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17 May 2007 : Column 336WH—continued
“The Department’s view is that producing a list of groups not expected to work would be likely to limit the aspirations of those who could potentially re-enter the labour market with the right support.”
I completely accept that if the message were wrongly conveyed, that interpretation might be taken, and that is not the Committee’s intention or, I am sure, the Government’s. However, it must be possible, particularly given the Government’s vast resources of spin doctors and so on, to get the message across in a way that does not have that impact.
I remind the Government of their own comment in paragraph 10:
“There will be many disabled people and carers, for example, for whom employment is not a viable option.”
They say that they do not want to identify such people, because it might limit their aspirations; then, two paragraphs down the very same page, they have done it. It is clearly possible, provided that it is approached sensitively and with a degree of understanding, to explain that people may not be expected to re-enter the
labour market, because it is difficult for them and it may be unreasonable to put them under that pressure, but that the Government want to give them the opportunity. The Government did that extremely carefully in their recent proposals to reform the incapacity benefit system. The support group has exactly such a definition behind it; its members are not expected to be in work, and will not be put under pressure to enter work, but if they want to get into work and volunteer for the process, they will be welcomed, supported and encouraged. Not only that group of people, but others should be given clarity about whether they are expected to be in work.
What will be the approach to people who are retired? We know that people over 65 will probably be encouraged into work in future, but are they expected to be in work? If not, let that be made clear: let us say that they are part of the 20 per cent. of society who are not expected to be in work, and that if the Government want an excuse for not attaining more than 80 per cent., with respect to their target figure, that is a reasonable one. We should not beat up Ministers for failing to get retired people into work when they do not want to be in work. I am trying to help the Government out by suggesting that as a potential answer to future criticism. Equally, as has been mentioned, we should consider people in full-time education. It may be unreasonable to expect them to be in full-time work.
I encourage the Government to be bold and clear about this issue. Who do we expect to be in work, and who do we not expect, but encourage, to be in work? Once those groups are defined, it will not be difficult to quantify them with at least reasonable accuracy, so that we know whether 80 per cent. is the right figure to aim for. If we have quantified groups of people who are not expected to be in work and they turn out to be 30 per cent. of the population, rather than 20 per cent., an 80 per cent target is ridiculous and we should reduce it to 70 per cent. Similarly, if those people are actually only 10 per cent. of the population we should raise the target, because 80 per cent. is too easy. It is important that the Government are not precisely wrong on the figure in saying that it is difficult to measure. It is important, however, that they are willing to be approximately right and say that they can define the groups and, within reason, distil from various statistics how many people there are in those classes, so that we know whether they are aiming at the right target.
That is an important point. If we do not have accurate statistics and targets, the Government will, by definition, be pointing their policy towards achieving an invalid or incorrectly grounded policy objective. It is therefore fundamental to the way in which the Government approach things that their targets are worth while—they are fond of targets—and provide a sensible direction for policy. This one in particular needs substantially more work.
3.30 pm
Natascha Engel (North-East Derbyshire) (Lab): I am absolutely delighted that the Select Committee has secured this debate. This is one of the many reports we have done to which the whole Committee was very committed.
On the one hand, the Government have been most successful in identifying an incredibly ambitious aspiration of 80 per cent. of people in employment. They also identified work as the best route out of poverty—I believe that everyone on the Committee agreed with that—and therefore also as the single best way of ensuring that their other ambitious targets to end child poverty are also met. The Committee applauded what the Government are doing in respect of the 80 per cent. target, and therefore was excited about examining the detail behind the strategy. We focused on the strategy, and that is where we were most critical. I should like to focus on it a little now.
The strategy falls into many different parts. Further to the point made by my hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble) about pilots, there have been some immensely successful pilots, and immensely successful examples of getting people back into work. One of the pilot areas for pathways to work in my area of Derbyshire, which we visited quite a while ago, informed much of the Committee’s debate and much of what went into the report.
We saw that the more individualised and tailored the support, the more people had success in making the leap from out of work into work. The more tailored the support—and, by the same token, the more expensive the support—the more successful the strategy was, not just in placing people in work but in keeping them in work for any length of time.
That goes to the heart of the problem that we as a Committee had with the strategy. It has been mentioned already, but is worth mentioning again, that the system and the Department for Work and Pensions at present look at the whole system—the whole strategy—of getting people back into work in terms of the benefits that they claim. They do not consider the individual or the barriers that they face in going into work. That has a huge implication for anybody who claims anything other than one simple benefit. For anybody who has multiple disadvantages—many different types of disadvantage—there is an issue about which benefit is the basis for getting them into work. We need not only a system change but a culture change, but that will not happen just by tweaking the present system. Other Members have spoken about the changes that they would like, but I go back to the point that the more tailored and individualised the support, the more successful it will be.
