Skip to main content

Welfare Reform

Volume 468: debated on Wednesday 28 November 2007

I am grateful for the opportunity to have this debate and, as I am confident the Minister appreciates, my remarks will be concentrated on issues arising from this summer’s Government consultation document on welfare reform, with particular reference to lone parents. It is right, I think, to begin by saying that my comments, critical though they will be, do not undermine the principles of the welfare reform and welfare to work agenda that has rightly been at the heart of Government policy in the past decade. Huge progress has been made on several fronts, both directly, in employment, and in terms of the support services that run alongside, including the overall expansion of child care. There has been a major change in attitude and effectiveness at Jobcentre Plus, and the new deal programme and the investment that went with it has been successful.

That is a necessary and important reminder of the context of the debate. Indeed, the success of those programmes and of the Government’s overall economic strategy, with its emphasis on job creation, can be observed directly in the record of lone-parent employment in recent years. As the Minister knows, almost 60 per cent. of lone parents are already in employment, and the increase in lone-parent employment in the past decade, for which I have seen two figures—10 per cent. and 12 per cent.—is the largest entry into the workplace of any of the groups that are disadvantaged in the labour market. Thus we know already that the economic and welfare-based measures that have been directed at lone-parent employment have been successful.

In two ways, those measures have not been successful. First, they have not been successful in London. My thesis is that the relative failure of sustained lone-parent employment in London perversely demonstrates the very success of the policies that the Government have adopted in general to make work pay. Where work pays—outside London—lone parents have successfully entered employment. Where work, effectively, does not pay—in London—we have not been able to mirror that success. That tells us that incentives work, a point that I shall return to later. Secondly, my critique is about sustainability of employment, not job entry, and that, again, can be seen as relevant to London, where job entry rates for lone parents mirror those for the rest of the country, but job sustainability rates do not. A Government target that underpins the latest welfare reform Green Paper, based on job entry for a particular sector of the lone-parent population, is fundamentally misguided: it misses exactly the group of people, with exactly the problems, that we should be dealing with to be successful.

The welfare reform Green Paper proposes a quite significant tangential shift away from the incentives-based and support-based regime that has been successful across the board outside London. Central to that difference of approach is the migration of lone-parent claimants from the income support regime on to the jobseeker’s allowance regime. That is misguided and it will prove counter-productive. It is not necessary and I am most concerned about it, as are several organisations that work with children and lone parents.

Ministers have said that they do not expect the jobseeker’s allowance regime to be applied in a heavy-handed way, and I am sure that that is right. I do not doubt that it is not Ministers’ intention to come down hard on lone parents seeking jobs. However, that is not consistent with the jobseeker’s allowance regime, and it raises a question about how that regime can be applied consistently for all groups if Ministers say that they expect a slightly more supportive and gentler regime. How are lone parents to be taken out of a regime that is predicated on a quite severe conditionality test? We already know from recent statistics that the conditionality applied to lone parents on existing benefits has led to a sharp increase in sanctions in recent years. I understand that the number of lone parents sanctioned for failing to attend a work-focused interview has risen from 5,600 to 40,000. That is a very significant increase, but the sanctions regime under the existing benefits system is nothing like as severe as that which will apply when the relevant benefit is jobseeker’s allowance. Sanctions, given the increased numbers, will have a much more deleterious effect on lone parents and, worryingly, their children.

My first question to the Minister—perhaps she will not be able to answer all the specifics of my questions, in which case I should be grateful if she wrote to me with answers—is what such a sharp rise in the number of lone parents sanctioned in recent years tells us about how the system is now operating; and what warning bells that rings about the dangers for parents of the much sharper jobseeker’s allowance sanctions regime. Secondly, will the Minister clarify whether there will be two parallel systems of regulations applying to jobseeker’s allowance when lone parents have migrated on to that system? Surely Jobcentre Plus staff will have to operate within a single regulations system. Does the Minister have any expectation of the likely number of sanctions under that regime?

Does the Minister accept that sanctions imposed under the jobseeker’s allowance regime can mean the complete suspension of benefit, so that families with children are left with virtually no income, and nothing but the option of applying for benefit to be restored to 60 per cent. of its original level? That compares with a maximum loss of income of 20 per cent. under the income support regime. What assessment—this is at the heart of my concern about the proposals—has the Minister made of the implications for child poverty of leaving children potentially with no income?

