Jobcentre Plus

Debate between Stephen Timms and Anne Begg

Thursday 10th July 2014 Westminster Hall

[Dame Anne Begg (Aberdeen South) (Lab)]

I am delighted to lead this debate on the report by the Select Committee on Work and Pensions, “The role of Jobcentre Plus in the reformed welfare system”. It is a bit of a mouthful, but the report contains a lot of interesting things. We published it at the end of January this year, and the Government responded at the beginning of April. It seems a long time between that and this debate, but that is because Parliament prorogued somewhat earlier than expected and our debate got dropped as a result. Some of our findings, therefore, might be slightly out of date, but in general, most of what we discovered when we considered the work of Jobcentre Plus is as relevant today as it was in April and May.

Jobcentre Plus is at the coal face of the benefits system. It is part of an administrative system that processes out-of-work benefit claims from hundreds of thousands of people each year. At the same time, its staff work with people one-to-one to help get them off benefits and hopefully back to work. They are both difficult tasks, but Jobcentre Plus performs them well with limited resources. It is well organised, has hard-working staff and has been officially recognised by the National Audit Office as offering value for public money. Jobcentre Plus has also coped well with the inherent uncertainty that it faces, not least from the large fluctuations in the claimant count brought about by the economy’s shifting fortunes. It has even coped with the innumerable policy changes imposed by the Government.

It was in the context of the unprecedented change brought about by the current Government’s extensive welfare reform agenda that we considered Jobcentre Plus’s effectiveness now and the challenges that it will face in future. Our central finding was that JCP is not currently good at prioritising those claimants who need the most help looking for work and providing them with the personalised support that they need. I know that that is no easy task, and given the volume of out-of-work claims made each year, Jobcentre Plus does remarkably well, but a range of witnesses, particularly those representing the most vulnerable groups, told the same story: there is generally very little in-depth assessment of claimants’ needs at the start of the job-seeking process, meaning that claimants facing particular disadvantages—the homeless, people with disabilities or people with drug or alcohol problems—all too often go unrecognised and get no help beyond a brief fortnightly signing-on meeting at the jobcentre.

Not for the first time, my Committee called for a much more systematic approach to the initial assessment of claimants’ needs. A classification instrument, to use the jargon, was the first of our key recommendations. In plain English, that means making a thorough, systematic assessment of each claimant’s needs and categorising them according to the level of support they require. That must surely be the logical first step in all effective employment support; otherwise, claimants with the most challenging barriers to employment will continue to be poorly supported and will remain unemployed for much longer than they should.

For some reason, however, the Government continue to dither on the issue. The Department for Work and Pensions told us that classification instruments are the holy grail. I thought universal credit was the holy grail of welfare reform—if so, it has not been found—but if the holy grail is classification instruments, it has already been found. They are already in use in Australia, where a jobseeker classification instrument has been used to good effect for more than 15 years and has been honed and improved through several iterations during that time. I would be grateful if the Minister could offer a proper explanation as to why we in the UK cannot replicate something similar here.

[Stephen Timms (East Ham) (Lab)]

I welcome the report. One of the points it makes is that the Government’s response on that issue was not entirely clear: was it that they cannot do that kind of segmentation assessment, or was it that they are developing something along those lines? It was not clear to me from the Government response which of those was the Government’s position. Has my hon. Friend been able to work that out?

[Dame Anne Begg]

I am not sure whether I can shed any more light on that than my right hon. Friend. Perhaps the Minister can reply. Certainly, in our briefings with the DWP and relevant officials, they have suggested that the Government are trying to work something out, but that they believe either that it is not effective—although the figures that they quoted to us did not necessarily have the interpretation that could have been made from the reports that have been published—or that it might cost too much money in the long run, because an up-front payment would inevitably be involved in setting up a classification system.

The Committee contends, however, that doing it properly at the beginning would ultimately save the Government money by ensuring that the correct level of help was given and that the barriers to work were identified early, so that a much more personalised approach could be taken to jobseekers in particularly vulnerable groups. We are talking about more vulnerable and difficult-to-reach groups, because we know that by any measure, Jobcentre Plus is relatively successful in getting mainstream jobseekers into work. That is what it does; it is Jobcentre Plus’s bread and butter. It is what staff do week in and week out.

[Stephen Timms]

One point in the Government response is that if there were such a tool, it would be only 70% accurate. That struck me as not bad, actually, compared with what happens at the moment. What did my hon. Friend think of that particular statistic?

