HL Deb 13 November 1998 vol 594 cc933-43

1.11 p.m.

Lord Hunt of Kings Heath rose to move, That the draft regulations laid before the House on 29th October be approved [46th Report from the Joint Committee].

The noble Lord said: My Lords, in moving this Motion, I shall speak also to the Jobseeker's Allowance Amendment (New Deal) Regulations. Both relate to the help we will offer people aged 25 and over: one supports the pilots we wish to introduce later this month and the other will allow refugees to qualify earlier for the employment and training opportunities of the New Deal for those aged 25 and over which we introduced in June.

I shall deal first with the employment and training opportunities regulations. The amendments to the JSA regulations address a specific issue affecting refugees and those with exceptional leave to remain—a group who are in a unique position and for whom we want to do the right thing. The amendment regulations will ensure that people in that position do not miss out on opportunities available under New Deal for those aged 25 plus as a result of spending time on income support while their asylum application was determined. For refugees and those granted exceptional leave to remain in the country, periods on income support as an asylum seeker will be counted towards the two-year qualifying period for access to the New Deal 25 plus education and training opportunities.

I want now to focus on the pilot regulations. For over a year now the Government have been putting in place their welfare to work strategy. We are here today to debate regulations that will support another element of that strategy. At the end of this month we intend to introduce, in 28 parts of the mainland and across Northern Ireland, pilots which will help people aged 25 and over who have been unemployed for at least 12 or 18 months.

Those pilots build upon the New Deal which we introduced in June for people in this age group. We are running them to find new and effective ways in which to help people aged 25 and over back into work. Consequently, the pilots place a heavy emphasis on innovation and flexibility for the partnerships and organisations which are delivering them. We have also sought a diverse range of delivery arrangements: 10 of the 28 will be delivered by private sector organisations. The remainder will be delivered by the New Deal partnership set up to run our 18–24 programme. These range from partnerships led by the Employment Service, through joint ventures involving ES and other local organisations, to partnerships led by local authorities and TECs. We will be evaluating the impact of the various types of help at different stages of unemployment and across the whole range of labour markets and delivery models.

I believe that is a welcome extension to the help we offer people over 25, and one which will be of real benefit.

The pilots will include all those in the pilot areas who reach, or have at the point the pilot starts already passed, a certain threshold of unemployment. In nine pilots, those unemployed for 12 months or more will be included. In the other 21, those unemployed for 18 months or more will be targeted. We also want to measure the impact of offering help before the 12-or 18-month point to people who are at a special disadvantage in the labour market. In certain pilot areas, therefore, early entry will be possible for people in this position. The information we gather from these pilot areas about the demand for early entry will help us to make decisions about future provision.

The pilots will all follow a basic framework design which will encompass a gateway period, based on the lessons learned from the development of the 18–24 New Deal; a period of intensive activity to tackle barriers to work; and a follow-through period for those who have not found work by the end of the intensive activity. The pilots will begin with an initial gateway period, during which participants will attend a series of interviews with a personal adviser, who will give advice and help to identify the barriers a person may face to finding work.

Those who do not find work during the gateway will be required to attend an employment programme for 13 weeks, which will consist of individually-tailored help which could include work experience, job-specific training, and help into self-employment. During this time they will receive a grant of up to £200 paid over and above their JSA and other benefits. The pilots will emphasise the focus on the individual, and will provide help aimed at meeting individual needs. In return, people will be expected to participate actively in the help they are offered during this period. This Government believe it is important that people fulfil their responsibilities while claiming benefit, and that they are fully committed to and active in their jobsearch as a condition of them continuing to receive JSA. For those who do not find work during the period of intensive activity, or who do not stay in work for any length of time, there will be further help and advisory support.

A feature of those pilots is the focus on moving people back into work as early as possible. These are, after all, older jobseekers, most of whom will have experience behind them and some skills to offer. The aim should be to build on that experience and skill in order to return them to paid work as soon as possible. We also want to help people to stay in work, once they have found it. Too many people achieve the difficult task of getting a job after a prolonged period of unemployment, only to end up back on JSA again for lack of continuing support.

