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Earl Russell: My Lords, I beg the noble Baroness's pardon, I wonder whether I could ask her to withdraw one sentence she has just spoken? She said that no one is arguing for full-time students to have benefit while studying. That is not correct; I am.

Baroness David: My Lords, I beg the noble Earl's pardon and certainly withdraw that as far as he is concerned. But I do not think many people are asking for that. Anyway, what I do not want the existence of that tiny minority to do is to frustrate the learning ambitions of up to 100,000 people seeking to hasten their return to the labour market and improve their chances in life by extending their skills and knowledge through learning.

The new proposals to change the regulations from April next year so that,


begin to clarify and give substance to the real position of unemployed people wishing to study, and there is confidence that colleges and voluntary organisations have the skills and capacity to design programmes within this new framework, and to offer flexible forms of continued participation to students lucky enough to gain appropriate—I stress "appropriate"—employment during their period of study.

The FEFC considers that the new limit of 16 guided learning hours is broadly equivalent to the old 21 hours of supervised study; but colleges do differ in their estimates, saying it will vary from course to course. One said that the pressure on colleges to drive down the number of guided learning hours per course will

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increase as a result of the rule change. I hope the Minister can give us some reassurance on that when he comes to reply.

But we should at last gain some consistency of interpretation from local employment and DSS officials. There have been any number of very bizarre decisions described by NIACE. The now irrelevant distinction between full and part-time courses will cease. It has been consistently argued that the old rule should apply to the students' hours and not the course—a 15 hour course could under the old system be designated full-time and a student taken off benefit. People will no longer have to declare they will give up a course if a job comes up. They may be able to continue their study by other means. That was announced last week by the DFE. I should like confirmation from the Minister that I have these plus points correct, including naturally that there will be no limit on the number of hours of private study allowed in addition to the 16 guided learning hours.

Now for the anxieties. The new JSA rules seem to be based on the assumption that work is always there if you search for it; the application of the "actively seeking work" regulations appears to be tightening with targets for officials to get people off the register; and the number of low paid, low skill, part-time and temporary jobs is growing. So that, even if a course of study is pursued as the result of advice given at a Restart interview it will not be "a positive outcome"; all the immediate availability for work rules will apply and since the Restart interviewers have positive outcomes to meet, it is unlikely that part-time education will often be the recommended path. Part-time study of 16 hours or under will not be disregarded by the Employment Service in availability for work tests. So just what questions will they, the officials, continue to ask? For example, if the course offers a qualification, will claimants be asked about their continued willingness to take unqualified work? Will they be asked if they can always be contacted by telephone at the college? One fears that such questions, experienced by many poor and vulnerable people as threatening their only source of income, will continue to deter many. Can the Minister give any reassurance that there will be more sympathetic understanding at these interviews? The targets seem to me dangerous, and I would entirely go along with the noble Earl's comment about performance related pay for these people, and would certainly support him in any amendment he puts down to that effect.

There is no serious attempt to define suitable jobs and no assurance that current pursuance of a qualification will be taken into account in considering a job's "suitability". I gather there is something called the "McJobs syndrome" because so many of these young people are asked if they will take a job at McDonald's, that being, I presume, one of the lowest paid jobs available. In the past the pursuit of a qualification has even been interpreted as proving that the claimant was not available for other jobs.

European Social Fund courses (designed for the long-term unemployed) will, unless run under the Training for Work scheme, continue to be subject to the JSA 16 hour rule. This is an absurd anomaly. Sometimes

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these will need to be short, intensive courses, including work simulation, and will naturally take more than 16 hours in one week. The hours are to be counted per week and not averaged. Some unemployed, and perhaps particularly the long-term, would clearly benefit from full-time study and a total re-orientation of their work path; yet there is no proposal to reintroduce a scheme like "Learning for Work", which offered this opportunity, and, with all its limitations, was welcomed by many education and training providers as a really useful element in any serious strategy to provide comprehensive training and education services for unemployed people.

What one hoped for, probably foolishly, was that there would be real progress in the move to change the whole atmosphere in which unemployed people seek to study from one of concession, inquiry, insecurity and even threat, to one of positive encouragement and support. That we have not got.

Ann Widdecombe's highest claim for the changes is that the same number of people will be able to study as now. That is simply not good enough. If we were serious about building a high skill, high tech. economy, we would not be looking for a pool of unemployed people to put into any part-time, temporary, unskilled jobs that come along, or, alternatively, offering low level, narrowly instrumental training programmes. We should be encouraging and supporting ever increasing numbers of unemployed people (and others yet to reach their full potential for learning) to participate in education and training of all kinds as a major contribution to eliminating the learning and skills deficit from which this country now suffers.

I trust that the hopes some people had that there would be a more liberal, imaginative and understanding scheme for the unemployed, and in particular for the 16 to 25 year-olds, will not be completely dashed. They deserve better than the Bill, and the regulations that go with it, now seem to offer. I hope that the noble Lord, Lord Inglewood, and the noble Lord, Lord Mackay, will use their best endeavours to influence the outcome in this House when we come to Committee stage so that a better Bill will leave the House than has entered it.

4.40 p.m.

Baroness Park of Monmouth: My Lords, I am on unfamiliar territory but my concerns are education and the vulnerable young. I am very sure that I should despair were I to be unemployed and without resources today in the face of the sheer bureaucratic complications that I should face in dealing with the state; and I am deeply sorry for those who will have to administer the Bill. I should also have serious doubts about the common sense of the promoters as regards some parts of the Bill. Not for the first time (the last example was the issue of student unions which the Government believed still to be the same animal as it was in the 1960s) the Government are to some extent legislating to curb an outdated stereotype—those who positively prefer to live in a squat on benefit rather than work—

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and are not considering sufficiently those today who want to work but wish also to secure at least a vocational qualification.