Sanctioning of Benefit Recipients

Debate between Stephen Timms and Anne Begg

Thursday 3rd April 2014 Commons Chamber

[Dame Anne Begg (Aberdeen South) (Lab)]

This is obviously a day for my Select Committee’s reports. My right hon. Friend the Member for Oldham West and Royton (Mr Meacher) referred to the report that we published a few months ago called “The role of Jobcentre Plus in the reformed welfare system”, in which we had a whole section on sanctions. Very helpfully, the Government published their response to that report today, so the debate is timely.

Sanctions as we know them today have probably existed from the 1980s, although there has always been conditionality as part of the rules for getting unemployment allowance. I suppose the question today is to what extent the use of sanctions has increased in recent years. Certainly there has been a huge increase since the Welfare Reform Act 2012 was passed. Dr David Webster of the University of Glasgow, the leading academic authority on benefit sanctions, told my Committee that

“the severity of the regime has increased drastically under the Coalition Government and is increasing further.”

He also highlighted the common misconception that benefit sanctions affect only a small minority of benefit claimants. In the period 2008 to 2012 around one fifth of JSA claimants were sanctioned, approximately 1.4 million people. Official data show that, since the introduction of the new rules which have already been referred to, the proportion of JSA claimants sanctioned every month is around 5%, which is approximately 60,000 people. In the period from the introduction of the new JSA rules to June 2013 there were 553,000 sanctions, an increase of 11% on the same period a year earlier. There were 860,000 JSA sanctions in the year to June 2013, the highest number in any 12-month period since records began in their current form, and probably the highest number ever. The number of employment and support allowance sanctions—it is a new development that people on a disability benefit can be sanctioned—in the period December 2012 to June 2013 was double that in the same period a year earlier.

Despite all this, by May 2013 the report to the Secretary of State found

“no evidence of a secret national regime”

to set targets for the number of sanctions imposed. However, the Public and Commercial Services Union told my Committee that the expectations placed on Jobcentre Plus staff to sanction claimants were “targets by another name”. The argument about whether such targets exist continues to this day.

Both Members who have already spoken talked about inappropriate sanction referrals. We received evidence of quite a number of those, but in the light of Mr Deputy Speaker’s strictures, I will not detail them. Suffice to say that many were silly and inappropriate. With the application of common sense—that was the phrase that we used in our report—they could have been avoided or should have been picked up at review stage. About 50% of sanctions are overturned on review by a decision maker.

Many hon. Members will have received postcards from constituents that were probably sent to them by Church Action on Poverty and Oxfam, which asked my Select Committee to hold an inquiry into the use of food banks. Those postcards arrived in my office when we had already embarked on our inquiry into Jobcentre Plus. We had already decided that that would form part of the inquiry. Church Action on Poverty and Oxfam, in their report, “Walking the breadline”, found that sanctions were a significant factor in the recent substantial rise in referrals to food banks. They estimated that some half a million people in the UK were “reliant on food aid”, and that “up to half” of people who are referred to food banks need help

“as a direct result of having benefit payments delayed, reduced, or withdrawn”.

DWP was unable to provide information on the number or proportion of JSA claimants who chose to sign off benefit during a sanction period, or for longer, which is the reason that they would come off the claimant count. That might explain why there is some disparity between the figures for the number of people looking for work and the official unemployment figures.

The Committee recommended that Jobcentre Plus should look at the impact of sanctions on the use of food banks, but the Government have effectively rejected that in their response.

The Committee was also keen to see a second independent review of the sanctions regime, in addition to the one already being conducted by Matthew Oakley. Indeed, we thought that we had got the Employment Minister, the right hon. Member for Wirral West (Esther McVey), to agree to that when she gave oral evidence. Matthew Oakley is considering the clarity of DWP’s communications with claimants, the whole issue of sanctions, the appeals process and the availability of hardship payments.

We had wanted that second independent review to examine: whether sanction referrals were made appropriately, proportionately and fairly across the jobcentre network; whether there is a the link between sanctioning and the claimant count that could explain some of the disparities in the figures; and whether the regime was achieving its aim of encouraging claimants to engage more effectively with employment support. There is no point having sanctions if we do not know whether they work. Are they making people look for work more thoroughly than they otherwise would? That is our question. We do not think that Matthew Oakley’s inquiry will answer that, because it is not in its remit.

The Committee thought that the Employment Minister had promised that second review, which is why our report states that we welcome that commitment. Unfortunately, that is not what she meant, because the Government’s response states that there will be no second review along the lines we were asking for, and which we thought the Government had agreed to.

