House of Commons
Wednesday 5 November 2008
The House met at half-past Eleven o’clock
[Mr. Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
Universal Primary Education
The global primary net enrolment ratio increased from 84 per cent. in 1999 to 89 per cent. in 2006. However, the latest estimates show that 75 million primary-aged children worldwide—41 million of them girls—are still not enrolled in school, and further progress is needed to achieve the target of universal primary education by 2015. We are working with the international community to accelerate action towards meeting that millennium development goal.
I thank the Secretary of State for that answer. Can he confirm that Department for International Development staff are implementing the education beyond borders policy changes and ensuring that education is core to any humanitarian responses? With particular reference to the Democratic Republic of the Congo, and notwithstanding the large sum allocated last year towards education, will there be extra funding for education as part of the UK’s humanitarian relief programme for that region?
I can confirm that the 2007 DFID initiative, education beyond borders, is being implemented. In relation to the DRC in particular, more than £10 million of £55 million to be provided over a five-year period goes towards access to primary education. We continue to assess the growing humanitarian difficulties afflicting the troubled area of the DRC. We made an immediate announcement of an additional £5 million at the weekend. I have had discussions with the Foreign Secretary since his arrival in the DRC. We continue, of course, to talk to our teams on the ground in the DRC to assess what further assistance is required.
My right hon. Friend will be confident that many African countries in particular are working hard to meet their millennium development goal commitments on education. Recently I have been working in Tanzania with people on education, and I should say that it is also important that we pay attention to the quality of the education experience in such countries as well as to the numbers receiving it. Tanzania is doing a great job in increasing the numbers of its children in primary education, but can the Secretary of State assure us that the Government are also working with that country to improve the quality of the education through better teacher training and teacher support?
I am happy to give that commitment to my right hon. Friend. Like her, I have visited schools in Tanzania and I have seen for myself the tangible difference being made by extending access to primary education for the young people of that country. Enrolment in Tanzania has doubled. Now, 98 per cent. of children there go to primary school; the figure used to be 60 per cent. My right hon. Friend is right, however, to recognise that there should be no contradiction between issues of quantity and quality. We are looking at the issue of retention; in Dar es Salaam I spoke with President Kikwete on exactly those challenges. I assure my right hon. Friend that it is one of the issues on which we are working in Tanzania.
The Secretary of State rightly identified the need for equality of opportunity for both sexes in education, and he will know of the tremendous improvements that there have been in Afghanistan. However, such opportunities are not available in other fundamentalist Muslim states. What is the Department doing to encourage those states to provide equal opportunity in respect of education for girls and young women?
The focus of our work at the Department for International Development is not dictated by the majority religious views of any one country but the requirements of the country for support in tackling poverty. We are working with Governments in a number of different countries; the hon. Gentleman mentioned Afghanistan, and we have contributed about £60 million to the Afghanistan reconstruction trust fund specifically for education. Where we are working we are in regular dialogue with Governments about improving the lot and opportunity of young girls in particular. To take one example, today about one in six of young girls around the world not in education are in northern Nigeria. That is why we are engaged in dialogue with the Nigerian authorities to see how we can extend opportunities to young girls and the disabled. It is necessary to get them into education if we are to see the progress that we want on the millennium development goals.
In townships, there is sometimes no electricity and no water, but there are always mobile phones. BlackBerry, Nokia and Vodafone have substantial educational trusts. Will the Secretary of State consider convening a meeting of mobile phone operators? Using mobile phones for content could be a way of increasing primary education.
I assure my hon. Friend that we are fully aware of the potential of what is widely seen in Africa as a leapfrog technology. Many countries that did not have fixed land-line telephone systems now have a number of mobile operators. Recently I discussed the potential of mobile telephony with Mo Ibrahim, who deserves huge credit for having expanded opportunity and built a hugely successful business in Celtel in recent years.
Will the Minister comment on the opportunity cost to the goal of universal primary education of the Government’s generosity to small-scale projects in emerging super-economies? Does he agree that that money might be better focused on areas of the world that are not blessed with natural resources or emerging super-economies of the sort that we see in China or, indeed, even in India?
China continues to be afflicted by considerable challenges in poverty reduction, notwithstanding the welcome growth of its economy in recent years. That is why we continue to work in China, although we are due to close our bilateral programme shortly. We are continuing to work there partly because any serious assessment of the role of China in Africa recognises that now is exactly the time to try to exert influence over the Chinese authorities to ensure that their engagement with the continent of Africa in providing infrastructure and new opportunities is benign in the years ahead.
The Government are committed to ensuring that UK aid is used effectively to make a difference to the poorest in the world. DFID has strong processes and systems that ensure that aid is allocated to the countries where it will have the greatest impact and used efficiently and effectively to reduce poverty.
I thank the Minister for that answer. As chair of the all-party group on Nigeria, I have visited the country on several occasions and will do so again next month. The best work that I have seen DFID do is when it takes a hands-on approach to a project and ensures that it is involved throughout. Can he assure me, and does he agree, that the norm with DFID projects should be that it adopts such a hands-on role and ensures that taxpayers’ money is well spent?
I pay tribute to my hon. Friend for his interest in the considerable progress that is being made in Nigeria. It is important that we adopt different approaches depending on the circumstances in the countries in which we are working. In some countries it is appropriate to work in partnership with Government through budget support, in others we should work with non-governmental organisations that are best placed to make a difference, and in some circumstances it is better to manage projects directly and then use the lessons from those projects to ensure that the populations of those countries can ultimately assume responsibility for building on that progress.
The Minister will know that a very high percentage of the population of Zimbabwe is starving as a result of the activities of ex-President Mugabe. What assurance can he give me that the aid that we are giving to that country, and rightly so, is getting through to the people who need it and is not being used by Mr. Mugabe and his henchmen for political purposes?
The hon. Gentleman raises an issue that unites Members on both sides of the House. The aid that we give to Zimbabwe goes directly through the United Nations and does not go through any governmental organisations within Zimbabwe. My right hon. Friend the Secretary of State met the head of our Zimbabwe office only last week, and those assurances were reaffirmed. Let us send a very strong message from this House today that we expect Mugabe to honour the commitments that were made in the agreement on a political settlement. Until that happens, the people of Zimbabwe are suffering as a consequence of Mugabe’s failure to honour those commitments.
Does my hon. Friend agree that one issue to consider is that most countries monitor their own aid programme in parallel with those of other countries? Will he and his colleagues work with our partners in the European Union, and with the welcome new US Administration, to try to co-operate in order to maximise the amount of aid that is given on the front line and not waste it in duplication?
My hon. Friend raises an important issue. It is important to note the progress that has been made. DFID has met seven of the 10 international targets on aid effectiveness agreed in the Paris declaration—that is three years ahead of schedule. The strong UK leadership from my right hon. Friend the Secretary of State on the Accra agenda for action has been welcomed in terms of ensuring that the maximum amount of resources is spent on the front line to help the poorest people of the world. It is absolutely crucial that we ensure that the Accra agenda for action is implemented.
The hon. Gentleman raises an important point. Of course, there are clear international standards and transparency in terms of what we expect to be the consequences for those who are found to misuse our aid. It is not necessarily for us to dictate how the criminal justice systems in those countries operate and how they bring people to justice, but the principle of accountability and responsibility is non-negotiable, and wherever corruption is discovered we expect the toughest conceivable action to be taken.
One of the things that most disrupts the effective disbursal of aid is conflict. My right hon. Friend the Secretary of State mentioned the additional support being given in the DRC; could the Under-Secretary say a bit more about what we are doing to ensure effective humanitarian aid access in that part of the world?
My hon. Friend is probably aware that we recently announced an additional £5 million in aid for humanitarian support to the DRC. That takes our contribution to £42.8 million. We have specifically focused on the north Kivu area, and some of the funds will be used to fly in essential items at the request of UNICEF, whose stocks are low. We still await further details on the situation before we consider the next stage of our assistance.
I am very optimistic that President-elect Obama will find a slot in his diary for me in the next few days—[Laughter.] I am sure that my right hon. Friend the Secretary of State will be delighted about that.
I am sure that all in the House would want to acknowledge what a momentous and historic event occurred in the United States of America yesterday. We send President-elect Obama our best wishes, and we believe that he will be a positive and progressive partner in tackling poverty in all parts of the world. It is one of the most encouraging things that has happened, politically, in my lifetime and it gives us all hope that the USA will make a tremendously positive contribution to tackling some of the world’s most serious problems.
It is welcome that aid in the past 20 years has focused on health and education, but that was at the expense of agriculture, and this year already an additional 100 million people in the developing world have been pushed into poverty. What adaptation is the Under-Secretary making to the overseas development programme, particularly on the issue of water security, which will undoubtedly be the prime security issue in the 21st century?
My hon. Friend raises an important issue. Agriculture is absolutely essential, as is water security. In that connection, we have recently announced £400 million of additional investment in research. There was a period when the world deprioritised the importance of agriculture, but we will make our contribution, and we recognise that agriculture is an important part of the opportunities available to the developing world to progress.
I welcome the Under-Secretary and his fellow Under-Secretary, the hon. Member for Worcester (Mr. Foster), to their new responsibilities in the Department. We wish them all the best for the future.
Building on the Minister’s comment about President-elect Obama, we now have the prospect of a new form of leadership in the United States. With regard to the partnership that the hon. Gentleman talked about, does he agree that one of the early priorities must be to ensure that aid levels are maintained? In the course of the current economic uncertainty, nobody in the world should scale down what they are offering. In that regard, does he agree that persuading the US to adopt a timetable to reach the UN aid target of 0.7 per cent. of gross national income must be an early priority?
I agree entirely with the hon. Gentleman. The Prime Minister has made it absolutely clear that the 0.7 per cent. target remains the UK’s aim. We also believe that the world’s current economic difficulties reinforce the interdependency of our world. Rather than being seen as a threat to development investment, we should use those difficulties as an opportunity to explain to our populations and to all the donor countries why supporting the developing world in an economically difficult period is even more important.
As my hon. Friend knows, the most effective way in which to tackle poverty is through good governance and capacity locally, especially when women are involved in local projects. Will he assure me that DFID programmes will always address those long-term issues, despite the short-term need to tackle immediate problems, such as those in the DRC? Maintaining such projects in the long run is the most effective way in which to effect genuine change and make a difference to people in the poorest countries in the world.
I agree with my hon. Friend entirely. It is important that change is sustainable and long term. We achieve that only by building up the authorities, the administration and the governance arrangements in those countries, and supporting all sections of society to fulfil their potential and ensure that their talent is deployed for the benefit of their country. There is no doubt that many women in those countries could play a much greater leadership role at village, community and political level. A major part of DFID policy is ensuring that we tackle gender inequality, which continues to hold back too much of the developing world.
On this great day for change, we, too, welcome the Under-Secretary to his new responsibilities. We also welcome the additional humanitarian aid for the Congo, which DFID announced at the weekend.
I hope that the Minister has read with concern the report by the respected National Audit Office, which found that a large percentage of development projects in conflict zones suffer from fraud or problems with financial accountability. What do he and the Department plan to do to tackle that?
First, let me say that I suspect that last night marked the death of the illusion of compassionate conservatism. It was always an illusion.
The serious response to the question is that we have always made it clear, and have been complimented on that by the National Audit Office, that maximum transparency and accountability are at the core of not only the way in which we go about our business in the Department, but the leadership that we provide in international institutions. My right hon. Friend’s contribution at Accra meant that, from a weak starting point, we have a robust commitment to ensuring maximum value for money and best governance practice.
Given that response, why does the Under-Secretary not announce today that he will implement in full the Conservative party’s proposal to set up an independent aid evaluation agency in London? Would not that give taxpayers confidence that their aid money was being spent efficiently and effectively?
The 2006 OECD Development Assistance Committee peer review of the United Kingdom states:
“UK offers a powerful model for development co-operation. The UK is currently seen by many aid practitioners and donors as one of the bilateral models for today’s evolving world of development co-operation.”
The Canadian International Development Agency stated:
“DFID is seen as the best development organisation internationally”.
The hon. Gentleman should congratulate one of the UK’s greatest success stories.
Climate change poses a serious and long-term threat to development in poor countries. To tackle this, the Department is pushing for an ambitious new global agreement to combat climate change. Our core business of lifting people out of poverty is still the most effective way of reducing the impact of climate change on the world’s poorest people. We are supporting countries to integrate climate change adaptation into their development plans, and doing the same for our bilateral aid programmes.
I am grateful to my hon. Friend for that reply and it is good to see him in his new role.
In recent years, the intensity and frequency of flooding in Bangladesh seems to have increased substantially. What are the Government doing to help that nation, which is one of the poorest, to tackle climate change?
I thank my hon. Friend for his comments. Bangladesh’s geography and poverty combine to make it especially vulnerable to climate change. DFID has helped to raise the floors of some 32,000 homes in Bangladesh—the equivalent of a small city in our country—above the one-in-100-year flood level. In addition, we have announced a £75 million programme to help the country to adapt further to rising sea levels, waterlogged land and increased saline intrusion.
The Minister will be aware—and it is worth reminding the House—that the Select Committee on International Development is about to embark on an inquiry into sustainable development in a changing climate. Does he agree that it is important for those of us in the west tackling climate change to understand that developing countries that have developed niche markets, selling, for instance, flowers and vegetables to the United Kingdom, can do so sustainably? Does he agree that we should continue to support those countries, rather than stop buying such goods, as some people have called for, which sustain thousands of jobs in Africa?
May I begin by congratulating the right hon. Gentleman on his work on the International Development Committee? I look forward to appearing before his Committee in that inquiry. He is absolutely right about enabling developing countries to grow in a sustainable fashion. I think that he and I would both agree that climate-smart development is the way for the future.
Does my hon. Friend agree that one immediate and visible sign of climate change is food shortages in developing countries? What is his Department doing to improve people’s nutritional status and stop the hunger, especially among children, in sub-Saharan Africa?
In addition to the humanitarian aid that we obviously give in such circumstances, we are embarking on a major piece of research, with some £400 million being invested over the next five years, so that in the long term we can help to cultivate drought-resistant maize and saline-resistant rice for waterlogged countries.
The Minister may be aware that drought and water problems are extremely difficult to overcome for parts of Africa and other parts of the world. As chairman of the all-party group on water and sanitation in the third world, which enjoys the support of 250 Members of Parliament, may I ask him to say what steps are being taken to satisfy organisations such as WaterAid and Tearfund, which recently made representations to the Department because of the shortfall in the amount of money being made available for sanitation and water?
The hon. Gentleman makes an important point. Just last week my right hon. Friend the Secretary of State launched DFID’s new water and sanitation strategy. Part of that strategy accepts the fact that there are 1 billion people living in developing countries who still have no access to toilets and 900 million people who have no access to clean water. Through that strategy and the good work of organisations such as WaterAid, we intend to build toilets for more than 50 million people and provide clean water for an additional 25 million people in the developing world.
Now that Britain is the biggest contributor to the World Bank’s International Development Association—or IDA—window, which funds grant aid to the least developed countries, we are in a particularly strong position to influence bank policy. What contribution do the Government want the World Bank to make to adaptation to climate change in the poorest countries of the world?
May I, too, welcome the Minister to his new post? Does he agree that consensus on a post-Kyoto agreement at Potsdam next month is essential to protect some of the poorest people on the planet? In that connection, what strategy have he and his colleagues in other Departments adopted to deal with the new President-elect Obama, who has already stated that he wishes to re-engage in the UN process and, in particular, to introduce a new and effective carbon cap-and-trade system?
May I say how much we welcome the pledges made during the election campaign by President-elect Obama? We are pushing for a post-2012 agreement on climate change and as part of that campaign we believe that it is important to engage with our European allies and European partners. If I could just tease the hon. Gentleman, I would say that isolation in the European Union is not good for the developing world or for climate change.
International Development Funding
As my right hon. Friend the Prime Minister stated as recently as 17 October:
“By 2013, the UK Government will reach our target of spending 0.7 per cent. of national income on aid. We have clearly laid out our plans to the reach this goal and we are encouraging our partners to do likewise.”
