With permission, Mr. Speaker, I should like to make a statement on the Government's plans for reform of the child support system.

Parents, whether they live together or not, have a moral as well as a legal responsibility to support their children. Relationships end, but responsibilities do not. Government and society have a clear interest in ensuring that those responsibilities are honoured. That was the foundation on which the Child Support Act 1991 rested, and I believe that those are the right foundations on which to build any future system of child support. But as we know, despite the best efforts of its staff the overall performance of the Child Support Agency has fallen well short of expectations. When we came to office the agency cost more to run than it collected in maintenance, and it has been taking longer to process claims than the court arrangements that it replaced.

The Child Support, Pensions and Social Security Act 2000 made important changes, simplifying maintenance calculations and allowing parents with care on benefit to keep up to £10 of any maintenance received. Since 1997, the agency has nearly doubled the number of cases receiving maintenance payments. However, as we all know, problems have persisted. Only a minority of cases handled by the CSA receive any maintenance at all. There is a backlog of around 300,000 cases. Debts of over £3 billion have built up, with limited prospects of recovery. There is a net cost to the taxpayer of around £200 million per year. Levels of customer service, although they have improved recently, have never reached the standards of quality and consistency that the public are entitled to expect.

The need for radical overhaul is clear, but I do not believe that the continuing problems are due to a failing on the part of the staff of the agency. Rather, I believe that they are due to a failing of the policy framework, and of the system that the staff are being asked to run. That is why, in February, I asked Sir David Henshaw to redesign our system of child support. He has now presented his recommendations to me. Copies are available in the Vote Office and on my Department's website, together with the Government's response.

Sir David has recommended an entirely new system for child support that will be simpler to use and administer, will be tougher on parents who do not face up to their responsibilities and will make a bigger impact on the reduction in child poverty, while delivering value for money for the taxpayer. His recommendations have four main elements.

First, Sir David believes that the system should focus on tackling child poverty by ensuring that parents with care keep more of the maintenance owed to them. He recommends that lone parents on benefit should be allowed to keep more maintenance through a significant increase in the extent to which child maintenance is disregarded in income-related benefits.

Secondly, Sir David believes that a new system should promote greater personal responsibility by ensuring that, wherever possible, we help parents reach their own financial arrangements for the maintenance of their children. That means reconfiguring advice services to improve the quality and accessibility of information and guidance for parents. Sir David also believes that the Government should remove the requirement that parents with care on benefits make an application for child maintenance through the CSA even when a perfectly satisfactory private arrangement already exists. As a first step towards getting maintenance flowing to children, Sir David recommends that, with up to a fifth of potential child support cases not having their fathers’ names on their birth certificates, we should consider the joint registration of births.

When parents cannot reach an amicable agreement, the parents with care need to be confident that the enforcement arrangements will be effective. The third element of Sir David's recommendations is the introduction of new, tougher enforcement powers, including the withdrawal of passports. He also recommends exploring the potential to make better use of existing financial penalties.

Fourthly, Sir David proposes that there should be a clean break with the past. He believes that the delivery of child support requires a fresh start with a new organisation. He believes that there should be no automatic conversion of cases from the two existing schemes to the new redesigned system. Instead, parents wishing to use the new system should be able to reapply. He recommends that there should be a separate residuary body to “manage down” and enforce old debt, and that we should consider how best to give the new organisation power to charge clients for using the new system.

Sir David has consulted widely in producing his recommendations. I am grateful to him for his work, and grateful to all who have contributed to it. As his report shows, tougher enforcement and a substantially higher disregard could increase the number of children receiving maintenance to about 1.75 million, compared with just 1.1 million today. The changes will lift many more children out of poverty, and a smaller, more focused agency that deals with significantly fewer cases will deliver better value to the taxpayer, with administrative costs substantially lower over the long run. Although there is still a great deal of detail to be dealt with, I think it right that the Government should signal their view of the way ahead.

We have decided to accept the principal recommendations. We will therefore bring forward legislation at the earliest opportunity to remove the requirement that all parents with care claiming benefit are treated as applying for child maintenance. We agree with Sir David’s recommendation that there should be a higher disregard, but that must ensure a fair deal for taxpayers and avoid sending any signal that families might be better off apart than together, so we intend significantly to increase the level of the current disregard of £10. Details will be confirmed later this year.

Both those changes will help more families to receive more maintenance and reduce the risk of child poverty. They reflect both the rights of children to be properly maintained by their parents and the right of society to ensure that parental responsibilities are properly discharged. We also agree that the delivery of child support requires a fresh start. We will therefore create a new organisation to replace the CSA and we will strengthen enforcement powers.

We intend to go even further and seek legislation to strengthen the powers available to the agency to recover maintenance from those who repeatedly fail to pay, including through the imposition of curfews as well as the suspension of passports. We will explore publicising successful prosecutions, including the feasibility of naming those who have been prosecuted. We will continue the CSA’s current operational improvement plan, which is already improving our capacity to trace people who owe maintenance and which should see the CSA collecting a further £250 million in unpaid maintenance.

There is still a great deal of detail in Sir David’s report that should now properly be the subject of fuller consultation and debate. In particular, we want to consult on the best way to allow existing claimants either to move to private arrangements or to make a claim to the new system. We must ensure that, where people currently receive maintenance through the CSA, they continue to do so, if they wish, under the new system, without disrupting the payment of child maintenance.

We should consult on how best to deal with the legacy of debt that is left, while protecting the interests of both families and the taxpayer. We should also consult on the appropriate role for the courts in the new approach, how to improve parental responsibility from birth—including the possibility of compulsory registration for fathers—and how we can further simplify and improve the current assessment, collection and enforcement processes. We will also consult on the details of any new charging regime.

In advance of legislation, I intend to publish a White Paper later this year, which will set out in greater detail the way forward in all of these areas. In the meantime, I have asked Sir David to report to me on the policy and implementation issues that arise from his first report. During the process of change, agency staff are entitled to expect the full support of my Department, and they will have it. In particular, we will do all we can to help and support staff through the transition to the new organisation and in their efforts to ensure that children and families receive the maintenance to which they are properly entitled.

The original proposals for child support had a wide and broad measure of support in the House, but the consensus on aims was never translated into a consensus on means: we must not repeat the same mistake. That is why I want the new arrangements now be established to command the broadest possible measure of agreement. I believe that there is a clear sense, both in the House and outside it, that our system of child support needs radical change. It must offer better value for money for the taxpayer, enforce the rights of children and the responsibilities of parents more successfully and ensure that families and children in particular do not slide into poverty when parents split up.

I believe that the proposals I have set out today can help us better to achieve those vital objectives, which is why I commend the statement to the House.

I thank the Secretary of State for his courtesy in letting me have a copy of the statement in advance, although he will understand that we have not yet had a chance to absorb the details of Sir David’s report.

I am sorry to tell the Secretary of State that his statement will be a disappointment to the 1.5 million families trapped in the shambles of the Child Support Agency, particularly the 900,000 who are trapped in the old system. The statistics are familiar to the House and the Secretary of State recited them again today, so I shall not repeat them, but what those people wanted to hear today was, above all, a timetable for moving them on to a new system of assessment. What they have got is yet another delay for further reports and more consultation, so they will feel let down once again.

The Government have invested half a billion pounds of taxpayers’ money in their redesign of the CSA system and now propose to turn their back on that investment and start again. The headline in press releases this morning is “CSA to be scrapped”, but the reality is that the existing, failing CSA will be rebranded and left with its difficult case load while the political spotlight will be shifted to a new body with low costs, no legacy and a carefully controlled onflow of suitable new cases.

We share the Government’s stated determination to maintain the obligation on both parents to contribute to the upbringing and support of a child. We also share the view that, where those arrangements can be made voluntarily, they should be. But in the real world, that will often not be the case, and it is not obvious what the incentive of a high benefit disregard will achieve in those cases that are not settled voluntarily. If a CSA application is made, we are back in exactly the position that we are now. If a CSA application is not made, we are back in exactly the position that we are now, with the difference that there will not even be a theoretical accrual of liability by the absent parent to offset the state’s payments to support the lone parent and her children. The absent parent will be totally off the hook, so what price the Government’s commitment to both parents contributing to their children’s support?

