New Clause 13
Welfare Reform Bill
4:30 pm
Paul Rowen (Rochdale, Liberal Democrat)
I beg to move, That the clause be read a Second time.
Again, I shall not press the new clause to a Division, but I think that it is important, given that we have spent most of our time in Committee dealing with sanctions, that we deal with other aspects of employment that ought to be considered in the current climate. I understand what the Secretary of State said on Second Reading: the recession and the credit crunch are not reasons for not pressing ahead with reforms. Nevertheless, speaking on behalf of the Liberal Democrats, I certainly feel that it is important that it is demonstrated to people, particularly those many thousands of people who have recently lost their jobs, that strategies can be adopted to improve employment.
If I may again use an international example, given that the Government have been very good at citing international examples that fit their agenda, there are four areas in the Wisconsin programme that operates in the US that deal with unemployed people. The first one is what is in the Bill: “work for your benefit”. Another is community service jobs, and a further one is transitions for people who need specialist help and support.
What is also included in that programme, but is missing in this Bill, is a system under which the state subsidises employers to take people into employment in what are called trial jobs. It is vital that things are done to get people back into work. Yes, we have considered measures to encourage people to go into work, but employers also need encouragement. I know that there has been experimentation through the city strategy pathfinders and the employment and skills partnerships. The hon. Member for Warwick and Leamington will remember last May’s debate, which was initiated by the hon. Member for Nottingham, North (Mr. Allen), about this issue and the greater freedoms of the partnerships.
I am seeking two major changes, although the first relates to a power that already exists. Local authorities can, when setting contracts, require as part of the contract that the person who wins it takes somebody off the unemployment register. In my authority of Rochdale, we set up a joint partnership board with a couple of employers. A few weeks ago, they took on their 300th employee who had come off the unemployment list. Those individuals include 15 people who were made redundant as a result of the closure of Woolworths.
Although that power exists, the new clause addresses something that does not and accepts that someone who is unemployed might need to be retrained if they are to undertake a job that they may be offered. A few years ago, when my local authority was renewing all the council houses, people were taken off the unemployment register. If someone is employed to become, eventually, a qualified bricklayer, electrician, plumber or roofer, there is no way that it can be argued that that particular person will be able to do, from day one, 100 per cent. of what can be done by a qualified person with several years’ experience. The ability to passport benefits would represent a payment to the employer. There would be a recognition that it was a training allowance for an employer taking someone off the unemployment register.
I have spoken to employers in my town who would be willing to take this on board. Indeed, Camden borough council operated a similar scheme under a contract with a company. We think that such a proposal is a good way of encouraging both employers and unemployed people. It tells unemployed people that they can learn on the job and that the benefits that they would have received if they were unemployed would be passported to the employer as a training allowance. A person could thus be trained in that particular trade.
In the next five years, there will be something like £1.5 billion of public and private expenditure in my local authority, for example through Building Schools for the Future. The jobs will be not only in construction, as that contract is over 20 years and involves the provision of such services as IT and cleaning. There is value in putting something in the contracts to say that it is a requirement that somebody is taken off the unemployment register, but that recognises that that person may not be suitably qualified for a limited period.I emphasise that it is not the intention that the benefits would be passported indefinitely.The new clause deliberately states that regulations will be laid, and there will have to be tight conditions to ensure that the scheme is not being used by an employer as a means of getting money off the state without delivering.
The second part of the proposal deals with something about which there are particular concerns: many industries are having to offload jobs because of the recession, which means that we will lose important skills and abilities. That problem has been raised regarding industries such as the motor trade and the aerospace industry, as well as other areas in which there are highly specialised people who taken many years to train. Employers are having to make certain people redundant because of a downturn in trade, such as someone who visited my surgery a couple of weeks ago and is making 13 of 88 employees redundant. I want to probe whether the Government are willing to consider this situation.
It could be shown—it would have to be demonstrated by the employer—that an employee should undergo a period of further retraining. It might well be that although a person was in the plant for five days a week, they could spend three days actually working and two days enhancing their skills and developing new ones so that when the upturn comes, they will be appropriately skilled up to take advantage of that.A scheme to allow that would be advantageous to the company, because there would be no way that it could afford to provide such training in the current climate. The new clause recognises that and looks to countries such as Germany, where such an approach is adopted. We could tell employers that we would do something to help them to keep people in employment if they could demonstrate that they were undertaking a retraining process instead of making those people redundant.
Such an approach would have a double benefit: it would cost the state no more than if those people were unemployed, and those people would still be in work and drawing a wage for the remaining part of the week, and so would be paying taxes on those wages. In the current circumstances, that would be a win-win-win situation. There would be a win for the employee, because they would not be unemployed and their skills would be enhanced, and there would be a win for the company, because it would be allowed to undertake reskilling that it would not otherwise be able to afford in the current climate. Additionally, there would be a win for the country, because instead of losing vital skills in some sectors, we would be guaranteeing that we would still have engineers and qualified people in the future, because if those people went abroad, or we otherwise lost them, we would be in dire straits.
I reiterate that I do not intend to press the new clause to a Division. I merely wanted to put on record that the Liberal Democrats were serious about dealing not only with “work for your benefit”, but about protecting employment and ensuring that companies and employees are able to ride out the recession.