Welfare Reform and Work Bill (Third sitting)
Corri Wilson Excerpts(9 years, 3 months ago)
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Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
Q 183 Much of the proposed legislation is born out of the assumption that those on benefits face the same choices as those in work. Does the panel agree?
Matt Padley: No. There is lots of evidence to suggest that people living on benefits, or with very low incomes, have very restricted choices across the board. Some of the language in the Bill does nothing to encourage integration across society; a lot of it is divisive.
Alison Garnham: I did not quite understand the question. What is the thing you think will be affected?
Corri Wilson
Q 184 Much of the proposed legislation is based on an assumption that people in work and people out of work are able to make the same choices.
Alison Garnham: Right. So you are thinking in terms of cutting different benefits? Is that what you are thinking?
Corri Wilson
Q 185 Is somebody who is out of work and relying on benefits able to make the same choices as someone who is in work and who has all the trimmings of being in work?
Alison Garnham: There are big differences between people in work and people out of work in terms of the choices they can make; that is absolutely evident. We know that children living in poverty, including those in working families—part of the problem we are talking about today is that two thirds of poor children live in working families—face constraints on what their families are able to afford. Children are not able to take gifts to birthday parties, they do not have adequate clothing and so on. That affects all low-income families.
Dr Callan: My understanding is that what the Bill is trying to achieve is to equivalise the choices—not to say, “You already have them,” but to say, “We need to make the benefit system work in such a way that you have the same choices around things like the numbers of children you have and being able to afford the number of children you have.” So I read it in a slightly different way.
In terms of us leading the world, our UNICEF reports on child wellbeing, very sadly, do not tell a good story about how well Britain has been doing, despite having leading child poverty indicators. I think we need to be very realistic about how our children are faring.
Professor Gordon: People do not choose to go on to benefits. The DWP’s own research shows that. They go on to benefits because they have little or no choice. Most people—the overwhelming majority—would choose not to be on benefits if they were able to get off them. So the idea that people on benefits have the same choices as people in work is just not supported by any evidence.
Corri Wilson
Q 186 Following on from that, Dr Callan, you talked about helping and supporting people to get off benefits. Surely that works only when there are decent work opportunities out there, and not things like zero-hours contracts. Does the cap on child tax credit not cause a bigger disconnect, making it even harder to get off benefits?
Dr Callan: There are more jobs out there than people realise, often not at the skill level they currently have. We have a massive skill shortage in this country. You are absolutely right: people have been stuck in very poor jobs, very poor working conditions. If the Government is doing what it said it would, and helping people at every stage to go through the income levels and to up their skills, and there is a culture that says, “That’s what’s expected,” that is where we will begin to see similar choices. A lot of people in work—certain professional people—think, “I want to improve myself.” Well, everybody in this country wants to improve themselves, and that is why we need to create a benefits culture to encourage, rather than dampen, people’s feeling that they can change their life circumstances.
The Chair
We have 12 minutes left for this session, colleagues. Three colleagues wish to ask questions, so can I ask, please, for brief questions and brief answers? I will call Peter Heaton-Jones, followed by Neil Coyle, followed by Emily Thornberry, who will ask the final questions.
Corri Wilson
Q 200 Julia, your recent report suggested that the Bill will have a major impact on lone parents. What protections should be included in the Bill to ensure that children of lone-parent families are not unfairly impacted?
Julia Unwin: All the evidence we have gathered over many decades makes it very clear that lone parents suffer a huge penalty for being widowed, divorced or single in the first place. That creates a very high incidence of women in poverty and therefore their children being raised in poverty.
Legislation argues or recommends that all parents—lone parents or two parents—go to work when their child is three. That takes you directly to the quality and quantum of childcare available. While the childcare allowance is hugely welcome, if it is also captured in the freeze, childcare in London will remain unaffordable. Investment in childcare—both the provision and purchase of it—matters enormously, but I believe there will always be a need for tax credits for people at the bottom end of the income distribution while they are raising their children, because raising children is such an important aspect of the next generation’s wellbeing.
Corri Wilson
Q 201 I would like to ask you the same question that I asked the last panel. Much of the proposed legislation is borne out of an assumption that those on benefits face the same choices as those in work. Do you agree with that?
Julia Unwin: I do not agree that there is a huge distinction between those on benefits and those in work, because we know that a significant proportion of people in work are on benefits and tax credits—there was an earlier discussion about housing benefits, for example. People are moving around the labour market in a very dynamic and frequently very damaging way, but once you are on benefits and out of work, it is very hard to make the sorts of choice that better-off people are able to make. We ask people on benefits to take enormous personal risks, and I think that point is very well made.
Dr Niemietz: Ideally, they should be in a situation where they broadly make the same choices and the same trade-off. That is not the way the benefits system is currently structured, because you have ring-fenced elements for particular expenses—you get an amount for childcare, an amount for housing and an amount for something else. If that were somehow wrapped up in a single payment and it was then left to people to make their choices, their everyday lives and the trade-offs they make would become more similar to those of working people.
Anna Turley
Q 202 What are your views on—this is one of the most controversial aspects of the Bill—limiting tax credits to two children? What do you think the impact of that will be, particularly for the most disadvantaged and larger families?
