Welfare Reform Bill

I beg to move Amendment 21, which stands in my name and that of my noble friend Lord McKenzie. It relates to subsection (7) on the top of page 3; an important, albeit small clause, stating that, "““regulations may specify circumstances in which a person is to be treated as having accepted or not accepted a claimant commitment””." Amendment 21 would add: "““Prior to the implementation of regulations made under this section, the Secretary of State shall initiate and respond to a public consultation concerning the operation of the claimant commitment””." Central to the Bill, as my noble friend said in an earlier debate, is the twofold aim of supporting work for those who can work alongside providing security for those who cannot. Key to the former is the availability of work, as was stressed by the noble Lord, Lord Wigley, who is not in his place now, but also assisting those who can work back into the workforce after a period of unemployment, illness or injury or the raising of children. As the Government have reiterated, one aspect of returning to work or entry to the workforce lies firmly in the hands of the potential employee or claimant of universal credit under this clause. This is not new and not simply from when my two noble friends were Ministers, but, as briefings provided by DWP have said, the requirement to seek or accept suitable work has long been part of the benefit system. Indeed, it has been a condition of receipt of unemployment benefit for 100 years, since 1911 when the system required claimants not to have left work without just cause and disqualified them if they refused to accept a suitable offer of employment. So, in slightly new wording, the Bill seeks to capture that responsibility and to enhance it by way of a claimant commitment. What is new is that for the first time, this covers those in work. Commitment is an interesting choice of word. Any dictionary tells us that a commitment is an obligation, a promise that restricts one’s freedom of action. That is fine. The problem is that such a commitment appears one-sided. It lays obligations on the claimant but, unlike the National Insurance Act which offered a guarantee of unemployment insurance for a fixed period for those who paid contributions, we are told nothing as to what commitment the state will make to the claimant under universal credit. Yet looking or preparing for a job is meaningless if no employer is under an obligation, or indeed helped, to create or provide jobs. There is also no commitment for an employer to be willing to take on someone who perhaps lacks an established work record or satisfactory referees, or someone who may have lost their job—for example, in Sheffield because the Government refused the loan to Sheffield Forgemasters, or in Derby because the Government did not help with a vital contract there, as my noble friend referred to earlier this afternoon. A one-sided commitment will mean little if the Government do not work with employers as actively as they work with claimants. I hope I may be forgiven for quoting something I said at Second Reading. It is a quote from the Work and Pensions Select Committee in the other place, which called on the Government, "““to pay as much attention to getting employers to take on someone who has been out of work as they do to getting the claimant ‘work ready’””.—[Official Report, 13/9/11; col. 364.]" Those were wise words which I repeat today. There is also no commitment that a parent will be better off in work, despite the voiced aim of the Government, due to the strong likelihood that support for childcare costs for working parents will be reduced. Modelling by Gingerbread and the Resolution Foundation suggests that under one of the Government’s options, to pay 70 per cent of childcare costs up to £125 per week for one child, a single parent on minimum wage who needs childcare for each extra hour of work would keep only 6p out of each pound earned for each hour over 24 hours per week. That is hardly a just reward, and certainly higher than the 50 per cent tax rate that so upsets Boris Johnson. With the option of paying 70 per cent of childcare costs up to £210 per week for two children, a second earner on £7.20 an hour would keep only 9p of each pound earned and would take home no extra cash at all from working beyond 30 hours per week. We are still awaiting an announcement, perhaps very soon, on how childcare is going to work under universal credit. But how can a claimant commit to take a particular job if they are not sure that they would be better off after paying for childcare? The draft regulations state that if there is no suitable and affordable childcare that may, at the discretion of the adviser, be good cause for turning down a job offer, but it is not a certainty. There is no commitment in the Bill that second earners will always be better off in work. Indeed, the DWP’s own impact assessment suggests that nearly 1 million second earners will face increased costs on entering work compared with the situation now. We do not yet know how many hours people will have to work in order to escape conditionality. The DWP briefing note published yesterday said that the department will set an earnings threshold above which claimants will not be subject to conditionality, so that single claimants will have to earn £212.80 before being free of conditionality. Lone parents with children aged 5 to 12 will be expected to work within school hours, but no limit has been set for