I appeal again to the Government to consider setting up a second independent review, and not just of the administration of sanctions, but of their effectiveness. Do they actually work? Do they change the behaviour of the people affected? If they are not changing people’s behaviour and so are purely punitive, the Government should be honest about that, because they must be saving money as a result. I do not think that most people would accept the application of sanctions that are purely punitive. If they are changing people’s behaviour, that is a different matter.

[Stephen Timms (East Ham) (Lab)]

Does my hon. Friend share my puzzlement about the Government’s about-turn, given that the Minister wrote to my right hon. Friend the Member for Oldham West and Royton and referred to the second review’s terms of reference? It is therefore very surprising now to be told that it will not happen at all.

[Dame Anne Begg]

I share my right hon. Friend’s disappointment, because we honestly thought, even before we published the report, that we had got the Minister to agree to such a review. I hope that the Government will think again, because they need to be satisfied, just as everybody else does, that the regime is not intended simply to save money in the welfare system through punitive sanctions, but has a real purpose in ensuring that people who are not fulfilling their obligations under the agreements they signed and who are trying to play the system should be sanctioned in certain circumstances. Sanctions should certainly not be applied if there is no reason other than to punish the individuals concerned.

I know that my time is up, Mr Deputy Speaker. I hope that the Minister, who is listening patiently, will take that back to the Department and that we can get a second independent review of the workings of the sanctions regime.

Pensions and Social Security

Debate between Stephen Timms and Anne Begg

Wednesday 13th February 2013 Commons Chamber

[Stephen Timms]

That is undoubtedly the case. The rhetoric and the reality are quite different.

[Dame Anne Begg (Aberdeen South) (Lab)]

Does my right hon. Friend acknowledge that the bedroom tax will also come into effect on 1 April? That means that a large group of people whose income has not gone up by very much will have to subsidise their housing costs to a far greater extent than they are doing at the moment.

[Stephen Timms]

My hon. Friend is absolutely right. It is fair to say that the bedroom tax is increasingly being seen as a hated tax across the country, as its impact becomes clearer and the date on which it will be applied approaches. It will make life a great deal harder for those people who have no option to move into a smaller place because there are no smaller places available in the council or housing association stock.

I commend to the Minister the speech made by the Bishop of Leicester in the other place in the Second Reading debate on the Welfare Benefits Up-rating Bill on Monday. He said of the Bill:

“It will depress hard-working families even further, remove much needed support for the vulnerable and unable to work, and potentially take us in the wrong direction for a generation, condemning countless children to poverty. It is a proposal that I cannot support.”—[Official Report, House of Lords, 11 February 2013; Vol. 743, c. 471.]

He was speaking for Britain. The Resolution Foundation has pointed out that the measure is a strivers tax, and that well over half the savings from uprating working-age benefits by just 1% over three years will be taken from people in work, because tax credits are being cut in real terms.

My hon. Friend the Member for Stretford and Urmston (Kate Green) has pointed out that the provisions will hit women particularly hard. The House of Commons Library has calculated that two thirds of those hit will be women. The real-terms cut of £180 to statutory maternity pay has already been dubbed the “mummy tax”. Taking into account all the cuts that will affect a woman during pregnancy and the first year of her baby’s life, including maternity pay, pregnancy support, tax credits and child benefit, the loss adds up to an average of £1,700. So, on the day when the highest paid are getting a massive tax cut and the rich are getting a £3 billion tax giveaway, people who are striving will be hammered.

Welfare Reform Bill

Debate between Stephen Timms and Anne Begg

Wednesday 1st February 2012 Commons Chamber

[Stephen Timms]

The hon. Gentleman is absolutely right—indeed, I am just going on to make that very point. It is not just cancer patients who will be affected; there are many other people in exactly the same position. That is why we have argued for a two-year limit instead of a one-year limit, because with a two-year limit there is a chance for people to get back into work. The National Aids Trust makes the point:

“Many people living with HIV who are found eligible will face significant barriers to work that cannot be overcome within 12 months.”

[Dame Anne Begg]

The other group of people who will be affected by the time-limiting are those who have slowly progressive degenerative conditions. Initially on diagnosis, they may not be able to work—or they may have fallen out of work—but their conditions will not be severe enough for them to be placed in the support group, and they could spend up to 10 years without any kind of independent income-replacement benefit.

