Examination of Witness (Questions 57-59)
MR DAVID
WEBSTER
WEDNESDAY 1 MAY 2002
Chairman
57. Good morning and welcome. David Webster
is Chief Housing Officer at Glasgow City Council, but I think
it is clear, David, that you are here in your own personal capacity.
You have had a long, abiding interest and have written many academic
papers in conjunction with colleagues from Glasgow University,
but, for the record, David, you are here in your individual capacity?
MR DAVID
WEBSTER
(Mr Webster) Personal capacity, yes.
Chairman: We are very grateful. We have got
your memorandum and it is very thought provoking. Thank you for
that. I wonder if we may turn to Anne Begg to start the evidence
session by looking at some of your experience and the work you
have done in Glasgow University and some of the employment programmes
and growth issues which flow from that.
Miss Begg
58. What are the main obstacles to success of
the Government's individual requirement programmes and how do
these compare in importance with economic growth?
(Mr Webster) As I mention in the memorandum, I think
the main problem is the great disparity in the state of different
local labour markets. In a labour market like Glasgow there is
a huge jobs gap and the kind of position which the council would
point to is that you have got under 20,000 people who are claimant
unemployed but the true number of workless people of working age
is more like 100,000, so you have only really got one in five
on the claimant count and there is a huge shortage of employment.
So I think these local jobs gaps are the major problem. There
is another problem, which did not really come out of the previous
two evidence sessions, about the long-term sick. I think that
is an extremely serious issue. As I mentioned in the memorandum,
the number of working age people who are on sickness benefits
has gone on increasing since 1997, even in a period of prolonged
economic expansion. There is lots of evidence now that this is
due fundamentally to the fact that unemployment has been made
a very unattractive status: the income is lower than if you are
getting sickness benefits and, of course, there are now all the
requirements brought in by active labour market policies, so you
are not going to get left alone if you are unemployed. Sickness
unfortunately has become quite a desirable status to have if you
do not think that your prospects of getting well-paid work in
the longer term are good, and there is a lot of evidence that
it is relatively comfortable. There is evidence from the new Scottish
household survey, for instance, which our chief executive's department
got out at my suggestion a couple of weeks ago. There is a question
in there which asks: "Are you financially coping? Are you
coping well? Are you just getting by? Are you struggling? Are
you in a state of financial crisis?" and there is a very
marked difference in the answers to that question from the people
who are on long-term sickness benefits and the people who are
on unemployment benefit. The people who are on unemployment benefit
are far more financially stressed. It is often alleged that government
employment advisers will try to get unemployed people onto sickness
because that is regarded as a positive outcome of some kind: it
gets them off their case load, they can then concentrate on people
who are easier to help and so on. Even if you leave all that aside,
we have created a system which has got incentives in it for people
to move onto long-term sickness. It is interesting that the kind
of theories which Richard Layard and others advanced in the mid-eighties
were about claimant unemployment. I think they were wrong, as
I mentioned in the paper, to say that being claimant unemployed
has a major impact on your employability, but I think there is
an issue about being on long-term sickness benefits. It may not
impact on your employability as such, but it is the difficulty,
psychological and otherwise, of moving from a status where you
have declared to yourself and to the world that you are not capable
of work, into a job. That is a very serious problem. Unfortunately,
we now have this very large stock of people who are in this condition.
In Glasgow it is between 15 and 20 per cent. I would say that,
apart from jobs gaps, that is the largest single problem.
59. You have identified the problem. What should
the Government do in order to help those people back into the
labour market or should the policy be different with regard to
the actual benefit levels?
(Mr Webster) I think you need to tackle the jobs gaps
obviously. Another somewhat more radical suggestion is to suggest
that you should make being unemployed more attractive compared
to being sick. It is not just me that has suggested that. Steve
Nickell, who is a very distinguished economist on the Bank of
England Monetary Committee, in his paper recently (which I cite
in my evidence) about the problem for the long-term sick, points
out that other countries have quite a successful combination of
policies where unemployment benefits are relatively high. You
do not have this distinction between unemployment and sickness
but you still have the pressure on unemployed people to get work.
The thinking in the 1980s certainly was very strongly that you
really could not afford to have a good level of benefits for unemployed
people because it would have such an adverse impact on the choice
between work and unemployment, but Steve Nickell was really casting
doubt on that and, certainly, if you were to equalise the level
of unemployment and sickness benefits you would get rid of this
financial incentive to move into a sick status. I think that would
be thoroughly beneficial because then that would make your unemployed
people visible and you could then start to do something about
the problem.
|
