With permission, Mr. Speaker, I should like to make a statement on our White Paper “Raising expectations and increasing support: reforming welfare for the future”.
This White Paper will transform lives. We know that the support that we offer helps people get back to work. It can turn lives around. We want to make sure that as many people as possible have this chance. That is why we want virtually everyone claiming benefits to be preparing for, or looking for, work. It is a fair deal—more support, in return for higher expectations.
That is a deal that has always underpinned the welfare state. As early as 1911, those claiming from the unemployment exchange could be disqualified if they refused a suitable job offer. It is a deal that was extended by the Beveridge report, and one that was championed by the 1945 Labour Government.
In 1947, Herbert Morrison said that
“we have no hands or brains to waste, and no resources to fritter away on those who don’t contribute to our national effort.”
Today, when the national effort is about a global downturn, we can no more afford to waste taxpayers’ money on those who play the system than they could then. But most of all we cannot afford to waste a single person’s talent.
We inherited a welfare state in which fewer than a third of claimants had to do anything in return for their benefits. Even that third got paltry support to get back in to work, while the rest got nothing. That truly was a welfare state that wasted talent and money. We paid for the costs of failure because we were not prepared to invest in the possibility of change. This Government set about putting that right. We taxed the excess profits of the privatised utilities to create the new deal. We merged the Benefits Agency and the Employment Service to create Jobcentre Plus, so that everyone who signed on for benefits signed up for work, too. That was the first phase of reform—deepening the obligations to work, so that there was no fifth option of just staying on benefits. We saw that those obligations caused youth unemployment and long-term unemployment to tumble, so we set about the second phase of reform and widened the scope of those obligations to work. We piloted helping those on incapacity benefit, first with the new deal for disabled people and then with the groundbreaking pathways to work programme, which increases a person’s chance of being in work by 25 per cent. Now we are rolling that out.
Since April, we have required all new claimants to take part, except those with the most severe conditions, and in October, we replaced incapacity benefit with the employment and support allowance, which focuses on what people can do, not what they cannot do. We improved help for lone parents. With the help of the new deal for lone parents, over 300,000 more lone parents are in work, but we wanted more people to benefit, so we are requiring lone parents of children between the ages of seven and 16 to look for work. We expect that to increase employment and lift 70,000 children out of poverty.
The White Paper will kick off the third phase of welfare reform. It is based on the simple idea that no one should be left behind, and that virtually everyone should be required to take up the support that we know works. It is built on the recommendations of two independent reviews, the Freud and Gregg reviews. The White Paper confirms that we will implement the Freud report in full, including his “invest to save” proposal, in which private and voluntary providers invest money in helping more people back in to work, and get paid out of the resulting benefit savings. Professor Paul Gregg’s report was published last week. The White Paper confirms our support for his vision. It sets out how we will put it into legislation and pilot his recommendations so that nearly all claimants are either preparing for work or looking for work.
We will migrate everyone on incapacity benefit on to the employment and support allowance. Under the new benefit, the poorest and most disabled will get nearly £16 a week extra. Everyone else will get support to manage their conditions and prepare for work. They will be required to attend interviews to develop their plan to do so, and advisers will be able to require them to implement that plan. We agree with the Gregg report’s recommendation that parents should not be left until their youngest child is seven before they are given help to get back into, or prepare for, work.
The support that we offer lone parents has been transformed since 1997. We pay a £40-a-week bonus to any lone parent going back into work. We pay 80 per cent. of their child care costs. We pay for travel costs to job interviews, and for interview clothes, if necessary. When the parent finds works, there is a £300 emergency fund to help them, if needed. We can also help people with more serious problems such as depression, debt or drug addiction. Most of all, we have made work pay. A lone parent who has one child and works 35 hours a week will be on at least £304 a week in April next year, compared to £182 in 1999. Thanks to the minimum wage and tax credits, such parents are now more than £100 a week better off.
Our goal is simple: we want more parents to benefit from help, so that they can help themselves and their children. That is why conditionality is so important in the welfare state. Only 5 per cent. of incapacity benefit stock claimants voluntarily take up the support that the pathways to work programme offers, and only around one in four lone parents takes up the support offered by their new deal. Partners in couples in which no one is working face even fewer obligations than lone parents.
The Gregg report found that
“Conditionality backed with a regime of sanctions improves outcomes.”
As a result of such a regime, the UK enters the downturn with the second lowest unemployment rate in the G7. However, the report also found that countries such as Denmark and the Netherlands had lower unemployment and child poverty rates than the UK, so if we want to abolish child poverty and improve social mobility, we need a welfare state that learns from the example of those countries. The Queen’s Speech made it clear that we will reinforce our commitment to ending child poverty in legislation that the Government will introduce in this Session. The White Paper is the other side of the coin, matching higher support with higher expectations.
Some people say that we should be slowing down the pace of welfare reform because of the downturn. The Government believe that we should do exactly the opposite. We should not repeat the mistakes of the recessions of the ’80s and ’90s, when hundreds of thousands of people were shuffled on to inactive benefits to keep the unemployment count down, and trapped there without support, abandoned and scarring our communities. In contrast, we are investing £1.3 billion in helping people find work, but we will have increasing requirements of people the longer they are out of work, to make sure that they do not fall out of touch with the world of work. After a year, everyone will be allocated to a private or voluntary provider, and expected to do four weeks’ full-time activity. After two years, we will pilot requiring people to work full time for their benefit.
The White Paper will also support children whose parents’ relationship has broken down. We will bring forward legislation so that it becomes the default option for both parents to register the birth of their child, whether they are married or not. And we will fully disregard child maintenance when working out income-related benefits from April 2010, so that children can take full advantage of the money provided for their upbringing.
