Jobseekers (Back to Work Schemes) Bill

Lord McKenzie of Luton Excerpts

Monday 25th March 2013 Lords Chamber

Moved by

[Lord McKenzie of Luton]

1: Clause 1, page 3, line 14, at end insert “; and such reconsiderations and appeals should be considered in a timely and efficient manner”

[Lord McKenzie of Luton]

My Lords, I will speak to Amendments 1 and 3 in this group. These are probing amendments, but I want to start by saying how much we deprecate the fact that we are having to debate this significant and retrospective piece of legislation at this hour and to complete all the stages before we draw stumps this evening.

It might be helpful if I set out from the start how we are approaching these matters. We accept from Second Reading that, whatever our fundamental concerns, the Bill will retrospectively make regulations lawful that the court has thus far considered to be unlawful and that notices that were inadequate are now to be treated as satisfactory. What we are seeking to probe by these amendments is whether individuals adversely affected by this will be in no worse a position as a result of this Bill than they would have been had the regulations and notices been lawful in the first place. This, in particular, requires focus on the reconsideration and appeal situations so that we are clear how they are to operate.

Where individuals have been sanctioned and are not part of the stockpile, they may have appealed already. Their appeal may have been stayed because of the High Court decision, may have been successful or may have been unsuccessful. Where such individuals have been successful in their appeal, it is presumed that the position would stand. Can the Minister please confirm this? Where appeals have been stayed, what is the position? If the appeal was based on the unlawfulness of the regulations or the notices—a defence that is no longer available—are appellants now able to bring forward new reasons that they thought unnecessary to explore before? This raises the question of those who have not hitherto appealed a sanction. It is understood that, under the rules, the time limit for an appeal is generally one month from the date of the recent decision, but this can be extended if the decision-maker does not object or if the First-tier Tribunal extends the time limit. Has any specific guidance been given to decision-makers on this matter or to those who have been sanctioned?

For those cases that have been stockpiled and will now proceed to be sanctioned, the key issue is how, in retrospect, the individual can now be assured of availing themselves of good cause provisions, the opportunities to mitigate and the hardship provisions. My noble friends Lady Sherlock and Lady Hollis will develop these themes in subsequent amendments, but it would be helpful if the Minister could set out for us what consideration has been given to this issue to ensure that there is fairness.

In so far as the stockpile of cases is concerned—those for which no decision to sanction has yet been made—it is understood that no sanctions will be pursued when someone is now in work. Can the Minister please expand on this? Does the individual need to be in full-time paid work for the purposes of being ineligible for JSA or is there another test? What if the individual has been in work since the failure to comply but has fallen out of work again? As was raised at Second Reading, there will be those whose employment is not very secure or whose hours, particularly with the proliferation of zero-hours contracts, will fluctuate. The point in time when a decision on sanctions for them will be made could determine whether or not they end up being sanctioned. How will this point be dealt with?

On a related point, again touched on at Second Reading, will the Minister say something about national insurance credits? Have the sanctions that have been imposed led to any national insurance credit restrictions? If so, will the Minister explain the technical linkage with JSA sanctions? Would those restrictions flow automatically or in some separate, if parallel, process?

These are just some of the questions that present themselves and we seek assurance from the Minister that these matters have been fully analysed and that no further detriment arises to claimants. In the time available, we have not explored all the interactions between requests for revision, supersession and appeals, nor all the nuances of appeals. As a general point, though, as well as dealing with the specifics of the above, it would be helpful if the Minister could confirm that it is the Government’s intent that claimants should be in no worse a position in respect of these matters than if the regulations and notices had been valid in the first instance. I beg to move.

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[Lord Freud]

Yes, but there are six billion people around. I am trying to refer to a particular group. I hope that by the time we get to the next amendment I will have found a better word, so bear with me for a little while if I cannot work that one out on my feet.

On the point about people going into work: if a claimant has been off jobseeker’s allowance for longer than the length of their sanction then they will be deemed to have served their sanction, and therefore will face no penalty. I cannot go through the absolute detail of the proportionate amount but it is likely that we will do this proportionately for those who have been in work, so there will be a record of that.

