump sum bonus of up to £1,000. They can cash this in when they move off benefit into work. We will also pay the bonus to people who move off JSA at pension age and at age 60 to income support claimants who have participated in the scheme so the bonus will not be lost. We expect to pay at least 150,000 bonuses to JSA claimants each year once the scheme is up and running. This scheme will encourage people to stay in touch with the world of work while they are on benefit and to keep their skills up to date. And it will give claimants a financial boost at a crucial time by helping them to meet the expenses connected with the move back to work.
As well as offering help in earnings disregards we will provide help for couples, enabling partners of JSA and income support claimants to work up to 24 hours—not 16 as now—which will encourage partners to remain in or to take part-time work. And in addition couples will be able to earn £10 even if only one is working. That should bring extra help to around 70,000 people.
Building on the incentives for the long-term unemployed, we also propose a national insurance holiday for up to 12 months for employers who employ someone who has been out of work for two years or more. This will encourage employers to take on long-term unemployed. Some 120,000 people are likely to be helped in this scheme and it should be worth £45 million to employers in national insurance savings.
We are underpinning the work incentive measure announced by my right honourable friend the Secretary of State for Social Security last November by introducing a power to allow housing and council tax benefits to run on for four weeks for unemployed people who have to move to another local authority area to find work.
Its purpose is twofold. First, it enables authorities to exchange information about HB and CTB details. Secondly, it ensures that local authorities give priority to dealing with claims to these benefits from those who benefit from the run-on so that any ongoing entitlement to benefit is established before the end of the run-on period and there is no gap in housing benefit if an individual is entitled to it. In this way the claimant is protected from the sort of gap in income which currently causes concern and difficulties on returning to work. That fear can sometimes act as a deterrent to taking the plunge back into a job.
15 There are other deterrents stopping people taking work: the fear of the unknown; of a job not working out. We intend to ease the rules to help those who find work. Employment on Trial allows jobseekers to try out unfamiliar work without fear of sanction if they give it up. People will be able to take a job on trial after just three months' unemployment and, if necessary, to leave it after four weeks. We estimate that about 200,000 extra people will come within the scope of this measure.
During the passage of this Bill in another place concern was expressed about carers who might wish to return to the workplace. We accept the special circumstances of this group. We will allow them to restrict the hours of their availability so they can work in line with their caring commitments, We will allow them to place restrictions on the locality and nature of work, provided that they retain reasonable prospects of finding a job.
The benefit system must be flexible and capable of adapting to change but it can be difficult to predict how effective some measures will be in improving incentives and affecting people's behaviour. We already pilot new employment services and training schemes and we will be extending this system to provide new powers to use local pilots in benefit regulations, too. These pilots will be used to assess measures which promote employment. All pilots will need specific parliamentary approval. They will be time limited and there will be no power to reduce benefit rates.
The Bill also allows the resettlement agency to complete its task of disengaging the Government from the running of resettlement units. This has been a success story. The resettlement agency has met all its targets and will complete its task in 1996, by funding more appropriate provision delivered by alternative providers such as voluntary organisations or local authorities.
In this Bill we are increasing the incentives for people to find work, widening the range of opportunities that we can offer people who are unemployed and targeting help on those who need it. This is a package of measures which will provide an improved means of delivering benefit to unemployed people. The Bill is a key part of the Government's strategy to tackle unemployment. I beg to move.
§ Moved, That the Bill be now read a second time.—(Lord Mackay of Ardbrecknish.)
§ 3.24 p.m.
§ Baroness Turner of Camden
My Lords, this is yet another nasty Bill from a Government which must hold the record for nasty Bills affecting employees and social security claimants. It appears to be based on the Government's oft-stated assumption that the jobs are there and all that needs to he done is to coerce people, many of whom are work-shy, into accepting them. The Government seem to have a bit of an obsession about possible social security fraud. We, on this side of the House, do not condone fraud, but we do believe that its 16 impact has been grossly exaggerated. It is certainly not so grave a problem as to warrant penalising everyone else.
This measure has to be seen against the general background of, and as part of, the Government's employment philosophy. We are constantly told that unemployment is reducing—the Minister told us so this afternoon—but most people simply do not believe it. They do not believe the Government's statistics. Many are aware that the basis of assessment has been consistently changed and will no doubt be altered again as a result of the Bill. They are aware that the level of unemployment is still very high. Even on the Government's own figures unemployment stands at 2.5 million, 1.1 million of whom have been unemployed for over a year. The demise of a lot of UK manufacturing industry has drastically reduced the number of full-time jobs available. In 1971, 41 per cent. of the male workforce was employed in manufacturing. That was down to 28 per cent. in 1994. And this is the direct result of policies pursued by successive Conservative Governments, particularly those of the previous Prime Minister, who it is well known had little time for manufacturing industry and thought that everyone could be employed in the finance and service industries.
Now, as we have seen, unemployment is hitting even employments once regarded as relatively safe, like banking and insurance. As we know, banking is already threatening that 75,000 jobs are to go very shortly. Much of the so-called new employment is part-time and often low paid. One million people now earn less than £2.50 an hour and as many as 328,000 earn less than £1.50 an hour. It is hardly surprising that in these circumstances, the so-called feel-good factor is conspicuously absent and that the Government are just about as unpopular as it is possible to be—perhaps the most unpopular government since the Second World War.
Against that background the Government really have a nerve to introduce a measure of this kind, which will disadvantage yet further the most vulnerable and the poorest in our society. One of the core elements in it, as has been explained, is the provision of a jobseeker's allowance in place of unemployment benefit. Unemployment benefit is a contributory benefit for which people have paid. This new jobseeker's allowance will last for the first six months of unemployment, unlike the present unemployment benefit which runs for a year. Thereafter, after the first six months, entitlement will be means-tested.
I still do not understand how the Government can justify this. I listened carefully to the Minister this afternoon and I did not hear a justification for it in his speech. It is a cut in contributory benefit. Many people—perhaps as many as 90,000—will not be entitled to the means-tested jobseeker's allowance because they have a partner in work, perhaps on a low income, or they have savings or a redundancy payment above the £8,000 limit. Under the new system an unemployed man, if he had a redundancy payment of over £8,000 or if his partner works, would suffer a cut of £1,100 in a year. That really cannot be right. If the Government claim that the interests of the taxpayer have 17 to be considered, they should remember that that unemployed man had been a taxpayer himself when in employment and had paid his national insurance contributions. The Government should not be allowed to change the rules of the game any more than private insurers are entitled to renege on policy promises and conditions.
Then there is the so-called jobseeker's agreement, which I note from what the Minister said this afternoon, is regarded as being a core part of the Bill. Personally, I do not believe that it is. I think that the real objective of this Bill is to try to save money in order to be able to provide some up-front tax cuts just prior to the general election.
I believe that this so-called agreement is all part of the pressure to try to get people to take low-paid jobs and inappropriate ones. On this side of the House we have never said that the unemployed should not attempt to secure other employment. It is part of the deal under which unemployment benefit is paid. For many years the requirement that people should simply be available for work on the day for which benefit is paid, was generally acceptable. Then the Government changed all that in order to specify that the unemployed must be actively seeking work. That has not been in operation for very long. We now have this new and much more detailed, and not very comprehensible, Clause 6 in the Bill which states:(2) Regulations may prescribe circumstances in which, for the purposes of this Act—
- (a) a person who is not available for employment is to be treated as available for employment;
- (b) a person who is available for employment is to be treated as not available for employment;
- (c) a person who is not actively seeking employment is to be treated as actively seeking employment; or
- (d) a person who is actively seeking employment is to be treated as not actively seeking employment".
§ Baroness Turner of Camden
My Lords, that particular clause also contains a whole lot of other proposals.
Therefore, we have a situation here where there will be an attempt, as far as we can see, to make it more difficult for people to qualify for benefit for which they have already paid. Obviously it means—indeed, it is stated in the Bill—that if there is a failure to enter into the jobseeker's agreement, in all probability the claimant will not get the jobseeker's allowance.
The agreement itself seems rather a one-sided affair. There is no commitment on the face of the Bill to ensure that the Government and their agencies do everything possible to find a job for the claimant—that is, a job that is appropriate to his or her skills, education and training—or to provide the necessary training (should that be required) to enable the claimant to compete successfully in the jobs market. All the emphasis seems to be on making it as difficult as possible to obtain the jobseeker's allowance—and to maintain it once entitlement has been established.
The Government boast of their new innovation—the back-to-work bonus. Again, everything will be done via regulations, since the Bill is not very specific about what 18 is entailed. We have no objection to the bonus—indeed, it is a good idea—but we would point out that it is not as generous as the Government would have us believe. It might have been better to increase the amount of the "disregard"—the amount of money an unemployed person may earn before benefit is affected. The amount of the disregard stands at £5 a week for a single person and £10 a week for a couple, and it has stood at that figure for a number of years. It might be an idea to raise those amounts at least in line with price inflation. In any event, as was pointed out in the other place, much as the innovation of the bonus is to be welcomed, it assists those who are successful in getting a job. We have also to concern ourselves with the plight of those who, for whatever reason, simply cannot do so.
Here we should say something about training. We have often in this House raised complaints about TECs—some of which do a good job, but not, I fear, all, and most suffer from inadequate resourcing. The Minister referred to training, but a Bill that was genuinely concerned with jobseeking, rather than with simply cutting benefits and saving money, would have devoted much more attention to training and to instituting a more effective system for providing training, both on and off the job. Sadly, the Bill does not do so.
It has, however, perpetuated one of the injustices of the present income support system. I refer to the reduced amount to be payable to the under 25s. I do not understand why this should be so, and the Minister did not explain it. Many young people under 25 have partners and children. Why should a 24 year-old receive £9.70 a week less than a 25 year-old? It simply does not make any sense.
I note the reference in the Bill to young people under the age of 18. The Government seem to have come belatedly to the view that something has to be done to alleviate hardship among such young people since the general entitlement to benefit for 16 and 17 year-olds was withdrawn in 1988. We share the view, which has often been expressed by the Government and which was stated again this afternoon, that young people in that age group should not really be in the workforce at all, but should be either still in full-time education or receiving training. Unfortunately, however, the guarantee of a youth training place has not been entirely fulfilled. There were 15,670 young people on careers service waiting lists in October 1994, of whom 1,060 had been waiting six months or longer. The result has been homelessness and destitution for far too many young and vulnerable people. We shall have to test out in Committee just how far the provisions of the Bill will go to alleviate the distress that clearly exists.
Then there may well be a problem of interface with other benefits—notably incapacity benefit—and there is the position of those who have been carers, mostly women but some men, who have been looking after elderly or infirm relatives in what is known as care in the community. Such people, as we know, save public funds a very large amount of money and they are entitled to have their needs properly safeguarded. I was glad to hear from the Minister that that point has at least 19 been given some consideration by the Government, although I believe that we shall have to test the amount of that consideration in Committee.
Being disabled is also a costly business, and those extra costs must be taken into account, particularly when disabled unemployed people are engaged in jobseeking. It is much more costly for people with a mobility problem actively to seek employment.
So, when taken altogether, it is not a Bill that we on this side of the House can welcome. I feel bound to tell the Government that the unions catering for the staff whose task it will be to administer the Bill are not happy either. There are already benefit offices in some parts of the country where screens have had to be erected to protect the staff from the wrath of occasionally disappointed claimants. There are likely to be far more disappointed claimants once this Bill is on the statute book, and the staff quite rightly fear that there may be an increase in violence at the places where they work and where they will be expected to administer the provisions of the Bill. I have no doubt that such staff are all now on systems of performance-related pay. Is that to be assessed on the basis of the numbers who have been refused JSA and other social benefits? It will be interesting to hear.
Clearly, the main purpose of the Bill is to save money. The Government expect the introduction of JSA to reduce public expenditure by £140 million in the first year and by about £270 million in the next year. The introduction of the back-to-work bonus is said to be cost-neutral. Those savings are to be made at the expense of the unemployed—notably, the longer-term unemployed. These are people who are the victims of 15 years of Conservative policies which have robbed them of employment and often of the prospects of it, and at the same time have gradually eroded public provision of all kinds. Moreover, the collective job protection that was once available via a strong trade union movement has also been deliberately eroded by a Government who see people as a commodity like any other, disposable when no longer profitable.
No: we do not like this Bill. It has been passed in the other place and we must therefore do our best in this House to seek to ameliorate the unacceptable conditions it contains. Had it not been the tradition of your Lordships' House that we do not oppose Bills on Second Reading which have already been through the other place, I would feel strongly inclined to say that we could not accept the Bill.
§ 3.36 p.m.