The White Paper also makes clear our intention to apply new benefit rules for problem heroin and crack users. Instead of receiving jobseeker’s allowance, or the employment and support allowance, crack and heroin users will receive a treatment allowance, alongside an obligation that they address their problem.
There needs to be help for people to find and keep work, as well as responsibilities to look for work, so we will double the access to work budget to allow more people than ever before the support that they need to stay in work, and because we recognise that disabled people are the experts in their own lives, we will legislate for disabled people to have the right to exercise choice and control over the support they receive from the state. This right to control will be a major step towards achieving equality for disabled people by 2025. It will be a transformation in the rights of disabled people.
These reforms point the way to a fairer society where children do not grow up in poverty, disabled people enjoy real equality, and everyone is given real help to overcome the barriers to fulfilling their potential. Yes, the reforms are about looking after taxpayers’ money, but they are also about looking after the future, by making sure that we do not waste anybody’s talent. I commend the statement to the House.
I would normally thank the Secretary of State for an advance copy of his statement, but instead of doing that, may I ask him to explain to the House why he has given such an extensive briefing about the content of the statement over the past few days in the media? Does he not think that briefing the media in that way, ahead of the House, flies in the face of both the rulings that have come from the Chair in the past few months, and the now rather hollow commitments made by the Prime Minister when he was first elected to that position, about the importance of the House?
I pay tribute to the work of David Freud. It was his report, commissioned by Tony Blair and comprehensively rejected by the current Prime Minister three years ago, that started the debate in Britain. When we published our Green Paper in January, we drew heavily on David Freud’s work and added to it the recommendations for mandatory community work to be added to the back to work process in the UK. All those recommendations—David Freud’s and ours—have now, it appears, been adopted by the Government.
We know that the Secretary of State will face a big rebellion on his Back Benches, so may I assure him that we will give the proposals our support? We know that his Back Benchers, his union backers and his own social security adviser are clearly opposed to the measures, but as much of what he is proposing comes from the work that we published in January, I can assure him that Conservative votes will help the measures on to the statute book, even if Labour Members try to stop them.
There will certainly be issues for debate when the Bill comes before the House. I think the Government are wrong to extend from six months to 12 months the date when young people are referred for specialist back to work support. We would change that in government. I am glad the Secretary of State agreed with me that the proposals in the Gregg report to make lone parents of one-year-olds prepare for work were just plain wrong. Even so, I remain unconvinced by some of his other proposals on lone parents, and we will want to debate those vigorously when the Bill comes before the House. There are far too many pilots in the proposals. After 11 years in office, surely the Government can, for a change, do something properly and not just pilot it.
There is one huge, unanswered issue, on which I would like the Secretary of State to concentrate his response to me. He has rightly accepted our proposal to put every single person currently claiming incapacity benefit through an independent medical assessment; that is clearly the right thing to do. However, it will also be a complete waste of time if adequate back to work places are not available for the people who go through the test and are told that they have the ability to prepare for work.
Our intention was always to fund those extra places for a proportion of 2.6 million people through the so-called departmental expenditure limits-annual managed expenditure, or DEL-AME, switch—the invest to save mechanism—using initial savings from getting people off benefits and into work to fund the cost of the programmes that get them there. The Secretary of State has said only that he intends to pilot that plan in two areas after 2010. However, the assessments start in 2010. What will happen in the rest of the country? Where will the extra places come from, and how much extra money does the Secretary of State have to put into the budget for the pathways to work programme after 2010 to pay for those extra places? If those places are not there, many of these proposals will not be worth the paper on which they are written.
We have had a wasted decade for welfare reform. The Government promised change, but failed to deliver it in the good times. Now unemployment is rising and these proposals will be much more difficult to deliver. The measures in the White Paper are mostly right for Britain and we will vote for them. It is a shame, however, that the Government have talked for so long and done so little. Let us hope that, this time, they will finally do something—start the real reform process and establish proper foundations for change that will enable the next Conservative Government finally to end Britain’s entitlement culture.
I am glad that at last the hon. Gentleman has acknowledged that it was this Labour Government who commissioned the Freud report; normally, he goes around creating the impression that it was his report. We are implementing it in full in this White Paper.
I am slightly confused about the hon. Gentleman’s position on these welfare reforms. Originally, he said that the Opposition would welcome the proposals enthusiastically; last week, he said that he thought that we were going a bit over the top; on Sunday, he said that the proposals did not constitute welfare reform; and by Monday, he went back to saying that he would back them enthusiastically. That is confusing, but the confusion is not mine—it is due to the fact that the policy of the Conservative party is confused. It does not know what it thinks because its modernisation was a spray job. It is increasingly falling back on exactly the ideas of the ’80s and ’90s that created the problems in the welfare state which we have had to address.
The hon. Gentleman used to say that he would give these proposals his full backing. However, if people listen to what he has said today, I think that they will see that he is trying to maintain a tiny bit of wriggle room. I tell him this: he can either be statesman-like and do the right thing for the country or play politics. He cannot do both at the same time. That is the test to which we shall hold him—will he support the full reforms in the White Paper or will he try to have his cake and eat it, and play politics while trying to say that he is doing the right thing?
The hon. Gentleman raised a number of points. He said that he wanted me to direct my remarks to the questions about extra funding. There is extra funding in this package for the pathways to work programme to be extended to people who are migrating from incapacity benefit to ESA. He has no such funding at all. Given his party leader’s remarks yesterday on the radio, he has a real problem. He would have to cut spending in our Department. The Conservatives said that the borrowing in the pre-Budget report was reckless, but it allocated an extra £1 billion and this White Paper allocates still further money. None of that would be available to him. He has already committed to cutting the new deal, and he would have to make even further cuts.
