Welfare Reform Bill

Public Bill Committee, 5 April 2011.

James Gray (Conservative, North Wiltshire)

I wish to make a point about the deadline for tabling amendments for consideration in the week when we return after Easter. The deadline for tabling amendments to be considered on Tuesday 26 April is Tuesday 19 April. Equally, the deadline for tabling amendments to be considered on Thursday 28 April is 4 pm on Thursday 21 April. Amendments must be submitted in hard copy to the Public Bill Office. In other words, amendments must be submitted in hard copy to the Public Bill Office a week before the sitting in which they are to be considered. I thought that it might be convenient for hon. Members to know that, because of the Easter break.

Chris Grayling (Conservative, Epsom and Ewell)

On a point of order, Mr Gray. May I raise two matters relating to debate on the Bill before the Committee begins its deliberations today? First, I apologise to Committee members, because regulation notes for clauses 25 to 30 are not yet with the Committee due to an oversight. We intend to provide them by lunchtime. Secondly, I want the Committee to be aware that the Government will publish at 9.30 a written statement setting out our intent to introduce an amendment to the Bill at a later stage to encompass the child poverty commission. Obviously, I do not want to anticipate that statement before it is laid before the House, but I wanted Committee members to be aware that it is coming. It will be published at 9.30 and will provide further details for the Committee about the Government’s plans.

James Gray (Conservative, North Wiltshire)

Neither of those is technically a point of order, but I know that the Committee will be grateful to the Minister for that information.

Stephen Timms (Labour, East Ham)

Further to that point of order, Mr Gray. I am grateful to the Minister for his assurance about the regulations coming later today. We had an exchange at the beginning of our debate last Tuesday, when I asked him to reassure us that his usual intention will be to provide information to us earlier than the night before the debate. The notes on regulations that we have received came, yet again, just before 7 o’clock last night and, as he said, some of the notes have not yet reached us at all. I would like to press him again to give us an assurance that we will receive information earlier than the night before the sitting in which we are to discuss it.

James Gray (Conservative, North Wiltshire)

Again, that is not technically a point of order, but the Minister will have heard what the right hon. Gentleman said and will no doubt take those points into consideration. It might be helpful to the Committee if we assume that in future the two sides of the Committee will convene to discuss such matters privately outside Committee. We take the point that the Opposition are keen to see the regulations as soon as possible. We are keen to press on, in which context right hon. and hon. Members on both sides of the Committee have agreed that we want to make speedy progress on consideration of the Bill today. I know that if, during any hon. Member’s contribution, I am grumpy and interrupt, everyone will forgive me for doing so. It will be for the best possible reasons.

Clause 11

Karen Buck (Labour, Westminster North)

I beg to move amendment 25, in clause 11, page 5, line 29, at end add—

‘(c) provide for payments made under this Clause to be paid direct to a landlord.’.

It is a pleasure to convene this morning under your chairmanship, Mr Gray. I am sure that you will appreciate that the reason for my saying that the pleasure is heightened is that this is the final day before the recess. We all greatly appreciate that.

We tabled the amendment pursuant our discussions last week regarding the method of payment for housing costs. It proposes that an option be retained in the Bill to enable direct payments to be made to landlords. I think that hon. Members on both sides of the Committee agree in principle with the notion that there should be choice in the system and that there is no intrinsic reason why tenants should not be able to manage their own payments and housing costs wherever possible. However, the practical reality can sometimes be different and, in relation to both private and social tenancies, there are specific problems.

The Department for Work and Pensions has accepted a shift to greater flexibility in the direct payment of rent to private landlords. I believe that a two-year provision exists in the current system—I am referring to the local housing allowance—to that end. That was done in recognition of the fact that the cuts in housing benefit, which take effect from this week, make it necessary to take steps to keep landlords in the market and to give them some incentive to continue to rent out their accommodation to people who need assistance with housing costs—and, in some cases, possibly as a means of trading it off against cuts in housing benefit. Does the Minister envisage that the provision for private tenants will roll forward into the Bill? How does he intend to monitor the system for the next two years? Is he completely confident about the technical capacity of the IT system?

On the question of social landlords, the Bill seems to be silent, although the White Paper suggested that it would remain an option to allow direct payments to landlords. The Minister will be aware that it causes a great deal of concern, particularly among social landlords and those in the financial sector who are lending to them. For instance, the Council of Mortgage Lenders has stressed the fact and said:

“Our members have lent over £60 billion to the sector...although lenders and investors are fundamentally confident of the financial strength of the sector, this could be affected by the impact of proposals within the Welfare Reform Bill on the way in which housing benefit is paid....Lenders and housing associations are extremely concerned that making payments to tenants could lead to an increase in rent arrears that would jeopardise a stable source of income, damage lender confidence and threaten to end a crucial source of private finance…the uncertainty is unhelpful”.

The National Housing Federation said in evidence that it, too, was concerned about the uncertainty, as the regulations are due to be published at a later date. It stressed the real danger that rent arrears could undermine their ability to secure money on the private market. We discussed last week the importance of new social house construction, but that very much depends on the sector being able to draw in financial assistance. Worryingly, last week, Moody’s investment service said that the way in which housing costs are to be dealt could prove to be credit negative. That cannot be left to the long term, because uncertainty already risks damaging the sector.

The amendment merely seeks to require the choice to be made available, and I urge the Minister to tell us how he will take this forward. However the system is designed, will he assure us that there will be a capacity to pay money directly to landlords? We may return to the question at a later stage, because we need to untangle the thorny question of what happens if the universal credit payment goes to one person in a household but another person there is the tenant. How on earth can the provision be constructed, both technically and legally, to ensure that this option can be pursued? I look forward to the Minister’s response.

Paul Uppal (Conservative, Wolverhampton South West)

As always, Mr Gray, it is a pleasure to serve under your stewardship. Mindful of the fact that I do not want to incur your grumpiness or wrath, I shall try to be brief. Some of the points that I wished to make have been covered by the hon. Member for Westminster North.

It would be remiss of me not refer again to the mythical bookshelf alluded to by the hon. Member for Edinburgh East last week. I shall carry on with that brief tradition. I do not know whether it was a metaphorical reference—it seems to be in the dim and distant past—but perhaps a suitable periodical for that bookshelf would be Good Housekeeping. That is the last of my flippant comments. I now turn to the meat of what I wish to say.

The essential point is that allowing tenants get into significant rent arrears is bad for them, but I seek the Minister’s guidance on a few points. Debt can increase the risk of tenants losing their homes. It can also affect landlords’ income, and in extreme cases it can jeopardise their investment in servicing their mortgage. For taxpayers, it means that money intended for housing benefit is being spent on other things. Essentially, that will add to the cost, as claimants will have to be rehoused.

Something about the amendment slightly troubles me. Before the nationwide introduction of local housing allowance in April 2008, tenants of private landlords had a choice as to whether housing benefit was paid directly to the landlord. Tenants are essentially the best people to judge their ability to pay their rent. I would appreciate guidance on how we could develop an early-warning system to alert councils of any late payments and how that might work. At the moment, an eight-week provision applies when rent is in arrears. The issue of private and social landlords has already been mentioned by the hon. Member for Westminster North. Finally, how will the Government ensure that landlords of vulnerable low-income tenants can continue to be paid for the service they provide if the tenant falls into difficulties?

Almost all the expert witnesses who have given evidence to the Committee could see merit in a system where rent was paid directly to the landlord. The Citizens Advice Bureau, Crisis, the National Landlords Association, the Residential Landlords Association, Shelter and the British Property Federation can all see merit in that system. However, I am raising this issue mainly because a couple of my constituents have come to my surgery and said, “Look, we’re aware of our own limitations. We have no wish to get into trouble ourselves; we would actually prefer to have a situation where we could pay the landlord directly”. As a result of those concerns, and in view of the issues raised both today and by expert witnesses, would the Minister provide guidance?

Sheila Gilmore (Labour, Edinburgh East)

In 2009, I was part of a research team undertook some work on landlords for the Scottish Government. We looked at ways of encouraging landlords to accept homeless people who were presenting to local councils. In many parts of the country—certainly in my own city—the number of people presenting in a year exceeds the number of council and housing association lets. The Scottish Government wanted us to look at what had been done up and down the UK, not just in Scotland, to bring more private rented accommodation into play, rather than having a big back-up of people in temporary accommodation, which is very expensive. There are disadvantages in doing that, to do with supply. I do not want to suggest that this is the answer to homelessness because I do not think that it is. It creates another financial problem.

Nevertheless, if it is a choice between expensive temporary accommodation and the private rented sector, clearly the latter is better: it is a more settled home. Landlords were asked what would encourage them to become part of this process. One issue was rent guarantees and deposits; some tenants cannot produce deposits. Another was certainty of rental income. Direct payment was far and away the method that landlords would most welcome.

I am trying to encourage landlords, therefore, to become part of this process and to offer their accommodation to meet that need. The theoretical point that people should have full control of their own money is laudable. However, many of us specifically set up direct debits to ensure that our payments go out, so that we can manage our lives in an organised way. The trouble for many low-income people is that they have limited access to bank accounts. Not everybody can get even a basic bank account; sometimes they have a Post Office payment card, for example, with no direct debit facility. If they do have a basic bank account there may still be difficulties with direct debits. People are very wary, because if a payment is mistimed and they have a bank charge of £25 or £30, that completely throws their financial calculations.

Jennifer Willott (Liberal Democrat, Cardiff Central)

It was the Labour Government who introduced this change in the previous Parliament. At the time, I was a member of the Select Committee on Work and Pensions, which examined the impact of the measure. To play devil’s advocate, evidence shows that paying money to claimants, rather than directly to landlords, can assist people in getting back into work, because it enables them to begin to manage their money better and to take more responsibility for their own finances. In pilots, that has been shown to assist them by helping them to have the confidence to get into work. Does the hon. Lady not have concerns that going back to direct payments will undermine something that can be helpful for people on low incomes?

Sheila Gilmore (Labour, Edinburgh East)

It is precisely that kind of thinking that lay behind the development. The important thing is to give people that level of choice. We have to look at things in the round. Looking at how most of us manage our money, we have a facility to ensure that payments are made on time on a regular basis, without our always having to remember to make them. How much easier it is when you have that set up!

Yvonne Fovargue (Labour, Makerfield)

I was part of a pathfinder pilot for the LHA when I worked at a citizens advice bureau. We were one of the most successful LHA areas. We received £35,000 from the local authority to work with vulnerable people and to give them financial capability. We all accept that that money is not there for every local authority. That project succeeded because we worked with it to identify people who were vulnerable and who needed their rent to be paid directly. We also worked with those who could manage with assistance from the bureau, and helped them to budget, set up direct debits and open bank accounts. We accept that not every local authority will have such a sum of money.

Sheila Gilmore (Labour, Edinburgh East)

I thank my hon. Friend for her important information, which comes from her experience.

In designing legislation, we have to be careful that we do not have conflicting policy aims. Clearly, seeing how housing benefit intersects with other housing aims is extremely important. If one aim is to enable more people to secure accommodation in the private rented sector, for the reasons I have already given, we have to ensure that we do not set up a conflicting and more difficult situation. The on-costs of that, in having to provide short-term, inadequate and much more expensive temporary accommodation, would undermine the policy initiative. It would also increase the housing benefit bill, because temporary bed and breakfast accommodation is an extremely expensive way of providing accommodation.

There is a particular problem for council and housing association landlords. They have said strongly—I have discussed this with the Scottish Federation of Housing Associations—that although for many, half or sometimes slightly more than half their tenants are not on housing benefit, they have a large number who are. The certainty of rental income through the direct payment route has the advantage not only of reducing the prospect of arrears accruing and all the work that goes into that, but of being advantageous to lenders, who have said so in relation to the lending packages that they are prepared to offer. The better the deal that a housing association can secure, the more that it can build and provide, which is extremely important. I have been on an association board—I am not so currently—and I know that that becomes an important part of discussions about lending opportunities.

Where people make their own payments, there is clearly a cost involved as well. The best landlords of all kinds—particularly councils and housing associations—put in a lot of effort to ensure that people do not get into arrears, but that is an expensive process. We know from experience that the best way of ensuring that arrears do not get out of hand, which is bad for the organisation and for the individual, is a lot of early intervention work, face-to-face contact and keeping people up to date, but that creates administration costs. From that point of view, I urge the Committee to support the amendment.

Chris Grayling (Conservative, Epsom and Ewell)

We well understand the arguments that hon. Members on both sides of the Committee have made articulately and on the basis of considerable experience. The hon. Member for Edinburgh East has extensive experience in that field, as does my hon. Friend the Member for Wolverhampton South West, who has a long track record of arguing the case on housing issues.

Let me set out briefly where the Government stand. We recognise that there are advantages to paying the housing component to individuals, in contrast to the current system where payments are routinely made direct to landlords. The reason for that, as the hon. Member for Edinburgh East articulated well, is that we are reluctant to see those in the benefit system being treated in a way that is materially different from the situation that they would experience in working life. The greater the difference, the more of a barrier there is to returning to a normal working existence. We also recognise the importance of stable rental income for social landlords to support the delivery of new homes and, as the hon. Lady rightly says, to ensure an adequate supply for the market. We therefore intend to develop universal credit in a way that protects their financial position.

My hon. Friend the Member for Wolverhampton South West made a sensible point about arrears, and a valuable suggestion about an early warning system which, if I may, I will take away to feed into our discussions. The key point is that we are not closing doors in this Bill. We intend to promote the use of bank accounts and direct debits to tenants—that point has been well made. We are retaining a facility for direct payments to landlords, and we will look at how we can introduce a protection mechanism that safeguards landlords’ incomes. Schedule 2 makes provision for the way in which universal credit is paid, including the housing element, and it amends section 5 of the Social Security Administration Act 1992. Section 5(1)(i) of that Act states that regulations may provide

“for the person to whom, time when and manner in which a benefit to which this section applies is to be paid and for the information and evidence to be furnished in connection with the payment of such a benefit;”.

Kate Green (Labour, Stretford and Urmston)

On that point, and in relation to another issue raised by my hon. Friend the Member for Westminster North, would it be possible in the legislation for Ministers to explore payment to someone other than the main claimant of universal credit, where a different member of the household has the housing obligation?

Chris Grayling (Conservative, Epsom and Ewell)

It would. In addition, clause 97 of the Bill allows claimants to nominate the person to whom universal credit payments should be made. There is an ability to make appropriate adjustments, but the philosophy underlying the Bill is that we should leave it to individuals and individual couples to decide how their affairs are handled.

Kate Green (Labour, Stretford and Urmston)

I understand the Minister’s point about individuals and couples having choices. Will it be possible to split payment of universal benefit and the elements within the household, so that one half of the couple receives most of the credit, while the person who has the housing obligation keeps the housing element?

James Gray (Conservative, North Wiltshire)

Order. Can we focus on amendment 25 and the payment of rent direct to landlords? That has nothing to do with clause 97.

Chris Grayling (Conservative, Epsom and Ewell)

We will return to those matters during our deliberations on the Bill. We are seeking to leave both options open. We recognise that in some circumstances, direct payments to landlords may be necessary, and the Bill makes provision for that. Where possible, our preference is for direct payments to individuals for the reasons that I have set out, but I reassure the Committee that the Bill provides the flexibility to meet both objectives. That is important; hon. Members on both sides of the Committee have articulated well the need for such flexibility, given the particular circumstances that can affect some individuals. The amendment is unnecessary, because the provision is already there, and I hope that the hon. Member for Westminster North will not feel the need to pursue it.