On the points made by the noble Baroness, Lady Hollis, a lot of the issues surrounding what the tribunals are doing are in ESA cases, while we are dealing here with JSA cases. We are talking about rather small numbers; I will go into more detail on them. This is a very small group of people, and the concerns about how quickly they may go through the tribunals, and the pressure they put on those tribunals, are to that extent much more manageable than if theirs were the more complicated ESA cases. Likewise, much of the concern around those cases has been around the medical area and that, of course, will not arise in this particular instance.

The decision-makers receive in-depth training, including on the importance of impartiality, what constitutes evidence, and the balance of probabilities. Clearly a large number of their decisions—three-quarters—are upheld. By putting decision-makers in between, for instance, the WCA and the tribunal, we were trying to weed out those areas where the DWP considered that the tribunal would find against, and thereby reduce the volume. That is what has been happening, and clearly we watch that very carefully. Having dealt, I hope, with all the issues raised, I beg the noble Lord not to press his amendment.

[Lord McKenzie of Luton]

My Lords, I indicated at the start that these are probing amendments. That highlights part of the problem of having this truncated process: that we do not have the chance to take away and read the Minister’s comments. We have to try to absorb both what is said and what is not covered this evening.

In relation to deferred decisions, I will not use the term to which my colleagues objected. The Minister said that these would be dealt with in a timely manner. However, the thrust of the presentation made by my noble friend Lady Hollis was to ask whether there was the capacity to deal with this. Decision-makers are struggling under current arrangements, and adding this extra burden will make life more difficult.

On national insurance credits, I was trying to probe the point that when they are withheld because of sanctions, post October, in circumstances where the regulations that underpin the sanctions were originally found to be unlawful, the Bill switches lawfulness back on in respect of the sanctions component. Does that automatically run where national insurance credits have been withheld? What is the connection between the two? Does it automatically flow from whether a sanction has been levied, or does it require another process that authorises the withholding of the national insurance credit? If the original decision was based on an unlawful position in respect of the regulations, is the restoration of the lawfulness of those provisions under the Bill enough to authorise the withholding of national insurance credits? That was the point I was probing, perhaps not in sufficient detail.

On those cases that have been deferred where no decision has been made, I think that what the Minister said was a change from what we previously understood the position to be. I thought that the point had been made very clearly before that if somebody was in work, there would be no sanction. It seems that some nuances to that have been introduced by the Minister’s reply. Now it will depend on how long they have been in work in comparison to the length of the sanction that has been levied. That seems to be a new formulation, which we have not heard articulated before.

I did not hear from the Minister an assurance that we were seeking. Leaving aside the issue of making the regulations and notices retrospectively lawful, is it the Government’s intention that individuals should otherwise be in a worse position than they would have been had the regulations and notices been lawful ab initio? How does that interact with the appeals process? We have not unpicked all those issues this evening.

Having said all that, I do not think that we can get any further. I hope that the Minister will reflect on this discussion. If we could get something further in writing before we rise later this week, it might give us some reassurance. For the moment, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

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[Lord Freud]

My Lords, before I deal with this amendment, I ask the Committee to indulge me as I answer a couple of questions on the last round from the noble Lord, Lord McKenzie of Luton, which may be relevant.

On the question of what sanctions mean for national insurance, if the failure to participate was after 22 October 2012, national insurance is not credited but if it was before 22 October 2012 then it is. On going into work, no sanctions will be applied to people who no longer receive jobseeker’s allowance. That might save some writing.

[Lord McKenzie of Luton]

On the point about national insurance credit, I am not sure that the Minister’s answer deals fully with the issue that I raised. Perhaps the noble Lord will look at the record tomorrow and write in due course.

