Previous Section Index Home Page

17 Mar 2009 : Column 820

I recommend to my hon. Friend the Member for Hayes and Harlington (John McDonnell) and anyone else in the House the research conducted by Reed in Partnership. It analysed every person who had been through its employment zone and found that 16 per cent. of participants did not have a job, training or anything at the end of it. Why? They did not want to work. They were quite open and blunt about it. They just wanted a life on benefits. They did not want to go to work. Reed arranged interviews and half of them were offered jobs, which they turned down. There must come a point where the state says, “If you are not going to play ball at all, the sanction will come in.”

Lynne Jones: I agree that if somebody has a job offer and real job opportunities, that is one thing. However, many people face a great deal of prejudice in trying to get employment, particularly those with mental health problems. I am very much opposed to any compulsion for that group, because it is likely to be counter-productive. On the two-year period, we do not know what will happen in two years’ time and how difficult it will be when we have high unemployment.

Mr. Rooney: Last month, 200,000 people left benefits for work. People seem to think that the whole economy has frozen up and that nobody is getting jobs. There is still a massive flow either way. More people are losing jobs than are getting jobs, but a huge amount of people are still moving into work and we need to recognise that.

The vast majority of those with mental illness receive employment and support allowance, and they get special support and pathways to work. All the difficulty about fluctuating conditions is recognised. Some of the work done with people with mental illness problems in the pathways to work pilots was quite stunning. I recommend that my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones) look at the results of the pilots, if she has not already, to see what happened.

Lynne Jones: I think that the Secretary of State has acknowledged that even the pathways to work programme has not always been successful for people with mental health problems.

Mr. Rooney: It has been far more successful than any other programme. It still gets a low level of people into work, but that is more to do with the prejudice of employers than the programme on offer. If our dear friends in Victoria street, in what used to be called the Department of Trade and Industry—whatever it is called now—ever came to their senses and brought in proper legislation on discrimination by employers, that would do far more for people with mental illness than any DWP scheme.

John McDonnell: Will my hon. Friend give way?

Mr. Rooney: Go on then.

John McDonnell: I do not know why my hon. Friend is dismissive, quite honestly. We have engaged in a fruitful debate until now. If a person declines a job, sanctions are available under the existing system. This provision introduces a sanction that forces people to work for their benefits. That is what this is all about. My
17 Mar 2009 : Column 821
hon. Friend said that we should turn this into an opportunity, and that is exactly what my amendments do. They offer an opportunity that we know—he has just demonstrated it—works on a voluntary basis but does not work when there is compulsion.

6.15 pm

Mr. Rooney: That argument suggests that if a person stays on benefit for 25 years, they will still be subject to no compulsion. That is nonsense. There must come a point when, for the benefit of the individual—never mind the benefit of the taxpayer—we do something different for them. The Bill is offering six weeks of work experience—it could be called a work trial, but it cannot be called Workfare—for four days a week, with the other day allowed for job searches, skills development and other top-ups to the assistance that those people have already received for two years. It is not Workfare. If people are going to carry on calling it that, they ignore the evidence.

My hon. Friend the Member for Hayes and Harlington quoted the Select Committee’s report, but he did not finish the quotation, because the report stated:

That is the basis of my amendments. The provisions should be piloted on a gentle approach because this is new territory for this country. We know some of the pitfalls from the research. Indeed, the person who carried out the research that my hon. Friend quoted was the specialist adviser to the Committee’s inquiry, so we had his advice at first hand, and he was able to give us a detailed insight into the systems operating in Australia, Canada and the US. He was adamant that what is being proposed in Britain is not Workfare.

Let me correct another quotation. It was suggested that we questioned or doubted the efficacy of the flexible new deal. The Committee actually said:

the flexible new deal

Mention has been made of Mr. Freud—David Freud, that is, not the other one. I wonder why he has acquired such a Svengali-like reputation because there was nothing revolutionary in what he said. He came up with two key principles, and, again, they were nothing new. The first was that when people had been long-term unemployed, they had to have much more intensive and expensive support to help them back into work, and that the best way of doing that was to transfer the risk of the cost to the private sector. The second was that the way to fund the first proposal was to use the benefit savings to pay the private contractor. That was absolute anathema to the Treasury and ever since David Freud’s report came out, the Treasury has been resisting it, because it does not want the report’s proposals to be accepted. One pilot is under way now—I forget where—and we will have to see what the outcome is.

17 Mar 2009 : Column 822

Some of the pathways to work pilots were partly funded by benefit savings and it is clear that there are benefits arising from the private and voluntary sectors carrying out employment programmes. That is nothing new. It has been going on for about 25 years. The truth is that Jobcentre Plus can offer very little to people who have been on benefit for a year, but it offers a superb service in the early days of unemployment, and especially in the first six months, as it can get about 65 per cent. of people back into work in the six months after they first claim.

