Welfare Reform Bill

My Lords, last summer, the Government published the Green Paper, No One Written Off: Reforming Welfare to Reward Responsibility. Following consultation, the White Paper, Raising Expectations and Increasing Support, set out proposals further to reform the welfare system to ensure that nobody is left behind and to ensure that we continue to have an active welfare state that supports people by building on approaches which have been successful over the past decade. Many of the measures set out in the White Paper do not need changes to primary legislation. This Bill makes those changes that are needed to deliver our reforms. It will put in place the systems to ensure that everyone gets the personalised support they deserve and that that support is matched with responsibility. It will form the bedrock upon which we will build a welfare system that is responsive and fit for the challenges we face moving into the next decade. We know that work is good for people’s health and self-esteem, and that it is the best route out of poverty. We know that the vast majority of benefit recipients want to get back into work, but many face barriers to doing so, barriers that can be varied and challenging. Our next stage of reform is about creating a system which recognises that barriers to work are different for each individual and that it is flexible enough to respond with personalised support, a system where most people move towards an eventual return to work and are expected to take up the support available to them. We know that this approach works and that combining rights with responsibilities, having regular contact with our customers and getting them to think about a return to work can not only change mindsets and outcomes; it can change lives. There are rightly those who should not be required to look for work or to undertake activity to move closer to the labour market. That is, people with caring responsibilities, with serious illness or disability and the parents of very young children. But many will want to make this journey and we must support them in doing so. We must make the support better, more flexible and more suitable for people when they need it. That is what Part 1 of the Bill addresses. In his review of conditionality, Professor Paul Gregg identified these broad groups: those who are work-ready; those where an immediate return to work is not appropriate but where, with time, encouragement and support, it could become a genuine possibility—the progression to work group—and those for whom there should be no requirements. The progression to work group would include those in the work-related activity group on employment and support allowance, partners of certain benefit claimants and lone parents with young children. The Bill makes provision for requirements to undertake work-related activity and for people to be mandated to a specific work-related activity prescribed in an action plan. We intend to test the progression to work approach in a range of pathfinders for those lone parents with a youngest child between three and six. We are starting with this group because there will be a strong foundation of childcare provision available to them. Jobcentre Plus will pay for that childcare where necessary. The system we want to put in place is based around a continuing relationship between the adviser and the claimant. We will ensure that we create an appropriate sanctions regime that is clear and provides incentives to recomply—even for those who continually fail to do so. Work, for those who can, substantially lowers the risk of poverty for families, with and without children. The surest way to address child poverty is to support more parents into work. We want to ensure that preparation for work becomes a natural progression rather than a sudden step. The Bill contains powers to ensure that those on ESA in the work-related activity group undertake activity most appropriate for ensuring that they can return to work as soon as possible. Advisers will support people to undertake activity that will be beneficial to that individual. These reforms will deliver better, more flexible, more appropriate support to people across the spectrum of out-of-work benefits: a personalised model of support and conditionality that is not dependent on the benefit you claim, but on the circumstances in which you claim it. The work ready group are those on jobseeker’s support allowance. Most people who claim JSA leave benefit in less than two years. Indeed, even in the current economic climate, most leave within six months—though some linger. We need to build on the substantial support that we are making available earlier in the jobseeker’s regime to minimise the risk that jobseekers will repeatedly cycle through the system. From April this year we introduced a refreshed jobseeker’s allowance regime for all new customers. For longer-term jobseekers this will be followed by a flexible New Deal, a tailored programme delivered through the private, public and voluntary sector. In pilot areas, some of those jobseekers who complete the flexible New Deal without obtaining work will be required to take part in a "work for your benefits" programme. We know from international evidence that programmes that consist of work experience in isolation are not always effective. We want to learn from this and develop a programme that meets our own needs and moves people into work. That is why we will be including additional employment support in the programme. It is designed to help long-term unemployed people remain close to the labour market and to provide them with the experiences and training they need to end the cycle of benefit dependency. Some people have asked why, given the challenging economic backdrop, we are taking these measures now. The answer is simple: it would be wrong to abandon people and repeat the mistakes of previous recessions. We have a choice between an ambitious welfare state that lifts people out of dependency and a passive one that traps them there. We are putting resources into Jobcentre Plus to help customers now, but we also need to ensure that we have the right systems in place for when the economy picks up, which it will. Now is not the time to abandon our reforms. In fact, the challenges we face now are a reminder that we need to be ambitious in the changes we are making for the future. We also need to be ambitious in combating problem drug use. Drug misuse causes damage to health, particularly mental health; it is a significant cause of crime and family breakdown and contributes to social exclusion. It can also contribute to worklessness, with the added problems that this brings to individuals and their families. Problem drug users who are claiming ESA or JSA will be expected to take steps to address their drug use where it is a barrier to their participation in the labour market. These new provisions allow for the introduction of a regime that will provide personalised, integrated support to help drug users overcome their drug dependency and to gain employment. These are sunset provisions. Within two and a half years of the regulations coming into force, the Secretary of State will be required to report on the pilots and a statutory instrument will be needed to continue or repeal the arrangements. This will allow a full evaluation of the provisions. This Government have a powerful record in tackling discrimination and promoting equality for disabled people. Our pledge is that by 2025 disabled people should have the same opportunities and choices as non-disabled people, and should be respected and included as equal members of society. Building on the progress to date, we are taking powers in the Bill to introduce a right to control for disabled adults. We acknowledge that disabled people are the experts in their own lives; they are best placed to control how state funding is used to meet their individual needs and ambitions. We will achieve that by enacting provisions that empower disabled people, provisions that will mean they have the right to know how much money is available through specified funding streams to meet their needs, and to have a say in how that money