Welfare Reform Bill

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, the right hon. Member for Delyn (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."—[Official Report, 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 on increasing such elements as the minimum wage and on 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 the Member for Camberwell and Peckham (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."—[Official Report, 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 states:""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 the hon. Member for Glasgow, East (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.