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Mr. Donald Dewar (Glasgow, Garscadden): The one thing that I can say about the hon. Member for Hertfordshire, North (Mr. Heald) is that, in his own way, he is quite engaging. His one characteristic in common, I think, with most hon. Members is that he does not take himself very seriously. If he is trying to argue that duties and responsibilities are never honoured unless there is a directly threatening sanction, he has a very miserable view of the human species which few of his hon. Friends would share.
I shall start with a complaint, although I do not want to make too much of it, and a rather remarkable circumstance. I picked up the Bill when it was first published and saw that it was presented--it says so on the back--by the Secretary of State for Social Security. The right hon. Gentleman is around the House. We saw him in the building and he even appeared briefly in the debate. However, he decided not to appear at the Dispatch Box, which I find a little puzzling.
One of my ingenious colleagues has suggested that the right hon. Gentleman is taking part in a job share: he is in ideological communion with the Secretary of State for Employment. They will do the job turn about, Tweedledum and Tweedledee, because they are intellectually indistinguishable. That is not entirely satisfactory. If this measure is important and a great Government showpiece it is somewhat discourteous to the House for the Secretary of State not to appear. I hope that I have put that in reasonable terms.
The Bill is depressing at a superficial level that is nevertheless worth mentioning. It is evidence of the depressing fashion for remote government. One can read the text with care and learn not a lot. Almost everything in the Bill is to be prescribed and will be done by regulations at a future and indeterminate date. Its
Column 111corpulent linguistic patterns are a delight to the insider. No doubt it is draftsman's padding of which he or she is proud, but it does not help the general public who may want to look at the measure. The simplest concept becomes complex. As something of a barrack- room lawyer in my own right, I ought to take great delight in, for example, clause 9(4), which deals with income and capital. It states: "Circumstances may be prescribed in which--
(a) a person is treated as possessing capital or income which he does not possess;
(b) capital or income which a person does possess is to be disregarded;
(c) income is to be treated as capital;
(d) capital is to be treated as income."
There are acres, stricken page after stricken page, of similar verbiage.
We have been led through something of a moral maze today. I genuinely enjoyed the speech of the hon. Member for Stratford-on-Avon (Mr. Howarth), who pushed the boat out even further than he usually does in defining his distinctive position. I was intrigued to hear, from Conservative Members, Disraeli and Gramsci working in harness--even if it was in a good cause. It might be stretching it to say that the hon. Member for Sutton and Cheam (Lady Olga Maitland) entertained us for 24 minutes--she is not the most sympathetic figure on the Conservative Benches--but I look forward to the fulfilment of her very precise prediction that, under a Labour Government, she would find it necessary to knock down windmills. That will do very little for property values in Norfolk.
Then there was the Secretary of State. I had no idea that he had such a touching faith in--despite an incomplete knowledge of--the works of the late Lord Beveridge; I shall certainly remember that. One stark fact, however, stands out from this interesting debate. The Bill is essentially about cutting public expenditure, reducing entitlement and undermining rights, and that is the essence of our objection to it. The core of the Bill is the cut from 12 to six months, about which the Secretary of State said very little. I can understand that--he wanted to concentrate on other matters, no doubt for good tactical reasons--but the cut is serious, in that it is unquestionably an attack on the contributory principle.
The Minister of State came to the Dispatch Box full of vim and vigour, but her intervention bore all the marks of the product of much time spent working on a bad case. It seemed that she had come up with something that she thought might just stand up, but it clearly did not.
People talk about the contract between Government and governed. We have heard a good deal about a speech that was made in Liverpool cathedral. Religious venues currently have a strange attraction for Conservative Front Benchers. The right hon. Member for St. Albans (Mr. Lilley)--not in his local cathedral, but addressing the Birmingham diocesan conference-- recently discovered that there was a strong case for a minimum wage, in that he at least accepted that the principal cause--or, rather, economic cause; I must be precise--of social instability and marriage breakdown was the low wage paid to unskilled manual workers. That at least opened a chink for common sense.
Column 112If we believe, as these gentlemen do, in the contract between Government and governed, this exercise in Treasury expediency has a hollow, mean and unpleasant ring. Let me give an example of what I mean. One of the virtues seen by those with tidy minds in the Departments of Employment and of Social Security is harmonisation of benefit structures. When it comes to the treatment of those under 25 and over 25 respectively, their logic seems to suggest the importation of rules that are currently part of the income support structure to the new contributory jobseeker's allowance. If that had been applied to the coming year--it will come into effect in the year after that, but the pattern will be similar--a 24-year-old who had made exactly the same contributions as a man of 25 living at the other end of the street would receive £9.70 a week less than that man during the six-month period that is allowed.
