Government Employment Strategy

I want to endorse and to follow up on many of the excellent points already made by my Select Committee colleagues: the Chairman, the hon. Member for Bradford, North (Mr. Rooney), and the hon. Member for Blackpool, North and Fleetwood (Mrs. Humble). In particular, it is important that we should not forget the points made about the Leitch report and its endorsement of the skills agenda, particularly for those over 25 and out of work. We have already heard how co-payment is not a viable opportunity or option for those people. I also endorse my colleagues’ comments about the Freud report and its suggestion about reinvesting benefit savings in bringing more people into work. Those look like excellent suggestions and I await with great interest the Minister’s response and in due course the Government’s more detailed response to Freud. Before I go any further with my comments, I should apologise to the Minister and to my hon. Friend the Member for South-West Bedfordshire (Andrew Selous), because I must leave before they sum up. I hope that they will forgive me for that. I want to expand a little on the point about flexibility for local advisers. We heard time after time, in many items of evidence, that that is vital. However it is, I think, contrary to many of the instincts of a large bureaucracy that goes for central control. It requires a degree of courage to allow the professionalism and excellent training of many of the advisers to be used to its fullest effect. Yes, some sort of control can be exercised by imposing a budget, so that flexibility does not run out of control, but it seems to be one of the most effective ways of allowing individual jobseekers to be treated as individuals, and their personal and specific circumstances to be taken properly into account. Therefore, it is particularly disappointing that the Government’s response, at paragraph 65 on page 14, to our recommendation that personal advisers be given greater discretion over further benefit extensions, is:"““The duration of these payments is four weeks, to help the claimant until their first in-work payday. The Department considers that benefit extensions beyond this timescale have no policy justification.””" That is peculiar, to put it politely, because in paragraph 34 of the same response the Government say, in discussing whether it makes sense to extend the definition of sustainable employment to 26 weeks or beyond:"““The purpose of monitoring sustainment over a shorter period is twofold: statistics show that the risk of becoming workless decreases over time, outcomes in the short to medium term are a good indicator””." Thus the Government are accepting that the longer someone is in work, if they can be got over that initial difficult period at the start of work, the better; there is a massively improved likelihood of staying in work. Surely that provides them with precisely the policy justification, which they said in their response in paragraph 65 did not exist, for giving advisers more flexibility to get people over the initial introductory hump, settle them in and ensure that they remain in work for the crucial first weeks and months, by whatever means their circumstances make necessary. I hope that the Minister will give a proper response to that. I was disappointed with the Government’s response to the various different points that were made about discrimination. Discrimination is extremely difficult to quantify. The assumption that tends to be made is that it is the remaining explanation for any differentials in employment rates for different groups, after all the other explanations have been used. However, it is difficult to understand precisely how much discrimination affects different groups. Nevertheless, the evidence that we received included a wealth of anecdotal certainty among many different groups that discrimination is real and affects many different jobseekers severely. Whether someone is elderly, from an ethnic minority, or in some other category, discrimination in one form or another is potentially a serious barrier to work for some people. It is important to understand that discrimination is not exercised only by employers, although I am afraid to say that it does occur with some employers. It may have other sources. Members of a person’s family or community might frown upon their going into work, so that they must overcome a societal barrier. I am very concerned that the Government’s response on this, whenever we have asked Ministers about it in evidence sessions—and, indeed, in the response to the Committee’s report—seems to be to postpone it, and to say that a report is coming up. Real hard suggestions are absent and that is deeply worrying at this stage. I hope for some concrete suggestions, because it is a difficult area to understand but it is vital to do so if we are to take on this task properly. I am conscious that other hon. Members want to contribute, so I shall limit myself to one more point. To return to what the hon. Member for Blackpool, North and Fleetwood said about the Government’s targets and whether 80 per cent. is right, she will, I am sure, be pleased to hear that I do not plan to go into any more detail about numerators and denominators, but it is important, from a conceptual point of view, to understand who we expect will get into work, and who we expect will not. The Government have said that they want 80 per cent. of some fictional number—the number of people in work divided by the number of people below retirement age, which is a strange figure anyway—to be in work. That implies that they have a view that the other 20 per cent. are not supposed to be in work. We need, as a country, to be clear about who is in that 20 per cent., and why that is the figure. What is the justification? Where is the evidence to support it? The Government’s response on that point looks pretty woolly. Paragraph 8 of their response to our recommendation states:"““The Department’s view is that producing a list of groups not expected to work would be likely to limit the aspirations of those who could potentially re-enter the labour market with the right support.””" I completely accept that if the message were wrongly conveyed, that interpretation might be taken, and that is not the Committee’s intention or, I am sure, the Government’s. However, it must be possible, particularly given the Government’s vast resources of spin doctors and so on, to get the message across in a way that does not have that impact. I remind the Government of their own comment in paragraph 10:"““There will be many disabled people and carers, for example, for whom employment is not a viable option.””" They say that they do not want to identify such people, because it might limit their aspirations; then, two paragraphs down the very same page, they have done it. It is clearly possible, provided that it is approached sensitively and with a degree of understanding, to explain that people may not be expected to re-enter the labour market, because it is difficult for them and it may be unreasonable to put them under that pressure, but that the Government want to give them the opportunity. The Government did that extremely carefully in their recent proposals to reform the incapacity benefit system. The support group has exactly such a definition behind it; its members are not expected to be in work, and will not be put under pressure to enter work, but if they want to get into work and volunteer for the process, they will be welcomed, supported and encouraged. Not only that group of people, but others should be given clarity about whether they are expected to be in work. What will be the approach to people who are retired? We know that people over 65 will probably be encouraged into work in future, but are they expected to be in work? If not, let that be made clear: let us say that they are part of the 20 per cent. of society who are not expected to be in work, and that if the Government want an excuse for not attaining more than 80 per cent., with respect to their target figure, that is a reasonable one. We should not beat up Ministers for failing to get retired people into work when they do not want to be in work. I am trying to help the Government out by suggesting that as a potential answer to future criticism. Equally, as has been mentioned, we should consider people in full-time education. It may be unreasonable to expect them to be in full-time work. I encourage the Government to be bold and clear about this issue. Who do we expect to be in work, and who do we not expect, but encourage, to be in work? Once those groups are defined, it will not be difficult to quantify them with at least reasonable accuracy, so that we know whether 80 per cent. is the right figure to aim for. If we have quantified groups of people who are not expected to be in work and they turn out to be 30 per cent. of the population, rather than 20 per cent., an 80 per cent target is ridiculous and we should reduce it to 70 per cent. Similarly, if those people are actually only 10 per cent. of the population we should raise the target, because 80 per cent. is too easy. It is important that the Government are not precisely wrong on the figure in saying that it is difficult to measure. It is important, however, that they are willing to be approximately right and say that they can define the groups and, within reason, distil from various statistics how many people there are in those classes, so that we know whether they are aiming at the right target. That is an important point. If we do not have accurate statistics and targets, the Government will, by definition, be pointing their policy towards achieving an invalid or incorrectly grounded policy objective. It is therefore fundamental to the way in which the Government approach things that their targets are worth while—they are fond of targets—and provide a sensible direction for policy. This one in particular needs substantially more work.