HL Deb 24 November 2000 vol 619 cc1076-85

11.39 a.m.

Lord Davies of Oldham rose to move, That the draft regulations laid before the House on 28th July be approved [28th Report from the Joint Committee].

The noble Lord said: My Lords, it may be for the convenience of the House if we also debate the second Motion standing in my name. I shall therefore speak to that second Motion during the course of this speech.

Perhaps I may remind the House of the con text of the jobseeker's allowance regulations. Provisions for joint claims for jobseeker's allowance are contained in the Welfare Reform and Pensions Act 1999. Joint claims for jobseeker's allowance will apply to couples without dependent children where at least one member of the couple was born after 19th March 1976. Both members of the couple will be required to meet jobseeker's allowance conditions and to be available for and actively seeking work. Each will receive help to obtain work and will be directed to training programmes or New Deal assistance as appropriate.

Joint claims for jobseeker's allowance will involve both partners directly in the labour market, preventing them adjusting to benefit dependency at an early age when they are in a position to find and take work. The House had an opportunity to debate these provisions during the passage of the Bill last year and that went through unopposed.

Our aim is to ensure that joint claimants of jobseeker's allowance will be treated, as far as possible, in the same way as single claimants are treated currently. The changes introduced by the regulations will give joint claimants the same favourable rights as single claimants regarding the labour market conditions for receiving jobseeker's allowance. They provide that joint claimants are treated as available for and actively seeking employment for the short periods of temporary absence from Great Britain as described. If the regulations were not approved, we should penalise joint claimants. If approved, the regulations will come into force on 19th March 2001, when joint claims for jobseeker's allowance will be introduced.

I turn now to the Social Security (New Deal Pilot) Regulations 2000. These relate to the New Deal 25 plus pilots. These pilots are part of our efforts to tackle long-term unemployment. They have been operating in 28 areas of Great Britain since November 1998, and are testing a variety of innovative ways of helping unemployed people into work. The majority are aimed at those who have been unemployed for 18 months or more; the rest are aimed at those who have been unemployed for 12 months or more. The participants in these pilots face a variety of barriers to work, including lack of recent work experience, lack of relevant skills and lack of confidence. The pilots provide individually-tailored help which identifies and then addresses these barriers.

I am pleased to be able to report that the pilots are proving to be a success. They have confirmed that the New Deal model of a "gateway", and a period of intensive full-time help works—over 16,000 people have already been helped into work. Independent research on the New Deal for young people has shown that, as a direct result of the programme, unemployment is lower and employment is higher. The research also suggests that the programme substantially pays for itself.

The results from the pilot schemes are also encouraging. Independent research has found early pilot effects of higher movement into jobs and out of unemployment. This confirms our own analysis, which suggests that the proportion of people leaving for work is 50 per cent higher in the pilots targeted at people unemployed for 18 months or more than in the control areas outside the pilots.

On the basis of this evidence, we have already announced that an enhanced scheme, New Deal 25 plus, will be introduced across the country in April 2001. The new programme is being designed to reflect the lessons from the pilots—we are retaining flexibility; ensuring that a range of help is always available; and investing more in advisers to enable them to provide continued effective support.

The pilots continue to be a useful source of evidence about how such a programme should operate; we therefore want them to continue until the new programme is introduced. The regulations before the House renew the pilot powers which already exist and which, under the provisions of the Jobseekers Act, can only be in force for 12 months at a time. They enable the pilot schemes to continue to take people in until the end of March 2001, after which the new national programme will be introduced.

The regulations prescribe the categories of people who will be required to participate in the New Deal pilots and the impact on their benefit of not participating, and they ensure that payments that they may receive as part of the pilot, including self-employed earnings, will not affect their benefit. The only substantive change is that the regulations now define the date on which the last participant will join. Technical changes reflect the introduction of joint claims, and the fact that some people will be entering the pilots for a second time.