The report deals with one of the big problems with strategies to get people back into work, which is that at present everything is delivered through Jobcentre Plus. Jobcentre Plus does an excellent job at many things in many parts of the country, but the focus is almost exclusively on job entry. Although there are bits about keeping people in work for a certain time—and we can discuss until the cows come home what that period should be—what Jobcentre Plus really focuses on is job entry. The proportion of people who come back to claim benefits, and who go back through the doors of Jobcentre Plus, is 70 per cent. That is a staggering figure. It tells us that there is something seriously wrong with the kind of work that Jobcentre Plus is doing. There is a revolving door, a churn—whatever one wants to call it. People go to Jobcentre Plus and are
placed in work, but they fall out of the labour market far too quickly and come back through the doors of Jobcentre Plus again.
There are plenty of statistics about keeping that 70 per cent. out of Jobcentre Plus, keeping them in the workplace and meeting our 80 per cent. target. All sorts of different statistics are bandied about, but they indicate that the system is not really succeeding at keeping people in work.
The report also points to what the Committee identified as a sort of a tick-box mentality in either the DWP or Jobcentre Plus. Once somebody has gone for 13 weeks, or however long it is, the box is ticked and their case notes go into the files. The person does not really matter until they come back through the door, when their case notes become live again. Not only is that enormously inefficient and expensive, but it is not very good for the individual who bobs in and out of the labour market and is just running to keep up. The Committee focused on that.
That brings me to the point about work first, work first plus and Lisa Harker’s report. Freud and Leitch were enormously interesting to read and enormously informative, but Lisa Harker’s report on child poverty targets is one of the best reports that I have ever read. She proposes the idea of work first plus. Under the New Zealand model, when somebody comes through the doors of Jobcentre Plus, the focus would be on work—not benefits—but not only on work. The focus would be on good work. Not only are people being churned through the doors of Jobcentre Plus, but we also have many people who are in poverty at work, and that is very alarming. I go back to the points made about lone parents and lone parent benefit, and how we must create a system whereby it is worthwhile for somebody to go back to work. Work is about a lot more than just earning money to survive. It is about creating social networks, and progression and personal development.
That brings me to retention and progression. An alarming aspect of Leitch was the description of our economy as having many low-skilled or unskilled jobs and many high-skilled, high-technology jobs but really nothing in the middle. It is difficult, given the state of our economy, to progress from a low-skilled, low-paid, often menial job through the labour market into a higher-skilled, higher-paid job. We must look at that situation in a sophisticated manner and develop policies to deal with it. Much is said about in-work skills and “Train to Gain”, but we must also consider how our economy is structured. That would go a long way towards ensuring that we keep in touch with people once they are in the labour market, rather than just letting them bob in and out without gaining any skills or any really useful experience other than how to sign on again.
The Government’s response to our excellent report on their employment strategy referred frequently to the Freud report. I am aware that the Government have not yet responded to it. I would like to make a bid in respect of the response. The Treasury will produce a response to Leitch, and the DWP will respond to Freud. Would it be possible to produce a hybrid response to both reports that addresses skills and welfare at the same time? That is essential if we are to
deal with the skills development agenda but also keep people in work and reach the 80 per cent. employment target.
The Freud report talks a lot about the radical proposal of regional prime contractor-led monopolies and consortiums bringing in local private and voluntary sector organisations to deliver welfare in each of the regions. The Committee produced its report when the Freud report was happening in the background. All members of the Committee welcomed some of Freud’s proposals and thought that they were new and interesting. We will certainly look at them in far greater detail, but we had slight concerns about the effect that such a large regional consortium would have on the local provision that is currently good. Some local provision is not good, but some is absolutely excellent. There were also concerns about the ultimate effect that proposals would have on Jobcentre Plus, which has a good district-based network of not just personal advisers but jobcentre managers, who are part of networks and liaise with local authorities and private employers. There is a danger that making consortiums far too big would undermine the good work that is happening and if it is done in the wrong way, the Government’s 80 per cent. employment target could also be undermined.
The proposal for city strategies was in the Welfare Reform Act 2007 and was discussed in our report and the Government response. The Committee visited Glasgow and I have recently found out about the Manchester city strategy. City strategies work best where there are close personal working relationships, not just with Jobcentre Plus, but with local authorities and different local providers. The key to the success of city strategies has been the pooling of resources and budgets. It is fundamental to the success of city strategies that those operating them are in control of the resources and budget. City strategies that have not yet been so successful have not been running for long and we should give them more time because it is a no-brainer to say that city strategies must work. Pooling resources and bringing together people with an interest in the strategies has to be a good thing.