Julia Unwin: One thing we know is that tax credits do not influence behaviour in the linear way that many people expect. Given my description of people coming in and out of dependency on benefits and tax credits, there is no way of knowing at what stage in someone’s life they will require those tax credits. I simply do not believe that people choose to have more children in the sure and certain knowledge that tax credits will bail them out. That is not how decision making works in most households that I have come across.
I think the impact could be very damaging for larger households. I would go back to the even more substantive issue, which is the concern about where families on benefits with more than three children will live and how they will afford to live. That strikes me as deeply problematic for families who have been on benefits for some time, and particularly those who find themselves on benefits.
Dr Niemietz: This links back to the earlier question about whether people on benefits make the same choices in the same way as people who are not on benefits. If you do not qualify for child tax credits, your income does not automatically go up because you have a third child. I do not see anything wrong with replicating that situation for people whose income mostly consists of state transfers.
Welfare Reform and Work Bill (Second sitting)
Corri Wilson Excerpts(9 years, 3 months ago)
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Anna Turley (Redcar) (Lab/Co-op)
Q 12 Building on that point about the lack of detail in the Bill, one of the biggest concerns you have raised is the huge number of existing claimants, but there is no detail on how they will be dealt with. What are your thoughts on how they should be dealt with? How serious is it that the detail is not there?
Paul Broadhead: Many, in fact more than half, of the existing claimants are in receipt of pension credit, so we are talking about a certain type of individual and we need to ensure that the advice is right. Many of these people have been long-term claimants, so we need fully to understand that change. The timetable for delivery is challenging. There could be an argument—I am not saying there is, because it depends on the Government’s delivery plans—for saying, “Okay, on 1 April 2018, this applies to new claimants,” and we then make sure that we take our time to ensure that everyone understands the effect of the change on their circumstances. Perhaps we could put that back 12 months or so for existing claimants, but it needs to be considered very carefully so that we do not end up with unintended consequences. We have talked about debt—whether it is debt or not and whether it is going to be repaid—and many of these people will not like the thought of debt and might put themselves in a more difficult position than is needed.
Paul Smee: I hope that the Government can come to an early conclusion about the channel through which the advice will be given, because we would want to work with those who are giving the advice in order to understand their position.
Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
Q 13 What effect, if any, would the potential increase of sanctions have on the entitlement period? If there were breaks in claims, would that have an effect?
Paul Smee: I am not sure I can answer that off the top of my head. I would not expect there to be any, but if I find that there is, I will drop you a note.
Kate Green
Q 14 I want to follow up on something that was said a moment ago about both existing and, once the legislation is in place, new claimants. I was struck by the statistic that more than half of claimants are in receipt of pension credit, which I suppose means that they are much less likely to achieve repayment by going back to work, as opposed to the eventual disposal of the property. What is your critique of that as commercial lenders, both in the abstract and in relation to SMI?
Paul Smee: Right across the population, we are increasingly seeing people borrowing into later life. The industry is now working on new ways to approach that sort of borrower. There are ways in which the value in a house can be unlocked. It depends on careful advice and helping people to understand the implications of what they are doing, but I think we are going to see more and more people borrowing into retirement, so the industry is getting itself into a position where it can help them to make the right choices. Bearing in mind that at some point people may well want to downsize, or an estate may well dispose of a property, in which case the funds become available.
Victoria Atkins
I am sorry, I was just asking about the rate of the salary.
Tony Wilson: There is an important point here. What drives the experience of the benefit cap is having children and living in the private rented sector. Families with children often have quite high entitlements to tax credits. For example, a family with earnings of £26,000 and three children would receive £5,500 in tax credits. They would also receive £2,500 in child benefit, and they would likely be receiving housing benefit if they were in the private rented sector. So benefits do exist for people on low pay as well as for people out of work. Essentially, a lower benefit cap brings more people into the benefit cap, but these are often people with large families in the private rented sector who would be receiving support in work.
Corri Wilson
Q 40 This is a question for Kirsty and Tony. How can you incentivise people who have been assessed as ill to get back to work? When we are capping people who receive severe disablement allowance, how is this treating people fairly?
Tony Wilson: Can I make two quick points to add to Kirsty’s really good, comprehensive list of what works in supporting disabled people and those with health conditions? One further thing is early intervention. One thing we could do much better to incentivise and support is to intervene much earlier. We intervene very late. By the time somebody has got through the work capability assessment and the ESA, they have probably been out of work for a year or more, although they might have been previously in work. Early intervention is really important. The earlier we can engage people, the easier it is and the more effectively we can incentivise a quick return to work.
In terms of financial incentives, for example, one thing that was abolished in 2011 was the in-work credit, which was a payment made to people who were claiming incapacity benefit or ESA when they returned to work. The in-work credit was paid at about £50 a week for 26 weeks. We did a qualitative evaluation of that; there was never a formal impact assessment of it. There is very good literature around financial incentives to individuals when they move into work, internationally. It is not something tested very well here. We should look at how we create financial incentives. It is a behavioural tool to support people to make the transition into work and help to meet the transitional costs of work.
