Welfare Reform Bill

My Lords, the Bill continues to replace income support with jobseeker’s allowance, but introduces progression to work where children are between the ages of three and seven, if I have understood it correctly. JSA is a man’s benefit: it supports him between full-time jobs; it assumes a sharp divide between being in full-time work and out of work, at which point the conditionality regime kicks in. The conditionality can be relatively tough, because beyond six months non-contributory JSA applies to the 22 year-old reluctant to get up in the morning. IS is very different. It is largely for women and recognises that their unwaged work counts too. Most are lone parents—although for less than five years before they return to work or repartner. Whereas JSA is for men between jobs, IS is for women who have children but who are often between partners. I emphasise that it is important to keep lone parents attached to the labour market for their own sake and for the sake of their children, which is why I strongly support the principle of the Bill and the progression to work, many of whose proposals strike me as both attractive and imaginative. However, whereas men on non-contributory JSA may have been out of the labour market for a year or two, for lone parents the period may be a decade or more. The longer you are out of it, the harder it is to re-enter. The lone parent may have fewer skills, poorer health, deeper poverty and, above all, precarious childcare arrangements. As for sanctions, which I accept are essential if the JSA regime is not to be simply voluntary, the 22 year-old is likely to be at home and able to fish the family fridge, but sanction the lone parent and inevitably you sanction the child. The noble Baroness, Lady Thomas, mentioned the ineffectiveness, based on research, of sanctions for lone parents failing to attend work-focused interviews. I suspect that a financial incentive—a cash incentive— would be far more effective. Will my noble friend tell us about that? I am sure that we all welcome the in-work credit of £40 a week for the first year for a lone parent back in work. Will my noble friend confirm whether some version of that could be attached to progression to work as well? The Government, to their huge credit, have made work pay. Tax credits can double the take-home minimum wage of a lone parent and make work worth it. The Government have also addressed childcare, the second key challenge. Childcare tax credits fund formal care but, for many women, the childcare of choice, the one that they trust, is that from their own mothers, which is why, like the noble Baroness, Lady Thomas, I am absolutely delighted that any grandparent caring for more than 20 hours a week will be credited into the NI pension if they are of working age. I think that we all thank my noble friend and the department for that. I am sure that my noble friend will confirm that it is the lone parent, not the adviser, who will determine that the childcare is both appropriate and available. The truth is that, if the mother is unhappy about childcare, or perhaps her child is voting with his feet, the lone parent will not stay in work, which is why the tax credit system nearly toppled over when it could not cope with the changes in childcare arrangements. I am also worried about transport, especially in rural areas. Under JSA conditionality rules, you are expected to be able to travel up to one hour a week to a job and an hour back for the first 13 weeks on benefit and, after that, an hour and a half each way. I hope that my noble friend can give me an unequivocal assurance that that will not be applied to lone parents, who—unlike the 22 year-old, who has only to take himself to work—may need to get two children to two different schools opening at 8.45 am when her proposed job may start at 8.30 am, is an hour away and even the childminder will not take the children until 8 am. Unless the home, the childminder, the two schools and the job are all within very easy reach of each other, the lone parent’s logistics, especially in rural areas where she has no car and public transport is weak, are impossible. The truth is that if she cannot find a job within easy reach of a home—say, in one of the schools that her children attends, or a local newsagent—she cannot work. No JSA regime can change her personal geography. She might be able to get a mini-job—eight to 10 hours cleaning houses, caravans or boats in Norfolk, seasonal work in a local B&B or picking mushrooms—while the children are at school, topped up in due course by six or eight hours a week in a newsagent. It will, however, be entirely up to chance whether together her jobs take her over 16 hours and into tax credits—good news. If they do not and she cannot make up the 16 hours, she may, alas, draw her benefit and enter the grey economy. We are then surprised about the fraud in the system—fraud that we have helped to construct. Why? Because we have a perverse benefit structure that allows her to keep every penny for her first four hours of work; that is the disregard. She then loses every penny for the next 11 hours of work, because she has used up her disregard. Then she doubles her money at 16 hours thanks to tax credit. Yet we know from Kate Bell’s research that one of the best predictors of her getting a proper job is that she held a mini-job the year before. Already, 27 per cent of jobs advertised at Jobcentre Plus branches are for fewer than 16 hours per week. Will such a mini-job meet JSA conditionality over and beyond the progress-to-work proposals? Why limit it to £40—in other words, doubling the disregard—or only seven hours-worth of disregard? I suggest that we must have a ladder so that eight hours’ work pays more than six, 12 hours pays more than eight, with a tapered reduction in benefit until at 16 hours her wage, topped up by tax credit, takes over. I know that DWP fears that, if it is worth working 12 hours a week, she will not work for 16, she will stick—but, frankly, does that matter? Even at 12 hours a week, she would have more money—that would address child poverty—remain engaged with the labour market and be far more attractive to employers because she is committed, more work experienced, reliable and sorted when she is ready for a job with more demanding hours. Why is it that the median number of hours worked by partnered women is 15—a real addition to the labour market and to family income and much sought by employers—but that of lone parents is only four or five? Answer: because partnered women with partners in work are not caught in the benefit trap, while the lone parent is. The partnered mother keeps every penny; the lone parent loses most of hers. Then we are surprised that lone parents are not similarly attached to the labour market as partnered women. It is a no-brainer. The outcomes that we all want will not happen until we have sorted out the benefit trap. Changing IS into JSA is not, by itself, enough. Personalised conditionality is not enough. Progression to work is not enough. We have to redesign the benefit structure so that it is on the side of those who want to enter work in a graduated way. There is a huge prize here—reducing child poverty—but we may need to enlarge our strategies to do so. Several years back, I remember a lone parent who was on the New Deal for Lone Parents and going to work saying, "I have a life, but what this has given me is a future". I hope that, if my noble friend is able to accept some of the amendments, the Bill will do that for many more lone parents who need that boost to their support.