Sanctioning of Benefit Recipients

John Hemming Excerpts

Thursday 3rd April 2014 Commons Chamber

[John Hemming (Birmingham, Yardley) (LD)]

I am pleased that the right hon. Member for Oldham West and Royton (Mr Meacher) has managed to secure the debate, although sadly it was scheduled at short notice, so I do not think that all hon. Members who might wish to be present are in the Chamber.

I support the Government’s general financial strategy, so I disagree with the right hon. Gentleman about austerity. Clearly we have to bring the deficit under control, so we have to be aware of the costs of the welfare system. I support a number of the changes to the system that the Government have introduced, but some have caused complications. I am worried about the impact of the changes to council tax benefit, which need to be reviewed because they have created odd results. My Labour opponent has taken to encouraging people to move from West Bromwich to Birmingham because that allows them to get more benefits from the council tax payer. I think that that is wrong, because it puts pressure on our local taxpayers, but it arises because Sandwell, which is where West Bromwich is, has a different rule from Birmingham on qualifying for council tax benefit.

Like all hon. Members, I have an office that deals with casework, and we learn a lot from the people who come to see us. I worry, however, that people who are sanctioned do not come to see me because only four sanctions cases have come through. We are a reference agency for the local food bank. We have made four references to it, although, oddly enough, they did not involve the people who were sanctioned, because we have generally found that we can deal with such cases. I worry about what is happening that we do not see because, although we can read the statistics, we do not see the people affected, and I like to understand individual cases so that I can find out what is going on. I have been involved in welfare rights casework for coming up to 25 years, so I have seen the system’s various changes and got used to concepts such as non-dependent deductions. Those things are complicated and difficult for people to understand.

My hon. Friend the Member for Brent Central (Sarah Teather) would love to be able to participate in the debate, but she has to be at another meeting, so she has asked me to quote her comments about a case from her constituency. She says:

“I have had many constituents who have been sanctioned completely inappropriately over the last 18 months. In all cases the removal of benefits has caused intense distress and suffering to people who are very vulnerable. This is a typical case—I shall call her Jenny. Jenny has profound mental health problems, learning difficulties and physical health problems. Her health problems and disabilities make it very difficult for her to organise herself and her own life. This is the reason that she finds it so difficult to hold down a job and the reason why she is on benefits. Jenny needs a great deal of support to function. Instead of which, when she missed appointments, her benefits were sanctioned, leaving her without any money whatsoever for more than 4 months. During this period Jenny was destitute and reliant on the food bank. The safety net of the welfare state that should support a woman who is too vulnerable to support herself entirely let her down.”

Those comments highlight the sort of cases that we should be especially worried about: those involving people who get confused by everything and are not quite sure what is going on, and all they find is that they do not have any money. Such people have visited my advice bureau. They know that they do not have any money but they do not know why. However, we have been able to deal with such situations.

Although the Opposition might think that the Government are out to get people, I do not think that that is true. The Government are trying to encourage people into work and to give support to those who need it, but we need to consider how we can review the sanctions process so that we do not trap people in destitution. If someone has no money, it is difficult to get a bus fare. A day’s bus fare in Birmingham is £3.60, which does not sound much to someone in work who is earning a lot of money, but it creates a bit of problem for someone who is on £71.70 a week and suddenly finds that they have no money at all.

That has a knock-on effect for housing benefit. We have marvellous computer systems that minimise the amount of paperwork that people need to do because benefits can be passported. If somebody gets JSA or some form of means-tested benefit, they automatically qualify for housing benefit as well. The problem is that when they come off JSA because they are sanctioned, the computer says no and suddenly they are taken off housing benefit as well. In fact, because they have got money, they qualify for housing benefit, but they have to put in another claim. This is the problem for people who have difficulty understanding how the system works. They know they have no money, but they do not understand why the council is asking them to pay rent. The danger with that is that they come for advice too late, and we end up trying to backdate housing benefit some months in a situation where people always qualified for it but had not claimed it.

The Government say that targets for sanctioning have been stopped, but there needs to be a review of how some of the agencies are operating. They seem to be referring too many people for sanctions, which creates problems. Then there is the question of delays on appeals. Obviously, a reconsideration is far better than an appeal, and there are mechanisms for that. We need to make sure that the advice agencies such as Citizens Advice get good co-operation from agencies such as Jobcentre Plus so that the process does not end up being over-bureaucratic.

I happened to ask a question about cases on appeal being stayed, because I discovered that the Department has had a tendency to stay cases. A thousand cases were stayed for more then six months. If there is a massive commercial dispute between two wealthy companies about an issue of copyright or patent, the fact that the court has not yet made up its mind does not affect either of them, but if somebody is destitute and depends on a food bank, it is a big issue if their case is stayed.

The Department needs to look at the cost-effectiveness of fighting some of these cases, and consider whether it might be better to cave in if a reasonable case is being made by the appellant. The amount of money being provided is not that great and the administrative cost of dealing with the case is quite high. One of the reasons that the Department does not turn up at tribunals from time to time is the administrative cost of doing that. I understand that the Department cannot give in all the time—there is no question about that—but there needs to be a cost-effectiveness calculation of fighting claims too hard, accepting that at the other end is not a large company that can wait, but somebody who is destitute and desperate for cash. Even though they may have family support and the like, I see people with very serious problems.

A further question that should be considered is whether the sanctioning system is designed the wrong way. I agree with the right hon. Member for Oldham West and Royton—we need a system to support compliance—but we should look at the way the universal credit sanctioning system has been designed, rather than the way the JSA sanctioning scheme works. The JSA sanctioning scheme is to a great extent punitive. It gives people a kick for doing something that the system deems to be wrong, whereas the universal credit system is designed to enforce compliance, so as soon as compliance starts, money starts again. That is what the system should be doing. We are waiting for the rest of universal credit and want to see that as soon as possible, but if the Government could bring in at an earlier stage the universal credit sanctioning system, we would have a system that is seen to be doing what it says on the tin and encouraging people to work with the system.

If, under that system, the easiest way of getting paid is for people to do what they are asked to do, rather than to fight it through an appeal process that can potentially take years to be settled, there would be a far better result for people. These are people without any other source of revenue, apart perhaps from support from families. Some people do not even have family support. We need to think about how the system is seen from those people’s point of view.

I congratulate the right hon. Member for Oldham West and Royton on asking for this debate, and on his persistence and his willingness to stand in at the last minute. Many hon. Members are concerned about the issue as they see it in their constituency surgeries, and the Government need to review some aspects of the process.

[Several hon. Members]

rose—