New Clause 13

Welfare Reform Bill – in a Public Bill Committee at 4:30 pm on 3rd March 2009.

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Passporting of Jobseeker’s Allowance

‘(1) The Jobseekers Act 1995 (c.18) is amended as follows.

(2) After section 27 insert—

“27A Passporting of Jobseeker’s Allowance

(1) Regulations under this section may make provision for or in connection with allowing Jobseeker’s Allowance to be passported to employers of individuals who have been on Jobseeker’s Allowance for at least 18 months prior to their employment.

(2) Claimants to whom these regulations apply must be in receipt of the national minimum wage.

(3) Regulations under this section may, in particular, make provision for contracts of public works whereby employers will receive claimants’ passported benefits should they take into employment under such schemes claimants that have been in receipt of Jobseeker’s Allowance for at least 18 months.

(4) The award of public works contracts may be rendered conditional upon a minimum percentage of Jobseeker’s Allowance claimants being taken on by the employer concerned.

(5) Regulations may further make provision for Jobseeker’s Allowance to be passported to employers planning to make skilled or semi-skilled workers redundant.

(6) Regulations under this section may only apply to employees who would be entitled to Jobseeker’s Allowance if no longer in employment.

(7) The passported benefits must be used to either—

(a) retrain the worker concerned, or

(b) permit retraining and employment as part of a reskilling package agreed between the employer and employee.”.’.—(Paul Rowen.)

Brought up, and read the First time.

Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister

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.

Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions 4:45 pm, 3rd March 2009

I appreciate the spirit of the new clause. If I were being churlish, I could rip virtually every provision apart, because it is wanting in many ways, but given the spirit in which it was tabled, I will not do so.

There are strong arguments for wage subsidy—indeed, we have had it in the new deal for the past 10 years. However, I am troubled by the fact that the new clause would kick in only after 18 months of longer term unemployment. The hon. Gentleman will know that, in our last series of announcements, we announced the introduction of a package, from April, that will include a £2,500 mixture of employer subsidy and training for companies that take on someone who has been unemployed for six months. Why the delay? It is precisely because of some of the problems with the new clause, such as resisting duplication and dead-weight costs. That is a horrible phrase, but we want to resist those costs. We also want to avoid the perverse notion, which is problematic in any subsidy system, that people can sack a worker to take on someone else.

The issue involves all sorts of details and complexities, but the notion that we should not deal with it at all is wrong. We can and do, as I have said, have a more focused use of Train to Gain—through the new deal, the new package that we are introducing in April, and our work with colleagues in the Department for Innovation, Universities and Skills—to achieve some of what the hon. Gentleman has suggested, such as keeping people in work, including in skilled jobs, and having additional training facilities. In motor car plants, for example, where the work force are on short time, Train to Gain has gone in to see what it can do to help with skills and training, and to preserve the skills base. The hon. Gentleman is right to raise this issue, because we do not want to come out of this recession having to look for the very skills base that were so dissipated in the past two recessions, and finding that those people simply were not around, leaving us having to skill people up again. That would not be appropriate.

I agree with the thrust and sentiment of what the hon. Gentleman said, but we have to be clear that subsidies are short term—the new clause is very open-ended—and, secondly, that they are precisely focused on the longer term unemployed, potentially through particular skills bases.

I will be candid and say that there is still a huge debate across Government about whether we should introduce blanket wage subsidy schemes in areas such as the motor trade. We think that there is a great deal of job substitution, duplication and other things going on in some of the European models—in Germany’s and France’s, in particular. If we were to go down that road, we would work much more around retention schemes that focus on training and skills interventions to skill up the work force while they are still in place.

I appreciate that Wisconsin is in the US—that is a perfectly fair point—but, although I am au fait and happy with the notion that we should not take job subsidies off the table as an element in our arsenal to equip us for responding to the downturn, for all the reasons that the hon. Gentleman suggested, including holding on to the skills base, I believe, on balance, that the new clause should be resisted, albeit for reasons that I have resisted giving because of the spirit in which the  hon. Gentleman opened the debate. However, I do not doubt that we will regularly return to this issue if the downturn endures.