Actis Capital, the opaque private equity company created in 2004 to invest the then Commonwealth Development Corporation’s funds, made $50 million profit in 2007 from sources such as a financial services company in South Africa and a hotel chain in China. How satisfied is my right hon. Friend with Actis’s use of public money at a time when aid budgets are under such pressure? Could it not be put to far better use in agriculture, health, education and infrastructure projects in the developing world?
CDC, which has worked with Actis in recent years, has accumulated capital while investing significant sums of money in the developing world. The need for continued flows of capital to the developing world has only increased in recent months and that is why it is important that, for example, the World Bank increases counter-cyclical lending. That is why we want to see other institutions, including CDC, continue to put capital into the developing world. Aid alone will never be sufficient to meet the challenge of poverty.
The Prime Minister was asked—
I am sure that the whole House will wish to join me in sending our profound condolences to the family and friends of the soldier from 2nd Battalion the Royal Gurkha Rifles who was killed in Afghanistan yesterday. In the week leading to Remembrance Sunday, we should remember the debt of gratitude that we owe to all those who have laid down their lives in service of our country.
Before I list my engagements, I am sure that the whole House will wish to join me in sending our sincere congratulations to Senator Barack Obama on winning the presidency of the United States and writing a new chapter in history in doing so. The bonds that unite the United States and the UK are vital to our prosperity and security and I know from talking to Senator Obama that he will be a true friend of Britain. The Government look forward to working with the new Administration as we both help people fairly through the downturn. I also want to pay tribute to Senator McCain, who has shown the characteristic dignity that has marked a lifetime of service to his country.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.
May I add my condolences to the family of the dead soldier?
Over the next few weeks, the residents of Greater Manchester will have the opportunity to vote in the referendum on introducing congestion charging in return for £1.5 billion of Government investment in public transport. Many people support road pricing but do not support the scheme. Will the Prime Minister—[Interruption.]
I know that the voting paper has options for a “Yes” vote and a “No” vote, but I am afraid that there is no option for a “Don’t know” vote. In the event of a “No” vote, it would be up to Greater Manchester authorities to decide whether they wanted to do further work on the proposals. The Government are in principle prepared to contribute, as the hon. Gentleman has said, up to £1.5 billion towards the Greater Manchester package, but that is dependent on the broad scope and nature of the package remaining the same. If Greater Manchester came back with a revised proposition, we would need to assess it on its merits.
The Prime Minister will be aware that this weekend South Africa will host the Southern African Development Community conference to discuss Zimbabwe and the atrocities in the Democratic Republic of the Congo. Will he continue to do all he can to ensure that the African leaders and the rest of the world realise that Zimbabwe, under the leadership of Morgan Tsvangirai, has resisted violence and stuck to peaceful and democratic means, and to ensure that that country is not sidelined because of what is happening in the DRC?
I welcome my hon. Friend’s long-term interest in Zimbabwe issues. I gather that the Speaker of the Zimbabwe Parliament is with us in this building today. I am determined that the international community act in a strong, united and decisive way on this issue. We have offered humanitarian aid—food aid going into Zimbabwe—but we regret that, despite all the discussions led by former President Mbeki, no agreement has yet been reached on the future of Zimbabwe and the personnel in the Government.
While we are determined to avoid a catastrophe in the Democratic Republic of the Congo—and we will take action as the Foreign Secretary said—by giving humanitarian aid and protecting civilians, and while Secretary-General Ban Ki-moon will visit the DRC in the next few days, a regional summit will be held to look further into this matter and a UN envoy will, I believe, be appointed very soon, I can assure my hon. Friend that we will not take our eyes off the humanitarian aid that we need to give to Zimbabwe and that we will not stop applying pressure for a political settlement that recognises the democratic will of the Zimbabwean people.
May I join the Prime Minister in paying tribute to the soldier from the Royal Gurkha Rifles who died in Musa Qala? We should honour his memory.
I join the Prime Minister in congratulating Barack Obama on his stunning victory in the American elections, and I also pay tribute to John McCain, not least for the gracious way in which he conceded. This really is an important moment—to have gone from the horror of segregation to the election of a black President in just four decades is an incredible transformation. It shows that the United States really is a beacon of hope, opportunity and change. I read this morning that the Prime Minister has sent a message to the President-elect; presumably it was not, “This is no time for a novice.”
Back to the business in hand. This week, the European Commission said that Britain faces a deeper recession next year than the United States, Japan or any major EU economy. The Prime Minister kept telling us that Britain was better prepared to face the recession. In fact, we are the worst prepared. Why was he wrong?
That was the only time I have ever heard the right hon. Gentleman quoting the European Commission. I have to tell him that the reason we are better prepared than other countries is that we have had low interest rates for years; we are now getting inflation down and it will come down further next year; we have high levels of employment—higher than in almost every other major industrial country; and we can come through this. At the same time, corporate balance sheets are strong outside the financial sector, and they are not in the position that they were in when the right hon. Gentleman was the adviser to the Chancellor in 1992. I also have to tell him that we are taking the long-term decisions for this country—on nuclear power, energy, infrastructure and planning—but we are not supported by the Conservative party.
The Prime Minister cannot hide from this: if we are better prepared, why is our recession forecast to be deeper? For years, he stood there reading out lists of countries that he told us we were beating. Yet according to the Commission, our recession next year will be worse than in Germany, France, Italy, Sweden, Spain, Greece or the United States. In fact, there are just two countries that we will do better than—Estonia and Latvia. They escaped the grip of Stalin; we are still in it. Just this weekend, the Prime Minister told people once again that Britain was “better prepared”. Why did he get it wrong?
I said that Britain is better prepared because of the reasons I have just given the right hon. Gentleman. He does not understand that since we rejected his policies and made the Bank of England independent and took the right course, we have had 10 years of economic growth, 10 years of stability, and 10 years in which 3 million jobs have been created. The right hon. Gentleman wants to compare the recent figures for European Union member states: Germany was in negative growth in the second quarter, France was in negative growth in the second quarter, Italy was in negative growth in the second quarter, and Ireland is in negative growth. We were not in negative growth in the second quarter.
The Prime Minister talks about his great decisions on the Bank of England; the terrible decision was to take it out of regulating the level of debt in the economy. Is not one of the reasons why our recession is predicted to be deeper that we have such high levels of personal debt? Will he confirm that we in fact have the highest level of household debt of any major economy? Does he not understand that we cannot build new Jerusalem on a mountain of debt?
If I can take debt overall in our economy—[Interruption.] The right hon. Gentleman usually likes to quote the International Monetary Fund, rather than the European Union. Let us look at debt levels in 2008: 37.6 per cent. public debt in the UK, compared with 55.5 per cent. in France, 56.1 per cent. in Germany, 101.3 per cent. in Italy and 94.3 per cent. in Japan. We have to look at personal and public debt together, and that is what we will do.
The IMF repeatedly warned this Government about the high levels of both personal and Government debt. I do not know why the Prime Minister did not just agree with my question, because this is what he said to the Labour conference in 1995. [Interruption.] It is another quote, and perhaps Labour Members would like to listen to it. These were the great words of the leader. [Interruption.] Why do Labour Members not listen for a change? [Interruption.]
I do not know why the right hon. Member for Normanton (Ed Balls), was shouting, but it was almost certainly “Balls”.
The Prime Minister said:
“I say to those who propose we simply tax, spend and borrow that it is because I care…about our responsibility to future generations that I tell you…we will not build the New Jerusalem on a mountain of debt”.
The facts are that we have the highest personal debt of any country in the world, one of the highest budget deficits in the world, and our regulation system has failed. In fact it failed so badly that the Prime Minister’s new Treasury Minister, Lord Myners, told the House of Lords this week that he wanted there to be a public inquiry into the regulatory failure. Can the Prime Minister tell us when we will have that public inquiry?
The Financial Services Secretary said no such thing, and I believe that the right hon. Gentleman is proving every time he speaks in the House that he is a novice in parliamentary procedure. When I referred to debt, I referred to low national public debt, and that is exactly what we have achieved since 1997 by reducing debt from 44 per cent. of national income to 38 per cent. this year. The Conservative party left us with higher levels of debt, and if the right hon. Gentleman wants to go back in history, he should remember his role as economic adviser to the Conservative Government when 3 million people were unemployed and, at the same time, we had interest rates at 18 per cent. As for borrowing, last week the shadow Chancellor said borrowing was the wrong approach. The Leader of the Opposition, however, said that borrowing
“is inevitable and you have to allow that to happen.”
The only change they represent is that they change their minds every week.
The Prime Minister says that I have in some way misrepresented what Lord Myners said. Let me explain exactly what he said. In the other place, Lord Lea asked him:
“If we are going to hold inquiries, do we not need a wider public inquiry?”
Lord Myners replied:
“My Lords, I agree with my noble friend.”—[Official Report, House of Lords, 3 November 2008; Vol. 705, c. 16.]
That is what he said. [Interruption.] That is the whole thing. He said we should have a public inquiry, and we should have one. Is not the truth that in Britain people are losing their homes, small businesses are closing, unemployment is rising and manufacturing output is falling again and that, by refusing to hold a public inquiry, the Prime Minister is yet again demonstrating that he cannot provide the change people want? On the day the American people voted for change, are not people in this country entitled to ask how much longer they will have to put up with more of the same from a Government who have failed?
The reason why the American people have voted is that they want progressive policies. They voted for a fiscal stimulus, opposed by the conservative; they voted for a rise in minimum wage, opposed by the conservative; they voted for regulation of pensions and mortgages, opposed by the conservative; they voted for tax credits, opposed by the conservative. The truth is that the Conservative party’s policies are rejected in America and in Britain by people who do not want to pursue them.
If the right hon. Gentleman will forgive me, on this day of all days, I believe that we should end this exchange by recognising the truly historic significance for America of the decision that has been made by the American people. They have demonstrated again and again the enduring strengths of their democracy and their values, and we will work closely with the new Administration, because their progressive policies are similar to ours.
We have already raised the winter allowance for pensioners, and it will be paid in the next few weeks; that is £250 for the over-60s and £400 for the over-80s. We are already coming down hard on the gas and electricity companies so that social tariffs—that is, the same rate as last year—are available to many low-income families in this country. We are continuing to talk to the electricity and gas companies about how the £900 million levy that we charged upon them can be used to give greater help to people who are poor or low-income, and to families on modest incomes as well. We will continue to do what we can to help people through these difficult times.
I would like to add my own expressions of sympathy and condolence to the family and friends of the soldier from the Royal Gurkha Rifles who tragically lost his life in Afghanistan this week. Of course, I would also like, on behalf of all Liberal Democrats, to join in congratulating Barack Obama on his extraordinary victory as the new President of the United States, and to wish him luck, because the hopes and expectations that people have of him to change America and change the world are immense.
The Prime Minister just said that he shares lots of policies with the new President-elect, so he will be aware that the central policy that Barack Obama fought on in his election was to cut taxes for people on low and middle incomes, paid for by the very wealthy. Why will the Prime Minister not do the same here?
The fact is that this Prime Minister has fixed things so that a millionaire pays less in tax on their capital gains than their cleaner does on their wages. He is not learning from Barack Obama; he is copying the Conservatives, who want to cut more taxes for millionaires and not give an extra penny to anyone else. So will he cancel his special tax breaks for the very wealthy to put more money into the pockets of hard-pressed families right now?
I think that the right hon. Gentleman is a bit behind the times. We raised capital gains tax from 10 per cent., and at the same time we took action on non-domiciles in the United Kingdom, but I have to remind him that a tax and spending policy must add up. If he is going to propose £20 billion of public spending cuts, he is out of touch with the British people.
Is it not 40 years ago that Martin Luther King said, “I have a dream”, and was that dream not fulfilled in the election yesterday? Given that the Prime Minister will be in the United States on 15 November for a financial conference with President Bush, will he also take time to see the President-elect to discuss the many issues of foreign policy that we have together?
I am grateful to my hon. Friend, who undoubtedly underlines the significance of what has happened in the United States: more people voting than ever before; the first black President elected by the American people; and more young people engaged in political debate than ever before. I will continue my discussions with Senator Obama, the President-elect, and I hope to talk to him very soon.
There are more people in education than ever before. I hope that the hon. Gentleman will go back to look at the statistics, which show that the number of young people and the number of adults who have been benefiting from our courses since 1997 is far greater than was ever the case in the years before—we wish to continue that. One example of this is the apprenticeship, which is available to adults as well as to young people. We have trebled the number of apprenticeships in recent years.
President-elect Obama has consistently opposed the war in Iraq since 2002, and he has made it his stated policy to withdraw all US combat troops by April 2010. That is a very significant policy change. Does my right hon. Friend consider it a change in which we should all believe?
I announced in July that, as we completed our mission in Iraq, there would be a fundamental change in what our troops do in the first half of next year. We have, of course, completed a lot of work in training the Iraqi forces, and we will continue to do that until completion. We wish to pass control of the airport across to Iraqi authorities. We wish to help to speed up economic development in Basra, and we wish to see the local elections take place. We have moved from a role in combat to one of overwatch, and we will have a further fundamental change of mission next year.
First, we do not own the Abbey National bank; it is owned by Santander. The second thing that I must point out to the hon. Gentleman is that interest rates have been cut from 5¾ per cent. to 4½ per cent, and the Bank has said that there is more scope for interest rate cuts. May I explain to the Conservatives what we have been trying to do in the past few weeks? We have been trying to get the liquidity into the system, recapitalise our banks and then get them to resume the lending that is necessary. The LIBOR has decreased from 6.25 per cent. to 5.25 per cent. We are starting to make progress, but I agree with what he says: that we want the banks and building societies to pass on the interest rate cuts to their mortgage holders.
Does my right hon. Friend agree that the President-elect’s inspirational address identified a number of key objectives, one of which was to help “a planet in peril”? Does my right hon. Friend agree that this time of economic downturn is one in which to invest in infrastructure for a low-carbon future, both in the public and private sector, and to work with the new US Administration on a new green deal that would benefit us all?
That is exactly what we want to do. We are committed to an 80 per cent. cut in carbon emissions by 2050. I believe that the policy is similar to that of the incoming US Administration. We want to work together towards an agreed solution in Copenhagen next year. We recognise that there are benefits in jobs, as well as in reductions in carbon emissions. That is why a new deal for the environment in America and Britain can create thousands of jobs for people in both continents.
I know that my hon. Friend has taken a great interest in these matters. We are discussing them with the devolved Administrations to deliver a coherent approach across the United Kingdom. The Government continue to prepare the Bill for introduction early in the fourth Session and do not intend to reduce its scope or coverage.
That was a sad incident involving the deaths of young people serving our country. However, in recent years, we have done our best to provide the necessary equipment. We have spent more than £1 billion on new vehicles for operations. In 2006, we ordered 108 Mastiffs and, in 2007, took steps to increase vehicle numbers. We ordered 150 Ridgbacks and the first Jackals as part of a constant review of capability. In June, operational commanders were asked by the Defence Minister to look again at our vehicle options. More armoured vehicles were decided upon, and last week we were able to announce the purchase of nearly 700 vehicles and an upgrade of more than 200 vehicles. That is a total of 1,200 new vehicles, and that is why the Conservative Chairman of the Defence Committee said:
“The personal equipment that our Armed Forces now have is better than it’s ever been.”
Is my right hon. Friend aware that those of us who are pro-American hope that the very welcome result of the presidential election will result in the United States regaining the respect of the international community? When the new President-elect takes office next year, I hope that one of the first steps he will take will be to end the torture of political prisoners. That would be a very welcome step.
I, too, want to do my best to help charities. We created Gift Aid, which allowed them to get very considerable relief, and over recent years we have given substantial money to work in partnership with charities. Of course, we will consider anything that helps to protect the charitable sector, and we are already considering a number of measures through which to do so.
