Welfare Reform Bill

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The Committee consisted of the following Members:

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

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

† Baron, Mr. John (Billericay) (Con)

† Clappison, Mr. James (Hertsmere) (Con)

† Harper, Mr. Mark (Forest of Dean) (Con)

† Howell, John (Henley) (Con)

† Jones, Helen (Warrington, North) (Lab)

† Lilley, Mr. Peter (Hitchin and Harpenden) (Con)

† McKechin, Ann (Parliamentary Under-Secretary of State for Scotland)

† McNulty, Mr. Tony (Minister for Employment and Welfare Reform)

† Mason, John (Glasgow, East) (SNP)

† Munn, Meg (Sheffield, Heeley) (Lab/Co-op)

† Plaskitt, Mr. James (Warwick and Leamington) (Lab)

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

† Rowen, Paul (Rochdale) (LD)

† Shaw, Jonathan (Parliamentary Under-Secretary of State for Work and Pensions)

† Ussher, Kitty (Parliamentary Under-Secretary of State for Work and Pensions)

Liam Laurence Smyth, Committee Clerk

† attended the Committee

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Public Bill Committee

Tuesday 24 February 2009

(Morning)

[Mr. Jim Hood in the Chair]

Welfare Reform Bill

Written evidence to be reported to the House

WR 04 Department for Work and Pensions

Clause 1

Schemes for assisting persons to obtain employment: “work for your benefit” schemes etc.

10.30 am

Paul Rowen (Rochdale) (LD): I beg to move amendment 40, in clause 1, page 1, line 12, after ‘circumstances’, insert

‘other than when a claimant is responsible for a child of school age’.

The Chairman: With this it will be convenient to discuss the following: amendment 65, in clause 1, page 1, line 12, after ‘circumstances’, insert

‘, and where claimants have guaranteed and predictable access to good quality, affordable and flexible childcare which meets the needs of the parents and the child or children in the claimants’ household,’.

Amendment 62, in clause 3, page 10, line 17, at end insert—

‘(8) The prescribed description of person under subsection (4)(c) above shall include any person with dependent children who has claimed benefit in the previous 12 months following an incident of domestic violence provided that the claimant is able to produce such evidence as may be required by the Secretary of State to establish that the relationship was caused to permanently break down before the end of that period as a result of domestic violence, as under United Kingdom Immigration Rule 289A.’.

Paul Rowen: It is a pleasure to serve under your chairmanship, Mr. Hood. I shall particularly address amendments 40 and 65. The Government have signalled their intention to introduce “work for your benefit” schemes, although I prefer to call the schemes Workfare, because I think that that better describes the Government’s intention. Liberal Democrat Members have considerable concerns about some of the proposed changes, and amendment 40 addresses parents with school-age children.

I make it clear that I have no problem with parents, or single parents in particular, working. My mother brought me and my two sisters up as a single parent, and I have no doubt that there are many other people in the same position. However, we are talking about working for benefit, and a change in Government policy to cover children of school age.

Under the proposals, from October 2010, 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

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schemes. We will then have a situation in which single parents will be competing with jobseekers for the attention and support of flexible new deal providers, although there will be no additional incentives or resources to support that group.

Previous experience of asking private sector providers to deliver for single parents have shown that, without additional resources, they are unwilling to invest in this area. In what is usually described as “parking”, there are concerns that providers will take little action for the most vulnerable claimants, who will therefore be more likely to become eligible for the “work for your benefit” schemes.

The YWCA is concerned not only that this is a “work for your benefit” programme, but that it is also inappropriate for single parents and unlikely to lead to improved work outcomes. Single parents are likely to form a disproportionate number of the participants. We have gone from the Government talking about the idea in the Green Paper to a situation in which the proposal is going to be actively implemented.

Research from the Department for Work and Pensions itself suggests that there is little evidence—not just in this sector, but across others—that work for benefit schemes actually increase the likelihood of finding work. Such a scheme is least effective at getting people into jobs in weak labour markets where unemployment is high. I am sad to say that that is the case in many of our constituencies. It is also not effective for individuals with multiple barriers for work, and it can reduce employment chances by limiting the time available for job search and failing to provide the skills and experience that employers value.

Despite all that evidence, the Government, in their Green Paper, preferred to rely on the following justification:

“The report points to evidence that full-time activity in such programmes leads to improved job outcomes: between a half and two-thirds of leavers found unsubsidised work at some point in the three years after leaving the Wisconsin programme. Australia's 'Work for the Dole' had a 7 per cent net increase in participants going into jobs compared to nonparticipants.”