Karen Buck (Labour, Westminster North)

I do not intend to press the amendment to a vote, and I am reassured to some extent by the Minister’s assertion that there is clearly capacity to respond. My purpose in tabling the amendment was to stress—this is a genuinely important issue—that universal credit with its strengths and some weaknesses must be compatible with broader policy objectives, particularly access to private rented accommodation and the continued delivery of social housing. The level of uncertainty that exists has been highlighted by some of the amendments, and it is a genuine issue. I am not sure that a message of greater certainty has been sent out today, and perhaps more work should be done. The important point is that for the moment, no options are technically closed off in the Bill, and therefore I beg to ask leave to withdraw the amendment.

Clause 12

Karen Buck (Labour, Westminster North)

I beg to move amendment 26, in clause 12, page 5, line 32, leave out ‘such’ and insert

‘childcare costs in prescribed circumstances (up to a maximum of not less than 80 per cent. of the prescribed allowable amount) and such other.’.

As is the case with housing costs, child care costs are one of the largest items of expenditure for low-income families, so the interaction of those costs with the work incentive measures of universal credit is critical. Worryingly, as with housing costs and passported benefits, those areas of greatest expenditure that could have the most important impact on family budgets are the least developed in the Bill. The Minister has said that the Secretary of State will come forward with proposals before the end of the Bill’s proceedings, but there is a little clarity about what that means. Will there be a consultation exercise or will we get specific regulations? When will we get them?

I shall make a few introductory remarks before I ask the Minister a series of specific questions. If he can answer some of them today, that would be much better, but if not, we would like a firm undertaking that we will get clear responses that will inform us about what will be brought forward under the Bill.

As things stand, the whole principle of universal credit and our understanding of its effectiveness are fundamentally weakened by the omission of such important areas of expenditure. The child care element of the tax credit system is not perfect, and I represent an inner London constituency in which it has tended to not work as well as I would have liked. I am absolutely comfortable with the idea that we bring a child care element into universal credit to build on and improve the child care elements of the existing working tax credits. However, in pursuit of the universal credit’s laudable objectives, we must not worsen the predicament of working parents.

Some 486,000 families receive the child care element of the working tax credit, getting on average £76 a week—more in some cases. Changes in last year’s Budget have already reduced the maximum percentage that parents are able to claim towards their costs, which is one reason why the amendment specifically states that we would like the universal credit’s commitment to child care to be based on no worse than the existing 80% entitlement. As the proposals work their way forward, more will need to be considered.

Apart from reducing the maximum percentage, the Government aim to stretch the investment in child care further by bringing in working parents who are working fewer than 16 hours a week, who are not currently included in the working tax credit. In addition, child care demands will rise because of the conditionality extension, thus bringing in lone parents whose child is five rather than seven. Total child care costs are rising, but the total amount available to support those costs is falling. We do not yet know much about the structure of, or investment in, child care in the universal credit.

Charlie Elphicke (Conservative, Dover)

I am puzzled by one thing. The hon. Lady says that the Government have reduced the amount from 80%. Will she tell the Committee what the Government have reduced it to? How much would the difference be if it was put back up to 80%?

Karen Buck (Labour, Westminster North)

The way in which the Budget changes have been introduced, as I understand it, is that there is a cash maximum for which parents are able to apply if they have one child, with a higher maximum if they have two children. At present, people are able to claim up to 80% of the maximum—although there is another caveat that I will come on to in a minute—which is being reduced to 70%. I do not have the notes in front of me on what the cash difference is on the Budget line, but clearly there is certainty that there will be parents who receive the cash element that goes towards their child care now but will not receive that in future. We do not know exactly how that will be taken forward under the Bill, however, which is why we are discussing it.

We know that parents who are receiving the higher level will tend to be those parents in higher-cost areas, particularly London and the south-east, where child care costs are much higher than they are in other parts of the country. We also know that there is a pool of parents who are receiving disregard for council tax and housing benefit and can also receive a higher level of assistance towards their child care, which in some cases can go to up to 97% of their child care costs. Those parents will, by definition, be among the poorest because they are receiving the disregard. We do not know exactly how that will be taken forward into the child care tax credit, but at the moment that disregard will disappear. The pool of parents who receive higher levels of support will therefore lose that as things are currently constructed.

The worry is that although this is scored as a Budget savings line, which I understand, it will inevitably mean one of two things: either parents cannot continue working; or they will have to use what is, in many cases, a substantial amount out of their working income to meet the costs of child care. In some cases, as the Child Poverty Action Group, the Daycare Trust and others are saying, if the situation is not addressed, there will be parents whose marginal rate of deduction is more than 100%. There will therefore be people who will be paying to go to work, which contradicts everything the universal credit is about, and that worries me.

We do not have the details in front of us and we do not have an impact assessment, so we are not able to make judgments about the process. I completely agree, as I am sure that my hon. Friends do, that it is a good thing that we provide assistance with child care costs for people who are working fewer than 16 hours. However, we need to be able to have a clear means of judging, given the reduced financial envelope, whether that is the right thing to do. Who will be the losers? Are they people who we would want to be losers? Are they people who, as a consequence of losing, will end up costing the state more in other ways, because they will no longer be able to pay for their child care?

Charlie Elphicke (Conservative, Dover)

I have a lot of sympathy with the hon. Lady’s argument, but we are in constrained times. According to measure i in table 2.2 on page 44 of the Red Book, the cost of her position would be some £350 million.

Karen Buck (Labour, Westminster North)

My amendment is not a suggestion—this is not the purpose of the debate—that the system should not change, although in an ideal world it would not change. However, given that the financial envelope is reducing and given the total number of people to whom the child care support is intended to stretch, is the Government’s approach sensible—is it the right thing to do? If members of the Committee had the impact assessment in front of us, we might say, “Yes, absolutely. Let’s take child care support away from those people currently receiving up to 97% because of the council tax and housing benefit disregards, because we do not think that that is worth it. Let’s not support women working full time, because full-time child care costs are expensive and this will hit people with full-time child care.” The whole point is that we cannot have that discussion because we do not have the information, or details of what the costs will be if people fall out of employment because we cannot make work pay for them.

The whole point of universal credit, rightly—as we keep saying—is to make work pay for everybody. The top line and the tapers are absolutely marvellous, but we know that they are not real. Last week we discussed how they are not real, because they do not include council tax benefit. Today we are discussing the fact that they are not real because they do not include any real assessment of what is happening in child care costs. There will be other examples. We are not having a real and honest discussion about meaningful work incentives, about who fails to get the advantage of the universal credit and what that will mean for people falling out of employment and their costs to the state. I suspect—we do not have an impact assessment—that those costs could cancel out a lot of that £350 million, but we need to have an honest debate.

I have some specific questions for the Minister. First, the Committee would like to know exactly where we stand on bringing forward regulations. When will they be brought forward and how does the process tie in with what the Secretary of State told us about a consultation? How will those timings work together and how will the Committee be able to take forward that discussion?

Given what we know about the financial envelope for funding child care support, as we have just discussed, will the Minister tell us who will lose from the reduction in the maximum child care support from 80% to 70%? How many households will lose, and by how much on average? What do we know about their characteristics? I suspect that there is a regional bias and that there might be a concentration at the lowest deciles because of the housing benefit and council tax disregard.

What exactly is the thinking behind structuring child care to assist parents who work fewer than 16 hours while removing support from parents with higher costs? I think that there is an emerging theme of reducing parents’ full-time employment and increasing part-time employment, which is not necessarily wrong, but something that we need to understand. If that is the case, may we have an informed strategy on that for the labour market, particularly in relation to women?

We have talked a lot about the concept of job entry via the mini-job. I am not unhappy about that in principle, but do the Government intend actively to support down-sizing among parents—mostly though not always women—who are working more than 16 hours and more than part time? Given what we know about the funding envelope, will the Minister confirm that there will be parts of the country in which it will be financially impossible for parents to work more than part time? It is worth remembering that a part-time child care place in London now costs £113 a week, so the way in which the envelope is constructed means that it will not always be possible to get part-time work in London, given the reduction in support.

Are the Government actively considering offsetting any changes in the percentage cover—this is the principal thrust of the amendment—with a reduction in the cash maximum to which parents will be entitled? I understand that that approach is on the table. We might get back to 80%, in line with the proposal in the amendment, but that would be 80% of a lower cash entitlement, which would have massive implications, particularly for parts of the country in which costs are higher. If that is to happen, will there be an impact assessment before proposals are introduced to the Committee setting out any proposed cash reduction in the maximum entitlement for child care? Who would be the losers, and what would the impact be in different parts of the country?

Is it the Government’s contention that parents with the highest child care costs— costs that are no longer met due to the reduced level of child care support—should be expected to meet this additional shortfall from their incomes and perhaps be exempted from the otherwise positive drive to improve work incentives? Are the Government expecting parents to meet a larger share of holiday and out-of-school costs, as well as ongoing nursery and equivalent provision? How can that be justified? We know that work has to pay, but if people are expected to meet shortfalls—we discussed this in the context of housing and now we are discussing it in the context of child care—it will shoot a hole right through the heart of the universal credit, and that worries us a great deal.

Ministers intend to extend conditionality to cover those in employment as well as those without it. If someone has to reduce their hours because of reduced child care support, will they be subject to any form of conditionality as a consequence? If someone is unable to continue work because of an increased shortfall in child care costs, or if they come into the system and their child care costs cannot be covered, would they then become liable to the overall benefit cap? That is a real worry. If people are actually priced out of employment for reasons that are not within their control, will they fall foul of the cap that we will be discussing later in the Bill?

How will the Department for Work and Pensions administer sanctions and conditionality rules for those parents whose child care costs mean that their marginal rate of reduction would be above the 65% level that is the basis of the universal credit? What assessment has the Minister made of the number of households that receive more than 80% of their child care costs because of the housing benefit and council tax disregards? How does he envisage that being treated in the future under the universal credit when that element of disregard seems to disappear? Will he accept that that group in particular could be subject to marginal rates of deduction of 100% or more, and that that is not reasonable for any household to have to endure?

Has the Minister made, or will he make, an assessment of the capacity of the child care sector to provide the changed provision that he is considering? We have discussed this point before. I am worried that the mini-job will not necessarily be compatible with what the child care sector is able to offer as sessional provision. It would be a great shame if entry into a mini-job by those new to the labour market was undermined because no capacity was available for them.

We intend to table a new clause to provide for a detailed strategy at a later stage, but obviously it would be infinitely preferably if the Government put before us a comprehensive impact assessment setting out all the winners and losers, all the implications and all the impacts on work incentives. We could then understand what, apart from simply a reduction in child care costs, is driving the Government’s approach to universal credit, and therefore ensure that the incredibly important, central role of child care support delivers on what universal credit is designed to achieve, rather than undermining it.

Kate Green (Labour, Stretford and Urmston)

I shall be brief because, as ever, my hon. Friend the Member for Westminster North has made an extremely comprehensive case on our concerns. I shall highlight just three additional questions that I would be grateful if the Minister could answer, the first of which relates to child care costs for disabled children, which are typically higher than those for children without disabilities. Is it intended that the same cap and same cash limitations will apply to families with disabled children who are eligible for child care costs as will apply to those with children without disabilities, or will there be extra assistance when those extra costs are necessarily incurred?

My second question relates to my hon. Friend’s point about the purpose of meeting child care costs through the universal credit. It has long been said by those of us who are advocates of extending formal child care provision that it is particularly beneficial to the most disadvantaged children that they spend time in good-quality, formal child care settings. Of course, the opportunity to spread the pot to those working fewer than 16 hours may offer that possibility, but I ask the Minister to tell us whether any impact assessment has been carried out in relation to child outcomes, because it is equally the case that short periods of stop-go formal child care are likely to be quite damaging and unsettling for children. I would be extremely interested to know what discussions DWP Ministers have had with their colleagues in the Department for Education about the impact on child outcomes of their proposals.

My third question relates to the point that my hon. Friend made about provision for child care costs when children are out of school, for example. We know from the long and painful history of tax credits that child care costs were probably the largest contributor to some of the problems that we had when changes of circumstance caused changes in entitlement to occur so frequently. Some hon. Members who have not had direct personal exposure to the problem might be surprised by how often people’s child care needs, and therefore their child care entitlements, change. The Minister should tell us how, in the context of the proposed real-time information system and the overall administrative cost envelope for administering universal credit, he intends to ensure that universal credit is responsive to frequent fluctuations in child care hours and child care costs, and whether a more generous cap has been considered as one way of cushioning some of that concern.

Sheila Gilmore (Labour, Edinburgh East)

The huge change over recent years in the ability of people with children to enter employment and to get good child care should not be underestimated. It is very different from what was available in the past, and the tax credit system’s payment for child care has played no small part in that. It is not the only factor by any means, but it has been one important factor, particularly in areas of lower income and higher deprivation.

When my older children were young, after-school care really did not exist. At best, parents had to find a private child minder for during those hours. The importance of after-school clubs and so on has mushroomed in the past few years and should not be underestimated. It has made a major contribution to one of the great successes of the last Government: enabling many more parents, and particularly single parents, to enter employment than was the case when Britain had a bad record.

Working even part time has always been difficult without child care. Most people probably know that in my city, the normal part-time place offered at a nursery school is two and a half hours. It is virtually impossible to carry out any kind of work within such a time interval, which would also include the time to get to work and back. Very few jobs allow anyone to work for an hour and three quarters in between running backwards and forwards. Even with nursery care for three to five-year-olds, parents still need additional child care. It is much the same when children are at school. School hours and holidays can cause difficulties that can make or break people’s chance of entering employment.

I was interested to hear one of our witnesses—I do not have the reference—discussing the possibility that providers could make child care available at hourly rates and therefore fit in with shorter working hours. That is attractive, although I have some concerns, as I know that it would severely undermine many providers’ viability. My son’s after-school club was open from the close of school until 5.30 pm. Parents could collect their children early, but the club was not in the business of saying, “If you only want an hour and a half out of two and a half, you can pay for an hour and a half.” The club still needed to pay for its premises, staff, training and all the rest of it, so parents had to buy the package. If they were able to arrive early and wanted to, that was fine, but the financial viability of the place would have folded if they had not paid for all the time.

If that is true for after-school care, it will also be true for a lot of nursery care. About five years ago, a colleague of mine carried out a piece of research on the child care available in some more deprived areas of Edinburgh that were regarded at the time as social inclusion partnership areas. Child care was one of the things that had been developed by the partnerships, and the research found that the biggest barrier was still cost. Even with the provision made through the tax credit system, cost was clearly an important issue. This goes back to the viability of provision. Empty places can make providing a nursery difficult. Providers cannot carry empty places and be viable, so cost becomes important. One recommendation of my colleague’s report was to increase levels of child care support through tax credit, which was done to a degree by the previous Government in order to meet the gap.

The issue is important and complex, and we must bear in mind that there is a relationship between what can be made available and what is affordable. If no child care exists, all arguments about cost disappear completely, because people cannot find anything suitable and of good quality for their children.

Chris Grayling (Conservative, Epsom and Ewell)

I have listened carefully to Opposition Members’ contributions. I will start by taking us back to what the clause will do and what the amendment seeks to do. To revisit the bookshelf quickly, the clause is no more nor less than a mechanism to allow the Government to pay a child care element of universal credit. As always with child credits, the detail is handled outwith primary legislation. The amendment would write into primary legislation a financial commitment and remove the flexibility of this or any future Administration to make changes. For that reason more than any other, we could not possibly accept the amendment.

