Examination of Witnesses (Questions 880
- 899)
TUESDAY 27 NOVEMBER 2007
CAROLINE FLINT
MP, MR JONATHAN
PORTES, RT
HON JANE
KENNEDY MP AND
MR JONATHAN
ATHOW
Q880 Mr Devine:
For them there were not any gains. Although people were getting
back to work, they thought the project was working and there were
concerns about privatisation at local levels, in the main they
were very enthusiastic about it. They were making the point that
the savings the Government were potentially making on benefits
and such like, none of that was coming back. They were putting
forward yesterday that it might not be a bad idea as a bit of
carrot if some of this money came back to the cities that were
successful. You just talked about London not being successful
and I wonder if there was any thinking of that type of strategy.
Caroline Flint: I have two comments
on that. First of all, I have to say when I was in Scotland recently
and visited a presentation in Edinburgh and Dundee as well, I
was really pleased with the energy and commitment of the partnerships
which were being pulled together as part of the City Strategy.
Each of the City Strategy Pathfinders has had to form a consortium,
they have had to put together a business plan and have been given
stretched targets in terms of the employment outcomes they should
find. What we have done so far is provided the money we provide
for the Deprived Areas Fund to put into the pot with other money
so that could be a bigger pot to share in terms of addressing
how they want to approach employment in their local areas. The
other point you make on savings and whether we can re-circulate
those where we make savings, that is something HMT might like
to comment on because, of course, we are bound by certain things
in the Department in relation to what we can spend and use in
these areas through our delegated budget and through other areas
where we have a commitment to just pay it, so we have a commitment
to pay benefits depending on the number of people who come through.
The issues around savings is important here. I was at an event
just the other day which was part of the Treasury's Invest to
Save project, but maybe Jane might like to comment on that.
Jane Kennedy: On the suggestion
you are making, all I will say to you is I suspect if we go back
with that Jonathan will say, "That's a very courageous proposal
to take back from the Committee". It is not exactly hypothecation
you are talking about, it is more complicated than that, but even
hypothecation is not attractive because of its complexity. We
prefer to think in broad terms in terms of the benefits of getting
people back into work where not only do you see a reduction in
the costs but you see a greater intake from tax because people
are working and paying taxes. It is an interesting point.
Q881 Danny Alexander:
Just two quick follow-ups to Jane, if I may. The point has been
made about how you use savings from people getting back into work,
and I think it is a very important one, and one of the proposals
that was put forward by David Freud in the Freud Review was to
allow savings from annually managed expenditure, which is the
money that is paid out by the Department in benefits to forecast
savings, to be able to be shifted to the Department's departmental
expenditure limit so that money could then be spent on getting
people back into work. That does challenge a piece of Treasury
orthodoxy which is that there should be a solid wall between those
two things, but in terms of the point Jim was making it seems
to me to be critically important to say that we should be able
to have that shift so that benefit saving can be spent directly
on the sorts of programmes that Caroline has quite rightly been
describing. What I want to know is what is the Treasury's view
on that proposal and can we get a clear position on it, because
I think that is the way to deliver the point that Jim has made.
Mr Athow: I think the issue of
how you use those savings and what those savings are raises a
number of points. For example, we have talked about child poverty
and moving a lone parent into work and when they go into work
they take up tax credits, maybe have help with childcare, the
savings from moving that lone parent into work can only be relatively
modest, yet moving somebody without a child into work potentially
could generate large amounts of savings to the Government. One
needs to be mindful that you do not want to encourage or incentivise
people where there is the biggest hit in terms of the money they
can save.
Q882 Danny Alexander:
If you go, like I did, and visit Australia and look at the systems
they have there for understanding the different barriers that
jobseekers face going into work and the different costs of having
someone, for example, on Incapacity Benefit versus a lone parent,
there are tools available that can be developed to analyse that
question to allow funding to be provided to third sector providers
that answer that question. I think that is a bit of a red herring
in the context of whether, in principle, the Treasury is willing
to allow permeability or not.
Mr Athow: I was raising that as
one issue and it is something you have to think about it. Beyond
that, you then need to think if there are these resources being
freed where, as a Government, you would like them to be allocated.
