Jobseekers (Back to Work Schemes) Bill

John McDonnell Excerpts

Tuesday 19th March 2013 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

Is it not true that the Office for National Statistics has confirmed that the Government have included in their employment figures those who are not being paid for their work?

[Mr Hoban]

If the hon. Gentleman looks at the detail of the Office for National Statistics labour force survey, he will see that there are people who are on schemes who say that they are in employment, but that was the case under the previous Government. I have raised that issue with the ONS, because I agree that they should not be included in the numbers who are employed, but it rejected the argument on the grounds of international consistency. We cannot ignore the fact that, excluding those schemes and any reclassification, we have seen more than 1 million net new jobs created in the private sector since May 2010. Perhaps the hon. Gentleman should congratulate us on achieving that.

--- Later in debate ---

[John McDonnell (Hayes and Harlington) (Lab)]

I feel proud of a whole range of speeches that have been made. They have been principled and have set out the case very clearly.

The straightforward issue is that the judgment basically said that the Government acted unlawfully. What surprises me is that there has been no word of apology from the Minister—not a single word to say, “We got this wrong, and therefore we apologise to the House.” Let us be clear what the judgment said: that the Secretary of State acted beyond his powers. He failed to provide the details of workfare schemes within the regulations and bypassed Parliament by introducing an umbrella scheme—the employment, skills and enterprise scheme. This is not a technicality. In fact—I quote from the judgment of Lord Justice Stanley Burnton:

“There is a constitutional issue involved. The loss of jobseekers’ allowance may result in considerable personal hardship, and it is not surprising that Parliament should have been careful in making provision for the circumstances in which the sanction may be imposed.”

This is a fundamental constitutional issue. The Government tried to slide through Parliament, without adequate consideration, regulations that would eventually deprive our constituents of significant sums of money. The decision found that the Government have unlawfully required tens of thousands of people to work without pay, and, if they have said no, have stripped them unlawfully of a significant amount of their benefits.

The public interest lawyers who took the case said that there are basic requirements of fairness, and those basic requirements are usually dictated by Parliament. The basic requirements of fairness in relation to anything like these regulations are to provide people with a clear explanation of what they have been asked to do, why they are being asked to do it, and what the consequences are if they fail to do it. That has simply, as a result of this judgment, not been complied with. That is what the debate is all about.

The solicitor who represented the claimants, Tessa Gregory, summed it up very well:

“The case has revealed that the Department for Work and Pensions was going behind Parliament’s back and failing to obtain Parliamentary approval for the various mandatory work schemes that it was introducing.”

There was a lack of transparency and fairness in implementing the scheme, and claimants had no information about what could be required of them under the back-to-work schemes. The Court of Appeal affirmed the basic constitutional principle that everyone has a right to know and understand why sanctions are being threatened and imposed. That is what this is all about.

It is worth referring to the cases that determined the judges’ action, and putting them on the record. It is staggering that the Government even contested them. Jamie Wilson, the lorry driver, said:

“I refused to participate in the Community Action Programme…because I objected to being made to clean furniture for 30 hours a week for 6 months when I knew it wouldn’t help me find employment. I was given next to no information about the programme, I was told simply that I had to do whatever the DWP’s private contractor instructed me to do and that if I didn’t I may lose my benefits. Being without jobseeker’s allowance was very difficult for me but I don’t regret taking a stand”.

The community action programme

“is a poorly thought out and poorly implemented scheme which even according to the DWP’s own statistics is not helping anyone get people back to work.”

He continued—this is enlightening about the nature of the people we are dealing with; they are desperate for work:

“I am now participating in the Work Programme but it doesn’t involve me working for free, I have to meet an advisor every 3 to 4 weeks who helps me look for work. I will continue to attend these sessions with my adviser regardless of whether or not I am required to attend because I want to find a job”.

That is what people want.

In the other case, Cait Reilly said:

“I brought this case because I knew it was wrong when I was prevented from doing my voluntary work in a museum and forced to work in Poundland for free…as part of a scheme known as the sector based work academy. Those two weeks”

I worked at Poundland

“were a complete waste of my time as the experience did not help me get a job, I wasn’t given any training and I was left with no time to do my voluntary work or search for”

a job. That is extraordinary. She continued:

“The only beneficiary was Poundland, a multi-million pound company. Later I found out that I should never have been told the placement was compulsory.”