The hon. Gentleman said that he would bring forward further proposals. We will apply three tests to them. First, are they fair? Secondly, would they work? Thirdly, how would they be funded? There is no point in his bringing forward theoretical proposals for which he has no money. He cannot just go around talking about the invest to save proposals as if they were some kind of magical piggy bank. We can proceed only at the pace that David Freud recommended.
The hon. Gentleman suggested that we were not implementing David Freud’s proposals, but he has an article in today’s papers saying that we are doing exactly what he recommended. It is right that we should do what he said, which is to pilot the scheme, not in two areas but in five, and then to make sure that we evaluate it and roll it out on the basis of that success. That is exactly what David Freud recommended.
The hon. Gentleman can no longer go around saying that there will be extra money from that process, because it is simply not available under his proposals. Nor can he say that he would pay for what he calls “ending the couples penalty” out of further welfare savings. He agrees with what we are doing, so there would be no further welfare savings to be had. I hope that in future he will make it clear that he would have no money for his proposal.
The hon. Gentleman has completely misunderstood the Gregg report. It does not say that we should make parents look for work when their child is aged one—it says that people should prepare for work. It gives them ownership of their own journey back into work. It says that they should be able to develop a personalised action plan, but then, as their children get older, in certain circumstances it is also right that they should be required to carry out that action plan. Like the rest of the White Paper, this proposal is about reducing child poverty, reducing unemployment and transforming lives. We believe in this because we think that the welfare state is the solution; the Conservatives do not, because they believe that the welfare state is the problem. On Sunday, the hon. Gentleman’s leader said that 5 million people in this country could all be a potential Karen Matthews. That is an insult to people on benefits, and it lets people like Karen Matthews off the hook. I think that in future Conservative Members should dissociate themselves from their leader’s remarks.
I commend the Secretary of State for the White Paper, particularly the move to greater flexibility for advisers and for the invest to save project. Does he agree that the global downturn means that many more people, in addition to the 2.5 million who already rely on legal, but very high, domestic credit repayments will require support and help? Does he also agree that the consultation launched a fortnight ago on the reform of the social fund should lead to a much more radical approach based on the partnerships in invest-to-save projects that would allow the public, private and voluntary sectors to expand dramatically the availability of affordable credit to the millions of people who would otherwise find themselves reliant on loan sharks who demand incredible payments that those people cannot afford to make?
My right hon. Friend is absolutely right. I pay tribute to him for starting off the process of welfare reform that we are announcing today. I also pay tribute to him for campaigning to reform the social fund. We think that it does great work, but that it could be improved by ensuring that people get financial advice alongside help with their finances. That is why we want to consider whether we could use that money to subsidise credit unions to do their job even better by helping people with their financial needs but also ensuring that they get out of debt.
I thank the Secretary of State for advance notice of the statement. I agree with the hon. Member for Epsom and Ewell (Chris Grayling), however, that it is disappointing that the Secretary of State held a press briefing on these measures before he came to the House, although both that briefing and the statement are almost pointless given the extent to which the proposals were trailed in the media over the weekend.
The Government have not consulted on the proposal to push lone parents with children as young as three or four years of age from income support on to JSA, because it was not in the Green Paper, although it was trailed quite strongly at the weekend. Clearly, it was not proposed earlier because the Secretary of State knew that there would be very little support for it, least of all among his own Back Benchers, and certainly among civil society organisations, which have raised serious concerns about that proposal. It is far too soon to consider such a proposal given that the Government have only recently brought in changes to the regime for lone parents and have not even assessed the progress of those changes. It was only three weeks ago that the Government started to move 300,000 lone parents from income support on to JSA. Many organisations, including the Social Security Advisory Committee, and many Members of this House have expressed concerns about whether enough flexible working opportunities, affordable child care, and appropriate personalised support are available. It is worrying that there is not yet enough evidence to suggest whether those changes will be successful and what their impact will be on child poverty. The Government have already admitted that they cannot guarantee that lone parents will be better off as a result of the changes that have already been introduced, so why is the Secretary of State proposing to go so much further before they have even evaluated those changes?
Why is Labour attacking lone parents and demonising people who are losing their jobs during a recession? The Secretary of State said that some people say that we should be slowing down the pace of welfare reform because of the downturn. Liberal Democrats are not saying that; instead, we believe that he should take account of the downturn and not penalise people who are suffering as a result. He referred to people who are long-term unemployed as “offenders”, which is not only counter-productive but also illuminating. The work-for-the dole proposals treat the long-term unemployed as though they were criminals on community service. The rhetoric that is being used demonises those who are on benefits. International examples show that the work-for-the dole option is not a success—it does nothing to develop skills and confidence and nothing to make people more employable. Why are the Government pushing ahead with a policy that has been shown to fail internationally?
On tailored support, the Secretary of State talks about responsibilities. We all share the view that people have responsibilities, but so do the Government. Beveridge strongly believed in helping people back into work. Why, under the JSA regime, is there no tailored support until somebody has been unemployed for a year? That is a very long time to wait when everybody agrees that early intervention is absolutely crucial in getting people back into work.
The Government are talking about making sanctions stronger. The Secretary of State says that he is implementing the Gregg review, but he seems to be overlooking the parts where Professor Gregg said that before introducing stricter sanctions, the Government had to ensure that they introduced proper tailored support for individuals. The Government seem to be picking the bits that they like and ignoring the bits that they do not like. Could the Secretary of State confirm whether he is going to implement all the recommendations in the Gregg report or only the bits that the Tories like? At the heart of the approach that the Government are proposing is the idea that work is the best route out of poverty. Of course, everybody agrees that that should be the case, but given that more than half of children in poverty have a working parent, work does not always pay at the moment. Before the Government places sanctions on people, they need to ensure that people are better off in work. Can the Secretary of State confirm how he is going to ensure that the changes will not just move people from out-of-work poverty to in-work poverty?
