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House of Commons

Monday 12 June 2006

The House met at half-past Two o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Work and Pensions

The Secretary of State was asked—

Incapacity Benefit

1. Mr. Rob Wilson (Reading, East) (Con): If he will make a statement on his Department's plans to reduce the number of people claiming incapacity benefit. [76092]

The Secretary of State for Work and Pensions (Mr. John Hutton): The welfare reform Green Paper that we published in January set out our proposals to reduce the numbers claiming incapacity benefit by 1 million over the next decade. The proposals include extra investment in the successful pathways to work schemes, as well as replacing incapacity benefit with a new employment and support allowance in 2008.

Mr. Wilson: I thank the Secretary of State for that answer. Has he seen the recent KPMG labour market research, which shows that a large minority of employers will not appoint incapacity claimants with a history of mental illness? What is his Department doing to help educate employers about the employability of previous sufferers from mental illness and has he considered offering grants to help employers with assessment, training and skills development for potential recruits?

Mr. Hutton: I have seen the report to which the hon. Gentleman referred. It is an important issue; about 40 per cent. of people claiming incapacity benefit cite mental health as the reason for being unable to work. Pathways to work, as it is at present, will successfully address that issue. Conditioned management support is one way through the issue, but we stand ready to work with the private and voluntary sectors, and other parts of the public sector, to make sure that the reforms are a success for people with mental illness.

Roger Berry (Kingswood) (Lab): My right hon. Friend has allocated £360 million so far for the national roll-out of pathways to work, which I warmly welcome. However, concerns have been expressed, not least by the Select Committee on Work and Pensions, as to the adequacy of those resources if we are to meet the Government’s
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laudable objective of taking 1 million people off incapacity benefit over 10 years. Given that enabling someone to work reduces benefit payments and increases tax revenue and national insurance contributions, is my right hon. Friend working closely with the Treasury to ensure that the savings from more people achieving employment will result in more investment in pathways to work?

Mr. Hutton: Yes, I work very closely with the Treasury on all such matters. May I express my appreciation for my hon. Friend’s work in supporting many of the reforms? I draw his attention to the part of the Green Paper that set out our plans in relation to the new city strategy, which is one area where we will be able to make progress in the direction to which he referred.

Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): Can the Secretary of State tell the House on what basis the £360 million for pathways to work was calculated and whether all that sum will actually be spent on the national roll-out of pathways to work, given a recent written answer that I received from one of the right hon. Gentleman’s ministerial colleagues, which suggested that only a proportion might be spent on the roll-out of pathways to work?

Mr. Hutton: The lion’s share of that £360 million will be spent on the roll-out of pathways. We are funding the national roll-out of pathways properly and fully and over the next few years we shall be looking to deliver more of the scheme through the private and voluntary sectors, which will, I hope, provide scope for more efficiency and more effective use of public money. I can assure the hon. Gentleman and the House that pathways will be properly and fully funded; to do anything less would undermine potential for the success of the reforms, and we do not intend to do that.

Chris Bryant (Rhondda) (Lab): Surely, it is not just about getting people off incapacity benefit and into work, but also about trying to make sure that fewer people end up on incapacity benefit. Has my right hon. Friend looked at the number of occupational health professionals working in the private sector and, if so, has he noticed that the level is one of the worst of any European country? Do not we need to move forward on that agenda, too?

Mr. Hutton: Yes, we certainly do, and the Green Paper set out a number of areas where we hope to make such progress. I want to work closely with my colleagues in the Department of Health, where, together, we can make the biggest impact. It is also worth bearing in mind the fact that a third fewer people claim incapacity benefit than a decade or so ago; we are just beginning to see year-on-year reductions in the total number of people claiming it. I have no doubt that the reforms are working. My hon. Friend referred to prevention and I am quite sure there is more that we can do in that regard. We set out our intention to do more in that area in the Green Paper.

Mr. David Ruffley (Bury St. Edmunds) (Con): Over the weekend we saw another report of Department for Work and Pensions Ministers running scared of their
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Back Benchers—this time, over US-style workfare policies. In evidence to the Select Committee, the Secretary of State said:

Can the Secretary of State come clean and tell us if in principle he supports such a workfare-style approach? If he does, when will he tell the parliamentary Labour party?

Mr. Hutton: I am afraid that it is the hon. Gentleman who needs to grow up. We set out our proposals in the welfare reform Green Paper. I shall let the hon. Gentleman read a copy of it to refresh his memory.

Child Poverty

2. Dr. Roberta Blackman-Woods (City of Durham) (Lab): If he will make a statement on trends in the level of child poverty since 1997. [76094]

The Secretary of State for Work and Pensions (Mr. John Hutton): In the two decades prior to 1997 the number of children living in poverty in the United Kingdom more than doubled. However, in absolute terms there are now 2 million fewer children living below the poverty line than when we came into office. This has been the result of investment in the new deal for lone parents, the introduction of tax credits, the introduction of the national minimum wage and our success in creating stable economic growth.