the number of hours that they need to work. A couple, neither of whom has health issues or caring responsibilities, will both be subject to conditionality until they earn £425.60 per week between them, but we do not know what thresholds will be set for couples who do have caring responsibilities. We do not know what thresholds will be set for those with health issues. Will those with disabilities be expected to find work for 35 hours a week before they can escape the threat of benefit sanctions? The briefing note suggests that the DWP will set what it calls ““personalised thresholds””, but without defining what they are, claimants are being asked to sign up to a commitment when its details have not yet been written. The number of hours are to be set in legislation, but it is unclear when these will be decided. From the background papers that we received by email yesterday lunchtime—though I have to say they were helpfully presaged in the Evening Standard on Monday night—we know that at least some people will have to be ready to travel up to three hours a day to work, presumably from the start of their claiming period, rather than after 13 weeks as is the case now. I assume that the DWP has calculated the cost of such travel, as this again is key to ensuring that it always pays to work. Perhaps the Minister could clarify this when he replies, which I note he did not in answer to an earlier question from my noble friend Lord McKenzie. Could the Minister also assure us that those with children will not have to travel for three hours, otherwise, the extra childcare costs would definitely mean that work does not pay. By children, of course, I include 14 and 15 year-olds who are not covered by the proposed exemptions. The Sun—I am sorry, I seem to read a lot of newspapers when travelling between here and my home—noted on Tuesday that, "““the PM will force claimants to spend time every day looking for work””." Yesterday’s briefing note reads: "““We expect the claimant to be engaged in work search for at least the number of hours we expect them to be available to work””." Could the Minister clarify how Jobcentre Plus will force claimants to spend 35 hours a week looking for work, especially in an area where a major employer has just closed, of the sort that we heard about earlier today, leaving perhaps thousands without jobs, but only tens of jobs available? What activities does the Minister expect people to undertake during those 35 hours? The DWP note specifies online job searching, job applications, and updating online profiles, and suggests that this will be monitored electronically, stating that, "““the approach … requires effective monitoring of claimant activity. We expect that this will be supported by a new IT functionality and business processes to allow this monitoring to take place in a smart, cost-effective way. As this work is at an early stage, we will need to keep our approach to work search requirements under review””." It would be helpful if the Minister could supply the Committee with more information about how the IT functionality will work and when it might actually be able to carry out such monitoring. Of course, for those who need to upskill, we understand that there will be offers of help. In September the Daily Telegraph—occasionally I do read upmarket—quoted David Cameron as saying: "““If there’s something you need to help you get a job, for instance being able to speak English and learn English properly, it should be a requirement that you take that course, do that study in order for you to receive your benefits””." Alas, however, funding for such courses is at risk, so a further assurance that any English language teaching needed for work will remain free will be welcome. There are still gaps in vital areas that the regulations will need to cover before universal credit can go live, and there is also the question of whether the chosen medium, which is lots of form-filling, is the best way to help people back into the workforce. The Minister in his many visits will have met people with a perfectly honed CV, sharp, smart, and shining, but with no hope of a job because they live in a depressed area, or because that CV may contain a short period spent at Her Majesty’s pleasure, or because their fluctuating health record puts them at a disadvantage compared with other job applications. The question is whether the chosen method of spending time at a computer applying for non-existent jobs is the best incentive for a claimant. The thinking behind Amendment 21 is that we should first research the obstacles of returning to work and what shape of commitment will best help overcome these, and that we should discover this by public consultation with potential users as well as with experts in the field. The second amendment in this group, Amendment 22, calls for the Secretary of State to initiate a review a year on from the introduction of the claimant commitment to see what impact it is having and thus to indicate how it might be improved. My guess is that the Minister will be very motivated to accept this amendment as it will produce intelligence that I am sure he will want to access at that point. As the DWP papers state: "““We are continuing to develop proposals on the type of conditionality regime we will implement. As the extension of conditionality to working claimants is new, we will need to keep these provisions under review as we learn from them””." This amendment writes that need into the Bill. I beg to move.