Community Programme (Unemployment Benefit)

– in the House of Commons at 4:17 pm on 3rd March 1987.

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Photo of Mr John Major Mr John Major , Huntingdon 4:17 pm, 3rd March 1987

With permission, Mr. Speaker, I wish to make a statement on the benefit position of participants in the community programme following a recent decision by the social security commissioners.

As the House will know, it is a fundamental principle of benefit law that people who work part time and do so regularly are not entitled also to unemployment benefit for those days on which they would not normally work. That principle is not novel and has been applied consistently under successive Administrations since 1948. It has not been a source of contention. The point is currently covered in the Social Security (Unemployment Sickness and Invalidity Benefit) Regulations 1983 and was previously covered by the corresponding regulations made in 1975. It is frequently referred to as the full extent normal, or FEN, rule.

The community programme provides temporary work—normally for people who have been unemployed for 12 months, or six months if under 25—and a substantial proportion of those employed in the programme work part time. Until now, the adjudicating authorities have held that the full extent normal rule applies. This approach has hitherto been supported by the social security commissioners, and was also endorsed by a Court of Appeal decision in 1985.

However, in the case of Mr. Brunt a tribunal of' commissioners has now decided that participating in the community programme on a part-time basis will not normally bring the full extent normal rule into operation. This decision was promulgated last week to the chief adjudication officer, who is independent of the Government, and I understand that he proposes to apply for leave to appeal against it.

The result of the commissioners' decision, if it were sustained upon appeal and applied generally, would be a significant change in current well established and understood benefit procedure. It would also cause a rise in benefit expenditure of around £2 million a week. This expenditure would be directed to people participating voluntarily in a programme from which the overwhelming majority receive earnings significantly higher than any unemployment benefit entitlement. The Government regard that as a quite unacceptable use of resources. We do not believe that community programme earnings and unemployment benefit should both be payable. Moreover, the adjudicating authorities will be uncertain of the law pending the conclusion of any appeal proceedings which could be lengthy. This, too, is unsatisfactory.

I am therefore laying regulations today under the urgency procedure to provide that people receiving earnings from the community programme are not entitled also to unemployment benefit. These regulations do not affect any supplementary benefit entitlement, because that benefit is not affected by the full extent normal rule.

I emphasise that these regulations are intended to establish beyond doubt the position that had, until now, generally been understood and applied. The regulations will take effect immediately.

Photo of Margaret Beckett Margaret Beckett Shadow Minister (Social Security)

Is the Minister aware that the statement that he has just made will cause depression and real anger among those who are working part-time on the community programme, for whom he has just explicitly confirmed that the programme is not an avenue for hope but a dead end? Did he not also confirm that, far from the community programme grooming people to move on to full-time work, it is the best that they can expect under this Government before they go back to the dole?

Is the Minister aware that the statement itself is in some respects misleading? It is not true that the application of the principle of full extent normal work has not been a source of contention, as the Minister says. Nor is it true that adjudicating authorities have always held that the rule applies, as he said in the statement. Indeed, it has been overturned in a number of cases.

The Minister's remarks on the community programme are contradicted explicitly by a document produced by the Department of Employment in March of this year, which stated : some part-time participants may be entitled to claim unemployment benefit for the days they are not working". The commissioners' decision makes it quite clear that that is the case, quoting the leaflet issued by the Manpower Services Commission.

Many would doubt—I hope the Minister will confirm this—whether someone who is offered only two and a half days a week on the community programme and is pushed into taking opportunities offered by programmes, such as the Government's restart programme, has voluntarily chosen part-time employment in preference to full-time work. Will the Minister now confirm that the long-established principle of the rule to which he refers is that a person should not be encouraged by benefit rules to choose to take well-paid work for a few days and then supplement his income by drawing unemployment benefit? Will he tell the House whether he really believes that that is the definition of the community programme? Does he not understand that for some time there has been increasing concern at the rigid application of this rule, especially at a time of high unemployment? Does he realise that he has confirmed the view that people on the community programme are not being groomed for real jobs, but are merely being kept off the unemployment register?

