(7 years, 7 months ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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As the hon. Gentleman will know, there is a cross-governmental approach to abuse that has its own definitions and so on, but the areas of abuse covered in terms of applications for legal aid are far wider than just physical violence and include sex abuse cases and the like, and we are alive to the need to cover a wider area than simply domestic violence.
While I appreciate the urgency and scope of the investigation, will the Minister give consideration to cases where the Department for Work and Pensions is sharing domestic abuse victims’ information with the perpetrators of the crime when making decisions about benefits claimants? The anonymity of a constituent of mine was taken away from her and the information was passed on by the DWP.
I am sure that the hon. Lady is making an important point. If she wants to write to me or speak to me about it, I would be more than happy to look at it, but this is not what we are doing in this exercise of looking at the cross-examination of victims by perpetrators or alleged perpetrators. We are tackling a discrete, narrow area, and we want to do this urgently. Her point is important, but it concerns a different matter.
(7 years, 10 months ago)
Commons ChamberIt is a pleasure to be called to speak in this important debate. I begin by adding my congratulations to the hon. Member for East Dunbartonshire (John Nicolson), first on securing the top spot in the private Members’ Bill ballot and then on deciding to use it to introduce this important Bill. I was pleased and honoured to be asked to be a sponsor of the Bill. My support for it remains undiluted, and, should we divide on it, I will be supporting the hon. Gentleman in the Lobby.
I identified with much of what the hon. Gentleman said in his opening speech about the experience of growing up as a closeted gay man in the west of Scotland. I went through a similar experience and upbringing, and it was not easy. It took me a long time to come to terms with who I was. Indeed, the hon. Gentleman and I went to the same school, although—and it might be ungallant of me to say this—not at the same time; I followed a few years later, but I can very much identify with his experiences. [Interruption.] The hon. Member for Glasgow South (Stewart Malcolm McDonald) says from a sedentary position that he is proud to have that school in his constituency, and a very fine school it is. But it was not easy growing up in that atmosphere being gay, and having to hide that out of a sense of shame. I will come back to that point in a little while.
My other reason for being very passionate about this measure is a constituency one. I am very proud that in my constituency of Milton Keynes South is Bletchley Park, where Alan Turing did much of his celebrated work during the second world war; as many Members have mentioned, he did much to shorten that conflict and save thousands, if not millions, of lives. I am very proud that we got to the point where he was granted a pardon during the last Parliament. That was the culmination of a long campaign over many years by many people inside and outside the House.
I remember that during the debate about whether Alan Turing should be granted a pardon as opposed to an apology a number of objections were raised. On the one and only time I have been grilled on “Newsnight” by Jeremy Paxman, two particular arguments were made. The first was that it was wrong retrospectively to pardon for something that was a crime at the time but now, in more enlightened times, is thankfully no longer so, because if we were to start pardoning for that offence, where would we stop? What about witchcraft—would we grant a pardon and apology for that? Well, if people want to bring forward a Bill to pardon people for witchcraft, bring it forward. But this particular issue really matters to lots of people. It is a sign of a civilised society that we can collectively pardon. There is a precedent in the blanket pardon issued to soldiers executed in world war one for so-called cowardice. I was very happy at the time to support the pardon for Alan Turing on the basis that we can retrospectively pardon.
The second argument was, why just Alan Turing? Yes, he is a famous and celebrated person to whom we owe an enormous debt of gratitude, but, many Members have alluded to the fact that he was just one individual out of thousands who were caught under the same legislation. It was more difficult to argue against that. I was happy to champion a pardon for Alan Turing because as a country we owe him a huge debt of gratitude. The pardon was right for that reason. It was also right as a symbol of the fact that the country had moved on; by pardoning him, we were sending a very clear message that such so-called crimes were no longer a stain on our collective conscience.
It troubled me, however, that the pardon was just for that one person. As the hon. Member for East Dunbartonshire and others have powerfully argued, this matter affected many thousands of other men. That is why I am very pleased that the Bill has been introduced. To be fair to the Government, they have made progress on this through the Protection of Freedoms Act 2012 in the last Parliament. They have also indicated their support for Lord Sharkey’s amendment in the other place. That is very welcome progress and I will wholeheartedly support that if it is the vehicle through which change happens. But I absolutely agree with the hon. Gentleman and the many others from both sides of the House who have said that we can do better. We can move forward in a much more symbolic way that will make a real difference to many people in this country.
That is an important point of symbolism, which is at the heart of what the hon. Gentleman is saying. I would dearly have loved to speak in today’s debate, but my voice is failing me due to a cold. I did not come out to my family until just after I was elected. It was with the support of my SNP colleagues, my family and friends that I made a public statement earlier this year. I hope the next generation of young people and politicians will not have to make public statements and will not have to say that they are gay—because it will not matter: our colour, our race, our sexual identity will not make a difference; all will be equal. That is why it is so important to give this Bill its Second Reading so that it can go forward into Committee. We will have better scrutiny of this Bill in Committee than we will of an amendment as an afterthought to a Bill that is already going through Parliament.
In saying those words, does the Minister not recognise that, in years to come, he may well reflect on the words he is about to say and that he is perhaps about to get it wrong?
I have done a number of these private Members’ Bills on Fridays, and it is very unusual to be doing one where the choice before the House is not the private Member’s Bill or no Bill at all, but the private Member’s Bill or a legislative vehicle—the Police and Crime Bill—that will help us achieve our aims much faster so that we can deliver justice. However, there is also an important point. It is not for nothing that they say, “You campaign in poetry, but you govern in prose.” Intentions are not good enough when it comes to making law; we have to think through the unintended consequences of law, and that is what the Government’s approach tries to do.
(8 years, 1 month ago)
Commons ChamberNo, we have not, and I have to say that we used quite strong language about that in our report, because we were, frankly, disappointed. What happened does actually go against the spirit of courtesy, openness and co-operation I have seen from the Ministry of Justice team throughout the year or so I have chaired the Select Committee, and I hope it is an outlier. I hope the Minister will give us an indication of why the review report has taken so long and when we will get it. I know it is sometimes not easy to agree these things across Government, but it is pretty clear that the data required for the analysis were collected a long time ago, and, as we say in our report, there can be no reason why at least that factual material cannot be published forthwith, even if the Government are not yet in a position to respond, because the more informed the House and the public are, the better. That is an area of regret, and that is why today’s debate is important and timely.
Let me touch on some of the principles we are concerned with. The levels of various courts and tribunal fees have been politically controversial. We all need to bear it in mind that a balance must be struck between the cost to the public purse of administering a justice system, which is an integral part of any civilised society and of the rule of law, and how much can reasonably be recovered from litigants. We say that, in principle, we do not object to the idea that there should be some financial discipline on those who choose to go to law—those who choose to litigate—in deciding whether that is a wise decision for them to make. We do not have a problem with the principle of a certain level of a fees. Equally, however, we must bear in mind the comments that have been made consistently ever since Magna Carta but were recently elegantly captured by the late Lord Bingham of Cornhill in his book, “The Rule of Law”—which I always think should be compulsory reading for anyone in the political sphere—in which he says, in essence, that the accessibility of justice is as much a part of the fundamentals of the rule of law as clarity of the law itself. He says that justice is not a commodity—it cannot be commoditised in the way that, perhaps, other services can be. It is important to get the balance right. That is where we have some concerns that I will now turn to.
We accept that there is no problem, in principle, with fees for litigants. We know that there are financial pressures on the Ministry, which is not a protected Department. I understand the pressures that Ministers were under when these decisions were taken. We think it is entirely legitimate to find a number of means of reducing the number of vexatious claims. That could be done as part of the financial discipline we referred to, but it could also be done by changing the substantive law to raise the threshold or by making changes to court procedure. That is a legitimate part of the mix. But—we then have to say a number of “buts”, looking at the evidence —the answer to what is a reasonable charge in striking this balance will vary depending on a number of factors such as the effectiveness of fee remission, the vulnerability or otherwise of the claimants, and the degree of choice that they have. There is a distinction, for example, between someone who chooses to litigate over a commercial contract dispute and someone who is charged by the state with an offence, or someone whose marriage has broken down and has no other recourse, in order to have the marriage dissolved and move on with their life, than to go to the courts. The degree of choice is an important issue that must be considered carefully in each case.
There is an argument for trying to recover, as far as one can within that balance, some of the costs that fall on the public purse. In some cases, it may be possible to recover all the costs, but that cannot be an absolute. We were particularly struck by the fact that in some cases there are fees that exceed the full cost of the operation of the court; they are sometimes referred to as “enhanced fees”. We take the view, consistent with Lord Bingham’s formulation and with a public policy approach that we have had in this country for decades, that making a profit from the justice system, in effect, albeit one that is intended to be used elsewhere, requires particular care and a strong justification.
Surely the Ministry of Justice should not be making a profit out of justice. Getting rid of tribunal fees and having equality of access to justice is about making sure that everybody in this country can be productive, particularly women, who can be discriminated against—it drives up productivity and boosts the economy.