[Lord Goldsmith]

Does the Minister not think that what has just taken place illustrates how wrong it was to bring this Bill in and try to fast-track it through? He is answering, on the hoof, important questions in relation to the entitlement, not of stockpiles but of people. We have this problem because the Bill is being fast-tracked through. The amendments so far have been admirably moved. In relation to Amendment 2, the Secretary of State will, within a month of the Act coming into force, do something which we would normally expect the Minister to tell us before the Bill is passed. Will the Minister kindly reflect on that and consider whether it is not an absolute disgrace that the Bill is being passed in this way, as the Constitution Committee of your Lordships’ House, of which I am happy to be a member, said last week and other noble Lords made clear at Second Reading?

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Moved by

[Lord McKenzie of Luton]

4: Clause 2, page 3, line 34, at end insert—
“( ) A report under subsection (1) will include, but not be limited to, information on the following—
(a) the number of penalties imposed, the type of failure for which they were imposed and the duration of such penalties;(b) the number of demands for reconsideration and the number of subsequent appeals;(c) the effectiveness of the appeals process;(d) the number of penalties imposed upon claimants in receipt of Employment and Support Allowance;(e) whether sanctions originate from a Work Programme Provider or JobCentre Plus;(f) the extent to which claimants understand the reasons for penalties being imposed upon them;(g) the extent to which sanctions are being promoted and whether targets are being applied in relation to penalties;(h) the support available for claimants upon whom a penalty has been imposed, and what additional support such claimants are seeking; (i) how penalties are being applied to those with a mental health or other fluctuating health condition;(j) the effectiveness of the hardship and mitigation provisions;(k) the effectiveness of sanctions in changing claimant behaviour; and(l) the application of the public sector equality duty.”

[Lord McKenzie of Luton]

My Lords, in moving Amendment 4 I will speak also to Amendments 5A and 6. I look forward to hearing from my noble friend Lady Lister on Amendment 5 and what appears to be a very worthy extension of the scope of the promised review and report, which we can also support. Amendment 4 relates generally to the criteria for Clause 2, and Amendment 5A has been tabled with the strong support of the shadow Secretary of State following press revelations of the existence of sanctions targets and league tables operating in London. It insists that the review specifically report on this matter.

Clause 2 brings some redemption to what is otherwise a deeply unsatisfactory Bill. The clause exists because of the perseverance of my right honourable friends Stephen Timms and Liam Byrne in another place and gives us the hope that at least something positive may yet come from this débâcle. The clause requires the appointment of an independent person to prepare a report on the operations relating to the imposition of penalties. The sanctions which are in scope for the review are those imposed for failures in the period from June 2011, when the defective regulations were first introduced, until February 2013, when the Court of Appeal judgment was delivered. We are told that the sanctions involved amount to around 25% of all JSA sanctions, which is clearly a minority of such sanctions. For those both delivered and withheld, covering the ESE and MWA programme, this amounts to in excess of 300,000 sanctions, mostly relating to those assigned to the Work Programme. The huge growth in the number of sanctions and the amounts involved—on average some £600 for ESE sanctions and £800 for MWA sanctions—are real causes for concern. There are suggestions that the growth of sanctions is a significant cause of the proliferation of food banks.

Recent revelations about targets and league tables are deeply worrying and reinforce concerns that the sanctions regime is being used to control benefit expenditure rather than for its proper purpose of supporting conditionality and changing behaviour. Ministerial denials will cut no ice until these matters have been fully and speedily investigated. We would be appalled if the reports of the suggested behaviour were true, as they would demonstrate not only that a climate of fear is being created within jobcentres but that staff are being actively encouraged to refer customers for sanction, especially to fine customers that they can claim are not fully available for work if they make mention of looking after a grandparent or having informal arrangements sharing custody of children. Jobcentre Plus is supposed to support vulnerable people, not try to trip them up on technicalities.

The review should also cover what management statistics are routinely kept and what use these are put to. At what point of it all are statistics around appeals on reconsiderations subject to any comparison, either intra a Jobcentre Plus area or between areas? Are the data broken down into individual decision-makers and matched against appeal performance? Do these form part of any discussion at appraisal time for individuals? Noble Lords will recognise that it is not even necessary to have formal targets to create a culture where these issues are seen to matter.

