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Some time ago, I was involved in a voluntary sector project to get hard-to-place youths into work. The success rate was one thing that gave those who joined the scheme a bit of drive—85 per cent. of those who went through the scheme got into full-time employment, which injected discipline into youngsters who might otherwise have found it difficult to stay on
the programme. Unless such success rates are achieved, people will quickly become fed up and think that the scheme is just another failed initiative.
Giving employers sanctions has generated some concern, but I do not share that worry. In my experience of that youth project, the employer having sanctions can sometimes be important, because the people who are directly involved can best judge whether a sanction is appropriate and which sanction is appropriate. I am not therefore worried about the fact that employers will have the ability to impose sanctions.
Turning quickly to housing benefit, I have two concerns. First, I am concerned about the payment going directly to the tenant, who will then pass it on to the landlord. Some Members have argued that that is good because it teaches people who receive the benefit responsibility, but many, sad to say, are unable to bear that responsibility because when they get the money they will immediately spend it on drink, drugs or whatever, or if they do not, their husband, wife or partner will. If the money goes into a bank account, sometimes the bank will take it. There is already an element of responsibility involved anyway. Most people do not get 100 per cent. of housing costs met through housing benefit, so they have to budget somewhat for housing. We need to consider whether direct payment is appropriate in all circumstances. The Minister said earlier on that there would be opportunities for some people to have money paid directly to the landlord, but that merely puts in place yet another expensive bureaucracy for assessing who should have direct payment and who should not. Either we have it or we do not.
Secondly, I am concerned about the issue of housing benefit being withdrawn in the case of antisocial behaviour. We need to impose as many sanctions as possible on those who engage in antisocial behaviour and make people’s life a misery on estates. However, I wonder how much of this part of the Bill is down to getting a headline in the papers, some of which have already zoomed in on it and said that people will lose housing benefit if they do not behave. However, the Minister has made it clear that he is already imposing a restriction. When I asked him about it earlier, he said that there is no chance of families with children being turfed out on to the street. If so, we are already ruling out a whole range of people who may cause misery for their neighbours. We have to ask ourselves when and how this measure will be applied if it is to be effective.
I trust that the Bill will be introduced in parallel in Northern Ireland. That is necessary given the circumstances of those in that part of the United Kingdom who find themselves out of work and on incapacity benefit without some of the support that is required. Antisocial behaviour is a big issue on many estates, so any sanctions that can be imposed, albeit that they have been weakened by what the Minister has said, will be an important element of the armoury in fighting against that blight on society.
I appreciate the opportunity to take part in this Second Reading debate and trust that some of the points that have been raised will be teased out more fully so that the Bill returns in an even better form.
8.58 pm
Mr. Andrew Love (Edmonton) (Lab/Co-op): I, too, warmly welcome the Bill for all the reasons that other Members have mentioned. I am particularly concerned with part 2, which deals with housing benefit.
We all know about the problems with the housing benefit system. It is incredibly complex: anyone who has seen the local authority manual for housing benefit will know just how complex. It is bureaucratic, as anyone who has had to endure it when trying to claim housing benefit will know, and that leads to significant delays in payment. Primarily, there are enormous shortfalls in the payment of housing benefit compared with the rents that people have to pay.
For all those reasons, it has been a priority for the Government to reform the system. They introduced the local housing allowance pathfinders in 2003 and we are now beginning to get the results of those pilots. The pathfinders’ objectives were to: promote fairness, increase choice for the tenant, have greater transparency—tenants would know in advance the amount of local housing allowance that they were to receive—and increase personal responsibility. I shall revert to the latter shortly. The primary objective was bringing an end to the interminable waits for claims because of the bureaucratic nature of the system.
Pathfinders have achieved most of the objectives and were especially successful in reducing the shortfalls between benefit and rent—from £24 to £17 on average. That is to be warmly welcomed. However, we need to consider several matters in our scrutiny of the Bill.