§ Earl Russell
My Lords, perhaps the Minister will forgive a moment of levity before we get down to the serious business. When I was listening to him explain that some people in 1995 have succeeded in finding a job I was irresistibly reminded of the line from Beyond the Fringe:Some gallant citizens of this country can run a mile in four minutes".20 I admit that unemployment is falling and, like the Minister, I welcome that, but I hope that the Minister appreciates that it is an urgent fiscal necessity that it has to fall a very great deal further than it has yet.
I do not know whether the Minister was listening last Friday night to Any Questions, which was broadcast from Babbacombe in Devon. Sir George Young said very much what the Minister has just said, and it produced such a ribald wave of laughter from the audience that he was barely able to complete what he was saying. He was telling the truth, but it is like saying, "You're only going to be shot six times instead of seven"; it does not give one very much comfort.
I owe the noble Baroness, Lady Turner of Camden, an apology for making an improper intervention in her speech. However, perhaps I may say, as the noble and learned Lord, Lord Hailsham of Saint Marylebone, once said on a similar occasion:I was tempted and I did eat"—
§ Earl Russell
My Lords, the noble Baroness went on to say one thing with which I disagree. She said that this Government are as unpopular as it is possible to be. Once the Bill is brought into effect, I think that the noble Baroness will find that she was mistaken on that point.
Having said that this is a very bad Bill indeed—one of the worst two or three with which I can remember dealing in this House—I must, to be fair, extend a welcome to two clauses. I welcome, first, Clause 24 which deals with a national insurance holiday for those taking on the long-term unemployed. I welcome that doubly because it is our own party policy that has now been adopted. I welcome also Clause 25 on expediting the payment of housing benefit and council tax benefit. That clause was desperately needed. I hope it works. There is common good will, and if we can do anything to help to improve it I hope that we can get together as necessary.
I am interested in the financial memorandum to the Bill; in particular, how the figures have been arrived at. I can well understand how the savings in the cutback on unemployment benefit have been arrived at. As to that, I say only that I agree with the noble Baroness that that is the one bad change in this Bill which is brought in by primary legislation. Therefore, it can be addressed in Committee, and I intend to do so. For today, I will concentrate on the other measures.
In the memorandum the estimated savings are given as £140 million in the first year and £270 million in the second year, of which £70 million in the first year and £220 million in the second year are, according to Mr. Roger Evans in a Written Answer on 24th November, attributable to the change in unemployment benefit. That leaves £70 million in the first year and £50 in the second year to be saved at the expense of the allegedly work-shy. I should like to know how those figures have been arrived at. Is the expectation that the savings will be made by putting people into work or disentitling them to benefit? How are the Government able to know in advance of the Bill how many work-shy there are and what they will do when pressure is put upon them? For 21 the Government to make a firm prediction without knowing how they will get there is a little like the young man in the predestinarian limerick, who exclaimed:Golly! I am not a taxi or tram, but a trolley.This forecast has a suspicious resemblance to a target. In that context, I ask for an assurance that the employment officers who administer the Bill will not be on performance-related pay. We intend to put down an amendment in Committee that no employment officer administering this Bill shall have a financial interest in any decision that he takes. Should that amendment not be successful, I have already referred the issue of performance-related pay to the Nolan Committee on Standards in Public Life which will take up a second round of issues after its first report. It is possible that it may also take interest in this point.
The Bill appears to be a long succession of regulation-making powers. I did not count them—the night was not long enough. I mention only a few of the more important ones: Clause 3(2), which deals with regulations to prescribe conditions of eligibility for contributory JSA; Clause 4(1), which deals with contributory JSA (the amounts to be determined by regulation); and Clause 4(3), which deals with income-based JSA (the premiums to be determined by regulation). In this context, does the Minister deny the story, reported under the byline of Donald Macintyre in Friday's Independent, that the Government intend to cut back the single period premium? Can he deny that there is any risk of single parents being required to make themselves available for work? It ought not to be possible to bring in these kinds of measures by regulation.
Clause 6 is nothing but a mass of regulation-making powers: conditions of eligibility and disentitlement and what shall be "good cause" for non-compliance. Clause 7 deals with the jobseeker's agreement. Here we have something more than the ordinary delegation of powers to Ministers. This appears to be suspiciously close to a delegation of the regulation-making power right down the line to the employment officer. I know that the Minister said that the jobseeker's agreement is not a condition, but it looks remarkably like one. If the noble Lord, Lord Inglewood, can convince me when he replies that this is not a condition I will be very relieved indeed. I very much hope that there is no prospect of market testing under that clause. If there were, I believe that there would be market testing of the power to make law. I would find that a bit rich coming from a government which regularly say that they are dedicated to defending parliamentary sovereignty.
I leave out quite a few clauses because there are too many to mention here. I refer to Clause 16 and jobseeker's direction. The length of disentitlement may be fixed by regulation at anywhere between one and 26 weeks. That is an enormous variation to leave to discretion. It does not say that at the end of 26 weeks it will not be done again. It refers to a disentitlement for failure to carry out the directions of the employment officer. In another place Mr. Alan Howarth described that as a profoundly illiberal power. We on these 22 Benches do not always agree with other parties' assessments of what is liberal. On this occasion we agree with it from the bottom of our hearts.
These are not merely powers that are likely to have a harmful effect on us. They are provisions which create powers to exercise real cruelty. I am sure that the Minister will say that the Government have no plans to do so, but that is not enough. This Government will not be in office for ever. They will leave those powers on the statute book for anybody to make use of—perhaps years hence. It is like leaving unexploded bombs around. Some of the things that may be done are quite startling. For example, I refer to the regulations under Clause 6 dealing with appearance. That is like giving the employment officer the power to say that he does not like somebody's face.
The noble Lord, Lord Inglewood, will undoubtedly tell me that all will be referred to the adjudication officer to determine whether or not it is reasonable. I do not see how it is possible to have a test of reasonableness on the exercise of an inherently unreasonable power. I believe that we severely underrate the gravity of the penalty of disentitlement to benefit. It is the next thing to a sentence of imprisonment. I have sometimes wondered whether I would rather be sent to prison than be disentitled to benefit. My noble friend Lord Harris of Greenwich will undoubtedly tell me later this evening that that will depend on the prison to which I am sent. I will accept that proviso, but I ask the House to consider the question as an open one.
The Minister may perhaps be familiar with the suicide of Rachel Cain who was denied benefit, wrongly as it turned out. She had already committed suicide before that was discovered. I do not believe that anyone will advocate suicide as a solution. However, I ask both Ministers the following question. If somebody comes to them who has been disentitled to benefit for 26 weeks and asks how he is to make a living, what answer will they give? If the answer is that the person should find a job perhaps I may be told how he can actively seek work when he has no money to pay fares. To actively seek work regularly involves travel. The next step—which is not far beyond this—is the creation of criminal offences by regulation.
The Minister said a great deal about 16 and 17 year-olds. What he did not appear to realise was that what he said has been made out of date by his own Bill. He referred to the danger of benefit dependency, but if the Bill does not remove the danger of benefit dependency then the Bill is being passed altogether in vain, and might as well be withdrawn.
The Bill is intended to stop benefit dependency, so if it does not succeed in doing that, it is useless. That means that the justification, which Ministers have trotted out more times than I care to count, is removed. I know that they keep on repeating it automatically. For that, I must take some share of the responsibility, and I am sorry for it. They should think again, and consider, before they talk about 16 and 17 year-olds living at home, that under the 1991 census, of people aged from 18 to 24, 1,116,000 were living away from home, very often upon the insistence of their parents. That ignores the fact we all know, that in that census there was 23 particularly gross under-enumeration of young people. That was a restriction that has outlived its justification, and it is time it changed.
Clause 27, and the effect on the homeless, I shall leave to Committee. But we have to think about the powers under Clause 16—arguably the most arbitrary clause in the Bill—of giving the unemployment officer the degree of power he has to decide whether refusal of work is with good cause. Take a case that I have here: a woman of 31, working in a bakery, became incapable of work because of tenosinovitis (an upper limb disorder—restriction of the wrist movement). She was finally found capable of work, though receiving the lowest component of the DLA. She was offered a job as a nude model. She was unwilling to do that because she felt embarrassed and upset at the prospect of sitting nude in front of art students. The Jobcentre staff said to her, "Are you saying that you are not available to work?" They threatened to withdraw her benefit if she refused. Under the old law, she was able to complain to her MP and obtain an apology. Under the new law, the jobseeker's direction will have the force of law.
I know again the Minister will claim referral to the adjudication officer. According to the latest report of the Chief Adjudication Officer, 40 per cent, of adjudication officers' decisions were found to be unsatisfactory; 92 per cent, of cases on refusal of benefit were found to be unsatisfactory. I ask the noble Lord, Lord Inglewood, whether he can tell me, when he replies, how far it can be said that adjudication officers enjoy judicial independence. The question is of importance.
We have in the Bill a series of regulation-making powers. We need to look at what the noble Lord, Lord Rippon of Hexham, said in the Hansard Society report Making the Law. I take this opportunity to pay tribute to the work that the noble Lord has done as chairman of the Delegated Powers Scrutiny Committee, and to wish him good health and a speedy return to the House. What that report had to say was:We emphasise that statutory delegation should never leave an Act bare of everything except a framework of ministerial powers, with all real substance being left to ministerial regulations etc. This has been done (see the legislation on student loans in the Education (Student Loans) Act 1990, for example); it should not be repeated".It was, once, in the Education Act 1993, but thanks to the courage and integrity of Government Back Benchers and the distinguished skills of the noble Baroness, Lady Blatch, the offending provisions were thrown out. I hope that will happen this time. If it does not, I cannot consent to the Bill.
I am not threatening to vote against the Second Reading. I would not do anything so futile. I do not want to be the one noble Lord who murmurs, "Not Content" and looks very relieved when the Lord Chairman does not hear him. I am not throwing a tantrum, I am making a technical statement. There is no procedure in the Bill whereby my consent to its most offensive provisions can be expressed or withheld. I warned the noble Viscount the Lord Privy Seal, when the Bill was published, that it risks putting the convention that we do not vote against 24 regulations in this House under intolerable strain. I would rather see the Bill severely altered in Committee than pursue that line of argument any further.
§ 3.55 p.m.
§ Lord Rix
My Lords, others in your Lordships' House will be dealing with physical and sensory disabilities in relation to the Jobseekers Bill. Indeed, I have received excellent briefs from the Disability Alliance and the Association of Disabled Professionals, which will, no doubt, help a number of your Lordships through this labyrinthine Bill. However, I shall try to wend my way through the problems facing people with a learning disability.
It is a little difficult to object to the principles that those who receive benefit for being incapable of work should be incapable of work; and that those who receive benefit because they cannot work, should be looking for work. The problems lie not with the principles, but with the law and with the practice that stems from the law. The worry is that disabled people who stand little chance of working may not satisfy the new tests of incapacity for work, while disabled people who are pushed towards the new unemployment benefit arrangements may have difficulty in establishing their eligibility for what used to be called unemployment benefits.
However, it is left to MENCAP and its Pathway Employment Service to speak on behalf of people with possibly the most complex problem—those with a learning disability. Our task is made no easier by the drafting of the Bill, apparently employing spirit-writing from the other side through the medium of the long dead Sir William Schwenck Gilbert. In "Ruddigore" we find the following words—and I shall not abuse your Lordships by singing:This particularly rapid, unintelligible patter Isn't generally heard, and if it is it doesn't matter"—while in Clause 9(4) (a), (c) and (d) we find:Circumstances may be prescribed in which … a person is treated as possessing capital or income which he does not possess;or,income is to be treated as capital;or,capital is to be treated as income".Unfortunately, that arcane drafting persists throughout the Bill, and one can envisage enormous additional savings being made by the department and its éminence grise (the Treasury) —savings being one of the main objects of the Bill, anyway —just because jobseekers and employment officers alike will be quite incapable of reaching an understanding of the rules and regulations laid before them—even if placed, as we have heard, on one application form, which I imagine will be longer than the Roll of the Lords—thus denying allowances to thousands of would-be applicants.
People with a learning disability fall smartly into that trap. I have been assured by Ministers on earlier occasions —no doubt with the firm intention of being both helpful and honest—that people with a learning disability are not the target of the changes, and should not experience any problems. It is pointed out that 25 having a severe learning disability is, truly, a passport to the non-contributory incapacity benefit; namely, severe disablement allowance. But there seem to be too many assumptions by Ministers and their parliamentary draftsmen. The first is that severe learning disability is readily identifiable and already established; the second is that people with a severe learning disability are simply not capable of working; and the third is that those of us who see problems ahead are Jeremiahs, with our heads in the sand or in the clouds, according to taste. Perhaps sand is to be treated as cloud, or cloud is to be treated as sand, as an additional clause to Part I of the jobseeker's jobseeking variation of the jobseeker's agreement.