Any advantage that the proposed change will bring lies solely in the cases where voluntary arrangements are made. Does the Secretary of State have any evidence about the proportion of benefit cases that that might involve? I note that, when he first referred to Sir David’s recommendation to remove the requirement that parents on benefits with care must make a CSA application, he used the phrase,

“when there is a perfectly satisfactory private arrangement already in place”.

But when he went on to announce that the Government would legislate to remove the requirement, there was no reference to the qualifying condition. So perhaps he can clarify whether the requirement will be removed in all cases, or only in cases where there is evidence that a satisfactory voluntary private agreement exists.

I also assume that the higher level of disregard will apply to all payments, not just those made voluntarily. If that is the case, while that disregard may have a significant impact on tackling child poverty in lone parent families, it will not operate as an incentive to agree voluntary arrangements, which I understood to be the Secretary of State’s original motivation for using the higher disregard in those cases only.

We have heard nothing of how parents not on benefit will be encouraged to make voluntary arrangements—other than vague reference to a threat to charge for the new agency’s services. I suspect that on an otherwise rather dismal day that may be the only thought that raises some merriment in single parent households that are trapped in the CSA bureaucracy at the moment.

Most importantly, the Secretary of State failed to deal with the key issue: the robustness of the assessment process, which was the focus of the 2000 Act reforms—sacrificing precision for simplicity—that are now acknowledged to have failed. Is the right hon. Gentleman really proposing to set up a new body attempting to assess and constantly reassess a payment that is due on the basis of fluctuating or uncertain in-year income? Unless the assessment process is made robust for those difficult cases, no system of collection will be effective. If the value of the claim cannot be accurately assessed on a real-time basis, no enforcement system, however draconian, will work.

There is no reason to suppose that the new agency will be any more successful than the old if it is constantly struggling to establish and maintain an accurate basis of assessment. When the right hon. Gentleman described Sir David’s remit as a redesign of the system, I understood that he was prepared to tackle this issue, but there is nothing in the statement on it—nothing, as the product of the past six months’ work, except a reference to it as something that requires further consultation and debate. There is no recognition of the fundamental importance of the assessment tool to a robust system of child maintenance.

We will look carefully at Sir David’s report and its implications. In the meantime, I have a couple of specific questions for the right hon. Gentleman. Can he give the House an estimate of the cost of the proposals? Obviously, the £200 million that the CSA is collecting for the Exchequer as a contribution to the agency’s costs will be lost. In fact, far from scrapping the agency, there will be the cost of maintaining two separate bodies, so can he tell us what the overall cost will be?

Can the Secretary of State also tell us what the programme will be for migration from the existing system to the new system, and over what period that will take place? Presumably, some people will have to remain with the residual agency, as access to the new system will have to be rationed at the outset in order to prevent it from being swamped. How will the Secretary of State deliver a perception of fairness in that migration process, as being on the new system will bring a huge financial benefit but it seems inevitable that that will have to be rationed over a number of years?

Can the Secretary of State give us a bit more of a feel about the level of the disregard? If he cannot give the exact amount of that, can he at least give some indication of it, because it is very difficult to understand the proposals without that? In his comments, he recognised that there is a risk that introducing a large disregard might create a perverse incentive for struggling families to give up and split up. What work has he done to establish to his own satisfaction that that will not result from the changes that he has announced today? Finally, can he tell us who will run this new body? Will they be the same people who run and staff the existing CSA?

We are disappointed by this statement, as will be hundreds of thousands of lone parents. It is mightily thin on substance. It consists of a rebranding exercise with no change to the substantive arrangements in, I suspect, a majority of cases, and that is not a solution for the families involved. We recognise that there is a need to make the system more effective, and to be more pragmatic about ways to increase the flow of maintenance, without losing sight of the underlying principles. Unfortunately however, it is not clear that the proposals address the fundamental flaws in the system. Having just poured half a billion pounds down the drain in respect of the CS2 system, the Government cannot safely move on and start again without being 100 per cent. sure that the real underlying causes of the problem have been identified and fixed.

It is unclear to me—and I suspect to most of my hon. Friends—what the hon. Gentleman’s view is of Sir David Henshaw’s report, and whether the hon. Gentleman will be able to give any indication today as to whether any of the proposals in it attract his interest or support. I find it bizarre in the extreme that he seems to want us to continue with the existing arrangements, as most of us, irrespective of which party we belong to, know that that would serve only to trap people inside a failing system that is not delivering for parents. [Hon. Members: “That is what the Government are doing.”] I note the comments from Conservative Members, so I think that I should send a copy of the statement to the hon. Gentleman again so that he can have another look at it, along with Sir David’s report.

These are undoubtedly the most radical reforms to the child support system that any Minister has brought before this House since the establishment of the Child Support Agency. I ask the hon. Gentleman to take a little more time to study the detail of the statement and of Sir David’s report. These reforms will address the fundamental flaws in the current system. We are encouraging parents to reach their own agreements—I would have thought, given all the ideological baggage that the Conservative party is keen to lose at the moment, that that at least would be one thing that they would want to support today. But, sadly, we did not hear such words of support.

Yes, you did.

Well, I do not think any Labour Members heard such words of support for that fundamental change.

We will remove the obligation on all cases; the hon. Gentleman asked about that, and we certainly intend to do that. The maintenance disregard will of course apply only in relation to benefit cases—obviously, it will not apply to other cases. The hon. Gentleman also asked about the assessment process. I think that there is broad support for that; Sir David Henshaw certainly found broad support for the reforms introduced in the 2000 Act, and we do not intend to revisit the issue.

The hon. Gentleman asked four specific questions. He asked about the estimate of long-term operating costs. Sir David has estimated that the changes to the administration of child support will probably save us 50 per cent. of the current operating costs of the agency. Of course, there will be other costs associated with making the changes, but they will depend on the detail of the proposals that we bring forward in the White Paper in the autumn.

On migration, Sir David recognised that more work will need to be done on that. I felt that it was important that Members could see the outlines of the new system as soon as possible; that is why I asked Sir David to bring his initial recommendations forward as quickly as possible. He himself recognised that a significant amount of work still needs to be done in that regard. It will be done as a matter of urgency, and I will take it as my responsibility to ensure that Members in all parts of the House have full sight of, and full involvement in, the development of that important work.

The hon. Gentleman asked whether I can give further details today on the maintenance disregard. All that I can say to him and to Members in all parts of the House is that it will not be 100 per cent., because such a figure would send the wrong signal about the balance of responsibilities between parents and taxpayers. Some interesting American evidence shows that, if one focuses more on dealing with child poverty as the principal objective in child support systems, there is, in particular, no discernible impact on incentives to work. That is a very important lesson that we need to reflect on. The hon. Gentleman also asked who is going to run the new arrangements and with the greatest of respect to him, it is just a little too early to name any names in that regard.

May I congratulate the Secretary of State on today’s statement? This has been a sorry 15 years of the CSA’s history that we have had to bear. Does he agree that the two principal factors that we need to consider are parental responsibility for maintaining their own children and attacking the child poverty target? Does he further agree that the full compliance of parents would have a significant impact on the child poverty figure?

I agree strongly with what my hon. Friend has said. He and the other Members of the Work and Pensions Select Committee made it very clear in their most recent report on the CSA that it really was time for the Government to consider setting up a new organisation that could pursue the very important objectives set out in it. I can confirm to him and to the House that those will be the principal objectives of the new system, and I am confident that, in the light of the arrangements that I have set out today, we can make those responsibilities stick.

May I thank the Secretary of State for his typical courtesy in making available a copy of the statement and of the documents so far in advance of today’s oral statement? May I also congratulate Sir David Henshaw and his team on completing this work in such a short time? Does not the speed of Sir David’s work contrast with the Government’s own tardiness in dealing with this issue since 1997 and, indeed, since the 2005 general election? I remind the Secretary of State that since that election, we have had a review of the CSA’s future, followed by a redesign of the policy on the CSA. We are now being offered today a consultation on the CSA’s future, to be followed by a White Paper on the CSA’s future. If the Secretary of State’s own document is to be believed, that will followed merely by

“an ambition…to see some aspects of the new system in place from 2008”.