The Secretary of State has been quoted as saying elsewhere:

“Does Cait Reilly think she is above shelf stacking?”

I hope that is a misquote. If he did say it, he should withdraw it because it is a disgraceful insinuation about someone’s character. Cait Reilly also said:

“I don’t think I am above working in shops like Poundland. I now work part-time in a supermarket. It is just that I expect to get paid for working.”

That is all she asked for. She continued:

“I hope the Government will now take this opportunity to rethink its strategy and do something which actually builds on young unemployed people’s skills and tackles the causes of long-term unemployment. I agree we need to get people back to work but the best way of doing that is by helping them, not punishing them. The Government ought to understand that if they created schemes which actually helped people get back into work then they wouldn’t need to force people to attend.”

That is what the young woman who took the case to court said, and I congratulate her on doing that. If she had not, we would not be in the situation of contesting what the Government are doing.

Let us be clear about the intent of the Bill. The Government have acted unlawfully. They have robbed some of the poorest people in our society of, on average, £500 of benefits, which is a lot to people living on the breadline. Now the Government are using this retrospective device to avoid paying back to those poor people money that they should not have been deprived of in the first place. The argument that paying £130 million back to poor people would damage the economy is derisory and laughable. As my hon. Friend the Member for Wansbeck (Ian Lavery) said, if the £130 million was given to the poor who need to spend the money, it would help to boost the economy. To suggest it is a threat to the economy when the bankers have been bailed out with £1.2 trillion is laughable in any Government logic. The suggestion that if we pay the money back, it must come from other claimants is the Government’s classic strategy of divide and rule in their welfare benefits policy.

As my hon. Friend said, the use of retrospective legislation simply ensures that illegality is made legal and sets an extremely dangerous precedent, but that is nothing to do with the money, taxpayers or the economy. It is about prejudice against the poor, the demonisation of the unemployed and the iron heel of a prejudiced state. It is also about the preservation of a large pool of unpaid labour for large-scale corporations to exploit. It is now estimated that the Government will put through 250,000 people on work experience, 850,000 on work programmes and more than 70,000 on the mandatory work activity. At the last calculation, that is about 60 million hours of free labour to those corporations. That is exploitation; it cannot be termed in any other way.

In the past two decades, we have seen a transformation in how unemployment is considered, discussed and viewed. Governments since the second world war had a commitment to full employment and saw as a responsibility their role to ensure full employment. There have always been sanctions within the system to prevent people from abusing it, but they were about ensuring that people were sanctioned if they refused to go for paid work, never unpaid work. Now, just when unemployment is at its highest and it is the hardest time to find a job, the attitude is that unemployment is not the fault of the system or a failure of Government or of society, but a failure of the individual. The individual is to blame, not the society that has caused the unemployment. Therefore, the logic follows that the individual must be penalised, so what the Government have successfully done in the media and elsewhere by ministerial statements is demonise the unemployed—the unemployed themselves have caused their own poverty, rather than the system that has created the unemployment. The result of that logic is what we see today: the poor and unemployed have to be harassed, pilloried, sanctioned, blamed and made to feel guilty for being unemployed.

[Steve Rotheram (Liverpool, Walton) (Lab)]

Does my hon. Friend agree not only that the Government have shown no contrition whatever on the issue, which is a mess of their own making, but that they are trying to scapegoat those people who have been sanctioned illegally?

[John McDonnell]

It is that, but there is also a wider agenda of making people feel guilty just because they are out of work and guilty just because—temporarily, in most instances—they have to depend on some benefits. This is about scapegoating and victimising the poor and people who cannot get a job. It is about harassment and exploitation. At the heart of that is the judgment that Parliament was not properly informed of what those schemes and regulations meant. That is what the judgment said.

I make it clear that I shall vote against the Bill because it is immoral and wrong. Before we vote to render those schemes lawful retrospectively, it is important that Members are aware of what we will be supporting. Boycott Workfare is an organisation that set up— [Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. There seems to be a phone ringing somewhere. Wherever it is, we can certainly hear it.

[John McDonnell]

It is most probably someone looking for a job.

