The Minister for Employment and Welfare Reform (Margaret Hodge) : I am delighted to have the opportunity to debate, in this elite group, an important issuelone parent employment. It is a central element of our welfare reform proposals, but in my view it has not been properly debated so far, or attracted as much attention as our proposals on incapacity benefit. I hope that this afternoon we can help to stimulate a discussion on the issues in the Green Paper as they affect lone parents.
There are many reasons for our developing the provision of effective support to lone parents in moving into work, but I shall pick out those that I consider the most important. The first is our ambition to eradicate child poverty. When we came into government in 1997 the UK suffered higher levels of child poverty than nearly all other industrialised nations. During the 20 years preceding 1997 the proportion of children in relatively low-income households had more than doubled, and the division, disadvantage, despair and lack of equal opportunity that that meant was intolerable to us as a Government, because the twin ambitions of economic prosperity and social inclusion are the underpinning objectives of all our public policies. That is why we have set ourselves the challenging goal of halving child poverty by 2010 and eradicating it by 2020.
Mr. Tim Boswell (Daventry) (Con): I am sorry to intervene so early on the Minister, and I hope that that will not be characteristic of our later exchanges, but before she goes too far into her prepared speech about the errors of the past, does she agree that at the moment income inequalities are tending to rise under the present Government, rather than to diminish?
Margaret Hodge : I do not agree with the hon. Gentleman that the number of people at the lower end of the scale is continuing to increase. In our attack on poverty, whether child poverty, pensioner poverty or family poverty, we have managed through our tax and benefit systems, our active employment policies and all that we have done in the way of investment and reform of public services, to draw people out of poverty. The hon. Gentleman is drawing attention to the fact that the rich are getting much richer, and the total spectrum may therefore alterbut the number being drawn out of absolute and relative poverty is improving, so I do not entirely accept what he said.
Mr. David Laws (Yeovil) (LD): I think that I heard the Minister say a moment ago that the Government
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remain committed to abolishing child poverty measured in relative terms. Can she clarify whether that is still their commitment, or whether the Government have moved away from that towards trying to bring British relative child poverty down into the lower portion of the league table in Europe? That was suggested to me by someone whom I spoke to earlier today, in relation to the publication of the new Department for Work and Pensions paper, which came out last year, on the Government's child poverty targets.
Margaret Hodge : I am somewhat bewildered by that intervention, because we remain as committed as we have ever been to the eradication of child poverty, and are currently working on the new measure of material deprivation that we announced when we announced the public service agreement targets. I hope to bring forward our definition of that in the not-too-distant future, so that we have another good way of measuring not just absolute poverty but the relative poverty of families with children. That, for me, is one of the Government's most important aspirations, and as I develop my opening remarks I hope that the hon. Gentleman will agree that the enormous inroads that have been made into absolute and relative child poverty are one of the Government's proudest achievements.
To achieve the challenging target that I have spoken about, we are implementing a multifaceted strategy: first to provide families with better financial support, secondly to tackle material deprivation, thirdly to invest in and reform public services so that we can improve children's life chances, and fourthly, to provide lone parents who want to work with the opportunity to do so, by breaking down the barriers that have stunted their opportunity in the past.
We know that children living in lone parent households are three times more likely to be living in poverty than children living in couple households. About two thirds of the children living in workless households live in a household headed by a lone parent. The combination of those two facts has led us to emphasise the importance of our new deal for lone parents and our intervention policies in relation to employment for lone parents. We know that through employment we can help to lift lone parents and their children out of poverty.
The second reason for our involvement in active labour market policies affecting lone parents is that lone parents tell us, in survey after survey, that they want to work. Nine out of 10 express the desire to work, but they face a range of barriers in realising their ambition. It is no surprise that people want to work. Work is important to all of us in the Chamber this afternoon. We need it. It is important because of the money that it brings to enable us to support ourselves and our families, the value and self-esteem that it gives us, and the position that it gives us in our communities and society. It is also important because of the network of relationships and friends that people can establish through work. We need to set about tackling the barriers that have prevented lone parents from realising their ambition to fulfil their potential through work.
In the past, lone parents were either ignored or stigmatised. They were ignored in the sense that no support was offered and they fell off the edge when their youngest child reached 16 and their automatic
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entitlement to income support stopped. Through our active labour market policies, the steps that we have taken to balance parents' responsibilities to their children with their workplace responsibilities, and the changes that we have made that ensure that work pays, we are responding to lone parents' express desire to work.
The third reason that I want to emphasise for our being involved in policies for the employment of lone parents is that we want to ensure that, as the demography of the country changes, we can continue to maintain growth and improve the prosperity of communities in Britain. We all know that 50 years ago, there were 10 people of working age to support every person in retirement. Today there are four people of working age to support every one person in retirement. Looking forward 50 years, we expect two people of working age to be supporting every one person in retirement. If we want to maintain prosperity and growth in our communities, we need to set ourselves, as we have done, a more ambitious target of bringing more people of working age into the labour markethence our aspiration of an 80 per cent. employment rate for the UK.
We already enjoy an unrivalled record on the management of the economy and participation in the labour market. All hon. Members present will know that we have the highest employment rate among the G8 countries, and the second lowest unemployment rate, and that we have created almost 2.4 million new jobs for Britain since we have been in government. The right to enjoy the opportunity to work is both a modern and a traditional value for a Labour Government. Extending that right to people who were never before supported to move into work is at the heart of the Labour Government's purpose and reason for being. Our traditional values in this instance find clear meaning and vital purpose in a modern setting, with the demographic structure of our society pulling us in that direction. Those are the three main reasons why this issue is an important part of the Government's policy agenda. Although we are proud of what we have achieved so far, we recognise that there is much left for us to do if we are to realise our aspirations.
In 1997, just over 45 per cent. of lone parents worked. In a mere eight years, we have introduced policies that have helped us to increase that to 56.6 per cent. The figures are now higher than they have ever been, which is a tremendous achievement. About 1 million lone parents are now in work. Since 1998, our new deal for lone parents has helped more than 400,000 lone parents to find employment, lifting them and their families out of poverty and ensuring a net saving to the Exchequer of about £40 million a year, on the latest analysis that I have seen. Partly as a result of that intervention, we have been ableagain on the latest figures availableto lift 600,000 children out of poverty on the measurement before housing costs; that is 500,000 after housing costs.
Our success is the result of a range of interventions. Through a number of policies, we have helped to make work pay, overcoming one of the key inhibitors for many lone parents seeking to move from benefit dependency into the world of work. That has happened partly because of the tax credit systems, under which the
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poorest fifth are now more than £3,300 better off than they were before the Labour party came to power. It has also happened because of the minimum wage, which has helped to make work pay, and because of a specific set of interventions in the new deal for lone parents, including job grants, work search premiums, in-work credits and linking housing benefit and mortgage interest benefit entitlements into the lifetime of people in work. So we have made work pay.
We have also made work more possible for lone parents. That is partly because of the £17 billion that we have invested to date in early years education and child care, nearly doubling the number of child care places available. It is also because of our introduction of better parental leave rights, better conditions for part-time workers and parents' right to request flexible working if their children are young.
Kali Mountford (Colne Valley) (Lab): My right hon. Friend rightly points to the financial and other benefits that accrue to families when a lone parent works. However, many of the peoplethey are mostly womenwho take on flexible work patterns and part-time work find that they are under great pressure, without the same financial remuneration as their male counterparts. Can we do more to ensure that there is greater fairness in the system for women who take on such jobs?
Margaret Hodge : My hon. Friend talks about the pressure on women who work part-time and flexible hours, and to some extent I recognise the situation that she describes. However, when many of the employers to whom I talk introduce flexible arrangementsmany of the staff involved are women and also mothersthey find that there is a massive benefit in terms of those people's productivity. Although there may be tensions involved in trying to negotiate such packages, we are rather rapidly reaching a situation in which employers who initially feared the introduction of the right to request flexible working are now welcoming it, because they see the benefits in productivity, staff loyalty and the commitment of those who choose flexible working.
The other issue to which my hon. Friend may have been referring is the difference in part-time and full-time pay, and we have to do much more work on that if we are to ensure fairness and equity between part-time and full-time workers. I entirely accept that.
Mr. Boswell : May I thank the Minister, on behalf of the hon. Member for Colne Valley (Kali Mountford), for that helpful comment? She has summarised the main concerns that we all have. Although she might not necessarily want to comment on this today, she will no doubt have in mind the finding in the case in another place yesterday, which made it clear, and stood on the principle, that part-time workers should be treated exactly the same as full-time workers in all aspects of their remuneration, including pension rights. Although that will not change the world tomorrow, it may well influence the course of the world over the next few years.
Margaret Hodge : I am delighted that the Opposition spokesman supports that progressive move. As
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someone who has campaigned on these issues for more years than I would like to remember, I agree that that finding was very important and welcome.
Mr. Boswell : I thank the Minister. For the avoidance of doubt, I should declare an interest. I have a daughter who is a mother, and works part-time for the civil service, which in this respect is almost an exemplary employer.
I have talked about making work pay and making work possible. I also want to talk about the support that we have provided to help lone parents back into work through our introduction of compulsory work-focused interviews and the new deal for lone parents.
As I said earlier, in the past not a lot happened until a lone parent's youngest child reached the age of 16 and shewe are talking mainly about womenwas suddenly thrown into a world where her entitlement to income support was challenged. In March 2000 we introduced the first compulsory work-focused interviews, and a growing and important body of evidence now demonstrates the positive impact of that intervention on people's lives. I talk endlessly to lone parents who have engaged with a personal adviser in a discourse about opportunities for work, although it could equally have been about other barriers that they face, such as problems in the home, financial problems, lack of confidence or lack of training. The ability to discuss all those issues with a personal adviser opens up opportunities for many women who previously felt that they did not have a proper contribution to make to society. Probably the most warming letters and cards that I receive are those from children of lone parents who have moved into work, saying, "Thank you for making my mum happy." That makes it all feel worth while.
The introduction of work-focused interviews has had a huge impact on many people's lives and has helped to bring parents on to the new deal for lone parents programme. Nearly a fifth of those who attend the compulsory work-focused interviews move on to that programme, and nearly half those who come on to the programme move into employment. Last October we extended the mandatory work-focused interview regime so that once a lone parent's youngest child reaches the age of 14, that parent is expected to have an interview every three months. That regularity of intervention and support is important and allows us more readily to prepare lone parents for moving into employment.
Mr. Laws : The Minister mentioned the improvement in the lone parent employment rate, which has been quite marked. Has the Department carried out any investigation into how much of that improvement is due to measures such as work-focused interviews, and how much is due to the general increase in employment opportunities and other measures? Has there been any attempt to break that down?
Margaret Hodge : We have done research on the impact of such measures, but it is of course difficult to quantify and distinguish clearly the general health of the
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economy and our stewardship of it from the effect of the active labour market policies. My recall is that about half the impact comes from the active labour market policy interventions and half from the general health of the economy and the growth in jobs. I shall write to the hon. Gentleman and give him the references, so that he can examine the research himself.
I have described what we have done through talking to lone parents in mandatory work-focused interviews. The new deal for lone parents was introduced in 1998. More than 600,000 lone parents have taken part and more than 400,000 have moved into work through the programme, which has evolved as we have learned what works. We have piloted an array of measures to respond to needs and priorities as they emerge in the work that we do with lone parents.
