House of Commons portcullis
House of Commons
Session 2001- 02
Publications on the internet
Standing Committee Debates
Welsh Grand Committee Debates

Pre-Budget Statement (Implications for Wales)

Welsh Grand Committee

Wednesday 28 November 2001



[Mr. Win Griffiths in the Chair]


4 pm

The Secretary of State for Wales (Mr. Paul Murphy): With permission, Mr. Griffiths, I should like to make a statement.

Yesterday's pre-Budget report is good news for Wales. In particular, the measures that do more to help everyone of working age to get into work are most welcome. The Secretary of State of State for Work and Pensions is elaborating on the Chancellor's announcement, and I am delighted to be able to tell the Committee how Wales will benefit.

First, we are extending Jobcentre Plus across the whole country, starting next year. Jobcentre Plus is the single gateway to the benefits system, where everyone of working age will have work-focused interviews that will help them into jobs. I recently visited the extremely successful pilot office in Bridgend, where I was most impressed by the results being achieved by the dedicated staff. It is excellent news for Wales that we can provide the same quality service to all our people.

Secondly, we are allocating an additional £6 million across Great Britain to the rapid response service over the next two years. That is a pot of money from which the Employment Service in Wales can draw to fund additional advisers in cases of significant redundancy. We mean significant in the context of the local labour market; we do not necessarily mean large-scale redundancy. When people lose their jobs, we will be able to respond more quickly. Prompt help will be given to retrain people and to get them back into work.

We know all too well how damaging both large and small-scale redundancies are to communities in Wales, although the overall economic picture is strong. Every month, people change jobs or get jobs, so we need to do more to match people with the vacancies that employers are trying to fill.

Thirdly, we need to provide extra support for those who require more intensive help to get into work. I welcome the new measures that will increase employment opportunity for the long-term unemployed. The transitional employment pilots, which build on the success of the new deal, will take place in two areas—Wrexham and Cardiff—where there are significant pockets of long-term unemployed people despite relatively high levels of economic activity. People are out of work in those areas, despite jobs being unfilled. The Cardiff pilot will start in April 2002 and will be one of the first six in Great Britain. The Wrexham pilot will start early in 2003.

In those areas, we will pilot transitional jobs for some of the hardest to help, investing £2.8 million in Wales to equip more than 400 people with skills, support and work experience who would not otherwise have those things. Each pilot will offer 20 places on a rolling basis. People who take up those jobs will be better able to make the transition from unemployment to unsupported jobs in the open labour market. They will receive training while they are at work and help to develop job search skills. That individual support will give people self-esteem, confidence, new skills and an up-to-date work record. They will gain experience of the discipline of going to work every day and be better placed to find permanent work. They will be more attractive to employers, as it is still the case that it is easier for people to get a new job when they are already in work.

We will ask employers, local authorities and other organisations with experience of the intermediate labour market to work with the Employment Service in Wales to put the programme together. We will ensure that it links properly to the local labour market, and the Government will bear the cost. We want to provide transitional jobs in a wide variety of occupations.

People who take up the jobs will receive the minimum wage. They will be better off in work than on benefits. They will have the same employment rights as anyone else. They will be entitled to the same in-work benefits as anyone else. They will be able to stay in the transitional job for up to a year. They will be offered a choice between jobs, but they will not be able to turn down all offers and remain on benefit.

This is good news for Wales. It means that we in Wales can pioneer new ways of creating job opportunities for all and new ways of helping those people who have missed out in the past.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy): I welcome the transitional employment schemes. I wish the pilot schemes a fair wind and hope that they work out so that they can be extended. I also welcome the rapid response service for redundancies. I am acutely aware of the problems at the Alcoa works in Dolgarrog in my constituency and the problems of Waunarlwydd in Swansea.

With regard to the new Jobcentre Plus set-up, will the Minister take note of what the Public and Commercial Services union has said about the open-plan nature of the offices and the need for better security? In the past few weeks, several staff have been assaulted and better security is warranted, although I am sure that open-plan offices are, broadly speaking, a good idea.

Mr. Murphy: I welcome the hon. Gentleman's comments on the Government's measures to help and employ people in Wales, especially those in areas where long-term unemployment predominates.