[Mr Deputy Speaker]

Let us hope that somebody answers it, then.

[John McDonnell]

Before we vote tonight, it is important we know that we will be voting to support the workfare schemes being introduced by the Government. The Bill will enable the sanctions to be continued and retrospectively made legal, because people refused to go on those schemes—I think justifiably so with regard to many of them. Let us take some examples from the Boycott Workfare website. Tesco is a classic, and one example refers to

“a fifty-six year old man who worked at Tesco for 40 hrs a week for 6 weeks for no pay.”

He was

“given the worst job, constantly filling freezers in the hope he would be taken on. After the 6 weeks were up the manager asked him if he would like to stay on for some extra weeks,”

and the man said,

“‘with pay?’”

The manager said no,

“why would he pay him when he can pick the phone up and get more unemployed people who have to work for nothing”?

That was at Tesco, and the list goes on. Poundland is a classic example of an organisation exploiting unemployed people, time and time again recruiting shelf stackers while laying off other workers. Primark is another example. One young woman who went to Primark said:

“The Jobcentre paid travel money but no lunch. I worked three days a week, 10 am to 4.30 pm or 5 pm with one half-hour break.”

Primark

“don’t pay any money. It was nearly six months, from January to June. When I finished the placement I took my CV and I asked the managers if they had any vacancies. They said, ‘Not yet—we’ll call you when we do.’ I haven’t had a call.”

[Jeremy Corbyn (Islington North) (Lab)]

Is my hon. Friend aware that there are companies that do the same, but with people who have not come through the jobcentres? People apply for a job, are asked to work for three or four weeks on probation and are then told to go and are replaced by colleagues. There are shops even in the west end using large numbers of totally unpaid staff on a permanent basis.

[John McDonnell]

The whole point of the exercise, as far as I can see—despite the arguments that it makes people job fit—is the massive exploitation of tens of thousands of people for free labour. I will not go through all the examples, but it is worth looking at the Boycott Workfare website, which gives example after example of people who have been exploited or have worked in unsafe conditions lacking health and safety, have stuck at it to try to get a job and who have never got the job. The job never materialises.

What happens if people say no or drop out? They are sanctioned. Sanctions have increased dramatically in this country. In 2009, 139,000 jobseeker’s allowance claimants were sanctioned. By 2011, the number had nearly tripled to 500,000, and it has risen again this year. Interestingly, it is private companies that recommend sanctions to the Department for Work and Pensions. The worst are Serco, Seetec, A4e and Working Links. If they do not get their pound of flesh—if they do not feel that they are getting value for money from someone who is unpaid—they recommend to the DWP that the person be sanctioned.

The irony is that despite all the pain, anxiety and suffering inflicted on unemployed people, the schemes are proven not to work, as my right hon. Friend the Member for East Ham (Stephen Timms) said. Time and time again, all the evidence—whether from the Social Security Advisory Committee, the DWP peer review, Ben Goldacre or the National Audit Office—demonstrates that not only do the schemes not work but, as others have said, they undermine wages for people in work and prevent others from getting paid jobs.

Large numbers of people are extremely angry at how they have been treated. I believe that many are now willing to stand up and say, “We’re not going to be treated in this way.” That is why the sanctions system is becoming even more rigorous, and why it is important for the Government to pass the Bill: they want to intimidate more people and force more people into work, done for free, that they do not want to undertake.

It is worth stating that this is about exploiting people. It is about ensuring that young people in particular are intimidated into unpaid work. People who were brave enough to say, “I’m not willing to take unpaid work and be exploited in this way, and if necessary, I’ll be sanctioned because of that,” have now been proven right. They were not informed of what they were getting into, but they were bright enough to understand the level of exploitation involved and they stood up against it. The Bill says to them that now they have won in court, we will try to ensure that they do not get justice. That is what it is about.

I urge Members to vote for justice. The Bill is a disgrace. It is a monument to a combination of incompetence by the Government and brutality to the poor. I look forward to hearing the Labour party consider what we are doing here today. I urge Members to vote against the Bill, because I think that people are looking to the Labour party to defend them again—to stand up for what is right and just, for the people in our society who are exploited and for those at the bottom at the moment: those who are unemployed, unable to get a job, dependent on benefits and desperate for work. Those people do not expect to be harassed and exploited by a Government using sanctions to force them into unpaid work. That is why I shall vote against the Bill, and why I urge all Members to vote against the Bill to demonstrate that someone in the House is standing up for those people.