Perhaps I may stress that MENCAP'S Pathway Employment Service has discerned a number of facts which contradict those gloomy assumptions. To begin with, we have more than 5,000 people in open employment—or in job training, leading to full employment—and often the nature of their disability is not always self-evident. Secondly, some people with very severe and, indeed, multiple disabilities can and do work for a modest living, thus proving that they will not always fit neatly into the boxes assigned to them. I am therefore extremely anxious to ensure that when they appear in the wrong box or move between boxes they suffer as little hardship as possible.
I suspect that in your Lordships' House there will be attempts to improve the Bill in a number of relevant aspects. But perhaps in this early stage in the proceedings I may seek to be helpful by asking four questions. If the Minister is unable to respond today, I would be happy—nay, relieved—to receive an explanatory note a little later. I am all too conscious of the fact that even those whose daily business is social security find it a rather complicated subject. If I had the choice, I should rather have a considered reply than an immediate one—quite apart from the fact that I should then have time to understand the Ouija board messages conveyed by Sir William, or his spiritualist medium in the department.
Question No. 1 is: how does the department propose to monitor what happens to people with severe disabilities who seem to be disadvantaged by the new distinctions between incapacitated and unemployed?
Question No. 2 is: will the Government share their findings with interested organisations and sit down with them to consider any changes that seem to be required?
Question No. 3 is: why is the full range of supportive measures to help people back into work restricted to people labelled "unemployed" and denied to those labelled "long-term sick and disabled"?
If the aim is to encourage employers to take on board people who have not had a foothold in employment for a long time—or indeed ever—and to encourage those people to get on board, it seems to me not to be a matter of any great relevance whether they are unemployed or disabled when it comes to the point of actual employment.
I have already hinted that one of the objectives of the Bill may be to save money. It also seems to have another prime objective—that is, the need to reduce the numbers on the unemployment register. However, the department 26 may find that the new incapacity benefit arrangements could in fact swell those numbers. That is a Gilbertian solution indeed!
I shall ask my fourth and final question and then I am finished—for the time being, anyway. I hope that I am not straying too far from the relevance of this Second Reading debate in asking for an assurance that charging employers for access-to-work provisions will not be introduced, for that would negate any improved incentives provided by the Bill, including those for disabled people who are searching for a job as well as those who have been offered a job. I am sure that we all share common ground in believing that disabled people need effective support while not working, and effective support to help them find and retain jobs so that they can be seen to be working in ever greater numbers.
I am sure too that we all share common ground in believing that it is contrary to the interests of disabled people, and to common sense and common decency, to complicate their lives and impede their progress by artificial obstacles. At a recent MENCAP conference, a young woman with a severe learning disability put it very clearly. She said, "I want a job; and I need money to live on". I am certain that your Lordships will agree that those are not unreasonable ambitions.
§ 4.4 p.m.
§ Lord Trefgarne
My Lords, I welcome the provisions of the Bill. I enjoyed the speech of the noble Baroness, Lady Turner, who referred to the popularity of Her Majesty's Government. It is not fair to say that this Government are the most unpopular ever. I remember that in 1978 the then government appeared to be extraordinarily unpopular; and so it subsequently proved the case when the electorate were given an opportunity to choose.
Be that as it may, the Bill is warmly to be supported. The arrangements surrounding the payment of unemployment benefit, and all that goes with them, are ripe for overhaul. The Bill does exactly that. The jobseeker's allowance is clearly about improving incentives to work, removing the barriers which stop people leaving benefit and focusing the efforts of jobseekers on looking for work. The allowance will operate a simplified and more individually tailored approach to jobsearch and more incentives to find work. Surely that is greatly to be welcomed.
The existing two-tier system is wholly out of date and the introduction of a new single benefit will be simpler and easier to understand and to administer. Therefore, the unemployed will received a better service, financial support and back-to-work advice, generally provided in a single, one-stop service. That will be much to their benefit. As a result of a streamlined administration and closer targeting, the allowance will improve the operation of the labour market by helping people in their search for work, enabling them to secure better value for money for themselves and, above all, for the taxpayers and by providing a better service to unemployed people.
27 Much has been made of the Bill's effect on the so-called work-shy; those reluctant to look for work with any kind of vigour or enthusiasm. It is right that the taxpayers should have some protection from those who have no intention of looking for work and who put every obstacle in the path of those who are seeking to help them. Surely taxpayers and national insurance contributors have the right to be protected from those who are not genuinely available for or searching for employment. In that regard, the rules will be clearer and fairer to claimants and to taxpayers.
That will be achieved by the two routes that will be available to the new benefit; that is, the contributory route and the income-based route. As we heard from my noble friend the Minister, those who have worked and made contributions in the relevant tax years will be entitled to benefit, regardless of means, for six months. Surely that is right. Those who remain unemployed after six months will not qualify for a contributory benefit but will become eligible for a means-based benefit. I am certain that that too is right.
I also greatly welcome the introduction of the jobseeker's agreement which will set out the jobseeker's planned jobsearch and activity and the support and guidance which the Employment Service will be able to provide. In return for benefit and advice on finding work, the claimant will be expected to make every effort to find a job. Those provisions too are very much to be welcomed.
I turn more seriously to the speech of the noble Baroness, Lady Turner. She referred to the importance of training and I agree with her. Indeed, I must declare an interest because I am chairman of the Engineering Training Authority, which will have a role to play in these matters. I am not certain that the Bill is the right vehicle for the provision of the various training schemes now in place, and nor does it provide for that. However, I wish to sound a note of warning. There is a risk that we become involved in training merely for the sake of training and as an alternative to gainful employment. It is important that training is tailored to the needs of employers as well as employees. Recently, there has been the risk of many people attending training courses simply as a means of finding something to do but with little hope of being better off at the end of the courses. To send young people on training courses of that kind is a delusion and I hope that there will not be too much of that. My own authority is obliged and concerned to ensure that the training provided relates as closely as possible to the needs of employers. I hope that that thought will continue to be in the Government's mind as they develop training courses now and in the future.
I do not believe that the Bill is an appropriate vehicle for those measures or for other matters relating to training activity. I welcome the provisions in the Bill and hope that it will find its way swiftly onto the statute book.
§ 4.10 p.m.
§ Baroness Dean of Thornton-le-Fylde
My Lords, when the Minister introduced the Bill, he tried to give 28 the impression that this was merely a simplification of the payment of unemployment benefits with one or two bolt-on extras which may be of assistance to the unemployed. I do not accept that premise. Indeed, if that were the case, we should not be faced today with the alarm and major opposition that has been forthcoming since the announcement of the Bill's provisions.
I suggest that the Bill has not been introduced out of concern for the unemployed. Indeed, I believe that it is a cruel, mean-minded measure which, whether or not it is intended by the Government, will stigmatise the victims of unemployment and their families. It will not stop there. It will impoverish the unemployed, and young people who have not even started their working lives will be included in that impoverishment and stigmatisation. It will have an impact on the sick, people with disabilities and carers. They will all be caught up in the Bill, which is supposedly a mere simplification. In fact, it is estimated that it will remove from benefits something like a quarter of a million people, with 90,000 people losing benefits altogether. Indeed, the savings on the face of the Bill show that the projected savings for 1996–97 will be £140 million and in the second year, £272 million. I suggest that the Bill does not take us forward as regards the extremely grave problem of unemployment.
Indeed, it takes away from those who have paid their national insurance contributions—insurance against being unemployed. People have paid for those benefits and recently have paid for them at an increased cost.
I believe that there is cross-party acceptance of the fact that unemployment is too high. I question whether Ministers really understand what it means to be unemployed. Have they seen the impact on families? Have they seen the despair, the lack of hope and the loss of self-esteem which unemployment brings with it? If one looks at the statistics in relation to people who are ill and the suicide rate, in the centre of that are large numbers of unemployed people.
I take the point made by the noble Lord, Lord Trefgarne, about protecting against people who are work-shy, but this is not the way to achieve that. It is not correct to imply —and I do not suggest that the noble Lord did so—that the majority of unemployed people are work-shy. They are not. I believe that the number of such people is so small that it cannot even be quantified.
The benefit cut from 12 months to six months is not a simplification. That is taking away money that has already been paid. In the first year of unemployment a couple over 25 years of age, where one partner is out of work, will lose over £1,100 in benefits. Their income will be cut by that amount in 12 months.
Part-time employment in Britain has been growing. There is a large increase in the number of men within that group. They are men who cannot find full-time employment. It is accepted—I believe that even the Government accept it—that part-time employment can be a bridge to full-time employment. But what do we find? The Jobseekers Bill will do absolutely nothing to help those people because all money over the first £5 will be taken away from them. It is no good saying that the compensation is the back-to-work bonus, because 29 that is not compensation. If we wish to build that bridge, why do we not make available increments or raise the upper earnings limit? I welcome the change from a daily to a weekly upper limit but it is just too low to be of any real encouragement.
The issue of training always arises when we talk about unemployment. It is not just a case of training for training's sake. The fact is that 38 per cent, of the long-term unemployed in Britain today—that is, those who have been unemployed for over a year—have no qualifications. We need a better trained and more highly skilled workforce to compete in the world economy. At present Britain is 2lst out of 22 countries in the World Economic Forum league table. That is nothing to be proud of.
What should we do? We should help people to train out of unemployment. But what do we do? In the past five years the Government have cut their training budget by 40 per cent. They have cut 55,000 places in the training-for-work programme. And yet there is still a skills shortage which tells us that we need to train people. In 1993 there was a 6 per cent, skills shortage when we were still in the depths of recession. Last year that increased by nearly 100 per cent.—it increased from 6 per cent, to 11 per cent. What will be the skills shortage this year? We desperately need to do something about training, and the Bill does nothing.
Indeed, I suggest that it penalises people who try to educate themselves out of unemployment because of the change from the 21-hour rule to the 16-hour rule. That will have an immediate impact by removing 6,000 students from benefits. Indeed, a recent CBI report called for a balancing of the skills shortage and the skills needed.
I turn quickly to the jobseeker's agreement. That is a misuse of the word "agreement". The Bill condemns people to poverty in the sense that the agreement requires them to be looking for work. It is right that unemployed people should look for work. But what does the Bill condemn them to? The abolition of the wages councils has meant that today in Britain just under one third of a million people are earning less than £1.50 per hour and more than 1 million earn less than £2.50 per hour. We are telling people that if they breach the jobseeker's agreement by refusing to seek any work which is regarded as reasonable by the officer, they will lose their unemployment benefit.
A recent Equal Opportunities Commission report established to look at compulsory competitive tendering, which is the Government's policy, identified the fact that that policy had driven forward the number of people in unemployment. Not only has it done that, but it has also driven down the level of wages which people were being paid.
I do not believe that the Bill does very much at all to get people back into work or to train them for work or, indeed, to understand their individual situations and those of their families.
Perhaps I may deal briefly with the position of carers. I should declare an interest in that I am patron of the carers association on the Fylde coast area of Britain. The savings which carers bring to the taxpayer are absolutely phenomenal. It is important that we do not penalise 30 those people further. I welcome the statement made by the Minister indicating that there will be changes in the Bill as it goes through this House. I look forward to debating those changes because we certainly do not wish to have a situation in which carers, who are already penalised through lack of job opportunities, career promotion and costs at the end of their lives, are penalised even further.
The Government say that the Bill has been introduced to help the unemployed. I do not accept that that is a reasonable assessment of the position. I was concerned to read of the reservations expressed by staff in benefit offices. I was also concerned to read a leaked internal departmental report about the changes which would be necessary within those offices to meet the reaction of claimants. The unions have said that they are anxious about the safety of their members because they know that the measures within the Bill will be neither perceived nor accepted as intended to work for the welfare of claimants. I would suggest that that view was accepted in the internal report which was leaked in the Financial Times. The advice in the report said that the department needed to ensure that anything which could be seen as a weapon in the benefits office is kept away from the public; that additional private interview rooms with safety measures—I do not know what they are, whether they are cages, alarm bells or two-way mirrors—should be installed; that there should be provision of closed-circuit TV, personal alarms and also of security guards.
The report also said that Jobcentre managers should have training, that clear escape routes for the employees should be provided and that they should be trained in customer aggression. We are not talking about prisons; we are talking about Jobcentres, where, under the provisions of the Bill, unemployed people will go for assistance to help them get back into work. That is the impact that the Bill will have. That was certainly the view of those who produced the report.
The Bill has many drawbacks. In overall terms, I would suggest that it does nothing in most of its areas of provisions to assist the unemployed get back into work. The unemployed need work, training to apply for such work and counselling and assistance from experienced people who are doing the work, on the basis of a joint agreement; that is, one which is real and not a one-sided agreement.
§ 4.21 p.m.
§ Lord Dean of Harptree
My Lords, I like the idea of a jobseeker's allowance. It seems to be much more positive than unemployment benefit. It recognises that most people who are out of work want a job and that they should be given every assistance to get one. I am sure that all noble Lords will agree that it must be right to improve incentives to work and remove barriers to people coming off of benefit and going back into work.