Significantly, with reference to the Australian research, the Green Paper omitted a sentence that the research report included, in bold type:

“However, other research found that WfD was ineffective in helping participants find sustainable employment with only one-quarter in work three months after leaving the programme and 14 per cent employed in full-time jobs.”

It is seriously worrying that the DWP is prepared to consider work for benefit schemes without addressing some of the key problems that other programmes have encountered.

We must consider the current employment climate. At a time of rising unemployment, the Bill’s focus on conditionality and sanctions is inappropriate. We should be concentrating on protecting the jobs that already exist and strengthening the opportunities that are available for people to find work. Using the big stick might have been appropriate a few years ago, but not in the current economic climate. We are particularly concerned that rising unemployment will cause anxiety and fear—[Interruption.]

The Chairman: Order. I will not allow conversations to take place between Members in the room while an amendment is being moved.

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Paul Rowen: Thank you, Mr. Hood.

At this time of increased anxiety, lone parents, disabled people and those facing the prospect of unemployment will be the hardest hit. We thus believe that excluding lone parents with children of school age from the programme, as proposed in amendment 40, would be appropriate.

Amendment 65 would ensure that before any programmes were produced, there would have to be evidence that there was guaranteed and predictable access to good-quality, affordable and flexible child care.

A woman who came to see me in my surgery a couple of weeks ago was getting a job which would leave her under the 16-hour rule, so she would not be entitled to receive the child tax credits that would have enabled her to pay for her child care. She told me that she would end up being only £5 a week better off. She has decided that she wants to work, but she is working those hours for an extra £5 a week. I would prefer the Government to amend the 16-hour rule so that parents can pay for flexible child care and to ensure that child care is provided in areas where there are shortages. Such steps would represent money better spent on helping people back into work.

The provisions in this part of the Bill are meaningless because they do not deal with some of the problems and barriers that many lone parents face when moving into work. I would prefer the Government to concentrate on addressing that, rather than using the stick without the carrot.

John Robertson (Glasgow, North-West) (Lab): It is a pleasure to see you in the Chair, Mr. Hood. I look forward to serving on the Committee with you.

I thank the hon. Member for Rochdale for mentioning my amendment—hopefully my input will result in better child care for children throughout the country—and I thoroughly endorse what he said. Having said that, this is about a Scottish element to the Bill, and I want to ensure that adequate support is available.

I recognise that there is a need to get people into work, particularly at the current time, and I disagree with the premise of amendment 40 because this has to be about exchange, not something for nothing. However, we know about the difficulty in reaching our targets and the prospective child poverty Bill, so we need to make sure that children are at the forefront of our minds when we consider the effect of this Bill. We cannot put extra strain on parents by making them worse off through a system that is supposed to work in the other direction. Given the increasing obligations to be placed on unemployed parents, there is widespread concern about a lack of high-quality, flexible and affordable child care in Scotland. Amendment 65 would ensure that such child care was considered before strict conditions were placed on parents.

Work on the amendment has been carried out by the Scottish Campaign on Welfare Reform, which includes more than 40 organisations that work with people experiencing exclusion and poverty in Scotland. I thank it for its work and help. The amendment has already attracted media coverage north of the border, and I thank the media for publicising the need to look at the amendment. I also thank Citizens Advice Scotland for its help, not just with this amendment, but through the other work that it has done with me over the years.

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This amendment would ensure that, unless a claimant had access to good, affordable child care, they would not be faced with the Catch-22 of deciding between benefits and making sure that their children were looked after. According to figures from One Parent Families Scotland, more than 50,000 children could be affected by the planned changes. We must remember that there is no legal entitlement to child care in Scotland, unlike in England and Wales, and no subsidy for child care for two-year-olds in Scotland, unlike in England and Wales.

There are limited means for systematically monitoring Scottish provision, so it is difficult to get a clear picture of the situation. However, we do know that between 2006 and 2008, the number of child care centres and child minders in Scotland fell from 10,388 to 10,322. While the decrease might be small, it is none the less a decrease at a time when we were hoping to give better coverage for children north of the border.

Costs are the biggest hurdle to getting a job with an income to support a family, especially for single parents and couples with low incomes. It is concerning that figures from the Daycare Trust show that the cost of out-of-school child care in Scotland increased by 29 per cent. in the last 12 months, while the cost of a nursery place rose by around 12 per cent. Given the problems in the finance markets and the fact that inflation is coming down, these increases are greater than we would expect parents paying for child care to face.

