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New Clause 1 — Jobseeker's allowance

Food Labelling Regulations (Amendment) – in the House of Commons at 3:38 pm on 17th March 2009.

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'Section 4 of the Jobseekers Act 1995 (c. 18) (amount payable by way of a jobseeker's allowance) is amended as follows—

(a) in subsection (1), omit paragraph (a), and

(b) omit subsection (2).'.— (Lynne Jones.)

Brought up, and read the First time.

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Photo of Michael Martin Michael Martin Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons

With this it will be convenient to discuss the following:

New clause 8— Work related activity: payment of additional premium

'(1) In the Social Security Contributions and Benefits Act 1992 (c. 4), section 135 is amended as follows.

(2) After subsection (6) insert—

"(7) The applicable amount shall include an amount in respect of a work-related activity component if the claimant undertakes work-related activity as defined in section 2D(8)(c) of the Social Security Administration Act 1992 (c. 5)."'.

Amendment 42, in clause 1, page 1, line 8, after 'benefit"', insert 'pilot'.

Amendment 43, page 1, line 9, at beginning insert 'Pilot'.

Amendment 11, page 1, line 11, leave out 'imposing on' and insert 'offering to'.

Amendment 36, page 1, line 12, after 'circumstances', insert

'and where claimants have guaranteed and predictable access to good quality, affordable and flexible childcare which meets the needs of the parents and the child in the claimants' household.'.

Amendment 12, page 1, line 12, leave out 'a requirement' and insert 'an opportunity'.

Amendment 44, page 1, line 13, leave out 'designed' and insert 'personally tailored'.

Amendment 13, page 2, line 1, leave out 'require' and insert 'allow'.

Amendment 14, page 2, line 9, leave out from 'scheme' to end of line 12 on page 3.

Amendment 15, page 3, line 12, at end insert—

'(11) Any work undertaken by a participant in a "work for your benefits" scheme shall be—

(a) paid at an hourly rate of no less than the full adult minimum wage; and

(b) paid at an hourly rate no less than that of directly employed staff undertaking the same role.'.

Amendment 45, page 3, line 12, at end insert—

'(11) This section shall have no effect after 31 December 2013.

(12) Evaluation of these pilots shall have particular regard to—

(a) the impact on single parents,

(b) the impact on claimants identified as having health problems or disabilities,

(c) the impact on claimants identified as having low skills,

(d) the impact on claimants identified as having problems with substance misuse.

(e) the impact on the overall level of employment within organisations that operate work for your benefit schemes.'.

Amendment 16, page 4, leave out lines 12 to 20.

Amendment 17, in clause 2, page 4, line 22, at end insert—

'(A1) This section does not apply in the case of a single parent of a child aged seven years or younger.'.

Amendment 35, page 4, line 22, at end insert—

'(A1) This section does not apply in the case of a single parent with a child under five years of age.'.

Amendment 49, page 4, line 26, leave out from 'with' to 'continuing' in line 28 and insert

'providing a person who is entitled to income support an entitlement to undertake personally tailored work-related activity in accordance with regulations while'.

Amendment 18, page 4, line 26, leave out 'imposing on' and insert 'offering to'.

Amendment 19, page 4, line 27, leave out 'a requirement' and insert 'an opportunity'.

Amendment 20, page 4, line 28, leave out 'as a condition of' and insert 'while'.

Amendment 21, in clause 2, page 4, line 31, leave out 'imposing on' and insert 'offering to'.

Amendment 50, page 4, line 31, leave out 'imposing on' and insert 'entitling'.

Amendment 22, page 4, line 37, leave out 'a requirement' and insert 'an opportunity'.

Amendment 51, page 4, leave out lines 37 to 39 and insert—

'to access personally tailored work-related activity'.

Amendment 23, page 4, line 39, leave out 'as a condition of' and insert 'with'.

Amendment 24, page 5, leave out from line 2 to end of line 43.

Amendment 52, page 5, line 4, leave out 'requirement' and insert 'entitlement'.

Amendment 53, page 5, line 5, leave out 'requirement' and insert 'entitlement'.

Amendment 54, page 5, line 7, leave out from 'is' to end of line 10 and insert

'entitled to personally tailored work-related activity services can access those services and the amount of activity the person may access at any time.'.

Amendment 55, page 5, leave out lines 11 to 30.

Amendment 56, page 5, line 39, at end insert—

'(c) for requirements that reductions shall not be applied where they may have adverse consequences for the wellbeing of children in a household or may worsen the severity or extent of child poverty.'.

Amendment 25, page 5, leave out lines 47 and 48.

Amendment 57, page 6, line 34, leave out from beginning to 'may' in line 35 and insert

'An action plan must be reconsidered if the person to whom it is provided makes a request on reasonable grounds for reconsideration to occur and regulations'.

Amendment 58, page 6, leave out line 37 and insert—

'(a) the factors that may be taken into account in deciding reasonable grounds;'.

Amendment 59, page 6, line 44, leave out from beginning to end of line 14 on page 7.

Amendment 26, page 7, leave out from line 15 to end of line 8 on page 9.

Amendment 46, page 11, line 1, leave out Clause 4.

Amendment 47, page 15, line 41, leave out Clause 11.

Amendment 60, page 16, line 40, leave out Clause 12.

Amendment 61, in clause 19, page 23, leave out lines 38 to 45.

Amendment 62, page 23, line 46, leave out from beginning to end of line 10 on page 24.

Amendment 64, page 26, leave out lines 1 to 38.

Amendment 29, in page 31, line 24, leave out Clause 23.

Amendment 65, in clause 24, page 34, line 17, leave out from 'period' to 'in' in line 18 and insert 'of one week'.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

Mr. Speaker, I am somewhat surprised to be called as I had not realised that my new clause had been selected, so please forgive me if I am not quite ready. The new clause calls for an improvement in the level of unemployment benefit. At present, this benefit is set at just over £60 a week for those over 25 and it is somewhat less for those between 18 and 25.

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

This is the removal of the younger rate.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

I am not even sure which measure I am speaking to, but I am advised by my hon. Friend that this new clause would remove the lower rate that applies to young people.

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

My hon. Friend tabled two excellent new clauses, the first of which would remove the younger rate and has now been selected. Unfortunately, the second, new clause 2, has not been selected. It would have increased the jobseeker's allowance by £15. However, we will return to that on Budget day, when I am sure that the Government will implement that measure.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

I had finally got round to appreciating what my hon. Friend said, but I thank him for his intervention.

We are in a recession, and unemployment is rising. It would be somewhat disingenuous to suggest that people are unemployed through their own fault. I recall my right hon. Friend's the Prime Minister's maiden speech back in 1983, and my right hon. Friend, who probably had ambitions to become Prime Minister but did not realise that he would achieve them, spoke with great passion about the low levels of benefit paid to those then on unemployment benefit. He castigated the then Government for considering that benefit rates should be kept low because it would give people an incentive to get work. He made a good case explaining why that was absolute nonsense. Sadly, we are back in similar circumstances.

Unlike the Government then, the present Government are actively helping people to get back into work, and I support the assistance being given—the training, advice and help. However, where I do take issue with my Government is on the fact that they still feel that people need to be given disincentives, in the form of benefit sanctions, in order to engage with the world of work. I disagree with that view, and so did the Prime Minister when he was a new Back Bencher.

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Photo of John Redwood John Redwood Conservative, Wokingham

Will the hon. Lady give us an idea of what she thinks would be a fair level of unemployment benefit?

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

The other new clause that I tabled, which unfortunately was not selected, would have increased the basic level of unemployment benefit of £60 a week by £15 a week. That would be equivalent to increasing benefit in line with earnings, as opposed to prices. For those under 25, the rate is even lower, and I challenge any hon. Member to live on £60 a week, which is the main rate of benefit, and the rate that my new clause argues should apply to younger unemployed people. It is an impossible sum to live on.

The Government have been very generous with other benefits, such as those for pensioners. We allow pensioners to live on no less than double the amount that is available as unemployment benefit and nearly three times the amount available to younger claimants. In addition to a more generous basic level of income, pensioners are quite rightly entitled to other sources of income and means of making life easier, such as free travel passes, the winter fuel allowance and the like.

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Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

The hon. Lady makes a very important point. Does she recall that the background of less money being paid to young people was the Tory changes of 1988? We moved from a system in which there was a householder rate and a non-householder rate, the presumption being that someone should get more if they had a house to run, to a system of an over-25 rate and an under-25 rate. That was done on the basis that the Tories thought that young people up to 25 ought to be living with their parents. Does she accept that the present system discriminates against young people who have to live independently, perhaps through no fault of their own? They are treated as non-householders, to use the old language, when in fact they may be householders.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

I agree entirely, and I have personal experience of that. I had to leave home at 18, before I went to university, because conditions at home had become so difficult. I am sure that that must apply to many young people. By the time I was 21 or 22, I was in a position to buy my own home. Few young people are in that position today, but even those living at home are expected to make contributions to the running of the household. I believe that it is impossible for them to live on £45 a week. The purpose of the new clause is to remove that punitive level of benefit for young people. However, we must do everything that we can to assist young people into work and to make the programmes that we will discuss later as effective as possible.

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Photo of Bob Spink Bob Spink Independent, Castle Point

The new clause is laudable, and in an ideal world we would all want to support it, but can the hon. Lady tell the House what it would cost each year to give the higher level of unemployment benefit to the under-25s? Does she have an estimate of that? I believe that it is relevant, given that resources are tight. The Government have a difficult job in deciding how best to spend their limited resources, upon which there are many demands.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

I do not have the precise total figures, but it would be £750 a year for each unemployed young person. I suggest that the hon. Gentleman can probably work out the total, but it is probably a few hundred million pounds—a sum that pales into insignificance compared with what is being handed out to banks and what has been taken as retirement pay by just a few bankers. Money put towards unemployed young people would be much more likely to help to stimulate demand in the economy than money that goes to failed bankers. Despite the financial problems that we face, it is immoral to expect young people to have to live on such a small amount of money. I am pleased to see the hon. Gentleman nodding his head, and I hope that he will support the new clause.

In conclusion, I wish to give a quotation from the speech that I mentioned earlier; it was made by the current Prime Minister on 27 July 1983. He talked about the unemployment benefit level of £26 a week. That was 26 years ago, and my right hon. Friend felt that it was a completely inadequate sum. Yet here we are today, and unemployed people have to survive on less than twice that amount despite the inflation that has occurred in between. My right hon. Friend said:

"The debate about the so-called unemployed trap, and the so-called incentives that it is claimed will be needed to get the unemployed back to work, is designed to obscure what everyone knows. If there are no jobs, no amount of poverty and no degree of destitution will create jobs where none exist."—[ Hansard, 27 July 1983; Vol. 46, c. 1242.]

The Government need to do everything that they can to ensure that those jobs exist. They can do—and are doing—a considerable amount, unlike the party that was in government in 1983. However, the Government of my right hon. Friend, who expressed those sentiments when he first entered the House, should use the power that is now in their hands to pay reasonable benefit to people who are unemployed through no fault of their own.

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Photo of Tom Harris Tom Harris Labour, Glasgow South 4:00 pm, 17th March 2009

My hon. Friend started her comments by explaining that the new clause was motivated by a concern for people who have lost their jobs as a direct result of the recession. Does she envisage some sort of sunset provision for the new clause? When, inevitably, we move to a period of economic growth and there are more jobs in the market, the new clause will not have its current force.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

No, I do not envisage that, because I believe that it is fundamentally wrong to discriminate against young people. Unfortunately, the new clause would not uprate general unemployment benefit. The principles are that discrimination should end and that no one should be expected to live on such a meagre amount of benefit.

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Photo of James Clappison James Clappison Shadow Spokesperson (Work and Pensions)

It is a pleasure to follow the hon. Lady, although I do not agree with the substance of her amendments. I congratulate her on the elegant—I mean eloquent—way in which she presented her case. Although she was eloquent, as well as elegant, I must advise my hon. Friends to vote against her amendments because they would reduce whatever value the provisions contain.

As the hon. Lady explained, the new clause is an attempt to increase jobseeker's allowance. Although it was not selected, she tabled another amendment, which specified £15 a week as the amount by which she wanted it increased. The group also includes amendments that would make the work-related activity that clause 2 requires of certain benefit claimants voluntary, and others that would make the "work for your benefit" schemes, which apply to people after two years of unemployment, pilot schemes so that they do not immediately take effect. Some of her hon. Friends would do away with the provisions for contracting out welfare-to-work services—[Hon. Members: "Hear, hear."] Some Labour Members shout, "Hear, hear." However, the provisions are an important aspect of the Bill, although they do not go nearly as far as Conservative Members would go, or nearly far enough, given the scale of the problem that the country faces.

Paul Rowen has tabled similar amendments and I look forward to hearing his case for them. Steve Webb mentioned 1988 and a voice behind me tempted me to say that next week we might hear about Neville Chamberlain's foreign policy or Benjamin Disraeli's mistakes with the title of Empress of India. At least the hon. Gentleman said a little more than the hon. Member for Rochdale said in Committee. We wait to hear the Liberal Democrats say where exactly they stand on welfare reform and the principles that they would follow, instead of talking about 1988.

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Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister

Does the Conservative party believe that we should discriminate against young people in the amount of JSA that they receive? Should not they receive the same as everybody else?

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Photo of James Clappison James Clappison Shadow Spokesperson (Work and Pensions)

I have made it clear, I hope, that we will not support the proposals made by Lynne Jones, but Liberal Democrat Members' comments suggest that they might do so, which would add that to the already-long list of Liberal Democrat spending commitments. We look forward to more forthrightness, because we have not had much so far.

We are clear where we stand. We will vote against the amendments standing in the name of the hon. Lady and her colleagues—I thought that I had already made that clear, but I will do so again. [Hon. Members: "Why?"] The amendments would remove what value there is in the Bill, which does not go far enough. We want a more thoroughgoing approach to welfare reform, and although, by and large, we approve of the Bill's provisions, it simply does not go far enough.

Some of the concerns of Government Back Benchers might be allayed when they see how little the Bill requires of claimants. There are some 2.6 million existing incapacity benefit claimants, 1.5 million of whom have been on that benefit for five years or more. For those aged under 50, the requirement made under the Government's plans is that they attend three interviews, and that is it. For incapacity benefit claimants aged over 50, of whom there are sadly too many, the only requirement that the Government make is that they attend a single work-focused interview. They are not required to do anything as a result of that interview; they are simply required to attend.

