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Column 438Question accordingly negatived.
Amendments made: No. 8, in page 6, line 35, after `referred `, insert `forthwith'.
No. 9, in page 6, line 44, leave out first `by' and insert `at the instigation of'.
No. 10, in page 6, line 44, leave out second `by'-- [Mr. Roger Evans.]
`(aa) where the claimant and A are a married or unmarried couple, any portion of the applicable amount which is included in respect of them shall be reduced to one half for the period for which this subsection applies to the claimant.'.
Mr. Evans: I understand that the Opposition are content for me to make only a short speech on amendment No. 11. The amendments are drafting and technical, but I should perhaps refer the House to amendment No. 12, where the first line includes the word "is", which is clearly a typographical error, and should be deleted. The amendment should read
"Where a reduction under subsection (2)(aa) would not produce a sum which is a multiple of 5p".
Mr. Bradley: I confirm that the Opposition are content with the amendments, but I add the caveat that we are not content with the clauses to which the amendments relate. We opposed them in Committee, and we continue to oppose them. I do not want the fact that we are not pressing the amendment to a vote tonight to be misconstrued. Amendment agreed to.
Amendments made: No. 12, in page 10, line 40, at end insert-- `( ) Where a reduction under subsection (2)(aa) would not produce a sum which is a multiple of 5p, the reduction shall be to the nearest lower sum which is such a multiple.'.
Column 439No. 13, in page 10, line 48, at end insert--
`(5) Subsections (6) to (8) apply where an order made under section 150 of the Administration Act (annual up-rating of benefits) has the effect of increasing the sum prescribed in regulations made under section 4(5) as the personal allowance for a single person aged not less than 25 ("the personal allowance").
(6) For the sum prescribed in regulations made under subsection (2)(c) there shall be substituted, from the time when the order comes into force, a sum arrived at by increasing the prescribed sum by the percentage by which the personal allowance has been increased by the order.
(7) If the sum arrived at under subsection (6) is not a multiple of 50p--
(a) any remainder of 25p or less shall be disregarded;
(b) any remainder of more than 25p shall be rounded up to the nearest 50p.
(8) The order shall state the sum substituted for the sum prescribed in regulations made under subsection (2)(c).
(9) Nothing in subsection (6) prevents the making of further regulations under subsection (2)(c) varying the prescribed sum.'.--[ Mr. Roger Evans. ]
Amendment made : No. 14, in page 11, line 35, leave out `has' and insert `and "other assistance" have'.--[ Mr. Roger Evans. ]
Amendments made : No. 15, in page 13, line 34, leave out `the' and insert `an'.
No. 16, in page 14, line 19, leave out `more' and insert `both'. No. 17, in page 14, leave out line 22.--[ Mr. Roger Evans. ]
Amendments made: No. 18, in page 18, line 3, leave out `subsection (5)(b) and to'.
No. 19, in page 18, line 38, leave out from `person' to end of line 44 and insert--
`(1) the whole or a prescribed part of a back to work bonus to be payable, in such circumstances as may be prescribed, to such person, other than the person who is or had been entitled to a jobseeker's allowance or to income support, as may be determined in accordance with the regulations.'.--[ Miss Widdecombe. ]
`, invalid care allowance or a benefit paid by virtue of his incapacity for work'.'
No. 4, in page 19, line 5, leave out `two years' and insert `one year'.
Column 440No. 5, in page 19, line 10, after `deductions', insert
`which may exceed the payments which he is required to make by way of secondary Class I contributions in respect of that person.'.
Ms Lynne: The Bill does a great injustice to disabled people and their carers. The national insurance holiday to employers who take on someone who has been unemployed is welcome, but it does not go far enough. Obviously, I should like a full benefit transfer scheme, but that is a debate for another day. The Bill would exclude those who care for someone, those who claim invalidity care allowance, those who claim benefits that are paid on the grounds that they are incapable for work and those who suffer an illness or disability that qualifies them to claim incapacity benefit or severe disablement allowance.
The Minister may feel that he covered the amendment in Committee with the reply that he gave, but it was not adequate. He said: "The basic principle is that it is a work incentive proposal and there is no obvious case for extending it to those who are incapable of work. . . . There are other helps for disabled people to get back into work in the form of disability working allowance at a more generous rate than family credit. Housing benefit and council tax benefit contain extra premiums for disability, which again increases the amount of benefit that disabled people receive."- -[ Official Report, Standing Committee B , 28 February 1995; c. 640- 41.] I do not think that that is good enough, although there are provisions within the social security system to help disabled people back to work. The disability working allowance is one such thing, but it is unlikely to have any impact as a work incentive and the take-up rate is only 17 per cent. It would take another 25 years for the Government to achieve their target of 50,000 claimants.