I find that extraordinary. The Government's explanation is that someone of 24 earns less, expects less and therefore deserves less; but, as everyone knows, people of 24 eat as much and dress as expensively as older people, and the bills are every bit as big. There is an interesting omission in the litany that is advanced to defend that proposal. We hear nothing about the "back to basics" philosophy. In the days before "back to basics" had a bad name, there was an additional argument: people would be persuaded, forced, encouraged, stimulated or motivated--all those nice euphemisms--to stay at home. That was the reason for such a substantial reduction. I enjoyed the exchanges between the right hon. Member for St. Albans and the Select Committee on Social Security on 26 January, when the right hon. Gentleman was questioned by my hon. Friend the Member for Liverpool, Broadgreen (Mrs. Kennedy). On the split between 24 and 25-year-olds, he said that the rules were
"the same for everybody in the sense that everybody under 25 will be treated the same and everybody over 25 will be treated the same." As an attempt at a reasonable defence, it is very sub Lewis Carroll but definitely in that league.
As I have explained, an income support rule on the 24 and 25-year-olds split has been imported into the contributory jobseeker's allowance. I must confess that I discovered that quite late in my exploration into these matters, but clause 1(4) contains an innocent looking provision on waiting days. A waiting-days concept will be introduced into the means-tested jobseeker's allowance. That concept was previously used only for unemployment benefit--the equivalent of the contributory jobseeker's allowance. I presume that the result of that will be that under part II of the Bill everyone who receives the contributory jobseeker's allowance will have to wait for a prescribed number of days before the benefit comes into effect; they will not receive it from the date of application, as they do now with the contributory benefit, which is being replaced.
It sounds complicated. It is a lovely proposal from the Treasury's point of view because it will save £40 million, as I heard in an answer to a parliamentary question. The proposal is the mirror image of what has been done with the 24-25 split. I deduce from that--I do not see any other deduction that I can make--that harmonisation is being pursued not in the interests of clients, justice or any other concept but simply to achieve the cheapest option. That
Column 113is harmonisation at the lowest common denominator. It tells us a great deal about the way in which the Government work and what they are trying to achieve.
We are told that the jobseeker's allowance will produce savings of £140 million in the first year and £270 million thereafter. It will be expensive to introduce. I say to the hon. Member for Rochdale (Ms Lynne), who waxed eloquent about the difficulty of getting a figure on the matter, that the financial memorandum printed at the front of the Bill states that the figure is £280 million over three years. We are told that there may even be 3,000, if not redundancies, at least redeployments in the Department of Employment. There is a great deal of disorganisation and a great deal of administrative expense. A fair degree of injustice and very minor savings will occur, even if one takes it from a Treasury viewpoint.
I ask the Secretary of State for Social Security to cast his mind back to the exchanges in the Select Committee on Social Security, this time with my hon. Friend the Member for Birkenhead (Mr. Field), who asked who would pay. The right hon. Gentleman replied:
"It is savings, so no one will be paying it."
It is some sort of magic, painless, bloodless performance where savings are made for the Treasury and can be clawed out of the Budget, but no one pays. When rightly pressed by the chairman, the right hon. Gentleman was driven from that position. He said that
"Those who least the need help of the taxpayer"
will pay. We are talking about not a targeted benefit but a contributory benefit. It is not a relevant argument but it provides an interesting insight into the Secretary of State's view of the contributory principle that he pretends to defend. Almost 250,000 people will face the bill. They will be without the contributory jobseeker's allowance after six months at a cost of £180 million in 1997-98. Many will find themselves without an adult dependency increase. Again parliamentary answers tell us that no fewer than 5, 000 will be forced on to means-tested benefits at any one time as a result. Spouses will have to give up work, very often to protect the husband's benefit. Of course, a large number of people will find that thrift has been punished because they have more than £3,000 in savings or perhaps £8,000 in savings, which takes them out of the jobseeker's system. After six months they will find that they are either bereft of benefit, forced on to means-tested benefits or left dependent on some other member of their family.