These proposals highlight primarily the fact that the Tories are showing their true colours—gone seems to be compassionate conservatism. It is hard to know who is hanging on the coat tails of whom. The Tories and the Government are arguing about whose idea was whose—they almost come across as squabbling brothers. We all agree that the system needs to be overhauled, but for the Government merely to target the most vulnerable and play “Are you tough enough?” with the Tories is not the way forward.
I did not hold a press briefing, and I hope that the hon. Lady will withdraw that comment.
The hon. Lady has fundamentally misunderstood what this is all about. It is about transforming people’s lives. It is about ensuring that we provide people with help and support so that they can get back into work and help their children to have a better standard of living and high aspirations for themselves. That is exactly the right thing to be doing.
On lone parents and the Gregg review, we are not saying that we are going to bring in those changes before the lone parent changes that are currently being introduced. This is about the next stage of welfare reform. It is right that lone parents should have to look for work when their child reaches the lower age of seven years, but Paul Gregg was not saying that parents of younger children should be made to work, or to look for work, but that they should prepare for work. We have fantastic help for people who need to get out of debt or to address serious issues such as mental health or drug problems. We also have help in relation to child care, confidence issues and training. It is right that people should go in and develop an action plan so that they can prepare for work, but then also, at the right time, be expected to take it up. It is all about ensuring that we end child poverty in this country—something that the Liberal Democrats have said is an “unnecessary distraction”. They are neither prepared to put in the support for people nor to address their high expectations to ensure that they get back into work to help themselves out of poverty.
This is the right approach that builds on the best approaches around the world, which involve full-time activity among other things. The hon. Lady is wrong to say that international evidence shows that that does not work. It does not work if that activity is of low quality, has no job search and does not help people to develop skills. It does work, however, if it involves full-time activity that teaches people skills, such as turning up on time and being presentable, and it ensures that people are looking for work. That approach is followed in countries such as the Netherlands and Denmark, and we will follow that approach because it is right for people.
The hon. Lady says that we should not deal with people who are repeatedly failing to live up to their obligations. I completely disagree. If people are taking money and playing the system without trying to get back into work, that is an abuse of the system. It is wrong for people to do that, and requiring those who do it to undertake full-time activity in return for benefits is the right approach because it is not fair on everyone else if they abuse the system in that way.
Finally, the hon. Lady asked what we will do to make work pay. We have transformed the situation: a lone parent working for a full week is more than £100 better off than in 1999, and that is even more than they would have had before 1997 thanks to the introduction of the minimum wage, which her party opposed. On top of that, we pay a £40 premium per week for people when they go into work. We are also piloting a £25 better-off guarantee. That is the right approach: more support and higher expectations. I am sorry that she does not support it.
I thank my right hon. Friend for his continuing efforts to support more disabled people and others getting into work. Does he agree that some media reports about the threat of sanctions against benefit recipients have caused anxiety among many people, not least those with mental health conditions? Such reports can be incredibly counter-productive in relation to what the Government seek to do. Moreover, they may discourage those entitled to benefits from claiming them. Can my right hon. Friend say how he intends to address those concerns?
I entirely agree with my hon. Friend, and I want to pay tribute to him for all the work that he does in championing the rights of disabled people in this House. It is right that we should give power to disabled people because society still discriminates against them and we need to ensure that they have the support and power to get themselves back into work and to achieve their aspirations, just the same as anybody else. No one should ever demonise or discriminate against disabled people, and we will ensure that that does not happen.
I start by welcoming the statement. As the Secretary of State knows, a year ago, the Centre for Social Justice published a series of reforms, many of which went alongside Freud, but some went slightly further. What the Secretary of State is saying is along those lines, so I welcome what he says. As he knows, the Centre for Social Justice and I have worked with the hon. Member for Nottingham, North (Mr. Allen) on early-years intervention, and on the idea that empathy and bonding between the age of one and two is vital. I suspect that that idea, which I recommend, is reflected by his rejection of any talk of forcing people into work at that stage of a child’s life.
I would, however, like to raise one issue. The Secretary of State talked about a lot of ways of getting lone parents back into work, and we know how difficult that is. When he refers to 32 hours work a week actually paying he is right, but one of the biggest problems is that many of the lone parents that we saw who worked between 16 and 32 hours complained hugely about the massive withdrawal rates that they suffered. I know that the issue is a difficult one, but the benefit block means that some of them take back only 10p in the pound for each of the hours that they work. That is a major issue and a disincentive for many of them. Losing housing benefit after falling out of employment and then finding it can take months to get it back is a major disincentive. Will he consider those matters in the next few months and bring some suggestions forward?
I welcome what the right hon. Gentleman says. Just to clarify, we are not rejecting a proposal that lone parents of children aged between one and seven should be made to work because no such proposal was made. Paul Gregg did not make such a proposal; he thinks that they should be preparing for work and that they should do that at a pace that is right for them.
The right hon. Gentleman raises an important point. In any welfare system that uses a taper, the taper can either apply to lots of people, who end up being means-tested across a wide-range of incomes, or it can be very sharp, and money is withdrawn very quickly. There is no perfect solution. We think that we have improved the situation substantially with the working tax credit and the minimum wage. The next issue to consider is housing benefit, and the White Paper announces that we will consult next year on reforms to the housing benefit system, looking at working incentives to ensure that there is fairness with regard to those who are working and those who are not, so that people on benefits do not end up getting subsidies for rents that those who work could never afford.
My right hon. Friend will be aware that there has been a huge increase in the number of child care places available through the Government’s national child care strategy, but many of those places are available during regular working hours. Will he do all that he can to ensure that more child care is available at weekends and in the evenings so that the lone parents who I meet in Blackpool can take advantage of jobs in retail, the hospitality trade, pubs, clubs and the tourist industry? At the moment, they cannot.