On Jobcentre Plus, I mentioned in my statement that I visited Bridgend, which is an open-plan office, and was deeply impressed by what I saw there. The information technology resources available for people looking for jobs were impressive, but so was the way in which the stigma of searching for a job, which, when I was a young man certainly existed, has been removed. I understand the hon. Gentleman's points on security, but I can assure him that the closed-circuit television and other measures that are being implemented will cover his concerns.

Alan Howarth (Newport, East): My right hon. Friend will recall that in Newport we have already had experience of rapid response in incredible and sad circumstances at Llanwern. Does he agree that the staff of the agencies involved in the job shop at Llanwern deserve our appreciation, thanks and congratulations for the remarkable work that they have done on behalf of the people affected by redundancy? Does he also agree that if Jobcentre Plus is developed in the same spirit of skill-sensitive, well co-ordinated and individually tailored help, no one need fear anything from the obligation to attend for work-focused interviews? The language may sound daunting but the reality of those interviews is very encouraging.

Mr. Murphy: I agree with my right hon. Friend's points, particularly in regard to the problems that he in particular and I, in my own constituency, have had to face because of job losses in Llanwern. I agree that the atmosphere in the job centres is now much more welcoming and that the stigma has disappeared. All of us in Wales, whatever constituency we represent, can welcome that, because all of us have seen reductions in unemployment in the past four or five years. That is because so many people want to work, but were not given such opportunities in the past.

Lembit Öpik (Montgomeryshire): I should like to thank the Minister for sight of his statement. Measures that help adjust the corrosive and wasteful consequences of unemployment are most welcome.

I have some specific questions. First, will the £6 million allocated to the rapid response service come from the Great Britain fund, or will there be a separate allocation for Wales? Secondly, what will be the practical consequences of creating a single gateway to the benefits system through Jobcentre Plus for people using the benefits system? What difference will they notice on the ground? Will there be less bureaucracy or streamlined access to the system, for example?

Thirdly, is there a minimum size for a local labour market if it is to be helped by the rapid response service? For example, would Llanidloes, which is having problems, be able to benefit from the scheme, or would it be too small?

My fourth point concerns the new deal, which I have always supported. Sometimes it has been criticised for not creating enough long-term employment once individuals come off the new deal. What confidence does the Minister have that many will not fall back into unemployment after the scheme has finished?

The Minister said in his statement that people would be guaranteed to be better off under the new scheme than if they stayed on benefit. Like all hon. Members, I occasionally meet people who have calculated that they will be better off by staying on benefit. Will the Minister assure me that, if that sometimes proved to be the case, he would seriously make representations to ensure that there would be no prospect of people being punished simply for taking employment?

Mr. Murphy: I agree with the hon. Gentleman on his last point. The system that we have introduced, including the working families tax credit, gives people the opportunity to work and earn more than if they are not in work.

The figure of £6 million covers Great Britain. In terms of the rapid response service, where that money is spent will depend on where it is needed. The Jobcentre Plus pilots in Wales will be extended to as much of Wales as possible over time. They provide a new way of seeking jobs so that young men and women can fulfil their potential. It will help the not-so-young as well, as those over 50 will also benefit from the measure.

The employment transition service has two pilots in Wales. I hope that they will be extended to other parts of Wales when we see them work well. Wrexham and Cardiff were chosen because they had high-level pockets of specific types of unemployment, but lots of other jobs that could be drawn on.

Kevin Brennan (Cardiff, West): Does my right hon. Friend the Secretary of State agree that probably the only way in which someone who had been given a job under the transitional employment scheme would be worse off would be if he worked illegally? Everyone who gets a job with a minimum wage under the scheme ought to be better off.

I welcome the scheme and ask the Minister to confirm the fact that city constituencies such as mine regularly have unemployment figures in the top five in Wales, contrary perhaps to popular belief. That is because of the problems of long-term unemployment in some estates, including some in my constituency, where people can be especially hard to help. The purchase of a job for those people by the Government under the scheme will be especially helpful in getting them back to work and giving them the chance of a job in the long term.


House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2001
Prepared 28 November 2001