In other words, what he is offering us today is that, 11 years after his Government came to power,

“some aspects of the new system”

will be in place. Does he think that that is really good enough, and does he acknowledge that his Government have wasted 10 years in dealing with this issue?

Is that point not also reinforced by what Sir David says at the beginning of his own document? He says that he had a very demanding timetable that was

“not sufficient to allow for a full redesign”,

but which allowed him to indicate only “the direction” of his new policy.

The Secretary of State said today that the CSA is going to be scrapped, which is what we have heard according to all the spin outside this place. He had previously said that he would not scrap it until he was clear what it was going to be replaced with. What is it going to be replaced with? Is it not astonishing that all that he can say today, in paragraph 55 of his own document, about the CSA’s future replacement is that there are a range of approaches that could be taken to the structure of the governance of such an organisation, and that an intensive programme of work will be undertaken, including full consultation with staff, to figure out a way forward? Is it really acceptable that, after 11 years in power—that is how long this Government will have been in power when these measures will, so the Secretary of State says, be implemented—he still does not know what he intends to replace the CSA with?

Is the agency going to remain under the DWP? Is it still going to be run by the existing chief executive, and is it going to be based at the existing locations? If so, is this not going to end up being a re-badging, rather than a fundamental replacement of the existing agency? The Secretary of State indicated that he intends to reinforce enforcement powers. Why has he proposed to introduce curfews for non-resident parents who are not adhering to their child support obligations when that proposal was not made by Sir David Henshaw? Will he tell us how effective that is likely to be? Is it likely to be as ineffective as previous Government gimmicks, such as withdrawing driving licences? That measure was used only 11 times in four and a half years.

We welcome the new emphasis on people making their own arrangements and the higher disregard that Sir David recommended and that the Secretary of State has undertaken to consider, but will he assure us that he will not use a charging mechanism for resident parents who have to use the agency and have had to deal with an incompetent service over the previous 13 years of the agency’s life, and who would be astonished to have to pay for the use of this incompetent agency in the future? Have the Government gone far enough in giving the new CSA access to the sort of income details that it would be able to get if it were part of Her Majesty’s Revenue and Customs, and the ability to deduct money directly at source?

Today’s statement, which was made almost 10 years after the Labour party came to power, contained a set of proposals that seem to amount to no more than re-badging with additional lengthy delay and more gimmicks. Should we not have expected more after 10 years?

I say to the hon. Gentleman what I said to the hon. Member for Runnymede and Weybridge (Mr. Hammond): this is not a re-badging exercise, but a fundamental change to every aspect—root and branch—of the child support system. The hon. Member for Yeovil (Mr. Laws) did not have the courage of his previous convictions and did not repeat his support for the transfer of responsibilities to HMRC. As he will know, that was considered on page 50 of Sir David Henshaw’s report and rejected for perfectly sensible reasons. He and his hon. Friends could usefully go away and study that. We cannot solve the problem of the administration by simply relocating it to a different part of Government. That is not the right way to deal with the problems of the CSA, because those problems are not just organisational or administrative. They are much more fundamental than that. That is why Sir David has come to his view that transferring the CSA to HMRC, which I understand is the hon. Gentleman’s policy, would not be right. We have no intention whatsoever of taking that course.

The hon. Gentleman berated the Government for taking 11 years to come to this decision. We tried very hard. We have tried repeatedly in recent years to make the arrangements that we inherited work. We have revisited the legislation and invested heavily in support and IT systems for the CSA. It does not work. We should have the courage to say that it is time to turn over a new leaf. That is what I am trying to do. He might catch up with us at some point, but I am afraid that he is significantly behind the curve today.

Most of the changes will require primary legislation. That is why we cannot announce the detail of all of them today. We cannot implement them until both Houses of Parliament have agreed that there should be changes to the primary legislation. That is called the democratic process and the hon. Gentleman will have to take part in that, as everyone else will, and I am sure that we will hear his views in due course.

I have made it clear that the operational details in relation to the structure of the new organisation will be set out in the White Paper. In relation to the enforcement powers, Sir David Henshaw suggested that we take on board the idea of a passport disqualification power and we will certainly do that. He has also made it clear in the report—the hon. Gentleman should study it—that he wants us to consider what further measures might add to the enforcement powers of the Child Support Agency. It is important that we have the powers. They will not necessarily always be used, but they will be a deterrent. That is the point and that is the way in which we should judge the success of all these issues. I want the CSA, now and in the future, to come down like a ton of bricks on absent fathers—it is usually absent fathers, but let us say absent parents—who are not discharging their legal and moral duties to support their children.

We will look for support from both sides of the House to strengthen the enforcement powers of the Child Support Agency, and I am sure that I will have it from my hon. Friends. When it comes to making some of the hard decisions, these guys—the Liberal Democrats—are never to be found anywhere on the premises. Given that, the hon. Gentleman’s response is entirely predictable.

rose—

Order. I remind the House that I expect only one supplementary from Back Benchers.

I welcome today’s statement and the recognition that too many children are being let down by the agency. Will the Secretary of State expand on his comments about the role of Child Support Agency staff? They are working very hard to implement both the old formula and the new formula, but they will now be dealing with phone calls about his statement and coping with uncertainty about their future in whatever the new structure will be.

I agree entirely with my hon. Friend. Those are major issues for the CSA and its staff to deal with. The Department will be providing all the support that it possibly can to help CSA staff to cope with the changes. She is right that there is likely to be immediate pressure on the staff. It is our responsibility to ensure that we provide every support that we can to them and we will certainly do that. We will consult closely with the trade unions of the CSA and work closely with CSA management and Stephen Geraghty, its excellent chief executive, to make sure that the reforms work in the way in which we intend. There will be full and proper consultation with all stakeholders, including the CSA staff themselves. Incidentally, the staff are doing a brilliant job for all of us, so it is our responsibility to support them to the fullest possible extent.

The Secretary of State said that he wants to come down like a ton of bricks on parents who do not contribute, but does he understand that the important thing is to get the infrastructure in place so that offices can talk to offices, e-mails can be answered, telephone calls can be returned and thousands of files do not just disappear as clerical files? He will recall that I wrote to him recently about a case, on which he kindly intervened. The senior resolution caseworkers have been involved, as has the hotline, but the case is stuck in Preston in a file that no one can see. Does the suggestion that there will be no automatic conversion of cases mean that my constituent will have to start again? She and her family have been deserted by a deadbeat father. How can I explain to her that the Government have now deserted her?

I will take further interest in the case that the hon. Gentleman cited, but I hope that he will make it clear that we are not deserting families. It is necessary to replace the CSA with a new organisation for reasons that are pretty widely accepted across the House, despite the comments of the hon. Member for Runnymede and Weybridge. In the intervening period, it is important that we do all that we can to support people, such as the constituent of the hon. Member for Brentwood and Ongar (Mr. Pickles), who are not getting the support to which they are entitled from the CSA.

By the way, we are investing another £120 million over the next three years in trying to deal with this and other related ongoing problems of the CSA. We are in no way walking away from the problems in the CSA that are there for us all to see. If the hon. Gentleman wants to confirm the details of the case to me again, I will certainly take a personal interest in it.

I was pleased to hear several of my right hon. Friend’s comments, but may I return to the staff? Many of my constituents and those of my hon. Friend the Member for Dudley, North (Mr. Austin) work at the Dudley call centre. Many are women, some of whom are lone parents with family responsibilities themselves. I met several over the weekend who were concerned about what was coming out in the press and worried about what might happen to their jobs. Will my right hon. Friend take this opportunity to congratulate those staff on their work and diligence up to now? They have coped with all sorts of reorganisations and their stress levels have reached the point at which many of them have become ill. They have sometimes suffered abuse from parents who have become upset on the other end of the phone. Will he not only congratulate the staff, but reassure them about their employment prospects for the future?

I am happy to do that. The staff of the CSA do an immensely difficult job, often in difficult circumstances. It is incumbent on all of us in the House to do all that we can to support them in discharging the functions that we ask them to deliver on our behalf. As I said, we will certainly be working closely with the trade unions and the management to ensure that the reforms are a success. CSA staff have coped with major change before, so I am confident that they will be able to do so again.