Of course there are still people who want to play the system. I remember two years ago an Oxford taxi driver telling me in justifiable anger about the three young men he had driven from the station to the Oxford United football ground who were discussing the useful tactic that they employed to apply for jobs but never to gain them. It was to attend in filthy jeans with a punk hairstyle and an earring, all designed to put off a prospective employer, which apparently it usually did. There are others drawing benefit and working in the black economy, as my noble friend said. Of course it is right to prevent exploitation of public money by such people. But I hope that we shall not penalise the vast majority of people who honestly want to work and to be valued by the society in which they live. I was very glad to hear the Minister make that very point.

I found great difficulty in wrestling with the acronyms and the professional jargon in the briefing that I received from many well-informed organisations—the CAB, Child Poverty Action Group, the Unemployment Unit, and many others. I freely admit to my noble friend that I may make mistakes in my comments on the Bill. However, I should like to focus briefly on the following issues.

First, in the Employment Service annual performance agreement, why are part-time educational courses not listed as a positive outcome while training for work, jobclubs, and work trials are among the 10 positive outcomes listed? We surely want the unemployed to take positive steps on their own to become eligible for employment. That means qualifications. Why, therefore, is voluntary participation in a course not explicitly recognised as a positive outcome? Since so much depends on the agreement and on the assessment made by the Employment Service officer, I urge that the Bill should clearly and unequivocally spell out recognition that a part-time course leading to a vocational qualification, or positively enhancing the education of the claimant and thus his or her employability, should be regarded as a positive outcome.

My next point concerns the decision to change the existing concession which at present allows the long-term unemployed who receive unemployment benefit or income support to study a part-time course in further or higher education for up to 21 hours of supervised study a week. Those who receive the jobseeker's allowance, which will replace those benefits, are to be allowed only 16 hours of what is now called "guided learning". Moreover, the proposed tightening up yet further of the requirement to be instantly available for work—any work—if notified, even to the point of dropping a course just when a student is about to complete it, represents an extraordinary approach to the idea of increasing the employability of the claimant. It will deal a severe blow to the economic viability of many colleges doing good or vital work in the further education sector. If numbers decrease because claimants have to give up their courses, the fees from the Further Education Council's fee remission scheme will decrease too. That could be

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serious for the institutions. I hope that there will be close consultation between the Department of Employment, the Department of Social Security and the Department for Education to ensure that one aspect of government policy does not torpedo another. It is surely vital to the country to produce as many qualified people as possible. Germany and other European Union citizens take many qualified jobs in this country. Surely we should be doing all we can to produce a skilled workforce ourselves.

It would be a sad day if the very real commitment by the Government to promote education should be negated in this vitally important vocational area by unrelated legislation in another part of the wood. It seems to me that the Home Office, too, may have some concern at the prospect of young people without a job or money on the streets. What will they do to survive?

I feel great concern, as I think we all must, that under the Bill those between the ages of 18 and 24—even those who have paid national insurance contributions—should be losing 20 per cent. of their personal allowance. Surely they eat as much as 25 year-olds—do they not, my Lords?

I am concerned, too, that the over-50s who have tried to provide for time of difficulty by saving and by taking out occupational pensions should be caught in a savings trap and see relatively modest savings depleted, and with that any hope of saving, for instance, to start a self-employed venture. That is taking away their independence.

My last plea to the Government is for really effective training to be given to those officials who will administer the legislation. That is in part where the CSA went wrong. There should, therefore, be at least a year's training before the Act becomes effective. In 1994, as a Member of the Committee of this House which reported on the poverty programme, I visited a project in Pilton in Edinburgh. The Pilton partnership between a deeply impoverished community, the district council and local industry has been very successful. One of its successes has been the setting up of the Granton Information Centre, working closing with the CAB, to help interpret the complex social security legislation so that those who are entitled to benefit could claim it. We saw a 40-page form which had to be completed, often by barely literate claimants, to secure disability benefit. We learned that the DSS officials themselves needed help from the CAB and the centre to understand the immensely complicated regulations which they had to operate.

Now there is to be yet another dense hedge of bureaucratic procedures to break through and more and more regulations on which denial of JSA may depend. The discretion given to officials who may not themselves understand the rules is great. I was glad to hear from my noble friend that everything is to be simplified. But too much power will still be in the hands of individual, overworked officials.

Perhaps I may urge the Minister most strongly to ensure that guidance is indeed clear, that training for officials in the sophisticated techniques which will be required is available, that application of the allowance is uniform, and that the Bill's objective is to help people

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back to good employment and to acquiring real skills. Not least, time must be given for the new legislation to be understood before it is applied.

4.48 p.m.

Lord Ashley of Stoke: My Lords, I could not recognise the Bill from the description given by the noble Lord, Lord Mackay. He is wasting his talent in his department. With his great diplomatic skills and capacity for presentation, he should be in the Foreign Office.

The main purpose of this distasteful Bill is to save money at the expense of unemployed people—the poorest and the most vulnerable in our society. The Bill will have the dramatic and disgraceful effect of reducing benefits for, and even removing benefits from, nearly a quarter of a million people. I cannot envisage how the Government can defend that. Few governments can be as unscrupulous as that, especially at a time when Ministers are permitting greedy executives of companies to line their pockets with millions of pounds in share options.

In the other place, there were smooth ministerial phrases about the Bill which failed to obscure the savage cuts involved. The real motive for them can be glimpsed from the occasional sentence uttered by Ministers there. The Secretary of State for Employment, for example, laid bare the basic premise of the Bill when he said:


    "No one has a God-given right to decide to be idle and to live off others".—[Official Report, Commons, 10/1/95; col. 52.]