We are doing our best to work with other countries. One of the reasons I went to the Gulf was to talk to other countries about how we can better prepare for the future. The Conservative party opposed all our measures on Northern Rock, and on the banking crisis and HBOS. The shadow Chancellor opposed what we did on share speculation. Conservative Members also opposed what we did on regulation—they wanted deregulation. They have no answers to the problems facing the country.
Does the Prime Minister agree that it would be an absurd dumbing down of the principle of democracy if last week he felt himself able, quite rightly, to express his views about the antics of Russell Brand and Jonathan Ross as employees of the independent BBC but felt himself unable this week to express his views about the increasingly obvious fact that the independent Bank of England has moved too slowly and by too small a margin to reduce interest rates?
We are committed to greater fairness in the NHS, and we know the worries of people who have long-term illnesses. We have agreed to abolish prescription charges for all cancer patients next year, and we are committed to abolishing charges for everyone with a long-term condition as we deliver savings in the drugs budget over the coming years. [Interruption.] The Conservatives are clearly not interested in the future of the NHS. We created it, and we are interested.
We have worked very closely with America over the past few months on the economic crisis. President Bush has called the leaders’ meeting in Washington, and there has been a co-ordinated cut in interest rates, led by the central banks of America. Britain and Europe. I believe that, over the next few months, we will have to work even more closely to deal with the international and national repercussions of what is happening in the economies of the world. Senator Obama has already indicated that he wishes more co-ordinated global action on these matters, and I believe that we will be able to work together very closely and lead the world in taking us through these difficult times.
I wish to make a statement about the two minutes’ silence.
As the House will know, next Tuesday is 11 November, Remembrance day. Although this House will not be sitting at 11 o’clock, the parallel Chamber in Westminster Hall will be sitting, and right hon. and hon. Members, their staff and officials in the House will also be attending to their duties at that time. I regard it as appropriate that we should join the nation in observing the two minutes’ silence at 11 o’clock, so that we might remember those who gave their lives for their country and to help preserve our democratic freedoms.
I should be grateful if those responsible for chairing Westminster Hall and any other Committees at that time would make appropriate arrangements. Instructions will also be issued to heads of House Departments so that those members of staff who wish to observe the two minutes’ silence will be enabled to do so.
Sale of Registration Marks (Amendment)
I beg to move,
That leave be given to bring in a Bill to remove restrictions on the format of vehicle registration marks; and for connected purposes.
The Bill is deregulatory, revenue-raising and populist. It would give people the ability to choose from a much wider variety of letter and number combinations on their licence plates, which would mean that it was possible to purchase a licence plate that spelt out a word exactly as it reads in the English language. The Bill would give people greater choice and bring in additional millions of pounds for the Driver and Vehicle Licensing Agency.
I shall outline the background to registration plates, demonstrating that the change is very much in keeping with previous changes, and the type of numbers that could be sold under the Bill; examine the enormous amount of money that would be raised and how some of it could be spent; and deal with some of the valid objections to the Bill, which I believe can be overcome.
Vehicle registration licence plates were introduced in 1903, both as a road safety measure and a revenue-collecting measure. Things developed quickly, from counties allocating numbers—for example, Lancashire allocated A1, A2, A3 and so on—to the need for larger numbers, such as AA1, AA2 and AA3. It was only in 1970 that the DVLA was created and all number plates were centralised.
There have been many changes, the most significant of which may have been in 1989, when a much wider range of letter and number combinations was made available. That was a truly innovative move, but looking back, we can see that it may have been far too cautious. The Bill builds on the work of 1989 and the work of Ministers subsequently.
I shall give some examples of plates that are sold at present and plates that could be sold, so as to compare the two. At present, if I had the money and there was a seller, it would be permissible for me to buy E5 5EX—Essex—but not ESSEX. It would be permissible for me to buy JPD1, but not JPD. I could buy J4 MES, but not JAMES, or S44 FND—Sarfend—but not SOUTHEND in full, which seems completely ridiculous. There could be commercial uses, such as ASDA 1, ASDA 2 or ASDA 3 on lorries. Plumbers could advertise, and there are a number of other examples.
I have consulted widely on the Bill and I particularly thank Richard Kitchen, the policy director of the DVLA, the Department for Transport and a large number of ex-Ministers. In fact, most of the people sponsoring and supporting the Bill are ex-Ministers who speak fondly of some of the modest changes they would have made to deregulate the marketplace. They all told me they wished they had done more at the time—[Hon. Members: “Ah.”] I shall come to that.
I have spoken to the police, the Association of Chief Police Officers and manufacturers of automatic number plate recognition systems, and I shall deal with some of their objections. I have also spoken to the Cherished Numbers Dealers Association—a very good organisation—and, crucially, Roger Williams, who was very helpful, particularly in the early stages. He was one of the DVLA officials who advised former Ministers and he has been instrumental in helping me to develop the Bill, as have other driving organisations such as the AA and members of the CNDA, who both sell registration plates as intermediaries and buy them as investments. I thank the Under-Secretary of State for Transport, the hon. Member for Poplar and Canning Town (Jim Fitzpatrick), with whom I have discussed these matters. He is already working on similar issues and I hope the Bill gives him further encouragement to be bold, release a large range of numbers and raise a large amount of money.
The House of Commons Library has set out the amount raised since 1989: £1.3 billion. Last year, more than 250,000 registration plates were put on the marketplace, raising £87 million. They tend to be sold by auction, and the September auction raised about £3 million. Some of that money is spent on DVLA costs and administration, and the rest goes to the Treasury. Organisations such as the AA have suggested that some of the additional money raised under the Bill, which could be as much as £1 billion over the next 10 years, should be used for road safety measures and to deal with some of issues relating to automatic number plate recognition that I shall address.
The original business case in the lead-up to the 1989 change anticipated that a break-even figure of £250,000 would be raised. Single registration plates already raise that amount, and I suspect that we could raise significantly more than even my quite big estimate of an extra £1 billion over 10 years. Online sales are growing at a dramatic rate; ebaymotors.co.uk reported a 23 per cent. increase in sales in 2007, so we are talking about a big marketplace.
I hope that my Bill is not opposed, but I want to talk about some of the potential objections to it, so that we can see how they could be dealt with. The DVLA went through my objections with me, and put them in the category of objections that could, and needed to be, dealt with before we could progress. However, there is an appetite to make progress. By far and away the most serious considerations are those raised by ACPO, the police, the security services and the Home Office about automatic number plate recognition, which is used to counter terrorism. Those problems must be overcome before the Bill progresses.
About 95 per cent. of numbers can be recognised by automatic number plate recognition. It is difficult technology if the car is dirty, if the font has been changed in any way, if a reflective material has been put on the plate, and if the screws are in the wrong place. Crucially, my Bill does not say that we should change anything in the manufacture, construction, design, font or display of number plates, except that it would remove the space. That would allow cherished number plates such as S44 FND to have no space in them, as a space would mean that they lost some of their value.
The objections need to be overcome, but there is a lot of money in the pot to deal with them. Some of the money should go not to the Treasury or the DVLA, but to the automatic number plate recognition people, who would then work alongside the Home Office to sort out some of the problems. That would be good for road safety and for counter-terrorism measures. The 5 per cent. of number plates that cannot be recognised are partly owned by people who are trying to be a bit flashy with their number plates, but that disguises the existence of slightly more sinister individuals—potentially terrorists or more serious criminals.
It has been pointed out to me that our number plates are recognisable around Europe, but they will still have the yellow background and the Union Jack. I think that the Minister has received representations about our using other flags, too. The Department for Transport and the Cherished Numbers Dealers Association have pointed out that there is a recession, and that sometimes number plates are the first thing to be sold, or not bought, in a recession. That may affect the timing of the roll-out of the Bill, but it should not affect the Bill or the principle behind it. There is the issue of rude and offensive language on number plates, but that issue is there already, and it is dealt with satisfactorily.
There are costs associated with the changes; the DVLA estimates them at about £20 million. That seems a lot of money, but even so, the number plate 51 NGH, which is close to spelling “Singh”, was just brought on to the market, and it went for more than £250,000. MR 51NGH and DR 51NGH, or the equivalents in the currently legal plates, will probably go for similar amounts, so we are looking at raising almost £1 million without even having sold 51NGH as a number plate. Given what could be done, £20 million is really quite a small number.
It is also pointed out that there could be confusion between J4 MES and JAMES, but there could be that same confusion between A and 4 in normal number plates. That is not a major issue for number plate recognition. In fact, people who have such number plates want to be recognised, and that will make the numbers more easily recognised. There is also the issue of existing investments. It is important that we drip-feed registration plates into the marketplace; JAMES should not be sold in the same year as J1M, J1MMY or J1MBO, just as the introduction of the 51 NGH plates has been delayed over time.
We are not talking about rich people. In times of recession, perhaps we should be thinking of those who are less well-off, but we have to remember that, in a way, we are talking about a form of voluntary taxation. If someone wants to pay £300,000 for JAMES, that is absolutely acceptable.
There are a number of other points that could be raised, but this is a good Bill, and I am sure that the Minister will want to take it forward. I recommend it to the House.
Question put and agreed to.
Bill ordered to be brought in by James Duddridge, Dr. Stephen Ladyman, Sir George Young, Peter Bottomley, Mr. Christopher Chope, Mr. Andrew Smith, Richard Ottaway, Mr. Alistair Carmichael and Sir Malcolm Rifkind.
Sale of Registration Marks (Amendment)
James Duddridge accordingly presented a Bill to remove restrictions on the format of vehicle registration marks; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 14 November, and to be printed [Bill 159].
Work and Welfare
I beg to move,
That this House has considered the matter of work and welfare.
It gives me great pleasure to move the motion and open the debate about work and welfare this afternoon. It is an important subject for debate, and I look forward to the contributions of hon. Members from all parts of the House. At the outset, I must apologise, because I may have to slip away just before the end of the debate, owing to a personal commitment, but I shall be here until at least 5 o’clock. I hope that that apology is accepted in the spirit in which it is intended.
The relationship between our welfare policies and the number of people in work is critical for our Government, and inevitably at a time of global economic turbulence, it is an issue that will be in the minds of many constituents throughout the country. I shall say a few words about the policy journey that we have been on over the past few years, followed by a few words about our future direction of travel and, finally, the extent to which the current economic circumstances are relevant.
When we came into government, we inherited a largely passive benefits system that rewarded people for not seeking work. Everybody knew that the overall effect of the previous Government’s policies was, in many cases, to push people away from the labour market on to incapacity benefit and then to leave them there—a one-way ticket to dependency. Not only was it bad for the taxpayer and the economy, but most crucially, it was devastating for the individual who was capable of far more, with confidence destroyed, potential unrealised and poverty entrenched for them and for their families. Our task over the past 11 years has been to transform that inactive welfare state into an active one.
Starting with the new deal, we embodied the idea that rights entailed responsibilities, and, in return for extra support, young people were expected to take up jobs or training or see their benefits cut. It was the beginning of the end for the idea that people could sit at home and claim benefits if they were able to work and had a job—and it worked. Long-term youth unemployment has been virtually abolished, so we extended the policy to lone parents, new claimants of incapacity benefits, older people and disabled people, and now, as the Green Paper that we published in July outlined, we are considering others, too, including those on long-term incapacity benefit, one quarter of whom have been on it since the Conservative years. The increase in employment is not entirely due to those targeted and personalised support measures, because a buoyant macro-economy has of course helped, but nobody doubts that they have made a significant difference, with our successful system of active support contributing to a fall of almost 1 million in the number of people claiming a key out-of-work benefit since 1997.
The new deal has helped almost 2 million people into jobs, and our incapacity benefit pilot, pathways to work, has already helped more than 94,000 people off incapacity benefit and into work. Overall, as a result of our welfare reforms and the successful management of the economy since 1997, the number of people in work has gone up by about 3 million, employment is up in every region and country of the United Kingdom, International Labour Organisation-defined unemployment has fallen by 260,000 and claimant unemployment has fallen by 680,000. In the past year, the number of people on incapacity and lone-parent benefits combined has fallen by more than 70,000.
So far, so good, but the question before us today is: what comes next? We need to build on that success to unleash the potential of more of our people, where it is appropriate to do so, and as I shall come on to argue, that is more important, not less so, in a downturn.
Might one area on which my hon. Friend reflects be the disregards offered to people who take up part-time work and are currently in receipt of a benefit to encourage them to take the first few steps into work, which might build towards more permanent and substantial employment?
We already try to help and support people in those circumstances, through the provisions on the permitted number of hours and through our linking policies. We are also examining ways in which we can improve on that position in the future. In some parts of the country, we are conducting what we call in-and-out-of-work pilots, to see what more we can do with the benefit support system to encourage people who are on that cusp, facing that marginal call on whether to work. The thrust of my hon. Friend’s question is entirely right.
Will the Minister’s Department reflect on the availability of written information and on the use of the Department’s website to highlight the problem that the hon. Member for South Derbyshire (Mr. Todd) has just mentioned? There have been cases in my constituency of people in the position mentioned being unaware of the provisions and of the possible effect on their benefits, or indeed on their enthusiasm to return to work.
We always try to do everything that we can to ensure that people understand the system. It is complex in some areas, and one of the purposes of this stage of our reforms is to try to reduce that complexity. Perhaps I can take the opportunity provided by the hon. Gentleman’s question to advertise the “Find your way back to work” leaflet, a copy of which has been sent to all MPs. It has been approved by the Plain English Campaign, and I hope that it will provide a useful starting point to anyone in that situation.
In July, we published a Green Paper on the future direction of our welfare to work policies. The consultation closed a fortnight ago and we are currently considering our response, and the need, if any, for legislation. In a nutshell, we intend to enshrine in legislation our commitment to eradicate child poverty—the biggest obstacle to individual achievement for this generation and the next—by 2020. To pick up on the point raised by the hon. Member for Ceredigion (Mark Williams), we intend to simplify the benefits system to ensure that it offers the right support, and to develop a personalised programme of help for everyone on benefits who can work, and greater support for those who cannot. We want to increase targeted support and activity for the groups most at risk from exclusion from the labour market, and to provide disabled people with greater control over their budgets for the services that they use. We want to devolve power and responsibility to individuals, communities and suppliers, to tailor services to local priorities, local economies and local needs, and to boost support and advice to help people to stay well in work.
The Minister has just given us a list of the steps that the Government are planning to take. Will she also tell us whether the Treasury has been liaising with the Secretary of State for Work and Pensions to discuss any contingency plans to alter, if necessary, the budget for the flexible new deal programmes, in the event that unemployment—and the bill for unemployment benefits—should start to rise significantly?
Those conversations are constantly taking place. A large amount of planning is currently being rolled out to ensure that, as demand for our services rises, which, of course, it will in an economic downturn, we have the appropriate response available to ensure that everybody gets the tailored help that they need. We will make sure that that happens.
I shall turn next to the flexible new deal. Critical to our next phase of support is the concept that the longer someone stays on benefit, the more support they need. Since 1997, long-term claimant unemployment has fallen by more than three quarters, and nine out of 10 recipients of jobseeker’s allowance leave the benefit within a year. Only 100,000 people are claiming JSA for a year or more. By definition, however, those who remain have the largest hurdles to surmount, so of course they should be getting the greatest support. From 2009, we will be introducing a reformed JSA and a so-called flexible new deal, targeting our resources in clear stages at those who need it the most.
First, there will be a screening for basic skills when someone has their first interview for benefit with Jobcentre Plus. Where there is an obvious gap, they will be referred for help to the local skills services. We will record that and pursue their actions as the claim lengthens. We are also taking the power to make skills training mandatory at the appropriate time. After three months and six months, claimants will be expected to intensify their job search activity, and to comply with a challenging back-to-work action plan, including a skills health check and appropriate training. If they are still on JSA after 12 months, jobseekers will be referred to a private, public or voluntary sector provider, who will be paid by results, and who will offer at least four weeks of full-time activity. For those who are still on JSA after two years, we will expect even more, and we have been consulting on full-time work programmes for the long-term unemployed.
