Poverty and Social Exclusion
Lord Freud Excerpts(9 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Clinton-Davis
To ask Her Majesty’s Government what is their response to the recent findings by the Poverty and Social Exclusion in the United Kingdom research group.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
This report was published back in March 2013. It says that people were deprived if they could afford less than 42 out of 44 necessities. Under the Child Poverty Act, which this House spent much time on, 1.8 million children are in combined low-income and material deprivation, which is far lower than the 4 million children reported to be deprived in this report.
Lord Clinton-Davis (Lab)
It is not only the Poverty and Exclusion research group that has highlighted what certainly was a catastrophic increase in the percentage of households that fall below society’s minimum standard of living. Does the Minister understand that the concern expressed by that organisation has also been expressed by the Joseph Rowntree Foundation, Barnado’s, and many others, and that it still exists? I prefer the joint views that they have expressed to those of the Government.
Lord Freud
The previous Government put through the Child Poverty Act, which we on this side of the House supported. It is based on some research that comes out regularly on households below average income. That came out last week, and it showed that the proportion of children in relative poverty is at its lowest level since the mid-1980s.
Baroness Howarth of Breckland (CB)
My Lords, it is clear that there are more than 1 million children still in poverty, and the relationship between their welfare and their education is well known. Does the Minister not agree that there should be a great deal of focus on young people who are going to find it difficult to pay for expensive school uniforms and trips? Otherwise they will be seen as different from their peers.
Lord Freud
The noble Baroness is completely right to concentrate on the fundamental causes of poverty, and working with youngsters is clearly right at the heart of that. That is why this Government have taken so many major steps in this area, including introducing the pupil premium and the early years pupil premium, raising teacher quality, and a number of others. I absolutely endorse her concentration on that area.
Baroness Grender (LD)
My Lords, given the importance afforded to education in this report, will the Minister also look at the welcome news in the Ofsted report published yesterday, that there is now evidence that the pupil premium is closing the attainment gap between children who have free school meals and their peers?
Lord Freud
It is clearly vital, as my noble friend says, to close the gap. There are lots of interesting statistics, particularly about what is happening in the London schools that are outperforming—although we do not know exactly how that has happened, and it is vital that we find out. It is the London Challenge, and there are quite a lot of analyses of exactly why that has come about.
Baroness Sherlock (Lab)
My Lords, the long-awaited interim report on the bedroom tax emerged this week. It slipped out at the height of the reshuffle without so much as a ministerial Statement, and it confirms what we knew—that only 4.5% of claimants have downsized, arrears have gone up, half of claimants have cut back on essentials such as food, and a quarter have gone into debt to avoid losing their home. I ask the Minister two questions. First, what assessment have the Government made of the effect of the bedroom tax on child poverty levels? Secondly, given the rather extensive briefing in today’s media that the Liberal Democrats are doing a U-turn on the bedroom tax, is it still government policy?
Lord Freud
Maybe I am not the best person to comment on Liberal Democrat manifesto planning. I can, however, assure the House that the removal of the spare room subsidy remains government policy—and I remind the House that this was coalition policy, which was decided in 2010 at the highest levels of government.
The Earl of Listowel (CB)
My Lords, I warmly welcome the excellent steps that this and the previous Government have taken in improving support for young people leaving local authority care, but may I draw the Minister’s attention to today’s report from the Education Select Committee in the other place, which highlights the fact that too many young people from care are going into bed-and-breakfast accommodation? There is still a lot of work to do, so will he look at that carefully? I also ask him to look at the next iteration of the care leavers strategy, which his department has been involved in, and to ensure that health, particularly mental health, is fully included, so that young people of 16 to 25 leaving local authority care, and the people who support them, have the excellent mental health support they need to avoid those young people entering social exclusion and poverty?
Lord Freud
The noble Earl is absolutely right to concentrate on this issue because this group has traditionally done disproportionately badly. We have taken steps to ensure that these young people are better off in terms of housing than youngsters who are not coming out of care. As regards the mental health issues, it is absolutely correct to concentrate on the fact that a large proportion of people develop long-term disabilities due to mental health issues. We are devoting a lot of energy to consideration of that area.
Baroness Hollis of Heigham (Lab)
My Lords, we have a bedroom tax because the Liberal Democrats voted for it—
Baroness Jenkin of Kennington (Con)
Does my noble friend agree that employment alleviates poverty, and does he welcome yesterday’s unemployment figures?
Lord Freud
It is always a great pleasure to reflect on the fact that we now have the highest rate of employment that this country has ever seen. One of the most interesting figures that I have looked at lately is that which shows what has happened to workless households in the social housing sector. That figure has always been high. It was up at 48.7% when we came into government and never got below 46%-odd at the height of the boom. However, it is now right down at 42.7%. That reflects a major cultural change as we get this country back to work.
Universal Credit
Lord Freud Excerpts(9 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, I should like to repeat as a Statement the Answer given by the Secretary of State to an Urgent Question in the House of Commons earlier today.
“Universal credit is a major reform that will transform the welfare state in Britain for the better, making 3 million people better off and bringing £35 billion of economic benefits to society. Rightly for a programme of this scale, the Government’s priority has been, and continues to be, its safe and secure delivery. This has been demonstrated throughout our approach to date, which started with the successful launch of the pathfinder in April 2013 and has continued with the controlled expansion of universal credit. On 5 December last year I announced that universal credit would be rolled out to the north-west and be expanded to couples from the summer of 2014, and would then expand to families later that year. That is exactly what is happening.
A fortnight ago we began our north-west expansion—universal credit is now in 24 jobcentres and will reach 90 across the country by the end of the year. A week ago we started taking claims from couples. This careful rollout is allowing us to test and learn as we go along, continuously improving the process. My department has always worked, and will continue to work, closely with the Treasury on these rollout plans. As we have made clear in a number of recent debates and answers to Parliamentary Questions, the Treasury has approved funding for the universal credit programme in 2013-14 and 2014-15, in line with the plan that I announced in December of last year.
These approvals are given by the Chief Secretary to the Treasury—such matters are delegated to him by the Chancellor—and these approvals are subject to rigorous controls, in line with recommendations made by the National Audit Office. It has always been our plan to secure agreement for universal credit in carefully controlled stages. First for singles, where we have agreed funding with the Treasury and are already rolling out in line with that agreement; then for couples, where we have agreed funding with the Treasury, and are already rolling out in line with that agreement; then for families, where we have recently secured agreement from the Treasury and will begin rollout later this year.
All of this was confirmed by the Financial Secretary to the Treasury in the answer to a Parliamentary Question yesterday, and that set of agreements confirms the approval of the strategic outline business case plans for this Parliament. The final stage in this process has always been sign-off of the full business case, which covers the full lifetime of this programme, and will eventually bring £35 billion of economic benefits to society. My right honourable friend and I expect to agree that shortly”.
Lord Freud
I acknowledge that in this House there is a supportive atmosphere towards universal credit. The contrast between the dialogues that we have in this House and another place is marked, and always has been marked, and I appreciate that.
On transparency, this programme is subject to an enormous amount of public challenge—whether from the NAO, the PAC or the Work and Pensions Select Committee. A lot of information is available. A couple of weeks ago, I committed to ensure that Peers got more precise information. I am getting a programme going for that, so I hear that and understand it.