We think that that is far too little help to offer people who need a great deal of help to get back to work, particularly in today's circumstances, when they will be competing for work against so many newly unemployed people. We did not choose the timing of the Bill; it was chosen by the Government. After 12 years of dither and delay, the Government have at last embarked on welfare reform, just at a time when there are difficult circumstances in the economy and when, sadly, queues at the job centres are being swollen by people who have lost their jobs through no fault of their own and who in many cases have long records of work.

Amendment 35, which stands in my name and those of my hon. Friends, relates to a completely legitimate issue to take up with the Government—the work-related activity that may be required of single parents. Clause 2 deals with the work-related activity that may be required of certain benefit claimants, including those on income support, income-based jobseeker's allowance or income-related employment and support allowance. Amendment 35 would prevent those requirements from applying to a single parent with a child aged under five. An amendment standing in the names of Government Back Benchers would raise the age to seven, but for reasons that I will explain, we prefer five as the age at which to make those requirements.

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Photo of James Clappison James Clappison Shadow Spokesperson (Work and Pensions)

I give way to the hon. Gentleman, although I think that I know what he is going to say.

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Photo of James Plaskitt James Plaskitt Labour, Warwick and Leamington

Is the hon. Gentleman telling the House that he has junked the policy of the social justice policy group, which is headed by Mr. Duncan Smith, his former party leader, and which called for parents whose youngest child was under five to have between five and 10 hours a week preparing for work? Has he now dumped that policy?

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Photo of James Clappison James Clappison Shadow Spokesperson (Work and Pensions)

I was going to turn to that point, but as the hon. Gentleman is there already I will deal with it now. If he studies the Green Paper that we issued last January, he will see that it mentions the age limit of five and that there is no age limit set below five. We can be judged only on what we propose in a Green Paper as a statement of our policy. The question that he and his colleagues on the Labour Benches have to answer is: why, when the Government published their Green Paper last July—six months after ours—did they chose five as the age at which those requirements should be made and why was there a change from five in July to three in December? What changed between July and December to bring that about?

As the hon. Gentleman is interested in this matter, may I take him through its history? It was not until June 2007 that the Government announced that they were moving single parents with children over the age of seven from income support to jobseeker's allowance, where the receipt of their benefits would be subject to conditionality. For many years under this Government, and until very recently, single parents were entitled to remain on income support until their youngest child reached the age of 16.

The Government's proposals of June 2007 began to be implemented last autumn. It is being done in stages, and single parents with children over the age of 12 are already being moved from income support to jobseeker's allowance. From October 2010, single parents with children aged over seven will receive jobseeker's allowance rather than income support.

Let me make it clear that we support these changes. We have no problem with them—we did not demur when they were first announced in June 2007—but the Government have since proposed to go further. In December last year, in their response to the Gregg review on conditionality, they proposed making further requirements of single parents with children aged over seven. These are the really important points for this debate. The Government's proposals were clearly set out in their response to the Gregg report.

The Government said that, when the youngest child is aged under 12 months, the single parent is not to be subject to any conditionality requirements. When the child reaches one year old, the single parent becomes part of what the Government term the progression to work group and, at that point, the single parent will be

"required to attend Work Focused Interviews and agree an action plan. They are not mandated to undertake any activities recorded on the action plan or any other activities, although they will be encouraged to do so on a voluntary basis."

When the youngest child reaches three, another distinct stage is reached. According to the Government's document, when the child turns three, the single parent is

"required to follow the full progression to Work regime, based around Work Focused interviews, action plans, work related activity and the backstop of adviser direction".

Clearly, there is a significant stepping up of requirements when the child reaches the age of three, and the Government will have to explain that. Receipt of benefit for the single parent of a child aged three or over is conditional on undertaking work-related activity. There is also the possibility of direction being given to the single parent about such work-related activity, and it is evident that the single parent could face a sanction of a reduction in benefit as a result of failure to comply with the requirements.

It seems curious that, for more than 10 years, the Government were content to permit single parents to remain on income support until their youngest child reached the age of 16, yet, in the space of little more than 18 months, they introduced proposals to move single parents from income support to jobseeker's allowance when the youngest child reaches seven—which we support—and proposed to go further still in imposing this degree of conditionality and rigour on the single parent from the time their youngest child reaches three. Is the correct balance being struck between conditionality and the age of the child? That is a legitimate question to ask. It is particularly legitimate to ask whether three is the appropriate age for these purposes.

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Photo of John Grogan John Grogan Labour, Selby

The hon. Gentleman is making a persuasive case, and I hope that those on my Front Bench will listen to him. Does he agree that his case is strengthened by the suggestion in the Work and Pensions Committee's recent report that the customer must have the final say on whether child care is suitable and affordable at the age of three? The Bill leaves that decision with the adviser, but is not the parent of a child aged three or four the best person to make that decision?

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Photo of James Clappison James Clappison Shadow Spokesperson (Work and Pensions)

To be fair to the Government, they have said that they foresee that there will be discussions and interviews. Behind those interviews, however, there will be requirements and the possibility of sanctions and of directions from advisers to single parents. The Government have to face the fact that, under this scheme, a single parent with a child aged three or over will face the possibility of sanctions.

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Photo of James Clappison James Clappison Shadow Spokesperson (Work and Pensions)

Yes, I will. Perhaps the hon. Lady is going to tell us that they will not face such sanctions.

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Photo of Meg Munn Meg Munn Labour, Sheffield, Heeley

On the issue of the age of three, I have certainly visited a number of child care and Sure Start centres where many parents benefiting from the free child care offered by the Government said that they now had the time to start thinking about employment and training. One of the benefits of putting that into legislation is that the schemes will be in place to enable parents to get the help and support, which they have not always had in the past, to enable them to get back into work.

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Photo of James Clappison James Clappison Shadow Spokesperson (Work and Pensions) 4:15 pm, 17th March 2009

Such places may be available, but the Minister for Employment and Welfare Reform conceded in Committee that such places were not available throughout the whole country. The Government looked into the issue themselves and published a Green Paper, which I adverted to earlier following a helpful intervention. In that Green Paper of July 2008, the Government said that they were

"considering whether we could introduce extra activity, as appropriate, when a lone parent's youngest child becomes five and goes to school full time so that preparation for work becomes a natural progression rather than a sudden step up."

The Government's Green Paper thus seemed to view the age of five—the age at which a child starts school—as the natural age to support for these purposes. It was only when the Government moved from that position that we began to look further at the question ourselves. Our amendment legitimately asks whether the balance is being correctly struck. The proposals to require lone parents to carry out work-related activity are right in principle, but is the balance being struck in the right place and is the age appropriate to the requirements? I believe that Government Members should think long and hard about that in the light of the full history that I have set out and particularly when they consider the nature of the regime to which single parents with children as young as three will be subject.

Let me make it clear again that we do not demur from the general principle of conditionality for single parents, or from the proposition that work is beneficial for both parent and child. However, there has to be a question of age appropriateness. We believe, quite simply, that in all the circumstances it would be more sensible if the age of the youngest child for these purposes were set at five, which is, after all, the age for starting school. We think that the Government have not got the balance right; if they press ahead on this, we would have to consider our position.

We will be seeking your leave, Mr. Speaker, to vote on this matter when we have had the opportunity to hear what the Minister has to say. I do not know whether, at this late stage, he is prepared to accept our amendment, but if not we will certainly press it to a vote because we consider that the Government have not got this issue right. It may be that they have wider objectives in mind; I do not know. They may wish to say, as has been implied, that because we do not agree with the Government's original proposals on the appropriate age of the single parent's child, we are opposing the whole of the Bill. If they want to say that, let them; but we are not. We support the Bill in principle, as we have indicated.

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Photo of Tom Harris Tom Harris Labour, Glasgow South

Will the hon. Gentleman clarify something for me? He said a few moments ago that his party will have to consider its position, but a few seconds later he said he wanted a Division on it. Does that mean that in those few seconds he has considered his party's position and decided that the party is against it?

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Photo of James Clappison James Clappison Shadow Spokesperson (Work and Pensions)

I give Ministers the credit of thinking that they want to listen to the debate. They may want to hear what I have to say; they may want to listen to what their hon. Friends say. What I am saying is that if the Government press ahead with this provision, we will press it to the vote. I hope that I have made that clear, just as I have made everything else I have said absolutely clear. We are not against the Government on the Bill. We think that it does not go nearly far enough, and anybody can see that. On this issue, we are going to have to disagree with the Government and, if it comes to it, we shall seek to press the amendment to the vote.

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

This is a large group of amendments and new clauses, some of which I shall wish to press to a vote. I shall deal with them in a bureaucratic fashion, for which I apologise.

The first block consists of amendments 11 to 14 and amendment 16, which seek to make Workfare voluntary. I shall wish to press them to a vote at some stage. I shall also wish to press amendment 15, which seeks to ensure that if people are forced on to Workfare they should be paid the minimum wage and/or the rate for the job, unless the Government concede. I live in hope.

Amendment 17 exempts lone parents with children aged seven and under from the conditions placed on them in relation to work-related activities. The choice of the age of seven can be discussed further later, but it is based on practice. I shall be happy not to press the amendment to a vote if amendment 35, tabled by Mr. Clappison—which proposes the exemption of lone parents with a child under five—is pressed, and in that event I will support amendment 35.

The next block consists of amendments 18 to 25, which seek to make work-related activities voluntary. I wish to discuss those amendments, but not to press them to a vote. Amendments 26 and 29 deal with the privatisation of jobcentres' role in relation to the long-term unemployed and others. I shall wish to press those to a vote if possible. It is, of course, open to you, Mr. Speaker, to decide whether that is appropriate. This is a large group of amendments, but they concern key issues involving the future of the welfare state, the welfare system and the administration of welfare. I fear that the system will not merely be amended in the short term, and that this Government or their successors may build on it in introducing elements of compulsion beyond those in the Bill, along with more sweeping privatisations. That is why I consider that the amendments concern matters of principle.

I shall try to be brief, because we have many other matters to discuss today. I tabled the amendments because, in my view, the Bill is an anachronism. It appears to have been designed for another age: an age when employment was available, and it was argued that people were not taking advantage of that. It seems to pursue the Government's twin obsessions with targeting lone parents and privatising public services, at a time when 2 million people are unemployed and 3 million could be unemployed by the end of the year. Ten people are chasing every vacancy. People are desperate for work. It is hard to comprehend why the Government are focusing on introducing Workfare, a "work for your benefit" scheme piloted for the long-term unemployed and other groups, forcing them into work. Unless my amendment seeking payment of the minimum wage is passed, people will be forced to work 35 hours a week for £1.73 an hour in jobseeker's allowance, while, unless new clause 1 is passed, the under-25s will be paid £1.37 an hour. That is not voluntary; it will be used as a sanction. If people refuse to comply, they will lose their benefits.

The argument for welfare reform initially advanced by the Secretary of State was the need to help people back into work. My amendments seek to turn a demand into an offer and a requirement into an opportunity. If Workfare constitutes an offer of assistance in work, why does it include an element of enforcement? When the PCS parliamentary group met the Secretary of State last week, he had changed his emphasis, and was more concerned with the need to tackle fraud and deal with people who claimed benefits without being willing to work. The media view of the Bill's objectives seems to vary according to which newspaper Ministers have spoken to. If it is The Guardian, the main thrust of the legislation is support and advice; if it is the Daily Mail, it is tackling fraud and scroungers. In my view, the linking of these two issues is stigmatising.

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Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister

Does the hon. Gentleman not accept that the big issue these days is not fraud, but mistakes committed by the Department for Work and Pensions, and that certain clauses of the Bill will condemn some people—such as those who may not be very articulate—to sanctions to which they should not be subject?

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

I think the Bill introduces sanctions that, as we all know from our weekly advice surgeries, are usually applied against the most vulnerable and confused and those who live the most chaotic lives. In addition, they introduce a stigma to the process: under this Bill, support, advice and assistance are provided not on a voluntary basis, but on a forced basis, stigmatising claimants as workshy or scroungers. That is my big fear; I fear that this runs counter to everything the Government have been arguing for in the direction of welfare reform policy. If this is about fraud, we must recognise that according to a ministerial statement last month, there is now the lowest level of fraud in recorded history. As a result of the work undertaken by dedicated DWP staff, fraud has been reduced by two thirds since 2001 and it accounts for only 0.06 per cent. of the overall budget. If we are to tackle fraud, that is not about introducing sanctions and enhancing the stigma on claimants; instead, it is about following the tested route of having informants and conducting investigations.

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Photo of Neil Gerrard Neil Gerrard Labour, Walthamstow

If the intention of Workfare is to help people into work, would my hon. Friend expect some evidence to have been produced of the effects of schemes being introduced in other countries? Has he seen any such evidence?

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

I thank my hon. Friend for his intervention, and I want to come on to that. I have trawled the different pieces of research the Department has undertaken to find evidence for developing this policy and establishing its potential success.

I have been trying to discover the genesis of the policy. I looked back to some of the debates in this House and some of the policy statements Ministers made in the mid-1990s. In 1996, the Conservative Secretary of State, Mr. Lilley, told the Conservative party conference:

"I can announce a revolutionary fourth step in our welfare to work programme.

For the first time, we will be involving the private sector in helping people move into jobs. Private firms will compete with Government teams."

In 1996, they introduced "project work", as it was called, which contained a compulsory work element for claimants of benefits of up to 13 weeks for those unemployed for two years or more. This sounds familiar, does it not? However, at that time, although it was compulsory, participants received an extra £10 week on top of the jobseeker's allowance for participating in the scheme, so there was also an incentive. The reaction at the time from my right hon. Friend Mr. Prescott, who went on to become the Deputy Prime Minister, was condemnatory. He said that under that Government, who had said in 1979 that Labour was not working, unemployment had now grown to 2.5 million, even on the Government's fiddled figures, and that their proposals were a form of Workfare involving chain gangs and that they were not the same as proper jobs. It was, therefore, condemned outright at that point by the person who went on to become the Deputy Prime Minister of this Administration. Another Labour Member said that the Government's Workfare proposals were taking us back to the days of the work house. It was not satisfactory then, and I do not believe that it is satisfactory now. It was condemned outright.

What is the evidence? What judgments have been made? Reference has been made to some of the expert studies. The DWP commissioned the Centre for Regional, Economic and Social Research to conduct research on workfare programmes in Australia, Canada and the US.

The resulting report concluded:

"There is little evidence that workfare increases the likelihood of finding work. It can even reduce employment chances by limiting the time available for job search and by failing to provide the skills and experience valued by employers."

It continued:

"Workfare is least effective in getting people into jobs in weak labour markets where unemployment is high."

That is exactly the scenario that we are facing.