I listened to the Secretary of State with great care and with no little sympathy, as he would understand. Although he might have been irked to some degree by the reservations of my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), I am sure he will recall that one of the reasons we are in the mess we are in is that the House was far too consensual during the passage of the legislation. The Secretary of State will be helped rather than hindered if careful and serious questions are asked at the earliest possible stage.

In ensuring that the levels of maintenance, even under voluntary arrangements, do not go back to the original derisory levels that caused the CSA to intervene, does the Secretary of State intend to venture into the difficult territory of the relationship between access and maintenance, or will the new agency or new arrangements maintain the rigid separation between the two? Over the years, the difficulties of those two issues coming together have led to much unhappiness in the way in which child support is handled.

I am grateful to the hon. Gentleman for his comments. I was not irked by the remarks of the hon. Member for Runnymede and Weybridge; I was just rather disappointed by them because he has not recognised the seriousness of our proposals. I hope that he will come to do so in due course.

We will keep custody and maintenance strictly separate. It is essential that we do so. I understand that in the heat of separation there are often difficulties around custody and access to children, but if we confuse the responsibility of parents to support their children financially with other issues, we will take a giant step backwards. We will not blur that distinction. As the hon. Member for North-East Bedfordshire (Alistair Burt) was one of the principal architects of the original scheme that we are trying to fix, I am sure that he will play an important role in our proceedings in the House.

In congratulating the Secretary of State on his courage in making today’s statement, may I make a plea for taxpayers? Since the Government rejected ministerial advice that the current system was not reformable, we have asked taxpayers to foot a bill of £50 billion for single-parent families. Does he accept that the more generous we are with the disregard under the new scheme, the bigger that bill will remain for individual taxpayers, and the more generous we are in the disregard, the more likely it is that some families will decide that it pays to pretend that they have split up, claim benefit and continue as they were? Are we not all wiser about the extent to which fraud can be committed from the response that we saw to the tax credit system?

Lastly, I make a plea that the Secretary of State keep together payment of maintenance and access. Many males who want to see their children and who regularly pay their maintenance feel that that is not taken into account fully in court. It is surely a sign of their good character that they have no access although every week they pay.

I accept my right hon. Friend’s caution about the level of the maintenance disregard. I assure him that we intend to proceed very carefully in that regard. It is fundamental to the reforms, however, that if we want to move to a system whereby we encourage and, yes, incentivise couples who are separating to reach their own financial arrangements on separation, we will necessarily have to look at being more generous in relation to the income support rules. That is what we intend to do. As I said clearly in my statement, we are not moving to 100 per cent. maintenance disregard, because that probably would hold out the prospect of some of the perverse consequences to which he alluded.

Is the indication in Sir David’s report of possibly reaching a maintenance figure of 1.75 million children, most of whom live in poverty, as distinct from the 1.1 million currently reached, to be a Government target? If so, when can we expect it to be reached? In addition, will there be recruitment to the new agency or new organisation that replaces the CSA? If so, will the Secretary of State ensure that the Government do their best to ensure that recruitment to those employee levels in Northern Ireland reflects the community, unlike the situation in the recent past?

We are not planning any immediate changes to the targets that we set for the CSA. The figures to which the hon. Gentleman refers, and which Sir David mentions, are the likely consequences of moving to the new arrangement once we have passed primary legislation and established the changes. It is too early for me to say whether we will then want to set a target along the lines set out in Sir David Henshaw’s report. There is an ongoing process across government whereby public agencies sign up to agreements and targets.

In relation to the hon. Gentleman’s final point about recruitment, with the greatest respect, it is too early to be clear about all the details. Clearly, if the CSA is in the business of recruiting to the new organisation, that recruitment must be ethical, legal, fair and balanced across the United Kingdom, and it will be.

I congratulate the Minister on being bold, because it is often difficult for a Government to admit that they have perhaps been throwing good money after bad and to conclude that the time has come to draw a line and start afresh. That was certainly the conclusion to which the Select Committee came: it was a failing agency and something radical and different had to be done—so well done on that. However, does my right hon. Friend have any advice for non-resident parents who on hearing the statement today and as a result of some of the headlines may think that there is no Child Support Agency and that therefore they have no responsibility for their children in the interim, and might be tempted to stop paying?

I have one very clear message: the law will be enforced. That is why we are taking new and additional powers. We are investing more in the organisational improvement programme to speed further the recovery of unpaid maintenance. I want non-resident parents to hear today the very important message that, until we make the changes, the current law will be enforced rigorously and effectively. As I said, we will throw the book at people who are holding up two fingers to society and their families in not discharging their financial responsibilities.

The CSA has been particularly hopeless in dealing with the cases of self-employed fathers who seem to manage to live extremely well on negligible incomes and who change some minor aspect of their affairs when they are in danger of being caught up with in order to be put back to the bottom of the heap. I am sure we all have experience of that. Is the Secretary of State confident that his new system will be able to deal with that problem?

I greatly respect the hon. Gentleman and his knowledge of these matters. Sir David Henshaw did not make any specific proposals on the treatment of self-employed people, but I have a strong feeling that we shall have to return to that matter when the primary legislation is introduced in the House at the earliest opportunity.

Will the Minister confirm that when the Tory Prime Minister of the day, John Major, introduced the scheme he was at the same time toying with the idea, which he carried through, of the traffic cone hotline? Will he also confirm that we used to have large lobbies of people outside the House of Commons? One day it was against the CSA; I went out the following day and asked the policeman on guard, “Who’s this lobby, then?” He said, “This is the police against the CSA.” It was at that point that I realised that it was time the agency was scrapped, and my friend Bob Cryer and I voted to scrap it. It is interesting to note that the Liberal leadership were not with us.

Order. I call Mike Weir.

As a former solicitor, I cannot help feeling that we are going back to the system prior to the CSA. None the less, subject to the details of this step in the right direction, we welcome the statement. We are concerned that there is no automatic transfer to the new agency and fear that there may be pressure to start some cases again from scratch. Will the right hon. Gentleman assure us that there will be no delay in dealing with new cases? Who will decide what is a perfectly satisfactory private arrangement, and will it be as enforceable as an old court decree used to be?

I reassure the hon. Gentleman that we are not returning to the previous CSA arrangement, where exclusive responsibility resided with the courts to recover maintenance. That is definitely not what Sir David is recommending and not what we are proposing today. On maintenance agreements, it will be for the parents to reach their own agreement on what they feel is appropriate in the case of their separation and family situation, but if they cannot reach an agreement or the agreement breaks down, it will be the responsibility under the new arrangements of the CSA to step in and to enforce the agreement according to the proper formula in statute. We are mindful of the need to ensure that there is no abuse of women in particular and of parents with care in those arrangements, but I am grateful to the hon. Gentleman for indicating in principle his support for the direction of travel.

One or two hon. Members have talked about the new system being deluged, but I do not think that will happen. Those who were failed by the first system and then failed to migrate to the replacement system will think twice before jumping on board any new system until it has had time to prove itself and if by then they are within two or three years of finishing with the CSA, perhaps they will not even apply at all. They want proper, objective assessment and robust enforcement, and once that has been proved over a period of time there will be voluntary transfer from the old system to the new.

I am grateful to my hon. Friend. On his latter point, I can confirm that we want the system to be robust, and we want people to know that the CSA will be a serious enforcer of parental responsibilities. That is not how people view the current arrangements, and it is that fundamental perception, and indeed the reality of the present situation, that we have to change. The proposals will help us to do so.

Can the Secretary of State confirm that three systems will be used to manage child support payments? As single parents make the depressing choice to go back to square one and reapply under the new system, at what stage will the Government close down the old systems on which so few people are left? Have the Government assessed how many people will choose to go on to the new system and to go back to square one and reapply?