He is after the popular vote. The Minister thereby reveals an attitude to unemployed people which is not only arrogant but at variance with the facts. Unemployment is a shocking, dismaying and demoralising catastrophe. It is a personal disaster which impoverishes the person and families. It has become a social and economic disease affecting vast swathes of our society. It is not only working class people who are affected, as was the case when I was a young man. All sections of society are affected. Some 40 per cent. of our workforce have been out of work for some part of the past five years. A large number of workers are fearful that they also will lose their jobs.

I admit that unemployment is a worldwide phenomenon, but the Government have little to be proud of. The Minister said, "We don't want any nonsense about figures". I shall give the reality about the figures and not nonsense about them. Britain has lost 40 per cent. of its manufacturing capacity over the past five years. We are the only one of the top seven industrialised nations to have seen no rise in employment since 1979. Unemployment here among the unskilled is still rising. I am open to challenge by the Minister, if he wishes. Has he seen today's report in the Oxford Review of Economic Policy? It makes dismal reading. In 1993 only 36 per cent. of the working population had full-time jobs. We hear all the glowing testimonials to the Government's policy by proud Ministers, but that is a massive drop from the figure of 55 per cent. in 1975. We have a two-tier labour market, with great uncertainty for one tier.

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The economists' ultimate solution is investment as a backcloth to market labour measures. There is a difference of opinion among economists, but those economists give little support to cutting and limiting benefits. The measures which are the central theme of the Bill, contribute far more to poverty than to solving unemployment. Those are not my words; they are the views of the Oxford Review of Economic Policy.

The question today is: would earlier publication of the report have changed the Bill? I do not think so. I can almost see how ministerial minds were working in the other place: "Let's see", said the Secretary of State for Employment. "Let's take a leaf from the book of the Home Secretary. We'll go for a really good populist cause because we're a very unpopular government. All the polls say so; the local government elections will say so; every political realist says so. Let's drop the term 'unemployment benefit' and call it an 'allowance'. That's a good idea. It will then look as though we are being generous", they probably said. "Let's call it a jobseeker's allowance. That would strike a positive, friendly note. We will lose the word 'unemployment'. That is a marvellous idea. We'll just drop the word 'unemployment' from our vocabulary. The great virtue of that is that it will distract attention from the fact that there are no jobs available. It's a marvellous idea, this Bill, so let's peddle it like mad and get someone of the genius of Lord Mackay, with his brilliant presentational abilities, to put it forward in the House of Lords as one of the greatest Bills since Parliament began".

You can see the Government's mind working. All the civil servants say, "Yes, Minister, that's a wonderful idea. Press on with it". There is a phone call to the noble Lord, Lord Mackay, asking whether he will do it. He says, "All right, I'm a loyalist", so he does it. He made a marvellous speech, but it was a little lacking in realism.

I am very serious about the Bill. The Government have now begun the painstaking job of humiliating unemployed people and cutting benefits. Unemployed people now have to parade before officials to prove that they are actively seeking work. They have to draw attention to their availability. They have to write and rewrite their CVs and prove that they are highly motivated for work.

What can they expect? There are currently limits on the conditions claimants can impose, but undoubtedly there will be a tougher regime. That is the reality. Regardless of the circumstances, the unemployed person may have to agree to the dirtiest job with the longest hours, peanuts for pay and possibly even moving away from home.

The final irony of the situation is that the officials may well conclude the interview by saying: "Well, that was a fascinating discussion. There are only a handful of jobs anyhow and we have another 1,999,999 people just like you who are also jobseekers. But we will give you the allowance. If you've paid enough stamps, you can have it as a right, but only for six months, not 12 months. There is nothing for your partner. We're very sorry about that. If you haven't paid your stamps, you may get something provided you are poor enough. You will have to watch it though. If you keep the wrong

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company at home with someone earning a small fortune like £10 a week, well, you know. Here you are, you can have it, but please keep looking eagerly for a job".

That is what will happen when the House of Commons and the House of Lords pass the Bill. That is why we shall be active in the Committee and Report stages. The marvellous speech by the noble Earl, Lord Russell, posed a number of significant questions for the Minister. I hope that his colleague who is to reply to the debate will give the assurances we are anxious to have on the questions raised.

We have come to a sorry pass under a sorry government—a government unable to refrain from hitting and humiliating unemployed disabled people. An estimated 200,000 people will lose invalidity benefit and will not receive incapacity benefit with its far more stringent conditions. Another estimated 70,000 will suffer the same fate annually. Many of them believe that they are not capable of work, yet it is judged by others that they are. The Government tell such people that if they want to appeal—and to appeal is a great right in a democratic society—they must take a cut of 20 per cent. in their income support. What kind of system is that? Alternatively, they can sign on. In doing so, they must state that they are fit for work. That is entirely the opposite of what they believe; they believe that they are not fit for work and that is why they are called "disabled".

That is a disgraceful choice to impose on disabled people. It is threatening a poverty penalty, to prevent appeals and minimise the number of appeals, even though we know from the citizens advice bureaux that most such appeals are successful. Social security doctors are far from infallible. We must face the fact that many more disabled people will seek jobs in the future—some because they want to and some because they are forced to. Many of them may have been out of the labour market for years. Others will be able to work only under limited conditions because of their disability. The £71 million that will go to the Employment Service to fund specialist help for disabled people is welcome but inadequate.

To make sure that the Minister does not feel unemployed himself and has something to talk about when he winds up, let me add to the questions of the noble Earl, Lord Russell —I want to make sure that he has a very full list when he answers—and put the following questions to him. Who are the people to be trained as advisers? What will be their background and who will train them? What form will the training take and for how long will they be trained? Will the new advisers be sensitive to the great variety of disabling conditions that they may meet? Many disabled people will have chronic but fluctuating conditions or there may be a mental element involved. Will there be training about the ways in which new technology can help to deal with disability? Above all, will there be an understanding of the discrimination which abounds in the workplace and will continue to obtain in the workplace for many years to come? Those are just a few of the questions that arise as a result of the Bill.

