Sanctioning of Benefit Recipients

Anne Begg Excerpts

Thursday 3rd April 2014 Commons Chamber

[Dame Anne Begg (Aberdeen South) (Lab)]

This is obviously a day for my Select Committee’s reports. My right hon. Friend the Member for Oldham West and Royton (Mr Meacher) referred to the report that we published a few months ago called “The role of Jobcentre Plus in the reformed welfare system”, in which we had a whole section on sanctions. Very helpfully, the Government published their response to that report today, so the debate is timely.

Sanctions as we know them today have probably existed from the 1980s, although there has always been conditionality as part of the rules for getting unemployment allowance. I suppose the question today is to what extent the use of sanctions has increased in recent years. Certainly there has been a huge increase since the Welfare Reform Act 2012 was passed. Dr David Webster of the University of Glasgow, the leading academic authority on benefit sanctions, told my Committee that

“the severity of the regime has increased drastically under the Coalition Government and is increasing further.”

He also highlighted the common misconception that benefit sanctions affect only a small minority of benefit claimants. In the period 2008 to 2012 around one fifth of JSA claimants were sanctioned, approximately 1.4 million people. Official data show that, since the introduction of the new rules which have already been referred to, the proportion of JSA claimants sanctioned every month is around 5%, which is approximately 60,000 people. In the period from the introduction of the new JSA rules to June 2013 there were 553,000 sanctions, an increase of 11% on the same period a year earlier. There were 860,000 JSA sanctions in the year to June 2013, the highest number in any 12-month period since records began in their current form, and probably the highest number ever. The number of employment and support allowance sanctions—it is a new development that people on a disability benefit can be sanctioned—in the period December 2012 to June 2013 was double that in the same period a year earlier.

Despite all this, by May 2013 the report to the Secretary of State found

“no evidence of a secret national regime”

to set targets for the number of sanctions imposed. However, the Public and Commercial Services Union told my Committee that the expectations placed on Jobcentre Plus staff to sanction claimants were “targets by another name”. The argument about whether such targets exist continues to this day.

Both Members who have already spoken talked about inappropriate sanction referrals. We received evidence of quite a number of those, but in the light of Mr Deputy Speaker’s strictures, I will not detail them. Suffice to say that many were silly and inappropriate. With the application of common sense—that was the phrase that we used in our report—they could have been avoided or should have been picked up at review stage. About 50% of sanctions are overturned on review by a decision maker.

Many hon. Members will have received postcards from constituents that were probably sent to them by Church Action on Poverty and Oxfam, which asked my Select Committee to hold an inquiry into the use of food banks. Those postcards arrived in my office when we had already embarked on our inquiry into Jobcentre Plus. We had already decided that that would form part of the inquiry. Church Action on Poverty and Oxfam, in their report, “Walking the breadline”, found that sanctions were a significant factor in the recent substantial rise in referrals to food banks. They estimated that some half a million people in the UK were “reliant on food aid”, and that “up to half” of people who are referred to food banks need help

“as a direct result of having benefit payments delayed, reduced, or withdrawn”.

DWP was unable to provide information on the number or proportion of JSA claimants who chose to sign off benefit during a sanction period, or for longer, which is the reason that they would come off the claimant count. That might explain why there is some disparity between the figures for the number of people looking for work and the official unemployment figures.

The Committee recommended that Jobcentre Plus should look at the impact of sanctions on the use of food banks, but the Government have effectively rejected that in their response.

The Committee was also keen to see a second independent review of the sanctions regime, in addition to the one already being conducted by Matthew Oakley. Indeed, we thought that we had got the Employment Minister, the right hon. Member for Wirral West (Esther McVey), to agree to that when she gave oral evidence. Matthew Oakley is considering the clarity of DWP’s communications with claimants, the whole issue of sanctions, the appeals process and the availability of hardship payments.

We had wanted that second independent review to examine: whether sanction referrals were made appropriately, proportionately and fairly across the jobcentre network; whether there is a the link between sanctioning and the claimant count that could explain some of the disparities in the figures; and whether the regime was achieving its aim of encouraging claimants to engage more effectively with employment support. There is no point having sanctions if we do not know whether they work. Are they making people look for work more thoroughly than they otherwise would? That is our question. We do not think that Matthew Oakley’s inquiry will answer that, because it is not in its remit.

The Committee thought that the Employment Minister had promised that second review, which is why our report states that we welcome that commitment. Unfortunately, that is not what she meant, because the Government’s response states that there will be no second review along the lines we were asking for, and which we thought the Government had agreed to.

I appeal again to the Government to consider setting up a second independent review, and not just of the administration of sanctions, but of their effectiveness. Do they actually work? Do they change the behaviour of the people affected? If they are not changing people’s behaviour and so are purely punitive, the Government should be honest about that, because they must be saving money as a result. I do not think that most people would accept the application of sanctions that are purely punitive. If they are changing people’s behaviour, that is a different matter.

[Stephen Timms (East Ham) (Lab)]

Does my hon. Friend share my puzzlement about the Government’s about-turn, given that the Minister wrote to my right hon. Friend the Member for Oldham West and Royton and referred to the second review’s terms of reference? It is therefore very surprising now to be told that it will not happen at all.

[Dame Anne Begg]

I share my right hon. Friend’s disappointment, because we honestly thought, even before we published the report, that we had got the Minister to agree to such a review. I hope that the Government will think again, because they need to be satisfied, just as everybody else does, that the regime is not intended simply to save money in the welfare system through punitive sanctions, but has a real purpose in ensuring that people who are not fulfilling their obligations under the agreements they signed and who are trying to play the system should be sanctioned in certain circumstances. Sanctions should certainly not be applied if there is no reason other than to punish the individuals concerned.

I know that my time is up, Mr Deputy Speaker. I hope that the Minister, who is listening patiently, will take that back to the Department and that we can get a second independent review of the workings of the sanctions regime.