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Baroness Hollis of Heigham: No, my Lords. Let us say that there are eight pilot areas where the order will commence on date X and conclude 12 months later. There may be another 12 pilots that start three or four months later. They will also run for 12 months. Then, if Parliament so wishes, they will both be renewed.
The reason that we would seek to renew them is for the very real reason that was discussed for the previous set of regulations, which is that you need results to show the longer term outcomes of your intervention. It is not just that people go through the gate, which itself can be a six-month programme; they then need to go into work that is sustainable and then we need to see what the outcomes are. I genuinely believe that we could not have robust findings after 12 months. That is why we need the pilots for two years, because it would not be right and decent to seek to roll that out nationally if we were not confident that that was the right approach.
Are these regulations compatible with the ECHR? I am assured by our solicitors that they are. Are they the same consultants? No, they are not. What goes on in that second stage? About three-quarters of people on jobseeker's allowance find work within six months; most of the rest find work within 12 months; those who have not returned to work within 12 months have found it difficult to re-enter the labour market. After 18 months you are often working with clients who have become detached from the labour market and possiblyperhaps for reasons of fear of discrimination by employershave given up hope of re-entering the labour market. The regulations are an effort to intervene in order to rebuild people's attachment to the labour market and to extend it, as at present is compulsory for those up to the age of 49, to those between the ages of 50 and 59.
Why are we doing this? Because we think that people of 50 to 59 have much to contribute to society. It is in their interests and in the interests of society and employers. What will the cost be? The pilot will cost £3,172,000. It is expected to break even and produce a net reduction in benefit expenditure savings of £136,000 by December 2006, but we will conduct a full cost/benefit analysis which looks at wages, national insurance, tax, levels of pay and so on, over and beyond the mere benefit savings.
The noble Baroness, Lady Barker, was right to say that is not just a problem of what people come into the labour market with, but the attitudes of employers towards them. That is absolutely right. There are real issues here. It is precisely the concern that employers may discriminate against people, unseen and unheard, that explains why the Government have introduced their age positive programme to challenge employer practices and to promote the business case for recruiting and retraining older workers as part of an age diverse workforce. We are campaigning through employer champions, events, advertising, trade and press coverage, awards initiatives and so on. I am happy to write to the noble Baroness because that is a question that I pursued. If one is dealing with a mindset in which employers remain discriminatory it is very difficult for people over 50 to break back into the labour market. The age positive campaign, together with our codes of practice and the proposals in the Budget 2004 of our new profile campaigns on that, seek to addressI agree with the noble Baronesswhat could be a real deterrent to older people.
The final question raised by noble Lords comes back to sanctions. Will sanctions work? I can put it negatively. We know that the voluntary arrangement does not work because only 12 per cent of people have gone on to the voluntary programme. We know that for people under the age of 50 the mandatory programme has not only worked but has been cost effectiveor valuablein terms of job outcomes. What we see in these pilots is whether the same mandatory approach improves the job prospects and employability of older people. If it does, that is very important. The noble Baroness will know as well as any of us that since the 1950s and 1960s the employment rate of those over 50 has been declining.
The noble Baroness said: My Lords, the regulations are intended to reduce the numbers of jobseekers who reach long-term unemployment and increase labour market flexibility through the intensification of the jobseeker's allowance regime.
Compared with 1997, when half of all claims lasted for more than six months, now only a third do so. Two-thirds of people come off within six months. However, nearly 300,000 current JSA claimants have been unemployed for more than six months and further support is therefore needed to ensure that a greater number of claimants find work earlier.
At present around 60 per cent of people who make a claim for JSA leave benefit within three months. But thereafter the rate at which people flow off benefit declines with duration. Of those reaching three months, about half leave in the next three months, while of those reaching six months, about 45 per cent leave before reaching nine months.
So we know that once jobseekers have been unemployed for three months, it becomes progressively more difficult to find work. Since 1997, the Government have introduced a number of programmes, such as the New Deal, that have focused help on those who most need it. Those policies have been successful in reducing long-term unemployment. But we are now seeking to intervene at an earlier stage. In particular, we want to focus more activity on people who have been unemployed for between three and six months. The intention is that, by intensifying jobsearch earlier, fewer people will enter long-term unemployment.
The Budget report 2003 therefore announced a package of changes aimed at reducing the number of people who become long-term unemployed. At the start of the claim, the emphasis will be on increasing the amount of jobsearch: jobseekers will be asked to take three weekly steps to look for work instead of two. After three months the emphasis will shift to increasing both the quality and the quantity of jobsearchfirst, by asking people to search more widely for jobs, in a geographic sense, and, secondly, by requiring weekly signing for six weeks. The introduction of weekly signing is possible under existing powers. Failure to comply with these measures without good reason could result in a jobseeker losing benefit.
I could explain what is meant by the steps and by the geographic outreach, but it may be that if your Lordships accept the push of these regulations that may be unnecessary, so I will sit down, and if they wish to pursue that further I will then give the rest of the speech. I beg to move.
Lord Higgins: My Lords, I suspect that is true of the Liberal Democrat Benches as well, that we understand the points which the noble Baroness thought it unnecessary to describe. There are only two points covered hereon the minimum number of steps, on the one hand, and the change in the travel allowances, on the other.
As for the travel allowance, can the noble Baroness tell us who pays the costs of the travel? What increased costs does she imagine will be incurred, if any, on changing from one hour travel to one and a half hours? It took me over one hour to get from Vauxhall Bridge to the House this morning, so I am not sure that that is an enormous improvement. The explanatory memorandum is very helpful, except under the heading, "Social Security Advisory Committee". It says that the regulations refer to the Social Security Advisory Committee on 3 December 2004, and that,
Baroness Barker: My Lords, I too understand that noble Lords are eagerly anticipating the return of the Energy Bill and I therefore will be similarly brief. I should like the Minister to explain, whether on paper or today, why if somebody spends a considerable amount of time making two good job applications in a week that is deemed to be better than them doing three cursory ones in a week. Is the expectation that somebody's travel time will be an hour and a half rather than an hour a simple indictment of our public transport system or is there a rationale for it? Has the department taken into account the effect on family life? Many people in that situation are single parents.
The Command Paper was No. 6145, and the noble Lord may wish to pursue the matter further. By steps, we mean not just newspapers but training opportunities and the like. If the noble Baroness wants me to write to her more fully about what we mean by that, I am happy to do so. Basically, we are trying to up the flurry of activity, so that people will make a job of seeking a job and not just do so in a perfunctory way.
We know that if we have not got people back into work by six months, it becomes increasingly hard to do so. We want to concentrate effort on the period between three and six months, including, if necessary, weekly signing-in, so that people will continually see an adviser or receive guidance. We must try to ensure that they do not become long-term unemployed and, therefore, dependent on benefit.
Noble Lords also pressed me on the issue of travel. At the moment, no one is required to travel more than an hour in either direction to find an acceptable job. Of course, many people travel far more than that. If someone in Birmingham is seeking a job in Glasgow, the department would expect Jobcentre Plus to help with their travel costs, as that distance is unreasonable and disproportionate. In the normal course of events, people should expect to meet the costs of travelling to work.
We are extending the geographical range over which we expect people to be able to travel in taking up a job. That is our purpose. Most of us may travel like that already.
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