If the hon. Gentleman has not done so already, I commend him to look in detail at the golden hellos and all the other bits in the package that we are introducing in April for the six-months unemployed. They will help and, I hope, obviate the need for a subsequent package for those at 18 months, as is suggested in the new clause, which I ask the hon. Gentleman to withdraw.

Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister

I am happy to withdraw the new clause because, as I said, its purpose was to stimulate discussion. I was interested by the Minister’s comment about six months, because, at present, no advice is given until at least 12 months. I am interested in how six months will fit in with current departmental policies. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions

I beg to move,

That certain written evidence already reported to the House be appended to the proceedings of the Committee.

With your indulgence, Mr. Amess, I shall try to wind things up. I thank your good self—in body and in spirit—for your excellent chairmanship, and ask you to convey our thanks in the same terms to Mr. Hood. You both used a light touch and were good humoured, as Chairmen should be, for which we have been grateful. There was, from both of you, that gentle menace that suggested that, were we to step out of line, you would pull out the full panoply of Chairmen’s powers, but of course we did not step out of line. I was pleased to serve under your chairmanship, Mr. Amess, and that of Mr. Hood.

I am grateful to the hon. Members for Forest of Dean and for Hertsmere, not simply for their presence—how would we have coped without them?—but, equally, for dealing with our business in a focused, professional manner that afforded the Committee a good deal of sharp debate about important issues. Our proceedings have been relatively free of partisanship and carried out in good humour and good spirit.

It would be remiss not to thank the hon. Members for Henley and for Billericay and the right hon. Member for Hitchin and Harpenden for saying as little as possible and not getting in the way of our deliberations—I mean that most sincerely. The hon. Member for Billericay, of course, is a Whip, so we would expect him to say very little, but it would have been rather nice if he had popped in every now and then. However, he is in the room now, for which I am grateful. We welcome ghosts, whichever side of the Committee they are on.

I am happy to put on record that I am enormously indebted to the Under-Secretaries of State for Work and Pensions, my hon. Friends the Members for Burnley and for Chatham and Aylesford, and my hon. Friend the Under-Secretary of State for Scotland for their contributions. Although the Committee was top-heavy with Ministers—I am not referring to my own spherical status—I am sure that hon. Members will agree that all Ministers made a significant contribution and that ministerial inputs were apportioned appropriately, if that is the correct phrase. I am grateful to my colleagues for the spirit and manner in which they contributed to the good order throughout the sittings.

I am enormously indebted to my hon. Friend the Member for Warrington, North for whipping lightly, but with gentle menace when required. I am equally grateful to my hon. Friend the Member for Ochil and South Perthshire. One of the meetings coming out of our deliberations is a discussion with the repetitive strain injury group to talk about the serious matter of RSI. Hopefully, my hon. Friend has not got that from throwing the advice and inspiration that we get from officials. I thank those officials for their endeavours, along with the Doorkeepers and the police—I do not think that we troubled them from their slumber too much having had only about two Divisions.

I congratulate my hon. Friends the Members for Sheffield, Heeley, for Warwick and Leamington and for Glasgow, North-West on their significant and positive contributions, which guided the ministerial team and the Committee. I especially congratulate my hon. Friend the Member for Glasgow, North-West, who tabled some challenging amendments—we will come back with at least two or three in some form. He, too, is a brooding presence with some gentle menace—hon. Members might see a theme emerging in my thanks.

I am also grateful to the hon. Member for Rochdale for his contributions to our deliberations, many of which were put forward productively, although perhaps he started off a bit slowly. He has given me a brand new definition of a probing amendment: one where the clause is wrong, the amendment is wrong and the wrong thing entirely is talked about. If one is told so in no uncertain terms by the Minister, it becomes a probing amendment.

I was a little disappointed by the contribution of the hon. Member for Glasgow, East, whose rants were rather partisan. His new clauses were fatuous and vacuous, as would be expected from the Scottish National party. I am disappointed because he comes from one of the poorest communities in the country. One would have thought that the welfare reform agenda would be right up the street of the people of Glasgow. Happily for us, Glasgow has been more than adequately represented by my hon. Friend the Member for Glasgow, North-West and the Under-Secretary of State for Scotland.

