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Grand Committee

Monday, 15 June 2009.

Welfare Reform Bill

Main Bill Page
Copy of Bill
Explanatory Notes
7th Report from the Delegated Powers Committee
14th Report from the Joint Committee on Human Rights
9th Report from the Constitution Committee

Committee (3rd Day)

3.30 pm

The Deputy Chairman of Committees (Lord Geddes): Before commencing proceedings, I must advise the Committee that if there is a Division in the Chamber while the Committee is sitting, the Committee will be adjourned as soon as the Division Bells ring and resume after 10 minutes.

Clause 1 : Schemes for assisting persons to obtain employment: “work for your benefit” schemes etc.

Amendment 24

Moved by Lord Skelmersdale

24: Clause 1, page 4, line 11, leave out subsection (5)

Lord Skelmersdale: I have been taken by surprise, as I rather expected the Deputy Chairman to announce that if this amendment were agreed to, it would pre-empt the next amendment in the large group of government amendments that follow.

I tabled Amendment 24, which removes subsection (5) from proposed new Section 17B, because I was curious as to just what the Government were up to. I tabled the amendment before the Government got round to tabling their own, which is now listed in the Marshalled List as Amendment 25, which removes the first part of the subsection. I expect that we will hear why in a moment. However, I decided to table this amendment so that I did not steal the Minister’s thunder in the next group. I think that Amendment 25 is perhaps consequential on later amendments in the Government’s list; or perhaps it is the other way round, and those amendments are consequential on Amendment 25. Whichever it is, they are sensibly grouped. However, I will hold out for a brief explanation of what subsection (5)(b) does—the bit that is left after the Government have drawn a red line through their own drafting.

Subsection (5)(b) amends Section 8(2)(b)(i) of the Social Security Fraud Act 2001, which deals with the effect of committing an offence on the allowance for joint-claim jobseekers—in other words, couples. With the inserted words, that part of the 2001 Act will read:

“8 Effect of offence on joint-claim jobseeker’s allowance ... (2) The allowance shall not be payable in the couple’s case for so much of any period comprised in the disqualification period as is a period for which—

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these are the important new words—

which covers the denial or reduction of joint-claim jobseeker’s allowance.

I should like the Minister to explain what difference exactly the new wording makes. Why are we treating members of a couple as being subject to sanctions and not individuals within that couple? I expect that there is a very good reason, but the drafting is a little impenetrable and I would welcome the light of clarity being shone into the Stygian drafting gloom. Why is “treated as being” so important that the draftsman, having had his attention drawn to subsection (5), decided to leave paragraph (b) as it is? I beg to move.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government & Department for Work and Pensions (Lord McKenzie of Luton): Subsection (5) is a technical provision and ensures that there are no loopholes for members of joint-claim couples who do not participate in “work for your benefit”. It is important to ensure that the new provisions we are introducing for “work for your benefit” do not have undesirable and unintended effects elsewhere in social security legislation.

Removing the entire subsection would mean that if one member of a joint-claim couple is sanctioned for not participating in “work for your benefit” and the other claimant is subject to a sanction for benefit fraud, JSA could still be payable. That would undermine the incentives to participate in the programme, and create an inconsistency between “work for your benefit” and other employment programmes.

As the noble Lord just identified, Amendment 25 is a government amendment which deletes part of this subsection, and I shall come on to why we need to do that when I speak to that amendment. However, to delete the entire subsection would have the effects that I have outlined. I hope that the noble Lord will not press his amendment.

It may be helpful if I place on the record a rather convoluted technical description, so that the noble Lord and others may be able to peruse it at their leisure. Clause 1(5) amends Section 63(2)(b)(i) of the Child Support, Pensions and Social Security Act 2000 and Section 8(2)(b)(i) of the Social Security Fraud Act 2001 by inserting after “is”, “or is treated as being”. The purpose of this subsection is a little convoluted, as the noble Lord noted, but it is essentially consequential on new Section 17A(7) of the Jobseekers Act 1995, as inserted by Clause 1(2). New Section 17A(7) is about sanctions for persons who fail without a good cause to turn up for a “work for your benefit” session where he or she claims jobseeker’s allowance as a member of a joint-claim couple. New Section 17A(7) states that in those circumstances the participant is “to be treated as” subject to sanctions for the purposes of Section 20A of the Jobseekers Act 1995.