I am glad that the Bill proposes one allowance instead of two. Unemployment benefit and income support were run off different engines; indeed, they did not dovetail very effectively. I believe that the new arrangements will prove to be simpler and clearer to operate for everyone concerned. I also welcome the fact that the 31 Bill brings together financial support, on the one hand, and, on the other, advice on getting back to work and training. They are part of the same situation. It is only right that they should be dealt with by one organisation.
It seems to me that there is much in the principle of the Bill to commend it. I also welcome the financial incentives in the Bill, and elsewhere, to assist people to return to work. I refer to the back-to-work bonus; the improved provisions for working partners where one member of the household is on benefit; the jobfinder's grant; the job clubs; the national insurance credit improvements and the national insurance contribution holiday for employers who take on someone who has been out of work for two years. Individually, they may be comparatively small improvements, but, taken together, they should provide substantial, additional incentives and ease the passage back to work. Of course, they must also be considered against the background of the £600 million package of work incentives which was announced last autumn in the Budget. I very much welcome those provisions.
I also hope that the new arrangements will help to deal with the abuses involved in the black economy. I am not talking about moonlighting—someone who has two jobs. Such people are very often the most enterprising members of the community and, perhaps, have two jobs for a variety of reasons. For example, such a person may have two qualifications and wish to "keep his hand in" in both of them. Alternatively, in order to earn a better living for their families, such people are often prepared to work unsocial hours and undertake jobs which other people will not do. That is to be commended, provided those people declare their earnings and pay the appropriate level of tax and national insurance contributions.
The black economy is very different. It involves cheating and, sometimes, also lying. There are two aspects to it. The first is working and drawing social security benefits at the same time. Of course, that is fraud on the social security system and the taxpayers who provide the money for the system. The second aspect is that earnings are not normally declared. Therefore, no tax or national insurance contributions are paid. I hope that the new arrangements will make it somewhat easier to deal with those abuses of the black economy.
I turn now to finance, which was referred to by the noble Baroness, Lady Turner. I thought that the new model Labour Party was very keen on trying to find savings in the social security system. However, I was surprised that we did not hear anything like that this afternoon. As my noble friend the Minister mentioned, there will be modest savings in expenditure as a result of the Bill. It surely must be right that Her Majesty's Government—indeed, any government—should look out for justifiable savings in the social security budget which, after all, is very large. It is a budget which grows year by year and this month's uprating will add no less than £1.5 billion to the cost of pensions and benefits. I am one of the lucky ones who will draw a little of that by an increase in pension, for which I am suitably grateful.
32 I suggest that we must take into account the fact that the total cost of the social security budget this year will be no less than £84 billion and that that will cost every working person £15 per working day. In the light of those huge and growing figures, it surely must be right for the Government to ensure that the burden on present and future working and taxpaying members of the community is not insupportable.
I note that the main saving is the payment of contributory benefit of six months instead of one year. That seems to me to be sensible when we take into account that two-thirds of those who lose their jobs return to work within six months. However, the reduction of the period of benefit as of right to six months emphasises the need for adequate support for those who are still unemployed after six months, especially those in the vulnerable groups. Concern has been expressed by the noble Lord, Lord Rix, and other speakers that some people might fall through the net after the six-month period is over. There are two obvious groups which come to mind. The first group is the disabled, who have already been mentioned in today's debate, and includes those who will not be eligible for the new incapacity benefit which starts this month.
As has already been mentioned, disabled workers are renowned for being very conscientious and good at their jobs. They often struggle greatly to hold down a job. We have another welcome feature in the Disability Discrimination Bill which has just had its First Reading in this House and which one hopes, again, will assist in that regard. However, if disabled people or those who are not in robust health are still unemployed after six months it is most important that support for them should be adequate. It is equally important that the staff who will be trying to help them understand the particular problems that they have and the difficulties that they face which are not faced by those who are able bodied. I hope that when my noble friend Lord Inglewood replies to the debate he will be able to give the House some reassurance with regard to the disabled.
The second group that I should like to mention is one which, again, has been referred to by several speakers in today's debate. I have in mind the carers; that is, those who are caring for elderly people, sick people or children. They also have special problems and needs. I welcome the big increase in expenditure on various carers' social security benefits in recent years, but it would be helpful if, again, my noble friend could give an assurance that the special needs of carers are adequately catered for in this Bill. With those reservations, this Bill seems to me sensible and practical and I support it.
§ 4.30 p.m.
§ Baroness David
My Lords, I am going to speak on education and training. I hope that we can start from the premise that it is far better for an unemployed person to be encouraged and supported in his wish to study and acquire knowledge and skills he has not already acquired, and thus make a positive contribution to the needs of the country for a better qualified workforce, than it is for him to be idle or to be pulled out of a good 33 training programme to take up a temporary or part-time inappropriate job. This is not what is happening now under income support regulations. The noble Lord, Lord Trefgarne, when he spoke, poured some scorn on certain forms of training. I think it may be true that some of the youth training programmes were not very good. What we want is good training leading to a qualification which will improve the skills of the workforce. That, as several noble Lords have said, is badly needed.
The National Institute for Adult and Continuing Education—an organisation for which I have the greatest respect—suggested in a briefing paper last year that the jobseeker's allowance legislation offered an opportunity to clarify the position, to resolve anomalies, and to change the whole atmosphere in which unemployed people seek to learn and reposition themselves in a rapidly changing economy and labour market. What I want to try to do today is to look at what seem to be the Government's plans and ask the Minister how reasonable, co-operative and flexible they are going to be in framing the regulations and monitoring them; and I hope he will have some positive replies when he winds up.
No one is arguing that full-time students should be eligible for benefit support while studying, nor that part-time study should be an alternative to suitable employment. Most unemployed people do not want or expect such treatment. The existence of a tiny minority seeking to use study as a means of avoiding work—
§ Earl Russell
My Lords, I beg the noble Baroness's pardon, I wonder whether I could ask her to withdraw one sentence she has just spoken? She said that no one is arguing for full-time students to have benefit while studying. That is not correct; I am.
§ Baroness David
My Lords, I beg the noble Earl's pardon and certainly withdraw that as far as he is concerned. But I do not think many people are asking for that. Anyway, what I do not want the existence of that tiny minority to do is to frustrate the learning ambitions of up to 100,000 people seeking to hasten their return to the labour market and improve their chances in life by extending their skills and knowledge through learning.
The new proposals to change the regulations from April next year so that,people unemployed over three months would be able to undertake further education study for up to 16 guided learning hours per week",begin to clarify and give substance to the real position of unemployed people wishing to study, and there is confidence that colleges and voluntary organisations have the skills and capacity to design programmes within this new framework, and to offer flexible forms of continued participation to students lucky enough to gain appropriate—I stress "appropriate"—employment during their period of study.
The FEFC considers that the new limit of 16 guided learning hours is broadly equivalent to the old 21 hours of supervised study; but colleges do differ in their estimates, saying it will vary from course to course. One said that the pressure on colleges to drive down the number of guided learning hours per course will 34 increase as a result of the rule change. I hope the Minister can give us some reassurance on that when he comes to reply.
But we should at last gain some consistency of interpretation from local employment and DSS officials. There have been any number of very bizarre decisions described by NIACE. The now irrelevant distinction between full and part-time courses will cease. It has been consistently argued that the old rule should apply to the students' hours and not the course—a 15 hour course could under the old system be designated full-time and a student taken off benefit. People will no longer have to declare they will give up a course if a job comes up. They may be able to continue their study by other means. That was announced last week by the DFE. I should like confirmation from the Minister that I have these plus points correct, including naturally that there will be no limit on the number of hours of private study allowed in addition to the 16 guided learning hours.
Now for the anxieties. The new JSA rules seem to be based on the assumption that work is always there if you search for it; the application of the "actively seeking work" regulations appears to be tightening with targets for officials to get people off the register; and the number of low paid, low skill, part-time and temporary jobs is growing. So that, even if a course of study is pursued as the result of advice given at a Restart interview it will not be "a positive outcome"; all the immediate availability for work rules will apply and since the Restart interviewers have positive outcomes to meet, it is unlikely that part-time education will often be the recommended path. Part-time study of 16 hours or under will not be disregarded by the Employment Service in availability for work tests. So just what questions will they, the officials, continue to ask? For example, if the course offers a qualification, will claimants be asked about their continued willingness to take unqualified work? Will they be asked if they can always be contacted by telephone at the college? One fears that such questions, experienced by many poor and vulnerable people as threatening their only source of income, will continue to deter many. Can the Minister give any reassurance that there will be more sympathetic understanding at these interviews? The targets seem to me dangerous, and I would entirely go along with the noble Earl's comment about performance related pay for these people, and would certainly support him in any amendment he puts down to that effect.
There is no serious attempt to define suitable jobs and no assurance that current pursuance of a qualification will be taken into account in considering a job's "suitability". I gather there is something called the "McJobs syndrome" because so many of these young people are asked if they will take a job at McDonald's, that being, I presume, one of the lowest paid jobs available. In the past the pursuit of a qualification has even been interpreted as proving that the claimant was not available for other jobs.
European Social Fund courses (designed for the long-term unemployed) will, unless run under the Training for Work scheme, continue to be subject to the JSA 16 hour rule. This is an absurd anomaly. Sometimes 35 these will need to be short, intensive courses, including work simulation, and will naturally take more than 16 hours in one week. The hours are to be counted per week and not averaged. Some unemployed, and perhaps particularly the long-term, would clearly benefit from full-time study and a total re-orientation of their work path; yet there is no proposal to reintroduce a scheme like "Learning for Work", which offered this opportunity, and, with all its limitations, was welcomed by many education and training providers as a really useful element in any serious strategy to provide comprehensive training and education services for unemployed people.
What one hoped for, probably foolishly, was that there would be real progress in the move to change the whole atmosphere in which unemployed people seek to study from one of concession, inquiry, insecurity and even threat, to one of positive encouragement and support. That we have not got.
Ann Widdecombe's highest claim for the changes is that the same number of people will be able to study as now. That is simply not good enough. If we were serious about building a high skill, high tech. economy, we would not be looking for a pool of unemployed people to put into any part-time, temporary, unskilled jobs that come along, or, alternatively, offering low level, narrowly instrumental training programmes. We should be encouraging and supporting ever increasing numbers of unemployed people (and others yet to reach their full potential for learning) to participate in education and training of all kinds as a major contribution to eliminating the learning and skills deficit from which this country now suffers.
I trust that the hopes some people had that there would be a more liberal, imaginative and understanding scheme for the unemployed, and in particular for the 16 to 25 year-olds, will not be completely dashed. They deserve better than the Bill, and the regulations that go with it, now seem to offer. I hope that the noble Lord, Lord Inglewood, and the noble Lord, Lord Mackay, will use their best endeavours to influence the outcome in this House when we come to Committee stage so that a better Bill will leave the House than has entered it.
§ 4.40 p.m.
§ Baroness Park of Monmouth
My Lords, I am on unfamiliar territory but my concerns are education and the vulnerable young. I am very sure that I should despair were I to be unemployed and without resources today in the face of the sheer bureaucratic complications that I should face in dealing with the state; and I am deeply sorry for those who will have to administer the Bill. I should also have serious doubts about the common sense of the promoters as regards some parts of the Bill. Not for the first time (the last example was the issue of student unions which the Government believed still to be the same animal as it was in the 1960s) the Government are to some extent legislating to curb an outdated stereotype—those who positively prefer to live in a squat on benefit rather than work— 36 and are not considering sufficiently those today who want to work but wish also to secure at least a vocational qualification.
Of course there are still people who want to play the system. I remember two years ago an Oxford taxi driver telling me in justifiable anger about the three young men he had driven from the station to the Oxford United football ground who were discussing the useful tactic that they employed to apply for jobs but never to gain them. It was to attend in filthy jeans with a punk hairstyle and an earring, all designed to put off a prospective employer, which apparently it usually did. There are others drawing benefit and working in the black economy, as my noble friend said. Of course it is right to prevent exploitation of public money by such people. But I hope that we shall not penalise the vast majority of people who honestly want to work and to be valued by the society in which they live. I was very glad to hear the Minister make that very point.
I found great difficulty in wrestling with the acronyms and the professional jargon in the briefing that I received from many well-informed organisations—the CAB, Child Poverty Action Group, the Unemployment Unit, and many others. I freely admit to my noble friend that I may make mistakes in my comments on the Bill. However, I should like to focus briefly on the following issues.
