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Column 391Shepherd, Colin (Hereford)
Shepherd, Richard (Aldridge)
Skeet, Sir Trevor
Smith, Sir Dudley (Warwick)
Smith, Tim (Beaconsfield)
Spencer, Sir Derek
Spicer, Sir James (W Dorset)
Spicer, Michael (S Worcs)
Spink, Dr Robert
Squire, Robin (Hornchurch)
Stanley, Rt Hon Sir John
Tapsell, Sir Peter
Taylor, Ian (Esher)
Taylor, John M (Solihull)
Taylor, Sir Teddy (Southend, E)
Thompson, Patrick (Norwich N)
Thornton, Sir Malcolm
Townend, John (Bridlington)
Townsend, Cyril D (Bexl'yh'th)
Twinn, Dr Ian
Vaughan, Sir Gerard
Waldegrave, Rt Hon William
Walker, Bill (N Tayside)
Wardle, Charles (Bexhill)
Wheeler, Rt Hon Sir John
Wiggin, Sir Jerry
Winterton, Mrs Ann (Congleton)
Young, Rt Hon Sir George
Tellers for the Noes: Mr. Timothy Wood and Mr. Timothy Kirkhope.
Column 391Question accordingly negatived.
`.--(1) Regulations shall make provision for the payment in prescribed circumstances and for prescribed items, of sums in the form of repayable loans to or in respect of persons, who are or have been entitled to a jobseeker's allowance or to income support. (2) A sum payable under the regulations shall be known as a "jobstart loan".
(3) The question whether a jobstart loan is to be awarded and how much it is to be shall be determined by an adjudication officer.
Column 392(4) In determining whether a jobstart loan shall be paid under this section, and the amount of any such loan, regard shall be had, so far as regulations so provide, to the income or capital of the claimant.
(5) Regulations made under this section may, in particular, provide for--
(a) a jobstart loan to be payable only on the occurrence of a prescribed event;
(b) a jobstart loan not to be payable unless a claim is made before the end of a prescribed period;
(c) the amount of a jobstart loan not to exceed a prescribed amount;
(d) the amount of any jobstart loan otherwise payable to be reduced where the claimant has income or capital of a prescribed description which exceeds a prescribed amount;
(e) a jobstart loan to be repayable after a prescribed period, upon such terms and conditions as may be prescribed.'.-- [Ms Lynne.]
Brought up, and read the First time.
Ms Lynne: I beg to move, That the clause be read a Second time. I shall not detain the House for long on new clause 5. It is a modest measure which recognises the financial barriers that can hinder unemployed people who are keen to work from taking work once they are offered it. I should prefer grants to be made more available to get people back into work or to help them when they have got back into work. If the jobfinder's grant were payable after six months of unemployment instead of after two years, that would be a step in the right direction--but I do not imagine that the Government will move on that.
My small proposal for a modest, interest-free loan for people starting work could be implemented at little cost. In that way, when people have stopped receiving benefit and are waiting for their first pay cheque, they would not be left without money in their first week or month of employment. I envisage a loan in the region of £500, to assist with living expenses, travel to work and other
A citizens advice bureau in western England reported the case of one client who had found a new job after five months' unemployment. His wife had been in work but had been off sick the previous three months and was about to have her income reduced from half pay to statutory sick pay. The client had borrowed as much as he could from the bank and was worried about supporting himself and his wife while awaiting his first pay cheque a month later as his employer was unwilling to pay his salary after two weeks. In eastern England, a citizens advice bureau reported the case of a client who came off unemployment benefit to start a job. After two weeks, she had no money left and a fortnight to go before receiving her first pay cheque. She was unable to afford her bus fares and was worried that she might lose her job, which she was enjoying tremendously. Neither the DSS nor the jobcentre could assist her. In such circumstances, I do not suggest payment of a grant, but a repayable loan.
It is also difficult for people to repay their debts after leaving the benefit system and before receiving a salary. The Benefits Agency has established a good scheme for the direct payment of debts to gas and electricity companies, and to others to whom a claimant owes money, but when a person starts work that scheme comes to an end and the individual has to renegotiate his own debt repayments. Invariably, the gas company, for
Column 393example, will want to negotiate a higher repayment rate and often is not prepared to wait a month before payments begin.
