Fourth Standing Committee on Delegated Legislation
Monday 29 March 2004
[Mr. Jonathan Sayeed in the Chair]
Draft Jobseeker's Allowance (Amendment) Regulations 2004
4.30 pm
The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond): I beg to move,
That the Committee has considered the draft Jobseeker's Allowance (Amendment) Regulations 2004.
We are pleased to be serving under your chairmanship this afternoon, Mr. Sayeed, for what is an important, but probably not lengthy, debate. The context for our discussions emerged during the recent Budget statement in which the Chancellor reported that 1.8 million jobs have been created since 1997. That achievement, against a backdrop of stagnant or negative growth in other industrialised countries, is the result mainly of careful management of the economy and public finances. It is also testimony to the effect of our active labour market policies.
Despite the overall achievements of employment policy, there remains a group of people who cannot access the opportunities available and who are therefore consigned to a lower standard of living than would be the case if they were in work. The regulations are intended to reduce the number of jobseekers who reach long-term unemployment and increase labour market flexibility through the intensification of the jobseeker's allowance regime.
Jobcentre Plus provides individuals who are out of work and actively seeking employment with the advice and support that they need to find jobs, helping to ensure that, for the majority of claimants, unemployment is a short-term experience. In 1997, half of all claims lasted for more than six months, but only a third do so now. However, nearly 300,000 current JSA claimants have been unemployed for more than six months, so further support is needed to ensure that a greater number of claimants find work earlier. Most JSA claimants leave benefit within three months. However, the rate at which people flow off benefit declines with duration as it becomes progressively more difficult to find work. Of those still unemployed after three months, about half will still be unemployed after six months, and half of them will still be without work after nine months. Since 1997, the Government have introduced several programmes, such as the new deal, that have focused help on those who need it most. Those policies have been successful in reducing long-term unemployment. However, we now need to focus more actively on people who have been unemployed for between three and six months. The intention is that, by intensifying their job search earlier, fewer people will be trapped into long-term unemployment.
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The Budget Report 2003 announced a package of changes aimed at reducing the number of people who become long-term unemployed. At the start of the claim, the emphasis will be on increasing the amount of job search. Jobseekers will be asked to take three weekly steps to look for work, instead of two. After three months, the emphasis will shift to increasing both the quality and quantity of the job search: first, by asking people to search more widely for jobs and, secondly, by requiring weekly signing for six weeks. The introduction of weekly signing is possible under existing powers. Failure to comply with those measures without good reason could result in a jobseeker losing benefit.
It is a condition of entitlement to jobseeker's allowance that jobseekers actively seek work. To satisfy that condition, a jobseeker must take reasonable steps that provide him or her with the best prospects of securing a job, such as registering with an employment agency or looking for jobs in the local newspaper. Jobseekers are currently required to take at least two such steps in a particular week. The draft regulations that we are considering this afternoon would increase that requirement to at least three steps each week, unless one or two steps are all that is reasonable for a person to take in a particular week.
Most people will be unaffected by such a requirement as they already take at least three steps a week to find employment. The regulations are intended to act as an incentive to ensure that the minority who fail to maximise their opportunities no longer so. Currently, from the outset of the claim, jobseekers are expected to travel for up to one hour in each direction. They could lose benefit if they refuse a job because of travelling time if it is less than an hour each way. Consideration must, however, be given to excessive travelling costs, a relevant medical condition or caring responsibilities, which may make it reasonable for some jobseekers to refuse jobs even if the travelling time is less than an hour.
The regulations would increase the area over which jobseekers are expected to travel to find work from one hour to one and a half hours after the jobseeker has been claiming for 13 weeks. Not all jobseekers will be asked to look for jobs in an area that is up to an hour and a half away. Jobseekers are allowed under their jobseeker's agreement to place restrictions on the areas where they are prepared to work, as long as they can show that they have reasonable prospects of finding employment. Subject to the approval of the regulations, we propose to introduce the changes nationally from 19 April.
Jobseekers already claiming when the changes are introduced must be told about them at an advisory interview. A personal adviser will explain the changes and, by reviewing and amending the jobseeker's agreement, will ensure that jobseekers are made fully aware of their new responsibilities. To protect such jobseekers from losing benefit before they have been made aware of the changes, the draft regulations prescribe that the changes will apply to existing jobseekers six months after they apply to new jobseekers.
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We have referred our proposals to the Social Security Advisory Committee and have carefully considered its recommendation to pilot the regulations before proceeding. The Government are committed to evaluating the measures, but we believe that there would be little to learn from a pilot scheme. None of the proposals are new—they build on existing processes that work, and provide an opportunity to improve the rate at which people find jobs. The key objective of the measures is to help people get jobs more quickly, as we know that the jobs exist. In jobcentres alone, 10,000 vacancies are notified every working day, and many more are advertised in newspapers. The measures will help Jobcentre Plus to work with jobseekers to devise the best strategy to get those jobs. I can confirm that the provisions of the draft Jobseeker's Allowance (Amendment) Regulations 2004 are compatible with the European convention on human rights, and I commend them to the Committee.
4.36 pm
Mr. Peter Luff (Mid-Worcestershire) (Con): I repeat the Under-Secretary's remark that is a pleasure to serve under your chairmanship, Mr. Sayeed. I will not rise to the bait offered by the Under-Secretary in some of his comments. The benign economic circumstances that we face owe rather more to the enterprise of the British people and to the golden economic legacy that the Government inherited than to the measures that he set out, but that is a debate for another day.
