Welfare Reform Bill

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The Committee consisted of the following Members:

Chairmen: Mr. David Amess, † Mr. Jimmy Hood

† Afriyie, Adam (Windsor) (Con)

† Alexander, Danny (Inverness, Nairn, Badenoch and Strathspey) (LD)

† Banks, Gordon (Ochil and South Perthshire) (Lab)

† Boswell, Mr. Tim (Daventry) (Con)

† Brown, Mr. Russell (Dumfries and Galloway) (Lab)

† David, Mr. Wayne (Caerphilly) (Lab)

† Engel, Natascha (North-East Derbyshire) (Lab)

† Heppell, Mr. John (Vice-Chamberlain of Her Majesty's Household)

† Hunt, Mr. Jeremy (South-West Surrey) (Con)

Laws, Mr. David (Yeovil) (LD)

† McGuire, Mrs. Anne (Parliamentary Under-Secretary of State for Work and Pensions)

† Mountford, Kali (Colne Valley) (Lab)

† Murphy, Mr. Jim (Minister for Employment and Welfare Reform)

Penrose, John (Weston-super-Mare) (Con)

† Robertson, John (Glasgow, North-West) (Lab)

† Ruffley, Mr. David (Bury St. Edmunds) (Con)

† Seabeck, Alison (Plymouth, Devonport) (Lab)

John Benger, Chris Shaw, Committee Clerks

† attended the Committee

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Standing Committee A

Tuesday 17 October 2006

(Afternoon)

[Mr. Jimmy Hood in the Chair]

Welfare Reform Bill

Clause 1

Employment and support allowance

Question proposed [this day], That the Clause stand part of the Bill.

4 pm

Question again proposed.

The Minister for Employment and Welfare Reform (Mr. Jim Murphy): Thank you for calling me, Mr. Hood. I congratulate you on your appointment to the Chair—co-Chair, lead Chair or whatever—of our proceedings. The Clerks or Mr. Amess might have informed you that we had a relatively well-informed debate in good tone while trying to work our way through some important details of the Bill. At the start of our second of 16 sittings, I seek to continue that approach.

I was responding to a point about migration raised by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander). I said that the migration strategy will be based on the premise that those who have been out of the labour market for the shortest time will be migrated first, simply because those people have a greater chance, based on objective analysis, of returning to the labour market.

Mr. Tim Boswell (Daventry) (Con): If somebody has been out of the labour market for a long time but is mad keen to get back—if they are strongly motivated and extenuating circumstances explain why they have not approached it—would the Minister consider at least in principle that they should be able on application to advance in the queue and to enter the new arrangements?

Mr. Murphy: The hon. Gentleman anticipates one of three points that I wish to make about migration. One is proximity to the labour market based on time out of it; the second is child poverty. The No. 1 priority of the Department for Work and Pensions is to eradicate child poverty. By general acknowledgment, the Government have set the most ambitious child poverty reduction target of any Government on the globe: we aim to halve it by 2010 and to eradicate it by 2020. In terms of migration strategy, it is important that those with dependent children—

Adam Afriyie (Windsor) (Con): The Minister talks about eradicating child poverty. Which measurement of child poverty is he discussing in this context—relative or absolute?

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Mr. Murphy: We are committed to abolishing all measures of child poverty till there are no kids in poverty. It does not matter which measure is used, but the one that we are using for our target is relative poverty. By all acknowledgment, that is the most ambitious measurement of child poverty, because it is a measure of relative income across the economy.

Adam Afriyie: On a point of clarity, if the Minister is referring to relative poverty, it would seem mathematically impossible to eradicate it. If he is talking about the lowest percentile of income for a family with children, that is a mathematical impossibility.

Mr. Murphy: I am pleased to hear from the hon. Gentleman. He has involved himself in an important part of the conversation. However, we are committed to that target, and we are even more committed to developing policies to get us to that target by 2020. It is really a question that he should have addressed to his own Front-Bench Members. As he will know, they have apparently now committed themselves to that objective. As so often, his party wills the ends without identifying any of the means; nevertheless, it is a small move forward for the child poverty target.

On the migration strategy, we are looking for ways to maximise the income of those with dependent children and to eradicate child poverty. The general assessment is that this Bill and the measures in the Green Paper could remove about 100,000 kids from relative poverty. Those and other measures on child support reform play an important part.

On the point made by the hon. Member for Daventry (Mr. Boswell), we are considering ways of ensuring that volunteering happens. Someone out of the labour market for three, five or seven years may, because of a change in circumstances, have the determination to get on and get up. We are considering ways to make that a reality.

Finally, I turn to the point raised this morning by the hon. Member for South-West Surrey (Mr. Hunt) about clause 1(3)(e). I confirm that someone wishing to make a benefit application would contact Jobcentre Plus and discuss the available options. For some people, only one benefit—jobseeker’s allowance, for example—would be available. However, some would have the opportunity to choose.

This morning, I gave the example of a lone parent who also had a disability; they would be able to claim employment and support allowance or income support. The customer, in discussion with Jobcentre Plus, will make their own decision about what would be most appropriate for their circumstances; the key point is that they would make the decision. As we know, they would be entitled to only one income-related benefit at any one time.

