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Sammy Wilson (East Antrim) (DUP): We broadly support these measures, but may I take the Secretary of State back to what he said about withdrawing
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benefits from those who were engaged in antisocial behaviour? Perhaps he did not mean to do so, but he seemed to gloss over the point about what happens in cases involving families with children and where homelessness might result. I think that his answer to that was that the interests of children would be taken into consideration. Will the Secretary of State spell out exactly what he meant by that? Will this sanction not be imposed on families with children, or else in what other ways will the interests of children be looked after?

Mr. Hutton: I am grateful to the hon. Gentleman for his signal of support for the package of measures. In relation to children and the housing benefit sanction, we must remember that housing benefit is administered by local authorities. We intend to give the decision maker—the local authority—an area of discretion in cases involving families with vulnerable children. We do not envisage the full sanction applying in such cases but, for the reasons to which I referred, it is important that a line is drawn. We as a society, and we as law makers in this House, should send out a clear signal that we are no longer prepared to ignore the antisocial behaviour of the small number of people—it is a very small number—who continue to flout any proper standards of social behaviour to their neighbours, and who expect their neighbours, through their taxes and income, to support their lifestyle. However, it will of course be necessary when there are competing considerations—when there is not just a single person or a couple with no children—to take into account the innocent children who are wrapped up in such cases, and we will of course make sure that there is no question whatever of families with children being turfed out into the street.

Ms Katy Clark (North Ayrshire and Arran) (Lab): Does my right hon. Friend agree that there seems to be a direct relationship between levels of employment and the number of people on incapacity benefit? Between 1979 and 1997, the number of people on incapacity benefit trebled, and that was accompanied by huge levels of unemployment. The current Government have made huge strides in this area; 2.4 million more people are in work, and employment in my constituency has increased by 25 per cent. But in areas such as mine, we still have a long way to go in respect of securing full employment. Therefore, does my right hon. Friend agree that we must be realistic in respect of targets, and recognise that they will be reached only as our policies for employment are put in place?

Mr. Hutton: That is obviously true, but we should be confident that we will succeed in meeting the ambitious target that we have set ourselves. The economy and the labour market are strong. Employment opportunities clearly exist, and they are continuing to grow. More people are in work this year than when we came into office, and the numbers are still increasing. Under the stewardship of my right hon. Friend the Chancellor, those of us on the Labour Benches are entitled to be confident about our economy developing in the right way.

Geraldine Smith: I congratulate my right hon. Friend on the measures to deal with antisocial behaviour. Let
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me give him an example of such behaviour. In Morecambe last night, I was called to a house at 10.30 pm to witness extremely loud music that was being played by people in flats across the road—I suspect that those people claim benefit. I was told that they continue to play their music until 3 o’clock in the morning and drink alcohol outside. Of course, those people might not have to get up for work the next morning, but several people in the street do. This is a considerable problem, so the Secretary of State is right to look at measures to deal with people on benefit who are committing antisocial behaviour.

Mr. Deputy Speaker (Sir Michael Lord): Order. Before the Secretary of State answers, I should say that interventions are getting longer and longer. An awful lot of people who are seeking to catch my eye are sitting waiting very patiently. It is not for me to curtail debate, but I just mention that fact.

Mr. Hutton: I shall try to speed up, as well, Mr. Deputy Speaker. I am sure that my hon. Friend the Member for Morecambe and Lunesdale (Geraldine Smith) speaks for many Members of this House, and we all have those problems to deal with in our constituencies. We need to be fair to people—as, of course, we will be—and there will be a due process that can be followed, but I do not think that the vast majority of law-abiding, decent people find it acceptable to continue with the current system, under which people can behave in the way that my hon. Friend describes with total impunity. Just as we have other measures across the benefit system that require a reasonable response from people on benefits, we should have one here, and I am grateful for my hon. Friend’s support for this measure.

Joan Walley (Stoke-on-Trent, North) (Lab): Will the Secretary of State give way?

Mr. Hutton: I shall give way once more but not again, because I need to get on.