In summary, the pilots have proved successful. They have provided us with valuable evidence to inform the development of a new national programme aimed at helping long-term unemployed adults into work. The regulations ensure that the pilots can continue until the national programme is introduced.

I hope that my explanation of the contents and import of the two sets of regulations has helped the House. They underpin important elements of the Government's ambitious and innovative welfare-to-work strategy. I commend them to the House. I beg to move.

Moved, That the draft regulations laid before the House on 28th July be approved [28th Report from the Joint committee].—(Lord Davies of Oldham.)

11.45 a.m.

Lord Goodhart

My Lords. I understand that this is the first occasion on which the noble Lord, Lord Davies of Oldham, has played a substantive role on the Front Bench. I should like to congratulate him on his appointment and give him all good wishes for his future on the Front Bench.

We are entirely happy with the first set of regulations—with one exception; namely, footnote (e), where the reference to the Jobseeker's Allowance Regulations 1996 is given as "S.I. 1998/207", which caused me considerable difficulty when attempting to call up the regulations on my computer!

We are somewhat less happy with some aspects of the second set of regulations, relating to the New Deal pilot schemes. Last year, when the equivalent provisions were moved, which will expire on 28th November, my noble friend Lord Russell moved an amendment to the Motion for their approval. It called for an undertaking from Her Majesty's Government to include a study of the outcomes for those deprived of benefit under Regulation 6, which imposes deprivation of benefit on those who fail to complete their programmes under the pilots. My noble friend asked for the study to include information as to the means of support relied on by such people and the proportion of those who, six months later, were employed, unemployed, in hospital or in prison, and how those outcomes compared with those whose rights were not taken away from them under Regulation 6. In response, the noble Baroness, Lady Blackstone, who moved the equivalent regulations last year, said: The evaluation strategy which we already have in place for the New Deal, including the pilot schemes, will enable us to explore what happens to those who have been subject to benefit sanctions, through both surveys and one-to-one interviews. I hope that that provides the noble Earl with some reassurance. The evaluation will be able to examine all the comparisons he suggests. If the noble Earl would find it useful, I should be happy to write to him giving further precise details of our evaluation plans".—[Official Report, 29/10/99: col. 546.] My noble friend accepted the offer to be supplied with this further information; and, indeed, some information was sent to him. However, that information was virtually useless and, he tells me, did not answer his questions.

I refer the Minister to Hansard of 22nd May on the debate on the Child Support, Pensions and Social Security Bill. That legislation raised a similar issue concerning those people who had been deprived of benefit for failing to comply with a community order. My noble friend explained why that information was useless as regards answering the questions that he had asked.

This is vital information. In some cases, no doubt, a jobseeker's failure to participate in an employment programme will have been due to the fact that he was already employed in the black economy and was making a fraudulent claim for jobseeker's allowance. But in other cases the failure will be due to the fact that the jobseeker is an inadequate or badly-organised individual who cannot help himself or someone who drops out of the programme because of bullying, racism or stress. We need to know how many of these cases were fraudulent, how many were unfortunate and what the effect is on the latter. I hope that the Minister can assure us that more and better research will be carried out on the issue. We have not tabled an amendment to the Motion on this occasion but we are still looking for the answers.

There are some other questions that need to be raised. The Minister said that the pilot schemes had proved to be a success, but we should like to know when we shall actually get a full statistical report on the impact of the schemes so that we can form our own views on whether or not they have been a success. In the first year of the pilot schemes there was an enormous underspend. I should like to know whether there has been an underspend for this year; and, if so, what it has been.

There are other wider issues of concern relating to the New Deal programme which I should like to mention briefly. In particular, there is the question of how many under-25s go into full-time education and training and how many leave before completion of such courses. The figures for 1999 were horrifying. Can the Minister tell us whether the figures for 2000 are any better? I do not expect him to answer that question on his feet because I recognise that it is outside the direct impact of the regulations. However, we should very much welcome an indication of the actual figures in so far as they are provisional, and perhaps the Minister can tell us when we can expect to receive final figures. The figures for 1999 for the FTET programme were so horrifying as to raise a question whether this was a sensible use of public money or whether the whole of that programme should be scrapped. We are anxious to know whether the outcome in the year 2000 has been significantly better.