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Unless there is extensive help for disabled people, there is a danger that in today's tight employment market they will perpetually lose out to non-disabled people. There will be an army of people who do not qualify for incapacity benefit and yet are not sturdy enough to take part in the job market. It will be a mortifying charade to force such people to sign on fortnightly and go through the motions of job seeking when they and the employment agency know quite well that the chance of their getting jobs is virtually zero. I believe that the provisions of the Bill are unrealistic with the present level of economic activity in our society.

A sense of outrage will be felt when the provisions of the Bill are implemented. Alan Milburn, MP, has revealed advice to Ministers by senior Employment Service health and safety assessors—I am willing to be contradicted by the noble Lord when he replies—who say that Jobcentre staff are at risk of assault and abuse from unemployed claimants about the jobseeker's allowance. The report urges the introduction of "clear escape routes" and personal alarms in some instances when unemployed people receive "unpalatable and unwelcome information". It is one thing for Ministers to present their proposals to Parliament with polite euphemisms; it is quite another for unemployed people who are already suffering poverty to be told the brutal truth of sanctions and cuts. But any government pushing through legislation which provokes angry protests, social unrest and public outrage cannot claim that they have not been warned in this House and elsewhere.

5.3 p.m.

Lord Henderson of Brompton: My Lords, I shall take only two or three minutes and thus reduce the average length of time of speeches so far made in this debate. I shall be able to do so because of the quality of the speeches that have been made, not least that of the noble Lord, Lord Ashley of Stoke.

I have a feeling that we should make greater use of our time in Committee rather than on Second Reading of this Bill. We have recently been considering the way in which our time is spent in order that the House may rise by 10 o'clock at night and not have to sit until the early hours of the morning. On this kind of Bill, for which we are the second Chamber and know we have only limited powers, it might be better to have spent this Second Reading day on an extra day in Committee.

I hope that the Government will listen to the immense amount of persuasion to which they have been subjected and will indeed find another, further day in Committee than has already been allowed—at any rate, I hope that they will keep their mind open on the subject—so that we do not have to spend night after night in the Chamber after 10 p.m.

I have only a few points of general principle to state. I cannot forbear to give them. They are very brief. First, I find it an odd conjunction to consider such a mean Bill as this one, which impoverishes and coerces the most vulnerable members of our society, at the same time as tax cuts seem to be promised in the next Budget for the benefit of middle England. Secondly, I find the increase in powers and the extension of what is in effect the policing of our society to be very worrying. Thirdly, the similarity

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between the Child Support Bill and this Bill in policing powers—which will be given massively by subordinate legislation and not by this House or another place where they can be amended—is deplorable. As this Bill is skeletal, and no more, we shall need an assurance from the Government that its fleshing out by subordinate legislation will be the subject of most minute consultation and be given plenty of time. Indeed, drafts should be laid before the subordinate legislation is brought before Parliament, when either House can say only yes or no; and under the Whips' system in the other place that is always a "yes". The Bill is too important to be treated as a matter of party politics. We shall not be allowed parliamentary procedures whereby we can amend what might otherwise have been two-thirds of the Bill. So I feel that special attention must be paid to the subordinate legislation after the Bill has been enacted.

I believe that, as in other legislation, the discrimination against young people, who as a category (including students) very much demand our support and encouragement instead of treating them as though they were dependent children, is to be deplored in the Bill. Also the element of violence is extremely unpleasant. It is so implicit in the Bill. It must be remembered too that the Child Support Act has already driven several people to commit suicide. It may well be that this Bill will have the same effect, and not merely on several people but very many. I am also alarmed at the possibility of violence in the benefit offices. We have heard evidence of that possibility from the noble Lord, Lord Ashley, and others.

I have made some rather rough comments. There are some credits to be given to the Government, which I am happy to do now. It is a very great achievement to have knocked together two huge bureaucracies. I hope that a great deal of benefit will come from it. I also like the back-to-work bonus scheme and the holiday tax allowance, which no doubt will be of great benefit. Those are imaginative schemes. One should give credit for them.

As I say, although, judging by the extremely fine speeches that we have heard this afternoon, the time of this House has been well spent, I believe that it could better have been devoted to the Committee stage. I therefore propose to reserve any further remarks to that stage.

5.10 p.m.

Lord Swinfen: My Lords, although not a benefit designed to cater for the needs of disabled people, the proposed jobseeker's allowance will affect long-term sick and disabled people who will be expected to sign on following the replacement this month of sickness and invalidity benefit with the more restrictive incapacity benefit, as mentioned earlier by my noble friend Lord Dean of Harptree. I should perhaps declare an interest in the Bill in that I am employed by the John Groom Association for the Disabled and therefore earn my income attempting to help people with disabilities.

The conditions for the jobseeker's allowance are that applicants must be capable of work; they must be available for and actively seeking work, and have entered into a jobseeker's agreement. Disability organisations are concerned that people could fall between the two benefits—not sick enough for

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incapacity benefit but not fit enough for jobseeker's allowance. A narrower incapacity test is estimated to move some 190,000 people from incapacity benefit to jobseeker's allowance in the coming financial year.

The current rules allow for people to place restrictions on their availability for work, such as limiting the type, hours, location or conditions of work where those are reasonable, given the person's physical or mental condition. If the restrictions are accepted as reasonable, the individual is exempt from the requirement applied to claimants with other restrictions; that is, to show that he still has a reasonable prospect of finding work. Though Ministers stated that, as now, people will be able to restrict their availability for work by reference to the type or hours of work, it is still unclear whether the current law will be fully reproduced in respect of other types of restriction such as location or distance to work.