All hon. Members who commented on housing benefit reforms mentioned direct payments to private tenants. I accept the objective of trying to increase personal responsibility. It is important if we are to assist people into employment, and the results of the pathfinders are encouraging. However, there are dark clouds on the horizon for the national roll-out of the scheme. Many people mentioned landlords’ resistance and expressed a view that that will increase the risk of non-payment and falling into arrears. I have some concerns that that will reduce the supply of accommodation for housing benefit tenants.
However, my main worry is about vulnerable tenants. They include the elderly, people who are leaving supported housing or care and the statutory homeless. There is a whole group of vulnerable tenants. Although I accept that provision has been made for local authorities to pay the benefit directly to the landlord, the system does not contain adequate safeguards and we need to consider whether trained and qualified staff are required to make an assessment to ensure that those who are most exposed under a system of personal responsibility do not fall into significant arrears.
One of the reasons for pathfinders’ success is the increased provision of financial advice to tenants in the pilot areas. Genuine difficulties undoubtedly arise when people have to set up bank accounts. Unfortunately, the Post Office card account is not available because, for some reason, the Post Office and local authorities do not have any agreements and people therefore have to set up bank accounts. There are major problems, with which people need help. For example, the European money-laundering regulations mean that people have to produce original
documentation. That has proved a genuine difficulty in other circumstances. I was pleased that the Minister gave the reassurance today that the enhanced money advice facilities will be available when the scheme is rolled out nationwide.
I want to consider the local housing allowance. Under the Bill, the rent service will set the local housing allowance and decide the broad rental market areas that that amount of local housing allowance will cover. Again, the pathfinder experience has been good. I welcome that and congratulate the Government because there has been a substantial reduction—from 58 per cent. to 39 per cent.—in the shortfalls that people experienced in those broad rental market areas. However, there have been significant variations, and several hon. Members voiced genuine concerns about that. For example, in Leeds, the scheme almost halved the number of people with a gap between their rent and housing benefit, but Conwy experienced only a small reduction. We need to look more closely at that experience, to determine how we can learn from it. There are also issues relating to transparency and to the boundaries of the broad rental market areas. I take the point made earlier about the significant variation in rental levels across Greater London, and we need to ensure that we get those boundaries right if we are going to make a success of the local housing allowance.
The shared room rate restriction will apply to childless claimants under 25 years of age. I will not go into that matter in detail, but I have raised an Adjournment debate on the subject. I welcome the extension of the shared room rate introduced by the Government, and the subsequent reduction in shortfalls experienced by young people in the pathfinder areas. However, there is still a major difference between young people, who experience an average shortfall of £35, and others, whose average shortfall was just over £16. We need to look into this matter, and I hope that Ministers will be sympathetic to a debate in Committee on the best way forward for the shared room rate.
I should like to make a brief plea in relation to interim payments, which have presented a particular problem in the housing benefit system. It does not look as though any changes will be made to the present arrangements, and I assume that that is because it has been accepted that the delays inherent in the existing system will not arise in the new system. However, we ought not to take that on trust. We need to strengthen the interim payments structure to ensure that people will be protected if their housing benefit is not paid, rather than finding themselves in arrears and threatened with eviction.
Finally, I want to say a brief word on the housing benefit sanction to tackle antisocial behaviour. I am sympathetic in principle to what the Government are trying to achieve. We have to crack down on antisocial behaviour and I am interested in the rehabilitation support that has been suggested. However, we must ventilate some of these arguments in Committee to ensure that that support is real. We must also consider the implications for families and, especially, young children who are evicted and who have action taken against them. I am certainly sympathetic to the idea of
establishing pilots to enable us to look carefully at this issue, because that is what is needed, and I hope that we will be able to improve the system to ensure that antisocial behaviour is dealt with.
I strongly welcome the Bill overall, and I particularly welcome the provisions for setting up the local housing allowance. The Bill will make a significant difference to people at the margins of our society, and I hope that it will not only encourage them to get back into work but ensure that they are looked after with a proper safety net while they are in the transition period.