On the apparent difference between my colleague, Esther McVey, and Bob Kerslake, they are both right, because they are answering slightly different questions. The first was about the strategic outline business case plans for 2013-14 and 2014-15. I went through in my Statement how they have been approved. Bob Kerslake was answering a question about the entire lifetime. As I said, that has not yet been approved, but we expect to have that cleared up and approved shortly.
Baroness Jenkin of Kennington (Con)
My Lords, as my noble friend is aware, several noble Lords were able to visit the jobcentre in Hammersmith this morning to see for themselves how the programme is being rolled out. Perhaps I may take this opportunity to thank officials from DWP and those at the jobcentre who were able to brief us so fully and to say how impressed we all were by how it is working—in particular, we were impressed by the coaches, who were able to give so much care and attention to individuals. Can my noble friend confirm that other noble Lords across the Chamber will be able to visit the jobcentres where universal credit is being rolled out to see it for themselves in a similar way?
Lord Freud
One thing I want to ensure is that I can get as much information to noble Lords as I possibly can. I am pleased to say that I have extended an invitation, which has been accepted, to arrange for a group of opposition Peers—as many as the noble Baroness would like to bring; well, not quite as many as that; we could not fit them all into Hammersmith; but enough to fill the room with a little standing room—to go through what is happening on the ground and the process.
One thing that I am keen to show the noble Baroness, which we saw this morning with a small group, is access to the work coaches to see how they work with clients in an entirely different way—in particular, to try to help the most vulnerable, whether it is looking at how they budget or various other things that they will need to do under universal credit.
Baroness Hollis of Heigham (Lab)
My Lords, Mr Duncan Smith insists that UC is on time, on track and on budget. I fear that it is not. None of the monitoring bodies—the Treasury, the Major Projects Authority, the NAO, the DWP Select Committee, the Public Accounts Committee, Sir Bob Kerslake—believes that. To paraphrase Sir Jeremy Heywood, the project remains well off-track. We want this to work. Will the Minister, whose integrity we entirely respect, give us the facts and the future plans rather than recycle the empty bluster of the Secretary of State?
Lord Freud
My Lords, this is a very large programme and the way we are doing it is quite responsive. What we have is a test and learn process. That is not just an empty phrase. It is a very large process, based on a live run-out of many tens of thousands of people, which feeds into how we build a fully digital interactive service that we are building at the same time. We will make changes to the process. That is what it is about. It would be silly to do all that work without being responsive. We learn lots of things. One of my jobs is to try to understand what we are finding out and then make those changes. There will be changes. Having said that, we announced a rollout process in December and we are, to my pleasure, managing to get it out to time with those plans. The next stages, which are towards the end of the year, are really important—moving on to families, bringing in childcare and going to that digital place. By the end of the year we will have a working test bed of how a fully interactive process will work. I am not saying it will not change after that, but I am saying that we are doing what we were planning to do.
Lord Kirkwood of Kirkhope (LD)
My Lords, I encourage my noble friend to redouble his efforts, as he has undertaken to do, to maintain cross-party support for this transformational programme which is so important to the future of our country. I am as impatient for implementation as anyone, but I exhort him to do this carefully—as he is doing—even if it means that the programme slips a little. It is better that it works properly than it is rushed and done wrongly. Does my noble friend agree that there is an advantage to keeping some flexibility in the funding of the scheme? Passported benefits, childcare costs and the local support services framework are all massively beneficial, and the Treasury should be persuaded to invest more money so that the programme is even more effective in future.
Lord Freud
My Lords, we are indeed trying to get that flexibility. One can look at our very intensive dialogue with the Treasury—going through point by point and milestone by milestone—in two ways. One can look at it as pretty onerous, and it is. On the other hand, it gives one a chance to look at what we should be doing next and changing it. One example is on the support system delivered locally—in the jargon, the LSSF. We were able to go to the Treasury and get more money put into that process quite recently because it could see how valuable and important that was.
Not locking everything down early and having that dialogue works. Frankly, you do not know what you are going to find out or what you are going to need to do when you have a major programme. Having that understanding from the Treasury of what we are doing and keeping it well-informed so that we can make those changes as we go along does work.
Lord Hylton (CB)
My Lords, most people are not yet eligible for universal credit. Can the noble Lord give the figures for how many people at the moment are subject to benefit sanctions and what is the current delay between agreeing that someone is eligible for a benefit and their actually receiving payment? Are these two factors not responsible for a good deal of destitution?
Lord Freud
In the universal credit build-out, we are fully aware that there is a gap between claim and payment. There is also a gap in the present legacy systems. We have set up a system of advances so that people can get the cash flow to match the differences. Alongside that, where there is, to use the word of the noble Lord, “destitution”, or immediate crisis, we are setting up the local support framework working with local authorities. They can get some of that support to people and are far more efficient at doing that than a bureaucratic central system would be.
Benefit Cap
Lord Freud Excerpts(9 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
Jobcentre Plus worked with potentially capped claimants from April 2012. By November the next year, 19,000 claimants in potentially capped and capped households moved into work, although we do not know to what extent those were additional moves or normal claimant churn. Since the cap was live, more than 5,700 households—around 40% of those who were capped but are no longer capped—are now exempt from the cap due to moving into work and claiming working tax credits.
Lord Fink (Con)
My Lords, I thank my noble friend the Minister for that comprehensive Answer, but will he confirm—
Lord Freud
There are two ways in which the cap works to incentivise people to go to work. One is that people who qualify for working tax credit are exempt from it, but there is another way, in that anyone doing even small amounts of work will be capped by a lesser amount because it serves to reduce the level of the cap and effectively allows them to keep their earnings. Clearly, one always has to be very careful to distinguish causation from correlation, but in a survey conducted by MORI a quarter of capped claimants said that they had looked for work because of the cap and 45% said that they would look for work in the next 12 months because of it.
Lord German (LD)
My Lords, the dignity of work is probably the best way in which people can escape from the cap. However, the figures to which my noble friend has just referred indicate only a trend in the direction of travel. From the figures which the DWP is now collecting, will the Minister have formed a view by the end of this coming recess as to the whole period? Will he know many people have moved into work and whether the trend that we have seen in the initial figures has been carried through, so that we can say that this initiative has really borne fruit into work?
Lord Freud
The cap is doing quite a lot of things. It has an influence on the people who are capped but it also sends out a message. The total number of people who have been capped at one time or another stands at just over 42,000; the current number is just over 27,000. A substantial proportion of those who have moved out of the cap, which they might do for various reasons, have gone into work and taken working tax credit. Others will have taken advantage of the effect that I have just referred to, whereby doing even small amounts of work reduces their cap.
Lord Foulkes of Cumnock (Lab)
Would the Minister contemplate for a while how people struggling to survive on benefits will view an aggressive Question being asked by someone who donated £2.62 million to the Conservative Party?
Lord Freud
Well, my Lords, my job at the Dispatch Box is to answer questions from all Peers. I hope that I have established a track record in answering questions with as much properly sourced information as I possibly can.
Baroness Wheatcroft (Con)
Very often, those who are out of work are suffering from other problems as well, often drink or drug addiction or a very poor education. Can the Minister say what is being done to help with those issues?