Baroness Miller of Hendon

My Lords, I, too, should like to congratulate the noble Lord, Lord Davies of Oldham, on his promotion to the Government Front Bench. I should like to welcome him to his new role. I hope that he enjoys it very much but not for too long on the Government Front Bench; just on the Front Bench of his party. I am also grateful to the noble Lord for the clear way that he introduced these two regulations and for the fact that they were introduced together. That makes the process much simpler and, I believe, much quicker. In return I should like to assure noble Lords that I shall be as brief as possible because these regulations were examined in much detail in Standing Committee in the other place. I know that many probing questions were put by my honourable friend the Member for Altrincham and Sale West.

The New Deal pilot regulations are of greater substance. Therefore, despite the fact that the Minister dealt with them the other way round, I should prefer to deal first with them. The concept of changing the old unemployment allowance—the dole—to the higher-sounding "jobseeker's allowance" is paved with very good intentions. However, what it really did, apart from changing the name, was to introduce more stringent conditions on the claimant for unemployment pay. In some parts of America they have what they call workfare—in other words, "Take such and such a job or you'll lose your benefit". We certainly agree with the objective of the introduction of stricter qualifications for the receipt of unemployment pay, to use a neutral term. That is why, when in government, we introduced the Jobseekers Act 1995, against, as I am sure the Minister will not mind me saying, opposition from the Labour Party at that time.

The Act under which the Government are now making the present regulations is that very Act. The qualifications are essentially that the claimant should be actively undergoing training or seeking work and should be available to do it if suitable work can be found. Indeed, that has always been the case, but what the jobseeker's regulations seek to do is to create a more specific definition of actively seeking work.

On 2nd July 1997, exactly two months into the present Government, the Secretary of State for Education and Employment said: Staying at home and doing nothing is not an option". On 5th January 1998, six months on, the Chancellor of the Exchequer said: From today there will be no option of simply slaying at home on full benefit doing nothing". But how much progress has there been in achieving these fine aims?

The Minister with the title that contains a full job description, the Minister for Employment, Welfare to Work and Equal Opportunities, told the committee in the other place that 16,000 people have been helped back to work. I believe that to be exactly the same number as the Minister gave us today. He also said that it had increased employment and decreased unemployment among young people. But what is the cost? By April, which is the last date for which I have figures, 60,000 people had been through the over-25year-old pilots. The Minister in the other place claimed that 16,000 had found jobs lasting more than 13 weeks.

However, according to this month's Labour Trends, 69 per cent of those people would have found jobs anyway or were substitutions for existing workers for whom there was no state subsidy paid to employers. Therefore, on the basis of the Minister's claim of 16,000 going into employment via the New Deal, that is to say that 11,000 would have found jobs in any event. Deducting these from the figure of 16,000, we find, on the basis of the authoritative survey that I have just quoted, that only 4,960 new jobs were created. Of course, that is not a figure to be sneezed at.

The Minster said that the cost involved was £64 million. On the basis of 4,960 jobs, each job would have cost £12,900. The Government may well argue that this is a price well worth paying both in terms of the welfare of the extra people who have found work and the benefit to the Treasury in terms of less benefits paid out and in many cases income tax and national insurance contributions received. But the jobseeker's allowance does not create jobs. What it can do is to create incentives or impose sanctions to ensure that claimants take up any jobs that are out there waiting to be filled. It is here that I believe the Government have failed to live up to the lofty aspirations set out in the two ministerial pronouncements that I quoted earlier.