The pilots will, therefore, feature a continuous emphasis, throughout the gateway, the intensive activity and the follow-through period, on getting into work. Jobsearch activities will feature at all stages, and people will remain on JSA, with its labour market conditions. To help the move into work, we have lowered the eligibility threshold for the £75 per week employer's subsidy to cover all those in the pilots, whether unemployed for 12 or for 18 months. Follow-up support will be offered to those who do enter work, to maximise the chances that they will stay there.

We are encouraging partnerships and private sector organisations to propose adaptations, within the general objectives of the pilots, to this basic model, to take account of local circumstances and individual need. We have asked them also to consider innovative ways of using the employer subsidy.

The regulations I am proposing today support the pilots in four ways. First, they identify those people whom the regulations will cover, in accordance with the piloting powers in the Jobseekers Act. Secondly, they prescribe the employment programme so that it falls under Section 19 of the Jobseekers Act. That means that if, without good cause, a person refuses a place on the programme, fails to attend it, gives up his place or loses his place through misconduct, he or she may lose JSA for two weeks for his first offence or four weeks on second and subsequent occasions. However, the regulations ensure that individuals cannot lose benefit for leaving the pilot after they have completed 13 weeks on the employment programme. Individuals who are sanctioned retain the usual entitlement to apply for reduced payment on the grounds of hardship; that is, this right will, as usual, be available to those people who fall into the categories in Regulation 140. It includes people with children. People will also have the usual recourse to an appeals procedure.

Secondly, the regulations will ensure that the steps people take to become more employable and the financial support the pilots give them will not affect their entitlement to benefit. The JSA regulations already treat people as actively seeking work for any week in which they are participating for at least three days on an employment programme. I believe that during the pilots it is sensible that the other labour market conditions be applied in the same way.

We have made a similar provision within the regulations to treat a person as available while they are undertaking an employment-related course for at least three days as part of the employment programme. I hope noble Lords will welcome the measures which go some way to ensure that people do not lose entitlement to JSA and are left without financial support.

Finally, as I said before, participants in the intensive activity period will receive an additional top-up grant of up to £200 while on the employment programme. Participants may also receive payments to cover work clothing, fares, training or job search expenses incurred whilst on the employment programme. Regulations make provision to disregard all of those payments for the purpose of assessing their benefit. I believe that the pilots will offer the most effective ways of helping people back to work and I commend the regulations to the House. I beg to move.

Moved, That the draft regulations laid before the House on 29th October be approved [46th Report from the Joint Committee].—(Lord Hunt of Kings Heath.)

Lord Higgins

My Lords, the House is grateful to the Minister for explaining the two regulations and I agree that it is convenient to speak to them both together.

The regulations extend the jobseeker principle introduced by the last Conservative government; and if one can encourage employment in an efficient way, it is to be welcomed. However, I feel bound to point out that when the previous legislation in the last Parliament was going through the House, it was viciously attacked by Miss Angela Eagle who is now the Under-Secretary of State for Social Security. It will be interesting to know what comments she will make on these orders when they appear in another place.

In fact, the jobseeker principle was a success—so much so, that the Government were committed to introducing a plan to deal with the young unemployed; and by July 1997, when they got round to announcing their New Deal policy, only around 125,000 were still in that position. The department was also remarkably successful in hanging on to the money which the Chancellor had intended it should have for this purpose. It is now using it to extend the principle to the over-25s. Can the Minister tell us what proportion of the total budget—I believe it is £5 billion over the life of the Parliament—is to be spent on the under-25s and what proportion is expected to be spent on the over-25s?

Of course, the situation may change with the falling rate of growth which the Chancellor of the Exchequer is now envisaging. That may have important implications also for employment. In his pre-Budget Statement the Chancellor said, Already, 29,000 companies have signed up to the New Deal and 30,000 have found jobs with employers, jobs they would not have had without the New Deal". How does the Chancellor know that that is so? We need an answer to that because we cannot have the Chancellor of the Exchequer making these remarkable statements if there is no basis for them.

