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The fourth goal is to strengthen parental responsibility. We have lifted 600,000 children out of poverty and, following the £1 billion invested in the Budget, we are set to help another 500,000. But we need to strengthen family life, too. So, for the first time, we will allow parents on benefits to keep all their maintenance payments and require both parents to register the birth of their
child. Together with our changes to lone parent benefits, we estimate that these welfare reforms will lift 200,000 children out of poverty.
Fifthly and finally, we propose to devolve power, so that services can be personalised to the needs of the individual. We want a triple devolution: to our advisers, to our providers and to local communities. Jobcentre Plus is recognised as one of the best back-to-work agencies in the world. Its staff have unrivalled knowledge of their customers and their needs, so we will give our advisers greater flexibility over how much time they spend with each client. We will offer our providers the right to bid for any part of our services that they think they could do better. We will also give local communities the chance to shape how back-to-work services are delivered in their area.
Most of all, we will implement all the reforms in the Freud report, the report that inspires our Green Paper. We will release the creative energy of the private, voluntary and public sectors. By paying them out of the benefit savings that they generate, we will free our providers to help even more of our customers back into work. And, as David Freud recommended, we will simplify the bewildering complexity of the benefits system. We propose to abolish income support and move current customers on to JSA when resources allow. The result will be a dual system of working age benefits, with ESA offering the right help for sick and disabled people, and JSA doing the same for those actively seeking work or with caring responsibilities. The conditionality regime would be appropriate to each and would not change for carers or parents of younger children.
Today’s publication marks the beginning of the consultation process. We want these proposals to be shaped by the opinions of the public and Parliament, and by the expertise of charities, providers and academics.
In the past, people were able—in many cases encouraged—to spend a lifetime on benefits. Once they had signed on, the welfare system all too often switched off. There was no expectation that anything could change and precious little support to make that happen. This Green Paper ends all that. It puts us on the road to our ambition of an 80 per cent. employment rate, with 1 million people off incapacity benefit by 2015, the eradication of child poverty by 2020 and equality for disabled people by 2025. The Green Paper will also restore Beveridge’s third principle—the principle of incentive, opportunity and responsibility—to where it always should have been: right at the centre of the welfare state. For that reason, the Green Paper will transform the lives of hundreds of thousands of people. I commend it to the House.
Chris Grayling (Epsom and Ewell) (Con): I start by thanking the Secretary of State for an advance copy of his statement, although after last week the contents did not come as much of a surprise.
May I also congratulate the Secretary of State on getting the Green Paper out before the summer recess? I know that many in his party most definitely did not want it published three days before the Glasgow, East poll and I have some sympathy with them. If I were running a by-election campaign on which my leader’s future depended, I would not want such a document published in an area of high benefit dependency three days before polling day, either. [Interruption.] But then,
hon. Members may suspect that the Secretary of State had other reasons for wanting the document published this week in particular.
Hon. Members may not know that the Secretary of State began his political career as Tony and Cherie Blair’s babysitter. He has come a long way since then— [ Interruption ]—and this Green Paper—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sorry to interrupt the hon. Gentleman, but the House should give him a hearing, just as it did the Secretary of State.
Chris Grayling: Today marks the day when the Secretary of State comes into his inheritance as the Blairs’ outrider in the House of Commons.
Today, the whole House should pay tribute to David Freud for the work that he has done and the influence that he has had on the welfare reform debate. His work formed a key part of our welfare green paper in January and of today’s announcement.
Much of today’s package is a straight lift from our green paper published in January. It included our plans for compulsory community work programmes for people who have been out of work for more than two years out of three; the Government have now adopted that proposal. It included plans for an independent medical assessment for all claimants of incapacity benefit; the Government have adopted that proposal. It planned to change things so that people could no longer sign on and off benefits for a week to avoid back-to-work programmes; the Government have adopted that as well.
We should bear it in mind that when we announced our proposals in January, the former Secretary of State described them as uncosted and unworkable, so the Government’s Pauline conversion since then is very welcome. Since these are Conservative proposals that we are discussing today, we will certainly support them. Indeed, I know that the Secretary of State will have some difficulties getting them through his own party, so may I assure him that we will help him to get them through the House even if he does have a Back-Bench rebellion to contend with?
In fact, I would go further than that. Hon. Members should not underestimate the importance of today’s announcement and why I am so grateful to the Secretary of State. It is much too late to start making a difference to Britain’s benefits culture during this Parliament, but by starting early, this Government are laying the ground work for the next one. We always expected it to take two or three years to get the new system up and running and then for it to take some time after that—when the various pilot projects are done—to maximise the potential savings and benefits of these proposed programmes. Today’s announcement means that during the next Parliament—beyond any of the current spending review periods—we will see real savings that can be reinvested in eliminating the couple penalty in the tax credits system, and those plans will take 300,000 children out of poverty. I am very grateful to the Secretary of State for giving us a head start.