Some examples of that are that we now give job grants to lone parents, which may just help them to buy the suit that they need to go to the first interview, if they do not have appropriate clothing at home. We are piloting work search premiums to assist lone parents in looking for work as they prepare themselves for work. We also have the in-work emergency fund, which a lone parent can access if they face a financial difficulty during the first couple of months of work, as well as the in-work credit.
We have developed a much stronger outreach programme, and from my previous ministerial responsibilities for Sure Start, I think that our work with lone parents through that programme has been particularly innovative. Sure Start programmes tend to be located in areas that have a high prevalence of lone parents. It is wonderful to see Sure Start mothers building their confidence, from coming to Sure Start children's centres, meeting other mums and doing a bit of training, to perhaps doing some work in the centre and then out into employment elsewhere in their local communities. I often used to come across people who had started the Sure Start trajectory with no qualifications and very little work experience, but who had moved through even into NVQ level 4 undergraduate programmes and beyond. Sure Start has been an excellent outreach programme.
New deal plus has brought together many of the measures into one integrated programme. They range from discovery events, which help to build confidence and engage lone parents with employers, more concentrated support for child care, emphasising the financial support through the in-work credit scheme, to better personal support, by having a named personal adviser, continuing support with the lone parent after he or she moves in work, and other initiatives, such as our computer access jobpoints, for jobs in places such as children's centres. I saw such a scheme the other day in the Robert Owen children's centre in Greenwich. It appeared to have been really effective, with mums coming into the café, seeing the jobpoints, playing around with them on one day, accessing job opportunities a few weeks later and then moving into work.
Five districts launched the new deal plus in April 2005, in London, Bradford, Leicestershire, and Dudley and Sandwell, and we have just announced that from
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October 2006 we shall further pilot the scheme in Wales and Scotland. With that range of policy levers we are on track to increase the employment rate of lone parents.
Mr. Laws : The Minister mentioned the expansion of the pilots to incentivise lone parents to return to work, but when will those pilots become national? Are they pilots because the Government seek to learn something, or because they do not have enough money to spread the benefits of such an excellent policy throughout the country?
Margaret Hodge : The honest answer is a bit of both. We want to continue learning, and we are dealing with such an innovative cutting-edge area of public policy that we still have to experiment and see what works in breaking down the barriers for lone parents. In addition, we can develop the infrastructure of support for lone parents only as we can afford to do so. However, we have made terrifically rapid progress and the new deal is very cost-efficient as regards entry into work for lone parents, even in comparison with other aspects of the new deal, all of which have produced good results for the economy and the country.
We have set ourselves the target of an employment rate of 70 per cent. for lone parents by 2010. That means increasing the number of lone parents in work by more than 320,000. If are to achieve that objective, we reckon that we would lift a further 200,000 children out of poverty and reduce the number of children living in workless households by up to a further 450,000.
Mr. Boswell : Would the Minister like to confirm that in order to fulfil that target by 2010, it would be necessary for the improvement in the inclusion rate for lone parents as a percentage of the working population to rise above the recent trend line? The Government have to do better, not just as well.
Margaret Hodge : Yes. I was about to say that we need to do more if we are to remain on track. We reckon that if we maintained existing policies and the current suite of interventions, we could probably get a further 200,000 lone parents into the labour market, but to reach 70 per cent. we need to get about 320,000 into work, as I said. We need to go further; hence the Green Paper and the further proposals on which we are consulting.
Finally, what are those proposals? We want to intensify the regime of compulsory work-focused interviews and are suggesting quarterly interviews for all those whose youngest child is 11. We have made a further suggestion, to debate whether 11 is the right age or whether there is a consensus on starting when children are even youngerperhaps seven. That is particularly important, given our commitment through the national child care strategy to introduce extended schools facilities by 2010, and therefore make high-quality child care available to all children throughout the country.
I shall be interested to see the response to the consultation on those issues, but much of the data and research evidence shows that parents make such life
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choices when their children are in transition, so more parents move into work when their children move into primary school. Similarly, more parents choose to go back to work as their children transfer to secondary school. We need to capture those points of transition if we are to be effective in lifting lone parents out of poverty by bringing them into work.
As well as suggesting quarterly interviews from when the youngest child is seven, we want more work-focused interviews in the first year of a claim. Again, that is a theme that runs through the welfare reform Green Paper. We know that the earlier we intervene and give support, the more likely we are to be able to change patterns of behaviour, and build and retain people's confidence, so that they stay in the labour market. We have also suggested that once somebody has been on income support for a year, the frequency of the work-focused interview should be increased from one every year to one every six months.
Finally, we are introducing a new incentive that we also want to pilot with parents whose youngest child is 11. There are still about 150,000 lone parents on income support whose youngest child is 11. Although the labour market participation rate is of course is higher when the children are older, that is still quite a considerable cohort, which we wish to capture to raise those families and children out of poverty.
The incentive will be a work-related activity premium, to which lone parents will be entitled for engaging in activities that bring them closer to work. We are consulting on this issue, and I feel strongly about it. We have suggested that we should pilot the scheme as an entitlement in the pilot areas, and lone parents would have to opt out if they did not want to participate in work-related activities. Rather than an opt-in scheme, which a number of organisations in the field would prefer, I would like to use an opt-out scheme to see whether it has a different impact on lone parent participation in the labour market.
Those ideas are out for consultation. We will listen to what people say in the coming months. We are rightly proud of our record in governmentof the support that we have developed for lone parents and the opportunities that we have given to so many to enjoy the benefits that work can bring to them and their childrenand we want to take our policies one step further. All the measures that we have introduced are aimed at making it easier for lone parents to find and enter work, as well as ensuring that their children are well cared for in a safe and stimulating environment. I strongly believe that our approach is a winning formula that will help us to provide a lasting legacy in lifting children out of poverty and enabling lone parents to realise their potential and fulfil their ambitions.
The Minister has clearly set out some of the issues and challenges that the Government faced in 1997. I shall sketch out my party's view of some of those challenges and draw attention to some of the Government's genuine achievements. However, in case we get too consensual, in view of the small number of Members
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present, I shall go on to consider some of the potential deficiencies in the Government's plans. I hope that the Minister will view that as a constructive part of the debate about the Green Paper[Interruption.]
If I am not being misled by my Conservative colleague, the hon. Member for Daventry (Mr. Boswell), whose pager service is working better than mine, I should like to be the first in the House to welcome my right hon. and learned Friend the Member for North-East Fife, the excellent Sir Ming Campbell, as the new leader of my party. I am pleased to say that he is the one whom I supported.
There are three huge challenges for the Department for Work and Pensions. One of those issuespensions and retirementwe are not talking about today, but the other two big issues are getting as many people as possible back into the labour market, which is in their interests and in those of the taxpayer, and child poverty. This debate touches on both those vital issues.
The Minister was gentle with her Conservative counterpartunusually gentle given the nature of these debatesabout the developments in both those areas in the 1980s and 1990s. I do not go over those developments purely to make the hon. Member for Daventry uncomfortable, but it is worth drawing attention to the enormous social changes that took place in those decades, because they had enormous economic and social consequences. For example, there was an explosion in lone parenthood in the United Kingdom, which was not seen across most of the rest of the developed world. For a while, we were the lone parent capital of most of Europe.
Associated with the explosion in lone parenthood was an almost unprecedented increase in child poverty from something like 14 children in every 100 at the end of the 1970s to a peak of 34 in every 100 at the mid-point of the 1990s. I suspect that that phenomenal social change has had enormous implications for crime rates, education standards, benefit costs and other consequences that fall on the taxpayer. One of the Government's great achievements so far is their attempt to tackle child poverty, albeit with only moderate results so farmoderate in terms of relative poverty, but more impressive in terms of absolute poverty.
The Government have also had some success in getting people back into the labour market. As the Minister indicated, the lone parent employment rate has increased by about 10 per cent. in the past decade or so. That is quite a large increase considering the nature of these things, but I remain sceptical about whether the 70 per cent. target will be easy to deliver.
The Government should take those issues seriously for three reasons, the first of which is that worklessness has a huge impact on the country as a whole. About one in four individuals of working age is not currently in employment, and groups such as lone parents are over-represented among workless households. That means that people in those households often have low incomes and lose contact with many of the social opportunities that people have through work. It also means that they will probably retire on poor incomes. The benefit cost
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alone of lone parenthood is vastabout £4.6 billion a year, which I believe is more than we spend on jobseeker's allowance. That is a significant change from the situation 20 years ago.
At the same time, 27 or 28 per cent. of children are still in relative poverty. The impact of that on opportunities for those children, as well as the situation in which they live, must be phenomenal. Therefore, any sensible Governmentnow or in futureshould do everything possible to increase employment rates for lone parents and the population as a whole, and attempt to tackle and reduce child poverty. Whether it will be possible to reduce child poverty to zero is another matter, as is the question of whether the Government are sensible to set a target of zero for child poverty without setting any equivalent levels for poverty among other individuals.
A legitimate issue for debate, on which we can only touch today, is the fact that the Government have decided to pour a lot of money into areas of the benefit system covering what are seen as worthy and deserving causes, such as children and pensioners, when many people rely on benefits that have been fixed in relation to prices rather than wages for the best part of 20 years. For example, the jobseeker's allowance rate is now about 12 per cent. of average earnings, compared with 21 per cent. in the late 1970s. If that price indexation continues, people such as single parents who rely on the underlying benefits rather than the child-related benefits might find themselves in deep poverty in future.
Kali Mountford : The hon. Gentleman has advanced these arguments before. I recall his previous statements about the parent's shopping bag, and being able to make sure that a certain set of goods can be bought. If I recall correctly, he acknowledged that that could be a costly way of ensuring that a family has enough to eat and sufficient shelter. Has he thought that policy through further and come to some proper costings, so that we can compare his approach with what is happening now?
Mr. Laws : Unless I misunderstand the hon. Lady's point, there are two issues to address. First, what measures of poverty do we usematerial, relative or absolute? Even the Government have acknowledged that none of those is perfect. They are, I believe, running those three targets alongside each other.
The other point that I sought to make is that if some of our social security system is linked to prices and other parts of it are linked to earnings to deal with issues such as child poverty, we might unintentionally end up with some individuals on extremely low incomes. Considering that some lone parents' benefits in relation to their children might be more generous, but that they might have underlying price-linked benefits, we might also find it difficult to meet some of the extremely ambitious child poverty targets that the Government have set.
The Government deserve some credit, not only for making these matters big priorities and allocating a lot of money to them, but for some of the detailed proposals in the new deal and other schemes that seek to help people back into the labour market. However, it is more interesting today to focus on where things are going wrong and what changes may need to be made in the future. That is the purpose of the debate, which comes on the back of the Green Paper.
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My first point was made earlier by the Conservative spokesman. Although the 70 per cent. target looks to be of the right order of magnitude if the Government are to address worklessness, the trends over the past decade make it difficult to imagine that they will hit that target.
The Library has produced a good briefing note for Members, which shows the lone parent employment rate since 1995. That has two interesting aspects. First, that rate was increasing fairly markedly before the Government's arrival in 1997. It is clear, as the Minister generously acknowledged, that part of the improvement must be due to the generally improved state of the economy after the severe recession in the early 1990s. It is not clear from the chart that there was any particular acceleration in the improvement in the lone parent employment rate until 200304. The Minister may claim that there has been some distortion, or that is when her policies kicked in and started to look impressive.