Lord Freud
One of the things that we are doing is reforming the whole of the welfare system in order to find out the barriers to going to work that people have and helping to address them. In the particular case of the introduction of the benefit cap, we had an enormous initiative to work with those individuals through Jobcentre Plus. We wrote to them, talked to them and provided intensive employment support. We worked with local authorities to help them with budgeting, housing and childcare. In this particular case we worked hard, and that seems to be an effective set of interventions.
Baroness Sherlock (Lab)
My Lords, how much has been spent on discretionary housing payments to those affected by the benefit cap and what impact has that had on the planned savings from the policy? So, for 2013-14, how much was spent on discretionary payments, to what extent has that reduced the savings for central government and what impact has it had on local government?
Lord Freud
The department pays out a lump sum of discretionary housing payments that local authorities apply to the various policies that they are tackling. There is a specific amount, £110 million, that goes to this particular policy although actually, when you look at the analysis of how local authorities attribute the spend, it is rather less than the amount attributed to the benefit cap. The total AME savings set against that are £225 million. As I said, the importance of this policy is that it sends out a message about the direction of travel, which is that the way to get people out of poverty so that they have proper support is to get them into work.
Baroness Farrington of Ribbleton (Lab)
My Lords, the Minister complimented himself on always trying to answer the question. Of those people that he has referred to, how many of them have gone into full-time employment on a living wage? Will the Minister, who has refused to consider studying those people who go to food banks to survive, have a meeting with the right reverend Prelates, who know more than he does because of their involvement in food banks, about the very people that he is not counting?
Lord Freud
My Lords, we do not collect information on the living wage within the working tax credits. We have a policy in universal credit to ensure that people have enough to live on however much they work, which is a transformation. I am pleased to say that I am in regular dialogue with the Archbishop on this matter, particularly with regard to the initiative that he is running, and which we are talking to him about, of supporting the credit union movement.
Housing: Underoccupancy Charge
Lord Freud Excerpts(9 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Quin
To ask Her Majesty’s Government when they expect to publish their interim review on the under-occupancy charge.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
We expect to publish the interim report by the Summer Recess.
Baroness Quin (Lab)
I welcome that reply although I note that last October the Minister said that he expected the report to come out in the spring, which has now come and gone. Can he assure me that in the meanwhile, he and his colleagues will be meeting some of the many people who have indicated their willingness to downsize but for whom there is no alternative accommodation and nevertheless end up having to pay a bedroom tax that they cannot afford?
Lord Freud
There are some 200,000 smaller premises in the social rented sector available through each year. We are now seeing a good increase in the number of home exchanges. Some systems are going up and the housing partners’ HomeSwapper scheme, for instance, has now had a 25% increase partly because of the effect of this change.
Baroness Turner of Camden (Lab)
Is the Minister aware of disputed cases being referred to the Local Government Ombudsman for decisions? If so, have there been any decisions in favour of the claimant as I understand that some people have disputed the charges that have been made under the bedroom tax?
Lord Freud
I am not aware of the ombudsman process. The process of which I am aware is when people appeal to the tribunal; there have been more than 100 such cases, which have gone one way or the other—some have gone to appeal and some have been accepted.
Baroness Gardner of Parkes (Con)
My Lords, many older people do not want to leave the property in which they have lived for many years, and I have suggested in the past that they should be able to take in a lodger, which would help pay their costs. However, I have been told that many authorities do not allow people to take in lodgers. Is the department aware of that and is anything being done to ensure that people who wish to take in a lodger—many people are looking for accommodation—can do so in order to stay where they are?
Lord Freud
We are encouraging people to take in lodgers when appropriate for them. Housing associations and local authorities are looking at that and tend to accept that that is a way of doing it. There is some confusion between strictures against subletting, which is a different matter entirely, but lodging tends to be accepted around the country.
The Lord Bishop of St Albans
My Lords, the Ipsos MORI report, undertaken by the National Housing Federation in February this year, looked at 183 housing associations. It found that two-thirds of tenants affected by the underoccupancy charge were in rent arrears and 38% indicated that they were in debt. That is the equivalent of 72,000 tenants in housing associations in debt in England alone, which seems to be allied in some way to the underoccupancy charge. What assessment have Her Majesty’s Government made of the impact on housing associations of rent arrears because of the underoccupancy charge?
Lord Freud
We have a general look at the level of arrears through the Homes and Communities Agency, whose statistics show that arrears have fallen—not risen—for the past two quarters in a row. The average rent collection rate for associations remains at 99%, a very high figure, which is very much at variance with some of the stories that we hear and the data that the right reverend Prelate referred to.
Lord Richard (Lab)
The noble Lord was asked by my noble friend Lady Quin when the Government expect to publish the interim report. I may have missed it but I did not detect any Answer from the Minister as to when the Government expect to publish the report. Can he tell us why it is so delayed?
Lord Freud
My Lords, I must learn how to enunciate better. I will repeat my Answer: we expect to publish the interim report by the Summer Recess.
Lord Deben (Con)
My Lords, does my noble friend agree that, if he is going to visit and meet people who have been concerned with this, he will also meet people who have lived in overcrowded conditions for long periods of time because of the underoccupation of homes that ought to have been available for them?
Lord Freud
My Lords, that is clearly one of the points of getting a better match for our very scarce housing. There are long waiting lists for social housing and substantial overcrowding. Depending on the data at which you look, there are more than 250,000 overcrowded homes in the social rented sector. On the census basis, that figure rises to 361,000.
Baroness Howe of Idlicote (CB)
My Lords, can the Minister tell us whether the interim review will include an assessment of how the underoccupancy charge affects people with conditions such as Parkinson’s, which can involve night terrors and uncontrollable movements that make it completely impractical for their partners to sleep in close proximity?
Lord Freud
My Lords, for obvious reasons, I have not seen the report. It will be published but I am not aware of that kind of detail at this stage. Clearly once the report is out we can look at the issues that remain uncovered. There will be a full report, which will be published next year in 2015.
Baroness Sherlock (Lab)
My Lords, the Minister has often complained about councils underspending the discretionary funds that mitigate the effect of the bedroom tax. Did he see the report in Inside Housing last week which stated that £7 million of the extra £20 million allocated by the Government last July remains unallocated to councils by the Government? An FoI request showed that 27 councils did not get the money they asked for mostly because the department decided that this would allow them to buy out the effects of the bedroom tax. So people asked for money, were turned down because it would have the effect that was wanted, and then it is claimed that the underspend shows that they did not need any more money in the first place. How can the Minister explain that to the thousands of people affected by the bedroom tax?
Lord Freud
My Lords, some of my more sharp-eyed colleagues here will have seen the information we put out on the discretionary housing payments for last year. That showed that there was a £13 million underspend by 240 councils and that of the £20 million bidding fund, £7 million was not spent. The £20 million was not applied for in its entirety. However, we allocated that money on the basis of parity of requirement. There was an extensive process to make sure that we gave the appropriate amounts of money to those councils.
Lord German (LD)
My Lords, the Ipsos MORI review, of course, is much awaited, not least by the Master of the Rolls who, in making a judgment in favour of the Government, said that the DWP had informed him that,
“the scheme may need to be modified in the light of experience”.
When the independent review comes out and my noble friend sees it before the Summer Recess, will he agree to act upon it and take decisions to make changes to the scheme so that it fits the experience shown by his independent review?