Let me ask the Secretary of State about two points of detail in relation to the Green Paper. First, how much additional budget does he have to pay for the extra back-to-work places that will be needed under Pathways
to Work for those currently on incapacity benefit who will be tested between 2010 and 2013 in those areas that are not covered by the annual managed expenditure-departmental expenditure limts—AME-DEL—pilots? Secondly, given all the concerns raised about the employment and support allowance by pressure groups and Labour Back Benchers, can the Secretary of State confirm to the House that no individual will be worse off in real terms after they are transferred from IB to ESA?
The Opposition welcome today’s announcement enthusiastically. We look forward to a constructive debate about it and to trying to work with the Government to turn these proposals into reality as quickly as possible.
James Purnell: I welcome the hon. Gentleman’s support, of course. When parties agree on proposals, they should not invent artificial political differences. If something is the right thing to do for the country, that is exactly what we should do. The hon. Gentleman was not quite as complimentary as he was outside the House, when he said that the Green Paper was revolutionary, that he was “delighted” and thrilled and that the proposals were great news, but I will wait for him to write to me with those comments.
I am glad that, for the first time today, the hon. Gentleman has paid tribute to David Freud and his report. To listen to him sometimes, we would think that the Opposition had commissioned the David Freud report, but it was actually commissioned by the Government. When the Opposition published their green paper, they said:
“Our plan is to build a programme based around the concept set out by David Freud in his report.”
The Government commissioned the report, we have consulted on it and now we are implementing it.
I am reminded of the quote by Ronald Reagan—I am sure that he is someone the hon. Gentleman will approve of my quoting—who, I think, said that there is no limit to what someone can do in politics if they do not care who gets the credit. The hon. Gentleman can scrabble around trying to get the credit if he wants to; we will get on with doing the right thing for the country.
When the hon. Gentleman talks about Glasgow, East and Glasgow in general, he betrays a deep misunderstanding, which still pervades the Tory party, about parts of this country. It was the Conservative party that allowed that city to be abandoned for so long, and over the past 10 years, we have been putting that right by halving unemployment in Glasgow and reducing incapacity benefit by 25 per cent. That city has been transformed under a Labour leadership. The hon. Gentleman should be saying to people in Glasgow that he will provide them with that extra support. People will not say that they do not want that support. When I was there recently, people were asking for extra powers and extra support, and asking us finally to put right the mistake that the Conservatives made in the 1980s, which was to abandon people on incapacity benefit without the support that they deserved. We will put that right.
The hon. Gentleman asked two questions of detail. I am glad to be able to reassure him that the programme outside the areas with AME-DEL pilots—to use the jargon—are also fully funded by the Treasury, and that
our budget will be increased to ensure that delivery. That will allow us to offer personalised support across the whole country, and AME-DEL will be on top of that. Also, the hon. Gentleman can be reassured that there will not be any cuts to people’s benefits. We will use a much better way of targeting people in the future, using the support group to get more money to people. That is exactly the right thing to do. It is also worth saying that, although these proposals build on David Freud’s recommendations, they go further in significant respects. The right to bid is a new initiative, as is the right to control. The doubling of the Access to Work budget and the full child maintenance disregard are new policies that encapsulate the idea behind our Green Paper that there should be support as well as responsibility.
If the Conservatives want to support that approach, there are two further lessons that they need to learn. The first is that responsibility without support is a hollow bargain, yet that is what the Conservatives are proposing. They say that they want to dismantle the tax credit system because it results in poverty disguised rather than poverty cured—
Chris Grayling: When did we say that?
James Purnell: The hon. Gentleman’s leader said last week that we had reached the end of the road for transferring money from the rich to the poor. That was a clear signal that a future Conservative Government would cut back on benefits for the poorest people in this country. We need the right approach—one that combines support and responsibility. The second lesson that the Conservatives need to learn is that any proposals that we or they make need to be costed and funded. They are agreeing to our policies today, and we welcome that, but that means that there is no further money to invest in the couples’ penalty, as the hon. Gentleman called it. That money is fully costed in our plans. I trust that, if he wants to repeat that proposal, he will find a new way of funding it. We welcome the Conservatives’ support. We will work with them and we hope that we can teach them those two lessons as well.
Mr. Frank Field (Birkenhead) (Lab): Given that the social security system compensates people with disabilities through the disability living allowance, and given that I thought most people agreed that it was unwise to have higher rates of benefit for people who stayed on benefit the longest, why did the Secretary of State reject the one radical move that he might have made today—namely, to introduce a single rate of benefit for all people who are workless, irrespective of the cause?
James Purnell: We continue to be interested in the proposals around a single benefit system. Indeed, we are taking a major step towards that today by abolishing income support on top of the abolition of incapacity benefit. That will lead to a system that is based essentially around two benefits: jobseeker’s allowance and the employment and support allowance. In the short term, however, going in the direction that my right hon. Friend suggests would involve either spending hundreds of millions of pounds to take the JSA rate up to the ESA rate, or reducing the benefit levels of disabled people on ESA, which is not something that we are prepared to do. We continue to look at proposals for a single benefit system, but I hope that my right hon. Friend will acknowledge that today’s proposals represent an important simplification.
