Welfare Reform Bill

Debate between Baroness Drake and Baroness Lister of Burtersett

Wednesday 26th October 2011 Grand Committee

[Baroness Drake]

My Lords, I support the amendment and come back to its detail; my noble friend indicated that it was a probing amendment. This is an opportunity to raise significant issues about in-work conditionality. Where a welfare system has to balance rights and responsibilities, under universal credit those in work will be embraced by an in-work conditionality of some complexity which neither they nor their employers will previously have experienced. From the emerging details of in-work conditionality it is clear that it will give the Government significant discretion over a sizeable section of the workforce, and powers to follow through with sanctions that will affect people's lives very significantly.

This is a novel discretion for three reasons. It will impact on a much greater volume of people; it will impact on existing in-work relationships; and it will require Jobcentre Plus people or any outside providers to engage with large numbers of companies with which they have previously had no engagement.

Setting and enforcing what is a reasonable condition, particularly in terms of increasing hours or requiring people to seek and change their jobs, must be sensitive to a range of factors: for example, local and regional labour markets, and different sectors and their employment practices. If an employer puts their employees on short-term working rather than making them redundant, is that a good thing or will it attract conditionality requirements? How will it be handled? What will happen when people have atypical or variable hours work contracts? Over what period and in what manner will earnings be averaged to assess compliance with income thresholds on conditionality?

In requiring people to work more hours or seek a higher-paid job, it is important to ensure that childcare and conditionality interact fairly. Parental need for confidence in the care of their children needs to be respected. My noble friend Lady Hollis moved in on some detailed concerns in this area. Any casual observation of female labour market statistics will show two peaks of part-time working by women. They coincide with key caring periods. Part-time working in the UK is part of the systemic solution to childcare, particularly for single parents. One cannot look at conditionality on the one hand without looking at the nature and characteristics of childcare in the nation as a whole. How will the sanctions regime be applied? How will it impact on the children of those who are subject to sanctions? How long will people and families be given to adjust to any new requirements and conditions, particularly if they come on top of a period of compulsory redundancy?

What we see from the details coming forward is the micromanagement of the work patterns of potentially millions of people, and the application of wide discretion that will need a considerable set of guidance notes and competences to apply the conditionality. The staff making these in-work conditionality assessments will have no previous experience of doing this. It is a novel area in its scale and complexity. No doubt in answer to my questions the Minister will say what is intended or that the matter is work in progress. It is pretty clear that an awful lot of work is still in progress. I say that not to appear negative but to say that the Bill has the effect of giving the Government considerable discretionary power over people in work.

Parliament needs to be satisfied on three issues: that the capacity and capability to implement the proposed in-work conditionality is there; that there is confidence that the discretion will be applied consistently, fairly and proportionately; and that there is a high level of confidence that there will be no inequalities of treatment or impact in the outcomes of applying that discretion. Because conditionality is now going to be applied to people who believe that they are already making a contribution, they will have to experience a different perception of the contribution they should make in terms of being in work.

I want to pose two questions for the Minister. First, do the Government intend to pilot in-work conditionality before they introduce it nationally? Secondly, would any introduction consequent on those pilots be both gradual and incremental so that experience, knowledge and skill can be built up by those assessing claimants? Thirdly, what will be the reporting to Parliament about the level of confidence that this complex system of in-work conditionality can be applied fairly and proportionately?

[Baroness Lister of Burtersett]

My Lords, I would like briefly to follow up on that because this takes us into largely uncharted waters, so we have to be sure of what it is that we are doing. I was struck by the research report, Perceptions of Welfare Reform and Universal Credit, which states that:

“Many part-time workers were surprised that the Universal Credit proposition addresses them as they tended to perceive that they were already doing their bit and felt a strong sense of entitlement to tax credits”.

I think that they found the idea that conditionality was going to apply to them quite disturbing. There is a real danger here. The Government talk a lot about not wanting an overly oppressive state, but I fear that many workers will experience this as just that.

I have two questions for the Minister. First, my noble friend Lord McKenzie mentioned the equality impact assessment. I understand why the Government are using earnings rather than hours as the threshold—because they want to get away from the in-work/out-of-work distinction—but in doing that, as my noble friend said, someone who can earn more will find it much easier to meet the threshold. We know from all the evidence that men are more likely to be able to do this than women, non-disabled people are more likely to do it than disabled people, and white people are more likely to do it than minority-ethnic people.