In other words, it switches on the provisions of Section 20A, which is an existing provision of the Act. Section 20A concerns sanctions for a member of a JSA joint-claim couple who fails without good cause

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to comply with a jobseeker’s direction or to attend a training scheme or an employment programme. If only one member of the couple is subject to a sanction, a reduced amount of JSA is payable to the couple for the period of the sanction. If both members are subject to sanction, payment of JSA is suspended altogether.

Section 63(2) of the Child Support, Pensions and Social Security Act 2000 and Section 8(2) of the Social Security Fraud Act 2001 apply where a sanction is imposed on one member of a JSA joint-claim couple who has breached a community service order—this is the provision that we are going to remove—or been convicted of benefit fraud and the other member is already subject to a sanction under Section 20A of the Jobseekers Act 1995. In these circumstances, benefit is stopped altogether until the earlier of the two sanctions expires. Clause 1(5) therefore ensures that Section 63 of the Child Support, Pensions and Social Security Act 2000 and Section 8 of the Social Security Fraud Act 2001 would work properly where one member of a JSA joint-claim couple was sanctioned for a breach of a community service order or for benefit fraud and the other member was sanctioned for failing to turn out for “work for your benefit”.

That is the logic of the technicalities behind the provision’s original construction. Perhaps when I move the next amendment I can explain further why we believe that part of it should now be deleted.

Lord Skelmersdale: I think that I understand the Minister’s explanation. Perhaps I should have tabled an amendment to line 31 on page 2 to leave out the words,

Although the Minister has explained that the person would “be treated as”, why not just get on with it and do so?

Lord McKenzie of Luton: I hope that the technical note I have just read out explains the connection with the existing sanction provisions that needs to be made for these new arrangements, which is,

It is the link to the provisions in the Bill and to Section 20A that drives this action. Not only do we need the word “is”, we need “is to be treated as”. That is why we need to insert the phrase.

Lord Northbourne: I can envision an adviser—

The Deputy Chairman of Committees: A Division has been called in the Chamber. The Grand Committee will resume at 10 minutes to four.

3.40 pm

Sitting suspended for a Division in the House.

3.50 pm

The Deputy Chairman of Committees: The noble Lord, Lord Northbourne, was in full flow. I apologise for interrupting him.

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Lord Northbourne: Having listened to the Minister’s exposition of the position, I was only going to say that of course we all understand entirely what he said—but it might not necessarily be wholly comprehensible to the ordinary jobseeker. That seems very bad PR. If our advisers are trying to be jobseekers’ friends, surely we want to try to make the Bill simpler so that people can understand what it is saying.

Lord McKenzie of Luton: We are dealing here with a technical provision to ensure that the legislation works as we want it to. Bits of it will not routinely be consulted although customers may have a technical interest in those bits if they want to challenge something. This provision ensures that the technical framework is right and facilitates an appropriate sanctions regime.

Lord Skelmersdale: I have clearly hit on a most abstruse and difficult point. By no means do I regard myself as a lawyer, and I hope that the rest of the Committee do not regard me as a barrack-room lawyer either. I note, however, that the Explanatory Notes say, as did the Minister, that the same approach is being followed as in Section 68 of the Welfare Reform and Pensions Act 1999, but that the Social Security Fraud Act came afterwards. Perhaps we had a different draftsman, or perhaps something else happened, but clearly there was an error in the Social Security Fraud Act 2001 in this respect. As I said, I will read very carefully what the Minister has said. I doubt whether it is a subject to which it will be necessary to return at the next stage of the Bill. However, a meeting or an exchange of letters might be an appropriate way forward.

Lord McKenzie of Luton: I am certainly happy to have a meeting with the noble Lord to give him a more detailed explanation. I want to place on record that we are not saying that we think the Social Security Fraud Act was incorrectly drafted in this respect. These provisions will ensure that the pre-existing provisions are properly tied into what we want to achieve in the Bill. However, perhaps we can discuss that elsewhere.

Lord Skelmersdale: The phrase “buckets of salt” comes to mind. With that, I beg leave to withdraw the amendment.

Amendment 24 withdrawn.

Amendment 25

Moved by Lord McKenzie of Luton

25: Clause 1, page 4, line 12, leave out paragraph (a)

Lord McKenzie of Luton: I shall speak also to the other government amendments in this group.