The Minister missed the point in his reply in Committee. We are not talking about an incentive for those out of work. We are talking about an incentive for an employer to take people on. Employers can save about £6 a week. I do not see why that should not apply if they take on a qualified disabled person. I hope that the Minister will reconsider this. The amendment has particular value for carers who want to return to work. I know that the Minister for Social Security and Disabled People talked about considering the position of carers who received income support but were exempt from the requirement to sign on at the unemployment exchange.
I hope that the Minister will clarify the position on carers and whether they could be included in the national insurance holiday. Could disabled people be included if they had been in receipt of incapacity benefit? If employers take on someone who is disabled could they be treated in the same way as if they had taken on someone who had been unemployed for two years? I hope that the Government will consider accepting the amendment. It would go a long way to helping disabled people and their carers.
Amendments Nos. 3 and 4 reduce from two years to one year the qualifying period under which a new employer would get the national insurance contribution holiday. Amendment No. 5 deals with the amount of the
Column 441contribution rebate that clause 23 leaves to be prescribed in regulations and provides for the rebate to be more than the employer's contribution for the person in question.
It is unfortunate that we have so little time to debate this important group of amendments, which deal with support for taking people off the long -term register and getting them back to work--one could describe it as pathways back to work.
When she moved amendment No. 41, the hon. Member for Rochdale (Ms Lynne) referred to our debate in Committee. It is important that I point out that we moved an amendment at that stage to provide that income support, incapacity benefit, severe disablement allowance or invalid care allowance should be included as part of the two-year qualifying period.
As the Minister will know, I have corresponded with the Department during and since the Committee to try to clarify exactly how ex-carers and others who have been in receipt of incapacity benefits will be treated by the Bill and whether they will have the right to be included in any scheme that takes people off the long-term register.
Carers who have been undertaking the caring role and have not been available for work should not be discriminated against in any way when that caring responsibility ends and should not be excluded for two years--those are the Government's terms--from any help for returning to work. I hope that the Minister will be able to give us further details on that matter, because there is a general wish on both sides of the House to support people in those circumstances. I am pleased to see the hon. Member for Stratford-on-Avon (Mr. Howarth) in the Chamber. I tried to catch him before the debate started, as I did not want to do any further damage to his career by quoting him without giving him notice. His succinct and pertinent comments on Second Reading are worth quoting again, as they are relevant to amendments Nos. 3, 4 and 5. He was critical of the Government for failing to provide worthwhile incentives to employers to take on the long-term unemployed and his criticisms have a sound base. He said:
"The problem is that, although the Government have accepted the principle, their measures are wholly inadequate. The national insurance holiday for employers who take on those who have been unemployed for two years or more will offer employers just £6 a week. Employers have already made it clear that this is simply not enough and that it does not offer an incentive.
What is more, the national insurance holiday will not be introduced until April 1996. Why should the two-year unemployed have to wait to become unemployed for three and a half years before they get this measly incentive?"--[ Official Report , 10 January 1995; Vol. 252, c. 61.]
We could not express the purpose behind our amendments more clearly than that.
There is a strong economic case for offering incentives to private sector employers to recruit the long-term unemployed. In the long run, that will allow the economy to grow faster while assisting the improvement of local economic activity in areas of social deprivation. The insecurity that people feel about their futures and the absence of the so-called "feel-good factor" are due to the chronic insecurity that people feel in their jobs.
Column 442The figures show for themselves why there is such debilitating uncertainty in the current climate and the current economy. Between 1993 and 1994, for example, 20 per cent. of all employees had left the job that they were in at the start of 1993. Similarly, people have a one in two chance of being out of their present job within two years. There are 1.5 million fewer jobs in the economy than in 1989, which means that 1.5 million jobs have disappeared during the recession and have not been replaced. In 1995, there are 3 million fewer full-time jobs than there were in 1979.
For two months running, the number of vacancies at jobcentres fell. Having fallen by 3,400 in January, they fell by more than 2,000 in February. If people are unlucky enough to lose their job, they have a one in three chance that their next job will be part time. Once they have shifted into part-time work, they are twice as likely to lose their job within a year as an employee in a similar full-time position. The impact of that insecure world of work which the Government have created is disastrous for families trying to plan for themselves and their children. Furthermore, nearly 11 million people--40 per cent. of the work force--have been out of work at some point in the past five years. Men are hit worst; 44 per cent. or 6.8 million men have been affected. The unemployment figure is still almost 1 million higher than it was under the post-war Labour Government.