We do not go so far as to say that it follows that there should never be fees in any particular class of case—that includes employment tribunal fees—but we do say that a balance has to be borne in mind. I suppose that one could conceive of an argument—we did not rehearse it in detail in our report—whereby an enhanced fee might be recycled within the system. If, for example, some of the fees were being used to cross-subsidise, as it were, other elements of the family jurisdiction, then there might be something in that, but we do not have any evidence that that is the case. The hon. Lady makes a fair point, which is consistent with our report, about the undesirability of going down that route.
The situation provides a contrast with the speed with which the Government acted over both the criminal courts charge, quite rightly, and the new proposals for higher fees ever since the employment tribunal fees were introduced, with some controversy. The Department made those proposals with great speed, but it has been remarkably tardy in producing its review of the impact of those employment tribunal fees. That is why we conclude that, although a legitimate balance has to be found in the interests of society, where the objective of achieving cost recovery and the principle of preserving access to justice are in conflict, it is the latter—access to justice—that has to prevail. In a sense, that is a restatement of the point made by the late Lord Bingham of Cornhill, and I would have thought that most Members saw the logic of that.
Other members of the Select Committee will wish to make particular points, so I will touch on a few of the major matters. I have already referred to the quality of the evidence from the Ministry of Justice, particularly that in relation to employment tribunal fees. Ultimately, the Department may not have the evidence; if that is the case, it should say so, rather than pretend otherwise.
It is worth giving a flavour of some of the comments we received about the evidence base. The Master of the Rolls, Lord Dyson, described the Department’s research as “lamentable”. It is pretty serious when the head of civil justice in this country talks in those terms. The chairman of the Bar Council described the research undertaken in relation to the domestic effects of fees as “insignificant”, and the president of the Law Society said it was “poor”.
I appreciate that the Under-Secretary of State for Justice, my hon. Friend the Member for Esher and Walton has only just started the job—I do not blame him or any of his colleagues personally—but the truth is that the Government did not produce adequate evidence. On the face of it, it seems to have been a “wet your finger and hold it up in the wind” job, rather than being based on significant research. We do not think that that is satisfactory.
Perhaps things would have been different if the Government had brought forward their review. We might have been less critical if we had seen the evidence that they have collated but not yet made available. As it was, we had to base our conclusions on the evidence that we had, which I am afraid went significantly in another direction. It is ironic that, by not providing that material, the Government have not been the best of advocates of their own cause.
I am not going to say that everybody had difficulties with employment fees. In their evidence to us, the Federation of Small Businesses and Peninsula Business Services said that it was reasonable to have the objective of discouraging weak and vexatious claims. That was certainly the Government’s assertion when they introduced the fees, but hard material to support that view has not yet been forthcoming. We must bear in mind the comments of the senior president of tribunals, Sir Ernest Ryder, who said that it was simply too soon to say whether that has happened. If that is the case, and if the valuation is not yet available, now is not the time to be rushing similar increases in other parts of the civil and family and immigration jurisdictions, which I will turn to later. I will leave it to others to go into more detail about employment fees, as I know they will.
I am grateful for the opportunity to speak in this debate, albeit at the last minute. I rise to speak having heard many of the statistics, which I still find shocking to hear, and I wish to give some personal reflection and context. My grandmother had many tall tales to tell when I was growing up, but one I always remember is the story of how she met my grandfather while working in munitions at the Rolls-Royce factory in Glasgow during the war. After the war, she went back to work to be a seamstress. When she got married and returned to work, she was “given her books”: her employment was terminated and she was unemployed. There were no tribunal fees in those days, and I often reflect on how we have come a long way, although not far enough.
Before I came to this place, I worked in the corporate sector for a number of years, where I managed a small team. A team member went on maternity leave as I started my employment, and just as she was coming back I was advised by the human resources department that if she took longer than nine months, I did not have to give her her job back—I just had to give her any job. I could not believe that. I found it incredible that someone senior—a marketing manager—was not allowed to get her job back. As a manager, I was put in the position of finding her any job.
This debate is about tribunal fees. They play a part here, but how we look at this is as much about company culture and our culture as a society. We also have to look at it in terms of the productivity gap, as I said in my intervention. We want to get people back to work and to encourage them. That is particularly true in the case of women, who are often marginalised, as so many of the reports have said. Having 400,000 women in this country experiencing discrimination in employment is not a mark of a modern or progressive society. Therefore, if we reduce people’s access to justice, it does not take us forward in any regard. The International Labour Organisation said in a 2014 report:
“Fathers undertaking a more active role in caregiving is likely to be one of the most significant social developments of the twenty-first century.”
This is therefore not just about women in the workplace and discrimination against them; it is also about men.
When the Equality and Human Rights Commission came to me a couple of weeks ago and talked me through some of the statistics and the issues relating to tribunal fees, I was staggered. I was told of the 56,000 women being put out of employment—that figure has been mentioned a number of times—and how 10% of mothers say that their employer discouraged them from attending antenatal appointments. We must get tougher. A number of Members from across the Chamber have legal backgrounds. There is a significant gap between people who are being discriminated against and the courts and the lawyers firms, which are undoubtedly making a significant amount of money out of cases.
Our courts are also being clogged up by cases that could be solved in other ways. I recently visited Australia, where I wanted to see how its small business commissioner operated by comparison with the legislation that has been introduced in this House. I found it incredible that Australia had a federal commissioner and individual state commissioners. They had developed a culture across Australia of resolving issues before they got to the courts, and that was very much welcomed by the legal profession. I wonder whether the Minister would consider that as a proposal and as something meriting further discussion: a commission with greater powers, sitting between the judiciary and businesses. There will have to be a carrot-and-stick approach at some point. I think of the number of times I have heard small and medium-sized enterprises saying, or people reporting, how they have had difficulties in supporting women or families through having children. We need to incentive small businesses, and individuals to start and develop their businesses. The fact of the matter is that women have children; we are not at the stage yet in genetics where men can carry children. We have to accept the fact that women are child bearers, and they bring so much to the economy and to our nations when they have children and continue on the next generation.
Some of the recommendations that Maternity Action made in its evidence to the Women and Equalities Commission were particularly interesting. They included having a single website and clear information for women who are going to be going on maternity leave or are thinking about having a family. There was disappointment about the withdrawal of the “Birth to Five” book and on the health and safety issue: the Government’s own research says that 41% of all pregnant women face health and safety risks being not properly managed by their employers. Those are damning statistics. We have to make business believe and understand that it is good for their them and for society for women to have flexible working, and the Government have to support that—it will not happen on its own.
In conclusion, we are a family of modern, progressive nations. Scotland is leading the way, in abolishing fees and giving access to justice. I hope that the Minister has an eye on the north and is taking notes.
My understanding, off the top of my head, is that it was £71 million. I will come back to the hon. Lady if I find out that that is incorrect.
The truth is that we cannot afford to duck these decisions around fees if we want to secure the long-term funding of the courts and the tribunals and deliver on the mandate on which the Government were elected. It is all very well for the Opposition to say that they want to scrap every fee that has been imposed or duck every difficult decision, but unless they can explain to the House how that will be paid for or the impact that it will have on our economy, it is not the responsible thing to do.
(8 years, 2 months ago)
Commons ChamberI congratulate the hon. Member for Wirral South (Alison McGovern) on securing this important debate and on an outstanding speech. In fact, she has made a lot of friends on this side of the House.
The 150th anniversary of the Kensington Society petition is an excellent opportunity to take stock of how far women have come in social, economic, cultural and political life. As the hon. Lady rightly said, it is also a time to consider how very far we still have to go. I also congratulate her on the digital debate she led this afternoon on this very issue. That is another new way of engaging with people and hearing their views. I followed it with great interest. As MPs, we must take on this mantle, take on these views and concerns, and work to end sexism and discrimination in every part of our lives.
The petition back in 1866 called for women to be given the same political rights as men. Shocking though it seems now, that was a very radical thought back then. Every woman in this country owes a massive debt of gratitude to those early suffrage campaigners, who did so much to advance the cause not only of women’s political rights, but other rights too. As the 310th woman to have been elected to Parliament, this subject resonates with me, as I am sure it does with all 190 of my female colleagues around the House.
I thank the hon. Member for Wirral South (Alison McGovern) for raising this subject for debate. I am listening to what the Minister is saying about representations of the suffragettes. Does she agree that while the new artwork is fantastic and must be welcomed, anyone who walks around this building realises how hugely influenced it is by men and how many men and statues of men there are? Anybody who goes to the cupboard of Emily Wilding Davison will realise how poor a tribute it is to what she and others did. Perhaps there is more that we can do across these Benches to promote the work of the suffragettes and other women in this Parliament.
The hon. Lady is absolutely right; we need to take every opportunity we can to promote the fantastic work of those who came before us and those who fought and died before us to secure the privileges that we enjoy today.
