Welfare Reform Bill

My Lords, the Department for Work and Pensions website tells us that this Bill, ""proposes to reform the welfare and benefit system to improve support and incentives for people to move from benefits into work and contains measures to increase personal responsibility within the welfare system"." These are aims that I very much endorse, but the difficulty that I and many others have is that the Bill also contains a number of measures that appear designed to get into employment what the more excitable sections of the media might term "the work-shy". The Bill has many worthwhile aspects, but the Government might have used it also as a means of overhauling jobseeker’s allowance, which has been thrown into sharp focus by the increasing number of people now experiencing unemployment for the first time, and in many cases being shocked to learn that their national insurance contributions qualify them for only £60.50 a week. That is no more than if they had never been in employment, and it also seems that Jobcentre Plus staff are not always equipped to help them find new work. The Welfare Reform Bill was planned in a period of economic prosperity quite different from where we are today. I would welcome a reform of welfare provision to increase support for those trying to get into the labour market and protect those unable to do so, but it seems that some proposals in this Bill could result in people experiencing even greater poverty. I welcome the Bill’s proposals for a full disregard from means-tested benefits of child maintenance and the increase in the Access to Work budget, but it focuses almost exclusively on the responsibilities of individuals without the necessary consideration of the effect on claimants’ families or the responsibilities of Government and employers in helping people from welfare into work. In the present climate, I do not believe that the new conditionality and consequent sanctions are effective ways of supporting more people into work. The evidence shows that if the right support is available at the right time, people will move into, or stay in, work. This is a view shared by campaigning organisations such as Child Poverty Action Group, Gingerbread and Save the Children. CPAG regards "work for your benefit" as workfare, pointing out that the Bill could force people to work for as little as £1.73 per hour, combining current jobseeker’s allowance rates with a 35-hour week. The Bill proposes the piloting of "work for your benefit" and would allow for a national rollout without further primary legislation, yet DWP’s own research already suggests that there is little evidence that workfare increases the likelihood of finding work. It is least effective in getting people into jobs in weak labour markets where unemployment is high. It is least effective for individuals with multiple barriers to work, and it can reduce employment chances by limiting the time available for job search and failing to provide the skills and experience valued by employers. Parents with primary childcare responsibility, whether as a lone parent or the partner of a claimant, should have a choice about how they balance paid employment with caring for their children. I believe that the proposals in the Bill constitute an erosion of basic parental rights, but only for parents who are reliant on benefits. This introduces an unfair differential for the poorest families and comes at a time when childcare is already unable to meet current needs, particularly for older and disabled children. The situation is likely to get worse during a recession that is having a negative impact on public, private and voluntary sector childcare services. As noble Lords know, childcare provision varies widely across the UK. Currently, there is only about one childcare place for every 200 children aged 11 to 14. Conditionality is a blunt instrument and I do not think it is acceptable for parents to be forced to put their child into a childcare situation with which they are uncomfortable simply because of the threat of having their benefits reduced. In his summing up at the end of the Bill’s Report stage in the other place, the Minister for Employment and Welfare Reform, Tony McNulty, said: ""I can confirm that parents on JSA will not be sanctioned if they fail to participate in ‘work for your benefit’ because they cannot access appropriate child care. I said that in Committee and my right hon. Friend the Secretary of State has said it on any number of occasions".—[Official Report, Commons, 17/3/09; col. 829.]" That is a most important statement, but I have to say that it is one which has not yet convinced everyone working for organisations supporting single parents. If my noble friend would repeat that statement today and spell out some of the means by which it will be guaranteed, that would be widely welcomed. The only long-term protection of this fundamental right for parents is for it to exist in primary legislation. Some of the greatest concerns regarding the impact of this Bill involve single parents. There are 1.9 million of them in the UK, caring for over 3 million children. Single parents have moved into employment faster than any other disadvantaged group over the past 12 years, and 56 per cent are now in paid work. Nine out of 10 single parents say they want to work when it is right for them and their children. Paid employment can help single parents to move out of poverty, but it is not a guarantee. One third of children with a single parent working part-time live below the poverty line. There is little evidence that sanctions are effective in encouraging single parents in the UK to seek employment. In fact, recent Department for Work and Pensions research concluded that their impact was "negligible". From October 2010, all single parents with children aged seven or over will be required to claim jobseeker’s allowance. After 12 months they will be transferred to a private provider under Flexible New Deal provisions, and after 24 months, to work experience schemes. I am concerned that not only is a "work for your benefit" programme inappropriate for single parents and unlikely to lead to improved work outcomes, but that they will form a