Do you think you would want them to be reinvested in doing more
to help move people into work or are there other competing priorities?
That is very much the process behind the Comprehensive Spending
Review, looking at spending as a whole and making decisions about
where those should be allocated. It does not necessarily follow
that the money, if it is raised from a particular source, should
be reallocated there, it may well be that it is health, education,
defence or other areas where the money could be best spent.
Jane Kennedy: Mr Alexander talks
about the Treasury orthodoxy but the orthodoxy is there for very
sound reasons that have been learned over decades of experience.
We have certainly sought not to apply that kind of refocusing
on how we use the resources. The Treasury view would be that if
we were going to focus resources it would not necessarily be back
into the area where the most savings were being made, we may want
to think about discussions with DWP about what do we do for London,
for example, where there is a particular set of difficulties in
lifting people out of poverty that may require more resources.
When you are in a position within the Treasury you have to take
that much broader view of what you do with the resources you have
got available. Obviously when you come to publish your report,
Chairman, we will look at the findings and want to consider them
very carefully and I am sure this will be one of the findings
you will want to flag as being of interest.
Q883 Mr Devine:
Reference has been made basically to the West Midlands and London
not being up to the Scottish levels, let us say Edinburgh levels
for example. If they had been up to the Edinburgh levels the Government
would have met its target. Did you have a look at why they were
not?
Caroline Flint: If we just take
London, for example, there are some particular problems in London,
I have to say, both in terms of the numbers involved but also
other issues around capacity to address a London-wide problem
and breaking that down. We have two City Strategy Pathfinders
in London, one in the west and one in the east, and the one in
the east covers five boroughs which have particularly very high
levels of worklessness. There are a number of issues that the
Mayor and the GLA are looking at working with us but, for example,
in somewhere like London the number of people actually going for
low skilled jobs is three times what it is in other areas, so
you have got a higher number of people with low skills going for
low skilled jobs compared with elsewhere. Not that we want everyone
to be in low skilled jobs, but that has an impact in terms of
getting people into work. We have two City Strategy Pathfinders
in London but I am looking more closely at what is happening across
London as a piece. In terms of the previous discussion, we do
have to look at how we are spending money and where we are spending
money, and trying to get that balance right between seemingly
to put money consistently there that is not achieving and what
incentives you have for the areas that are achieving in order
to sustain their input. This is an active debate we are having
across Government about how we do this. We have been looking at
it in terms of training and we have had some very good work with
the Treasury supporting us in that regard on some of the training
and skill initiatives that were announced yesterday. We are at
the early days of some of this. Some of the chocolate we have
given to Edinburgh is the point at which we have said that we
are prepared, and DWP is this big organisation, to let go of some
of the reins and some of the chocolate is some of the autonomy
we are giving and the fact that we have got a sum of money that
we would normally control and decide how it would be spent that
we have put into the pot. Those might seem small steps but they
are small steps in the right direction. It is not just in terms
of what the UK Government gives but what other local authorities
are prepared to give on a constant basis where you can keep the
momentum going where there is success. One thing is for sure in
all of this, we cannot reach a target, and hopefully we will reach
our target, and say, "Right, that's it, job done". We
have to constantly be looking and re-evaluating the job market
and what the needs are even in the period we have now, which is
with historically high levels of employment. We have to be thinking
of the next step. That combination of money where it is most needed
because the problem is most serious and challenging is important,
but alongside that is how do you continue to re-incentivise people
who are actually doing good work and that is a debate we continue
to have.
Q884 Chairman:
Measurements of income may be taken before housing costs or after
housing costs and I believe that government prefers the BHC targets.
Evidence submitted to the inquiry has suggested that BHC measures
may give a distorted picture of disposable income. Would you agree
with that assessment?
Caroline Flint: We use the before
housing costs and we also look at after housing costs as well.
It is not like we are not mindful of the impact of these different
areas. Part of the reason why for example on child poverty we
look at particularly before housing costs is because that is in
line with other international measurements. Again, there is no
perfect system in all of this but what we try to do is in line
with international measures so we have something to compare ourselves
with. If we look at pensioners, our preferred measure there is
after housing costs. Again, that is partly reflecting pensioners
in terms of the fixed costs they have or the fact that they actually
sometimes own their own home outright. With all these issues and
measurements, the fact that we look at relatively low income and
we are looking at some issue around material deprivation as well
is that combination to give us as clear a picture as possible.