Is the Minister aware of the impact of sanctions on associated benefits such as housing benefit? The reality of the situation that faces claimants in my constituency who lose benefit for even a week or two is that housing benefit is automatically suspended, putting the family into immediate arrears. If they are in the private rented sector or temporary accommodation, two weeks’ suspension of benefit alone can leave them £1,000 in debt. In fact, in-work benefit claims for housing benefit can take weeks to process. That leaves families at risk of homelessness action and bailiffs. At the very best, the families in social housing lose their chance to bid for a transfer. I can supply the Minister with numerous cases of families who have attempted to work, even under the present system, and have got into thousands of pounds of debt, with bailiffs coming into their homes, and who, despite chronic overcrowding, have been suspended from the transfer regime because a benefits claim has left them in arrears.

Does my hon. Friend agree that the housing benefit regime is central to the issue of people’s ability to afford to work? The high cost of housing and the cliff edge, as it were, of housing benefit prevents our constituents from gaining work and from living and working as people do in the rest of the country.

I totally agree with my hon. Friend, who has worked hard on the issue of housing benefit. The centrality of housing benefit and the impact of the way in which housing benefits tapers incomes, particularly for second earners in families and for people who are trying to work full time when they are in high-rent accommodation, is worrying. It is also a puzzle, as is the fact that the Government show so little interest in pursing the “Working Futures” pilot. I do not know whether that was tested in my hon. Friend’s constituency, but the system was designed for families in temporary accommodation in high-rent properties—£435 a week for Westminster council temporary accommodation—for whom improving status through work is almost impossible because of the housing benefit trap. The scheme was successfully piloted, but the Department appears to have no interest whatever in following it through. I am disappointed about that because I think that it is a good and sensible system. There are 60,000 households in London in temporary accommodation, and such a scheme could make a difference. There is a 30 per cent. difference in employment rates for people in temporary accommodation compared with families in social housing, which we need to address.

I have another set of questions about the proposed move to the new regime. The jobseeker’s allowance regulations allow for claimants to be treated as available for, and actively seeking, work. Will the Minister offer greater specificity on how that will relate to the availability of suitable child care? Is she confident about the provision of services for older children—those aged between 11 and 14 or 15, such as those who are part of the Government’s extended school programme? I must tell the Minister that I am not confident. The Government’s overall child care programme has been hugely successful—more than double the number of places are available, but they are almost exclusively for younger children. In fact, there appears to have been a levelling off in the rate of expansion in the past year or so. The Minister will be aware that the latest estimate by the charity 4Children is that there is only one place for every 200 children in the older age group in the country as a whole. There is little chance of closing the child care availability gap between now and next year—frankly, it is impossible.

What is the Department’s definition of child care for older children? There is a lack of clarity between the DWP and the Department for Children, Schools and Families regarding the definition of what extended schools are supposed to offer, yet extended schools will be at the heart of that child care provision. The extended schools offer explicitly does not offer child care. Given that extended schools are not designed to offer a service that will be at the heart of jobseeking, will the Minister say under what circumstances Jobcentre Plus staff can make a decision on what is appropriate and secure provision for older children? Given the vagueness and informality of the extended schools offer, how will staff at Jobcentre Plus decide whether provision is right for a parent or a child?

Is the Minister confident that there will be provision for school holidays, especially short holidays such as half-terms and Easter? In my area, which includes some of the most deprived communities in the country, such provision does not exist. That raises a secondary question about the use of the child care tax credit. That is taken up by very few people, particularly in London, in high-cost areas, where people need it. It is partly a take-up issue, but it arises partly because of a mismatch between the availability and cost of child care and the wages that people earn when they enter employment.

None of what I said is a criticism of the extended schools programme, which is excellent. I would like to see far more provision for children in wrap-around school hours, but I must tell the Minister that hard-pressed schools in my constituency that deal with large numbers of children on free school dinner entitlement have received an allocation equivalent to £20 per child per year for the next year. We are not going to be able to offer an 8 o’clock to 6 o’clock package with provision for school holidays based on that level of initial investment. I hope that the Minister will address that.

If a parent leaves or is forced to leave work because a child is excluded from school or from participating in a school event or is sick, or if child care arrangements break down, will the parent automatically return to full benefit under the JSA regulations? Who will arbitrate a dispute about whether it is reasonable for someone to leave employment on the JSA regime in such circumstances? Will it be possible for a lone parent to refuse a job on the ground that appropriate child care is not available? Will the DWP or Jobcentre Plus staff ask parents to use informal child care? That is a very important question, and we need clarity on it.

