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Social Security Amendment (New Deal) Regulations 1998

Volume 589: debated on Thursday 7 May 1998

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6.34 p.m.

rose to move, That the draft regulations laid before the House on 9th March be approved [26th Report from the Joint Committee].

The noble Lord said: My Lords, my purpose today is to seek approval for amendments to the jobseeker's allowance (JSA) regulations which will allow us to take forward measures for the New Deal for those aged 25 and over who have been unemployed for two years or more, and for the New Deal for 18 to 24 year-olds. We believe it is essential that we take action to help people in those groups to improve their employability and find work. As the bulk of the package of regulations before the House today relate to the 25 and over age group I will turn to those first.

Noble Lords will be aware that a manifesto commitment was given that, as part of our Welfare to Work programme, we would introduce a New Deal for people aged 25 and over who have claimed JSA for two years or more. There are two elements of this New Deal: first, an entitlement to an employer subsidy of £75 per week for up to six months; secondly, opportunities for people in this group to study full-time for up to a year on an employment-related course while on JSA.

Noble Lords will no doubt also be aware that we intend to pilot further measures for this group. Those were touched upon in the Budget announcement on 17th March. However, the regulations before us today do not concern the development of those pilots. I intend, therefore, only to deal with the regulations necessary to bring the two elements already developed for introduction in June 1998. To introduce the employer subsidy requires no legislation. The regulations deal with the legislation necessary to offer full-time education and training opportunities to those eligible for the New Deal for the 25s and over.

To provide those opportunities we propose to adopt an approach broadly similar to the JSA Workskill pilot approach, which was started under the previous government. The House will be aware that we extended those pilots in September 1997. We intend to amend the main JSA regulations so that the people in this New Deal group will be able to receive JSA while they undertake full-time employment-related education and training courses. They will be excused from the normal requirements to be available for and actively seeking work. We believe that alongside existing provision from the Employment Service and training and enterprise councils and local enterprise companies, the job subsidy and this measure will provide the opportunity for this group to pick up new skills or refresh existing ones. We also believe that it will work as an added incentive for employers to recruit from this group. That will mean that people in this particularly disadvantaged group will have a better chance of finding work.

People in this New Deal group will be able to apply for a full-time education or training course for up to one year, though we expect in practice that many will want to take job-focused courses of shorter length. They will be able to undertake a wide range of courses, most of which will lead to an approved qualification. They will normally be able to take courses up to and including NVQ level three standard; that is, broadly A-level standard. However, to maximise flexibilities for this age group of whom some will have substantial work experience and high qualifications, people will, in particular cases, be allowed to take courses at a higher level. The regulations place the condition that all courses have to be employment-related. That is because we want the courses taken to help people to get the skills needed for work, for particular occupations or for improving job search facilities.

We expect these opportunities to be welcomed by people in this New Deal group. From those that do take advantage of this measure we will expect their commitment to attend and make satisfactory progress on their courses. To discourage the few who might be tempted to relax or lapse on their course once they are excused the normal JSA attendance arrangements and job search rules, there is a potential sanction in terms of loss of JSA for two weeks. We want people to benefit from the considerable flexibility we propose to the JSA rules to allow them the opportunity to study full-time.

There is one additional regulation in this package which relates to self-employment. This does not only apply to New Deal participants—although it is relevant to the New Deal for young unemployed people, where self-employment is one of the options available—but applies particularly to an anomaly in Scotland. It will benefit all JSA claimants preparing for self-employment programmes in Scotland. Under the current regulations, not all JSA claimants could be treated as actively seeking work when they are preparing to take up a place on a self-employment programme. Because of the existing regulations in Scotland, JSA claimants who are preparing for a self-employment programme which is not provided by Scottish Enterprise or Highlands and Islands Enterprise are not treated as actively seeking work. The proposed amendment will allow all JSA claimants, including New Deal participants, to be treated as actively seeking work for up to eight weeks, when preparing for self-employment programmes in Scotland which are funded directly or indirectly by the Secretary of State for Scotland, in addition to those provided by Scottish Enterprise or Highlands and Islands Enterprise.