I turn to the first of the two sets of regulations, the ones concerned with refugees and those persons given exceptional leave to enter or remain in the United Kingdom on humanitarian grounds. It must be the case that it is beneficial if those who are granted asylum in this country are able to find jobs rather than being a burden on the taxpayer. We welcome that. But I should like to raise one point in that context. The regulations specifically refer to whether or not they are on income support. The period they are on income support counts towards the qualifying period. But a recent view expressed by various outside groups referred to the non-cash system of support for accommodation provided on a no-choice basis. Can the Minister say—I genuinely do not know the answer—whether those who are in the position of seeking asylum or have been granted permission to enter or stay are always on income support? It may be that they are supported in some way other than the narrow definition of "income support". If so, will they still qualify in the way the Government intend or what is the situation in that regard?

I am slightly surprised that the order was introduced, though its intention is clearly admirable. How many refugees and others are expected to be affected and what, if any, will the cost to the Exchequer be? One would have thought it was a relatively small number of people and clearly we need to obtain some idea of scale in relation to this specific order.

I turn to the second order relating to the Social Security (New Deal Pilot) Regulations. Although the jobseekers' system worked well, the reality is that the efficiency of the New Deal is open to question. Indeed, the pilot schemes previously introduced were extremely disappointing. Regardless of that, the Government have pressed ahead; for example, with regard to the New Deal for lone parents: so much so that it looks as though the Government now require, under the new "Gateway" system, compulsion from those who would not otherwise respond to invitations to go for an interview.

I must make one point at this stage. Over three decades or so I have seen a lot of statutory instruments, some better drafted than others. But this one is about the worst drafted one I have seen for a long time. Indeed, at one stage in the preamble the draftsman seems to resort to the wording used for the introduction of new Members into your Lordships' House. It reads, and of all other powers enabling each of them in that behalf". and so forth. It seems to be an extremely desperate form of drafting. But what is clear is that it is intended to be an experiment and perhaps the Minister can tell us what criteria are to be used for determining whether or not the experiment has been a success and whether it should be continued and extended beyond the various areas specified in Schedule 1.

Having said all that, I hope that we obtain answers to my questions. Up till now the experiments have not been successful and if we are to engage in a further extension of the scheme, it is important to have some idea of the basis on which we will determine whether or not to go ahead with what is in fact, as a means of encouraging employment, on the face of it a very inefficient way of dealing with the problem. Other than that my points were largely technical.

Can the Minister say whether there is to be a leaflet produced for those affected by this scheme which will explain to them, in words other than those employed in the statutory instrument, what the situation will be in regard to them applying for arrangements under the regulations?

1.30 p.m.

Earl Russell

My Lords, I should like to thank the Minister for the elegant way he introduced these regulations and for reminding us that Dr. Pangloss is alive and well and living in Whitehall. I should like to associate myself with two of the questions posed by the noble Lord, Lord Higgins. The first concerns the people who have found new jobs because of welfare-to-work. Can the Minister tell us how the Chancellor of the Exchequer knows about that? The second concerns asylum seekers whose eligibility depends on receipt of income support, which is about to be taken away. I cannot help wondering whether no one had programmed the office computer with forthcoming changes. Indeed, these things have been known to happen.

I sympathise with the noble Lord, Lord Higgins, as regards the drafting, but I have seen worse. Fortunately, I have been very expertly advised on these regulations. Perhaps I may draw attention to one point in the drafting as regards Regulation 1(2) of the New Deal regulations which says: These Regulations shall cease to have effect on 29th November 1999, unless revoked with effect from an earlier date". First, that is an example of the redundant words so regularly deplored by the noble and learned Lord, Lord Simon of Glaisdale. The Secretary of State can always revoke regulations whenever he feels like it. Secondly, it indicates a more than usual awareness of the uncertainty principle of politics. When the Minister replies, perhaps he could give us some indication of why the uncertainty in this area is so intense.

I am afraid that I have some moderately far-reaching questions about the regulations. On 4th November, the Department for Education and Employment said that in extending the New Deal to over 25s, we will be insisting on the same high quality standards and monitoring as we have been for the New Deal for the young unemployed". When he considers that question carefully, I wonder whether the Minister might think that those words have been just a little economical with the truth. This relates to two points. One is the use of sanctions and the other is the issue of the quality.