Lord Freud
My Lords, we always look very closely at any research that is done and we will do no differently with this research.
Personal Independence Payment
Lord Freud Excerpts(9 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord McAvoy
To ask Her Majesty’s Government what measures they are taking to tackle delays in personal independence payment assessments.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
We are committed to ensuring that personal independence payment claimants receive high-quality, objective, fair and accurate assessments. I acknowledge that the end-to-end claimant journey is taking longer than expected. We are absolutely committed to improving performance, both ours and that of the assessment providers.
Lord McAvoy (Lab)
My Lords, as the Minister is aware, his own department’s figures show that it will take 42 years to clear the backlog. Yesterday in the House of Commons the Minister of State, Mike Penning, said that this was scaremongering. If that is the case, can the Minister give a guarantee as to when it will be cleared?
Lord Freud
One can do some funny things with mathematics and that 42-year figure is one of them. Clearly in the opening period of any new policy of this sort there is a ramp-up, and we need to get that ramp-up right. As I said, the position of this process is not satisfactory and we are taking a lot of steps to make sure that we get the improvement that we must have. We are pushing up the numbers of staff, improving claimant communications in this process, getting more paper-based reviews which will speed the process up, and taking a series of other initiatives to get this right.
Lord Alton of Liverpool (CB)
My Lords, given the view just expressed by the Public Accounts Committee of the House of Commons that the introduction of personal independence payments has been a “fiasco”, and that in securing the contract ATOS gave,
“incorrect and potentially misleading information”,
does the Minister have any plans to re-examine the ATOS tender documents? Does he believe that ATOS should be able to bid again in future for DWP contracts?
Lord Freud
The build-up of PIP was done in a controlled and phased way, and that was acknowledged by the NAO. ATOS won that contract in fair, open competition and we have no plans to reopen that process.
Baroness Eaton (Con)
My Lords, can the Minister tell us what assessment he has made of the level of support by Her Majesty’s Government to disabled people?
Lord Freud
My Lords, the Government remain committed to maintaining support for disabled people. We spend roughly £50 billion a year, every year, and that is held in real terms. That is a fifth higher than the EU average. The overall spend on incapacity benefits has remained roughly flat in real terms over the life of this Government, and indeed the benefits about which we are talking—PIP, DLA—have actually been going up in real terms over the past four years.
Baroness Sherlock (Lab)
My Lords, the Minister’s assurances would be rather more encouraging were it not for the fact that, as well as this shambles of the WCA and the 42-year backlog, employment and support allowance has been delayed and proved not to be succeeding; the Work Programme has a 94% failure rate; the bedroom tax is not meeting its objectives; and at current speeds, universal credit will take 1,052 years to roll out. Is the Minister proud of these achievements?
Lord Freud
My Lords, we are transforming the welfare system in this country. We are doing it across the piece. It is all very well for the Opposition to complain about the speed at which we do these programmes. These programmes are difficult to do. They were shied away from by the previous Government. I think that Peers all round the House will be pleased to see these transformational changes go in and transform the way in which this country operates at a fundamental level. There is a level of cynicism about what is always a difficulty: getting difficult, complicated programmes through exactly to timetable. People who know how difficult projects are know that process, but this is critical work for our country.
Lord Kirkwood of Kirkhope (LD)
My Lords, there is, however, an important point that I would like the Minister to comment on, following on from earlier comments made by colleagues. People increasingly say to me that in the implementation of the flagship schemes contained in the Welfare Reform Act 2012 we are beginning to look as if we have bitten off more than we can chew. That is a matter of serious concern. On the narrow point of PIP, I exhort the Minister to hasten slowly. Will he give an assurance to the House that it is more important to him to get these things right than to do them quickly? In that regard, will he look at the possibility of clearing the backlog of personal independence payment claims before the rollout of the reassessment of DLA to other parts of the United Kingdom?
Lord Freud
My Lords, as my noble friend said, we have to be careful to get the implementation right. We are aiming to do our programmes at the pace that we can do them, so if we have to slow down we will slow down. We go at the pace that works because it is one thing to not go at exactly the speed you may have planned at the beginning; it is another thing to make it difficult for people. In the case of PIP, we are looking at how we carry out the next stage of the PIP rollout, the natural reassessment process. We will extend that only when we have capacity to do so, and so far we have not made any decisions on when we will do that rollout.
Universal Credit (Transitional Provisions) Regulations 2014
Lord Freud Excerpts(9 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, I feel a bit castigated by the two speakers, who clearly feel that more communication is in order. I know that in the past I committed to keep noble Lords in touch. I take the point on that. I will look at the best way of communicating in the next period. Often I invite people along and nobody comes. I will try to find a time and an enthusiasm for noble Lords to come, because colleagues in this House have been very supportive of universal credit, which I acknowledge and appreciate. The atmosphere in this House when we discuss this programme is markedly different from that in the other place. I appreciate that for obvious reasons.
Let me talk about the timetable as it stands at the moment. Although the noble Baroness, Lady Sherlock, said that it was not about to be rolled out across the country any time soon, I can tell her that we are about to roll out expansion right across the north-west pretty soon. As noble Lords know, “soon” is a technical expression in our discussions. That represents 90 jobcentres: one in eight of the jobcentres in Britain will come in as we roll it out. That will be followed by couples, going out this summer, which in turn will be followed by families later in the year. New claims in those areas will go automatically, subject to their passing the gateway rules. There should be no great complexity. There is a slightly ugly expression that we have used before: the “lobster pot”. In practice, when people go into universal credit, they will stay in universal credit even if their circumstances change and it becomes more complicated. We now have a full apparat—a full structure—for running universal credit and we can do that.
We then have universal credit rolling out across the country during 2016. In that period, all new benefit claims will be for universal credit. Our plan is for the majority of existing claimants to move on to universal credit in 2016-17. My noble friend Lord Kirkwood was quite right when he drew attention to the 700,000 ESA claimants who have just had a transition from IB to ESA. We do not feel that there is necessarily a huge hurry for them. However, I can tell the noble Lord that some of his wilder, 12-year plans are certainly not in our plans. Clearly, we will be able to give more information as we develop and look at our enhanced IT programme.
By definition, there has been a series of quite aggressive questions that I am happy to answer. Before I go into detail, however, I will make the point that we are safely and steadily getting this new benefit out to the country. We are doing so in 10 jobcentres now and are about to expand the scheme quite a lot. We have 99% of employers on the real-time information system, so we are getting those flows and making that connection. There is one category of people of whom 90% make their claims online. We have now taken one element of the universal credit infrastructure, the claimant commitment, and deployed it right through the country. That is a big thing: it implies training more than 23,000 of our staff. It means that 600,000 people have signed it. We have been putting in computers and wi-fi along with the infrastructure to bring about this substantial change.
It seems to be working. Noble Lords will remember some initial figures showing that people felt that the financial incentive was better under universal credit. They looked for work for longer and applied for more jobs. Of this group, which we are watching carefully, the majority—three-quarters—were comfortable with the monthly payments, which I know has been of great concern to this House. We watch that, not least because whenever this House tell us to watch something, we do so.
