It is a pleasure to follow the thoughtful contribution from the hon. Member for Dumfries and Galloway (Mr Brown).
A very simple principle underpins my remarks: if somebody works a shift for an employer, they deserve a fair day’s pay for their time and effort. I cannot think of any circumstances in which it is okay not to pay employees or to pay them a derisory sum below the legal minimum wage for the work they undertake. I am sure that a number of us feel that the Government’s back-to-work schemes have fallen short of that principle, but the critical point is that the courts have found aspects of the regulations and sanctions regime attached to the schemes to be unlawful. At stake here is whether it is acceptable
to use retrospective legislation to clean up the mess left in the wake of these court rulings. I do not think it is. Instead, I think the Government should accept that they made mistakes with the original legislation, take responsibility for the consequences and use the opportunity to rethink their approach and find more effective ways of creating job opportunities for people entering or returning to the labour market.
Given that aspects of the existing scheme have been judged unlawful and that penalties have therefore been imposed on some claimants unlawfully, it would be wholly wrong to legislate retrospectively as the Government propose to do. That, frankly, undermines the judicial process and the rule of law. We might as well rename this Bill “Jobseekers (Make It Up As You Go Along Schemes) Bill”. Whether or not we agree with the approach of the schemes in question—I have made it clear that I do not—the key issue is whether backdating legislation is the right approach to deal with this. I do not think it is. One of the main reasons why the courts found against the Government concerned the information provided to claimants and the description of the scheme in regulations. As legislators, we have a duty to scrutinise these regulations, and if we go down this retrospective “policy on the hoof” route, that aspect of our role is compromised, and that gives me great concern not only in a general sense, but in relation to the particulars of this issue, because to my mind the use of unpaid labour by businesses requires careful scrutiny and proper accountability.
I am quite sceptical about the value of such schemes, not just because if the jobs are there, they should be properly paid—at the very least at the minimum wage—but because I have seen very little evidence that they work. I am sure that many jobseekers will welcome every opportunity that comes their way, and some might even be able to use them effectively in the future, but there remain serious questions, mentioned by other hon. Members, about the practical outcomes of these programmes. I want to raise concerns about their long-term sustainability while the wider economy remains stagnant. There are real fears that schemes such as these actually inhibit recovery. Jobseekers might not be getting the skills that they need, but in the meantime they are depriving someone else, or even themselves, of a proper paid job opportunity. Also, while they are working for free, they cannot be out there looking for work that is appropriate to their skills and experience. Many will find themselves stuck in a sector that is wholly inappropriate and unsuitable.
To my mind, the schemes represent a poor use of our human capital. For example, they require graduates to stack shelves, yet we have invested thousands of pounds in those people’s education. They often have the confidence, skills and qualifications to enter the labour market, but if they are compelled to undertake low-paid, low-skilled work instead of looking for more suitable opportunities, what hope will that give to people who do not have high-level qualifications and who are trying to access a competitive labour market?
One question that has been raised today is: where is the money coming from? It is important to point out that that could well be a worst-case scenario. Other Members, particularly the hon. Member for Wansbeck
(Ian Lavery), have mentioned section 27 of the Social Security Act 1998, and suggested that only some of those who have been sanctioned under the unlawful sanctions would have a case. Also, claimants would need to appeal, and there is no guarantee that they would all do so.
In regard to the question of where the money would come from, this is only a tiny proportion of the overall welfare budget. I am sure that there are as many ideas about where the funding could come from as there are Members in the Chamber today. There are lots of other places where the money could be found, according to one’s political priorities. My own personal bête noire is tax avoidance, which, even by the most conservative estimates, costs the UK billions in lost revenues every year. Ironically, some of the large corporations that have faced recent allegations of tax avoidance are the same large corporations that are participating in the unpaid labour schemes. So it is not just that they do not pay tax; some of them are now not paying wages either. I suggest that recouping unpaid tax might be one way of meeting the shortfalls in the budget. That might also bring a rather satisfying element of poetic justice to the proceedings.
The UK has a poor track record on cheap labour schemes, and we should learn from the mistakes of the past. As someone who came of age in the 1980s, I remember all too well the failures of the youth training scheme that afflicted many of my own peer group. It was essentially a cheap labour scheme for employers that exploited the hopes and aspirations of young people desperate for work, and it marched far too many of them up the hill, only to abandon them back on to the dole at the end of the scheme. Some were able to use the scheme as a springboard to something better, but for many, the quality of the training was highly questionable and it did nothing to help them to develop skills that employers wanted.