Welfare Reform Bill

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 the Member for Hayes and Harlington (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.