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17 May 2007 : Column 329WH—continued

My second point is to do with the increasing use of work-focused interviews. I do not have a problem with the principle that people engage in work-focused
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interviews to assess where they are on the return-to-work scale, where they need help and everything else. However, it is worrying—frightening, in fact—that there have been 40,000 sanctions against lone parents. Something is not working if that many lone parents do not engage with the system in the full knowledge that their benefits could be sanctioned.

The Minister helpfully replied to a question of mine the other day and set out the process, and it is almost impossible to get sanctioned because of the number of attempts that are made to get the person to take part in the interview. Notwithstanding that, there were 40,000 sanctions last year. Someone needs to consider that, because the system is obviously not working and nobody is benefiting. The individuals are losing benefit, and the Department is not getting people into work. Something is going wrong somewhere, perhaps in the training programme or the personal adviser programme. We need a close analysis of why 40,000 people have chosen to take a benefit hit rather than attend an interview. An interview is all that it is. It is not an instruction to go to work, it is theoretically a helping part of the process of moving people back into the work arena. That is a serious cause for concern.

2.59 pm

Mrs. Joan Humble (Blackpool, North and Fleetwood) (Lab): I wholeheartedly endorse everything that the Chairman of the Select Committee, my hon. Friend the Member for Bradford, North (Mr. Rooney), said. We engaged in the report because the subject is at the centre of the Government’s welfare to work programme and because getting employment strategies right is vital for so many people.

We started off by acknowledging that the Government have got a lot right—I reassure my hon. Friend the Minister that we know that. The 2.5 million extra people in work and the amount of job creation in the past 10 years are signs of a successful economy and that the Government’s employment strategies have been working. Over the years, the introduction of various new deal programmes has been successful in targeting particular groups.

To achieve the 80 per cent. target that the Government are now talking about, we need to consider what has been working best, what is no longer appropriate in the labour market and how we can particularly help the groups that are the most disadvantaged in going back to work. That is why we examined certain groups in particular in our inquiry, and my hon. Friend the Member for Bradford, North outlined those groups. I wish to cover two or three of the issues that we raised.

I mention again to the Minister the issue of definitions and what we mean by the 80 per cent. target. Our report starts with an analysis of the extreme ends of the spectrum—the 16 to 18-year-olds and the 65-plus-year-olds. The Government are actually more sympathetic to us when we talk about the 65-plus-year-olds, because there are an increasing number of them in the labour market. To exclude them from the 16 to 65-year-old group that forms the target for the statistics will become increasingly bizarre, particularly as the Government are actively encouraging people to continue working beyond 65
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through changes to pension legislation. We need to examine the basis of the statistics.

At the other end of the spectrum, the 16 to 18-year-olds, we currently have an analysis through the Department for Education and Skills of the NEET—not in education, employment or training—group. However, we are also getting messages from the DFES that the Government are considering encouraging the overwhelming majority of young people to be in education or training until they are 18. It therefore seems illogical to count the ones who are in education and training as unemployed for the purpose of the statistics.

I accept the Government’s response to our report. In it we say that they should leave the situation as it is but monitor it. If they come up with definitive proposals to require young people to remain in education until they are 18, it will be a nonsense to include them in unemployment statistics. Equally, if the Government are encouraging over-65s to remain in employment, it is bizarre not to include them.

For the time being I accept the Government’s response that they will monitor the situation, but it is important that they examine what will happen in the future. Their response that the suggestions would make international comparisons difficult will not be sustainable in the long term. Other countries are doing exactly what we are doing—encouraging older people to remain in work and younger people to remain in education.

John Penrose: Will the hon. Lady give way?

Mrs. Humble: I give way to my Select Committee colleague.

John Penrose: I thank my Select Committee colleague. On a point arising from what she said, in the existing statistics the Government are trying to have their cake and eat it. They are including people over 65 who are in work in one part of the calculation but excluding them from the other. They are including them in the numerator of the fraction and excluding them from the denominator, thereby pushing up the percentage. It is clearly relatively meaningless if one does not compare like with like. The Government need to make clear why they think that is okay.