My hon. Friend makes an important point, and she gives me the opportunity to make it clear that this is not about targeting lone parents. In fact, the people who have the least obligations in the system at the moment are couples who are parents and are out of work. We want to ensure that we expect the same of them as we do of lone parents. That is the right thing to do. She is also right about the centrality of child care. We have made it clear in our reforms to the regime for lone parents and the jobseeker’s allowance that if there is no appropriate child care, parents should not be expected to take up work, because that child care should be the first priority. We need to continue to expand child care. We have doubled investment. As she knows, from 2010, all secondary schools will be expected to have wrap-around child care in the evenings and before school, and we need to ensure that people have that support in the holidays—that is very important for people.
I broadly welcome the reforms that the Secretary of State has introduced, but with some concerns. I am sure that all hon. Members would agree that there are those on benefits who genuinely want to get back into work to give themselves some pride, and to make a contribution to society. The Secretary of State hit on one vital point. All hon. Members will agree that a hardcore percentage of individuals have spent their lives creaming benefits off the state. Can the Secretary of State assure us that his proposals will deal with that?
Our proposals will ensure that there are clear expectations of people, and if people repeatedly fail to live up to their obligations, they will face clear sanctions. They will either lose their benefit, or be required to do full-time work in return for their benefit. That is the right thing to do, but it will apply to a tiny proportion of people. The vast majority of people are never sanctioned. Of those who are sanctioned, the vast majority are only sanctioned once, and half of them think it was the right thing to do in the first place.
I thank the Secretary of State for his statement. Some of us, however, are unsure of some of his proposals because of our constituency experience. Can he colour in for us how the right to control will be meaningful for disabled people, and whether it will apply to people with all recognised long-term conditions? On invest to save, and the proposal that the private and voluntary sectors should compete to win commission-driven contracts, how will he ensure that the process works in a fair way, and allows the voluntary sector to compete credibly What scale of investment will it need to muster, and will the process disadvantage areas where there are recognised concentrations of high, long-term unemployment, where such contracts will be less attractive? If conditionality and sanctions are to be the order of the day for lone parents and other people on modest benefits, when will the Government extend that principle to the banks?
I think that the Leader of the Opposition said that we had too much conditionality with regard to the banks.
My hon. Friend is right to point to the need for the DEL-AME mechanism in areas with higher levels of inactivity, which is exactly what we are providing. That mechanism will be more attractive in areas where there are more people who need help to get back into work, and therefore the areas that he mentioned would be particularly helped. We want to consult people on how the right to control will work; it will be a fundamental reform to the way in which support for disabled people works in practice. We want to consult people on which funding streams should be included. People would clearly not want defence or refuse collection to be included in a right to control, where they could take control of those matters in an individual budget, but if support is given to help disabled people, we want them to have control of it. If they are happy with what they are getting from local authorities and others, they can continue with it, but if they are not, they have the power to say, “No, I want to take this money and spend it in the way that I think fit.” That gives power to disabled people, and it will lead to a real transformation.
It is for you to decide, Mr. Speaker, whether the Secretary of State’s claim that he did not brief the press despite issuing a press release requires an apology to this House. None the less, I wholeheartedly welcome the statement, now he has brought it to the House, just as I have welcomed innumerable statements of similar rhetoric from his predecessor. Can he assure me that attributing more substance to his statement than to all those previous statements made during the past 10 years is not a triumph of hope over experience? Can he explain, given his rhetoric and Freud’s arithmetic, both of which I support and which suggest that the savings from getting people back to work should exceed the costs of doing so, why he requires more than a temporary increase in his budget to bring this about? More specifically, can he tell us what safeguards he proposes, so that fully disregarding child maintenance when working out income-related benefits will not create a direct incentive for couples to split up? When they are together, couples get no allowance for the income earned typically by the father in helping to bring up the children, and it is important to consider that. I hope that he has found a way of overcoming that, but if he has not, he should be aware of the problem.
The problem that we inherited from the right hon. Gentleman—he was one of my predecessors—is that the money was not put in to help people back into work. The Conservative Government cut benefits, not unemployment queues, and the number of those claiming incapacity benefit increased from 700,000 to 2.6 million. We now have a million fewer people on benefits precisely because we have been prepared to do what he never did: invest money in getting people back into work, rather than just paying the cost of the failure to do so.
The right hon. Gentleman is right to say that we want to put money into getting people back into work precisely to reduce the costs of their not working. That is exactly the right thing to do. In relation to child maintenance, we are trying to solve the problem of the way in which the Child Support Agency was created, which meant that benefits were going straight to the Treasury, not to parents. There was no proper incentive for people to give money to their ex-partner, because they thought it would go to the taxpayer rather than to the parent. This measure means that money will go to the children. It has been widely welcomed and it is absolutely the right thing to do.
I represent a coalfield community where, under the Conservatives’ failed policies, thousands of people were thrown on to incapacity benefit and were more likely to die on it than ever to work again, so I very much welcome these reforms. However, may I press the Secretary of State specifically for clarification that lone parents will not be required to take a job unless affordable child care is available? I would also like a better-off calculation to be done for them, so that they are better off and their children can be rescued from poverty. The matter of couples should also be looked at carefully, particularly the way the tax credit system works, because it is often not worth their while to get into work and off benefit. Finally, the revolving door syndrome, whereby people get a job but then come back out of employment and cannot immediately claim benefit or pay their mortgage, could become a problem that needs to be addressed. Dealing with those matters would help to ensure that the attempt to get genuinely full employment was successful.
On the first three assurances that my right hon. Friend asks for, I can say yes, yes and yes. On the fourth, I can say that that is absolutely the case, because of the work he did. He started the process of making sure that we assess tax credits, housing benefit and other benefits from the Department for Work and Pensions together in one office. We will now be able to roll that out across the country. We want to look at both how people can have stability when they go back into work and how housing benefit reforms can help to ensure that people have certainty that, when they go back into work, they will continue to get that level of funding. That is one of the fundamental points that we want to consider in the housing benefit reforms.
