§ Mr. Nigel EvansTo ask the Secretary of State for Social Security when he expects to commission independent research into the earnings top-up pilot scheme. [20608]
§ Mr. BurtI have today awarded contracts to three research organisations—the Policy Studies Institute, the Institute for Employment Research and the Centre for Research in Social Policy. Over the next three years, these institutes will undertake a detailed programme of research to evaluate the effectiveness of the earnings top-up pilot.
Earnings top-up is a new step in the Government's programme to strengthen incentives to work. The challenge is to discover whether topping up wages for
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Table 1: The Average Incomes of Pensioners 1979–1993 (by quintile-quintile l=lowest)—(£ per week July 1993 prices) (a) Single pensioners Income source Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5 Total 1979 1993 1979 1993 1979 1993 1979 1993 1979 1993 1979 1993 Earnings1 0.40 0.00 0.10 0.10 0.40 0.30 3.80 2.10 25.40 24.50 6.00 5.40 Benefit income 51.70 60.80 60.10 73.10 63.00 84.70 62.50 83.20 56.70 84.80 58.80 77.30 Investment 2.10 4.10 2.20 5.10 2.40 4.90 7.00 13.30 33.40 69.10 9.40 19.30 Occupational 0.60 2.40 1.90 6.90 3.40 9.40 8.00 23.70 37.60 87.40 10.30 26.00 Other1 0.50 0.30 0.20 0.50 0.30 0.20 1.00 0.70 1.00 0.40 0.60 0.40 Gross income 55.30 67.60 64.40 85.70 69.40 99.60 82.40 123.10 154.10 266.10 85.00 128.40 Deductions 5.70 7.10 4.70 6.90 4.40 7.30 7.40 11.50 29.90 50.10 10.40 16.60 workers without dependent children helps them to get jobs and stay in work. Family credit tackles this issue already for families with children, helping over 600,000 families.
The research programme lasts three years. It starts this year—before earnings top-up is introduced—to set a baseline against which progress can be measured. It then continues the investigation in succeeding years to assess the impact of earnings top-up, comparing the pilot areas to the four control areas.
The Policy Studies Institute will survey over 30,000 employers, workers and unemployed people, to look at the changing circumstances of people including movement into or out of work, and the wages they receive.
The Institute of Employment Research will look at how earnings top-up affects local labour markets, that is, at changes in the rates of employment, unemployment, and any effect on local wage levels.
The Centre for Research in Social Policy will carry out more in-depth interviews with people receiving earnings top-up, those in low-paid work not receiving it, and employers. This will build up a detailed picture of reactions and attitudes to the pilot benefit.
This £3 million research project is the largest the Department of Social Security has ever undertaken but it represents excellent value for money. To extend earnings top-up immediately to all low-paid people without dependent children would be a large investment, of the order of £500 million. We are taking the prudent course of testing its effectiveness first on a smaller scale.
At the end of the three years, we expect to have the information we need to decide whether earnings top-up is of value in helping people to move into work and to avoid unemployment.
I shall, in due course, be placing further details of the research programme in the Library.