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Employment (Benefit Claimants)

Volume 495: debated on Monday 29 June 2009

2. What recent assessment she has made of her Department’s performance in moving people from economically-inactive benefits into employment. (282347)

It is good to see you in the Chair, Mr. Speaker.

The Department is continuing to help people from incapacity benefit and income support back into the labour market and jobs. Despite the recession, and although unemployment has risen, the number of people on inactive benefits has not risen over the last year, which is in contrast to what happened during the recessions in the early ’80s and early ’90s.

High levels of economic inactivity inevitably mean high levels of poverty, particularly child poverty. Over the past decade in Glasgow, we have seen incremental reductions in the number of people claiming incapacity benefits, but if that incremental approach continues, we are going to see those levels of poverty inflicted on yet another generation. Does my right hon. Friend share my impatience? Is it not time that we moved from an incremental approach to a step change in moving vast numbers of people off benefits and into work?

My hon. Friend is right that huge problems can be created for the families of those on incapacity benefit and those left out of the labour market for a long time, even though they may be able to come back into work. He will also know that after the numbers on sickness benefit rose for more than 20 years, they have, in fact, been falling since 2003. I think that some of the measures in the Welfare Reform Bill will help prepare people for work in the future as well as helping those who can get back into work do so in the short term.

Does the Secretary of State agree that the best incentive to get people into work would be a serious increase in the minimum wage?

The minimum wage has played an important part in making work pay for a huge number of people who were previously stuck on poverty pay. We take the advice of the Low Pay Commission in setting the minimum wage so that we can support the economy more broadly, but there is no doubt that, along with tax credits and other measures, it has helped to ensure that people are better off in work.

Given that the number of workless claimants under retirement age has fallen only from 5.6 million to 5.2 million at a time when 3 million new jobs have been available—nearly all of them taken by people coming to this country to seek work—what plans does the Secretary of State have to free up local offices and give them their own budgets so that they can find more effective ways of moving people from benefit into work?

As my right hon. Friend will know, we are introducing the flexible new deal, which will provide more flexible and personalised support. We are also seeking, both though the Welfare Reform Bill and through pilot programmes, to introduce more flexibility, focusing on individuals’ personal problems and the reasons why they may not be able to return to the labour market. I hope that he will recognise that important progress has been made to reverse what was an inexorable rise in the number of people on sickness benefits, and that there have been no increases although the labour market is under considerable pressure as a result of the recession.

I am afraid that the Secretary of State simply is not correct. The Government’s target is to remove 1 million people from incapacity benefit and employment support allowance by 2015. The last set of official statistics showed an increase, as do early estimates from the Secretary of State’s own Department. Let me return to the question asked by the hon. Member for Glasgow, South (Mr. Harris). How exactly will the Government hit that 1 million target, given that they have been singularly unsuccessful in doing so thus far?

I am sorry to hear the hon. Gentleman ask that question, but the answer is clear: we will invest additional sums to help people back into work. Conservative Front Benchers have opposed that investment. It is tragic that they should oppose £5 billion of additional support to help people to return to work during a recession. It should also be recognised that in the early 1990s, between 1990 and 1991, the number of people receiving inactive benefits rose by more than 200,000, and that it has not increased over the past 12 months.

I was told by a very experienced individual who had been a job centre manager during the 1990s about the really tough targets for moving people from employment benefits to incapacity benefits at that time. We also discussed the fate of the cohort who have failed their employment support allowance medical and who have not so far turned up again on the jobseeker’s allowance rolls, although they might have been expected to do so. Either they have found jobs, which would be a good thing, or they have fallen out of the system altogether, which would be a bad thing. What research is the Department conducting to ensure that no one who needs help and support is losing out as a result of the new system?

My hon. Friend will know that we are monitoring all the changes to ensure that we support the most vulnerable, and that we help people back into work. He will also know that some people have managed to find work for themselves. However, we should also focus on more individual problems. We should examine the individual reasons why people may not be receiving the support that they need, and ensure that we can provide it.