There is a massive inconsistency in the Government's position and it is illustrated by the facts. This is a serious argument. The Government rail, in my view quite rightly, about the difficulties of means-tested benefit. At the same time, they deliberately introduce measures that force many people on to means-tested benefits. That happens under other legislation as well as the Jobseekers Bill. For example, under the Social Security (Incapacity for Work) Act 1994, 90,000 people in the first year and 190,000 in the second year will be forced on to means-tested benefits or on to the dole queues. The Government may make bigger and better savings, but there will be even greater misery, frustration and depression for the people who do not necessarily deserve that fate but who become the casualties of this sort of legislation. It will not do and the House should not vote for it.
There is another side to the argument. We are told that there is a stick and a carrot--that the Bill will help workseekers and encourage the work- shy. All that is
Column 114contained in a rather nice little blue pamphlet. It is a sort of canvassers' aide memoire which was distributed at the Conservative party conference. I suspect that the phrase "encourage the work-shy" is a euphemism.
Some have argued that all this talk is simply gesture politics, posturing and playing to the Conservative party gallery. They say that it is tough talking but that nothing will really change. We will have to wait and see. I have said repeatedly that I fear that there is a strong hidden agenda. To be fair to Ministers, it is not hidden very thoroughly or consistently. A Conservative party brief produced for this debate includes a section entitled:
"Tougher sanctions on the Work-Shy."
It was interesting at Question Time this afternoon that, when faced with the neanderthal views--I use that phrase advisedly--of the hon. Member for Welwyn Hatfield (Mr. Evans), the Minister of State, the hon. Member for Maidstone (Miss Widdecombe), did not repudiate them but hurried to tell the hon. Gentleman that she hoped that the Jobseekers Bill would go at least some way towards allaying his fears. I do not want to live in a Britain where the fears, delusions and prejudices of the hon. Member for Welwyn Hatfield are pandered to. In fairness to the Conservative party, I am sure that on the boat out I will find not only the hon. Member for Stratford-on- Avon but many others as well, and quite right, too.
There are some good things in the Bill. There is the back-to-work bonus, but it does not make the transition to work any easier. It rewards those who are successful in finding work. It reinforces success but does not help those who do not have the equipment to be successful. For many of the most vulnerable it will be a case of perhaps jam tomorrow, but it is much more likely that it will be jam never.
The national insurance holiday for those who have been unemployed for two years is a peelie-wally little attempt to deal with a real problem. It is worth about £6 a week. That is the incentive. Surely the Government who invented the national lottery can do better than that.
The jobfinder's grant, the extension of family credit on a test basis, and the job trial extension are not in the Bill and will have to be considered on another occasion.
I know that I am running into the Minister's time and I make no apology for that given what happened earlier in terms of the allocation of time and the agreement reached behind the Chair. I believe that I am within my rights.
One of the favourite examples of self-deception and delusion that afflicts Conservative Ministers is that they carry with them the support of a large number of outside bodies with expertise. However, even they cannot imagine that that is true in this instance. Carers' organisations are very worried about the lack of a right to the jobseeker's allowance for those who cease caring, perhaps because of the death of the person cared for. There were sympathetic noises from the Secretary of State for Employment, but I assure him that we shall return to the issue in Committee. I hope that his sympathy will extend to practical help when we get there.
The National Association of Citizens Advice Bureaux, the Royal Association for Disability and Rehabilitation, the Disablement Income Group and the coalition of young people on social security have condemned the Bill. Almost everyone involved has said that it will not do and that it is inappropriate.
Column 115I remember the speeches, which have been referred to, made by the Secretary of State for Employment. I remember his speech about the need to restore deference in our society so that everyone knows his appointed place and keeps to it. However, the other side of deference is stigma. My worry is that, whatever the intention of some people in the Conservative party, the end product will be an extension of stigma, with all its disastrous consequences for the unfortunate in society. Those who have suffered misfortune, which may be economic or health related, will find themselves in the dock, stigmatised as economic failures and seen by many less tolerant people as social outcasts. That should not be the House's intention. The Bill is not merely about Treasury expedience; it is a social philosophy that still has about it the smell of less eligibility, which is why we shall vote against it tonight.
The Parliamentary Under-Secretary of State for Social Security (Mr. Roger Evans): The hon. Member for Glasgow, Garscadden (Mr. Dewar) made a valiant effort to sit on both sides of the fence. He wondered whether the Bill was tough or whether it was merely talk that would change nothing. He spoke of hidden agendas and ended with a fantastic peroration on the principles of stigma, which had nothing to do with the Bill. The mealy- mouthed concession in his closing remarks was that there were some good things in it, such as the back-to-work bonus.