We should look, first, at exactly what the manifesto said about sanctions. Those words apply to the under-25s and the under-25s alone. The exact words of the manifesto were: Rights and responsibilities must go hand in hand, without a fifth option of life on full benefit". There is a very significant difference between those words and the words of Tony Blair's Amsterdam speech of February 1997. Tony Blair's words were: There is no option of a life on benefit". That was changed in the manifesto to the words, a life on full benefit". During the election, I remembered doing a radio interview on a particularly obscure radio station. I sat opposite Mr. Chris Smith who was then Opposition spokesman on social security. I said to him that I would love to be a fly on the wall at the moment when that drafting amendment was agreed. Of course, he treated that as an off-the-wall comment, as, indeed, he would. I also said that I had some interest in the question of whether the wording of Mr. Tony Blair or that of the manifesto would be applied.

It turns out in fact to be the wording of the Amsterdam speech and not the wording of the manifesto on which the Government have consistently acted. I say that because total disentitlement to benefit is not sanctioned by the manifesto, although Ministers consistently confuse the two—most notably in Mr. Donald Dewar's recent reply to the objection to compulsion in the report of the Scottish Select Committee. Mr. Andrew Smith, again on 4th November, said in a DfEE news bulletin: Unwarranted refusal will lead to loss of benefits". It is not quite as clear an example of confusion as that from Mr. Dewar, but it is very definitely in the same ministerial family.

In the light of that question, I should like the Minister to clarify the following points. First, what is the relationship to the manifesto of the extension of sanctions to the over-25s; and, secondly, are these sanctions for the over-25s total or partial? If they are partial, can the noble say in which proportions?

This must have been a fairly recent change of outlook. If we look at the Secretary of State's Answer to my honourable friend Mr. Keetch during Question Time on 9th July, it will be seen that he said: Attending for interview is compulsory, but taking one of the options available … is not".—[Official Report, Commons, 9/7/98; col. 1223.] Can the Minister tell us when the Secretary of State changed his mind between 9th July and today, and what reasons led him to make that change? This is a matter of some legitimate interest. I believe that the difference between those words is particularly clear.

The issue of quality depends largely on the question of cost. I will accept what the noble Baroness, Lady Hayman, told me during the debate on the Statement on the Utting report. It was said in a slightly different context, but the point is the same. She said that the relationship between cost and quality is not exactly a constant. However, the fact that there is such a relationship is, I hope, something that the Minister will not consider denying.

For the 18-to-24 age group the average cost of the employment option is £2,000 per person. For the other three categories, the average cost of those options is £4,000 per person. However, in the specification document for the pilots as regards this option for the over-25s the average cost is £1,300 per person. It may be possible, by a quite remarkable exercise of what Whitehall misleadingly describes as efficiency, for quality to be kept up even with that dramatic reduction in costs. But if that is possible, it would need a rather good explanation. I look forward to hearing the Minister provide it.

There is also a question about the length of time for which training is available. As far as I can understand—I believe the Minister's mention of 13 weeks probably tended to confirm my view—there is no guarantee of training being available beyond 13 weeks. Indeed, we have been advised that training may under this option last as little as one day. I very much hope that the Minister can assure me that that is a mistaken view.

The Minister also talked about learning lessons from the welfare-to-work projects applied to the 18-to-24 age group. That is well worth considering. We were told that the gateway should not last beyond four months, yet 20 per cent. of those on the under-25s pilots who went into the gateway in January were still there in August. As anyone who drives around London will know, gateways tend to involve traffic jams.

There is also a good deal of thought to be given to the question of sanctions. Here again I refer to the DfEE news bulletin of 4th November which has some points to make in that respect. It makes mention of the categories of sanction and this information comes again from Mr. Smith. The categories were listed as follows: Failure to attend an adviser interview—623; Failing to take up a New Deal Option—112; Refusal to take up employment—45; Leaving employment voluntarily—237; Failure to attend an employment programme—82; [and] Number of other reasons, including failure to attend training—253". Mr. Andrew Smith describes the latter straightforwardly as "abusing the system". I would not for a moment dispute that some of those are leaving the system. However, let us take just one example: the case of voluntarily leaving employment. There have been cases of people found guilty of voluntarily leaving employment in situations where I believe that either the Minister or I—and I believe that both of us are honourable people—would have done the same. Take, for example, a case in Cheshire of a man aged 60 suffering from severe angina whose work involved the lifting of heavy packing cases. He was advised by medical personnel that he could not expect to live if he remained in that job. He left it. He was found guilty of voluntary unemployment and deprived of benefit—as the noble Baroness, Lady Hollis of Heigham, so memorably stressed in the previous parliament—before appeal.