I know that the hon. Lady is a member of the Select Committee but, in fact, there are three systems now in operation: the old scheme, the new scheme, and the hybrid scheme for cases with which the IT cannot cope, so we have to deal with them manually. In future, there will be one scheme, not three, once we make the changes. That will significantly increase people’s understanding of the system and its clarity. She asked me for a specific figure, but I cannot give one today; we have to undertake work before the publication of the White Paper, but when we produce it in the autumn, I hope that it will deal specifically with those issues. In the meantime, Sir David Henshaw will continue to work with us to make sure that we get the operational design of the new system right, and I am very grateful to him for that. I hope that she will find the answers that she is looking for in the White Paper.

May I particularly commend the steps to encourage voluntary agreements between parents? Will my right hon. Friend set out in more detail the measures that he has in mind, including advice and other services for parents? Will he bear in mind, too, the durability of such agreements, in the face of the evidence of fractured relationships, and changed and new relationships that establish completely different household incomes, and that require a complete reassessment?

My hon. Friend makes an important point. Sir David has recommended that the CSA of the future develop more of an advisory and help and support role for couples who are splitting up and for families in those circumstances. It is important for those people to be given proper financial advice. On my hon. Friend’s latter point, the way forward that Sir David identified will be partly through the more generous maintenance disregard, which he believes—and I think that he is right—will encourage and incentivise more sustainable and durable financial agreements between separating couples. That is the direction of travel that Sir David believes it is right to follow, and he is absolutely right.

I think that members of the Select Committee on both sides of the House are pleased that the Government are finally addressing the crisis in the Child Support Agency. I am concerned about two issues: first, the extent to which the Government failed to address the amount of debt that they must write off for the CSA; and, secondly, the apparent inconsistency between increasing voluntary arrangements—I think that everybody would support that—and the proposal to start charging parents who have to use the new CSA replacement. Aside from the fact that the modest incentive of avoiding a charge might encourage voluntary arrangements—that I can understand—will the Secretary of State explain how parents who are not prepared to accept a voluntary arrangement, and their children, will benefit if the parents are charged to use the service?

I am grateful for the hon. Gentleman’s overall support. On debt, which I covered in my statement, we would need primary legislation for any debt write-off, and we are still looking into that. In the meantime, we are investing significantly more in the current operation, so that we can use more specialist debt recovery and debt enforcement agencies, mainly in the private sector, to recover more of the debt. That is beginning to produce results. On charging, I am not thinking of charging the mother but the non-resident parent who is failing to comply with the obligation to pay maintenance. It is important that we do not penalise the parent with care in those circumstances. The details of the charging regime will be set out in due course.

In the context of his welcome new proposals, can my right hon. Friend say how he foresees new family relationships being dealt with? I have often found that the objections to the CSA proposals and the pursuit of absent fathers come from mothers in a new relationship and the impact that the payments have on the family income.

That is getting us into complicated sets of issues to do with relationships between separating couples and their new families. It is work that will need to be examined in the context of the White Paper. We need to look in particular at Sir David Henshaw’s proposals to develop the new advice, guidance and support service for the CSA.

The Secretary of State rightly said that the proposals would take time, and in the meantime the law will be enforced. Has he any interim proposals to improve the operational ability of the CSA to ensure that the 300,000 claimants are dealt with much more quickly?

Yes. We published the details of those plans in February and I will happily send a copy to the hon. Gentleman.

Any of us who have struggled with the CSA will welcome my right hon. Friend’s statement. Does he agree that unless we can deal with people who can make a modicum of change in their financial arrangements—that is, if they are self-employed or if they have a sympathetic employer—the enforcement powers included in his statement will not be worth the paper they are written on? May I urge him to test his enforcement powers against some of those cases? If he would like a few case histories, I am prepared to provide some from my constituency. The CSA fell down most in that respect and we must get it right now.

We could probably all add to my hon. Friend’s list of cases where we have seen the system fail. We must develop the proposals for primary legislation at the earliest opportunity—in the next Session of Parliament, I hope. My hon. Friend and others will then be able to judge whether the strengthened enforcement powers, which I would very much like to be available to the current CSA ahead of any change, are worth the paper they are written on. I will not waste the time of the House with powers and new enforcement roles that I do not believe will make a ha’p’orth of difference. I believe the new powers will make a difference, and as I said to the hon. Member for Stratford-on-Avon (Mr. Maples) earlier, we must look again at how self-employed people are treated under the current rules.

Notwithstanding the understandable nervousness of the Secretary of State about linking contact and financial support, have the Government recognised the practical advantages of deciding issues of financial support within the same framework as issues of contact and residence when, after all, members of the family are deciding all matters in relation to the future of the family?

That sounds to me like a request that we go back to the courts having primary responsibility for dealing with these matters. I see that the hon. Gentleman is agreeing with me. That is not what Sir David Henshaw is recommending and it is not what the Government believe to be the right way forward. As the hon. Gentleman knows, there are proposals before the House to re-examine the matter of contact orders. That legislation is still progressing, and I am sure he will have the opportunity to make such comments in that regard.

I congratulate my right hon. Friend on grasping the nettle and appreciating at last that tinkering with Tory failure will seldom produce an outcome. My constituents who run the CSA in Hastings—the many hundreds there—will be worried, as my colleagues have said. When will my right hon. Friend be able to say what the alternative will be, where it will be carried out and when their jobs can be made secure?

I hope and intend to set out the details of that in the White Paper in the autumn. I have been to Hastings and met many of my hon. Friend’s constituents. They are doing a very good job in difficult circumstances. I do not want to add to the difficulties that the agency is experiencing, but we need to spend the next few weeks getting it clear with the staff, the management and others how the new arrangements will work. That will be time well spent, but there will be full and proper consultation with all the relevant trade unions.

When parents separate, it is often difficult to come to voluntary agreements because the professional organisations that they go to, such as solicitors, are confrontational, rather than helping them to come to an agreement. Will the Secretary of State consider giving some funding to organisations such as Relate and Citizens Advice to help set up volunteer but trained mediation services to help parents who might want to reach a voluntary agreement at that time to find the mechanism, skills and process by which they could come to such an agreement that would stick?

I am interested in exploring all those options. They are primarily matters for the Secretary of State for Constitutional Affairs, but we will need to look at that in more detail as we prepare the White Paper.

I congratulate my right hon. Friend on making such a bold step forward after so much of a problem, which we have all faced as constituency Members. Given the rigidity of the current system, whereby individuals who work so hard for the CSA basically operate within boxes and anything outwith the parameter of the box is a nightmare for them to cope with, can he assure the House today that the new system will have flexibility, and that common sense will prevail in running the system?

Yes, that is very much what we would like.

On a point of order, Mr. Speaker. On 25 July 2005, I wrote to a Minister in the Department for Environment, Food and Rural Affairs about an issue that is of great concern to a number of my constituents. Last week, on 19 July, I received a reply. The earth has done a complete orbit of the sun in the time that it has taken for my reply to arrive. I know that as the summer recess is about to begin this is a difficult time to raise this point of order, but would you, Mr. Speaker, use your good offices to explain to Departments how embarrassing it is for Members to have to write repeatedly to constituents to apologise for not having received a reply over such a long period?

The hon. Lady is very lucky that she got a reply. Many hon. Members have told me in points of order that they have not received a reply. I do not know the quality of the hon. Lady’s reply, but I hope that it was good. [Interruption.] The hon. Lady says that it was not. I can tell her that the Leader of the House and I are working closely to try to improve the time that replies to questions take so that Members receive them within a reasonable period. I hope that after the recess things will improve, and that that will help the hon. Lady’s constituents.

I beg to move, That the Bill be now read a Second time.

The reforms in the Bill set a new direction of travel for our welfare system. They are underpinned by a belief in an active enabling welfare state that sees tackling poverty and social exclusion as its central mission, with no one left behind and no one written off. The Bill therefore marks a major shift away from the established orthodoxy of welfare provision in our country, which has always treated functional limitations as automatically disqualifying people from the world of work. That is based on a flawed analysis of the nature of disability and the rights of disabled people, and it is time we changed it.

The Bill before us today therefore signals a new approach. It offers new support in return for new obligations for people to help themselves, and it delivers on our manifesto commitment to reform incapacity benefits while ensuring security for those who cannot work. Together with the wider welfare measures set out in our Green Paper, the Bill continues a process of reform that has sought to lock in the right set of values: of universality and opportunity; of security and equity; of fairness and due process— values that stretch back to Beveridge—under which the right to work is fundamental in tackling poverty and building aspiration for everyone in our society.