My hon. Friend the Member for Dover made the valid point that the amendment represents a significant spending commitment by the Opposition. Although the amendment is probing in nature, if it were to pass into statute, it would require significant additional spending, which opens the question of where that money would be found.

I will answer some questions that have been asked today, but some of the others are not material to the clause or the amendment. We will undoubtedly return to them in a new clause later on, and there will clearly be extended debates about regulations as and when they emerge.

We accept that this is a complicated area. There have been a number of changes. Some issues arise from the Budget last year and some from our desire to reduce the threshold, from the current 16 hours, below which child care costs cannot be paid, because we recognise that the mini-jobs that we have discussed are a vehicle to get many people back into the workplace. By definition, that leaves us with some hard challenges.

We are committed to retaining the current spending on child care; that is important to do. We do not want to make further changes—further reductions in the money made available for child care. The Government are strengthening the pre-school offers within the education system. The hon. Member for Stretford and Urmston raised the issue of disabled children. We have considered increasing nursery provision in the school system for two-year-olds with disabilities, which is an important step to take.

We need to consider carefully how to structure the best system of child care. The Secretary of State for Work and Pensions said in the House of Commons last week that he intended to hold a consultation on this. I hope that that consultation will involve Members on both sides of the House, given the substantial expertise among Opposition members of the Committee, let alone those elsewhere. We welcome cross-party engagement on how best to structure a new system. We intend to hold a number of seminars over the next few weeks to discuss this. Opposition Members are welcome to take part. We want to get the best possible solution that balances the financial realities of the moment with our desire to achieve our aims.

On timing, we intend to complete the work as quickly as possible. I am expecting hon. Members to table a new clause before our consideration of the Bill ends in late May. It is my aspiration that we should be able to complete at least a goodly part of that discussion with them before we get to that point, so that we can have a much more informed debate.

I will not give an absolute commitment today that every detail will be in place by the time that we get to that point. For the purposes of primary legislation, there is no need for that to happen, but for the purpose of doing the right thing by the Committee and informing its debates and discussions, we will do as much as we possibly can to ensure that the nature of the debate is open, that the issues are open and that the details of the different impacts are as clear as possible.

It is important that I make a couple of points. First, marginal deduction rates cannot change. The rate will apply to all elements of universal credit. Hon. Members are suggesting that, in reality, the changes might lead to a higher marginal deduction rate. That is not a given. We need to work through and discuss the best system. The actual marginal deduction rate within universal credit will taper off, as will all the different elements of universal credit.

It is not our intention to force people into part-time work rather than full-time work. We have made it clear that universal credit should focus on the first earner in the household, as that is the most important part of starting to lift households out of poverty. We believe that individuals should have choice in how to manage their working lives—and child care if they have reached that point. There is no conscious intent to push people from full-time to part-time employment. That would not be right. This is about supporting individual choice.

Other points were raised. Parents of disabled children already benefit from higher disregards under the tax credit system, with a higher child amount for severely disabled children. It is right and proper that such support should be provided. Local authorities make additional provision in support of disabled children.

The hon. Member for Westminster North will be aware that conditionality is focused particularly on moving households out of worklessness altogether. It is not our intention to impose severe or stringent conditionality upon households where the right thing is being done—where people are working more, and where the main earner is moving up the income scale. Our goal is to ensure that we have a system that lifts households out of worklessness. As I said last week, that is our prime concern, and the conditionality regime that applies to universal credit will focus particularly on that objective.

The hon. Lady is right that today’s child care system is not geared up towards mini-jobs, but that will change. We will see a greater willingness for child care providers to provide short-term placements, precisely because the system will be more geared towards mini-jobs. That is one of the benefits that we seek to achieve, and I would be surprised if the market did not respond. At the same time, the hon. Lady must remember that child care support for mini-jobs can be delivered within families. Informal child care will enable quite a lot of people to take the first few steps back into work, before moving on to something more substantial—longer-term work with increased hours.

The hon. Lady asked about holidays. As everyone knows, arranging child care during the school holidays is always a big headache. It is, and will remain, a challenge. The conditionality that applies to lone parents does not require them to work hours that are unreasonable, given their responsibility for bringing up their children—in particular, the obligation for lone parents of children at primary school.

The hon. Lady referred to the impact on child care costs of the reduction in the age threshold from seven to five. However, lone parents in that position are obliged not to work way outside the normal school hours, as that would add considerable additional complication to their lives. For instance, we do not expect lone parents of kids at primary school to work night shifts. The conditionality is not designed to work like that. When possible, we are trying to help them move on to job opportunities that fit alongside their child care responsibilities.

Opposition Members referred to increased provision in and around schools. There has been a tremendous amount of innovation in this area. It is a great example of schools and other organisations delivering improved child care support without necessarily having the hand of the state on their shoulders. I think that we will see much more of that as time goes by. It is my intention to set out as much detail as we sensibly can, as we go through this process. We are not required to set out everything in primary legislation—indeed, we actively want flexibility for the future—but I shall do my best to help.

The hon. Member for Stretford and Urmston asked about the technical ability of the system to deal with rapidly changing circumstances. A central hallmark of the systems that we are developing will be an ability to respond to an individual’s circumstances when moving into or out of short-term or part-time jobs. That will have to be built into the system. Child care entitlement will have to be set against the number of hours worked and the money coming in.

We will return to the matter, and I hope that Members on both sides will engage in discussions about how best to go about it. We shall certainly face some difficult challenges in trying to balance things that we would like to do against the resources that will be available. That is why we made a point, following the Budget changes last year, of saying that we do not intend to make any further changes to the amount of money available for child care. We will consider how best to use that in the context of other changes taking place elsewhere—in the Department for Education and in our school system, for example. I hope that we can have a constructive dialogue on that, and I am sure we will return to it when Opposition Members table their new clause in a few weeks’ time.

Karen Buck (Labour, Westminster North)

I do not intend to press the amendment to a vote today—there will be other opportunities. Obviously, it is absolutely true that there is a savings line in the Budget that has to be considered in this context, but it is incumbent on the Government to bring forward a comprehensive impact assessment to help us understand the implication of that savings target. I still do not understand, and nothing the Minister has said has helped me understand, how a reduced sum of money for child care can be combined with the desire to stretch it—morally a good thing, but practically questionable—to cover 16 hours.

I was slightly alarmed, and perhaps the Minister can make sure I have understood this correctly, when he said that the concept of the mini-job could be an opportunity for the greater use of informal child care. In practice, of course, that it sometimes true: people will use grandmothers and others for informal child care, particularly for a few hours. I just hope that the child care strategy in universal credit is not in any way predicated upon that.

I am grateful to the Minister for confirming, as I understood it, that the marginal rate of deduction that is the backbone of universal credit will apply and will be the test for job entry, including whatever child care element the Minister brings forward, and that nobody will be expected to pay a higher rate of deduction, including whatever he brings forward for child care in the future.

Chris Grayling (Conservative, Epsom and Ewell)

There is a common taper for all the elements of universal credit. All the different elements in these various clauses are put together and the rate of support tapers away at a consistent rate.

Karen Buck (Labour, Westminster North)

I am grateful to the Minister for that, because I am still unclear—particularly when it comes to those households which, because of the disregard system, will be getting above 80% with their assistance—as to how that will be factored in at the same time as reducing the money and increasing the level of coverage. The key point is that child care, along with housing, is a central element in making universal credit work.

It is an enormous shame—although it is difficult and I have sympathy with any Government who are struggling to make this work—that in a long-planned welfare reform Bill with such important elements, not necessarily sorted out in every single detail, we are without any impact assessment to help us make informed choices. The Committee may decide that it is absolutely inevitable that the levels of child care support for full-time workers or people in high-cost areas will be sacrificed in order to provide child care for those working fewer than 16 hours, but we need to know the exact facts and figures upon which decisions should be made. I do not think that we do and my hon. Friend the Member for Stretford and Urmston has obviously got some other questions, particularly around provision for disabled children and impacts upon the sector, that we need to consider. We will return to this.

This has been a helpful debate and we have had some greater clarification from the Minister, but I urge the Minister to make sure, if nothing else, that we have a comprehensive impact assessment in front of us that incorporates these financial savings and the extended hours so that we can see exactly what choices we are being asked to make. I beg leave to withdraw the amendment.

Karen Buck (Labour, Westminster North)

I beg to move amendment 27, in clause 12, page 5, line 33, leave out ‘may’ and insert ‘shall’.

James Gray (Conservative, North Wiltshire)

With this it will be convenient to discuss amendment 28, in clause 12, page 5, line 38, at end insert—

‘(d) the fact that a claimant has children in receipt of school meals.’.

Karen Buck (Labour, Westminster North)

This is the third in a trilogy of complementary amendments that explore the same area of weakness in universal credit. We have discussed housing and child care without being able in this Committee at the moment properly to appraise what the consequences of universal credit will be—who will potentially lose, how they will be dealt with, who will gain and so forth. That is also true, I am afraid, when it comes to the element of clause 12 looking at how additional needs will be met within the universal credit system. One area about which the Government are unclear and on which we have no strong steer as to how it will work is that of free school meals. Amendment 27 would replace the discretionary “may” with the mandatory “shall”, in respect of the different needs and circumstances. Amendment 28 adds a particular example of free school meals.

We know the introduction of universal credit will replace the out-of-work benefits and tax credits that currently entitle children to free school meals and other passported benefits. We know and agree that the key strengths of universal credit are intended to be integration, simplification and the removal of cliff edges. We strongly support that dimension of the Bill. However, yet again we are being asked to judge the aims of universal credit without reference to this crucial and complex element.

The Bill makes provision for the entitlement to free school dinners to be based on universal credit, but provides no details as to who will be entitled. The White Paper suggested that entitlement would be removed at a fixed income threshold, which would clearly impact on work incentives and family budgets, and undermines the thinking behind universal credit reforms, which is that households should gain equally from each extra pound earned, withdrawing entitlement at a fixed income or earnings threshold instead of a so-called benefits cliff edge. I seek to draw out a little more of the Government’s thinking to help us understand how passporting, in particular free school dinners, will be compatible with the central aims of universal credit.

Free school meals are an important financial benefit to families on low incomes, worth on average £366 a year for a single child; and over £1,000 for larger families. Under the current system, parents who are in work for more than 16 hours, and therefore entitled to working tax credits, will lose their free school meals. We discussed possibly having a more generous system; indeed, there were pilots looking at a more generous system. The gains from working are offset by the loss of free school dinners. Most families are still better off in work because of the working tax credit that becomes available at that point. That seems a real challenge for universal credit. I do not think that the Minister has made clear that he anticipates the same number of people as now being entitled to free school meals. There is a challenge, given the change in the structure of the benefits, which removes the 16-hour jumping-off point—potentially for a good reason—and the working tax credit that smoothed and eased the way off passported benefits.

The loss of free school meals, as we understand universal credit, could create a severe benefit cliff edge. As a result of tax and universal credit withdrawal, a family will not achieve a similar equivalent level of income after paying for school meals until they earn an additional £87 a week—£4,500 a year. That substantially undermines any financial incentives to earn above the rate of income at which free school meals are withdrawn. That brings us straight into conflict with the potential of the mini-job.

Universal credit is designed to include all working-age means-tested benefits in one family assessment and one single rate of benefit withdrawal or taper. It is also designed to recognise a family’s extra needs and include higher earnings disregards to take account of the size of the family and the extra needs of members with disabilities. It would, therefore, make sense to align the structure of support for school meals closely to reflect the structure of universal credit, or even include a school meal element within universal credit.

The most comprehensive option to ensure those principles are coherently delivered would be to include a per child school meal element in universal credit, which is paid to schools via local authorities to provide meals, and in effect passports children in receipt of universal credit to school meals. That would, of course, potentially extend eligibility, and we know that extended eligibility is not the Government’s intention. It is not anyone’s intention currently. Although the Government and Ministers have said that they are sympathetic to the argument for an extension to free school meals—the Under-Secretary of State for Education, the hon. Member for East Worthing and Shoreham (Tim Loughton) has announced that the coalition would consider extending free school meal eligibility—that expenditure is not actually in the budget. As things stand, universal credit needs to be able to accommodate a provision for school meals that does not extend eligibility, but that leaves us, of course, with the cliff edge problem.

There are a number of different models to eliminate the high marginal deduction rate. It is important, as we have discussed in terms of housing and of child care, for the Government to give us an impact assessment and the modelling, so that we can appraise seriously the pros and cons of the different technical models to deliver this in a way that avoids cliff edges.

Although the amendment centres on free school meals, the same principles apply to other passported benefits. I know that the Government are considering a phased tapering away of other passported benefits, so that there is no single withdrawal at a particular level of income. Will the Minister tell us how the thinking behind that is proceeding? The difficulty with doing that is that we might end up with a degree of confusion, because people will not know exactly how benefits will be tapered away.

Guto Bebb (Conservative, Aberconwy)

I am interested in the hon. Lady’s comments about the passported benefits and the way in which they might be tapered away. Five members of the Committee are from Scotland or Wales, which have free prescriptions. Does the hon. Lady have any ideas about how that should work in the universal credit system?

Karen Buck (Labour, Westminster North)

I intend to end with a few questions, one of which centres on the exact issue of how the aims of universal credit interact with the roles of local authorities, which are the delivery agencies for free school meals, and of the devolved Administrations. They will have to be worked through, and important, practical questions need to be understood. That is yet another area in which the Bill as drafted contains a fundamental lack of clarity.

When does the Minister expect a decision to be made about how free school meals in particular and passported benefits in general will be addressed, so that we can consider the pros and cons of the different delivery options? How does he think we can avoid the cliff edge? Does he accept the view of Citizens Advice that the risk is that a family could, in certain circumstances, end up in gaining an extra £1 at work, but losing £18 a week in free school meal entitlements? That is obviously an extreme case, but it is a real one.

If the intention is broadly to assist as many people as now, which is, I believe, the stated intention with free school dinners, how does that interact with the expectation that universal credit will also increase take up, and what are the financial implications for school meals? If we are working within a fixed financial envelope but universal credit extends take up, will eligibility then be lower for families who currently receive assistance?

How will the technical side and IT be able to deliver passported benefits, given that we do not have clarity on the decisions? How does that interact with the devolved Administrations and local authorities, which are on the front line of providing delivered services? It is a question, once again, of a major gap at the heart of universal credit that does not allow us to make a proper judgment about its reliability for delivering on work incentives or for achieving all its stated aims, particularly smoothing the passage from out of work into work and avoiding cliff edges. Although, as always, it is possible for regulations to advance some of the most technical elements of the delivery, this is now the third example of an area of policy that is important and financially significant to low-income families, on which we are being asked to trust universal credit at a time when it is being undermined by the Budget’s financial cuts. That is not satisfactory and it is not a good way to judge the effectiveness of the policy. I hope that the Minister will answer those questions and give us some reassurance.