The nature of the regulations represents a slight change to the way in which the commencement orders work, and it is important for me to explain this precisely. Previously, we had only the gateway conditions in the regulations. When we rolled out geographically, we did so by commencement orders. However, we are now mixing in new types of people at different times. Imagine the process: we are taking a new group, which must be small in size for safety, and testing it carefully. We take out that small group and take it through the gateway while doing a geographical expansion. You have to take those two decisions in tandem. That allows us to do this safely and steadily. That is the only reason that we are doing it.
To pick up the point of the noble Baroness, Lady Sherlock, because we are doing it in that way we can deal with unexpected circumstances. For instance, when we open up four jobcentres to a new type of claimant and find that we have a problem—there are lots of things you find out and sort out as you go through—we can slow down if we have to and sort it out before we have done a massive amount.
I have given a commitment to the Social Security Advisory Committee—SSAC—that whenever we make an order that changes the gateway conditions for claiming universal credit, we will write to the committee explaining the changes that we are making. There is a process going on there for just the reasons about which noble Lords are concerned. Making arbitrary changes is absolutely not the purpose.
My noble friend Lord Kirkwood picked up on one of the points mentioned in the Secondary Legislation Scrutiny Committee about impact assessments. Clearly, impact assessments are done when there is major legislation or very significant changes. There have been some changes to universal credit over the years. We have been pretty open about their individual effects; they have been on the record. However, there is nothing that justifies the major exercise of an impact assessment.
On transparency with the committee, we have invited committee members to our nearest live site, which is in Hammersmith. They have accepted, and we are looking for a date for that. We are trying to be as open as possible.
As my noble friend Lord Kirkwood said, I view the local support service framework as being as important as universal credit; indeed, this House is responsible for the local support service framework. That is because it was impressed upon me very vigorously that the concern with universal credit was what we are going to do for the vulnerable. That was the genesis of something which, as all noble Lords know, was not in our minds when we started. We have built quite an intensive process, starting with local authorities but with lots of other partners such as housing associations in particular and other third-sector bodies, to build a delivery model.
We have one in our four initial sites, which have a local support service framework, and we will test to get a definitive version of that. That will be published in the autumn next year, and we are planning to do another series of very specific pilots. There is a lot of enthusiasm around the country to take part in that—I am sure that my noble friend Lord Kirkwood’s moles are telling him all about that process. I suspect that that is one of the reasons his moles have become much more enthusiastic about the process they are engaged in, because we are gripping this.
EU: Youth Unemployment (EUC Report)
Lord Freud Excerpts(9 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, as always, this has been a very high-quality debate, which I have very much enjoyed. I am very grateful for what has clearly been really hard work from this committee to put together a really interesting summary of these issues. I need to add my thanks to my noble friend Lady O’Cathain for running that work so well; I heard the tributes and the appreciation from the rest of her committee.
As noble Lords know, we have responded formally to this report and several noble Lords were able to pick out what we were saying, despite the fact—I need to apologise for this; I only discovered it this afternoon—that we actually sent out to colleagues a completely unformatted version of the response. I have taken steps to repair that so there will be something noble Lords can actually read. I am very impressed that many of them managed to do so anyway. I am sorry and I shall ensure that they get appropriate hard-copy versions. I do not know quite how it happened, but it did.
Let me start off by setting out where we are today. We have made really good progress on youth unemployment, and that has been particularly the case over the past year. As the economy begins to pick up, we are starting to drive out the cyclical rise in youth unemployment that we saw in the recession. The youth claimant count has fallen for the past 30 months and overall youth unemployment has been falling since last summer. Excluding students, it now stands at 565,000 youngsters. Of those leaving JSA—in response to the question of the noble Lord, Lord Haskel—about two-thirds go into work; others go elsewhere because the young move very dynamically.
We still face really big challenges. Long-term youth unemployment has risen in the recession and it remains at more than 100,000 people above the pre-recession level. We have, though, seen a welcome drop in that particular figure over the past seven months, but it is vital that we maintain the trend. Through the Work Programme and Youth Contract, we have put in place about the most comprehensive response to long-term unemployment that has ever been seen.
As the noble Lord, Lord Brooke, said this evening, this is actually a structural set of issues with really deep roots. Even before the recession, more than 1 million young people were neither working nor in full-time education. That is why we are addressing those long-standing structural issues through our reforms to education and skills and by improving access to apprenticeships.
As the report explains, unemployment among young people is a really serious problem in many pars of the EU. Clearly the source of this is diverse and is different in different countries, with origins in structural or cyclical effects, or some combination of the two. It is important, as many noble Lords said tonight, to recognise that the structural causes of unemployment are issues that are most effectively tackled by individual countries and not by a one-size-fits-all solution.
Just to pick up the related point on what is happening in different parts of Europe and the point made by the noble Lord, Lord Roberts, on regional differences, 90% of the fall in the year that we have very happily seen in the youth claimant count has been outside London—so we are seeing some real regional responses.
There was concern, particularly from my noble friends Lord Liverpool and Lady O’Cathain about a skills mismatch. In 2010, we were left with a system that was simply not delivering what it should have for our young people. I know that noble Lords will have heard me talk about the Wolf report, which is one of the most interesting and disturbing reports that I have ever read about the situation in this country. It concluded that the system that was in place was,
“failing at least 350,000 of our 16-18 year olds, year on year”,
with substandard vocational training.
Improving access to quality training remains a key challenge, and it is one that we are facing up to. We are improving the standard of vocational training in this country and we are expanding apprenticeships. We are committed to tackling youth unemployment. Taken together, our package of labour market interventions, programmes and reforms tackles both structural and cyclical unemployment. This programme is supporting young people to equip themselves with the right skills to succeed. As the noble Lord, Lord Haskel, said, we need to be more ambitious—and we are not complacent. We cannot be complacent at this stage. There is more to do to support young people into work, and we are committed to building on some pretty outstanding improvements.
On the numbers issue raised by my noble friend Lady O’Cathain, we now have 65,500 youngsters starting a job based on the work incentive programme. The payments come a little bit later. We have 275,000 young people taking part in our work experience and pre-employment training, with 146,000 taking part in work placements and 48,000 in sector-based work academies. Some 390,000 young people have joined the Work Programme, and 89,000 have now got sustained employment.
On the point from my noble friend Lord Liverpool on entrepreneurs, the figures for that were just published today. There are now 8,280 18 to 24 year-olds with mentors on those schemes, and 3,370 are on the allowance.
Clearly, there is more to do. Universal credit, because of the way it is structured, will give young people under 25 in-work support for the first time and will encourage young people to try their hand at different jobs, while providing responsive and continuous support as they move in and out of work. That will become a really important support for youngsters as they do that necessary experimentation to find out what they enjoy and want to take forward as a career or job interest.
The Government will reduce the cost of employing young people by abolishing from next April basic rate employer national insurance contributions for people aged under 21. We are trialling new help for young people, including intensive support for 16 to 17 year-old NEETs not in receipt of benefits. We are piloting new, day 1 help for unemployed 18 to 21 year-olds to improve English and maths skills. To help schools to better meet their duty to provide independent careers advice, we are strengthening statutory guidance and developing the role of the National Careers Service. Ofsted will also be giving a higher priority to careers guidance in school inspections. We accept the point from my noble friend Lady Hooper that employers have an important role in course design by providing placements, sponsoring students and so on.