First, in the Employment Service annual performance agreement, why are part-time educational courses not listed as a positive outcome while training for work, jobclubs, and work trials are among the 10 positive outcomes listed? We surely want the unemployed to take positive steps on their own to become eligible for employment. That means qualifications. Why, therefore, is voluntary participation in a course not explicitly recognised as a positive outcome? Since so much depends on the agreement and on the assessment made by the Employment Service officer, I urge that the Bill should clearly and unequivocally spell out recognition that a part-time course leading to a vocational qualification, or positively enhancing the education of the claimant and thus his or her employability, should be regarded as a positive outcome.
My next point concerns the decision to change the existing concession which at present allows the long-term unemployed who receive unemployment benefit or income support to study a part-time course in further or higher education for up to 21 hours of supervised study a week. Those who receive the jobseeker's allowance, which will replace those benefits, are to be allowed only 16 hours of what is now called "guided learning". Moreover, the proposed tightening up yet further of the requirement to be instantly available for work—any work—if notified, even to the point of dropping a course just when a student is about to complete it, represents an extraordinary approach to the idea of increasing the employability of the claimant. It will deal a severe blow to the economic viability of many colleges doing good or vital work in the further education sector. If numbers decrease because claimants have to give up their courses, the fees from the Further Education Council's fee remission scheme will decrease too. That could be 37 serious for the institutions. I hope that there will be close consultation between the Department of Employment, the Department of Social Security and the Department for Education to ensure that one aspect of government policy does not torpedo another. It is surely vital to the country to produce as many qualified people as possible. Germany and other European Union citizens take many qualified jobs in this country. Surely we should be doing all we can to produce a skilled workforce ourselves.
It would be a sad day if the very real commitment by the Government to promote education should be negated in this vitally important vocational area by unrelated legislation in another part of the wood. It seems to me that the Home Office, too, may have some concern at the prospect of young people without a job or money on the streets. What will they do to survive?
I feel great concern, as I think we all must, that under the Bill those between the ages of 18 and 24—even those who have paid national insurance contributions— should be losing 20 per cent, of their personal allowance. Surely they eat as much as 25 year-olds—do they not, my Lords?
I am concerned, too, that the over-50s who have tried to provide for time of difficulty by saving and by taking out occupational pensions should be caught in a savings trap and see relatively modest savings depleted, and with that any hope of saving, for instance, to start a self-employed venture. That is taking away their independence.
My last plea to the Government is for really effective training to be given to those officials who will administer the legislation. That is in part where the CSA went wrong. There should, therefore, be at least a year's training before the Act becomes effective. In 1994, as a Member of the Committee of this House which reported on the poverty programme, I visited a project in Pilton in Edinburgh. The Pilton partnership between a deeply impoverished community, the district council and local industry has been very successful. One of its successes has been the setting up of the Granton Information Centre, working closing with the CAB, to help interpret the complex social security legislation so that those who are entitled to benefit could claim it. We saw a 40-page form which had to be completed, often by barely literate claimants, to secure disability benefit. We learned that the DSS officials themselves needed help from the CAB and the centre to understand the immensely complicated regulations which they had to operate.
Now there is to be yet another dense hedge of bureaucratic procedures to break through and more and more regulations on which denial of JSA may depend. The discretion given to officials who may not themselves understand the rules is great. I was glad to hear from my noble friend that everything is to be simplified. But too much power will still be in the hands of individual, overworked officials.
Perhaps I may urge the Minister most strongly to ensure that guidance is indeed clear, that training for officials in the sophisticated techniques which will be required is available, that application of the allowance is uniform, and that the Bill's objective is to help people 38 back to good employment and to acquiring real skills. Not least, time must be given for the new legislation to be understood before it is applied.
§ 4.48 p.m.
§ Lord Ashley of Stoke
My Lords, I could not recognise the Bill from the description given by the noble Lord, Lord Mackay. He is wasting his talent in his department. With his great diplomatic skills and capacity for presentation, he should be in the Foreign Office.
The main purpose of this distasteful Bill is to save money at the expense of unemployed people—the poorest and the most vulnerable in our society. The Bill will have the dramatic and disgraceful effect of reducing benefits for, and even removing benefits from, nearly a quarter of a million people. I cannot envisage how the Government can defend that. Few governments can be as unscrupulous as that, especially at a time when Ministers are permitting greedy executives of companies to line their pockets with millions of pounds in share options.
In the other place, there were smooth ministerial phrases about the Bill which failed to obscure the savage cuts involved. The real motive for them can be glimpsed from the occasional sentence uttered by Ministers there. The Secretary of State for Employment, for example, laid bare the basic premise of the Bill when he said:No one has a God-given right to decide to be idle and to live off others".— [Official Report, Commons, 10/1/95; col. 52.]He is after the popular vote. The Minister thereby reveals an attitude to unemployed people which is not only arrogant but at variance with the facts. Unemployment is a shocking, dismaying and demoralising catastrophe. It is a personal disaster which impoverishes the person and families. It has become a social and economic disease affecting vast swathes of our society. It is not only working class people who are affected, as was the case when I was a young man. All sections of society are affected. Some 40 per cent, of our workforce have been out of work for some part of the past five years. A large number of workers are fearful that they also will lose their jobs.
I admit that unemployment is a worldwide phenomenon, but the Government have little to be proud of. The Minister said, "We don't want any nonsense about figures". I shall give the reality about the figures and not nonsense about them. Britain has lost 40 per cent, of its manufacturing capacity over the past five years. We are the only one of the top seven industrialised nations to have seen no rise in employment since 1979. Unemployment here among the unskilled is still rising. I am open to challenge by the Minister, if he wishes. Has he seen today's report in the Oxford Review of Economic Policy? It makes dismal reading. In 1993 only 36 per cent, of the working population had full-time jobs. We hear all the glowing testimonials to the Government's policy by proud Ministers, but that is a massive drop from the figure of 55 per cent, in 1975. We have a two-tier labour market, with great uncertainty for one tier.
39 The economists' ultimate solution is investment as a backcloth to market labour measures. There is a difference of opinion among economists, but those economists give little support to cutting and limiting benefits. The measures which are the central theme of the Bill, contribute far more to poverty than to solving unemployment. Those are not my words; they are the views of the Oxford Review of Economic Policy.
The question today is: would earlier publication of the report have changed the Bill? I do not think so. I can almost see how ministerial minds were working in the other place: "Let's see", said the Secretary of State for Employment. "Let's take a leaf from the book of the Home Secretary. We'll go for a really good populist cause because we're a very unpopular government. All the polls say so; the local government elections will say so; every political realist says so. Let's drop the term 'unemployment benefit' and call it an 'allowance'. That's a good idea. It will then look as though we are being generous", they probably said. "Let's call it a jobseeker's allowance. That would strike a positive, friendly note. We will lose the word 'unemployment'. That is a marvellous idea. We'll just drop the word 'unemployment' from our vocabulary. The great virtue of that is that it will distract attention from the fact that there are no jobs available. It's a marvellous idea, this Bill, so let's peddle it like mad and get someone of the genius of Lord Mackay, with his brilliant presentational abilities, to put it forward in the House of Lords as one of the greatest Bills since Parliament began".
You can see the Government's mind working. All the civil servants say, "Yes, Minister, that's a wonderful idea. Press on with it". There is a phone call to the noble Lord, Lord Mackay, asking whether he will do it. He says, "All right, I'm a loyalist", so he does it. He made a marvellous speech, but it was a little lacking in realism.
I am very serious about the Bill. The Government have now begun the painstaking job of humiliating unemployed people and cutting benefits. Unemployed people now have to parade before officials to prove that they are actively seeking work. They have to draw attention to their availability. They have to write and rewrite their CVs and prove that they are highly motivated for work.
What can they expect? There are currently limits on the conditions claimants can impose, but undoubtedly there will be a tougher regime. That is the reality. Regardless of the circumstances, the unemployed person may have to agree to the dirtiest job with the longest hours, peanuts for pay and possibly even moving away from home.
The final irony of the situation is that the officials may well conclude the interview by saying: "Well, that was a fascinating discussion. There are only a handful of jobs anyhow and we have another 1,999,999 people just like you who are also jobseekers. But we will give you the allowance. If you've paid enough stamps, you can have it as a right, but only for six months, not 12 months. There is nothing for your partner. We're very sorry about that. If you haven't paid your stamps, you may get something provided you are poor enough. You will have to watch it though. If you keep the wrong 40 company at home with someone earning a small fortune like £10 a week, well, you know. Here you are, you can have it, but please keep looking eagerly for a job".
That is what will happen when the House of Commons and the House of Lords pass the Bill. That is why we shall be active in the Committee and Report stages. The marvellous speech by the noble Earl, Lord Russell, posed a number of significant questions for the Minister. I hope that his colleague who is to reply to the debate will give the assurances we are anxious to have on the questions raised.
We have come to a sorry pass under a sorry government—a government unable to refrain from hitting and humiliating unemployed disabled people. An estimated 200,000 people will lose invalidity benefit and will not receive incapacity benefit with its far more stringent conditions. Another estimated 70,000 will suffer the same fate annually. Many of them believe that they are not capable of work, yet it is judged by others that they are. The Government tell such people that if they want to appeal—and to appeal is a great right in a democratic society—they must take a cut of 20 per cent, in their income support. What kind of system is that? Alternatively, they can sign on. In doing so, they must state that they are fit for work. That is entirely the opposite of what they believe; they believe that they are not fit for work and that is why they are called "disabled".
That is a disgraceful choice to impose on disabled people. It is threatening a poverty penalty, to prevent appeals and minimise the number of appeals, even though we know from the citizens advice bureaux that most such appeals are successful. Social security doctors are far from infallible. We must face the fact that many more disabled people will seek jobs in the future—some because they want to and some because they are forced to. Many of them may have been out of the labour market for years. Others will be able to work only under limited conditions because of their disability. The £71 million that will go to the Employment Service to fund specialist help for disabled people is welcome but inadequate.
To make sure that the Minister does not feel unemployed himself and has something to talk about when he winds up, let me add to the questions of the noble Earl, Lord Russell —I want to make sure that he has a very full list when he answers—and put the following questions to him. Who are the people to be trained as advisers? What will be their background and who will train them? What form will the training take and for how long will they be trained? Will the new advisers be sensitive to the great variety of disabling conditions that they may meet? Many disabled people will have chronic but fluctuating conditions or there may be a mental element involved. Will there be training about the ways in which new technology can help to deal with disability? Above all, will there be an understanding of the discrimination which abounds in the workplace and will continue to obtain in the workplace for many years to come? Those are just a few of the questions that arise as a result of the Bill.
41 Unless there is extensive help for disabled people, there is a danger that in today's tight employment market they will perpetually lose out to non-disabled people. There will be an army of people who do not qualify for incapacity benefit and yet are not sturdy enough to take part in the job market. It will be a mortifying charade to force such people to sign on fortnightly and go through the motions of job seeking when they and the employment agency know quite well that the chance of their getting jobs is virtually zero. I believe that the provisions of the Bill are unrealistic with the present level of economic activity in our society.
A sense of outrage will be felt when the provisions of the Bill are implemented. Alan Milburn, MP, has revealed advice to Ministers by senior Employment Service health and safety assessors—I am willing to be contradicted by the noble Lord when he replies—who say that Jobcentre staff are at risk of assault and abuse from unemployed claimants about the jobseeker's allowance. The report urges the introduction of "clear escape routes" and personal alarms in some instances when unemployed people receive "unpalatable and unwelcome information". It is one thing for Ministers to present their proposals to Parliament with polite euphemisms; it is quite another for unemployed people who are already suffering poverty to be told the brutal truth of sanctions and cuts. But any government pushing through legislation which provokes angry protests, social unrest and public outrage cannot claim that they have not been warned in this House and elsewhere.
§ 5.3 p.m.
§ Lord Henderson of Brompton
My Lords, I shall take only two or three minutes and thus reduce the average length of time of speeches so far made in this debate. I shall be able to do so because of the quality of the speeches that have been made, not least that of the noble Lord, Lord Ashley of Stoke.
I have a feeling that we should make greater use of our time in Committee rather than on Second Reading of this Bill. We have recently been considering the way in which our time is spent in order that the House may rise by 10 o'clock at night and not have to sit until the early hours of the morning. On this kind of Bill, for which we are the second Chamber and know we have only limited powers, it might be better to have spent this Second Reading day on an extra day in Committee.
I hope that the Government will listen to the immense amount of persuasion to which they have been subjected and will indeed find another, further day in Committee than has already been allowed—at any rate, I hope that they will keep their mind open on the subject—so that we do not have to spend night after night in the Chamber after 10 p.m.