This Bill covers important subjects that will matter to our communities and individuals up and down the country. I commend it to the Committee, and I seriously commend the Committee for its deliberations. Even though not many amendments, if any, were endorsed, we will reflect on the Committee proceedings. The Bill will be served well by the contributions of most Committee members.

Photo of James Clappison James Clappison Shadow Spokesperson (Work and Pensions)

I join the Minister in many, although not all, of his sentiments. I certainly agree with all the sentiments that he expressed to the Chairmen of the Committee. We are extremely grateful to you, Mr. Amess, and to your colleague, Mr. Hood, for the manner in which the Committee has been chaired, both in our deliberative sittings and evidence sessions. As the Minister rightly said, the Committee has been conducted in a good humoured and appropriate manner due to the skilled chairmanship of you and your colleague. I join the Minister in the thanks that he extended to everybody else who helped the Committee to perform in an expeditious way, including the Clerk, the Hansard writers, the Doorkeepers and the police officers.

I am very grateful to colleagues in my party. I thank my hon. Friend the Member for Forest of Dean for his hard work, his telling analysis of the Bill and his excellent contributions. I am grateful to our Whip, my hon. Friend the Member for Billericay, for the extremely efficient role that he has played. I am also grateful to my hon. Friend the Member for Henley and my right hon. Friend the Member for Hitchin and Harpenden for bringing their wisdom to bear on these proceedings.

Since we are being consensual, I reciprocate the spirit of the Minister for Employment and Welfare Reform by congratulating him and his ministerial team. I also congratulate Labour Back Benchers on their contributions, as well as the hon. Member for Rochdale, who speaks for the Liberal Democrats, and the hon. Member for Glasgow, East, who speaks for the Scottish Nationalists—I want to be all-inclusive in this atmosphere. If there was an element of tenderness at the beginning of the Minister’s contribution a moment ago, I would like to continue with that, although perhaps not all the remarks at the end of his contribution were made in that respect.

I certainly think that the Committee has been conducted appropriately, and we are pleased to have had the opportunity to examine the Bill and to do justice to the process of parliamentary scrutiny, which is our duty. We feel that we have done that fully. As the Minister rightly said, the subject matter of the Bill is important, particularly at present. We have been conscious throughout our proceedings of what is unfolding in the country at large. As this part of the Bill’s passage reaches its conclusion, we look forward to further analysis and scrutiny.

Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister 5:00 pm, 3rd March 2009

I echo the sentiments expressed by the Minister and the hon. Member for Hertsmere. I have certainly enjoyed your chairmanship, Mr. Amess, and that of your co-Chairman. You have been fair and reasonable about the way in which the business of the  Committee has been conducted. I also express my thanks to the Committee Clerk, the Doorkeepers, those doing shorthand and all Members who have contributed.

This has probably been the most top-heavy Bill Committee that I have served on in terms of Ministers and ex-Ministers—I am not including weight. When the debate moves to the Floor of the House, it will certainly be interesting, because I do not think that it will be as consensual, and I will not feel that I am such a lone voice when raising concerns. I also thank the hon. Member for Glasgow, East, who represents the Scottish National party. This is his first Public Bill Committee, and I think that he has done extremely well in the circumstances, notwithstanding the Minister’s comments.

Photo of John Mason John Mason Scottish National Party, Glasgow East

I think that I said at the beginning of our proceedings that this is the first time that I have served on a Public Bill Committee, so this has been very much a learning experience. I am sure that I have learned how to do something from every Member here—from one or two I have learned how not to do things. I suppose that I am a little disappointed that Ministers did not take on at least one amendment, but I have had a good experience, and I appreciate all the help from staff and others.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

May I thank colleagues for their kind and generous remarks? Mr. Hood and I would like to thank colleagues for making this such an easy Bill to chair. The reason why it was so easy was that, at all times, hon. Members kept in good order and the debate was conducted in good spirit and with great humour—many thanks. I thank the Clerk for his expert advice, which the Committee has appreciated at all times, and the rest of the staff of the Commons for the way in which they have served the Committee.

Question put and agreed to.

Bill, as amended, to be reported.

Committee rose.