I am delighted that Parliament commissioned the new permanent work of art to commemorate women’s suffrage. I know that the hon. Member for Wirral South was on the Committee led by my hon. Friend—and real life friend—the Member for Romsey and Southampton North (Caroline Nokes). I pay tribute to the Committee for its work.
(8 years, 5 months ago)
Commons ChamberI am delighted to speak in this important debate. I pay tribute to the hon. Member for Eastleigh (Mims Davies)—before this debate started, she chaired an excellent cross-party panel with young women about International Women’s Day—and, indeed, to the hon. Member for Birmingham, Yardley (Jess Phillips) for her excellent contribution to the debate.
There is no doubt that huge progress has been made for women around the world in the 97 years that have passed since Nancy Astor took her seat on the green Benches. Many hon. Members will recall the story of how, when the first female MP tried to reach her usual place in the middle of a row, other MPs moved closer together to leave no space for her to get through, and then laughed and jeered as she forced past them. The braying some of us still hear in the Chamber seems a tired relic of those distant days—it is time to move on. Perhaps we should move on from the outdated “Hear, hear” to modern applause. That would be a welcome change, but it is probably best described as work in progress.
I should say that while 17 of us on the SNP Benches are women, the 54 of us are 100% feminists. I am very glad that my party has led the way, with Nicola Sturgeon’s gender-balanced Cabinet. More than two thirds of our new candidates in the elections to the Scottish Parliament are women.
My hon. Friend mentions our First Minister, Nicola Sturgeon, who has received plaudits internationally for having a gender-balanced Cabinet. Will my hon. Friend join me in paying tribute to Winnie Ewing, our first female SNP MP, who came up against some of the outdated practices that my hon. Friend mentions?
Absolutely. We stand on the broad shoulders of the giants who came before us and had to deal with so much in this Chamber and beyond. Huge strides have been made to improve the representation of women in Parliament at Westminster and Holyrood, but there is much more to do. I pay particular tribute to the significant work of the Women 50:50 campaign in Scotland.
(8 years, 7 months ago)
Commons ChamberI congratulate my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) on securing this important debate and on moving the motion with such an impassioned, articulate and typically powerful speech. I also pay tribute to the hon. Member for Worsley and Eccles South (Barbara Keeley) for her speech and for being a co-signatory to the motion. I pay tribute to my hon. Friends the Members for Kirkcaldy and Cowdenbeath (Roger Mullin) and for Ross, Skye and Lochaber (Ian Blackford), who have consistently and effectively raised this issue since their election in May.
By the same token, I must pay tribute to the Women Against State Pension Inequality and their campaign to urge the Government to make fair transitional state pension arrangements for women born after 6 April 1951. In particular, it is important to show our appreciation to Anne Keen, who first raised the petition on this issue after receiving a letter from the DWP which said that her expected retirement age had been increased. Far from getting 15 or indeed five years’ notice, she was notified only 18 months before her 60th birthday. What an absolute scandal and disgrace. Last night the petition had more than 107,000 signatures. I imagine that it is now approaching 108,000. That is testimony to all those who have worked so hard to bring this matter to the Government’s attention, including constituents of mine in Airdrie and Shotts.
Unashamedly, the Government are shifting the goalposts at very short notice for hard-working women—women who have gone to work, bettered our industries, raised children and supported families, but who have not had equal employment opportunities, access to independent pension funds or the opportunities that we have today. These women who have made enormous contributions to our society for the betterment of us all will see their retirement age rise without fair or proper notice.
Does my hon. Friend agree that the Minister must come to the Dispatch Box and give an explanation to my constituents in Livingston, some of whom retired and finished their employment before they had even heard the news and many of whom did not have time to prepare or save before the news was upon them?
I wholeheartedly agree. Sadly, those are typical stories that have played out across the Chamber today. It is this simple but dramatic injustice that is so galling.
The simple truth is that women born in the 1950s will be disproportionately burdened by the Government’s plan for many reasons, not least because men of the same age are and have long been in a better position to offset at least part of the loss through savings or a private defined contribution pension scheme.
The Pensions Policy Institute, in its submission to the Work and Pensions Committee on the Government’s pension reforms, emphasised that point by illustrating that only 65% of women in the 55 to 59 age range are economically active compared with around 76% of men. The gap is even greater among those in the 60 to 64 age bracket: 34% of women are currently economically active compared with 54% of men.
(8 years, 10 months ago)
Public Bill CommitteesI beg to move amendment 19, in clause 16, page 15, line 25, at end insert—
‘(7A) The waiting period before a person can apply for a loan under this section shall be 13 weeks.”
To require that the waiting period before an application for a loan for mortgage interest can be made is 13 weeks.
It is a pleasure to serve under your chairmanship, Mr Owen, ill or not.
Housing costs are never far away from our discussions in this Committee, and the clause brings the subject back into focus in a new and unexpected way. It is not at all clear to me what the Government are trying to achieve with this strange proposal. Support for mortgage interest—SMI—is a benefit that has been in existence in some form or another since 1948. It is the same age as the welfare state and the national health service and is paid exclusively to those on the lowest incomes. It is an important part of the social safety net, the entire principle of which is undermined when we start talking about replacing benefits with loans, which is what the proposal would do.
We have tabled mostly probing amendments to clauses 16 to 18. We do not believe that interest-bearing loans have a place in the social security system at all, but we have sought to highlight some of the most serious flaws in the proposal in the hope that the Government might reassure us that the consequences of the changes have been adequately thought through because, at first blush, it seems to us that they have not.
Towards the end of Tuesday’s sitting, we began to air some of the arguments about waiting periods. The Government made clear their intention to fix the waiting period for SMI loans at 39 weeks, which is three times its current level. That is without a doubt a substantial change. The waiting period was set at 13 weeks in 2008 when the global financial crisis prompted the then Labour Government to shorten the waiting period as part of a range of measures intended to prevent homeowners from going into arrears and facing repossession of their homes.
A research report published by the Department for Work and Pensions in 2011—I recommend the Minister reads it because it is very interesting and enlightening—says that the measures were successful. It stated that the changes
“resulted in more people being assisted, more fully and sooner. Borrowers accrued lower levels of arrears or none at all”
and
“lenders have been more willing to forbear and not seek possession.”
The report was published in 2011 and can be found on the Government’s DWP website.
Reversing the process by reverting to a 39-week waiting period is counterintuitive and likely to be counterproductive. It seems likely to increase the probability of homeowners facing repossession and homelessness when they fall on hard times. If the measure is about saving money, making things more difficult for people who find themselves falling on hard times when trying to buy their home and more likely that repossession will happen earlier is counterintuitive because of the costs to us all to look after the people whose homes have been repossessed. As we discussed on Tuesday, I was disappointed that there was no mention of that in the latest Government impact assessment.
The Government have not been able to provide any reassurance that there is a robust evidence base or, indeed, any evidence base at all for the contention that the charge will not risk an increase in homelessness. The best that the Minister could do on Tuesday was to tell us:
“The Council of Mortgage Lenders has not said that the 39-week wait will drive repossessions. That is an eminently respected organisation, and it would have said if it felt that was the case.”––[Official Report, Welfare Reform and Work Public Bill Committee, 12 October 2015; c. 360.]
I was interested and frankly surprised to hear that, and thought perhaps I had misheard it. I gave the Minister the benefit of the doubt at the time, but I am afraid I do not now. I wondered if the Council of Mortgage Lenders had looked into this in a bit more depth than the Government, so I went back and looked over its submission to the Committee. Imagine my surprise when I found that the view it had expressed on the waiting period was the exact opposite of what the Minister told us! For the sake of clarity, I will quote the submission at length, because it is a very helpful document:
“If the waiting time is extended, as planned, we believe that it will result in more cases of repossession as lenders will not be able to allow their customers to continue to accrue mortgage arrears over this period especially where the customer is unable to make any payment. Lenders already have to carefully balance allowing a person to remain in their home while not allowing their financial position to worsen. Extending the waiting time will only cause additional consumer detriment.”
There we are. The council is against it. The one piece of evidence that the Minister was able to cite in support of extending the waiting period turns out to be nothing of the kind.
The Government have to do better than that. In order to persuade Members on the Opposition Benches, the Government ought to make an effort to produce some evidence or opinion from someone apart from Government Ministers that shows that the proposal is a good idea, and that extending the waiting period for mortgage lenders to get repayment will not mean an increase in homelessness. That, I appreciate, is an uphill task, but it is one they have set themselves.
I appreciate that I am a cracked record on this, but we must go beyond the rhetoric and look at evidence. Social policy should be based on evidence, and I will be interested to hear whether there is any evidence to show that extending the period from 13 weeks to 39 weeks, as the Government want, will actually help anybody.
It is a pleasure to serve under your chairmanship once again, Mr Owen. The Scottish National party supports the intentions behind Labour’s amendment 19, because access to support must be available within 13 weeks and not the proposed 39 weeks.