If the Government are learning the lessons of these pilots, I hope they will consider the effect of disentitling people to benefit—possibly mistakenly—before appeal. I ask the Minister the question I asked the previous government; namely, why is it that a single, able-bodied person cannot be in hardship? Is it something to do with family values? That is a question to which I would like an answer, and perhaps a rather better answer than I received on a previous occasion. I would also like it explained how a person can be totally disentitled to benefit under any normal circumstances without being in hardship.

I leave the Minister with the following question. If the Government are dedicated to preventing social exclusion, will they give their mind to monitoring what happens to people who are disentitled to benefit in order that they can find out information to rebut the charge which I shall most certainly make; namely, that in dealing with social exclusion they are creating it with one hand while combating it with another?

Lord Hunt of Kings Heath

My Lords, a considerable number of questions have been asked during this debate. I shall do my best to answer them. First, I shall discuss the budget. The budget for the 18-to-24 years category is £3.115 billion. The June package for those aged 25 and over who have been unemployed for two years or more is £350 million. The budget for the pilots for those aged 25 and over is £126 million. As regards the pilots for those aged 25 and over, we expect to cover about 90,000 people. The 18-to-24 programme covers not only those 18 to 24 year-olds who are unemployed now but also all those who will cross the six-month threshold during this Parliament.

The noble Lord, Lord Higgins, referred to the 30,000 young people who had found jobs by the end of September. It is unwise to jump to too many conclusions about new jobs. What is clear is that we shall build up a more statistically robust picture by the New Year as we begin to start comparing different cohorts. Our aim is to consider openly and carefully all the data we are gathering to see what lessons can be learnt from them.

Lord Higgins

My Lords, as regards jumping to a conclusion, the Minister said that these people obtained these jobs and that they would not have done so without the New Deal.

Lord Hunt of Kings Heath

My Lords, there is no question that the New Deal has given much support to young people, many of whom would not have been in a position to find jobs without that support.

Lord Higgins

My Lords, that does not answer the question.

Lord Hunt of Kings Heath

My Lords, that is the best that—

Earl Russell

My Lords, can the Minister tell us of a case where the New Deal has created a single job?

Lord Hunt of Kings Heath

My Lords, the New Deal is giving support to young people to enable them to enter work. It has done a considerable amount to help those people find work. That surely is the benefit of the New Deal. We are considering openly the results so far of the New Deal programme so that we can learn from the data and develop programmes in the future.

Earl Russell

My Lords, I thank the Minister for those comments. What he says is clearly true, but is he not saying that jobs have gone to one young person rather than to another young person?

Lord Hunt of Kings Heath

My Lords, I am not sure whether one can draw that conclusion. I am absolutely convinced, however, that by developing the New Deal we have been able to support people who ordinarily would have found it extremely difficult to obtain work. I think the scheme has proved to be successful.

I was asked about the validity of evaluation arrangements. We chose the pilot areas on the quality of their proposals, but the competition was arranged so as to produce a range of labour markets, a geographical spread and a variety of delivery arrangements. The broad objectives of evaluation are to measure the cost-effectiveness of the approaches tested in the pilot in getting people into work and keeping them there across a range of labour markets and a range of delivery models. The objective is to measure the costs and benefits of intervening at the 12-month stage of unemployment and at the 18-month point.

We seek to measure the effectiveness of the approach in helping those aged 50 and over, and to test the response to opportunities for early entry for those groups who have been identified as facing particular barriers to employment. We shall monitor control groups in three different ways. We shall compare the pilot areas to the rest of the country as a whole and monitor a set of closely matching areas geographically separate from the pilot areas. In some pilots we shall also create control groups from half the jobcentres within an area, say Birmingham, while the other half of the jobcentres are in the pilots. Random assignment will be used in which participants are assigned in equal parts to either the pilot or the control group by a process designed to be random and therefore without bias. I was asked about information in relation to publicity. I can assure noble Lords that a range of publicity and written notice of any requirements will be made available.