Secondly, about a year ago there seemed to be a pause in the rate of improvement in the lone parent employment rate. The Minister might be able to confirm that those figures are slightly out of date and that there has been an improvement, but the "plateauing off" in the lone parent employment rate would appear to coincide with the flattening off of the labour market as a whole, which has led to some 11 or 12 months of increasing claimant count over the past year. I do not seek to pretend that economies do not sometimes slow down under all Governments, and clearly we have had a long period of sustained increase in output. However, if the labour market continues to be weak and we continue to have such a plateau for several years, it seems almost impossible that we shall reach the Government's ambitious target by 2010.
Mr. Boswell : I had come to rather the same conclusions as the hon. Gentleman, butto muddy the academic waters furtherwill he also note that the turndown in the improvement of the participation of lone parents in employment is also coincident with a reduction in the expenditure on the new deal for lone parents, which is also set out in the Library briefing? That dropped from £95 million to £91 million in the years in question.
Mr. Laws : The hon. Gentleman raises an important point about how the Government will financially support getting people back into employment during what is widely anticipatedcorrectly, I suspectto be a much more difficult spending round next time.
Margaret Hodge : I acknowledge that the economy has been in a flattened period in the past year, but would the hon. Gentleman acknowledge that although there has been a slight rise in claimant count, we have also seen a welcome reduction of those on active benefits, including both lone parents and those on incapacity benefit? That tends to suggest that our labour market interventions over the past few years have been effective in tackling the most disadvantaged in the labour market.
Mr. Laws : It that is accurate, it is encouragingbut I would be interested to hear whether the Minister has
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more up-to-date figures relating to the table, and can clarify what has happened to the lone-parent employment rate since autumn 2004. Has it continued to plateau or is it inclined to increase? Tempted by my success in anticipating the outcome of the Liberal Democrat leadership election, I would wager a bet that the Minister will find it difficult to meet her target of 70 per cent. by 2010. We all have to hope that the labour market will start to improve rather rapidly, rather than continue to pause.
There is clearly a challenge for the Government, and all parties, to consider other measures that may be able to support accelerating the rate at which lone parents get back into employment. It seems statistically to be the case that without acceleration, the target will simply not be met. It seems less likely to be met than the Government's child poverty targets for the same period.
That takes us to Government policy in the area. One of the most complicated and controversial issues is what the benefit rules for lone parents should be. That is always controversial, and in our Library briefing pack we have a headline from The Independent on Sunday from 23 October last year, which reads "Blunkett to crack down on single mothers". The article quotes the Minister as saying:
One of the things that has baffled me when considering the social security system is how far out of line on this matter we appear to be with other countries across the world. I wonder whether the rules are based on a view of the role of women, particularly, in the labour market that is totally out of date and based on Beveridge's conception in the 1940s, after the use of women in the labour market during the second world war, that the natural place for women was at home. Even today, after the Government have supposedly put rights and responsibilities high on their agenda, the presumption in the benefit system is that there is no obligation on a lone parent to work. They can stay on income support until their youngest child is 16.
I was surprised when I first heard the limit. Testing my perception of it on other individuals in Westminster and my constituency, I found that they were almost universally baffled that that was still the rule in the United Kingdom in 2006 under this Government. I have a table that compares us with other countries on whether there is a work test or whether lone parents are expected to be willing to go back into employment, and we seem to be dramatically out of line. Not only are the lone parent employment rates in many other countries far better than ours, but they almost all appear to have a work test for lone parents when children are still at an early age. In fact, the age range for the work test is between one year and seven years. The briefing note says that of the countries in the table that do not already have a work test, only Ireland and the United Kingdom do not plan to introduce one. A number of those who have work tests plan to increase their severity. In some parts of the United States of America, the age threshold for youngsters at which their lone parents are expected to present themselves to go back into the labour market is not 16 years, but 16 weeks. That is an extraordinary comparison with the United Kingdom.
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I am not suggesting that 16 weeks is an age that my party would support; most of my colleagues would notand I am sure that the new compassionate Conservative party would not support a reduction to that level, either. However, we should be having a real debate about whether the benefit system in that area is completely out of line with modern reality, and whether we are sending out a message to lone parents that they should consider it normal to stay out of the labour market for that long. After all, if a lone parent has several children it could mean the person being out of the labour market for two decades. We do not need to be a genius to work out that if a person has been out of the labour market for 20 years, their skills and willingness to return to employment would be eroded dramatically.
The Government said in one of their publications that a large proportion of lone parents who were still out of employment when their children turned 16 years old ended up automatically on incapacity benefit. That is a worrying escalator. That is not to say that some lone parents may not be genuinely unable to work, but we must suspect that some of them have simply fallen out of the labour market altogether and, given the level of jobseeker's allowance, sensibly and rationally looked at other benefits that they could claim.
Will the Minister explain her thinking on that topic? Does she consider that it will be right at some stage for the Government to make re-engaging with the labour market and going back on jobseeker's allowance or into employment, rather than being on income support, compulsory? Does she think that that should be part of the benefit system, rather than encouraging lone parents back to work as the Government have chosen to do, through the work-focused interview route? I am not suggesting for one moment that there will not need to be all types of support to help lone parents back into employment. Perhaps a work-focused interview approach will still be part of the system, but is it sensible to have a benefit system predicated on the basis that anyone who has a child can stay at home until that child is a certain age?
It is difficult to calculate the right age at which a work obligation should be imposed. My initial inclination was that it should at least be when a child goes to secondary school. However, people's expectations have moved on rapidly in recent years, as has the Government's provision of child care. Many of those whom I have spoken to in my constituency would set the threshold far lower than I would. They would put it more in line with the figures in the rest of the developed worldpresumably at the age when children enter primary
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school. The Government should be considering such matters. Parents have a responsibility to provide for their children, and that is difficult to do on benefits. If we are to have a benefit system with support and child care provision, as well as opportunities, incentives and responsibilities, the existing rules seem rather out of date.
I referred earlier to the pilot. How much budgetary support will there be to help lone parents and others back into the labour market? It is difficult to establish whether over the next few years the Government will put in the financial resources necessary to help individuals, many of whom have been out of the labour market for many years, to reconnect with the labour market. Presumably, the Government will want to help through those reforms the many lone parents on incapacity benefit, as well as those on income support.
Given that the Government have piloted some of the schemes, several of which have been successful in giving lone parents economic incentives to return to work, is it not unsatisfactory that they are not made part of a national benefit system? As the Minister candidly admitted, is there not a danger that the Government will do no more than pilot the schemes more extensively, although they know that they are working successfully, because they do not have enough money to deliver them throughout the country?
If so, how will the prioritisation process work? Will pilot schemes be scattered geographically at random? Will the Minister explain how the process works now? Alternatively, will the Government pilot the schemes in areas with the highest number of lone parents and people on incapacity benefit? That would be more logical, although it still would not be consistent with the national benefit system; it might seem a rational approach, although it would not satisfy my constituents. However, when we consider some of the pilot areas, such as those in Surrey, Somerset and elsewhere, it is clear that the Government are not taking such an approach. Perhaps the pilots are supposed to be spread throughout the country to capture different labour market features.
If it is demonstrated eventually that the pilots work, how will we guarantee that everyone will have access to them? Is it fair that a lone parent seeking to go back into employment in one part of the country will not have access to an advantage that a lone parent elsewhere will have? In addition, can the Minister give us a little more information about the roll-out of assistance for people on incapacity benefit who need support to go back into work? She will be aware that there is considerable worry about whether the incapacity benefit reforms will be properly funded, when the Department for Work and Pensions budget is bound to be under great pressure during the next spending review. We know that the next spending review will bring about a much lower overall settlement than the present one.
Mr. Boswell : Does the hon. Gentleman agree, particularly in the context of incapacity reform as well as benefits for lone parents and others, that this is not only a matter of the internal DWP budget, but of ensuring access to all the other support services that may
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be requirednot only child care but housing or educational support, tooto strengthen people's claim and potential to return to the labour market?
Mr. Laws : I agree. The Government deserve some credit for recognising that, in areas such as incapacity benefit, a huge range of services need to be joined together and funded if people with long-term illnesses are to be helped back into the labour market. We all know from Government figures that when someone is on incapacity benefit for a year or more, they are stuck on that benefit for eight years on average, and might need considerable help to get back into the labour market. The funding of incapacity benefit reform and pilots is critical.
Will the Minister clarify the success of the existing employment zones? I understand that some have been extremely successful, and that the Government have allocated some of the funding that might have been spent through Jobcentre Plus to private sector deliverers to encourage them to get people back into the labour market. I have been told that although the zones have been successful, their range has been limited and that there are no clear plans to roll them out further. It would be interesting to receive clarification from the Minister.
Over the past 20 years, there has been an enormous turnaround in the number of people on incapacity benefit compared with the number of people on jobseeker's allowance. The figures have flipped on their head. We are now spending three times as much on incapacity benefit as we are on jobseeker's allowance. One of the reasons might be that, as was said earlier, jobseeker's allowance has been at fixed prices for the past 20 years, so its value has contracted rapidly. It is set at what most people would regard as a low level. The longer term incapacity benefit rates are set higher, and many people might be suspicious that, given the differential between the two, there is a considerable incentive for people to get themselves on incapacity benefit, not jobseeker's allowance.
When the benefits system was established in its relatively modern form by Mr. Beveridge, he was very clear that benefit levels would be set against a measure of how much people needed to live on to stay out of poverty. I believe that I am right in saying that he thought that it would be appropriate to set benefits for people who were out of work because they could not get a job at the same rate as benefits for people who had disabilities and therefore could not get a job. One can imagine that some people who are unemployed because they cannot find a job and others who cannot get employment because they have disabilities might have similar economic needs. Have the Government ruled out having a single rate of benefit for people on incapacity benefit and those on jobseeker's allowance? Presumably, it would need to be set at a higher rate than jobseeker's allowance, but would that not be more rational than the present position, whereby people have a large incentive to get themselves on incapacity benefit rather than on jobseeker's allowance? I appreciate that the transition to such a new benefit would be complex and that there would be understandable concerns about winners and losers, but is there really much logic in the present system? In addition, given the Government's
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concerns about the abuse of incapacity benefit and about people who end up stuck on that benefit because of legitimate illness, would it not be sensible to look at that option?
"The reforms set out in this Green Paper will reduce much of the complexity surrounding existing benefits for those facing health problems and disability. We consider that there may be advantages in moving in the longer term towards a single system of benefits for all people of working age, with appropriate additions for those who have caring responsibilities and those with a long-term illness or disability."
Mr. Laws : I do support the long-term aim, and I certainly think that the Government should be looking into that, but I fear that the long term may be very long term indeed because the Government have only just begun the process of reforming the incapacity benefit system, as announced by the Secretary of State for Work and Pensions a few weeks ago, I think. I am losing sense of time, but I believe that the announcement was made a few weeks ago. I recall asking exactly the same question as I have asked today of the Secretary of State after his statement to the House, and I do not believe that I had a response to it.
It is difficult to understand why the Government are undertaking a major reform of the incapacity benefit system without including that possibility. After all, the Minister cannot possibly think that in the few years immediately following the reform there will be yet another reform of the incapacity benefit system. The transition from the existing system to the new system will be complex. If the Government are attracted to this idea and want to give the impression to people who think that it is a good idea that they think that it might be a good idea, why on earth are they not going ahead with it now? Is the reason simply that they are too nervous about the political consequences given some of the other controversial measures that have been going through the House of Commons recently?
