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Mr. Hutton:
It was my mistake not to have made that clear. I agree absolutely with what the hon. Lady says. We want opportunities to be more widely shared than they are at the moment, and that will include people who have never been active in the labour market. Such
people will not be excluded from any of the help and support packages that we are seeking to make available through pathways to work.
I recognise the sensitivity and importance of getting such a crucial distinction right. That is why we are consulting all our stakeholders carefully, to ensure that we take an equitable approach. The group that I have just described, known as the “support” group, will receive the new benefit at a higher rate. As now, they will be able to volunteer to participate in work-related activity and access all the appropriate support available, but it will not be a condition of their entitlement to any part of their benefit.
For the vast majority—those who are not in the “support” group—the new benefit will have a clear framework of rights and responsibilities. In return for the additional support provided by the national roll-out of pathways to work, claimants will be required to attend regular interviews, complete action plans and, in time and when resources permit, undertake work-related activity. As the Green Paper makes clear, the full level of benefit that they receive will be above the current long-term rate of incapacity benefit. However, those refusing to engage with the help and support offered, without good cause, could see their benefit reduced progressively to the basic level of jobseeker’s allowance.
I want to return to the point raised by my hon. Friend the Member for Bridgend (Mrs. Moon) a moment ago, which I did not deal with. She asked how we would approach the issue in relation to people who have a mental health problem, and who might, for a perfectly good reason, not have been able to attend, for example, a work-focused interview. At the moment, we would never dream of sanctioning in those cases, unless there had been a home visit, and until decision makers in Jobcentre Plus were absolutely sure that the person had no plausible reason for missing the work-focused interview. With all such matters—I shall make this point later, as I know that Members on both sides of the House will be concerned about benefit sanctions—the success of the policy is not to be judged by how many people we sanction, but the reverse. It will be judged by how many people we can help to get into work, whether for the first time or following on from an earlier career. As we established in relation to the new deal, if we are going to provide new help and support, it is essential to have some reciprocity in the provision of that additional investment in our welfare state. The vast majority of people, I hope, will have no difficulty with that argument.
Mrs. Joan Humble (Blackpool, North and Fleetwood) (Lab): I want to explore a little further the issue of work-focused interviews and people with mental health problems. I am pleased by the reply that my right hon. Friend has given to my hon. Friend the Member for Bridgend (Mrs. Moon). In order to reassure those who have genuine fears, what steps will he take to ensure that his staff are properly trained to identify when someone’s mental health problem is so severe that it would be adversely affected by being required to attend a work-focused interview?
Mr. Hutton:
I accept that there is fear about all these issues, and it is important that we dispel those fears.
There is no reason for people to be fearful. We invest significantly in the training of personal advisers in Jobcentre Plus. Through pathways, we have been doing this for the best part of two years, and we are beginning to find a sensible way forward. I do not doubt that there are areas for improvement, and Jobcentre Plus is always ready and willing to learn. If there is a role for some of the voluntary organisations to help us to train our staff properly, we should explore that further. We are making progress. It is not our intention to be punitive as we develop these approaches; that would be wrong. As I have tried to say previously, we can be radical, which I believe that these reforms are, without being punitive. I hope that my hon. Friend does not infer from anything that I have said today, or anything in the Green Paper, that we will punish people unfairly because they have a level of incapacity. That would be totally at odds with the values to which I referred earlier, and forms no part of the approach that we want to develop.
Mr. Russell Brown (Dumfries and Galloway) (Lab): I welcome the Bill, which, as far as I can see, is based more on people’s abilities than on their disabilities. In relation to work-focused interviews and pathways to work, may I impress on my right hon. Friend that in rural constituencies such as mine, which has two Jobcentre Plus offices 75 miles apart, the difficulty of delivering what I hope will be delivered is much greater?
Mr. Hutton: I absolutely accept that. That is why, wherever possible, we try to take our services out to our customers. I do not know the precise details of the issue raised by my hon. Friend, but he would be welcome to raise it with me in more detail on another occasion.
Roger Berry (Kingswood) (Lab): I support the Bill, and hope that I shall have an opportunity to explain why.