As regards asylum seekers and income support, asylum seekers are not generally allowed to claim jobseeker's allowance when they first arrive in Britain and must wait for a minimum of six months before they can be given permission to work. During this period they may claim income support, with the exception of in-country asylum seekers. When permission to work is granted, they can choose whether to claim jobseeker's allowance or income support. However, many choose to remain on income support as they are familiar with this benefit. Once they have been given refugee status they no longer have the option of claiming income support unless they satisfy one of the other conditions of entitlement, for example, because they are a lone parent or they suffer from a disability. Many former asylum seekers therefore end up claiming JSA for the first time only when refugee status is granted or they are given exceptional leave to remain in the country. At present the period in receipt of income support as an asylum seeker cannot count towards the two-year qualifying period for the New Deal education and training opportunities. I was asked about sanctions.

Lord Higgins

My Lords, I am sorry to interrupt but this is not perhaps an unimportant point. I did not perhaps put my question as clearly as I should. I understand that if an asylum seeker is on income support the period he is on income support is now to be part of the qualifying period. What I am not clear about is whether some asylum seekers who are not on income support but are supported in other ways—for example, they are given accommodation or other support by the Government—would now also qualify. The drafting of the measure is erratic, but should not that point have been covered?

Lord Hunt of Kings Heath

My Lords, I shall write to the noble Lord with more details on that point. There are no plans to extend the eligibility criteria to those asylum seekers supported other than through income support. New Deal eligibility is based on periods in receipt of benefits.

I shall now discuss sanctions. The Government have made no secret of their belief that people who claim jobseeker's allowance have an obligation to make every effort to find work. This mirrors an obligation on the part of the Government to provide high quality and relevant help to overcome the barriers which prevent those people from getting a job. These pilots are part of our strategy to fulfil our part of the bargain. I think we are entitled to ask unemployed people to fulfil theirs.

The approach within these pilots is in line with the approach taken in the 18-to-24 New Deal where we have made clear that there is to be no fifth option of life on benefit without making efforts to find work. The evidence of the I 8-to-24 New Deal is that we will not see huge numbers of people sanctioned unnecessarily. The purpose of sanction is to encourage participation in the programme and a return to work. Decisions will, of course, be made by adjudication officers on the evidence provided and people will have the right to appeal.

The issue of blockage in the gateway was raised. At the end of August, seven months after the New Deal started, 20 per cent. of those starting in January are still in the gateway, which, of course, was supposed to be for only four months. There are various reasons for that. Some, about a third, can be explained by simple lags in catching up with young people who have moved on. In another third of cases the young people are properly still in the gateway because they have left the New Deal—

Earl Russell

My Lords, I wonder whether the Government will publish their planning assumptions. That might enable us to discuss this matter rather more clearly.

Lord Hunt of Kings Heath

My Lords, I shall be happy to find what information is available and send it to the noble Earl.

There is no doubt that some young people are waiting for the start of their courses on the full-time training and education option. From management information available, there is a big increase in the numbers of young people joining this option in September. Some young people left the New Deal and re-joined the gateway some time later. Some have had periods of illness. We are keeping in touch with participants on an individual basis to ensure that they move into the appropriate options. We will monitor progress closely but I shall ensure that the noble Earl is informed of the information that is available.

The noble Earl also raised the issue of whether training is too short. We certainly anticipate that less training will be needed with this group. Many in this group already have extremely effective experience and skill, but we have the flexibility to give extended training in individual cases.

I began the debate by setting out the Government's reasons for bringing forward these regulations. First, we are keen to give people who have been on income support for some time as asylum seekers the chance, once they are granted leave to remain, to get into work and become financially independent. Secondly, we wish to introduce pilots which help us to develop our strategy for helping all unemployed people aged 25 or more to get back to work. I ask the House to approve the regulations and I commend them to the House.

On Question, Motion agreed to.