is spent, delivering real choice and control. They will also have the right to take a direct payment if that is the best option for them. The regulations will implement a new policy framework, which is fully intended to put the disabled person at the centre of the process. We are committed to consulting widely on the details of how the right to control will work. I thank the noble Baroness, Lady Campbell of Surbiton, for chairing the advisory group set up to support the development of this policy. The group has offered an excellent range of advice, challenge and constructive discussion that has helped to shape the context of this Bill. I thank her for this and her ongoing work with the EHRC. We will be introducing the right to control in several trailblazing local authority areas from 2010. We will use the trailblazers to test important aspects of that right. In the trailblazers we will also be evaluating how the services under the right to control fit with community care services in order to ensure a seamless provision of self-directed support. It is important to make sure that the right to control aligns with the Government’s vision for the personalisation of community support, which was set out in the cross-government concordat, Putting People First. The Bill also brings forward an important measure to extend the higher-rate mobility component of disability living allowance to disabled people with severe visual impairments. I am sure noble Lords will welcome this major change and join me in thanking the RNIB—in particular its chairman, the noble Lord, Lord Low, who I know cannot be here today—not only for pressing its case so persuasively but also for working so constructively with my department. This is a change that has drawn support from across the political spectrum. Unfortunately, in the enthusiasm of the moment, the Bill was amended twice in another place to this effect. As such, we will be taking a government amendment to remove Clause 13, a redundant clause whose ambitions are achieved through Clause 12. Indeed, we wish to introduce a modest number of technical corrections to the Bill, in order to ensure that the powers function correctly. We will, of course, give clear notification to the House at the appropriate time. We want to take powers further to simplify the benefit system so that it is an easier system for people to engage with. This includes provision to abolish income support once there is nobody left claiming it. Powers in the Bill would allow us to move claimants of income support onto jobseekers’ allowance, retaining the same level of conditionality they would experience on income support. The aim is to move towards a simpler system of benefits for people of working age, based on two main benefits: ESA, which is specifically for sick and disabled people, and JSA, for a range of other groups. However, we have made this commitment: we will not move carers from income support until we have a clear and detailed plan setting out how we will reform the benefit system over the longer term. We also propose to amend the law so that couples, where one partner is capable of work, make a claim for JSA. This will ensure that the partner who is closest to the labour market can access as much support as possible to move back into work. We are abolishing the last adult dependency increases in the benefit system, and will align more closely the contribution conditions over ESA and JSA. We are also intending to reform the way in which loans are provided to people on benefit. We intend to take powers that will allow certain loans to be provided by external providers instead of through the Social Fund. These measures are not designed to privatise Social Fund loans, but to tap into the wealth of financial expertise which lies outside of Jobcentre Plus. Let me be clear: we do not intend to charge interest on Social Fund loans, and this clause will not allow for an external provider to charge interest on social loans. It will enable us better to promote and extend financial inclusion, and to grant access to the support and advice available to others in their community while they are on benefit and when they move into work. At the same time, we are also taking powers to improve the delivery of community care grants, to allow the Government to provide items such as white goods at a much lower cost. This Bill also contains provisions to extend the circumstances in which payments on account of benefit can be made. We will not tolerate violence towards either against Jobcentre Plus staff or providers and will sanction those who engage in such behaviour. Benefit fraud is at its lowest level ever, but we are not complacent and will increase the sanctions for those who are found to have committed benefit fraud. Pension credit has been highly successful in addressing pensioner poverty, but it has become increasingly difficult to reach those we believe are entitled, but are still not claiming. We are taking a pilot power in the Bill to explore ways of making better use of information we already have in order to improve take-up. It is part of the Government’s continuing campaign against pensioner poverty. We expect parents to take responsibility for the welfare of their own children. That is why we want the Child Maintenance and Enforcement Commission to be able administratively to remove the passports and driving licences from those parents who have a history of wilfully refusing to pay maintenance for their children. I do appreciate that some noble Lords may be unhappy to see these provisions back only a year after the then Child Maintenance and Other Payments Bill passed through this House. However, having looked again at the issue of such administrative powers, taking particular note of the evidence from the USA and Australia, we have concluded that, with appropriate safeguards in place, an administrative process is likely be more effective for both driving licences and passports. Let me stress that the use of such powers will be a last resort, when other forms of enforcement have been attempted and maintenance remains unpaid. However, they create an effective deterrent, thereby influencing the behaviour of those non-resident parents who might otherwise fail to support their children financially, which is more significant than the number of administrative orders actually made. We are also modernising the way in which parents are registered after the birth of their child. We need to act to ensure that the birth registration system reflects the diversity of modern relationships. Our amendments to the Births and Deaths Registration Act 1953 are designed to do that. They will promote child welfare and parental responsibility by ensuring that as many children as possible have the names of both parents on their birth certificates. However, the protection of vulnerable women is also a key concern. If a mother fears that contacting the father and asking him to register might be construed as a provocative act and risks harm to herself or the child, he would not be contacted and she would be able to register alone. In that way, we can achieve a balance between the need to protect vulnerable mothers and their children, and the right of a child to be acknowledged by both parents. The Bill is the right way forward. It is designed to work with people to lift them and their children out of poverty and to be flexible enough that the requirements placed on people are aligned to their circumstances. It is designed so that the expectations we have of any claimant are realistic and achievable. We are not in the game of creating a welfare state which punishes people. We want to create a welfare state that supports people, which ensures that the safety net is never abolished, but which does not forget the third principle of Beveridge’s welfare model that social security can be achieved only through co-operation between the state and the individual. We are working to provide the help that people need to deal with the challenges of the recession today, but we are also determined to take this opportunity to help people overcome the obstacles that they may face in the future. I commend the Bill to the House.