According to Shelter, around £300 million per annum in SMI is “small” in terms of welfare spending, but it is very important:
“It covers the interest payments for around 200,000 home owners on their mortgages, meaning that they are less likely to be forced into having their home repossessed and, ultimately, to end up homeless.”
Shelter also says that SMI has
“tight eligibility criteria and is restricted to very low income households who are out of work, pensioners or sick or disabled. In fact, the overwhelming majority of recipients of SMI either qualify through pension credit or employment and support allowance.”
They are already some of the most vulnerable benefit claimants, so adding a further burden by turning the benefit into a loan is essentially giving with one hand and taking away with the other. We do not support the Government’s attack on the weakest by forcing more and more vulnerable people to take on the added burden of debt just to get out of hard times. How can we define that as welfare?
Amendment 19 would ensure a waiting period for applications by eligible claimants for support with mortgage interest of 13 weeks. That would offer protection against the Government increasing the waiting period, as they have done with statutory instrument No. 1647, which will increase the waiting period to 39 weeks from 1 April 2016. The explanatory memorandum to the instrument states:
“The provisions in this instrument introduce a 39 week waiting period for all working age claimants who are required to serve a waiting period before housing costs, including payment of eligible mortgage interest, can be paid.”
We do not want yet more financial pressure on benefit claimants due to having to wait more than half a year to receive financial help with their mortgage interest payments, let alone the added pressure of that financial help pushing them into further long-term debt when that benefit is turned into a loan. Has the Minister had discussions with the Scottish Government on the implications of that change from support to loan, which will impact the people of Scotland by pushing them into further debt? I would be grateful for information on that.
It is a pleasure, Mr Owen, to serve under your chairmanship. First, may I clarify one point concerning the Council of Mortgage Lenders? The other day, I spoke in good faith and on the basis of the many regular meetings that we have with the CML during which the issue has not been raised at all. Indeed, Paul Smee, its director general, did not raise the issue when he was in a meeting with my ministerial colleague, the noble Lord Freud, when they met in early September. Although the CML has definitely said that it believes that the 39-week waiting period will drive repossessions, they are unable to quantify numbers of repossessions. We will continue to work with the CML to assess any such impact in terms of repossessions but we do not believe that these will be significant.
I will make this brief. In Scotland, people did not vote for the Conservative manifesto or the Conservatives’ austerity cuts—more than 50% voted for the SNP. However, on the specific point I asked about—I apologise if I missed the answer—what discussions has the Minister had on the clause with the Scottish Government? It will affect people in Scotland.
I will happily answer that question. There has been contact at official level, and the engagement will certainly continue with the Administration in Scotland.
Government amendment 129 is a straightforward technical amendment, which will ensure that new clause 13 has the same extent as clauses 16 and 17 and apply to England, Wales and Scotland. I hope the hon. Member for Islington South and Finsbury will withdraw the amendment and accept Government new clause 13 and Government amendment 129.
(8 years, 11 months ago)
Public Bill CommitteesQ 171 I am hearing a lot of you referring to the income measure, but what are the panel’s thoughts on the way that a relative income measure means that reported child poverty falls during a period of recession, when median income falls, and rises in a period of economic growth, when incomes rise?
Professor Gordon: That is one of the major objections to that one measure. The Child Poverty Act 2010 had a series of tiered measures so you could get an overall picture. If you have just one measure, you get an artefact, but the other measures pick up on that. The relative falls, the absolute rises, the combined low income and material deprivation rises, and probably so does the persistent poverty measure. By looking at all four measures, you get a full picture of what is happening.
Matt Padley: The line is not necessarily always helpful. Just getting people over a line does not solve poverty. The bundle together indicates a direction of travel, which is fundamentally important. Without that, you cannot track the direction of travel. When all those things are moving in the same direction, you know that things are getting worse or better.
Alison Garnham: The fact that we had four measures enabled us to explain what was happening to the headline indicator. Basically, everybody was doing badly, so people at the bottom were not doing so badly in relation to the middle, but the absolute poverty indicator was going up so we knew that people at the bottom were losing income. The group of indicators together gives you a powerful explanatory tool.
Dr Callan: The only thing is that if you have a legally binding income target, we are right back to where we were before. The Government could be subject to judicial review for, frankly, doing the right thing: taking a more effective approach to poverty and tackling life chances.
Q 172 I thank the panel for joining us. I would like to pick up on the removal of the targets. It seems to me that the targets are being removed because the Government had no chance of meeting them. That in itself is a very dangerous move. I also want to pick up on some of the observations that have been made about the rise in the national wage, which as we all know is not a living wage, because the living wage has been set independently at £7.85 outside London and £9.20 within London. Even the Institute for Fiscal Studies said that the welfare cuts, coupled with the moderate increase, will lead to only a 13% benefit, and the vast majority will have their income reduced significantly. The Scottish National party believes that we should not remove the targets. Do you agree with that? At the very least, should we delay any removal so we can properly consider and review what impact it will have?
Alison Garnham: Yes, I would support that. I have said that I am in favour of keeping the targets. It is worth pointing out the kind of change that was driven while child poverty was falling. We know that as people’s income was improving and child poverty was falling there was more spending on fruit, vegetables and children’s books, and less spending on tobacco and alcohol. We saw improvements in child wellbeing in 36 out of 48 OECD indicators. It was not just about people simply getting more money; there were big impacts on what was happening to families, too. That is one of the reasons why we need to continue to track it. One of the important things about the indicators we have is that we have an income series that goes back to 1961, so we can compare historically. We can also compare internationally, because these are the measures used in the EU, the OECD and the International Monetary Fund, so we are able to see how we are doing in relation to other countries.
Dr Callan: May I point out some other drawbacks? It has already been mentioned that in the recession it looks like child poverty is falling, which does not make sense. There are other reasons why the targets were unhelpful. There is no sense of how families’ circumstances change when they move in and out of poverty across a certain line, and there is no distinguishing between those a long way from the line and those just below it. Obviously it is nuanced—you do very careful analysis, I appreciate that—but we get into this poverty-plus-a-pound issue, where somebody is just over the line but their life circumstances may not have changed one bit. It is misleading, really—
Q 173 If I might come in, you have some specific things that you are talking about that you think should be measured. Would it not make sense to add those and not remove the other ones? Should it be one in place of the other? To me, it should be additional.
Dr Callan: I could go through more reasons. Compared with other countries I do not think we are doing brilliantly in Britain in terms of life chances yet, but if we compared ourselves Europe-wide, we are not doing too badly. Yet do we want to just say, “Oh, we’re not doing too badly compared with the rest of Europe”? No, not at all. I am just trying to build a picture of how inadequate these are. I have already talked about the Government activity that will be driven by anything, frankly, to do with income.
One more thing on what you were saying about the IFS figures. What tends to be lacking is that, first, you cannot forecast child poverty—the IFS knows that, it has tried and gets it wrong quite a lot of times. The dynamic effects are what very few projections ever really bring into play. I know people who say, “I can see the day when I’m not going to be able to have child tax credits any more, so I am planning for it—I want to up my skills, I want to up my game”. If these are people who can do that, then good, but if people know they need to but need help, that is where we need to put Government effort. We will not put the Government effort into that if we are just thinking about how much income there is in a family and are not even disaggregating that and thinking how much is earned income, which is also very important.
Q 174 On the point about the IFS, I understand that it cannot measure child poverty, but what you are talking about is income and the effect that the cuts, versus the lift in the minimum wage, is going to have on people, which is significant. Surely a measure of income against child poverty is very important in that instance—we recognise that.
Dr Callan: If the Government activity is in raising people’s skills and raising people’s expectations of what they can do and that is where the effort is directed, with people getting help to move up and out of tax credits, it is a completely different way of seeing it.
One final thing. I do not think that we are doing this too quickly. The Centre for Social Justice has been writing about this and provoking a debate since 2007 on whether we should be simply looking at income levels or whether we should be tackling root causes. Eight years have already passed; I think we need to do something about it with the political will that is there.
Professor Gordon: Improving skills and improving the quality of services such as education and health are very important, but the scientific evidence shows that money matters. If you raise the income of children in poor families, child wellbeing increases across the whole range of measures. The targets were not met in 2010, although they were reasonably close—they are on track, possibly. When those targets were first introduced, Britain was ranked at the bottom of the UNICEF league table for child wellbeing. By 2010, as things had improved, there were fewer poor children in terms of low income and Britain had moved up to the middle of the ranking for rich countries. That is across a broad range of measures, in independent research by UNICEF.
There is, of course, also a whole lot of UK research that shows, as Alison said, that there was more money spent on better-quality food, on education equipment for children and a whole range of positive things that improved child wellbeing. Attainment among poor children also increased, in terms of education.
Matt Padley: We looked at research recently that points out that those who are most likely to gain from the national living wage are those without children, which I think adds some context. Increasing wages at the bottom is not necessarily going to have an impact on households with children.