I very much support the flexible approach to the new deal. Given the current economic climate, however, and today’s news that the Engineering Employers Federation in Birmingham is receiving 40 calls a day from employers seeking advice on making workers redundant or reducing their hours, would it not be a good idea to accept the advice of the Social Security Advisory Committee that we should not implement the regulations that will make it compulsory for more lone parents to sign on for work, at least until the recommendations on comprehensive, wrap-around child care have been implemented?
I understand the difficulties that my hon. Friend’s constituents are facing; she makes a valid point. However, I do not agree with her conclusion. The lone parents regulations were approved by the House last week, and they are currently being considered in another place. We would be making a terrible mistake—a mistake that was made by the Conservative Government in the previous downturn—if we did not keep as many people as possible as close as possible to the jobs market at a time when there is a net effect of people leaving work, so that, when things turn around, they are ready to take the opportunities that are available to them. The longer that people are away from the jobs market, the harder it is for them to return to sustainable employment, if that is appropriate to their needs.
We have changed the regulations on lone parents and child care. Once they have been fully implemented, if a lone parent with a child of seven years of age or older cannot find appropriate child care that would allow them to take up a job offer, that will be considered all right and they will not face sanctions as a result. There is a kind of feedback loop between the Jobcentre Plus and the local authority, in the form of a child care partnership manager, to ensure that the legal obligation that local authorities now have to provide appropriate child care for everyone seeking work is adhered to in practice, and that there is an understanding of where more child care places could be made available. We believe that we have met the concerns of the Social Security Advisory Committee in that regard, which is why we are pressing on with those measures.
I thank my hon. Friend for that response, but will she assure me that Jobcentre Plus will have the capacity to deal with these increased work loads and that it will be flexible in how it operates? I encountered a case recently of a man who was working 14 hours a week and who hoped that his employer would increase the number of hours that he worked. However, it was demanded that he sign on during the very hours that he was at work, which caused all sorts of difficulties with his employer. We must ensure that there is flexibility in such situations.
Our staff have been trained to deal with the new regulations, which are being rolled out in a phased way precisely so that there will not be a capacity constraint on our side. Obviously, I do not know the specific details of my hon. Friend’s constituent’s case, but if she would like to write to me, I will certainly look into it for her.
In addition to introducing the flexible JSA, we are also building on the success of the pathways to work pilots for those on incapacity benefits with the new employment and support allowance that was introduced last week. The ESA is just for new customers at the moment, but over the next few years, everyone who is currently on incapacity benefits will be moved on to the ESA. Each will receive a work capability assessment, focused on what they can do rather than what they cannot, as was the case in the past. Some people will presumably no longer qualify for incapacity benefits, and they will move on to JSA, getting all the support that that entails.
The rest will qualify for the ESA, and will be placed either in what we call the work-related activity group or in the support group. In the work-related activity group, individuals will receive personalised support, which crucially includes the highly successful condition management programmes delivered by condition management practitioners, to move them closer to the job market. The support given will build on learning from the positive experience of the pathways pilots, which I have seen at first hand in my own constituency. In one example, a constituent of mine told me that, as a result of the pilots, he had been given his life back. We want far more people to be given their lives back. The pilots have been shown to increase the chances of a new customer being in work 18 months after the claim was made from 28 per cent. to 35 per cent.
As we have just discussed, the House has recently approved regulations to give lone parents with children aged seven and over full support to prepare for and move into work in return for signing up to a jobseeker’s agreement. As I said, nobody will be forced to take up work if no child care is available, but I see no reason why, as a point of principle, lone parents should not be available for work while their children are at school. A quick glance at the child poverty statistics should put the issue beyond doubt. More than a third of children in lone parent households live in poverty; 58 per cent. of children living in workless lone parent households live in poverty. That figure decreases from 58 per cent. to 19 per cent. if the lone parent works part time, and to 7 per cent. if the lone parent works full time. That is why we are doing what we are doing.
In recognition of the particular logistical challenges faced by lone parents when they consider entering the labour market, however, we have adapted the existing JSA provisions to ensure that they support people effectively. Lone parents can restrict their availability to 16 hours a week, and they have more time to attend interviews and take up a job offer. Furthermore, they can cite without sanction unavailability of child care as a reason not to take up employment.
Child care has doubled since 1997—the number of places is approaching 1.3 million—and local authorities have the legal responsibility to secure, when practicable, sufficient child care to meet the requirements of parents in their areas. Furthermore, 14,230 extended schools in England offer affordable school-based child care on weekdays between 8 am and 6 pm all year round, and child care partnership managers at Jobcentre Plus provide a feedback loop to local authorities on whether sufficient places are available, so the issue is far less of a problem under this Government. We will take legislative powers to apply similar provisions, with appropriate support, to non-working parents who are partners of people who are working.
I hear the Minister’s figures on child care, but is she aware that child care places fell by 2,000 in England last year? There is the most tremendous churn, which is worrying to parents, particularly those with young children. Parents need stability.
It is extremely important for people to have certainty, but the most important thing is that there should be enough places for the need to be met in each individual area. I have not mapped the extent to which the supply of child care places is related to the demand in individual areas, but we will continue to make sure that the policy is rolled out and effective. Our child poverty targets require us to do so, and in many circumstances it is the best thing for the entire family unit.
I urge the Minister to carry out urgently that mapping of supply and demand. She will be aware that although there are more child care places today than five years ago, there is a large number of vacancies. That illustrates a problem—an awful lot of child care is provided at the wrong time of day, on the wrong day of the week and at the wrong price and quality for parents to be able to access what they need when they need it. The state often provides something that is not suitable for what a great many parents who need access to the correct type of child care really require.
The hon. Gentleman has referred to a number of broad so-called facts. We have decided to put the onus and legal requirement on to local authorities to ensure that sufficient child care is available in their areas. The process will be iterative. If he can see particular lack of supply in a particular area, he should raise that with the local authority. We are ensuring, with Jobcentre Plus, that there is a continuous feedback loop so that if a lone parent or any parent says, “I cannot take that job because no child care is available”, they will be challenged by the Jobcentre Plus adviser. If what the parent says is accepted, the local authority will be challenged by national Government. We are doing what the hon. Gentleman suggests on an ongoing basis. There is no doubt that far more child care places are available now than 10 years ago, because we have grasped the issue and are doing everything we can to ensure real choices for parents as they decide how they wish to organise their lives.
Finally, I want to say a few words on what the current economic situation means for the direction of our welfare reform. To those who say that we should surrender to the tides of the current economic situation and relax our direction of travel I say that we will not give up on the people of this country, who rightly expect us to support them through these difficult times. Yes, unemployment is rising—there is no denying that. The number of people claiming jobseeker’s allowance has been rising since the beginning of 2008, with the last figures going up by just over 30,000.
That increase is the net result of 260,000 people entering claimant unemployment and nearly 230,000 people leaving jobseeker’s allowance. The situation is dynamic. Even in these difficult times, people are leaving unemployment to restart work. Every working day, Jobcentre Plus helps 5,400 people into work. Furthermore, people are leaving unemployment faster than they used to—a direct result of the more active, supportive regime developed for jobseekers. Although the numbers starting to claim JSA have risen and may rise further, our aim is to help as many people as possible find their next job as quickly as possible.
In an economic slowdown we need to do more, not less, to keep people as close as possible to the labour market. According to the latest figures, there are 600,000 vacancies in the economy right now. We want to prepare everyone to get those jobs and we want more people to get more jobs as more jobs become available. That means having active labour market policies keeping more people as near as possible to work-related activities. The alternative is to let people sink.
Unlike the last Conservative Government, we are not shifting people away from the labour market to get them off the books and make unemployment look lower than it is—quite the opposite. We are moving people closer to the jobs market and more people on to JSA, because more people will then have more opportunities to leave JSA and go into work. Other things being equal, we estimate that our reforms to lone parent benefits will increase the JSA count by about 80,000 by 2010-11. Our reforms to the ESA will also add several thousand each year in the next two to three years, before any effects of the economic downturn are taken into account.
We need to learn the lessons from previous slowdowns and from overseas. They are: first, to increase support and not relax conditionality; secondly, not to move people on to inactive benefits; and thirdly to maintain efforts to reduce inactivity. We are not giving up. We are not surrendering to the doom and gloom merchants who say that the force of economic change means that we should leave people to perish in the storm. We are holding true to our aspiration of an 80 per cent. employment rate and standing by our commitment to ensure that by 2025 disabled people are respected and included as equal members of society.
The Minister mentioned people with disabilities. Is she satisfied that the arrangements for them are robust enough? I am thinking particularly of conditions such as autistic spectrum disorders. Is she satisfied that Jobcentre Plus staff have the capacity to help such people navigate their way through the system? She has talked a lot about identifying skills deficits early on, but I have mentioned a special group of people who need added assistance to work their way through the system. Can she reassure us that that support is there and will proactively help such people get nearer the job market? She used the expression “doom and gloom merchants”, and I do not want to be one of them; not many Opposition Members do, but we want to ensure that those people have maximum access and support.
The hon. Gentleman raises an important point, and I think that I can reassure him. We are training our staff extensively and in conjunction with excellent organisations such as the National Autistic Society to ensure that the expertise is at the front line.
We are working with such organisations nationally and we are rolling out the training in conjunction with them. If Autism Cymru gets in touch with us, we will ensure that any of its extra insights are incorporated nationally and locally.
I was explaining that we are standing by our commitment to ensure that by 2025 disabled people are respected and included as equal members of society. Furthermore, we are still committed to eradicating child poverty by 2020.
We believe that while we must support the most vulnerable, there is no automatic right to a life on benefits, that paid work is the best route out of poverty, and that each of us has a role to play in contributing to the society that we live in. Equally, however, we believe that no one should be left behind, and we will provide personalised support to everyone who needs it to ensure they have the opportunity to get into and remain in work. When jobs are harder to find, it is even more important that we help people to prepare for work with practical advice and support. Our welfare reform proposals are about changing the system to offer that support to people looking for work.
To conclude in a sentence, our direction of travel is right in the bad times as well as the good, and I look forward with interest to the contributions of all hon. Members who have chosen, despite some alternative attractions, to be with us today.
This debate on work and welfare is most welcome in the light of the current very difficult economic circumstances facing our country. The economy has slowed substantially in the past quarter and, according to the conclusions of the recent Ernst & Young ITEM Club report, “Out of the financial frying pan, into the fires of recession”, it is likely to contract further in the coming months. Many people have already lost their jobs, and there is great anxiety among many others in all areas of the country that a similar fate might await them. Although the Minister failed to use the “recession” word, it has been used by the Minister of State, the right hon. Member for Harrow, East (Mr. McNulty). We are facing very difficult economic times, and these issues will increase in importance over the coming months. It is therefore right that the House debates them today and it will no doubt do so on a number of occasions in future.
It would be interesting if the Minister or the Under-Secretary told us who are the doom and gloom merchants saying that we should leave people to sink or swim by themselves. I do not know of anybody in this House who is suggesting such a thing.
It is a shame that the hon. Member for Cardiff, Central (Jenny Willott) has not been joined by the hon. Member for Edinburgh, West (John Barrett), the Liberal Democrat spokesman on disability issues. He recently said that having been in the job for only nine months he was on a “strict learning curve”, and was
“the first to admit that I’ve got a lot to learn.”
He said that he hoped that we were not facing an immediate election and that the Liberal Democrats would have time to develop some policies between now and then. I am sure that everyone in the House wishes them good luck in that endeavour.
The unemployment figures released last month by the Office for National Statistics made grim reading. It is disappointing that the Minister failed fully to face up to the scale of the problems that we are presented with. In the last quarter to August, there was a rise of 164,000 in the number of jobless on the internationally comparative basis that the Labour party used when it was in opposition. The unemployment level was 1.7 million and, as the Minister said, the number of people claiming jobseeker’s allowance increased by 32,000 in September—the eighth consecutive monthly rise and the highest figure for almost two years. The dole queues are lengthening by more than 1,000 people a day. The Minister’s remarks suggest that there is a great deal of complacency in the Government’s approach: saying, “So far, so good”, is not a conclusion that I would agree with.
Perhaps the hon. Gentleman could explain why his party is so opposed to additional borrowing when it is clear that it will provide additional jobs. It is absurd to say that the Government are being complacent in undertaking that borrowing, and it explains why we are hearing words such as “doom and gloom”, which is exactly the image that the Conservatives project when they suggest that we should not borrow because they do not want job opportunities to be created for people in this country.
I am grateful to the hon. Lady for raising that. My right hon. Friend the Leader of the Opposition and my hon. Friend the shadow Chancellor have acknowledged that in a recession the automatic stabilisers in the economy mean that borrowing will rise. However, they oppose a programme of deliberately spending money on public works programmes and putting up taxes. As my right hon. Friend said earlier today, the Prime Minister himself said at a Labour conference that one does not build the new Jerusalem on a huge debt burden. Spending a fortune and racking up debt that our future generations will have to repay is not a very sound economic policy, nor is it one that will be successful.
Does the hon. Gentleman agree that job creation is not simply about public spending but about easing the burden on small businesses, which are the real job creators? The policies being followed by the Government are making it much more difficult for small businesses to do that. If we are going to find ways of re-channelling those who are unemployed, there must be a good, strong small business sector.
The hon. Gentleman makes an excellent point. Businesses, particularly small businesses, are the engines of job growth. The Government should focus on allowing good businesses to succeed, perhaps by adopting some of our sensible insolvency proposals, and supporting small businesses instead of increasing borrowing and taxing them, which will drive jobs out of the economy rather than into it.
In response to the hon. Member for Llanelli (Nia Griffith), I should point out that it is not the Conservatives who are the doom and gloom merchants. As my right hon. Friend the Leader of the Opposition said at Prime Minister’s questions, the European Commission has pointed out that unemployment is set to soar to 7.1 per cent. as Britain suffers the longest and deepest recession of the EU’s big economies. The Commission’s outlook for Britain is particularly bleak, with a Budget deficit and a forecast of spiralling debt as the national economy contracts at its fastest rate since 1992. Reading forecasts by the European Commission is not being a doom and gloom merchant—it is recognising the world as it is rather than the parallel universe that Ministers sometimes seem to inhabit.
I do not want to score any cheap points, but I wonder what the hon. Gentleman’s solution is. Is it to go back to where we were under the previous Administration, when unemployment was seen as a good price to pay while we waited for the markets to right themselves? We are offering a solution to the problems that we face and having real concern about people’s jobs and opportunities, whereas the Conservatives are telling us to take no action and wait for the markets to re-regulate themselves. About 3 million to 4 million people would be unemployed by the time that the markets righted themselves. Does he think that that is the right price to pay?
That is a helpful intervention, but as I have been speaking for only seven minutes I have not got to our policies on welfare reform. When the hon. Lady has listened to that, she will be welcome to intervene on me again if she has any questions. No one in this House, certainly on our side, is proposing that the Government sit and do nothing, but we think that they should take the right action rather than the wrong action.
When the hon. Gentleman was challenged by my hon. Friend the Minister, he said that he had not seen some of the Government’s proposals and was unable to comment on them. On the right or the wrong action, the hon. Member for Havant (Mr. Willetts) said at his party conference—I can provide the website connection for the hon. Gentleman if he wants—that the Conservatives would cut the Train to Gain budget by £1 billion and use it for inheritance tax. We have readjusted Train to Gain to help small businesses. Does the hon. Gentleman support Train to Gain or changes to inheritance tax, or does he agree with the CBI, which was aghast at those proposals?
As the hon. Gentleman should know, my hon. Friend the Member for Havant (Mr. Willetts) did not suggest that we use those savings to pay for changes to inheritance tax. I am surprised that the Minister did not mention the proposals that the Government have announced on the £100 million and the £350 million. When challenged on those, the Under-Secretary had to acknowledge that there was no new money—it was already in the Train to Gain budget and was being re-focused and re-prioritised.
The hon. Gentleman can send it.