I looked again at what was said by Mr. Freud, who, as a former investment banker, is obviously well experienced in poverty and welfare. He designed some of the proposals, but he did not specifically recommend a "work for your benefit" scheme; he recommended additional conditionality. Whatever happened to him? I believe he is about to be appointed to the House of Lords by the Opposition to lead this legislation through on their side and perhaps try to introduce yet more draconian proposals.

The other review on this aspect of the Bill was carried out by the Select Committee on Work and Pensions, which published its report on 25 February. It reiterated:

"We are not convinced that the current design of FND will discourage the creaming and parking of customers on the programme."

That refers to the private sector. The Committee, too, referred to the DWP's research and the finding that Workfare was the least effective means of getting people into work in weak labour markets; so it is difficult to see where the supporting evidence to justify this scheme has come from.

The one body that the Government appoint to advise them on social security is the Social Security Advisory Committee. Its chair, Sir Richard Tilt, submitted his views, saying:

"We have seen no evidence to suggest that any of the contemporary 'workfare' models are likely to be effective in Great Britain".

In addition, he said that Workfare schemes would be

"creating an additional stigma for those who are long term unemployed".

That finding was reinforced by the Child Poverty Action Group, whose concern is that the scheme is unlikely to achieve much more than the stigmatisation of a small group of very vulnerable people.

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Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North 4:30 pm, 17th March 2009

Does my hon. Friend have any evidence of what Workfare has achieved in the United States, where there are reports of severe destitution as a result of it and the stigmatisation of people who then find great difficulty in getting jobs, even when the economy turns upward later on?

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

The one objective piece of evidence provided to the Department was its own research, which found that the Workfare scheme in the United States does not provide long-term, sustainable employment. That evidence was supplied to the Secretary of State and to the Work and Pensions Committee, and, on that basis, the Committee has expressed scepticism about the Government's proposals.

My proposals try to restore the scheme to what the Government originally intended, namely to make it voluntary. My objective is to ensure that instead of having a scheme that stigmatises, the support and assistance provided to the long-term unemployed is provided as an offer—an opportunity of work experience, voluntarily entered into by the claimant. In that way, the support would be made much more effective and if people took up their offer, they would be properly rewarded. My proposals would mean that as a result of their work such people would be paid at the minimum wage or through a job-related payment. Again, that would prevent the exploitation of the unemployed by unscrupulous employers, who may wish to substitute those on this work experience—if they are not being paid any wage and are being paid only jobseeker's allowance—with temporary unemployed emplacements.

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Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

I listened carefully to the hon. Gentleman's proposal about people volunteering to go on such schemes. Does he accept that those who are willing to volunteer to go on such schemes already have a plethora of schemes that they can go on? What the Government seek to achieve is to reach the core of people who are not prepared, for one reason or another, to join schemes. Such people therefore must be targeted in order to ensure that the opportunities for work and for preparation for such opportunities are taken up, so that they can have the dignity of eventually finding themselves in full-time employment, rather than being dependent on the state.

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

We are all trying to ensure that we provide opportunities for people to gain the skills and support that they need to get into work. I am trying to explain that there is no evidence that compulsory schemes—the Workfare schemes that have been implemented around the world—have worked. In fact, the reverse is true. The introduction of compulsion has led to stigma, which has provided an even more depressing overlay on the experiences and anxieties of the long-term unemployed. The Government were unable to provide any evidence that justifies the introduction of compulsion in this way. There are already elements of compulsion in the system, and the Bill would overlay those in a completely counter-productive way. Eventually, that would waste the resources of staff in the Department and the sector.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

We know that those who participate voluntarily in schemes are much more successful in getting into work. A leaked letter from the DWP confirmed that mandatory customers of pathways to work had a success rate of only 5.99 per cent., in the phases examined, whereas those who came forward voluntarily—who were actually further from the labour market than the mandatory customers—had a success rate of 27 per cent., or nearly five times more. If people know about voluntary programmes and are encouraged to engage in them, the outcome is far more successful than when they are compelled to do so.

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

The evidence confirms what my hon. Friend says. It relates to new clause 2 as much as it does to the introduction of Workfare. New clause 2 would introduce the compulsory element in relation to work-related activity, and I looked at the evidence that was provided by the Social Security Advisory Committee to the Gregg review and the White Paper. It states:

"The focus on sanctions is, we believe, unhelpful and does not take proper account of the full findings of the Department's own research or our own work. We are disappointed that more evidence has not been presented to prove that sanctions and compulsion are effective in generating long term sustainable employment."

It concludes:

"We remain unconvinced that the evidence to support this view is either consistent or robust, or that evidence of improved compliance under threat of sanctions necessarily leads to improved engagement and activation."

We have discussed with the various agencies and organisations at length—over nearly a two-year period— what their views are and what they think the reaction will be on the ground. Most of us have worked with the Child Poverty Action Group over the years and I have a great deal of respect for its expertise and the soundness of its advice. It says that claimants do not need compulsion to take up high quality training and employment services.

Evidence from citizens advice bureaux and the Government's own research both showed clearly that, in most cases, threatening benefits cuts is neither necessary nor effective in moving people off benefits and into work, and they tend to hurt the most vulnerable. What happens to the other members of the family when every sanction has been applied? Most of us will have dealt with that situation, and the answer is that we then have to trawl around social service powers to assist them as best we can.

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Photo of John Mason John Mason Scottish National Party, Glasgow East

I take the hon. Gentleman's point that we probably should not introduce more compulsion, but does he agree that if we did, it would be effective only if the benefit level were higher, so that the excess level could be taken away but people could still live on the rest?

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

That relates to the point that my hon. Friend Lynne Jones made when she moved new clause 1. We are already dealing with people on the margins and with families in the direst circumstances in our society. We are dealing with vulnerable people, who are often confused and chaotic. The offer of assistance, if it comes with sanctions, acts as a stigmatising deterrent. If we apply those sanctions, we push those people over the edge into absolute poverty the like of which I do not think that any Member of this House would want to support or experience.

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Photo of Sammy Wilson Sammy Wilson Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Education)

I take the hon. Gentleman's point that we are already dealing with people who are on the margins. However, they are often on the margins because they have become dependent on inadequate state benefits. Surely the way to remove them from the margins is to get them into useful employment and to get them on the employment ladder. If they are not prepared to volunteer to take the first step on to that ladder, is it not the duty of the House to ensure that we put something in place that will enable them to take that first step?

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

I understand what the hon. Gentleman is saying, and I accept that it is said with the best of intentions, but my argument is that such sanctions do not work. The only thing that we have found to work is support and incentives. Departments other than the Department for Work and Pensions are learning from experience. For example, a few weeks ago, on 27 February, the Ministry of Justice announced the withdrawal of its benefit sanction for breach of community order pilots. That announcement was made in a written statement, which some hon. Members might have missed—it was not the most scintillating statement. The Minister of State, Mr. Hanson, said:

"Initial evaluation research showed a modest 1.8 per cent. improvement in compliance by sanctioned offenders".

He added that

"once all costs had been factored in, the overall sum for continuing the scheme would be in the region of"

£650,000

"or £5.60p for every £1 of savings made under the scheme."—[ Hansard, 27 February 2009; Vol. 488, c. 37WS.]

Under the Government's proposals we are to invest a large amount of money in a sanctions regime, but our argument is that we need to build that money into the support regime and an incentive package. Part of that incentive should be linked to enabling people to earn a decent wage when they get work. As we have seen from recent Government figures, a large number of children are living in families that are in poverty even when the parents are in work. I would rather invest the money positively in increasing such elements as the minimum wage and in other forms of support so that we could get people into work.

The attitude displayed towards the unemployed that seems to be retained in the psyche of the Government is that unemployment is about individual guilt and individual unwillingness to work. When we have 2 million unemployed—possibly 3 million by the end of the year—and when people are chasing every vacancy they can, I do not think that that reasoning should govern the thrust of policy. Let me quote what my right hon. and learned Friend Ms Harman, who is currently the deputy leader of the Labour party, said in 1995:

"The vast majority of the unemployed are not out of work because they are work-shy. They are out of work for three reasons: jobs are not available; they cannot earn enough to make it worth moving from benefit into employment; or they lack the skills for existing vacancies."—[ Hansard, 10 January 1995; Vol. 252, c. 58-59.]

The thrust of Government policy has, I hope, been to invest in those skills so that people can qualify for those vacancies as they appear. That thrust certainly should not include the sanctions that we are introducing through the Bill, which is why my amendments to clause 2 on work-related activities will make those activities voluntary.

Let me turn to the issue of lone parents. I tabled amendment 17 because I wanted to exempt lone parents with children aged seven and under from the sanctions. As I said, I shall not press the amendment to a Division on the basis that the Opposition will press their amendment 35, which would apply to parents of children under the age of five, to a Division. I tabled amendment 17 because I agree with some of the statements that have been made previously by Labour Members. I cherish one statement, which reads:

"The reality is that many mothers are forced out of the door and back to work before they want to because of financial constraints...The state should pay for this 'family' care in the same way it pays for the state pension of at least £150 a week".

Would I even think of moving such an amendment? However, I fully support what the current deputy leader of the Labour party said in 2000. It is difficult to see why we are pressing ahead with penalising lone parents yet again. Why are we are introducing this element of stigmatisation, given what the current deputy leader of the Labour party has said about our knowing and cherishing the role that parents play in our society?

I want to be very clear, so it is worth going through the history of the matter. The November 2008 changes to the lone parent entitlement that reduced from 16 to 12 the age of the youngest child for whom an income support claim could be made have already removed 135,000 people from that benefit. That age limit will fall to seven in 2010, by which time 315,000 fewer lone parents will be entitled to lone parent benefit. Under the Bill, the youngest age of child entitlement will effectively be reduced to three. After their youngest child reaches that age, lone parents will become subject to work-related activities as part of the progression to work regime. There are approximately 230,000 lone parents with children aged three to six, inclusive, so we are not talking about a large number of people.

To be frank, the Government's record of getting lone parents back into work on a voluntary basis is superb, and is an achievement by this Administration that we ought to brag about. The voluntary new deal for lone parents began in October 1998 and is delivered by civil servants and others through Jobcentre Plus. It has found jobs for the 64.5 per cent. of the lone parents who have participated, and that compares with the 62.5 per cent. of members of the youth scheme who have been found work. The nearly 1 million lone parents on the new deal scheme are outperforming any other group, which highlights the value of the voluntary approach.

Again, that demonstrates that the voluntary approach that the Government have used in respect of lone parents has been incredibly successful. The Government have brought lone parents on, given them support and got them into work that the figures that we have seen suggest is sustainable.

What is stopping others in the lone parent category getting back into work? I am trying to look at evidence-based policy making, and the most detailed work has been done by Citizens Advice. Its report on the matter said that the main barriers for lone parents were inflexible jobs and employers, lack of access to affordable child care, inadequate support in making the transition to work, being financially worse off in work than on benefit, inflexibility in the benefits system, and money problems.

Those are the issues that we should address. It is not that lone parents do not want to work or support their families, because the truth is that they want what we all want—a proper balance between looking after their children and a job that is decent and properly paid and which at the same time enables them to afford child care.

Again, I looked for the evidence. Research by the Department for Work and Pensions published in 2008 found that the impact of sanctions on lone parents seeking employment would be "negligible". Yet the Government are going to force lone parents through another stigmatising process: they are going to put pressure on them again and waste a large amount of resources for a negligible effect.

Why are we doing that? The Government are becoming almost obsessional. I looked at the evidence, and consulted the experts on the ground—in this case the organisations One Parent Families and Gingerbread. They advocate an approach that I thought was evolving into Government policy at one time. They say that, instead of threatening sanctions, we should be offering a premium for participating in work-related activities. That would allow us to demonstrate to people that engaging in work will gain additional income, which is the point that John Mason made earlier.

We need to incentivise participation, not use sanctions. As I said, our aim with amendment 17 was to prevent the change proposed in the Bill from applying to children aged seven or under, but I shall certainly support amendment 35, which would do the same for children up to five.

I turn now to the amendments dealing with privatisation. Again, I have been trying to clarify why the Government have moved further along the obsessional and dogmatic road towards privatisation of this section of our public services. It may be ideology, but the TUC briefing circulated to all hon. Members spoke about dogma, and I cannot disagree. What is the Government's attitude to the performance of in-house jobcentre staff? The DWP website describes Jobcentre Plus as a

"world leading welfare to work organisation".

When the PCS parliamentary group met the Secretary of State for Work and Pensions last week, he described the jobcentre service and the staff as "excellent" and commended them for their work.

What seems to have happened along the path in recent years and certainly in the development of the Bill is that Mr. Freud has come along. He is an expert banker—I think that that is the expression—and one of his key themes is the privatisation of the service. Again, we looked for evidence of why that should be so. I looked at the Select Committee on Work and Pensions report on the DWP's commissioning strategy and the flexible new deal, which says that

"fundamental flaws exist in the design of the FND and the assumptions upon which it is based... the financial model for the FND is flawed and its targets unrealistic... there is less evidence from the UK to substantiate this approach... DWP needs to build its evidence base".

That was the recommendation. We have yet to see any evidence base developed to promote the privatisation of the services.

What is even more dogmatic is that a section of the work to be privatised is set aside, without even allowing jobcentres to bid for it. Where is the "what works best" ethos in that approach? Again, I go back to the research undertaken to justify the privatisation. Let me quote the Cardiff university research report of 2008. On the contracting out of employment services to third and private sectors, it concluded:

"whenever Jobcentre Plus staff have been allowed the same flexibilities and funding as private sector companies or charitable organisations they have been able to compete with, if not surpass, the performance of contractors."

QED, is it not? The research from Cardiff demonstrates the point, but it was not just that, was it?

There was a leaked report in The Observer only a couple of weeks ago. My hon. Friend the Member for Birmingham, Selly Oak and I tabled a series of parliamentary questions to ask what evidence existed about privatisation and the past performance of the private sector in delivering some of the objectives set for incapacity benefit claimants and other claimants. We were advised by Ministers that no report or evidence was available that we could use to judge any further privatisation proposals. We then discovered, because of a leak, that there had been a DWP report on that very issue. It was marked "restricted" and circulated to jobcentre managers, not to hon. Members or the House. We were told that it was not published because the research was still in progress and had not been validated. Well, that was two weeks ago; it could have been validated by now, and we still have not seen a copy of it.

What did that research say? It revealed that the private companies placed into work just 6 per cent. of incapacity benefit claimants on their books, rather than the 26 per cent. that they claimed would be possible when they bid for the contracts. That compares with 14 per cent., achieved by state jobcentres during the same period. The report described the private contractors' performance as "not satisfactory". That information should have been put before the House and published before the debate took place, because it evidences the fact that the rush to privatisation is being pursued for dogmatic reasons and is a waste of taxpayers' resources.