Given that the proposals relating to work-related activity depend heavily on the use of private and voluntary-sector providers, can my right hon. Friend assure us that decisions on sanctions will be made not by those providers but by Jobcentre Plus?
Mr. Hutton: That is certainly the current arrangement, but, as my hon. Friend will know—I suspect that that is why he asked the question—clause 15 allows the possibility of benefit sanction decisions being made by some of our private and voluntary-sector providers. I shall come to that section of my speech shortly, but let me say first that a number of providers have told us that they would like to have those powers. I agree that not all them may want the powers, and I quite understand why, but it is worth exploring the issue a bit further.
I consider the additional obligations to be central to the reform package that we are proposing. As I said earlier, I believe that the vast majority of people will consider them to be reasonable and necessary. They are very much powers of last resort. As with any such measures, the proof of their success will come not in large numbers of cases in which the sanction is imposed, but in the number of people whom we can
return to employment and, therefore, lift from poverty. In the current pathways areas where extra conditions have been imposed, the benefits of fewer than 1 per cent. of claimants have been sanctioned. That is a mark of the success of the deal that we have offered people on incapacity benefit.
I know that some have expressed concern—as my hon. Friend just did—about clause 15, which permits the application of employment and support allowance benefit sanctions by private and voluntary-sector providers. I can reassure the House and my hon. Friend that a clear system of safeguards, similar to that used in pathways, will be used before any such sanction can be applied, and that the normal rights of appeal will be fully applicable. We will talk to private and voluntary-sector providers about whether they wish to exercise the function, but I think it is important for us to explore whether the new power will be helpful as we engage with a wider range of welfare-to-work providers in the years ahead. We will invest a further £360 million over the next two years to support the measures in the Green Paper, and to secure national coverage of pathways to work.
Mr. David Laws (Yeovil) (LD): Will the Secretary of State clarify what aspect of non-compliance the private and voluntary-sector providers might sanction? Might it relate to participation at an interview, taking up employment opportunities, or obtaining medical assistance?
Mr. Hutton: No sanctions would apply to health care provision. I think it would be entirely wrong to apply sanctions to how an adult decides to obtain health care. Nor would sanctions apply to the job-seeking that the hon. Gentleman describes, because that is not part of work-related activity planning. Essentially, we are talking about work-related activity when it becomes a mandatory condition for benefit—if it does—along with work focus interviews and the drawing up of action plans. Only in those areas could benefit sanctions apply.
Working with our partners in the private and voluntary sector will be a critical part of our building of a modern, active and increasingly devolved welfare state which makes more use of a wider range of providers with the skills and expertise to target local labour market issues more successfully. I said a few moments ago that a modern welfare state could not afford to leave anyone behind, and should not seek to do so. That is why we will roll out our offer of help and support for existing claimants of incapacity benefits—available on a voluntary basis—as pathways spread nationwide. In Somerset, for example, we are already piloting a regular set of work-focused interviews for all existing customers as part of pathways, and if that approach works, we will seek to expand it further as resources allow.
In time, as provided for by schedule 4, existing claimants will be “migrated” to the new employment and support allowance. That will help to reduce the complexity involved in having two completely separate administration systems running indefinitely. I want to make one thing clear, however: existing claimants will not be mandated to undertake work-related activity as a condition of receiving the full amount of the new
benefit. Clause 12 gives us the necessary power to require ESA claimants to undertake work-related activity, but we will ensure that the regulations made under the clause reflect the position that we set out in the Green Paper in relation to existing incapacity benefit claimants. As the Green Paper also made clear, the current benefit level of existing claimants will be fully protected.
Angela Browning: What is the position of people who are still receiving the old severe disablement allowance, which preceded incapacity benefit? Will those whose claims show that they still have SDA status be brought within the incapacity benefit loop, or will they be treated as a separate group?
Mr. Hutton: That is a very good question and I wish that I had the exact answer to it right now, but I will ensure that my hon. Friend the Minister for Employment and Welfare Reform deals with it in his winding-up speech.
