Jobseekers (Back to Work Schemes) Bill

Debate between Steve McCabe and Eilidh Whiteford

Tuesday 19th March 2013 Commons Chamber

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

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.

[Steve McCabe]

Does the hon. Lady think that the small number of Government Back Benchers present in the Chamber is indicative of the fact that they do not share her concerns about the quality of these schemes and about what happens to these people?

[Dr Whiteford]

It is very disappointing, but what disappoints me even more is that I suspect that we will be very lonely in the No Lobby tonight when we vote on this question. I urge everyone present who cares about this issue not to sit on their hands this evening but to stand up for people who are being asked to undertake unpaid work when they could be working for a wage in a proper job.

The worst aspect of the youth training scheme was that people were paid off from proper jobs in order to make way for YTS trainees on 20-something quid a week. Even in the 1980s, that was a derisory amount of money. It perpetuated dependency, sucked real jobs out of the economy and created huge resentment, not just among trainees who felt that they were being exploited, but from those who had watched their own wages and job opportunities evaporate.

The reality, then and now, was that people started getting jobs in significant numbers when, and only when, the economy started picking up again. Castigating the unemployed for being out of work entirely misses the point, and simply passes the buck away from those of us who have more responsibility for the state of the economy. The point about the state of the economy is as relevant today as it was in the 1980s, and it is particularly relevant with regard to the availability of work for people who do not have much work experience, or who face hurdles because of their health, because they lack skills or because they face other barriers to employment.

For several years now, I have taken an active interest in the programmes run by the Prince’s Trust in my constituency, which help young people who are some distance from the labour market to build the skills, the experience and, above all, the confidence and self-belief to find work and derive the many benefits that come with it. A work experience placement is an integral aspect of the Prince’s Trust programme, but as the economic recession has dragged on, it has become harder for staff to find placements, and significantly harder for the young people taking part to secure employment subsequently.