Q 175 I have been harrumphing all the way through because so many of the questions I was going to ask have basically been answered. I was going to ask the panel a very simple question. Do you think it is possible to measure child poverty and life chances, without taking financial income into account? I think we have heard a very emphatic “No”, “No”, and “No”, although I am not sure about Dr Callan. I was really shocked to hear you say in your introductory comments that financial income is a symptom, but that families and things such as addiction are drivers of poverty. I find that a very simplistic and narrow view. The rest of the panel said quite emphatically that income is a driver of a lot of the other outcomes that we see in life chances.
Dr Callan: If you look at why people have low earnings, it is not—that is why the living wage is so important, that is why doing more hours is important and people upping their skills, so that they can earn more is important, rather than just, “The Government’s going to sort it all out.” That is what I am trying to get at. We do not want to take all agency out of the hands of people and say, “Whatever you do, don’t worry. We’ll look after you; we’ll top you up.”
We should not be subsiding firms. Firms should be paying enough so that people can work their way out of poverty. Just now people have told me that it is laughable to talk about working your way out of poverty. I agree when wages are so low. That is why we need a whole package of things, but not necessarily setting targets around income levels, for all the reasons I have said.
Matt Padley: But if the living wage, for instance, is a way out of poverty, then surely it is important to measure those who have low incomes. Without a low-income measure, knowing who is above or below the living wage—
Q 181 Just a brief question. Alison, you touched on OECD targets. I am concerned more fundamentally that we will not be able to measure impact, but from an international perspective, will how we report our poverty levels damage the world’s view of us? Will the international bodies still be able to measure us as they do at the moment, given that we will not report in the same way?
Alison Garnham: Well, they will have to continue to do it, because of course the data still exists and the Government will continue to produce it, so they will still be able to make those comparisons.
Q 182 Will those figures be skewed?
Alison Garnham: Not as long as we continue to conduct the family resources survey and get data from that. That should not be a problem.
Professor Gordon, are those figures going to be skewed? We need to know.
Professor Gordon: As I said, the UK has been a world leader and the OECD and European Union have adopted our measures. So, if we abandon our measures, there is a danger that we become an international laughing stock. They will still report those measures if the HBAI—households below average income—is still collected and reported. I suspect it will be, because, as we are a part of the European Union at the moment, it is a requirement to report. So, at least for the time being, it will be reported. If it stops being reported, Britain will go from being a leader in the world to being—
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.
Q 203 Thank you both for coming today. Julia, in your recent report you said that the new legislation is, at best, a sideways step. I would argue that it is a retrograde step. In the light of what you said, which is very interesting, do you welcome the fact that Scotland and Wales will retain their own targets and will try their best under the current framework to do things in their own way? I would welcome comments from both of you on conditionality. In particular, you mentioned the years of research that you have done on parents with young children, who are not required to work not until their children are three. We know that the new legislation will suggest that parents of one-year-old children are going to have to start looking for work. What kind of impact will that have on children and, in particular, single parents with very young children, who will have to go back into the workplace?
Julia Unwin: We said it is a sideways move, and I think it is, although we debated long and hard about whether it is a sideways or backwards move. It takes away the real opportunity that the Bill presented to have a life chances strategy and look at all the different drivers across the Government. The Government do not hold the levers. For too many years we have assumed that the Government can fix the issue of poverty. Welfare and credits really matter, but so too do the nature of the labour market and what happens at a local and regional level. They are all different drivers. What matters is that we work together to improve life chances. Nobody can look at the UK at the moment without recognising that the different parts of the UK will be going in very different ways on this. As a member of a research organisation, I welcome it because it is interesting. From the point of view of children in Scotland, it is welcome that the Scottish Government have decided to keep the target and the focus on this issue. I hope the rest of the UK will take note that this is an opportunity to look at life chances and to protect something for the next generation.
Dr Niemietz: I am very much in favour of the conditionality of benefits. We have seen in places such as Wisconsin in the US that making welfare more conditional can work and can help get people back into work. It also helps to restore public confidence in the benefit system. Increasing conditionality is an alternative to simply cutting benefits. It is not about saying, “We are taking money away from you,” but saying, “We are attaching strings to those payments.” That is a way to increase public confidence. The perception that it is being overused largely comes from the fact that, so far, conditionality has not played the role that it could play.
Q 204 Do you really, truly believe that if we have more people and children in poverty —let us not forget that the research suggests that we are going to have 200,000 children in poverty, versus 80,000 adults—the public are going to welcome that?
Dr Niemietz: Not if conditionality works properly. If it gives incentives—a carrot and stick approach—to getting back into work, why would it increase poverty? It has not done that in Wisconsin.
Julia Unwin: The evidence shows that conditionality can work for some people and the global evidence suggests that, for some people, it provides the spur back into work, but far more often it drives people into making the wrong work choice, accepting a job they cannot possibly fulfil and therefore falling back into benefits. In Wisconsin and other parts of the United States, there is clear evidence that people are coming off benefits completely but not going into work. We are concerned about what the implications of that will be, because you end up with people making short-term choices that keep them going in the short term but can cost the state very much more in the longer term. Conditionality applies to all public services and all people. There is a contract in place, and we need to understand how it works. But if the current method of sanctioning creates destitution by design, we have created a real, expensive problem for the long term.
Q 205 The four-year freeze on working-age benefits, the limit of tax credits to two children and, in particular, the lowering of the benefit cap continue the disconnect between the amount of benefit that is paid to people because of their need and the simple sum they are given. It is not done on the basis of needing more; it seems to be that people will be given an absolute sum, and that is that. Clearly, that will have an impact on poverty and on particular groups—I wonder which groups. Is it right that the group affected most might be single parents, when it comes to child poverty?
Julia Unwin: Is it correct? Yes. Is it right? No. Single parents and disabled people in different categories will be particularly affected, but in terms of this Committee’s concerns, single parents will be affected most.
I am sure we will be hearing more about that over the next few weeks. Dr Niemietz, did you want to comment on that?
Dr Niemietz: That is an issue where I would have started from a different angle by asking why childcare is so expensive in the first place. For a long time the argument has been that we have to raise childcare subsidies to Swedish or Danish levels and the problem will go away but, in terms of total tax spending on childcare subsidies, we are already at Swedish and Danish levels. The difference is in unit costs. Here, it is not just the taxpayer who spends a lot on childcare. It is also the actual user. People pay twice: first in their role as taxpayers and then again in their role as childcare consumers. I would start by looking at the structural drivers of costs in that sector—which those are, I cannot tell in detail, but there has to be something. There has to be a reason that the UK spends more on childcare subsidies than almost all of continental Europe and without having higher usage rates.
Julia Unwin: Part of the reason is that ours is a purchase system, not a provided system. We have a patchwork of childcare benefits and a patchwork of childcare provision. That has turned out to be expensive. To drive high quality will cost in different ways.
Q 212 I think you were both in the room when I asked this to the previous panel. How will these changes and the removal of reporting affect us from an international perspective? Will it potentially do any damage if we are not reporting in the same way and we are not able to tell the world whether we are doing better or worse in terms of child poverty?
Julia Unwin: I only know from my own organisation that JRF research is received, viewed and analysed across the world and we get an enormous amount of international interest in that. Part of that has been because the UK Government have set the path in indicating how serious leadership and serious focus can make a difference. I believe that there is still a focus but we need to retain that international leadership because, over decades, we have learnt things that we need to be able to transmit. I fear that not having that clarity will make that more difficult.
Dr Niemietz: That has been the problem with most of those child poverty measures—they were not internationally comparable. That is not just because they set the poverty lines at different levels but because you have big differences between countries in terms of relative prices and the structure of prices. You cannot compare a country where the basics of life are very much inflated, as they are here—housing costs, childcare costs and other things are unnecessarily expensive—with countries where that is not the case, because the same amount of money can stretch a lot further in the second set of countries.
The one indicator that was fairly robust for international comparisons was the material deprivation measure because that is an outcome-based measure where you simply give people a list of goods and services, and ask them how much of that they can afford and not afford. You do not have to know exactly why that is—you are just looking at the outcome. Do people have everything on that list or most of the things on the list? If they do not, you do not have to know exactly why that is. That is what made it internationally comparable.
Thank you very much indeed. Our time has flown by. Thank you for your expertise and wisdom. We deeply appreciate it. Thank you for coming today. Committee, we will meet again at 4.30 pm this afternoon in Committee Room 12 to begin our line-by-line consideration of the Bill. I know that we are all looking forward to that.
Ordered, That further consideration be now adjourned. —(Guy Opperman.)
(8 years, 11 months ago)
Public Bill CommitteesQ 8 Thank you, gentlemen, for joining us. Why should homeowners be forced into extra debt when the renting sector has access to housing benefit? That seems somewhat iniquitous given that many of those people are already struggling financially and are on benefits. Will the measure mean that people on low incomes and in insecure jobs will be disadvantaged or excluded from getting on to the housing ladder as a result of the change?
Paul Smee: On the first point, I think that the rationale is that the individual concerned has an asset, and that that asset is realisable and, at the moment certainly, appreciating in value. I can understand when, at a time when policy choices are being made, the argument is that, given the existence of that asset, it is better to have some claim back of any money that is paid out.
