Select Committee on Work and Pensions Minutes of Evidence

Examination of Witness (Questions 60-79)



  60. Essentially what you are saying is that if you are of working age and you are unemployed, you really should be on the same benefit regardless of the reasons for your unemployment.
  (Mr Webster) I think so, yes. Except, obviously you have to have these specific disability premiums where people's costs are higher because of their problems.

  61. But that is not Incapacity Benefit, that is Disability Living Allowance.
  (Mr Webster) Yes. I am suggesting really it should be the same level of benefit.

  62. The Disability Living Allowance is something that in-work disabled people get regardless of their employment status.
  (Mr Webster) Yes.

  63. What about your assessment of the range of initiatives within Glasgow that have adapted programmes to the circumstances of the regional economy, its employers, economic development agencies, or to the needs specifically of the city's unemployed?
  (Mr Webster) I think the Glasgow agencies do a good job in trying to adapt these programmes to the circumstances of the city, but it is difficult. For instance, there is a purely Scottish programme called "New Futures" which is aimed at hard to help unemployed young people and it has been very difficult to mesh that with the New Deal and get the flexibility that you need in the New Deal Gateway, for instance, to make those two work together. Lots of effort had to go into that: the decisions had to go up to Whitehall and Sheffield and so on, and that sort of problem tends to manifest itself for every group. You are talking about national UK-wide employment programmes which are quite hard to adapt to the specific local circumstances. The local agencies then have to do a lot of work to try to adapt them. There is an initiative which was discussed last Friday with DWP called "full employment areas" which the city council is promoting, which is aimed at trying to get at the long-term sick in specific designated areas and give them stronger work guarantees, to try to overcome the reluctance of people to give up their sick status in case work does not last, and also to get the flexibility to redeploy some of the benefit money to carry on after they are in work. These are things that the Government can agree to because they have got powers under the 1999 Act to do that. So a lot of creative work gets done in Glasgow to try to adapt the programmes, but it is always rather difficult, and in my memorandum I suggest that really it would be better to start from the other end because, after all, there are not many places like Glasgow. There is Glasgow, Manchester, Liverpool and a few other big places, but basically you have got certain places, like Glasgow, which have a massive worklessness problem and it would be worth having a specific process of working out a local employment plan for places like that because they make such a big contribution to the overall unemployment problem. I mean, Glasgow is more than one per cent of the UK population. It is a big place and it has this massive unemployment problem. It would not be too much, it would not be irrational, to say, "We need a dedicated approach to this type of area."

  64. There are examples in Glasgow, you are saying, where, although obviously they have been constrained by the existing programmes, they have been adapted and there is good practice. I visited quite recently the old Glasgow workshop for the blind where they are doing windows and they are also doing beds for the QE2 and all sorts of things, which is again taking very disadvantaged people and putting them into work, and many have been long-term unemployed. There are examples of that happening, but at the moment they are constrained because they have to fit in with the programmes the Government has developed at a national level.
  (Mr Webster) Yes, that is correct. Also if you look at the big numbers in Glasgow, they remain very bad. The number of long-term sick people in Glasgow has not come down since 1997. The absolute number of people is the same.

  65. How successful has the Glasgow Employment Zone been?
  (Mr Webster) It has not had a very big impact on the numbers. I am sure it has been well run and useful for the people who have been through it, but it has not had a discernible impact on the big numbers.

  66. If the Government is always looking to make sure it is getting value for money and it always has to be assured that any investment it puts into an area is properly controlled, is that going to be too much to say to Government, "Give us the money and we will work out how we will best use that for the local circumstances"?
  (Mr Webster) I am not suggesting that the local authority or local agency should have carte blanche. I think what they should be able to do is to propose a thoroughly thought through package and obviously the Government would have to endorse it or otherwise.

  67. Obviously Glasgow is working under a devolved administration, so what is the relationship like with regard to issues such as the welfare to work, which is a reserved matter, yet the delivery mechanisms are very often under the control of the devolved administration. Is that working well or are there extra problems or does it, indeed, give the flexibility you have been talking about?
  (Mr Webster) In terms of the specific administration of these employment programmes, yes, it is rather problematic. I think the difficulties get dealt with but it is an awkward relationship. But of course I think there is a much more fundamental problem that the supply-side employment programmes are primarily a UK responsibility—although they have a Scottish fringe to them, they are primarily UK—whereas the demand-side action that you need to deal with the local jobs gap is mainly a devolved responsibility. All of the things to do with derelict land, transport infrastructure and so on are Scottish responsibilities, and of course there is not a perception on the part of the Treasury and the DWP that there needs to be much emphasis on those policies because they are still saying that there are not these significant jobs gaps. They do not think the demand-side action is very important; consequently the Scottish Executive is not under pressure to deliver demand-side results in a place like Glasgow.