On international comparisons, fine, we may need some statistics, but that should not be driving what is right for British policy making. Let us have a target, definition and statistic that are correct. Then, if necessary, we can publish the subsidiary figures that allow international comparisons on a like-for-like basis.

Mrs. Humble: That intervention has highlighted to the Minister the sort of detail that the Select Committee went into. We not only questioned witnesses on numerators and denominators—I had to think back for a minute to my schoolgirl maths to try to remember what they were—but compared ratio with rate. I will not question the Minister on that.

We all know that statistics can be misleading. As the hon. Member for Weston-super-Mare (John Penrose) said, they should be tools to help to develop policy, so I want to start from the basis of an analysis of whether the parameters in which the statistics are determined are correct. More importantly I wish to reinforce what I think is the key message of our report, to which my hon. Friend the Member for Bradford, North referred,
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which is what we mean by employment. We let the statisticians and the Government off too easily by saying that because somebody has been in employment for 13 weeks the job is done. It is not. A lot of people start work and leave it a lot more quickly than that, and a lot leave just after the 13 weeks. Surely the success of an employment strategy is whether people are still in work after six months or a year. We have recommended 26 weeks.

Greg Mulholland (Leeds, North-West) (LD): rose—

Mrs. Humble: I give way to the hon. Gentleman, another colleague.

Greg Mulholland: I agree absolutely with the hon. Lady, my Select Committee colleague, on the fundamentally important points that she is making. Does she agree that we would like to hear from the Minister the Government’s thinking on our recommendation that the sustainable employment measure should be 26 weeks, which I know they are currently considering? I also ask the hon. Lady, and thereby the Minister, whether we can examine not only ways to measure people going into employment in the first place but a more meaningful measure including such matters as the level of pay at which they start a job, their job sustainability, the length of time they are in it and their job prospects. That would meaningfully get people into the culture of work as well as into work itself.

Mrs. Humble: The hon. Gentleman anticipates a point that I shall come to. As part of an employment strategy, in determining what we mean by sustainable we must also consider what makes a job sustainable. We need to examine what barriers there are that cause people to leave work. For many people going into the labour market, certainly for lone parents, sustainability depends on such issues as appropriate, easily accessible and affordable child care. My hon. Friend the Member for Bradford, North pointed out that there are real difficulties here in London with the affordability and availability of child care. There are problems for parents of disabled children wherever in the country they live. The employment level of parents with disabled children is 16 per cent., which is abysmally low. That is not to say that all those parents want to stay at home with their children; they often want to go out to work, whether in a part-time or a full-time job.

We need to examine all the issues that make a job sustainable, which could include child care or the prompt payment of in-work benefits. My hon. Friend the Minister is not entirely accountable for that, because in-work benefits are paid through the tax credits system. There must be close working relationships with Her Majesty’s Revenue and Customs to ensure that the transition from out-of-work benefits to in-work support is handled properly and that there are prompt assessments. As we heard earlier, there are issues about housing benefit. Some people do not realise that they might still be entitled to it when they are in work, depending on the level of their wages. Those people need to be made aware of that.

The issue of sustainability leads me on to the test that can be carried out to establish what people’s income will be in employment as opposed to on benefit. As the Chairman outlined, many people on
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benefit are fearful that they will lose the security of their, albeit very low, income when they go into the world of work. They are not entirely sure whether all the entitlements that they receive in work will match those that they receive out of work. For the overwhelming majority of people, being in work pays, but it does not pay for certain groups, and some lone parents with high child care and travel costs might well be no better off or only slightly better off in work. If we are to ensure that work is sustainable, we need a strategy to address all those barriers.

Natascha Engel: Does my hon. Friend recall our visit to Jobcentre Plus in Newham, where we met three or four women claimants, most of whom were single parents? When we asked about the better-off calculation, which assesses whether people would be better off in work or out of work, the advisers told us that it was not automatically done for lone parents on benefit unless they specifically asked for it, which seemed absolutely ridiculous to every Member on the visit.