At Report stage in the other place the Minister said that there would be a section in the jobseeker's agreement which would enable disabled people to,


    "add extra points that are not necessarily to do with hours or the type of work".—[Official Report, Commons, 22/3/95; col. 371.]

However, to me it is still unclear whether disabled people will remain exempt from the requirement that there must be "reasonable prospects" of finding work despite the restrictions.

At Report stage in the other place Ministers clarified that the claimant's own evidence about restrictions on their availability would normally be accepted. Medical evidence would only be required in a limited number of cases, when general practitioners would be expected to provide a certificate free of charge. My honourable friend Miss Widdicombe said on Report that she would ask the Under-Secretary of State for Social Security to speak to the Department of Health about the matter. Can my noble friend say whether that conversation took place? If so, what was the outcome?

People who move off incapacity benefit onto unemployment benefit after this month stand to lose out financially. There is a difference of over £32 a week between the average weekly invalidity benefit payment, which is £79, and unemployment benefit, which is £46.45. Under the jobseeker's allowance the contributory benefit will be payable for only six months instead of 12, as now. The reason for the change is that many people return to work within six months. However, that rationale does not apply in the case of disabled people, who may take twice as long as able-bodied people to find work.

The contributory jobseeker's allowance will be reduced pound for pound where people receive an occupational or private pension of more than £50 per week. Previously that applied to pensions of more than £35 payable to people over the age of 55. That rule could adversely affect some disabled people taken off incapacity benefit when they have a payment from a previous employer in recognition of their ill-health or disability. For example, a 50 year-old man with an occupational pension of £55 a week will lose £5 weekly

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from his contributory jobseeker's allowance. Under unemployment benefit that would not have been reduced.

Removing the dependant's allowance for a non-working spouse or partner means that contributory jobseeker's allowance will amount to a personal allowance only. An earlier means test could bite particularly hard for people with income or savings above the limit. That could disproportionately affect disabled women, particularly if leaving incapacity benefit, who are more likely than male claimants to have partners or spouses working full-time. It would exclude them from the means-tested jobseeker's allowance. The savings limit of more than £8,000 could exclude disabled people with capital derived from compensation for personal injuries.

The Jobseekers Bill includes provision for back-to-work schemes. That includes a bonus for people working less than 16 hours which, as I understand it, amounts to 50p out of every £1 of earnings above the earnings limit (£5, or £15 for someone with a disability premium). That is payable once someone moves into work of more than 16 hours a week. Another clause provides for a year's national insurance contributions holiday for employers recruiting people who have been unemployed for two years, which is most welcome.

Amendments to extend the provisions to people on incapacity benefits or carers were not accepted during the Commons stages of the Bill. Ministers argued that disabled people who were claiming jobseeker's allowance or income support would be covered, but those who were on incapacity benefits were not the target group for the bonus. The Government expressed some sympathy with the position of carers and promised to consider their position in the development of the back-to-work schemes. Perhaps my noble friend can tell us whether or not he will bring forward suitable amendments at a later stage of the Bill.

The Bill misses an opportunity to assist the movement of disabled people on incapacity benefit from benefit into work. The announcement that ex-carers can use a period on invalid care allowance to link to jobseeker's allowance and therefore qualify for contributory benefit, provided there has not been a break of more than 12 weeks, is welcome. However, despite the indications in Committee in the other place, I understand that that 12-week linking rule will not apply to incapacity benefit. That means that people on incapacity benefit will have only eight weeks in which to try out work and requalify for their previous level of benefit. There was also no acceptance of the use of pilot schemes to test out other models of a partial incapacity benefit.

When opening the debate my noble friend Lord Mackay of Ardbrecknish said that the Government will protect people with disabilities.

I hope, therefore, that he will look kindly upon amendments that I and others will table to improve the position of disabled people as the Bill progresses through your Lordships' House. I took considerable note of what was said by the noble Earl, Lord Russell, in relation to the number of regulation-making powers

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within the Bill, which is quite extraordinary. Perhaps my noble friend will bring forward at the next stage an amendment to retitle the Bill the "Henry VIII Bill".

Clause 3 relates to the question of partners. I find that to be a particularly difficult concept. What is a partner? How long does one have to remain in a partnership? Are partners always of the same sex? Can they be changed frequently? There does not appear to be any real watertight legal definition of that term. I would have preferred to see the term left as "spouse".

5.20 p.m.

Lord Monkswell: My Lords, I must crave the indulgence of the House in the presentation of my remarks because I may not be as articulate as I would normally hope to be. I am suffering from 'flu at the moment and so I ask the House to bear with me.

I want to say a few words about the background to the Bill, to touch on what the Government are trying to do and then to suggest what will probably be the result of the Bill. Before I do so I think it is worth reflecting a little on my own experience. I have been unemployed three times during my working life: once for a period of about a week in the 1960s, but I obtained employment fairly quickly thereafter; once in the 1980s for 12 months; and once in the 1990s for 11 months—to date.

The noble Lord, Lord Ashley of Stoke, pointed out how British manufacturing industry had been decimated in the recession to which we have been subjected under the Tory Government of the past 16 years. I can remember a trade union official telling me in the mid-1980s that Margaret Thatcher and Geoffrey Howe had done more damage to British manufacturing industry than Hitler and Goering in the last war. That is a fairly strong statement, but it is quite intriguing to think that after the war this country was capable of building ocean liners. We built quality motor cars for affluent people. We built a number of motor cars —not just Jaguars and Rolls-Royces but Rovers and one or two others. What is the situation now? We seem to be incapable of building ocean liners to the requirements of P&O. There seems to be quite a fashion among rich people in this country to buy prestige motor cars that are not made in this country. I am talking about BMWs, Mercedes and so on.