Sometimes the picture is not always that clear because in all
of this of course is also what is happening in terms of choice
of individuals and families about how they spend their money,
but also what other factors are happening. For example, we managed
in Scotland and elsewhere—which we are doing in a number
of different ways—to improve insulation in housing. That
has a knock-on effect on fuel costs. We try as much as possible
to be in line with other comparators internationally, Europe specifically,
but at the same time look at some other issues that we think have
an impact on levels of income and also how people use their income
and what income they have got actually that is not tied up in
debt or other things as well.
Jane Kennedy: We use after housing
costs for measurements of pensioner poverty for very sensible
reasons. About 80% of pensioners own their homes outright and
therefore measuring it after that makes more sense. We do publish,
for child poverty figures, both forms of figures. We use the before
housing costs alongside the material deprivation indicator precisely
as Caroline says, partly because that is what the whole range
of academic, the voluntary sector and others advised, but also
because it allows us to compare ourselves particularly with other
European Member States so that we can make judgments about where
we are in comparison to our closest economic neighbours.[12]
The reason we publish both before and after housing cost figures
is that we are seeking not to stifle the debate but to promote
the debate. One of the great things about not only the fact that
you have been investigating this but the Work and Pensions Select
Committee is also running an inquiry is that it is great to see
that poverty is now right at the centre of political debate. Having
two different sets of indicators that you can draw on and compare
and contrast adds to that and adds to the general knowledge in
this field. It is good to see that now it is at the centre of
every political party's view and it is a discussion that is not
going to go away.
Caroline Flint: Whether it is
before or after, they are failing.
Q885 Chairman:
We took evidence from representatives of COSLA yesterday in Edinburgh
and their view is that the relationship between the Scottish local
government and the UK government has weakened since devolution.
What is your view on this?
Caroline Flint: That is not something
that has been expressed to me in the four or five months I have
been in this particular job. If COSLA has any particular issues,
I would be very glad to hear about them because I think local
government is a very important part, whether it is in Scotland,
England, Wales or Northern Ireland, of delivery on the ground.
Through the Scottish Executive, they have identified in Scotland
local authority areas that have particularly high rates of people
unemployed and have actually supported in a number of different
ways initiatives with those local authorities to tackle that.
I hope that will continue. Certainly within the city strategy
pathfinders, local government's involvement and other public sector
involvement—health, for example—I was absolutely delighted
in Dundee about the involvement of the local trust, both in providing
work for people but also supporting their own staff through skill
training and what have you. Public sector bodies are key as a
provider but also part of the strategic framework to make some
changes. If there is anything in particular COSLA is concerned
about, I would be very happy to meet with them and listen to that.
Maybe it is a perception rather than a reality but until I have
actually heard from them it is difficult for me to comment.
Q886 Chairman:
This could be the perception because of the establishment of the
Scottish Parliament.
Jane Kennedy: The Scottish Government
have contributed to child poverty delivery agreement for example
covering that area of poverty debate.[13]
That is a very explicit agreement in which they not only explicitly
commit to sharing our objective of hitting the 2020 eradication
target but to doing everything in their power to achieve that
target. If you are receiving representations like that, you will
want to flag them in your report and it will be a matter not only
for ourselves but the Scottish Executive too to consider as a
result of your considerations.
Q887 Chairman:
COSLA have told the Committee that there should be more local
flexibility in the administration of benefits and tax credits.
What is your view on this suggestion?
Jane Kennedy: Tax credits, if
I deal with those first, are a national policy delivered nationally.
It has had a huge impact, particularly on the lowest income families.
I have figures on the number of Scottish families that are in
receipt of both child benefit and tax credits. For me, one of
the most interesting figures is that for families in the lowest
income, whose income is below 10,000, the take-up of child tax
credit is the highest. It is clear that families in those low
income groups are aware of the benefits that they can get from
child tax credit and not only are aware of it but go and seek
it out and claim it. I would like to see it at 100% but 97% is
not bad and is an indicator that the policy is working well in
the sense that people are aware of it and claim it.