Ministers have repeatedly fallen back on optimistic assertions about their welfare and employment record, and we heard the Under-Secretary, the hon. Member for Burnley (Kitty Ussher) do that today, when she claimed that Britain had record employment. The Secretary of State said, as recently as 7 October, that the employment rate of 74.3 per cent. under this Government was
“the highest employment level that had ever been achieved in this country”.—[Official Report, 7 October 2008; Vol. 480, c. 205.]
As my hon. Friend the Member for Epsom and Ewell (Chris Grayling) said when he challenged the Secretary of State during the last Work and Pensions questions, Ministers need to take a long, hard look at the figures that they present to the House. According to the Library, the rate of employment is below what it was in the late ’80s, and lower than it was in the 1970s. According to the Office for National Statistics, only 300,000 more British-born people are in work today than in 1997—not very impressive after those years of growth.
Why does the Under-Secretary think that employment among British people has fallen by more than 350,000 in the past two years while employment among migrant workers has risen by nearly 1 million? When that point was made to the Minister of State, the right hon. Member for Harrow, East, he had no answer. The real position is very different from that set out by the Under-Secretary today. If we count unemployment using the accepted international measure—the International Labour Organisation measure—Labour has cut unemployment by just under 300,000 during their 11 years in office. Unemployment fell faster between 1992 and 1997 than it did during the 10 years since 1997.
In reality, the Government have built their employment record on the back of migrant labour. The number of British-born people in work has fallen by 365,000 in the last three years, and during the same period the number of migrant workers finding employment in Britain has risen by 865,000. As my hon. Friend the Member for Hertsmere (Mr. Clappison) said:
“Time and time again Labour Ministers boast about their employment record and the jobs they have created in the last 10 years. The reality is that employment of British people has been falling for years. Gordon Brown’s failure to address underlying problems with employment and skills will make recent rises in unemployment more difficult to tackle.”
I am simply citing the figures.
The Minister with responsibility for employment and welfare reform, the right hon. Member for Harrow, East, could not answer the question at oral questions. The question was asked by my hon. Friend the Member for Epsom and Ewell, and the Minister cast doubt on the veracity of the figures. He said at oral questions:
“I am looking to see precisely how the 365 and 865 figures were reached…It appears that the definition of working activity is being played around with, as is the definition of a UK national and a foreign national. That is how those figures are reached. When I am clear about the provenance of the figures, however, I will get back to the hon. Gentleman.” —[Official Report, 20 October 2008; Vol. 481, c. 4.]
My hon. Friend is still waiting for an answer, and perhaps when the Under-Secretary, the hon. Member for Chatham and Aylesford (Jonathan Shaw), makes his winding-up speech he will clarify whether the figures are accurate, or perhaps tell us what they actually are. They paint a revealing picture of Labour failure. Ministers constantly repeat how they have created 3 million new jobs, but forget to mention that up to 80 per cent. of those have gone to migrant workers.
I am a little concerned at the thrust of the hon. Gentleman’s argument, which appears to be in favour of restrictive practices to prevent the arrival of foreign workers in our country, who are required for a competitive economy. If that is what he is drifting towards, has he run his thoughts past any industrialist in the UK to test their reaction to such policies?
I have two points in response to that. First, I mentioned the figure because at a time when we have seen growth in the number of migrant workers getting jobs, we still have, as the Under-Secretary, the hon. Member for Burnley, acknowledged, nearly 5 million British-born people on out-of-work benefits, and we want to ensure that they can share in economic growth. Secondly, the hon. Gentleman is a little behind the curve. If he had listened to what the Minister for Borders and Immigration said, he would have noted that it is the Government’s policy to restrict the number of people coming into this country, but it is simply the case that their policies to date have not worked.
That may be his view, and he is perfectly entitled to it, but it is not the view of the Government. His right hon. and hon. Friends have a different view from him, and as far as direction of travel is concerned, they want to achieve what we want to achieve.
The Under-Secretary, the hon. Member for Burnley, spent a fair amount of time on child poverty. Child poverty is up for the second year in a row, rising in the last two years by 200,000, and it is the same now as it was in 2002. The UK has a higher proportion of children living in workless households than any other EU country. I noticed that the Under-Secretary referred to the Government’s 2020 target, but she did not mention their 2010 target to halve child poverty. She and I had an exchange on this matter at oral questions a short while ago, and I challenged her to say whether the Government were going to hit the target. She failed to answer on that occasion, and I would be grateful if the hon. Member for Chatham and Aylesford told us, when he makes his winding-up speech, whether the Government are likely to hit their 2010 child poverty target.
The hon. Gentleman will notice from my remarks that we still have a very poor record compared with the rest of Europe, after 10 years of economic growth. It is interesting to note how many Labour Members spend all their time looking at the past, rather than focusing, as we are, on the future. They have been in government for 11 years—it is interesting to note, on a day like today, when we acknowledge the tremendous achievement of Senator Obama, that that is 50 per cent. longer than an American President is allowed to serve. After 11 years, they have not made a great deal of progress, and things are going into reverse.
The Government’s record on welfare reform and getting people into work is not as rosy as the Minister would like us to believe. It is worth reflecting on the current state of play and the challenges that we face. After 11 years in power, Labour’s record on welfare reform is disappointing, to say the least. It was Tony Blair who said, as far back as 1995, that welfare reform would be
“one of the fundamental objectives”
of a future Labour Government. He boldly professed that he was
“the only one with the will to do it”,
and that it would take a Labour Prime Minister radically to reshape the welfare state. When we look at the facts, we find it clear that that rhetoric has not been translated into effective policy. The figures for the number of people claiming out-of-work benefits make for bleak reading. There are still 2.6 million people claiming incapacity benefit, a figure that has stayed broadly the same during the period in which the Government have been in power. The number of people claiming for more than five years is higher than it was 10 years ago, and it continues to rise. About half a million people—almost one in five of those incapacity claimants—are under 35.
As the right hon. Member for Birkenhead (Mr. Field) has said on many occasions:
“the growth in the number of new jobs and the impact of Labour’s welfare reforms should have reduced the total of worklessness by record levels. The opposite is sadly true.”
The Government’s failure to deliver the promised change is all the more a missed opportunity now that the economic situation has darkened. Delivering real welfare reform would have been somewhat easier in a steadily growing economy rather than in one heading into a sharp recession. At a time when such matters are so important, it is important that Ministers are focused on the job in hand. Unfortunately, three of the six Ministers in the Department are effectively only part time. The Minister of State, the right hon. Member for Harrow, East, who is responsible for employment and welfare reform, doubles up as Minister of London. The other Minister of State, the right hon. Member for Doncaster, Central (Ms Winterton), who is responsible for pensions, doubles up as Minister for Yorkshire and the Humber, and the Under-Secretary, the hon. Member for Chatham and Aylesford who, as well as being responsible for disabled people, doubles up as the Minister for the South East. Given that they all have two jobs, they are either 100 per cent. focused on their jobs in this Department, and focused on the challenges of work and welfare reform, while neglecting their regional duties, or they are spending time on regional duties when they should be focused on ensuring that those thrown out of work as the recession deepens are the centre of their priorities. It is disappointing to have part-time Ministers at a time of full-time challenge.
I want to challenge one or two points that the Under-Secretary made in her opening remarks. She mentioned the performance of the Government’s new deal. Again, it is worth quoting the former Minister for welfare reform, the right hon. Member for Birkenhead, who described the performance of the Government’s new deal for young people as “woeful” and, more recently, as a “calamity”. It is also worth remembering that the new deal is a revolving door back to benefits. Half all young jobseekers who leave the new deal for young people are back on benefits in a year, and 75 per cent. of new jobseeker’s allowance claims are made by people who have claimed previously. Half those repeat claimants spend more time on benefit than in work, and 500,000 new claimants have spent at least three quarters of the past two years claiming benefits. The system has not been successful in getting people into long-term, sustainable employment.
My hon. Friend the Member for Epsom and Ewell raised the manipulation of statistics in a recent debate in the House and pointed out that young people who claim jobseeker’s allowance for six months, and over-25s who claim for more than 18 months, are automatically referred to the new deal. If they fail to find a job initially, they are referred to a period of mandatory activity, moved off jobseeker’s allowance on to a training allowance and removed from the Government’s official claimant count. At any one time, around 40,000 people are hidden in that way. If they were included in current figures, the genuine claimant count would exceed 980,000.
Approximately one in three people who leave the new deal return straight to benefits. At that point, they rejoin the claimant count, their previous claim is wiped clean and they appear to have only just become unemployed. Under the Government’s current system, it is possible to be unemployed for more than two years, but for it to appear as though a claimant has been on benefit for only two days. That obscures the true picture.
I am glad that the hon. Gentleman has raised the point because it gives me the opportunity to ask for some clarification. First, did not the Conservative Government introduce the system in 1995? We are simply operating under the rules that that Government introduced. Secondly, there is an enormous difference between a system that keeps people near the job market and makes no attempt to disguise what is happening, and the Conservative party’s policy of moving people away from the labour market and on to incapacity benefit.
I shall deal with our proposals on welfare reform shortly. However, the new deal is the Government’s programme. They have been in power for 11 years, and Ministers must learn to take responsibility for the things that they have done. Trying to pretend, after 11 years in power, that every ill in the world can be laid at the door of the previous Conservative Government is not credible.
My hon. Friend is making a superb speech, highlighting the flaws in the Government’s argument. Will he reinforce the point that we should look forward to change and improved welfare and job opportunities? We do not want to go back to the 1990s or earlier because that is history. We are talking about now and ensuring that there are better opportunities for all people, so that they can be in work, with their welfare looked after when they are not, but with the opportunity to get back into jobs.
My hon. Friend makes a good point. It might help if the Under-Secretary confirms in his winding-up speech whether the Government hold to the claim that they have abolished long-term unemployment. They made such a claim in the past, but failed to confirm it more recently.
Given that we have a huge problem to fix, now combined with the more challenging economic climate, we are pleased that the Government have followed our lead and adopted many of the proposals that we published in January in their Green Paper, which they published in the summer. I agree with the Under-Secretary that, with the downturn in the economy, there is an even stronger case for providing the right support to get people into work or back into work. Most people on benefits can and want to work, but, in many cases, they need the right support to do that.
Last week, I visited the very good NeuroMuscular Centre at Winsford, which does an excellent job in providing physiotherapy and rehabilitation for those with neuro-muscular diseases, such as muscular dystrophy. One of its powerful achievements is that 100 per cent. of people who use its services are able to stay out of hospital and more than 80 per cent. are able to stay in paid employment. That is a good example of an organisation that provides the right practical support to help people stay in work, even when they have long-term health conditions or other disabilities.
There is consensus between the parties about the direction of welfare reform, but there needs to be a greater sense of urgency and ambition in implementing the Freud proposals in full. Although we are pleased that the Government have accepted that using the expertise in the private and voluntary sector is effective in getting people into work, they have not matched our commitment to fund that properly.
David Freud, who was, stopped being and is again an adviser to the Government on welfare policy, said that the major ingredient necessary for welfare reform to work was to change the DEL-AME—departmental expenditure limits-annually managed expenditure—rules. That may sound obscure, but in English, it means using the savings one makes from getting people off benefit and into work to help fund programmes to provide support. One can therefore have the ambition of helping everybody—rather than only a few—who is on an out-of-work benefit. David Freud, the Government’s adviser, said that that was the single most important item necessary to make the proposals work.
Perhaps the Under-Secretary will explain in his winding-up speech why the best that the Government have devised so far is a limited programme of a few pilot schemes. After the previous Budget, hidden away on page 60 of the Red Book—the hon. Member for Burnley will be familiar with that, given that she has been a Treasury Minister—is a commitment only to “explore” implementing David Freud’s proposals in full. The Under-Secretary acknowledged that we are facing a difficult economic position, when we need to extend help and support. It is a time for not exploring but implementing ideas and delivering help and support to people who need it.
I support my hon. Friend’s comments. Earlier, I asked the Under-Secretary about Government plans, in the event of rapidly rising unemployment in the future and given the economic downturn, to adjust the budget for the flexible new deal because more people would need the sort of support that the programme involves. That was a golden opportunity for her—I offered her an easy lob—to say that the Government’s budget could be flexible if they adopted the Conservative party’s proposal, which they have already agreed to examine, simply because the budget would automatically rise pro rata as the unemployment benefits bill rose in the downturn.
The Under-Secretary knows that, during the Budget, the Secretary of State made it clear that he agrees with David Freud and wants to implement the report. Unfortunately, the look on the face of the Chancellor of the Exchequer demonstrated that, yet again, the Treasury is blocking the proposal.
Let me finish my point. The Red Book makes it clear that the Government will only explore the ideas. Given that the economy is contracting, that next year we will experience negative growth in every quarter, that 164,000 people have lost their jobs in the last quarter and that the position will get worse, it is a time for stepping up the help and support that we need to provide. That will not be done unless the funding is in place. When will the Government accept David Freud’s recommendations to allow benefit savings to be used in full to help fund the necessary support?
Let me make it clear that “explore” means pilots. Is the hon. Gentleman interpreting Government policy through a look on a Treasury colleague’s face? That is rather odd, or perhaps he has hidden talents. I emphasise that “explore” means pilots. That was the recommendation—how much clearer does he want us to make that?
The Secretary of State made it clear in the Budget debate that he wanted to move much faster. It is clear from the Red Book that he has been blocked from doing so by the Treasury. If the Minister is comfortable with the scale of the help and support that the Government will be able to provide in the recession, that shows a worrying complacency. Both he and his hon. Friends will regret that lack of ambition and the fact that the Government are not moving fast enough to make the proposal work.
Another crucial issue for getting people into work will be adopting the right commissioning strategy for welfare programmes. The current approach appears to be tilting the balance in favour of larger volume providers, at the expense of those smaller, specialist providers, who help some of those furthest from the labour market. That is a cause for concern. The Government need to think again and ensure that the most vulnerable are not parked to one side or ignored by providers. We need to refocus our efforts on what is best for the thousands of people who need our help to get into work and give them the support that they need, rather than risk the silo approach of having a small number of excessively large providers.
The Social Market Foundation recently published a comprehensive report into the issue, which said that “it is unlikely that” the flexible new deal
“will deliver the kind of step-change in performance that the government hopes for. The new programme is therefore in danger of failing to live up to its theoretical potential.”
The Social Market Foundation worked closely with the Department on its report. It is therefore disappointing that, instead of taking the report’s warnings seriously, the Department’s representative tried to rubbish it at a recent conference. The Government should pay attention to such concerns. Indeed, those bidding for such contracts or thinking of doing so have expressed many concerns to the Government, which they should take seriously.
Before I finish, I want to ask the Minister one or two questions that he can perhaps respond to when he winds up. My hon. Friend the Member for Epsom and Ewell recently met the Terence Higgins Trust, which raised concerns about the review of the special rules for those with HIV. The special rule benefits were introduced at a time when contracting HIV was expected to lead to rapid death. Owing to very welcome medical advances, however, some people have been on such benefits for a decade or more.
As a result of the special rules review, one in five people with HIV on such benefits have had their award removed and one in three have had it reduced and are expected to return to the workplace. That is absolutely right, but the Terence Higgins Trust is concerned that the support for such people to return to work is not adequate, as they have been moved on to jobseeker’s allowance only and are not receiving the proper help that they require. It would therefore be helpful if the Minister explained what support those people, who have been out of the workplace for perhaps a decade or more and who are coping with a highly stigmatised condition that requires ongoing medical treatment, will receive to return to work.
I want briefly to touch on the employment and support allowance, which the Minister mentioned in her opening speech and which I debated with the Under-Secretary, the hon. Member for Chatham and Aylesford in a Committee considering the regulations. We agree with the broad thrust of the employment and support allowance. I thank him for writing to the Chairman of that Committee, my hon. Friend the Member for Southend, West (Mr. Amess), to address some of the issues raised that he did not have time to deal with in Committee. As he said, the previous system focused too much on what people could not do, as opposed to what they can do. We welcome that change.
