Welfare Reform and Work Bill (Eleventh sitting)

Neil Coyle Excerpts

Tuesday 20th October 2015 Public Bill Committees

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

Will the Minister give way?

[Debbie Abrahams]

Will the Minister give way?

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[Neil Coyle]

On childcare, will the Minister explain how families with children older than the qualifying age will benefit from that policy?

[Priti Patel]

They will benefit from tax-free childcare. That will be available for families whose children are at school—basically, those who are still school age. That is a Treasury policy.

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[Emily Thornberry]

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

The new clause is about having a review of the application of sanctions. Many shadows have fallen upon our discussions over the past few weeks. This particular shadow is whether there is a link between welfare reform and work. What happens to people who do not live up to the requirements imposed on them?

Too often in recent years the Government’s focus has been on a target-driven approach that has assumed that anyone out of work simply lacks willpower. The cornerstone of that approach has been the sanctions regime. The Committee might remember that the previous Minister for Employment, who lost her seat at the last election, took the view that

“people who get sanctions are wilfully rejecting support for no good reason”.

The evidence, however, had she or any of her colleagues cared to look, suggests otherwise.

As the Minister frequently reminds us, and as I am sure she will remind us again today, it is true that conditions have always been attached to the social safety net since unemployment benefit was first introduced in 1911. Nevertheless, the Government mislead the public when they fail to acknowledge that the sanctions regime introduced as part of the Welfare Reform Act 2012 marked a radical departure from the history of the welfare state and from the entire principle of evidence-based policy making.

The official justification of the Department for Work and Pensions for sanctions remains that

“they are there to encourage claimants to take reasonable steps to find employment or move closer to the labour market”,

but its own impact assessment for the 2012 changes acknowledged that there was insufficient evidence for the proposed approach achieving that. Since then, of course, extensive evidence has emerged that demonstrates that sanctions are deeply counterproductive if helping people into work is really the intention.

The number of people claiming jobseeker’s allowance has fallen since 2012, but that has coincided with a significant rise in the number of people whom the Office for National Statistics classes as economically inactive—not unemployed or claiming jobseeker’s allowance, but statistically almost non-people. Interestingly, many of those economically inactive people, if asked why they have become economically inactive, give their reason as being discouraged. So that is their reason—they have been discouraged and so dropped out of the labour market altogether. I would have thought it was important to do some work on what “discouraged” means and on the experiences of those discouraged people, because there might well be a clear link between cause and effect.

Research published in January by Oxford’s Professor David Stuckler found that, of those sanctioned between 2011 and 2014 who subsequently stopped claiming benefits altogether, only 20% said that it was because they had found work. According to the professor, all those people were sanctioned and 80% of them then stopped claiming benefits, but not because they had found work. So they are all off the jobseeker’s allowance statistics and are no longer unemployed. In some ways, therefore, perhaps there has been some success.

To the extent that increased sanctions have had an identifiable impact at all, it has been to increase dramatically the levels of hardship and poverty in recent years, as illustrated most starkly in the extraordinary rise in food bank use. I do not know how many Members were at the Trussell Trust breakfast this morning, but one of the stories I heard arose because the trust has started to give medical advice at some of its food banks. It was giving medical advice to a nurse who had a condition that meant she needed to take various pills. The nurse in her knew that she had to take the pills regularly, but the mother in her knew that, because their tax credits had been wrongly taken away and they were in great need, she had to give the food in the cupboard to her children. So she was taking the pills without having eaten anything and was causing herself more harm. There are hundreds of thousands of these stories and unfortunately things seem to be getting worse, not better. We understand that last year, a million people took advantage of food banks. One has to wonder what would happen if they were not available. According to the 2014 survey by the Trussell Trust, 83% of food banks said that the new sanctions regime had caused an increase in the number of people needing their help.

Another very odd thing about the sanctions regime, which would be addressed if the new clause were accepted, is that different towns and villages have different numbers of people going to food banks and different levels of sanctions. There is one jobcentre where in one month, 40% of people were on sanctions. If there are such extraordinary variations happening within the system, there is clearly unfairness. If individuals within jobcentres are given powers and exercise them with a wide element of discretion, that discretion will clearly be exercised differently in different jobcentres. In some areas there will be more strain on food banks, let alone on the poorest and most vulnerable who continue to be sanctioned.

[Neil Coyle]

It might surprise my hon. Friend to learn that part of the strain on the resources of the food bank in Southwark, which is provided by Pecan as part of the Trussell Trust’s network, comes from people in work. Some 10% of that food bank’s users are working, and the Government have just made that a whole lot worse with their tax credit changes.