Q888 Mr Devine:
97% in Scotland?
Jane Kennedy: It is 97% in the
lowest income group, under 10,000. It is difficult to get figures
for Scotland but it is about 82% take-up overall for tax credits
which is exactly the same as the UK average.
Q889 Danny Alexander:
You have mentioned the take-up of child tax credit is good. For
working tax credit the take-up figures are not quite so good in
some areas. I wonder what is being done to improve the take-up
of tax credits and perhaps I can ask the same question of Caroline
because when we took evidence in Inverness from the Highland Council
one of the issues that they were talking about was in some areas
low benefit take-up rates and the need to promote those things.
Jane, in answer to the question on tax credits, also you mentioned
in relation to child poverty earlier on that the measures in the
CSR were designed to increase tax credits a bit for families to
try and deal with child poverty. I wonder if you could just tell
the Committee what your estimate is of the impact that those changes
will have on child poverty in terms of meeting the target because
that is also a matter of interest to us.
Jane Kennedy: If I start with
that last point first, the Budget 2007 this year announced that
the child element of child tax credit will rise by £150 per
annum above the standard earnings indexation. That represents
an investment by the government of about £1 billion and we
estimate it will lift 200,000 children out of poverty, that one
measure alone. The PBR announcement last month announced that
the child element of child tax credit will rise by a further £25
a year above earnings indexation in April and again in April 2010
by a further £25. The PBR also announced that the child maintenance
disregard will quadruple by April 2010. We think that package
taken together will lift 100,000 further children out of poverty.
That is the estimate that we make of the impact of those measures.
Taken together, those two measures around tax credit will help
lift 400,000 children,[14]
but there are a number of other measures that Caroline alluded
to. The Prime Minister announced that the in work credit will
be rolled out nationally. That is something that has been trialled
so far, but £40 a week and then £60 a week in London,
so we are aware of the problems in London. In March 2007 there
was the Working for Children report that the DWP released, aimed
at doing more to help single and couple parents move into work.
There is the CSR commitments to spending on education which Caroline
mentioned.
the PBR will help lift 100,000 children out of poverty—300,000
altogether.
Q890 Danny Alexander:
Can I bring you back to the question of take-up on tax credits?
Jane Kennedy: In Scotland? Take
up of working tax credit is about 19% in the UK.[15]
Q891 Danny Alexander:
The question was about what measures you mentioned.
Jane Kennedy: I am going to come
to that. I was getting too carried away there. Working tax credit
is an area that we want to see greater take-up in. We have been
aware of this ourselves. Other select committees have also expressed
concern about it. What Her Majesty's Revenue and Customs are undertaking
as we speak is a targeted campaign. We judged that the groups
that would benefit most from working tax credit who are not claiming
it at the minute are single people in the younger age group, 25
to 35. There is an advertising campaign under way as we speak
using local radio stations and commercial radio stations in particular,
where we are advised that we will get the greatest hit at those
groups. There are other advertising campaigns going on in magazines
that that particular age group we know reads. We are trying to
use the advertising resources in a very highly targeted way to
see what impact we can bring to that take-up. I agree it is an
area that I am disappointed in and we are working hard to try
and improve that.
Caroline Flint: From the benefits
side, there are probably two parts to the question. One is about
take-up and one is I think discretion as to how benefits can be
provided. I will deal with the first one first on benefit take-up.