Indeed, there was a third pronouncement by the Secretary of State only last June, when he said: We are determined that under the New Deal, there is no 5th option". In a written reply to my honourable friend on 6th November, the Minister told him that, of the 60,000 people who had joined the over-25 pilots, 2,222 had been subjected to sanctions that is, 3.7 per cent. The vast majority, 1,750, had been sanctioned for failure to attend. It is reasonable to surmise that a high proportion of those were people who may have already been in employment but who were nevertheless claiming benefit and had been trapped by the scheme. That is a useful spin-off but it does nothing to increase the potential of the scheme to get more people into work. The question is: why have sanctions not been extended nationally? I hope that the Minister will be able to tell us when they will be and, now that we have had the benefit of the experience of the pilot schemes, what the reason is for the hold-up.

I mention another problem. In the course of the debate in committee in the other place my honourable friend asked what sanctions applied to someone who was removed from a scheme through misconduct. The Minister was unable to answer at first until she received in the course of speaking what she later described as "clarification" from her officials. I am sure that she used the word "clarification" with a sense of irony. According to her, the answer is to be found by the use of the word "and" at the end of regulation 10(1)(a).

I take a few moments to read a shortened version of that regulation: An income-based jobseeker's allowance … shall be payable to a person … even though section 19 of the Act prevents payment … to him if⁁ (a) an allowance would not otherwise be payable because the circumstances in section 19(5)(c) of the Act apply". That section deals with wilful default. I resume my quotation with the Minister's magic word "and". The regulation further states: and he has already participated in that same intensive activity period … for … 13 weeks". What does all that mean? A claimant can be sanctioned for misconduct unless he has already gone through the same option. In other words, as I understand it, if he has taken a job for 13 weeks, he cannot then be sanctioned if he leaves that job or is dismissed for misconduct and declines to take another. I very much hope that I am wrong, but perhaps the Minister will obtain clarification on that.

As the noble Lord has had a longer time than his colleague to be briefed, will he please tell us in simple terms whether a person who declines to co-operate with the scheme can be protected from any sanctions to any extent in face of the clear and unambiguous wording of Section 19(5) of the Act which states that he shall be sanctioned by the loss of benefit? Can a claimant continue to receive benefit even though his unemployment is due to continuous misconduct? A simple yes or no answer would be sufficient if the Minister is able to obtain one from his officials. If the answer is yes, why are the Government turning the intention of the Act on its head by these regulations?

I must return to the figure of 60,000 persons claimed by the Government to have participated in this programme. It is acknowledged by the department that some people have participated in more than one option of the scheme, for example, they have gone on a training scheme and then have taken a job. Will the Minister confirm that there is no element of double counting here—I should be grateful to hear that—and that the Government are talking about 60,000 different people and are not including x thousands who have gone through a kind of revolving door?

The only substantive change introduced by the two regulations we are discussing is the new regulation dealing with joint claims. The Minister told the committee in the other place that this would affect only a small proportion of partners and is technical in nature. I believe that the noble Lord said more or less the same thing. I certainly accept therefore that that is the case.

The new pilot regulations are by way of a continuation of the existing scheme and are, we trust, a preparation for the extension of the scheme nationwide. We on this side of the House will keep the effect of those regulations under continuing scrutiny. We trust that the Government, without any prompting from us, will also keep them under review to ensure that they are genuinely effective in getting people to work, as distinct from providing the Government with another spinning platform.

The Earl of Mar and Kellie

My Lords, I have a simple question for the Minister. He used the words "Great Britain". I wonder whether that was a slip of the tongue and he meant to say the United Kingdom, or does this legislation not apply in Northern Ireland?

Lord Davies of Oldham

My Lords, first, I thank the noble Lord, Lord Goodhart, and the noble Baroness, Lady Miller of Hendon, for their kind comments. I am sure that I shall enjoy my new role for as long as I have it. I am aware of the fact that many people have some influence over that, not least the electorate in the not too distant future, although we in this House are not, of course, directly elected. I appreciate the sentiments that have been expressed. I shall certainly enjoy debating these issues with the noble Lords who have spoken today.

I apologise to the noble Lord, Lord Goodhart. I am not directly responsible for the website or the computer that malfunctioned in terms of sending information to him. I regret that that occurred. I shall ensure that the department is aware of the fact that he was unable to obtain the information to which he was thoroughly entitled. I hope that we shall do better in that regard in the near future.