Unfortunately, however, we are concerned that ESA does not live up to the reassurances that we were given. The Government have broken their promises on the ESA rates, which are lower than they promised. We raised concerns that the system favours people with fewer national insurance contributions and penalises those who have worked—that is, those on the contribution-based ESA, rather than the income-based ESA. The Minister acknowledged that problem in his letter to the Committee, but said that it applied only to relatively small numbers of people. It might therefore be helpful if he said how many people, of those going on to ESA, he expects to be on the contribution-based ESA and on the income-based ESA.
I tabled a written question, which was due for answer on 17 October, to ask
“whether the Disability and Work Division’s Employment and Support Allowance design team has undertaken an impact assessment”
into the introduction of that benefit. Despite receiving a holding answer, I am still awaiting the substantive answer. Perhaps the Minister will take this opportunity to prod his officials into action, unless of course the answer is awaiting his approval. I also tabled a further question for the Secretary of State, to which an answer was due on 10 September, to ask
“from which part of his Department’s budget”
the very welcome increase in the access to work budget would be drawn. A holding answer has been received, but a substantive answer, nearly two months later, has not. I should therefore be grateful if the Minister chased that up.
In conclusion, as we enter stormy economic waters, work and welfare policy will become ever more pressing. The Government’s record on welfare reform has been characterised more by disappointment than by real reform. Many thousands of people will look to the Government for the right support in getting into or returning to work. Should the Government look to accelerate the implementation of the Freud proposals, with that change to the DEL-AME rules, so that the benefit savings can be used to help people get into work sooner rather than later, we will support them. It would have been a lot easier to reform the welfare system in the good years, but that opportunity was squandered. It will be more difficult to do so now that we face difficult economic times. However, I agree with the Minister that it is hugely important that we do so.
This is the second day this week that I have had the pleasure of following the hon. Member for Forest of Dean (Mr. Harper). On this occasion, however, I suspect that there will be less agreement than there was in Westminster Hall yesterday.
I welcome this afternoon’s debate, which gives us an opportunity to discuss various issues, not least the Green Paper, which has been referred to already, as well as support for lone parents, policies for tackling child poverty, and support for disabled people. My focus will be on policies to support disabled people. I therefore first welcome to his post the new Minister responsible for disabled people, who very kindly came to the all-party group on disability soon after his appointment. I am sure that we will continue to have good relations with him.
Let me also express not only my profound thanks, but those of the House and the wider community, to my hon. Friend’s predecessor, my hon. Friend the Member for Stirling (Mrs. McGuire). I notice that the hon. Member for Forest of Dean referred to the latest issue of Disability Now at the start of his speech in order to make a comment—and not a very helpful one—about the new Liberal Democrat disability spokesperson. The same edition devotes a whole page to quotations from members of the disability movement congratulating and thanking my hon. Friend the Member for Stirling on her work. The former chair of the Disability Rights Commission said of my hon. Friend:
“She was a smashing minister who did a lot for disabled people…She understood the disability movement and the importance of human rights and independent living.”
I, too, wish to place on record my thanks for her sterling work during her period in office.
I have no doubt that improving opportunities for employment for disabled people who are able to work is the best route out of poverty. That is why policies to secure full employment, a decent national minimum wage, the new deal, pathways to work and all other such policies are central to providing opportunities for disabled people. Why do one in three disabled adults of working age live in poverty? It is because half of them are unemployed, while those not in employment receive benefits that are simply too low. If we are honest, we will accept that they are in receipt of benefit income that is below the poverty level.
Progress has been made on the employment front, so I am genuinely surprised to hear the assertion that nothing has happened over the past 11 years. That is nonsense. Some 10 per cent. more disabled people of working age are now in employment. That has happened for the simple reason that we have had record employment growth and specific programmes to support disabled people into work and legislation to outlaw discrimination in the labour market. My view is that the successful economy and specific programmes have been by far the most effective. There have been changing attitudes among employers, too, and that should be welcomed.
The fact that 10 per cent. more disabled people of working age are in employment is progress, but clearly much more needs to be done. For example, the employment rate among people with mental health conditions is not 50 per cent., but only 20 per cent. For people with learning disabilities, it is 25 per cent. An important challenge that we face is to increase employment among those groups of disabled people. To address their needs, specialist and individual support is clearly required. We have all said that many times. That is why I warmly welcome the direction taken by the Green Paper. No one should be written off, and we should all support the thrust of the Green Paper.
I am, of course, delighted that funding for the access to work scheme has been doubled, finally. It will go up from £69 million per annum to £138 million by 2013. That is not quite as ambitious a change as I had in mind, but it is a significant increase and it is far better than the £15 million available under the previous Government. It is not what people say but what they do that matters in politics. Once that £138 million is spent yearly on the scheme, it will enable another 48,000 disabled people every year to enter and remain in employment by providing payments for the purchase of reasonable adjustments.
Along with many others, inside and outside the House, I have been calling for a substantial increase in that funding for many years. With the House’s indulgence, I should like to repeat the reason why it is a good thing to support disabled people into work. As the Department for Work and Pensions confirms, for every £1 million that is spent on enabling access to work, the Treasury gets £1.7 million. It is a no-brainer. At some stage I would be interested to hear whether we are not aiming for more than £138 million a year because there is no need for more money, or whether somebody has not realised that getting a £1.7 million return on a £1 million investment is one of the better deals at the moment.
We can move in the right direction and do good things; the access to work scheme is a good programme which I have seen in operation. I have had constituents who have benefited from it and it is outstandingly important. It is a win-win situation in every case. I would have thought that the amount of money available could be even higher. At some stage, I would like to know why we have to wait until 2013. My hon. Friend the Under-Secretary will no doubt answer that question when he responds. I support what is happening, but we could do things quicker.
We also need to ensure that employers are aware of the scheme—the Green Paper refers to this problem. Five or 10 years ago, it used to be said that the access to work programme was a closely guarded secret. Virtually no small employers knew about it, and about a third of large employers had heard of it. The implicit fear was that if more people knew about it, too many people might apply. I do not think that that is the case now. I would be pleased to get reassurance on that point.
Let me give an example. RADAR—the Royal Association for Disability and Rehabilitation—estimates than only a quarter of employers know about the programme. It is a very important way of reducing discrimination by employers who might be worried about the additional costs of employing a disabled person. It is a critical programme: please, please can it have as much money and as much publicity as possible? [Interruption.] That statement is only slightly off message. We are talking about millions, not billions. If my hon. Friend the Member for Bishop Auckland (Helen Goodman), the Whip, tempts me, I could be a bit off message later when we get to the economy. In all seriousness, can we do the best that we can with the programme?
I am not entirely happy that the Government argued in the recent debate that blind people could not be allowed access to disability living allowance higher-rate mobility allowance because the money was going to the access to work scheme. I was not impressed by that argument. Many of us were at the Royal National Institute of Blind People lobby, where constituents and others told us that people with sight impairments felt that they could not afford to leave their homes, faced considerable taxi costs and wanted to have independence but felt that they could not afford it. People with serious sight impairments should have access to the higher-rate mobility component of DLA. I hope that my hon. Friend the Minister will give a positive response to that, too. It was quite disappointing that the extra funding for the access to work scheme was invoked as a reason why such a provision might not be affordable. That is not good enough for a Government who have otherwise made enormous progress in relation to disabled people and disability rights.
As I am talking about people who want to live independently, let me move on to some points on chapter 5 of the Green Paper, which is about delivering choice and control to disabled people. It is frequently said that with rights come responsibilities, but it is also true that with responsibilities come rights. If more is being asked of disabled people in making personal efforts to secure work, their right to support should be regarded as of equal strength.
In my view, rights to independent living are a prerequisite for successful welfare reform; they are not just an add-on that might come later. The Government’s independent living strategy defines independent living in the following familiar terms, saying it should mean
“disabled people having the same choice, control and freedom as any other citizen—at home, at work, and as members of the community.”
The Government’s strategy welcomed the principles of the Disabled Persons (Independent Living) Bill, introduced by my noble Friend Lord Ashley, which was passed in the other place. They welcomed and supported its principles, but have so far resisted encouragement to legislate on independent living and specifically to legislate so that disabled people have greater choice and control over their lives, particularly when it comes to individual budgets that could be used to support their social care needs, housing needs and so on.
Independent living should not be regarded as an add-on to the welfare reform programme. If people cannot get to work because of the transport system or the costs of transport, cannot live in decent accommodation, and cannot get the support of personal assistants or whatever else makes their life better—
I shall ask the Minister that question without repeating it. I have had constituents in precisely that situation, too. It is part of the general point that with responsibilities come rights. If someone is prepared to go to an interview to discuss work, to take up more training or to try out a work placement, that is the responsible thing to do, but unless that person has the right to access decent transport, proper support in the community and all the other things that people with disabilities or ill health require to do their day-to-day business that other people do not require, a significant extra burden is placed on them.
We all know that, sadly, despite significant extra funding going in to social care in this country, needs are not being met. More than 70 per cent. of English local authorities restrict access to support to just those who meet the highest eligibility criteria. We all have constituents who should receive support in the form of social care, but who find it difficult to access. Some are denied it by rising charges. That is a long-standing problem, which has been recognised in the Government’s independent living strategy, by the Commission for Social Care Inspection, by the Local Government Association and many others. Some needs that should be met so that disabled people and others can participate equally in society are not being met. In addition, hon. Members will need no explanation, but the present system of social care is also appallingly bureaucratic, wasteful and inefficient. There are also inconsistencies between local authorities, which gives rise to an important issue for employment.
Each local authority can set up its own system of support and its own care package for individual residents. Those packages are not portable from one local authority to another. One can get assessed for a care package in Lambeth, but if one were to move to Southwark to be nearer a place of work or closer to family and friends, one would have to be assessed all over again. If we are talking about people’s responsible behaviour, we also need to talk about their rights. How on earth can it make sense for care packages to be reassessed simply because people have moved from one local authority to another? I hope that the Government will legislate to make care packages portable as quickly as possible. Without that, it will be much more difficult for people to consider moving in order to secure employment. The right to independent living should therefore be a prerequisite to successful welfare reform. As I say, people cannot be expected to find and sustain a job without an adequate support package that gives them the necessary freedom and choice.
Let me move on to the role of the private and voluntary sectors. I welcome the Green Paper’s focus on outcomes—its view that in supporting individuals into sustained employment, the important thing is the outcome rather than the organisations that happen to provide that support. Many voluntary sector organisations—Mencap and many others—provide excellent support for disabled people, not least in their efforts to secure employment. I have no difficulty at all in saying that job centres cannot do everything today, as it is obviously true. I wish they could do more, but they cannot do everything. There is expertise in the voluntary and private sectors and it is right for the Government to harness it in order to give disabled people the support they need to secure employment.
I, too, however, have concerns about the contracts and I would certainly like some reassurance from the Minister that the contracting mechanism will ensure the desired outcome and not just support those closest to the labour market. The hon. Member for Forest of Dean raised that point earlier; I do not like phrases such as cherry picking, but it is one that people use, even in this context. The Government must have firm control over contractual arrangements to ensure that we get the best result from taxpayers’ money. We are increasingly having to support people who are a fair distance away from the labour market; they should not be left behind in the process.
I have a couple of concerns about the Green Paper. The gateway under the work capability assessment is tightening. The Department has mentioned a possible 10 per cent. increase in disallowance. I am concerned that the former incapacity benefit regime, which was widely described, including by Ministers, as one of the tightest regimes in Europe in its gateway and for jumping through the hoops, is to be tightened even further. I would appreciate the Minister’s confirmation that I have completely misunderstood that and that there is no question whatever of the new gateway being tighter.
I would also like an assurance that no one will be on a lesser benefit under the new regime than under the old one. Having looked at the numbers and having passed some of them to the Department—the Disability Benefits Consortium has produced some detailed work—I do not think that that is strictly true. A couple of years ago, we were told that employment support allowance rates would be set above the long-term incapacity benefit rate, which implied that nobody could possibly be worse off. I repeat that I would like an assurance that I have completely misunderstood the position and that I am out of my depth on it. I hope I am wrong, because we are talking about people on low incomes, living in poverty. Making them worse off would be unacceptable.
It is said that we are all Keynesians now. It is not true, not least because, sadly, not many people have read what the learned gentleman—and liberal—said. Rising unemployment significantly changes the context of welfare reform. It is not only about putting more effort into supporting people into work, as it is about running the economy at the macro level. I have to confess—no, I am proud of it, so I am not confessing—that I believe that Keynes and many others of his generation were absolutely right that when in a recession we should not simply use fiscal policy to drift into a slightly higher deficit in order to accommodate changes, which I believe to be the Opposition’s position. If we want to get out of the recession, we should rather allow the deficit to rise as a matter of policy, either through higher public spending and/or lower taxation.
It was once said that we cannot spend our way out of a recession, but if anyone can tell me how to get out of a recession without more spending, I will buy them a very good present. Extra spending has to come from somewhere: it might come from exports; it might come from consumption or private investment; otherwise, it has to come from the Government. If this lesson has not been learned—throughout the world—we face an even bigger problem than I thought.
I say genuinely that we must ensure not only that disabled people have skills to secure available jobs, but that more jobs are available, which requires a proactive policy. That is precisely what the Government have argued—that they will bring forward capital projects and look at ways of helping the economy out of a recession. I happen to agree that many of today’s programmes could be targeted for extra resources. One of the great virtues of increasing opportunities, either through employment or benefit payments, is that they go through to people on lower incomes, who by and large tend to spend the money. Having tax cuts for the rich is not a very clever way of trying to boost the economy during a recession.
In conclusion, I strongly support the Government’s proposals to increase opportunities for education, training and employment for disabled people. The Government have made very significant progress over recent years, and I repeat that that is the reason why fewer disabled people of working age are unemployed than was the case previously. We need to look further into having a more generous in-work and out-of-work benefit system and we need to simplify it in order to increase take-up. Most of all, we need to make rapid progress on independent living. That is necessary if—as is the aspiration of the Government and, I hope, of us all—disabled people are to have the same choice, control and freedom over their lives as other citizens.
The hon. Member for Kingswood (Roger Berry) made some valid and interesting points, and I look forward to hearing the Minister’s response to them.
We have recently had several debates on similar subjects, and unfortunately I think we are likely to have many more over the coming months and years. I wish to focus today on the measures that are needed to help people to get back into work and the barriers that are stopping that happening. Members know of the multitude of problems that there are in the job market at present so I shall not rehearse them all, but it is clear that the effects of the credit crunch are starting to take hold in the real economy: we have rising unemployment figures and, most worryingly in terms of this debate, the number of vacancies is now just over 600,000, which is a drop of 40,000 from the previous quarter. That is a significant decrease, and it is a worrying sign for those trying to get off welfare and into work.
There is also an underlying problem with worklessness, which Labour has not tackled effectively enough over the past 11 years. In some groups, worklessness has even increased under a Labour Government. For example, almost 1.3 million young people aged between 16 and 24 are not in work or full-time education. That is 19 per cent. more than in 1997. That, too, is a worrying sign.
David Freud’s report highlighted the importance of early intervention in helping people into work, and the need to tackle issues at an early stage. To their credit, the Government seem to recognise this. They have included in the Green Paper a proposal to fast-track to the supported job search stage those with a history of long-term unemployment and 18-year-olds who are not in education, employment or training. Government figures show that 38 per cent. of people who have spent 12 months on jobseeker’s allowance expect never to work again, and the longer people are on benefits the more likely they are to think they are not going to work. That is a destructive cycle, so early intervention is crucial, particularly in supporting those who are the hardest to get back into work. Early intervention can help to tackle issues such as intergenerational poverty, serious skills shortages, alcohol or drug dependency or mental health problems. Leaving people with such problems sitting on benefits for months and months before anything is done is completely counter-productive and a total waste of their talent.
We also know that delaying intervention can cause serious problems for people who later try to get into work. However, although the Government appear to know that, the Green Paper sets out a rigid programme for the stages at which interventions can happen, and the flexible new deal will allow tailored support of a more specific nature only after someone has been on benefits for 12 months. That is a long time for people to be out of work before there is an attempt to tackle the problem. I also understand that six months will pass before they are offered basic job search support if they have not already been able to get into work.
