HL Deb 10 January 1996 vol 568 cc126-8

3.14 p.m.

Lord McCarthy asked Her Majesty's Government:

What steps have been taken to implement the Workstart scheme and the one-year national insurance holiday, proposals to assist the long-term unemployed, set out in the Budget Statement of 29th November 1994.

The Minister of State, Department for Education and Employment (Lord Henley)

My Lords, draft regulations to introduce the national insurance holiday for employers were laid before both Houses on 12th December last year and, subject to parliamentary approval, this measure will start from April 1996.

The second group of Workstart pilots, which were announced in the 1994 Budget Statement, began in April this year and recruitment will end in March 1996. A full evaluation will be carried out. Workstart subsidies will also be available to those participating in the Project Work pilots in Medway and Maidstone, and Hull.

Lord McCarthy

My Lords, does the noble Lord agree that this is a remarkable change in government policy? In 1994 the Chancellor announced both those policies as a matter of urgency. Nothing has yet been done to implement either of them. The Government have received a study of the Workstart programme which indicates that six out of 10 of the people on that programme benefited from it. Therefore, for £2,340 we can save £5,700. As a result of that, surely the Government should introduce Workstart on a much wider scale than another pilot suggests.

Finally, what is the cost of the one-year holiday scheme? Will that cost £2,340, or less or more? How many people do the Government think will be covered by that scheme.

Lord Henley

My Lords, what the noble Lord states is nonsense. We have done a great deal. We have started and finished two of the pilots, as the noble Lord well knows, and evaluation of those two pilots has now taken place. Initially evaluation suggests, as the noble Lord was prepared to admit, that it had a positive effect on employers' willingness to recruit long-term unemployed people. Obviously we shall learn more from the second stage. That is the point of the pilots. That is why we pilot those programmes.

The national insurance contribution holiday took a little more time to be brought into effect because of the complications of the rules relating to national insurance contributions. However, as the noble Lord knows, it will come into effect subject to parliamentary approval in April of this year, as I made clear in my original Answer. It is designed to help around 130,000 people and will offer to business about £50 million in reduced labour costs.

Lord Clark of Kempston

My Lords, does my noble friend agree that whatever the success of the Workstart scheme it would be impaired if we were to subscribe to the social chapter or have a minimum wage?

Lord Henley

My Lords, I can assure my noble friend that we have no intention of subscribing to the social chapter or having a minimum wage.

The important point is that the schemes are pilots and not whether or not they are a success. They test out new, innovative approaches to dealing with the problems of the long-term unemployed. As a result of those tests, we hope to come forward with appropriate solutions to that problem.

Lord Barnett

My Lords, my noble friend the Leader of the Labour Party in the House of Lords was told yesterday that the Government do not believe that there is any way in which they can help to create jobs. Is not this scheme one way, or have the Government changed their policy since yesterday?

Lord Henley

My Lords, that is not what I said yesterday to the noble Lord the Leader of the Opposition. I said that it was not the business of the Government to create jobs. It is the business of the Government to create the right environment in which jobs can grow. It is not the aim of the schemes to create jobs. They are designed to help the long-term unemployed back into work. Because the long-term unemployed are more greatly divorced from the labour market, their problems are that much greater than those who are recently unemployed.

Lord Rochester

My Lords, aside from the two schemes to which the noble Lord, Lord McCarthy, referred, are the Government considering any other measures—for example, in the field of training—aimed at alleviating the plight of the long-term unemployed?

Lord Henley

My Lords, I could rattle off a whole list of different schemes in which the Department for Education and Employment has been engaged for a long time. Perhaps it would be best if I merely concentrate on the latest one which I also mentioned in my initial Answer. It is Project Work, a scheme designed again to help the long-term unemployed by a system whereby their benefits will be at risk if they do not take part in certain schemes. That will be available for those who are unemployed for over two years. That scheme will start as a pilot in Medway and Maidstone, and Hull, shortly.

Baroness Turner of Camden

My Lords, is the Minister aware that in areas in which there was once heavy industry long-term unemployment, in particular among males, is now a serious social problem? First, is anything specific being done for those areas in which long-term unemployment mostly among males is high?

Secondly, is the noble Lord aware that according to research undertaken on the pilot it appears that small employers have been mainly involved and concerned with Workstart schemes? Is anything being done to ensure that larger employers become more interested in these schemes?

Lord Henley

My Lords, we targeted some of the schemes at areas of the kind to which the noble Baroness referred. I can assure her that the latest two Workstart pilot schemes are targeted at the West Midlands, particularly the metropolitan area, Greater Manchester and Sheffield. Those areas fit into the category to which the noble Baroness referred. I shall look at the other point of whether the pilots are biased overmuch in favour of the smaller employer and are not reaching the larger employer. Obviously it would be right that, so far as possible, we should reach all employers.

Lord Dormand of Easington

My Lords, the Minister mentioned evaluation. Did not the IES survey carry out an evaluation of the pilot schemes in the summer of 1994? When are we to see the results of that evaluation? Are the schemes proving unsatisfactory? I am sure that the whole House would want to have that information. The scheme was primarily aimed at long-term unemployment. Is there any evidence at all at this stage that it is getting the long-term unemployed back to work?

Lord Henley

My Lords, the schemes have not reached quite as many people as we initially hoped. The evaluation certainly seems to suggest that as a result of the schemes employers have a willingness to take on the long-term unemployed. More important, there seems to be a willingness on the part of those employers to retain people at the end of the period, whatever it is. That is the important point. No good is served by merely taking people on for a certain length of time if the employers are then going to dismiss them at the end of that period. We find that there seems to be an intention by the employers to retain the employees.

Lord Dormand of Easington

My Lords, may I ask whether the evaluation has been published?

Lord Henley

My Lords, so far as I am aware it was published at the end of December 1994.

The Clerk of the Parliaments

The Lord Bruce of Donington.

Lord McCarthy

My Lords, may I just—

Noble Lords


Lord Strathclyde

My Lords, the Clerk of the Parliaments has already called the next Question. Perhaps in view of the time we ought to carry on with the fourth Question.