I accept that the measures in the statutory instrument are not inherently new. However, there comes a moment in the history of any policy when a quantitative change becomes a qualitative one. For example, the rapid growth in council tax in recent years has meant that, suddenly, council tax becomes unacceptable when levied at a certain level. We must ask whether the measures in the regulations render the original proposal unacceptable in any sense. The Under-Secretary rightly referred to the Social Security Advisory Committee report, but he lightly tossed aside the thought that a pilot—one of the things that the report suggested—would be a good idea. I have read the report, and it is a more significant criticism of the regulations than the Under-Secretary suggested. He would do this Committee and the Social Security Advisory Committee a service if he responded in greater detail to some of the very important points made by the report. On pages 8, 9 and 10, the advisory committee examines the implication of the increase in weekly job search steps and states in paragraph 16:
''Many of the suitable steps exemplified in the regulations can normally be carried out only once; for example preparing a CV, registering with an employment agency, and seeking specialist advice. In effect, the change would simply mean that people would be expected to apply for more jobs each week. Applying for jobs in an unstructured, unsupported way may not be the best method for getting people with fairly entrenched problems back to work more quickly.''
It would therefore be helpful if the Under-Secretary told the Committee what steps he expects the claimants to take. The advisory committee highlighted difficulties for people applying for jobs in areas of high
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unemployment. I accept that at present there are relatively few areas of high unemployment, but that could change very easily. In such areas it would be particularly difficult to find extra jobs to apply for, so applying for three instead of two could become a trivial paper exercise.
In paragraph 21 of its report, the committee expressed the concern that unless we identify properly what the steps should be, the exercise
''could all too easily deteriorate into a 'box-ticking' exercise of little practical benefit to jobseekers and employers. Instead, it would be more productive to widen the categories of activity that would count as steps, for example to include training and voluntary work.''
I find that proposal extremely compelling. I can think of many long-term unemployed people in my constituency who would benefit from the opportunity to undertake voluntary work with greater facility. Counting that as a practical step back into work is a sensible idea.
The Under-Secretary must answer a particularly interesting point in paragraph 23 of the report:
''For example, if looking at advertisements for job vacancies in a local newspaper is treated as one step, then is looking in a second newspaper on the same day a second step? Is then looking at the same newspaper, but on a different day of the week, a second step?''
Those are serious questions—if we are going to increase the number of steps that claimants must take by 50 per cent., we need to know exactly what that means.
The other major issue in the draft statutory instrument relates to travel. Significantly, a 50 per cent. increase in travel time is proposed in the regulations. Perhaps I should know the answer, but my first question is: who pays the cost of the travel? Often, the type of people whom we are talking about will be going to relatively low-wage employment and the question of who will bear the cost of such protracted periods of travel is important. One hour and a half's travel will, by definition, cost more than one hour's. What account has the Department taken of the impact of that additional cost on the claimant?
The impact on the claimant as well as the cost of the travel should be of concern to the Government. In rural areas in particular it can be difficult to travel to any location where work is available, as transport can be very unreliable. How will the Department approach the issue of what constitutes one hour and a half's work? If an hour were involved, it might be a less difficult question, but as it involves an hour and a half it is very hard indeed. One could construct a theoretical journey that would take an unemployed person from Evesham to Birmingham within one and a half hours, but I know from my constituents' experience that that journey can be extremely precarious. On paper, it may be possible in an hour and a half, but in practice two or two and a half hours is the more likely journey time, given cancelled buses, late trains and so on. Therefore, what kind of flexibility will be built into a definition of one and a half hours? What kind of understanding of the travel realities of such a journey will be taken into account by the Government when they define one and a half hours?
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In his Budget statement, the Chancellor announced a significant reduction in staffing in the Under-Secretary's Department. As the regulations were drawn up before that announcement, what impact will the reduction have on their implementation, as they will necessarily increase his Department's work load? Returning to the issue of travel, the Social Security Advisory Committee raised serious concerns about the consistency of the measures in relation to Government policy in other areas, particularly the impact of such long travel periods on family life and on the work-life balance. Can the Under-Secretary justify to the Committee the impact of the measures on the work-life balance.?
In paragraph 30 of its report, the Social Security Advisory Committee made an important point about the motivation of people affected by the measures, and stated:
''As well as the additional expenses involved, there are real concerns about expecting people to spend three hours a day travelling to what may be quite poorly paid jobs. The likely effect is inconsistent with the Government's proposals to improve the life/work balance and also has implications for both the short term and long term health of people making such journeys for prolonged periods. In some cases there are real dangers in trying to negotiate routes to work which are not well served by public transport and may be in isolated areas, even if the distances are not great.''
That recapitulates many of the points that I have made. However, making people's experience of work as unpleasant as possible by requiring three hours of precarious travel to and from a low-paid job might not be the best way to bring people back into a love affair with work. In addition to those serious points, I have one slightly flippant drafting point to raise with the Under-Secretary. Why do the regulations say
''a person shall be expected to have to take more than two steps in any week''
and not ''three or more''? I would be fascinated to know whether there is a legal reason for that.
4.44 pm
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