Margaret Hodge : I cannot immediately identify the relevant diagram in the Green Paper, but although I respect the hon. Gentleman's great intellect he should read the section where we address the employment support allowance carefully, because he will see that that allowance is an addition, over and above the basic JSA rate. That appears to me to be a logical reform that carries us along the road in what we both think is the right direction; I say that because I thought he shared our view that it would be sensible over time to have one benefit for people of working age who are not in work, with additions to that benefit depending on the responsibilities of those individuals, such as caring responsibilities, and on whether there are additional costs arising out of ill health or disability. If the hon. Gentleman looks again, he will see that we are taking a logical next step in the movement towards that longer-term reform.
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Mr. Laws : I am mildly cheered, but I am not entirely persuaded that the step is a logical one. The Government's proposals on incapacity benefit reform produce a slightly more logical system and they attempt to deal with some of the undesirable incentives in the existing system, but they do not remotely correspond to the Beveridge principle and they continue the situation in which people on JSA are on one very low rate that has continued to contract rapidly in relation to average earnings over two decades, while other people who could have exactly the same economic needs get a substantial premium even though they are engaging in what is presumably almost exactly the same work-related activity as the people on JSA who are engaged in work-related activity to find jobs. I do not understand how that can possibly be a transition; surely it is a completely different alternative.
Margaret Hodge : I simply pose a question back to the hon. Gentleman, in his role as the Liberal Democrat spokesman. Is my understanding correct that if he held my position he would propose a massive increase in JSA to bring it into line with current levels of incapacity benefit, with additions beyond that for people with ill health and disabilities? If he is proposing such an increase, how would he fund it?
Mr. Laws : I thought we were making progress towards agreeing that we needed a single benefit. Now the Minister is telling me why we have not got a single benefit: she is not willing to increase the rate of JSA and she is not willing to cut incapacity benefit from the rate that the Government envisage. If that is her view, how will we ever have a single rate?
Yes, I would argue that there is a strong case for having a single rate of benefit for people of working age who are not in the labour market, and for the distinction between those on incapacity benefit and those who are not on incapacity benefit being related to the costs of the disability, not to the fact that one set of people are on work-related activity because they have a disability and another set are on work-related activity because they cannot find a job. That may sound like a bogus distinction now, but were we to return to the situation we were in 10 or 20 years ago, when millions of people were unemployed and many towns across the country suffered huge worklessness, the distribution of benefits between two types of household, both of whose members are workless and want jobs, would be irrational. The Government would be sending out a signalas they are now, although we do not know how powerful it isthat people would do better to have themselves classified as unable to work than to be on JSA trying to get work in the labour market. That is not a sensible structure for benefits, and it was not the structure that we started off with in the 1940s.
I see you leaning forward, Mr. Gale, and I will not extend this debate any further in case you get impatient with me, but I must ask the Minister one question. As the Green Paper is considered, will she mull over the issue and tell us what the long term is? I fear that the long term is even further away than the time when child poverty is completely abolished, and that is quite a long way ahead.
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I will raise only one more point, because I have spoken considerably longer than I expectedbuoyed, perhaps, by the good news from down the road. The point relates to any attempts to get single parents or anybody else back into the labour market. There continues to be strong disincentives within the benefit system, the council tax system and the housing benefit system against getting back into the labour market. The Government have been conscious of the issue since 1997 and they have taken some action to reduce the number of people who experience high marginal tax rates when they go back into employment because they lose a lot of their benefits. However, the number of such people who are experiencing marginal tax rates of 60 per cent. or more in the labour market has increased from 760,000 when the Government came to power in 1997 to almost 1.9 million. The spread of means-testing, as the Government increasingly seek to target resources on those on low incomes, has meant that more people are being trapped in this net.
When the Prime Minister debates the structure of the income tax system, he always says that a 50 per cent. upper rate of tax for people with incomes of more than £100,000 a year would have horrific effects, and that those people would immediately stop working or flee aboard. However, a much greater number of people, almost 2 million, face tax rates that are higher than that60 per cent. or 70 per cent.when they go back into the labour market. Whether the Government can do, or try to do, anything to reduce those marginal tax rates is an issue, as is whether they can continue along the route of tackling child poverty by for ever increasing means-tested benefits without increasing the extent of disincentives in the system. Doing so could damage their ability to get others back into the labour market. That is a point on which the Minister could usefully concentrate.
We have had an interesting debate so far; I have acknowledged some of the Government's successes on this subject since 1997, but also pointed out some of the problems ahead. Without tackling those problems, it is unlikely that the target that the Government set themselves will be met.
I want to start if not where the hon. Member for Yeovil (Mr. Laws) left off, then at least on a point that he mulled over: that of Beveridge and people's social attitudes, particularly to women in the labour market. I should like to take the hon. Gentleman back even further to the Marxist analysis of women as the reserve labour force, or the reserve army, as I think Marx called us at one time. That really shows the social attitude that the hon. Gentleman quite rightly identified, whereby women were not necessarily key drivers of the economy, but instead could be picked up and put down at any time, and were not necessarily accepted as the family's main breadwinner.
The hon. Gentleman pointed to a useful graph from the Library and also made a remark about women's employmentor lone-parent employmenthaving
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generally grown with the overall growth in the economy, and with more people being in work. He asked whether there was really any difference. I should like to take him back to the social attitudes that he rightly identified.
One of the problems was always that even if an economy was growing, women did not necessarily get any share of that growth, except when there was real dire need. For example, during times of great crisis when the men were sent away to war, it was suddenly all right for women to go to work. That social attitude had to be tackledand still does, to some extent. The hon. Gentleman is right to point to the fact that women still are not generally accepted as the key earners for their family, even when they are the only adult in the family able to earn that money.
That brings me to the issue of pressures; they are distinctly different for women in the work force and for women who are the only carer for their family. The first issue is that of social attitudes. If a woman declares that she wants to earn for her family, she will still not get unanimous support from everyone around her. It is difficult sometimes, even when we make as many provisions as we reasonably can when the economy is growing and when we can make the investments in infrastructure that are necessary to change those social attitudes. Even when the support systems that can be supplied by a Government, a local authority or any other network are in place, family and friends may tell a mother that her real place is caring for her child. They ask, "What if the child falls down? What if they get ill? What if they need you? What if you are too tired? What if you have not sat them on your knee? What if they leave school and feel deprived?" There is a "what if?" all the time.
Women, I tell the House, are born to guilt, and we bear that guilt daily, particularly when we are mothers. It is very difficult to get around that social attitude, but it can be done. As recently as Monday, I was in the local Sure Start in my constituency. The changes that it has made to local women just amazed me. The hon. Member for Yeovil rightly pointed out how women sometimes feel after only a short time out of the work force. Sometimes, they have never been to work at all; they may have had a child very youngI will pick up on that point laterand may have no confidence in their own ability.
It was tragic to hear one woman say that she felt completely isolated in her home. She did not go out and there was nobody she would trust with her child. She would not leave the child with anybody, not even her sister, for fear that something would happenwhether it was the child's first steps or first word, or the first time that she read somethingwhen she was not there. The mother worried that someone might give the child food that she would not have approved of, or might chastise her in a way that she did not agree with. She had become completely overprotective of the child and withdrew more and more into herself. That is not something that has happened to just one woman; I have met many people who have experienced that sort of thing.
That woman, encouraged by her neighbour, decided to go along to Sure Start and give it a go. She has changed remarkably, and she is not the only one, although her story stood out in my mind because the
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change was so dramatic. The change in the child was dramatic, too, and that is key to why we need women to go to work when they are the only parent. The child changed not just because her mother was starting to change, but because she was mixing with other children. She had been a frightened child because she was isolated at home with her mother, but once she had social contact, she stopped all the screaming and clinginess and started to develop and do the very things that the mother was afraid she would miss out onmake friends, enjoy herself and play.
Encouraged by that experience, the woman thought, "Perhaps I'll take on a little training." The training was provided through Sure Start, and the woman took the first step of her own 10-step road to recovery, as the Americans might call it, if they were here. There is a 10-step programme for everything.
The woman took that next step and took on a little training, but not too much. She was a little overwhelmed at first, but she carried on. She thought, "I can do this. Perhaps I'll do some training that will lead to something more concrete; I'll do a national vocational qualification", and she did. With the help of Sure Start, she had that opportunity. And so it went on, although I shall not go through all 10 steps. Eventually, she started a part-time job, and she describes not only herself, but her child, as transformed. Other women gathered around, saying, "That's exactly what happened to me." It was an absolutely fabulous day. I would tell anyone who can spend a day in a Sure Start to go and do it. It was great to see such happy children and adults.
Key to the whole process is the fact that there is a credit union based inside the Sure Start premises, and health support is available there. All the things needed to give a person the confidence to make a radical change to their life for themselves were put in one place. To me, that is the key building block of the entire process. We cannot assume that we can make the changes that the hon. Member for Yeovil described as desirable unless those building blocks are in place.
The House might say to me, "You've been here a while now. Why haven't you done something about the issue already?" Quite right toowe should always aspire to what is even betterbut let us be realistic about where we started from. We started from an absolute assumption that when a parent was on their own for whatever reasonand there are a variety of reasonsthat parent would stay at home. The hon. Member for Yeovil points to the fact that across Europe there are different attitudes. I do not know the precise list that he had in front of him, but if he looks down it and considers what the rest of society is doing in those countries with a different attitude, and what infrastructure there allowed social attitudes to change, we might see a clearer or more complete picture.
I do not think it reasonable to send people off into the world unless there is something concrete for them to rely on. It is the reliability that parents are looking for. They have to be certain that if they take steps into employment when they are not used to it, the package in place for them is completely reliable.
Mr. Laws : If those measures were in place, what would be the hon. Lady's view of the right age at which the ability to rely on income support should end, and at
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which people should be expected to transfer to jobseeker's allowance or take a work test of some kind? From her experience, what would be the right point in a child's development?
Kali Mountford : According to Helen Bee's book, "The Developing Child", there would never be a right place. I studied that book in the 1980s, when there was a real change in attitude to child development. It could easily be said that a child might be in some sort of care, outside the home, from birth.
There is no reason why, if we make decisions on the basis of the development of a child, there has to be an age element. We have to consider what people prefer for their own families and accept that. Although I chose to work from day one after the birth of both my children, which was my choice and that of many other women, many women have never made that choice and are influenced by other voices saying, "This might be bad for the development of your child."
I do not want to give an age in respect of the development of the child. Instead, I want to look at how families cope at different stagesnot of the child's development, but of the care available for the child that the parent can be confident about. Sure Start is involved in the very early years. Incidentally, I make a plea to the Government, as we need to extend Sure Start to older age groups. Sure Start helps children around the age of five, with some schemes letting children who are a little older through the doorbut we will not say too much about that. If a child is in Sure Start aged five, with a sister and brother aged six and seven, we need to consider how we can move that provision on, because it is so useful to people who want to get into the workplace.
At the ages that we are talking about, there are school places available, so mothers tend to look outside the home for something to do, knowing that the child is in a secure, safe place during the day. We need to consider flexible working, which we were talking about earlier, because work patterns tend to operate around the school day. That almost brings me to the schools Bill, but I will not venture into that too much, Mr, Gale, which I am sure you will be pleased about.