Joan Walley: I am most grateful. May I take the Secretary of State back to the issue referred to a couple of interventions ago—areas in which many people are on incapacity benefit? Will he work with colleagues to develop a joined-up approach to this issue, and try to find opportunities to link the relocation of Government Departments under the Lyons review to areas such as Stoke-on-Trent, in which we need to create even more jobs?

Mr. Hutton: My hon. Friend has made a very important point and I look forward to working with her to ensure that those benefits are realised, particularly in her constituency.

I now have the answer to the question that the hon. Member for Tiverton and Honiton (Angela Browning) asked about the severe disablement premium: people in receipt of it can volunteer for pathways. I am grateful to her and to my hon. Friends for their interventions; it is because there have been so many of them that I have now been able to deal with the hon. Lady’s point.

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The Bill contains provisions dealing with fraud, and we have decided to go further in this area. Given that some 50 per cent. of fraud against a local benefit also involves fraud against a national benefit, it is crucial that we lift the restrictions that prevent up to 2,000 local authority investigators from tackling the full extent of the benefit fraud that they encounter. Clauses 43 to 45 address those concerns.

Rights and responsibilities lie at the heart of this Bill, and nowhere is the abuse of those responsibilities more blatant than in benefit fraud. Clause 46 will extend the “two strikes” rule for repeat offences, so that people who commit a second benefit offence within five years of their first one can have their benefit withdrawn.

Part 4 of the Bill contains a number of smaller but important measures to correct anomalies in the—

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): I am grateful to my right hon. Friend for giving way. I draw to his attention clause 55, schedule 6 and the reference to pneumoconiosis. Under the schedule, a claim made more than 20 years after a period of employment ended will be disregarded. In effect, that will mean that very few pneumoconiosis-related claims will be made under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979. As he will be aware, provision for bringing a claim under that Act came in when British Coal ceased to exist, in 2004, but because of the way in which the schedule is drafted, it will not be possible to make such a claim. I ask the Secretary of State to reflect on that, and to see whether we can consider the nature of the disease in deciding whether a claim is proceeded with.

Mr. Hutton: My hon. Friend has a great deal of experience in this area and I have a great deal of respect for his view, but I think that he is wrong about the effect of clause 55 and schedule 6. We are trying to incorporate a more practical version of the relevant employer condition, which officials have been applying since 1980 on an extra-statutory basis, and to update the 1979 Act to reflect modern partnership rights by providing for civil partners. We are not trying to restrict access to the scheme at all; far from it. We are trying to put on to a statutory footing and basis the current rules that are being applied. The Minister for Employment and Welfare Reform and I would be very happy to pursue this conversation with my hon. Friend later, but I can assure him and the House that there is no suggestion that we are trying to restrict access to the scheme.

Part 4 of the Bill, which my hon. Friend has read, as I am sure others have—it is fantastic—contains a number of quite important provisions. In addition to provisions relating to pneumoconiosis, there are provisions to ensure that disability living allowance recipients around the age of 16 do not lose up to three months of benefit entitlement, which there is a risk that they might do at the moment, and to simplify the operation of the budgeting loans scheme.

With the Bill, we can harness the power of modern advances in health and employment support, and foster a society of genuine equal rights and opportunities for everyone. We can help families lift themselves out of dependency, tackle child poverty and build a lasting
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legacy for millions of our fellow citizens. We can deliver an active welfare state that does not simply cushion people from the effects of poverty and unemployment, but which instead seeks to tackle those issues at source. The Bill begins the next stage of our reforms to our welfare state. I believe that it enshrines the proper balance between rights and responsibilities. It reflects the values of opportunity and security. It has been built on the foundation of a broad and wide consensus. It is the right way forward if we are to succeed in tackling the poverty and social exclusion that still blights the lives of so many disabled people. I commend the Bill to the House.