9.7 pm
Greg Clark (Tunbridge Wells) (Con): The hon. Member for North-East Derbyshire (Natascha Engel) —and indeed the Secretary of State—referred to William Beveridge. I should like to refer to that other great titan of the 20th century, Sir Winston Churchill, who summed up the vision for our party’s involvement in social policy with two images: the ladder and the net. That has served us well during the 20th century, but it is an outdated vision for the 21st. People get tangled up in nets, and our purpose in this age must be to propel people upwards, not to leave them languishing in a net, however humane the intention behind its provision.
Nothing could better illustrate that problem than incapacity benefit. We know that once someone has been on IB for a year, they are likely to spend an average of eight years on it. The reasons for that are complex. People have special needs that can be difficult to deal with. When setting targets for reforming welfare provision to alleviate poverty, it is appropriate to tackle the difficult cases as well as the easier ones, and I urge those on my Front Bench as well as the Government to take that on board.
I applaud the Government’s achievements in reducing child poverty, but when we look at the construction of that target and at how progress towards it has been made, we realise that it has consisted largely of increasing the income of people just below the 60 per cent. poverty line to just above it. However, the number of people on less than 40 per cent. of median earnings—those in more severe poverty—has increased. Some 800,000 more people are now in severe poverty than 10 years ago. Many of those people are disabled. In a very good lecture to the Fabian Society, the Secretary of State pointed out that 25 per cent. of all children in poverty have at least one disabled parent. It is therefore extremely important that we direct our attention to that group. I hope that the Government’s headline targets will not distract them from that purpose. Our welcome for the Bill reflects the fact that it goes some way to show that the issue is not being entirely forgotten.
What can be done about it? The hon. Member for Tooting (Mr. Khan) and I serve on the Public Accounts Committee and we recently had the pleasure of scrutinising a report from the National Audit Office that considered the Department’s record on support for disabled people. It contained some shocking revelations. For example, as the Minister knows, 2.6 million people are on incapacity benefit, but only 125,000 of them are engaged in programmes to get them back into work. That is a drop in the ocean. If we are serious about giving people with disabilities the
chances that they require and about extending to them the social justice that we extend to other parts of society, it is vital that we increase the number and quality of places available.
The NAO also found that, since April 2001, one third of all workstep suppliers have not progressed a single person into unsupported employment. As well as providing some of the sticks and carrots in the Bill, we need to consider the quality and availability of that provision. In so doing, I urge the Minister to make far greater use of the private and voluntary sectors, which have a record of innovation that commends itself. I have had some experience of the work of Tomorrow’s People in my constituency and around the country. It has a fantastic record in dealing with the difficult problems that people face and helping to alleviate and, in some cases, cure them, so that people can go back into unsupported employment and have a decent chance of staying in it.
I also commend to the Minister’s attention the experience of Kent, where the supporting independence programme was a trailblazer for what is possible when local councils are trusted to think imaginatively about how to take welfare spending and turn it into positive opportunities for people. Over the past three years, Kent has seen a 4 per cent. reduction in welfare spending, responding to the challenge set by Ministers through public service agreement targets to take on responsibility, for example, for getting people from welfare back into work. That has been a great success. It has not only helped the chances of people with disabilities but been a positive economic factor.
I also welcome the city strategy programme that Ministers are advancing. I hope that Kent will be selected to be part of that. Sometimes people get the wrong idea about Kent and think that the garden of England is universally affluent and without social problems, but we have great problems of social deprivation.
Justine Greening: I am interested that my hon. Friend mentioned the city strategy. Does he agree that it is ironic that London features in the last wave of the pathways to work roll-out, and my area will only be rolled out in April 2008, nearly two years from today?
Greg Clark: I am grateful for my hon. Friend’s intervention, which underlines that we perhaps need to be more ambitious in rolling out such programmes. There is no point having financial penalties and interviews if programmes are not available for people who are keen, to the point of being desperate, to get into work. I hope that the pressure from this debate might encourage Ministers to roll out such programmes more quickly and aggressively across the country.
