§ 11.47 p.m.
§ Baroness Hollis of Heigham rose to move, That the draft regulations laid before the House on 10th March be approved [12th Report from the Joint Committee].
§ The noble Baroness said: My Lords, the purpose of these regulations is to test two measures aimed at helping people with a disability or a long-term illness to try out work while remaining entitled to benefit payable on the grounds of incapacity.
§ These are the first regulations to be made using Section 77 of me Social Security Act 1998. This power allows beneficial changes to be made on a pilot basis which will give us the ability to test different measures to determine which are the most effective in helping people with a disability or long-term illness who wish to move towards the world of work. It allows us to learn from pilots what works and what does not and therefore offers us a learning loop which is denied us when we start out with the roll-out of the national scheme.
§ The regulations form part of a package of pilot changes which includes a £200 Jobfinders Grant and a £50 a week jobmatch payment—independent research suggested that those were two of the most effective measures in helping people back to work in terms of value for money. They were brought in using powers in me Employment and Training Act 1973.
§ Regulation 1 provides for the way in which the regulations are to be described and the period for which, subject to parliamentary approval, they are to have effect— namely, from April 1999 to April 2000—and interpretation of terms used in die regulations. I could describe what is meant by "pilot scheme", "pilot scheme period" or "pilot scheme area", but bearing in mind die lateness of the hour I shall not do so unless your Lordships request it.
§ Regulation 2 provides that the regulations will apply to people living in a pilot scheme who are receiving a benefit on grounds of incapacity from one of die pilot offices. Regulation 3 sets out the people to whom the regulations apply. Regulation 4 sets out die conditions for die first pilot we wish to test, the incapacity earnings provision. The current benefits system has been built on the principle that a person is entitled to benefit on the grounds of incapacity if they are, or are treated as, incapable of work. At die moment someone on incapacity benefit is not allowed to do any work at all unless it falls within one of die exceptional permitted work categories such as therapeutic earnings. This creates a considerable barrier to re-entering die labour market, making it a very big step for people to take up work. We want to test allowing people to do a small amount of work while receiving an incapacity benefit, so that they can take a more modest first step if they wish.
§ Under this pilot a person receiving an incapacity benefit will be able to do any work subject to a limit of £ 15 a week without losing benefit. The kind of situation we have in mind is where someone with a substantial learning difficulty may only want, or be able to work, two or three hours a week. As a result of this regulation such a person 1281 would be able to keep all of the earnings—unless he or she is paid extremely generously—up to £15 without it affecting their benefit. Whereas DWA rules kick in at, say, the 16-hour limit, we are talking about people who may be working for small periods of time and therefore for quite modest sums which nonetheless they will be allowed to keep under the £15 a week rule.
§ Regulation 5 provides for the second change to the benefit system that we wish to test. Under this proposal, a person will be able to undertake a work trial without losing benefit. Work trials are run under an existing Employment Service programme that allows employers to offer vacancies to clients on an unpaid basis for up to three weeks. This allows a client to see whether the job is suitable and allows the employer to evaluate the suitability of the jobseeker. During the trial the client remains on benefit and both they and the employer take part without obligation. Work trials are used for real, full-time vacancies where the job is expected to last at least six months. We know that there is a rather high success rate with these trials and that people are kept on.
§ Regulation 6 makes provision for people who, for whatever reason, move out of a pilot scheme area but who continue to do the work started under the pilot. In some cases it would have been unfair if they were forced to give up the work they had started. This regulation therefore allows for geographical mobility.
§ Regulation 7 provides that on expiry of these regulations a person can continue to benefit from the pilot measures for six more months. That allows for sensible planning of an end to the work if a person decides not to continue with it.
§ These two measures which I believe are entirely beneficial and which I believe will be widely welcomed are designed to give people claiming an incapacity benefit the opportunity to try out work without risking their position. We hope that for some people with a disability these measures will represent a real opportunity to take the first steps in moving from benefit into work. I hope your Lordships will support these regulations. I beg to move.
§ Moved, That the draft regulations laid before the House on 10th March be approved [12th Report from the Joint Committee]. —(Baroness Hollis of Heigham.)
§ Lord Higgins
My Lords, I have only one point to make as there is something I do not quite understand. As I understand it, the programme allows employers to offer vacancies to jobseekers on an unpaid basis for up to 15 working days. I say 15, but the noble Baroness mentioned three weeks, and I am not sure which is the correct figure. No doubt she will tell us.
§ Baroness Hollis of Heigham
My Lords, me technical language is 15 working days, but that is three times five which makes three weeks.
§ Lord Higgins
My Lords, given the weight of the programme we have this evening I shall not go into that. But be that as it may, I am slightly puzzled about the work on an unpaid basis for up to 15 working days. However, it also appears that the jobseeker remains on benefit during the work trial and both the employer and the jobseeker take part 1282 in it without obligation. It appears that the work trials are used for full-time vacancies of at least 16 hours where the job is expected to last six months. I am not clear what the relationship is—no doubt it is due to the lateness of the hour—between the 15 working days, or three weeks, on the one hand, and the idea that the jobseeker will have a job that lasts six months. No doubt the noble Baroness can explain that. Further, given that this is a niche market, I am not clear why this has to be full-time employment rather than part-time.
§ Lord Addington
My Lords, I briefly and humbly refer the noble Baroness to the points I made when I spoke to the wrong order.
§ Baroness Hollis of Heigham
My Lords, I had hoped that in my introduction to these regulations I had, to some extent, addressed the noble Lord's point. I accept the point I think he was seeking to make that £15 is a modest sum, but it is modest because it is parallel, for example, to the amount that a lone parent can retain if she is on income support and is working. There are perfectly decent and proper "reads across", but the group for whom we think it may be particularly appropriate are those working very short hours indeed—for instance, someone with severe learning difficulties who may nonetheless be working in a retail outlet, but supported. They will be able to keep that money, and it seems right that they should.
This brings me to the second point made by the noble Lord, Lord Higgins, who was baffled about the relationship between the 15 days and the work vacancy. This may have been because I was cutting corners when trying to explain the scheme, being mindful of the time. Basically, the work trial is not work experience but a trial in a real job. The trial means that for three weeks a person can do a real job and continue to receive benefit. At the end of the trial the client and the employer can decide whether they wish to continue the employment. To qualify for that three weeks, the job must be a real job in the sense that it is full time. By full time we mean over 16 hours; not necessarily 30 or 35 hours but the point at which family credit, working family tax credit or DWA would kick in.
Secondly, the job must be one that is not temporary; in other words, it must be a job that lasts at least six months so that, if the work trial is successful, the person will go into a real and worthwhile job. The definition of that real and worthwhile job is that it is full time—more than 16 hours— and it will last a minimum of six months. As I say, there appears to be an attractively high success rate as a result.
With a disabled person, for example, an employer may not be aware of the disabled person's capacity; in turn, the disabled person may not be fully aware of how much staying power, physical fitness or aptitude he may need for a particular job. It is a no risk, no obligation situation. In practice it has turned out to be very successful. Both parties come in and, as a result, a person goes on to gain a job. With that explanation I hope that your Lordships will accept the regulations.