Kate Green (Labour, Stretford and Urmston)

I will be brief because, again, I follow an extremely comprehensive presentation by my hon. Friend the Member for Westminster North. First, I want to reinforce her point about the significance of school meals for people moving into low-paid work. Research carried out by the Child Poverty Action Group several years ago when I was its chief executive, together with the Low Incomes Tax Reform Group and Community Links, revealed that parents felt that one of the biggest shocks of moving into work was the loss of free school meals. Therefore, in the context of universal credit as a single in and out-of-work benefit, I am interested in hearing how the Minister intends, if at all, to use the credit to lessen that shock for people in low-paid work. My hon. Friend rightly stressed that we have a limited envelope for spending, so will there be losers as well as winners, and if so, what quantification has been made of that?

The second issue is that the price of school meals varies, between local authorities and between schools. The latest figures show that the minimum cost in primary schools is £1.20 and the maximum cost £2.30, and for secondary schools the figures are £1.55 and £2.45 respectively. I say latest figures, but I assembled this briefing just before I read the weekend newspapers, which revealed that many local authorities have put their prices up, so the figures might be on the modest side.

Can the Minister assure us that people who are entitled to free school meals will be entitled to them in full? We do not want to be in a position in which people are able to access only a partial entitlement, and in the context of tapering and disregards I am particularly concerned to hear the Minister’s thinking on that. We cannot get into a situation in which a child can afford to eat dinner on Monday, Tuesday and Wednesday but by Thursday has run out of universal credit entitlement. That would be extremely disruptive, for both the school and the child and his or her family.

Chris Grayling (Conservative, Epsom and Ewell)

The hon. Members for Westminster North and for Stretford and Urmston have identified the issue as complicated, and in many ways it is probably one of the most complicated that we are dealing with, because things such as free school meals and prescription payments sit outside the benefits systems. They are not an integrated part of the system and are, in many cases, devolved issues, which introduces additional complications.

First, though, I shall quickly deal with amendment 27. I ask the hon. Member for Westminster North to withdraw it, because it would remove the flexibility to deal with different needs. For example, we now expect to carry forward the rules that apply to the existing premium for carers, but the amendment would require us to return to primary legislation if a better way to deliver that support were identified.

As the hon. Lady knows, there have been cases—for example, concerning people who are blind or visually impaired—of a need to return to primary legislation to make changes. On the category of people who are deemed to have limited capability for work or work-related activity, if there were a policy change on how to deliver support to people in the work-related activity group, the amendment would require us to return to primary legislation.

“May” is used instead of “shall” purely to ensure that a future Administration, from whichever side of the House, have the flexibility to make entirely positive changes without necessarily having to return to primary legislation. That is the sole reason for us taking this approach, so I ask the hon. Lady not to press the amendment. One can envisage the nature of support changing or needing to respond to different circumstances in society, and we should not tie the hands of future Governments over reacting quickly to the need for change.

On amendment 28, hon. Members are right that the withdrawal of free school meals could create a cliff-edge problem. That is certainly a challenge for us, but I am not convinced that the amendment represents the only, or necessarily the best, approach. We are looking at the issue carefully, and the Secretary of State has said that he will ask the Social Security Advisory Committee to consider it and make recommendations. I should offer my congratulations to that committee’s recently appointed new chairman, one of whose first tasks will, I hope, be to respond on this matter. We will also ask the Cabinet Social Justice Committee, which draws in participation from across Government and the relevant Departments, to make recommendations.

The hon. Lady is absolutely right to talk about the problems with a taper for free school meals and about the amount of money the young person has available to use each week. As she rightly said, that is complicated still further by the variations in cost and in systems. In many schools we now have electronic systems that disguise whether a young person is receiving free school meals, which is admirable. It is important that young people are not stigmatised by the financial circumstances of their parents.

That issue does not always apply to people from traditionally low-income backgrounds, as children from previously prosperous backgrounds can suddenly find themselves in this bracket when the family breaks up or the mother is left with children and very little income. Therefore, the issue is not simply one of deprivation: it can affect all parts of society, perhaps unexpectedly. The systems put in place to remove stigma have been positive, but that adds to the complication of how we address this specific issue in relation to passported benefits.

We said in the White Paper that we aimed to stagger the point at which different passported benefits are withdrawn to reduce the impact on incentives to work. We are working with the devolved Administrations and with the Department for Education, looking at how to reduce the risk of a cliff edge in the eligibility criteria for those benefits.

Jennifer Willott (Liberal Democrat, Cardiff Central)

The Minister mentioned the electronic forms of payment for free school meals. Does that not give a potential opportunity for tapering the amount that a family gets in that area of benefit, so that, rather than having a cliff edge, the Government could gradually reduce the amount paid to that family through the electronic payment system?

Chris Grayling (Conservative, Epsom and Ewell)

The theory of what the hon. Lady says is right. The complication comes from the practicalities on the ground. Some schools have such systems, some do not. Schools may have systems that are not interoperable. The theory might be fine, but I am not certain that it could work in practice.

Kate Green (Labour, Stretford and Urmston)

Is the Minister aware of an estimate, based on Department for Education figures, that suggests that there are 24,605 schools in England alone, and even if a full 43% of them had a cashless system, which is the impression that we have, that would mean 14,000 schools without a cashless system, as described by the hon. Member for Cardiff Central? The estimated cost of putting such a cashless system into those schools is £308 million.

Chris Grayling (Conservative, Epsom and Ewell)

The hon. Lady makes a good point: sometimes, sensible theory and practical reality do not meet as we might wish. Although we can see more such systems being put in place, these are difficult issues to deal with right now.

The hon. Lady is right: we freely admit that some aspects of the current system make it complicated to create the perfect outcome, so we have to work as carefully as we can and take the time to do this properly to try to ensure that we deal with some of the complexities, whether it be child care or these issues.

In this particular case, we thought it would be sensible to ask the Social Security Advisory Committee for recommendations. Our discussions with other Departments are progressing well. The approach we take has to be simple and affordable. The issue will inevitably come back—if, indeed, it moves within the ambit of universal credit at all. Given that all these benefits lie without the benefit system, there is no certainty that they will move into the universal credit system; there is no particular need for them to do so. We have to ensure alignment between the work incentives in universal credit and the situation outside those systems.

We are working closely to try to get this matter right. We will certainly provide information to the Committee as we discuss it—as, indeed, it passes into the other place. The issue will not necessarily impact on social security regulation or legislation. The Bill contains the flexibility for it to do so, were that to be the decision, but at the moment our goal is simply to align what other Departments are doing with what we are trying to do, so that we do not create the cliff edge to which the hon. Member for Westminster North rightly drew attention.

Karen Buck (Labour, Westminster North)

We are at one in accepting that this is a very complex and difficult area. I do not think that anyone has it exactly right. It is quite disturbing that we have three massive areas of policy—housing costs, child care costs and passported benefits—where we do not know how the Government intend to deal with them, despite this being our third week in Committee. Whether they are integrated in universal credit or aligned with universal credit is probably not the most important issue. However, the centrality of the universal credit’s purpose in improving work incentives and creating a single taper cannot be judged effectively when we do not know what the Government’s approach will be.

Chris Grayling (Conservative, Epsom and Ewell)

Does the hon. Lady not accept that, within complex projects such as this, where there are issues that are difficult to resolve, it is better for the Government to be open and upfront in saying that, to be open and upfront in saying also that we want discussions across the political spectrum with expert groups that may be able to offer advice to find the best solution, and to do that without rushing? Does she not accept that that is a better way forward?

Karen Buck (Labour, Westminster North)

I agree with that totally, but I do not know why we are here. The Government introduced the Bill and they have been busy spinning its virtues, some of which we are completely comfortable with, but why are we in Committee if, as the Minister rightly says, there are so many areas of policy that fundamentally challenge, or present fundamental challenges to, its effective delivery? I am very uncomfortable with that.

Free school meals are passported benefits. As we know, and as my hon. Friend the Member for Stretford and Urmston said, free school meals are very important calculations for working parents, so it is critical that we get this right, but we are not in a position to be able to judge the extent to which any of it is compatible with the shared stated aims of universal credit.

Chris Grayling (Conservative, Epsom and Ewell)

I spent quite a lot of time over the past decade sitting in Committees in which Labour Ministers explained why they were building frameworks within which regulations could subsequently be fitted and debates on detail could happen. What has changed?

James Gray (Conservative, North Wiltshire)

Order. That is an interesting general point, but we want to focus on the question of school meals.

Karen Buck (Labour, Westminster North)

School meals are an aspect of public policy that is so critical and so integral to universal credit that it is very hard to have a thoughtful discussion or to make judgments on it without having that information in front of us. We need to be assured, and I am not sure that we have been yet, about exactly when we will have in front of us a set of models and an impact assessment that enable us to judge the advantages and disadvantages—difficult though they are, as we all agree—of the different ways of making this work and how those will be compatible with the work incentive and the tapers that are the heart of the universal credit.

I do not intend to press the amendment to a vote, but I am very uncomfortable indeed with what is a third critical area of policy within universal credit on which we do not have satisfactory answers even as we approach the Committee’s halfway point.

I beg to ask leave to withdraw the amendment.

Margaret Curran (Labour, Glasgow East)

I beg to move amendment 29, in clause 12, page 5, line 38, at end insert—

‘(d) the fact that a claimant is a severely disabled person.’.

It is a pleasure to serve under your chairmanship, Mr Gray. My comments will be made in parallel with the comments I made last week with reference to disabled children. The amendment is about disabled adults, so this debate is very much a continuation of last week’s. I would not wish to induce any grumpiness, so I will be brief and not repeat what I said then.

Government policy in this field has developed since I tabled amendments, so, if the Committee will bear with me, I will refer to the policy as developed, rather than the context of the amendment. In some ways, I will be continuing the point that has just been made by my hon. Friend the Member for Westminster North. I accept that when the Government produce such policies, they do not, and nor would any Government, necessarily wish to include the details in the Bill or in primary legislation. I accept that levels of benefit would perhaps not be referred to directly, but I again make a claim for more detail to be given to the Committee. As my hon. Friend said, we are being asked to judge whether we support universal credit, but that judgment and our support will be determined by how universal credit impacts on certain groups of people.

I am sympathetic to the case for universal credit and to strong efforts being made to ensure that people work and play their part in society, so that they are not just passive recipients of benefits. I am supportive of that, but my conclusions about universal credit will be determined by how it works for people and whether it is fair and effective. My perspective is particularly on issues of disability and how universal credit affects disabled people. I will make my comments with reference to that.

Chris Grayling (Conservative, Epsom and Ewell)

It might help the hon. Lady if I invite her to look at clause 12(2)(b). It says:

“the fact that a claimant has limited capability for work and word-related activity”.

Such claimants are those who are in the support group, who are categorised as severely disabled.

Margaret Curran (Labour, Glasgow East)

I am about to address that, because I recognise that the Government’s efforts have been concentrated in that area. My argument relates to the implications of the measure for other people, especially disabled people, and their benefit and income levels. I recognise that levels of income will not be specified in legislation, but it is legitimate and reasonable for us to ask whether other people’s incomes will be substantially reduced. I have a number of questions to put to the Minister on that matter. I ask him to come back to us with some more information, because my concern is not simply about the detail of policy and benefit levels; it is about policy shifts, and shifts in principle between how disabled people are treated under the current benefit system and under the changes with universal credit.

The Minister has indicated that one of the big shifts in policy will be an emphasis on providing more support to severely disabled people, which is very reasonable. It is incumbent on us to say, however, that the implication of that policy shift is less support for those with moderate and middle levels of disability. The measure has a huge implication for the living standards, quality of life and opportunities of such disabled people and their families. It raises questions about how universal credit is being developed and will be managed.

George Hollingbery (Conservative, Meon Valley)

To explore further the general principle behind the measure, is the hon. Lady saying that she does not believe that in difficult times resources should be focused on the most disabled? Is she saying that we should maintain the same level of budget as before and that the impact should be felt across the spectrum of disability?

Margaret Curran (Labour, Glasgow East)

I refer the hon. Gentleman to the comments that were made last week. Unsurprisingly, I think that the previous Government’s approach to the matter was reasonable and positive. I caution him that in any discussion about disability, the disability movement will say, assertively, “Yes, of course you must look at the needs of the most severely disabled, but you must be very careful how you define that.” If we do so at the expense of those who have moderate disability, such as learning difficulties, or those who are, perhaps, autistic—I shall provide examples as I make my comments—we do them a profound disservice. We should look at disability in the round rather than simply at the most severe cases.

Kate Green (Labour, Stretford and Urmston)

My hon. Friend is absolutely right. Does she also agree that one of the reasons for ensuring adequate financial support for people with less profound disabilities is that they are precisely those who may be able to enter paid employment? To remove the extra financial support that might enable them to make that move—because they are required, or choose, to do so—seems short-sighted in the context of the universal credit.

Margaret Curran (Labour, Glasgow East)

I thank my hon. Friend for her comments. Such concerns will be one of the strands of comment about the Government’s attitudes and practices in relation to disabled people and the division drawn in the disability community. Disabled people feel strongly about that. We are developing our understanding of disability, perhaps most significantly in relation to autism. People associated with autism would urge us strongly not to dismiss their experience or say that they are not worthy of support because the disabilities are not noticeably as severe as those of others. It is a controversial area, but one that is worth considering. I take the point that the hon. Member for Meon Valley has made.

I shall focus on the issues that relate to the amendment. As has been said, in any change of benefit there will be winners and losers. That is to be expected. I have a number of questions to ask about the winners and losers under the provisions. As the Minister himself indicated, the clear winners from the Government’s proposals are those who are in the support group but currently do not get severe disability premium. That group will do particularly well. At the end, I will ask the Minister about the numbers. Perhaps we can come back to that, if he is willing to help us work them out. The losers are those in the work-related group and those who currently get the severe disability premium.

I urge hon. Members to look at the figures in the briefings made available to us, particularly this morning. For the families and individuals who will be losers, the sums of money involved are substantial. I ask hon. Members to consider the experience of disability and what it does to family income and opportunities; losing substantial amounts of income as well is a significant step. I note what the Minister said last week about the impact assessment, which the Government feel covered those issues, but I press him on it again. In light of the implications for certain groups, I think that it is necessary to spell out in more detail what impact the measures will have. We must know the implications for disabled people in the support group who do not currently have carers. We recognise that individuals who do not have carers in their family incur significant costs. They might have to do many extra things and face extra costs.

Many groups are particularly concerned about that. Family Action has drawn our attention to young carers who do not attract the carer’s allowance and therefore fall within that category. If they now receive money, they will lose it if they enter those circumstances. Family Action says that the measures will have a particular impact on young carers. I hazard a guess that most of us here want to support families who include young carers; I have heard hon. Members talk in the Chamber about caring issues, particularly the burdens faced by young carers. I do not think that any of us would want to cause difficulties for such families. Those issues must be spelled out for us.

We must think through the implications for people in the work-related activity group, who will lose significant sums. Citizens Advice has drawn our attention to blind people, who might be in that group and could lose money. People whom I think most of us would recognise as being in need or clearly disabled could lose money as a result of the measures. We must ask the Minister about those key groups.

Can the Minister come back to the Committee today or at another time with answers? What specific groups will be affected by the changes, and how many people are involved? What will the impact on those people be? In reference to a point that I made last week, he told the Committee that all the resources lost to disabled children will be recycled within the disability group. Can I therefore assume that those resources will be spent on disabled adults, and that more money will be spent on that category of people? Will he spell out the amounts and tell us which group of disabled adults will benefit?

Finally, what discussions have been held with disability organisations about the Government’s proposed changes? There is a scale of concern among disability organisations about the proposals. In light of what the Minister has said about wanting to be constructive and come forward with solutions to the challenges of universal credit, I am sure that those organisations and any other key stakeholders are willing to participate to resolve some of the difficulties, particularly for young carers and those without carers.