Throughout the UK we have been looking at how we can better improve
our services and the roll out in Scotland in terms of Job centre
Plus is now complete. I was up in Aberdeen also the other week
to look at one of the newer benefit delivery centres there and
how that is working. I am pleased to say that certainly some of
the targets we set in terms of processing claims in Scotland are
working very well. There is a combination of factors here. One
is about the issue we have to deal with whereby people who are
on benefits are also relying on other agencies to provide part
of their support and income. Housing benefit and council tax benefit
will support and be part of that. The other side of it as well
I think is for people who might for example be going from benefits
into work, the transition from benefits to in work benefits, whether
that is tax credits, disregards or what have you. We are trying
to get better at that and closer working but we have for example
now—it started in the north east—expanded to seven
areas where HMRC, local authorities and the DWP are working together
so we can tackle this particular triangle of housing benefit,
council tax benefit, other in work benefits that we provide for
and then the tax credits to make it better. Early analysis shows
that not only have we been able to reduce the amount of time involved
for the individual in terms of processing those different parts
of what will affect their income and support, but also we have
actually been able to improve the confidence of people, in particular
where it is a process of being unemployed into work because actually
these things are being sorted out. They are important because
obviously when you start work and if you have things to pay for
in terms of child care or you might not get your first wage for
a couple of weeks, those things are key. I think we have some
fantastic work happening on that front and we will be looking
at that closely as well with our colleagues in local government
to see as a good practice measure how that could be developed
in the future. There are other things we have done as well. For
instance, one phone call to the Pension Service can now give access
to five benefits: state pension, pension credit, housing and council
tax benefit and underlying entitlement to carers' allowance too.
In the Department they use the phrase "no wrong door"
to try and create the situation where people might ring the Pension
Service, but there might be another part of either our organisation
or another organisation that has something to offer in this regard.
What people do not like is being told, "Sorry, mate. I deal
with that. You are off somewhere else." It is not easy, all
of this, I have to say, working across government, working with
agencies outside of government, but we have an ambition that we
can do better than we currently are. By 2011, what we are looking
at is that people who are in receipt of benefits of whatever form
will have a personal, online account with the Department for Work
and Pensions.
Q892 Danny Alexander:
A secure one, I hope.
Caroline Flint: I have "secure"
down here as one of my principles. People will not have to provide
information more than once because again often similar information
is being used. There might be some extra information but actually
why have to ask people for some of the basic stuff time and time
again? Customers will be able to submit claims on line and track
the progress themselves, so not just having to ring up and ask,
but hopefully in the future to track it themselves as to where
it is in the system. Again obviously we are looking at this. If
we are going to do this, what security will we need to have and
also a wider choice of secure methods for people and within that
as well—security is key to this too—if people want
that sort of choice and service, when we are dealing with a number
of different intermediaries, how do we balance the individual
wanting that choice to know if they speak to someone in the Housing
Department about their council tax benefit, they can deal with
something else in relation to their income support. How do we
achieve that whilst making sure that that means you are widening
the net? Obviously there are issues around security and data protection
within all of that. Those are some of the issues we are working
through on the access to benefits front. On the other side, which
I think was part of the question about flexibility, we obviously
have to have across the UK—and it is not devolved for this
very good reason—a system of benefits that is equal to whoever
you are, wherever you are in the UK, whatever that may be in terms
of income support, job-seeker's allowance; and also why we do
have a sense that if some people are on job-seeker's allowance
within the guidance there is a lot of flexibility, more than people
might think, but there is a sort of process so that we do not
end up with a situation whereby someone might say, "Why is
it because I live here I am being treated totally differently?"
Having said that, what we are going through at the moment with
things like the flexible new deal and developing our thoughts
around that and in line with David Freud's report about a more
personalised service is recognising too that we might have some
people who sign on, who need some initial attention straight away.
For others they might sign on but be back in work within a few
months so we do not need to give as much attention. Then down
the road for people who are still unemployed after six months
or even a year, some more tailored support which will be at a
higher cost because the sort of support we will need to have will
have to pay for that, so again some flexibilities about the sort
of support we can give to people. What we are looking at at the
moment is some more discretion to our personal advisers. For example,
we do have discretionary funds that are there for lone parents
when they are going to work, maybe to help them with the initial
payment for child care or transport costs. Again what we are looking
at in the Department at the moment in line with the other measures
we are looking at and reforms we are taking is: where can we give
some more flexibility and discretion to someone who has got someone
sat in front of them? They know that person much better than I
ever will because they are sat in front of them. They will be
able to say, "Actually, can I have some discretion to provide
this?" On another level, they know the person in front of
them and they know whether they are actually cooperating or not,
and be able to make a decision on that front as well. Again, I
think it is that balance because we have to protect the public
purse UK wide and how we spend it. There are issues around human
rights in that, about how people are treated and not discriminated
in one part of the country to another. I still think we can have
that balanced with some more local discretion, some ability to
use funding imaginatively, recognising that everybody we see is
unique and there will not be a one size fits all approach to actually
supporting them into work and helping keep them there.