When we came to office nearly 6 million people in Britain were dependent on benefits. Between 1979 and 1997 unemployment went up by 50 per cent., and in a world where discrimination already scarred the lives of many disabled people and older workers, the numbers claiming incapacity benefits trebled, while 3 million children were left to live in poverty. I make no apology for reminding the House of those grim and shameful statistics. They set the context for the challenge that we now face, and they teach us valuable lessons about the role of the welfare state in today's society.

Through the minimum wage and tax credits, we have tried to make work pay, and through record investment in the new deal and Jobcentre Plus we have begun to create an enabling welfare state that tries to respond to the needs of individuals and matches rights with responsibilities.

Today, as a result, there are more people in work than ever before—2.5 million more than in 1997, with the biggest increases in the neighbourhoods and cities that started in the poorest position. Overall, there are 1 million fewer people on benefits, and 2 million children and 2 million pensioners have been helped to escape the poverty line. As last month’s Organisation for Economic Co-operation and Development report showed, not only do we have the highest employment rate among the G7 countries but, for the first time in 50 years, we have the lowest combination of unemployment and inactivity rates.

Of course, there is more that needs doing. The challenge that we face today is how to build a modern welfare state that allows people to exercise their fundamental right to work, when our economy and our society are changing more rapidly than at any time since the industrial revolution. While the pace of such change can seem daunting or even terrifying, the forces that lie behind it, in my view, represent progress, not decline, and they hold out more opportunities than threats. If we can take full advantage of them, they will extend the chance to reduce poverty and social exclusion in our society.

We must act to meet that challenge, which is why we have set ourselves the aspiration of an 80 per cent. employment rate, with 1 million fewer people receiving incapacity benefits, 1 million more older people in work and an extra 300,000 lone parents off benefit. That is why we are taking forward through secondary legislation the measures in our welfare reform Green Paper to provide more support to lone parents and to break down the barriers experienced by older workers. And that is why we have introduced the Welfare Reform Bill, which will enact crucial elements of the proposals that we set out to the House in January.

My constituency is 15th in the table of constituencies with the highest number of incapacity benefit claimants, so I welcome the attempt to get more people into work. Does my right hon. Friend agree that a key aspect of the process involves changing attitudes among some employers towards the employment of people with disabilities? A written answer in the other place recently stated that 15 per cent. of disabled people of working age who want to work are not in employment, compared with 4 per cent. of the non-disabled working age population. Does my right hon. Friend agree that that must be a key aspect of the welfare reform programme?

I agree that that is true. However, we are making steady progress in bringing to the attention of employers the tremendous pool of skilled labour available among people who are claiming incapacity benefit. It is a mischief and a mistake to assume that if a person is on incapacity benefit they have no skills, talents or opportunities—far from it. I have been tremendously encouraged by the agreements that we have reached with major national employers that are prepared to offer people on incapacity benefit a second chance to return to the labour market. We want to see more such agreements, and we will do everything we can to speed up the process.

How will the Bill help the unemployed in Shropshire? In the past year unemployment in the county has risen by 30 per cent., and it is rising in the west midlands, too. Is it not the case that unemployment is now at a four-year high? How will the Bill help those people?

Unemployment is a lot lower than it used to be, when the Conservative Government were in office. Labour Members remember that unemployment twice reached 3 million under the stewardship of the Conservative party.

The hon. Gentleman asks what the Bill will do for jobseekers. The Bill primarily focuses on the needs of people who currently have some functional limitation and are unable to work. The thrust of the proposals is to encourage the speedy return of those people to the labour market. Any of the hon. Gentleman’s constituents who currently claim incapacity benefit will have access, in the next 18 months to two years, to the pathways to work programme—the first attempt by any Government, Conservative or Labour, to do something practical and positive for people who are out of the labour market because of incapacity and who desperately want to return to it.

My right hon. Friend knows that I support the Bill. Will he accept that this is a unique opportunity to create a new consensus that belies the rather carping intervention by the hon. Member for The Wrekin (Mark Pritchard), and which states that we agree about the right to work and the duty to work? It is the Government’s role to provide the facilities to allow people to work and to ensure that employers can cope with the extra needs of those who are currently on incapacity benefit and who should be able to work. However, such a consensus will work only if the Opposition parties endorse my right hon. Friend’s strategy.

I hope we will see that later. Certainly, it has been indicated so far that Opposition parties broadly support the proposals in the Green Paper.

Not the Liberal Democrats, surely.

I understand that that is in fact the case—[Interruption.] I should ask some of my hon. Friends to write my speeches for me, as they would be much more entertaining.

I am interested in the Minister’s comments. I agree about the need to work with employers to get more disabled people back to work. However, one of the things that struck me about the Bill was the lack of any clear idea of how people will be helped once they have obtained a job, rather than in getting a job. Many people, particularly those with mental disabilities, require long-term help after they have been appointed to a job. Can the Minister tell us about his proposals in that regard?

That is precisely what pathways to work currently provides. It is true that the details of that are not spelt out in the Bill, but we recognise the need for the Department and for Jobcentre Plus to provide such ongoing support. In Scotland there are now fewer people claiming incapacity benefit than there were in 1997.

Will my right hon. Friend take this opportunity to congratulate the staff of the Glossop and Buxton jobcentres, and others throughout Derbyshire and in the other five pilot areas, on pathways to work? In my area they have vastly exceeded expectations not only in getting back to work many people who were not expected to be in the programme, but also in providing much job satisfaction for jobcentre employees.

I am happy to congratulate those staff. I visited the pathways to work scheme in Derbyshire a few months ago; it has probably been one of the most outstandingly successful examples of how this type of intervention can work. What was significant in Derbyshire, as we heard a few minutes ago, was that cognitive behavioural therapists were directly employed to fast-track the provision of help and support for people with mental health problems, to give them the self-confidence to represent themselves to employers and to secure work—and many have succeeded in doing so. That is a model of what more needs to be done, and what we are keen to extend across the country.

I am grateful that my right hon. Friend took the time to visit Glasgow and see at first hand the terrible problems facing the city. As he knows, my constituency has the highest number of people on incapacity benefit in Great Britain: more than 11,000 of the tragic Glasgow total of 60,000. Is he aware that the working links pilot in Parkhead and the partnership action team for jobs in Glasgow, East have come to an end despite being very successful? Will he consider extending those two projects to work in tandem with his reforms, in order to tackle successfully the most serious problem in my constituency and other constituencies in Glasgow?

My hon. Friend is right to draw attention to the problem facing many people in Glasgow who are on incapacity benefit and want the opportunity to work again. I know how actively he is involved with this issue in Glasgow, where, in conjunction with the city council and local employers, a huge amount has been done to move people off incapacity benefit back into employment. Some 11,000 to 12,000 people in Glasgow have been helped to re-enter the labour market over the past few years. That is a great tribute to Jobcentre Plus, local employers and the local authority.

We took the decision to end action teams and roll up funding into a new deprived areas fund, which will allow access to a similar level of resources to support such initiatives in my hon. Friend’s constituency. I am sure that local Jobcentre Plus staff would be happy to explain to him how they are taking that forward.

My right hon. Friend knows that more and more people cite mental health problems as the chief reason for claiming incapacity benefit. Will he confirm that the new personal capability assessment will be more sophisticated, the better to identify people with mental health conditions and tailor the help that they require more effectively?

That is our intention. We have convened several groups involving mental health stakeholders to work with us to design a better, more accurate and fairer assessment of people’s mental health problems when they present with a claim for employment and support allowance. It is important to find a way forward. The fact that the current arrangements do not do that properly has been the subject of continuing concern. We are anxious to try to find a way of resolving it.

Does my right hon. Friend agree that the public sector has a huge role to play in helping people get back into work? Indeed, Lancaster city council has been involved in projects for the long-term unemployed. Does he also accept that it is sometimes difficult for private companies, which are small businesses, to employ someone who has, for example, been on incapacity benefit and may require several days off sick because of a genuine illness? That is sometimes one of the biggest barriers to people going back to work. Are there any measures to deal with illness once someone returns to the workplace, and with the need for time off?