Dr. Blackman-Woods: I thank my right hon. Friend for that response. I hope that he will agree with me that constituencies such as mine in Durham have benefited enormously from measures that the Government have taken to tackle child poverty, with literally thousands of children being lifted out of poverty since 1997. Nevertheless, poverty is still disproportionately higher in the north-east than elsewhere. Will my right hon. Friend tell the House what the Government are doing to tackle regional inequalities in child poverty?

Mr. Hutton: Yes. The new deal has been a huge success in my hon. Friend’s constituency and throughout many parts of Britain that suffer from high levels of unemployment. The city strategy that we set out in the Green Paper will, I think, provide further targeted help in tackling worklessness in some of the most deprived parts of the country. Together with the other reforms in the Green Paper, I am sure that we will continue to make a significant impact on improving the opportunities for families with children to share in rising national prosperity.

Alistair Burt (North-East Bedfordshire) (Con): In a debate on social exclusion in Westminster Hall at the end of last year, I asked whether the Government’s social exclusion unit could examine the relationship of long-term family and relationship breakdown with long-term deprivation. Will the Minister make the same request in relation to child poverty? Will he also examine the work that is being done by many faith, independent and voluntary groups in supporting relationships that are in trouble? As a nation, it costs us
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a fortune to deal with the consequences of relationship breakdown in child poverty terms, yet we spend so little in trying to support those relationships.

Mr. Hutton: I agree with a great deal of what the hon. Gentleman has said. I have decided to make the pursuit of the child poverty targets that have been set for my Department the No. 1 priority for the Department. I think that that is right if we are to break the cycle of deprivation and poverty between the generations. The social exclusion unit is the responsibility of my right hon. Friend the Chancellor of the Duchy of Lancaster. I will be working closely with her and the Minister of State to ensure that we make progress in this general area.

Mr. Frank Field (Birkenhead) (Lab): I congratulate the Government on nearly achieving their target of reducing the number of poor children by a quarter in five years. Does my right hon. Friend accept that probably the major reason why the Government have scored success in this area was the impact of tax credits, which cost the equivalent of a 5p reduction in the standard rate of tax? Given that that sort of money will not be available for the next five years, might my right hon. Friend, at some suitable opportunity, set out before the House how he intends to achieve another quarter’s reduction in the number of poor children in the following five years?

Mr. Hutton: Yes, I will certainly be doing that. I am grateful to my right hon. Friend for his support in this area. We shall have to focus our attention in a number of areas if we are to make continuing progress, not least in relation to how we can improve the operation of the child support arrangements. That is a piece of work currently being carried out by Sir David Henshaw.

We will certainly have to consider how we can continue to make the new deal for lone parents effective. It has been hugely effective and we have seen a huge increase in the employment rate of lone parents—about 11 percentage points. We should continue to explore all these areas and avenues to ensure that we can improve the household income of families with children.

Mr. David Laws (Yeovil) (LD): On the issue of tax credits and poverty, has the Secretary of State had a chance to read the research produced by his Department last year, which concluded that the problems in the administration of tax credits had lent an unwelcome unpredictability to a key element of financial support. It went on to talk about the profoundly negative effects on more financially vulnerable households?

Earlier, the Secretary of State indicated that he is working closely with the Chancellor of the Exchequer. May I encourage him to ask the Chancellor to consider that, as tax credits are no more than means-tested benefits, it would make far more sense to administer the credits from his Department than from the Treasury? Does the right hon. Gentleman accept that his Department could hardly do a less effective job of that?

Mr. Hutton: Answer that one.

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I read a great deal of research and many reports. The particular report to which the hon. Gentleman refers, apparently from my Department, I have not yet managed to read. I will need to ask the hon. Gentleman for the reference number of the report. We examine carefully the administration of tax credits. It is wrong to suggest that somehow they have not been a significant benefit to millions of families with children. They have been a huge boon to millions of households. The Department currently has no plans to take on the administration of the tax credits system.

Ms Karen Buck (Regent's Park and Kensington, North) (Lab): Is my right hon. Friend aware that London is the only region where no significant progress was made in reducing child poverty for the first milestone in 2004? Does he accept that one of the key reasons for that is high housing costs? Typical of that is a constituent who came to me on Friday, who is in temporary accommodation—one of 3,000 families in temporary accommodation in my borough—who faces a rent bill of £430 every week. That is a ludicrous disincentive to work. Will he therefore take urgent action, with the Department for Communities and Local Government, to tackle the housing costs for those in temporary accommodation? Will he also agree to meet the London—

Mr. Speaker: Order. One supplementary question is fine.