The point raised by the hon. Member for South-West Surrey was not an issue of principle but of whether clause 1(3)(e) was fit for purpose. I looked into that point during the recess. I shall say something about the work entitlement, which the hon. Gentleman asked about. A person is entitled to a benefit only if they meet all the conditions and make a claim for it. Those are the two stages: entitlement to the conditions and making a claim. That is the legal, constitutional and legislative argument on entitlement.

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Just before the end of this morning’s sitting, I was about to say—it was on the tip of my tongue—that, in common with other social security legislation, the Bill will achieve what I have set out by amending section 1 of the Social Security Administration Act 1992 through a consequential amendment, which can be found in paragraph 4(2) of schedule 3.

That may be a dry assurance, but I hope that it is what the hon. Gentleman sought at the end of this morning’s sitting. I have been advised that it has the correct and proper legal meaning and that it achieves the purpose that we wish to set out. I thank the hon. Gentleman for raising that issue and giving me the opportunity to clarify it.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Schedule 1

Employment and support allowance: additional conditions

Mr. Murphy: I beg to move amendment No. 78, in schedule 1, page 49, line 2, after ‘Act,’ insert—

‘( ) a contributory allowance,’.

I am slightly worried about saying it, but this should be a brief debate on the amendment, which involves a drafting omission. As Committee members will be aware, schedule 1 is duplicated from existing income support and incapacity benefit legislation, but we omitted to include the phrases contained in the amendment.

The amendment extends the definition of “benefit” given in paragraph 1(5) of schedule 1, which defines what is meant by “benefit” for the purposes of paragraph 1(4) of schedule 1. We use the current regulations to relax the first contribution condition so that it can be satisfied if sufficient contributions have been paid in any one tax year, not necessarily one of the previous three tax years. We want to be able to do the same in future for people who have been entitled to contribute to ESA and to do so we must ensure that to contribute to ESA is defined as a benefit in paragraph 1(5). I apologise for that drafting omission.

Amendment agreed to.

Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): I beg to move amendment No. 164, in schedule 1, page 50, line 41, after ‘receiving’, insert ‘full time’.

The Chairman: With this it will be convenient to discuss amendment No. 170, in schedule 1, page 51, leave out line 28.

Danny Alexander: I join the Minister in welcoming you the Chair, Mr. Hood. I look forward to serving in this Committee under your chairmanship.

The amendments are designed to probe, in order to clarify the Government’s definition of education with respect to the qualifying criteria for the ESA. Paragraph 285 of the explanatory notes states that regulations will set out what is to be treated as education and when it may not apply, but we need to hear a bit more from the Government about what they mean by education and how they wish it to apply in this case.

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For example, income support entitlement is usually allowed for part-time students and not full-time students, so amendment No. 164 would insert the words “full time” to make that clear. Indeed, exceptions in the case of income support that allow full-time education include, for example, students who are eligible for the disability premium and deaf people who receive the disabled students’ allowance.

The point that I wish to make is that the rules surrounding this benefit must not be a disincentive for people to learn. The Bill should allow more opportunities than at present to improve employment chances through education and training and it is particularly important that the terms of the Bill do not put up new barriers to people who might be suffering an impairment, condition or disability to access education and training while continuing to be able to claim their benefits.

I want to bring some relevant figures to the attention of the Committee, for which I am grateful to the Disability Rights Commission. Of those currently in receipt of incapacity benefit, 40 per cent. have no qualifications whatsoever and 15 per cent. have literacy and numeracy problems. It is worth noting, too, that having qualifications can increase the chances of a disabled person being in paid employment by 30 per cent. for men and 45 per cent. for women. In the context of the overall objectives of the Bill, encouraging education, training and gaining qualifications is vital.

As the disability premium for income support will be abolished under ESA, will the Minister clarify how students will be identified as qualifying for income-based ESA while studying full-time? People who receive income support can get reductions in their course fees and sometimes fee waivers. That does not apply to people who are on incapacity benefit, although some colleges individually allow fee waivers. Will the Minister explain how he thinks that people who receive income-based ESA will be supported in the high cost of post-16 education? Will a fee waiver apply to ESA recipients in the context of the Bill?

I look forward to the Minister’s response.

4.15 pm

Mr. Jeremy Hunt (South-West Surrey) (Con): I take this opportunity to welcome you to the Chair, Mr. Hood. I look forward to serving under your no doubt wise and erudite chairmanship.

I wish to speak in strong support of the amendments. We have reflected carefully on them and we support them because the role of education needs to be fleshed out if the Bill is to achieve the objectives that the Government have set out. In particular, part-time and even full-time education are often vital stepping-stones towards getting back into full employment. The Committee will be aware that one of the most iniquitous problems facing disabled people trying to lead an independent life and contribute fully to society is the education disadvantage that they suffer. Statistics such as the fact that a disabled person with a higher education qualification is more likely to be out of work than a non-disabled person with no qualification ought to give pause to anyone and make them think. In considering the drafting of the Bill we must be careful

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not to ignore inadvertently the fact that education is part of a solution, not part of the problem. Although we understand that for obvious cost reasons it is not possible to give the employment and support allowance automatically to everyone in full-time education, we would have much greater success in getting people into the labour market if we had a more positive attitude to the role of education.

I must declare an interest: before I was elected to Parliament last May, I ran my own publishing business. We published guides and websites to help people get on the right course and choose the right university or college. My hon. Friends might be relieved to know that it was a healthily capitalist occupation for me—at that time, of course, it was a different Conservative party. [Interruption.]

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Prepared 18 October 2006