That is a genuine problem. However, it does not lend itself to any quick legislative fix. The Bill contains nothing that would directly tackle the concerns that my hon. Friend raises. We have responsibilities in Jobcentre Plus to ensure that we do everything we can to support people with mental health problems in staying active in the labour market. We will continue to discuss with my hon. Friend and others ways in which we might improve on those methods.

Bridgend has been an incredibly successful pathways to work pilot scheme area. Unemployment is 2.6 per cent., with fewer than 1,200 unemployed, but more than 5,000 people are on incapacity benefit. On Friday, my hon. Friend the Member for Ogmore (Huw Irranca-Davies) and I met the mental health matters group from Bridgend. Its members were worried about whether the personal capability assessment recognised that their capacity to cope changes daily. Even a change in medication or moving to a cheaper brand of medication can affect their performance and capacity to attend for interview. Will that be taken into account, and not lead to people losing their right to benefit because of a fluctuation in capacity?

It is important that the personal capability assessment is more than a snapshot. It is especially difficult to craft the assessment as my hon. Friend suggests for those who are mentally ill. We are working hard to try to reach agreement on the best way forward and we will continue to discuss that fully with all the relevant stakeholders. We need employers to co-operate with Jobcentre Plus, and I strongly believe that the evidence shows that they are willing to do that. My hon. Friend referred to pathways to work, which has been another great success in south Wales. I hope that we can build on that.

I thank the Secretary of State for his courtesy in giving way. Clauses 41 and 42 refer to recovering overpaid benefits. In his statement an hour or so earlier, he announced that the Child Support Agency would no longer be with us. As a critic of that agency for many years, I am pleased that it will finally be buried, even if the funeral is somewhat delayed. We are clearly dealing with some sensitive client groups in recovering those overpayments. Although the taxpayer must be protected, will the Secretary of State give some assurance that his officials will handle those cases sensitively and with appropriate discretion?

Yes, of course.

Part 1 provides for the new employment and support allowance, which will replace the current system of incapacity benefit. It places additional requirements on new claimants to be actively engaged in preparing for a return to the labour market in return for new support, by embedding the values and principles of the successful pathways to work pilots into the structure of the new benefit. We know the difference that pathways to work can make. In the first year of the pilots, the number of recorded job entries for people with a health condition or disability had increased by approximately two thirds compared with the same period the previous year. The pilots’ continued success has driven a significant increase in the proportion of people leaving incapacity benefit in the first six months of their claim, compared with that of non-pilot areas. This early success has underpinned our achievements in helping people off incapacity benefit, with new cases down a third since 1997, and with the first falls in the total count, now down 61,000 in the year to November 2005.

Will the Secretary of State give way?

Not at the moment.

At present, nine out of 10 people who come on to incapacity benefit expect to get back into work. Yet as we all know, if they have been on incapacity benefit for more than two years, they are more likely to retire or die than ever to get another job. Little is expected of claimants, and almost no support is offered to them. The gateway to the benefit is poorly managed, and a person gets paid more the longer their claim continues. Even the name of the benefit sends a signal that a person is incapable, and that there is nothing that can be done.

The Bill seeks to change that. It provides for a transformed medical assessment as the gateway to the new benefit, with an assessment process that for the first time properly looks at a person’s potential capability to engage in the labour market, rather than simply measuring the level of their incapacity. It provides for a new benefit system founded on the concept of measuring and building up each individual’s capability rather than writing them off as incapable, and a radical extension of the support available, which will be underpinned by the extension of pathways to work to every part of Britain by 2008.

We are continuing to review the design of the new medical assessment, and we are particularly conscious of how important that process is for people with mental health problems and learning disabilities.

The National Audit Office has found that 77 per cent. of cancer patients are not given information about the financial support to which they might well be entitled. Will my right hon. Friend comment on whether Jobcentre Plus staff will now routinely ensure that such advice is given to cancer patients?

We do all we can to bring an entitlement to benefit to the attention of such people, but I will reflect on what my hon. Friend has said and see whether there is anything more that we can do. We are not in the business of giving advice, but it is our responsibility to ensure that people are at least aware of the various entitlements that might be available to them.

I know that my right hon. Friend is coming to an important part of his speech. Many people who have been long-term recipients of incapacity benefit have received doctors’ lines time after time without any form of investigation into their illness. Will my right hon. Friend assure me that the new system will ensure that that can no longer happen?

Yes, I can give my hon. Friend that assurance. It will be important that, apart from having access to the support group, people have a regular face-to-face medical examination of their condition, so that we are able to provide them with the right measure of help and support that they need. This is a failure of the present system. I know that there are some of my own constituents who have not seen anyone for some considerable time, and that is not an acceptable way to run our welfare state.

My hon. Friend said that I was coming to an important part of my speech. I am not sure how he knew that, but I have been trying to get to it for quite a while. I would like to remind people of what I was saying about the design of the new personal capabilities assessment. We have created review groups, involving both technical and stakeholder experts, to look at the mental health and physical components of the assessment. We intend to complete this work by September so that we can provide a clear view of the new assessment during the Bill’s Committee stage.

The new personal capability assessment will identify those who are capable of undertaking work-related activity and the support and interventions that will be necessary to help them get back to work. It will identify separately people who are so limited by their illness or disability that it would be unreasonable to require them to undertake any form of work-related activity.

I notice that on several occasions the Secretary of State has referred to getting people back into work. Will some of the proposals that he is spelling out today also apply to people who have never enjoyed paid employment? They include people with learning disabilities, autism or mental health problems, who might well be in their 20s or 30s, and who would like to work but have no previous experience of doing so.

It was my mistake not to have made that clear. I agree absolutely with what the hon. Lady says. We want opportunities to be more widely shared than they are at the moment, and that will include people who have never been active in the labour market. Such people will not be excluded from any of the help and support packages that we are seeking to make available through pathways to work.

I recognise the sensitivity and importance of getting such a crucial distinction right. That is why we are consulting all our stakeholders carefully, to ensure that we take an equitable approach. The group that I have just described, known as the “support” group, will receive the new benefit at a higher rate. As now, they will be able to volunteer to participate in work-related activity and access all the appropriate support available, but it will not be a condition of their entitlement to any part of their benefit.

For the vast majority—those who are not in the “support” group—the new benefit will have a clear framework of rights and responsibilities. In return for the additional support provided by the national roll-out of pathways to work, claimants will be required to attend regular interviews, complete action plans and, in time and when resources permit, undertake work-related activity. As the Green Paper makes clear, the full level of benefit that they receive will be above the current long-term rate of incapacity benefit. However, those refusing to engage with the help and support offered, without good cause, could see their benefit reduced progressively to the basic level of jobseeker’s allowance.

I want to return to the point raised by my hon. Friend the Member for Bridgend (Mrs. Moon) a moment ago, which I did not deal with. She asked how we would approach the issue in relation to people who have a mental health problem, and who might, for a perfectly good reason, not have been able to attend, for example, a work-focused interview. At the moment, we would never dream of sanctioning in those cases, unless there had been a home visit, and until decision makers in Jobcentre Plus were absolutely sure that the person had no plausible reason for missing the work-focused interview. With all such matters—I shall make this point later, as I know that Members on both sides of the House will be concerned about benefit sanctions—the success of the policy is not to be judged by how many people we sanction, but the reverse. It will be judged by how many people we can help to get into work, whether for the first time or following on from an earlier career. As we established in relation to the new deal, if we are going to provide new help and support, it is essential to have some reciprocity in the provision of that additional investment in our welfare state. The vast majority of people, I hope, will have no difficulty with that argument.

I want to explore a little further the issue of work-focused interviews and people with mental health problems. I am pleased by the reply that my right hon. Friend has given to my hon. Friend the Member for Bridgend (Mrs. Moon). In order to reassure those who have genuine fears, what steps will he take to ensure that his staff are properly trained to identify when someone’s mental health problem is so severe that it would be adversely affected by being required to attend a work-focused interview?