I suppose that we should be grateful that the hon. Member for Garscadden was not quite as bizarre as the hon. Member for Newport, West (Mr. Flynn), who saw something sinister in the back-to-work bonus because it might save money in persuading people to go back to work.
Let us deal with the fundamental principles behind the Bill. Mr. Flynn rose --
Mr. Evans: I shall not give way, as I have very little time. The first principle of the Bill is to improve the operation of the job market, but we heard nothing about that from the Opposition parties. Secondly, when it came to improving the service to the unemployed by means of a uniform streamlined service, they grudgingly conceded that there might be something somewhere in the Bill that would achieve that end, but they based their miserable attack on the premise that anything involving streamlining was harmonisation on the worst possible basis.
The third principle is to improve value for the taxpayer, but that did not receive a single word of support from the Opposition, who ridiculed the considerable savings and treated them lightly. The smokescreen of an attack offered by the hon. Members for Peckham (Ms Harman) and for Garscadden was focused on the reduction of the period of receipt of contributory benefit from 12 to six months. It was spoken of as if it were a breach of faith or a breach of a private contract, which is absolutely absurd.
The contribution system of national insurance has always been a scheme regulated by statute, the terms of benefits of which have been altered over the years
Column 116by successive Governments--including Labour Governments--as circumstances have changed. That must be so, because the basis of the scheme involves a number of parties: it involves those who draw from the system from a given moment in time and those who contribute to it for the greater part of their working lives. Parliament is the guarantor that the scheme is operated fairly. The National Insurance Act 1946 introduced a 30-week period plus additional days if the number of contributions was more than 26. The National Insurance Act 1966, introduced by the Labour Government, introduced the period of 12 months, with an earnings supplement for up to 156 days. The most startling reason for the change, which the Opposition have completely ignored in this debate, is the fact that the national insurance scheme depends on the number of those paying in and the number of those paying out roughly balancing. We know full well that, with the increased proportion of the aged in the population, there must be an adjustment, which will be the matter of a separate Bill on pensions.
The hon. Member for Makerfield (Mr. McCartney) said in an intervention that, somehow or other, there was a breach because nobody had been given notice of the change. This is not a proposal to come into force immediately, even if the House passes the Bill tomorrow. The proposal will not come into force until April 1996. Notice has been given. Nobody believes that even a private contractual arrangement cannot be altered when notice has been given. My hon. Friend the Minister of State rightly pointed out that the fundamental purpose of the national insurance scheme is that it is earmarked taxation. The promise is that the purposes for which the money is spent are those for which it is raised.
The savings involved are not trivial; this aspect of the Bill will save £180 million. The interesting challenge which, I have no doubt, will resound around the country over the next month and the next year, and when the next general election comes, is the question that the hon. Member for Peckham (Ms Harman) wholly failed to answer: if the Government's proposals are wrong, will the Labour party promise to reverse them? It is a simple question. Either this is a matter of principle, which is how it has been argued, or it is a minor, contingent matter depending on transient economic circumstances. Labour will not answer; it does not wish to answer because it wants the bills never to come in and it wants the country never to be aware of the costs. The hon. Member for Peckham asked--
Mr. Evans: No. I shall finish shortly. The hon. Member for Peckham asked where the winners, as opposed to the losers, would be under the Bill. I emphasise--[ Laughter. ] The cackling and the frivolity ignore the fact that the back-to-work bonus will benefit about 150,000 people. The employment-on-trial provisions will benefit about 200,000 people and the national insurance contributions holiday is expected to benefit about 120,000 people. The hon. Member for Garscadden mocked the fact that--
Column 117The hon. Member for Garscadden mocked and said that a £6 a week concession was meaningless to a small employer. That is not the case, as was shown by my hon. Friends the Members for Scarborough (Mr. Sykes) and for Hertfordshire, North (Mr. Heald). They have pointed out that there are very real incentives in the proposals. One should, perhaps, ask a further question, which was originally put by my hon. Friend the Member for Scarborough. How many of those who are seeking jobs--
How many of those about whom there has been a great deal of talk have put their houses up on a bank guarantee? How many of the people of whom the Opposition spoke appreciate the difficulties of running small businesses, of maintaining solvency and of being able to provide the jobs that will promote prosperity?
