Health and Safety Executive

Mark Hoban Excerpts

Thursday 25th April 2013 Written Statements

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

In April 2011, the Cabinet Office announced that all non-departmental public bodies (NDPBs) would undergo a substantive review at least once every three years. I have today launched a review of the Health and Safety Executive (HSE).

Triennial reviews are part of the Government’s commitment to ensuring that NDPBs continue to have regular challenge on their remit and governance arrangements. The review will be conducted in two stages as set out in the Cabinet Office guidance.

The first stage will examine the key functions and form of HSE. If the outcome of this stage is that delivery should continue in its current form, the second stage of the review will consider whether HSE is operating in line with the recognised principles of good corporate governance.

When it is completed I will inform the House of the outcome of the review and place a copy of the outcome in the House Libraries and on the Gov.uk website.

Jobseekers (Back to Work Schemes) Bill (Allocation of Time)

Mark Hoban Excerpts

Tuesday 19th March 2013 Commons Chamber

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

I beg to move,

That the following provisions shall apply to the proceedings on the Jobseekers (Back to Work Schemes) Bill—

Timetable

1.–(1) Proceedings on Second Reading, in Committee, on consideration and on Third Reading shall be completed at this day’s sitting.

(2) Proceedings on Second Reading shall be brought to a conclusion (so far as not previously concluded) four hours after the commencement of proceedings on this Motion.

(3) Proceedings in Committee, on consideration and on Third Reading shall be brought to a conclusion (so far as not previously concluded) six hours after the commencement of proceedings on this Motion.

Timing of proceedings and Questions to be put

2. When the Bill has been read a second time—

(a) it shall, despite Standing Order No. 63 (Committal of Bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;

(b) the Speaker shall leave the Chair whether or not notice of an Instruction has been given.

3.–(1) On the conclusion of proceedings in Committee, the Chairman shall report the Bill to the House without putting any Question.

(2) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.

4. For the purpose of bringing any proceedings to a conclusion in accordance with paragraph 1, the Chairman or Speaker shall forthwith put the following Questions (but no others) in the same order as they would fall to be put if this Order did not apply—

(a) any Question already proposed from the Chair;

(b) any Question necessary to bring to a decision a Question so proposed;

(c) the Question on any amendment moved or Motion made by a Minister of the Crown;

(d) any other Question necessary for the disposal of the business to be concluded.

5. On a Motion so made for a new Clause or a new Schedule, the Chairman or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

6. If two or more Questions would fall to be put under paragraph 4(c) on successive amendments moved or Motions made by a Minister of the Crown, the Chairman or Speaker shall instead put a single Question in relation to those amendments or Motions.

7. If two or more Questions would fall to be put under paragraph 4(d) in relation to successive provisions of the Bill, the Chairman shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.

Consideration of Lords Amendments

8.–(1) Any Lords Amendments to the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(2) Proceedings on consideration of Lords Amendments shall be brought to a conclusion, if not previously concluded, one hour after their commencement; and any proceedings suspended under sub-paragraph (1) shall thereupon be resumed.

9.–(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 8.

(2) The Speaker shall first put forthwith any Question already proposed from the Chair.

(3) If that Question is for the amendment of a Lords Amendment the Speaker shall then put forthwith—

(a) a single Question on any further Amendments to the Lords Amendment moved by a Minister of the Crown, and

(b) the Question on any Motion made by a Minister of the Crown that this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.

(4) The Speaker shall then put forthwith—

(a) a single Question on any Amendments moved by a Minister of the Crown to a Lords Amendment, and

(b) the Question on any Motion made by a Minister of the Crown that this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.

(5) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown that this House disagrees to a Lords Amendment.

(6) The Speaker shall then put forthwith the Question that this House agrees to all the remaining Lords Amendments.

(7) As soon as the House has—

(a) agreed or disagreed to a Lords Amendment; or

(b) disposed of an Amendment relevant to a Lords Amendment which has been disagreed to, the Speaker shall put forthwith a single Question on any Amendments moved by a Minister of the Crown and relevant to the Lords Amendment.

Subsequent stages

10.–(1) Any further Message from the Lords on the Bill shall be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(2) Proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (1) shall thereupon be resumed.

11.–(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 10.

(2) The Speaker shall first put forthwith any Question which has been proposed from the Chair.

(3) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown which is related to the Question already proposed from the Chair.

(4) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown on or relevant to any of the remaining items in the Lords Message.

(5) The Speaker shall then put forthwith the Question that this House agrees with the Lords in all the remaining Lords Proposals.

Reasons Committee

12.–(1) The Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the appointment, nomination and quorum of a Committee to draw up Reasons and the appointment of its Chair.

(2) A Committee appointed to draw up Reasons shall report before the conclusion of the sitting at which it is appointed.

(3) Proceedings in the Committee shall (so far as not previously concluded) be brought to a conclusion 30 minutes after their commencement.

(4) For the purpose of bringing any proceedings to a conclusion in accordance with sub-paragraph (3), the Chair shall—

(a) first put forthwith any Question which has been proposed from the Chair but not yet decided, and

(b) then put forthwith successively Questions on motions which may be made by a Minister of the Crown for assigning a Reason for disagreeing with the Lords in any of their Amendments.

(5) The proceedings of the Committee shall be reported without any further Question being put.

Miscellaneous

13.–Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply so far as necessary for the purposes of this Order.

14.–(1) The proceedings on any Motion made by a Minister of the Crown for varying or supplementing the provisions of this Order shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.

(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to those proceedings.

15. Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.

16.–(1) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken or to recommit the Bill.

(2) The Question on any such Motion shall be put forthwith.

17.–(1) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.

(2) The Question on any such Motion shall be put forthwith.

18. The Speaker may not arrange for a debate to be held in accordance with Standing Order No. 24 (Emergency debates) on a day on which the Bill has been set down to be taken as an Order of the Day before the conclusion of any proceedings to which this Order applies.

19.–(1) This paragraph applies if the House is adjourned, or the sitting is suspended, before the conclusion of any proceedings to which this Order applies.

(2) No notice shall be required of a Motion made at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order.

20. Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.

21.–(1) Any private business which has been set down for consideration at 7.00 pm, 4.00 pm or 2.00 pm (as the case may be) on a day on which the Bill has been set down to be taken as an Order of the Day shall, instead of being considered as provided by Standing Orders, be considered at the conclusion of the proceedings on the Bill on that day.

(2) Standing Order No. 15(1) (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before the moment of interruption, for a period equal to the time elapsing between 7.00 pm, 4.00 pm or 2.00 pm (as the case may be) and the conclusion of those proceedings.

I do not wish to detain the House long, because I am sure that we want to spend as much time as possible discussing the Bill. We seek the approval of the House to consider all stages of this important Bill in a single day. The motion allows for a total of six hours of debate, with up to four hours on Second Reading, with the balance of time spent in Committee and on Third Reading. With the co-operation of the House, the Bill will ensure that the taxpayer does not have to repay previous benefit sanctions to claimants who have failed to participate in certain employment programmes, and it ensures that we can properly impose sanctions for such failures. Without this Bill, the cost to the taxpayer would be up to £130 million.

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

Is it not the case that test case law from 2012 refutes the argument that the Government are making in terms of the requirement for sanctioned benefits to be recouped?

[Mr Hoban]

The hon. Lady makes a helpful point, but the legal position is as follows. If the Supreme Court does not give us leave to appeal, the regulations will be quashed, and we would have to repay sanctions to claimants who had not participated in schemes to help them back into work. The Bill is therefore needed. Hon. Members may have received briefings from third parties saying that that was not the case, but I can assure her and others that it is.

The Department has applied for permission for leave to appeal to the Supreme Court, but there is no guarantee that that will be granted. We therefore need to expedite the Bill so that we are not in a position where we have to repay benefit sanctions to people who have neither participated nor accepted the help that we have offered them.

[Mr Speaker]

I take it that the Minister has concluded his remarks. He cannot be accused of doing so with a fanfare of trumpets, but we are grateful to him for moving the motion.

Jobseekers (Back to Work Schemes) Bill

Mark Hoban Excerpts

Tuesday 19th March 2013 Commons Chamber

[Mr Hoban]

I beg to move amendment 1, page 3, line 11, at end insert—

‘() Subsection (12) does not affect a person’s ability to apply for a revision or supersession of, or to appeal against, a decision to impose a penalty by reference to other grounds.’.

We tabled the amendment as a result of discussions we had with the right hon. Members for Birmingham, Hodge Hill (Mr Byrne) and for East Ham (Stephen Timms), who expressed concern that existing appeal rights might be brought into doubt. The Bill as introduced to the House is clear in its intent. Its provisions refer solely to the consequences of the Court of Appeal and High Court judgments. The amendment, therefore, will have no effect on the overall purpose or intent of the Bill. However, after constructive discussions with the right hon. Gentlemen, we decided to include something in the Bill to put it beyond doubt that a claimant’s appeal rights against a decision to sanction their benefit will remain unchanged in all other matters.

The clause sets out that any decision to sanction a claimant for failure to comply with the employment support allowance regulations or the mandatory work activity regulations cannot be challenged on the ground that the regulations are invalid or that the notices given under them are inadequate, notwithstanding the Court of Appeal’s judgment. In practice, claimants will retain full appeal rights on matters where a sanction has been imposed but they feel that they had good reason not to comply with the requirements of the scheme—for example, if they failed to attend training because of illness of a family member or one of the other standard reasons set out in either regulation or guidance around good cause. However, claimants will not be able to appeal against a sanction decision on the ground of the High Court or Court of Appeal judgment.

I hope that the amendment meets the concerns of the right hon. Member for East Ham and that there is support for it on both sides of the Committee.

[Stephen Timms (East Ham) (Lab)]

The Government have got themselves into a terrible mess. As we heard, they ignored the advice of the Social Security Advisory Committee—that appears to be a significant part of what went wrong—but I welcome the amendment, because a straightforward reading of the Bill might, and indeed does, suggest that if one is hit, perhaps in particular by one of those stockpiled sanctions, that will be it.

I am grateful to the Minister and the Secretary of State for tabling the amendment, which helpfully clarifies—puts in the Bill—the fact that normal opportunities for reconsideration and appeal apply, but I want to ask the Minister about two points. I would be grateful for his comments on them during his winding-up speech for what I imagine will be a brief debate.

Some of the stockpiled sanctions, which we read about in the impact assessment, relate to events of quite a long time ago—up to eight months, which could be the beginning of August. I would like to know, because it is not entirely clear to us, whether all the 63,000 people affected by stockpiled sanctions already know that they have a sanction on the way. If, for example, they enter work straight after receiving a sanction that is in the stockpile, and so receive little benefit after the sanction is imposed, presumably the amount to be reclaimed from them will be very small. I ask for clarity. Is the intention, in taking the sanction out of the stockpile and applying it, that people’s benefits will be stopped for the appropriate period, or is it— [Interruption.]

--- Later in debate ---

[Stephen Timms]

My hon. Friend asks a good question, and the answer is in the impact assessment that the Government have produced, which distinguishes between the amount that would be incurred because of people who were sanctioned before 6 August 2012 and the amount incurred in respect of people sanctioned since the court case, because those sanctions have been stockpiled.