All those figures and many more show that the current workings and deregulation of the labour market do not work. Long-term unemployment is grossly inefficient and unjust. There is a strong argument to support measures targeted at getting the long-term unemployed back to work. People who have lost their job in the past year have only a 23 per cent. chance of finding work within a month. If they are out of the labour market for a year, their chance of finding work falls to just 12 per cent.
Sir Peter Emery (Honiton): Is the hon. Gentleman trying to argue that employers should keep people in work to stay inefficient and that people should be kept in employment to increase prices and to have inefficient industry? Is that the policy that the Labour party is putting forward? Is he saying that industry should not return to efficient organisation? Is that what the Labour party wants? If so, we want to know.
Mr. Bradley: That intervention was quite amazing. The purpose of the amendments is to build on the Government's measures. They have recognised that they must create incentives to get the long-term unemployed off the dole queue. The right hon. Gentleman implied that he did not even support those modest measures and wants no help to be given to the long-term unemployed. He clearly does not understand the Bill before us, the clause that we are dealing with and the fact that the amendments that we are discussing would help people to return to work. He should concentrate his mind on those matters and even read the statements made by the Chancellor of the Exchequer in introducing the proposals.
In his Budget speech, the Chancellor recognised that the Government must introduce those measures, and they have been included in the Jobseekers Bill, the back-to-work schemes and the back-to-work bonus. The amendments seek to reinforce, improve and extend those measures to help people who, because they have been out of work for one or two years, stand little chance of getting back into work. I should have thought that the right hon.
Column 443Gentleman would have felt some responsibility, given how long his party has been in government, for trying to help the long-term unemployed back into work. That is the sole intention of the amendments.
At the same time as the Chancellor announced his measures to help the long- term unemployed, we put forward the Labour party's eight pathways back into work. Given the intervention from the right hon. Member for Honiton (Sir P. Emery), it is worth re-emphasising that clear Labour party policy to help the long-term unemployed. We strongly believe in the release of capital receipts to enable local authorities to build and launch small business expansion schemes, so that those businesses can expand and take on new workers. We shall introduce a benefit transfer programme for non-profit employers to help them to take on the unemployed in their areas. We shall propose an environmental task force, open to all young people. We shall look at tax rebates for employers who take on those who have been unemployed for two years or more. We shall look at modernising the benefits system so that we can ensure that people have pathways out of poverty through a combination of properly paid work and benefits. We have just had an excellent debate on the minimum wage, which revealed that the Labour party is seeking proper wages for employment, topped up by benefits, rather than that people are ground down into poverty through the benefit system. We shall work to set up national child care systems to ensure that there are full opportunities for everyone to get back into employment.
We shall introduce many other measures when we are in government. At this stage, we want to ensure that the Bill provides the maximum opportunities to ensure that those who have been long-term unemployed and registered as such have the opportunity to benefit from the modest schemes that the Government have introduced. Amendments Nos. 3 and 5 are therefore designed to ensure that the Government include people who have been unemployed for between one and two years in the proposed new system. In particular, amendment No. 41 would guarantee that those people who have not been on the unemployment register but who have been unemployed through no fault of their own, because they have willingly undertaken the essential task of caring, also benefit from the Government's proposals.
As the hon. Member for Rochdale reminded us, in Committee the Government were not minded to look more sympathetically at the needs of the long-term unemployed or to consider lowering the unemployment threshold from two years to one. Since then, I hope that the Government have reflected on their position. I hope that they now appreciate that it is important that the plight of carers who, having undertaken caring responsibilities, face great difficulties when they try to get back into work, should be recognised.
More should be done to encourage the long-term unemployed back into work. I hope that the Minister will give us some encouragement by demonstrating that he has recognised the problem and by looking sympathetically at the amendments. I hope that he will accept them; otherwise we shall divide the House on amendments Nos. 41 and 3.
Column 444satisfy the terms of clause 23(1). They can be treated as such. The necessary empowerment to make the regulations is already included in the Bill. Therefore it is unnecessary to pass the amendment in order to achieve the object that the hon. Member for Rochdale (Ms Lynne) and, indeed, the hon. Member for Manchester, Withington (Mr. Bradley), sought to persuade me to achieve.