Following consultation on the Green Paper, we made two substantial changes to our proposals. First, we listened carefully to concerns that the adoption of jobseeker’s allowance rates in the employment and support allowance would penalise disabled young people. It was never our intention to discriminate against young disabled people and we decided that young people will now get the same basic allowance as everyone else in the main phase of the ESA.
Secondly, there were strong concerns from employers over our proposals to simplify statutory sick pay. Our intention was to simplify the process of administering the scheme while maintaining the crucial balance between helping to keep costs down and retaining protection for the most vulnerable employees. Employers felt that the simplicity they would gain from these changes was not sufficient to outweigh the loss of flexibility that waiting days gave them, so we decided not to proceed with those proposals at that point. We will instead invite all interested stakeholders to discuss with us the scope for alternative approaches to simplification, which must not, however, involve unreasonable costs to employers.
Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): In his answer to my hon. Friend the Member for Yeovil (Mr. Laws), the Secretary of State suggested that conditionality would not apply in respect of medical activities. Will he confirm that the conditionality in the Bill can apply to the work-focused, health-related assessments that are proposed in clause 10?
Mr. Hutton: Yes, but it will not and we will make sure of that in the regulations.
Part 2 takes forward our Green Paper proposals to simplify the existing housing benefit system to improve work incentives and encourage personal responsibility for housing choices. Following the success of the 18 pathfinder areas, the Bill will facilitate the extension of local housing allowance across the deregulated private rented sector. Where possible, to promote personal responsibility among tenants, we propose that payments of housing benefit will be made to the tenant, rather than the landlord, but appropriate
safeguards will be in place to protect both tenants and landlords so that in cases where tenants are likely to have difficulty in managing their affairs, payments can still be made to the landlord.
Mr. Andrew Love (Edmonton) (Lab/Co-op): My right hon. Friend rightly points to the success of the 18 pathfinder areas. One reason for their success is the enhanced money advice provided in those areas, so will he give us an assurance that such an enhanced money advice service will be available on the roll-out nationwide?
Mr. Hutton: Yes, we will certainly want to do that and it will feature in subsequent debate and the Minister for Employment and Welfare Reform will comment further at the end. He is going to have to make a longer speech than he anticipated, but there we are.
The Bill also provides for a reduction in housing benefit where someone has been evicted from their home on grounds of antisocial behaviour and refuses to co-operate with the support that is offered by the local authority to help improve behaviour. There is clear research evidence that the provision of intensive support and supervision can achieve significant changes in the behaviour of persistently antisocial households.
An active welfare state, with rights and responsibilities at its heart, must send a clear signal to those evicted for antisocial behaviour that they are at the end of the line and cannot simply expect to move to another property and continue their bad behaviour at the expense of decent hard-working families. That would serve only to undermine public confidence in our welfare system and if we are right to expect minimum standards in other areas of the welfare state—I believe that we are—we should be consistent across the whole system, including housing benefit.
We intend to pilot the sanction in about 10 English local authorities over a two-year-period as soon as we have the legal power to do so. Proper consideration will be given to the needs of any children involved in such cases, but we cannot go on turning our back on those who have to put up with that kind of behaviour and who rightly look to us to deal with the problem. The Bill makes a start in the right direction in this sphere.
Mr. Terry Rooney (Bradford, North) (Lab): My right hon. Friend knows that I have some doubts, but if people in rented accommodation suffer from that penalty, should it not also apply to those who receive state support for mortgage interest payments? If guilty of similar antisocial behaviour, should not those people be subject to a similar regime?
Mr. Hutton: As my hon. Friend knows, that is not in the Bill, but if he raised that matter again in Committee or on Report, I am sure that we would reflect carefully on any arguments that he deployed.
Those responding to the Green Paper consultation expressed concerns about introducing local housing allowance for tenants in social housing. We recognise
those concerns, and we have therefore decided not to introduce such legislation at the moment.
Part 3 proposes a number of measures to improve the administration of social security, including new powers to allow greater sharing of information to improve the take-up and delivery of benefits and other services administered by my Department and by local authorities. For example, where pensioners are entitled to both pension credit and council tax benefit or housing benefit, common information on personal and financial circumstances will only need to be given once.