The part of the impact assessment that contains those figures says that, by the look of it—to take the upper valuation—£24 million out of £130 million relates to sanctions that have been stockpiled. The CPAG view would be that of the £130 million, £106 million or £107 million would not apply, because of the Social Security Act 1998, whereas £24 million—the stockpiled sanctions—would. As I said, I am sure that the Department’s advice is different from the advice given to us by the CPAG, but it would be helpful if the Minister provided clarification so that we know the basis on which the measure has been introduced.

I would say again to the Minister that this is a helpful amendment. I do not think that it changes the position substantively, but it helps to clarify it, and to make it clear that anyone who will be presented with a stockpiled sanction will, as usual, have the opportunity to ask for a reconsideration and perhaps subsequently to appeal. That is a welcome clarification, and I am grateful to the Minister for providing it, but I would be grateful, too, if he commented on the two specific matters that I have raised.

[Mr Hoban]

The right hon. Gentleman has made a couple of points. In respect of payments where decisions have been stockpiled, when we received the High Court judgment, we did not proceed to make any further sanctions decisions, but claimants who were subject to a stockpiled decision are aware of that: we made it clear at the time, so they know what to expect. However, he asked whether we would recover sanctions from those who are in work now. The answer is no, we would not. That is a policy that we adopt elsewhere. We want to encourage people to do the right thing, and doing the right thing in this case is getting back into work.

The right hon. Gentleman then raised the note circulated to Members of Parliament by the CPAG. I touched on that point in opening the debate. Section 27 of the Social Security Act 1998 applies only when a challenge is brought by way of an appeal to a court or tribunal. The Wilson/Reilly case began with an application for judicial review, and on that basis, section 27 does not apply. With that, I hope that the Committee will approve the amendment.

Amendment 1 agreed to.

Clause 1, as amended, ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

New Clause 1

Report

‘(1) The Secretary of State must appoint an independent person to prepare a report on the operation of the provisions relating to the imposition of a penalty during the period of a year beginning with the day on which this Act comes into force, so far as that operation relates to relevant penalties.

(2) The person must complete the preparation of the report and send it to the Secretary of State as soon as reasonably practicable after the end of the period mentioned in subsection (1).

(3) On receiving the report, the Secretary of State must lay a copy of it before Parliament.

(4) In this section—

“penalty” means a penalty that may be imposed for—

(a) failing to participate in a scheme within section 17A(1) of the Jobseekers Act 1995, or

(b) failing to comply with regulations under section 17 A of that Act;

“relevant penalty” means a penalty that, but for section 1 of this Act, would not be or would not have been lawfully imposed on a person.'.—(Mr Hoban.)

Brought up, and read the First time.

[Mr Hoban]

I beg to move, That the clause be read a Second time.

[The Temporary Chair (Mr Jim Hood)]

With this it will be convenient to consider the following:

Amendment (a), in subsection (1), leave out 'a year' and insert 'six months'.

Amendment (b), in subsection (2), leave out

‘as soon as reasonably practicable'

and insert 'within three months'.

[Mr Hoban]

The new clause provides for a report on the operation of benefit sanctions affected by the provisions of the Bill. Again, I thank the right hon. Members for East Ham (Stephen Timms) and for Birmingham, Hodge Hill (Mr Byrne) for their constructive approach to the Bill. We discussed this topic with them as we drew up the Bill. After our discussions, we decided to bring forward the new clause to satisfy the concerns of the right hon. Member for East Ham to provide for an independent report on the operation of benefit sanctions subject to the provisions in the Bill.

The new clause requires the Secretary of State to appoint an independent person to prepare a report on the operation of the provisions relating to benefit sanctions during the first year after the Bill has come into force. The report must be prepared as soon as reasonably practicable after the end of that period.

Subsection (3) requires the Secretary of State to lay a copy of the resulting report before Parliament, which meets the right hon. Gentleman’s requests. It is important to say that as a Department, we keep the functioning of sanctions under review. A number of comments on that were made on Second Reading. It is important to ensure that sanctions are applied fairly and consistently across Jobcentre Plus. It is an important part of the regime, so the sanction should be credible, and something that we keep under review.

Let me pre-empt the arguments made by the right hon. Member for Wythenshawe and Sale East (Paul Goggins). I understand the purpose of his two amendments. He is keen to ensure that the review is expedited, and we will try to complete it as quickly as possible. The time period for someone to launch an appeal against the sanction is 13 months. By imposing a six-month deadline, we might miss appeals that are made at a later point. He then requires a report to be laid within three months of the end of the six-month period, so that is nine months. There is a risk that we will miss out on three months’ worth of appeals, so we would not necessarily get a full view of how the sanctions under the Bill have operated. Although I understand his arguments for haste, may I suggest, as a counter argument, that we take things at a slightly more leisurely pace, which will ensure that we get a full year? None the less, I share his view that once we get to the end of that year, we should be moving as quickly as possible to complete the review and to lay the report before Parliament. It is not in any of our interests unduly to delay a measure such as this. I commend new clause 1 to the Committee.

[Stephen Timms]

I warmly welcome the new clause which, as the Minister has said, was proposed and suggested in the discussions between him and the Secretary of State for Work and Pensions, and me and my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne). It is something genuinely valuable to emerge from this debacle, which has been entirely of the Government’s own making. We do need to know what is going on with sanctions. The independent review, which is required by the new clause to be conducted over the coming year—I will comment in a moment on the further amendments proposed by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins)—could be crucial in getting to the bottom of what is going on. From the standpoint of anyone who is concerned about what is going on in our social security system, as very many people are, this is a valuable initiative.

The scale of the sanctions that are being imposed at the moment is extraordinary. My hon. Friend the Member for Hayes and Harlington (John McDonnell) made that point in the earlier debate. He correctly suggested to the House that the number of sanctions being issued trebled in the two years between the period just before the general election and subsequently to more than half a million per year, and that number is still going up. The impact assessment tells us that the number of sanctions that has been issued under the defective—as we now know them to be—employment, skills and enterprise regulations is “between 221,000 and 259,000”; that those sanctions involved between 136,000 and 159,000 people and that their cumulative value is between £80 million and £99 million.

--- Later in debate ---

[Mr Hoban]

We have had a helpful debate on the review. I note the comments of the right hon. Member for East Ham (Stephen Timms)—I think he actually asked 11 questions, but I will allow him an extra one. The scope of the review is set out in the new clause. I take the point about the terms of reference, but we have set out the area that the review will cover.

My memory is not bad, and I recollect that the right hon. Member for Wythenshawe and Sale East (Paul Goggins) was a Minister in the previous Government so he should know what “reasonably practicable” might mean; I am sure he has probably used the phrase.

[Paul Goggins]

rose—

[Mr Hoban]

Perhaps the right hon. Gentleman is a sinner who has repented. I happily give way.

[Paul Goggins]

It was precisely some of the experience I was reflecting on that caused me to make the comment.

[Mr Hoban]

The sinner has repented on this occasion.

Let me be clear. I want the review to proceed as quickly as possible. It is in all our interests for it to do so. I am keen that we improve the quality of decision making on sanctions and that we ensure that they are applied consistently. The right hon. Member for East Ham was right to highlight the fact that my right hon. Friend the Secretary of State made it clear that there should be no targets, and that if there was evidence of targets being used at any jobcentre, we would stamp them out. We do not want targets; we want good quality decisions made consistently from jobcentre to jobcentre. I do not think targets have a role to play in that regime. [Interruption.] The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) laughs. Is he saying we should have targets? I suspect not.

[Mr Byrne]

I look forward to the evidence of the next few days.

[Mr Hoban]

Given that my right hon. Friend said that he would stop the practice, we would stop it again if it reappeared. We do not want to see it happening.

I want to pick up on some of the points raised in the 10 or 11 questions put by the right hon. Member for East Ham. We have published, and will publish annually, tables setting out the number of sanctions. The data for 2011-12 were published online on 15 August 2012, and we gave a breakdown of sanctions, so it is not correct to say that there is no information. There were 108,000 variable length sanctions for employment-related failures; 378,000 sanctions were of fixed length, which included 58,000 that were for not attending ESE—employment, skills and enterprise—regulation schemes, 55,000 for not complying with training requirements or for not carrying out a jobcentre’s direction or for a failure to participate in mandatory work activity.

The reason there is a range in the impact assessment is that we were trying to be helpful to the Committee. We used a combination of official statistics and an estimate based on management information to give Members an up to date figure of the numbers involved. The final numbers will be available when we publish the next official statistics. Having been a DWP Minister, the right hon. Gentleman will appreciate that we take the validation and verification of statistics seriously. These are official national statistics and they need to be published to appropriate quality. That is the basis for the numbers in the impact assessment.

Communication is really important, and we need to ensure that we get it right. We talked about some of the measures that we set out in the recent regulations to ensure clarity in universal credit. There is a challenge here. We want to ensure that communications between the Department and jobseekers are clear, whether they are oral communications between a personal adviser and a claimant, or items of correspondence. But I think there is a tension here. The hon. Member for Slough (Fiona Mactaggart) said in her Second Reading speech that she felt that the notice we sent out was defective, and the courts said the letter should have contained more detail about the sanctions regime.

[Fiona Mactaggart]

The courts said that or judges ruled it was obfuscation.

[Mr Hoban]

Absolutely, but the hon. Lady repeated that, and by virtue of the quote I think she was supporting their view. Another hon. Member said that people “may be” sanctioned. I think there is a tension here between clarity and disclosure. The more detail there is in the letter—maybe to comply with what is in the law—the harder it can be for people to understand what is in the letter. It is possible to go into lists, as the right hon. Member for Birmingham, Hodge Hill did—to list a whole set of “good cause” reasons in a letter. One could put in a letter every detail of the graduated sanctions regime. We need to ensure that our communications are very clear and legal; sometimes the two do not go as easily together as we would like them to, but we do need to ensure that there is clarity.

The right hon. Member for East Ham talked about what happens if people are sanctioned, and then immediately answered his question by referring to hardship schemes. He and I have debated the revised sanctions regime and discussed hardship at length, as we did on a previous occasion with the right hon. Member for Stirling (Mrs McGuire). There is a hardship scheme in place for people, and it is right that it is there. We do ask people to look to see whether there are any other ways in which they could find financial resources to live off, and that is very carefully set out in the Bill, but those hardship schemes are available. It would be wrong to give anyone the suggestion that there is no hardship scheme in place, but the rules on access are very tight indeed.

[Stephen Timms]

I take entirely the Minister’s point about the hardship schemes, but I wonder what he thinks has driven the huge increase in the number of people referred to food banks over the past three years—a tenfold increase between the year just before the general election and the current financial year. I wonder whether he can understand why many of us think that the growth of sanctions must have been a big part of the driver.

[Mr Hoban]

The practice of the Government the right hon. Gentleman was a part of when he was a Minister in this Department differed from that of the present Government. When the Labour party was in power, it refused to have any material in jobcentres about food banks, to try to deny their existence. It did not refer people to food banks. We decided, when we came into office, to reverse that policy—to ensure that people were aware that food banks were in place.