These measures are only part of our approach to the New Deal. We shall be shortly laying other regulations which will extend the employment option of New Deal to include self-employment. Broadly speaking, these are two measures and I hope that they will be acceptable. I hope that the explanation has helped noble Lords. I commend these regulations to the House. I beg to move.

Moved, That the draft regulations laid before the House on 9th March be approved. [26th Report from the Joint Committee].—(Lord Whitty.)

My Lords, I am grateful to the Minister for his comments. I have two points on this matter concerning the question of balance. The first relates to the support which is to be given to the over-25 year-olds as against those below that age. Much of the Government's thinking on this some time ago was based on the idea that the level of unemployment among the younger members of the young community would remain very high and the provision was designed to deal with that problem. But in fact the trend has been rather more steeply downwards, as I understand it, for that group than for those who are in an older age bracket. I wonder whether the Government's proposals here have really caught up with the change in the overall unemployment situation and in particular the position of the older members as against the younger.

The second is a more general point as to whether the provisions made for full-time education and training for the New Deal create a reasonable balance as regards the entire expenditure on the programme. My understanding is that it is only about 10,000 or so who may benefit over the lifetime of a parliament. That would seem to be a relatively small number given the scale of the overall expenditure on the New Deal project as a whole. I shall be grateful if the Minister can comment on those two points.

My Lords, we on these Benches warmly welcome the principle of what the Government are doing. We have some reservations—some of significance—about how exactly they set about it. The Minister will not remember the many hours when his noble friend Lady Hollis of Heigham and I slogged through the night fighting against the 16-hour rule. They were really hard fights. It is a very great relief that we are not going to need to have those fights again. It was a rule that discouraged people from trying to better themselves. It discouraged them either to get a job in the first place or to get into a better qualified job where they could make themselves rather more useful. That always seemed to us to be rather stupid.

For the over-25s the Government exempt them from the jobseeker's allowance rules if they are engaged in full-time employment-related education or training. That is a constructive measure. But they have to confine themselves to courses for only up to one year.

Here there is a disadvantage. My honourable friend Mr. Webb, speaking about these regulations in another place, referred to one of his constituents who had taken up a two-year course in cabinet making. He assured the House that it was not of the Westminster variety. At the end of the first year of the course the man was made to give it up, although he achieved a distinction in the first part of it, because he had been offered a temporary part-time poorly paid job as a van driver. That did not seem particularly useful. Because it applies to courses up to one year, my honourable friend's constituent is not going to benefit. That is very far from being an isolated case.

I received a letter yesterday by sheer chance from one of our councillors in Swansea concerning someone in his own ward. I referred this case to the Minister's office and I hope that the Minister is provided with an answer to it. A single mother enrolled on a three-year nursing course. She received a bursary, but was turned down for housing benefit, council tax benefit and family credit because the course for training to be a nurse is not classed as work. Therefore, the changes, together with the single-parent changes, make her £45 to £50 a week worse off plus £17.50 a day for child care.

One would have thought that it might have been in the public interest for that person to qualify as a nurse as it would have been for my honourable friend's constituent to qualify as a cabinet maker. One of my son's closest school friends was recently caught by the 16-hour rule regulations. He wanted to qualify as an electrician. I say not only as a family friend, but as a satisfied customer, that he knew what he was about and loved his work. He also had to withdraw from his course. I rang him up last night to tell him that the law was being changed and found that, although he would otherwise have been eligible to benefit, he had taken a job as a painter and decorator just last week.

That leads me to wonder whether, with a qualifying period of two years' unemployment before one can come into the scheme, it may to some extent act as a perverse incentive because there are people with a perfectly serious sense of vocation for a job that needs qualification but who will be unable to get the qualification unless they remain unemployed for two years.

If one's vocation is really genuine and serious, one may take that. It is not necessarily going to be in the public interest. So will the Government think about whether a shorter period of unemployment might qualify people to take part in this rather generous scheme?

I also ask the Government to look at the interface between this scheme and the actively seeking work rules. My honourable friend's constituent, as he said, was pushed off a course paid for by one department to meet the rules of another department. As so often, one wants to say to government departments "only connect". But if one pushed that they would set up an inter-departmental committee which would become known as the Howard's End Committee and be chaired by a not quite sound civil servant called Howard. It is a very difficult job.