At Second Reading the Minister said:

“I have heard today concern from Peers about how DWP issues sanctions to JSA claimants more generally. I would like to make it clear that the department will discuss with the Opposition the terms of reference of the sanctions review”.—[Official Report, 21/3/13; col. 756.]

This is to be welcomed. Can we take it from this that the review need not be limited just to those sanctions identified above? Of course, a discussion with the Opposition does not necessarily mean agreement, which is why we have particularised, in Amendment 4, specific questions posed by the right honourable Stephen Timms in another place. We have added to the list the important matter which my noble friend Lady Lister spoke to at Second Reading concerning the public sector equality duty. I am sure that my noble friend will pick up that issue shortly and expand on her telling intervention that the Government know that they are treading on thin ice on this matter. It is too late for this legislation to be able to benefit from the scrutiny of the JCHR, which makes it imperative that it is covered by the review.

The items included on the list are for the most part self-explanatory and have been discussed numerous times before. However, now is the time to have an independent assessment of what is actually happening in practice. These include how penalties are being applied to those with a mental health condition, or rather fluctuating health conditions, which has been a longstanding concern under this Government and, to be fair, under the previous one as well. As we need to know how in practice the sanction and hardship provisions are really affecting people’s ability to survive, it is important that the review and report are thorough and that sufficient time is available to do the job effectively. However, this should not preclude an interim report, which is what Amendment 6 suggests.

This is fast-track legislation which we now have very limited time to consider further. The independent review was an important consideration for us in our approach to this Bill and we need to nail this down as tightly as possible tonight. Paragraphs (a) to (l) of the amendment must be deliverable, and if the Government are approaching this in a spirit of co-operation it really should not present them with a problem. Will the Minister commit now to these being included in the terms of reference for the review?

Above all, however, we need to be certain that we get to the bottom of the alleged existence of targets and league tables, which is why Amendment 5A is essential. If the Government are committed to their mantra of low targets, they should have common cause with us in accepting this. If they want to tidy the wording for Report, then so be it. I beg to move.

[Baroness Lister of Burtersett]

My Lords, I rise to speak to Amendment 5 as well as in support of Amendment 4, moved by my noble friend Lord McKenzie of Luton. Amendment 5 complements and amplifies Amendment 4. The point behind it is that the sanctions in scope of the review established in Clause 2 of the Bill represent approximately only a quarter of all JSA sanctions imposed over the relevant period.

If we are to understand how the sanctions regime is working, the review needs to set the narrower group of sanctions in the scope of the Bill into the wider context of the operation of sanctions more generally. I have tried to make sense of the sanctions statistics, and it seems that there has been a massive increase since March 2010 in the number of fixed-length sanctions applied in relation to work-related programmes, and a smaller increase in other varied-length sanctions, albeit in both cases with some month-to-month fluctuations.

The review needs to help us understand what lies behind these statistics in the round. The sense that I am getting from voluntary organisations working in the field is that there is a growing concern about the general operation of sanctions. I am particularly grateful to CPAG and SPAN for the information they have sent me at very short notice.

I do not propose to pursue the question of whether or not jobcentre staff are being set sanction targets. My noble friend Lord McKenzie of Luton has already addressed that point admirably. However, I want to say something about the wider culture that is giving rise to such claims. It has been brought to my attention that some jobcentres are pursuing a practice of “botherability”, which includes bringing in claimants at weekends. CPAG sent me the example of a client of the CAB in the north of England.

The client is a lone parent with two children aged eight and six. The eight year-old has reduced hearing and gets low-care DLA. The client is claiming JSA, housing benefit and council tax benefit. She received a letter at the start of March 2013 calling her into the jobcentre for a compliance meeting a few days later, at 9.30 am on a Sunday, which was Mother’s Day. She asked for a different date but was told that her benefit could be sanctioned. She decided to go to the interview as she could not afford not to, but her two little girls were very disappointed as they were planning a treat for her on Mother’s Day morning. She has been on JSA for six months and says that she has jumped through all the hoops. Last week she said that she had applied for 22 jobs. She does not understand what she has done or not done that has necessitated a compliance interview, especially on Mother’s Day. She says she is pretty disgusted with the way that claimants are treated—can your Lordships blame her? I would be grateful for the Minister’s comments on such practices. Is he aware of them? Does he condone them?