People do go to food banks. They go for a variety of reasons. It is right for there to be a hardship regime in place for sanctions. If people do not choose to apply for that hardship regime, that is their choice, but people know it is there.

[Stephen Timms]

The Minister is right about the hardship regime, but he is surely not trying to tell us that the number has gone up from 30,000 to 300,000 because there are some leaflets in jobcentres, is he?

[Mr Hoban]

Well, actually it is not about leaflets. It is about signposting people to food banks. The right hon. Gentleman and his Opposition colleagues forget the way in which they tried to airbrush food banks out of history when they were in government, and to use them now as political pawns is beneath them.

I hope that the Committee will accept new clause 1. As I said in response to amendments (a) and (b) tabled by the right hon. Member for Wythenshawe and Sale East and his colleagues, we want to ensure that the Bill proceeds as quickly as possible; I do not think there is any interest in spinning it out. But we do need to ensure, as the right hon. Member for East Ham said, that it is properly and thoroughly considered. As a consequence of a measure introduced by the previous Government, we have an independent reviewer of work capability assessments. That is a very thorough process and no corners are cut, neither would we want them to be. It is helpful that there is clarity.

[Paul Goggins]

I know from other dealings with the Minister that if he says he wants something to happen urgently, he will get on with it—I accept his word in good faith. However, one matter he has not dealt with is the clear commitment to get on with it as a matter of urgency. My amendment proposes six months and my right hon. Friend the Member for East Ham (Mr Timms) suggested an interim report. There seems to be a coalition of ideas, and I press the Minister to indicate that he is prepared at least to consider that seriously.

[Mr Hoban]

I do not want to end up getting stuck in a laborious process of issuing interim reports when I would much rather let the reviewer get on with the job. As a former Minister, the right hon. Gentleman will know that just getting interim reports out of the door can be time consuming. I would rather let the reviewer focus on good recommendations and good analysis instead of bogging him down in a bureaucratic process that will not benefit any of us. I take on board the right hon. Gentleman’s comments, but in the interests of expedition and speed an interim report would slow the process rather than accelerate it.

[Andrew Miller]

rose—

[Mr Hoban]

We have plenty of time for Third Reading. I will bring my remarks to a close by encouraging the House to support new clause 1.

[The Temporary Chair (Mr Jim Hood)]

Mr Goggins, you did not inform the House whether you wanted to move your amendment formally, or withdraw it.

--- Later in debate ---

[Mr Hoban]

I beg to move, That the Bill be now read the Third time.

We have had short but helpful debates on Second Reading and in Committee. I want to reiterate briefly and in a workman-like way that the Bill is vital to protect the proper functioning of the benefits system and to safeguard the public purse. I thank Opposition Front-Bench Members for the constructive way in which they have engaged with us on the Bill, and I hope that they believe that our amendment and new clause reflect their concern. I commend the Bill to the House.

Jobseekers (Back to Work Schemes) Bill

Mark Hoban Excerpts

Tuesday 19th March 2013 Commons Chamber

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

I beg to move, That the Bill be now read a Second time.

I hope that I conduct this debate in a workman-like way, as I did the debate on the allocation of time motion. The Bill will ensure that following the recent Court of Appeal judgment in the case of Wilson and Reilly v. the Secretary of State for Work and Pensions, the taxpayer will not have to repay to claimants the benefits lost because of their failure to take part in mandatory back-to-work programmes. It will also enable the Government to impose benefit sanctions on those who fail to participate in a mandatory programme where a decision has been put on hold because of the Wilson and Reilly case.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Is it not the reality that this is a multi-billion pound failed flagship scheme, which was condemned by the Public Affairs Committee as extremely poor? Having lost a case and fearing that they will lose the appeal, the Government, instead of respecting our justice system, are abusing our emergency procedures to fix the consequences of losing? Does that show not a shocking disrespect both for our courts and for the principle that workers should be paid the minimum wage?

[Mr Hoban]

The hon. Lady clearly has a press release that she wants to set out this afternoon. [Interruption.] From a sedentary position, she says that it is a good press release. I wish it were an accurate one. The reality is that our schemes are helping to get people back into work. It is vital that people who are looking for work are given help to get into work, and we are offering that. Up to the end of September, 200,000 people found work as a consequence of the Work programme. If she thinks that that is a failure, she is insulting the people who have got work through the Work programme. She should recognise the benefits that such schemes bring. To allow people not to take part in them is breaking a contract between us and the unemployed. We give them the support that they need to get back into work and we expect them to take up that offer of support. If they do not take up that offer, it is right that they are penalised.

[Dr Julian Lewis (New Forest East) (Con)]

Will the Minister tell the House how our employment rate compares with that of eurozone countries and even with that of the United States?

[Mr Hoban]

My hon. Friend makes a good point. The unemployment rate in the UK is below the average of the eurozone and the European Union. We are seeing one of the fastest rates of job creation in the developed world and we have record numbers of people in work, and record numbers of women in work. Our policies to help people into work are effective. On the whole, jobseekers welcome them and it is important that they continue to take advantage of the schemes that are on offer.

[John McDonnell (Hayes and Harlington) (Lab)]

Is it not true that the Office for National Statistics has confirmed that the Government have included in their employment figures those who are not being paid for their work?

[Mr Hoban]

If the hon. Gentleman looks at the detail of the Office for National Statistics labour force survey, he will see that there are people who are on schemes who say that they are in employment, but that was the case under the previous Government. I have raised that issue with the ONS, because I agree that they should not be included in the numbers who are employed, but it rejected the argument on the grounds of international consistency. We cannot ignore the fact that, excluding those schemes and any reclassification, we have seen more than 1 million net new jobs created in the private sector since May 2010. Perhaps the hon. Gentleman should congratulate us on achieving that.

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

Is it not the case that the employment rate now is lower than the rate—not the absolute numbers—in 2008?

[Mr Hoban]

The hon. Lady must recognise that we are in a very different economic climate from the one in 2008, when we saw a debt-fuelled boom that undermined the strength of the British economy. The economy is going through a healing process at the moment, and since May 2010 we have actually seen the private sector creating an extra 1 million new jobs. She should welcome that, because it has given people across the country an opportunity to get into work. We have seen the effectiveness of our welfare reforms—230,000 fewer people are claiming out-of-work benefits than they were in May 2010—and they have contributed to an increase in the numbers of people in work. People are coming into the labour market and finding jobs, and I would have thought that the hon. Lady would welcome that.

Before I go into the detail of the Bill and the background to the Court of Appeal judgment, let me outline why the Government believe that, in certain circumstances, jobseeker’s allowance claimants should be mandated to take part in employment programmes. and that when they fail to participate without good reason, they should face a benefit sanction.

First, this is a policy that is supported not only by Members from all parts of the House, but by the vast majority of the British public. According to the British social attitudes survey, 85% of the public believe that someone who is unemployed and on benefits should be required to do some unpaid work in the community while keeping their benefits. Sir Stanley Burnton, one of the Appeal Court judges in the Wilson and Reilly judgment, said:

“Parliament is entitled to authorise the creation and administration of schemes that are designed to assist the unemployed to obtain employment...it is not easy to see what objection there could be to them. Parliament is equally entitled to encourage participation in such schemes by imposing sanctions, in terms of loss of jobseekers’ allowance, on those who without good cause refuse to participate in a suitable scheme.”

[Fiona Mactaggart (Slough) (Lab)]

Is not the issue the fact that sanctions can work if people know the consequences of failure to action? Did not the court rule that the information that was sent to people who were sanctioned did not comply with the regulations passed by this House?

[Mr Hoban]

A clear message was sent that people who failed to participate in schemes could lose their benefit for up to 26 weeks. That is the maximum they could lose. What the Court of Appeal said, and what the High Court said previously, was that we should make reference to the fact that if someone had committed a first offence, as it were, we should give details of the amount of benefit they would lose the first time they did not participate in a scheme. In fact, we have changed the notices as a consequence of the High Court judgment. The notice that we sent out said that people would face a loss of up to 26 weeks benefit if they did not take part in the scheme. What the High Court wanted was details of the lower levels of sanctions that could apply in that situation.

There is a broad consensus that mandatory back-to-work schemes are a necessary part of the approach that we take to get people back to work. When a person signs on to receive jobseeker’s allowance, they accept that they have certain responsibilities. It could be called a contract between the jobseeker and the taxpayer. We will offer a huge amount of support to jobseekers, including help to search for jobs, work experience and jobseeker’s allowance. That is our part of the deal. The jobseekers’ part of the contract is to take up the help that we offer. While the vast majority of jobseekers live up to their part of the contract, there are a small minority who are reluctant to do everything they can reasonably be expected to do to get back into work.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

rose—

[Mr Hoban]

In a moment. For that group of people, it is right that we have the power to mandate them on to different back-to-work schemes, which we think will help them improve their chances of finding work. I am sure that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) supports that sentiment.

[Mr Byrne]

A couple of years ago now, the Secretary of State gave an assurance to the House that individual jobcentres or jobcentre districts did not have targets for sanctioning jobseekers and that there were not any kind of league tables that ranked jobcentres or districts for sanctions. Will the Minister confirm that that is still his Department’s policy?

[Mr Hoban]

Absolutely. There are no league tables in place. We do not set targets for sanctions; I have made that point in previous discussions with, I think, the right hon. Member for East Ham (Stephen Timms). The decisions that need to be made are the right ones. They need to be based on whether people have breached the agreements they have set out with the jobcentre, and there are no targets in place.

Let me set out in a bit more detail the programmes that exist. The programmes might vary from a training course that the Government have paid for so that the claimant gains some essential skills that will increase their chances of finding work, or they might involve a community work placement, whereby claimants can pick up the basic disciplines, such as turning up on time, that every reasonable employer will expect.

We also know that those schemes work. Recent research on our mandatory work activity scheme found that nine in 10 participants said that they better recognised the benefits of a working routine, and around three quarters said that their confidence and ability to work as a team had improved. More than half said that they felt more positive about work than they did before attending.

[Sheila Gilmore (Edinburgh East) (Lab)]

Is it not the case that the research on the mandatory work schemes found that, afterwards, people were as likely to be on benefit as they were before?

[Mr Hoban]

The scheme is used particularly for those who are some distance from the labour market. We know that we need to make a range of interventions to get people to move closer and closer to the labour market. The scheme changes people’s attitude to work. Those on the scheme can put that work on their CV and demonstrate to employers that they are ready for work. That makes a contribution to moving them closer to work. As the evaluation that the hon. Lady referred to pointed out, people themselves feel the benefits of taking part in the scheme. It is therefore right that when claimants refuse to take up the support that is available, and then fail without good reason to attend these mandatory programmes, they face the consequences of their actions—a benefit sanction.

[Mr George Howarth (Knowsley) (Lab)]

Will the Minister give way?

[Mr Hoban]

I want to make some more progress. We have four hours, and I am sure that the right hon. Gentleman will have time to make a contribution.