In 2001, the Government introduced a pilot scheme in four areas to apply a benefit sanction to those found to be in breach of their community orders. The pilot covers Derbyshire, Hertfordshire, Teesside and the West Midlands and is a joint initiative run between the Department for Work and Pensions and the Ministry of Justice.

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The aim of the pilot was twofold: to link the receipt of benefit more closely to the fulfilment of responsibilities to society, and to encourage greater compliance with community sentences. The scheme applies to those offenders in the pilot areas who are aged between 18 and 59 and receiving jobseeker’s allowance, income support or certain training allowances.

The new clause to be inserted after Clause 22 will bring the pilot scheme to an end, and the other amendments are consequential on this. It was always the intention to evaluate the overall impact of these pilots before making a decision to introduce it nationally. Evaluations of the scheme have shown modest improvements in compliance, but any savings made in running it are outweighed by the overall running costs. Additionally, new measures introduced since the introduction of the pilots have proved to be more effective in holding offenders to account for non-compliance of community sentences. The Criminal Justice Act 2003 strengthened measures on compliance and enforcement and courts must hold offenders to account in all cases where they do not comply with their order. This includes the power to send the offender to prison for up to 51 weeks. In weighing up the improvements made with the introduction of other measures against the total cost-effectiveness of running the pilot scheme, we have concluded that it should not be rolled out nationally and should come to an end.

I reiterate that the amendment to the first part of the provision that we have been debating is consequential on this new clause. I beg to move.

Lord Skelmersdale: Unlike with local housing allowance, there has been a fairly prompt evaluation of this pilot. I note that the Minister said that it did not appear to make much difference and, in any case, that it was not cost-effective. That is a very good reason for not pursuing it. We shall deal with pilots more generally later in our deliberations. However, can the Minister tell me when the pilot finished and how long the Government took to evaluate it before the decision was made?

Lord Kirkwood of Kirkhope: This is an interesting moment at which to stop and reflect on how the pilot worked out in practice. I remember it very well. It was very controversial in 2001—when, indeed, the noble Baroness, Lady Hollis, was at the sharp end—which was quite a while ago. If the pilot was carried out under Section 19 of the 1995 Act it should have been limited to one year. It may have been introduced through joint legislation in conjunction with the Ministry of Justice or the Home Office—I do not know—but 2001 is a long while ago. I would like to know exactly when the pilot ended and when the evaluation was made available.

The potential sanctions were for up to 26 weeks’ benefit. That will be familiar to Members of the Grand Committee because those are exactly the kind of sanctions that are applicable under the provisions of this Bill. Although the community service sanction, as it became known, is not in point with our unemployment scheme—I understand that perfectly well—the possibility of improving compliance is an essential part of the Bill. If the pilot did not improve

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compliance and if, as the Minister said, the costs of sanctioning and of transferring information between the courts, the benefit system and the potential community offender outweighed the benefits of the scheme, are there any lessons to be learnt from the evaluation in terms of the work we are doing on this Bill? There should be some questions about hardship payments, for example, because they were part of the pilot and may be part of the new legislation that we are putting in place with this Bill.

It is a little casual, if I may put it that way, for the Minister to say, “These plans were put in place in 2001. They were too expensive and did not work very well, so let us take them out of the legislation”. I think that we are entitled to a little more than that. A written evaluation of the scheme must have been shared between the department and the Ministry of Justice, if no one else, and I for one would not mind seeing it. If it is not classified information—although I am always looking for state secrets if I can find them—perhaps the Minister can put a copy of it in the Library. There may be lessons that are directly apposite to the legislation we are considering. If that is so, the Committee should see the fruits of the conclusions that the Government reached in withdrawing the scheme.

4 pm

Baroness Hollis of Heigham: As the person who had the honour, privilege and pleasure of introducing this in the first place, I congratulate my noble friend on coming to a clean decision on it. The easy way would have been to have let it fall into disuse without actually changing the legislation. My noble friend is to be congratulated on cleaning it up in this way.

At the core of the problem—this is why the pilot at the time was limited in its geographical areas—was the issue of double jeopardy. The question was whether it was legitimate to sanction someone for failing to observe a community sentence, which meant, if that sentence was being properly monitored, that that person should have gone back to prison anyway. At the time, the changing direction of the Probation Service had not been sufficiently clarified so we were putting financial sanctions in that would not have been needed if the Probation Service had been working effectively; they would not have applied or, indeed, been relevant.

