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Benefit Reforms

4. Mr. Hawksley: To ask the Secretary of State for Social Security if he will make a statement on how his benefit reforms will help people off benefit and into work. [19702]

6. Mr. John Greenway: To ask the Secretary of State for Social Security what reforms of the benefit system he is planning to help unemployed people back to work. [19704]

The Minister for Social Security and Disabled People (Mr. Alistair Burt): The Government's benefit-to-work programme has made a substantial contribution to the reduction in unemployment in the United Kingdom. In addition to family credit, which has helped 300,000 families leave income support in the past three years, about 750,000 people will be helped this year by a range of new measures. From April, the four-week extension of housing benefit will remove worries about rent for new job starters. The national insurance contribution holiday will help employers who take on the

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long-term unemployed. Help with child care costs in family credit and disability working allowance will increase from £40 to £60 a week. Family credit claims will be speeded up to get the extra help to people more quickly.

Mr. Hawksley: I thank my hon. Friend for that answer, which is good news for everyone. Does my hon. Friend agree that the so-called welfare-to-work schemes, which often involve minimum wage levels, result in people being put out of work rather than in more jobs? Does my hon. Friend agree that such proposals are best described as work-to-welfare schemes and are the sort of schemes that the Labour party pushes?

Mr. Burt: My hon. Friend rightly points out the main flaw in the welfare-to-work package, which includes the minimum wage. The minimum wage does not help the poorest--studies show that the majority of low-paid workers are the second, or even third, income earners in high-earning households. In addition, the minimum wage tends to squeeze out jobs, particularly for the lowest-paid and those with the fewest skills. Our programme of finding ways to improve job opportunities for people and to help them to gain work through benefit offers the unemployed a far better option than a minimum wage.

Mr. Greenway: Will my hon. Friend do what he can to encourage flexibility in the setting of benefits so that those who may have the opportunity of part-time employment, which may be seasonal, are better off taking a part-time job than sitting at home doing nothing? Will my hon. Friend ensure that staff in benefit offices are properly acquainted with all the rules?

Mr. Burt: My hon. Friend is right about the importance of the flexibility of the benefit system. I hope that my answer encouraged him, because that is precisely what we have been trying to do. Increasing earning disregards for those who remain unemployed is not necessarily the best approach as it may be a disincentive to their taking up full-time work, which we want to encourage. Those who are working part time on benefit will, from October, be able to build up a back-to-work bonus--a substantial lump sum that will help them into work.

Mr. Barry Jones: There are 2,500 jobless people in my constituency. How many of them will be helped into work by these measures?

Mr. Burt: We expect that some 750,000 people will benefit from the £600 million-worth of changes that the Budget made to work incentive measures last year. The hon. Gentleman should be able to do the division and work out how many people in his constituency are likely to benefit from these measures.

Mr. Pike: When the Minister is next in his constituency, will he come a few miles north into Burnley and note the wage levels that are being offered to many people? Does he understand that they cannot afford to go to work--even with the type of help that he has spoken about this afternoon--because they are out of pocket if they do? What the Tories have done to wage levels and working conditions since they were elected is an absolute disgrace.

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Mr. Burt: I am not sure whether the hon. Gentleman fully appreciates the links between the benefits system and the wage system. I do not know whether his idea of a minimum wage--which would put even more of his constituents out of work--would help in any respect. If the hon. Gentleman studies the types of measure that the Government have introduced and the earnings top-up pilot that we are introducing this year--which will provide an opportunity for people on low incomes to see whether they can have their wages increased to help them into work--he will see that what we are providing will assist many of his constituents. I would guess, without looking at the figures too closely, that fewer people are now unemployed in his constituency than was the case at the last election--that shows the benefit of the measures that we have been passing.

Mrs. Peacock: I welcome the Government's decision to give an extra £10 a week to people who are working 30 hours a week or more and are in receipt of family credit. Does my hon. Friend know how many families it will help?

Mr. Burt: The extra £10 a week premium for those currently working 30 hours or more and in receipt of family credit will help a substantial number of people. It helps a substantial number of families at the moment. The exact number of people who will benefit from this extra measure has slipped my mind, and I shall write to my hon. Friend.

Family Poverty and Low Pay

5. Mr. Mackinlay: To ask the Secretary of State for Social Security what action he has taken to ascertain the extent of family poverty and low pay; and if he will make a statement. [19703]

The Parliamentary Under-Secretary of State for Social Security (Mr. Andrew Mitchell): The key to helping people out of low income is to create opportunities and incentives to work. We have looked closely at the difficulties that families face in moving into work and we have introduced a wide range of practical measures to help overcome those barriers.

Mr. Mackinlay: Why has no Minister from the Department of Social Security attended the hearings that are being held at Church house, Westminster? The Archbishop of Canterbury, the Cardinal Archbishop of Westminster, many politicians and prelates are attending the hearings of the Church action on poverty to listen to people who are low-paid and homeless. Is it not time that Ministers went with some humility and listened to people who are in utmost deprivation, and explained to them how poverty has increased since 1979 from 4 million to 15 million people? Why are 4 million children in this country in poverty? How is it that the United Kingdom has one quarter of the people who are poor in the European Union?

Mr. Mitchell: Ministers will take a close interest in the results of today's seminar at Church house. The Prime Minister sent a personal message to the seminar, as the hon. Gentleman will have heard. Why does he not tell the House that unemployment in his constituency has fallen

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by 23 per cent. in the past 24 months? Why does he not tell the House that it has fallen by 750,000 since 1992? Why does he not tell the House that unemployment in the United Kingdom is well below the European average and below the level in Germany? Why does he not take account of the fact that the way to improve living standards, as the Prime Minister said in his message this morning, is to get people back into work? The Government have been improving and expanding into-work support, as my hon. Friend the Minister for Social Security and Disabled People said, and we are now helping 630,000 families on family credit.

Mr. Bill Walker: Can my hon. Friend confirm that the more public money that is used to give support to families in need, the more families will register as being in need of help and therefore be named as being in poverty? "In poverty" is hardly a description of people who have received substantial sums. It is the way that money is spent that is important.

Mr. Mitchell: My hon. Friend is right. The vast majority of our fellow citizens are a great deal better off than they were in 1979. Average incomes are up for all family types. Average incomes are up on average by a third since 1979 and pensioners' income has increased by about 50 per cent. We can therefore be proud of the Government's record in those areas.

Mr. Chris Smith: Is it not the case, however, that, after listening to the Minister and the hon. Member for North Tayside (Mr. Walker), one would suppose that poverty did not exist? It does, and it is growing. If the hon. Gentlemen had been to Church house today, they would have heard the evidence at first hand. Does the Minister realise that one in three children are growing up in poverty, compared with one in 10 when the Government took office? Is that not a standing indictment of the damage that the Government have done to our country?

Mr. Mitchell: We are all looking forward to 8 May, when the hon. Gentleman will have finished his six-month review and when he can explain to the House whether, if he believes what he just said, he intends to increase payments for welfare as he suggested.

If the hon. Gentleman is serious about what he says, however, why does he back the Labour party's decision to impose a national minimum wage and to sign up to the social chapter? If he were serious about that, he would acknowledge that the national minimum wage would reduce jobs and put people out of work, while destroying future job opportunities.

We have discovered from recent surveys that the richest 30 per cent. of those affected by a national minimum wage would gain far more than the poorest 30 per cent. If the hon. Gentleman is serious about those matters, as part of his review of thinking the unthinkable he should change his party's policy on a job-destroying national minimum wage.

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