On 12 February, the Jobseeker's Allowance (Employment, Skills and Enterprise Scheme) Regulations 2011 were found to be ultra vires by the Court of Appeal on the ground that the programmes covered by the regulations were not described in the regulations in sufficient detail. Those are the regulations that provide for most of the mandatory back-to-work schemes, such as the Work programme and the day one trailblazers, which we are running at the moment.

The Court of Appeal also held that the notices sent to claimants advising them that they were required to take part in a programme within the ESE scheme did not comply with the requirements of regulation 4 of the ESE regulations. It is important to remind all Members that the Court of Appeal has ruled that there was no breach of article 4(2) of the European convention on human rights, meaning that these schemes cannot be equated with slave labour. As I have already stated, the judgment was supportive of the principle and policy of our employment schemes.

[Mr Howarth]

Will the Minister confirm that he intends to appoint an independent person to produce a report on this matter? The intention is that they will report within 12 months and the Secretary of State will consider that report for some unspecified period. I know that it is a complex issue, but does the Minister agree that that could be done much more quickly, and the issue could be resolved much more quickly, if that process were shortened, rather than the period being 12 months and then as long as it takes to consider the report?

--- Later in debate ---

[Mr Hoban]

I will touch on this in a bit more detail later, but we will appoint an independent reviewer to look at the way in which the sanctions regime works under the Bill and to report to Parliament; that is dealt with in new clause 1, which we will discuss later. The Secretary of State will lay the report before Parliament. The operation of the sanctions regime will be looked at within a 12-month period. If it could be looked at more quickly, that would be a good thing. That is one of the helpful products of the discussion between the two Front-Bench teams over the past couple of weeks. I hope that that gives Members reassurance on the nature of the review. I will come back later to the new clause, which will provide further reassurance.

In response to the judgment of 12 February, the Department laid new regulations, which came into force with immediate effect, so that we could continue seamlessly to mandate claimants to these vital back-to-work schemes. We have also written to everyone already taking part in the schemes to ensure their continued participation in schemes designed to help them to get back into work.

[Derek Twigg (Halton) (Lab)]

Could the Minister clear something up? Does he believe that the Court’s judgment is basically about a technicality, or was there a serious oversight by the Department? Many of my constituents think that there was a serious oversight.

[Mr Hoban]

No, there was not a serious oversight; the judgment was about a technicality. The High Court agreed that the regulations were satisfactory. It did not have a problem with the amount of detail in the regulations, whereas the Appeal Court did. I therefore believe that the judgment was about a technicality; it was about the amount of detail in the regulations. The Appeal Court thought that there should be more detail about the schemes. We felt, for reasons of efficiency and responding quickly to identify schemes that would help people to get back into work, that it was helpful to have some detail in the regulations but not as much as the Appeal Court wanted. To ensure that we could respond flexibly to the changing labour market and the changing needs of the unemployed, we designed the regulations in the way we did. We are seeking leave to appeal to the Supreme Court to continue to press that point about the amount of detail that should be in the regulations.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

On the very points that the Minister is making, of course it is right that those involved in the system—those seeking employment and training—should have as much information as possible. Does he recognise that the wider public need to be confident that the system—what is happening out there to find employment and training for those in need—should be robust and stand up to scrutiny, including scrutiny by the courts?

[Mr Hoban]

I think that the system is robust and that it does stand up to scrutiny by the courts. That is why the High Court accepted the amount of detail in the regulations. The Appeal Court disagreed with that and we are seeking leave to appeal to the Supreme Court to argue that point. It is not unusual for there to be a limited amount of detail in regulations and much more information to be supplied in guidance or notices provided not just by the DWP but by other Departments.

[Fiona Mactaggart]

Will the Minister give way?

[Mr Hoban]

I have given way already to the hon. Lady. I want to make some progress.

As I have made clear, the Department fundamentally disagrees with the Appeal Court’s verdict, which is why it has applied for leave to appeal to the Supreme Court in respect of both grounds. We believe it is right that the regulations should allow for flexibility, so that we can respond rapidly to improve jobseekers' chances of finding work, such as trialling new approaches in Derbyshire and London to help young people get vital experience to bolster their CV. A more prescriptive approach—the one proposed by the Appeal Court—to the content of the regulations would create inflexibilities that would ultimately hinder the jobseeker's chance of finding work.

Those are the arguments that we will make before the Supreme Court, if we are granted permission. Those arguments will not be affected by the Bill. We are hopeful that we will obtain permission and that we will win our appeal. There is, however, no guarantee that we will be granted permission to appeal, or that we would win the appeal. Were that to happen, claimants who have been subject to a sanction for failing to take part in the schemes would be entitled to a refund of that sanction. It would also mean that we had no power to impose sanctions in relation to failures under the ESE regulations, in cases where no sanction decision has yet been taken—the so-called stockpiled cases. If that were to happen, the cost to the taxpayer would be up to £130 million.

It is vital that, in the present economic climate, the public purse be protected from such claims. The Bill will ensure that the taxpayer does not have to repay benefits lost by claimants who have failed to participate in employment programmes, and can properly impose sanctions for such failures. It would be unacceptable for claimants who have failed to take all reasonable steps to increase their chances of finding work to receive an undeserved windfall payment. The Bill will prevent that by providing that any decision to reduce jobseeker's allowance under the ESE regulations cannot be challenged on the grounds that the ESE regulations were invalid or the notices given under them inadequate. It makes similar provision in relation to the mandatory work activity regulations in respect of notices given under those regulations.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

Following on from the intervention by my hon. Friend the Member for Halton (Derek Twigg), who pressed the Minister on whether the judgment was about a technicality or not, may I draw the Minister’s attention to the comments of Lord Justice Pill? He said:

“Claimants must be made aware of their obligations and of the circumstances in which, and the manner in which, sanctions will be applied.”

I do not think that he regarded it as a technicality, but if it is, next time the Department makes a mess, will the Minister come and seek a further retrospective Bill, in the way he has done today?

[Mr Hoban]

The High Court upheld the steps that we took in setting out the detail in the regulations. As I said earlier, the letter that we sent to claimants who were required to participate in the schemes set out the fact that they could be subject to sanctions of up to 26 weeks’ worth of benefits. That is not the only communication we have with jobseekers. The jobseekers who come into Jobcentre Plus will have discussed the requirements with their personal adviser, so there is a range of ways in which we will communicate to jobseekers their obligations under the schemes. That is vital. It is important that people are aware of those obligations. We believe that the notices and regulations provide sufficient detail, and that will be backed up by the conversations and other communication that jobseekers have with personal advisers.

[Sheila Gilmore]

rose—

[Mr Hoban]

I want to make some more progress.

The Bill will ensure that the Government will not have to refund sanctions on the basis of the Court of Appeal’s judgment and will be able to make a decision in cases where no sanction decision has yet been made.

As I have previously stated, the Government have applied for leave to appeal to the Supreme Court. However, to ensure that we are not faced with having to repay benefit sanctions, we have had to press ahead with this fast-track legislation.

I would like to put it on record that I am grateful for the constructive way in which the right hon. Members for Birmingham, Hodge Hill and for East Ham have approached this topic. In supporting the Bill, they have allowed us to expedite its progress, thus safeguarding taxpayers’ money.

Following discussions last week with the shadow Secretary of State, the right hon. Member for Birmingham, Hodge Hill, we will be proposing two Government amendments in Committee. The first will reiterate in the Bill that a claimant’s appeal rights against a sanction decision remain unchanged in all matters, apart from those covered by the High Court and Court of Appeal judgments. For example, when a claimant felt that they had good cause for not participating in one of these schemes, they would still be able to appeal to the first tier tribunal on the basis of good cause. That is a helpful reconfirmation of the right of claimants to appeal. Similarly, the Bill will not overturn appeals that have succeeded on the basis of good cause. I hope that our amendment on that provides the clarification that the right hon. Gentleman seeks.

[Mr Byrne]

Will the Minister now confirm that the grounds of good cause in respect of appeals will remain undisturbed and will include the grounds covered in DWP guidance, which says that good cause can include an unsuitable course, full-time study, health and caring reasons, travel time that is inappropriately long, religious belief, bereavement, attending court and other emergencies? Will he also confirm that, ultimately, the timetable for lodging appeals will remain at 13 months?

[Mr Hoban]

We have been very clear in this amendment. We are confirming the right to appeal, and appeals can proceed on the grounds that are usually available in these situations, which the right hon. Gentleman has listed. The Bill does not change people’s right to appeal, save for appeals based on High Court or Supreme Court judgments.

The second Government amendment that we will bring forward in Committee will require the Secretary of State to appoint an independent person to carry out a review of the operation of the sanctions validated by this legislation during the first 12 months after Royal Assent. That review will report as soon as possible after the 12-month period, and the report will be laid before Parliament. I hope that these assurances are satisfactory.

To conclude, this Bill is necessary to ensure that the taxpayer does not have to repay up to £130 million in benefits lost through the failure of claimants to take up the Government’s offer of support. It is vital that scarce public resources are targeted at those who need and deserve them most. It would be unacceptable for claimants who have failed to take all reasonable steps to increase their chances of finding work to obtain an undeserved windfall payment. This Bill will prevent that, and I commend it to the House.

--- Later in debate ---

[Mr Hoban]

But the people taking part in the schemes knew at the start that, if they did not take part, they would be sanctioned. They knew there was a penalty for not taking part in the schemes. Does the hon. Gentleman think it right that they should not be penalised?

[Ian Lavery]

I am certain that the 300,000 people the Court says have a claim because of the illegal actions of the Minister’s Department should receive it—there is no doubt about it. The Bill is being introduced by the DWP and the Government to deprive many hard-working people, and many people who want to be hard-working, of any finance whatever. Is that in the best interests of the economy? It is an absolute disgrace. Those people will spend money in the economy. They might get £50, £100 or £72 a week, but they will spend it, because it is the only money they have. The Minister should not seek to deprive those people and leave them with no finances whatever.

[Mr Hoban]

Does the hon. Gentleman disagree with Opposition Front-Benchers, who earlier argued in favour of sanctions?

[Ian Lavery]

I have not disagreed with anyone up until now other than the Government, because they wish to deny ordinary, hard-working people—people who wish to get on in life—what the Court of Appeal says they should have.

--- Later in debate ---

[Ian Lavery]

Members of Parliament discuss with constituents, and often people away from the constituency, the merits and otherwise of policies. I often meet people with a very different view from the people the hon. Gentleman has met. That is not to say that that has not been said, but the people I meet want decent jobs. They want the opportunity to get up in the morning and go to work for a decent wage. They would accept the minimum wage even though, at this point in time, it is not high enough. Where I live, 25 people are after every single job in the jobcentre. That means that 24 are not getting employment for every single opportunity. People want to work for the best intentions and the right reasons. They want self-esteem and finances. People where I live want to work—I am sure that extends throughout the country.

Saying that paying claimants the money that the Court says they should be paid—the result of the ruling means that the £130 million can be paid—does not represent good value for the taxpayer is an absolute disgrace. It is not the type of language we would expect from any Government. It is not right to talk about people as, “This group of claimants.” They are ordinary people with feelings, and many of them want to get on in life.