On the issue of caring for a child throughout the day, I attended a seminar by somebody who runs an academy. We will call it a school, rather than an academy, for the ease of my tongue. He opens up at 7 am, so parents can go in, and there is flexible working for the teachers and teaching assistants, so that somebody reliable is there from 7 o'clock in the morning right through to 6.30 in the evening. The school is open to the families all that time, so they have that reliability. We need to consider the reliability of the care of the child, which is the key, rather than whether a child has reached a certain point in their development. There is much evidence suggesting that a child's development accelerates when they are in the company of other children. It is useful for children to have that social interaction and organised play as a means of learning.
The attitude that working mothers are doing a disservice to their children by not staying at home is starting to change, but it can do so only through experience and through people knowing that, once a system has been put in place, they can rely on it as
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genuinely safe and something that will not be taken away from them. The idea that parents go into Sure Start with their child and develop that understanding has been key to them changing their role and going out to work.
I want to see more people taking up the opportunity of working because of all the things that the hon. Member for Yeovil said about what happens then economically to the family and also throughout their lives. Presenting a role model to the child is so important. So many children used to be brought up in households where no adult had ever worked. That was particularly true when certain industries, particularly coal and steel, were collapsing in areas around Yorkshire. It was the natural pattern, for generations, for some families not to work at all. The growing number of lone-parent families also became a pattern, which was regrettable. However, the answer is not to wag the finger at those families and say, "You bad person, get yourself sorted out." Our duty must be to the children in those families and to get the families economically viable, so they can have the kind of life that they need. We know that if we do not do that, the health of the children and the parent will be affected, and all of us in the long term will pay a heavy price, because of either their ongoing behaviour or the cost to us as a nation of their ill health.
It is sensible to ensure that people go to work. Instead of looking at the moral imperativeit is a strong, good idea for lone parents to work and we should deal with the social attitudes mentioned by the hon. Member for Yeovilwe should consider the strong economic imperative for us to ensure that this happens, even if it means switching the balance a little, so that the work force, who used mainly to be made up of male earners in two-parent families, include all peoplemen and women, and one and two-parent families alike. We should not say, "These people can be left out of the system."
There are two benefits from doing more to encourage people into the system: the moral and the economic. To get to the position that the hon. Member for Yeovil was talking about, there has to be a great deal of investment in the infrastructures that I am talking about, which means extending not just the Sure Start scheme, early breakfast clubs and after-school clubs, but child care generally. It is pleasing to see the number of child care places increasing, but some mothers want a different system, partly because they have not yet had the opportunity of a Sure Start scheme in their area. Such schemes are not yet universal. We need to consider more closely the reliability and credibility of such schemes, and people's sureness of the safety of their child in the hands of somebody they approve of.
Some local authorities put a great deal of time, care and energy into these issues, and child minders are an essential part of the infrastructure that we need to have in place so that lone parents can take up opportunities. For example, a woman who phoned me recently was concerned that she had been invited for an interview and wondered what that meant for her. The first thing she thought was how, if she was made to take a jobshe had not yet understood that nobody was going to make her do anythingshe would know that her son would be cared for after school. The traditional "what if?" came in straight away. She wondered what would happen if the hours were too late, or she did not like the job.
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I had to persuade that person to go to the interview and not worry about the "what ifs?", because there was no question of her being made to do a job until 6 pm, meaning her son would return to an empty house; her being unable to find a child minder in her streetshe would not want him to go any further from home than thatand the local authority not being able to get child minders fast enough because they have to be checked out. I said, "Never mind the 'what ifs?'; just go and find out."
That woman did find out. She was told about what the benefits could be of going into work, which is another essential part of this process. By talking to her about those potential benefitsas the hon. Member for Yeovil said, some people are concerned that they might lose their housing and council tax benefitsa calculation could be made to show that, at a certain earnings point and taking into account various amounts of tax credit and a sum of money to pay for a child care place, she would be better off. Such analysis might make a difference for her.
That process has made us see that there is another possibility, although that woman is still concerned that the system might not be robust and that she might try a job but later realise that her son, as she predicted, was not doing his homework and starting to fail in school because she had been, as she would see it, guilty of neglecting him, which is her concern. She might retreat to the home if she thinks that the safest and best thing for her child.
These are the real issues that parents are challenged with and try to make decisions about. They need support in making those decisions. The conversation that the woman I have mentioned had with the adviser at the jobcentre was good, and, as far as I could see, she was not forced into anything at all. All the adviser did was open up the possibilities that might be available to her. I met both those women in the same week, and I almost felt that I wanted to introduce them to each other and say, "Look what it can be like."
We need to do much more to tell people about what things can be like. We are combating a huge set of social attitudes that, it is fair to say, have not caught up with the modern world. Sometimes I am surprised that people can watch certain television programmessometimes soap operasand see all the ideas from around the world, yet still believe that everybody in their street is going to point and wag a finger at them. However, they believe that because it often happens.
I went to a community centre in my constituency where women gather together, usually while the children are at school, and share information. The idea is that they should gain knowledge, but they also share information. Unfortunately, some of it is incorrect. I often find myself having to debunk the myths about what would happen if they got a job. One myth might beit is absolutely true, because Elsie said sothat the women would not get the money that everybody said they would, and that if they ever claimed benefits again after they got a job, they would have to wait for months. Some believe that they would have to wait six months,
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or even longer, because their benefits would have been stopped. We are battling against those myths all the time when people make those decisions.
Mr. Laws : The hon. Lady has raised extremely important issues about people's concerns as they move from benefit into work. Does she agree that there are sometimes significant transitional problems for some individuals? Without making too cheap a party political point, I should say that the recent problems at Jobcentre Plus offices and with the benefit delivery system are creating and underpinning some of those fears. Sometimes those matters of concern are matters of fact.
Kali Mountford : It is true that they are matters of concern, although I have not really understood the hon. Gentleman's point about changes at Jobcentre Plus. Perhaps he will enlighten me. Was he talking about the introduction of interviews or structural change at Jobcentre Plus? [Interruption.] I shall assume that he means the changes in respect of interviews. I do not think that such concerns are always borne out. They might be genuine in so far as people think they will lose out, but, given that an in-work benefit analysis can be done reasonably accurately, any fears that somebody taking a particular job will end up worse off can be ameliorated. If it turns out that they will be worse off in a particular job, they have the opportunity to take some other job that does not lead to that disbenefit.
If, for example, somebody's family finances have become totally reliant on making sure that the tax credits and everything else are in place, there is no reason for them to be concerned that those benefits will be taken away unreasonably because the in-work benefit analysis can be done before any job is taken up. That is the safeguard.
The problem is the fear that we do not really mean all that, that the analysis will show that the person will not be better off working in a particular job, and that if they turn that job down, they will lose out on benefits. The Minister will correct me if I am wrong, but I believe that that is not the case. The requirement is to look only at what is available and what opportunities are out thereand, perhaps, what training is available.
Training is another point that arises from the speech of the hon. Member for Yeovil. A key barrier to work is the fact that somebody who has been out of work for a time might have lost skills. It is important, especially when somebody has lost confidence, that we build up skills to an appropriate level at a speed that people can cope with. I hope that the Government will consider carefully the speed people can cope with, because some do not become job-ready as quickly as others. There are all sorts of different problems to cope with.
Sometimes we make it sound so easy to be a parent, and also a working parent, but being a parent is extraordinarily difficult, especially when someone dealing with a crying, demanding or needy child is told that she also has to go to workand, by the way, get some skills. When I talk about pressures on mothers, those are the pressures I think of, and they are real and significant. Although those problems can be overcome, and people can become a great deal better off by overcoming them, the worry over facing them is very
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real to people, who must be able to move at a speed that is okay for them. Otherwise, they will feel completely overwhelmed, especially if they find, as they have a cup of coffee in the community centre, that many local employers are not as generous as the superlative employers that we all hope they could be.
Some employers offer flexible working patterns and part-time work at an appropriate rate, and they are to be applauded for that. My right hon. Friend the Minister was right in saying that such employers get in return a properly trained, loyal work force and that everybody benefits from that. Unfortunately, some employers have not yet caught on, and there is work to be done in helping them see the error of their ways.
I hear many stories about women, often in caring professions, who work very long hourssometimes more than their allotted hours. They do not get proper remuneration for that overtimethey feel deeply about the clients they care forand their employers use the guilt trip to put upon them and get them to do jobs later in the day than they should without pay. That is appalling.
There is often not enough support for people to get access even to the minimum wage. I hear awful stories about women who accept a lower than minimum wage, often due to jiggery pokery around bonuses through which employers try to get out of paying the proper rate for the job. Although trade unions do a marvellous job of representing their members, they are traditionally not present in the smaller workplace, where women do not feel that they can access the advice that they need to ensure that they get the pay they need. That means a knock-on effect on their tax credits and that overall family income is not what it should be.
Those situations result from people playing around with the rules, which are there to protect people, and the issue is what we do when the rules are broken. It is easy for me to say to such ladies, as I often do, "Look, you will get this, that and the other and it will all add up. You will get your wages; you can get this tax credit, and then another to help with your child carethe whole package together. You will be well supported economically."
These women have never had the confidence to take a job, so if they know that there are local employers that break the rules and that the pay is not what it is said to be, it is a big step for them to challenge those employers about the appropriate rate for the job. We might need to re-examine that area again, although we should not go so far as to say that the idea of the minimum wage is wrong. We need to ensure that appropriate support exists for people who want to challenge the remuneration for their job.
In addition, a great deal more can be done to help people move on from a base-level job into something better. That can work only if a point of entry to the workplace is just that, not the only place in which a lone parent stays in work. There must be an avenue for people to move on, otherwise what the hon. Member for Yeovil was saying about pensions will become a problem. Obviously, if a person's working life was limited because time is taken out to care for children, older parents or other family members, and we had already limited the number of years available in which
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to accrue a pension, restricting things yet further because income was artificially kept down would be another injustice.
That would also not achieve what we want: to demonstrate to the children in the family that working pays and makes people better offnot just financially, but in themselves. People get something for working, not just the friendships that everyone else has talked about, which build people up as individuals and give them a reason to get out of bed every morning. Working gives a structure to the day, which is psychologically important. People need to know that it is right, fair and proper, otherwise the message is wrong.
I am not saying that this is a universal problem, but I doubt whether any constituency does not have at least one employer that does not play by the rules properly. I have battles from time to time with some employers in my constituency whoI will be careful with my words since this is on the recordsometimes play fast and loose with the employment of women. I deplore that and I hope that they will step away from that kind of activity. We need to be able to examine these matters and ensure that people have adequate support if they feel that they are not being properly treated.
I would like to concludeperhaps hon. Members will be delighted to know thatby saying that I have concerns relating to ensuring that what is available for lone parents as they move into work is robust and secure. We need to give them the support that they need for their working lives to grow. I am delighted that we have started down a path that challenges the social attitudes that make the assumption that parentsespecially lone parentsstay at home.
We need to tackle one more social attitude, which is that of young girls who think that one way of having an identity is to become a lone parent very early in life. I make no assumption about young women who have babies when they are teenagers. However, some make the choice to do so because it seems a logical one. They think that to be a mother gives them an identity and allows them to feel that they play a part in society. As some have found it difficult to achieve in school, and perhaps because that is the pattern for the family, deciding to have a child seems an appropriate thing to do. That attitude is less common than it used to be, but I still encounter it.
