Third Standing Committee on Delegated Legislation
Wednesday 25 March 1998
[Mr. Joe Benton in the Chair]
Draft Social Security Amendment (New Deal) Regulations 1998
The Chairman: Before I call the Minister, I inform members of the Committee that they may remove jackets or top coats.
4.30 pm
The Parliamentary Under-Secretary of State for Education and Employment (Mr. Alan Howarth): I beg to move,
That the Committee has considered the draft Social Security Amendment (New Deal) Regulations 1998.
It is a pleasure for us all to be chaired by you, Mr. Benton, and we appreciate your liberal ruling. We know, however, that you will want us to keep our deliberations tight and to the point.
My purpose today is to seek the Committee's approval to introduce provisions to take forward measures for the new deal for those aged 25 and over who have been unemployed for two years or more, and for the new deal for 18 to 24-year-olds. We have made clear our plans to introduce new support to help those groups of unemployed people find work. I will turn first to the regulations on the new deal for the 25 and over age group as they form the bulk of the package of regulations before hon. Members.
The Committee will be aware of our manifesto commitment that a new deal for people aged 25 and over who have claimed jobseekers allowance for two years or more would be introduced as part of our wider welfare-to-work programme. We believe that it is vital to take action to bring those people back into the labour market. The two elements of this new deal consist of an entitlement to an employer subsidy of £75 a week for up to six months and the ability for people in the group to study full time for up to a year on an employment-related course while on jobseekers allowance.
Hon. Members will know that we are planning to pilot further measures for the 25 and over age group which were outlined in the Budget announcement on 17 March. The regulations do not, however, touch on those matters, which are currently being developed. I shall confine myself to the regulations necessary to introduce on 1 June 1998 the two elements which have already been developed. Legislation is not required to permit payment of the employer subsidy. The regulations deal with the legislation necessary to achieve the education and training element of the new deal for the 25s and over.
We propose to adopt an approach broadly similar to the JSA Workskill pilot approach which the Committee will be aware we extended in September 1997. Our intention is to amend JSA main regulations so that the people in this new deal group will be able to receive jobseekers allowance while they undertake full-time employment-related education and training courses. They will be excused from the normal requirement to be available for and actively seeking work. Our view is that, together with existing provision from the Employment Service, training and enterprise councils and local enterprise companies, the job subsidy and this measure will provide both the opportunity for this group to gain new skills or refresh existing ones and an incentive for employers to recruit from the group. That will improve the chances of finding employment for people in what is recognised to be a particularly disadvantaged group.
I should like to introduce the regulations to the Committee by explaining briefly our amendments and their effect. We aim to introduce the provisions on 1 June 1998. People who have been receiving JSA for two years or more will be able to apply for full-time education or a training course for up to one year, although many will want to take shorter, focused courses. They will be able to undertake a wide range of courses, most of which will lead to an approved qualification. They will normally be able to take courses up to and including level three standard, which is broadly A-level standard. Recognising the diversity of this age group and that some people in it will have substantial work experience and high qualifications, we have allowed in particular cases for courses to be taken at a higher level. All courses will have to be employment related--that is, they will help people to get the skills needed for work, for particular occupations or for job-search. They will help them to obtain a job.
4.34 pm
Sitting suspended for a Division in the House.
4.50 pm
On resuming--
Mr. Alan Howarth: I was saying before the Division that the training courses that long-term unemployment people will be permitted to attend without loss of JSA under the new deal include courses that would help them to obtain a job.
We believe that people will welcome those opportunities and do their utmost to succeed on their course. However, we expect people to take their opportunities seriously. To discourage the few who might be tempted to relax or lapse on their course once they are excused the normal JSA attendance arrangements and job search rules, there is a potential loss of JSA for two weeks. We want people to benefit from the considerable flexibility we propose to the jobseeker's allowance rules to allow them the opportunity to study full-time.
I would like to turn to the provisions that deal with the self-employment measure of the new deal. That is contained in regulation 5, which seeks to amend regulation 19 of the jobseeker's allowance regulations.