The whole concept of unemployment benefit as we have known it since the war is built on the basis of trust—the trust that the Government, of whichever party, would run the economy on the basis of full employment. That was part of the bargain. The other side of the bargain was that the individual agreed to work. The payment of unemployment benefit allowed for dislocations in the economy; it provided some fluidity in the economy and it enabled change to take place without undue hardship to the individual. The intriguing point is that it was actually paid for by the individual through national insurance contributions. For the past 15 years this Government have broken that trust. They have said in effect that the job of government is not to run the economy on the basis of full employment; that the job of government is to run the economy on the basis of some modern gold standard and that it does not matter about unemployment. The

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implication of that is mass unemployment. However, the old mechanism—the payment of unemployment benefit—has continued until the advent of this Bill.

Why are the Government introducing the Bill at this time? A number of speakers have mentioned the escalation in the social security budget. The Government would accept that the reason they are introducing the Bill is to save money—the way they put it is that it will save taxpayers' money. But it is money which people have contributed through national insurance contributions. It is not the Government's money; it is the workers' money in the sense that it is an insurance fund.

A number of eloquent contributions this afternoon have dealt with some of the implications of the Bill. The risk of violence in the unemployment offices has been mentioned; the increase in poverty that individuals and their families will experience has been mentioned; the ludicrous situation that, unless changes are made to the Bill, people will be denied a sensible opportunity of gaining education and training has been mentioned. One of the points that has not been mentioned is the effect that the Bill will have on marriage and on people living together. The noble Lord, Lord Swinfen, touched on that point when he suggested that the word "spouse" should be used rather than "partner". What will be the effect on marriage?

When a man is made unemployed it is an enormously stressful time for that person as an individual and for the family at large. With unemployment benefit as we know it today the payment as of right of a non-means tested benefit for 12 months provides a cushion to that feeling of lack of self-worth and the feeling that the spouse or the partner of the man may have that he is not contributing to the household, especially when the Government keep saying that the reason we have unemployment is that people are not prepared to work, as opposed to the fact that they cannot get a job. That has an effect on families and on the relationships between people. For quite a large proportion of families that line is held because the man is contributing something—he is contributing unemployment benefit to that household's income for 12 months. One of the effects of the Bill will be to restrict that to six months.

One of the problems that I can see—I am sure that if the Government were prepared to listen to sociologists who work in the field they would probably see it in similar terms to myself—is an increase in the breakdown of marriage. That is part of the problem, but the position is a little worse than that. One of the other effects is that, in trying to do the best for their families, men may leave their wives and go and live in a flat somewhere in order to ensure that they can claim income support. The flat rent will be covered by housing benefit. They will then have some money of their own which they can contribute. What will be the net effect of that? The net effect will be a waste of national resources. Instead of having a family living in one house there will be a divided family in two houses. It is a wasteful use of housing accommodation.

One of the other effects of the Bill will be to drive down unemployment benefit, income support, national pension provision and student grants. What will the Government do with the money they save? They will

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give it back to rich people in the form of tax cuts. What will be the net effect of that? Those rich people will buy BMWs and Porsches and go on holidays on the "Oriana", which will have a negative effect on the British economy; whereas if those benefits were increased, the people would spend their money on British goods and services. That would increase employment and there would be a virtuous circle.

It is a little too late for this Government, but I hope that we can persuade, as I am sure we can, some noble Lords on the Government Benches—we have heard some interesting contributions today—to make some changes to the Bill in order to make it a little less pernicious than it otherwise would be. But the real salvation will be the next Labour Government.

5.30 p.m.

Baroness Nicol: My Lords, I intervene very briefly. My name was on the list of speakers, but I withdrew it in anticipation of a personal difficulty which, I am happy to say, did not arise. I do not normally take part in employment Bills, but I find some aspects of this Bill so offensive that I am quite unable to remain silent. However, today I shall respect the conventions about speaking in the gap and simply put on record that I hope to be able to support my noble friends in improving this Bill at the later stages.

5.31 p.m.

Baroness Hollis of Heigham: My Lords, since January and through to July, this House has been and will be discussing and debating four social security Bills. We have had already the Pensions Bill; today we have the Jobseekers Bill; soon, there will be a disability Bill and soon after that a Child Support Agency reform Bill. Three of those Bills we on this side of the House will and do broadly support, although I have no doubt we shall wish to amend, strengthen and improve them.

But not this Bill. It contains a sprinkle of small goodies which have been repeated tonight, such as the back-to-work bonus, the national insurance employers' holiday, the roll over of housing benefit and council tax benefit, which we all welcome. But the core of this Bill we believe to be nasty and pernicious because, quite simply, it takes as a starting point the blaming of the unemployed for their unemployment and therefore seeks to make their life on unemployment benefit, to coin a cliché, mean, nasty, solitary, brutish and short.

But, despite the speech of the noble Lord, Lord Mackay, the problem is not those who will not work but could, but those who want to work but cannot. There are probably 5 million people today who are seeking work but cannot find it. There are 3 million fewer full-time jobs in the economy now than there were in 1979. Even though wage rates have fallen for the lower paid—1.25 million people earn less than £2.50 per hour, as many of my noble friends have cited today—there are still eight or 10 claimants for every registered vacancy. As my noble friend Lord Ashley quoted, we have had today the devastating report from Oxford which shows a fall in the number of men in full-time

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work. Having wrecked our manufacturing economy and made the employed unemployed, the Government now finger them for their unemployment, and hence this Bill.

Beveridge said that,


    "The only satisfactory test of unemployment is an offer of work".