disproportionate number of its participants. Single parents are similarly disadvantaged when compared to employment support allowance claimants in the amount they can earn while remaining entitled to means-tested benefits. ESA claimants can earn up to £88.50 without losing access to benefits, enabling them to work in jobs of fewer than 16 hours, at which point they would become entitled to tax credits. But single parents can earn a maximum of just £20, which means that there is no financial incentive for them to work in jobs of between four and 16 hours. As my noble friend Lady Hollis said, in December 2008, some 28 per cent of Jobcentre Plus vacancies were for jobs of less than 16 hours. Enabling single parents to take these up would be a far more effective way of increasing employment levels than additional sanctions, as well as representing a step towards simplifying benefits. I want briefly to introduce a Scottish perspective to this because the Bill applies throughout the United Kingdom. The proposed legislation does not fully take into account devolved aspects of welfare reform such as the key policy areas of childcare provision and skills development. In particular, the continuing failure of the Bill to take proper account of the distinct legislation on childcare provision in Scotland is of serious concern. The Childcare Act 2006 puts a duty on local authorities in England and Wales to provide sufficient childcare for working parents, but no such legislative duty exists in Scotland. There is a real need for the Government to take account of Scotland’s differing institutional framework, enabling a joined-up approach to tackling poverty across the whole of the UK. This point was raised both in Committee and on Report in another place by John Robertson, but he was given an answer by the Minister which more or less said, "It is up to the Scottish Government to sort that out". Ultimately, of course, that is correct, but what happens in the interim? With the Bill set to impose new obligations on parents who are unemployed, there is particular concern over the lack of high-quality, flexible and affordable childcare, particularly in Scotland. One Parent Families Scotland estimates that more than 50,000 children could be affected by the planned changes. The Scottish Campaign on Welfare Reform has also been campaigning vigorously on this issue. They are seeking a delay to the introduction of the Welfare Reform Bill’s provisions on "work for your benefit" and abolishing income support in Scotland, at the very least until such time as adequate and affordable childcare is in place for all families. There is a precedent for such action because implementation of provisions in the Children (Leaving Care) Act 2000 was delayed in Scotland for four years because removing benefit entitlement was based on alternative care arrangements in England and Wales that were not in place in Scotland. These differences remain today. Irrespective of any legislative changes that may or may not emerge from the Scottish Parliament, can the Minister give an assurance today that more consideration will be give n to this important issue and its potential effects? The question of skills development is another issue concerning the Bill that has a Scottish dimension. Scotland’s Colleges is the umbrella body that represents all 43 FE colleges in the country. They are keen to have an involvement in any pilot schemes that the Government may introduce through regulations after the Bill has completed its passage through Parliament. The Bill offers the opportunity for Scotland's Colleges to work with Jobcentre Plus to ensure that claimants will increase their skills through training and gaining recognised qualifications that will enable them to move from the benefits system to sustainable employment. The colleges have a clear role to play in providing long-term solutions to what, in many cases, may have been long-term problems. Scotland's colleges’ wide and well-established expertise means that they should be the first-choice provider for education and training. I hope that the Minister will give a commitment that the primary aim is to have training courses for benefit claimants that are provided by publicly-funded institutions that award universally recognised qualifications. This would enable employers to have confidence in the quality of training and qualifications with the level of skills that potential employees possess as a result. The next issue to which I wish to refer concerns a letter that I and other noble Lords speaking in this debate received from Sir Richard Tilt, the Social Fund Commissioner. It refers to the question of social loans by external providers and the statutory right of review against those decisions that has been promised by Kitty Ussher, the Parliamentary Under-Secretary of State. I am quite concerned that the Social Fund Commissioner comments in his letter, ""in my view this is not an equivalent standard of redress for service users"," because the financial services ombudsman, to whom such individuals will have redress, settles most disputes within six to nine months. The Social Fund Commissioner, Sir Richard himself, says that the independent review service for the Social Fund itself deals with many issues within 12 working days and 88 per cent of urgent crisis loans within 24 hours. It is important that the questions raised by Sir Richard Tilt in his position—he has no axe to grind other than wanting to be as effective as he can in implementing the services of the Social Fund—are addressed. I hope that that is one of the issues that the Minister will be able to address in his remarks. I close by saying that I believe this is a very important piece of legislation, which has the ability to assist many people in moving from benefits to employment and, once in employment, to assist them in remaining there. It also contains a number of proposals that could have the unintended effect of placing vulnerable people under great pressure and potentially leaving them financially worse off. I hope that, in the Minister's response, and as the Bill goes through its Committee stage, we shall be able to ensure that its effects are overwhelmingly positive.