Compulsory Jobs Guarantee

Debate between Debbie Abrahams and Stephen Timms

Wednesday 11th February 2015 Commons Chamber

[Stephen Timms]

My hon. Friend is right about that. I have spoken to a large number of people, including young people whose break came through the future jobs fund. They have said that having got six months’ work under their belts, thanks to that initiative, they were then able to look after themselves and apply for jobs, do well and build a career. As he rightly says, young people need that crucial first break and that is what this guarantee will provide.

Every day of unemployment means hardship, worry and missed opportunity for someone who wants to be working and earning. But the full costs are borne more widely and last much longer. Every day of unemployment is a cost to the taxpayer in unemployment benefit and tax revenue forgone, and a cost to the economy in lost output. It also imposes a cost we can never account for, through the strain it puts on individuals, families and communities. Those costs—in benefit spending, tax revenues, economic output, and individual and social well-being—can reach far into the future, as the scarring effects of unemployment build up.

The Acevo commission on youth unemployment found that people who experienced unemployment in their younger years are more likely to suffer not only spells of unemployment in later life, but in work an average wage penalty of more than 15%. That is why it is so troubling that youth unemployment is going back up. It is back up today to more than three-quarters of a million. Young women now unemployed will, a decade from now, be earning on average £1,700 a year less as a result of being unemployed today. Young men now unemployed will be earning £3,300 less a decade from now. Those effects worsen the longer that somebody is out of work.

Work by Paul Gregg at the university of Bath and Emma Tommony at the university of York suggests that the 200,000 young people who have now been out of work for more than a year are, on average, likely to spend another two years either unemployed or economically inactive between the ages of 28 and 33, and that the men, by the age of 42, will be suffering a wage penalty of more than £7,000 a year. Those are big effects that need to be addressed.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

My right hon. Friend is making a very powerful case. On the effects of long-term unemployment on young people, he mentioned the impact on income, but will he comment about the impact on mental health, as unemployment can have lifelong effects? Does he agree that it is important to have a joined-up approach between the Department of Health and the Department for Work and Pensions?

[Stephen Timms]

My hon. Friend is absolutely right. I was at an event yesterday with the Prince’s Trust where a young man was describing how he was about to be sectioned when, thanks to the Prince’s Trust, he was able to go into a job and his mental health problem was resolved. She is also right about the costs to the economy and the health service of long periods of unemployment early on.

Jobcentre Plus

Debate between Debbie Abrahams and Stephen Timms

Thursday 10th July 2014 Westminster Hall

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Amess. It is also a pleasure to follow my colleague on the Select Committee, the hon. Member for Newton Abbot (Anne Marie Morris), who, as always, made a balanced speech. I am particularly pleased to speak on behalf of my constituents, many of whom are claimants and use their Jobcentre Plus, but I also speak on behalf of those who work within the Jobcentre Plus network and more widely within the Department for Work and Pensions system. I have been contacted by a number of people since the Select Committee started looking at this issue, and I want to air their views as well.

My speech will focus on sanctions, which both the previous speakers have touched on. The Select Committee’s report raised concerns on whether sanctions are being applied

“appropriately, fairly, proportionately and in accordance with the rules, across the Jobcentre network.”

The principle of conditionality has been accepted across all the parties represented in the Select Committee and beyond. It is that if claimants are receiving financial support from the state, there are conditions around that—on job search and on having regular meetings with jobcentre advisers, for example. That principle is long established and has in recent years been extended to involve financial penalties or sanctions being applied to the claimant, with benefit payment being stopped for a limited period if the conditions are not met. Even more recently, it has been extended to people who are sick or disabled, who can have work preparation conditions, with associated sanctions, applied to their benefits.

As many know, two thirds of those who receive social security payments are in work. The Government have already mooted that in-work conditionality and conditionality for in-work social security payments is likely. We should remember that and reflect on the particular issues we are facing with those on out-of-work or ill-health payments. The Welfare Reform Act 2012 introduced a new regime of sanctions. Instead of a maximum of six months of sanctions, the maximum period of a JSA benefit sanction is three years. The minimum is a month. Under the previous system, people could perhaps tide themselves over for a week’s sanction—they might have been able to borrow off family members or friends. A month, however, is a different kettle of fish. Later, I will come on to what that change means for so many individuals and families.

Many fair-minded people would say, “If you’ve done something wrong, it is only right that you should be punished for it.” That was raised by the Committee and has been mentioned today. My colleagues and I, however, have received overwhelming evidence, and investigative journalists have highlighted, that people are being sanctioned for doing nothing wrong at all. They are being set up to fail.