The staff at Jobcentre Plus perform extremely well. What is being proposed would be a completely new area of activity for them, but it is something of a misnomer to say that something that is not happening at the moment is being privatised.

Paul Rowen: I listened carefully to what the hon. Gentleman said about Jobcentre Plus being good in the early days of a person’s unemployment. Does he accept that one of the most retrograde steps in the flexible new deal is that it gives intensive support after 12 months out of work and not at the beginning? That is why the scheme will not work.

Mr. Rooney: This is a difficult argument. Giving people the same intensive support at the start of a claim that they get further down the track would probably treble the cost of Jobcentre Plus. I forget the exact figures, but about two thirds of claimants get a job within the first three months of unemployment. Most of them will get a job whatever the Government do, but the skill lies in identifying at the start of a claim those who will take a long time to find work.

I use the word “skill”, but it is obvious that ex-offenders, people with drug or alcohol abuse problems and repeat claimants will take a long time to find work. Lots of people could be identified much earlier, but the Bill proposes a facility to accelerate access to the additional help that comes after six months so that people can get it right from the start of their claim. It is the skill of Jobcentre Plus staff to identify those for whom that acceleration would be appropriate.

Personal advisers have been around for only about 10 years, but they are the linchpins of the system—the system works only thanks to their numbers and quality. Jobcentre Plus does what it does better than any employment service organisation in the world. In Australia, for example, the employment service was effectively privatised but it cannot have been very good because it went bankrupt and went bust inside two years. Most people in this Chamber will never experience unemployment—although there might be a problem for some of us next year, but we will deal with that—so we do not have personal knowledge of how things have changed. Jobcentres now are vastly different from what they were 10, 15 or 20 years ago. The idea that people should be given support and help to get them back into work is only about 15 years old. Such things never used to happen.

This will be the only compliment that I shall to pay to those on the Liberal Benches, but this year is the centenary of the Labour Exchanges Act 1909. The original labour exchanges that it introduced literally used to exchange labour for a job, but anyone in 1909 who suggested giving unemployed people a personal adviser would have been laughed out of court. We have moved on from that.

17 Mar 2009 : Column 823

I think that it was the hon. Member for Henley (John Howell) who spoke about the “welfare reform failure” of the past 10 years. My goodness! He should have seen what conditions were like in the previous 20 years. The things that have happened over the past 10 years—and the development of Jobcentre Plus is not the least of them—represent a massive step forward. People who sadly lose their job and experience unemployment are amazed at the quality of provision that they get.

Paul Rowen: The hon. Gentleman has spoken about Jobcentre Plus, but does he accept that needs have changed because more people who traditionally have not been unemployed are now losing their jobs? A person came to my surgery the other week who had not been unemployed in her life. After 35 years at Woolworths, she went to Jobcentre Plus and was told to go back at Easter, but it was also made clear that, if there was no job for her then, there would not be one before Christmas. She was expecting all sorts of support but got none, and that is part of the failure. Does he agree that the 12-months arrangements proposed for people like my constituent—that is people who have never been unemployed or on drugs—need to be addressed?

Mr. Rooney: I take the hon. Gentleman’s point, but I want to say a couple of things about former employees of Woolworths. Of the 30,000 people made redundant by the company, fewer than 6,000 have made a claim for benefit. The numbers still on benefit are dropping day by day, so it is clear that the closure of Woolworths was not the catastrophe that it was supposed to have been. In addition, the average staff turnover in retail is 26 per cent. a year, which means that people who leave a job are not always losing it. Staff changes are common in retail: even in the current difficult climate, almost every major retail chain has hundreds, if not thousands, of vacancies across the country.

I do not think that it is typical for a retail worker to work for 30 years and have no experience of unemployment, but some 2.5 million people every year make a new claim for jobseeker’s allowance. That has been going on for many years: people seem to think that unemployment does not happen any more, but it does. Yet it is also true that 2.5 million people also move into work every year, and that the vast majority of them do so within three months of making a claim.

There has been huge activity in the economy in the past few years. At present, slightly fewer people are getting jobs and slightly more are losing them, but that economic activity is still going on. There is still a role for Jobcentre Plus, but the person mentioned by the hon. Member for Rochdale (Paul Rowen) who has worked for one company for 30 years is exactly the sort of person who will benefit from the skilled personal adviser. A lot of advice is given at the initial interview, and it is obvious that a person with a proven track record of work is much more likely to get another job rapidly.

I accept that the profile of people who have been unemployed more than 12 months will change. The new arrangements are not in place yet: they will start feeding through only this autumn, and that is another reason
17 Mar 2009 : Column 824
why we need specialist provision. However, offering that specialist provision to every claimant from day one would probably treble the bill for Jobcentre Plus. That would not be very good economics.