[Mr Hoban]

If they want to get on in life, why have they turned down the opportunity to get the training and support that will help them to get a job?

[Ian Lavery]

People have received sanctions for a range of reasons. The Government should not overrule a Court of Appeal ruling and introduce retrospective legislation against people just because they have received sanctions. I am sure the Minister is not suggesting that people who have, for whatever reason, received a sanction, should under no circumstances claim some sort of subsistence, even if the courts have agreed in a ruling that they should receive it.

[Ian Lavery]

I fully understand my hon. Friend’s point. As I have said to the hon. Member for North Swindon (Justin Tomlinson), every MP has received many representations with regard to the wide and various workfare schemes.

The impact assessment states:

“If the Department cannot make these retrospective changes, then further reductions in benefits might be required in order to find the money to repay the sanctions.”

That is blackmail of the highest order—I make no apology for the strength of my feeling on that. If people are due finances, they should get them, particularly following a court ruling, but the Government are saying, “If we pay these people, we might have to cut benefits for other people as a result because that is where we have to find the money.” That is emotional blackmail. It is totally and utterly bang out of order. They are trying to set people who are looking for work and on benefits against each other. That is absolutely unacceptable.

To conclude, I have some questions for the Minister to answer in his winding-up speech. Is it right that claimants face financial penalties for failing to participate in schemes when the possibility of those penalties had not been properly explained to them? Is it right that the Government can flout the will of Parliament, which had clearly expressed its wish to have some oversight of the schemes, especially given that the schemes that were designed and imposed on claimants without an opportunity for parliamentary scrutiny do not appear to be working?

Is it true that the DWP continued to issue letters to claimants that did not explain things properly even after the High Court had stated that the letters were inadequate?

[Mr Hoban]

That is not true.

[Ian Lavery]

From a sedentary position, the Minister says that that is not true, but I hope he will clarify that.

[Mr Hoban]

Let me clarify that now. When the High Court issued its judgment, we changed the letters to comply with its rules.

[Ian Lavery]

That is debatable.

Finally, what is the Department’s understanding on whether section 27 of the 1998 Act protects people from having to repay some of these sanctions? Some 300,000 people will be denied their legal rights if the Bill is passed. This is just another ideological attack on the unemployed and the less well-off, despite a High Court judgment. Why does the Minister not just accept the court of law? Give these people what they are entitled to. It is the Minister’s mess. Why should they suffer?

--- Later in debate ---

[Mr Brown]

My hon. Friend is correct. It is as if time has stood still for all these people. The only thing they have felt all this time is pain and hardship.

I told my hon. Friend the Member for Coventry South (Mr Cunningham) that I would mention the national minimum wage. When we introduced it, the assessment showed that for every £1 million that we gave to poorer people and which went into the economy, we created 40 jobs. Even if every £1 million now created only 10 new jobs, that £130 million would create more than 1,000 jobs.

[Mr Hoban]

If we had to pay out this £130 million, we would have to find it from another group—potentially other benefit claimants who had done the right thing.

[Mr Brown]

In life, when things regrettably go wrong, we have to face the consequences. I firmly believe that the Government should be facing the consequences in respect of this £130 million penalty. Can the Minister tell me exactly how many of these people were, like Reilly and Wilson, innocent? I think that a fair number of those 300,000 should have had their money repaid to them.

I know that other colleagues want to contribute, so I shall finish by saying that this is a tough decision for all of us in opposition. We still believe in sanctions—in government, we recognised that we needed them—but the Government have got it horribly wrong. On behalf of both the Ministers, I am disappointed that, up until now at least, we have not heard any attempt from Government Back Benchers to defend what is happening.

--- Later in debate ---

[Fiona Mactaggart]

I withdraw that word, Mr Deputy Speaker.

The Minister suggested that claimants knew the consequences. I refer him to the statements of judges on the matter. Judge Foskett said that

“the words…in the letter received by Mr Wilson were that his benefits ‘may be stopped’, perhaps conveying the impression that sanctions are not necessarily automatic.”

He goes on to say that

“the information given concerning sanctions is unclear and opaque.”

I accept that, since then, the Minister has improved the letters. I think that is right, and I do not oppose the possibility of sanctions; I believe that sanctions can work if people know that they are at risk of being sanctioned.

[Mr Hoban]

May I point out that, actually, sanctions are not automatic? Sanctions may be applied, because actually we disregard sanctions—sanctions do not apply—if there is good cause not to apply them. So “may” sounds right to me. The problem that the courts had was not specifying the graduated approach to sanctions.

[Fiona Mactaggart]

As I said, the judge said that

“the information given concerning sanctions is unclear and opaque.”

If the Government want sanctions to work, people need to know the consequences of their actions, and this is a debate about the consequences of actions—the consequences of the Government’s actions in failing to ensure that they complied with regulation 4 of the regulations in every communication with claimants. It seems to me that the Government should bear the consequences, and the consequence in this case is up to £130 million. When the Government do wrong—and let us be clear, the Government have been found to do wrong in this case—it is not just to be overlooked. This is a series of court judgments which say, in respect of individual citizens, that they have been wrongly treated—the Government must give those citizens back their money. It is not the Government’s money; it is their money. The Government have wrongly kept it from them, and it is quite clear that that is what the courts have decided.

If the Government are going to say that a sanctions regime is necessary so that people know the consequences of their actions—an argument that I would support—it seems right to me that the Government themselves should bear the consequences of their wrong actions, and they should not be coming to Parliament to ask us to give them a free pass for breaking the law, because that is what the Bill is doing.

Oral Answers to Questions

Mark Hoban Excerpts

Monday 11th March 2013 Commons Chamber

[Chris Skidmore (Kingswood) (Con)]

1. How many young people have received support through the Get Britain Working programme to date.

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

Between January 2011 and November 2012, about 106,000 young people aged between 18 and 24 received support through Get Britain Working, including work experience and sector-based work academies. Many young people have also benefited from the help offered through volunteering, and work and enterprise clubs.

[Chris Skidmore]

Job clubs and job fairs play an important role in the Get Britain Working scheme. In Kingswood, as the local Member of Parliament, I have organised four job fairs so far, as well as running a weekly job club. Does my hon. Friend agree that we as MPs have a vital role to play in Get Britain Working by organising job fairs and job clubs and getting our constituents back to work?

[Mr Hoban]

My hon. Friend is well known for his support for getting young people into work, and I commend him on the job club and job fairs that he has run. As a result of the collective effort between employers, Members of Parliament, Jobcentre Plus and others, youth unemployment today is lower than it was in May 2010.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does the Minister not realise that however good some of these programmes are—and some of them are quite good—we are not doing enough? Nearly a million young people are unemployed. There must be more imagination. Could we not agree on a cross-party basis that we must not allow young people to fester in unemployment any longer?

[Mr Hoban]

No one should be complacent about the challenge that young people are facing, but I should point out to the hon. Gentleman that, if full-time students are excluded, 66,000 more young people have been in work over the last quarter. We are seeing more progress, but we must not be complacent, and we must not forget that the problem started some time ago.

[Mr Philip Hollobone (Kettering) (Con)]

What progress is being made with sector-based work academies? Which sectors are being targeted, and in which parts of the country?

[Mr Hoban]

My hon. Friend is right to point out what an important part of our programme sector-based work academies represent. They provide a combination of work experience, training and a guaranteed job interview. Jobcentre Plus will work closely with employers throughout the country to organise the right type of sector-based work academies, but I encourage Members to work with jobcentres to identify good opportunities in that regard.

[Sheila Gilmore (Edinburgh East) (Lab)]

A constituent of mine, aged 20, has spent a year and a quarter on the Work programme, and has had six meetings with three different advisers during that time. He still has no job, and has had no job offers. He eventually found a Barnardo’s course, but was told that he would not be allowed to go on it because he was on the Work programme. Is the programme not failing such young people?

[Mr Hoban]

I think the hon. Lady should raise issues about training in Scotland with the Scottish Government, who are responsible for it. They will not allow people on the Work programme to go on Scottish Government-funded courses, and I suspect that that is where the problem lies.

[Grahame M. Morris (Easington) (Lab)]

2. What steps he is taking to tackle the increased use of pension liberation schemes.

--- Later in debate ---

[Mr Stephen Hepburn (Jarrow) (Lab)]

10. What steps he is taking to tackle long-term unemployment.

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

Long-term unemployment fell by 15,000 last month. Our main initiative to help get people who are long-term unemployed into work is the Work programme. In the period to September 2012, 200,000 people found work as a consequence of the Work programme.

[Mr Hepburn]

Long-term unemployment in my constituency went up by 67% last year. Does that not tell us exactly what the Tories are like in this country today? Will the Minister stand up, put his hands up and admit that the policies of the millionaires in government are totally failing the ordinary people of this country?

[Mr Hoban]

I would have thought that the hon. Gentleman would want to celebrate the fact that an additional 21,000 people in the north-east are in work compared with a year ago. Yes, there are deep-seated challenges in the north-east, but I am confident that progress is being made in rebalancing the economy, and that is down to the strength of the private sector.

[Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)]

May I ask my hon. Friend what happens when someone who is long-term unemployed rings Worthing benefits centre given its failure to return calls within even the three-hour performance target and its failure to meet the target of processing 85% of employment and support allowance payments within the target of 16 days? What action is being taken to remedy the position, and when does he anticipate that the centre will be meeting all its performance targets?

[Mr Hoban]

My hon. Friend is right to highlight the issues at Worthing benefits centre. As a consequence of a very high level of applications for ESA, there is some pressure on performance at the centre. Work is being done to help tackle the backlog and to get back to the 85% level. Managers from the Department are happy to meet my hon. Friend to discuss the situation.

[Robert Halfon (Harlow) (Con)]

11. What assessment he has made of recent trends in unemployment.

[James Wharton (Stockton South) (Con)]

13. What assessment he has made of recent trends in unemployment.

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

Unemployment has been falling in each of the last 11 months; on the International Labour Organisation measure it is down by 156,000. The unemployment rate is now lower than it was in 2010. This is testament to the strength of the private sector, which has created 1 million net new jobs since May 2010.

[Robert Halfon]

My hon. Friend will be aware that Tesco has announced the closure of a huge depot in Harlow, with the possible loss of 800 jobs. Will he work constructively with the Union of Shop, Distributive and Allied Workers, which is trying to ensure that the workers who are offered jobs in other plants get the same pay and conditions?

[Mr Hoban]

I can assure my hon. Friend that Jobcentre Plus is working with Tesco and has offered full rapid response team support. Discussions are focusing on redeployment and other opportunities to help the work force to secure new jobs.

[James Wharton]

In Stockton South youth unemployment has fallen from 11.3% to 9.6% January to January. This is a welcome trend, but I would like it to go further. What are the Government doing to ensure that it can continue over the coming year?

[Mr Hoban]

I am delighted to welcome the news of what is happening in Stockton South. That is in contrast to what has happened in Jarrow, but it demonstrates the resilience of the economy in the north-east. The fact that 40,000 extra private sector jobs have been created in the north-east over the past couple of years demonstrates that while there are difficult challenges, the economy is rebalancing, and that should be to the benefit of everyone there.