It seems to me that whether or not formal targets are operating, such practices are indicative of an oppressive culture that is aimed at punishing claimants rather than helping them to find work. The point has been made to me that in assessing the overall impact of sanctions we need to be looking at those cases not just where sanctions have been applied but where they have been threatened, sometimes inappropriately; in other words, when claimants have been led to believe that failing to do something is a sanctionable offence when it is not.

I wish to focus on the paragraphs of Amendment 4 that deal with mental health conditions, the effectiveness of hardship provisions and the application of the public sector equality duty. Mind has argued that the incentive structure represented by conditionality and sanctions in back-to-work support for people with mental health problems is a misplaced and counterproductive response to the barriers they face. It cites recent DWP research which found that some staff believe that conditionality and sanctions are not useful or appropriate for some groups of participants, including people with disabilities or addiction problems, and some staff acknowledge that the stress that can be caused can be counterproductive in terms of claimant engagement, which also has implications for paragraph (k), which concerns,

“the effectiveness of sanctions in changing claimant behaviour”.

Mind cites a number of service users who have been in contact. I will take just two examples. The first is:

“I got a nasty letter which said my benefit was at risk because I didn’t attend an appointment and I had to give a really good explanation within a week or my benefit would be cut. It quoted all these regulations I broke. I freaked out because I couldn’t understand what I hadn’t done … It turns out there was a mistake”.

Another example is:

“I was made very anxious and sleepless by what I perceived as threatening letters and terms from Jobcentre Plus and A4e. I became depressed because I could see that my hopes to return to work were being made unrealisable by this route”.

Let us put ourselves in the shoes of these people and imagine how stressful it must be for anyone, never mind someone with a mental health problem, to be treated in that way. Further examples can be found in evidence submitted by Citizens Advice Cymru to the ongoing Welsh Affairs Committee inquiry into the Work Programme. A number of them are where there was failure to take account of mental health problems as good cause for non-compliance—an issue to which we will return when debating Amendment 7.

A 20 year-old female sought advice from a CAB in south Wales. She had missed four appointments and was sanctioned. She suffers from periodic depression and memory problems and relies on her social services support worker to remind her of appointments. On these occasions, the support worker failed to do so. She could not apply for a crisis loan as she had been sanctioned, and she has no money at all. She is also worried that she will lose her accommodation.

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[Lord Freud]

My Lords, clearly, I cannot talk about examples when I am not familiar with the particular example. It may have been a strategy. As I said, there is a general strategy to prevent non-compliance by using the device of asking people to come in on different days. Sometimes people are asked to come in on every day of the week. The example I am thinking of is the five workings days, but I have seen examples of that. I saw that example under the previous Government to be honest. I do not know why noble Lords opposite are looking aghast as this was absolutely standard procedure under the previous Government and nothing has changed. It was standard procedure and has been maintained because it works in areas where we are concerned about benefit fraud.

On Amendment 4, it is worth noting that for sanctions more broadly much of the information that the noble Lord, Lord McKenzie, sets out in his amendment is already published by the department. For example, we have published, and will publish every six months, tables setting out the number of sanctions issued and the number of reconsiderations and appeals. The latest figures published for employment, skills and enterprise schemes and mandatory work activity show that up to October 2012 around 170,000 sanctions were issued. There were just over 50,000 reconsiderations, with claimants being successful in just over half of them. Following this there were about 5,000 appeals to the First-tier Tribunal, with claimants being successful in around a quarter of them. I hope that gives enough reassurance to the noble Lord and the noble Baroness that the independent review will be comprehensive and in the spirit of Clause 2. I therefore urge them to reconsider the position and not press their amendments.