I have only a few points of general principle to state. I cannot forbear to give them. They are very brief. First, I find it an odd conjunction to consider such a mean Bill as this one, which impoverishes and coerces the most vulnerable members of our society, at the same time as tax cuts seem to he promised in the next Budget for the benefit of middle England. Secondly, I find the increase in powers and the extension of what is in effect the policing of our society to be very worrying. Thirdly, the similarity 42 between the Child Support Bill and this Bill in policing powers—which will be given massively by subordinate legislation and not by this House or another place where they can be amended—is deplorable. As this Bill is skeletal, and no more, we shall need an assurance from the Government that its fleshing out by subordinate legislation will be the subject of most minute consultation and be given plenty of time. Indeed, drafts should be laid before the subordinate legislation is brought before Parliament, when either House can say only yes or no; and under the Whips' system in the other place that is always a "yes". The Bill is too important to be treated as a matter of party politics. We shall not be allowed parliamentary procedures whereby we can amend what might otherwise have been two-thirds of the Bill. So I feel that special attention must be paid to the subordinate legislation after the Bill has been enacted.
I believe that, as in other legislation, the discrimination against young people, who as a category (including students) very much demand our support and encouragement instead of treating them as though they were dependent children, is to be deplored in the Bill. Also the element of violence is extremely unpleasant. It is so implicit in the Bill. It must be remembered too that the Child Support Act has already driven several people to commit suicide. It may well be that this Bill will have the same effect, and not merely on several people but very many. I am also alarmed at the possibility of violence in the benefit offices. We have heard evidence of that possibility from the noble Lord, Lord Ashley, and others.
I have made some rather rough comments. There are some credits to be given to the Government, which I am happy to do now. It is a very great achievement to have knocked together two huge bureaucracies. I hope that a great deal of benefit will come from it. I also like the back-to-work bonus scheme and the holiday tax allowance, which no doubt will be of great benefit. Those are imaginative schemes. One should give credit for them.
As I say, although, judging by the extremely fine speeches that we have heard this afternoon, the time of this House has been well spent, I believe that it could better have been devoted to the Committee stage. I therefore propose to reserve any further remarks to that stage.
§ 5.10 p.m.
§ Lord Swinfen
My Lords, although not a benefit designed to cater for the needs of disabled people, the proposed jobseeker's allowance will affect long-term sick and disabled people who will be expected to sign on following the replacement this month of sickness and invalidity benefit with the more restrictive incapacity benefit, as mentioned earlier by my noble friend Lord Dean of Harptree. I should perhaps declare an interest in the Bill in that I am employed by the John Groom Association for the Disabled and therefore earn my income attempting to help people with disabilities.
The conditions for the jobseeker's allowance are that applicants must be capable of work; they must be available for and actively seeking work, and have entered into a jobseeker's agreement. Disability organisations are concerned that people could fall between the two benefits—not sick enough for 43 incapacity benefit but not fit enough for jobseeker's allowance. A narrower incapacity test is estimated to move some 190,000 people from incapacity benefit to jobseeker's allowance in the coming financial year.
The current rules allow for people to place restrictions on their availability for work, such as limiting the type, hours, location or conditions of work where those are reasonable, given the person's physical or mental condition. If the restrictions are accepted as reasonable, the individual is exempt from the requirement applied to claimants with other restrictions; that is, to show that he still has a reasonable prospect of finding work. Though Ministers stated that, as now, people will be able to restrict their availability for work by reference to the type or hours of work, it is still unclear whether the current law will be fully reproduced in respect of other types of restriction such as location or distance to work.
At Report stage in the other place the Minister said that there would be a section in the jobseeker's agreement which would enable disabled people to,add extra points that are not necessarily to do with hours or the type of work".—[Official Report, Commons, 22/3/95; col. 371.]However, to me it is still unclear whether disabled people will remain exempt from the requirement that there must be "reasonable prospects" of finding work despite the restrictions.
At Report stage in the other place Ministers clarified that the claimant's own evidence about restrictions on their availability would normally be accepted. Medical evidence would only be required in a limited number of cases, when general practitioners would be expected to provide a certificate free of charge. My honourable friend Miss Widdicombe said on Report that she would ask the Under-Secretary of State for Social Security to speak to the Department of Health about the matter. Can my noble friend say whether that conversation took place? If so, what was the outcome?
People who move off incapacity benefit onto unemployment benefit after this month stand to lose out financially. There is a difference of over £32 a week between the average weekly invalidity benefit payment, which is £79, and unemployment benefit, which is £46.45. Under the jobseeker's allowance the contributory benefit will be payable for only six months instead of 12, as now. The reason for the change is that many people return to work within six months. However, that rationale does not apply in the case of disabled people, who may take twice as long as able-bodied people to find work.
The contributory jobseeker's allowance will be reduced pound for pound where people receive an occupational or private pension of more than £50 per week. Previously that applied to pensions of more than £35 payable to people over the age of 55. That rule could adversely affect some disabled people taken off incapacity benefit when they have a payment from a previous employer in recognition of their ill-health or disability. For example, a 50 year-old man with an occupational pension of £55 a week will lose £5 weekly 44 from his contributory jobseeker's allowance. Under unemployment benefit that would not have been reduced.
Removing the dependant's allowance for a non-working spouse or partner means that contributory jobseeker's allowance will amount to a personal allowance only. An earlier means test could bite particularly hard for people with income or savings above the limit. That could disproportionately affect disabled women, particularly if leaving incapacity benefit, who are more likely than male claimants to have partners or spouses working full-time. It would exclude them from the means-tested jobseeker's allowance. The savings limit of more than £8,000 could exclude disabled people with capital derived from compensation for personal injuries.
The Jobseekers Bill includes provision for back-to-work schemes. That includes a bonus for people working less than 16 hours which, as I understand it, amounts to 50p out of every £1 of earnings above the earnings limit (£5, or £15 for someone with a disability premium). That is payable once someone moves into work of more than 16 hours a week. Another clause provides for a year's national insurance contributions holiday for employers recruiting people who have been unemployed for two years, which is most welcome.
Amendments to extend the provisions to people on incapacity benefits or carers were not accepted during the Commons stages of the Bill. Ministers argued that disabled people who were claiming jobseeker's allowance or income support would be covered, but those who were on incapacity benefits were not the target group for the bonus. The Government expressed some sympathy with the position of carers and promised to consider their position in the development of the back-to-work schemes. Perhaps my noble friend can tell us whether or not he will bring forward suitable amendments at a later stage of the Bill.
The Bill misses an opportunity to assist the movement of disabled people on incapacity benefit from benefit into work. The announcement that ex-carers can use a period on invalid care allowance to link to jobseeker's allowance and therefore qualify for contributory benefit, provided there has not been a break of more than 12 weeks, is welcome. However, despite the indications in Committee in the other place, I understand that that 12-week linking rule will not apply to incapacity benefit. That means that people on incapacity benefit will have only eight weeks in which to try out work and requalify for their previous level of benefit. There was also no acceptance of the use of pilot schemes to test out other models of a partial incapacity benefit.
When opening the debate my noble friend Lord Mackay of Ardbrecknish said that the Government will protect people with disabilities.
I hope, therefore, that he will look kindly upon amendments that I and others will table to improve the position of disabled people as the Bill progresses through your Lordships' House. I took considerable note of what was said by the noble Earl, Lord Russell, in relation to the number of regulation-making powers 45 within the Bill, which is quite extraordinary. Perhaps my noble friend will bring forward at the next stage an amendment to retitle the Bill the "Henry VIII Bill".
Clause 3 relates to the question of partners. I find that to be a particularly difficult concept. What is a partner? How long does one have to remain in a partnership? Are partners always of the same sex? Can they be changed frequently? There does not appear to be any real watertight legal definition of that term. I would have preferred to see the term left as "spouse".
§ 5.20 p.m.
§ Lord Monkswell
My Lords, I must crave the indulgence of the House in the presentation of my remarks because I may not be as articulate as I would normally hope to be. I am suffering from 'flu at the moment and so I ask the House to bear with me.
I want to say a few words about the background to the Bill, to touch on what the Government are trying to do and then to suggest what will probably be the result of the Bill. Before I do so I think it is worth reflecting a little on my own experience. I have been unemployed three times during my working life: once for a period of about a week in the 1960s, but I obtained employment fairly quickly thereafter; once in the 1980s for 12 months; and once in the 1990s for 11 months—to date.
The noble Lord, Lord Ashley of Stoke, pointed out how British manufacturing industry had been decimated in the recession to which we have been subjected under the Tory Government of the past 16 years. I can remember a trade union official telling me in the mid-1980s that Margaret Thatcher and Geoffrey Howe had done more damage to British manufacturing industry than Hitler and Goering in the last war. That is a fairly strong statement, but it is quite intriguing to think that after the war this country was capable of building ocean liners. We built quality motor cars for affluent people. We built a number of motor cars —not just Jaguars and Rolls-Royces but Rovers and one or two others. What is the situation now? We seem to be incapable of building ocean liners to the requirements of P&O. There seems to be quite a fashion among rich people in this country to buy prestige motor cars that are not made in this country. I am talking about BMWs, Mercedes and so on.
The whole concept of unemployment benefit as we have known it since the war is built on the basis of trust—the trust that the Government, of whichever party, would run the economy on the basis of full employment. That was part of the bargain. The other side of the bargain was that the individual agreed to work. The payment of unemployment benefit allowed for dislocations in the economy; it provided some fluidity in the economy and it enabled change to take place without undue hardship to the individual. The intriguing point is that it was actually paid for by the individual through national insurance contributions. For the past 15 years this Government have broken that trust. They have said in effect that the job of government is not to run the economy on the basis of full employment; that the job of government is to run the economy on the basis of some modern gold standard and that it does not matter about unemployment. The 46 implication of that is mass unemployment. However, the old mechanism—the payment of unemployment benefit—has continued until the advent of this Bill.
Why are the Government introducing the Bill at this time? A number of speakers have mentioned the escalation in the social security budget. The Government would accept that the reason they are introducing the Bill is to save money—the way they put it is that it will save taxpayers' money. But it is money which people have contributed through national insurance contributions. It is not the Government's money; it is the workers' money in the sense that it is an insurance fund.
A number of eloquent contributions this afternoon have dealt with some of the implications of the Bill. The risk of violence in the unemployment offices has been mentioned; the increase in poverty that individuals and their families will experience has been mentioned; the ludicrous situation that, unless changes are made to the Bill, people will be denied a sensible opportunity of gaining education and training has been mentioned. One of the points that has not been mentioned is the effect that the Bill will have on marriage and on people living together. The noble Lord, Lord Swinfen, touched on that point when he suggested that the word "spouse" should be used rather than "partner". What will be the effect on marriage?
When a man is made unemployed it is an enormously stressful time for that person as an individual and for the family at large. With unemployment benefit as we know it today the payment as of right of a non-means tested benefit for 12 months provides a cushion to that feeling of lack of self-worth and the feeling that the spouse or the partner of the man may have that he is not contributing to the household, especially when the Government keep saying that the reason we have unemployment is that people are not prepared to work, as opposed to the fact that they cannot get a job. That has an effect on families and on the relationships between people. For quite a large proportion of families that line is held because the man is contributing something—he is contributing unemployment benefit to that household's income for 12 months. One of the effects of the Bill will be to restrict that to six months.
One of the problems that I can see—I am sure that if the Government were prepared to listen to sociologists who work in the field they would probably see it in similar terms to myself—is an increase in the breakdown of marriage. That is part of the problem, but the position is a little worse than that. One of the other effects is that, in trying to do the best for their families, men may leave their wives and go and live in a flat somewhere in order to ensure that they can claim income support. The flat rent will be covered by housing benefit. They will then have some money of their own which they can contribute. What will be the net effect of that? The net effect will be a waste of national resources. Instead of having a family living in one house there will be a divided family in two houses. It is a wasteful use of housing accommodation.
One of the other effects of the Bill will be to drive down unemployment benefit, income support, national pension provision and student grants. What will the Government do with the money they save? They will 47 give it back to rich people in the form of tax cuts. What will be the net effect of that? Those rich people will buy BMWs and Porsches and go on holidays on the "Oriana", which will have a negative effect on the British economy; whereas if those benefits were increased, the people would spend their money on British goods and services. That would increase employment and there would be a virtuous circle.
It is a little too late for this Government, but I hope that we can persuade, as I am sure we can, some noble Lords on the Government Benches—we have heard some interesting contributions today—to make some changes to the Bill in order to make it a little less pernicious than it otherwise would be. But the real salvation will be the next Labour Government.
§ 5.30 p.m.
§ Baroness Nicol
My Lords, I intervene very briefly. My name was on the list of speakers, but I withdrew it in anticipation of a personal difficulty which, I am happy to say, did not arise. I do not normally take part in employment Bills, but I find some aspects of this Bill so offensive that I am quite unable to remain silent. However, today I shall respect the conventions about speaking in the gap and simply put on record that I hope to be able to support my noble friends in improving this Bill at the later stages.
§ 5.31 p.m.