  68. So you are saying the Scottish Executive is under pressure rather than the Scottish Executive is feeling constrained.
  (Mr Webster) They are not constrained at all.

  69. So the Scottish Executive could do that without having any pressure from the DWP and the Treasury?
  (Mr Webster) Yes. They have complete discretion where things like derelict land and transport are concerned. They have complete discretion.

  70. That is through the Enterprise and Lifelong Learning Department, so they could be much more pro-active.
  (Mr Webster) They could be, yes.

  71. I think I may be straying on slightly dangerous land as well. Is there anything that the Government down here should be doing to reinforcing the hand of the Scottish Executive in these areas?
  (Mr Webster) Of course the regional policy designation of assisted areas, European Union objective 2 and so on, those are UK responsibilities, so they certainly have a role there. The most helpful single thing that the UK Government in Whitehall could do would be to stop saying that there are not any important local jobs gaps and start saying that they expect all levels of government to promote maximum employment growth in the areas which have the most difficult labour markets. That really would help a lot.

  72. We met with Maatwerk, one of the companies in the private sector that is helping to get people into jobs in Glasgow, ironically when we were in Holland. I know some of the Committee were very impressed by what they were saying and others of us were a bit sceptical, that what they were saying was too good to be true. From your knowledge on the ground I am just wondering what your take is on how successful companies such as them have been in placing people into work.
  (Mr Webster) Ironically, my take on it is that, because Glasgow has such a big jobs gap, the quality of people who are claimant unemployed at any duration is particularly high. I have obtained some evidence to this effect from my own research and you can also find research like that in the literature. A three-year long-term claimant unemployed person in Glasgow is a very employable person compared to a three-year long-term claimant unemployed person in, say, Reading or Newbury or Northampton.

  73. You are basically saying it should be easier in Glasgow to get these people into jobs.
  (Mr Webster) Indeed it is. That in fact is why some of the agencies are able to claim such good figures in Glasgow, because they are actually dealing with a very able clientele.

  74. Why are they not getting into jobs?
  (Mr Webster) They are getting into jobs but the problem is that getting a flow of people into jobs is not the same as bringing down the stock of unemployed or workless people. That is the fundamental problem. That is a supply and demand problem.

Mr Stewart

  75. How much has worklessness fallen since 1997 after taking account of a number of factors which you mention in your paper—which, again, I thought was very helpful—first of all, the changing definition of unemployment compared with the ILO definition, and of course the welfare-to-work programmes, and, as you yourself have said earlier, the whole issue of the growth of sickness and disability, particularly thinking of the hot spots of industrial closures in our steel towns and coal communities?
  (Mr Webster) How much has worklessness actually come down? I found, looking at this for the paper, that there did not really seem to be too much difference in the broad kind of numbers whichever definitions you were using. I had expected to find a bigger difference between the change in the claimant count and the change in the ILO measure than there seems to be. So I think the broad figure I mention of 350,000 to 400,000 improvement is probably more or less right. You know, the ILO figure is quite strangely affected by demand factors as well as supply factors, so that, if an area is doing well, ironically you tend to get more people pulled into ILO unemployment from inactivity—because you get people like housewives who had not thought of working, who see the employment opportunity and they then start looking, and, once they start looking, they get counted as ILO unemployed but they are not actually distressed in the same way as someone who has been on the claimant count for a long time might be. So you have to be a bit careful about these definitions. But broadly speaking, there has certainly been a very substantial improvement overall in the labour market, and even in Glasgow. There is some evidence that cities have done rather better out of this expansion than previously—Glasgow's performance certainly has been better in this latest upswing than for a couple of decades—and that is because the kind of jobs growth that we have had has quite favoured city locations.

  76. For example, on the retail side, I suppose.
  (Mr Webster) Financial services tends to like city centre locations and that is the big success story of the last two or three years.

  77. Can I ask how much the real fall in worklessness since 1997 has been due, in your view, to the Government's employment programmes as opposed to economic growth?
  (Mr Webster) I think the Government's employment programmes have been rather a small factor and the main improvement has been due to economic growth. I give some numbers in the paper. I would think that 50,000 to 100,000 is probably the impact of the Government's employment programmes and 350,000 to 400,000 is the overall improvement. I do not think the civil servants would give you radically different estimates from those; they may quibble about the detail.


  78. There are some figures on the top of page 7 which I think you might be able to help us with. I think there is a typo there, where you say, "Robert Rowthorn notes that since 1973 British and UK manufacturing output have increased by 14 per cent and 114 per cent . . .".
  (Mr Webster) I am sorry, it should be "USA".

  79. So it is: ". . . British and USA manufacturing output have increased by 14 per cent and 114 per cent . . ."
  (Mr Webster) Yes. I am sorry about that. American manufacturing output has doubled; British manufacturing output has remained the same.

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