John Barrett (Edinburgh, West) (LD): The hon. Gentleman said that many former Woolworths employees were not claiming benefits, but does he accept that that was because they were not entitled to them? Many of those workers were women who worked part-time.

Mr. Rooney: That is a convenient excuse. About 1,800 former Woolworths employees retired, having reached or even worked past retirement age. It is true that some former Woolworths workers were not entitled to benefit, but that will always be the case. It is nothing new: in the 1970s and 1980s, lots of women who lost their jobs were not entitled to benefits because they kept on paying their married women’s stamp. That does not alter the argument about the service that is provided.

Mr. Tom Harris: The hon. Member for Edinburgh, West (John Barrett) makes a valid point, but the fact that a claimant is not entitled to receive benefits does not preclude them from making a claim. My hon. Friend the Member for Bradford, North (Mr. Rooney) is right to say that many of the former Woolworths employees did not claim benefit, whether or not they were entitled to receive it.

Mr. Rooney: I think that I have been on that subject long enough. I want to move on.

Some of the amendments that I have tabled call for pilot schemes to be conducted, and I hope that the Government accept the need for that. They also propose that the work for benefits scheme must end in 2013 unless it receives a positive evaluation, and that special care must be taken to evaluate how especially vulnerable groups fare in the system.

Finally, clause 1 talks about a system that is “designed”, but my amendment 44 proposes that the wording should be “personally tailored”. The word “designed” suggests that everyone must fit a template imposed by a person on the outside, whereas the phrase “personally tailored” takes much more seriously the need to make the advice given by personal advisers relevant to the individual.

Lynne Jones: I endorse my hon. Friend’s call for pilot schemes, but how does he envisage that the control scheme would work? A control scheme that just carries on as usual would offer no useful comparison with a pilot scheme that is active and in which people are positively engaged. Does he agree that we need active schemes, one voluntary and one compulsory, because that would allow us to compare the voluntary and the compulsory approach?

Mr. Rooney: The challenge of any scheme and any evaluation is to have a control model. I do not know whether that model should involve those who do not participate at all or those who volunteer. One thing to the DWP’s credit is that it is extremely good at commissioning research. In fact, most university social science departments would close down without the DWP. The hon. Member for Northavon (Steve Webb) would have been unemployed for 20 years if it had not been for the DWP and its predecessors—it has got a lot
17 Mar 2009 : Column 825
to answer for! The Department is extremely good at commissioning research, which often turns around and bites it or kicks it in the teeth, unlike in America, where an extreme paucity of research into the impact of policies lets Washington get away with murder, but I must move on.

6.30 pm

Amendment 46 seeks to delete—it really hurts to say it—clause 4. I am not sure what the policy intention is of clause 4. [ Interruption. ] No, if we wanted to nationalise the top 200 companies now, we would have to invade Tokyo, Paris, New York and Berlin or something. Clause 4 seems to suggest that, where both people in a couple are entitled to make a claim and one of them has a health condition and the other does not, the one with a health condition will no longer be allowed to make a claim and that the one without a health condition will have to make a JSA claim, subject to the job-searching routine and so on. It seems to me that that removes choice, because one individual is no longer allowed to make a claim and she—I suspect that mostly women will be impacted by the provisions—will not have the benefit that would have been previously available to her under employment and support allowance. That represents a policy deficit, and I hope that the Minister can explain what lies behind that clause.

Amendment 47 seeks to delete clause 11, which will alter the conditions for receiving employment and support allowance. There are two contribution conditions—the first condition and the second condition, as those who are expert in these things will know. At the moment, the first condition is that people must have paid national insurance contributions sometime in the past three years. Clause 11 seeks, for some reason, to reduce that to two years. It aligns that benefit with JSA, so I suppose that there is some logic in that, but it seems a particularly picky and negative thing to do. I do not think that many people will be affected by that proposal and I cannot see any financial advantage to the Department, so I hope that the Minister will comment on it.

Mr. David Winnick (Walsall, North) (Lab): I was present earlier for part of the debate, and I will not take very long. In fact, I will be very brief. I want to make three points. First, I do not accept the premise, which has been proposed on other occasions, that a large number of people who receive benefit are workshy. I do not doubt for a moment that some people are workshy, but when I visited a jobcentre in my constituency recently, I found people eager—indeed, desperate—to find work. I am sure that the same applies to other hon. Members who make such visits, and that experience should be taken into account. I certainly do not accept the premise that it is necessary to take action because the majority of people on benefits do not want to work, and I have never accepted it. My local press has reported in the past fortnight that, where vacancies have occurred—not many—hundreds of people have applied. That is hardly an illustration of people being shy of finding work.

Next Section Index Home Page