Welfare Reform — Statement

Part of the debate – in the House of Lords at 3:56 pm on 10th December 2008.

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Photo of Lord McKenzie of Luton Lord McKenzie of Luton Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions) (also in the Department for Communities and Local Government) 3:56 pm, 10th December 2008

My Lords, I thank those noble Lords who have participated thus far in our deliberations. The noble Lord, Lord Skelmersdale, started with the issue of press briefing. I simply repeat what I said last time he raised this point, when we debated the PBR. I have no idea who may or may not have leaked documents. That is not the way that I proceed, and I think that I have always dealt with the noble Lord and other colleagues in the House on a very straightforward basis as far as that is concerned.

I agree with the noble Lord absolutely, and it is a key thrust of the paper, that with rights come responsibilities. I am pleased that we have a shared understanding of that. He said that it was a bit rich that we should come forward after 11 years with these proposals. There has been a journey to deal with these issues. We started, as I said, with the New Deal and putting together the Benefits Agency and employment support in Jobcentre Plus. That was the start of the programme, and we moved on, as the noble Lord acknowledged, with the Welfare Reform Bill to introduce the employment and support allowance. It is not right to say that IB is only an administrative arrangement, which I think was the thrust of his point. The number on incapacity benefit is 2.6 million, but that is down 178,000 since its peak in 2003 and down 47,000 in the period from May 2007 to May 2008.

The noble Lord raised again the issue of childcare. Let me be clear that there will be no requirement in the White Paper for lone parents with children under the age of seven to look for work. The Gregg report looked at three categories: the work-ready group, those for whom progression to work was important, and those for whom there should be no conditionality—people in the employment and support allowance group. The noble Lord will be aware that we have invested well over £25 billion in childcare for the early years in England since 1997, and the Government have stated that by 2010 there will be a childcare place for all children aged between three and 14 in England whose parents want one, with that provision available on weekdays between 8 am and 6 pm. Again, as I said when we debated the regulations regarding lone parents, if no suitable or affordable childcare is available, there will be no requirement on a lone parent to take up work. I hope that that was very clear from our debates.

The noble Lord makes the point, and I agree, that we should not step back from this process simply because we face challenging economic times. What has fundamentally changed and developed in recent years is that there is a clear understanding that work is good, not only for people's financial well-being because it is generally their best route out of poverty, but for their self-esteem and health as well. Therefore, all the work that we are doing to help people get closer to the labour market, or to stay in the labour market, is very important. It is right to say that, notwithstanding what has happened to the headline unemployment figures and the rate of employment, some 200,000 people were taken off jobseeker's allowance in each of the last two months. It is a dynamic situation. I am pleased that the noble Lord supports our approach to couples.

We remain interested in David Freud's ideas for a single system of working-age benefit, but none of the options is straightforward and we would need a high degree of public acceptance before embarking on changes on this scale. We are considering the best way to initiate a public debate, and will put forward proposals when we are ready. Freud did not make any specific recommendations for reforming the benefits system. His main conclusion was that there were no obvious solutions and many difficulties in moving from where we now are. However, we remain attracted to the idea of a single benefit and continue to develop our thinking.

The noble Baroness, Lady Thomas, welcomed the thrust of the White Paper, but with some reservations. She queried whether we were right to proceed in the current climate, but I would simply reiterate that we have learned lessons from the past. We need to keep people who find themselves out of work close to the labour market, and not languishing on benefits. We need to prepare people for the upturn. The noble Baroness made reference to sanctions and, particularly, the need for clarity. I absolutely agree and think that that point is dealt with in the White Paper. If we are going to sanction people, it is important that they understand what is involved, why it is being done and what to expect. That is a fundamental component of a fair system.

The noble Baroness took issue with the White Paper's proposal to pilot people working for benefits. I think her point was that, at the end of a year on the flexible New Deal, the unemployed might be stigmatised or criminalised. I am bound to say that that is not how we see it. The whole thrust of this is about supporting people and helping them back towards the labour market and, we hope, into it. The noble Baroness was pleased that we are not proceeding with any suggestion that lone parents whose youngest child is under the age of seven should have to take up employment.

What does preparing for work mean? It could mean a variety of things. It could mean dealing with a skills need, family budgeting or childcare arrangements. It is important to have flexibility on this. The noble Baroness also referred to the fact that contracting arrangements need to ensure that people do not cherry-pick, and that the easiest to get into work are not addressed first while others are forgotten. Some discussion of the proposals for accelerated payments—so that the more people we get into work, the greater the payment—will help to address that particular issue. I am pleased that the noble Baroness supports our decision that carers should not be moved on to JSA before we see where the review is heading.

The noble Baroness addressed the case for an independent commission. The Government are aware that there have been calls for an independent commission, but are not convinced of the need for one, especially since there is a broad consensus that we should find ways to simplify the system and improve work incentives while maintaining flexibility to provide for groups with different levels of need. I hope that addresses the points raised and deals with Members' queries.