[Stephen Timms]

My hon. Friend is absolutely right. A woman with Parkinson’s disease also makes exactly that point:

“There’s no guarantee that I’ll find a job in 12 months. It could take me much longer. I’ve worked all my life and paid for decades into the system on the understanding that there will be support if I need it. To be told that all this support could have a… time limit is…unfair and stressful.”

The charity Sense points out that for some people in the work-related activity group, once their health has stabilised, they will need to retrain to get back into work. It will be impossible for them to do that within the 12-month period that is being proposed.

--- Later in debate ---

[Stephen Timms]

Those figures were quoted extensively in our debate. Our view is simply this: we should not be taking large sums of money from people who are recovering from cancer or from a stroke, and who have been told throughout their lives that if they paid into the national insurance system, they would be able to get help when they needed it. That pledge needs to be honoured, even by this Government.

Let me turn to Lords amendment 15 and the question of the youth passport. It is astonishing that the spiteful policy towards disabled young people remained in the Bill for so long. It is even more astonishing to see the Minister now trying to ram it back in today, after the other place took it out. The current principle is that people who have been disabled since birth or childhood should be passported on to a contributory benefit. In Committee, the Minister described the principle as an “oddity”, but it has been well established since the 1970s and backed by Tory Ministers throughout the 1980s and 1990s. Only now are this Government trying to scrap it. It provides an independent income for severely disabled people whose disability started before they had a chance to work. The Minister wants to deny them that. The principle that young people who are disabled from birth ought to be able to rely on a secure independent income might seem odd to him; to most people, it is simply right.

The Government’s impact assessment justifies this change, disgracefully, on the basis of simplifying the system.

[Dame Anne Begg]

The change will affect not only those who have had a disability since birth or childhood. A young person who has worked for only six months before having a major accident could also lose out and never have the chance to have an independent income-replacement benefit at any time in their life.

[Stephen Timms]

My hon. Friend is absolutely right.

The impact assessment states that the provision

“puts those previously eligible for ESA ‘youth’ on an equal footing with others who have to satisfy the relevant National Insurance conditions before they qualify for contributory ESA, which will create a simpler system”.

It will not put them on an equal footing. They have been unable to work since before they had a chance to work, or at least to build up two years of contributions, as my hon. Friend points out. They have had no chance to build up their contributions, and they are therefore at a disadvantage, compared with everybody else. Attempting to justify the proposal—in frankly Orwellian terms—as a simplification really takes the biscuit. We are talking about a small group—15,000 people—who have never had a chance to build up a contribution record. It is right that they should be treated differently. A little complexity is necessary for fairness.

It is worth looking at how much money the Government will save by overturning this amendment. It involves a fair amount of contributory ESA —Ministers in the other place said £70 million. However, many of those young people—the Minister said it would be 90%—will be entitled to income-related benefit if they lose their contributory benefit. Furthermore, the amendment from the other place is very narrow. It applies only to the support group—that is, those who the Government accept should be protected from ESA time-limiting. The net annual saving from this spiteful cut will be about a quarter of the amount that the state-owned Royal Bank of Scotland will hand out in executive bonuses this year. It will be less than £10 million a year.

--- Later in debate ---

[Dame Anne Begg]

What has just been illustrated is the assumption that people are out of work in order to get benefit. We know—well, we hope, unless the Government are proposing to change the new personal independence payment—that there will be no capital rules, so someone with a million pound inheritance will, if they qualify and meet the criteria, continue to get benefit. That has always been in our system.

[Stephen Timms]

My hon. Friend is absolutely right. The number of people who have a million pounds can be counted on the fingers of one hand.

Pensions Bill [Lords]

Debate between Stephen Timms and Anne Begg

Tuesday 18th October 2011 Commons Chamber

[Stephen Timms]

No, it does not bother me. The people in that kind of employment might well fall into the category that the Minister mentioned earlier—people who progress later in their working lives, and the earlier that they start their pension saving the better. If they are in a job for more than one month, I would welcome giving them the ability to start saving for their retirement.

[Dame Anne Begg]

As someone who, in their young days, was a fruit picker in Angus, picking strawberries and raspberries, I think that the only way a fruit picker might end up in auto-enrolment would be if they had other jobs throughout the year that put them above the threshold. However, I can assure the Minister that the three months of the summer for which one would be fruit picking would be unlikely to generate the income that one would need to get over the threshold.

[Stephen Timms]

I could not have wished for a more effective endorsement of the case that I have put to the House. I am grateful to my hon. Friend.

The Government’s waiting period would incur significant costs through lost contributions for 500,000 employees at any one time and amounting to 7% of an average worker’s fund over a lifetime. Those losses undermine the principle of auto-enrolment and substantially outweigh the benefit from the small reduction in the annual costs to employers.