As others have said, I have significant concerns around the incentive and disincentive effects of the changes to the ESA WRAG. As much as anything, the most likely effect is to further increase the cliff edge between the support group and the rest of the benefits system. It will probably make the WCA even more of a mess. It will clog up the system even more with appeals and problems. We need the fundamental reform that Charlotte talked about.
Kirsty McHugh: One of the positive things over the past few years has been the introduction of the Health and Work Service. We need to stop people becoming long-term sick to begin with. The early intervention with the employer is important so that when somebody becomes ill, they are prepared to keep them in work. We need to keep an eye out to ensure that that is doing what we want it to.
A lot of people get assessed to death. They go through the personal independence payment assessment and the WCA. They are assessed by the employment providers. We could probably streamline some of that process—that is the outsourced sector and the DWP element. At the moment we are not sharing those assessments in a sensible way. We could probably take some costs out of the system and make life much easier for the people who are subject to it if some of those system issues were more effective than they are currently.
Jo Churchill (Bury St Edmunds) (Con)
Q 41 I will try to be succinct, because you have covered a lot of this. My major interest is in how we help occupational health outcomes that would aid employees, particularly those who, for example, suffer from cancer and, through no fault of their own, end up in a situation where they are claiming. Many of them, after Question Time yesterday, asked me why we could not do something like invoke a conversation between a doctor and the employer to avoid them falling between the cracks. They are okay to work and they want to work, but it is an all-or-nothing scenario. Is there any mileage in a better dialogue or a service where doctors can help to inform—this leads into long-term conditions, an ageing population and so on—so that we have a better conduit of information between different services?
Kirsty McHugh: Short answer—yes. We know that the NHS is not brought into the conversation as much as it should be. Again, a positive: employment is now one of the NHS framework outcomes in a way that it was not before. That should be a big step forward for us. Where things work well, the GP is part of the conversation. We often find people who have been on ESA for a long time and whose medicine has not been reassessed. The prescription keeps on running, which cannot be good for them and does not help that idea of work being good for people.
Peter Heaton-Jones
Q 56 It would be interesting to know what percentage of people who have been in receipt of ESA in the WRAG have come off that and in to employment. Does anyone else have anything?
Tony Wilson: The only indicators that the Department publishes are benefit offloads at 65 weeks—the proportion who have left benefit after 65 weeks. You have put me on the spot because I cannot remember what the figure is. It is not a lot—it might be 40% or 45%.
Charlotte Pickles: It is not job outcomes.
Tony Wilson: It is not job outcomes.
Charlotte Pickles: Which is the problem and the point I was making earlier.
Tony Wilson: It is not beyond the gift of the Department to work that out, essentially matching with HMRC and its own data. I think that is something we would all find invaluable.
Corri Wilson
Q 57 I just wanted to touch on the carer’s allowance and the widow’s pension in part of the cap. Those are obviously groups of people who are already under a strain: they have either lost a partner or have a caring responsibility 24/7. Should they be part of the cap? Should they be included?
The Chair
Any takers?
Tony Wilson: There is a good argument to exempt them. The groups we most focus on exempting from the cap would be those that are least likely to be able to respond by moving into work or moving home. In particular, those are parents with very young children. We would not expect parents with a child aged one or nought to be moving into work or moving home in response to the cap. Therefore, their only option is to see their income reduced. Focusing exemptions on those groups where a labour market or housing response is not possible or feasible is critically important. Some of those may be widows and carers, yes.
Corri Wilson
Q 75 I should like to challenge the assertion that the changes to ESA and universal credit will save the Government money. It may be just the welfare budget, but surely it will put a strain on other parts of the system: the NHS, charitable organisations and local authorities. That is for anybody who wants to answer.
Sophie Corlett: Yes, I agree, and since the welfare changes that we have already had we have had an enormous increase in calls to our information line from people who are in debt or worried about debt, or worried about how they are going to be able to make ends meet.
Oral Answers to Questions
Corri Wilson Excerpts(9 years, 6 months ago)
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Caroline Dinenage
Yes, it is important to maintain family ties, and family engagement workers are in place in all public sector female prisons, including Foston Hall. They meet all prisoners on induction to identify any support required to maintain or establish family contact. Women’s prisons are also looking at other support for improved family links, including family days, child-centred visits, homework clubs and specific relationship and parenting skills programmes.
Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
T8. Following the question asked by the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) on freedom of information, does the Secretary of State intend to introduce legislation on proposals to price out FOI requests and extend the ministerial veto, which my party would oppose, and will he give us a timetable for that?
Michael Gove
We want to review the operation of the original Freedom of Information Act. Some of the judgments that have been made have actually run contrary to the spirit of the original Act, and some of those behind the original Act, including former Prime Minister Tony Blair and the Home Secretary who introduced the legislation, Jack Straw, have been very clear about the defects in the way in which the Act has operated. It is vital that we get back to the founding principles of freedom of information. Citizens should have access to data and they should know what is done in their name and about the money that is spent in their name, but it is also vital that the conversations between Ministers and civil servants are protected in the interests of good government.