When it comes to getting on the housing ladder, particular checks are already in place to ensure that people do not over-borrow and get into financial problems. That is enforced by the regulators of the financial services system. I do not believe that the change in SMI proposals will in any way add to the protections or inhibitions that the current regulatory system imposes.
Paul Broadhead: I agree with what Paul just said. The only thing I would add is that, in a case where it is not repaid from the sale of an asset—either on death, on the sale of the property or whatever it may be—and someone moves back into work, it is vital that they are not put under undue pressure, having been in financial difficulty and got themselves back on their feet with their mortgage payment, to make contributions that are perhaps not affordable in their circumstances at that time. Because we are in primary legislation mode, the detail of that is not yet clear, but it is an important consideration for later down the line.
Q 9 Do you think it is therefore very important that, if we end up with this in legislation, there are guarantees and stipulations on Government that people do not end up in that position? So many people’s circumstances change and fluctuate.
Paul Broadhead: In the way that mortgage lenders have requirements to assess the affordability of a mortgage loan when someone takes it out, that same mechanism ought to read across to their ability to repay the loan once they are back on their feet. If they can afford it, clearly they ought to be repaying it.
Q 10 Welcome. Paul, I want to pick up on a point you raised about advice. Mortgages are complex, as are the legalities around housing. You talked about accessibility and ensuring that we give people channel preferences so that they can get advice. From an industry perspective and knowing this whole area, do you have any other advice in terms of things we need to consider? That question is for either of you.
Paul Smee: When we talk about channels of advice, it will be important that face to face is an option. I think a lot of people would want to receive this in a personal situation, and it will be important to have probably a single body as the focal point for providing that advice, which can then ensure that it is of the required standard and that those giving the advice have been trained appropriately.
Paul Broadhead: The other thing to consider when giving people this advice is whether it is in their best interests to remain in home ownership and wait for the 39 weeks, if that is right. It may well be that if they are in a situation where they cannot get back on their feet, and if they are in an environment where house prices are not rising and their debt is rising, nine months later they may be in a worse situation, having waited for that benefit, than they would be if they faced facts and took active steps to market the property and seek another form of residency. I do not think we should automatically favour remaining in homeownership as absolutely right for that person. They need to know the pros and cons to make an informed choice, because repossession or selling the property is not always the wrong thing for a borrower and their family.
Q 18 To clarify, in your discussions with Department for Work and Pensions officials, there is still the intention that those flexibilities will be available but your experience, in practice, is that they are quite often not?
Octavia Holland: Yes, absolutely. To clarify, it is even quite difficult to establish where in guidance those lone parent flexibilities are now. They are in disparate pieces of guidance that are given to jobcentres and work coaches. It is not like you can get your hands on one piece of guidance that says, “Look, if you want to support a single parent into a decent job, these are the kind of things you want to consider.” There is a real lack of clear information.
Q 19 Thank you very much for coming to speak to us. On that point about lone parent flexibilities, do you not believe that those important flexibilities should therefore be brought into statute, so that they are very clear and people can understand them?
Octavia Holland: At Gingerbread, we absolutely feel that the lone parent flexibilities should be in regulations, as they were previously, because that makes it very clear to jobcentres and work coaches the best way they can support single parents into employment. Single parents are generally very keen to work and over 60% of them do, but you do need to consider the fact that they are not going to have childcare in the evenings or the weekends. You do need to think about that kind of thing. Yes, we do support that they should be back in regulations.
Q 20 This is a question mainly for Tony. We are told that there is evidence that the benefit cap has encouraged some people to go into work who would not otherwise have done so. Can you tell us how compelling you think that evidence is, and how big an effect there appears to have been from the application of the benefit cap?
Tony Wilson: The Department published some ad hoc analysis about a year ago on the estimated impacts of the benefit cap. That was peer-reviewed by the Institute for Fiscal Studies. That was a good piece of work and it did show a statistically significant positive impact on some people in households affected by the benefit cap, on the likelihood of their moving off benefit and in to work. It showed some interesting things. It showed that those impacts were greater where the financial impact of the cap was greater. They were greater in London than in other parts of the country, so things you would intuitively expect to see.
However, there are a couple of points. One is that the total numbers moving into work are very low. This is a group where the likelihood of entering work, where you have been capped, is very low. A percentage increase in the likelihood of moving into work, you might see a 30% or 40% increase in likelihood of entering work. But if your likelihood was originally one in 20, then that might increase to only about one in 15 and still look like a very large impact. The research found percentage points. If you like, the absolute impact of the cap on the likelihood of entering work was pretty small—it was three or four percentage points. In other words, out of every 100 people capped, an additional three or four may move into work. That was the average. It was greater where the financial impacts were greater, which is what one would expect.
The benefit cap is probably one of the only measures in the last Parliament that created a really strong financial incentive to move into work. Out of all the welfare reform measures, if you move into work, you get your benefit back, essentially. You get your £200 or £300 income back. To some extent, it might be surprising that there was not a greater impact. The impact in terms of actual numbers was relatively small.
More interesting still, we evaluated a programme called the Brent Navigator. Brent Council invested in adviser support to help capped households back into work. We used a statistical technique to try to find the additional impact of that, and we estimated that that had about a 50% positive impact. Having intensive, adviser-led support to help people move back into work led to a larger-again impact on the likelihood of people moving into work. It highlights the importance of joining up the support you deliver and ensuring that those who are affected by reforms also get access to appropriate support to move back into work.
With the lowering of the cap, there will be more people with quite small losses compared with what happened under the previous cap. In those groups with small losses, the evidence found a far smaller impact. It was a negligible—pretty much a zero—impact on people whose losses were £10, £20 or £30 a week. That is consistent with the impacts of many of the other reforms such as the spare room subsidy, or the bedroom tax, or the lower uprating of benefit, which add quite small impacts and probably did not have a behaviour effect.
Q 26 I appreciate that. I just wondered how much your thinking has influenced the Bill when you are here giving evidence in relation to the Bill. It is important to see it in that context.
Charlotte Pickles: Sure. We published our paper on this just after the election, so I think it would have been early June. I assume that would have been significantly after when conversations started taking place about what to do, but certainly in the conversations I have had with people, both on and off the record, most would say that there is a perverse financial incentive built into ESA as it currently exists.
Q 27 I have a number of concerns about the kind of language and terminology that is used. First, you are saying the perception is that ESA programmes are successful and hugely ambitious. I am not sure that a 10% success rate would be deemed by me or anyone else on this side of room a success. When the number of people being sanctioned on the Work programme is twice as many as those getting employment, I would again question whether that is a success.
I put this to everyone on the panel: we are not clear about the impact that the cap has had already, although we have a lot of concerning figures, particularly about single-parent families. Before we cap people further, should we not be looking at the Work programme and having a full-scale review of it to make it more effective for people moving off ESA, before we cut their benefits?
Everyone.
Tony Wilson: The 10% is a good example of what I was trying to describe earlier, probably in a slightly confusing way, about percentage versus percentage point impact. You might think of it as potentially a successful programme if what you would have achieved was 8% of people into work. You would say, “Actually, we got an extra 2% into work, so we’re a quarter more successful than we were,” and we would probably pat ourselves on the back and think we are doing a good job. But the reality would be that nine out of 10 people would be going through two years of employment support and coming out the other side without a job. Many of those may not be any closer to a job than they were when they joined.
Do we need to be more ambitious? Do we need to understand what works much better? Do we need to be more systematic in how we test, trial and learn from what works? Yes. Do we need to make sure that, alongside changes to welfare and reductions in benefit, we are offering appropriate employment support? Absolutely, yes. One of my biggest concerns here is that people who are affected by welfare changes, quite apart from whether those changes are right or wrong, are not, for example, automatically entitled to support through the Work programme. Many of them will not be supported through the troubled families programme. Many of them will not have access to advice or support. Many of them will be outside the ambit of Jobcentre Plus.
Q 28 Specifically on that, what would be the cost of providing a radical, tailored, personal employment service, because clearly that is what is needed? These are some of society’s most vulnerable people who need that support.
Tony Wilson: But it need not necessarily be—to be honest, unit cost is not necessarily the issue. The Work programme is very tightly funded.
The other substantive point I want to make is that we just do not help very many people. We are talking about ESA and disability. Fewer than one in 10—we published research on this last year—disabled people who are out of work are receiving any kind of employment support, whether that is through the Work programme, Work Choice or anything else. Nine out of 10 simply are not in programmes. When we talk about ESA claimants in the Work programme, it is 300,000 over two years against a case load of 2.5 million. People on ESA are not in the Work programme. People on ESA are mostly in the support group, and they are in a support group where they get no support—they do not get employment support. They do not go to Jobcentre Plus. They do not have a personal adviser. They have voluntary access to programmes that they do not enrol in because of the negative perceptions of those programmes and their effectiveness.