I am aware that others wish to speak, so I will cut my remarks short. Let me end by saying that, as I believe was pointed out by a Labour Member, this is an historic opportunity for the Government to add to their achievements in welfare reform—which, for the most part, have been relatively disappointing from our point of view—and to take a major step forward. So far, the Government’s record in returning people with disabilities to work has not been one of their highlights, but I hope that as a result of the Bill, especially if it is
taken a little further in the direction that I have suggested, many hundreds of thousands of people with disabilities will benefit.
9.15 pm
John Robertson (Glasgow, North-West) (Lab): As a fellow Celt, the hon. Member for East Antrim (Sammy Wilson) will appreciate that I do not give a jot about what members of his party think of my contribution. Someone from Glasgow, a city that may contain the largest number of people on benefit, will consider it important to look at exactly what the Government are trying to do. Their attempt to place 80 per cent. of the population in employment suggests a taxing target, to say the least, but an honourable one, which I hope all Members will support. We have already observed a degree of consensus tonight.
We ought to remember that, in the 1980s, the Tories took people off the unemployment list and put them on benefits. At one stage, fewer than 60 per cent. of Glasgow’s people were employed; the rest were either unemployed or, in most cases, claiming benefits. In cities like Glasgow, it has been hard work to return people to employment. It is difficult to believe that our city contains third generations who are incapacitated. I do not understand how it is possible to be on incapacity benefit without having had a job in the first place, but it happens. In cities such as ours, there is a great deal of work ahead of us.
Reforming incapacity benefit and income support is very important to those who, we hope, will eventually be given work. Thanks to Pathways to Work, people in Glasgow have returned to employment, and not just cheap employment: a number have obtained first-ever jobs paying over £15,000 a year, so there is hope. Nevertheless, the Trades Union Congress, among others, has concerns about, in particular, employment and support allowance. As far as I know, there has as yet been no mention of ESA rates, which makes it difficult to calculate the number of people who will be better off or, in some cases, worse off. I shall reserve judgment until we see the figures.
The Bill states that new claimants will receive an ability assessment within 13 weeks of their claims, but Citizens Advice rightly fears that that is not achievable. It is unacceptable that families on low incomes having to adapt to new or worsening health conditions should have to survive on jobseeker’s allowance for more than 13 weeks through no fault of their own. Can the Minister comment on the idea of backdating entitlement if the target is not met? Backdating does not mean that such people should not be employed, but it might help them by confirming that although their health is bad, they want employment. It would help them to feel part of the system.
As my right hon. Friend the Secretary of State said earlier, pathways to work has been a highly successful pilot scheme. I see the positive results in my constituency. The scheme was launched on 31 October, and was designed to help people claiming incapacity benefit to return to work. About 9,000 pathways to work interviews have been conducted, and, as has been said, the average national rate of voluntary participation is 8 per cent. I am proud to say that in Glasgow the figure has reached 20 per cent.
Before the introduction of pathways to work, 1,760 claimants were in receipt of incapacity benefit or income support. Those people have now moved back into work and about 74 per cent. of them—1,300 people—are in receipt of return to work credit: £40 a week for 42 weeks, before moving into full-time incapacity benefits. My concern over pathways to work is about the lack of training of advisers, so will the Minister assure me, my colleagues and people who work in the Department that advisers will be properly trained? I have not found any reference to that in the Bill, but it should be included. Advisers should also be fully trained in mental health issues. I shall not go into further detail on that, as many hon. Members who have much more experience than me have already dealt with it.
The Minister should also be aware of the half-truths spread by the media. Some might say that there is nothing new there, but the media seem to imply that the Government are forcing people into work. Will the Minister assure my constituents that that is not the case and will he dispel the propaganda of the populist press?
The role of the new deal in getting people into work is important. The hon. Member for Runnymede and Weybridge (Mr. Hammond), who is unfortunately not in his place, described the new deal as an expensive flop, yet 310 young people, 250 under-25s and 400 lone parents in his constituency have benefited from it.
We have done a similarly good job with tax credits. The shadow Chancellor, the hon. Member for Tatton (Mr. Osborne) said:
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