Will the JSA regulations be amended to ensure that no one is required to take work that does not make them better off? The regulations do not ensure that at the moment. Will the DWP fund child care while lone parents take a jobseeker’s direction? What specific arrangements are being made to help lone parents with children who have special needs? We do not have answers to those questions, and the Government timetable is short.

On alternatives, why is it not possible and, indeed, preferable, to keep lone parents on income support, which would avoid the risks I described, while making it a condition of benefit that they attend a work-focused interview? At the same time, the barriers that such people face could be assessed. After a few months, they could be moved automatically on to the new deal for lone parents and, after a few more months, they could be referred to a specialist provider. That would avoid the harshness implicit in the Jobcentre Plus regulations, and the risk of falling foul of the tougher rules on, and sanctions for, people leaving employment voluntarily.

In conclusion, work entry rates for lone parents are comparable with those for the general population. Incentives such as the tax credit do work—they are working outside London, where work pays. In places such as London, where costs are high and tax credit receipt is low, incentives are not working. We need to address that. The Department’s research confirms those things, and the Government need to take a different approach based on the one that I have outlined. It is consistent with the principles on which we agree: making work pay, overcoming barriers, keeping people in touch with the workplace and developing skills. That is consistent with everything that the Government have said about welfare reform in the past, and such an approach would be good for children, families and the economy.

I congratulate my hon. Friends the Members for Regent's Park and Kensington, North (Ms Buck) and for West Ham (Lyn Brown) on attending the debate.

As my hon. Friend the Member for Regent's Park and Kensington, North outlined, the Government’s programmes to support people going into work have had some success. A system that asked little of people, whether lone parents or others, has been tightened up in the past 10 years. We expect people to keep to a combination of obligations—I like to use that term more than the concept of conditionality. Those who, for one reason or another and often through no fault of their own, find themselves reliant on the benefits system, have obligations. Alongside that, as well as expecting people to help themselves and their families, we have recognised in the past 10 years that people come with a range of baggage, and different needs and histories. That makes it difficult to have a national system and framework and to come up with a system that deals with everybody, because people are unique, as are families. That problem applies to the systems for income support, jobseeker’s allowance and incapacity benefit. That is why I have been looking closely at issues such as the jobseeker’s system.

I have been reassured by and, in some ways, surprised at, how much flexibility there is within the jobseeker’s allowance regime. At the moment, lone parents whose youngest child is 16 automatically move on to jobseeker’s allowance, but we expect to lower that to age 12 and, as is proposed in the Green Paper, to consider lowering the age to seven in years to come. Clearly, we have only recently finished our consultation on the Green Paper, so we have yet to respond formally. It is valid to ask: why, if we have been so successful, do we need to make some changes? There are a number of reasons for that and it is difficult to deal with them in the time that we have left, because we could spend a lot more time discussing this matter.

In the past 10 years, with our new deal programmes for different groups of people, whether young people or older workers, the work that we have done for lone parents, and even the expansion of pathways to work for people with health conditions and disabilities, we have been on a journey. We had a starting point where, as we know only too well, there was little support. Also, in the 20 years before 1997, we were dealing with high levels of unemployment. Not only has the economic environment changed in terms of the number of jobs that are available today, but we have high employment rates. With the right support and, as I have said, the right obligations, more people have been able to go into work.

We have to ask ourselves some questions about the difference between 1997 and 2007 and about the different provision that is available, particularly for families—whether in lone-parent or couple households—through in-work benefits, as well as through the development of child care support. As a founder member of the all-party group on child care, which my hon. Friend the Member for Regent's Park and Kensington, North took the reins of in later years, I know only too well that it is and always will be difficult for any Government to come up with the perfect system of child care and work balance to meet the needs of all families. We can help and do whatever we can, but it is never easy to combine work and family life and we can just try to make it as easy as possible.

Does my hon. Friend the Minister agree with the basic thesis in the speech by my hon. Friend the Member for Regent's Park and Kensington, North, which is that the capital has specific needs that the Government need to address differently?

I think that that is right. I look specifically, in a regular session, at the quarterly performance of London in terms of Department for Work and Pensions services. Indeed, my hon. Friend the Minister for the Olympics and London has a special responsibility for London. I accept that there are particular issues in respect of London and about how to make our dealings with various agencies in London work as well as possible, whether we are working with the Mayor, the London Development Agency or other bodies. An employment and skills board is being established in London, bringing those two aspects together. I will touch on that and on the announcements that were made on Monday.