Jenny Willott (Cardiff, Central) (LD): It is good to have the opportunity to talk about welfare reform. I think that all my predecessor Lib Dem spokespeople have done so, given that this is the seventh Green Paper on the subject to be produced in the past 10 years. I thank the Secretary of State for giving us an advance copy of his statement, although I think I learned more from what I saw on television on Friday than I did from today’s statement.
I welcome the emphasis today on helping everyone back into work and the focus on the assumption that many more people are capable of contributing if they are given the right support. It is also good to see that the Department has persuaded the Treasury that a new funding model will be essential if this system is to work. I am also glad to see that there is finally recognition that the benefits system is far too complicated, which is something that the Liberal Democrats have been going on about for a number of years.
However, I would like to raise a number of concerns with the Secretary of State. The first is that these policies are very centralising, and that individuals do not appear to be at the centre of the reforms, no matter what he says. Every jobseeker is different. Many can easily find themselves a job within a few months and with very little assistance, but for others that simply is not the case. Instead of adopting centralised timetables, we should devolve more discretion to advisers in job centres and employment providers so that they know who is able to get jobs themselves and who will need assistance right from the start, rather than waiting a number of months before support can kick in—and the same should apply to sanctions.
My second concern is about privatisation in the current economic downturn. We agree that private and voluntary sector organisations should be involved in back-to-work support, but the Government’s approach is too centralising and large scale and the regional contracts are far too big for voluntary sector organisations to have much of a role in providing them. That will be exacerbated by the right to bid, as the only organisations with the capacity and resources to put in speculative bids will be big private sector companies rather than voluntary organisations.
That brings me to my biggest concern, which relates to the economic climate. Under the right to bid, there could be very little state provision left, but if it became apparent that the companies were finding it insufficiently profitable to provide those services or could not afford to run certain ones, there would be problems. Has the Secretary of State looked at the evidence and can he assure us that that will not happen?
My third concern is the system’s complexity. The Green Paper reflects what we have said for a number of years—that the benefit system is too complex—but genuine simplification seems to be on the backburner. Will the Secretary of State provide more detail on what he wants the simplification of the system to achieve and a timetable for doing so? Given that the Conservatives say that the Government have adopted all their ideas, may I recommend that the Secretary of State implements the Liberal Democrat policy of a single working age benefit?
Tackling poverty is the next matter of concern. The Green Paper is based on welfare to work—getting people into work as the route out of poverty—but more children
with working parents were living in poverty last year than were children with no parents in work. The number of children of working parents living in poverty has risen over in the past three years, whereas the comparable number of children in poverty with parents out of work has fallen. The lesson appears to be that, under this Government, work does not pay. How do the Government plan to tackle that problem? If this is a genuinely cross-departmental initiative, will the tax credit system be taken into account when looking at benefit simplification?
The final matter I want to raise with the Secretary of State is that of mental health. The Green Paper talks about drugs misusers, but does not mention people with alcohol problems. In fact, more than a million people on incapacity benefit have mental health problems, which is barely mentioned at all. Although we welcome some elements of the Green Paper, I would be grateful for more suggestions about what it will do to help that large group of people. I look forward to the Secretary of State answering my questions and to seeing the legislation that results from the Green Paper.
James Purnell: I welcome the hon. Lady’s backing for our support measures, the new funding mechanism and the simplification measures. We are, of course, happy to continue to reflect on proposals for a single working age benefit, but I think that the Liberal Democrats have to say how they would achieve that. Which benefit rates would they cut in order to have that harmonisation; or, if they are not proposing to cut any benefits, where would they find the extra money to lift everybody up to the level of the highest benefits within the system? [Interruption.] I note that the hon. Lady says that she is happy to have that conversation and I would happy to hear her set out her proposals.
It is also important to say that we want to give greater discretion to our advisers. They already exercise quite a lot of discretion, but we want to go further—for example, by giving them more time to discuss issues with people who may need half an hour or a bit longer, so spending correspondingly less time with those who are already looking for work and may need only a couple of minutes to arrange the next interview. We also want to give more discretion to our providers. That is why we are following the so-called black-box approach, where we set the outcomes and the results we want to achieve, but we also free up the people involved to determine how they actually achieve those ends. Where the private and voluntary sector is concerned, it is important that we do not curtail discretion with too many centralised rules.
The hon. Lady is absolutely right that the third sector and social enterprise have a vital role to play in the delivery of services. Indeed, they already do so, and we are determined that, as we bring in these prime providers, that will be a way of improving our work with the third sector. That is exactly why I have asked the Association of Chief Executives of Voluntary Organisations and Tony Hawkshead from Groundwork to lead a taskforce looking specifically into this issue. If the hon. Lady has any suggestions, we would be happy to consider them.
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