I regret that I am not in a position to offer any satisfaction on the two policy matters that were mentioned. First, in respect of the disabled, the hon. Member for Rochdale fairly quoted me from Standing Committee, and the Government remain of the view that disabled people receive help to return to work in other ways. Disability working allowance is available at a more generous rate than family credit. Housing benefit and council tax benefit contain premiums for disability which also increase the amount of benefits that disabled people receive. Disabled people will qualify for the extra £10 premium in family credit or disability working allowance if returning to work for 30 hours or more a week.
Ms Lynne: The Minister has not understood, as I said in my speech. We are talking about giving the employer an incentive to employ disabled people, not the other way round--not giving the disabled person the incentive to get into work.
Mr. Evans: The hon. Lady makes a fair point of analysis, but at the end of the day there is a question of money, whichever way round one tackles it. The Government's opinion is that the package announced in the uprating statement is an important, and indeed expensive, work incentive measure. The measures will cost an extra £300 million in benefit expenditure and will cut costs to business by a further £300 million when the national insurance reduction is taken into account. The Government's opinion at this stage is that we have gone a very long way. There is power in the Bill to go as far as the hon. Member for Rochdale wishes, but we do not propose to do so at the moment.
The second category, which was referred to by the hon. Member for Withington as well as the hon. Member for Rochdale, was that of ex-carers. My hon. Friend the Minister for Social Security and Disabled People has expressed sympathy. Indeed, he has written to the hon. Member for Withington, explaining that that category would not be entitled to the national insurance holiday, but expressing sympathy for the opinion that those who had received income support should be able to qualify and offering to consider the matter. I am not in a position to take the matter any further this evening, but that is the position as it stands.
The three amendments that the Labour party has tabled are extremely interesting and important. The purpose of amendments Nos. 3 and 4 is to make labour more attractive for hiring. The idea is that national insurance contributions are expensive; the employer has to meet them; if one gives a holiday from them, that is a direct incentive to the employer. The pair of amendments seek to extend that concession to employers from two years to one. The inexorable logic of the argument is that, by making labour cheaper, employers will have an incentive to take on more employees. Conservative Members strongly concur with that viewpoint.
Column 445It is deeply ironic that the inexorable sanity and logic of that position has been denied for the rest of the evening, because the minimum wage that Labour Members have contended for would have the effect of making labour more expensive. Somehow the Opposition wish to have more people in employment by making labour cheaper by those amendments, but refuse to accept the corollary that, if one increases the cost of labour by introducing a minimum wage, it will have the opposite effect. That is cloud cuckoo land of a most extraordinary nature, and shows the fundamental failing to understand a free market economy that is endemic on the Opposition Benches.
The difficulty with amendments Nos. 3 and 4, which are well intended, well meant and no doubt efficacious in the sense that they provide a positive incentive to increase the amount of people employed by reducing the cost of labour, is that, unhappily, they cost the taxpayer a considerable sum of money. The effect of amendment No. 3 would be to increase the category of employees who would potentially benefit from about 120,000 to 500,000 to 600,000. The precise effects are not necessarily easy to predict, but it is obvious that an estimated cost to the taxpayer of about £45 million would increase to about £170 million to £200 million in the terms of those two amendments. I regret to say that the Government believe that a considerable amount of money has been spent on the issue and it is not appropriate now to increase the burden on the taxpayer. In Committee, the hon. Member for Makerfield (Mr. McCartney) proposed amendments to like effect and suggested that they did not represent a spending commitment.
The hon. Gentleman suggested that, because the cost would be met out of the consolidated fund--general taxation--it was a mere book-keeping exercise. Increasing the burden on general taxation would, as a consequence, increase the amount needed to be raised from taxpayers to cover the additional cost. In no sense was it a book-keeping exercise. The hon. Gentleman's logic in Committee was incapable of being followed. The reality is that, yet again, the Labour party is arguing for a substantial public expenditure commitment.
Amendment No. 5 is in a different category. I can happily say that it is otiose in the sense that the Bill contains the power to do the same thing in any event.
[Interruption.] I can say to the hon. Member for Wallsend (Mr. Byers) that I shall be brief.