We are taking forward the radical reforms that my right hon. Friend put in place, particularly in relation to lone parents, and he is absolutely right to say that this is about helping the thousands of people—
At the end of the Secretary of State’s statement, he said that he would legislate to give disabled people the right to have choice in and control over services and support received from the state. I welcome that. He will know that local authority social services departments are introducing personally directed support over the next three years. Will the legislation cover the support that disabled people get from the national health service?
It will not cover things such as accident and emergency care, because that would not be the right approach. The NHS is running individual budget pilot schemes and we do not want to confuse the picture. It is right for the NHS to have such pilot schemes, for example, in relation to chronic care, because we are trying to build on previous individual budget pilots, which worked well, but had two problems: first, people sometimes did not have the powers to have individual budgets in practice and, secondly, although those pilots were good within particular funding streams, they were less good for allowing people to pull different funding streams into one budget. That is what this right will create for disabled people. We will have eight trailblazer authorities to see exactly how the measure will work in practice, and introduce legislation to roll it out if that is successful.
I have a constituent who, after working all his life, was diagnosed with a serious, life-threatening disease in his early 60s. He is now 63 and the Department’s doctor has decided that, following treatment, he can now return to work and his incapacity benefit has been stopped. At his age, it is unlikely that the jobcentre will look seriously for a job for him and it is even more unlikely than any employer will take him on. Will my right hon. Friend consider allowing people of that age and in those circumstances the opportunity to self-certify for incapacity benefit—for the higher levels of the new benefit that he is proposing?
I do not know if we can go as far as self-certification, but I know that my hon. Friend has met ministerial colleagues about that case, which he feels is distressing. Those decisions are taken independently of Ministers by medical professionals, but I am happy to look at the case and see whether any general lessons can be learned for the work capability assessment, which will be part of the employment and support allowance regime.
I thank the Secretary of State for advance notice of his statement. We all support the idea that as many people as possible should be getting into work, but can he guarantee that the jobs will be there? It has been suggested that in my constituency, for every single job, there are some 33 people available and looking for work. Does he agree that it is the most vulnerable who are likely to lose out from this kind of proposal and that there must be a safety net and a minimum income for every person in this country? Does he also agree that it is the ordinary folk who currently struggle with the complexities and bureaucracy of the system and that the danger is that they will suffer in the future? Does he share my concern about some of the words used, such as “wasting money”, “benefit savings” and “offenders”, which suggest that the direction of this proposal is towards a Conservative policy?
This is not about penalising the most vulnerable; it is about helping them and ensuring that they have support and the expectation that they will take up that support. It is worth pointing out that in the past 11 years, Scotland has gone from having higher unemployment than the national average to having lower unemployment than the national average, because of the policies that we have put in place. Unfortunately, I think that the SNP Executive—the hon. Gentleman can nod if he wants to—will refuse to have policies to help people with drug problems to address those problems, and will not supply treatment places. They are cutting training policies and apprenticeships, so that people will not have help to get back into work; and they are not going to use the NHS to help people to tackle problems of ill health at work. They are cutting away the very support that has helped people to get back into work during the past 10 years. That is a retrograde step and I hope that they will change their mind.
Mrs. Anne McGuire (Stirling) (Lab): I welcome my right hon. Friend’s statement and ask him to recognise that some of the fears that individuals and organisations are expressing are founded on their experience during the ’80s and ’90s when, along with colleagues such as my hon. Friend the Member for Glasgow, South-West (Mr. Davidson), we had to manage training programmes that were little to do support or individuality. During the consultation on the White Paper, will he recognise those fears and emphasise that conditionality is about investment in people, not benefit cuts?
My right hon. Friend is absolutely right. I thank her for her help in developing the Green Paper and the White Paper and for all her fantastic work with disabled people. She championed the right to control and I am glad that we are putting it into legislation, as a tribute to the work that she did.
Following the question asked by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley), can the Secretary of State tell the House how he would explain to hard-working couples with families who struggle to pay all their bills and taxes how it is fair that parents who have separated should have their child maintenance disregarded for income-related benefits? Can he reassure the House that that change, unlike other Labour reforms to the benefit system, will not provide an incentive for couples to live separately in order to boost their incomes?
I can indeed give the hon. Lady that reassurance, because there are no child maintenance payments where the parents stay together. If money is being paid, it is right that it should go to the children. That is the right thing to do and it has been widely supported by organisations that represent poor children.
Has the Secretary of State considered the problem of the high level of private sector rents, particularly in major cities such as London? Families are routinely placed in private rented accommodation by local authorities, where the rents can be as much as £300 to £400 a week, and when people are offered jobs, they cannot afford to take them because they will be considerably worse off. Is he prepared to tackle such excessive rents and the need, I believe, for rent control and a housing benefit taper that reflects the problem that too many families face?
My hon. Friend identifies a problem that our housing benefit review intends to look into. The problem particularly affects inner-city London constituencies such as his, so if he and a group of London MPs would like to meet me to discuss it, I would be happy to work with him.
Will the Secretary of State provide a little more detail to that part of his statement where he said that instead of receiving jobseeker’s allowance or employment and support allowance, crack and heroin users will receive a treatment allowance, alongside an obligation that they address their problem? Will he tell the House whether that is confined to just crack and heroin or whether it extends to other addictive drugs and alcohol? Will he also explain what protections he plans to build into the disbursement mechanism to reduce the risk of vulnerable drug addicts going out and spending the money inappropriately? Will he confirm that the obligation that they address their problems is a—
The problem now is that people can receive JSA or ESA, but have no obligation to address their drugs problems. By sharing information across Government, we are ensuring that we have much better information about who has a drug problem. That is the right thing to do, because there is no point in putting people through a back to work regime if they have a serious drugs problem. The other problem in the system is that it is hard to check whether people are undertaking their treatment. We therefore think it right that, instead of being in the JSA regime, people should be on the treatment allowance. In return for that, however, they have to show that they are taking steps to address their drugs problem. Otherwise, the money will just go straight into drug dealers’ pockets.