The noble Baroness, Lady Lister, raised a point on hardship and the new hardship regime. The new hardship regime will not apply to these jobseeker allowance claimants. It will come into effect only when universal credit is in place. The lone parent’s caring responsibilities are taken into account when setting work search requirements. In the example used by the noble Baroness, they can be used in citing a good reason for non-compliance.

I turn now to the linked Amendment 6, the purpose of which is to ensure that there is an interim report on the operation of the provisions relating to the imposition of a penalty, as well as the report after 12 months that the Bill already requires. I am as keen as the noble Lord, Lord McKenzie, that the review is expedited and we will endeavour to complete it as quickly as possible. However, it may help if I set out why an interim report would be unhelpful in providing a complete picture. A claimant who has a sanction imposed on them has 13 months to bring an appeal against that sanction, so by imposing a six-month deadline for an interim report we would miss those appeals made at a later point. That could then give a misleading view of the overall picture in a way that could be unhelpful. As I said earlier, we are committed to producing a report as soon as is reasonably practicable and it would be far better to wait for the full annual report. I hope that the noble Lord will reconsider the position and not press that amendment.

[Lord McKenzie of Luton]

My Lords, first, I thank my noble friend Lady Lister for her support for this amendment. I believe that my noble friend made a powerful contribution and painted what I think we would all agree is a very troublesome picture of what is happening on the ground in too many instances. She specifically asked whether the review would receive evidence from outside bodies, and I do not think that the Minister has addressed that point. I thank the noble Lord, Lord Kirkwood, too, for his support, at least in spirit. I believe that he is absolutely right that the projected cost of £130 million is excessive. Of course, from the Government’s point of view, the higher that figure, the greater the weight given to the opportunity of retrospective legislation. But I think that the noble Lord’s analysis is right.

The Minister’s response was desperately disappointing generally. On the question of targets, let me be clear about what Amendment 5A says. It seeks a report that,

“will include an assessment of the extent to which jobcentre managers have applied targets on the issue of sanctions”.

I accept the Minister’s words—he would not wish to mislead us—on whether Ministers have targets, but the question is whether as a practical matter targets are being applied within certain Jobcentre Plus premises. The noble Lord says that it is about business information and that it is necessary to spot outliers, but the one document that we have as an example is worth reading. It says:

“I have until 15 February, along with other area managers, to show an improvement, and then it is a performance improvement plan for me”.

A PIP is the first stage of the disciplinary process, as my noble friend Lady Hollis identified. It goes on to say that,

“if I am on a PIP to improve my team’s Stricter Benefit Regime referral rate I will not have a choice but to consider implementing PIPs for those individuals who are clearly not delivering SBR within the team”.

It seems to me that there is an awful lot of pressure there, whether you label it as pressure driven by targets or by some other means. It is pressure, and it is changing the culture of the organisation. What does it lead to? It leads to advice like,

“listen for telltale phrases ‘I pick up the kids’, ‘I look after my neighbour’s children/my grandchildren’ or just ‘I am busy’—all of which suggest that the customer may not be fully available for work, even cases where a parent shares custody can be considered if the arrangement is informal. Not that I am suggesting you go there, but you need to consider each case individually”.

Is not the Minister troubled to understand that those sorts of memos are floating around within Jobcentre Plus? Is that not entirely contrary to what he himself has asserted? I cannot believe that he would feel comfortable about that happening. That is the purpose of the amendment—to find out what is happening or has happened in Jobcentre Plus generally. It is not a question of whether the Minister has set down a particular target but what is happening within those Jobcentre Plus premises and the impact that it is having on people being referred for sanctions.

Again, the hour is late, and I will withdraw the amendment, although when it is called I propose to test the opinion of the House on Amendment 5A, which is the key issue dealing with the sanctions and the revelations that the press have identified, because there is a pressing and clear need for that to be addressed.

Amendment 4 withdrawn.

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Moved by

[Lord McKenzie of Luton]

5A: Clause 2, page 3, line 34, at end insert—
“( ) A report under subsection (1) will include an assessment of the extent to which jobcentre managers have applied targets on the issue of sanctions.”

[Lord McKenzie of Luton]

I beg to move. I wish to test the opinion of the House.