We shall have to think about protecting people who are on these courses against attempts to get them to take dead-end jobs. I take the Minister's point that they must do the courses properly. I understand why there is a benefit sanction if they do not. I ask the Minister to read the speeches made in the last Parliament by his noble friend Lady Hollis of Heigham about the case for arguing that people should not lose benefit before appeal. They were very powerful speeches. I hope that the thinking they represent is not now lost inside the Government.

It is worth their while to think about whether the burden of proof about attendance on a course should be placed on the provider rather than the claimant if for no other reason than that the provider is usually rather better provided with records. I hope that the Government will think—as, I hope, things improve—that the budget for this scheme might be improved. It is a little disproportionate compared with what is made available to the under-25s.

I am very glad indeed that this scheme does not include an element of compulsion. It is for the people who want to do it so that they are taken out of the actively seeking work rules rather than being deemed to be actively seeking work when they are not under the Humpty-Dumpty clause of the Jobseeker's Act. But it leaves one wondering why the under-25s are being treated as lesser breeds without the law, but that is a matter for another occasion.

My right honourable friend Mr. Ashdown once drew attention to the plight of young people sleeping in shop doorways, only a width of plate glass away from advertisements for jobs they will never have the skills to apply for. We now have a beginning of addressing that problem. I welcome it warmly, but it is only a beginning. I look forward to the next instalment.

My Lords, perhaps I may crave the indulgence of the House to make one comment. Like many of my colleagues I was waiting somewhat impatiently for the conclusion of the business in respect of Northern Ireland. But I delayed just a moment or two and my ears pricked up when this business began.

I have a son aged 40 who has a medical condition called myotonica dystrophia which causes him difficulties. He is registered at Loughton unemployment exchange. They are very helpful to him and he, I can assure you, is very keen to work. He wanted to attend a course but before he could be accepted and take up training he needed to qualify and pass an examination. He failed by not obtaining the 50 marks required; he obtained 48. He does not have a jobseeker's allowance because, by prudence, he has sufficient moneys which he declares and which prohibit him from receiving that allowance.

My question to the Minister is that when he and his colleagues are looking at ways in which one can take account of, and encourage, people who are genuine, who want the opportunity to work and who accept that there needs to be training, perhaps they should consider showing tolerance at the lower level and agree that the lower level needs to be reduced or ensure so that in some way discretion is applied. My son was simply told that he had failed the entrance examination and that was the end of the matter. It was not the end of the matter for Martin, I can assure you. He was advised, at one stage, that office skills would be useful to him and he has taken courses in computer studies, among other things, at the technical school near our home.

Perhaps the Minister and his colleagues will look closely at those near the borderline. Wherever the line is drawn there will be some near to it. I understand that standards need to be set. There are so few places and so many applicants that one has to be harsh. But if the Government are opening up what I call a new seam of those who are willing to work and want to be trained, perhaps they can look at that aspect. I shall be glad to furnish the Minister and his colleagues with further details.

My Lords, I very much appreciate the general welcome for these moves reflected in the speeches of all noble Lords who have contributed to the debate. Clearly this is part of an overall strategy. The noble Lord, Lord Higgins, raises perhaps one of the important points of the strategy: the balance between those over 25 and those under 25.

We have always made it clear that the whole welfare-to-work strategy is to increase the opportunities for all those who are currently on welfare to move into jobs. We made a start with the 18-24 year-olds because we believed that they were the group most seriously affected by under-skilling. If they do not start at that age attaining skills which they have somehow failed to attain during their formal education, they will become an even bigger problem in later years. It is also true that although long term unemployment among the under-25s has fallen, it remains at about twice the national average. They are therefore still the highest priority group, even on a statistical basis.

The amendment regulations we are discussing are only part of the measures that will be available to people in the over-25 group. The total package of measures will provide a range of help and advice and a coherent approach to addressing employment and training needs for the over-25s. As we announced in the Budget, we have made available £450 million from the windfall tax for the New Deal for long-term unemployed adults. The allocation will change over time but the priority is still with the under-25s, although we are beginning to shift more resources to the over-25s.