On finance, I know that my hon. Friend the Member for Regent's Park and Kensington, North would accept that some in-work credits have been changed: nationwide, the figure is £40, and in London it is £60.

There are some issues about the cost of housing, too. On housing and council tax benefits, I am not totally optimistic, because a number of people in work do not realise that they can continue to get access to housing and council tax benefit discounts. Clearly, we have to raise awareness of that.

At the moment, the DWP is leading on some important pilots on benefits, tax credits and the housing benefit triangle, so that when someone makes the journey into work, we can get things fixed at one point, rather than someone having to deal with lots of agencies. We are working with the Treasury on that. If that proves as successful as the first pilot in the north-east, I hope that we can consider how to deliver a better service on that front.

On housing, we will engage with colleagues in the Department of Communities and Local Government and the Minister for Housing, because there are some issues directly linking social housing and worklessness. We should consider how we grapple with those matters in different neighbourhoods and communities.

In the time that is left, I should like to deal with some of the other questions that were raised. I hope that I have dealt with, as much as I can today, and acknowledged some of the issues to do with housing benefit and housing.

The jobseeker’s allowance conditions, which I considered in great detail over the summer, are flexible enough to take account of the circumstances of lone parents. Of course, the responses that we are receiving on the consultation have given us some thoughts about how we look at that matter and about the guidance. I do not want there to be two separate regimes operating with JSA, because there are all sorts of implications with such an arrangement, and I do not think that my hon. Friend the Member for Regent's Park and Kensington, North is suggesting that. We are considering how to ensure that the existing guidance and flexibilities are used appropriately when dealing with a lone parent or someone on jobseeker’s allowance who has a family and child care responsibilities.

The current regime allows carers, including lone parents, scope to tailor their availability for work to suit their circumstances, linked to an underpinning minimum of 16 hours per week, so long as they still have reasonable prospects of finding work. At the start of a JSA claim, a jobseeker’s agreement is put together, setting out the hours that the claimant can reasonably be expected to work, as well as the types of work, location and wage that they are looking for. In our discussions, we are also looking at child care availability. There are already 9,000 lone parents on JSA with children under 16. Clearly, some lone parents are working with the current regime.

The issue of sanctions is important. We hope that the sanctions, and the obligations that come before them, are a way of deterring people from not engaging. I am looking at why lone parents are not attending a work-focused interview. Some 40,000 lone parents did not attend in one particular year. Considering that all we are doing is asking people to turn up for an appointment at a time of their choosing, why would a lone parent be prepared to take a cut in their family’s money by not turning up for such an interview? We will be evaluating that.

First, I want to know whether the lone parent was aware of what the interview was meant to provide. Secondly, I should like to know whether, if someone has missed an appointment, they have the opportunity to flag up why they could not make it on a particular day. I have yet to hear arguments about why it is so onerous for an individual to attend an interview to engage with them about what is available and what support there is, particularly when we are talking about their doing so when their children are at school.

We hear a lot about people not getting access to the benefits to which they are entitled, not sorting out their housing benefit and not knowing about child care. One way for them to resolve such matters is to attend a work-focused interview and ask those questions, so that we can ensure that the provision is understood and we know what the problems are.

It is valid to ask the question, because people are making a big judgment to take a cut in money for themselves and their children by not attending an interview. I am not saying that interviews work perfectly all the time, but many people, many of them women, have found them to be a springboard to helping them to focus on their future goals. Over the summer, many women have said to me, “I am so glad I was called in, because, to be honest, I would not have gone if I had not been asked.”

Briefly, on that point, will the Minister write to me after this debate and let me know how many people were sanctioned for failing to attend repeat interviews. The Government’s own research confirms that it is not initial interviews that are the problem, but people’s feeling that there is little point in follow-up interviews that do not add anything to the initial assessment. Does the Minister really, honestly believe, following the logic of her argument, that people should be losing all their benefit? There may be a case for that, but what will happen to the children?

I will write to my hon. Friend with some more detail on that matter. I understand that people do not necessarily lose all their benefits straight away: there is a graduated process and we have various hardship funds operating. However, that is a fair point. People are being asked in for an interview to get a plan of action and goals, including things to sort out—they may not be getting things that they are entitled to, they may not understand the tax credits or they may be unsure how they might be better off in work. One would hope that such things would be drawn out from one of these interviews, along with other things, such as skills and education needs, to enable them to move forward. I accept that inviting people for one interview after another without moving anything forward is not something that I want to spend DWP money on.

Sitting suspended until half-past Two o’clock.