What have we seen in the approach to the privatisation of further jobcentre work? So far, the Government have gone out on their consultations and in the development of tenders, and a number of companies have expressed their interest. There were regional discussions and consultations. The Government gave a commitment that money would be paid up front—the argument was that 20 per cent. of it would be front-loaded—and that the companies would receive the rest of the payments on the basis of placing people into work. We are now told that those involved have had to re-consult, that the companies want more money up front and that the targets are not to place people into work, but to prepare them for the possibility of work. I do not understand why we are wasting resources and undertaking such a lengthy process when we are praising jobcentre staff to the hilt for their professionalism and success.

I considered some of the problems that the private sector has brought forward. If we look at a number of areas in which back-to-work support has already been contracted out, we see that some contractors have failed completely. Two external providers of the pathways to work scheme, Instant Muscle and Carter and Carter, went bust almost as soon as they were awarded the contract, leaving claimants high and dry. Other contractors, notably A4e and Maatwerk, have been heavily criticised for poor performance. Again, I just do not understand why the Government are pursing such a dogmatic path when there is no evidence to justify their doing so; all the evidence demonstrates the perils of dependence on the private sector for the delivery of the services that we are talking about.

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Photo of Gordon Prentice Gordon Prentice Labour, Pendle 4:45 pm, 17th March 2009

Could the answer be relatively simple—that the Government want to drive down the civil service headcount, and think that the way to do that is to transfer jobs done by civil servants to the private sector, regardless of the consequences?

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

There is an argument that the Government, taking a very short-sighted approach, may well want to do exactly that—drive down the headcount. They may try to look at the issue as a cuts exercise, or a reduction-of-expenditure exercise, and dress it up as a way of increasing performance and getting people back into work, or preparing them for work. However, all the evidence points in the opposite direction. All the evidence points towards abortive costs. If contracts are awarded to companies that go belly-up and into administration, we are back to square one, and there will be abortive costs as a result of going through the whole tendering process again.

The argument has been put forward that the measures are not about private companies, but about awarding contracts to the voluntary sector, or third sector, as we now call it. Well, in the recent period, 33 out of 34 DWP contracts have gone to the private sector, not the voluntary sector. The private sector companies have largely been the large corporates. We have consulted, and looked at the evidence from, the voluntary sector. I give the example of the Leonard Cheshire charity. It stated that the model that the Government were putting forward would result in the

"complete loss of the competitive market, to the detriment of small specialist existing providers, as well as the removal of customer choice and control", because contracting out is being dominated by the large companies.

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Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

Does my hon. Friend have any evidence on the comparative working conditions of those employed directly by the DWP to deliver services, and those employed by companies that successfully bid for such contracts?

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

We are aware of some comparisons of wage rates, which are considerably lower in the private sector. We are also aware of the high turnover of staff in the private sector, which is possibly a result of the management style, but also a result of conditions of work and wage rates. That is an issue that we need to consider, because jobcentres and the DWP have built up expertise over decades. We have commended staff for the expertise that they have shown in their performance in recent years; Ministers have said that they have provided an excellent service.

My amendments on the subject seek to halt the privatisation, as there is no evidence or justification for it. There is another reason, too: we have to accept that the continued onslaught on DWP staff is undermining their morale. We have already laid off 30,000 workers in the DWP. It has been mentioned that 200 jobcentres were closed down, but in total, more than 500 offices have been closed down. At the same time, we have engaged in a management style that has provoked a whole series of disputes in recent years, yet DWP staff still provide the excellent service described by Ministers. However, staff can only take so much. Having provided an excellent service, they are threatened with more privatisation and more job losses.

Let me end on a quote. Ministers say that they have toured jobcentres and found that staff were supportive of everything that the Government were doing, and all the rest of it. When those staff meet separately, and within their trade union branches, they express their concern and their anger. The PCS DWP group president, Jane Aitchison, said:

"Our members are proud of the work they are doing in jobcentres. The staff have responded in exceptional fashion to sharp increases in workloads. After years of being under-valued, constant cuts and under investment, the response to the recession has demonstrated our members' ability to meet extraordinary challenges in a way no private company could have done. The government should not be galloping towards further privatisation. The kind of outsourcing of jobcentres proposed in the welfare reform bill would be a major blow to my members' morale."

If the amendments were agreed to, they would end that privatisation. We should be building DWP staff's morale and congratulating them on the work that they have done, not targeting and undermining their role in this way.

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Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister 5:00 pm, 17th March 2009

It is a pleasure to follow John McDonnell. My party and I have serious concerns about some of the clauses in this part of the Bill. A series of amendments seek to deal with conditionality.

As the hon. Gentleman said, this is a Bill for another age. This week, we will see unemployment top the 2 million mark. The Bill does not address the problems that many of our constituents now face. There are many things that it could and should have done to help employers and to help people who are losing their job to stay in work. I spoke to an employer yesterday who told me that in the next six weeks he is likely to have to shut his company because of insufficient orders. We ought to do what they are doing in Germany and France, which provide support for such companies, so that they can lay off their staff but continue to pay them. There is no provision for that in the Bill, so that company will close in six weeks, as many others have done.

We are not opposed to welfare reform, but there are some basic principles that the Bill does not address. The Royal College of Psychiatrists set out five principles for effective reform which the amendments should meet. Although those principles are meant particularly for people with mental health problems, they apply across the piece. The first is that there should be clear evidence that welfare programmes work for people. We are talking about introducing a raft of programmes, introducing conditionality, and forcing people to work for their benefits, as the hon. Gentleman said, at rates of less than £1.60 an hour, but where is the evidence that such conditionality works?

The Government are good at quoting examples from abroad. However, the examples from America, the Netherlands and Scandinavia are very different. The programmes in America clearly do not work and have not been a success. As I pointed out to the Minister for Employment and Welfare Reform in an earlier debate, the scheme in Wisconsin pays people who work a proper wage and does not put them on Workfare, as the Bill proposes.

The second principle is that the welfare system must address people's needs and particular circumstances. Where in the Bill is there clear provision for proper child care facilities to be in place before a lone parent is put on such a scheme? Amendment 36 tabled by John Robertson seeks to address that need. There is no guarantee of that in the Bill. Similar safeguards are not in place in respect of other provisions.

Thirdly, when services are contracted out, there should be no discrimination against those who are difficult to place. From the evidence that has been provided, we know that so-called parking and creaming—that is, parking those people who might be difficult to get into work, and creaming off those whom it is easy to place in employment—already takes place. Where are the safeguards in the Bill to prevent that? The fourth principle is that employers should fulfil their responsibilities to employ and support disabled people. What does the Bill do to strengthen that commitment? An opportunity has been missed. Fifthly, everyone must have access to an appropriately well informed and trained vocational work force.

I want to talk about amendments 49 to 65, which stand in my name, and to say a few words about the other amendments in the context of the five clear principles for undertaking any welfare reform. I also want to ask why the Government are not adhering to those principles.

We support new clause 1. As my hon. Friend Steve Webb said, in 1988 the Conservative Government made a clear distinction between those under 25 and those over 25 in respect of the amount that they should receive. Young people on JSA are currently on £13.35 a week less than other JSA claimants. Where is the evidence that that is necessary? Young people's needs are the same as those of other people. I am not talking about child care, as that is dealt with elsewhere, but the differential puts young people at a real disadvantage. We support the new clause, which would ensure that there is no discrimination against young people. The Equality Bill is going through the House. How can the Government say in all seriousness that that Bill's provisions will be adhered to, given that some of the unemployed are discriminated against for one reason and one reason only—because they are of a certain age? That is a clear breach of the provisions.

New clause 8 seeks to ensure that income-related benefits can be adjusted to take into account work-related activity performed by the claimant. There is already a provision whereby employment and support allowance claimants can receive an additional £24-odd a week for undertaking work-related activity. Why has that provision not been extended to all people undertaking work-related activity? Why should a lone parent who has agreed to undertake such activity not receive that bonus, which is paid to ESA claimants? Where is the fairness and equity in that? Where is the evidence that not paying lone parents that supplement will encourage them back into work? As the hon. Member for Hayes and Harlington said, there is no evidence for that. The evidence is that when lone parents are properly supported they return to work, and that Government schemes are successful. We support new clause 8, which seeks to enshrine what is patently missing from much of the Bill—equality in how claimants of all types are treated.

Amendments 40 to 43 would make the "work for your benefit" scheme a pilot. The Government are right to say that in a recession they do not want to stand back on reform, that it is important that no one should be forgotten and that things should move forward. However, I put it to Ministers that unemployment is rising and that there is already evidence—there were reports in the press last week—that Jobcentre Plus staff cannot cope with the number of people whom they have to see; people are getting two-minute interviews instead of 20-minute ones. Why, then, do we need to press ahead completely and make these things mandatory for everyone? It makes sense—again, sticking to the principle that there has to be clear evidence that welfare reforms work—for the scheme to be a pilot. Then it could be properly evaluated and reported on to the House, and we could see where to go from there. We support amendments 40 to 43.

Amendments 11 and 12 would render the "work for your benefit" scheme an offer, rather than an imposition. Again, where is the evidence that imposing something is successful? The available evidence, whether international or based in this country, shows that providing good-quality support to people is what works, not seeking to impose something.

Amendment 36 would ensure predictable access to good-quality, affordable and flexible child care. An important principle is involved, which is that the parent should be able to make that decision. It is not for an adviser, who may not live in the area and may not know what is available, to decide what that claimant should do. I know that the hon. Member for Glasgow, North-West has tabled amendment 36 because in Scotland there is no legal entitlement to child care. In Committee, the Minister promised to reflect on it, and get back to us on Report. I hope that he is willing to consider it, because it is fair and reasonable. It is a matter not of saying no, but of saying that there has to be access to proper entitlement.

Amendments 13, 14 and 15 deal with the compulsory elements. Amendment 13 would mean that work-related activity was not compulsory. That is the right way forward in the current circumstances—such activity should be an option, not imposed. Amendment 14 removes the provision that requires individuals to participate in "work for your benefit" schemes, and we support that. Amendment 15 ensures an hourly rate at the level of the minimum wage in any "work for your benefit" scheme, or a wage equal to that of staff directly employed and undertaking the same role. In Committee, I cited the example from Wisconsin where, whatever benefits might be paid in America, it is clear that someone undertaking a work-related activity is paid a fair wage for it. Again, I ask the Minister why that should not take place? Why should someone be required to undertake work, even though it may benefit them, without being paid a fair rate? Given this Government's record on the minimum wage and protecting vulnerable workers, I find it surprising that they are not putting such protection in place.

Amendment 45, following an established sequence, would require a pilot to continue until 2013, when it would be properly evaluated. Throughout the Bill, there are provisions to set up pilots—whether we are talking about direct payment, or the Child Support Agency and the removal of driving licences—about which there will be reports to this House. Given that wholesale changes are being made that affect a large number of vulnerable people, why can we not have a pilot that is reported on in 2013? That seems logical and fair, and we support it. Amendments 13 to 16 deal with increasing payment and lessening compulsion for work-related activity. That is the way forward.

Amendment 17 deals with work-related activity, and amendment 35 deals with the problem of a lone parent returning to work. We all want to see as many people who are able returning to work. Whatever our stance, that has to be the case. However, it really ought to be for a parent, particularly a lone parent, to decide when they are able to go back to work. We have moved rapidly, in the Green Paper, the White Paper and then the Bill, from a lone parent having to return to work when their child is 16 to their having to do so when their child is three, if the Bill is not amended. Again, I ask Ministers what the evidence is that compulsion, and forcing a lone parent to go back to work when their child is that age, is successful.

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Photo of Terry Rooney Terry Rooney Labour, Bradford North

How about Sweden, Norway and Denmark?

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Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister

There are examples elsewhere, but in places where there are much better systems in place to support such parents.

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Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister 5:15 pm, 17th March 2009

There is some evidence, as the Chairman of the Select Committee on Work and Pensions says, but we are moving far too fast. The system needs to be supportive.

Again, I wish to quote Fiona Weir, the chief executive of Gingerbread. She said during the evidence session of the Public Bill Committee:

"From our experience of working with single parents, we feel quite strongly that the vast majority want to work; in fact, nine out of 10 say that they want to work when it is right for their family. Usually, when you unpick that a bit, there are very good reasons behind their choices on work, and 40 per cent. of lone parents with children under seven are already in work. Those who are not working often have very good reasons: sometimes it is skills and confidence, sometimes a lack of access to the right child care, and sometimes a different set of barriers relating to the particular needs of the children. Fundamentally, what is required is a system that really provides support on skills training and building confidence, and good provision of child care, but that essentially leaves the decision about when it is right for the family for the single parent to return to work up to that single parent."[ Official Report, Welfare Reform Public Bill Committee, 10 February 2009; c. 42, Q53.]

If we had all the other things in place—if the personalised agenda that the Government are so keen to talk about were up, running and working and if we had excellent child care in every locality that could deal with the needs of not just very young children but older ones, for whom there is clear evidence that adequate child care is not available—then yes, the Government could go ahead and introduce compulsion. However, those things are not available. We are putting the cart before the horse. We are not concentrating on improving services to make it easier for lone parents to go back to work, even though we have it in our head that that must be done. We are willing the ends but not the means, which is not an acceptable way to behave.

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Photo of Gordon Prentice Gordon Prentice Labour, Pendle

How does that square with what the hon. Gentleman said earlier: a lone parent is in the best position to decide when to go into employment, taking into account the interests of her, or sometimes his, children?

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Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister

I am grateful to the hon. Gentleman. It clearly does not. There could be a whole set of individual circumstances in a particular family. There might be a child who is disabled or has other problems, or a parent who needs additional training in skills and confidence-building. Someone who has been raising a family will have been out of the job market for a while, so what guarantee is there that she or he will automatically be able to go back? Again, it is conditionality that causes us concern. The problem is not whether people want to go back to work, because as we have said and as Gingerbread's evidence showed, nine out of 10 lone parents want to do that. It is whether the means are in place to enable them to do so.

I turn to amendments 49 to 56, which are in my name. They would remove the power of the Department and private contractors to issue mandatory directions to income support claimants and their partners. Again, Child Poverty Action Group believes that a parent with the primary child care responsibility, whether a lone parent or a partner of a claimant, should have a choice about entering work, and that such choice requires far greater support than is currently available.

Child care provision is patchy and we know that it is inadequate for older and disabled children. Child Poverty Action Group opposes an increase in conditionality and the consequent sanctions, which will create hardship for parents and their children and fail to tackle barriers to employment.