[Emily Thornberry]

My hon. Friend is right. The range of people going to food banks is very alarming. It is not enough to say, “Oh well, it’s because people know that there are food banks now. They didn’t know about them in the past, but now they do, and they are going in because it’s free and taking a can of beans, but they don’t really need it.” That may be how some Government Members feel that people behave. There is another point of view, which is that to go to a food bank is completely humiliating. It is the worst.

I raise my own personal experience again. After my family got thrown out by the men with the bowler hats and went into social housing, I remember my mother used to get boxes of food from friends. It was embarrassing, but it was the way we kept things together; there were no food banks at that point. I remember that one of the food boxes always used to include Campbell’s meatballs. My mother kept them under the stairs and threatened us that if we did not eat what was on our plates, we were going to have to eat the meatballs instead. They may still be under the stairs for all I know. But at least those boxes of food were delivered to our door, instead of my mother having to go out to ask for food. That is humiliating for anybody, for heaven’s sake.

What the Government’s sanctions regime has brought us is increased hardship and suffering, with no tangible gains in the likelihood that those affected will move into work as a result. If we could be confident that all this suffering was resulting in something good, that there was meaning and that people were moving into work who would not have moved into work otherwise—can the Conservative party show us some real evidence of that?—that would take some of the edge off the terrible stories that we hear, which show that the sanctions regime is simply unfair. How on earth do people manage if they are living from hand to mouth, have no savings and have exhausted the support they can ask for from their families and friends, but then are sanctioned a third time and given nothing for three months?

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[Priti Patel]

Let me start by saying that the Government keep the operation of the sanctions system under constant review to ensure that it continues to function effectively and fairly. Where we identify an issue, we will act to put it right. It is therefore unnecessary to embed the implementation of a review in the Bill. The Government have made a number of improvements to the JSA and ESA sanction systems following recommendations made by the independent review led by Matthew Oakley only last year. That improvement work is continuing to ensure that the Oakley recommendations are acted on in the right way where possible. In addition, we are taking the opportunity to ensure that the ongoing improvements in the review are built into the design and delivery of universal credit.

We have not only responded promptly and positively to the recommendations, but have gone further. We have improved the clarity of the JSA and ESA hardship application process, and made improvements to the payment process to ensure that payments are made within three days. We have carried out a review to check that our systems are operating effectively in respect of housing benefit, and that housing benefit is not impacted when a sanction is applied. We have introduced an improved claimant commitment for JSA jobseekers on the Work programme. We have also revised guidance to encourage jobseekers to share that claimant commitment with their provider. That will ensure that jobseekers understand what is required of them—their responsibilities both to Jobcentre Plus work coaches and Work programme providers—and that providers are clear on any previously agreed restrictions for the jobseeker, helping them to design tailored support.

We have made significant improvements to the decision-making process to ensure that doubts about actively seeking work are resolved quickly. The vast majority of decisions are now made within 48 hours, including consideration of good reasons. Our systems are ensuring that, when decisions are made in the jobseeker’s favour, their benefit payments are transferred to them using faster electronic payment systems to ensure that payment reaches their account on the same day.

I would like to touch on a couple of the points hon. Members have made. Sanctions were discussed in Committees in the previous Parliament, and there have been many debates about sanctions in the Commons Chamber and in Committees. Each month, more than 99% of ESA claimants comply with the requirements that are asked of them with regard to sanctions, and the individuals are asked only to meet the requirements that they agree with their advisers. That includes consideration of any health conditions, disabilities or health impairments.

[Neil Coyle]

There are individual examples. A man with a visual impairment and who has a guide dog was sanctioned for non-compliance. He did not know what the agreement said, because he was never sent it in an accessible format—he never had a Braille copy of the agreement. That was raised with the Royal National Institute of Blind People. A case was raised with Mencap of someone with a significant learning disability who never understood what the agreement meant, could not comply with the proposals that he had supposedly agreed to, and ended up being sanctioned. Does the Minister agree that those examples do not reflect a system that she has described as effective and fair? Where is the Department’s review of accessible formats provision?

[Priti Patel]

The hon. Gentleman is right to give those examples. What happened is not right. He mentions accessible formats. I will go away and report back to him on that, but what happened in that case is simply not right—that should not have happened to someone with a visual impairment.

The Department is considering the contents of the Work and Pensions Committee report and looks forward to working with it not just on that, but on future reports.

I come back to my point that, with all our policies, we will keep the operation of the sanctions system under review. We are focusing our efforts on continuing to improve the process on JSA and ESA to ensure that the agreed recommendations can continue to be delivered in the existing universal credit live service and embedded into the design and build of the emerging universal credit digital service. On the basis that we have a system of continually reviewing the sanctions system and are looking at it with regard to the universal credit live and digital services, I urge the hon. Member for Islington South and Finsbury to withdraw the new clause.