In response to my noble friend Lord Liverpool’s very pertinent point, the DfE is strengthening the teaching of digital skills in schools by replacing ICT with computing from September this year. We have introduced traineeships, which are available for young people aged 16 to 23 inclusive. These consist of pre-employment training, a work experience placement with an employer and English and maths training to GCSE level 2 for those who need it.
We have now got NEETs down to the lowest level since we started to count them in 2001, so the number now sits at 53,000 16 to 17 year-olds. I know that the noble Lord, Lord Brooke, wanted to get hold of that figure, produced by the ONS from the Labour Force Survey, and I am quoting the fourth quarter of 2013, which is the latest figure. There is a big change coming in that area. That young area has been a weakness as we raise the participation age. That is, in the spirit of new bipartisanship of the noble Lord, Lord McAvoy, something that both sides have agreed on. Participation age goes to the end of the academic year in which people turn 17, and from summer 2015 this will be until their 18th birthday.
We are giving young people support when they need it most, referring 18 to 24 year-olds to the Work Programme early to keep them from becoming long-term unemployed. We have talked a lot tonight about apprenticeships, which already stand at 1.7 million with a goal of 2 million. I am not being complacent but we are not in the same situation as much of Europe. Our youth unemployment rate is well below the EU average and, for those who have left education, the UK has the second highest youth employment rate of the major EU economies, behind only Germany. I should point out that Germany does not have a Youth Guarantee but has developed its own approach. While we learn about good practice, a point made by several Peers, we know that member states of the EU with the lowest youth unemployment, such as Germany and the Netherlands, have good vocational training systems. We know from their experience that our reforms to apprenticeships and broader vocational training are the key to our reducing our youth unemployment in the longer term. That is why we are putting so much emphasis on that.
Let us look at the EU Commission’s proposed Youth Guarantee. Our view is that this is a response with its eyes too much on the past, dealing with the immediate consequences of the recession and not addressing the structural problems that it is vital we tackle now. That is why we do not believe that this is the way forward. The Youth Guarantee is the type of rigid approach that we have tried and has failed us in the past. It has not been fully implemented elsewhere—except, recently, in Finland—and it has not worked here when we have looked at schemes such as the Future Jobs Fund, which have performed no better than the work experience schemes but at much higher cost. Therefore, we are not clear that the guarantee represents good practice.
It is vital that we help young people to experiment in the labour market and try out different jobs. All our policies, from universal credit to the Youth Contract, embody this approach; the Youth Guarantee does not. It is not flexible and does not meet the test we set ourselves of offering the right help to the right people at the right time.
I assure noble Lords that the Government do not intend EU funds to subsidise existing national measures but to complement them by addressing local needs. In England we are allocating the majority of relevant EU funding to local enterprise partnerships—so the funding will be used locally—which we think are best placed to offer that tailored support to young people. I think there is common ground there between us and the committee’s report. We believe that this decentralised and flexible approach is the best way to target young people who are most at risk. Indeed, noble Lords will have heard me talk about our local support services framework, in which the DWP is working with local authorities to build the partnerships that will provide holistic support for people who need help before they can enter the workforce, particularly as regards their underlying problems. We are expending enormous effort in doing that and using funds from a variety of places, including the ESF.
The noble Baroness, Lady Uddin, referred to Untapped Talent, our autism initiative introduced a couple of years ago, which she remembers so well. Our Disability Confident campaign, which she may remember, embraces a wider context and seeks to ensure that employers are aware of this valuable labour resource, which they may not have concentrated on enough in the past. We are ramping up support for the disabled within Jobcentre Plus and the Work Programme. One of the things that I am most keen to get right is our support for people with mental health issues, and we have introduced a series of mental health pilots.
I should like to take a moment to reflect on the EU Commission’s views of our programme. The Council of the European Union agreed to the Youth Guarantee recommendation in April 2013, one year after we had implemented the Youth Contract. We responded to this recommendation, setting out in detail how the Youth Contract and other policies address the important aim of reducing youth unemployment.
The European Commission recognises the success of our programme. In its annual draft country-specific recommendations this month, the Commission noted:
“The United Kingdom continues to address the challenges of unemployment and underemployment as well as the specific issues related to youth unemployment”,
and urged us to,
“maintain commitment to the Youth Contract”.
While I am not in the habit of looking first to Brussels for inspiration, I am happy to receive such an acknowledgement of the path we are taking.
I again thank noble Lords for their excellent contributions. I think that I have covered all the issues that were raised. I hope noble Lords agree with me that it is clear that we need to stay the course with our programmes to tackle youth unemployment. We have a long-term economic plan and it is working.
Housing: Discretionary Housing Payment
Lord Freud Excerpts(10 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord McAvoy
To ask Her Majesty’s Government what assessment they have made of the level of discretionary housing payment available to local authorities.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, the department has asked local authorities to provide details regarding their use of discretionary housing payments twice yearly. Details of how local authorities are using discretionary housing payments in the first half of the year were published on 20 December. Despite some people’s predictions, the vast majority of local authorities were managing within their budgets. In 2014-15, local authorities will receive a share of £165 million, which will ensure that they can offer ongoing support where appropriate.
Lord McAvoy (Lab)
My Lords, despite assurances from the Minister, 47 councils spent 90% of their DHP budget by February. A third of the councils reported that a third of the applications were refused. Can the Minister tell the House whether he is aware of how many evictions there have been due to bedroom tax arrears? Does he know? Does he care?
Lord Freud
My Lords, the noble Lord used those figures as if they were his; I am sure that he would want to attribute them to another group called False Economy. They show that 85% of councils surveyed had spent less than 90% of their money with one month to go. However, in that particular report, which found that 11 councils had overspent, there were a lot of mistakes. The figures for four of them—Swindon, Haringey, Leeds and Middlesbrough—were simply wrong.
Lord Best (CB)
My Lords, has the Minister had a chance to see the Joseph Rowntree Foundation report released today, which provides a fairly definitive analysis of what has been going on with the so-called bedroom tax over the past six months? If he has, did he note that—sadly, from one perspective—savings were about £115 million less than had been hoped for during the course of this year? About 6% of people have moved home, but another 22% have been trying to move home but have not been able to downsize, because there is not accommodation for them. Although the Rowntree report from Professor Wilcox predicts that over £330 million will be saved this year, sadly, that is at a pretty great cost to both tenants and landlords.
Lord Freud
The savings that we are looking at—which are running on the Budget scoring at £490 million—are both observable and unobservable; in other words, from people moving or from people taking up jobs and coming off benefits. There are various figures around. The BBC last week talked of 6% of people moving in 11 months; the JRF report, which the noble Lord has just cited, talked about 6% in six months; a report a couple of months ago from Harry Phibbs, doing a similar job, found that 11% had come off benefits because they had gone into work. We will have proper returns on discretionary housing payments in May, and are working on getting a proper report on all of this.
Baroness Taylor of Bolton (Lab)
Will the Minister answer the question posed by my noble friend about the number of evictions? Does he know the number, and does he care?
Lord Freud
My Lords, I am not sure of the exact number of evictions, but I do not think that there are very many at all, if any. Clearly it is a matter of great concern. I can let the noble Baroness know that the data from the Homes and Communities Agency, which are based on the 266 largest housing associations with more than 1,000 homes, show that the average arrears in the final quarter of last year—the third quarter of the financial year—fell to 3.9% from 4.1% in the previous quarter and that rent collection rates for the year stood at 99%.