A loan would also be useful to pay for work tools or for special clothing or footwear, without which the individual might be unable to take a job. The person might need driving lessons, or a driving course if he intended to set up as a minicab driver. A loan would also help to meet the cost of a medical examination if required. The loan could be claimed before the individual started work or within 28 days of doing so. If the person had savings of more than £500, the loan could be reduced. Repayments would be interest free, commencing 13 weeks after the start of employment, as it would be unreasonable to expect the person to start repaying it before he was re-established, and there would be a maximum repayment term of three years.
I hope that the Government can see their way clear to accepting new clause 5, which would help people seeking work to begin new employment. Otherwise, many people may be debarred from saying yes to a new job because they do not have the right clothes or cannot meet the travelling expenses involved.
Mr. Bradley: Although most of the time in Committee was spent on the main thrust of the Bill--which is to cut benefits--there were frequent debates on measures to help people back to work. As the Government had called the measure the Jobseekers Bill, we hoped that they would take every opportunity to accept suggestions to help people back to work. I pay tribute to the citizens advice bureaux and to other organisations which, throughout the Committee stage and since, have provided invaluable information on the detail of the Bill and on cases such as those cited by the hon. Member for Rochdale (Ms Lynne) which illustrate the difficulties that people experience when they want to take up work but do not have the means to do so. The hon. Member for Rochdale could not serve on the Committee during those deliberations because she was serving on the Committee considering the Disability Discrimination Bill. In view of the contributions that the Liberal Democrats are making now, it is unfortunate that they were unable to produce another spokesperson in Committee on the Jobseekers Bill as I am sure that we would have welcomed that support.
One is always reluctant to support the introduction of more loans into the social security system. We have learnt from bitter experience that the replacement of grants by loans under the social fund--because of the inequitable way in which that system can be administered with cash-limited budgets--leads to disparities of treatment depending on when people come through the door. I was always under the impression that one stood more chance of a social fund loan at the beginning of the year when the new budget was in place, and when offices were more likely to treat claimants sympathetically, but research shows that the reverse is true. Social fund officers are so worried about exhausting their funds too early in the year that they store up money and administer the fund only towards the end of the year. That is clearly unacceptable and inequitable, and leads to claimants in identical circumstances being treated differently in the course of the year.
Column 394Our experience of the social fund and of the Student Loans Company has shown that loans are expensive to administer and we would certainly not want to use the latter as a model for new clause 5. However, a loan is better than nothing and we approve new clause 5 in those terms because we must give whatever help we can to encourage people to take up new employment.
New clause 5 is modest in that, as with our earlier new clauses, it would allow the Government to prescribe the circumstances, amounts and operation of loans in regulations. At this stage, we are not asking the Government to accept a defined proposal which would create tremendous costs--the money would be paid back. We are not asking for an open-ended commitment to the loan: we are looking to the Government to take the modest view that such a scheme should be considered with a view to coming back with the detail at the regulation stage to debate the matter further.
The Labour party supports the new clause. We believe that it should be added to the package of measures that the Government have introduced, modest as they are. I do not believe that this additional modest measure should be denied by the Government. We leave it in their hands to come forward with the detail. I believe that this enabling new clause would be to the great benefit of unemployed people and I hope that in that spirit the Minister will accept the new clause.
Mr. Roger Evans: I thought that the hon. Member for Manchester, Withington (Mr. Bradley) was rather torn in his speech. He began by saying that he was reluctant to see the extension of loans in the social security sphere and gently chided the social fund for a number of faults which he and his colleagues have put to Ministers in the past. He referred to loans being expensive to administer and even referred to the Student Loans Company, but at the end of the day he said that the new clause was good and that it simply empowered the Government to do things. I respectfully suggest, therefore, that there is perhaps some ambiguity in the hon. Gentleman's position. 6.30 pm
I must say straight away that the hon. Member for Rochdale (Ms Lynne) raised a most important issue, and I do not disagree with her fundamental proposition that there are difficulties for people moving into work after a period of unemployment. The question is what is the best combination of ways in which we can assist. People in that position face a number of problems and it is a matter of putting a number of measures together to deal with them.