Jane Kennedy: Let us not pretend
that what we disclosed last week has not happened. All of the
work that is going on across government is very popular with customers.
If a customer is just going to use one port of call to leave their
information and then gain a whole range of support as a result
of that, it does mean that all those different agencies then share
that one piece of information. What we have to do is use the experience
of last week and the event that led up to the announcement to
ensure and to test at every level that, when we are going forward
with this sort of measure which is popular and what customers
want, we have absolutely appropriate levels of security necessary
to allow that transaction to take place and to go forward with
public confidence that we are going to treat that data as absolutely
securely as it requires, which obviously has to be a founding
principle of this work. A second point, totally unrelated to that,
on working tax credit take-up. I am told that although the radio
campaign and the advertising campaign—we do not have figures
yet; it is too early for figures for evidence—but it would
appear in light of the increase in the number of hits on the website
and an increase in calls to the tax credit help line it is beginning
to have an effect. We will have to see what the overall effect
of that is and we will be able to do that in a few months' time.
It has been very well worked through and we think we have it well
targeted. We will see what the results are.
Q893 Danny Alexander:
Is that process happening anywhere in Scotland? Could you let
us know if you do not know?
Jane Kennedy: I can get you the
detail of that advertising.
Q894 Ms Clark:
A great deal of the government's anti-poverty strategy is focused
on getting people into work and the New Deal has been successful
in doing that, but a lot of the evidence that we have taken suggests
that a lot of the jobs that people are being pushed into are low
paid, with few prospects. What we are being told is that effectively
whether people are in work or out of work they are hovering round
about the poverty level. What is the point of pushing people into
work if it is not actually going to mean that it is lifting them
out of poverty in the long term?
Caroline Flint: I think part of
yesterday's announcement was about what skills we need to identify
for people to get into work. For example, we said yesterday that
when someone assigns them as a new payment we really do need to
do an initial skills check to see if their reading and writing
are of a level that is going to help them work or for example
if their English language is of a level that is going to help
them to work. That is really important because you can do everything
else but if you do not have that in place it is going to be difficult.
Alongside that, as part of yesterday's announcement, it was about
what happens when you are in work and how do you progress. Clearly
that is important too. That should be the case for recognising
that, even in low paid jobs—I think we are all very pleased
that at least we have a national minimum wage that puts a floor
under that—actually some people do have to start somewhere.
I get a little bit annoyed, I have to say, sometimes when I am
in meetings and people disparage people who do cleaning jobs or
do low paid jobs. These are very important jobs in our communities.
We may have family members who are in those jobs. The fact is
they are out there working. What can we do to support them and
actually recognise that those jobs are valuable as well? Over
the course of the summer, I have had a chance to talk to many
of our staff but also to meet people as well who maybe started
in what would be seen as one of the lower paid jobs in a community
but what they have got with that is pay and actually it is important
that people are seen to be better off in work, even in the lowest
paid jobs. Also what they have got as well is more confidence
back about being in control of their own lives. All the evidence
suggests to us that actually things around health, confidence,
even children's attainment in school are benefited by having someone
in the household in work. I am not suggesting you are doing this
but I am a little bit wary when people pigeon hole low paid jobs,
low skilled jobs. I think it comes across in a disparaging way.
Many people who work in lots of organisations often have people
who come and clean their houses and I am sure they will be paying
them a good wage. The other point is about you have got to start
somewhere. Part of it is about progression and how do we achieve
that. Again, there are opportunities to skill yourself in work.
There are opportunities to move up in an organisation. We are
signing these local employment partnerships with big firms up
and down the country. There is an example like Travelodge, who
have signed a local employment partnership with us and, yes, they
are employing people to be working in their restaurants, working
as chamber maids and what have you, but they also told me about
people who had come through that route and then progressed within
the organisation itself. I cannot promise that for everyone but
I do know that actually the starting point is important. We have
to also be realistic. For a number of people who are on benefits,
their starting point in the job market is going to be in some
of those lower skilled jobs. My ambition is to get them there
and support them to move on. Importantly, for those many people
now and in the future who will be in the low skilled jobs in our
economy, how do we make sure that it pays for them and that they
are better off, even in the lowest paid jobs, than they are on
benefits and they are supported and their families are supported
whilst they are in those jobs, because they are as vital to our
community as being a doctor or a lawyer or anything else.