Chris Grayling (Conservative, Epsom and Ewell)

We recognise that the issue is extremely important. We seek to create a simplified system to mirror the structure within the existing employment and support allowance structure, which we inherited from the previous Government. It made a sensible split into three groups: those fit for work, those in the work-related activity group and those in the support group. It makes logical sense to align the support that we provide to disabled people with those three areas. Generally speaking, those in the support group are those who need the most intensive long-term care. As you are aware, many of those are not even invited to take part in a work capability assessment, such is the nature of their condition, and rightly so. She made a particular point about young carers. I would expect that, where the disability was sufficiently severe for a child to have to provide the support, that family would have an adult in the support group.

Margaret Curran (Labour, Glasgow East)

If that were not the case and there were circumstances in which the adult was not in the support group, would you think that resources would be made available?

James Gray (Conservative, North Wiltshire)

I would not.

Margaret Curran (Labour, Glasgow East)

The Minister, I am sorry.

Chris Grayling (Conservative, Epsom and Ewell)

One never says never to any situation, but my expectation would be that in almost all cases there would be an adult in the support group. I am open to discussing that particular issue with my colleague, the Minister for Disabled People, but that is my expectation where a young carer is looking after an adult who is sufficiently immobile that they are not even judged to have limited capability for work and therefore the child needs to provide the level of intense caring that we do see in many families.

These people are hugely to be admired. The young people in this country who care for disabled parents lose many aspects of their childhood as they grow up and deserve our admiration and support. Our focus is on increasing the level of support for those in the support group. We intend to increase the amount of universal credit for people in this category—subsection (2)(b) in this clause. That is why we also do not need the line that she has proposed in her amendment, though I suspect it is in order to stimulate the debate. That is the group we envisage as being the most severely disabled—those who do not have the ability to go to work and those who receive ongoing unconditional support from the state. They will be the focus of the financial support we provide. It is our goal to increase the support provided to people in that group to £74.50 a week over time from the current rate of £31.40. That is more than double what is provided at the moment. We think that is a better approach than multiple additions which give no clear income guarantee to those who need it most.

Margaret Curran (Labour, Glasgow East)

I take the point about simplification, and I accept that the Government are sympathetic to young carers. However, families with young carers would not technically be registered as having a carer because of the age of the carer, but they could be in receipt of a severe disability premium, which might be higher than the measures in the Government proposals, so the family could ultimately lose a significant amount of money. I would draw the Minister’s attention to those circumstances.

Chris Grayling (Conservative, Epsom and Ewell)

I note the hon. Lady’s comments and I am happy to make a commitment to look at that situation. It is my view that households where a parent is disabled to the extent that they do not have even a limited capability for work are unlikely to be in the position of households with young carers whose parents depend on them utterly for basic day-to-day support for the basic routine in the home, let alone anything outside the home. We are sympathetic and mindful of the needs of young carers and I am happy to commit to having that discussion with my colleague.

In these measures, we have taken steps to ensure that no current claimant loses out. The transition protection will protect people in this position. The people who notionally might have been losers had we not built in transitional protection are likely to be single people who are fit for work; or who could do some work-related activity; or people who would be entitled to both enhanced and severe disability premiums. Our intention is that a single person in the work-related group would get £91.40 a week; the support group would get £139.95 a week.

The hon. Lady asked about the numbers, but we will not know for sure until we have completed the incapacity benefit migration exercise. However, we have the initial findings from that work, and she will have seen that they were reported in the past few days, as information is available on the Department’s website. We have discovered that roughly a third of people have been found fit for work. A little under 40% have been found to have limited capability for work, and the remainder have been placed in the support group. The work-related activity group is slightly smaller so far, based on the experience to date, than we anticipated. There are more people in the support group and more people in the fit-for-work group. We will only know for certain what the impact and changes are numerically once we are further into the national migration and have a real sense of the long-term balance between those three groups. We will, as a matter of routine, continue to provide information to hon. Members as the months go by about the experience of the full national roll-out that began yesterday. Broadly, we expect that there will be fewer people in the work-related activity group.

The focus of our support, and the place we have chosen to invest the resources available, is the support group. There are a small number of cases where, as a result of programmes such as Work Choice, which is operated by the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller), some people have the opportunity to get back into work despite having a severe disability, although there is no obligation on them to do so. People in the work-related activity group are judged to have some potential to return to work, either now or in future, and they have an obligation to take part in work preparation activities.

We have made a conscious policy decision to concentrate our support on people in the support group, to increase the resources available to them and create a simplified and more streamlined system. Where adjustments must be made because people are moving around between different categories of support, we have put in place transitional protection to ensure that nobody loses out in cash terms. That is our approach and we have made provision in the Bill to help the most severely disabled people. Should any future Government wish to withdraw that support, they would have to come back to Parliament through primary legislation—that is one hurdle that a future Administration should certainly have to jump. What the hon. Lady asks for is already in the legislation, and I hope that on the basis of those remarks, she will allow the Bill to proceed in its current form.

Margaret Curran (Labour, Glasgow East)

I am happy to withdraw the amendment in light of the policies outlined by the Minister, which my amendment was designed to extract. I thank the Minister for saying that he will look again at issues that affect young carers, and the interaction between the support group and those who currently receive payment for severe disabilities. There could be some losers in that group, which we may have to address. I take the point about the numbers, which will undoubtedly be an ongoing discussion. Perhaps the Minister could think again about an impact assessment. It may not necessarily look at numbers, but it could look at key groups and who will be the winners and losers in those groups.

My final point is that significant groups of people with disabilities will lose out under this legislation. They may not have the most severe disabilities, but they have extra costs and require support. They are currently supported through the benefit system, but they will lose that support under the universal credit system. Those people will be distressed by the outcome of the legislation, and we must give much greater consideration to that matter. In light of those remarks, I beg to ask leave to withdraw the amendment.

Chris Grayling (Conservative, Epsom and Ewell)

I hope hon. Members will feel that we have discussed the salient issues in the clause, so I am happy for the question to be put.

Clause 13

Anas Sarwar (Labour, Glasgow Central)

I beg to move amendment 43, in clause 13, page 6, line 8, at end insert—

‘(1A) The Secretary of State shall, when imposing work-related requirements with which claimants must comply, ensure that claimants have the necessary type and level of personalised support, and access to localised support, to enable them to obtain employment, or to undertake work or work related activity.’.

James Gray (Conservative, North Wiltshire)

With this it will be convenient to discuss amendment 59, in clause 22, page 10, line 32, at end add—

‘(4) The Secretary of State must, except in prescribed circumstances, provide a claimant with access to personally tailored work-related support.

(5) Regulations are to specify, or provide for, minimum standards for provision of personally tailored work-related support.’.

Anas Sarwar (Labour, Glasgow Central)

It is a pleasure to serve under your chairmanship, Mr Gray. As a fellow Glaswegian, I know that people from the west of Scotland should never be made grumpy, so I will be brief and to the point.

The amendment seeks to probe the Government’s plans to provide personalised and localised support to enable individuals to obtain employment and equip them with the skills to undertake work. Some recipients of universal credit will no doubt come from difficult backgrounds, and they will require a certain type and quality of support. It is crucial that the Government recognise that some claimants require intensive, individual support to assist them in obtaining employment. It would be helpful if the Minister provided details to confirm and clarify what type and level of support specifically designed to identify and address barriers to employment will be made available to claimants. If universal credit and other reforms are to have a true effect and become a pathway to fulfilling and lasting employment, it is essential that an holistic approach takes into account individual circumstances and needs. That is particularly important for groups that face the greatest barriers to employment, such as young people, those with disabilities, single parents and the long-term unemployed.

One example I have witnessed working in my constituency is the Youthbuild project, supported by Action for Children, which provides training and employment opportunities for young people in the construction industry. Support includes interview and induction preparation, work experience, training courses, skills development and direct personal support from the staff. Youthbuild provides services to young people who may have come from a disruptive background, who may have been previously in care, who have had to deal with chaotic lifestyles, such as drug dependency in the family or teenage pregnancy, and who may also have been in contact with the criminal justice system.

This is exactly the kind of targeted support we need to roll out across the country. At a time of budget cuts across local government, and with voluntary sector organisations having to tighten their own budgets, we run the risk of seeing that support being withdrawn right across the country. That does not feed into the Government’s vision of a big society. I would appreciate it if the Minister told us what support would be available for individuals to turn their lives around and to end their dependency on the state. In his winding-up speech on Second Reading, the Minister said that the Government would provide more individualised support to help people move back into the workplace. So far we have seen little or no detail on that.

Does the Minister accept, first, that some claimants will require targeted personalised support to participate in schemes to assist them in obtaining employment or to undertake work or work-related activity? Secondly, what type and level of assistance will be made available to support individual claimants to access work to make sure that they stay in work placements as part of the welfare proposals? Thirdly, what funding, if any, will be made available as part of these proposals to provide such support? I look forward to his detailed reply.

Kate Green (Labour, Stretford and Urmston)

I would like to speak to amendment 59. As an Edinburgh girl I certainly do not want to do anything that would make anyone grumpy, so I will be brief. I know that the Minister will probably not welcome or agree with the amendment, because I am well aware of the Government’s enthusiasm for what they call the black-box approach to state support for people who are preparing to return to employment. I tabled the amendment because there are concerns about that approach, which can work only if one believes in a perfect market for labour market services. As evidence around the world shows, that market does not always work perfectly or for ever. It is important that the most vulnerable individuals can feel confident that there will be a minimum level of personalised, tailor-made support.

We are particularly concerned about that because, as the Minister will be aware from his recent appearance before the Work and Pensions Committee during our inquiry on the contracting structure for the Work programme, there are concerns that even within the incentive model that has been designed for the new Work programme contracts, there is still a residual risk of creaming and parking. It has long been the experience in the delivery of employment services that that always occurs and that providers always find a way to do some of that, whatever incentive structure is designed. My amendment seeks to ensure that that is mitigated at bottom and that providers are restrained from doing so. I do not expect the Minister to welcome the amendment, but I would be interested to hear his comments.

Chris Grayling (Conservative, Epsom and Ewell)

Let me deal with the hon. Lady’s comments in reverse order. I am well aware of the issues to which she draws attention. It has been a matter for concern for us in shaping the contracting structure of the Work programme. She is right to raise the question of creaming and parking, which have undoubtedly happened on a number of occasions over the years. The two measures we have taken to address it will, I hope, address her fears. We required every bidder in the contracting process to set a minimum standard of support that they will provide for everyone referred to them. We have not sought to dictate what that standard should be. In assessing the bids, we looked at the quality of what was on offer from the different bidders. We are satisfied that there is a contractual requirement not simply to send half the people down the corridor to sit reading the paper while the other half get the back-to-work support. Any organisation that took that approach would be in breach of contract and I have made it clear that I will have no compunction at all about terminating contracts if we need to do so.

Kate Green (Labour, Stretford and Urmston)

I am grateful for that assurance. Will the Minister explain what monitoring procedures are being put in place?

Chris Grayling (Conservative, Epsom and Ewell)

There will be routine monitoring of contracts and contract performance by the Department, but not on an overbearing basis. We will have systems in place to monitor contracts, contract performance and what is happening. Most importantly, we will also listen to those people who go along and then come back to us. There is a formal right to complain about the standard of provision. There is a provision for the independent case examiner to look at each particular case and if we begin to receive successful complaints about the standard of provision, or about the provision that is not being provided, we will take significant and immediate steps to address the issue.

If I believe that any provider is failing to live up to their contractual commitments, we will act quickly to deal with that situation. We will fire a firm shot across their bows and if they do not respond, I am very happy to see contracts terminated. One of the things that I find most encouraging, given the highly competitive nature of the bidding for the Work programme, is that if somebody falls by the wayside and does not deliver what they have said they will deliver, there are others willing to step in and take their place.

I give the hon. Lady my clear assurance that we expect and ask for commitments about what will be provided within the black box. We have not sought to dictate its contents, but we will be rigorous about ensuring that what has been promised is delivered.

Sheila Gilmore (Labour, Edinburgh East)

I am slightly puzzled as to how the Minister can be clear that there are minimum standards if he has not sought to specify what those standards are. How is it possible to monitor something that is so open-ended?

Chris Grayling (Conservative, Epsom and Ewell)

The hon. Lady has put her finger on a key difference between the approach of the current Government and that of the previous Government. We have not sought to tell the bidders how to do the job. They have told us what they intend to do and we expect them to live up to that. I cannot accept the proposals about setting requirements in regulations because we no longer believe that Whitehall should dictate the structure of programmes. We believe that individual organisations should tailor the programmes to best suit the individuals or groups of individuals they are working with, but we expect them to tell us in broad terms what they are planning to do and if they do not deliver what they say they will deliver they should expect to lose their contract.

Ian Swales (Liberal Democrat, Redcar)

Does the Minister agree that he is talking about the managerial control of the system and that putting a word such as “necessary” into the legislation opens the door for all kinds of judicial challenges from people about whether they have had what they regard as the “necessary” support?

Chris Grayling (Conservative, Epsom and Ewell)

Absolutely. The lessons from the past decade are that the more that we seek to dictate, structure and create frameworks, the less effective the support networks are. That is the point that I wanted to make to the hon. Member for Glasgow Central, who rightly raised legitimate concerns about the need to provide flexible and individualised support. That is what the Work programme is designed to do and it is also what the support systems that we have put in place for the earlier days of job search in Jobcentre Plus are designed to do.

In Jobcentre Plus, for example, for those who are relatively new to being on benefits, we have removed a lot of the guidance, frameworks and the instructions from the centre about how the funds that are available to Jobcentre Plus in the front line can be used. I would much rather that Jobcentre Plus managers said, “The key issue in our area is this”, and that they divert resource towards it. If there is a large problem with youth unemployment, there is a need to provide additional training support, and the funds available to managers can be used for that purpose. In other areas, the problem might concern older workers, or transport. However, we must allow our front-line staff the discretion to adapt to localised circumstances and individual circumstances. In Jobcentre Plus, we have taken very clear steps to ensure that that is the case.

Anas Sarwar (Labour, Glasgow Central)

I fully understand what the Minister is trying to say about localising support. I just wonder what level of training will be given in Jobcentre Plus offices to people at the front line to identify the barriers for certain individuals who come through their door. How will that process take place so that those individuals receive the personalised support that they need? If staff are dealing with people who come from very difficult backgrounds and who need that personal support, I wonder what training they will have.

Chris Grayling (Conservative, Epsom and Ewell)

The hon. Gentleman makes a very interesting point. Funnily enough, the training is not what he thinks it should be. In my conversations with Jobcentre Plus staff, I have not found that the issue is about their not knowing what needs to be done on the ground. The issue is much more about their understanding the flexibility that is now available to them, so that they can respond to what needs to be done on the ground. The organisation is still a bit inclined to be trapped in a way of thinking, “What does the guidance from the centre say”? I had a conversation just a few weeks ago with a group of Jobcentre Plus staff who were surprised to discover that they had the flexibility to do some of the things that they had wanted to do. I see the education process as being about changing the culture of the organisation, so that people realise that that flexibility is there, and not about deciding how that flexibility should be used.