A couple of schools in my constituency have achieved quite a lot through the healthy schools programme. The touchy subject of sexual activity and all that goes with it is often discussed. There remains a great deal to do to raise people's expectations when they are young: perhaps having a child so early in life is not an appropriate choice, and if they made different choices they could have their children inside a happy home where everybody had an opportunity to do well for themselves.
We know what a dreadful effect having children early in life can have on young womenwe might be talking about not just the effect on women. It is difficult for them to succeed in their lives and to bring up their children in the way that we would hope. I am not assuming anything about any of those mothers, because I know that they try extremely hard. If there was a little more support for sexually active young people, perhaps we might avoid some of them becoming lone parents in the first place.
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We might be able to give them the opportunity to wait to make decisions at a more appropriate time in their lives. Having done that, I hope that the Government ensure that all those parents who find themselves alone, for whatever reason, are appropriately supported in their efforts to bring up their families, so that they and their children can all do well.
Mr. Tim Boswell (Daventry) (Con): I genuinely welcome this opportunity to discuss these serious issues in a relatively calm, objective and non-partisan format. I think that on the whole so farI cannot speak about myselfwe have done the House credit in having done so.
I pay tribute to the Minister for the way in which she introduced the debate, for some of the Government policies that she is bringing forward and for the insight into future policies that she gave. Like some other Ministers, she has a tendency to regard 1997 as year zero and not always to give credit for social advances that may have taken place before then or, as the hon. Member for Yeovil (Mr. Laws) pointed out, for trends towards the greater participation of lone parents in the labour force that were grounded in actions that were taken earlier. On this occasion, however, we will excuse her and treat the debate and these serious issues on their merits.
The hon. Member for Yeovil did exactly that, very commendably in view of the fact that he might well have been distracted by other events. I hope that he will not regard it as in any way sinister if I borrow a phrase from our last election campaign: he might well have been thinking some of the things that we were thinking about some of the defects in the present position and about how we should proceed. There is a good deal of understanding, not least of how complex these issues are.
My good friend the hon. Member for Colne Valley (Kali Mountford) spoke eloquently about the huge opportunities for women and the way in which they can be empowered by going out to work and doing things that they might never have thought of being able to do in the past, but equally about the big cultural and sometimes practical constraints that need to be overcome for that to happen. I thought she put a healthy human face on the debatenot that other participants have not done so. I look forward to the Minister's response to her hon. Friend's remarks.
I want to state as clearly as I can that my party and I recognise the difficulties faced by most, if not almost all, lone parents and indeed, by parents generally. The difficulties are magnified considerably for any lone parent. Their situation is complex and there is a variety of lone parents. We tend to forget, possibly because it is now 60 years since the end of world war two, that lone parents include a significant number of widows and widowers with young childrenone was in correspondence with me the other daypeople who were once married or in a firm relationship and are now separated or divorced, and many parents who have never married. As the hon. Member for Colne Valley said, their motives and circumstances might be very different.
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All these things together add up to there being 1.8 million lone parents in Great Britain. We should not forget that slightly less than 10 per cent. of them are lone fathers, who also have to cope with the situation and perhaps with the expectation that they should be at work as well. Despite the advances that the Minister has recordedthe Government are entitled to some credit for some of their programmeswe can always argue about the contribution made by the general buoyancy in the labour market and about how much has been done by specific active labour market policies and whether they are the right ones or not. Whatever the mix, things have got better. However, we must remind ourselves that nearly half of the 1.8 million lone parents are still on income supportthe figure is a little less than that, at about 800,000, but that is still a large number.
All lone parents face a tough time, but they have strong aspirations, which we should recognise. Almost all of them want to do the very best for their children and for their family unit, as well as for themselves. There is not and never should be a war on lone parents. We must pay them the tribute of understanding their position and the barriers that they face, whether psychological or practical or some other form of obstacle. When we understand some of the issues that have been developed in this debate, we can give them practical help.
The debate is entitled "Lone Parent Employment" so I do not want to confine myself narrowly to what I refer to in shorthand as "new deal issues"the specific programmes of the Department for Work and Pensionsat the expense of the wider context. First, I shall say something about an issue that has already featured in the debate. We should acknowledge that the employment rate for lone mothers has now reached 56.6 per cent. I am glad that it has gone up, but the reasons for that are complex: they include economic buoyancy as well as specific interventions. I am not sure that anyone has done an entirely convincing regression analysis that reveals exactly how the numbers pan out. Incidentally, picking up on a point made by the hon. Member for Yeovilthe Minister may have noticed this toothe Secretary of State claimed on, I believe, 22 November that there was a 50:50 split between active labour market interventions and the state of the labour market, so the right hon. Lady got it spot on today. At least she is on message.
Whatever the cause, the employment rate among lone mothers has increased. It is significantly below the employment rate among mothers with partnersthat is 72 per cent. The Government's target of 70 per cent. for participation of lone parents is below the current figure for mothers with partners. The Minister explicitly acknowledged today that it will be extremely difficult to hit the target. There are only four years to go, and a progression of some 3 to 4 per cent. a year would be required, which would be unprecedented in terms of the trend that has developed since about 1992.
We must remember that many mothers go out to work, or return to work, without any involvement with income support, the benefit system, Jobcentre Plus or any other labour market intervention. Indeed, my daughter is one of themfor the avoidance of doubt, I should say that she is married. They make their own way; of course, they may have difficulties because of their family circumstances, but they carve out their own destiny. Equally, others will avail themselves of the
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strong right, which, as the hon. Member for Yeovil said, is somewhat unprecedented in other countries, to stay at home with their children.
We must consider the exact balance between pressure and incentive. We must remember that some parents, even parents of secondary age school children, may have good reasons for staying at home. They may not be organised as or defined as carers, but they may be responsible for caring for another member of the family. There may be particular circumstances, and we should not rush to judgment. As the hon. Gentleman said, we have a benefit system and we must think about the balance that must be drawn between sanctions that disapply benefits and the individual's circumstancescertainly if ruinous cost is to be avoided.
Mr. Laws : Can I tempt the hon. Gentleman to indicate his party's view on one point? The age of the youngest child is the basis for parents continuing to claim income support. Do the Conservatives think that the present age limit should be reduced? It was not reduced over a long period of Conservative Government, so a decision must have been taken not to do that. Does he believe that now is the time to reduce the age limit?
Mr. Boswell : The hon. Gentleman is seductive. He tempts me, but I shall follow only to the extent of saying that age is a relevant consideration that should at least be re-examined. It is for anyone to make a principled case for keeping the limit as it is. One of the dangers of adopting any rigid policy is that there may have to be exceptions for some cases. We should all reflect on that. It is easy to produce a new formula and say that the limit will be the beginning of secondary school or primary school, but then fall flat on our face when somebody comes along with a perfectly sensible set of family circumstances that preclude following that formula.
It has always been difficult to disentangle cause and effect. As I said, the present Government are past masters of attributing improvement in the participation of lone parents in the labour market to the new deal programme, yet we know that there was a sort of deadweight, in that unemployment was falling anyway because of wider economic factors. The relevance of that to the present circumstances has been touched on in the debate: the Government must be concernedI certainly amabout the growth in the unemployment claimant count in the past 12 months, particularly the sharp rise in youth unemployment, which, for the purpose of our debate, is extremely relevant.
Such a rise could have two malign effects: the direct effect could be to drive up demand for marginal employees; and, in terms of labour market action, the effect could be to put further strain on the Government's employment services at a time when the Department has to hold back resources to support continuing problems at the Child Support Agency. The Department also has to deal with the Jobcentre Plus customer relationship management problems, which have been mentioned, and fulfil Gershon efficiency and head count targets.
All of that could mean that some of the extra public activities that are foreshadowed in the welfare reform Green Paper and which the Minister spoke about today
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could amount to mere pie in the sky. Even if they did come to fruition, any benefits that they offer could be negated by problems in the labour market. It is no good introducing people to the labour market if the labour market is shrinking and is no longer prepared to absorb them.
Margaret Hodge : In his analysis of the labour market, will the hon. Gentleman acknowledge that nearly 2.4 million new jobs have been created since year zero1997and that even in the past year, which I believe we all accept has been a more difficult year for the economy and the labour market, 300,000 new jobs have been created in Britain? If he looks at the most recent labour market statistics, he will see that the claimant count has started to decline for the first time in 11 months.
Mr. Boswell : I am happy to respond to that. The buzz that I put around my colleagues in the Conservative research department was that if we had sacked everyone in sight, we would just about have turned those figuresthe decrease in the claimant count was that small. However, it is no part of my purpose today to belittle the Government's efforts, although I cannot call it the Government's creation of jobs, because they do not create jobs except through their own spending. Of course I welcome the fact that more people are in employment, but that is not directly attributable to the Government. It is subject to qualifications such as, for example, whether people are in full-time or part-time employment. I do not seek to make qualitative distinctions, only to say that people are not working as long. One can split up the activities in different ways. However, I persist in saying to the Minister that we are worried about whether the buoyancy that has characterised previous years will continue and about her Department's ability to secure the budget that will enable it to carry on intervening to meet those challenges.
I now turn to the new deal for lone parents as it has operated to date and how it might progress. From the outset, our criticism of the schemes taken together and branded as the new deal centres not on their motivationalthough that might be mixed in some respectsbut on whether or not they have worked: their effectiveness. We are happy to embrace what we described in our recent election manifesto as
and we are happy to adopt active labour market policies. The House may recall our "work first" proposals, which drew on the experience of the Government's own employment zones and working neighbourhoods. I recall making a particularly constructive visit to Birmingham in the months leading up to the election. The schemes I saw there seemed to have worked rather better than the flagship policy of the new deal itself.
Our "work first" proposals were based on what we regarded as cardinal principles: first, greater private and voluntary sector involvement, run on contract, with payment by results rather than for participation; secondly, greater flexibility for assistance tailored to the needs of the individual; and thirdly, a emphasis on jobs that last rather than the Government's revolving door into work, on to unemployment, back on to the programme and then round the houses again, which is
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slightly characteristic of the new deal. It is a small wonder, and the cardinal weakness of the new deal, that the targetshow new Labour loves targetsnever measure or track employment sustained after 26 weeks, although we do know that even on the more simple issue of entry to employment at zero weeks after the programme only 55 per cent. of lone parents leave for employment in the first instance.
Margaret Hodge : I am astounded by that remark because I think that that figure is jolly good. If the hon. Gentleman were to examine labour market interventions throughout the world, he would find that it is necessary to work pretty hard and make comprehensive interventions to secure the sort of result where half the people who get involved in the programme succeed in moving to employment. Of course we want that employment to be sustained, and we want to do better in that regard, but the hon. Gentleman ought to have the grace to accept that that sort of success rate for labour market intervention should be welcomed in this nation. It is certainly welcomed internationally.
Mr. Boswell : I am not trying to belittle anything that the Government have done. What I am saying is that the coverage is not complete. My substantive point, which the Minister should reflect on, is that it is very difficult to log whether people are staying in employment beyond 26 weeks. In effect, it is almost as though the attitude is, "The target has been met; we move on the next target."