Evidence on the new deal points to declining performance. There has been a significant drop in the proportion of people getting into immediate employment at the end of programmes. That is the case for all the programmes, but it is worse in some than in others. More than half those on the new deal for young people went into immediate employment in 1998, but the proportion is now less than a third. In 2001, more than one third of those on the new deal for lone parents got into immediate employment, whereas the proportion now is less than one in seven. This is a worrying indication of what is happening in the job market, and I am concerned that it will be even worse for young people in future. Whereas in the past a young person would go on to the new deal for young people after six months, after April they will no longer be entitled to access that support then; they will have to wait until November, when they will have been out of work for 12 months, before they are entitled to access that support. That is a counter-productive move, and I would like the Minister to clarify what will be done to make sure we do not waste the talents of those people as they are sitting on benefits waiting for the support they need to get back into work.
The hon. Member for Forest of Dean (Mr. Harper) mentioned the sustainability of jobs. There is an emphasis in the welfare reform Green Paper on getting people off benefits and into work as soon as possible. That is generally a positive thing, of course. However, the Government figures show a churn of 25 per cent. One in four people who move off JSA are back on it again within three months, and, according to Her Majesty’s Revenue and Customs figures, four out of 10 are back on JSA within six months. There are clearly underlying issues preventing those people from being able to access sustainable employment, and I believe that early intervention is the only way to identify and address the underlying causes that are stopping people getting sustainable jobs and helping themselves out of poverty. The churn of people going in and out of work does not do any good, especially for children. When I was a member of the Work and Pensions Committee, we heard some interesting evidence on the effect on children’s aspirations of their parents going in and out of work on a regular basis. The Government must tackle that.
Under the Government’s proposals in the Green Paper, it is unclear how people who pass in and out of work will fit into the timetable. Will they, for example, be expected to go back to six months of self-help at the beginning, when they sign on to JSA for the second, third or fourth time? Will that be the case even if it is clear to the personal adviser that they have serious skills shortages or there are other underlying issues that need to be tackled to enable that person to stay in a sustainable job? If that does not get taken into account, we will not be able to reduce the number of people stuck in this cycle, going in and out of work.
I take on board the hon. Lady’s point about the importance of timing the intervention correctly. However, does she agree that just doing that is not enough, and when the intervention comes it may be necessary to have a different scale of intervention for people who have multiple barriers between themselves and the job market? There is great concern that the Government’s proposals offer a flat-rate budget for each jobseeker regardless of the scale of the difficulties they face. Many countries—such as Holland, which the hon. Lady visited when she was a member of the Committee—have a greater variety of measures and a sliding-scale budget that can be applied to match different people’s requirements and to overcome the different barriers they face.
The hon. Gentleman makes an interesting point to which I shall turn later, because I agree that there are problems in how the Government are framing the contracts.
The hon. Gentleman also flags up the fact that there needs to be discretion at the level of the personal advisers, so they can identify when somebody has particularly complex needs and may require more than one intervention. Some of the decision making should be devolved to a lower level to enable the people who are involved with an individual to make the decisions that are best designed to get them back into work, rather than have a one-size-fits-all approach, which is a problem with the Government proposals.
Let me deal now with the commissioning process. The Work and Pensions Committee, of which the hon. Gentleman is still a member, recently took evidence from a range of organisations, including the Social Market Foundation, the Employment Related Services Association, A4e, Serco and the Association of Chief Executives of Voluntary Organisations. I have also been talking to providers about issues concerning the commissioning process and the contracts the Government are putting forward. My understanding is that providers broadly agree that the Department’s funding model will not meet the Government’s objectives—for example, of delivering personalised support for all clients and involving specialist and third-sector providers. Members have raised the issue of the need for specialist providers to be able to offer support to those with specialist needs. That applies particularly to those who have physical difficulties or mental health issues, and that may present problems in terms of the contract.
Providers appear to be backing up the Social Market Foundation’s argument that the proposed funding model does not incentivise providers to support those who are furthest from the job market—the point just made by the hon. Gentleman. The Government’s estimate in the tendering process is to achieve a 55 per cent. employment rate at 13 weeks, so 55 per cent. of all those going through the process have to be in work for a minimum of three months before the provider gets the full payment. The SMF said in September that that was over-ambitious, and that was before the most recent figures, which show that unemployment for the three months to August has risen at the fastest rate for 17 years. That makes the target of 55 per cent. even less realistic than it was before; however, the Department has not revised the target rate of employment that it is expecting from providers, which gives rise to a number of concerns.
Another very important issue is that providers do not have confidence that the contracts for which they are bidding will be profitable. If the targets that the Department expects to be achieved are completely unrealistic, it will be very difficult for providers to achieve them, which could undermine the whole exercise. Providers could go bust in the middle of a contract because they are unable to sustain the work that they are doing on the money they are getting back from the Government; or they could pull out mid-contract simply because it is not financially viable and that is the only way to avoid going under.
We already know that the economy is in a worrying state. The Chartered Institute of Personnel and Development suggests that the worst is still to come and, according to most estimates, unemployment is going to rise significantly. In the last quarter, an average of 1,600 people were made redundant every day. That shows that the changes in the job market are rapid, which has the potential to undermine the involvement of the private and voluntary sectors. They will find it even harder to provide services if the contract is not based on a realistic funding model.
We also need to be realistic and honest about the prospects of those who are already furthest from the job market—the long-term unemployed, those on incapacity benefit, those with very low skills levels. As unemployment gets worse over the next months and years, those falling out of work as a result of the economic downturn are the people most likely to be able to get back into work when conditions improve. They will be closest to the job market, more likely to have up-to-date skills, and so on. If we are not careful, we will have the same people out of work by the end of this recession as we have now. It will be even harder for those already out of work to find jobs in a narrowing jobs market, so to deal with that issue it is absolutely crucial that the contracts and the funding model are right.
The contracts need to ensure that those who are currently unemployed can get back into work, and that they get the necessary support. That also means looking at those coming off incapacity benefit or employment and support allowance and going back into the jobs market, who will have additional needs. We need to ensure that the contracts take into account the additional needs of those who will be furthest away from work.
At the moment, providers are saying that there is no room in the budgets for which they are being asked to tender for medical support for people with minor mental health problems—those, for example, with an alcohol or drug problem, or who need cognitive behavioural therapy to help them back into work. As more and more people fall out of incapacity benefit or the ESA and on to jobseeker’s allowance instead, there will be a pool of people on JSA who will need such support; it will not just be people who are going through pathways to work. Because of the way in which the Government propose to draft the contracts, there is not enough headroom for providers to fund such support.
I turn now to an issue raised by the hon. Members for Kingswood and for Weston-super-Mare (John Penrose). There is not enough money in the contracts to provide support for those furthest away from the job market and with the most complex needs. Because there is a flat rate, those closest to the job market will be the ones creamed off by providers, because they will be able to get them back into work. Given the contracting job market, it will be even more important that funding is available to tackle the really hard-to-reach people, in order to make it profitable for providers—in the private and voluntary sectors—to support those furthest from the job market in getting back into work. I should be grateful if, when he concludes the debate, the Minister said what the Department is doing to take into account the changing labour market conditions when they look at the contracts for the flexible new deal. If we do not take the changing circumstances into account, there could be a real problem in the next 12 months or so with the contracts that the Government intend to put out.
Finally, there is a knock-on impact on Jobcentre Plus. Many Members, from all parts of the House, have raised concerns about overstretch for Jobcentre Plus staff. A number of people are concerned that the Government’s stripping down of the Jobcentre Plus network and staff during times of economic prosperity is looking increasingly unsustainable. Since 2002, 491 Jobcentre Plus offices have closed and at least another 12 closures are planned in the foreseeable future. That is having a real impact on accessibility of staff and the services provided by Jobcentre Plus. That is particularly true of many rural areas, where it has become increasingly difficult for people to travel to their local jobcentre to access support services.
The DWP is also cutting significant numbers of staff: it has cut 30,000 jobs over the past three years, and a further 12,000 jobs are due to go over the next three years.
I absolutely do, but I should be grateful if the Minister clarified whether he is saying that every single one of the jobs lost over the past three years is based in Whitehall, rather than in jobcentres around the country. In the light of the 491 closures over the past six years, it is clear that plenty of front-line jobs have been lost in that figure of 30,000 figure, as well as back-office jobs.
As the claimant count is rising significantly, the work load of the remaining Jobcentre Plus staff is increasing dramatically. Between 2004 and 2008, there has been a 33 per cent. increase in the number of JSA claimants per full-time equivalent member of Jobcentre Plus staff. That is a massive increase in the burden of work that such staff are expected to do. If personal advisers are taking on increased work loads, it makes it much harder for them to give the personal support that individuals need to enable them to get back into work. The impact of these reductions is already being seen in the effect on claimants. For example, the number of outstanding JSA claims across the UK at the end of September had risen to 66,000—up from 42,000 in December 2004. That is a big increase in the number of people waiting for their claims to be decided. On the social fund, rising processing times for crisis loans have reached nearly two days, and there has been a 50 per cent. rise in crisis loan applications over the past year. Clearly, there is a massive increase in the Jobcentre Plus work load, and we should be concerned about the deteriorating economy’s impact on that issue.
The hon. Lady mentions delays. Does she share my concern at the fact that the recent average figure for processing new housing benefit claims—sadly, this applies to many people at the moment—is about 34 days? Does she, like me, want to see that improved?
Absolutely, and that is another example of how the economic downturn is having an impact across the whole range of services—Jobcentre Plus, councils—provided for people who are really struggling. That shows that the system is starting to creak. I agree with the hon. Gentleman.
I have another concern, which has been highlighted by previous speakers. The situation for Jobcentre Plus is likely to get significantly worse over the next 12 months, not just because of rising unemployment and the accompanying claimant numbers, but because of changes to other benefits that are also pushing more people on to jobseeker’s allowance.
The Minister mentioned both ESA and lone parent changes. On the ESA changes, the Government estimate that over the next year the number failing the work capability assessment and therefore moving on to JSA will be 60,000 and the number of lone parents being moved from income support to JSA will be 110,000. Thus, in addition to the estimated 30,000 a month newly unemployed, 170,000 people will be moved by Government policies on to JSA. That will clearly put an extra strain on the overstretched Jobcentre Plus.
I would be grateful if the Minister clarified what the Government are doing to examine Jobcentre Plus’s ability to absorb those extra people going on to JSA and to ensure that the support they need will be available to them. The Government need to examine the range of offices available, the number of staff available and the staff-to-claimant ratio, because they must ensure that that does not get too high.
Although the Government appear, in many ways, to be travelling in the right direction, they seem dead set on making the same mistakes that have been made before, and not only in the UK; they are not necessarily learning from international experience. My concerns focus particularly on the issues of delaying support, rather than introducing it right at the beginning; on the setting of targets for contracts that are not achievable and will cause the commissioning system not to work properly; and on not enough money being put into those contracts to ensure that those furthest from the job market are able to get jobs. I would be grateful if the Minister could respond to some of those issues. [Interruption.] From a sedentary position, he is querying a lot of what I am saying, so I look forward to his response and to his giving us an idea of how he plans to ensure that the Government do not copy the mistakes made by the Conservatives in the 1980s and 1990s, because we cannot afford to write off another generation.
I am grateful for the opportunity to raise issues relating to employment and unemployment in my constituency, and people with disabilities. I echo the comments made by my hon. Friend the Member for Kingswood (Roger Berry) in welcoming the Minister responsible for disabled people to his post and in praising the former holder of that post, my hon. Friend the Member for Stirling (Mrs. McGuire), for her brilliant work with disabled organisations.
In 1997, unemployment in some of the inner wards in Burton upon Trent stood at 17 per cent.; the reduction in employment in the brewing industry in Burton had taken its toll. The town of Uttoxeter had still not recovered from the loss of more than 2,000 jobs in the early 1980s, when the local dairy and Bamfords agricultural machinery factory closed. More than 2,000 people were unemployed in my constituency in 1997, many of them long-term unemployed and young, but between 1997 and 2007, unemployment in my constituency decreased by well over 50 per cent.
Until the recent downturn, Government policies such as the new deal, more help for parents through tax credits and the provision of better advice and support through Jobcentre Plus had transformed the job situation and the hopes and opportunities of hard-working people. Unfortunately, the number of people claiming unemployment benefit in Burton has risen steeply. However, I understand from Jobcentre Plus that it is still receiving 20 to 30 vacancies per day. Companies are still choosing to relocate to my constituency because of our excellent work force and strategic position in the country. Although unemployment has risen, 81.7 per cent. of those claiming unemployment benefit in Burton have been doing so for less than six months, compared with 69.9 per cent. in the west midlands as a whole.
These are difficult times and the Government need to do everything possible to support those who lose their jobs, to ensure that they can be retrained and can regain employment as quickly as possible. I welcome the Government’s decision to endeavour to help small businesses to withstand the downturn by making the swift payment of invoices a priority; I hope that local authorities will do the same. I also welcome the Government’s action in encouraging the banks to open up credit facilities for small businesses.
I also welcome the Government’s decision to maintain spending and to bring forward capital projects where possible. That is crucial in order to stimulate the construction industry, save jobs and build homes that people need, as well as to continue to improve this country’s public infrastructure. It is far better to borrow to maintain jobs than to have the downward spiral that we experienced in the 1980s. One of the first companies to be hit by the global downturn, particularly the downturn in the construction industry, has been JCB, whose headquarters is at Rocester, in my constituency. JCB’s UK work force, who are mainly based in Staffordshire, had increased by 44 per cent., from 3,900 to 5,700, between December 2005 and December 2007. Sadly, JCB announced earlier this year that more than 500 workers would be made redundant because of the worldwide downturn.
I am grateful for the help and support offered at that time by agencies such as Jobcentre Plus, Advantage West Midlands and the Learning and Skills Council, and by voluntary bodies, such as the citizens advice bureaux. More recently, JCB announced the prospect of further redundancies or the alternative of a shorter working week and fewer redundancies. I congratulate the GMB and the work force on deciding to accept a cut in working hours and pay in order to protect jobs. It will be a hard time for JCB workers and their families, but we hope that the company can quickly increase production again if there is an upturn in the world economy. Indeed, since that decision was taken we heard good news; when the Business Secretary, Lord Mandelson, led a delegation to Russia, the announcement was made that JCB had secured a £23 million order to supply machines to help build the transport infrastructure for the 2014 winter Olympics. I also commend Advantage West Midlands, the LSC and other agencies for the work that they are doing to try to protect the 950 jobs at Fox’s Biscuits in Uttoxeter. The west midlands is fortunate in having the expertise to help businesses to improve their production and training, and the skills of their work force.
Brewing and pub companies remain extremely important employers in Burton upon Trent, in my constituency. There has been a gradual decline in the number of people employed in brewing and there are great pressures on the industry. It is important for all Departments to examine how they can help that traditional industry. I recently co-chaired an inquiry into community pubs on behalf of the all-party group on beer. Our report suggests sensible ways of helping the pub and brewing industry. We urge the Government to reconsider their policy on beer duty, and to examine how the rating system can reflect the benefits that pubs bring to local communities, the differential between pricing in the on-trade and the off-trade and how red tape can be reduced. We need the Government to give a positive response to the report in order to save jobs in my constituency and elsewhere.
I know that besides trying to prevent unemployment, the Government want to ensure that those with disabilities and ill health are not left behind and that even in a downturn they are given equal opportunities to retain and find employment. I congratulate Jobcentre Plus on the work that it has done through the pathways to work programme. I also welcome the Minister’s reassurance on the training that Jobcentre Plus officers have received to help people with autism. I chair the all-party group on autism, so I know that those with conditions ranging from autism to lupus and other inflammatory arthritis welcome the principle behind the changes that the Government are making to prevent people from being disadvantaged in employment opportunities because of their disability. However, we must ensure that the process works well on the ground and that other agencies, such as the national health service, understand the need to treat people quickly to ensure that patients can retain their employment or train for new employment. Thankfully, the waiting times for operations have been greatly reduced. For conditions such as inflammatory arthritis, however, timely and correct referrals to consultants for diagnosis and treatment are important. We want not only to keep people in work or get them back to it, but to improve long-term prognoses so that people can be maintained in work. NICE should take account of the benefits of quick treatment and the most effective drugs when producing its guidance on drugs and treatment—it does not always do so.