Lord Flight (Con)
The Minister will be aware that in central London and, in particular, the borough of Westminster—and I declare an interest as my wife is a councillor—there have been cases where very substantial housing benefit amounts have had to be paid particularly to house those categories that the local authority is obliged to house. Is there any system or intent to limit the amount of housing benefit that can be paid on an individual property?
Lord Freud
My Lords, my noble friend draws attention to the point that we have introduced a cap on the amount of housing benefit to stop the very large amounts that were paid on local housing allowance.
Baroness Sherlock (Lab)
My Lords, 500,000 people are affected by the bedroom tax, most of them disabled. If the Minister wants some figures, two-thirds of tenants hit by the bedroom tax are currently in arrears and, of those, 40% have been issued with a notice seeking possession. This is a serious crisis, and I think that the Minister should acquaint himself with all the figures, including those on evictions.
The House knows that a Labour Government would abolish the bedroom tax. The Minister told the House on 12 December that,
“the interim review is due to be published in the spring of 2014. I will be most pleased to discuss the findings of that review with Members of the House, who I suspect will be keen to have that dialogue”.—[Official Report, 12/12/13; col. 907.]
I am very keen to have the dialogue. When does it start?
Lord Freud
The noble Baroness need not persuade me about the savings—she needs to persuade the OBR, which has scored down in the Budget £490 million. The noble Baroness talked about the fact that a Labour Government would abolish the spare room subsidy. We will produce an interim report later this year, as I said, and we will bring forward next year the full report on what has been happening with the bedroom tax, as you would call it.
Pensions Bill
Lord Freud Excerpts(10 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
That this House do not insist on its Amendment 1, to which the Commons have disagreed for their Reason 1A.
“( ) Regulations may provide for circumstances in which a person may opt to have a year treated as a qualifying year if by aggregating income from two or more jobs, that person’s earnings are equal to or greater than the lower earnings level for that year.”
Commons Disagreement and Reason
The Commons disagree to Lords Amendment No. 1 for the following Reason—
1A: Because it would alter the financial arrangements made by the Commons, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, this amendment is the one outstanding issue of a Pensions Bill that will radically reform the state pension system, providing a clear, simple platform on which to save for retirement. This Government want people to build up a full entitlement to this new pension, to give them this platform and then to take them above the level of the basic means test. This is why we have a comprehensive and recently reformed crediting system, which covers those looking after children or elderly relatives and people claiming JSA and ESA. Those in universal credit households will also get credits so that, in time, at least a further 800,000 people will gain a qualifying year. It is why during this Parliament we have introduced a credit for adult carers of children, commonly known as the “grandparents’ credit” and, with thanks to Members of this House, we will now be extending credits for partners of members of the Armed Forces on overseas postings to have retrospective effect.
On Report, we had a good debate about whether the national insurance system is failing those who have more than one job and are earning enough to pay national insurance or be credited into the system but do not reach the required thresholds in any one of their employments. This is an area that the noble Baroness, Lady Hollis, has been campaigning on for some time and I pay tribute to her tenacity. It is clear to us that people are in that situation. Our own evidence suggests that around 50,000 people in 2012-13 had more than one job with combined earnings above the lower earnings limit and yet did not get a qualifying year for the purposes of the state pension. What is less clear is whether that will affect their state pension. The system allows people to have gaps in their records over their working lives. For those with a typical working life, they might be able to have gaps for 10 or 15 years and still get the 35 qualifying years that they need for a full single-tier state pension. For those in this situation for a short period of time, there is no reason to expect an impact on their pension.
What we heard from the noble Baroness on Report was that having more than one job was not a temporary situation for some people and that there is evidence to suggest that this is a growing phenomenon. While the current evidence that we have does not suggest a growing problem, the Minister for Pensions and I would like to acquire a greater understanding of the scale of the issue, who is being affected and at what point in their lifetime. For this reason, as the Minister for Pensions announced last month, the department will be updating and doing more detailed analysis and will be working with stakeholders to build its evidence base in this area. As the noble Baroness, Lady Hollis, herself said, the implications for individuals’ state pension entitlement have perhaps been neglected in recent debates about the labour market, so I am pleased that we now have the opportunity to shine some light on this area.
The department will update its analysis based on the latest data and will look to identify the characteristics of those affected. We are keen to bring other interested parties on board. As well collating the relevant findings from think tanks and research organisations, we will be convening a forum to discuss this evidence base before the Summer Recess. We are hoping that, among others, the Pensions Policy Institute, the Chartered Institute of Personnel and Development, the Resolution Foundation and, of course, the noble Baroness, will attend this forum. I am pleased to say that the Institute for Fiscal Studies has agreed in principle to chair it. This event will allow the department and interested parties to consider the available evidence in order to answer three main questions. First, what is the current evidence base? Secondly, is the number of individuals in this situation likely to change? Thirdly, what is the impact on their state pension outcomes? I believe that this work will get us to a place where we will understand whether there is a problem and, if there is an issue, will provide some pointers as to how it might be addressed.
I turn briefly to why this Government do not believe that we should insert a power in the Bill ahead of the conclusion of this work. Put simply, we already have the powers we need. The Social Security Contributions and Benefits Act contains broad powers to create new national insurance credits and to adjust the way voluntary national insurance contributions work—two possible options suggested by the noble Baroness on Report. There could, of course, be other options that we do not have the powers for, but I am sure noble Lords will understand that we cannot simply give ourselves a sweeping power to make regulations both to introduce any possible solution and to amend existing primary legislation where necessary.
I hope that I have made my position clear. I again thank the noble Baroness for her work on this issue. She has highlighted the need for us to dig deeper and that is what we shall do. Building the evidence base will give us a clearer sense of whether people working in multiple jobs are at risk of losing out on state pension and who these people are. I look forward to reporting back to the House on the results of this work and, in the mean time, I beg to move.
Lord Freud
My Lords, again, I record my thanks to those who have contributed to the discussions on this issue, in particular, of course, the noble Baroness, Lady Hollis, who has shone a spotlight on this group of people.
I will pick up a few of the points that have been made today. The first was raised by my noble friend Lord German and the noble Baroness, Lady Sherlock, and concerned zero hours. There has been quite a lot of conflation between this issue and zero hours, which is probably, on balance, unhelpful, because people on zero-hours contracts do not necessarily have more than one job. Indeed, they can be working quite a large number of hours. I think the title “zero-hour contracts” does not do justice to what should perhaps be called “flexible-hour contracts”. The mean in the Labour Force Survey of people on these contracts is 21 hours and the median—I know that people like both—is 18. When you look at the average usual hours, it is a higher figure: 25 mean and 23 median. There is quite high satisfaction with that.
On the point about the labour market, the percentage of women in two or more jobs has hardly changed in the past 10 years. It is approximately 10%. The number of women who work part-time because they cannot find a full-time job is currently standing at 13.3%.
The noble Baroness, Lady Hollis, asked about the forum. We do not want to prejudge the outcome of the forum. I am sorry; the question was about the commitment to further research, if necessary. We will consider further research if it can fill the gaps in the evidence and we need it to aid our policy. If we need to take more evidence, we will need to take the time to do it properly. The rough timing is that from the initiation of qualitative research to carry out and publish takes roughly six months.