There is absolutely no doubt that activity is taking place under the new deal programmes. The question has always been whether it is devised to best effect. At least in the area of lone parents, and having regard to the sensitivities mentioned earlier, which we all understand, I acknowledge that the programme is more or less voluntary. The only element of stick as opposed to carrot, if I can put it like that, is the requirement to attend a work-focused interview if the applicant is receiving income support. Since October last year, that process is refreshed after six months, with those who have older children required to report in quarterly. The Minister touched on further proposals in relation to the welfare reform Green Paper.
I calculate that the number of initial or review meetings now taking place must be approaching a million a year. I would be grateful if the Minister told us the average cost of each interview and perhaps the time involved, too. Will she also let us know more about the profile of the work load? Is it true, as I have heard anecdotally, that the word has gone out that halls are to be hired and "conveyor belt" interviews conducted before the end of the financial year in order to meet targets for participation? Is there a backlog that has to be cleared?
It would also be helpful if the Minister gave us further and current details of the one element of the programme that involves a degree of coercionthe sanctions for non-attendance at interview. According to the latest figures that I have, about 100,000 lone parents must have suffered at least one partial deferral of benefit. Is that problem going away, or is it likely to increase when we move to more than one interview a year? It was
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suggested that the change is an attempt to winkle out the people who were, for whatever reason, really determined not to go back to work without very good reason, and there is an idea that they might need to be seen more often than that. It is going to be quite difficult to get them to attend quarterly.
I give the Minister a slight warning: I hope that slippages in the timetable for interview, or other means such as letting people off without good causeof course, they should be let off for good causeare not used as a device to massage the figures to make them look better. I would like the Minister to unpick that area. I am not saying that there should not be sanctions or interviewsfar from itbut it is important that they are carried out genuinely and in the way described by the hon. Member for Colne Valley: supportively, helpfully and with a reasonable allocation of time. They should not be used just as a bureaucratic procedure related to arbitrary targets.
As the Minister will have picked up from our exchanges, I am not surprisedbut not gratified eitherto be told by the Department's annual report that if one examines the total expenditure on the new deal for lone parents, which now approaches £100 million a year, two thirds go on administration and less than a third is spent on programmes.
Margaret Hodge : Hidden behind those figures are all the lone parent personal advisers, who are counted as part of the administration. The service that they provide is a direct service to lone parentsperhaps the most important element of our service because it helps in relation to the issues raised by my hon. Friend the Member for Colne Valley (Kali Mountford). People are able to sit down and talk through all their problems and barriers with an individual who is entirely focused on their needs. I hope that the hon. Gentleman is not trying distort the statistics and that he recognises that those are direct costs of direct services that assist lone parents.
Mr. Boswell : I have not the slightest wish to distort because it is important that we have a better understanding of the process. I quote only from figures provided by the Library briefing on expenditure on the new deal for lone people, which are divided into administrative and programme expenditure and relate to a source in the departmental report. What our exchanges lead on to is the suggestion that it would be to the public benefit to know more about the matter. I understand that advisers have to be in place; they have to conduct interviews and devote time to that. They also have their "piggy bank", if I may put it that way: the £100 discretionary allowance. I notice that most of those allowances are spent in full, but I welcome that sort of flexibility in the system. I am not suggesting that any of this process should be cheap, but I want to get every pound that we can into the front line of delivery while spending the minimum amount on bureaucracy. I give the Minister credit for sharing that objective.
The Minister knows that I approach life as an optimist. I genuinely do not want to end on a wholly negative note. There are elements of the current arrangements that could be of some future use. In particular, I agree that the problems and situations faced by lone parents are likely to be complex, so whatever the actual programme and whatever its
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branding and design at any one time, those problems will require complex and usually holistic solutions, and not just a one-shot solution. It would be interesting to learn more about not only the Minister's experience of the old pilots from autumn 2004, but the range of the new pilots' design, particularly in relation to the welfare reform Green Paper. If she could say a little about what has happened with child care and the job grant from autumn 2004, that would be helpful. I hope that they have been successful.
In relation to pilots in general, I hope that the Government drop their habit of making decisions first and running the pilots in parallel, and properly evaluate what works and what is cost effective. I hope that with the health warnings that the hon. Member for Yeovil has already given, they carry on that new approach into the new pilots that were foreshadowed in the Green Paper. We must be sure that the resources are available and, if the approach is to be a success, that they can be rolled out.
In particular, I hope that future developments within the Minister's briefwhile it continuesalso take on board the lessons of the more explicitly work-oriented programmes in the United States. The work emphasis of those programmes has always been strong. whereas ours is person-oriented. It is a question of bringing the two together rather than excluding one or the other.
We would all do well to remember the importance of employers in the process. In discussing some Conservative concepts drawn from the approach that we developed and labelled "work first", I wanted to emphasise the greater flexibility and smaller bureaucracy of the private sector approach to preparing people for job readiness. That need not shock the Minister, because she knows that the right hon. Member for Kingston upon Hull, West and Hessle (Alan Johnson), the last Secretary of State for Work and Pensions but two, used to emphasise how much of the Department's labour policy work was already outsourced. I think that in correspondence with my colleagues he said that 30 per cent. was outsourced. The wider role of the private sector as the provider of real and sustainable jobs for lone parents and others wanting to return to work is crucial.
By offering people the prospect of a job, private employers could play an invaluable role in pulling people through into employment. People come from different types of social exclusionas lone parents, or after a long period of exclusion in prison, for example. They may need a period of intensive support or mentoring before they can take their first step in the labour market, and they might better do so with the protection of a job offer. It will motivate them to carry through that process. We want those people to take their first step in the labour market. That is where we should all like them to be, but between us there are differences of emphasis about how that should be achieved.
Finally, we must offer lone parents opportunity rather than any suggestion of coercion. There must be rules, but they should be seen as reasonable and sustainable, and not designed to penalise lone parents. We must offer them help rather than cynicism or bureaucracy. As a Conservative, I believe in trusting people and sharing responsibility. I want all our citizens to have a chance to find for themselves economic independence and job satisfaction, and in so doing to
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make their full contribution to our society. The Opposition are not after quick fixes or silly targets, and we shall welcome anything well founded that the Government do now for the long term. We all ought to be focused on something built to last. It is a phrase that will resonate on Conservative lips, and of which the nation may hear quite a bit, in the months to come.
Margaret Hodge : I shall try to respond to the key issues that have been raised in the debate, but I start by saying that I do not think that we could have had a debate of this nature eight or nine years ago. I want to retain the atmosphere that we have enjoyed this afternoon. The hon. Member for Daventry (Mr. Boswell) has said that he does not want to wage a war on lone parents, and I really welcome that. I remember with horror how the right hon. Member for Hitchin and Harpenden (Mr. Lilley), when he was Secretary of State for Social Security, did just that at a Conservative party conference sometime in the 1980s.
I tend to think of 1997 as year zero in some respects, because as somebody who has worked in public life for more than 30 years, what I found most difficult when I entered Parliament and most challenging when I became a Minister was the legacy of child poverty that we inherited. The divisions that were created during the preceding 20 years, leading to one in three of our children growing up in relative or absolute poverty, were outrageously awful. Many of them were the result from the war that was waged on the poorest, among whom I include lone parents. In that context, I am delighted by the change of atmosphere and the approach that the hon. Member for Daventry reflects as a spokesman for the Conservative party.
I am delighted also that there is a consensus about the complexity of the issues with which we are dealing. There appears to be a consensus of ambition: that trying to help lone parents and their children out of poverty by creating opportunities for work through active labour market policies is a legitimate role for the Government, and one that we should try to pursue.
Mr. Boswell : To emphasise the positive, or areas on which we might agree, rather than re-fight the past, this debate is essentially about establishing a good business case for lone parent employment, and not only in terms of lone parents themselves, their aspirations, finances and opportunities, but in terms of the wider economy. We live in a world where even if there are short-term labour difficulties, there may be an increasing demand for skills. If we are not prepared to recruit those people, we will all be losers in the wider economy.
Margaret Hodge : I accept that entirely, but I would go further: there is not only a business case, but a social exclusion case. The reason we have focused our energy on those who have traditionally been most disadvantaged in and ignored by the labour market is that, although we want to promote the economic prosperity that comes from using the skills and attributes of all in our society, we want to promote social inclusion, too, by bringing people into work.
It is important to deal with the key issues. All my discussions with labour market economistsI cannot believe that Opposition Members do not also engage in
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such discussionslead me to retain my optimism and confidence that we have in place the basic structures that will ensure that as we develop our active labour market policies for the most disadvantaged in the communities, plenty of good-quality jobs will be available to them.
The overall employment rate in Great Britain increased from 74.6 per cent. in 2003, to 74.7 per cent. in 2004; in 2005, which was a flat year, it went down 0.1 per cent. to 74.6 per cent. again. However, lone parent employment rates continued to increase throughout those years: in 2003, the rate was 53.1 per cent., rising to 54.3 per cent. in 2004, and in our latest figures from spring 2005, which appear to be more up to date than the Library's, the rate was 56.6 per cent. Even with the flattening of the overall labour market, through our interventions we have been able to obtain some improvement in lone parent participation.
I have identified the source of the research that my right hon. Friend the Secretary of State and I used to produce the figures. It is by Paul Gregg and Susan Harkness and it covers employment changes from 1992 to 2002. It is as a result of that research that we come to the assertion that half the employment rate increase is due to Government policies, the majority of which were implemented after 1997.
I accept that our target of reaching a 70 per cent. participation rate by lone parents by 2010 is ambitious. One of the joys of government is setting oneself stretching, ambitious objectives. The difficulty of government is trying to achieve them, but if we had set less ambitious objectives, no doubt this debate would have been about how unambitious and constrained our policies were. I am confident that we will reach that rate, but I accept that we need to introduce more policy changes. That is precisely why we have the propositions in the Green Paper, and we called for the debate this afternoon so that they could be discussed.
The hon. Member for Yeovil (Mr. Laws) raised the interesting question of compulsion. I put much of our success down to the fact that we have moved along in a gradual way on a voluntary basis. We have engaged lone parents. The only element of compulsion is that they should attend a lone parent interview; we have not put any further compulsion on them. That is one reason why we have been so successful at lifting the lone parent participation rate by more than 11 per cent.
Mr. Boswell : Does the Minister agree that there is great value in trust and that if there is any suggestion that the programme is derogatory, nasty or unduly coercive, at that point trust goes out of the window and many of the other benefits will be lost?
Margaret Hodge : That tends to be my view. I have looked a little at the experience in America, where the system involves much more compulsion, and at the impact of that. As in the rest of the welfare reform Green Paper, our purpose is not to cut the benefits bill, much as we would like to use our resources more creatively and positively to invest in services such as education and health. Our purpose is to tackle child poverty and to provide opportunitiesin this instance, for many lone
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parents locked into benefit dependence, who experience all the fears that were so brilliantly expressed by my hon. Friend the Member for Colne Valley (Kali Mountford).
Mr. Laws : Does the Minister therefore rule out a change in the age limit in relation to which lone parents can continue to receive income support without having to pass a work test? If she does, can she say why, because that is inconsistent with experience across most of the rest of the developed world and with the Government's application of the sanction regime in respect of jobseeker's allowance?