The noble Lord, Lord Higgins, also raised the question of the numbers participating in the education training part of the package. The figure of 10,000 has been quoted. That is probably an under-estimate. We have effectively talked about £23 million on the basis of 10,000 people studying for nine months. In practice, the average length of course is likely to be less than nine months. Therefore, that will be interpreted with some flexibility. We believe that many courses will be shorter than that and therefore the figure will be larger. But that is, broadly speaking, the ball park figure about which we are talking. Between 10,000 and 15,000 people seriously lack skills and have been unemployed for two years at a relatively adult age of over-25.

In terms of the total provision for the over-25s, we have effectively provided 70,000 new opportunities for adults reaching the 12 and 18 month point of unemployment. Those pilots will provide individually tailored help and support for those aged 25 and over. They follow from the provision for the under-25s and the other provisions which were started under the previous government and which we have expanded. Noble Lords will be familiar with the categories: the employment subsidy, work in the voluntary sector, job-related training and help into self-employment, part of which is covered by these regulations.

The noble Earl, Lord Russell, asked why courses were only of one year. We do not want too much of a crossover between the provision of welfare to work and the provision of what are effectively long-term student courses. The prime aim of the jobseeker's allowance is to help people into work. There is a balance between relaxing the labour market rules of the JSA and encouraging people to take up jobs. One year at this stage seems to us the right balance. We will, of course, review matters as we move through delivering the New Deal.

My Lords, I thank the Minister. Will he consider the possibility that the key dividing line should perhaps be the words "employment related" rather than the length of course?

My Lords, unfortunately, I think one has to specify both. We are talking about priorities here and what courses we would relax the JSA rules for without moving into a situation where JSA is still applied to people who are effectively in full-time education, whatever their age. I think that probably the one year cut-off is sensible. I appreciate that there will be situations like the one mentioned of the furniture maker where this seems a little unfortunate. There has to be a cut-off. The key cut-off is certainly that they are employment-related courses. But there has to be a division also between what we are doing to encourage people off welfare into work and what we are doing to encourage people at a later age to move into full-time education, as such.

The noble Earl also raised the question of whether the two-year unemployment threshold was appropriate in all the circumstances. Again, we are talking of priorities. Clearly there will be people who have been unemployed for less than two years who will be looking to improve their employability through improved skills. This measure, however, addresses people who are over 25, who are adults and who may well have family responsibilities, and who have been out of the labour market for over two years. Such people are our priority among that group at this stage. That is why the relaxation of the 16-hour rule and the other rules relating to it have been prioritised and that is why it is not a general relaxation.

Both the noble Earl, Lord Russell, and my noble friend Lord Graham referred to specific cases. In respect of the case about which the noble Earl notified the department earlier today, I must advise him that we are not sure of the details of the case. Perhaps I may give some clarification. The regulations will allow those who are 25 and over and who have been unemployed for more than two years to take full-time education and training while remaining on jobseeker's allowance. Lone parents with a dependant under 16 are described for benefit purposes as a vulnerable group. In most circumstances they will not at present be in receipt of jobseeker's allowance. Those in that group may study full time and still remain eligible for income support and for other social security benefits. I have the letter from the noble Earl's colleague. It is not clear why benefit was refused in that case. We would appreciate some further details. If the noble Earl will permit me to do so, I shall write to him because if he can provide me with further details, I am sure that the department can give a more detailed response to that case.

My noble friend Lord Graham referred to the situation of somebody who is not in receipt of jobseeker's allowance but who, because of failing some sort of access course, failed to get on the proper employment-related course. That situation needs greater examination. If further details are available, we shall look into it. Clearly, it is our intention that the rules should be operated with some degree of flexibility towards benefit claimants. Indeed, we have built a support system into the New Deal process so that individual circumstances can be taken into account. That does not apply directly to my noble friend's son in the sense that, as I understand it, he is not on benefit at this point. However, if my noble friend will provide us with further details, I am sure that we can develop a more detailed response.

I believe that I have dealt with the specific points raised in the debate in so far as I can tonight. Further details can be provided in writing. I thank noble Lords for their general support for the regulations and I commend them to the House.

On Question, Motion agreed to.