Jane Kennedy: I was going to tell
a war story. When I was a trade union official for the National
Union of Public Employees, one of the tasks I had to do in Oldham
was to help negotiate an in-house bid for a cleaning contract
in the schools. I went to a school in Chadderton and sat with
a group of 12 cleaners who cleaned at a junior school. We did
a skills audit and I sat and chatted through with them, with one
of their line managers, what their qualifications were. We found
in that group of women there were qualified midwives; there was
a woman who had been a company secretary and a chief executive
in a company and a wide range of skills. I said to them, "Why
don't any of you put in to be caretakers? We need more women caretakers?"
They just laughed at me and said, "Why would we do that?
For an extra 50p an hour, we would have all that worry and responsibility
of being called out at night." What you find with a lot of
part time jobs, particularly at the lower paid end—the point
Caroline makes—is that people make choices about what work
they do at certain times of their lives. What we want to do is
have a structure that enables people to make those choices and
to make appropriate choices. Like Caroline, I do not believe we
are pushing people. I think we are asking people to think about
it and we
want people to consider work as a serious option.
That is why we have structures in place to help them into work.
That is why tax credits are structured in a way that we want to
see people get the maximum benefit from it. As a result of the
tax credits, four in ten families in Britain pay no net tax. The
number of families paying no net tax has risen by around half
a million since 1997. I just throw that figure in to underline
why we think giving that choice is important and why I think we
have to give people the freedom to make that choice.
Q895 Ms Clark:
The points that you are making in terms of what you are calling
poorly paid, unskilled work as cleaning are exactly the points
that have been put to us by organisations. They are saying to
us, "These are jobs that we are always going to need done.
They are vital for us in society." The reality is that the
largest low paying employer is the public sector. It is hospitals
and councils and actually, if we are going to tackle poverty,
we need to see the wage levels increase. We need for example a
higher level of minimum wage, rather than the state subsidising
bad employers, whether it is in the public sector or the private
sector. That money should actually come from employers and, yes,
work should pay. The way that we do that is by making sure that
wage levels are significantly higher than people get elsewhere.
What would you say to that?
Jane Kennedy: There is always
a debate every year about what is the right level to set the national
minimum wage at. The fact that we have one is one that I rejoice
in because it was something I lobbied hard for when I was a trade
union organiser. The level we can always argue about and there
will always be representations that the national minimum wage
should be set higher. There is a very fine balance to be struck
between what is an appropriate level for a minimum and then what
levels people should be paid above that. That debate is one that
takes place every year. It is a debate we did not used to have
before we had the national minimum wage.
Q896 Chairman:
Sometimes when we set the national minimum wage what is meant
is that that should be paid minimum to any employee but some employers
think that is their moral obligation and that is what they are
paying, the government targets. This sometimes gives the wrong
perception as well. How do you think we should tackle that?
Caroline Flint: There is always
this balance between what we say. We set the national minimum
wage and provided for that. We have been talking about obligations
we put on employers in terms of training opportunities and what
have you. For example, we have introduced other measures to support
families where we have made it a legal right to request flexible
time if your child is under six and, if you have a disabled child,
up to 18, and you are looking after an adult who is dependent.
We are also now looking to consult on extending that right to
flexible working for parents of older children which I am pleased
we are discussing. There is a whole load of factors here that
are about pay but also about the support you give to manage that
work/life balance to enable people to be in work. The other thing
is also the job markets and how they work too. We do not have
any evidence that for example what often comes up is migrant workers.