Are not the Government, as usual, simply ignoring an opportunity to reassess the operation of the full extent normal rule and the community programme and to improve the training content and other aspects of that programme as the commissioners suggested in the judgment to which the Minister referred?

Finally, are the regulations intended to preclude the consideration even of different individual cases in future, as has been the case in the past?

Photo of Mr John Major Mr John Major , Huntingdon

The hon. Lady should remember that, when the community programme began in 1982, it was not envisaged by the Government or by anyone else that both community programme earnings and unemployment benefit would be payable. That underlying point, which undercuts a substantial amount of what the hon. Lady had to say, was fully understood by all concerned at the time.

As regards the hon. Lady's remarks on depression and anger, my announcement today re-emphasises and re-endorses what has long been understood to have been the position.

The hon. Lady will know that a large number of people do not conclude their participation in community programmes, precisely because they obtain employment during the passage of that programme.

There has been some uncertainty about the full extent normal rule, although I quoted the most notable court case that had taken place. I confirm that I shall be considering the operation of the full extent normal rule separately from the instance that I mentioned today.

As regards the hon. Lady's comments about people being pushed into the community programme, I reaffirm what has long been understood—that the community programme is and will remain voluntary.

Photo of Mr Roy Galley Mr Roy Galley , Halifax

The fact that the social security commissioners' decision in this case is ludicrous is surely underlined by the thin arguments presented by the hon. Member for Derby, South (Mrs. Beckett). It is anomalous that the state should provide work for someone and yet allow him to register as unemployed. It is also anomalous that the state should provide a wage and expect at the same time to provide unemployment benefit. Will my hon. Friend assure the House that he will act swiftly in bringing these regulations before the House and that they will be legally watertight when they are presented?

Photo of Mr John Major Mr John Major , Huntingdon

On my hon. Friend's second point, I live in hope and trust that that will be the case. On his earlier remarks, it is certainly true that the present position would be anomalous if people received both earnings on the community programme and unemployment benefit. That was never the intention, and these regulations will take effect immediately to prevent that occurring. The commissioners' decision may be surprising, but that is a matter for the chief adjudication officer who has appealed against it.

Photo of Mr Jack Ashley Mr Jack Ashley , Stoke-on-Trent South

Is the hon. Gentleman aware that this is the first time that I have known a Minister to step in and change the rules before an appeal has been heard? I wonder what he would say if someone was found not guilty of a criminal charge and the Government stepped in before any sort of appeal could be heard—although, of course, one cannot appeal against a not guilty verdict in a criminal case. However, is the Minister aware that by these regulations he is robbing unemployed part-time workers of up to £15 a week? It is wrong to regard people who are employed for a fixed temporary period as being fully employed. Will he think again and withdraw these regulations?

Photo of Mr John Major Mr John Major , Huntingdon

I reiterate that the regulations will ensure that the law that we all thought existed does exist. There is nothing novel in the principle of these regulations. On the matter of cost, the right hon. Gentleman will know, as well as any hon. Member of this House, that there are a vast number of competing demands upon Social Security Ministers. Double provision of this sort is not the most effective use of the resources at my hand.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

I congratulate my hon. Friend on coming to the House with quick and effective action which will stop a disincentive to people taking jobs that are available and will also save the taxpayer money which should not have been spent and otherwise would have been spent. Will he tell the Chief Secretary to the Treasury to add another £100 million to the taxi meter, so that he is operating on behalf of the Labour party? Will he also assure the House that he will now take much more vigorous action to stop the payment of supplementary benefit to those many hundreds of thousands of people in the south-east of England who are not taking jobs when the jobs are manifestly available?

Photo of Mr John Major Mr John Major , Huntingdon

I take note of my hon. Friend's important points. I shall certainly draw the attention of the Chief Secretary to the Treasury to the observations of the hon. Member for Derby, South (Mrs. Beckett).

Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East

Is not one problem the low level of earnings on the community programme? The average rate of pay, £67, has been virtually the same now for many years. As the community programme has to pay the rate for the job, the participants have to work fewer and fewer hours, so that there are very few now doing a full-time job. Many do only two days a week. Therefore, is it surprising that the industrial tribunals do not look upon those as proper jobs and award unemployment pay?

