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House of Commons

Monday 10 July 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. Stephen Crabb (Preseli Pembrokeshire) (Con): What interim targets have been set in relation to his target to reduce the number of people on incapacity benefits by 1 million by 2016; and if he will make a statement. [83298]

The Minister for Employment and Welfare Reform (Mr. Jim Murphy): No interim targets have been set but, as with our successful pathways to work pilots, we will continue to monitor and publish our progress on a regular basis.

Mr. Crabb: As a result of demographic changes, and without any policy change or special initiatives, the forecast incapacity benefit case load will fall from 2.7 million today to about 2.36 million in 2015-16. Does not that rather handy head start of 340,000 make the Minister’s promise to cut the incapacity benefit count by 1 million both unambitious and a little misleading?

Mr. Murphy: That is an entirely unfounded claim. Recent changes have resulted from the introduction of the new deal, the policy to make work pay through the national minimum wage and new, more flexible working arrangements in the workplace. All those policies have two things in common—first, they have successfully enabled more people to enter the labour market and, secondly, they were all opposed by the Conservatives. It is therefore an ambitious target and we are determined to achieve it so that people should no longer be written off and consigned to a life on incapacity benefit, which was all too common under the previous Government.

Mr. Terry Rooney (Bradford, North) (Lab): My hon. Friend will know that there is a very low employment rate among people with mental illness. Undoubtedly, there is a problem with employer attitudes to that client group, so what are his Department and other Departments doing to try to take that agenda forward?
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Mr. Murphy: My hon. Friend, as Chairman of the Select Committee on Work and Pensions, has worked tirelessly on that agenda and rightly identified the fact that the biggest single factor that leads people to claim incapacity benefit is mental illness. The new personal capability assessment and the new employment support allowance will focus on that emerging trend and seek to address it. The roll-out of pathways has provided encouraging evidence about how we can support people with mental illnesses and give them the chance to return to work. I look forward to discussing those matters in more detail when I visit my hon. Friend’s constituency next Monday.

Mr. David Laws (Yeovil) (LD): The Minister said last week that, for every £800 spent on pathways, the taxpayer is saved some £8,000 as a result of people returning to employment. If that is the case, why have Ministers briefed that they do not have enough money to roll pathways out for all claimants and may even have to ration them? Is it not bizarre that the Government can find billions of pounds of additional finance for benefits and tax credits, which can keep people in dependency, but they cannot find the money to get people back to work in this way?

Mr. Murphy: I do not know whether that is another of the endless spending commitments from the hon. Gentleman, whom I had previously thought was on the moderate wing, if there is such a thing, of his party’s spending commitments. The roll-out of pathways has been shown to be the single most successful initiative ever in supporting people while they leave incapacity benefit and take up the chance to work. However, we have to go much further, which is why, last week, we announced the national roll-out of pathways throughout the country by 2008, so that everyone on incapacity benefit and the new employment and support allowance will have the chance to participate in that very successful initiative.

Mr. Frank Field (Birkenhead) (Lab): Does the Minister accept that the fact that a number of Labour Members wish to question him is a sign of our support for the Government’s strategy of trying to give opportunities to work to people who are on benefit? Does he realise that, over the period in which the Government aim to reduce the numbers on incapacity benefit, over 1 million claimants will either retire or die? Can he set out the net effect of the new Government policies?

Mr. Murphy: I have set out a 1 million net reduction in the numbers on incapacity benefit, and I take the comments by my right hon. Friend and others as offering support in principle for our ambitious agenda. Through other initiatives, we have already ensured that there is a reduction of one third in the number of new claimants receiving incapacity benefit since 1997, but we must go further. We look forward to a conversation with him and my hon. Friends to discuss what more we can do so that people are no longer written off, as they were throughout the 1980s and 1990s.

Hywel Williams (Caernarfon) (PC): Does the hon. Gentleman accept that psychiatrists in my constituency
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have serious doubts about the capability test? [ Interruption. ] It is a serious point, as they have serious doubts about the capability test in respect of mental illness. Will he look at that test again to ensure that it is properly standardised and has a basis of scientific rigour?

Mr. Murphy: Unusually, the hon. Gentleman makes an entirely reasonable point. We are looking at how we can review the personal capability assessment, which is so crucial to ensure that every individual is treated as just that: an individual, so that an assessment can be made of their learning disability, mental illness or other injury. If the hon. Gentleman has specific ideas about how we get that right, I am happy to listen, but we are spending a huge amount of time and effort working with disability organisations such as Mind and Mencap to make sure we get personal capability assessment exactly fit for purpose.

Mr. Khalid Mahmood (Birmingham, Perry Barr) (Lab): Does my hon. Friend agree that the huge increase in the number of people receiving incapacity benefit was purely a result of the policies of the Conservative Government and their attempts to hide the unemployment figures and that, to get people on incapacity benefit back into work, we need to provide more encouragement and capacity building for them so that they have the necessary self-esteem to get back into employment?