I welcome my right hon. Friend’s statement and I am sure that all of us who want to make our long-term commitment to abolish child poverty a reality will strongly support the White Paper. Given its emphasis on returning to work, does he agree that there will be an increased need for work readiness skills training and that colleges of further education and the voluntary and private sectors could have a role in delivering area and sector-specific programmes?
That is a very important point. Ensuring that the skills support we offer people is appropriate to them is one of the things that I am working on closely with the Secretary of State for Innovation, Universities and Skills. We want to ensure that that skills provision specifically addresses work readiness. FE colleges spend quite a lot of money on that already and we want to ensure that our work is supported. My hon. Friend knows that we are integrating skills into the welfare system. I thank him for his help in developing the housing benefit and social fund proposals that we are taking forward in the White Paper.
I noted with interest the Secretary of State’s statement that the sanction for those not meeting the conditions would be having to work for their benefits. What will be the ultimate sanction for anyone who refuses to work for their benefits or to participate in a scheme? Who will monitor how well the schemes are working, if it is a private or public provider giving feedback on whether people are complying and getting something out of the system?
I hope that I can reassure the hon. Lady that sanctions are not enforced by private or voluntary providers, but by Jobcentre Plus advisers and expert decision makers. As is the case now, if people refuse to take a job, they can lose their benefits for six months—that has been in the system ever since 1911. If people fail completely to comply with the system, they lose their benefits for six months. That is the ultimate backstop, but virtually no one gets there, because people can avoid a sanction simply by ensuring that they do what is expected of them.
My right hon. Friend knows that my constituency still has relatively high levels of structural unemployment. His proposals today will almost certainly be welcomed as a way of tackling those structural problems. However, will he ensure that areas have the capacity relative to their needs, so that areas of relatively high unemployment such as mine have training places and the ability to enable people to return to work?
Yes, absolutely. That is one of the reasons why we are bringing forward the extra funding. However, just as the money is important, so too is devolving power to the people who can use it most effectively. We will make it clear in the White Paper that we want to devolve power to local authorities that want to work with us on tackling worklessness. Manchester is one area where we can make the greatest progress, because there is an opportunity to devolve power across Greater Manchester, to ensure that we deal with exactly the issues that my hon. Friend raises.
Further to the point made by the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), does the Secretary of State accept that there are times when some parents of children over seven need to be with their children, which means that full-time work might not be a realistic option for them? What assurances can he give us that parents who choose part-time work in the best interests of their children will not be financially penalised for doing so?
Within the regime for lone parents, they can choose part-time work after their child is seven if they think that it is the right thing for them. If a lone parent’s child is disabled, they do not have to be looking for work. If there is a problem or crisis, such as the child being excluded from school, the system is flexible, in order to ensure that people can best balance looking after their children and working, exactly as the hon. Lady describes.
Will special consideration be given to the parents of children aged between six and 12 who have severe disabilities, especially learning disabilities, where the parents have a special caring role? My right hon. Friend will be aware that there was a carers’ parliamentary lobby here last Thursday. Will the White Paper that he has described to us today link with the Government’s response to the Select Committee on Work and Pensions report on valuing carers, which was published last August?
Yes it will. My hon. Friend made representations to me about her view that we should not go ahead with the proposal to move carers on to jobseeker’s allowance. We have made it clear that we will not do that, but will look at the right approach as part of our work on long-term care and a single working-age benefit. On her first point, which she is absolutely right to make, parents who care for disabled children who receive carer’s allowance will be outside the conditionality regime completely. If they are on JSA but their child receives the middle or higher rate of the disability living allowance, they do not have to look for work either. I hope that that reassures my hon. Friend.
I listened carefully to the Secretary of State’s reply to the point that the right hon. Member for Neath (Mr. Hain) made about the revolving door problem, whereby people who have gone into work but who cannot hold on to their job suffer when they go back on benefits. That problem exists today. I have written to the Secretary of State a number of times about people who have suffered from long-term sickness, particularly those with depression or drug problems, being petrified that if they do not hold on to a job—sadly, that happens—they will be unable to pick up the benefits that they need to survive. I am not talking about just housing benefit, but other benefits as well. Can we look into the problem now, as the pilots proceed, so that we can protect such people and encourage them into work, rather than scare them?
One of the key elements in the new employment and support allowance for the group that the hon. Gentleman is talking about will be the much greater ability for people to try out work while keeping their benefits. They will be able to do 16 hours a week work at the minimum wage, which will give people with depression, for example, the ability to try out something to see whether they can manage. It is important to point out that most people now recognise that being in work is a very good way of helping people with depression, but what the hon. Gentleman says is absolutely right.
We have 2 million unemployed, we are facing the longest and deepest recession in our lifetime, the Government have laid off 30,000 workers in the Department for Work and Pensions—the very people who are there to assist people to get back into work—and the lack of affordable child care has been admitted by the Prime Minister, yet we are threatening to withdraw benefits from some of the poorest people in our society. What measures will be put in place to protect the children in families that lose their benefits from falling into even more severe poverty?
This measure is about reducing child poverty. We think that our reforms to lone parent benefits will lift 70,000 children out of poverty, and it is right that we should do that. We know that, when a parent is working, their child is eight times less likely to be in poverty than if they are not working. It is also worth saying that, where we can make our Department more efficient, it is right that we should do that. We have used the reduction in the number of people working for us to increase the number of people on the front line: the number of personal advisers has increased by 1,500. Now that we have a rising claimant count, we have announced that we will be spending more than £1 billion more, and that means 6,000 more posts in jobcentres, which I think my hon. Friend might welcome.