My approach to the problem has been this. It is important to recognise that in the Bill and in other Government actions we have introduced a number of proposals, the first of which--the jobfinder's grant--was mentioned by the hon. Lady. The 1994 Budget announced the nationwide expansion of that scheme from April 1995, with 25,000 grants available each year. The main national programme will have a fixed grant of £200 available to all people unemployed for two years who take a job paying less than £150 per week. The hon. Lady welcomed that, but sought to persuade me that we should reduce the qualifying period from two years to six months. The difficulty, of course, is cost. The grant targets help on those who most need it and the cost will be £5 million. Obviously, that sum would increase considerably, the
Column 395more the period of qualification was reduced. We have determined that it is best to focus that help on the long- term unemployed. The second two measures are in the Bill before us. The back-to-work bonus is a measure whereby for claimants who have taken small amounts of work while on benefit, a bonus will build up, to be paid when they go back into work. The gross costs in the first full year 1997-98 will be £50 million.
Mr. Evans: It will be included in capital after 52 weeks. The point at stake is that that sum of money, which will have been built up by work and effort, will be available to be spent on all the problems that have been mentioned, for example, when the breadwinner of a family is moving back into work. That is a positive and real way of helping.
The third item in the Government's package is one that I mentioned earlier- -the four-week run-on of housing benefit and council tax benefit to ensure that the family will be able to afford the rent in the first four weeks. The cost, again, is £50 million.
Those measures are already a substantial package and they are targeted at the unemployed who need most help--the long-term unemployed. The measures are a most important advance, but they involve significant extra expenditure. I must tell the hon. Lady, therefore, that in view of that package we do not propose now to introduce additional proposals for loans. As the hon. Member for Withington recognised, loans--even modest ones of £500--involve an administrative cost, so it would not be fair to say that the proposal would be cost-neutral.
Let us see how the measures that we have proposed work out. We recognise the problem that the hon. Lady identified and we shall, of course, continue to review whether any further measures--whether loans or other initiatives- -are needed to address that continuing problem. For the reasons that I have given, I invite my hon. Friends to reject the new clause.
Ms Lynne: I am disappointed that the Minister cannot see his way to accepting the new clause. It is a modest measure and would involve little cost for the Government. I believe that unemployed people will be hindered from taking work. Those who want to take work and are offered a job may not be able to meet some of the expenses and may have to turn the offer down.
When the Minister talks about the cost of administering the measure, he must balance that against the cost of people staying on benefits. I gave an example of a woman who could not get to work because she did not have enough money for the bus fare. She was going to have to give up her job because she could not afford to get to work. She had no money whatever. We are talking about people who would have to stay on benefit or return to benefit. It would be more cost-effective if the Government accepted the new clause.
I take the point made by the hon. Member for Manchester, Withington (Mr. Bradley) about the social fund. I am not asking for a grant to be replaced by a loan. I am not in favour of the social fund and would prefer to
Column 396see a grant brought back in, but this is a new, small loan, and it is up to the Government to decide how much it should be. I said that it should be in the region of £500, because that seems a reasonable amount when the person has a month's travel costs and also the cost of new clothing and so on to be taken into account. The Government have taken that into account with the back-to-work bonus. A person who has been unemployed for some time may well need a new suit. He may need different clothes for the job. He needs to be able to pay debts that have built up.
Taking into account all that the Minister has said and the three measures that he has introduced, it is a very small and specific thing that I am asking for and I am disappointed that the Government feel unable to accept the new clause. I believe that in the long term it would be cost-effective. I therefore urge the House to join me in voting for the new clause.
Question put , That the clause be read a Second time:--
The House divided : Ayes 250, Noes 261.
Division No. 109] [6.38 pm
Column 396Adams, Mrs Irene
Ainsworth, Robert (Cov'try NE)
Banks, Tony (Newham NW)
Beckett, Rt Hon Margaret
Beith, Rt Hon A J
Benn, Rt Hon Tony
Brown, Gordon (Dunfermline E)
Brown, N (N'c'tle upon Tyne E)
Campbell, Mrs Anne (C'bridge)
Campbell, Ronnie (Blyth V)
Campbell-Savours, D N