A whistleblower—a former JCP adviser—came to my constituency office and said that stitching up claimants was part of the job. He referred to a “bullying” culture, driven from above, in which claimants were constantly harassed to get them “off flow”, off benefit and off register. If advisers resisted pressure from managers, they were issued with a performance improvement plan, which is the start of a disciplinary procedure. Targets were set for advisers to cover targets for decision makers, resulting in perverse behaviour. He described advisers setting claimants up to fail, including making appointments about which they had no knowledge so that they were automatically sanctioned when they did not turn up. That is absolutely outrageous and there is growing evidence that it is happening up and down the country.

Another whistleblower from the midlands this week reported the pressure that she is under to meet targets to push people, including the sick and disabled, off benefits, such as being told to “disrupt and upset” claimants. The article states:

“Managers repeatedly question them on why more people haven’t been sanctioned. Letters are sent to the vulnerable who don’t legally have to come in, but in such ambiguous wording that they look like an order to attend. Tricks are played: those ending their contributory entitlement to a year on ESA need to fill in a form for income-based ESA. But jobcentres are forbidden to stock those forms. These ill people’s benefits are suddenly stopped without explanation: if they call, they’re told to collect a form”—

but of course the jobcentre does not stock them. The article continues:

“If someone calls to query an appointment they are told they will be sanctioned if they don’t turn up, whatever. She said: ‘The DWP’s hope is they won’t pursue the claim.’”

It is shocking.

Figures for the new sanction regime introduced at the end of 2012 show that sanctions have increased by 11% on the same period and that 1.35 million people on JSA were sanctioned in the first six months, with 553,000 upheld on appeal. For the same period, 11,400 people on ESA were sanctioned, including a constituent of mine who had a heart attack in the middle of a work capability assessment. The nurse said, “You’re having a heart attack. We’re going to have to stop. You’re going to have to go to hospital.” He received a letter two weeks later to say that he had been sanctioned.

The work that Citizens Advice in Manchester did on the effects of benefit sanctions on claimants showed that 40% did not receive a letter informing them of their sanction; they just had their money stopped. Over half of claimants said that they had not received any information about how to appeal.

When the Minister attended the Work and Pensions Committee in November, I asked her how sanctioned JSA claimants would affect JSA claimant figures and she said that, as long as they kept signing on, they would be counted. What she did not say, however, is that the Department does not keep such data. No one knows how many sanctioned JSA claimants keep signing on. If more than half of those sanctioned do not know that they can appeal, how many will know they need to sign on stay on register? Will JCP tell them? I would query that. I did some basic maths: taking the May JSA claimant figure, if 5% of 1.09 million people are sanctioned every month, the actual JSA claimant figure would be 1.147 million. It is apparent how the number can be distorted because the actual JSA claimant figures are not being kept.

I also asked the Minister whether she would commit to a second, broader independent review, as mentioned by my hon. Friend the Member for Aberdeen South (Dame Anne Begg), to look at inappropriate sanctions. At the time, she agreed. The Work and Pensions Committee certainly believed she had—it was one of our recommendations—but it is disappointing that the commitment has since been reneged on. I ask the Minister once more whether she will commit to that important piece of work in light of the compelling and growing evidence that has come forward since our inquiry and the potential distortion of the JSA claimant count.

The impact of benefit sanctions on people’s lives is becoming well documented. The Trussell Trust, which runs so many food banks up and down the country, cites benefit changes and delays, including sanctions, as the main reason why people visit it needing help. People are not able to feed themselves and their families. The principle of social security conditionality is well established and supported, but it needs to be examined in the round, as my hon. Friend said, to ensure that it is effective and produces the desired behaviour.

[Stephen Timms]

My hon. Friend is making a powerful case. Regarding the documentation of problems with benefit sanctions, has she seen the website devoted to the topic? It is entitled “A Selection of Especially Stupid Benefit Sanctions” and contains a raft of ludicrous examples, including the case of her constituent not completing his work capability assessment because he had a heart attack in the middle of it.

[Debbie Abrahams]

I have seen that website. Following the inquiry and people becoming more aware, a whole raft of unbelievable examples are coming forward.

As I said, the principle of social security conditionality is well established and supported, but the reports of punitive, unfair and inappropriate sanctioning and bullying behaviour in JCP offices should be a cause for concern. I urge the Minister not to turn her back on the issue and the people it is affecting this time and to do the right thing by committing to an independent review of inappropriate sanctioning.