The Government expect to provide, in regulations, for the deduction to equate to the amount of the employer's national insurance contributions. But the Bill contains the power to make that amount more or less. It is likely that we shall make provision in regulations for employers who operate occupational pension schemes to claim an amount equal to their gross national insurance liability--the actual amount of contracted-out national insurance contributions paid, plus an amount equal to the employers' 3 per cent. contracted-out rebate. That puts all employers on an equal footing and encourages them to include employees who qualify for the national insurance contribution holiday within the pension scheme, which will be beneficial to
Column 446them. If amounts in excess of the employers' contribution liability were generally to be available, that would increase the amount of money involved and increase the burden to the general taxpayer. The national insurance contribution holiday scheme is intended to be easy for employers to understand and operate, and for the Department to administer, within a given cost. We are concerned to keep it on a broad basis and limit exceptions that would otherwise complicate a straightforward scheme. I invite the House to reject amendment No. 41 on the basis that, even if it is necessary and desirable to carry out the policy intentions urged on me, which I reject, the Bill already contains the power to take such action were the Government to be persuaded to change their mind.
Amendments Nos. 3 and 4 are extremely expensive. The Government understand the logic of the desirability of making labour cheaper to encourage more people to be taken on. I remain baffled by the fact that that logic was missing in the earlier argument this evening. I urge the House to reject amendment No. 5 on the basis that the Bill already contains the power. I have explained the way in which we intend to pursue the regulations.
Ms Lynne: I am grateful to the Under-Secretary of State for Social Security, but I am not grateful for the fact that he has not accepted amendment No. 41, especially when the Minister for Social Security and Disabled People said that he would consider it. I was hoping that we would receive a commitment tonight from the Under-Secretary of State further to the statement from the Minister for Social Security and Disabled People. I am also worried that disabled people, along with carers, will not be encouraged to get work. If we had a national insurance holiday for carers as well, it would help them to get back into work.
The Minister also said that the scheme would cost a great deal of money. He seems to forget that it is cost-effective to get people back to work. It might cost money for the national insurance holiday to be extended to disabled people and carers, but we should think of the savings in benefit. If the people who are now receiving benefit got back into work, that would represent a great saving for the Treasury rather than a cost. It is a great shame that the Minister is not prepared to accept amendment No. 41 and I shall certainly wish to put it to the vote.
Mr. Bradley: I was glad to hear the Minister's views on the amendments, although I am clearly disappointed by what he said. It is correct that I have been in correspondence with the Minister for Social Security and Disabled People, as I thought I mentioned in my opening remarks on the amendment. I will continue with that correspondence in an effort to assist carers as much as possible within the benefit system and to try to ensure that they benefit from the Government's schemes.
The Minister was disingenuous in describing our proposals. We recognise-- the shadow Chancellor stated it quite clearly at the time of the Budget-- that extra expenditure will be required in the short term in order to extend the pathways back to work proposals. That will prove economically efficient in the long term.
Column 447but it may assist the House in forming a view about it if he were to estimate the short-term cost of the back-to- work package that he has described.
Mr. Bradley: I urge the Minister to read the statements made by the shadow Chancellor at the time of the Budget when he presented the whole package. The Minister is welcome to come back to me if he thinks that the package will not prove economically efficient and at least cost neutral in the long term. It must be a better use of human resources to remove people from the unemployment register so that they stop claiming benefit and start paying taxes.
Mr. Bradley: That is certainly not true. I have been in the Chamber for six and a half hours and it is the first time that I have seen the hon. Lady here. She must have wandered in and out in a dream, because she has certainly not had anything to do with the debate. I will quote from the Chancellor's last Budget speech in support of my views. He said:
"We must combine greater prosperity for the majority with measures to prevent the emergence of a deprived underclass, excluded from the opportunity to work and dependent on welfare".--[ Official Report , 29 November 1994; Vol. 250, c. 1079.]
Through our amendments, we are saying that the measures that the Chancellor has taken and those in the Jobseekers Bill do not go far enough. They scratch only the surface in tackling the problems of the long-term unemployed in this country.
If the legislation's intention was to create jobs, its thrust would be primarily towards measures to help people back to work. However, the Government's key measures cut the benefits that are available to unemployed people and undermine the basic contributory principles. They reduce from 12 months to six months the amount of benefit that people will receive from their payments through the national insurance scheme. The Bill's whole emphasis is wrong; we believe that the Government should look at further enhanced measures to help the unemployed back into the work force. That is why, after reflection in Committee, the amendments were tabled to allow the Minister to reconsider the opportunity to extend the proposals in the way that the amendments are framed. It is to be regretted that he has not taken that opportunity and in that light we shall divide the House. Question put, That the amendment be made:--
The House divided: Ayes 259, Noes 278.
Division No. 111] [9.59 pm
Column 447Abbott, Ms Diane
Adams, Mrs Irene
Ainsworth, Robert (Cov'try NE)
Anderson, Donald (Swansea E)