[Wayne David (Caerphilly) (Lab)]

Will the Minister kindly tell the House how many young people are unemployed?

[Mr Hoban]

According to the ILO measure, 974,000 young people are unemployed, about 300,000 of whom are full-time students. Over the past few months there has been an increase of 66,000 in the number of young people in work.

[Alison McGovern (Wirral South) (Lab)]

The Minister mentioned the so-called 1 million new jobs. With reference to the labour force survey, will he tell me how many of those so-called new jobs arise from reclassification and how many represent people who are under-employed?

[Mr Hoban]

If the hon. Lady looks at the labour force survey, she will see that the figure is 1 million net new jobs. She talks about people being under-employed. I hope that she is not being condescending to those of her constituents and mine who are working part-time and want to work part-time.

[John Stevenson (Carlisle) (Con)]

20. Does the Minister agree that the economic success and, indeed, the social success of places like Carlisle depend on the creation of private sector jobs? Will he confirm that to help to achieve this he will ensure that it is always better financially to be in employment than on benefits?

[Mr Hoban]

That is absolutely at the heart of the roll-out of universal credit, which will mean that people know that they are better off in work, and better off working more hours and earning more than working fewer hours and earning less. That incentive to get paid work is at the heart of our welfare reforms.

[Katy Clark (North Ayrshire and Arran) (Lab)]

12. If he will reconsider the decision not to include residential properties owned by local authorities for temporary accommodation in the definition of temporary accommodation contained in the Housing Benefit (Amendment) Regulations 2012.

--- Later in debate ---

[Jeremy Lefroy (Stafford) (Con)]

22. How many people are in receipt of out-of-work benefits; and what assessment he has made of the level of inactivity in (a) Stafford constituency and (b) England.

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

The proportion of people who are in work or looking for work is the highest for more than two decades, and the number of people who are claiming the main out-of-work benefits has fallen by 230,000 since 2010. In Stafford, about 5,000 people are claiming one of those benefits, which is down on the year and down since 2010.

[Jeremy Lefroy]

Last month, inactivity fell to the lowest rate since 1991 at just 22.3% of the working-age population. What has contributed to that fall?

[Mr Hoban]

There is a range of factors, including the resilience of the private sector in creating jobs and the fact that people are able to work more flexibly and thereby manage health conditions and look after children while working part time. The Government have had a relentless focus on using welfare reform to encourage more people to look for jobs and move into work. The benefit of that is starting to flow through.

[Mr Clive Betts (Sheffield South East) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

[Sheila Gilmore (Edinburgh East) (Lab)]

T2. Mandatory reconsideration after employment and support allowance is refused and when somebody wants to appeal can lead to people being without either ESA or jobseeker’s allowance. Will the Minister ensure that a short time limit is set on reconsiderations so that people are not left without any income?

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

Mandatory reconsideration is in place to help accelerate decision making, so that the Department can revisit a case rather than have to wait for it to go to the tribunal. We try to keep delays as short as possible to ensure that we get the right outcome and get the right support to people as quickly as possible.

[Paul Uppal (Wolverhampton South West) (Con)]

T6. As the Minister may be aware, the number of private sector jobs in the west midlands decreased under the last Labour Government. Will he welcome the news, as I do, that Jaguar Land Rover is increasing investment in the engine plant in Wolverhampton by £150 million, creating an additional 700 high-skilled jobs?

[Mr Hoban]

My hon. Friend is right to celebrate the achievements of Jaguar Land Rover. In national apprenticeship week, I commend him for his work to promote apprenticeships in his constituency. He is right, and he points the way towards how a private sector-led recovery can increase employment. That is why we have seen 107,000 additional jobs in the west midlands.

[Ann McKechin (Glasgow North) (Lab)]

T5. Local housing associations in my area are deeply concerned about their ability to provide services as a result of this year’s welfare changes. What assessment will the Secretary of State make of their credit ratings, both this year and next? Does he expect them to go down the way?

[Glyn Davies (Montgomeryshire) (Con)]

T7. Last week we discussed in the House the treatment of women across the world. To deliver equality and fairness of treatment in the United Kingdom, we must ensure equal access to work and remuneration. Does my hon. Friend agree that it is important to make a continuing assessment of the number of women in work?

[Mr Hoban]

My hon. Friend will celebrate, as I did on international women’s day, the fact that there are record numbers of women in work and that the number of women unemployed has fallen by 29,000 over the past year. We need to do more to get women in work, and universal credit will help, but it is important also to celebrate the flexibility of the labour market, which enables more and more people to work part time to meet their responsibilities.

[Mr Jim Cunningham (Coventry South) (Lab)]

T9. Why is the Secretary of State disregarding research by the National Housing Federation which shows that the discretionary fund to provide help with the bedroom tax is £100 million short of what is required?

--- Later in debate ---

[Mr Stewart Jackson (Peterborough) (Con)]

There is significant concern across the country about the likelihood of welfare dependency as a result of immigration from Romania and Bulgaria from January 2014. Will the Minister look urgently at the habitual residence test within the context of the free movement directive and ensure that such issues are addressed in good time?

[Mr Hoban]

I assure my hon. Friend that we apply a habitual residence test to see whether people moving from other EU states are entitled to means-tested benefits. We will continue to look at that test and at what more can be done to strengthen it.

[Susan Elan Jones (Clwyd South) (Lab)]

Will the Secretary of State consider introducing a compulsory jobs guarantee for people who have been unemployed for two years or more?

[Mr Hoban]

The hon. Lady should be commended for trying to trot out a policy that I thought the Opposition had dropped two or three weeks ago. When such a scheme was piloted under the previous Government, it demonstrated that it was not good value for money or good for the unemployed. The hon. Lady should welcome the measures the Government are taking to get people into work. That is why record numbers of people are in work and unemployment has continued to fall for 11 months in a row.

[Philip Davies (Shipley) (Con)]

Although the Labour party thinks that the benefit cap is too low, the majority of my constituents think it is far too high. May I urge the Secretary of State to ignore the left-wing bishops, who probably do not even speak for the majority of people who go to church each week, let alone the vast majority of the British people?

Employment, Social Policy, Health and Consumer Affairs Council

Mark Hoban Excerpts

Thursday 7th March 2013 Written Statements

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

The Employment, Social Policy, Health and Consumer Affairs Council met on 28 February 2013 in Brussels. I represented the UK.

There was a discussion on the European semester 2013 focusing on the priorities for action highlighted in the annual growth survey (AGS) and joint employment report (JER). The UK stressed the need to ensure that the Europe 2020 process focused on supporting delivery of difficult reforms needed to recover from the crisis. Ministers subsequently adopted Council conclusions on the AGS and the JER. Ministers also agreed a general approach on the guidelines for the employment policies of the member states and endorsed the main messages contained within the Social Protection Committee’s report on the social situation and trends to watch in the EU.

Ministers adopted a Council recommendation for a youth guarantee. The UK stressed the importance of greater member state flexibility especially on the four-month time limit, and put in a parliamentary reserve on the recommendation.

The Commission presented its social investment package, which would pave the way for a stronger social dimension of the EMU and the presidency provided further information on the forthcoming tripartite social summit.

Under any other business the presidency updated the Council on progress under legislative dossiers, the Employment Committee and Social Protection Committee Chairs outlined their work programmes for 2013, and the Employment Committee updated the Council on ongoing work with the social partners on wage developments. Finally the Commission updated Ministers on the transitional arrangements regarding free movement of workers of Bulgarian and Romanian nationals and reported on the working time directive social partner negotiations.

Universal Credit

Mark Hoban Excerpts

Wednesday 6th March 2013 Commons Chamber

[Nigel Mills]

It would be very optimistic to assume that the application form will take half a minute. I have not seen the form, but I have not seen any Government form that takes half a minute for a long time—[Interruption.] Does the Minister wish to answer the question?

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

I think we must be careful and not underestimate where people are at the moment. The vast majority of claims for jobseeker’s allowance are made over the telephone and an increasing proportion are made online. We are not entering uncharted territory and I am surprised that Opposition Members seem keen to keep us in a luddite past. We need to tackle the digital divide, and this is a very good way of doing it.

[Nigel Mills]

I am grateful to the Minister although I am not sure we got an idea of how long the application form will take to fill in. Perhaps we will get that later.

--- Later in debate ---

[Nick de Bois]

The right hon. Gentleman is absolutely right to make that point.

[Mr Hoban]

rose—

[Nick de Bois]

I will give way to the Minister, who no doubt will want to answer the right hon. Gentleman’s point, in a moment. I do not want us to set a tone that will undermine our overall goal, but of course if the shadow Secretary of State has concerns, he should raise them. I am sure the Minister is keen to answer them.

[Mr Hoban]

The shadow Secretary of State has been touting this story for months. [Interruption.] No, it has been longer than that. The last outing was in today’s Guardian. I want to make it clear that nobody has walked off the project; all the contractors are in place and the project is on schedule to be delivered at the end of April. Now, if he thinks the idea is good in theory, it is about time he supported it. It is working and the contractors are in place, doing the job and ensuring that the pilots will be up and running at the end of April.

[Nick de Bois]

I am glad to have spirited into being some Front-Bench dialogue.

--- Later in debate ---

[Mr Hoban]

Just to be clear, the project has not been delayed because of IT problems. That is a complete red herring. The hon. Lady should not read the stories that the shadow Secretary of State puts in The Guardian.

[Ms Ritchie]

I thank the Minister for his intervention.

--- Later in debate ---

[Richard Drax]

I agree with the shadow Minister. When I was a soldier, the great cry was, “Hope for the best and prepare for the worst.” I am a little concerned that, on this policy, the worst has perhaps not been prepared for. Will the Minister, when he sums up, reassure us that there is a system in place that will cope?

In dealing with the inevitable snags, community care grants and crisis loans could be administered by the local departments if this computer system were rolled out to them. The local housing benefit departments in my constituency are already running down their offices, yet their local knowledge could be invaluable in administering universal credit. In the world of IT and computers, how often have our constituents rung a telephone number and got a disembodied voice saying, “If you want flowers, press 1. If you want somebody else, press 2. If you want to go to heaven, press 3. And if you don’t want to bother us at all, press 4.”? At that stage the person wishes they had slammed the phone down and they give up the will to live. Although I welcome IT—I am not a luddite in that sense—I am a great believer in the human touch. Nothing beats eye-to-eye contact with constituents, including, as in this case, the many who need help. If people lose that contact with human beings—leaving aside the distress that will be caused if the computer system goes down—there will be an awful lot of concern, particularly among the elderly, many of whom do not understand the system in any case.

[Mr Hoban]

May I point out to my hon. Friend and to one or two other Members that universal credit is a working age benefit and will not affect the elderly?

[Richard Drax]

I take my hon. Friend’s point, but many people who are not of pension age are, like me, middle aged—shall we put it that way?

As we know, universal credit is also intended to go online. As we have heard from many Members on both sides of the House, that will be unfeasible for many and could result in many incomplete applications. Again, local offices equipped with universal credit software might be a great help at least until the system is up, running and proven.