What will be the net effect of imposing conditionality on a lone parent? As the hon. Member for Hayes and Harlington said, stopping a lone parent's benefit will mean an additional cost for local authorities. Will that family be split up because the parent is no longer able adequately to provide for her or his children? That is not the way forward.

It is important to have high-quality, tailored employment and support to partners as an entitlement that they may take up voluntarily. Many claimants and their partners have a strong interest in work, but where, in the current economic climate and in many of the areas that we represent, are the jobs that will make the conditionality operate? Clearly, it will not work, and there will be genuine problems. It will be a distraction from what, in our view, should be the main task of jobseeker's allowance: to help as many people as possible back into work. The increasing numbers of unemployed will present a challenge to the Department.

Amendments 57 and 58 deal with the factors that should be taken into account when considering what is reasonable in relation to loss of benefit for not participating in a work-related activity. The Bill states that regulations may provide for reconsideration of an action plan, but imposes no statutory duty for such reconsideration. Amendment 57 would insert a legal right for a claimant's action plan to be reconsidered, provided that the request is reasonable. In the discussion on clause 2 in Committee, Ministers and the Conservative Opposition presented two main arguments against that.

First, the Government and the Conservatives argued that our amendments would make reconsideration mandatory, but amendment 57 clearly provides that such a request must be reasonable. Hon. Members might reasonably ask what is meant by "reasonable". Numerous clauses refer to reason and good cause, yet the Bill contains no definition of them. If it is okay to provide that there must be a good, reasonable cause for making direct payments to a disabled person, and that a local authority can refuse to do that if the request is not reasonable, why cannot the amendment make the same provision of reasonableness? Both the clause and the amendment are either reasonable or not, and it is up to the Bill to provide a definition of reasonable.

Secondly, Ministers claim that amendment 57 would shift the balance of power in favour of the claimant. It would not. The amendment would not give claimants carte blanche to refuse to accept the responsibilities that are set out in the action plan. Rather, it would give the claimant who is concerned about what may be in the action plan an opportunity to reconsider that action plan, which would be drawn up in the context of Jobcentre Plus staff being under severe pressure, with a lack of time. Will we get the personalised agenda that the Government talk about or will claimants be presented with a standardised action plan and told, "Take it or leave it"? That would not be acceptable. It is also said that there is no definition of what is reasonable, which is true, but that will be set out in regulation and amended by case law. As I have said previously, that is clearly what applies elsewhere in the Bill.

Amendment 56 would ensure that children are never harmed by any financial sanctions applied to their parents' benefit. We already know that, compared with many other countries, the levels of benefit paid to claimants here are below the poverty line. We do not want the imposition of sanctions to cause or increase child poverty. The Government have a good record on eliminating child poverty and in recent years they have taken additional steps to eliminate it. Why go down the route proposed? The hon. Member for Hayes and Harlington cited the example of the Ministry of Justice abandoning the idea of conditionality and imposing sanctions, which clearly do not work. If we are going to do something, where is the evidence base? Clearly it is not there.

Let me deal with amendments 29 and 26, which deal with privatisation. We are not opposed to privatisation per se and we will not support the amendments dealing with it. Equally, however, we will not support wholesale privatisation. Where is the evidence that privatisation works? We all know that there are third sector organisations that can deliver a much better service, particularly in highly specialised circumstances, for those with learning disabilities or a mental health problem, for example, than Jobcentre Plus staff or private contractors can. We want any move towards privatisation to be evidence-based, with a clear rationale and with competition.

We see no reason why Jobcentre Plus could not also compete for those contracts at the same time as the private contractor. However, I return to what I said earlier. If, when the Minister finally reveals his evidence about the operation of the pilots, that evidence shows that Jobcentre Plus outperforms the private contractor, what will the evidence base be? The evidence base would clearly be that Jobcentre Plus staff have outperformed the private sector and should therefore get the contract. We cannot and should not go down either route for purely dogmatic reasons. We should have the flexibility to pick what works best for the constituents whom we seek to serve.

This is a large and complex group of amendments. We are not seeking to press any of our amendments to the vote, but we will certainly support the first three proposals made by the hon. Member for Hayes and Harlington and the Conservative amendment dealing with child care, because we believe that they would considerably improve the Bill. They also underline the clear danger with the Bill, which is its reliance on dogma and conditionality. The Bill does not deal with the one issue in the real world that we all want to do something about, which is rising unemployment. The Bill is an example of yesterday's problem being dealt with by, I am afraid, some of yesterday's Ministers.

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Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North 5:30 pm, 17th March 2009

I want to speak primarily to new clause 8, which stands in my name and which delves back into the arguments that we have been rehearsing for the past couple of hours on the balance between incentives and sanctions, particularly with respect to lone parents. Before I do so, however, I want to spend a few moments talking about two arguments that have emerged in the debate with which I fundamentally disagree and which need a response.

The first relates to the comment with which Paul Rowen closed his speech—namely, that the Bill represents yesterday's agenda and that this is the wrong time for it. I fundamentally disagree with that. It is absolutely correct that we should have a new, or revised, agenda as a response to the recession. There is a desperate need to work with businesses to halt the flow of job losses, and to ensure that newly unemployed people are given a different kind of assistance to get back into work from that offered by Jobcentre Plus and other organisations.

It is also essential, however, that we should not repeat the catastrophic mistakes that we made in the past, particularly in the 1980s. The recession at that time led to long-term unemployment, and the people involved were utterly abandoned. I say that with some knowledge because, in the early 1980s, I was working for an organisation that ran Manpower Services Commission employment programmes. They were an example of brutal Workfare. They were deeply under-administered, and offered very little in the way of additional payment for those working on them and virtually no training. The fact that huge numbers of people could not even get on to those schemes shows how desperate the situation was.

It is essential that, at every stage, we prevent those people who join the jobless queue from drifting into hopelessness for years and years, because we know that that is closely correlated with depression and with exactly the loss of skills and confidence required for job re-entry that the hon. Gentleman referred to. At this juncture, it is therefore critical that we put in place measures—about some of which I must enter caveats—to ensure that people who have been out of the labour market for some time have the means to reconnect and stay in touch with that market.

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Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister

Does the hon. Lady not accept that many of the amendments do not ignore such people, in that they propose to increase jobseeker's allowance, to give lone parents a choice or to run certain pilots? They would ensure that what works works, rather than going headlong down a route that might lead to our repeating what happened in the 1980s.

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Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

I am not seeking to rubbish the amendments, many of which I agree with, either wholly or in part. However, the fundamental principle of adopting a strategy and measures to reconnect people with the labour market and to prevent them from remaining distant from it over a long period is absolutely right.

That leads me to my second point, which relates to the age that the youngest child of a lone parent should reach before we expect the parent to engage in some form of work-related activity. That is a total red herring. The parents of three-year-olds, particularly in this day and age when 95 per cent. of children enjoy the nursery provision available for three and four-year-olds—some of them part time, certainly, but at least the provision is there—could be in a better position to take advantage of some form of work-related activity than cohorts of other lone parents whom I know, although I have some caveats about the quality of the contact involved.

For example, I have expressed my concern many times in the Chamber about the availability of child care—perhaps it is wrongly called that—for older children. Strangely enough, young children under five have more opportunities to obtain, and gain greater access to, the quality child care that gives their parents the security that they desperately need when trying to ensure that their child is receiving quality provision. They are better provided for than many parents with older children.

I speak with feeling on this subject as a parent with a teenager, and I know that other hon. Members also know perfectly well that if they are out at work or not available during the day, their older child will not necessarily be safe or be occupied in a way that they would like. I ask the Government to continue urgently to address the issue of access to extended services or other out-of-school provision, because it is really critical for that significant minority of lone parents with older children for whom regulations have recently changed to be monitored in respect of the services they rely on. We must ensure that they are able to be confident about taking up job opportunities in the knowledge that their children are safe. Even more critically, they must know that their child will be properly and securely looked after in their absence.

To come to what is probably the heart of the matter, the issue is less a concern about age cohorts and defining whole groups of people than it is about the quality of delivery and the tailoring of the personal intervention to the individual. I know plenty of lone parents of three and four and five-year-olds who are more than ready—and, indeed, willing and welcoming of the idea—for work or training or preparing themselves for moving some way down the path towards employment. I also know lots of parents of older children, as well as some who are not parents at all, who have very specific and important needs that must be addressed before they can be ready for any kind of activity.

I am reminded of a woman who came to see me a couple of weeks ago who was in the process of adopting her dead sister's child. Her circumstances completely occupy her mind and her mental energies and she is likely to be unwilling to take up work opportunities for the time being. She is the parent of an older child, whereas as I have already said, some parents of a three-year-old child might be more than ready for work. As we know, large numbers of parents—lone parents and in couples—are already going back into employment at the end of their statutory maternity leave.

The critical task for all of us—the Government have gone a long way towards addressing it, but have not convinced me absolutely on every front—is making sure that the service is able to take a decision that is properly tailored to the individual person's needs.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

I speak as one of those parents who went back to work when my children were only a few weeks' old, but does my hon. Friend agree that society should have respect for a parent's decision? If a child needs the parent to be at home, we should actually value the fact that parents want to take care of their children, while at the same time we should allow them to avail themselves of opportunities to get back into the world of work if they want to.

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Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

That is absolutely right. The issue, as always, is finding a way through a number of conflicting objectives. Parenting is without doubt one of the most important things that any of us ever do. Virtually every parent will put their child at the heart of virtually everything they do in their life; it is sad if they do not, as the child will be damaged. Choice is absolutely important, and parents will make choices.

Plenty of children have a non-statemented special need—attention deficit disorder or dyslexia, for example—and their parents are very conscious of the fact that although their child does not have a statement, they will have to spend more time and invest more of their emotional energy in supporting that child. On the other hand, it is also true that children tend to thrive when their parents are properly occupied through work. There is plenty of evidence that being based outside the home is also good for children and that quality child care—the emphasis being on quality—is good for children and improves their attainments. That is particularly the case when the children's families come from disadvantaged backgrounds. My hon. Friend is right, but it is a complex issue.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

I agree that a child's well-being depends on the well-being of its parent. A parent who is happy and fulfilled, and not subject to undue stress, will be a better parent. When we are devising mechanisms such as this, it is important that we do not put stress on parents who may already have a difficult job because of their personal circumstances or the circumstances of their children.

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Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

I do not think that there is any difference of opinion between us. We should not get hung up on whether the threshold is 16, 11, seven or three, but we should get totally hung up on whether the service is sufficiently flexible and sufficiently sensitive to the variation of needs within families, in the context of employment.

In tabling new clause 8, however, I was principally concerned not with employment but with work-related activity. I think that that can be even more easily accommodated within the capacity of most parents—again, with the vital qualification that it must constitute an opportunity, and that Jobcentre Plus staff should not be frowned upon or penalised if they allow certain parents of 15-year-olds, or in some cases three-year-olds, to opt out because it does not fit their circumstances.

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Photo of John Mason John Mason Scottish National Party, Glasgow East

I thank the hon. Lady for giving way so generously. Once or twice in her speech she has used words such as "tailored", "personalised", "sensitive" and "flexible". Is she convinced that Jobcentre Plus, as a large bureaucracy, is capable of offering as sensitive and personalised a service as she and I—and, I am sure, everyone else—would wish?

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Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

I think that Jobcentre Plus is capable of doing so and that it often does so, although it sometimes fails. The service is certainly dramatically better than it was when I first came to the House. I spent a great deal of time with Jobcentre Plus staff at that time, because the Government were rolling out the new deal initiative very quickly after 1997. I remember what jobcentres were like, physically and in terms of the capacity of staff to respond. But have we got it entirely right now? No, and I shall explain why, very briefly, in the context of new clause 8.

As has been said by one of two other Members, the balance between incentives and sanctions, or conditionality, is critical. Claimants of the work-related activity component of the employment and support allowance can receive an additional premium of £24 above jobseeker's allowance in return for participating in work-focused preparation, but that does not apply to lone parents. Although the principle that incentives work is enshrined in the Government's programme, that incentive is denied to them.

We know very well that incentives work for lone parents, and we know that their employment levels have risen sharply in recent years. We know that most people want to work, and we know that one of the clear judgments they make when deciding whether to enter employment is whether they will be better off in work. That is at the heart of the matter. Although incentives work, however, they are often not tried out properly. The whole tax credit regime has been crucial in making work pay, but, in various degrees, various parts of the country and various circumstances, the "better off" calculations, or the incentives that underpin them, are not effective enough.

It is entirely sensible to ensure that the people we wish to encourage to participate in work-related activity can enjoy a premium for so doing. As was spelt out so well by my hon. Friend John McDonnell, all the evidence suggests that if people can be incentivised into participation, outcomes are better. People feel more in control, which makes them more likely to be able to manage other aspects of their lives. They feel more positive, and can therefore take advantage of what work-related activity should do: enable them to assess and develop their skills, and to overcome the confidence-related barriers that have prevented them from moving closer to employment. It does not really matter whether that happens now, in the midst of an economic downturn, or a little further down the road.

Equally, and set against this, without a premium we rely on work-related activity being a requirement underpinned by a sanction only, and sanctions do not work. We know that the impact of sanctions is only marginal in terms of people deciding not to participate, and, worse still, they can have an utterly catastrophic impact on individuals. The Department's own research shows that the application of sanctions is closely correlated to poor health among both parents and children. We do not want to inflict that on people.

We also know one other thing—I certainly know this, from my experiences of working with my constituents. One of the big factors in determining whether people participate in training, work-related activity or employment is risk aversion. People are damaged by risk, and parents are particularly risk-averse—I think it is hard-wired into us. We do not want people to be put into a situation where their income plummets and rises again, so that there are all kinds of consequences for them in terms of benefits. Also, any sanctions that apply to their benefits will often have knock-on impacts in terms of their housing. Other people then get to know about that, and word gets around, so people do not want to participate in any of these schemes that will take them further down the road towards their being subject to the risk of consequences that will upset them and their children.

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington 5:45 pm, 17th March 2009

I wholeheartedly share my hon. Friend's views on incentivisation—we have discussed that—and on sanctions not working. They not only do not work, but they are counter-productive at times. Most of us have seen—particularly through the asylum regime—that not only are they driving people into absolute poverty in some instances, but they also drive them into the employment black market where they can be more exploited, especially through illegal employment. This, therefore, becomes deeply counter-productive for certain groups within our society.

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Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

I do not disagree with that. No system of benefits can survive without sanctions. They are an essential part of any such system: there will always be some people who deliberately undermine the system and calculatedly refuse to participate, so they are necessary. However, sanctions should be a measure of failure of the system, not a measure of its success. I am not saying that they are regarded by the Government as a measure of success, but I think that, subliminally, they almost are; it is as if the attitude is, "Well, we've managed to catch this many people doing something wrong and sanction them, and that shows the system's working." That is not the case. We in this House should always keep an eye on what is happening to levels of sanctions, and be very concerned when they rise.