The hon. and learned Member for Leicester, West (Mr. Janner) talked in the most classic, old-fashioned, socialist way about everyone having a right to work, and about everyone being entitled to a good place to live and a good education. All highly desirable, no doubt, but there was not the beginning of an understanding that such matters have to be paid for. There was not the beginning of an understanding that it is the members of the population who work who have to provide the earnings on which such standards can be maintained.
Mr. Andrew F. Bennett (Denton and Reddish): On a point of order, Mr. Deputy Speaker. Will you confirm that it is a tradition of the House that Ministers give way at least once in their speeches and that if-- [Interruption.]
Mr. Bennett: On a point of order, Mr. Deputy Speaker. Would you confirm that it is a tradition of the House that Ministers give way at least once during their winding-up speeches and that, if they do not, it tempts the House to behave in an unruly way and to consider--
short-circuited. The point which the hon. and learned Member for Leicester, West was making totally failed to deal with the question that all those excellent matters of which he spoke have to be paid for.
Column 118The hon. Member for Rochdale (Ms Lynne) said that the only point of the Bill that she could see was that it would save money for the Treasury. That is not in itself a matter to be spoken of with such levity. May I give her--
Mr. Evans: I was about to assist the hon. Member for Rochdale on the specific matters which she put to me. On the question of training, 225,000 long-term adult places for training are expected next year and the Government have given their guarantee of providing training for all 16 to 17-year-olds. I give the assurance that the disabled will not fall--
Mr. Dewar rose --
Mr. Evans: To expect me to give way in the last four minutes of my speech is unrealistic. I am trying to answer serious points made by the Liberal Democrats. I am amused that the Labour party apparently does not think that the Liberal Democrats are worth replying to. I am very interested to hear that, but never mind. [Interruption.]
Mr. Evans: I shall give way happily to the hon. Member for Peckham if she will answer the question which she has totally failed to answer at any stage of this debate: will she permit a future Labour Government, if ever such a Government should exist, to reduce and reverse what this Government are proposing in the Bill? That question will haunt her. Somehow, when it comes to a comment which the House may think would address the most material question, intervention comes there none.
My hon. Friends the Members for Plymouth, Sutton (Mr. Streeter), for Scarborough and for Ribble Valley (Mr. Evans) made the most important point that there must be a fair reciprocity of interests, a balance of interests between the taxpayer and the claimant. The talk by the hon. Member for Streatham (Mr. Hill) of a climate of coercion and compulsion is exactly the kind of grotesque exaggeration which has so harmed British politics in recent years. [Interruption.] It goes down in history--rather like privatising the national health service--as a load of fabricated nonsense.
One of the fundamental mechanics of the Bill, which my hon. Friend the Member for Hertfordshire, North in particular explained and defended, is that there should be a jobseeker's agreement. The purpose of that agreement is to assist the jobseeker. It is based on the present back-to-work plan. It is designed to spell out and set out the steps that the jobseeker will take, to which he agrees.
Column 119It is right that the individual jobseeker should be invited not only to discuss those terms with the person at the employment office but to agree them.
I am very concerned about the attack on the next stage of the mechanics of the Bill--the question of the direction. I can give the assurance that the direction will be subject to the ordinary process of adjudication, so the more fanciful fears expressed by some Opposition Members are wholly without foundation. The point is that a direction and some degree of compulsion are necessary to strike a fair balance between the taxpayer and the claimants. The work-shy are an unknown quantity, but they are thought to be one in six claimants.
Question put , That the Bill be now read a Second time:-- The House divided : Ayes 304, Noes 269.
Division No. 32] [10.00 pm
Column 119Ainsworth, Peter (East Surrey)
Aitken, Rt Hon Jonathan
Alison, Rt Hon Michael (Selby)
Allason, Rupert (Torbay)
Arnold, Jacques (Gravesham)
Arnold, Sir Thomas (Hazel Grv)
Atkinson, Peter (Hexham)
Baker, Nicholas (Dorset North)
Banks, Matthew (Southport)
Banks, Robert (Harrogate)
Beresford, Sir Paul
Biffen, Rt Hon John
Bonsor, Sir Nicholas
Bottomley, Peter (Eltham)
Bottomley, Rt Hon Virginia
Bowden, Sir Andrew
Boyson, Rt Hon Sir Rhodes
Bright, Sir Graham
Brooke, Rt Hon Peter
Brown, M (Brigg & Cl'thorpes)
Browning, Mrs. Angela
Bruce, Ian (Dorset)
Carlisle, Sir Kenneth (Lincoln)
Clark, Dr Michael (Rochford)