There is a lot more we can do in terms of bringing programmes to people and being much more proactive about how we engage with people and how we make programmes voluntary and supportive. Yes, that does mean investment, but it also means, for example, looking at social investment models, at invest-to-save models and at how we recycle some of the savings we would achieve if we did actually engage with disabled people who are a long way from work. At the moment, we are not engaging with those people at all, quite apart from whether they are finding work in the Work programme.
Q 29 Should we not have that first, though, before we drive more of the more vulnerable people into poverty?
Tony Wilson: We should do both, in my view, ideally. Let’s not let one be the enemy of the other. We should do both.
Some of the questions and answers are getting a little long. Octavia is very keen to come in, and then we will go along the panel because this is an important question.
Octavia Holland: I want to pick up on the reference you just made to the benefit cap and to single parents, to make sure that everybody is clear on the stats. Over 60% of people capped so far have been single parents; 70% of them have children under five and 34% have children under two. DWP’s own research shows really clearly that the younger the child is when the parent is capped, the harder it is for them to get into work.
When we are talking about the benefit cap and supporting people into work, we really also need to be looking at the contradiction between the benefit cap and the conditionality policy that exists and the one that is being proposed. If you are capping up to 20,000 single parents who have children under two, there is no childcare support available for that group at present. There is also evidence that there is a real shortage of childcare available, so there are really clear reasons why that group of single parents will not be able to go into work. DWP’s research, again, has shown that where those people who are capped do not find work, it is likely that 40,000 more children would be pushed into poverty. When we are looking at the benefit cap we need to look at the circumstances of the family and the age of the child.
Q 48 The point about the implementation of that 30 hours is important—how it is done.
Octavia Holland: It is. I think a lot of lessons need to be learnt from the 15 hours. There are providers who will say, “Okay, I’ll offer the 30 hours, but I’ll offer only two 30-hour-only places. The rest will be full-time at a much higher rate.” If you are trying to help low-income families, you really need to address those issues.
Charlotte Pickles: Can I answer that? The 30 hours, and the increase from 70% to 85% coverage in UC, is a very positive step forward. However, I agree that, if the 30 hours is a term-time only offer, it is a problem, given that you do not just work in term time.
However, to go back to your point about Jobcentre Plus and the flexibility and freedoms that individual jobcentres have, I would say that more work needs to be done to understand the difference in quality of that provision from jobcentre to jobcentre. Some jobcentres are excellent, provide fantastic support and do everything that they possibly can using their flexibility and discretion to do positive things with all sorts of cohorts. Some jobcentres are doing a lot less. One challenge I encourage the Department to look at is measuring jobcentres based on job outcomes and not off-flow from benefits, because we are holding providers to account in a way that we are not holding jobcentres to account. That is a real problem for understanding the performance of jobcentres.
Octavia Holland: I just wanted to point out that over two thirds of single parents enter the three lowest-paid occupation groups, and that training to upskill adults has been cut by 20% over the last five years. Actually, what needs to be looked at is the quality of jobs that people are moving into, and how that benefits their long-term independence and the support that they can give their families. Talking about work is obviously important—single parents want to work—but if it is a low-skilled job and they will be trapped in a low-income job with no prospects for moving on, the benefits that that will bring their family are not as profound as they could be.
Charlotte Pickles: Can I add briefly to that? It is absolutely true that we need to support people to progress when they are in work, but the evidence clearly shows that a job is better than no job, so I do not think we should be disparaging entrance in to low-skilled jobs, but we should be focusing on helping people progress once they have gone into them.
Q 49 Should we not be stipulating that it be decent and fair work, rather than any work? The current statistics are one hour in any work in the week before. Should the legislation not stipulate another term of reference?
Charlotte Pickles: I do not think so. I think you need to focus on getting people into work. As we know, for some people, doing a few hours of work is a very positive thing. Also, the evidence base shows us that a job is better for people’s wellbeing than focusing on trying to get a—[Interruption.]
Q 53 Very briefly, this was a question I asked of the previous panel but we did not get a chance to come on to it. On the two-child policy in limiting child tax credit, one aspect that I and my colleagues are very concerned about, though there is no detail, is that there will be exceptional circumstances for rape. As we understand it, we are potentially going to be in a position where women are questioned and have to justify if they have a third child as a result of rape, or indeed if their first or second child was a result of rape and they go on to have further children. What are your views on that and its implementation, even at a basic human level?
Octavia Holland: From our perspective, limiting the number of children for whom a family can receive tax credits, or in future universal credit, is obviously problematic. There are all sorts of reasons why you can often have a single parent who would not have anticipated that they would be a single parent and in receipt of tax credits. There are a number of reasons why people have not necessarily planned that they were going to have a higher number of children, and they definitely should not be penalised for it.
In terms of single parents and the cuts that are going to be made to tax credits and universal credit, our analysis, which we commissioned through the Institute for Public Policy Research, has shown clearly that the reduction to the work allowance is going to have a really severe effect on incentives to work. That is very concerning because the analysis shows that the loss for a working single parent is going to be more than the loss for a non-working single parent. In terms of support for people going in to work and incentivising that, it is not adding up at the moment.
Tony Wilson: It is really concerning. There are no answers to it, are there?
Q 54 Leave it out?
Tony Wilson: Yes, not to do it is the simplest one. It will be a really tough one for the Committee to grapple with. We know that rapes tend not to be reported; we know that prosecution rates are very low. How do you do it in a way that does not rely essentially on the outcomes of criminal cases? It is quite unpalatable to think how that might work in practice. I do not think there are any easy or straightforward ways to resolve it.
Q 55 I will be brief. I just want to clarify a couple of figures, if I may. The latest figures I have for the number of ESA claimants in the work-related activity group is just shy of 500,000, I think. Do we have any figures for what percentage of people successfully come off WRAG and get into paid employment?
Kirsty McHugh: We could look at the Work programme figures and ERSA collates job start figures as well as the job outcome figures, which are produced by the Government. We can share all of those with the Committee if you want us to.
Colleagues, we are approaching the end of our time for this session, and you have all been fairly well behaved. Are there any final questions?
Q 61 On that final point about adults and working families, the evidence is that the impact of some of these cuts, particularly the benefit cap, is going to be on 200,000 children versus 81,000 adults. How can we justify that? How can we balance that without saying that this is going to disproportionately affect children and young people through the cuts that are going to happen to their parents? They have no way of protecting themselves in those situations.
Octavia Holland: That is absolutely right, which is why it is particularly shocking that the Joseph Rowntree Foundation research and the IPPR analysis have shown that, actually, the benefits for working families are less significant than for those who are not working. The impact of those cuts, as you say, will more often be on families that have children, so it is a real concern.
Tony Wilson: We will end up where we end up on the benefit cap. One thing I really hope we see is that those parents who are affected by the cap are given access to employment adviser support that is available through the troubled families programme, which they currently do not have. They should be prioritised for the Work programme, which they are currently not. They should be given an adviser in Jobcentre Plus, which they are not. Discretionary housing payments, which at the moment are basically just cash transfers to patch up a short-term problem, could also be invested in people, advisers and resources to help people to get into work or to deal with their housing problem.
There will be a lot of debate and political argument about whether the cap is right—fine—but let us make sure that those affected by the cap actually get support to move back into work, to change their housing situation or to deal with the consequences. Yes, let us try to exempt those with very young children, where this is not going to be practical or desirable. There is research on negative impacts on the wellbeing of adults with very young children when they move into work, but there is also a lot of research that says that work is good for your health. It is not a straightforward thing.
Thank you very much indeed to all four witnesses. This has been a very interesting discussion. Thank you for your evidence, Charlotte, Kirsty, Octavia and Tony. We are very grateful to you. The next session will start in five minutes. We will have a very short comfort break.
Matt, do you want to have a final say on this?
Matt Oakley: Yes, just a quick one. I am sure we will talk about lone parents and other groups later, but the general point is that any changes you make to benefits are going to have an impact on people. The key question is how the Government, the Opposition, people in jobcentres and people in the sector can work together to make sure that those impacts are mitigated, that people are moving back towards work, that people have the support they need when they get into a crisis and that people have the support they need to tackle the barriers that they face to getting into work. That, for me, is the much bigger question, because you could equally raise that kind of question for any of the groups that we talk about today, whether they are disabled, lone parents or in work. So the key question for me is this: how do we tackle that? How do we mitigate the impacts? How do we improve the chances of someone finding work, staying there and getting more pay?
Q 65 Thank you very much for your contributions. On those points and the work programmes, would it not therefore make sense to do a wide-scale review of the work programmes and how we enable people with disabilities of all types to get back into employment before cutting their benefit and reducing it to the level of JSA?
Sophie Corlett: We would be very keen to see much better support to help people back into work. The Work programme does not—
Or, indeed, not cutting them at all.