What has happened, as I think my noble friend said, is that since 2003 we have sharpened that aspect. Given that most of those offenders should not be in a position where they are receiving any benefit in the first place, there is not much point having sanctions on benefit for people who are not receiving it. Clearing up the legislation has made that section of the original 2001 Act largely redundant.

It was uncomfortable because we were trying to work out whether it was reasonable to go for what some people were alleging was double jeopardy or whether, in the absence of an even degree of involvement by the Probation Service in enforcing community orders, anti-social orders and so on, it was legitimate to have this as an additional penalty. We were trying to steer a line through that, and I am delighted that we do not have to continue to do so. We should congratulate my noble friend on clearing it up for us.

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Lord McKenzie of Luton: I am grateful to my noble friend, as ever, for her explanation of her engagement in this at an earlier stage. In February 2004 the DWP published an independent evaluation of the community sentences on withdrawal-of-benefit pilots. The evaluation highlighted a small increase in the number of people who complied with their community sentence because of the sanctions policy, and it was agreed that the length of the pilot would be extended to test the scheme further, looking at any lessons learnt before making a decision to roll it out nationally.

The introduction of the Criminal Justice Act 2003, to which my noble friend has just referred, brought new rules to manage the breach. Any need for the pilots to continue was effectively ended by the measures introduced by the Act to address breach; the Act replaced existing community sentences with a new community order, which was implemented with effect from April 2005. The Act removed the court’s discretion on whether or not to punish breach, which meant that a court then had to take action.

Will we learn the lessons from this? Yes, of course. We hope that piloting an evaluation will always lead to learning lessons so that we can ensure that we put into effect in future policy development those things that we have learnt.

A Statement was made by the right honourable Jack Straw in February this year indicating that the pilots would be brought to an end, so that is already on the record. I am happy to make details of that independent evaluation available to the noble Lord.

Lord Skelmersdale: Like the noble Baroness, Lady Hollis, I am delighted to discover that, when a pilot does not work very well, as this one did not for the reasons that the Minister gave in his opening address, it is done away with within a legislative framework.

I am getting more and more confused, though. Again, this needs explanation outside the Committee. If the original legislation was in 2001, presumably the first pilot started in 2002. At that point it was allowed to run for one year, as the noble Lord, Lord Kirkwood, said. It was then carried on to 2004, at which point there was an independent evaluation. It was then extended, presumably until 2005—or was it 2006? It was not until February this year, three years later, that the right honourable Mr Straw made a Statement on the subject. Does it really take three years for the final evaluation? I think that there is more to this than meets the eye. However, I doubt that the Minister, at this moment, can go any further—although he is looking fairly pregnant, so perhaps he can.

Lord McKenzie of Luton: No, I was just looking to scotch the suggestion that there is more to this than meets the eye; generally there is not, so far as I am aware. These pilots were introduced and the change to the law which I indicated was the key issue which caused these to be, in a sense, outdated. In any event, on a value-for-money basis they have proved not to be effective. It is no more complicated than that. If it will help, I will circulate to all noble Lords attending this sitting a copy of the Statement made by the right honourable Jack Straw and a copy of the independent

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evaluation, and indeed any follow-up evaluation that is in the public domain. I should be very happy to do that. I hope that that will reassure noble Lords. There is nothing sinister in this.

Lord Skelmersdale: What I think the noble Lord, Lord Kirkwood—I am putting words into his mouth now—and I would require is a timetable, not least a timetable between the decision to end the pilots and the finish of the independent evaluation, showing how long it took. As the noble Lord, Lord Kirkwood, said, this is directly relevant to the pilots within the ambit of the Bill—which of course are extended from one year to three years, except for one or two of them which suddenly become two years. I shall have a lot more to say about that a bit later in our proceedings. Judging by the speed we are going, I do not think that that will be today.

Amendment 25 agreed.

Amendment 26

Moved by Lord Skelmersdale

26: Clause 1, page 4, line 16, at end insert—

“( ) No provisions in this section shall come into effect unless the Secretary of State is satisfied with the readiness of job centres to manage “work for your benefit” schemes.”

Lord Skelmersdale: We now come to an even knottier problem: what exactly is going on in jobcentres up and down the country? I have suggested that we insert the words of this amendment at page 4, line 16, and I was very pleased to see that the noble Baroness, Lady Thomas, has added her name to it.

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