Another of Mr Hodder’s concerns is about the receipt of a single lump sum payment once a month. Although most of the population—75%, I believe—receive their salary once a month, and although we want to treat everyone in this country in an adult fashion, it is pragmatic to realise that many of the people who will receive quite a lot of money in one blow are not necessarily in a position to handle it and have not been accustomed to it. Welfare recipients are currently paid out of many pots and money comes in at different times of the month, possibly to different accounts and different partners. For example, child benefit is often paid to the mother.

Management of a single lump sum payment is likely to prove challenging for many, at least at first. Mr Hodder suggests, and I concur, that payments should be split into two a month to lessen the stress of managing day to day. He also points out that that would make recipients less of a target for payday loan sharks, as the monthly benefit salary would not be so large. I believe that there will be a rise in the number of those sharks, who will prey on those who get their money one month, spend it and then want more money to pay off their bills. The problem will therefore be increased. The money will also often go to one member of the family. If the husband is abusive, for example, there will be a problem if the wife does not have access to the money and it all comes in one lump.

Mr Hodder’s main concern is the proposal to include housing benefit, which was once paid to landlords, in that monthly lump sum. Mr Hodder’s view, with which I agree, is that there is a “huge risk” of non-payment to landlords—I think that that is a pragmatic and realistic fear—because of wilful non-payment or the inability of the tenant to manage funds over a month. He says that the impact on his association and others will be a rise in arrears and collection costs. They will need more staff, the cash flow will be reduced and there will be less investment in social housing. Private landlords are already saying that they will not take on tenants who get their money first, for obvious reasons, so that could also shut the door on the private rented sector. Further down the line, arrears could lead to more evictions, more clogged-up courts and more families being thrown on the mercy of local authorities, which are charged with accommodating them in emergencies.

In my view, those are all unintended consequences, but the human cost means that they matter even more. This ambitious shake-up is bound to cause some problems and I think we all accept that there will be some. Mr Hodder, I and many people to whom I have spoken believe that they could be mitigated by careful forward thinking.

The intention of universal credit is to make the benefits system more streamlined and efficient. I think that we would all agree with the principle that incorporating some of Mr Hodder’s suggestions would give it the best possible start. I hope to hear from the Minister that some of those concerns, expressed by Members on both sides of the House, will receive some answers. I also hope that the Government will consider very carefully all that has been suggested.

--- Later in debate ---

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

I commend the Chair of the Select Committee, the hon. Member for Aberdeen South (Dame Anne Begg), for the way in which she opened the debate, and for the balanced way she set out the issues in its report. I thank the Committee, too, for its work. Often, people outside the House underestimate the important role that Select Committees play in scrutinising policy development, but the report is a very good example of the excellent work they do to highlight the issues and to get the balance right.

Balance was what was missing from the speech by the right hon. Member for East Ham (Stephen Timms). I think there was a 10-second acceptance at the start that universal credit was a good idea. He then spent the rest of his speech trying to conjure up reasons why it was not a good idea. [Interruption.] No, that is absolutely true. I will give some examples. He and the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) have been touting for some months now the story that people have been walking off the project and that the project is in chaos. We saw it in today’s Guardian—an article that perhaps should be seen in the context of today’s debate—and the right hon. Member for East Ham said just now that he expected contractors to walk off site. What a load of rubbish we have heard! In a statement today, HP, one of the big contractors, said that it remained committed to supporting the DWP, to the universal credit pathfinders going live in April 2013 and to subsequent releases. It also said that it would continue to work with the DWP and our other suppliers on this major programme of welfare reform.

[Stephen Timms]

rose—

[Mr Hoban]

Perhaps the right hon. Gentleman wishes to apologise for scaremongering.

[Stephen Timms]

I can reassure the Minister that the source of the report came from the companies concerned. But let me ask him this: the initial plan was for all applications for out-of-work benefits to be handled as universal credit applications from October this year. Is there a new date for that milestone, and if so, what is it?

[Mr Hoban]

Yet again, the right hon. Gentleman needs to get some perspective. We have always made clear our plan for a progressive roll-out of universal credit, for exactly the reason that hon. Members have mentioned, which is that previous Governments have launched unsuccessful big-bang IT projects. We have been clear, therefore, that we need a progressive roll-out—pilots, lessons learned, consolidation and then next-stage roll-out.

That is the best way to ensure that universal credit is rolled out correctly and it is a significant change from how previous Governments have handled IT projects, including the disastrous tax credits system when, of course, the right hon. Gentleman was a Treasury Minister. We have made clear our plan for a gradual roll-out for new claimants from October 2013. We have always said that the progressive roll-out of new claims across the country would begin in October 2013. That is a simple restatement of what we have always intended to do. I respect the right hon. Gentleman, but I think he has overreached himself on this argument.

[Stephen Timms]

Will the Minister give way?

[Mr Hoban]

No, I only have a relatively short amount of time in which to respond to quite detailed questions from hon. Members. [Hon. Members: “Give way!”] No, I want to make some progress.

[Stephen Timms]

rose—

[Mr Hoban]

No, all the right hon. Gentleman is doing is scaremongering, which is not the right approach. Someone made the valid point that misinformation undermines claimant confidence in the system. I want to address some of the concerns that people have expressed in this debate and demonstrate how the Government are tackling the issues highlighted in the Select Committee’s report.

[Stephen Timms]

rose—

[Mr Hoban]

I am not going to give way. The more often the right hon. Gentleman seeks to intervene, the less time I have to engage with the substantive discussion.

I will remind the House of the aims of universal credit. It is designed to avoid universally recognised problems in the current flawed system, which traps people on benefits and makes them dependent on the welfare state. It will ensure that work remains the best route out of poverty and benefit dependence for those who can work, and is intended to be radically simpler than the complex web of tax credits and benefits it replaces. We made a deliberate choice here. My hon. Friend the Member for Leeds North West (Greg Mulholland) was right to highlight a previous Committee report on the complexity of the welfare system. Rather than replicating the current system, in all its complexity, we are seeking to design a system that is easier for claimants to understand and creates better incentives.

Crucially, universal credit brings together in-work and out-of-work support into a single monthly payment for those out of work or on low earnings. At present, there are separate systems for out-of-work and in-work benefits administered by different national and local agencies. A move into work therefore entails a recalculation of entitlement, multiple communications and possible delays and gaps in payments. As a result, many people are not prepared to take the risk of moving into work.

This is not just about those who are out of work, however; it is about those who are in work as well. One of the rigidities built into the tax credit system is the 16-hour-a-week rule, which means that people offered work have to ask themselves, “Is it worthwhile my taking on this additional work?” Many people have to go to the jobcentre to make a better-off-in-work calculation. We cannot have barriers in place preventing people from wanting to earn more, take on more hours and look after themselves and their families.

With universal credit, we are aiming above all to achieve a fundamental change in attitudes to work, helping people to see more clearly that they are better off in work and encouraging and supporting people to move into work or to increase their hours.

As I said earlier, too many people are trapped into working 16 hours a week by a system that means there is no point in extending their hours because they would be worse off. I have even heard of people turning down bonuses from their employers because they are concerned about the impact on their benefits. What a tragic situation we are in, when a system of benefits traps people in low incomes. What we need to do—I hope Opposition Members will reflect on this—is find a system that helps people to get back into work. That is one reason why it is important to have in-work conditionality, to help people move up the income scale and find ways to increase their earnings by getting new skills, getting promotions and increasing their hours. In focusing on how we resolve some of the exceptions in the system, Opposition Members are in danger of losing sight of the reason for doing this: to free people from a complex system of benefits that has trapped so many out of work.

[Stephen Timms]

I am most grateful to the Minister for giving way. He was not able to give a date for the earlier milestone; he is now setting out the advantages, as he sees them, of universal credit for people who are in work. To begin with, all new in-work benefit applications were going to be universal credit applications from April 2014. Can he tell us when that new milestone will be reached?

[Mr Hoban]

We have always said that there would be a progressive roll-out of the system. I am not going to give a running commentary on the timetable at this moment. We have been very clear—[Hon. Members: “Ah!”] No, we have been very clear that we would have early implementation in April 2013, and we are going to see that in the Greater Manchester and Cheshire area. That will enable us to test the end-to-end process in advance of the progressive national roll-out of universal credit from October. Once a pathfinder has happened, we will continue to adjust the exact timing and sequence of the migration process in the light of experience, including the operation of the pathfinder service in the Greater Manchester area. That will be done exactly to avoid the problems that previous Governments have faced with big-bang system changes falling over.

I would also point out to hon. Members who continue to question the Department’s ability to deliver significant system changes that we have launched the latest generation of the child maintenance system on time and on budget. We have also successfully launched the universal jobmatch service, which is helping more than 1 million jobseekers find work and get into employment more quickly. That we have been able to do those things demonstrates the Department’s capacity and capability to deliver programmes on time.

[Kate Green]

Even if things work entirely to plan and universal credit proves to be easily accessible and simple to use for the majority of claimants, we know that some of the most vulnerable claimants will be unable to make claims unassisted. They will go to an independent advice agency such as Welfare Rights or Citizens Advice for help. Can the Minister assure me that those agencies will be able to contact the Department easily with queries? They already struggle in the present system to find a dedicated helpline that can help them as advisers. Can the Minister confirm that that will be put in place and will work effectively for adviser agencies under universal credit?

[Mr Hoban]

I want to return to the question of support and advice agencies, because the need to support people on to universal credit is an important issue that has been raised. Before I do that, let me talk about a couple of other issues that people have raised in this debate.

A number of hon. Members have raised the issue of online access. We should recognise that digital exclusion is a major issue affecting communities and individuals. It acts as a barrier to employment, as well to claiming universal credit. We need to lift that barrier and make it easier for people not just to claim universal credit, but to get the online and digital skills they need to get into work. Universal credit gives us an opportunity to move people online.

[Dr Whiteford]

Will the Minister give way?

[Mr Hoban]

I have only just started making this point, so let me make a bit more progress.

Research suggests that 92% of advertised vacancies require applicants to have basic IT skills. Therefore, those without such skills are considerably limited in their employment prospects. By using the digital channel as the default, we will be able to identify individuals who are struggling to manage or who lack the basic skills to use online systems. In doing so, we will be able to target support so that they can learn these essential skills, thus improving their prospects of finding work. Work done by the Cabinet Office on internet usage demonstrates that 78% of existing benefits and tax credits recipients already use the internet. Our latest figures show that more than 51% of jobseeker’s allowance claims received by the Department are now made online. I think that that demonstrates that people will be able to do it. We need to encourage more people to go online and find ways to give that support. For those who cannot use the internet, telephony and face-to-face access will be available. Rather than accepting that people cannot use the internet, we should try to help them get on to it and use telephony and face-to-face access as a fall-back mechanism.

The hon. Member for Bishop Auckland (Helen Goodman) said that 10% of people do not have access to superfast broadband with a speed of more than 2 megabits per second. She will be pleased to know that people will not require broadband at that speed in order to access universal credit and make claims.

[Dame Anne Begg]

The Minister might not know the answer, but will there be a real person at the end of the telephone, or will people have to enter all their details by pushing buttons and never get to speak to anyone?