The core point of new clause 8 is that sanctions must be balanced with incentives. We do that in terms of the employment and support allowance, but we do not do it in respect of lone parents. I think that the system is broadly right—I do not have any fundamental principled concerns about it. However, if we are going to make it work, we need to make sure that sanctions are borne down on and are matched in all cases with the incentives that we know work.

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Photo of John Howell John Howell Conservative, Henley

I must express my disappointment that there are so many wrecking amendments from Labour and Liberal Democrat Members. The idea that we can bring about the major change required in this Bill through merely voluntary means, by offering and providing opportunities, strikes me as ludicrous. I am also still unclear about the scale of the change in the current welfare system that Labour Members believe is required.

I could not believe my ears when I heard that there was no evidence available to support the Government and ourselves on this issue. As a member of the Select Committee on Work and Pensions, I sat through an extremely valuable inquiry on the commissioning strategy, which was full of evidence. I fully admit that evidence can always be evaluated differently, but it is simply not the case that there is no evidence to support the Government. I hope that those of us who had the privilege of speaking to and questioning Professor Gregg will have been impressed by the academic research and evidence that went into what he had to say.

May I cite an example of two single mothers whom I met when I went to my local Jobcentre Plus and, with their permission, sat through their interviews? One of them had rushed to the jobcentre within an hour of getting a job to make sure that she was signed off from every possible involvement with Jobcentre Plus, not because the experience of working with the people there had been bad, but because she wanted a job. She required neither conditionality nor incentives; she just wanted to be in employment.

That single mother was shortly followed by a young mother from a similar background and of a similar age. Her attitude was that producing a child was her contribution to society—she thought it was all that was required—and no incentive would have convinced her otherwise. She is surely a good example of the need for personalised support and conditionality. How is a scheme of offerings and opportunities likely to work in practice in the example I have just given?

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Photo of John Mason John Mason Scottish National Party, Glasgow East

Does the hon. Gentleman not think that if that young woman had the opportunity of a higher income, she, wanting the best for her child, would be incentivised into work?

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Photo of John Howell John Howell Conservative, Henley

I thank the hon. Gentleman for his question, but the answer to it must be no. I had the benefit of sitting through that woman's interview, and she had fundamentally made up her mind that she had done her bit for society and other issues were not going to get in the way. There has been the tragedy of a wasted decade in welfare reform and I do not wish things to be further hampered by any of these amendments being passed.

The only amendment that deserves support is amendment 35, which deals with the absence of child care. Government changes over the past couple of years have created considerable fears in my constituency that the mixed child care economy of public and private provision, of which we are justly proud, is being undermined and that private providers might go to the wall. In addition, when my county introduced school provision for four-year-olds, which was welcomed as an issue of choice, it was quite clear that parents overwhelmingly believed that four was too young. People were very happy with the idea of five, because it is part of letting go of one's children and there were good practical reasons for it.

My final point deals with contracting out and the so-called privatisation. Listening to some Labour Members, one would think that the whole of Jobcentre Plus will disappear tomorrow into private sector hands. The evidence that we were given on the commissioning strategy pointed to the fact that the inclusion of the private sector can lead to considerable innovation in the service provided, particularly that provided to the long-term unemployed. On that basis, I hope that we will be sensible about these amendments and allow the reforms to go through. As my hon. Friends have mentioned, they do not go far enough, but they are a step in the right direction at the right time.

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Photo of John Robertson John Robertson Labour, Glasgow North West

Before I discuss my amendment 36, I wish to congratulate my hon. Friend Lynne Jones, who was aided and abetted by my hon. Friend John McDonnell; after a standing start, she certainly got into her swing with the help she was given. I may not necessarily agree with everything she said, but I have some sympathies with her proposals.

I am sure that right hon. and hon. Members will be glad to hear that I wish to discuss just my amendment 36 and am not going to go through every amendment—that would mean that we would be here all night. If we are to place additional requirements on parents as part of these reforms, we need to make sure there is adequate support before the conditions kick in. I recognise the need to get people into work, particularly in the current times—it is important that people have that opportunity. However, with the prospective Bill on child poverty and the difficulty of reaching our targets on this, we need to make sure children are at the forefront of our minds when we consider the effect of these reforms. We cannot put extra strain on parents if they cannot afford it—that would mean that they would be left worse off by the welfare system, and that was never the intention.

Given the increasing obligations to be placed on parents who are unemployed, there is particular concern over the lack of high quality, flexible and affordable child care, particularly in Scotland. My amendment seeks to make sure that that is considered before strict conditions are placed on parents. It is a probing amendment—for the third time—to ensure that the Government have been listening and that children are at the heart of these reforms.

My right hon. Friend the Minister for Employment and Welfare Reform recognised the issues involved, both on Second Reading and in Committee, and undertook to revisit them on Report. We are now on Report and I look forward to his reply. I know that he has been looking at the matter, which is why I have re-tabled this provision.

I wish to thank the Scottish Campaign on Welfare Reform, which has helped me with this amendment. The group includes more than 40 organisations that work with people experiencing exclusion and poverty in Scotland, and when it was discussed in Committee the amendment attracted media coverage north of the border due to the group's excellent work. The provision seeks to make sure that unless a claimant has good access to affordable child care they will not be faced with a Catch-22 decision between benefits and making sure that their children are looked after.

My hon. Friend Ms Buck made a good point that my amendment missed out: the cover provided for older children. I ask the Minister to have a word with his colleagues who deal with schools about after-school care and pre-school care, to ensure that children are looked after while parents are working and that the care that they get is sufficient for their needs and their education. That would go a long way to help remove the fears that my hon. Friend the Member for Regent's Park and Kensington, North has about whether older children are being looked after.

I wish to focus on the lack of child care in Scotland, because the Minister recognised that on Second Reading. According to figures from One Parent Families Scotland, more than 50,000 children could be affected by the planned changes. There are limited means of systematically monitoring Scottish-wide provision, so it is difficult to get a precise picture and no one can produce any knock-down statistics. However, there are a number of important factors that I would like to bring to the House's attention. First, there is a precedent for ensuring that child care arrangements in Scotland are taken into account in legislation. Implementation of provisions in the Children (Leaving Care) Act 2000 was delayed in Scotland for four years because removing benefit entitlement was based on alternative care arrangements in England and Wales that were not in place in Scotland—these differences remain today. There is no legal entitlement to child care in Scotland, unlike in England and Wales. There is no subsidy for child care for two-year-olds in Scotland, again unlike in England and Wales. There is no UK-wide equivalent of the Childcare Act 2006, which puts a duty on local authorities in England and Wales to secure as far as is practical sufficient child care to meet the needs of working parents. I hope that that message has been heard north of the border and that Scotland will put its house in order to meet the same requirements as exist in England and Wales.

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Photo of John Mason John Mason Scottish National Party, Glasgow East 6:00 pm, 17th March 2009

The hon. Gentleman suggests that Scotland's house is not in order. Does he accept that in some ways that is a result of history? When we were younger, child care and nurseries were hardly heard of. The speed of change in Scotland may be different, but we have already heard that child care provision is inadequate in many parts of the UK, not just in Scotland.

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Photo of John Robertson John Robertson Labour, Glasgow North West

I thank the hon. Gentleman for his intervention, which is one more than he made when we had this discussion in Committee. What he says does not mean that we do not have to supply child care today. I actually went to nursery school before I went to primary school—I was going to say that it made me the man I am today, but perhaps it made me half the man I am today. The important point is the obligation. It is not a question of whether Scotland's child care is better than the child care in England and Wales: the most important element is the obligation on the local council to ensure that when the Bill comes into force and parents are forced into work, there is sufficient child care to meet their needs. I am not claiming that England is better than Scotland or vice versa. I just want to ensure that local councils have an obligation to provide the service, so that the parents have some recourse if the child care is not made available. Lack of child care would be more than an excuse for not going into work, and it is difficult to work for people who are worrying about their child.

The DWP document "Impact Assessment of the Welfare Reform Bill", published in January, emphasised the importance of child care and recognised the risks of imposing obligations on parents. However, it stated that the risks were mitigated by the improvements in England and Wales as a result of the Childcare Act, which places a duty on local authorities in those countries to secure sufficient child care for working parents. Given that there is no such duty in Scotland, the risks of imposing conditions on parents clearly remain.

We also know that things have been moving in the wrong direction in recent years. Between 2006-08, there was a fall in the number of child care centres and child minders in Scotland from 10,388 to 10,322. It is a small fall, but any reduction is going the wrong way, because we should be seeing an increase. Cost, particularly for single parents and those couples with low incomes, is the biggest hurdle to getting a good job with an income to support their family. So it is of real concern that figures from the Daycare Trust show that the cost of out-of-school child care in Scotland increased by 29 per cent in the last 12 months, while the cost of a nursery place rose by 12 per cent.

I ask the Minister whether the Government have spoken to their counterparts in the Scottish Executive to ensure that the child care obligation can be met. I note that no one has criticised my questions, so I assume that everyone agrees that this is an area that needs looking at. I have been disappointed by the official Opposition. I tabled amendment 36 because in Committee everyone seemed to be in favour of the proposal, but the official Opposition have given no indication of whether they support the amendment or even whether they think that it is a good idea. Do they care about child care or not?

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Photo of John Robertson John Robertson Labour, Glasgow North West

I would rather hear from the Conservatives, but I will give way to the hon. Gentleman.

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Photo of John Mason John Mason Scottish National Party, Glasgow East

If the hon. Gentleman is so passionate about this issue, why will he not press amendment 36 to a vote?

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Photo of John Robertson John Robertson Labour, Glasgow North West

A probing amendment is just that. If their lordships want to press this issue to a vote, that is up to them. I want to try to obtain an extra four years for Scotland to ensure that we match the facilities provided in England and Wales. Why would I push an issue to a vote when I am seeking an extension for Scotland before the Act comes into force?

In conclusion, I wish to emphasise that there are clear differences in child care provision in parts of the UK, such as Scotland. We clearly need to take great care in ensuring that the conditions placed on parents are not counter-productive in helping them into work and that, in no circumstances, do we leave them in a Catch-22 situation over child care. The Bill is based on what is happening in England and Wales, not in Scotland. I look forward to the Minister's reply.

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Photo of Terry Rooney Terry Rooney Labour, Bradford North

I wish to speak to amendments 42 to 47. Amendments 42 to 45 deal with clause 1, which covers "work for your benefit" schemes, or as it has been called today, Workfare. There has been much quoting—perhaps I should say misquoting—of various research and of what the Select Committee said about this subject. It is important to put the issue in context.

In the US, Workfare was defined as mandated participation in unpaid work activities as a condition of receiving social assistance. In New York, it applied from day one of a claim for assistance. In Wisconsin, the system was corrupt from the start, with certain organisations—which are trying to set up in this country now—milking the system and making millions out of it, while claimants got nothing. Workfare never worked in Wisconsin, although some people got very rich—contractors as well as politicians.

At the height of the system in New York, in 1999, some 40,000 people were on Workfare. Today, there are 3,000, because the authorities have realised that it does not work. The scheme that was being operated in New York was nowhere near what is proposed in the Bill. Hon. Members can object to the scheme in the Bill, but it is not Workfare as operated in New York. Australia had a totally different system. It did not take effect until people had been on benefit for six months and all Workfare was in the non-productive sector. In fact, there was great concern that people were getting no work experience at all, and it largely failed in Australia for that reason.

It is claimed that there is no evidence that Workfare works. In fact, in New York, it worked as a massive incentive for people to cancel their benefit claim or not to claim in the first place. That is what happens under a proper Workfare system that operates from day one of the benefit claim. The "work for your benefit" proposal does not take effect until people have been on benefits for two years. Frankly, if our employment services cannot get someone into work after two years, there is something wrong with the system to start with.

We know, from the work trials for lone parents that have been done with Marks & Spencer and other organisations, that they work. Generally, the person works for four weeks and demonstrates capability—not least being able to arrive on time—and the vast majority of those people get jobs. That is what the direction of travel has to be.

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

The Government's scheme is called "work for your benefit", so I think that it can be translated into a requirement to work to receive benefit. I commend the schemes that my hon. Friend has recommended, which are voluntary schemes.

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Photo of Terry Rooney Terry Rooney Labour, Bradford North

There are different definitions of voluntary. The schemes are largely voluntary, but I think that there are hidden pressures behind them. However—this is where I have to take exception with my hon. Friend—such schemes work. When something works, why not—

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Photo of Terry Rooney Terry Rooney Labour, Bradford North

No, my hon. Friend will have to wait. He spoke for 40 minutes; will he let me have a go for five minutes?

When something works, why not extend the opportunity to take part in it to others?

There is an issue about compulsion, but let us deal with the matter in general—let us not deal with lone parents. If somebody has been on benefit for two years and has had every type of assistance going, if they have been through the ordinary new deal and the flexible new deal, if they have had intensive programmes and a skills audit and if they still do not have a job, that suggests that something is missing.

I recommend to my hon. Friend John McDonnell and anyone else in the House the research conducted by Reed in Partnership. It analysed every person who had been through its employment zone and found that 16 per cent. of participants did not have a job, training or anything at the end of it. Why? They did not want to work. They were quite open and blunt about it. They just wanted a life on benefits. They did not want to go to work. Reed arranged interviews and half of them were offered jobs, which they turned down. There must come a point where the state says, "If you are not going to play ball at all, the sanction will come in."

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

I agree that if somebody has a job offer and real job opportunities, that is one thing. However, many people face a great deal of prejudice in trying to get employment, particularly those with mental health problems. I am very much opposed to any compulsion for that group, because it is likely to be counter-productive. On the two-year period, we do not know what will happen in two years' time and how difficult it will be when we have high unemployment.

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Photo of Terry Rooney Terry Rooney Labour, Bradford North

Last month, 200,000 people left benefits for work. People seem to think that the whole economy has frozen up and that nobody is getting jobs. There is still a massive flow either way. More people are losing jobs than are getting jobs, but a huge amount of people are still moving into work and we need to recognise that.

The vast majority of those with mental illness receive employment and support allowance, and they get special support and pathways to work. All the difficulty about fluctuating conditions is recognised. Some of the work done with people with mental illness problems in the pathways to work pilots was quite stunning. I recommend that my hon. Friend Lynne Jones look at the results of the pilots, if she has not already, to see what happened.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

I think that the Secretary of State has acknowledged that even the pathways to work programme has not always been successful for people with mental health problems.