In the case of the Work programme, in my view the combination of the black box approach and the payment by results regime incentivises the likely focus on the needs of the individual to the best possible degree. The providers cannot be paid unless they find an individual the right job, because if they do not, that individual is much more likely to drop out, and they are not paid in full. So, within the system we have established a real incentive to ensure that the provider matches an individual to an opportunity, builds close relationships with local employers so that they understand their needs, and can take an individual with a particular skill set and match them to the employer’s requirements.

The hon. Member for Glasgow Central rightly makes the case for the role of local voluntary sector groups in his own constituency. One of the things I was most pleased about in the outcome of the Work programme contracting basis was the fact that we had a really good mix of voluntary sector organisations. We do not simply have the private sector investing £580 million in back-to-work support in the next 12 months—money that they are putting in at their own risk, with a commitment to deliver for unemployed people up and down the country. Alongside them, we have a really good mix of voluntary sector organisations, ranging from big national organisations such as Mind and Mencap, which have real skills that they can bring in helping some of the most challenged people on welfare to get back into work—some of those people are in the work-based activity group—to organisations that can deliver localised support on the ground. There are some good projects in Scotland that will be part of the mix in future.

Sheila Gilmore (Labour, Edinburgh East)

It is precisely that point that I would like the Minster to address. Perhaps I have misread the letter that he sent out this week, but it appears that the proportion of the contract going to the voluntary sector in Scotland is in the region of 6%.

Chris Grayling (Conservative, Epsom and Ewell)

No, that is not my understanding. I do not have the figures with me, but across the whole country, the amount of business that is likely to go to the voluntary sector is between 40% and 50%. There is a good spread of organisations in the voluntary sector in Scotland, ranging from a small, local, third sector organisation in the Hebrides, to established organisations in the bigger cities.

Sheila Gilmore (Labour, Edinburgh East)

I am struggling to understand, because we received a letter from the Minister this week that appeared to break down the proportions in each contract. There are two large contractors in Scotland, Igneous Recruitment and—

Chris Grayling (Conservative, Epsom and Ewell)

Working Links.

Sheila Gilmore (Labour, Edinburgh East)

For each there was a breakdown of the proportion that was private sector, voluntary sector, and so forth. As I said, I was very concerned about the apparently low level of provision by the voluntary sector in Scotland, which appeared to be in the region of 6%.

Chris Grayling (Conservative, Epsom and Ewell)

That is not my memory of the situation, but I will check the position, and if the hon. Lady wishes we can discuss it this afternoon, before the Committee sits. I am very pleased that across the whole of the UK the average percentage of business that will flow to the voluntary sector is between 40% and 50%, and while there is some variation I do not remember it being as varied as she describes. Indeed, I can remember a very long list of organisations in Scotland that will benefit from these contracts, but I will give her an answer on that after lunch. I hope that the nature of the support provided through the Work programme, the flexibility given to front line staff, and the safeguards—I have said that we will make absolutely sure that that is there—in the process of dealing with Work programme contracts will reassure hon. Members that the support they are looking for will be there.

Anas Sarwar (Labour, Glasgow Central)

I thank the Minister for his reply, and for the details he has given about the Work programme and about the localised support that will be provided at job centres. We still need to see how that process would work. We do not have clear details on how the Work programme, job centres, and front-line staff will work in practice in local communities. We need to see more detail as the Bill progresses, and I look forward to hearing more during our debates and beyond. With that, I beg to ask leave to withdraw the amendment.

Kate Green (Labour, Stretford and Urmston)

I beg to move amendment 68, in clause 13, page 6, line 20, at end insert—

‘(4) A decision by the Secretary of State as to which of the work-related groups the claimant falls into is a decision of the Secretary of State for the purposes of the Social Security Act 1998, in particular sections 8, 9, 10 and 12 of that Act.’.

The amendment is rather techie, and it might not be obvious what on earth it is about. However, it is simple and I can explain it briefly. Which work-related group claimants are placed into is up to the decision maker, and under the amendment such a decision would attract a right of appeal. At present, the position is not clear, but it seems that decisions about which work-related group claimants might fall into will be solely for the Secretary of State. It is not clear whether there will be a right of challenge in respect of those decisions.

A good example of what such a provision would mean in practice leads me to clause 19, which we shall debate later, as it sets out the different groups into which a claimant might be put when he or she is not required to undertake work-related activity. That is particularly likely when someone has undertaken the work capability assessment, for example, and it has been found that they might or might not be fit for either work or preparing for work. As the Minister knows, that has been hotly contested territory since the work capability assessment was introduced.

We certainly look forward to some improvements on that front as the result of the reforms that the Government are introducing in the wake of Professor Malcolm Harrington’s report, but it is fair to say that a decision left entirely to the Secretary of State, when there is so much worry and doubt about how such decisions are taken, will cause disquiet to claimants, whereas a right of challenge would offer them some reassurance about the process. Claimants will not naturally fall into a particular group, and in many instances, wrongly or rightly, they may believe that they should be in a different work-related group with no or a lesser work requirement, while the Secretary of State thinks otherwise.

The amendment would make the decision on which group claimants are placed into subject to existing social security adjudication machinery. It would not create a new set of appeal rights. The claimants would therefore have the right to appeal such decisions to a first-tier tribunal and, when necessary, to the upper tribunal and beyond. I suspect that the Minister will not welcome the amendment, but it is important because it would introduce a new landscape and offer reassurance to claimants that their rights and interests were fully protected. It is in that spirit that I move the amendment.

Chris Grayling (Conservative, Epsom and Ewell)

Let me assure the hon. Lady that the legal powers in such matters rise far higher than the Bill. Under the Human Rights Act 1998 and article 6 of the European convention on human rights, there is a statutory right of appeal, which has been endorsed by the Supreme Court. In decisions following the outcome of the work capability assessment to place someone in the fit-for-work group, the work-related activity group or the support group, there is indeed a statutory right of appeal.

The hon. Lady will be aware that, later in the Bill, we have included a provision—I shall return to it—that will require someone to seek a reconsideration with Jobcentre Plus before they make the appeal. That has been included purely for technical reasons because people can do both at the same time and forget that they have done the other one, but there is an absolute right of appeal that goes beyond the Secretary of State. I assure the hon. Lady that that right will not change as a result of the Bill. It is linked with the Human Rights Act and the powers under article 6, so I hope that she will be reassured that the rights are in place.

Kate Green (Labour, Stretford and Urmston)

I am grateful to the Minister for that assurance and for highlighting the role of the Human Rights Act in protecting claimants’ rights in such a context. It would do no harm for the amendment to be accepted, given that it would not create a new right but would merely highlight and articulate its existence. However, I accept what the Minister says, and I beg to ask leave to withdraw the amendment.

Chris Grayling (Conservative, Epsom and Ewell)

This requires only a few moments of explanation. The Bill restates the position that was established by the previous Government with the different categorisation of claimant groups. We do not seek to change that. The clause simply paves the way for the more detailed clauses that follow, which will enable us to debate the details of our proposals. I hope that the Opposition are happy to accept the clause.

Clause 14

Kate Green (Labour, Stretford and Urmston)

I beg to move amendment 1, in clause 14, page 6, line 23, at end insert

‘and a statement of the responsibilities of the Secretary of State with regards to that claimant.’.

James Gray (Conservative, North Wiltshire)

With this it will be convenient to discuss amendment 2, in clause 14, page 6, leave out lines 32 and 33 and insert—

‘(c) a statement of the responsibilities of the Secretary of State with regard to that claimant,

(d) details of how the claimant may appeal the contents of the claimant commitment,

(e) any other information the Secretary of State considers it appropriate to include.’.

Kate Green (Labour, Stretford and Urmston)

This is quite an important philosophical amendment, and it will be interesting to hear the Committee debate it. We are moving into fundamentally new territory with the introduction of universal credit, and Ministers and Government Members have expressed great enthusiasm for what they clearly regard as a transformational step forward in the design of social support through the welfare state. I feel that some of the claims that are made for universal credit in the context of the history of the welfare state are a little exaggerated, but none the less we are certainly moving into a new world, given the financial support that will be provided and the introduction of the Work programme and a much more—we are told—personalised approach to providing support for claimants to move into employment. Ministers argue that that is a significant step forward in welfare reform.

In that spirit, it will be extremely unfortunate if these reforms are understood to be something that is being done to claimants because they will not comply otherwise. That is completely the wrong mindset with which to embark on such reforms, and it is completely unnecessary. The vast majority of people who are on out-of-work benefits would love to be in paid employment. I am aware that that is not the popular prejudice, but it is undoubtedly true. The reason why so many lone parents are unable to work is not that they are lazy or that they do not like the look of the jobs on offer. All too often, that they cannot take those jobs because suitable child care is not available. When they can find someone to look after their child, their employer might not be prepared to say that they can go home when their child suddenly needs them. The reason why so many disabled people are unable to be employed is not that they do not want to be, but that the workplace is not well adapted to their needs, or that employers do not want to employ them or cannot see past the disability to the skills and attributes that disabled people can bring.

Charlie Elphicke (Conservative, Dover)

I have a lot of sympathy with the hon. Lady on that point. The other day in Deal, in my constituency, I bumped into a lady who told me that she used to be a child minder but that she is no longer one because madcap regulations have increased the prices for all the people for whom she used to do child minding. Is it not really important to make access to child care easier, cheaper and simpler, particularly for lone parents?

Kate Green (Labour, Stretford and Urmston)

I could not agree more about the importance of child care that is accessible and affordable, but to that I would add that it must be good quality. That is why it has been so important to put regulatory standards into the child care market that the Government funds. It will take only one child protection disaster for politicians to realise the importance of regulation and to cause a public outcry. Although I absolutely understand where the hon. Gentleman is coming from—it is a debate that we have had many times over many years—I think that when the state is paying for child care, it should set minimum standards for the quality of care that children receive. I am sure that all hon. Members agree with that.

For working-age adults in ethnic minority communities an ethnic penalty exists in the labour market. The employment gap of about 15% is difficult to account for when we strip out things such as skill and education levels and the communities in which people often live. Certain minorities are concentrated in low-work areas, where few job opportunities are on offer. When we strip out all that, it is difficult to think that the ethnic penalty in some way reflects the fact that those people do not want to work. It is therefore important that we start by understanding that the role of the welfare system is rightly to go with the grain of most people’s aspirations. The vast majority of people would like to be in work that enables them to support themselves and their families. We should set up the procedures and structures around these reforms to support and reinforce that message.

George Hollingbery (Conservative, Meon Valley)

Has the hon. Lady heard any Government Member say anything that makes her think that we want to do anything less?

Kate Green (Labour, Stretford and Urmston)

Absolutely not. From time to time, Ministers from all parties have been guilty of a little bit of rabid rhetoric, which, whatever its intention, certainly puts the wind up claimants. I do not accuse current Ministers of being especially guilty of that—I have seen it across parties and over many years—but pandering to popular opinion is sadly something of which politicians are occasionally guilty. Whatever that may translate into in the practical administration of our welfare system, there is no doubt that claimants hear that kind of language, too, and they feel concerned, disconcerted and upset by it. I do not want to stray too far from the amendment—I am sure that you will not allow me to do so, Mr Gray—but a good example is the concern that disabled people are expressing about the range of policy changes that the Government are introducing. They feel, wrongly or rightly, that such changes see them as scroungers or undeserving. None of us intends that that message goes out to disabled people, but that is why it is important to have positive reinforcing messages that make it clear what Ministers’ intentions truly are.

Amendment 68—my other amendments that you have selected, Mr Gray, develop and amplify the theme that I am advocating—goes to the heart of the old Labour message about welfare reform, which was to balance responsibilities and rights. The amendment substantially says that the claimant commitment should be a two-way deal. The claimant should give a commitment to participate in the activities that will prepare her or him for a return to employment, where that is possible; but equally, the Secretary of State has a responsibility to provide the support that the claimant needs.

The amendment seeks to put that balance of obligations, responsibilities and entitlements into the regulatory and legislative framework that underpins the welfare reforms. That may seem like a matter of semantics or decoration, but it goes to the heart of the kind of enabling welfare state that we all want and that, I understand, Ministers intend the reforms to create. It will send a strong signal, as the Minister will know, to decision makers throughout the Jobcentre Plus hierarchy. They should understand that the framework in which they work is one that they must discuss and agree with the claimant in a spirit of mutual respect and sharing of information, concerns and ambitions. That conversation should, as much as possible, be on an equal footing, but it cannot be entirely equal, because the Secretary of State ultimately retains certain controls over the claimant.

All the evidence that we have received from Jobcentre Plus advisers and from advisers in the voluntary and private sectors shows that a relationship between the adviser and the claimant that is genuine and built on a basis of mutual respect and joint assessment of what is in the claimant’s best interests and what the claimant needs to support him or her in achieving their aspirations delivers the best employment outcomes and most quickly. We all want to see such relationships.

I proposed the amendment to create that balance of the shared aspiration of claimant and Government and also to protect claimants’ interests in what is an intrinsically unbalanced bargaining relationship—the might of the state on the one hand versus the individual on the other. It is always right that we should seek to balance and temper that inequality of bargaining power, and that is what the amendment seeks to do. It is important that we get a better balance between the commitments of the claimant and of the Department and that we create a genuinely two-way commitment in which the claimant is clear about the support to which he or she has a right. As we alluded to earlier, it is important that that support is personalised, tailor-made and appropriate to claimants’ needs. That is especially important for vulnerable claimants, such as homeless people, who have particular support needs, or parents, whose support needs relate to child care or working hours and so on.

Finally, Ministers often like to tell us that a virtue of universal credit is that it will make the system clearer and more transparent. A claimant commitment in which rights and responsibilities on both sides are clearly articulated and documented would add to that transparency and clarity. I hope that we all agree that that would usefully reinforce the policy intent. I am interested to hear the Minister’s comments. I have a number of other amendments that fill out the detail of the proposals, but I hope that hon. Members will support the spirit of the amendment.

Sheila Gilmore (Labour, Edinburgh East)

We are all very much aware of the huge improvements that have been made in how what are now called Jobcentre Plus offices operate, compared with the bad old days. We have made progress from the time when the seats were screwed to the ground, there were glass panels between customers and members of staff and the whole atmosphere was one of fear and dread. They are now seen as being open and personal, and the physical surroundings make people feel much more at ease. That enables Jobcentre Plus staff, who are very enthusiastic, to do their job better, because they have a better relationship with the person whom they are trying to help. How the office is set out and arranged is obviously part of that. Physical factors matter, because they tend to create the right atmosphere. It is also important that people feel motivated to co-operate, that they do not simply feel that there is a list of things that they have to do and that, from the beginning, they do not feel that they are being treated as someone who is not reliable.

When I raised an aspect of that earlier in Committee, the Minister or one of his hon. Friends said, “The other part of the contract is that we give people money. There is a contract: the claimant has a commitment; the state gives the money, and that’s it. We don’t need anything further to amplify that contract.” I think that that is profoundly wrong. If we want people to work with the grain of what the Government are trying to do, this is one way to ensure that people are fully engaged. The system will work better because people will be better motivated, which must be what we all want.

Chris Grayling (Conservative, Epsom and Ewell)

We have just a couple of minutes before we wind up, so I will deal with those remarks quickly.

First, there is a lack of a meeting of minds over the core of this issue. My view is straightforward: we are providing claimants with significant financial support; in return, we want them to make a real effort to get into work. That is what lies at the heart of the claimant commitment. Of course, Jobcentre Plus and Work programme providers have an obligation to provide satisfactory support to claimants as they look for work.