--- Later in debate ---

[Grahame M. Morris]

My hon. Friend, who is very knowledgeable and has a background as an economist, has hit the nail on the head. The general public, my constituents and many Opposition Members do not understand why the Government do not address this problem. There is a relatively straightforward way to do so: by legislating for a general principle of tax avoidance. The Government are quite happy to use primary legislation retrospectively to deprive people who have been illegally sanctioned of £130 million, but they will not use the same route to recover moneys properly due to the Exchequer.

There is a contradiction here. Although the Government have been highly critical of what has happened, they continue to push the case for further deregulation. Just yesterday, in a Delegated Legislation Committee the statutory period of notice for compulsory redundancies for employers employing more than 100 people was reduced from 90 days to 45. This Government are still very much pursuing the Beecroft agenda.

[John McDonnell]

It is worth noting that, according to the Government’s impact assessment of that delegated legislation, employers will gain £290 million and employees will lose £250 million.

[Grahame M. Morris]

That just goes to show that we are all in this together—or rather, we are not.

I have seen the graphs and the charts showing that the poorest are being hardest hit. We should consider the effect of a 5% cut in their weekly income. Other Members have spoken about the sort of cuts that individuals are going to experience. I do not know whether the Minister, other Front Benchers or even Conservative Back Benchers know what it is like to exist on £71 a week, but it is a real struggle. Taking up to £25 a week from the poorest families, most of whom are in social housing, can mean a choice between eating or having proper heating. How can this be fair, when the Government’s priority is to make millionaires richer, to the tune of £2,000 a week? Such a tax cut is unimaginable for someone who would be sanctioned under the Work programme. In fact, the £2,000 a week tax cut for millionaires that we anticipate tomorrow equates to 28 weeks’ income for somebody on jobseeker’s allowance.

--- Later in debate ---

[Simon Hughes]

I apologise to the right hon. Gentleman for delaying his intervention. My understanding—the Minister could be helpful in this respect in her winding-up speech—is that the Court upheld the general policy principle of the employment programmes and ruled that the general principle of such employment programmes did not breach article 4(2) of the convention. The failures to be specific and to get the paperwork right meant that programmes could breach the convention. I am not disputing what the right hon. Gentleman says, but I understand that mandatory work activity is not illegal under the European convention. We need to be clear about that. Labour Front Benchers accept the principle of mandatory work activity, provided that it is decent, and accept sanctions in the benefits system.

[John McDonnell]

Lord Justice Burnton made it clear—I think I quoted him before the right hon. Gentleman arrived—that this is a constitutional issue. It is not just a matter of not informing claimants, but of not informing this House.

[Simon Hughes]

I did hear the hon. Gentleman and I accept what he said.

My fourth constituent was sent to a charity shop. He was required to carry out mundane manual lifting work. He said that he had a problem with a back injury, which meant that the work was inappropriate. He has asthma, and therefore work in a dusty environment was not great. There was a failure to provide sufficient work for people to do, including for other people who had been sent there. There was a clear breach of the rules that state that people are meant to work four weeks for five days a week from Monday to Friday. The person at the work placement said, “You have to work on a Saturday if I say so.” Clearly, that was not in the paperwork. The crude point for the Minister is that I am not sure that a graduate seeking work in finance should be sent to a charity shop to dust shelves and move boxes. This seems to be regular and routine in the current system. The Government are spending taxpayers’ money on providing schemes that should help people back to work. I am not sure, however, that there is any intelligent management of the schemes being offered.

It is entirely reasonable for somebody who has been out of work, and has extremely low qualifications, to do a relatively low-skilled mandatory work activity. It is not reasonable if they are seeking to do something else. The Secretary of State is in his place, and he has always been very courteous and helpful in responding to such issues. I ask him and his team to consider how we can significantly improve the quality of mandatory work activity, monitor it better and ensure that we do not send people to do work that, bluntly, will be of no use to them in enhancing their job prospects. Almost nobody wants to be on benefits all the time. People on benefits struggle to make ends meet and we need to do better.