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Photo of Terry Rooney Terry Rooney Labour, Bradford North

It has been far more successful than any other programme. It still gets a low level of people into work, but that is more to do with the prejudice of employers than the programme on offer. If our dear friends in Victoria street, in what used to be called the Department of Trade and Industry—whatever it is called now—ever came to their senses and brought in proper legislation on discrimination by employers, that would do far more for people with mental illness than any DWP scheme.

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There used to be workshops in the old mental hospitals which worked well for the patients. When the hospitals closed a workshop in Cornwall, Pentreath Industries, and I believe one in Southport, were opened on a voluntary basis and acted as an occupational part of the TREATMENT for people with severe and...

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

I do not know why my hon. Friend is dismissive, quite honestly. We have engaged in a fruitful debate until now. If a person declines a job, sanctions are available under the existing system. This provision introduces a sanction that forces people to work for their benefits. That is what this is all about. My hon. Friend said that we should turn this into an opportunity, and that is exactly what my amendments do. They offer an opportunity that we know—he has just demonstrated it—works on a voluntary basis but does not work when there is compulsion.

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Photo of Terry Rooney Terry Rooney Labour, Bradford North 6:15 pm, 17th March 2009

That argument suggests that if a person stays on benefit for 25 years, they will still be subject to no compulsion. That is nonsense. There must come a point when, for the benefit of the individual—never mind the benefit of the taxpayer—we do something different for them. The Bill is offering six weeks of work experience—it could be called a work trial, but it cannot be called Workfare—for four days a week, with the other day allowed for job searches, skills development and other top-ups to the assistance that those people have already received for two years. It is not Workfare. If people are going to carry on calling it that, they ignore the evidence.

My hon. Friend the Member for Hayes and Harlington quoted the Select Committee's report, but he did not finish the quotation, because the report stated:

"We welcome the Secretary of State's emphasis on the difference between 'workfare' and the 'Work For Your Benefit' pilots proposed in the Welfare Reform Bill and we urge the Government to ensure that the piloted approach does not negatively impact upon the employment opportunities of those on the programme. We ask the Government to publish a full evaluation of the pilot and we recommend that it only proceeds with the programme if this appraisal demonstrates convincing proof of success."

That is the basis of my amendments. The provisions should be piloted on a gentle approach because this is new territory for this country. We know some of the pitfalls from the research. Indeed, the person who carried out the research that my hon. Friend quoted was the specialist adviser to the Committee's inquiry, so we had his advice at first hand, and he was able to give us a detailed insight into the systems operating in Australia, Canada and the US. He was adamant that what is being proposed in Britain is not Workfare.

Let me correct another quotation. It was suggested that we questioned or doubted the efficacy of the flexible new deal. The Committee actually said:

"The Committee has endorsed the principles of" the flexible new deal

"in this report. As a programme that provides more personalised support delivered through large-scale, longer contracts it has the potential to offer better support for the long term unemployed than is currently available."

Mention has been made of Mr. Freud—David Freud, that is, not the other one. I wonder why he has acquired such a Svengali-like reputation because there was nothing revolutionary in what he said. He came up with two key principles, and, again, they were nothing new. The first was that when people had been long-term unemployed, they had to have much more intensive and expensive support to help them back into work, and that the best way of doing that was to transfer the risk of the cost to the private sector. The second was that the way to fund the first proposal was to use the benefit savings to pay the private contractor. That was absolute anathema to the Treasury and ever since David Freud's report came out, the Treasury has been resisting it, because it does not want the report's proposals to be accepted. One pilot is under way now—I forget where—and we will have to see what the outcome is.

Some of the pathways to work pilots were partly funded by benefit savings and it is clear that there are benefits arising from the private and voluntary sectors carrying out employment programmes. That is nothing new. It has been going on for about 25 years. The truth is that Jobcentre Plus can offer very little to people who have been on benefit for a year, but it offers a superb service in the early days of unemployment, and especially in the first six months, as it can get about 65 per cent. of people back into work in the six months after they first claim.

The staff at Jobcentre Plus perform extremely well. What is being proposed would be a completely new area of activity for them, but it is something of a misnomer to say that something that is not happening at the moment is being privatised.

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Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister

I listened carefully to what the hon. Gentleman said about Jobcentre Plus being good in the early days of a person's unemployment. Does he accept that one of the most retrograde steps in the flexible new deal is that it gives intensive support after 12 months out of work and not at the beginning? That is why the scheme will not work.

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Photo of Terry Rooney Terry Rooney Labour, Bradford North

This is a difficult argument. Giving people the same intensive support at the start of a claim that they get further down the track would probably treble the cost of Jobcentre Plus. I forget the exact figures, but about two thirds of claimants get a job within the first three months of unemployment. Most of them will get a job whatever the Government do, but the skill lies in identifying at the start of a claim those who will take a long time to find work.

I use the word "skill", but it is obvious that ex-offenders, people with drug or alcohol abuse problems and repeat claimants will take a long time to find work. Lots of people could be identified much earlier, but the Bill proposes a facility to accelerate access to the additional help that comes after six months so that people can get it right from the start of their claim. It is the skill of Jobcentre Plus staff to identify those for whom that acceleration would be appropriate.

Personal advisers have been around for only about 10 years, but they are the linchpins of the system—the system works only thanks to their numbers and quality. Jobcentre Plus does what it does better than any employment service organisation in the world. In Australia, for example, the employment service was effectively privatised but it cannot have been very good because it went bankrupt and went bust inside two years. Most people in this Chamber will never experience unemployment—although there might be a problem for some of us next year, but we will deal with that—so we do not have personal knowledge of how things have changed. Jobcentres now are vastly different from what they were 10, 15 or 20 years ago. The idea that people should be given support and help to get them back into work is only about 15 years old. Such things never used to happen.

This will be the only compliment that I shall to pay to those on the Liberal Benches, but this year is the centenary of the Labour Exchanges Act 1909. The original labour exchanges that it introduced literally used to exchange labour for a job, but anyone in 1909 who suggested giving unemployed people a personal adviser would have been laughed out of court. We have moved on from that.

I think that it was John Howell who spoke about the "welfare reform failure" of the past 10 years. My goodness! He should have seen what conditions were like in the previous 20 years. The things that have happened over the past 10 years—and the development of Jobcentre Plus is not the least of them—represent a massive step forward. People who sadly lose their job and experience unemployment are amazed at the quality of provision that they get.

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Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister

The hon. Gentleman has spoken about Jobcentre Plus, but does he accept that needs have changed because more people who traditionally have not been unemployed are now losing their jobs? A person came to my surgery the other week who had not been unemployed in her life. After 35 years at Woolworths, she went to Jobcentre Plus and was told to go back at Easter, but it was also made clear that, if there was no job for her then, there would not be one before Christmas. She was expecting all sorts of support but got none, and that is part of the failure. Does he agree that the 12-months arrangements proposed for people like my constituent—that is people who have never been unemployed or on drugs—need to be addressed?

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Photo of Terry Rooney Terry Rooney Labour, Bradford North

I take the hon. Gentleman's point, but I want to say a couple of things about former employees of Woolworths. Of the 30,000 people made redundant by the company, fewer than 6,000 have made a claim for benefit. The numbers still on benefit are dropping day by day, so it is clear that the closure of Woolworths was not the catastrophe that it was supposed to have been. In addition, the average staff turnover in retail is 26 per cent. a year, which means that people who leave a job are not always losing it. Staff changes are common in retail: even in the current difficult climate, almost every major retail chain has hundreds, if not thousands, of vacancies across the country.

I do not think that it is typical for a retail worker to work for 30 years and have no experience of unemployment, but some 2.5 million people every year make a new claim for jobseeker's allowance. That has been going on for many years: people seem to think that unemployment does not happen any more, but it does. Yet it is also true that 2.5 million people also move into work every year, and that the vast majority of them do so within three months of making a claim.

There has been huge activity in the economy in the past few years. At present, slightly fewer people are getting jobs and slightly more are losing them, but that economic activity is still going on. There is still a role for Jobcentre Plus, but the person mentioned by Paul Rowen who has worked for one company for 30 years is exactly the sort of person who will benefit from the skilled personal adviser. A lot of advice is given at the initial interview, and it is obvious that a person with a proven track record of work is much more likely to get another job rapidly.

I accept that the profile of people who have been unemployed more than 12 months will change. The new arrangements are not in place yet: they will start feeding through only this autumn, and that is another reason why we need specialist provision. However, offering that specialist provision to every claimant from day one would probably treble the bill for Jobcentre Plus. That would not be very good economics.

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Photo of John Barrett John Barrett Shadow Work and Pensions Minister

The hon. Gentleman said that many former Woolworths employees were not claiming benefits, but does he accept that that was because they were not entitled to them? Many of those workers were women who worked part-time.

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Photo of Terry Rooney Terry Rooney Labour, Bradford North

That is a convenient excuse. About 1,800 former Woolworths employees retired, having reached or even worked past retirement age. It is true that some former Woolworths workers were not entitled to benefit, but that will always be the case. It is nothing new: in the 1970s and 1980s, lots of women who lost their jobs were not entitled to benefits because they kept on paying their married women's stamp. That does not alter the argument about the service that is provided.

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Photo of Tom Harris Tom Harris Labour, Glasgow South

John Barrett makes a valid point, but the fact that a claimant is not entitled to receive benefits does not preclude them from making a claim. My hon. Friend Mr. Rooney is right to say that many of the former Woolworths employees did not claim benefit, whether or not they were entitled to receive it.

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Photo of Terry Rooney Terry Rooney Labour, Bradford North

I think that I have been on that subject long enough. I want to move on.

Some of the amendments that I have tabled call for pilot schemes to be conducted, and I hope that the Government accept the need for that. They also propose that the work for benefits scheme must end in 2013 unless it receives a positive evaluation, and that special care must be taken to evaluate how especially vulnerable groups fare in the system.

Finally, clause 1 talks about a system that is "designed", but my amendment 44 proposes that the wording should be "personally tailored". The word "designed" suggests that everyone must fit a template imposed by a person on the outside, whereas the phrase "personally tailored" takes much more seriously the need to make the advice given by personal advisers relevant to the individual.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

I endorse my hon. Friend's call for pilot schemes, but how does he envisage that the control scheme would work? A control scheme that just carries on as usual would offer no useful comparison with a pilot scheme that is active and in which people are positively engaged. Does he agree that we need active schemes, one voluntary and one compulsory, because that would allow us to compare the voluntary and the compulsory approach?

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Photo of Terry Rooney Terry Rooney Labour, Bradford North

The challenge of any scheme and any evaluation is to have a control model. I do not know whether that model should involve those who do not participate at all or those who volunteer. One thing to the DWP's credit is that it is extremely good at commissioning research. In fact, most university social science departments would close down without the DWP. Steve Webb would have been unemployed for 20 years if it had not been for the DWP and its predecessors—it has got a lot to answer for! The Department is extremely good at commissioning research, which often turns around and bites it or kicks it in the teeth, unlike in America, where an extreme paucity of research into the impact of policies lets Washington get away with murder, but I must move on.

Amendment 46 seeks to delete—it really hurts to say it—clause 4. I am not sure what the policy intention is of clause 4. [ Interruption. ] No, if we wanted to nationalise the top 200 companies now, we would have to invade Tokyo, Paris, New York and Berlin or something. Clause 4 seems to suggest that, where both people in a couple are entitled to make a claim and one of them has a health condition and the other does not, the one with a health condition will no longer be allowed to make a claim and that the one without a health condition will have to make a JSA claim, subject to the job-searching routine and so on. It seems to me that that removes choice, because one individual is no longer allowed to make a claim and she—I suspect that mostly women will be impacted by the provisions—will not have the benefit that would have been previously available to her under employment and support allowance. That represents a policy deficit, and I hope that the Minister can explain what lies behind that clause.

Amendment 47 seeks to delete clause 11, which will alter the conditions for receiving employment and support allowance. There are two contribution conditions—the first condition and the second condition, as those who are expert in these things will know. At the moment, the first condition is that people must have paid national insurance contributions sometime in the past three years. Clause 11 seeks, for some reason, to reduce that to two years. It aligns that benefit with JSA, so I suppose that there is some logic in that, but it seems a particularly picky and negative thing to do. I do not think that many people will be affected by that proposal and I cannot see any financial advantage to the Department, so I hope that the Minister will comment on it.

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Photo of David Winnick David Winnick Labour, Walsall North 6:30 pm, 17th March 2009

I was present earlier for part of the debate, and I will not take very long. In fact, I will be very brief. I want to make three points. First, I do not accept the premise, which has been proposed on other occasions, that a large number of people who receive benefit are workshy. I do not doubt for a moment that some people are workshy, but when I visited a jobcentre in my constituency recently, I found people eager—indeed, desperate—to find work. I am sure that the same applies to other hon. Members who make such visits, and that experience should be taken into account. I certainly do not accept the premise that it is necessary to take action because the majority of people on benefits do not want to work, and I have never accepted it. My local press has reported in the past fortnight that, where vacancies have occurred—not many—hundreds of people have applied. That is hardly an illustration of people being shy of finding work.

My second point is that I cannot accept that single mothers with children as young as three should be transferred, as I understand it, from income support to JSA, at least in certain cases. I accept that, yes, it is right when the child is older—seven and above—that efforts should be made to get the single parent into employment, where there are jobs of course. Obviously, when the children are as young as three, there is no reason at all why there should not be ongoing discussions between the jobcentre and the person concerned. No one would object to that—I certainly would not do so—but to use undue pressure where the child is as young as three is without any justification, and I could not support it.

The last point that I want to make has been much commented on by my hon. Friend Lynne Jones in moving the new clause. Why will private companies be so deeply involved instead of Jobcentre Plus? I listened to my hon. Friend Mr. Rooney, but Jobcentre Plus has long experience. I do not know whether it is some sort of sin that it should be in the public sector, which it obviously is, but I need to be persuaded that it is necessary that, as I understand it, 33 out of 34 contracts will go to the private sector. Why is that necessary? I could understand it if there was a Conservative Government. Indeed, we have been given a bit of warning today about what a Conservative Government are likely to do. I find it difficult to understand why a Labour Government have put such emphasis on the private sector instead of on the traditional public sector agency that is responsible for finding employment. I hope that my right hon. Friend the Minister will respond to those three points.

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Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions

Let me start by agreeing with the first comments made by my hon. Friend Mr. Winnick and the tenor of some of the debate. The emphasis of the Bill is not that those who have the misfortune to find themselves unemployed are feckless, workshy or lazy. In fact, the evidence is entirely to the contrary.