We have set out clear guidance internally, through our customer charters and our guidance to employees about the nature of the support that should be provided. I am reluctant to set out in regulations or law what the nature of that support should be, because that would remove the flexibility that I described earlier as being so important to advisers when delivering the right approach for an individual. The more that we prescribe, the more difficult that it is to deliver the right approach. Big public sector organisations have a tendency to default to the regulation, rather than having independence of mind on the front line.

Most fundamentally, however, the claimant commitment is about that two-way bargain: we will provide people with financial support when they are down; in return for that financial support, we expect them to do everything that they can to get back on to their feet. That is the essence of this part of the Bill, which is why I cannot accept the amendment.

Kate Green (Labour, Stretford and Urmston)

I am very disappointed with that response. It is an extremely narrow view of what an enabling welfare state should look like and the principles on which it should be based. It appears to ignore the common human interest that we all have in a welfare state that adequately supports people and in which we all have a stake. Irrespective of our circumstances, we have a right to appropriate support.

James Gray (Conservative, North Wiltshire)

I remind the Committee that with this we are discussing amendment 2, in clause 14, page 6, leave out lines 32 and 33 and insert—

‘(c) a statement of the responsibilities of the Secretary of State with regard to that claimant,

(d) details of how the claimant may appeal the contents of the claimant commitment,

(e) any other information the Secretary of State considers it appropriate to include.’.

Kate Green (Labour, Stretford and Urmston)

I was saying this morning that I was disappointed with the Minister’s answer on what I think we are all agreed is essentially the welfare bargain, to use a rather unpleasant—and probably American—term. We are talking about who gives and gets what in return for what, and about the balance of rights, entitlements, obligations and responsibilities between the claimant and the state.

As I said, it is important that we use this opportunity to ensure that there is a fair balance between the might of the state and the much weaker bargaining position of the individual, as well as to create a genuine sense and spirit of association and shared aspiration between the personal adviser, acting on behalf of the Secretary of State, and the individual claimant. We believe that that will help strongly to achieve better employment outcomes. Thirdly, we should send an important message to the public about how the vast majority of claimants are serious about wanting to work, as they are, and about the respect that we afford people who are reliant on safety-net benefits. We should not somehow treat them as the undeserving other, but as part of the community as a whole.

There is a fundamental philosophical disagreement between us and the Government—it is probably an unbridgeable divide. The Minister seems to believe that the transaction is financial and that because the state is handing out money, it is entitled dictate the terms. I do not see why we take that view when the state is providing safety-net benefits in the context of an enabling welfare state that, if we can get more people into work, will benefit the whole community. We do not have the same take-it-on-our-terms attitude, for example, to the provision of public health and care through the NHS. We seem to have some particular dislike of handing money to poor people, and a sense that they are somehow expected to behave differently—more obediently—when receiving that form of social support compared with others. That is an extremely unfortunate context in which to bring forward radical welfare reforms.

I suspect that we will not see the nature of the welfare bargain in the same way at all. Claimants will be most disappointed with the stance of Ministers. We will have an opportunity during our consideration of subsequent amendments to amplify some aspects of the relationship between the claimant and the state, but as amendment 1 is rather philosophical—the other amendments go into more detail about exactly how the relationship can be exercised—I do not intend to press it to a Division, although our debate has been helpful and illuminating. I beg to ask leave to withdraw the amendment.

Kate Green (Labour, Stretford and Urmston)

I beg to move amendment 64, in clause 14, page 6, line 24, leave out from ‘State’ to end of line 25 and insert

‘in consultation with the claimant and may be reviewed and updated by the Secretary of State on a change of circumstances or on a request by the claimant for it to be revised.’.

James Gray (Conservative, North Wiltshire)

With this it will be convenient to discuss the following:

Amendment 60, in clause 14, page 6, line 24, after ‘State’, insert

‘in conjunction with the claimant’.

Amendment 61, in clause 14, page 6, line 25, at end insert

‘or at the request of the claimant’.

Kate Green (Labour, Stretford and Urmston)

I have tabled a number of amendments to amplify the operation of the relationship between the claimant and the state. They reflect a set of arguments that repeat the point about the co-operation and collaboration between Jobcentre Plus staff—almost acting on behalf of the Secretary of State—on the one hand, and the claimant on the other. I probably do not need to repeat those points.

Also relevant to the amendments, however, is a particular recognition that a claimant commitment could be imposed on a claimant in the context of a particular set of circumstances that could change. It is important that a change in circumstances would trigger a review of whether the claimant commitment that had been put in place continued to be appropriate. The claimant, while perhaps not moving into a different form of work activity group, might none the less face different barriers and obstacles to participation in or preparation for employment, which negotiation involving Jobcentre Plus or the providers acting for the Secretary of State would, when drawing up a claimant commitment, have wanted to take into account.

Amendment 64 would allow for the possibility that a claimant commitment could be reviewed or varied if the claimant’s circumstances changed. I hope that the Secretary of State would not have difficulty with that, at least conceptually, although he might be reluctant for it to be firmed up in regulations.

Amendment 64 would also allow a claimant to initiate a request for the claimant commitment to be varied. Presumably the Minister will be concerned that that might give a green light to a lot of trivial and unjustified requests, but that would be unlikely. The claimant will be the person who knows when their circumstances change, so it would be more likely that they would want to go to their Jobcentre Plus adviser, or perhaps to a member of staff of one of the Work programme providers, to highlight that change and seek a review of those elements of the claimant commitment that were inappropriate in the light of that change.

I would welcome an indication from the Minister about how, in the context of the establishment of a claimant commitment, such varying circumstances could be raised and discussed with Jobcentre Plus advisers or Work programme staff to ensure that the claimant commitment remains at all times apposite and relevant to the situation in which a claimant finds themselves. The other amendments in the group repeat the point about the claimant being able to make a request for an alteration in the claimant commitment when that seems appropriate.

I would also welcome an explanation from the Minister about how flexible the claimant commitment will be, how often it will be examined with the claimant, how detailed it will be, and therefore how much more likely it is that it will need to be reviewed regularly and possibly changed. How much say will the claimant have in drawing certain elements to the attention of the officer with whom they are dealing when looking at the contents of the commitment, and when highlighting changes in their circumstances? I hope that the Minister will be able to give us some reassurances about those points.

Chris Grayling (Conservative, Epsom and Ewell)

There are two aspects of the way in which I want to approach the amendments. First, there are technical reasons why they are not right for the Bill. Secondly, however, I want to provide a degree of reassurance to the hon. Member for Stretford and Urmston that it is not intended that a claimant commitment will simply be imposed on someone, any more than it is intended that the current rules around job search are imposed on an individual. The individual is subject to certain rules and guidelines, but the planning of the job search is done in a partnership between an individual and an adviser.

Of course, one of the reasons why we are not simply adopting the existing job search requirements is that the universal credit can apply to a claimant both pre and post-employment. In many cases, we may be looking at somebody who has taken that first step into work and is then, having established themselves in work, looking to move on, in terms of either the number of hours they work, or finding something more substantial. That is a key reason why we have changed the nature of what we are doing.

Let me start with the technical points. There are two key aspects to the amendments. First, they would require advisers to prepare the claimant commitment “in conjunction” or “in consultation” with the claimant. Secondly, they would allow the Secretary of State to update the claimant commitment following a request by the claimant or a change in the claimant’s circumstances. Let me deal with each of those aspects in turn.

Our understanding is that the phrase

“in consultation with the claimant”

in amendment 64, or the phrase

“in conjunction with the claimant”

in amendment 60, would mean that requirements should be imposed only through a process of discussion, engagement and, potentially, agreement. However, there will be a number of circumstances in which that is not practical and when the requirements in the claimant commitment are non-negotiable. For example, the requirements to report changes of circumstance and to provide evidence of compliance are obvious examples of those for which it is absolutely clear that the claimant will follow the rule book. It is not appropriate for such requirements to be subject to discussion or negotiation along the lines that would be required by the amendments.

There are also some fundamental work-related requirements that the claimant cannot reasonably or realistically be expected to be able to call into question. The group that a claimant falls into makes it clear what these requirements are for each individual claimant. A claimant in the all-work-related requirements group must look for work, while a claimant in the work-focused-interviews-only group must attend work-focused interviews. Those basic responsibilities must be met.

Yvonne Fovargue (Labour, Makerfield)

I want to ensure that the claimant understands the commitment that they make. There was an incident in my constituency when a claimant did not understand the requirement to attend a work-focused interview. The Jobcentre Plus advisor had booked an Urdu translator, but the claimant spoke very little Urdu, and they were sanctioned for not attending the interview when they did not understand what they were supposed to do.

Chris Grayling (Conservative, Epsom and Ewell)

The hon. Lady makes a fair point. It is an obvious shame that the person in that situation had not mastered the English language, and that is something that we will have to address for people who come to this country. However, there is an appeal mechanism for such a situation, and if someone has been judged or sanctioned inappropriately, they have a mechanism through which they can appeal—and rightly so. I cannot claim that the system will be perfect, as mistakes will always be made, but I know that Jobcentre Plus staff endeavour to ensure that that does not happen.

Ian Swales (Liberal Democrat, Redcar)

Is the Minister happy that the proposals will be able to cope with people with mental health issues or who have particular intermittent health issues—either mental or physical—such as myalgic encephalomyelitis? I know from my constituency work that that is often part of the problem.

Chris Grayling (Conservative, Epsom and Ewell)

I am acutely aware of the issues to which the hon. Gentleman refers. There is a clear instruction from Ministers to Jobcentre Plus that one area in which we expect front-line staff to use discretion is when there is evidence of mental health problems. One cannot always be certain that those problems will be apparent at first glance, but we have to work very hard to get this right. Front-line advisers certainly have discretion over whether to sanction someone, and one of the things that we expect them to look for is a mental health issue, and that should be reflected when any decisions are taken.

We agree that there is an important role for discussion and consultation when setting the specifics of any requirement. Indeed, I would go further than that. One of the changes that we are putting into place in Jobcentre Plus is to try to ensure that when it comes to job search, an individual deals with the same adviser all of the time rather than a different person every week. That is an important aspect of creating an ongoing, joined-up process. I expect that the claimant commitment will determine exactly what work a person is looking for, when or if a work-focused interview should be taking place, and the nature of any training that they need to carry out.

I expect that the interviews will be used to develop an understanding of all factors relevant to job search requirements, and also to understand a bit more about the person themselves—their caring responsibilities, their health and their work history. In much the same way as already happens with jobseeker’s allowance, we expect the discussion with the adviser to be central to shaping the nature of the back-to-work effort. Claimants might have to look for and be available for work as a condition of entitlement to benefit, but the nature of the job search that they pursue is down to the individual discussion.

I shall now touch on the second aspect of the amendments: allowing the Secretary of State to update the commitment following a request by the claimant or a change of circumstance. The clause already allows changes to be made to the commitment in line with hon. Members’ proposals. The commitment is intended to be a record of requirements imposed on a claimant. It is the main way in which we will inform claimants of the requirements that they must meet, so it is essential that we keep it up to date, and the clause gives us the ability to review the commitment whenever that is appropriate, which will include whenever requirements imposed on a claimant are changed or need to change.

We have already discussed how the requirements imposed on a claimant must take account of all relevant matters, and not just at the beginning of a claim but throughout a claimant’s time on benefit. We will review requirements following a relevant change of circumstance, when a claimant brings a particular issue to our attention, or if the nature of job search changes. For example, it might become clear that a claimant is not going to get a job in one area of employment and therefore needs to start to look for something else.

I see this as an ongoing process of discussion between an individual and the adviser. Of course, an individual will have the right to say to the adviser, “What about this and that?” There is an obligation for changes of circumstance to be discussed. The mandatory aspect is that there are some things within the process that are a given, such as the requirement to look for a job.

Stephen Timms (Labour, East Ham)

Has the Minister seen some of the significant academic research that seems to indicate that if such commitments are co-designed—in this case between the Jobcentre Plus adviser and the individual—there is a good prospect that they will work better due to the degree of commitment on both sides?

Chris Grayling (Conservative, Epsom and Ewell)

I accept that. In operational terms, we expect that the adviser will sit down with the jobseeker at the initial interview and work through a job search plan. That is what happens now and we expect it to continue, but certain elements have to be able to be mandated by the Secretary of State. That is all the Bill provides for, but the amendments would make that more difficult.

I say to the hon. Member for Stretford and Urmston that this is of course a joint effort. One reason why we are making changes to Jobcentre Plus is to ensure that there is an ongoing relationship between a claimant and an individual adviser. The primary legislation sets out the parameters for us to put in place the minimum conditions for job search that apply to every job seeker, or everyone in a particular position as regards the conditionality that applies to them, whether that is attending a work-focused interview, looking for a job or notifying us about a change of circumstances.

I hope that that reassures the hon. Lady. There is certainly no intention simply to instruct an individual of what they should do without them having any input at all, but there is a need for a basic level of conditionality that every claimant has to meet, and that has to be able to be written into the claimant commitment in an unfettered way.

Kate Green (Labour, Stretford and Urmston)

I am grateful to the Minister his helpful and detailed response on how the Government intend the drafting and the ongoing life of a claimant commitment document to be approached, and also on the elements in the process that are to be mandated. We do not take any issue with the notion that there are mandatory elements to the relationship between a claimant and the state when the claimant is in receipt of universal credit. That is not new; it is clearly the fundamental basis of our social security system for out-of-work claimants now.

It was helpful to hear from the Minister that the intention is that the claimant will play a full part in discussing and being consulted on the factors that need to be considered when drawing up their commitment, including their point of view. As my right hon. Friend the Member for East Ham pointed out, that approach is much more likely to produce a robust and effective commitment for achieving the outcome that we all seek: claimant commitments that have been drawn up in a way that improves the likelihood that a claimant will, when possible, move into employment and progress.

It was particularly welcome that the Minister confirmed the important point that the document will, in a sense, be a living document in the context of a benefit that is both an in-work and an out-of-work benefit. We do not yet have much information about what the in-work conditionality will look like, when it will be applied and at what point the claimant may be called in for further discussion when in receipt of financial support. Clearly the claimant commitment needs to be flexible enough to reflect the fact that the extent of employment can change and that people move in and out of work, so a single and unvarying claimant commitment might not be suitable.

We have heard helpful reassurances from the Minister and I welcomed his response, so I beg to ask leave to withdraw the amendment.

Kate Green (Labour, Stretford and Urmston)

I beg to move amendment 65, in clause 14, page 6, leave out line 26 and insert—

‘(3) A claimant commitment will be in a form prescribed by the Secretary of State.

(3A) Regulations made for the purposes of subsection (3) make provision for a claimant to appeal the content of a commitment where—

(a) the claimant could not be reasonably expected to comply with the requirements of the commitment,

(b) complying with the commitment could not be reasonably expected to make it more likely that the claimants would obtain or remain in work.’.

James Gray (Conservative, North Wiltshire)

With this it will be convenient to discuss amendment 66, in clause 14, page 6, line 36, at end insert—

‘(6) A claimant who appeals the contents of a claimant commitment under the provisions of subsection (3A) shall be deemed to have complied with the commitment pending a decision on the appeal.’.

Kate Green (Labour, Stretford and Urmston)

We are nearly at the end of the amendments on the claimant commitment.