Mr. Murphy: My hon. Friend is right. The pathway back to work will be taken in a series of small steps. Importantly, that involves rebuilding self-confidence and self-esteem, refreshing skills or learning new skills, and then receiving support in the completion of CVs and preparation for interviews, which many may not have undertaken since they left school. The package of measures through pathways will be important in helping to transform the life chances and job opportunities of many who have been neglected in the past.

Mr. Philip Hammond (Runnymede and Weybridge) (Con): Conservative Members are keen to see the benefits of the pathways roll-out being achieved not only by diverting new claimants into work as soon as possible, but by engaging existing IB claimants. In his statement to the House on 24 January, the Secretary of State said:

Will the Minister confirm that that is the Government’s policy and that a requirement for existing claimants to attend an interview and agree a plan will be introduced as soon as sufficient resources are available?

Mr. Murphy: The hon. Gentleman invites me to agree with my Secretary of State, and I am happy to do so. We are piloting ways of ensuring that the pathways scheme supports current incapacity benefit claimants. As we set out in the Green Paper and subsequent statements, we will look to migrate the existing case load of about 2.6 million across to be supported by the
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employment and support allowance. Of course, in the interim, individuals currently on incapacity benefit can volunteer, if they so wish.

Mr. Bob Blizzard (Waveney) (Lab): I received a letter from my hon. Friend’s Department last week, informing me that pathways to work would start in my constituency next year. Based on the pilots that we have had so far, what impact can I expect that to have on the number of people on incapacity benefit in my constituency?

Mr. Murphy: Based on the roll-out of pathways across about 40 per cent. of claimants, we anticipate continuing reductions in the number of those on inactive benefits, particularly those with more complicated multi-dimensional needs in terms of the support that they require to get a chance to work. The evidence is that about 25,000 people have entered the job market as a consequence of pathways thus far. We can learn from the best experience of those pilots and roll that out across the country as a much more substantial contribution towards our target of reducing the number of those on inactive benefits by 1 million.

Mr. Hammond: With reference to the Minister’s response to me earlier, the reason I asked him to confirm the Secretary of State’s statement to House is that the Green Paper says something slightly different. The Green Paper states:

That is a nuance on what the Secretary of State said. If the only constraint on extending the work-focused interview to existing claimants is resources, why does not the Minister negotiate with the voluntary and private sector providers who are to roll out 60 per cent. of the pathways programme to see whether they will include the interview stage in their package and accept a full transfer of risk—effectively, a no success, no fee basis—so that the resource constraint evaporates and the benefits of the pathways to work programme can be rolled out to existing benefit claimants as well as new claimants with the scheduled roll-out of the overall programme?

Mr. Murphy: That would not be the most effective way in which we could roll out pathways support across the country. The evidence is that, if someone is on incapacity benefit for two years, they are more likely to die or retire than ever to find a job. As a priority, we will focus on those who are newest to incapacity benefit or employment support allowance, but we will not neglect those who were placed on incapacity benefit as a matter of public policy by the Opposition when they were in government. We know that it is an ambitious target to change incapacity benefit numbers by 1 million, but it was achieved in the 1980s and 1990s by the Opposition. We intend to achieve the same level of change in incapacity benefit numbers, only in the opposite direction.

Civil Servants (Gershon Review)

2. James Duddridge (Rochford and Southend, East) (Con): What head count reductions there have been in his Department since the Gershon review; and if he will make a statement. [83299]

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The Secretary of State for Work and Pensions (Mr. John Hutton): Since 2004, staffing levels in my Department have fallen by 19,385 full-time equivalents. As a result, we are now two thirds of the way to meeting the target reduction of 30,000 set out in the Gershon review.

James Duddridge: Will the Secretary of State guarantee that movements from the Department to sort out the mess in the Child Support Agency will not negatively impact on the service delivery in those departmental areas from where the staff originally came?

Mr. Hutton: We certainly do not want that to be the result. We are recruiting additional staff to the CSA to deal with some of its problems, but overall it is right and proper that we pursue these efficiency measures in my Department. If we can carry them out successfully, it will save £1 billion a year for the taxpayer by March 2008, and that is the sensible way forward.

Keith Vaz (Leicester, East) (Lab): In welcoming the fact that the Secretary of State is on target to reach the necessary reductions, and echoing the point made by the hon. Member for Rochford and Southend, East (James Duddridge), is my right hon. Friend satisfied that there will be no reduction in services to our constituents? Many people still come to my constituency surgeries, and those of other hon. Members, who are concerned about the delay in processing their claims. Will he give us that assurance? By all means rationalise and simplify the service, but keep the front-line services as efficient and effective as possible.

Mr. Hutton: That is absolutely the main focus of our objective in making these changes. I acknowledge that there have been times when we have not provided the level of service that we would have liked, but we are working hard with the front line to improve service delivery. Part of the reorganisation in the Department will see an extra 10,000 staff moved into front-line responsibilities, dealing directly with my hon. Friend’s constituents and those of other hon. Members.