5.25 pm

Mr. Philip Hammond (Runnymede and Weybridge) (Con): As the Secretary of State knows, we are generally supportive of the overall structure that was put forward in the Green Paper proposals and of which the Bill is an integral part. In the three key areas—incapacity and sickness benefit; getting lone parents into work; and getting older people into the workplace, or enabling them to remain in the workplace—we agree that there is a need for change in order to contribute to the Government’s target of 80 per cent. working age participation in the work force. It is essential to achieve that target in the face of a rising dependency ratio. I agree with the Secretary of State that we cannot afford to leave anyone behind in 21st-century Britain, so we are broadly supportive of the proposals that we are considering today, but I hope that he will understand that, within that broad support, there are a number of things that we want to question and matters that we want to raise.

Welfare reform has been on the Prime Minister’s “to do” list since 1997. It struck me that there is a remarkable similarity between the language of the 1998 Green Paper and that of the 2006 Green Paper, which the Secretary of State published earlier this year. The 1998 Green Paper states:

Many Labour Members may think that the right hon. Member for Barking (Margaret Hodge) went a little far when she said that Labour had done “sweet nothing” to tackle incapacity benefit since 1997, but it is clear that, despite the Welfare Reform and Pensions Act 1999, many of the aspirations in the 1998 Green Paper remain unfulfilled—hence the repetition of some of the language in this year’s Green Paper and many of the key elements of the Bill.

Of course, the Bill and the accompanying notes leave a number of questions unanswered. That is partly an inevitable consequence of the structure of the Bill. It is very much a framework and I welcome the confirmation that the Minister for Employment and Welfare Reform was able to give at departmental questions last week that draft regulations will be made available to the Committee before consideration of the relevant parts of the Bill.

Part 1, as the Secretary of State has said, introduces the new employment and support allowance and the arrangements around it, which are inextricably linked to the recently announced roll-out of the pathways to
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work programme, which will support the measures in the Bill. We agree that a degree of compulsion in the employment and support allowance regime is appropriate, provided that adequate support is in place, especially for people with disabilities. Many people who have been out of the workplace for a long time will lack the self-confidence that they might otherwise have and will need firm encouragement to re-engage in work.

The first point on which I seek clarification relates to the baseline for the Secretary of State’s announced target. The Government set out a target of a reduction of 1 million in the number of people on incapacity benefit. In its report, the Select Committee was critical of the lack of detailed baseline information and the Government have subsequently published that information. It shows that in any case—with no additional action whatsoever—it is expected that there will be a 360,000 drop in the number of people on incapacity benefit by 2014-15. That is thus the baseline number, without any of the measures in the Bill or the extended roll-out of pathways to work. Just so that we are clear about the backdrop against which we are conducting the debate, the target for the new regime is to deliver not a reduction of 1 million in incapacity benefit numbers compared with the existing baseline projection, but a 640,000 reduction. When the Secretary of State told the Select Committee that 1 million was “a net figure” and not a

he was right, because including 360,000 people who are already in the baseline as part of the net figure is a rather crude statistical sleight of hand. I hope that we are all clear that we are talking about a reduction of not 1 million, but 640,000.

Hugh Bayley (City of York) (Lab): May I respectfully remind the hon. Gentleman that when his party was in power, the number of people on long-term sickness benefits rose from 600,000 to 2.4 million? He criticised the Government a moment ago for not doing enough to reduce the numbers on incapacity benefit. His figures suggest that about a third of a million people will come off the benefit as a result of measures that have already been taken, but I think that he would agree, having repudiated the policies of the past, that more needs to be done, which is surely what the Bill is about. Can he not support it?

Mr. Hammond: The hon. Gentleman obviously was not listening. I said at the outset that we supported the package of measures. However, if we are to have these debates, it is important that we understand the parameters. When a target is announced against which we will measure the success of a package, we should be clear about what that target is. I hope that we are all now clear about the target.

At the time of the publication of the Green Paper, we and the Select Committee expressed concern that existing claimants should not be written off in the process. The regulatory impact assessment that accompanies the Bill says:

Conservative Members strongly agree with that statement, but much of the focus of the package is actually on tightening the gateway on to benefit. The
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Select Committee has expressed the concern that existing claimants are in danger of being left behind.