What we have instead in this Bill is a jobseeker's agreement—not, as Beveridge would have it, that if one seeks work one will obtain it, but that unless one seeks work which is not there one will not get benefit for being unable to find it. That so-called "agreement" is going to be reinforced by a deep cut in benefit. Not only will contributory benefit fall from 12 months to six months, but in all sorts of other nasty ways, including the removal of the adult dependant's allowance, age reductions, the tightening of part-time study work and the harsh treatment of redundancy money, its financial value will be cut. As the noble Lord, Lord Henderson, so rightly said, in the process some of the poorest and most vulnerable members of our society are still further attacked—that is to say, women, the young, the disabled, the homeless, old and redundant men and the longer-term unemployed.

So we oppose this Bill as my noble friend Lady Turner so eloquently argued. We despise its principles—no, they are not principles—we despise the ideology that informs it. We oppose it on four main grounds. First, as many noble Lords and the noble Baroness, Lady Park, have mentioned, we object to the authoritarianism of this Bill. This jobseeker's agreement is not an agreement. As my noble friend Lady Dean said, there is no equity of contract; it is a directive backed by powers to impose benefit penalties covering highly personal matters such as appearance and behaviour at interview. How many holes are there in the jumper and how long does the hair have to be before one risks losing benefit? What many of us find so offensive about the new Right, Tory ideology is that the Bill demonstrates a deeply unpleasant reading of human nature. It assumes the worst about people. They are workshy, scroungers and layabouts unless they are browbeaten or penalised, not into work but into the fruitless and demoralising search for work that does not exist.

The Department of Employment, the DSS and all the major research foundations, have found abundant evidence—and I know the Minister knows it—that the unemployed are desperate to work. We have plenty of research to the effect that single parents, the disabled and the long-term unemployed all want to work not just because of the money but because of the need for sociability and self-esteem. What is stopping them is not lack of moral fibre, the lack of a punitive jobseeker's agreement or a too-generous benefit level, but the lack of childcare for women, the lack of suitable skills for older men with manual skills; discrimination and poor health records for some disabled people, or limited access to and information about the labour market. Above all there is the loss to our economy of about 5 million full-time jobs.

The problem is not because they are workshy, choosy or because they are not accepting wages that are not realistically low enough or because they are receiving benefits which are unrealistically high. Over one half of

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the unemployed receive in benefit less than one half of what they last received when in work. That is some incentive! As the department's own social security advisory committee has argued, in times of high unemployment actively seeking work rules and jobseeker's agreements should be eased and not tightened. Instead this Bill pushes in precisely the opposite direction, to our shame.

The second objection to this Bill is because it increases the poverty of the unemployed. Not surprisingly, the Minister said very little about that. That is because, as my noble friends have said, 90,000 people will lose their benefit and 150,000 will receive between 20 per cent. and 70 per cent. less in benefit. Existing benefits are already far from generous. Already over one half of unemployed men fall behind with their rent, council tax, mortgages and fuel bills. They will now move even deeper into debt. Only a short while ago this House raised the national insurance contribution by about 10 per cent., raising an extra £2.2 billion for the Treasury. Now that same insurance-based benefit is being cut from 12 months to six months and thereafter it will be means-tested.

But is not just that: because the Government are not content they are putting on some pretty unpleasant topspin. If one wants or needs to claim an allowance for one's wife because one has young children and the wife is not in work, then one is not allowed any contributory benefit at all. One moves immediately to means-tested benefit, whereupon one is promptly penalised for any modest savings that one might have, either built up over the years or perhaps a redundancy payment. If a woman, the situation is even worse. Having paid national insurance contributions, 60 per cent. of women will lose their jobseeker's allowance because their partner is in work and it is means-tested. Not, therefore, being eligible for benefit, those persons will usefully disappear from the unemployment count.

This legislation also hurts and damages disabled people, who will find the simplistic and unrealistic "either/or" test of fitness or unfitness to work for incapacity benefit interlocking with a similar simplistic and unrealistic approach in the jobseeker's allowance so that, as many noble Lords such as the noble Lords, Lord Swinfen and Lord Rix, and my noble friend Lord Ashley have argued tonight, those with fluctuating conditions, with less severe mental health problems or with learning disability difficulties or those whose pain and fatigue are cumulative will find themselves barred from incapacity benefit but unable to meet the jobseeker's agreement and may be left with nothing at all.

The Bill deepens the poverty of young people. That was the special concern of the noble Earl, Lord Russell. Although they have paid national insurance at the standard rate, those under 25 will nonetheless see a 20 per cent. cut in benefit whatever their home responsibilities.

The Bill also worsens the poverty of the single homeless, who may be told that their first step, under the jobseeker's agreement, will be to get accommodation. That often requires a month's rent in advance, which they cannot find. So, because they are

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homeless—and remain homeless—they will be deemed to have failed the jobseeker's test. On what then will they live?

I think that I am right in saying that, for the first time in the history of the welfare state, potentially large groups of adults will have no benefit—no legitimate income whatsoever—once the Bill becomes law. I ask your Lordships to think of the implications of that. In the United States, where single men are not entitled to a legitimate benefit, they get their income illegitimately, off the streets, and 2 per cent. end up in prison. One might think that that is a rather expensive form of income support.

Thirdly, we object to the Bill not only because it is authoritarian and demoralising to the unemployed and not only because it deepens their poverty but because, while doing so, it will increase, not decrease, our public expenditure on benefits—the arguments of the noble Lord, Lord Trefgarne, notwithstanding. Such a Bill is not only indecent but—almost as unforgivable—it is stupid also. I shall seek to follow my noble friend Lord Monkswell in explaining why.