As my hon. Friend the Member for Blackpool, North and Fleetwood mentioned, Jobcentre Plus and city strategy partners are losing flexibility because the Government have recently centralised the procurement budget. That undermines the help and support that can be brought in at a district and city strategy level in order to better and more easily reflect local labour market needs and the needs of local claimants. Nationally pooled and spent budgets means that the local labour market angle is totally lost, which we warn against in the report.
Finally, the Government response states that there will be
“a small number of consultation events in May 2007”
on the Freud report. I am not aware of any consultation events although I have been looking out for them. I would like to know where they will be, when they will be and who can take part in them. The issues raised by Freud are dramatic—such as moving welfare delivery from Jobcentre Plus to the private sector for people who are out of work. That is a dramatic shift and I understand that the DWP will be piloting Freud’s recommendation before it is introduced. As it is such a
dramatic shift from the way that welfare is currently delivered, consultations should not take place not just in May, but for a much longer time. We need the opportunity to scrutinise that proposal much more carefully to ensure that the good things are not wiped out.
I do not wish to be too negative and will end on a positive note. The whole Committee agrees that the 80 per cent. target is wonderful; it was just the way to reach it that we had slight concerns about.
3.44 pm
Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): It is a pleasure to be here. I feel a bit like an intruder because so far all the speakers have been members of the Committee—it is only the Front-Bench spokespeople who are not. Having listened to the quality of the contributions from all parties and all members of the Committee, it is clear that the Committee is well on top of its brief and knows what it is talking about. That comes through in its excellent report, which offers a strong critique of the Government’s employment strategy, albeit phrased in the careful, constructive, none the less critical language that we have heard from all members of the Committee. In particular, the Chairman, the hon. Member for Bradford, North (Mr. Rooney)—who I am sorry has left the Chamber so will not hear me say this—gave an excellent introduction to the debate and clearly set out the wide range of issues that need to be considered in relation to the Government’s employment strategy.
The last sentence of the contribution of the hon. Member for North-East Derbyshire (Natascha Engel) summed the matter up: it is not the 80 per cent. target about which we are worried, it is how we will achieve it. That is the question. All parties think that it is right to have the objective of getting more people into employment, particularly from the disadvantaged groups that are mentioned in the report. That is the right objective and a considerable amount of good work is taking place.
The Committee said in the report, and I believe strongly, that the overall employment strategy and target for significantly raising the employment levels of people with disabilities and on incapacity benefits must be a big part of successfully delivering on that objective. That is not a matter considered extensively in the report because it was the subject of a previous report by the Committee. None the less, it is important to place on record that if the numbers of people in employment in this country are to be significantly increased, it is important to get people off incapacity benefit or its successor—the employment and support allowance. The Minister and I spent many a happy hour in the Committee that considered the Welfare Reform Bill considering that matter in detail and I was delighted that many of the amendments introduced by the Liberal Democrats in Committee were accepted by the Government when the legislation reached the other place. That is a welcome sign of the Government’s willingness to listen.
However, as the Chairman said in his excellent introduction, the Government response is thoroughly
inadequate, and does not address many of the points that were made. It is uncharacteristic for the Minister to be inadequate; normally when we discuss these matters—not least at the recent international gathering on welfare reform—he is robust and clear in his opinions. That does not come through effectively in the Government’s response.
3.48 pm
Sitting suspended for a Division in the House.
4.3 pm
Danny Alexander: I think that I had finished the point that I was making, but I am sure that, if I repeat myself, hon. Members will bear with me. The Select Committee’s excellent report dwelt in detail on a number of the important issues that need to be dealt with for the Government to meet their targets relating to raising the employment rate. I am referring in particular to issues relating to older people—the over-50s—ethnic minorities, the cities strategy, to which I want to return in detail, and multiple disadvantage, which is, if I may say so, the fundamental burden of the report. That has come out in a number of the speeches that have been made. I do not intend to go into detail on all those matters, because many of the points that I intended to make have been made by members of the Committee. I think that I have made the point, but it is worth repeating that, in looking in total at the way in which the Government—
4.4 pm
Sitting suspended for a Division in the House.
4.13 pm
Danny Alexander: A critical part of the Government’s strategy to meet the target to increase the number of people in employment must be to tackle the low rates of employment among people who are disabled or who have long-term sicknesses, as well as focusing on the groups that are rightly dwelt upon in the Select Committee’s report. I know, from our discussions in other debates and Committees, that the Minister is well aware of that.
In his opening speech, the Chairman of the Select Committee voiced his concerns about the poor quality of the Government’s response to the report and their inadequacy in addressing many of its important points. It seems that Ministers are in the mood for apologising at the moment—the Chancellor has certainly been in the habit of apologising for other Departments’ mistakes recently. I know that the Minister has great aspirations: perhaps he could take a leaf out of the Chancellor’s book and apologise to the Committee for the Government’s poor response, but that might not be his style. I do not know; we shall see.
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