§ Baroness Hollis of Heigham
My Lords, since January and through to July, this House has been and will be discussing and debating four social security Bills. We have had already the Pensions Bill; today we have the Jobseekers Bill; soon, there will be a disability Bill and soon after that a Child Support Agency reform Bill. Three of those Bills we on this side of the House will and do broadly support, although I have no doubt we shall wish to amend, strengthen and improve them.
But not this Bill. It contains a sprinkle of small goodies which have been repeated tonight, such as the back-to-work bonus, the national insurance employers' holiday, the roll over of housing benefit and council tax benefit, which we all welcome. But the core of this Bill we believe to be nasty and pernicious because, quite simply, it takes as a starting point the blaming of the unemployed for their unemployment and therefore seeks to make their life on unemployment benefit, to coin a cliché, mean, nasty, solitary, brutish and short.
But, despite the speech of the noble Lord, Lord Mackay, the problem is not those who will not work but could, but those who want to work but cannot. There are probably 5 million people today who are seeking work but cannot find it. There are 3 million fewer full-time jobs in the economy now than there were in 1979. Even though wage rates have fallen for the lower paid—1.25 million people earn less than £2.50 per hour, as many of my noble friends have cited today—there are still eight or 10 claimants for every registered vacancy. As my noble friend Lord Ashley quoted, we have had today the devastating report from Oxford which shows a fall in the number of men in full-time 48 work. Having wrecked our manufacturing economy and made the employed unemployed, the Government now finger them for their unemployment, and hence this Bill.
Beveridge said that,The only satisfactory test of unemployment is an offer of work".What we have instead in this Bill is a jobseeker's agreement—not, as Beveridge would have it, that if one seeks work one will obtain it, but that unless one seeks work which is not there one will not get benefit for being unable to find it. That so-called "agreement" is going to be reinforced by a deep cut in benefit. Not only will contributory benefit fall from 12 months to six months, but in all sorts of other nasty ways, including the removal of the adult dependant's allowance, age reductions, the tightening of part-time study work and the harsh treatment of redundancy money, its financial value will be cut. As the noble Lord, Lord Henderson, so rightly said, in the process some of the poorest and most vulnerable members of our society are still further attacked—that is to say, women, the young, the disabled, the homeless, old and redundant men and the longer-term unemployed.
So we oppose this Bill as my noble friend Lady Turner so eloquently argued. We despise its principles—no, they are not principles—we despise the ideology that informs it. We oppose it on four main grounds. First, as many noble Lords and the noble Baroness, Lady Park, have mentioned, we object to the authoritarianism of this Bill. This jobseeker's agreement is not an agreement. As my noble friend Lady Dean said, there is no equity of contract; it is a directive backed by powers to impose benefit penalties covering highly personal matters such as appearance and behaviour at interview. How many holes are there in the jumper and how long does the hair have to be before one risks losing benefit? What many of us find so offensive about the new Right, Tory ideology is that the Bill demonstrates a deeply unpleasant reading of human nature. It assumes the worst about people. They are workshy, scroungers and layabouts unless they are browbeaten or penalised, not into work but into the fruitless and demoralising search for work that does not exist.
The Department of Employment, the DSS and all the major research foundations, have found abundant evidence—and I know the Minister knows it—that the unemployed are desperate to work. We have plenty of research to the effect that single parents, the disabled and the long-term unemployed all want to work not just because of the money but because of the need for sociability and self-esteem. What is stopping them is not lack of moral fibre, the lack of a punitive jobseeker's agreement or a too-generous benefit level, but the lack of childcare for women, the lack of suitable skills for older men with manual skills; discrimination and poor health records for some disabled people, or limited access to and information about the labour market. Above all there is the loss to our economy of about 5 million full-time jobs.
The problem is not because they are workshy, choosy or because they are not accepting wages that are not realistically low enough or because they are receiving benefits which are unrealistically high. Over one half of 49 the unemployed receive in benefit less than one half of what they last received when in work. That is some incentive! As the department's own social security advisory committee has argued, in times of high unemployment actively seeking work rules and jobseeker's agreements should be eased and not tightened. Instead this Bill pushes in precisely the opposite direction, to our shame.
The second objection to this Bill is because it increases the poverty of the unemployed. Not surprisingly, the Minister said very little about that. That is because, as my noble friends have said, 90,000 people will lose their benefit and 150,000 will receive between 20 per cent. and 70 per cent. less in benefit. Existing benefits are already far from generous. Already over one half of unemployed men fall behind with their rent, council tax, mortgages and fuel bills. They will now move even deeper into debt. Only a short while ago this House raised the national insurance contribution by about 10 per cent., raising an extra £2.2 billion for the Treasury. Now that same insurance-based benefit is being cut from 12 months to six months and thereafter it will be means-tested.
But is not just that: because the Government are not content they are putting on some pretty unpleasant topspin. If one wants or needs to claim an allowance for one's wife because one has young children and the wife is not in work, then one is not allowed any contributory benefit at all. One moves immediately to means-tested benefit, whereupon one is promptly penalised for any modest savings that one might have, either built up over the years or perhaps a redundancy payment. If a woman, the situation is even worse. Having paid national insurance contributions, 60 per cent. of women will lose their jobseeker's allowance because their partner is in work and it is means-tested. Not, therefore, being eligible for benefit, those persons will usefully disappear from the unemployment count.
This legislation also hurts and damages disabled people, who will find the simplistic and unrealistic "either/or" test of fitness or unfitness to work for incapacity benefit interlocking with a similar simplistic and unrealistic approach in the jobseeker's allowance so that, as many noble Lords such as the noble Lords, Lord Swinfen and Lord Rix, and my noble friend Lord Ashley have argued tonight, those with fluctuating conditions, with less severe mental health problems or with learning disability difficulties or those whose pain and fatigue are cumulative will find themselves barred from incapacity benefit but unable to meet the jobseeker's agreement and may be left with nothing at all.
The Bill deepens the poverty of young people. That was the special concern of the noble Earl, Lord Russell. Although they have paid national insurance at the standard rate, those under 25 will nonetheless see a 20 per cent. cut in benefit whatever their home responsibilities.
The Bill also worsens the poverty of the single homeless, who may be told that their first step, under the jobseeker's agreement, will be to get accommodation. That often requires a month's rent in advance, which they cannot find. So, because they are 50 homeless—and remain homeless—they will be deemed to have failed the jobseeker's test. On what then will they live?
I think that I am right in saying that, for the first time in the history of the welfare state, potentially large groups of adults will have no benefit—no legitimate income whatsoever—once the Bill becomes law. I ask your Lordships to think of the implications of that. In the United States, where single men are not entitled to a legitimate benefit, they get their income illegitimately, off the streets, and 2 per cent. end up in prison. One might think that that is a rather expensive form of income support.
Thirdly, we object to the Bill not only because it is authoritarian and demoralising to the unemployed and not only because it deepens their poverty but because, while doing so, it will increase, not decrease, our public expenditure on benefits—the arguments of the noble Lord, Lord Trefgarne, notwithstanding. Such a Bill is not only indecent hut—almost as unforgivable—it is stupid also. I shall seek to follow my noble friend Lord Monkswell in explaining why.
Let us take the case of a husband who is in work and whose wife is in part-time work earning perhaps £80 per week. They have two children. They are work-rich. If the husband loses his job, he will get contributory benefit for the first six months and his wife will remain in work. Some benefit will be paid, such as housing and council tax benefits, totalling perhaps £109. However, after six months, the husband will move on to means-tested benefits if he is among the third who are unable to find work. If his wife remains in part-time work, his benefit will be docked virtually pound for pound. With the extra costs of work, such as clothes and travel, it will not be worth her working, so she will stop work. That household is now work-poor. Both are now on benefit and will need additional allowances, such as full housing benefit, full council tax benefit, free school meals and free prescriptions. Their total benefit bill will increase from £109 per week to £180 per week. Precisely because it had been means-tested, we would be paying more in benefit than would have been the case if the benefit had been contributory. If the wife had remained in work, she could have continued to float them off the benefit trap. Instead, we as taxpayers are paying more than £70 per week more in benefits than would be the case if the family were not means-tested.
That is stupid. Indeed, it is even worse—precisely because both husband and wife have now become so dependent on benefits, the husband would need to earn about £200 per week to spring them off benefits. He cannot—and so they will not be able to come off benefits. They are locked into benefits, and the longer they remain so and the more out of touch with the labour market they remain, the harder it will be for them to get back into work. Means-testing will cost us, as taxpayers, more and for longer. That is perverse. It takes some doing for a government to produce a Bill which simultaneously constructs a poverty trap, a dependency trap and a savings trap, but the Government have managed all three. When will the Treasury learn?
Finally, we object to the Bill because it does not do what it says that it will do in its Long Title, which is, 51to promote the employment of the unemployed".As my noble friend Lady David and the noble Baroness, Lady Park, said, nowhere is that more evident than in the 21-hour study rule. We all know that we need to skill and educate our workforce. All of the research shows that general educational qualifications are at least as valuable as vocational training in obtaining work, yet it is proposed not only to cut benefits for those in part-time study for more than 16 hours per week, but, if someone is in part-time study for only five hours per week but nonetheless has paid fees of, say, £100 for a computer course or for lessons to teach them to drive heavy goods vehicles, the fact that they have invested so much of their own savings in that course is taken as evidence that they are not sufficiently committed to seeking work. Again, that is stupid. Such people will be required to take temporary, part-time, insecure, low-paid work rather than being allowed to become skilled (at their own expense) for useful and decent work. Again, that is short-termism of the worst sort. In this Bill, we see not efforts to promote the employment of the unemployed, but efforts to harass, police and coerce them—and to cut their benefits.
Back in December 1992 this House passed the actively seeking work regulations. But that did not produce the effect for which the Government had hoped, which was to reduce benefit levels. That was precisely because the Government found that people were actively seeking work. So, in April 1994, the target for disqualifying people from benefit was doubled to 150,000 per year. I ask your Lordships to note that we are talking not about a target for getting people into work, but about a target to disqualify them from benefit. What a goal at which to aim: "Get 150,000 off the books!" And it is on those new operational targets that staff performance and performance-related pay may be based. The inescapable conclusion, which I am sure is as distasteful to the staff as it is to these Benches, is that benefits staff will earn more if they ensure that benefits claimants and up getting less. That is the ugliest of all social contracts, yet at the same time the chief adjudication officer worries about the quality of the decision-making. As the noble Earl, Lord Russell, pointed out, the annual report of 1993–94 found that 92 per cent. of appeal decisions were unsatisfactory.
There we have it: the Minister professes to be worried by the workshy; we are worried by the work-poor. I ask your Lordships: in what way will the Bill create one extra job'? What we do know is that it will humiliate and impoverish the unemployed while simultaneously adding to the benefits bill that we shall all end up paying. As the Oxford Review of Economic Policy, which was quoted by my noble friend Lord Ashley, shows today, so-called labour flexibility and making benefits conditional upon job search are irrelevant. What matters is investment and the skills bank to exploit that.
52 As other noble Lords have said, we have had 15 wasted years and another wasteful Bill. It is wasteful of people, wasteful of opportunity and wasteful of money. We have nothing but contempt for it.
§ 5.48 p.m.
§ Lord Inglewood
My Lords, the Government are committed to giving unemployed people a better chance of taking a fair share of the increasing number of available jobs. The new jobseeker's allowance will play a vital part in targeting our help on every individual who wants work. It is designed to meet the needs of unemployed people from the time they start to look for a job until they are back in work.
We have had a useful and wide-ranging debate this afternoon about the interface between the labour market and the benefits system. As was made clear by the noble Earl, Lord Russell, and the noble Lord, Lord Henderson, much of our debate has been not about the Bill, which is the skeleton of the new system, but about the policy details which will be attached to it in secondary legislation.
There is a consensus in this House that the priority must be to help people back to work. I agree. I believe that we have shown in this debate that JSA will do this. Nonetheless, a number of important concerns have been raised about the impact of the new benefit. Whilst I believe that those concerns are unfounded, I should like to address some of the points that have been raised. First, the jobseeker's agreement provides a new focus on the experience and actions of unemployed people as individuals. Each has different needs and will follow different paths in the labour market. The jobseeker's agreement will enable each jobseeker, and the Employment Service, to plan the most effective steps back to work for that person.
The agreement will ensure that each jobseeker fully understands his duties and responsibilities in return for the benefit that he receives. At the same time, it will ensure that he receives expert advice and is aware of the help and services that the Employment Service is able to offer for successful jobsearch. To say, as was intimated unintentionally, I believe, that the Employment Service does not put its efforts in to finding work for those it is helping is a calumny. Each agreement will set out the terms of the jobseeker's availability for work, including any restrictions that he wishes to place upon it and the steps he will take to look for work. That will bring greater clarity to the conditions for benefit. But the agreement itself will not change the conditions for benefit. As my noble friend the Minister of State has made clear in his opening, the conditions remain those set out in the legislation.
