Government Employment Strategy

I think that the analysis takes account of all the trends in the labour market. The fact is that it is not just down to employer discrimination, although that is there. There are cultural issues, family structure issues and the poverty of place—the concentration of poverty and a lack of aspiration. That is all a complicated interplay, but the Business Commission will make recommendations on it. My hon. Friends the Members for Bradford, North, for Blackpool, North and Fleetwood and for North-East Derbyshire spoke about lone parents and what more we can do to support them. That question is clear in the report. I would point out that in London the lone parent employment rate has increased in the past decade, I think by 8.5 per cent. Although the rate of improvement has not been as fast as in the rest of the United Kingdom, there has nevertheless been improvement. We do need to recognise the specific challenges in London referred to by my hon. Friend the Member for Bradford, North, which is why, as part of the new strategy in response to Lisa Harker’s review, there is an in-work credit in London. It takes account for the first time of the additional pressures that lone parents face in London. In response to the Committee’s comments we must do more work on how to structure the in-work credit to reward sustained employment. It is currently a regular payment, which is a great help, but we need to do more work on analysing where the drop-off points and pressure points are for lone parents—whether three months, six, nine or whenever is the point at which there is the greatest propensity for lone parents to fall back out of the labour market. We should restructure the in-work credit to incentivise retention at those points of friction. My hon. Friend also asked about the processing of benefits. There have been improvements in recent years in the processing of housing benefit in particular. In the most recent years for which records are available, between 2002-03 and 2005-06, there was a 19-day improvement in the average clearance time for housing and council tax benefits. There is more that we can and should do, particularly to address continuing underperformance below the average. We are trying to drive that down. We anticipate that the introduction of the local housing allowance in the Welfare Reform Act 2007 should speed up the claims process by an average of a further seven days, which will be welcome. My hon. Friend the Member for North-East Derbyshire raised the issue of skills, to which Lisa Harker’s report also referred. The question is what we do to assess the skills needs of people—particularly but not exclusively lone parents—at the point when they become unemployed and report the need of a benefit application, so that they can compete in the labour market. In response to Lisa’s report and as part of the evolving work on the new deal, we must be much smarter at the first point of contact so that we do not refer lone parents to just any job but to one that fits around their life patterns, child care needs and the pressures of family life. We have committed to that as a consequence of the part of Lisa’s report about trying to mark jobs that are suitable for lone parents. Probably more important is that we do not just wish people luck as they enter the labour market but provide sustained support through their first few weeks of employment to reduce drop-off and the recycling of people coming on to benefit. Points were made about sustained employment. The definition of sustained employment is currently 13 weeks. The Committee has suggested 26 weeks and David Freud three years. We have given David Freud’s report a warm initial response and we shall respond to it in more detail in the summer. I do not think that I am giving too much away by saying that we are not instinctively attracted to a definition of sustained employment as unbroken employment for three years. David has set us a phenomenal challenge and, based on the challenges that we now know of in the labour market, we can no longer defend the idea that 13 weeks is sustained employment. In considering the detail of the Select Committee’s report and David Freud’s report, we will move away from that. I shall not announce today what we shall move to. We joked at the seminar earlier in the week that no one considers 13 weeks to be sustained employment with the exception of current Ministers. No one would plan on the basis of 13 weeks’ employment, as the hon. Member for South-West Bedfordshire fairly said. An additional point on sustained employment is that we have made important announcements about permitted work rules and introduced more sensitive linking rules on benefits. We need to go further in publicising some of the rules, not just to customers but to those with whom we work. If we were all to pop into our local citizens advice bureaux—mine, like many others, does a phenomenal job—we could ensure that the advocates there were aware of some of the changes that we have implemented. I was asked what events we have planned as part of the continuing conversation on Freud. We had an event earlier this week organised by the Smith Institute, which was attended by my hon. Friends the Members for Bradford, North and for North-East Derbyshire, who spoke at the event. Lord Kirkwood of Kirkhope was there and spoke from the audience, and the hon. Member for Bury St. Edmunds (Mr. Ruffley) also spoke. We have an event tomorrow in Manchester, organised by ippr north, involving stakeholders and others, and one has been organised for 22 May by the Social Market Foundation as part of the discussion prior to the Government’s formal response to Freud. Once we have that response we will enter a formal Government process of listening and consulting. Even before that we are trying to give people an opportunity to feed into the process. On benefit simplification, which is referred to in the Select Committee’s report and was mentioned by hon. Members this afternoon, when I arrived at the Department I thought, ““Well, let’s just do that, then.”” But if it were so easy to do—I am not being political about this—the previous Government and every Government would have done it. I have reflected on it, and although every new benefit rule is introduced for a correct and proper reason, they have cumulatively led to a benefits system that is bamboozling for our customers, some of our advisers and many of our advocates. There is the issue of how simplification should be done, but there is also the question whether if there were a single benefit there should be a single benefit rate. That is a reflection on the comments in the Select Committee report and elsewhere, but it is easier said than done. It will rightly be acknowledged that there are additional pressures such as the financial pressures of disability. We have to reflect on whether we bring low benefits up to the level of the disability benefit or whether we level the disability benefit down to the jobseeker’s allowance rate. That would probably be a lot less popular, and it is something that we would never do. If we want to simplify benefits and have a single working-age benefit, we will have to deal with all sorts of often complicated issues.