Many of the measures in my right hon. Friend’s statement are welcome, but what consideration is being given to the experience of bringing up children well and of creating a welcoming and stable home on a low income as being excellent preparation for paid work? What measures are in the White Paper to ensure that such work is valued, recognised and supported?
That is exactly why we are saying that the JSA regime should not be taken down to parents in that category and that people should instead be coming in and developing action plans that work at their own pace. If they do not want to go back to work when the child reaches one or two, or older, that is absolutely their right. That is the correct approach. We must ensure that people find out about the support that is available, including child care and Sure Start, and about the help that can enable them to bring up their children in exactly the way that my hon. Friend wants. I am happy to discuss this matter further with her, if she would like to.
Many decisions are taken in this House based on laudable principles, but the interpretation of the decisions and the way in which they are applied outside the House can be a real problem. As MPs, we are the first in line to have to deal with these problems. Will the Secretary of State ensure that we have direct access to a hotline, so that we can deal with these matters properly? May I also suggest that he meets the Secretaries of State for Scotland, Wales and Northern Ireland, because many of the vehicles for the provision of health services, nursery care and so on are dealt with by the devolved Administrations? If we are to carry these measures through, it is important that he meets those people to ensure that this can all be done properly.
I can give my hon. Friend that assurance. Indeed, it was the present Secretary of State for Scotland, when he was Minister with responsibility for welfare reform, who started this process off. I have also met representatives of all three devolved Administrations to ensure that we can work together. My hon. Friend is right to say that MPs need to be able to deal with any issues that their constituents raise, and I am happy to look into the possibility of a hotline. I will write to him to let him know more about that.
Further to the question raised by my hon. Friend the Member for Midlothian (Mr. Hamilton), will the Secretary of State tell us what will be done to change the culture among some of the people in his Department? A constituent of mine, a bricklayer, suffered a hernia and had to undergo an operation. He contracted an infection and, while he was waiting for his fourth operation, he was told that he had not scored enough points on his incapacity benefit form. He had an open wound in his stomach, yet he was told that he was fit for work and that he should go on to jobseeker’s allowance. That decision was callous and wrong, and it was not overturned on appeal. If we are going to deal with such people in the way that my hon. Friend has suggested, we need to deal with them as people and not through forms and box ticking. Will the Secretary of State assure the House that, where such a culture exists in his Department, it will be changed?
My hon. Friend is right to say that one of the big challenges here is to give advisers the flexibility and skills to help people in the right way. I am sorry that he feels that his constituent was not treated properly by the Department. Those decisions are taken independently of Ministers—that has always been the case—but I am happy to look into the case that he has raised. We need to ensure that people are treated according to their personal circumstances, and not according to whichever group of claimants they happen to be in. This is exactly what the Gregg review is about, and I hope that it will work on that issue.
Is the Secretary of State not being too soft in his approach to the dependency culture, particularly in relation to drug abuse? It sounds as though there is going to be a reward for drug abusers. Why is he not extending the treatment for drug abusers to alcohol abusers? Will he take my assurance that not all Glasgow Members of Parliament take the view that they have to stand up for rascals and chancers? We believe that the Scottish Government should be supporting this initiative from Westminster—even though it is from Westminster—to help decent people into employment.
I know that I shall need the help of the Opposition in the coming rebellion over how we are not being tough enough on drug users, and perhaps the hon. Member for Epsom and Ewell (Chris Grayling) will be able to help me with that. I am pleased that my hon. Friend welcomes the approach that we are taking, and I know that he also supports what Glasgow city council is doing on apprenticeships and getting people back into work. We have announced today that that area is going to have one of the pilots for the DEL-AME projects that we are introducing.
My hon. Friend mentioned drug users. We are prepared to look at including alcoholics, but it is harder to identify people who have alcohol problems. If he has any suggestions on how to do that, we would be happy to look at them. We offer specific help to people who self-identify, but if there are better ways of doing that, we will be happy to look into them. This is not about giving more help to people who are drug users; it is about ensuring that they go into treatment rather than just taking the money and spending it on drugs.
I very much welcome the clarification from the Secretary of State that the Gregg review’s proposals for lone parents whose children have reached the age of one will not involve forcing them to go out and find work immediately, but will instead involve preparing for work. One of the best ways for such people to prepare for work might be to go into full-time education, but at the moment the system penalises them if, for example, they want to go to university full time rather than working part time. Will my right hon. Friend assure me that, as part of the review, he will ensure that people who want to do a full-time university course will not lose their other associated benefits, and that they will not be treated like a normal student? In that way, they will be able to take their course and, when their child reaches the age of seven, they will be able to have a decent career rather than a job that pays only the minimum wage.
I am relatively confident that the answer to that question is yes, but if it is not, I will write to my hon. Friend. People who are on JSA get different treatment from those on lone parent benefits, and that gives people the ability to study at the same time as claiming income support. I will write to my hon. Friend if that is not correct.
Under the last Conservative Government, those who were unemployed got almost no help. They were either shovelled on to incapacity benefit or expected to take jobs as security guards at £1 an hour—or, if they were lucky, they were able to join one of those wonderful job clubs. Under the Labour Government, the world of work has been transformed. We have a national minimum wage, increased health and safety, increased employment rights, increased trade union rights—although not enough, I believe—and the £40 premium for single parents. People also have a lot of help with child care, and those who are in work are generally better off through tax credits. Will my right hon. Friend assure me, however, that the reforms that he has outlined today—which I broadly support—will be dealt with sensitively? These are very sensitive issues for people.