Sophie Corlett: Yes, definitely. The Work programme is not successful for people with mental health problems: 8% of people with mental health problems are helped back into work through the Work programme; that is not a great result. Other methods that people use include IPS—individual placement and support—which is a voluntary scheme. It works with people on their aspirations. In a very key way, it looks at what the other barriers are that stop them getting to work, and it works with employers to help them to overcome the stigma of employing people with mental health problems, because employers are not keen to take people on. It looks at all these things. It works with people in a voluntary way, without all the threat of sanctions, which can be very worrying for people.
If you have really good systems, people who want to get back into work can get back into work, but to have a system that is both punitive on people as if it is their fault and then does not actually help them is grossly unfair.
Gareth Parry: The Department did lead a pretty comprehensive review in 2013, when it produced the disability and health employment strategy. There is quite a lot of good content in that strategy, but it does seem to have lost the focus a little bit over the last 18 months. Our organisation would recommend going back to that strategy and seeing what was in there that could still be progressed, because that was sort of the review you are talking about.
Matt Oakley: I was there for a speech the Secretary of State made a couple of weeks back, and it seemed very much to be the start of a new discussion about how we can help disabled people and people with illnesses first of all to stay in work where that is appropriate, and secondly, when they leave work, to get back in more quickly—when they are out of work, to get back to work. I would be a huge advocate of significant changes to the Work programme to make sure it is putting more money into those people who need the greatest help. At the moment, it is not targeted enough; it is not personalised enough. We need to make sure we are targeting as much money as possible at those people furthest away from the labour market, of which this is one of those groups.
Q 66 The Government had hoped that the number of people on long-term incapacity benefit and employment and support allowance would be reducing. In fact, it has been increasing, and particularly the numbers in the support group have been increasing. What is your analysis of the impact of a very sharp distinction between the level of benefit that you will receive in the support group and the level of benefit that you will receive if you are not in the support group? Is there any incentive, perhaps, to present yourself as more severely unwell or disabled, and therefore having to go into the support group?
Elliot Dunster: We have to look at the confidence in the WCA as well. The speech that the Secretary of State made a few weeks ago, which has been mentioned already, talked a little bit about that. Disabled people are concerned about the WCA and how accurate it is. In Scope’s view, this will mean that people will continue to appeal those decisions because of this slightly more binary distinction.
We agree with the Secretary of State’s assessment that it is not very helpful to think about people being fit for work or not fit for work. That is not a particularly helpful way of looking at things, but of course we have an assessment in which we have to try to draw lines, effectively, about what support people receive. We would like to see the WCA reformed along a number of principles that we have submitted to the Committee, which would make it much more about back-to-work support. However, we think that making a slightly binary distinction between jobseeker’s allowance and ESA will make people more likely to appeal decisions if they think they should have been awarded the support group rather than the work-related activity group, because there is a financial incentive for them to appeal.
Q 79 But you have just accepted that there are people who will be. It is your own evidence I am picking up on. It was your evidence that said you accept there will be people who are unemployed because of their physical or mental disabilities for a number of years. Given that you recognise that, all I am asking you is: as a matter of humanity, is it not wrong to push those people on to a level of jobseeker’s allowance and expect them to live on it?
Matt Oakley: What I am saying is that there will be people in the ESA WRA group who are, under the current system, likely to be unemployed for an extremely long time. There are similarly people in the JSA group who are classed as ready for work but who will be unemployed for a very long time. I am agreeing with other people on the panel that we should stop classing people through a basic system of “ready”, “not quite ready” or “ready for work,” and start looking at tackling their barriers in a much more flexible way. That means re-targeting employment support and the very hardest to help.
Elliot Dunster: It is really important to remember that people in the work-related activity group are disabled people, and disabled people face additional barriers to get into work. There is nothing wrong with that person; they don’t need to be fixed. They just have additional barriers that they face to get back to work. That can be employers’ attitudes. That can be structural barriers where they live—perhaps the transport infrastructure is not accessible and they find it difficult.
The biggest barrier that disabled people tell us they find is a lack of flexibility in the workplace and the right jobs available. If you have an injury and have done a manual job all your life, you are probably not going to go back to that same job, and you will need a period of rehabilitation. The statistics bear that out: 10% of unemployed disabled people are unemployed after five years. That figure is only 3% for people on jobseeker’s allowance, so there is a difference and it is because of the additional barriers that disabled people face to get back to work.
To address your question about the additional funding available, we have a range of ideas that we suggested to the Committee through our written evidence. One of them, which we would like the Committee to explore, is to join up “holistically”—to use your word—across Government and to look at the Chancellor’s focus on devolution, for example, and regional growth. What can we learn from some of the youth unemployment programmes in the last Parliament? We should target some of that money at areas where there is high unemployment among disabled people, and use some of the things we already know to work—for example, small disabled people’s organisations working with disabled people intensively to find them jobs that they can stay in, progress in and build careers in. That is where we think that money should go.
Laura Cockram: Just briefly, I think it would be useful to address the issues we talked about earlier in terms of the work capability assessment and reforming it. Actually, if we are assessing people correctly to go into the right groups that is a very good use of the money that is extra there.
Q 80 I will follow on from Emily’s points, because my question is really very similar. The numbers from the House of Commons are that we have 492,000 people on the ESA WRA group, and half of them—250,000— have very serious mental or behavioural issues. They have very different requirements and some of them will probably never work. How can we justify in any kind of humane way putting them on to a level of income that they will have no option of getting off, because they will never be able to work?
There is a bit about categorisation, and while I realise we are talking about all being in it together, and there are some very good ideas coming out, we have to look at, for example, a radical vision to provide employment support that is tailored and personal. We do not have that at the moment, as many of you have already suggested; so surely we have to look at that first, before cutting anybody’s benefits. People have to have the opportunities and the support has to be out there before we put people further into poverty.
Sophie Corlett: Absolutely we do, but I think we also have to recognise that for some of those people it does not matter how much help you provide them with, because they might not be well enough; and a cut in their benefit not only may subject them to poverty, but it may subject them to worse mental health, for which they are then punished, for not getting more of a job. So there is a responsibility not just to give people a decent amount of living, but to give people an opportunity for good health. We know that having appropriate work is good for people’s wellbeing, but actually having enough money not to be socially isolated, to be stress-free about whether you pay the rent, the heating, or put food on the table—those things are important for people’s wellbeing.
Gareth Parry: I think, if I may—it is not helpful to talk about people who will never work. That shows a culture of a lack of aspiration. Everybody should have the potential to work—
Okay, let me rephrase that, because I do not want to be misquoted: people who will not be—
Gareth Parry: No, let me finish, please. I think that there is something about a culture of aspiration around disabled people, families, advocates, parents and the professionals who work round them, and society generally, that says there is a culture of dependency—that there is a lack of aspiration. I am not going to get drawn into a political decision on where a benefit should be cut, or not. What I would say is we have all got collectively to have a greater level of aspiration for disabled people in our communities and our society; and we have to put the support processes in place, and the labour market opportunities in place, for them to have somewhere to go; and we do not focus enough on that. We focus on the negative stuff; we do not focus enough on the aspirational stuff.
And I do not want to be misquoted in any way; so what I am talking about is those people who will find it very difficult, or not be able to do it, because of a physical or mental disability. I am not denying that we need to be more aspirational or have greater ambition. However, there is a very great difference. You say you do not want to get into political discussion. We are talking about those people who have found it very difficult to get into work having benefits cut and having very little quality of life in comparison with being supported to a level where they could have a quality of life, and they will be able to engage better in society. That is specifically what I am talking about.
Okay, this sitting is about asking questions. We will have the debate when we get into Committee properly.
Roy O'Shaughnessy: I completely agree that there must be a safety net for those that are the most vulnerable. We see them every day and none of us wants that to be left out. I guess that is the whole point of this process—to look at how we get that safety net. We cannot deny that the support group has gone up from 10% to 65% through June 2014; so how we achieve the halving of the disability unemployment rate and how to be a responsible civil society—that is the challenge that we face. So I too want to qualify that I did not mean that there should not be a safety net for the very kind of individuals that you are talking about.
(8 years, 11 months ago)
Commons ChamberI can certainly give my hon. Friend that assurance. We will be treating all submissions carefully. No decisions have been made yet. We are proposing a radical new direction for the future of our courts system, and if sensible proposals are made, we will certainly consider them.
The Secretary of State will no doubt be aware that in their programme for government 2015-16 the Scottish Government said that they would abolish employment tribunal fees using powers to be devolved under the Scotland Bill. Will he now recognise that the introduction of those fees has prevented access to justice and follow the Scottish Government’s lead by abolishing those fees across the UK so that all workers in the UK can afford to have their cases heard?
I look forward to seeing what happens in Scotland as a result of devolution. One of the great things about devolution is that different parts of the UK have the opportunity to do different things and we can all learn from one another. For that reason, I was absolutely delighted when the First Minister of Scotland just last week adopted our policy on primary and secondary school testing after years when the gap between rich and poor in Scotland had grown wider and the gap between rich and poor elsewhere had narrowed. At last the SNP are learning from what this Government have achieved.