Has that had an adverse impact on pay rates? Our evidence overall
is that there is very little evidence to suggest that that is
the case. We are dealing with an economy where there are 660,000
vacancies, so we have a buoyant job market which actually means
that the potential employee in that has certain strengths in terms
of their contribution. Again, these are difficult questions because
it is about also if you decide one thing in one part, if you like
the package—say, the minimum wage—if you get that
wrong, what does that mean? One of the things we have done very
successfully is not only have a national minimum wage that those
of us here now know politically 15 years ago we did not have a
political consensus on—it would be a very foolish party
to suggest they were against it today—but also it has not
had the impact that the Conservatives suggested, for example,
that it would lead to a loss of jobs. We have seen rising employment
and, despite some blips we have talked about, we have seen the
levels of poverty going down. Gaining the balance more with this
is incredibly important because we now have a policy with the
national minimum wage which I think is pretty much enshrined in
our government's approach and I have to say for any future government,
as to it being a very important underpinning of how we support
tackling poverty in this country. It is always difficult because,
on one level, it would be easy for me to say, "Yes, let's
just put it up", but it is the consequences of all of that
and other knock-on effects that I think are really important here.
Jane Kennedy: We have to strike
a balance between helping the low paid through a national minimum
wage but maintaining their opportunities to work and maintaining
the creation of jobs in the employment market. The minimum wage
has made a very big difference but for many people who work in
those jobs at that lower end of the wage spectrum, some of those
are second earners. They are not all people who are the sole wage
earner. There are a number of different factors that are brought
to bear on a family in those circumstances. The minimum wage is
just one of those factors, although an important one, and I think
it has been a decision that we took that I have rejoiced in ever
since we made it.
Q897 Mr Devine:
We welcome the minimum wage and all the arguments that you have
both given. I have a 17 year old constituent who is classed as
an apprentice. She works in a hairdresser's. She works, some weeks,
70 hours a week. She works Saturdays and Sundays, right through.
Sunday is classed as a training day. She takes home £30 in
her hand because she is classed as that. How can we as socialists
justify not having a minimum wage for a 16 year old when they
go in to work? How can we still be allowing people to be treated
like that in this day and age?
Jane Kennedy: She works 70 hours
a week?
Q898 Mr Devine:
Some weeks she is working 70 hours a week and she gets £30
in her hand. This woman gets away with it, being on the council,
being conversant with the Low Pay Commission. She gets away with
it because she is classed as an apprentice.
Jane Kennedy: And as a trainee.
Q899 Mr Devine:
How can we justify that?
Caroline Flint: The DWP does not
deal directly with issues around apprenticeships, so we will make
sure your comments are passed on. There are two things. There
are some issues around where training has been provided, what
is an appropriate rate. There is some justification for having
a different rate where there is that sort of training involved.
Having said that, you have raised a particular case. What the
guidelines are about the hours that someone should work when they
are in that training position I would have to get some further
information for, because clearly, whilst I would argue that there
are some justified arguments for a different rate for people on
apprenticeships and trainees, there are some issues you are raising
there which ask questions about the guidelines about how many
hours a young person or, for that matter, an adult apprenticeship,
should be doing in any given week. What is the supervision? Obviously
within any apprenticeship scheme and any employer signing up to
an apprenticeship scheme which may be funded in some way by government
or the Scottish Executive or a local authority, what are they
doing in return? Apprenticeships are not meant to be just a source
of cheap labour for people. It is meant to be an experience that
allows people to get a trade, to hopefully get a qualification
and allow them to move on. On the details of that, I would have
to take it away. It is the DIUS who deal with apprenticeships
or in Scotland it might be a different agency for that matter,
to follow up that particular situation about the number of hours
involved.
12 Measuring Child Poverty outlined the three
indicators for child poverty-relative low-income, absolute low-income
and combined relative low-income and material deprivation. Expert
academics and the third sector were involved in the extensive
consultation process. The combined indicator, by measuring material
deprivation, will help capture the costs of housing. Back
13
The Scottish Administration do not have a separate delivery agreement
on the child poverty PSA, but they did contribute to the PSA Delivery
Agreement published alongside the CSR which outlines the roles
and responsibilities of the Scottish Executive. Back
14
Measures announced in Budget 2007 will help lift 200,000 children
out of poverty and measures announced in the PBR will help lift
100,000 children out of poverty-300,000 altogether. Back
15
Take-up of the WTC only by families without children was 19%
by caseload and 25% by expenditure in 2004-05. Back
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