[Mr Hoban]

I assure the hon. Lady that a lot of real people answer telephones at the Department. I am sure that she has visited some of our contact centres and seen them in the flesh. It is important that that human support is available either locally or over the telephone.

[Dame Anne Begg]

In my experience of the disability living allowance, it takes some time to speak to a real person because the caller has to push lots of buttons, and that in itself acts as a barrier.

[Mr Hoban]

Indeed, but we also need to triage people so that they can get to the person with the right expertise and ensure that we focus our resources on the more difficult and challenging enquiries, which requires some triage through the telephone system.

[Helen Goodman]

Will the Minister give way?

[Mr Hoban]

I have about 15 minutes left and am keen to deal with some of the other points that have been raised.

On advice and support, the advice sector is key to ensuring that we deliver universal credit effectively. We work very closely with the stakeholder organisations to ensure that their expertise is utilised. This is a moving picture and several things have happened since the Government published their response to the Committee’s report. On 11 February, we published the local support services framework, which addresses what support UC claimants need, including those with complex needs, and how we will work with the third sector and local authorities to provide that support in the most effective way.

At the heart of the framework is a partnership approach, which emphasises the need for close working between DWP, local authority managers and service providers such as social landlords and charities to agree on the services that will be needed at a local level. By encouraging close partnership-working between agencies, we will provide a more joined-up, holistic service for claimants with complex needs and a single claimant journey towards greater independence and, wherever appropriate, work readiness for claimants.

The hon. Member for Stretford and Urmston (Kate Green) asked about access. We have not decided yet whether there should be specialist advice line for welfare rights advisers, but we will try to bring together all benefits guidance in one place—I think it is a legitimate criticism to say that it has been fragmented in the past—and provide a much more simplified resource for relevant information. I hope that will make life easier for advisers in the third sector. I take on board the hon. Lady’s helpful point.

A number of hon. Members raised the issue of monthly payments, including the Chair of the Committee and my hon. Friend the Member for Amber Valley (Nigel Mills). Universal credit is designed to reflect a world where 75% of employees are paid monthly. Paying universal credit monthly will not only reflect patterns that people who fall out of work are used to, but help smooth the transition into work and encourage claimants to take personal responsibility for their finances. For the first time, we will be able to identify those claimants who struggle to manage on a monthly salary, and will provide support to help them develop the necessary money management skills to remove barriers that prevent some of them from moving into work.

We recognise that a move to a single monthly household payment is a significant change to the way in which many benefits are currently paid and that some claimants will require support to help them manage that change. Money advice will be offered to all claimants when they make a claim, and given to those who have a clear need for it. There will be different levels and types of money advice, based on need. Some claimants will be signposted toward an online service, some might be offered a single session over the phone, and others might be offered an intensive face-to-face session with follow-up calls. We also recognise that some clients might need money advice for only a short period, while others will need it for longer. We are trying to create a service that can be tailored to the needs of individuals, rather than a one-size-fits-all service.

On 11 February, we published guidance giving details of the factors that advisers should consider when discussing alternative payments with claimants. Those factors include drug and alcohol dependency. For most claimants, alternative payment arrangements will be time limited, and offered alongside further budgeting support and help to move towards managing a standard monthly payment. I mentioned that drug and alcohol issues were one of the factors that should be borne in mind. Others include learning difficulties, mental health conditions, those in temporary or supported accommodation, perhaps including people who are homeless, those who have severe debt problems and those who are the victims of domestic violence. So a range of factors will be taken into account to determine whether a monthly payment should be made, or whether an alternative, more frequent payment would be in the claimant’s interest.

My hon. Friend the Member for Enfield North (Nick de Bois) made the point that this is all about boosting aspiration. It is about enabling people to manage their finances and to get into work, and we need to ensure that we have a system that meets mainstream needs but also supports the needs of more complex cases, rather than a scheme that is designed entirely around the needs of the exceptions. It is important to get the balance right.

[Stephen Timms]

Will the Minister give way?

[Mr Hoban]

I just want to say something about basic bank accounts. We have set aside £145 million to stimulate new financial products for universal credit claimants, and we are working closely with financial providers across the private, social and third sectors. We are continuing to consult those providers and other stakeholders about the arrangements for those products, and we will announce our detailed approach and requirements in due course.

The hon. Member for Edinburgh East (Sheila Gilmore) referred to the fact that we had discussed basic bank accounts when I was in my previous role. There is a real challenge involved. One of the final pieces of research produced by the financial inclusion taskforce identified that many of the people who did not have a bank account were those who claimed benefit, and that many people who had had bank accounts had ceased to use them. It is important to ensure that we put the right financial products in place, but we must also give people the support they need to manage their money so that they can remain banked, rather than dropping out and becoming unbanked.

[Stephen Timms]

The Minister mentioned people in supported accommodation. Does he have a response to the concern that I raised about women’s refuges and other supported accommodation, given that the definition in the regulations does not seem to be quite right? Can he give me any reassurance about continued support for people living in such accommodation?

[Mr Hoban]

The definition in the regulations will be the one that is in the existing regulations, and it has worked well so far. We are talking to women’s refuges and others to try to understand what has changed, and why the existing definition no longer gives the desired results. That is a matter that we want to continue to discuss.

We need to be careful when we talk about the direct payment of rent, because the vast majority of people have no problem paying their rent or their mortgage. My hon. Friend the Member for South Dorset (Richard Drax) has raised this matter. In one of the pilots, 92% of people paid their rent on time. Among the other 8%, some were underpayments and some were mis-payments, but not all were wilful non-payments. We have an obligation to try to move that 8% so that they can pay their rent on time and meet their obligations. Also, this change will encourage social landlords to think about the broader needs of their tenants—how they can find the necessary skills to get work, and get the necessary financial and budgeting support to manage their money more effectively—rather than just thinking about collecting the rent.

We need to ensure that the new system does not remove personal responsibility from everyone, while recognising that we will need to do something for those who are facing the greatest problems. We are working on that, and the pathfinders will help us to gain that knowledge. We want to make sure that the risks are managed and that landlords can request that the housing element is paid to them when the rent arrears trigger has been reached. These arrangements will be in place for some high-risk claimants from the outset until there is improved financial capability. In effect, we will start the shift to direct payments for claimants with the easier cases and then progress to the more difficult cases. The approach that runs through the roll-out of universal credit is to pilot things and understand the lessons to be learned to ensure we avoid mistakes in the future.

I am sure that I have already spoken for far longer than I should have done, but I think our debate has been important. I end by echoing the words of my hon. Friends who have contributed. We are talking about a change in culture. It is not just a benefit replacement exercise; it is about helping people back into work—making sure that they know that it is better to work than not to work, that it is better to work longer to earn more than to work fewer hours and earn less. We need to tackle some of the barriers to getting people into work, not just in respect of the complexities of the benefit system, but by enabling people to manage their money and to take responsibility for their finances and for their future.

Universal credit is a huge step forward in encouraging self-reliance, but we recognise that a number of people—not the vast majority of people—will need more support. The measures we have set out today and the way in which we have developed them, even from when we submitted our response to the Select Committee’s report, demonstrates this Government’s serious commitment to get universal credit right. It is by getting it right that we will have the best chance of getting people out of poverty.

[Mr Deputy Speaker (Mr Nigel Evans)]

Dame Anne Begg seeks the leave of the House to make a short response to the debate. With the leave of the House, I call her to speak.

Employment, Social Policy, Health and Consumer Affairs Council

Mark Hoban Excerpts

Wednesday 27th February 2013 Written Statements

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

The Employment, Social Policy, Health and Consumer Affairs Council will be held on 28 February 2013 in Brussels. I will represent the UK.

The council will finalise its contribution to the European Council, which will take place on 14 and 15 March 2013. There will be a discussion on the European semester 2013 focusing on the priorities for action highlighted in the annual growth survey (AGS) and joint employment report. The Government support the five priority areas identified by the AGS.

There will be a general approach on the guidelines for the employment policies of the member states and an endorsement of the key conclusions and policy messages on the social situation and trends to watch in the European Union. Finally the presidency will report on preparation for the tripartite social summit meeting.

Ministers will also consider a Council recommendation on establishing a youth guarantee for political agreement and the Commission will report on their communication on the social investment package.

Under any other business the presidency will provide updates on legislative and other issues, the Employment Committee and Social Protection Committee will outline their work programmes for 2013, and the Employment Committee will report on its meeting with social partners on wage developments. Finally the Commission will update Ministers on the transitional arrangements regarding free movement of workers of Bulgarian and Romanian nationals.

Work Capability Assessment

Mark Hoban Excerpts

Tuesday 26th February 2013 Written Statements

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

I am pleased to announce that Dr Paul Litchfield, the chief medical officer for BT, has been appointed to carry out the fourth of the five independent reviews of the work capability assessment (WCA) required by the Welfare Reform Act 2007.

The review will continue the process started by Professor Malcolm Harrington to refine the WCA to better identify those who are capable of work over the short and medium term and those who will require longer-term financial support.

Dr Paul Litchfield is chief medical officer and director of health, safety and wellbeing for BT, a post he has held since 2001. His fields of expertise include mental illness and the impact it can have on work prospects. As a member of the World Economic Forum’s Global Agenda Council, he has also played a key role in raising the profile of the economic impact of chronic disease.

An independent scrutiny group, chaired by Professor David Haslam—past president of the Royal College of General Practitioners, national professional adviser to the Care Quality Commission, and chair designate of the National Institute for Health and Excellence (NICE)—will oversee the review process.

Dr Litchfield replaces Professor Malcolm Harrington as independent reviewer. Professor Harrington’s third review, published in November 2012, found that real progress has been made to improve the WCA.

Dr Litchfield will present his report to the Secretary of State for Work and Pensions before the end of 2013.

Informal Employment, Social Policy, Health and Consumer Affairs Council

Mark Hoban Excerpts

Thursday 14th February 2013 Written Statements

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

The informal Employment, Social Policy, Health and Consumer Affairs Council met on 7 and 8 February in Dublin.

On the first day, there were three simultaneous workshops covering: active inclusion for jobless households; job-rich recovery, key actions for future skills needs in ICT; and labour market engagement of older women. The UK attended the first workshop on jobless households and agreed that professional skills were important, but that benefit systems also needed to make work pay and labour markets had to be flexible. The challenge was providing tailored support to young people and that work experience had proved to be a valuable measure in helping young people find and keep work.

On the second day, there were two main plenary discussions. In the first discussion on youth guarantee, some member states called for flexibility both in the list of measures and the implementation deadline. The UK called for the current four-month deadline to be extended to six, suggesting that the focus should be on those most in need rather than those who re-enter the labour market within a short period of time by themselves. The Commission remained adamant that both the list of measures and the deadline had to remain closed. The presidency subsequently circulated a revised text which stated that gradual implementation of the recommendation could be considered for countries with highest levels of youth unemployment.

The second discussion was on a proposal for benchlearning across European public employment services (PES) and the potential legal formalisation of the head of public employment services (HoPES) network. The UK welcomed both proposals, but cautioned against blanket targets and measurements.