Welfare Reform Bill

Baroness Lister of Burtersett Excerpts

Tuesday 31st January 2012 Lords Chamber

[Lord Freud]

My Lords, let me cut straight to the chase. We have the powers in regulation to do whatever we or any future Government want to do to raise sanctions, so I can provide reassurance to that extent. I will go into a little detail about our plans and what we intend to do, but first I pay tribute to noble Lords because some really interesting and useful ideas were expressed in Committee that we took on board, although I do not think that we took them on board quite as much as some noble Lords would want. We moved a long way and thought about this again more specifically, so I thank noble Lords a lot for that.

We are trying to create a sanctions regime to provide at one level—probably the most important—a deterrent against behaviour that damages a claimant’s and indeed others’ employment prospects. Ending sanctions when a claimant complies with requirements can clearly play a role in incentivising sanctioned claimants to do the right thing. That is why we are moving in the direction of open-ended sanctions for lower-level failures, such as the failure to participate in training or to attend work-focused interviews. In essence, these sanctions apply only until the claimant re-complies, with a short fixed period of a week or a few weeks.

This amendment is about the higher-level sanctions: sanctions imposed for failing to comply with the most important requirements. These are employment-related failures, such as the failure to apply for a job when specifically asked to do so, the failure to accept a job offer, or the failure to leave employment voluntarily. By failing to do these things for no good reason, a claimant is fundamentally breaking the agreement that sits at the heart of jobseeker’s allowance: that they do everything possible to find work in order to be able to support themselves. That is why we believe it is vital that there are clear consequences for such failures. Fixed, substantive sanctions reinforce the message that these requirements absolutely must be met.

As I said on Report, we propose to wipe the slate clean by terminating any outstanding sanctions once a claimant has moved into employment for six months, but we believe that going further and ending these critical sanctions after a few weeks or months of compliance would undermine the clarity of our message and the effectiveness of the sanctions regime. It is worth noting that in the current system sanctions can be imposed for up to six months and are typically not lifted at all on re-compliance.

As I said at the beginning of this debate, we have the powers to end sanctions following re-compliance—we have defined the levels of re-compliance—so if, after a period of live running, we or future Governments wish to change the position, we have the powers to do so. Indeed, this is one area in which it might be very interesting to do some piloting work on how incentives and deterrents actually work.

Just to be techie about this, the powers that I mentioned are in this Bill and in the Jobseekers Act 1995. Clause 19(4)(b) provides a broad regulation-making power to set the duration of a sanction. Existing Section 36 of the Jobseekers Act allows for any regulations made under that Act to be subject to particular exceptions. I am not absolutely surprised that no one could piece that together.

[Baroness Lister of Burtersett]

I thank the Minister for the techie stuff, but what happens to someone who has been subject to a sanction, goes into paid work, through no fault of their own loses that job before the six months is up, then assiduously looks for work daily, just as they are supposed to do?

[Lord Freud]

My Lords, under this construct, they will have to do the six months to wipe off the sanctions. Let us not forget that the sanctions that we are talking about do not involve the full amount of support but the equivalent of the JSA—£63-odd. There will be a very strong incentive on that person to take absolutely anything to fill in the rest of the time.

As I said, this is a very interesting area of deterrence and compliance and how we influence behaviour, which is exactly why I wanted to have the powers to pilot all these things. This is our starting point. Noble Lords have influenced us into making the lift at the six-month level, and it is clearly our best view today on what the reasonable balance is. No one can know yet as we have not done the live testing, but we will do it and we will be able to look at this and get the balance absolutely right. It might need to be milder, it might need to be tougher, but noble Lords will appreciate that if we pilot and test and look at these things in the way that I am describing, we will start to get answers on what works and move away from some of the rather more excited commentary and pressures from some of the media in this area. It could be of great interest to noble Lords if we start to move this into a social science area where we know the answer as opposed to an area where everyone has an opinion.

With those thoughts, I urge the noble Baroness to withdraw her amendment.

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[Baroness Lister of Burtersett]

My Lords, I support the amendment. It is important that there has not been a change in meaning. I know that the Government have their doubts about targets and so forth but they are very important in terms of accountability. I talked a lot last week about accountability in relation to the Social Fund. This is accountability in terms of organisations which are very concerned about what is happening as regards child poverty and enabling them to know what progress the Government are making and are intending to make. I know that certain voluntary organisations are very concerned about child poverty and that there has been a slight shifting here in meaning that could make their job that much harder.

[Lord Freud]

My Lords, Amendment 14 is designed to place a caveat on the amendment to Section 9 of the Child Poverty Act which is already included in the Welfare Reform Bill. As I discussed on Report last week, the amendment to Section 9 is a clarification which confirms the Government’s existing understanding that the requirement in Section 9(7) of the Child Poverty Act for a UK strategy to describe progress can be met with a description of progress in narrative or policy terms, rather than in numerical or statistical terms.

This amendment appears to seek clarification that the changes already agreed by the House will not undermine three requirements on the Secretary of State which are included in Section 9 of the Child Poverty Act; namely, first, that he must publish and lay before Parliament a child poverty strategy; secondly, that he must describe in that strategy the progress that he considers necessary to meet the four child poverty targets by the target year of 2020-21; and, thirdly, that he must describe in that strategy the progress he intends to make over the period of the strategy to reduce socioeconomic disadvantage as far as possible.

I can state clearly on the record that our amendment to Section 9 is not designed to remove the requirement on the Secretary of State to do any of those things. The Secretary of State will continue to have a duty to produce a strategy every three years which sets out the measures that will be taken, and the progress that needs to be achieved, in that period in order to meet the targets by the target year and reduce socioeconomic disadvantage as far as possible. The purpose of our amendment to Section 9 is not to change the substance or effect of the law. The amendments simply clarify how progress can be described—in particular, that it can be described in policy or narrative terms rather than statistical or numerical terms if the Secretary of State so wishes.

I discussed on Report the reasons why we think that this clarification is important. We believe that a requirement to set out the progress required in statistical terms is equivalent to a requirement for interim targets on child poverty towards the 2020 target. Interim targets incentivise the short-term, income-transfer approach that we have seen in the past. That approach has not worked and completely fails to address the underlying problems. This can lead therefore to small amounts of money being given to families just to lift them over the poverty line.

The Government remain committed to eradicating child poverty and improving social mobility. We do not believe, however, that the right way to achieve these aims is by using income transfers to move people above an arbitrary line, so we must focus on tackling the root causes of poverty and changing behaviour. In the long term, those with the lowest level of income can only improve their life chances by keeping pace with those at the top. This is why we must take long-term sustainable measures to improve skills, abilities and aspirations. An income-transfer approach does not work because it is unsustainable and does not deal with or address the underlying causes of long-term deprivation. We will continue to monitor progress through the annual publication of the Household Below Average Income Statistics, the beloved HBAI. However, we think it is very important to clarify that the law does not require the child poverty strategies to set out interim income targets. It is because of this that we cannot accept the amendment. By reintroducing the wording of the original Child Poverty Act, in effect it would remove the clarification that we introduced using the amendment to Section 9.

I emphasise that we remain fully committed to eradicating child poverty, and that amendment does not alter current government policy. We will continue to be required to produce a strategy every three years which sets out the measures that will be taken and the progress that needs to be achieved over the period. This amendment is unnecessary and unhelpful. The requirements it seeks to place on the Secretary of State already exist. All it will do is reintroduce lack of clarity regarding how progress is to be described, and I therefore urge the noble Lord to withdraw it.