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14 Jul 2005 : Column 1279W—continued

Return to Work

Mr. Amess: To ask the Secretary of State for Work and Pensions what steps he is taking to encourage (a) unemployed people and (b) people on income support to return to work; and if he will make a statement. [10476]

Mr. Plaskitt: Since 1997 the Government's priority has been to tackle the scourge of unemployment, inactivity and poverty through investment in, and reform of, the welfare state. The UK now has one of the strongest labour markets in the world, with the best combination of employment and unemployment of the major world economies. More people are moving from welfare back into work with employment up almost 200,000 in the last year and by over 2 million since 1997. With more people in jobs than ever before, we now spend £5 billion less on unemployment benefits than we did in 1997.

A central part of our strategy is to ensure that work pays, establishing a real incentive for people to move off benefit and into work.

The national minimum wage was introduced in April 1999 as part of our overall strategy, establishing minimum standards of pay in the labour market. In October 2004 the minimum wage was increased from £4.50 per hour to £4.85 for workers aged 22 and over and from £3.80 per hour to £4.10 per hour for people aged 18–21 inclusive.

Building on the success of working families' tax credit (WFTC), disabled person's tax credit and the children's tax credit, from April 2003 the Government introduced two new tax credits, the child tax credit (CTC) and the working tax credit (WTC). Entitlement to the tax credits is based on the particular circumstances of an individual or family.

The adviser discretion fund was introduced in July 2001, giving jobcentre plus advisers direct access to funds to remove immediate barriers to employment and thus help people move quickly into work. In addition, from October 2003, access to the fund was further extended to all incapacity benefit customers in Pathways to Work pilot areas from the first day of their claim.
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Job grant was also introduced in October 2004 to help people manage until they receive their first wages. It replaced both the lone parents run-on and the original job grant schemes.

Additionally the housing benefit and council tax benefit extended payments allow maximum housing benefit and council tax benefit to continue for the first four weeks after starting work. Help with mortgage interest in the first four weeks of employment may also be available through mortgage interest run-on in the income-related benefits.

Today, Britain is working again. We are transforming the welfare state from a passive one-size-fits-all model to an active system that delivers both rights and responsibilities, tailoring help to the individual and providing the support and incentives people need to move from welfare and into work.

Tax Credit (Overpayments)

Jim Cousins: To ask the Secretary of State for Work and Pensions how many adjustments of (a) council tax benefit and (b) housing benefit payments have resulted from corrected overpayments of tax credit; and what research is being carried out on (i) the number, (ii) costs and (iii) effects of such adjustments. [6326]

Mr. Plaskitt: It is the actual amount of a tax credit award that is in payment that is taken into account when assessing entitlement to housing benefit and council tax benefit. There is, therefore, no retrospective reassessment of those benefits because a tax credit award has been overpaid during a past period.

The housing benefit or council tax benefit claim does, however, need to be reassessed if the amount of a tax credit changes because, for example, of an overpayment of the tax credit. This is to ensure that housing benefit or council tax benefit takes account of the actual amount of tax credit in payment.

No assessment has been made of the cost implications to local authorities of readjusting payments of housing benefit or council tax benefit because of the correction of an overpaid tax credit award. This is because such a change is only one of many that may mean a housing benefit or council tax benefit claim needs to be reassessed. However, local authorities have received additional administration subsidy in recognition of the ongoing costs to local authorities of administering claims which include tax credits.