The DWP’s impact assessment on the Bill, which was published in January, emphasised the importance of child care and recognised the risks of imposing obligations on parents. However, it stated that those were mitigated by the improvements in England and Wales as a result of the Childcare Act 2006, which places a duty on local authorities in those countries to secure sufficient child care for working parents. However, there is no such duty in Scotland, as my right hon. Friend the Minister for Employment and Welfare Reform recognised on Second Reading when he said:

“The measures are not, as billed, ‘Any job at any cost,’ regardless of whether there is child care provision or other elements. I take on board what many of my Scottish friends have said about...child care provision in some areas of Scotland, not least Glasgow.”—[Official Report, 27 January 2009; Vol. 487, c. 268.]

While that recognition is welcome, we need to ensure that the Bill takes account of child care availability so that they are not just warm words. I look to the Minister to address these concerns.

10.45 am

It should be noted that a precedent was set with regard to the Children (Leaving Care) Act 2000, with regard to which Scotland was given nearly four years to put its house in order so that it could come in line with England and Wales. I am asking the Minister for something similar: for the Bill to give the Scottish Government and local authorities north of the border time to ensure that children in Scotland receive the same care and attention as those in the rest of the UK.

Mr. James Clappison (Hertsmere) (Con): It is a great pleasure to serve under your chairmanship, Mr. Hood. We look forward to receiving your guidance as we seek to subject the Bill to proper parliamentary scrutiny.

As the hon. Member for Rochdale said, the Government’s plans for “work for your benefit” were first mooted in their Green Paper of July 2008. It might assist the

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Committee if I say, by way of brief introduction, that in January 2008—six months before the Government produced this scheme—we published a Green Paper on the subject. We proposed a return-to-work programme, saying:

“Our intention is that anyone who has been through the new system without finding work and has claimed the allowance for longer than two out of the previous three years will be required to join a mandatory long-term community work scheme as a condition of continuing to receive benefit support.”

We do not resile one bit from that proposition, which we produced a little before the Government reached their position.

Given what the hon. Member for Rochdale said in general terms about the Liberal Democrats’ approach, I take it that they are opposed to the proposal in principle and that amendment 40 is not just a probing amendment to seek more details. It was not entirely clear whether that opposition in principle extended to all time or just the present economic circumstances. However, we must consider amendment 40 against that background.

It appears to me—I look forward to legal advice and analysis from those with perhaps greater expertise than me—that, under amendment 40, no parent with a child under 16 would be eligible for “work for your benefit”. The hon. Gentleman confined himself to talking about single parents, but the amendment would apply to any couple because it refers to responsibility for a child, not sole responsibility for a child, so it would appear to cover both members of any couple with a child under 16. Therefore, neither member of such a couple would be required to work under the provisions of “work for your benefit” after they had been out of work for two years and undertaken the flexible new deal programme for 12 months. We simply cannot agree with that.

We heard the hon. Gentleman’s case, but it is always possible to mix and match research on such a subject, and it appears that there is no academic consensus. He referred to the Australian scheme of working for benefit, which appears to attract at least a degree of political consensus. A telling feature of that scheme is that while it was introduced by the previous Australian Government, the incoming Australian Government, who are of a different political complexion, have chosen to keep the scheme in place. That tells us something about the way in which the scheme in seen in Australia.

As a general proposition, we believe that work is a good thing, and that children in families with at least one member in work do better than children in workless families. There is a great deal of evidence to support that. That is not only due to the higher income that work generates, but because the child grows up seeing somebody in the family in work. Anything that brings a family into the routine of work, that gets children into the habit of seeing at least one of their parents go out to work, that prevents long-term worklessness, and that helps people get back into work, is a good thing.

I heard the various complaints made by the hon. Member for Rochdale. However, one is tempted to ask what members of families in low-income work, or those of families in which both members have low-paid jobs, would make of the hon. Gentleman’s proposal that if two members of a couple are on benefits, neither should be in work. He did not indicate whether he would press

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amendment 40 to a Division—he has not yet heard the Minister’s response—but if he does so, we shall vote against it.

The hon. Member for Glasgow, North-West made reasonable points in support of amendment 65, which relates to child care. He said that his points related to Scotland, but they are important in themselves and we look forward to hearing the Minister’s response to them.

I also note that amendment 62 is in this group, although I do not think that the hon. Member for Rochdale discussed it. It relates to clause 3 and the entitlement to jobseeker’s allowance. Clause 3—as opposed to clause 1, which deals with the “work for your benefit” proposals—is concerned with the shift of claimants from income support to JSA. I have not yet heard the details of the amendment from the hon. Gentleman—I will wait to hear what the Minister says about it—but it raises a reasonable point about the serious subject of domestic violence. I anticipate that we will be told that the amendment would make little difference in practice. However, it is worth considering domestic violence in such circumstances.

I say once again that if the hon. Gentleman presses amendment 40 to a Division, we will oppose it, because we think that the amendment represents opposition to the scheme in principle.

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Prepared 25 February 2009