Mrs. Moon: Can my right hon. Friend explain who will decide whether an individual should receive personal payments of their rent allowance? There is great concern among professionals working in the health and social care sectors that families with children will find themselves in debt, as their benefit will be paid into overdrawn bank accounts, the banks will use it to pay off bank arrears and it will never reach the landlord. Can he explain how we can ensure that people are not forced into further debt under that proposal?
Mr. Hutton: I can just point to the research and the outcomes in the pathfinder areas, and my hon. Friend might want to study them. We have seen no correlation between the direct payment of the local housing allowance in those areas and any difficulty that those tenants have in paying their rent. There has been no increase in arrears and no problem with landlords then seeking to evict tenants. As a general principle, it is right to treat adults as adults and for the payment of rent to go directly to them.
There are safeguards, however, and in the pathfinder areas—we have been very clear about this—about 15 per cent. of those who are eligible for local housing allowance have not received it directly, because they felt that they were at risk of not paying up. There are problems, for example, if someone has a drug or alcohol dependency. We certainly do not want to make matters worse in those cases. There is a sensible way to deal with those concerns that does not undermine the fundamental principle—this must be right in the welfare state—that we should treat people in the benefits system as adults. We manage money; they are perfectly capable of managing money, too, and we should not start with any assumption that they cannot do so.
Kali Mountford (Colne Valley) (Lab): My right hon. Friend is describing a new system that will bring together those in different parts of the civil service who did not work so closely together previously, along with other sectors. May I tell him that my discussions with people inside Jobcentre Plus suggest that that is causing them some concern. They need to learn lessons from the past. They are also concerned about the target that has been set of benefiting 1 million people’s lives. The assessment that others have made that that target is not too challenging does not fit with their concerns about the new system.
Mr. Hutton:
We will have plenty of opportunities to listen to those concerns and to act on them where we think that that is the right thing to do. I think that my
hon. Friend is referring to the aspiration—the objective—of getting 1 million people off incapacity benefit. That is the right objective for us to have. We are investing significantly more in the help and support available to people who have a measure of incapacity. They and the organisations that represent disabled people have made very clear to us the importance that they attach to extending what my hon. Friend the Member for Manchester, Central (Tony Lloyd), who is no longer present, referred to as the right to work. That is the right and proper thing for us to do, but I am quite sure that the debate about how we implement these reforms will continue inside and outside Jobcentre Plus, and we are certainly more than willing to listen to what people are telling us about them.
Mr. Marsden: I want to touch on the 1 million target, which, although ambitious, should be put in front of us. However, does my right hon. Friend agree that it is extremely important—particularly in a constituency such as mine, where many of the target people on IB might have been in that position for five or 10 years—to focus on an element of job progression if we are successful in getting them into work, so that they do not think that they are coming into work at a relatively low level, without aspirations and skills or the training that they need to develop them thereafter?
Mr. Hutton: I absolutely agree with that, and some of the issues to which my hon. Friend refers will be picked up by Lord Leitch, when he reports to my right hon. Friend the Chancellor on how and to what extent we can do more to support the skills of the labour force. However, I agree with my hon. Friend fundamentally: we are here to help, and we will be long-term partners in incapacity benefit reform. We have a role to play in supporting people not just to get a job, but to make progress up the labour-market ladder as well. I agree with him that that is very important.
Lyn Brown (West Ham) (Lab): Given that 60 per cent. of people come off incapacity benefit within the first year, is it realistic to assume that we can take 1 million people off it? If we are basing that estimate on pathways to work figures, how can we be sure that the 8 per cent. of people in respect of pathways to work are not also included in the 60 per cent. of people who would normally naturally come off incapacity benefit in the first year?
Mr. Hutton: In pathways areas, access to help and support has not been confined to new claimants; in some parts of the country, the entire stock is being looked at, and in others the pathways are looking back five, six, seven or eight years. I believe that we should set ourselves difficult targets. If a Government set themselves a target that they know they can reach, that is easy; and it is worse to set a target in respect of which we can torture the data until they confess and tell us that we have met it. There should be a genuinely objective measurement of our progress, but if we are to make a difference to the lives of disabled people, it is right and proper that we aim high, not low.
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