The noble Lord referred to evaluation of the schemes. They are, of course, pilot schemes and therefore detailed statistical analysis must obviously be limited. However, we published a report on 9th October. I understand from the noble Lord's remarks that that information was not as full as he would have wished. I think that he will, however, recognise that the evaluation of pilot studies is bound to be more limited than in the case of a full ongoing programme. I hope that the noble Lord has been able to discern from more recent statements that there is justification for the Government's view that the schemes have been successful.

The noble Lord is right to surmise that there is some underspend with regard to the programme. That amounts to £13 million. I notice that a former Chancellor of the Exchequer is present. Therefore I am mindful of the fact that it is important to be as accurate as possible with regard to the department's figures. However, the underspend in this area may be due to falling unemployment and the fact that fewer people are therefore eligible to attend the programme. It may be considered that in those circumstances the underspend is understandable and justified.

The noble Baroness said that the Secretary of State had emphasised that there should be no fifth option. I am sure that all noble Lords would agree that people have responsibilities as well as rights and that people who are well and able to work should avail themselves of the opportunities under the programme to prepare themselves more effectively for work.

The noble Lord, Lord Goodhart, referred to a particular category of people on the scheme who present real difficulty with regard to their consistent availability for work. I think that we all share those sentiments. As regards the long-term unemployed, many factors are involved, some of which need to be remedied in terms of improving their competence. However, some of them may relate to more obvious difficulties such as health and preparation, to which we should pay proper regard. I appreciated the noble Lord's comments on that point. I assure him that in evaluating the success of the schemes and the question of when sanctions should be invoked Ministers will ensure that schemes are designed to be fully sympathetic to difficulties which some people may experience. In those circumstances sanctions would be inappropriate and would not be applied.

The noble Baroness, Lady Miller, suggested that the figure of 16,000 beneficiaries of the scheme that I mentioned could be computed rather differently by estimating a percentage of people who might have found work anyway. That is a hypothetical judgment. Thanks to the more general success of the Government's economic policies, unemployment has fallen so far that our record is the envy of many other countries. However, the noble Baroness's computations led her to an extraordinarily precise figure of 4,960 people who would not otherwise have found work. That is a little on the low side. I recognise that our interpretation is bound to be open to dispute, but we can state categorically that 16,000 people are in work because of the effective operation of the system.

The noble Baroness and I are united on the general principles behind the order: that staying at home and making no attempt to make oneself available for work is necessarily to be deplored. Precise and effective government action was required to remedy that.

The noble Earl, Lord Mar and Kellie, referred to a slip of the tongue on my part. When I referred only to Great Britain, I was talking about the 28 pilots. There is a similar programme for Northern Ireland. The joint claims regulations are specifically for Great Britain. I am sure that the noble Earl knows that the New Deal scheme has a counterpart in Northern Ireland.

I listened carefully to the noble Baroness' comments on the interpretation of the details. I cannot pretend that I came to my new role with an enormous enlightenment on the details of the regulations. I struggled likewise to interpret them accurately and effectively. At least we have that in common. I assure her that sanctions are introduced when an individual has failed to comply with the requirements of the programme. She said that wilful misconduct would render an individual unacceptable to their employer, but that would bring the individual back into the scheme either for an effective presentation for the next position or for a sanction because the terms of the arrangement had been broken. We make no apology for that. We have emphasised all along that the right to benefit must be balanced against the obligation to be available for work and to conduct oneself appropriately when one has a job. I hasten to add that the counterpart to that is that anyone who enters work under the scheme also enjoys all the rights and protections that we expect all employees to have in relation to the conduct of their employer.

I hope that I have answered all the detailed points that have been raised. I apologise if I have failed in any respect, and I assure your Lordships that I shall reply in detail in writing as soon as possible. On the basis of the debate, I commend the regulations to the House.

On Question, Motion agreed to.