We must ensure that the medical assessments of the Department for Work and Pensions are accurate. I recognise that the doctors who carry out the work capability assessments will consider what people can do irrespective of their medical condition, but we need to ensure that those doctors understand claimants’ medical conditions. Recently, I attended the Burton upon Trent scleroderma and Raynaud’s group, and was horrified when a lupus patient described her medical to me. The doctor had no knowledge of the condition, did not refer to a consultant’s letter or report and kept referring to the symptoms as having been caused by drugs; anyone who knows anything about the condition knows the symptoms caused by it.
We must ensure that people do not fall through the gap between incapacity benefits and jobseeker’s allowance, especially at a time of rising unemployment. We must ensure that people do not necessarily lose their benefits just because, following a medical, they are told that they are fit for work. Some employers keep people’s jobs open for them only until their consultants believe that they are fit for work. I recognise that for many people these are worrying times, but I welcome the proactive work of the Government and agencies such as Jobcentre Plus and the regional development agencies in trying to prevent redundancies and, when they do arise, to ensure that good advice, training and support are available.
When I was a young man—[Hon. Members: “Now.”] When I was a younger man, I lived for a while in America. About twice a year, I would fly back and forth, and I nearly always travelled economy class. Once, however, I was upgraded to club class. Having been called to speak so early, that is how I feel now—I feel like I have been upgraded to club class. I know that it will not happen again, so I am very grateful to you, Mr. Deputy Speaker.
I congratulate the excellent staff at the Waltham Cross Jobcentre Plus office in my constituency. They do an incredible job dealing with some very hard client groups and without expecting much thanks. They are truly professional and we are very lucky to have them. They also do their jobs without great financial rewards. They are excellent public servants. A few weeks ago, when I visited the office, I was told about some of the consequences of what we all know is happening in the economy: the number of clients visiting jobcentres was rising and the number of vacancies falling. We are in for a very difficult two years, and I imagine that all Members will be holding some very difficult surgeries. We will have many families and people coming to see us in very desperate situations—having lost their jobs and, tragically, their homes.
One of my concerns about the current system is that it is very difficult for people who have been self-sufficient throughout their lives to access help in their time of need. In a sense, they are not professional claimants, and they probably thought that they would never have to call on Jobcentre Plus and the Department for Work and Pensions. Many probably thought that they would always be employed and able to look after their families through their earnings. Suddenly, however, and through no fault of their own, they need some help—not for a long time, but to get them back on their feet. I hope that the Government, the Opposition, Jobcentre Plus and the Department are alive to those people’s needs. Over the next two years, we must be there to help them and to give them the leg-up they need.
When I visited the jobcentre, I was struck by its awareness of and concern about the number of professional claimants—people who believe that the state owes them a living and who have not done a stroke of work in their lives. We need to tackle that problem. Nothing makes hard-working people, earning the minimum wage or just above, whether they live in Broxbourne or Burton, more angry than seeing people in their streets taking the system for a ride. It is worth reminding the House that many of the Department’s advisers are also on very low wages, so I am sure that they are just as upset and angry when people present themselves, week in, week out, with no intention of getting a job.
All hon. Members need to work together to end this culture. I am well aware that the Government have tried to get people back into work; they have received pressure from Labour and Conservative Members about it. However, it is about time that people such as Charles Walker, the Member of Parliament for Broxbourne, got a bit of spine and backbone. All too often I have put pressure on the Government to act. We all know that many people who come to our surgeries have terrible and tragic stories, but we also know that some are just telling a story. However, instead of offering wise counsel and saying, “The Government are right and my best advice to you is to get a job, because you will be much happier that way”, I actually say, “Isn’t that appalling? This horrible Government! Let me take up your case. I shall write to the Minister and demand that your case be reviewed.” In doing that, I am not being honest with my constituent, myself or my constituency.
We hon. Members are good people who do not like to disappoint others, but it is incumbent on us to say to some people, “I am sorry, but it is in your interests to get a job, and that’s the end of the matter.” If they say, “I’m going to the local newspaper”, we should say, “Be my guest! Here’s the name and address of the editor and the news reporter.” If they went to the newspaper, the overwhelming majority of constituents, whether in Labour, Conservative, Liberal Democrat or independent seats, would say to us, “Good on you, Member of Parliament.”
Well, I look forward to not sending them. However, talk is cheap in this place, and I suspect that the Under-Secretary might still receive the odd letter from me.
Many people are desperate to get back into work. They might have been out of work for a number of years, had mental health or disability problems and lost their self-confidence. We need to help them rediscover that self-confidence so that they can re-launch themselves in the world of work. However, a small minority of people remain who simply will not work; they are, I am afraid, work-shy and believe that the state owes them a living. A life on benefits should not be an option for those people. We have an obligation to look after people in their time of need, but we need to put a time limit on benefits.
Of course, I am not saying that we should throw people and families into the street to starve. That would be ridiculous, but at some stage it would not be unreasonable to tell able-bodied people who are capable of working but choose not to, “Mr. Jones”—or Mr. Bloggs, or Mrs. Jones or Mrs. Bloggs—“your benefit needs to be earned. We’ve paid it for two years but that ends today. When you come and see us tomorrow, you will present yourself in this office at 9 o’clock in the morning and you will join a group of people going out into the community to do good and important work. When you have done that work, at the end of the week we will give you your money.”
Of course people will bitch and moan about that: they will be miserable at having to work, but they will have to if they want to get their money. Anyway, who knows? After two or three weeks or three or four months, some people frightened by the concept of work might actually discover that they like working with a group of people, and that they like to be motivated and achieve something as part of a team. At that stage, they might decide voluntarily to get a proper job with an employer.
Let us all work towards that. I am not a paragon or beacon of virtue. I have been work-shy in my past life, but very occasionally people close to me gave me a kick up the backside, and that was the motivation that I needed.
Mr. Deputy Speaker, thank you for calling me so early in this debate. I have thoroughly enjoyed making my brief contribution.
It will be hard to follow the speech by the hon. Member for Broxbourne (Mr. Walker), especially as I shall come at the subject from a completely different angle.
I want to focus on an area in the welfare and work agenda that, although small, is of the utmost importance to the constituents whom I represent. I want to underline the difficulties experienced by many in my constituency who are forced to live in temporary accommodation and who, as a result of the high rents that are charged, find it impossible to work and keep a roof over their heads. That is due almost entirely to the way in which the housing benefits system works, and I hope to be able to impress on my hon. Friends on the Front Bench the seriousness of the poverty trap that that causes.
I make this speech in the knowledge that we are just weeks away from a Queen’s Speech and new legislation. I have mentioned this matter at least twice in the Chamber and three times in Westminster Hall debates, and I hope that something can be done.
Professor John Hills’s report into social housing was launched in February 2007 by the then Secretary of State for Communities and Local Government, my right hon. Friend the Member for Bolton, West (Ruth Kelly). In her speech, she excellently summed up the Government’s aspiration for social housing:
“My key point today is that we should be more ambitious. Social housing must work better as a platform for social and economic mobility…The Working Future pilot in East London”—
it was based in my constituency—
“is testing how low rents and better employment advice can help families in temporary accommodation find work. It is only a small pilot, but the results are striking.
This is an area where seven in ten households contained no-one in work. Where nearly half of people had never held a job…The pilot gave intensive support to a group of participants. After 18 months more than a quarter are now in work and well over half are engaged in training or work placements.
We will evaluate this pilot closely. But I am clear that in the future, working with the Department for Work and Pensions, approaches that bring housing, training and employment together should be the rule, rather than the exception.”
I welcome the Government’s understanding of the interconnectivity of people’s social and economic circumstances that impact on their ability to work and thrive. I am making a call to action across Departments—the Government must take the right actions to help individuals and communities back to work. However, I believe that we have failed to consider properly the impact of a tax and benefits system that delivers a most extreme manifestation of the poverty trap.
My constituents are virtually imprisoned by the excessively high rents charged for temporary accommodation, which those on low wages can afford only because they are subsidised by the housing benefits scheme. We are talking about rents of more than £350 a week—not for a palace or a mansion but often for a two-bedroom flat above an insalubrious parade of shops or take-away establishments.
On one level of key importance, our Government are attacking the problem at the root by accelerating the creation of affordable housing. Housing that is available at a social rent will significantly improve the life chances of many of the people whom I represent, in all kinds of ways and not just in their ability to work. Additionally, I am pleased to welcome the small but significant step that has been taken in the right direction to reduce the depth of the poverty trap by disregarding child benefit as income when housing benefit is calculated. I believe that is an astute move, and I shall certainly support much more of the same.
I also welcome the Government’s undertaking to engage positively with the report of the London child poverty commission, and the review of working age housing benefit and its effectiveness in promoting work and fairness. I hope that someone from that review will take note of what I have to say today.
My message is that the housing benefit system is in desperate need of reform. To illustrate my concerns, I want to tell the story of a constituent of mine, a lone parent in her early 40s, who was working as an administrator at Guy’s hospital. She was renting privately and had good prospects, having been offered a promotion and additional hours. She wanted to purchase a property under the key worker scheme and was eligible to do so, but the high cost of living and private sector child care meant that she could not get a deposit together. However, she was still optimistic: she was still ready to go for it, and she came to see me to talk about the options available to her. It was gut wrenching for her that she could work only 16 hours a week and was thus not able to take up the promotion that she was being offered.
She then had to move out of her property because her landlord wanted to sell it. Her circumstances were really awful, through no fault of her own. She joined a scheme that allowed her a social rent for her home, but it was short-lived. She and her little girl found themselves in bed-and-breakfast accommodation, and things went downhill from there. From the bed-and-breakfast accommodation, she was moved—with debts—to temporary accommodation, and her rent escalated.
Her rent for a two-bedroom property—which is mostly paid by housing benefit—is £355 a week. She went to the citizen’s advice bureau and asked for a calculation of her in-work entitlements. She was really struggling to make ends meet and could not work out why she was not able to survive. It was explained to her that she would be only £50 a week better off in work, although that estimate did not include transport costs. She had to travel only a short distance on the Jubilee line, but unfortunately her transport costs came to £100 a month, which meant that she would be worse off working.
I hope that the House will bear it in mind that I have set out only the up-front costs involved. Working incurs many more costs that are not included in Jobcentre Plus calculations of in-work benefits. For example, a person’s eligibility to claim free school meals can be forgotten, and that can have a large impact on their finances. Sometimes, too, factors such as travelling time are not calculated properly, and that can have an impact on the amount of child care that has to be paid for. I hope that hon. Members will remember those little illustrations as I continue my speech.
My constituent is not working at the moment. She simply cannot afford to keep the roof over her head for herself and her child. She does voluntary work for a small charity to keep her hand in—ironically, it provides advice on employment and benefits, as well as running activities for children.
My constituent has told me about the depth of her despair. She said that the events that I have described came at a time of her life when she wanted to progress. She said that she is
“trapped in benefits, prevented from returning to work—all my wages would just go to pay the rent and I would be worse off.”
She had been on the housing waiting list for four years, and she has been bidding under the choice-based letting scheme for three years. She has been told that it will take a minimum of between five and six years for her to be rehoused in permanent accommodation. She contacted the council’s homeless persons unit and has repeatedly asked to be rehoused in a property that has a social rent as she is desperate to work. Unfortunately, the unit could do nothing to help her.
Does the hon. Lady agree that people in her constituent’s situation are not helped by the bidding process? It actually works against them and they go further down the list, as other people outbid them for properties. That is certainly the case in my constituency.
Does the hon. Lady agree that it is not just a question of sorting out supply, as that will inevitably have to be a fairly long-term solution to the problems she describes? Another alternative, which might be quicker to achieve, would be to reform housing benefit, notably to make it substantially simpler to administer so that we do not have the long lead times at the start of claims that my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) mentioned. There should be much greater transparency in the calculation of local housing allowances; at present, they are largely secret, so when they are set too low, which sounds as though it may be one of the problems faced by the hon. Lady’s constituent, there is little comeback. Finally, withdrawal rates for housing benefit can be incredibly rapid, and the combination of that with other parts of the benefits system makes it extremely difficult for some people to remain in work—they are less well off in work.
I thank the hon. Gentleman, who pre-empts the content of my speech, as I was about to complain massively about the housing benefit taper. However, I was planning to take a long time doing it, to prolong the pain for my Front-Bench colleagues in the hope that it might bring about the change that I want.
My constituent is a woman of positive outlook. She has been a health service administrator and she wants to make her own way. She wants her child to witness and copy her work ethic and get on in life. She knows that being out of work is not a good example for her little girl. She is skilled, articulate and motivated. The last thing she wants is to be caged in unemployment for years to come, but that is her position. That pernicious, self-perpetuating cycle of dependency on housing benefit traps a significant number of my constituents in temporary accommodation and out of work. More than 4,000 households in the London borough of Newham alone are living in private sector temporary accommodation, which costs about £70 million a year.
Those people have years to wait before they can expect to receive a council property; the average wait for a three-bedroom property is 13 years—and we have 25,000 families on the housing waiting list. I have heard from constituents who have asked their managers not to give them a pay rise, as after the recalculation of their housing benefit they would be worse off. Other constituents would like full-time work, or to increase their hours, but they have discovered that if they work additional hours they may lose financially once housing benefit is withdrawn. I could tell many similar stories.
When people talk to me about returning to work, there is hesitation—I admit that to the hon. Member for Broxbourne—but not because they are feckless; they are fearful, in most cases rightly, that they will not be able to manage financially. There may be people who would advocate that my constituent returns to work despite being advised that she will be worse off by £50 a month, so I want to enlarge the picture to include other women I have met during my time as MP for West Ham.
I attended a focus group—for want of a better word; it was not a focus group, but I describe it as such because Members will know exactly what I mean—looking into regeneration for an area, and I interviewed two groups of women separately about their living conditions. I asked them what they wanted to see improved in the area and what steps they thought we could take to improve their prospects. We talked about the obvious things—schools, nurseries, child care, education, antisocial behaviour and health. Then I asked about work, and I did not expect their reaction. I was shocked to discover that eight in 10 of those women had heard and responded to the Government’s call to return to work but after a period of only months they had to cease working, completely defeated. They found themselves in increasing debt, unable to manage the costs of working, which included housing, child care, school meals and transport. The calculations that had been made for them by professional advisers had been inaccurate or perhaps overly optimistic. Those women expressed complete devastation and despair that they had been defeated. Their confidence had been absolutely shattered by the experience. Before they went back to work they had not been in debt; they had found ways of managing. After going back to work they found themselves saddled with costs that they had not foreseen and they tried to soldier on hoping it would all work out—but it did not and it has left them crushed.
Despite recent falls in the rate of the probability of leaving work, lone parents are still almost as likely as non-lone parents to leave their jobs. One in five lone parents who leave income support return to it within six months; more than quarter do so within a year, a third within two years and almost two fifths within three years. Lisa Harker’s report on child poverty projected that if the rate of job exits among lone parents was reduced to that of non-lone parents, the Government’s target of 70 per cent. employment could be met with no increase in the number of lone parents entering work.
For some women, the loss of help with child care costs, rent and tax credit can mean that they face a marginal tax rate of 96 per cent. At the centre of that marginal tax rate is housing benefit and the problem centres on the 65p in the pound withdrawal rate of housing benefit as income increases. The Hills report, to which I have referred before, stated that a couple with two children paying a typical private rent of £120 a week—please: in my constituency we are talking circa £350 a week—would, as a result of reduced benefit and tax credits and a higher rate of national insurance, gain only £23 if their earnings rose from £100 to £400 a week. There is simply no incentive.