Mrs. Humble: My hon. Friend makes an excellent point. If the Government are really serious about adopting a “work first” approach, it must apply from the initial interview—from someone’s initial contact with the Department for Work and Pensions. We heard examples such as that of a mother who had been widowed and who had young children at home, and it could of course be hurtful to talk to such people about better-off calculations when they have recently been bereaved. There will of course be exceptions, but individuals should be offered the calculations as soon as possible, because many people do not know their entitlement to in-work support or employment law support. Many people—particularly young women—are unaware of the excellent legislative changes that the Government have introduced on the work-life balance to give them all sorts of entitlements, such as time off when their children are ill, statutory holidays and new arrangements for maternity pay.

The Government have a responsibility to advise people about such issues to ensure that they go into work, that that work is sustainable and, to pick up an earlier point, that there is the possibility of advancement. One problem that has been raised with me as a constituency MP is that when people are in fairly low-paid jobs and have little hope of advancement, the jobcentre does not give them advice, because they are already in employment and are expected to look in the newspapers and find things out for themselves. However, many people in the lowest-paid jobs lack skills, might not have educational attainments and, quite honestly, often do not know where to look for opportunities to re-skill so that they can get into jobs that offer them a lot more. Long-term sustainability means having promotion prospects and being able to move from basic, entry-level jobs to more interesting, better-paid jobs. I therefore urge the Minister to look again at our recommendations on the issue.

As part of that, I want to repeat a recommendation that was made in earlier reports about the pilots to build on the new deal. In a report some time ago, our predecessor Committee pointed out that the original new deals worked well and put something new in place to support lone parents, people with disabilities, over-50s
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and the like, but many people might be over 50, a lone parent and disabled. The Committee recommended then, and recommends now, that personal advisers should not categorise individuals as belonging to one little group. People should be seen not just as lone parents, for example, and advisers should consider whether there are age, gender or disability issues.

We were pleased when the Government set up the building on new deal pilots, but they did not go anywhere. In the present report, we ask what has happened to BoND. Can we have a rebirth please, if not of BoND, then of something very similar—[Interruption.] The Minister now has a whole series of recommendations on the matter, but I will refrain from making any. I simply say that we must not label people when they walk in through the door, but see them as individuals who need support for their particular needs. That in turn means that we need appropriately trained staff with the range of knowledge and experience necessary to deal with individuals in the round and the flexibility to do so. However, the Government have not only not given personal advisers more financial flexibility, but have reduced the financial flexibility that they currently have. The limited amount of money that advisers had to buy people a new suit to help them get into work, for example, has been reduced. However, we are constantly told in our inquiries that that small amount of money can make the difference between somebody going back into work or not going back into work. Will my hon. Friend the Minister look into that?

That leads me on to two final points, one of which leads into the other. There are too many pilots. We keep reading of pilots, and they usually work. They do a good job, and somebody in a particular area will benefit, but nobody in other areas does. I am sorry, but I really am going to have to get a dictionary out when I leave to look up what starting a pilot actually means. To me, it means that if things work, we then look at extending them throughout the country. One such pilot, which was mentioned earlier, was the new deal plus for lone parents. We have been told that it is working well where it is in place and offering lone parents just that little extra. Similarly, the Committee’s report calls for the work-related activity premium to be extended to parents of secondary school-age children, because it has worked well where it has been implemented.

There is a lot more that I could say about our report, but I will not, because colleagues want to get in. The Government have done so much good on this issue, but it is now time to build on that, to build on the pilots and to reconfigure services. In the Committee, my hon. Friend the Minister has a group of Members from all political parties who work hard and produce excellent reports with excellent suggestions. Will he please listen to us as much as he does to some of the external organisations and individuals that he commissions to produce very similar reports?

