Welfare Reform — Statement

Part of the debate – in the House of Lords at 3:47 pm on 10th December 2008.

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Photo of Lord Skelmersdale Lord Skelmersdale Shadow Minister, Work & Pensions 3:47 pm, 10th December 2008

My Lords, the House will be grateful to the Minister for repeating the Statement on welfare reform that was issued to the press yesterday afternoon, I believe, in its entirety. At least we in Parliament now know for certain what has been in the public domain for many hours. So when we get inappropriate briefings for the press from government departments well in advance of Parliament being informed of the government's intentions, should there not be established guidelines on what can be said and when? Was the White Paper, which was embargoed until the Statement began in another place, leaked to the press as well?

On the Statement itself, which we on these Benches broadly support, it has been my party's policy that with rights go responsibilities. In whichever part of the House we sit, I hope that we were all brought up with that central tenet. That is why, before many of your Lordships graced this Chamber, a Conservative Government introduced the concept of availability for work as a condition for getting what was then unemployment benefit. It is a bit rich, then, for the Statement to say that the Government inherited a welfare state where less than one-third of claimants had to do anything in return for their benefits. In case anyone has forgotten—I certainly have not—the Government have had more than 11 years to correct this so-called anomaly. Why have they taken so long to come up with these proposals?

What we have here is not part three but part two of benefit reform, which started with the Welfare Reform Act, aimed at getting 1 million of the 1.7 million people on disability benefit into work. I discount the administrative rearrangement that the Statement calls "part two" as I cannot believe that it has made any difference to unemployed people, especially when the Statement confirms that only 5 per cent of invalidity benefit claimants voluntarily took up the support that Pathways to Work offers.

It was just the other day that we debated an affirmative instrument that added new conditions to income support for lone parents with children and put them on to jobseeker's allowance. Over the next year or so, that will affect lone parents with children as young as seven. In that debate I pointed out that lone parents will be happy in work only if they can find suitable childcare. I still have not had an answer from the Minister about whether that can be guaranteed in all parts of the country. If it cannot be guaranteed for seven year-olds, surely the chances of lone parents of three year-olds finding suitable work, and being satisfied that their children are being properly looked after during working hours, are even lower. It is no use the Government paying 80 per cent of childcare costs if childcare is non-existent.

I agree unequivocally with the Government that it is wrong to believe that, because of the recession, this is not the time to be introducing the reforms in the White Paper. The doubters believe that, with Britain having the highest unemployment figures for nine years, with 1.8 million people out of work, any changes to the availability-for-work regime should be delayed. I say to them that there is a strong evidence base showing that worklessness is associated with poorer physical and mental health and well-being. Even in these straitened economic times there are job vacancies to be filled in some places, even if they have been reduced by 40,000 over the past quarter. Opportunities therefore exist, and in my book there is never, ever a bad time to encourage people to seek them. I remember my noble friend Lord Tebbit being roundly criticised for the phrase that he never uttered, "Get on your bike". It was of course spun—just as much as the first four pages of this Statement are spin.

We also agree with separating family units when calculating jobseeker's allowance and income support. We see no reason why half the unit should have to sign on, with the other half getting the relevant benefit with all the conditions that are attached to it while their partner need do nothing at all. That must be wrong.

Chapter 2 of the White Paper sets out the very beginnings of a plan to reform the benefits system, which is so complicated that it is widely recognised as a disincentive to getting people both on to benefits and into work. The amalgamation of benefits was proposed last year by David Freud in his report. I pay credit to him for a piece of work that has framed not only the debate in this area but the very similar proposals of both the Government and my party, as shown in our recent Green Paper.

The Freud report, which the Government say is accepted in full—after, by the way, a Prime Ministerial hiccup that originally rubbished it—gave three options for working age benefits. They were: to continue to reflect people's different circumstances based on the income support personal allowance rate; a single benefit with a single rate; and a single system with two rates, a basic rate and a long-term rate. He concluded that the current system is relatively inefficient whereas a single system with a single rate could maximise efficiency, and a single system with two rates would be very similar to the present arrangements but may be an improvement on it.

Even though the Government have had over a year to go nap on one of these options, they seem to me to be sitting on the fence. They propose to,

"simplify and improve the benefits system following consultation by ... exploring models to reform the benefits system, including looking at a single income-replacement benefit for people of working age", and,

"exploring how we might develop our plans to support carers alongside working towards a simplified benefits system".

That is hardly accepting a report in full. It leaves the door wide open as to what the Government will end up doing. How long will this consultation last, and when do the Government expect to respond to it?

That said, much of the White Paper will be reflected in the welfare Bill, which I hope the Minister will confirm will be published in January in another place, where I would expect a speedy passage. On this side of the House we will give it every support, although as usual I cannot guarantee that it will leave our House in exactly the form that it arrives.