The self-employment route of the new deal will provide training and support for young people wishing to start their own business. That will complement the options that are in operation for this age group--that is, opportunity for subsidised employment, a job with a voluntary sector organisation, work with an environment task force or full-time education and training.
Young people who wish to enter self-employment will receive training and support and will be helped to draw up a business plan during the gateway to the new deal. That will be a crucial time for young people, because it will provide them with some knowledge of what self-employment will involve, and it will help them to refine their ideas about their proposed business.
Under the current regulations, not all JSA claimants could be treated as actively seeking work when they are preparing to take up a place on a self-employment programme. In Scotland, JSA claimants who are preparing for a self-employment programme that is not provided by Scottish Enterprise or by Highlands and Islands Enterprise are not treated as actively seeking work. The proposed amendment will allow all JSA claimants, including new deal participants, to be treated as actively seeking work for up to eight weeks when preparing for self-employment programmes in Scotland, which are funded directly or indirectly by the Secretary of State for Scotland, in addition to those provided by Scottish Enterprise or by Highlands and Islands Enterprise.
We will lay other regulations, which will extend the employment option of the new deal to include the self-employment route, in the coming months. I hope that my explanation has been helpful, and I commend the regualtions to the Committee.
4.53 pm
Mrs. Angela Browning (Tiverton and Honiton): I have not previously served on a Committee that you have chaired, Mr. Benson, and I must say how pleased I am to do so.
The Government will be familiar with the Opposition's reservations about the new deal and its final success, but I shall not rehearse our views--we have made them clear on the Floor of the House and in other Committees. I shall restrict my remarks to the regulations. I do not disagree with the principle behind the regulations. Indeed, the Minister will be aware that Workskill pilots were begun before the previous election. The regulations build on that formula, although it has been extended.
I have one or two questions on detail for the Minister. He mentioned the fact that people will genuinely have to undergo suitable educational training that will enable them to get into the world of work. How will that be analysed and assessed? Clearly, there are resource implications for the Department for Education and Employment and for other Departments. Experience in a previous manifestation--in the world of training--taught me that sometimes people have unrealistic ideas about what training is appropriate to their final objective. How much guidance will the Employment Service give and will it use public and private sector bodies to help to give the right advice and to ensure that appropriate training is given?
The Minister mentioned regulation 5 and self-employment. I was pleased to hear him say that those who consider self-employment will be required to produce a business plan on the feasibility of the work that they will seek to do. The Minister will be familiar with previous Government schemes in which similar grants were made on the basis that a viable business plan would be prepared and analysed. Other schemes funded from other sources, such as those run by the Prince's Youth Business Trust, are also subject to viable business plans.
Will the Minister reassure me that the people who will assist with business plans will have proven experience? We have criticised even bank managers in the past for not understanding the sector in which they were granting loans. We must help young people to succeed instead of setting them up to fail. I am a great enthusiast for young people becoming self-employed and we have many successful young entrepreneurs. Profession input is crucial and I should be concerned if just existing Employment Service staff were to be involved in producing and assessing business plans. Specialist expertise is required.
I support in principle what the Minister said about resources, but evaluations and monitoring will have financial implications for the Employment Service. Has that been costed and where will the money come from?
4.57 pm
Mr. Paul Keetch (Hereford): I am delighted to support the proposed changes to the regulations, if for no other reason than that at least some of them are based on Liberal Democrat policies. Again, we must support the Labour Government for being far-sighted enough to look to our manifesto as well as their own when drawing up proposals.
As many unemployed people as possible should have access to education and training to prepare them for the job market. It is increasingly clear that many people would prefer welfare-to-work to mean welfare-to-education-and-training-to-work. Many people fully accept that they need more education and training before they can enter the job market.
The Prime Minister spoke this afternoon of skill shortages. The Minister will know that we broadly support the concept of the new deal, but will also accept that many new deal applicants will not have the qualifications to fill those skill shortages. The Minister has said, publicly and privately, that while the new deal is not designed to create new jobs, it will go some way towards improving education and training.
We support the principles of the regulations. We would like them to go further, but I shall not delay the Committee with small technical points.
4.59 pm
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