3.20 pm

John Penrose (Weston-super-Mare) (Con): I want to endorse and to follow up on many of the excellent points already made by my Select Committee colleagues: the Chairman, the hon. Member for Bradford, North (Mr. Rooney), and the hon. Member for Blackpool, North and Fleetwood (Mrs. Humble). In particular, it is
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important that we should not forget the points made about the Leitch report and its endorsement of the skills agenda, particularly for those over 25 and out of work. We have already heard how co-payment is not a viable opportunity or option for those people. I also endorse my colleagues’ comments about the Freud report and its suggestion about reinvesting benefit savings in bringing more people into work. Those look like excellent suggestions and I await with great interest the Minister’s response and in due course the Government’s more detailed response to Freud.

Before I go any further with my comments, I should apologise to the Minister and to my hon. Friend the Member for South-West Bedfordshire (Andrew Selous), because I must leave before they sum up. I hope that they will forgive me for that.

I want to expand a little on the point about flexibility for local advisers. We heard time after time, in many items of evidence, that that is vital. However it is, I think, contrary to many of the instincts of a large bureaucracy that goes for central control. It requires a degree of courage to allow the professionalism and excellent training of many of the advisers to be used to its fullest effect. Yes, some sort of control can be exercised by imposing a budget, so that flexibility does not run out of control, but it seems to be one of the most effective ways of allowing individual jobseekers to be treated as individuals, and their personal and specific circumstances to be taken properly into account.

Therefore, it is particularly disappointing that the Government’s response, at paragraph 65 on page 14, to our recommendation that personal advisers be given greater discretion over further benefit extensions, is:

That is peculiar, to put it politely, because in paragraph 34 of the same response the Government say, in discussing whether it makes sense to extend the definition of sustainable employment to 26 weeks or beyond:

Thus the Government are accepting that the longer someone is in work, if they can be got over that initial difficult period at the start of work, the better; there is a massively improved likelihood of staying in work. Surely that provides them with precisely the policy justification, which they said in their response in paragraph 65 did not exist, for giving advisers more flexibility to get people over the initial introductory hump, settle them in and ensure that they remain in work for the crucial first weeks and months, by whatever means their circumstances make necessary. I hope that the Minister will give a proper response to that.

I was disappointed with the Government’s response to the various points that were made about discrimination. Discrimination is extremely difficult to quantify. The assumption that tends to be made is that it is the remaining explanation for any differentials in employment rates for different groups, after all the other explanations
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have been used. However, it is difficult to understand precisely how much discrimination affects different groups. Nevertheless, the evidence that we received included a wealth of anecdotal certainty among many different groups that discrimination is real and affects many different jobseekers severely. Whether someone is elderly, from an ethnic minority, or in some other category, discrimination in one form or another is potentially a serious barrier to work for some people.

It is important to understand that discrimination is not exercised only by employers, although I am afraid to say that it does occur with some employers. It may have other sources. Members of a person’s family or community might frown upon their going into work, so that they must overcome a societal barrier. I am very concerned that the Government’s response on this, whenever we have asked Ministers about it in evidence sessions—and, indeed, in the response to the Committee’s report—seems to be to postpone it, and to say that a report is coming up. Real hard suggestions are absent and that is deeply worrying at this stage. I hope for some concrete suggestions, because it is a difficult area to understand but it is vital to do so if we are to take on this task properly.

I am conscious that other hon. Members want to contribute, so I shall limit myself to one more point. To return to what the hon. Member for Blackpool, North and Fleetwood said about the Government’s targets and whether 80 per cent. is right, she will, I am sure, be pleased to hear that I do not plan to go into any more detail about numerators and denominators, but it is important, from a conceptual point of view, to understand who we expect will get into work, and who we expect will not. The Government have said that they want 80 per cent. of some fictional number—the number of people in work divided by the number of people below retirement age, which is a strange figure anyway—to be in work. That implies that they have a view that the other 20 per cent. are not supposed to be in work. We need, as a country, to be clear about who is in that 20 per cent., and why that is the figure. What is the justification? Where is the evidence to support it?

The Government’s response on that point looks pretty woolly. Paragraph 8 of their response to our recommendation states:

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