Sir Paul Beresford (Mole Valley) (Con): The Secretary of State mentioned savings to the taxpayer. I would like an assurance that that will be the case, because many Departments are recycling the savings, so they do not appear in the taxpayer’s pocket.

Mr. Hutton: This will be a saving.

David Taylor (North-West Leicestershire) (Lab/Co-op): In other Government departments—the Rural Payments Agency springs to mind—departmental heads, in pursuit of Gershon targets to reduce the head count, have got rid of some of the most experienced, talented and productive people and replaced them with low-cost, inexperienced staff from agencies, with all the consequent problems that we have seen in that and other departments. Will the Minister reassure the House that we shall not go through that bogus process in achieving any head count reductions in his Department?

Mr. Hutton: We will not go through any bogus process. I believe strongly that it is possible to make such efficiency improvements without reducing the
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quality of the service that we provide to the public. Despite the fact that there have been problems in one or two parts of the country, overall customer satisfaction levels remain incredibly high for the service delivered across the Department, and we need to remember that and ensure that it is our No. 1 priority.

Mr. Tim Boswell (Daventry) (Con): Of course we welcome sensible use of technology to sustain and even improve services to vulnerable people. However, it is clear that many of them will have experienced—the Secretary of State has tacitly acknowledged this—serious declines in service delivery, including the initial meltdown of the service to jobseeker’s allowance claimants last autumn, continuing dysfunction in the CSA and continuing poor morale and industrial relations problems in the Department itself. In the light of all that, does the Secretary of State acknowledge that Gershon emphasises the maintenance of service quality as much as head count reduction, and does he share Gershon’s view that they are of equal importance?

Mr. Hutton: Yes, I do, as would all hon. Members. The problems that arose last autumn have been addressed, and we have moved on since then. In making all these changes, it is of course essential that we keep as our No. 1 priority the service to the public and the customers whom we are here to serve. That will always be the Department’s priority.

Unemployment (Shropshire)

3. Mark Pritchard (The Wrekin) (Con): How many people were unemployed in Shropshire in June 2005 and June 2006; and if he will make a statement. [83300]

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): The latest claimant count in Shropshire is 2,604, as opposed to 2,010 a year earlier. Employment in the county continues to expand, as it does right across the country, where it is up by 270,000 over the same period. Our employment rate is one of the highest on record and the highest in the G7.

Mark Pritchard: I can understand why the Minister does not want to talk about unemployment rates in Shropshire and would rather talk about the county’s employment rates. Is he aware that the Office for National Statistics says that between May 2005 and May 2006 unemployment rose by an astonishing 30 per cent.? I am not blaming the Minister, but will he and his colleagues liaise with the Secretary of State for Defence about the defence training review and safeguarding 2,500 much-needed defence sector jobs in Shropshire?

Mr. Plaskitt: The hon. Gentleman is right to point out that there have been some unfortunate increases in unemployment and redundancies in his constituency recently; of course, we all regret that. His constituents will need to know from us that the Government are pursuing the right economic policies to help those people back into work as quickly as possible and that
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my Department is pursuing the right policies in terms of giving them individual assistance back into work. He may be aware that there are 1,400 vacancies in Shropshire and that eight employers in his area have recently made 440 job announcements. His constituents will want to be sure that we are not going to return to the claimant levels that they experienced before—2,600 now, as opposed to 4,300 in 1997 and 12,500 in 1986.

State Pension

4. Mr. Jamie Reed (Copeland) (Lab): What steps he is taking to increase the number of women of pensionable age who are eligible to claim a full basic state pension. [83301]

The Secretary of State for Work and Pensions (Mr. John Hutton): The pensions White Paper set out a series of measures that will increase the number of women qualifying for a full basic state pension, including reducing the number of qualifying years, introducing a new carers credit for those caring for at least 20 hours a week and moving to a more generous system of weekly credits. As a result, we estimate that around 70 per cent. of women reaching pension age in 2010 will be entitled to a full basic state pension instead of about 30 per cent., as now.

Mr. Reed: I welcome the emphasis that the excellent White Paper places on pensions provision for women. That was urgent and overdue. Will the Secretary of State consider the importance of the so-called grey pound on the local micro-economies of areas with increasing ageing populations such as Cumbria, which he knows well? Would it be feasible to help the economies in those areas by prioritising Government policy towards women pensioners?

Mr. Hutton: We should prioritise the needs of women pensioners everywhere, including in my hon. Friend’s constituency. I am glad that he signalled his support for the pensions White Paper, which, in relation to women, is probably the most radical shake-up of the pension system since 1948. I hope and believe that the reforms that we have announced, which will have a big impact on improving equity for women in the state pension system, will have the support of hon. Members on both sides of the House.

Mr. Nigel Dodds (Belfast, North) (DUP): In genuinely welcoming the measures in the White Paper for women and carers from 2010 onwards, may I ask the Secretary of State about today’s women pensioners—the 3.8 million who are already retired and the 1 million who will retire by 2010? What is he doing for them? How will he help them in increasing their ability to achieve full pensions?

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