It seems to me that there is a wide consensus in the House in support of measures that will help people back into work because that is the best and most effective way of tackling poverty and social exclusion. However, if we all agree on the value of the programme, we cannot accept that those who were specifically referred to and offered hope as long ago as the publication of the 1998 Green Paper should be left behind. The reduction in numbers must therefore represent a genuine increase in off-flow as well as a reduction in the numbers of new claimants. I urge the Minister to give in his winding-up speech a commitment to providing disaggregated targets for those two components of the total reduction to which the Government are committed.

We also need to understand the Government’s thinking about the migration of existing claimants. It has come out during our extensive debate so far that provisions in schedule 4 will allow the migration of existing claimants on to the new system. However, as is consistent with the broad architecture of the Bill, schedule 4 contains largely regulation-making powers. It would therefore be helpful to understand how and when existing claimants will become subject to the new regime.

We understand that the Government’s original intention was that existing claimants would remain on the old incapacity benefit, with work-focused interviews being gradually rolled out. The Secretary of State has now made it clear that there will be a migration process, but, if I have understood it correctly, with existing benefit levels protected. Will the Minister of State be clear, either when he winds up the debate or in an intervention, about what that means? If an existing claimant goes for a new reformed personal capability assessment test and fails it, he would presumably be obliged to claim jobseeker’s allowance, but if benefit levels are to be protected, he would get JSA but at the rate of his former incapacity benefit. Is that correct? Would the JSA come with the usual conditionality—the actively seeking work and available for work tests? We need to understand how the proposals would work in practice.

All the Government announcements and publications that I have seen give the impression that eventually everyone will be included in the system and eventually there will be a requirement to engage in work-related activity, rather than just to complete an action plan and then not necessarily act on it. However, the Government continually enter the caveat “as resources allow”. The Secretary of State made it clear that there can be no further roll-out of the programmes until after the comprehensive spending review.

We agree that it is right to extend the compulsion elements of the programme only when the necessary support is in place and available, but we are talking about a programme that is intended to deliver huge savings—billions of pounds of savings—to the Exchequer. The Government’s analysis, such as it is, says that there is an 8 per cent. increase in off-flow in the pathways pilot areas and that the scheme is very much more than self-financing. The Minister of State
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said in a press release, I think, last week that the average cost on a pathways programme was £800 and the average saving was about £8,000. So talk about being unable to roll out the programme because of resource constraints does not ring true, or at the very least it betrays a desperate lack of financial imagination.

The Green Paper says that pathways will be rolled out in new areas by the private and voluntary sectors, paid for by results and in a way that allows

The announced roll-out will use private and voluntary sector providers, but on a much-diluted basis compared with what the Green Paper envisaged. They will not conduct the roll-out in all new areas, they will not be paid wholly by results, and the roll-out will be with a degree of prescription that, frankly, will stifle the most innovative in their ambitions for those programmes. It is almost as if the proposal for roll-out with the private and voluntary sectors has been designed not to maximise the potential benefits that could be squeezed out of using them.

I have a number of different points to suggest to the Minister. There is not enough transfer of risk in what is being proposed.

Mr. Hutton: I was not planning to intervene, but the hon. Gentleman’s concerns about the roll-out of pathways through the private and voluntary sectors are fundamentally misplaced. We will shortly discuss with the potential new providers of pathways our proposals for how we want the roll-out to proceed. It will certainly not remove the opportunity for innovation, development and flexibility. We want to pursue, and rightly so, the best possible value for money for the taxpayer. If he is prepared to wait a bit longer, he will see from the documentation, which he has asked for and which I am happy for him to see, confirmation that his fears are misplaced.

Mr. Hammond: I am grateful to the Secretary of State and I am encouraged by the fact that he does not intend to hamper the innovation that the private and voluntary sectors can deliver. However, I have talked to private and voluntary sector providers at some length over the past few days. Perhaps he will allow me to set out my concerns and intervene again if he wants to. I would be more than happy if, after the next three or four minutes, I was able to say that he had dealt with all my concerns.

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