Let us take the case of a husband who is in work and whose wife is in part-time work earning perhaps £80 per week. They have two children. They are work-rich. If the husband loses his job, he will get contributory benefit for the first six months and his wife will remain in work. Some benefit will be paid, such as housing and council tax benefits, totalling perhaps £109. However, after six months, the husband will move on to means-tested benefits if he is among the third who are unable to find work. If his wife remains in part-time work, his benefit will be docked virtually pound for pound. With the extra costs of work, such as clothes and travel, it will not be worth her working, so she will stop work. That household is now work-poor. Both are now on benefit and will need additional allowances, such as full housing benefit, full council tax benefit, free school meals and free prescriptions. Their total benefit bill will increase from £109 per week to £180 per week. Precisely because it had been means-tested, we would be paying more in benefit than would have been the case if the benefit had been contributory. If the wife had remained in work, she could have continued to float them off the benefit trap. Instead, we as taxpayers are paying more than £70 per week more in benefits than would be the case if the family were not means-tested.

That is stupid. Indeed, it is even worse—precisely because both husband and wife have now become so dependent on benefits, the husband would need to earn about £200 per week to spring them off benefits. He cannot—and so they will not be able to come off benefits. They are locked into benefits, and the longer they remain so and the more out of touch with the labour market they remain, the harder it will be for them to get back into work. Means-testing will cost us, as taxpayers, more and for longer. That is perverse. It takes some doing for a government to produce a Bill which simultaneously constructs a poverty trap, a dependency trap and a savings trap, but the Government have managed all three. When will the Treasury learn?

Finally, we object to the Bill because it does not do what it says that it will do in its Long Title, which is,

3 Apr 1995 : Column 51


    "to promote the employment of the unemployed".

As my noble friend Lady David and the noble Baroness, Lady Park, said, nowhere is that more evident than in the 21-hour study rule. We all know that we need to skill and educate our workforce. All of the research shows that general educational qualifications are at least as valuable as vocational training in obtaining work, yet it is proposed not only to cut benefits for those in part-time study for more than 16 hours per week, but, if someone is in part-time study for only five hours per week but nonetheless has paid fees of, say, £100 for a computer course or for lessons to teach them to drive heavy goods vehicles, the fact that they have invested so much of their own savings in that course is taken as evidence that they are not sufficiently committed to seeking work. Again, that is stupid. Such people will be required to take temporary, part-time, insecure, low-paid work rather than being allowed to become skilled (at their own expense) for useful and decent work. Again, that is short-termism of the worst sort. In this Bill, we see not efforts to promote the employment of the unemployed, but efforts to harass, police and coerce them—and to cut their benefits.

Back in December 1992 this House passed the actively seeking work regulations. But that did not produce the effect for which the Government had hoped, which was to reduce benefit levels. That was precisely because the Government found that people were actively seeking work. So, in April 1994, the target for disqualifying people from benefit was doubled to 150,000 per year. I ask your Lordships to note that we are talking not about a target for getting people into work, but about a target to disqualify them from benefit. What a goal at which to aim: "Get 150,000 off the books!" And it is on those new operational targets that staff performance and performance-related pay may be based. The inescapable conclusion, which I am sure is as distasteful to the staff as it is to these Benches, is that benefits staff will earn more if they ensure that benefits claimants end up getting less. That is the ugliest of all social contracts, yet at the same time the chief adjudication officer worries about the quality of the decision-making. As the noble Earl, Lord Russell, pointed out, the annual report of 1993-94 found that 92 per cent. of appeal decisions were unsatisfactory.

There we have it: the Minister professes to be worried by the workshy; we are worried by the work-poor. I ask your Lordships: in what way will the Bill create one extra job? What we do know is that it will humiliate and impoverish the unemployed while simultaneously adding to the benefits bill that we shall all end up paying. As the Oxford Review of Economic Policy, which was quoted by my noble friend Lord Ashley, shows today, so-called labour flexibility and making benefits conditional upon job search are irrelevant. What matters is investment and the skills bank to exploit that.

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As other noble Lords have said, we have had 15 wasted years and another wasteful Bill. It is wasteful of people, wasteful of opportunity and wasteful of money. We have nothing but contempt for it.

5.48 p.m.

Lord Inglewood: My Lords, the Government are committed to giving unemployed people a better chance of taking a fair share of the increasing number of available jobs. The new jobseeker's allowance will play a vital part in targeting our help on every individual who wants work. It is designed to meet the needs of unemployed people from the time they start to look for a job until they are back in work.

We have had a useful and wide-ranging debate this afternoon about the interface between the labour market and the benefits system. As was made clear by the noble Earl, Lord Russell, and the noble Lord, Lord Henderson, much of our debate has been not about the Bill, which is the skeleton of the new system, but about the policy details which will be attached to it in secondary legislation.

There is a consensus in this House that the priority must be to help people back to work. I agree. I believe that we have shown in this debate that JSA will do this. Nonetheless, a number of important concerns have been raised about the impact of the new benefit. Whilst I believe that those concerns are unfounded, I should like to address some of the points that have been raised. First, the jobseeker's agreement provides a new focus on the experience and actions of unemployed people as individuals. Each has different needs and will follow different paths in the labour market. The jobseeker's agreement will enable each jobseeker, and the Employment Service, to plan the most effective steps back to work for that person.

The agreement will ensure that each jobseeker fully understands his duties and responsibilities in return for the benefit that he receives. At the same time, it will ensure that he receives expert advice and is aware of the help and services that the Employment Service is able to offer for successful jobsearch. To say, as was intimated unintentionally, I believe, that the Employment Service does not put its efforts in to finding work for those it is helping is a calumny. Each agreement will set out the terms of the jobseeker's availability for work, including any restrictions that he wishes to place upon it and the steps he will take to look for work. That will bring greater clarity to the conditions for benefit. But the agreement itself will not change the conditions for benefit. As my noble friend the Minister of State has made clear in his opening, the conditions remain those set out in the legislation.


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