The premise of the Bill and of the clauses that these amendments seek to amend is not that we will introduce Workfare for everyone or, indeed, sanctions for everyone in all circumstances. Those who suggest otherwise mislead the debate, and that is not terribly helpful in all circumstances. Nor is the Bill made for another time or another age. It is not fair that some hon. Members would rather leave those who are in the unfortunate position of being unemployed for any length of time to wallow in that position. That cannot be right for any hon. Member; it cannot be right as a matter of public policy. If we remove some of the elements of the Bill, suitably crafted, and allow some of the amendments to prevail, that would be the end result. That is not the intention of many hon. Members.

Nor does the Bill seek in any way, shape or form to stigmatise the unemployed or cast any aspersions on the lot of any unemployed individual. My hon. Friend the Member for Walsall, North made the point that it is indeed the case, as experience shows, that most unemployed people seek to get back into work at the earliest opportunity.

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Photo of David Winnick David Winnick Labour, Walsall North

I am grateful to my right hon. Friend for what he has just said, but he used the phrase "wallow in unemployment". Will he say clearly that, far from wanting to be complacent about people being unemployed, the Labour party has a long history—indeed, as long as the party has existed—of fighting unemployment and of giving the opportunity of employment to everyone who wants to take it? We fought the Tories in the House, as well as outside, during the 1980s and for part of the 1990s. We are the last people to be complacent about unemployment.

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Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions

I certainly was not suggesting that my hon. Friend was the least bit complacent. All that I am suggesting is that if many—not all—of the amendments considered tonight prevailed, they would be the alternative that the hon. Members who tabled them would have to offer many unemployed people. Those hon. Members have not put forward a substantive alternative. They have not said anything other than, "In one instance, we'll raise the benefit level a little bit." As for help and support—the essence of the Bill, and elements of the White Paper and Green Paper—there is no advice on what the unemployed should do. It is important to put those elements on the record, because the Bill is far from having been designed for another age. My question is: if not now, when? Now is not the time to say to the long-term unemployed that there is no help or support for them at all, especially given the deteriorating economic conditions.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

My right hon. Friend's interpretation of the views that I and other Labour Members expressed is a travesty. We are saying that the voluntary approach has been shown to be more effective in engaging people in the world of work, and we should pursue that approach. We are saying that any schemes that involve sanctions or people losing their benefit should be subject to a pilot scheme that compares that approach with a voluntary approach, so that we can see which works best.

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Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions

Yes, and as I understand it, that position prevails. As my hon. Friend Mr. Rooney said, whether the period is five or 25 years does not matter; the person concerned can languish on benefits, and the state or public policy has no role at all. That is not an active, interventionist state, and it cannot be the way forward.

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Photo of James Clappison James Clappison Shadow Spokesperson (Work and Pensions)

I support a great deal of what the right hon. Gentleman is saying, but does he think that it would help the debate if we clarified that we are not necessarily talking about the unemployed? We are talking about people who are economically inactive, and have been on economically inactive benefits. That is quite apart from people who are on jobseeker's allowance and the requirements in relation to them. There is a large number of economically inactive people, and a very large number of them—2 million of them—want to work. We should be giving them help.

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Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions

I agree that that is the starting point. That is the starting premise behind the Green Paper, the White Paper, the work that Freud and Gregg have done, and the work by many social welfare organisations and think-tanks across the political spectrum. That is right and proper. The wider starting premise of all the measures is that we will give as much focused, personalised help and support as possible to every individual, in all circumstances. As my hon. Friend the Member for Bradford, North, said, that starts with what we offer people as soon as they come through the doors of Jobcentre Plus, and goes on to include the six-month package that we will offer from 6 April.

I have some sympathy with Paul Rowen on his broader point. There should be a debate on where the more substantial support should come. I happen to agree with my hon. Friend the Member for Bradford, North that flipping the system over and having it all at the beginning is probably not appropriate, but the point made about whether the period should be three, six, nine, 12 or 18 months is fair—it is a fair point for debate. That point for debate, however, was totally missed in our discussion on the amendments about "work for your benefit" schemes. The illusion given was that we were talking about universal sanctions that start straight away, and that we were seeking to apply "work for your benefit" schemes to every single claimant, which is far from the case.

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Photo of Paul Rowen Paul Rowen Shadow Work and Pensions Minister

I accept the point that the Minister makes. Our point is that everyone should be assessed on day one. The assessment will determine the action taken, and then there will be a range of activity for that individual. Moving everyone who is on the flexible new deal to the 12-month arrangement, including young people, would, in our view, be a retrograde step, unless the Minister could give us an assurance that there will be a proper assessment of the person's needs on day one.

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Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions

Increasingly there is such an assessment. I have gone on record saying that we may need to, and should, do more to assess people's roles, especially given the downturn, from the time when they originally present. I said clearly in the previous debate that the woman who interviewed me who worked successfully for Findus for 20 years needs a slightly different approach, from day one, from someone who is dipping in and out of employment all the time, whether as a matter of choice or otherwise. I therefore take the point that the hon. Gentleman made earlier about Woolworths.

It would be remiss of me if I did not refer at least to the lead new clause, if not to some of the other amendments. There has been a fairly extensive debate, but I thought it important to put my contextual points on the record. New clause 1 seeks to homogenise JSA rates across age groups. I express no view about why my hon. Friend Lynne Jones seeks to do that, but I point out that jobseeker's allowance is not, and should not be, a substitute for wages for paid employment. It would not be in anybody's interest if benefit levels offered an alternative to work. That would fundamentally undermine what the benefits system and the welfare state are there for.

Notwithstanding the comments of Steve Webb, the majority of those under 25 have fewer financial responsibilities and lower earnings expectations than older workers. Paying the full adult rate would not therefore reflect the reality of the labour market and would erode the incentive to move off benefits and into work. For those reasons, I cannot support new clause 1. As my hon. Friend the Member for Birmingham, Selly Oak, knows, it is important to remember that for those young people with additional financial pressures, such as those who are parents or who are disabled, there is additional support, for example from tax credits or disability living allowance.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak 6:45 pm, 17th March 2009

On that point, could my right hon. Friend have a word with the Prime Minister? It was certainly the Prime Minister's view that keeping benefits so low was not an incentive to get people back to work; it did not help people to get back to work if there were no jobs available for them.

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Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions

The point that my hon. Friend misses slightly is that I think that the disparity between the amounts for different age groups should prevail. There is, of course, a perfectly legitimate wider argument to be had about the level of benefits, the relation to wage levels and the minimum wage, and how the two interact; I agree that that is perhaps a debate for another time. However, it is not germane to the Bill.

On the notion of paying wages rather than JSA under the "work for your benefit" programme, as I have said, "work for your benefit" will be introduced only after two years of sustained, long-term unemployment, and not in any other fashion, as was at least intimated. We think that paying wages rather than JSA would result in an erosion of the incentives to move into the open labour market and into paid employment. We genuinely do not want to create a system in which, after two years' long-term unemployment, the "work for your benefit" programme is the end of a jobseeker's journey to work; it should rather be a stepping stone. I hope that the more we focus on personalised help and support being offered to individuals far more readily, and far earlier—certainly after a year—the fewer people will come into the category of having been unemployed for two years or longer.

There is a misunderstanding of the nature and purpose of the "work for your benefit" scheme. It is not employment; it is an employment programme. It is designed specifically not only to give people the chance to develop work habits and experience through supported placements, but to deliver tailored back-to-work support. For those reasons, we cannot support amendment 15 or the broader array of amendments—that is, amendments 11 to 14 and amendment 16. As my hon. Friend the Member for Bradford, North, said, the scheme is clearly not Workfare in any way, shape or form. I agree not only with DWP research, which is rather handy, but with some of the comments made about those overtly Workfare-focused schemes in America and Australia that have not worked in all regards.

Amendment 36, tabled by my hon. Friend John Robertson, seeks to ensure that jobseekers can be required to participate in the "work for your benefit" programme only if good-quality, affordable, flexible child care is available. As he moved the same amendment so eloquently in Committee, I understand where he is coming from, but it is unnecessary now, as it was then. I will do as he asks and raise the point about provision for older children, and the issues of child care more generally, with colleagues in the Department for Children, Schools and Families and with the devolved Administration, but I can confirm that parents on JSA will not be sanctioned if they fail to participate in "work for your benefit" because they cannot access appropriate child care. I said that in Committee, and my right hon. Friend the Secretary of State has said it on any number of occasions. That, rather like other aspects of the Bill, has been entirely—and wilfully, I think—misinterpreted as "Lone parents had better get a job. We'll force them into a job regardless of the circumstances or the barriers." That has never been the position, nor should it be.

On the broader issues that my hon. Friend raises about Scotland, I agree that it is high time that Scotland put its house in order and came into line with England and Wales in respect of child care provision. Sadly, even since the Committee, there remains no commitment from the Scottish Government to legislate in the area of child care or to make further investment using existing powers. Indeed, the latest pronouncement by the Scottish Government in December last year, although recognising the importance of child care, makes no mention of any new initiative or additional resources—a little bit of gesture politics from the nationalists.

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Photo of John Robertson John Robertson Labour, Glasgow North West

Is my right hon. Friend telling me, then, that he has spoken to his counterparts north of the border and that they are not willing to do anything to try to help the children in Scotland by means of a similar obligation to that in England and Wales?

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Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions

I am not telling my hon. Friend that I have spoken to Scottish Ministers since our Committee finished, but I repeat that there is no commitment from that Government to legislate, and from their perspective, apparently, no more money and no further investment are needed. I do not see why Scottish parents should have to wait for that Government to catch up with everybody else and for the necessary legislative conditions to prevail. I hope that we can, in the end, prevail upon the Scottish Government to get their act together and, as my hon. Friend rightly says, put their house in order, although I fear that that may take some time.

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Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions

I will, because the hon. Gentleman did at least speak once in Committee, for which we are grateful.

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Photo of John Mason John Mason Scottish National Party, Glasgow East

I thank the Minister for giving way. I do not always agree that volume of words is better than fewer. May I press him on the point about Scotland coming into line with England? Does he accept that the point of devolution is that we do things slightly differently in the different nations?

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Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions

As devolution is dear to my heart, I fully accept that you do things differently, but we would rather like you to do it. That is the point. I am sorry about the "you", Mr. Deputy Speaker. We would rather like broad agreement across all devolved Administrations that child care is a fairly important provision. It is quite right that it should be devolved. I have no problem with that, but as my hon. Friend the Member for Glasgow, North-West says, the Scottish Government should get their house in order.

My hon. Friend Ms Buck was spot on when she spoke on amendments 17 and 35. The child's age at which lone parent obligations should start in respect of work-related activities is, as she described it, a red herring. The substantive point, which is at the centre of the Bill, is that the quality of child care, flexibility and sensitivity are crucial. The prescription suggested by the hon. Member for Rochdale, that there should be no help and assistance for lone parents until child care which meets a gold standard is offered everywhere, will not do.

Gregg was looking for such provision from the time the child was one. We do not consider that appropriate. It is appropriate for the parent to undertake work-related activities when the child is aged three to six, not least because of pre-school provision at three and four and full-time education at five.

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Photo of Neil Gerrard Neil Gerrard Labour, Walthamstow

My right hon. Friend has just said, in relation to lone parents, that age was a red herring. If it is so unimportant, why is it in the Bill?

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Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions

For the reasons that my hon. Friend the Member for Regent's Park and Kensington, North suggested. There may well be significant barriers, in terms of child care provision, for someone with a child considerably older than three, six or seven, and the personalised and tailored support package will take full account of that. All we are saying is that those lone parent obligations start at the earlier age. If the barriers still prevail, the sanctions and direction will not be implemented. In that sense, age is a red herring.

In the context of all that we are trying to do to reduce child poverty, it must be right that the lone parent obligations prevail. A child in a household where no adult is working has a 63 per cent. risk of living in poverty. That is much higher than the 29 per cent. risk of poverty for children in households where at least one adult is in work. This is not about compelling lone parents into jobs that are not appropriate. Like every aspect of the welfare reform agenda, the Bill's provisions are about helping people back into work as quickly as possible, or giving them help, support and activity to enable them to stay as close to the labour market as possible.

I recognise that I have not touched on every amendment, and there is one more that I shall deal with, but it would detain the House too long if I went through every amendment. I will take back the detailed points made by my hon. Friend the Member for Bradford, North about clauses 4 and 11. I shall examine them closely to see if they are as he describes them, but I do not think they are.

We say clearly, as we have done for the period of the present economic downturn, that all that Jobcentre Plus does is in the right direction. It is a network staffed by professional people doing a very good job at all times, increasingly in more difficult circumstances. As I have described it before, it is a learning organisation; it learns from the 30-year employee who presents for the first time, as we heard, and from those from professions and sectors who have not presented before.

We are told that we are privatising parts of the Jobcentre Plus organisation, but we are not. Contracting out—delegating out those contracts—is not the same as privatisation. Those contracts are going to the voluntary sector and the private sector to get them to carry out specific parts of the operation, to cover the journey of people who are long-term unemployed—areas in which they can develop expertise while Jobcentre Plus does what it does best on the front line, helping people from day one all the way through and retaining overarching supervision of the pathways developed under flexible new deal. Some of the descriptions of what Jobcentre Plus does verged on travesty.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

I presume that my right hon. Friend is aware of the memorandum circulated from the DWP, which makes it clear that the provider-led pathways to work have been far less successful than the Jobcentre Plus-led pathways. We have there a clear example of Jobcentre Plus being more effective, so why does he assume that private providers will automatically be better at all the new services that are to be provided?

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Photo of Tony McNulty Tony McNulty Minister of State (Employment and Welfare Reform; Minister for London), Department for Work and Pensions

I have told my hon. Friend and others by way of answers to parliamentary questions that there are emerging data on that. It is still early days. We are looking at the data and will present our findings in the fullness of time. If the performance is not appropriate, we will deal with it. As was said, the Gregg report and others certainly stand up the notions that sanctions work and that the voluntary sector can do the job. However, it is not the case, as is intimated, that a whole set of activities at present carried out by Jobcentre Plus will not be carried out by it in future. That is the impression given, but it is not the case. For that reason we resist amendments 26 and 29.

At the risk of sounding churlish and less than generous, I ask the House to resist new clause 1 and any other amendment in this group that is subsequently put to the vote.

Question put, That the clause be read a Second time.

The House proceeded to a Division.

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The House having divided: Ayes 85, Noes 408.

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Division number 74 Food Labelling Regulations (Amendment) — New Clause 1 — Jobseeker's allowance

Aye: 84 MPs

No: 407 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Abstained: 1 MP

Abstaineds: A-Z by last name

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Question accordingly negatived.

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