Margaret Hodge : I was going to develop that thought. The evidence from America, where there is much more compulsion through the work test, is that lone parents and their children get locked into a downward spirala cycle of deprivation. The women tend to go, because they are forced to do so, into very low-paid jobs, and their children tend to go into very poor-quality child care. The women tend to be in the revolving door of going in and out of work, and the outcomes for the children as they move into adulthood are extremely poor. Our objective is to deal with child poverty and deprivation, to provide proper opportunity, including sustained employment opportunities, for the women and to improve the lifelong opportunities of their children. Given that, a work test in the absence of good-quality jobs and child care and proper support for parents is inappropriate.
Mr. Laws : Is not the Minister underestimating the contrast between her policies and those of the United States of America? Given what the Government have done on tax creditsthe working tax credit, child tax credit and child care tax creditis there any reason to think that the problems that have arisen in the United States because of the work sanction would arise in the United Kingdom? Surely the Minister underestimates the Government's achievements.
Margaret Hodge : Not at all. We have built an infrastructure to make work pay through the tax credit system and we have supported children's opportunities through the child care infrastructure of Sure Start and extended schools. Because of that and because of our effective stewardship of the economy, we do not have to force women into work, which is what happens all too often in America with the work test and the test of eligibility for benefits. We do, however, support and encourage, which is much more successful. In such an environment, we bring women into sustained employment. I quarrel with the concept that many of the jobs are not sustained: that is not what the evidence tends to show. We bring women into sustained employment and effectively lift the children, over their lifetime, out of poverty and into opportunity.
Having said that, if the hon. Member for Yeovil looks at our propositions and at the further proposals that we have made, he will see that we are increasingly growing the conditionality that we believe is appropriate.
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However, doing that in a gentle way and bringing lone parents with us is much more effective as a longer-term sustainable policy intervention than suddenly
Margaret Hodge : In that case, I will take another intervention, but just let me finish the point. Bringing lone parents with us is much more effective in the longer term in tackling poverty and in ensuring that lone parents move into sustained employment, which is the key to ensuring a better future for their children.
Mr. Laws : I feel very uncomfortable outflanking a Blairite Minister on some kind of responsibility agenda. She talked about increasing the degree of conditionality. Is she saying that she will eventually end up in the same place as me, or is she giving us an assurance that the Government have no plans ever to reduce the age in relation to which lone parents can continue to claim income support?
Margaret Hodge : The proposals in the Green Paper suggest that we should lower the age in relation to which we start requiring lone parents to come in for work-focused interviews. From October last year, we introduced quarterly work-focused interviews for lone parents whose youngest child was 14. The Green Paper proposals take the age down to 11 and suggest a discussion on whether that is the appropriate age, and we await a response. I say to the hon. Member for Yeovil that much of the success of the programme in enticing, encouraging and supporting lone parents back into the labour market has been achieved because we have got the balance right between conditionality and support. Much of the reason for having to do that has to do with the social attitudes about which my hon. Friend the Member for Colne Valley talked so eloquently.
The hon. Member for Yeovil raised a range of issues relating to whether we have sufficient budget resources to ensure that we can continue our programme. He will know the priority that the Government attach to ensuring that as many people as possible have an opportunity to work, for both economic and social purposes. He will know how important it is to all of us in government that we do all that we can to eradicate child poverty. As we discover what works, we will ensure that the appropriate support infrastructure is in place to enable us to progress in the direction in which we want to go. Through the careful use of our resources, the Department for Work and Pensions has ensured that we can roll out the pathways to work, for example, for all new claimants by 2008. I hoped that the hon. Gentleman would welcome that as another element of the welfare reform Green Paper.
My hon. Friend the Member for Colne Valley talked largely, and extremely eloquently, about attitudes to women and work. She brought us to the reality of what the issue means to the lives of people outside this
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Chamber in the community and constituency that she represents. Nothing that she said was not important. All parentsparticularly mothers and lone parentsstruggle to find the right balance between their responsibility to support their families through work by bringing money into the house and their responsibility to support their families by caring for their children. I have yet to come across a mother who works who does not feel guilty about getting the balance wrong. Perhaps my hon. Friend and I, having been through it all, are the only ones here who can properly understand how difficult it is to get the balance right.
I am proud of what the Government have put in place to support women to move into work and I am proud of what we have done through the Sure Start programme. I urge my hon. Friend to examine in detail the extended schools programme, which for me is Sure Start writ large for children throughout their childhood and teenage years. It brings together not only quality child care and invigorating activities in school, but all the other services that families need on a school site, whether they be primary health care services, employment support services or Jobcentre Plus advisers.
We hope to introduce a range of services. Indeed, a debate is taking place in the House this afternoon on the Children and Adoption Bill, which contains a proposal to bring contact centres for separated parents on to the school site. There is a range of support, which builds on what we have learned through Sure Start, for children and teenagers through the extended schools programme.
I also accept entirely that if we are to be successful in encouraging more lone parents to return to work, we must not only continue to transform social attitudes, but have reliable packages of support. That is why our commitments in the extended schools policy and a clause in one of the education Bills going through Parliament, which places a duty on local authorities to provide a sufficient package of child care support for all children of school age, are so important to our policy of increasing the number of lone parents in work.
I completely concur with the view of my hon. Friend the Member for Colne Valley on working lone parents being role models for their children, particularly on some of our more difficult estates, where it is often unusual to find many people in work and where there tends to be a concentration of lone parents. I also concur with what she said about trying to encourage personal advisers to support lone parents in transforming their attitudes to work and building confidence. People very quickly lose confidence when they move out of the labour market. All of us who have had time out of the labour market, whether through having children or for other reasons, know that one can quickly start to feel that one has little to contribute. Building and retaining confidence and self-esteem are important.
My hon. Friend also talked about teenage pregnancy and what we need to do to ensure that that group of lone parents decreases. We have a terrible record of teenage pregnancy in this country, with one of the highest rates. The teenage pregnancy strategy, for which I had some responsibility in my previous ministerial role, was difficult to get right so as to tackle all the issues that cause too many young people to become parents at too young an age.
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I was therefore particularly pleased to see the most recent figures, which I think were released in the past week or two by my right hon. Friend the Minister for Children and Families. They show a 15.2 per cent. drop in conception among under-16s since 1998 and that the teenage pregnancy rate has declined overall by more than 11 per cent. We now have conception rates lower than at any time since the mid-1980s. It is important to raise the aspirations of those young girls, who are often the children of lone parents and teenage mothers, so that they feel that there are other ways to gain recognition, status and esteem within society through education, training and other means. I thank my hon. Friend the Member for Colne Valley for her contribution.
Finally, the hon. Member for Daventry, speaking for the Opposition, said that our proposals are pie in the sky for two reasons: because we do not have the resources to implement them and because of the possibility of the employment rate not growing.
Mr. Boswell : The conditional has been omittedI said that the proposals "could" be pie in the sky. I was simply seeking to impose a constraint on the Minister's ebullience, rather than firmly predicting a disaster.
Margaret Hodge : I am so tempted that I cannot resist saying that, as long as we have a Labour Government, I am completely confident that we will continue to have good stewardship of the economy and a growing number of jobs with which to increase the employment rate. We will ensure in the prioritisation of our resources, in what will undoubtedly be a tight fiscal environment for public spending, that we focus on what we know will make a lasting difference to children and their families. Nothing is more important than providing the opportunity for work.
The hon. Gentleman raised the role of the private and voluntary sectors. He has probably heard all the Department for Work and Pensions team concur with him that many support services that we want delivered for peopleparticularly those most disadvantaged in the labour market, be they lone parents, incapacity benefit claimants or othersare often best delivered by voluntary and private providers.
However, we do not have an ideological commitment to one sector as always the most appropriate to intervene above another. We will always use the sector that works most effectively to provide our objectives. In some instances, that might well be the state, working through the Government, Government agencies or local authorities; in other instances, the private sector, the voluntary sector or both might have a key role to play.
Mr. Boswell : I thank the Minister for that helpful formulation of the Government's position. Does she agree that ever since their inception, including in the latest tranche, the new deal for lone parents pilots have characteristically, if not universally, involved some private or voluntary partner participation?
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Margaret Hodge : All the new deals involve private and voluntary sector participation, because often the services that we need to provide for individuals are most appropriately provided by private and voluntary sector partners. As we have said, as we roll out the next phase of pathways to work services throughout the country, we will probably focus mainly on private and voluntary sector providers to deliver many of those services.
I tend to feel that the hon. Gentleman's remarks contained an ideological preference for the private and voluntary sectors. I do not share that. I believe that we need to use the agency that works best in a particular instance. Perhaps he has not thought of this, but as we move forward, in some instances sanctioning people's benefit if they fail to participate in particular work-related activities, it is difficult to say that private and voluntary agencies working on our behalf should do that, rather than the state and its agencies. He might hold a different view from me on that, but it is one of the rather difficult issues that we have to think through.
With the Australian experience, there has been great emphasis on private and voluntary sector providers. They provide the services while the state agency does the sanctioning, yet when the private and voluntary sectors refer to the state, a different decision is taken by the state from that taken by the front-line provider working with the individual. This certainly is not an easy ideological debate from my standpoint; I hope it does not become one from the hon. Gentleman's standpoint or that of his party.
We recognise that employment zones have been successful, and much of the greatest success comes from flexibility. We are trying to learn from that as we move forward. The hon. Gentleman is, again, right to say that we do not measure whether people maintain their jobs for more than 26 weeks. The difficulty with that is collecting data and keeping track of people who move into employment, but we hope that the movement-to-job outcome target, which will start in April and for which we will use Treasury data rather than our own, will significantly improve our ability to measure retention. I hope he will support our work on that.
I shall come back to the hon. Gentleman about the cost per interview, but my recollectionfrom figures that I looked at in preparation for the publication of the Green Paperis that it is less than £10. All our evidence shows that work-focused interviews are a successful way of engaging lone parents and supporting their transition into work. The figures that I have been given show that one lone parent in five moves from the initial new deal for lone parents interview into a six-monthly review, and then about half45 per cent.go on into employment.
The hon. Gentleman talked about sanctions; I have figures here that will help him. Since we started to develop work-focused interviews as a condition of benefits, we have had to sanction only 58,400 people up to August 2005. Relative to the number of interviews that we must have done since they first became compulsory in 2000, that is a small number. Of those people, 65 per cent. subsequently participated in the
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work-focused interviews, so the sanctions on them were lifted; 11 per cent. did not pursue their claims; 10 per cent. left the benefit; and only 14 per cent. stayed on income supportat a reduced rate. One way in which sanctions work effectively is that their very existence encourages people to participate in the various activities there are to bring them closer to the labour market. It is not necessarily the implementation of sanctions and the associated poverty that lead us forward.
This has been a consensual and interesting debate. The problems are complexI agree with the hon. Gentleman on thatbut that is why we need to learn from "what works", and why we will keep trying to innovate through either the policy levers that we put forward or the innovation that is much easier to take forward with private and voluntary sector providers. We will also subject everything that we do to rigorous evaluation. I hope that all hon. Members accept that all
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such labour market interventions are constantly rigorously evaluatedsometimes using too many of the always limited resources that I have available, but ensuring that we properly test everything we do.
This issue is an incredibly important part of our welfare-to-work programme and vital for attacking child poverty and ensuring social inclusion. It is a bit sad that, because it is a Thursday afternoon and there is snow around the country, there are not more Members here to engage in the debate, but I hope that some people read the report of this afternoon's proceedings in this Chamber and that that ensures that there is engagement with this part of the welfare reform Green Paper and our proposals within it. It is exciting and difficult, but I am glad that we are embarking on this journey.