Amendments 19 and 20 would link the earnings trigger for auto-enrolment to the increase in either earnings or the lower earnings limit for national insurance. As the Minister set out earlier in his exchange with my hon. Friend the Member for Aberdeen South, the Bill will link the level of earnings at which people are auto-enrolled to the higher income tax threshold, with the level reviewed in future according to a number of factors. However, like the three-month waiting period, this measure will exclude a significant number of people from auto-enrolment. Those people will by definition be lower-paid workers, who we know already save proportionately less than others. We also know that they are disproportionately likely to be women.

Earlier the Minister touched on the aspiration that the income tax threshold will in due course rise to £10,000. As my hon. Friend said, there would be a worry if all those earning less than £10,000 were in due course excluded from auto-enrolment as a result. The National Association of Pension Funds has pointed out that that would exclude 17% of all employees and 27%—more than a quarter—of women employees. Adrian Beecroft might be pleased about that, but the Minister should not be. Pension contributions would remain payable on earnings above the national insurance threshold under the plans in the Bill. The TUC has pointed out that moving to that scenario would create a big cliff-edge, so that people would get to, say, £10,000 and suddenly find a large chunk of their earnings deducted, having previously not had anything deducted automatically. That would create a significant disincentive, which the Bill ought to avoid, to enrolment.

We have heard about the basis on which the Government intend to raise the earnings trigger. Their worry is that saving will not deliver sufficient benefits in retirement to be worth while for many people earning below the income tax threshold. However, the Government’s own report shows that most people earning around £8,000 to £9,000 a year will not be earning consistently or permanently in that range, as the Minister underlined, but will move up the income scale.

Welfare Reform Bill

Debate between Stephen Timms and Anne Begg

Wednesday 15th June 2011 Commons Chamber

[Dame Anne Begg]

That is exactly what I would like the Minister to clarify. I do not know whether there will be contributory ESA for those in the support group, whether it will be income related, or whether everyone will get it. If someone lives in a household with a working partner who earns £20,000 or £30,000 a year and then goes into the support group, having not worked before that and so having not made national insurance contributions in their own right, will they get any ESA? I am not sure they will, because ESA is an income replacement benefit, and of course to get such a benefit they need to have made national insurance contributions or have a low income.

[Stephen Timms]

My understanding is that, even though they are in the support group, if they have not met the contribution conditions they will not get the contributory benefit. Perhaps the Minister will confirm that when she responds.

[Dame Anne Begg]

That is my understanding also. There will be a group of people who will have paid the contributions in the two previous years and who will go straight into the support group and get to keep the benefit for life, but those with slowly degenerative diseases and those who come from better-off households will get nothing at all. It is that kind of unfairness and that sense of a two-tier system that frightens people.

Equitable Life (Payments) Bill

Debate between Stephen Timms and Anne Begg

Tuesday 14th September 2010 Commons Chamber

[Stephen Timms]

My hon. Friend is absolutely right. EMAG today is very angry indeed. When the Prime Minister, the Deputy Prime Minister, the Chancellor, every Treasury Minister, and the great majority of Government Members signed that pledge, EMAG thought that they meant it. Over the next couple of months, the Ministers and their hon. Friends behind them are going to find a lot of their constituents saying exactly what my hon. Friend’s constituent said, and wanting to know why Government Members have reneged on their pledge. They will have a great deal of explaining to do.

[Miss Anne Begg (Aberdeen South) (Lab)]

The previous Government made reparations for a number of historical injustices during their time in office, including compensation for the miners and for the fishermen involved in the cod war, and the financial assistance scheme. We hoped that all those processes would be simple and straightforward, but none turned out that way. Indeed, the Government had to revisit a couple of them on more than one occasion. Equitable Life is a far more complex case than any of them, however, and it was always going to be difficult, if not impossible, to come up with a scheme that was simple, transparent and fair. We hope that the Government will be able to do that, but it is going to be very difficult indeed.

[Stephen Timms]

My hon. Friend is right. This has been a difficult task, and that is why it has taken such a long time to get to this stage. We all hope that the matter will be quickly resolved, but it is now becoming clear that the coalition is not going to deliver. All those nods and smiles before the election, and all those pledges earnestly signed, are not worth the candle. The truth is that both the coalition parties led EMAG up the garden path. They will not deliver what they promised. It is flagrant: EMAG delivered votes at the election, but now that the election is safely over, it can be ditched.