§ Earl Russell
My Lords, is the Minister giving an assurance that regulations will not change the conditions of benefit? If so, that is very welcome.
§ Lord Inglewood
My Lords, referring to Clause 6, it is clear that the subject matter of the regulation is what is contained in subsection (2) (a) and (c). Those paragraphs simply define and interpret the law to the facts of the particular case, according to my understanding.
53 In introducing the initiative of the agreement we have sought to ensure that the jobseeker is fully protected against being required to take any unreasonable steps. If an agreement cannot be reached, both the jobseeker and employment officer will be able to refer proposals for an agreement to independent adjudication and appeal.
A number of associated points were raised. For example, the noble Baronesses, Lady Turner and Lady Hollis, raised the question of the Employment Service having a target for disallowing benefit. This is not a target for disallowance or suspension of benefit. It provides a requirement for Employment Service staff to meet high standards of quality and accuracy in the submissions that they make to the independent adjudication officers. A question was also raised about the reduction in the contributory period for the jobseeker's allowance. It is important to appreciate that this is not a contributory scheme. The national insurance scheme is a pay-as-you-go scheme, and it is an established principle that Parliament can alter the rules with reasonable notice.
I turn to the proposals for jobseeker's directions that have received some criticisms. I do not accept them. Of course, there may be occasions when a jobseeker is not prepared to accept the help offered to him and will not agree to make reasonable efforts to secure a job. In those circumstances, it is entirely reasonable that the Employment Service adviser should be able to require the jobseeker to make the most of the available opportunities, whether it be to undertake training or to improve jobsearch skills. It goes without saying that claimants will always be treated reasonably and fairly. Any decisions to impose a benefit sanction will be made by an independent adjudication officer. He will decide whether a direction is reasonable in the light of the claimant's circumstances. No sanction will be imposed on a claimant who can show that he has good cause for refusing or failing to carry out a direction. Benefit will continue to be paid in full until the adjudication officer has made a decision.
The noble Earl, Lord Russell, asked about the status of the adjudication officer. He is an independent officer and is ultimately subject to the rules of natural justice in the exercise of his tasks. We regard it as important that decisions on questions that arise from claims for jobseeker's allowance will be taken by independent adjudication officers. I emphasise that there is no truth whatsoever in the suggestion that decisions on JSA will be privatised.
The introduction of JSA will mean a number of changes to the manner in which adjudication decisions are taken in the Employment Service and in the Benefits Agency. We are currently considering those changes and are continually looking at ways to improve the speed of adjudication decisions. If locating some adjudication decisions closer to the work with individual jobseekers will speed the process of adjudication and give claimants a better service, it is right that such ideas should be properly considered and piloted if appropriate. I hope that your Lordships will welcome such a commitment to improving services.
54 The noble Baronesses, Lady Turner and Lady Dean, together with the noble Lord, Lord Ashley, raised the question of the possible danger in Employment Service offices during the exercise of their jobseeker's allowance functions. The functions previously carried out by the DSS and the Employment Service have been brought together. The document to which reference was made was one that was leaked but not taken further forward. Clearly, it is important that there is safety for staff in the offices. That is a matter which must be properly taken into account. At the same time we must make sure that the premises are user-friendly for those who are to go into the offices. I assure my noble friend Lady Park that proper training will be given to those who are involved in administering the new system.
A number of noble Lords, in particular the noble Lords, Lord Rix and Lord Ashley, my noble friends Lord Dean of Harptree and Lord Swinfen and the noble Baroness, Lady Dean, raised anxieties about disability issues. Throughout the planning of the new benefit the Government have been concerned that we should include and not exclude people with disabilities, and that we address their needs specifically and not assume that somehow they will fit in. No disabled person need face exclusion from both incapacity benefit and JSA. There will be no grey area between the two benefits. If a person is found capable of work through the new tests for incapacity benefit that decision will apply also to JSA. Of course, all JSA claimants must be available for employment, but we recognise that some people's mental or physical condition may cause them difficulties in making themselves available for the full range of employment opportunities. Therefore, we will make specific provision in JSA that they should he able to restrict their availability to the hours of work that they are able to undertake within the limits of their condition.
The Employment Service offers a range of specialised services to people with disabilities. Every week they help over 1,000 disabled people into work; and next year they aim to do even better. The new challenging targets for the Employment Service announced last week will call for that service to place 75,000 in jobs, the highest total ever.
The noble Lord, Lord Rix, in Gilbertian mode, asked me four questions. Since I reply in my capacity as captain of the Yeomen of the Guard, I will reply fully to him in writing, if I may.
The noble Lord, Lord Ashley, raised the question of discrimination against disabled people. This is a matter that will be fully and widely dealt with in the context of the disability Bill that will be discussed in this House before too long.
My noble friend Lord Swinfen raised the question of the cost of medical evidence in cases of restricted availability. He referred to some remarks that had been made by my honourable friend the Parliamentary Under-Secretary of State in the other place. This matter is still under consideration, and we shall return to it at Committee stage.
Another group whose special needs your Lordships are concerned about are those jobseekers with caring responsibilities. As my noble friend the Minister of State emphasised, the Government accept the special 55 circumstances and needs of these people. We will allow them to restrict the hours of their availability to fit in with caring responsibilities. We have also responded to concerns that carers can lose entitlement to contributory unemployment benefit if they have been receiving invalid care allowance for some years and earned no national insurance contributions during that time. If their caring responsibilities come to an end, their entitlement to contributory JSA will he based on their contributions record before they claimed invalid care allowance. That further underlines our commitment to those people who devote themselves to caring. I very much hope that that will reassure the noble Baroness, Lady Dean, and my noble friend Lord Dean of Harptree who raised those matters.
As has been mentioned, on many occasions the House has debated the help and support which the Government provide for 16 and 17 year-olds. I should like to begin by emphasising once more that the Government guarantee every young person who is not in employment or full-time education a suitable training place if they want one. That comes with an allowance which in many cases is topped up by a trainer. Most young people need not, and should not, look to the benefit system. They should not become dependent upon benefit.
We are spending £676 million on youth training in England—a significant investment in the future of our young people and the nation's economy. My noble friend Lord Trefgarne made the point about the lack of constructiveness of training just for the sake of training as opposed to training to help people, and that was a point that was well taken.
If young people are in a vulnerable group, or if they are at risk of severe hardship because a suitable training place and allowance have not been provided, we will provide for them and continue to do so. There is no change in policy in JSA in that respect. But young people should take any suitable opportunity of training, or work with training, that is offered to them. A minority of young people should not be allowed to abuse the system by rejecting without penalty the help offered. That is why we are ensuring in JSA that there is a clear and fair system of sanctions for young people.
The noble Earl, Lord Russell, and my noble friend Lady Park asked why the allowances for those under 25 are not the same as those for a higher age group. The answer is simple. It is that they do not have the same earning expectations and commitments as those who are older. At the same time, I must emphasise that, where there are families, they of course are entitled to income-based JSA like any other family.
A number of speakers, in particular the noble Baronesses, Lady Dean, Lady David, and Lady Hollis, and my noble friend Lady Park, urged the Government to look further into the matter of benefit provisions to allow unemployed people to study while still receiving benefit. Full-time students are not allowed to claim unemployment benefits, because it is not their first priority to find a job. Those who wish to study full-time should look elsewhere for support. The benefit regime— 56 this is an important distinction—should not become an alternative source of funds for education provision. That was a point made by the noble Earl, Lord Russell.
Of course I accept, as the noble Baroness. Lady David, said, that courses of study can help unemployed people to get back to work. That is why unemployed people are currently allowed to study part-time and to continue to claim benefit, provided that they remain available for and are actively seeking work. That will continue under JSA. But the current rules are becoming increasingly difficult to administer.
§ Baroness David
My Lords, perhaps I may ask the Minister a question. Will they he allowed to continue their course if they are being asked to do an unqualified job, which is something that will interrupt their training and not he worthy of them?
§ Lord Inglewood
My Lords, the noble Baroness's question is a hypothetical one. The crucial point here is that the way further education is going, as I understand it, means that there is frequently considerable flexibility in how the learning is presented. We understand that in many cases it is possible, if there appears to be a clash, to find a mutually satisfactory outcome by negotiation.
As I said, the current rules are becoming increasingly difficult to administer, and we have faced calls from all sides for greater clarity in the arrangements. That is what we shall achieve with the JSA. People claiming JSA will be able to enrol on FEFC-funded courses of up to 16 guided-learning hours per week. There will be no such change in higher education, where the full-time/part-time distinction is still recognised, and will continue. There will he no restriction on private study, provided that people remain available for work. I hope that that confirms the point raised by the noble Baroness, Lady David.
The debates over those changes, especially in earlier stages of the Bill in another place, have been characterised by misunderstanding, so let me make it clear: this is not an exercise in cutting provision. The same number of unemployed people (about 80,000) will be studying and claiming benefit. On the contrary, it introduces a clear and workable regime, and should he welcomed as such.
The noble Earl, Lord Russell, and the noble Lord, Lord Henderson, expressed concern at the use in the Bill of delegated powers. The House takes very seriously its responsibilities for scrutinising the use of delegated legislation, and it is right to do so. But I think that it will by now have become clear to your Lordships that the Bill deals with extremely complex and detailed issues—issues which it would he inappropriate to draw into primary legislation.
It has long been recognised that the nuts and bolts of social security rules should be issues for regulation and not primary legislation. Social security legislation needs to he flexible to cope sensitively with changes in circumstances; with changes in operational requirements; with a labour market of many facets. That can best be done through secondary legislation.
The Select Committee on Delegated Powers will, I am sure, examine in great depth the Government's proposals for secondary legislation. We have given the 57 committee a very detailed account of the Government's policy and our reasons in each instance why we believe secondary legislation is an appropriate vehicle. Where our intentions still remain unclear from the face of the Bill we will of course explain our policy proposals in Committee.
Very many of the powers in the Bill carry across provisions in the 1992 Social Security Acts. As far as possible the Bill proposes the same procedures for control and scrutiny of delegated powers. It seems to the Government sensible to follow what Parliament has found satisfactory in the past. The Bill therefore ensures that all regulations made before the allowance is payable will be subject to affirmative resolution, I am sure that your Lordships will wish to consider the regulations when they are brought before you.
Pilots brought forward under the new power in the Bill to run pilots of regulations under JSA and the income-related benefits will also be subject to affirmative resolutions. I believe that it is right that your Lordships should be given the opportunity to examine and debate on each occasion the Government's proposals under that unprecedented power.
§ Earl Russell
My Lords, I am grateful to the Minister for what he has said about the opportunity to discuss. Will he tell us how the House can give or withhold its consent?
§ Lord Inglewood
My Lords, there is a convention on how those matters are dealt with. Let us see what the memorandum says, and then, if noble Lords wish to raise any different matters, that may be the appropriate moment to do so.
The Bill is a comprehensive, coherent and innovative measure, as my noble friend Lord Trefgame said. It is part of a wide-ranging reform of labour market and benefit measures. It is comprehensive because it does what no government of either party have attempted for 80 years. It creates a single system of support for unemployed people while they look for work. Where there have been two benefits, there will be one. One benefit with one set of rules means clarity and simplicity. It means better service for unemployed people.
The Bill is coherent because it is informed by an approach which the Government have applied with consistency and conviction. We have created a climate in which businesses can flourish and so create jobs. We have cut down on the kind of public spending which costs jobs. We have liberated enterprise and the ambition of individuals. We have promoted active labour market policies to increase the responsiveness of the workforce to changes in the world of work and to help people back into jobs.
We should not forget that recently the European Community pointed out that in our country it is no job rather than low pay which is at the root of poverty. The results are clear to see. Unemployment has fallen by over 600,000 over the past two years and is now lower than in all major EU countries.
As my noble friend Lord Dean of Harptree pointed out, the Bill is innovative in the incentives it introduces to encourage jobseeking and the take-up of work. In 58 doing so it creates real winners: the 150,000 winners who will benefit from the back-to-work bonus; the 120,000 winners who will be covered by the NICs holiday; the 200,000 extra people who can take advantage of employment on trial; those who will be guaranteed their existing rates of housing benefit and council tax benefit in the first weeks of starting a new job; those whose partners will now be able to work up to 24 hours without the work affecting the family's benefit.
Our proposals for jobseekers will help Britain to generate more jobs. They will help unemployed people to find work; they will strengthen Britain's economy and will give better value for taxpayers' money. They will be welcomed by those who want to sec a prosperous economy, the only source of all benefit payments, and who want to help unemployed people achieve their main goal: a job. I commend the measures to your Lordships and I invite the House to give the Bill a Second Reading.
§ On Question, Bill read a second time, and committed to a Committee of the Whole House.