My noble friend Lord Forsyth asked about timing. We will hold the forum in July, we hope. Our analysis of existing data should be published roughly at that time, before the break. My noble friend also asked what the criteria are. The criteria are that we want to ensure that people with multiple short-hour jobs are not disadvantaged, and we would need to consider the most appropriate and proportionate means to ensure this. We need to ensure that any remedy does not place an undue burden on the business.
Perhaps I may correct something I said earlier. When I said “10% of women in two jobs”, I should have said “5%”. I apologise for that.
On the criteria and on the question of whether we would have the answers this side of Christmas—the noble Baroness, Lady Dean, was rather rude in referring to “long grass”—we are taking this issue seriously. We are making an enormous number of changes in this department. We are rebuilding the welfare system and the pensions system. We want to make sure that we incentivise flexible work. I do not think that your Lordships see before you a Minister or a department shy of taking action where it is required. I think that that is the best assurance about lawnmowers that I can give.
Lord Forsyth of Drumlean
I shall read my noble friend’s words carefully in Hansard, but they sounded to me like a commitment that he would address this problem one way or the other. Is that what he was saying?
Lord Freud
I was saying that we now have a base on which to look at this problem, see what it is and, on that basis, decide how to deal with it.
Lord Forsyth of Drumlean
When my noble friend has decided how to deal with it, will he then deal with it?
Lord Freud
I would be pretty surprised if, when one had reached a decision on how to deal with something, one did not get on with trying to deal with it.
On the timetable, we have the power to introduce credits anyway—that is a point that I have already made—but it would take time, working with HMRC, to get it right. We need to work through the impacts to ensure that there are not any significant burdens on business. However, I give the assurance that this is not a numbers game and we will look at the most appropriate action.
I think that I have dealt with most of the issues raised. I am glad that we can conclude the scrutiny of this important Bill with another example of how, through well informed discussions, this House can move a debate forward, in this case by ensuring that we have a robust evidence base on which to consider the issue of multi-jobs. On that basis, I ask that the House do not insist on Amendment 1.
Youth Unemployment
Lord Freud Excerpts(10 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness McDonagh
To ask Her Majesty’s Government what action they have taken to tackle youth unemployment.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
The Government provide support to young people through Jobcentre Plus as well as through the youth contract and the Work Programme. Our approach continues to work. The youth claimant count has fallen for the 21st consecutive month.
Baroness McDonagh (Lab)
Why then has long-term youth unemployment doubled since 2010 and why, according to a recent Local Government Association study, were 40% of young people underemployed? Does the Minister agree that the Conservative Party has form on this? It is what it did in the 1980s, causing long-term generational unemployment with catastrophic social and economic consequences, only now it is being aided and abetted by the Lib Dems.
Lord Freud
There is a great deal of confusion about long-term youth unemployment. The actual figures, rather than the fantasy figures made up on the opposite Benches, show that before the coalition came to power long-term youth unemployment had doubled. Since then, that increase has slowed and the figure has now started to fall—it was down 38,000 this quarter and 59,000 this past year—and the long-term count has fallen for the 12th consecutive month. Those are the unemployment figures. One of the sources of the confusion is the JSA claimant count for long-term youth unemployment. The reason for that confusion is that the previous Government hid long-term unemployment by introducing training allowances, which took people off. So those figures are distorted. The right figures, which show the underlying position, are the ILO unemployment figures which I have just given.
Baroness Wheatcroft (Con)
My Lords, I recently visited the Hammersmith Jobcentre Plus. I recommend it to all noble Lords, and not only if they are looking for jobs. It was a delight to see that under one roof one could get help with housing, drug and education problems as well as with jobs—and, of course, the first three are important in finding jobs. Does the Minister agree that this holistic approach is paying dividends?
Lord Freud
The key element of universal credit, clearly, is that it is an incentive for everyone to go to work and to work more. That is particularly attractive to younger people who are excluded from tax credits. Around universal credit, we are putting in place a series of local partnerships so that we can provide holistic help for people who have barriers to going into work. That is the issue. One needs to address the structural problems of getting youngsters and, indeed, others into work and not fiddle around with figures.
Lord Brooke of Alverthorpe (Lab)
My Lords, first, I am not clear about what the Minister said in his earlier reply on the numbers. Is it not true that the underlying trend for the number of long-term unemployed is still increasing, even though there have been some decreases latterly? Also, the figure is still higher than it was under the previous Government. Secondly, can he state whether he meant to say, when he attacked Labour’s policy of putting people into training, that he would rather have them unemployed than in training?
Lord Freud
My Lords, the figures show that the long-term unemployment figure is still 6% higher than it was in 2010, on top of the doubling that was seen under the previous Government. I am absolutely behind training because it is the way to help people, particularly youngsters, get into the labour market. The trouble is that when things such as training allowances are used as a way of distorting the underlying problem, it misleads people. Indeed, I think it has misled a lot of Members on the other side of the House.
Lord Roberts of Llandudno (LD)
My Lords, first, is the Minister satisfied with the quality of the interviews being conducted by Jobcentre Plus and with careers advice in schools? Secondly, does he agree that we need to look very much at the core unemployment rate, which is a major problem that the Government are not succeeding in solving, whichever party is in power?
Lord Freud
We are looking to improve careers advice in schools and Ofsted has confirmed that it will give this guidance a higher priority. Reducing unemployment is clearly a central objective for this Government, and I thought it was interesting that a couple of weeks ago the Financial Times reported that we have now overtaken the United States in our participation rate, a rate that normally falls during a recession. We have also been pushing employment up in the key 25 to 35 year-old group between 2007 and 2013.
Baroness Prosser (Lab)
My Lords, will the Minister explain why this Question is being answered by the Department for Work and Pensions and why we do not have a Minister from either BIS or the Department for Education? Is it because the Government see youth unemployment as merely a welfare problem and not as an issue of training and getting young people into work? Is he further aware that the Department for Education spends 0.04% of its budget on careers advice, the lowest percentage in the developed world?
Lord Freud
My Lords, the reason I am answering this Question is that I represent the Department for Work and Pensions, so it is fairly self-evident that I should be responsible for it.
Lord Forsyth of Drumlean (Con)
My Lords, will my noble friend confirm that neither the Opposition nor the Government can create jobs for young people, and that the fantastic work being done by the Government in encouraging apprenticeships, and the Budget measures that have reduced national insurance contributions by £2,000 for those who take on young people, will do far more than the kind of comments we have heard from some parties about offering youth job guarantees that are undeliverable?
Lord Freud
My Lords, the party opposite has a policy of guaranteeing jobs that cost more than its own costings. It thinks that the policy will cost £1.9 billion in the first year and £0.9 billion in subsequent years. The Treasury has looked at the Opposition costings and puts them at £2.6 billion a year. That money is anyway to be taken from a tax on bonuses that has already been spent. Apparently it has been spent 10 times over, but it is now to be devoted to this policy. Most disturbing of all is that to the extent that this is built on the Future Jobs Fund, the figures show us that we can get the same result for youngsters through the Work Programme, which delivers real jobs with mainly private sector employers. We are achieving the same outcomes at one-20th of the cost. You know what you get with Labour: tax and spend.