I accept that there is fear about all these issues, and it is important that we dispel those fears. There is no reason for people to be fearful. We invest significantly in the training of personal advisers in Jobcentre Plus. Through pathways, we have been doing this for the best part of two years, and we are beginning to find a sensible way forward. I do not doubt that there are areas for improvement, and Jobcentre Plus is always ready and willing to learn. If there is a role for some of the voluntary organisations to help us to train our staff properly, we should explore that further. We are making progress. It is not our intention to be punitive as we develop these approaches; that would be wrong. As I have tried to say previously, we can be radical, which I believe that these reforms are, without being punitive. I hope that my hon. Friend does not infer from anything that I have said today, or anything in the Green Paper, that we will punish people unfairly because they have a level of incapacity. That would be totally at odds with the values to which I referred earlier, and forms no part of the approach that we want to develop.

I welcome the Bill, which, as far as I can see, is based more on people’s abilities than on their disabilities. In relation to work-focused interviews and pathways to work, may I impress on my right hon. Friend that in rural constituencies such as mine, which has two Jobcentre Plus offices 75 miles apart, the difficulty of delivering what I hope will be delivered is much greater?

I absolutely accept that. That is why, wherever possible, we try to take our services out to our customers. I do not know the precise details of the issue raised by my hon. Friend, but he would be welcome to raise it with me in more detail on another occasion.

I support the Bill, and hope that I shall have an opportunity to explain why.

Given that the proposals relating to work-related activity depend heavily on the use of private and voluntary-sector providers, can my right hon. Friend assure us that decisions on sanctions will be made not by those providers but by Jobcentre Plus?

That is certainly the current arrangement, but, as my hon. Friend will know—I suspect that that is why he asked the question—clause 15 allows the possibility of benefit sanction decisions being made by some of our private and voluntary-sector providers. I shall come to that section of my speech shortly, but let me say first that a number of providers have told us that they would like to have those powers. I agree that not all them may want the powers, and I quite understand why, but it is worth exploring the issue a bit further.

I consider the additional obligations to be central to the reform package that we are proposing. As I said earlier, I believe that the vast majority of people will consider them to be reasonable and necessary. They are very much powers of last resort. As with any such measures, the proof of their success will come not in large numbers of cases in which the sanction is imposed, but in the number of people whom we can return to employment and, therefore, lift from poverty. In the current pathways areas where extra conditions have been imposed, the benefits of fewer than 1 per cent. of claimants have been sanctioned. That is a mark of the success of the deal that we have offered people on incapacity benefit.

I know that some have expressed concern—as my hon. Friend just did—about clause 15, which permits the application of employment and support allowance benefit sanctions by private and voluntary-sector providers. I can reassure the House and my hon. Friend that a clear system of safeguards, similar to that used in pathways, will be used before any such sanction can be applied, and that the normal rights of appeal will be fully applicable. We will talk to private and voluntary-sector providers about whether they wish to exercise the function, but I think it is important for us to explore whether the new power will be helpful as we engage with a wider range of welfare-to-work providers in the years ahead. We will invest a further £360 million over the next two years to support the measures in the Green Paper, and to secure national coverage of pathways to work.

Will the Secretary of State clarify what aspect of non-compliance the private and voluntary-sector providers might sanction? Might it relate to participation at an interview, taking up employment opportunities, or obtaining medical assistance?

No sanctions would apply to health care provision. I think it would be entirely wrong to apply sanctions to how an adult decides to obtain health care. Nor would sanctions apply to the job-seeking that the hon. Gentleman describes, because that is not part of work-related activity planning. Essentially, we are talking about work-related activity when it becomes a mandatory condition for benefit—if it does—along with work focus interviews and the drawing up of action plans. Only in those areas could benefit sanctions apply.

Working with our partners in the private and voluntary sector will be a critical part of our building of a modern, active and increasingly devolved welfare state which makes more use of a wider range of providers with the skills and expertise to target local labour market issues more successfully. I said a few moments ago that a modern welfare state could not afford to leave anyone behind, and should not seek to do so. That is why we will roll out our offer of help and support for existing claimants of incapacity benefits—available on a voluntary basis—as pathways spread nationwide. In Somerset, for example, we are already piloting a regular set of work-focused interviews for all existing customers as part of pathways, and if that approach works, we will seek to expand it further as resources allow.

In time, as provided for by schedule 4, existing claimants will be “migrated” to the new employment and support allowance. That will help to reduce the complexity involved in having two completely separate administration systems running indefinitely. I want to make one thing clear, however: existing claimants will not be mandated to undertake work-related activity as a condition of receiving the full amount of the new benefit. Clause 12 gives us the necessary power to require ESA claimants to undertake work-related activity, but we will ensure that the regulations made under the clause reflect the position that we set out in the Green Paper in relation to existing incapacity benefit claimants. As the Green Paper also made clear, the current benefit level of existing claimants will be fully protected.

What is the position of people who are still receiving the old severe disablement allowance, which preceded incapacity benefit? Will those whose claims show that they still have SDA status be brought within the incapacity benefit loop, or will they be treated as a separate group?

That is a very good question and I wish that I had the exact answer to it right now, but I will ensure that my hon. Friend the Minister for Employment and Welfare Reform deals with it in his winding-up speech.

Following consultation on the Green Paper, we made two substantial changes to our proposals. First, we listened carefully to concerns that the adoption of jobseeker’s allowance rates in the employment and support allowance would penalise disabled young people. It was never our intention to discriminate against young disabled people and we decided that young people will now get the same basic allowance as everyone else in the main phase of the ESA.

Secondly, there were strong concerns from employers over our proposals to simplify statutory sick pay. Our intention was to simplify the process of administering the scheme while maintaining the crucial balance between helping to keep costs down and retaining protection for the most vulnerable employees. Employers felt that the simplicity they would gain from these changes was not sufficient to outweigh the loss of flexibility that waiting days gave them, so we decided not to proceed with those proposals at that point. We will instead invite all interested stakeholders to discuss with us the scope for alternative approaches to simplification, which must not, however, involve unreasonable costs to employers.

In his answer to my hon. Friend the Member for Yeovil (Mr. Laws), the Secretary of State suggested that conditionality would not apply in respect of medical activities. Will he confirm that the conditionality in the Bill can apply to the work-focused, health-related assessments that are proposed in clause 10?

Yes, but it will not and we will make sure of that in the regulations.

Part 2 takes forward our Green Paper proposals to simplify the existing housing benefit system to improve work incentives and encourage personal responsibility for housing choices. Following the success of the 18 pathfinder areas, the Bill will facilitate the extension of local housing allowance across the deregulated private rented sector. Where possible, to promote personal responsibility among tenants, we propose that payments of housing benefit will be made to the tenant, rather than the landlord, but appropriate safeguards will be in place to protect both tenants and landlords so that in cases where tenants are likely to have difficulty in managing their affairs, payments can still be made to the landlord.

My right hon. Friend rightly points to the success of the 18 pathfinder areas. One reason for their success is the enhanced money advice provided in those areas, so will he give us an assurance that such an enhanced money advice service will be available on the roll-out nationwide?

Yes, we will certainly want to do that and it will feature in subsequent debate and the Minister for Employment and Welfare Reform will comment further at the end. He is going to have to make a longer speech than he anticipated, but there we are.

The Bill also provides for a reduction in housing benefit where someone has been evicted from their home on grounds of antisocial behaviour and refuses to co-operate with the support that is offered by the local authority to help improve behaviour. There is clear research evidence that the provision of intensive support and supervision can achieve significant changes in the behaviour of persistently antisocial households.

An active welfare state, with rights and responsibilities at its heart, must send a clear signal to those evicted for antisocial behaviour that they are at the end of the line and cannot simply expect to move to another property and continue their bad behaviour at the expense of decent hard-working families. That would serve only to undermine public confidence in our welfare system and if we are right to expect minimum standards in other areas of the welfare state—I believe that we are—we should be consistent across the whole system, including housing benefit.

We intend to pilot the sanction in about 10 English local authorities over a two-year-period as soon as we have the legal power to do so. Proper consideration will be given to the needs of any children involved in such cases, but we cannot go on turning our back on those who have to put up with that kind of behaviour and who rightly look to us to deal with the problem. The Bill makes a start in the right direction in this sphere.