Mr. Hutton: I will certainly pass on my hon. Friend’s concerns to the Secretary of State for Communities and Local Government. I remind my hon. Friend that the Prime Minister recently announced two significant projects covering the east of London and the west of London to try to bring more resources to improving employment prospects and to make the impact greater, but she is quite right to say that, sadly, it is still true today that 50 per cent. of children born in inner London are born into poor households—that is households that have 60 per cent. or less of the median income. That is not acceptable for us and we will continue to work across Government in ways that I hope that she will find sensible and an effective response to the problem that she has highlighted.

Mr. Jeremy Hunt (South-West Surrey) (Con): The Secretary of State knows that one in four children in poverty have a long-term sick or disabled parent. Does he also know that there are 13,000 children with caring responsibilities greater than 50 hours per week? That is a situation that can greatly aggravate the negative consequences of child poverty. In the context of eliminating child poverty, and given that we are at the start of national carers week, what specific measures does he propose to deal with the problems facing child carers?

Mr. Hutton: The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Stirling (Mrs. McGuire), who is the Minister with responsibility for disabled people, and I are currently developing a series of new proposals that will address some of the concerns that the hon. Gentleman has raised. I think that that was the first time that he has contributed to
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Work and Pensions questions, so I am grateful. [ Interruption. ] It may not be, but it felt like perhaps it was. [ Laughter. ] I hope that that is in no way disrespectful to the hon. Gentleman, whom we hold in high regard on this side of the House. My right hon. Friend the Secretary of State for Health also has responsibility in this area, and we are also addressing the issue through the spending review settlement.

National Insurance Numbers (Illegal Immigrants)

3. Mr. Andrew Robathan (Blaby) (Con): What representations he has received on the allocation of national insurance numbers to illegal immigrants. [76095]

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): I have had a number of representations from hon. Members. Since the inception of the national insurance system in 1948, the allocation of a number has never been designed to confirm that an individual has the right to live or work in the United Kingdom. However, in order to tighten the system further and to build on improvements that we already made in 2001 and again in 2004, we propose to introduce a right-to-work condition that will have to be satisfied before a number is issued.

Mr. Robathan: I am pleased that the Government have finally taken note of this matter, but it was six years ago, in May 2000, that Lord Grabiner brought out his report, which highlighted the issue of illegal immigrants making national insurance applications. Why has the change taken six years? Why has it taken the Home Office scandals and fiasco to bring focus to this matter? I hope that the Minister will not tell us that the Government did act in 2000 and that everything was rosy, because if it was, why did they need to change the rules last week?

Mr. Plaskitt: The hon. Gentleman should refresh his memory of what Lord Grabiner actually said. In paragraph 4.15 of his report, he said:

His specific recommendation was about identity fraud. We enacted it within a year by the introduction of the enhanced national insurance allocation system. In 2004, we amended his Government’s legislation to strengthen the controls that employers have an obligation to put into place. The third improvement that we are making is to introduce the right-to-work condition. He should welcome that.

David Taylor (North-West Leicestershire) (Lab/Co-op): In relation to individuals whose asylum application fails although they are granted a national insurance number, would it be possible to incorporate in the number a field or pair or digits that showed their status so that the number could be de-registered when their application is refused? Is that not the way forward, as long we do not give the project to the Accentures, the EDSs and the Capitas of this world to mess up?

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Mr. Plaskitt: We do make records of such information at the point of dealing with the application, and that information is passed on to the immigration and nationality directorate.

Peter Viggers (Gosport) (Con): I am reliably informed that in official circles there is widespread concern about the issue of temporary national insurance numbers and, indeed, multiple national insurance numbers to the same individual. On 2 March, however, the Department answered a question, saying that no temporary national insurance numbers were issued. Can he explain that apparent discrepancy?

Mr. Plaskitt: Temporary numbers are issued in certain circumstances, but if there is doubt about an applicant’s immigration status—as I said, if they are in employment a national insurance number is issued, and that has always been the case—the matter will be referred to the IND. If they are not in employment, or if we suspect that their documentation is false, a national insurance number is not issued.

Mr. Philip Hammond (Runnymede and Weybridge) (Con): We welcome the fact that the Minister has announced plans to introduce a test of legality before issuing NI numbers from next month, but what plans does he have to recall for interview with a view, if appropriate, to cancelling national insurance numbers, the 1,712 applicants whom he recently told the Chairman of the Select Committee on Home Affairs had been referred to IND over the period April 2005 to February 2006 as potential immigration offenders, but who were issued with national insurance numbers anyway?

Mr. Plaskitt: Last year, we referred 2,537 cases to IND on the grounds of immigration irregularities. We also reported 772 suspect document cases, and my Department brought 773 prosecutions for false documentation.

Mr. Hammond: That is very interesting, but the Minister omitted to tell us that he gave all those people national insurance numbers.

Mr. Plaskitt indicated dissent.

Mr. Hammond: The Minister shakes his head, but the Chairman of the Home Affairs Committee certainly understood that to be the case. Let me ask him another question. In 2001, shortly after the Grabiner report, Jeff Rooker, the then social security Minister, said in Standing Committee in 2001 that techniques developed in the Balham project

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