Should we not increase the level of earnings and upgrade the community programme, so that it is not a cheapskate programme but a proper, credible programme that would be so regarded by industrial tribunals?

Photo of Mr John Major Mr John Major , Huntingdon

It is so proper and so credible that it tends to be substantially over-subscribed. The hon. Gentleman might also bear in mind the fact that the amount available as earnings under the community programme is substantially higher than the amount of unemployment benefit that would generally be payable. The community programme is popular and successful. I am sorry that the hon. Gentleman cannot see that.

Photo of Mr John Watts Mr John Watts , Slough

Does my hon. Friend agree that it would be totally unacceptable for someone employed part-time on the community programme to be treated more favourably than someone employed part-time in the private sector? Will he confirm that entitlement to family income supplement is not affected, just as he confirmed that entitlement to supplementary benefit is not so affected?

Photo of Mr John Major Mr John Major , Huntingdon

I confirm my hon. Friend's latter point, and I entirely agree with his earlier observations.

Photo of Charles Kennedy Charles Kennedy , Ross and Cromarty and Skye

May I follow the point raised by the Chairman of the Select Committee on Employment, the hon. Member for Newham, North-East (Mr. Leighton), and take the Minister one step back? Surely the nub of the problem is the large proportion of people on the community programme who are there on a part-time basis. Will the hon. Gentleman look at the per capita funding of the programme? There seem to be some signs that the suburban criterion which is used as the base line is not relevant to the creation of full-time CP jobs in rural areas and inner cities which, for different reasons, have higher overheads. Will the hon. Gentleman ascertain whether the method used is sensitive enough to give an accurate figure for those two categories?

Photo of Mr John Major Mr John Major , Huntingdon

I understand the points that the hon. Gentleman makes so cogently. I shall draw them to the attention of my right hon. and noble Friend the Secretary of State for Employment.

On the community programme, I am bound to reiterate what I have said : whatever defects the hon. Gentleman may fear exist in the programme or in its funding, it is substantially over-subscribed and very popular.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Is not the reason why it was never envisaged that benefit would be paid in addition to earnings the fact that, when it was introduced, it was a full-time scheme based on full-time employment? Transforming it into a scheme of part-time working was a Government cut. Does the hon. Gentleman recognise that, although many people want to have a place on the community programme, they want full-time employment? The reform should come there. It should not be a matter of changing the rules in this way when they were set following a perfectly reasonable commission decision.

Photo of Mr John Major Mr John Major , Huntingdon

The hon. Gentleman, as ever, is very ingenious in the points that he makes to the House. The underlying principle is the full extent normal rule, which precedes the community programme by some 25 years, so the hon. Gentleman's point is not valid.

Photo of Dr Norman Godman Dr Norman Godman , Greenock and Port Glasgow

The Minister spoke about the community programme's success and popularity, but I should point out that a recent inquiry by the MSC in the west of Scotland revealed serious irregularities in the management of such a programme. Surely we need an independent inquiry into the management of such schemes.

Photo of Mr John Major Mr John Major , Huntingdon

I understand that that matter is under investigation, but, to be frank, I am not sure that it arises from the statement that I have just made.

Photo of Clare Short Clare Short , Birmingham, Ladywood

It is very difficult to believe the Minister when he says that this is such a long-established principle. Why have the social security commissioners found differently? They must understand the law and the principles only too well. All my hon. Friends who have spoken have pointed out that thousands of people on the community programme desperately want to work because they have been unemployed for so long. That means that they feel poor and cut off and that they cannot contribute to society. Most are taking home about £40 a week, which leaves them poor.

Does not the hon. Gentleman think that, as the commissioners have found that those people are entitled to a top-up on that money, they should have it? Should he not appeal against the decision and not change the law in the middle of the game? Is not the Government's real worry the fact that this rule means that many people on the community programme will again be counted in the unemployment figures? Is not the Government's major intention keeping the figures down rather than helping the unemployed?

Photo of Mr John Major Mr John Major , Huntingdon

I cannot comment directly on the commissioners' decision in this case, which is the subject of an application for leave to appeal by the chief adjudication officer. Commissioners had previously specifically endorsed the full extent normal principle, as has the Court of Appeal.