Amendment 65 would offer the opportunity for a claimant to appeal the content of a commitment when it was not reasonable to expect that they could comply with its conditions or, perhaps more subtly, when the claimant could comply with the conditions, but doing so would not make it more likely that they would obtain or remain in work. That second leg to amendment 65 is important for what we think that we are trying to achieve, and it goes back to the nature of the relationship between the state and the claimant. We are not talking about developing a system that is punitive or that is intended to be some sort of warning of what will happen if people do not find work. We genuinely intend to see universal credit developed in a way that supports and enables people, when possible, to move into paid work.

There seems little point in expecting a claimant to go through a series of hoops and loops, activities and engagements that do not increase their likelihood of obtaining or remaining in work, not least because that would significantly undermine the credibility of the claimant commitment. It is important that the claimant feels that the commitment has real relevance and will be effective in helping to move them towards paid employment. Otherwise, the nature of the relationship with the adviser will be difficult. Again, that goes back to the point that the best and most effective agreements are those that are made in a genuinely co-operative spirit, where the aspirations, goals and activities are agreed as much as possible between the claimant and the adviser.

It is right to say that Jobcentre Plus advisers are often highly regarded by claimants for the way that they are able to understand and build a relationship with them. However, where none of that is going on—we hope that that is very rare—it is right that claimants can exercise appeal rights to say that the commitment is inappropriate, perhaps because they simply could not be reasonably expected to comply with the conditions, which will be a clear-cut, evidential matter. More subtly, perhaps claimants comply with the conditions, but they do not see what will be achieved in getting them closer to paid work.

Kate Green (Labour, Stretford and Urmston)

I was just about to invite the hon. Member for Redcar to intervene, and I would be delighted if he did so now, because it would give me a breathing space.

Ian Swales (Liberal Democrat, Redcar)

Does the hon. Lady agree that the activities that claimants are expected to undertake should be proportionate and appropriate to their circumstances? Would she agree that a graduate in my constituency who has been asked to go on a three-month CV-writing course should not have to do so and that whatever box that is enabling someone to tick should not be part of the process?

Kate Green (Labour, Stretford and Urmston)

I am grateful to the hon. Gentleman. We hear reports of such frankly irrelevant, potentially insulting and time and money-wasting endeavours, which get people to fill in time, rather than improving their employment prospects. Clearly, as he says, any commitment that the claimant is required to comply with should be proportionate, relevant and likely to increase the chances of their remaining in or obtaining work. Conversely, claimants are often keen to undertake forms of education or training that they believe, but the adviser may not perceive, will improve their employment prospects. That goes to the heart of the need for the claimant commitment to be the result of a shared discussion and collaboration. Where it is quite clear that the activities that a claimant has been required to undertake are not likely to improve their employment prospects, it seems wholly appropriate that they should be able to question the commitment’s conditions.

The Minister has helpfully said that a claimant will have the opportunity to go back and raise such issues, as well as changes in circumstance, but we cannot be confident that they will always be given a receptive response. Where a real breakdown occurs between what a claimant believes to be the likelihood of obtaining work and the view of the adviser who is imposing the conditions, it seems right that the claimant’s interests are protected to the extent that he or she is able to appeal the content of a commitment that has been imposed.

Amendment 66 goes a little further in unpicking what would happen if a claimant were, in whatever circumstances, to lodge an appeal against the contents of the claimant commitment. It makes the not at all remarkable proposition that the claimant should be treated as complying with the commitment pending a decision on appeal. It would clearly be wrong to sanction a claimant who might be shown to have a perfectly legitimate case. It is not at all unusual for penalties to be stayed where appeals are made or queries raised about process. That is true in the social security system and much more generally in public policy. In fairness to the claimant, amendment 66 suggests that he or she should be deemed to be complying with the commitment until the outcome of the appeal is determined.

I hope that the Government will be amenable at least to the sentiment behind the amendments. Perhaps the Minister will take the opportunity to clarify exactly what appeal rights will exist in the context of the claimant commitment and how he envisages that claimants might, where appropriate, initiate such an appeal. I would expect—I am sure that we all hope—that such a process would be used only rarely. It is, however, an important protection for the claimant that, where something goes badly awry in the imposition of a claimant commitment, they have the right of appeal and can seek redress.

Chris Grayling (Conservative, Epsom and Ewell)

Let me touch on some of the detail referred to by hon. Member for Stretford and Urmston. The amendment would require us to make regulations that prescribe the form of the claimant commitment in universal credit, whether electronically or in hard copy, but clause 14 will allow the Secretary of State the freedom to choose the form in which the claimant commitment will be made. In reality, it will be for the delivery agency—Jobcentre Plus, predominantly—to decide the best way to set out that commitment.

I do not think that that element of the hon. Lady’s proposal needs to be prescribed in regulations. However, that really was not the essence of her argument, which was about an individual’s right of appeal against the claimant commitment. I remind her that our intention, as I described in the debate on the previous amendment, is for this genuinely to be a two-way process. A relationship should be built up between an individual claimant and an adviser, and they should work together on the job search. It is certainly our intention that there will be a sensible discussion about what is and what is not necessary.

There will be times when the adviser has to put a foot down. For example, if someone has been working in a profession but is having no success whatsoever in finding appropriate opportunities in that field, the rules rightly say that three months into the process they have to think about doing something different. The individual might be reluctant to accept the need to look more broadly for a job, but the adviser needs to put their foot down and say, “I’m afraid this is the point at which there’s no choice; you’ve got to broaden the horizons of your job search.” The process should be a collaborative exercise between two individuals, but there will be moments when the adviser has to set the terms of trade for the job search.

The appeal process kicks in when someone says, “I’m not willing to do the things that I’ve been asked to do.” That right of appeal exists because a sanction inevitably applies at that point. If, for example, the Jobcentre Plus adviser has resolved that an individual needs to start looking for something else, has established with them that they need additional IT training and has said, “I’m going to send you on an IT training course for a couple of weeks,” and the individual then turns around and says, “I won’t go,” they will be sanctioned and they have a right of appeal—a right to say, “I don’t think that’s correct.” The system normally reviews the decision internally and then refers it externally for a proper appeal. If the decision to sanction is not upheld, the situation returns to the individual’s status quo ante.

That covers the situation that the hon. Lady described, and I am not convinced about adding an extra right of appeal—allowing someone to appeal against a decision to send them on a course—because we would end up with a double appeal process. She wants a right for the individual to say, “No, I don’t want to do that course,” and if they are sanctioned for that, the right to turn around and say, “No, that’s not acceptable; I want to appeal.” That would add an extra unnecessary layer of complexity to the system, thus causing practical and operational problems.

A number of things in the commitment are essential. We must be able to set out rules for job search, attending work-focused interviews and fortnightly signing-on requirements, and we clearly could not offer a right of appeal in those circumstances. The question arises, therefore, only if an individual does not agree when an adviser asks them to do something that is not within the conventional confines of job search, such as going on a course. If the adviser says, “I insist,” the individual says, “I refuse,” and a sanction is applied, there is a right of appeal against the sanction. I believe that that process does the job that the hon. Lady requires.

We could not include a right of appeal against much of the commitment’s content, because it is a fundamental part of the rules for the receipt of benefits. Given that and the fact I have said that a right of appeal for individuals who feel that they are mistreated by the system is enshrined in the legal position that I described earlier, I hope that the hon. Lady will withdraw the amendment.

Picking up on the point made by my hon. Friend the Member for Redcar, I have heard exactly the same stories about people who are inappropriately sent on a provision that would not be right for them, and that is precisely why we want to change the nature of support in Jobcentre Plus and in the Work programme. We have had one-size-fits-all approaches. For example, the 13-week new deal programme has all too often required individuals to sit in a classroom for 13 weeks reading the paper. We have all had complaints about such approaches over the years, and I absolutely accept that the format has not always been appropriate.

I hope that with the greater flexibility that we are offering to Jobcentre Plus and through the Work programme, the situation that the hon. Member for Stretford and Urmston is anxious about will not arise in the future. To reassure her, ultimately, there is always the right of appeal. If people say, “I don’t want to do that; it is not appropriate for me,” they face a sanction, to which they have a right of appeal. I hope that she will be satisfied that the process will be sufficient to do the job that she wishes.

Kate Green (Labour, Stretford and Urmston)

I am grateful to the Minister for the clarification that he has given on the continuing status of appeal rights. It will be important for claimants to be clearly aware of their rights and how to exercise them, which is not always so in what remains a complex social security system. If the universal credit claims to be simpler and more transparent to the claimant, I hope it will include clear information for claimants when they are in a situation in which an appeal might be an appropriate remedy to attempt. I hope that information on how to exercise that right will be easy to access and simple to understand.

I do not think that any Opposition Members disagree that there will be times when an adviser will want to set down conditions that the claimant is unwilling to accept. As the Minister has pointed out, there is already a process to deal with such situations. If the process leads to a sanction that the claimant feels is unjustified, that sanction can be appealed. I hope that it will be possible within the context of the claimant commitment to ensure that that right is clear to the claimant. Claimants must also have clarity about the consequences of non-compliance, including the possible financial consequences. They must be clear about the obligations that they are expected to meet under the provision and about how to seek redress when they are unhappy.

I have found the Minister’s remarks helpful. We all share the hope that, in practice, very little use will be made of the existing appeal provisions. It is especially important, however, to have clear appeal provisions, because a substantial part of the support for claimants is now going to disappear into the famous black box. We need to be certain that what goes on in that black box on behalf of the Secretary of State is properly protecting claimants’ interests, and that claimants know how to raise concerns about their treatment, which could ultimately be exercised through their formal right of appeal where a sanction arises.

There might be other circumstances in which a claimant feels that a situation—particularly in relation to the black box—although not leading to a sanction, is unduly onerous, unreasonable or burdensome. I hope that the Minister ensures that clear complaints processes are available to claimants when they are unhappy. Of course, if such processes are good, well designed and easily accessible, they will in themselves help to reduce the incidence of cases that go to appeal. I am prepared to accept the Minister’s reassurances, so I beg to ask leave to withdraw the amendment.

Clause 15

Stephen Timms (Labour, East Ham)

I want to raise a matter with the Minister that makes its first appearance in the Bill, in clause 15. In doing so, I am conscious that the Secretary of State for Health paid a heavy price yesterday in the Chamber for pushing ahead with a badly thought out Bill. Part of the Committee’s duty is to seek to protect this Minister—and indeed his Secretary of State—from a similar fate. We have already established today some worrying gaps around child care in the Bill. To be fair, the Secretary of State was very frank with us about the difficulties the Government were having in deciding what to do about child care support. We also discussed free school meals—where we had not previously been told there was a problem—and other passported benefits, such as free prescriptions and, I presume, mortgage interest support. The Minister made the point about free school meals—they are not a social security benefit, whereas mortgage interest support is. Presumably the Government are not in a position to say who will receive mortgage interest support.

In clause 15, we come to another area—I think for the first time—which is a significant departure from the way the system has always operated. That is the proposal that people who are in work should be subject to conditions set by the jobcentre. We are all familiar with the arrangements that apply to people who are out of work, and the conditions and responsibilities imposed on them to assist them into work. In subsection (3), there is a little phrase in brackets at the end, which opens up for the first time the idea that people will be required to undertake a work-focused interview, even though they are already in work, in order to get a job entailing more hours or pay than their current one. As we go through clause 15 and subsequent clauses, that little phrase in brackets, appears several times, indicating that the Government intend to open up the possibility of a range of measures being taken to encourage people in work to get a better job. I well understand why Ministers are interested in that.

Charlie Elphicke (Conservative, Dover)

I am a little puzzled by the right hon. Gentleman’s remarks. My understanding is that this is a codification of the position that already exists under the Employment and Support Allowance Regulations 2008, which I believe—correct me if I am wrong—also contain the phrase “or more paid work or better-paid work”.

Stephen Timms (Labour, East Ham)

I was reflecting on the position with jobseeker’s allowance in the past. I think I am right in saying—and the Minister will correct me if I am not—conditionality has only applied where people have been out of work.

Chris Grayling (Conservative, Epsom and Ewell)

I remind the right hon. Gentleman that under the 16-hour rule, there is still an obligation to attend the jobcentre, to sign on and be subject to conditionality.

Stephen Timms (Labour, East Ham)

Indeed. What has changed—and the reason that this is a more prominent and novel feature of this legislation—is the removal of the 16-hour rule, and the wish the Government have explained to provide support for people who are in mini-jobs. The truth is that if people increase their pay, either by increasing their hours or by moving to a better-paid job, the call on universal credit will be reduced, and the Exchequer saves money. Therefore, it is perfectly appropriate for Ministers to wish that to happen. It will be a much bigger issue in the future than the past because of support for mini-jobs. I can well see that the Government would not wish people to avoid all conditionality if they are working for, say, one hour a week, with support from universal credit, including perhaps for the cost of child care associated with working for that one hour. It is perfectly proper that the Government would wish to encourage them to work for longer. That said, I think this is a significant change, introducing us to a potentially quite intrusive monitoring of people who are in work.

I want to ask the Minister a few questions as to how this will operate in practice. Will he assure us that people in full-time work will not be required to attend a work-focused interview under the provision in clause 15? How about people who are working 16 hours a week? Will he assure us that they will not be required to attend a work-focused interview? If there is the possibility of somebody who works 16 hours a week being required to attend a work-focused interview, when will such interviews be held, and where? What if the employer, albeit one for only 16 hours a week, objects to the person attending such an interview?

Depending on the extent to which the Minister envisages that happening, it could certainly be a significant new obligation for jobcentre staff to fulfil. I wonder whether he can tell us what assessment he has made of the staffing that will be required to carry out that additional work. How will obligations that are imposed—more under the following clauses than this one—on people who are already in work differ from those imposed on people not in work? For example, could somebody who is in work be required to attend a training course? If that conflicted with their work responsibilities, which one would they be expected to do? What about people—and many are in this position—who perhaps on paper do not seem to be doing many hours or very much work but who in reality are struggling to juggle, for example, work and child care? What sort of obligations could be imposed on them? Would they be required to attend these work-focused interviews, too?

The Bill makes it clear that people in work could be required immediately to give up a job to take on another with longer hours or higher pay. Would self-employed people be in danger of having to give up their business in order to take up higher-paid work somewhere else? Would there be some minimum pay rise specified, below which it would not be necessary to change jobs? On the face of it, somebody could be required to leave their job to gain £2 a week, which would be modestly in the Exchequer’s interest, but people would presumably not be required to do that. Would there be some kind of threshold of increased pay that would have to be exceeded for people to have to change jobs? How, in practice, will such requirements be constrained?

The clause raises a large number of questions. It is important that the Minister starts to give us some answers about this new area of the Bill, which we have not yet explored. I hope that that will make a modest contribution towards his avoiding the discomfiture suffered by his right hon. Friend yesterday.

Chris Grayling (Conservative, Epsom and Ewell)

I am grateful to the shadow Minister for his concern about my welfare. It is much appreciated.

Let me set out how we seek to approach the issue. As the right hon. Gentleman understands, it is necessary and appropriate to encourage people to take steps further back into the job market, when their circumstances permit. Clearly, one circumstance that puts a constraint on people is bringing up children. At particular stages of children’s lives, it is more difficult for a lone parent, for example, to be able to do more than a certain number of hours of work. At the same time, we want to use universal credit as a ladder for people to climb up the work scale, and in particular, for those entering employment for the first time after a long period on benefits, where the experience of a mini-job may prove to be a valuable way of beginning to get a foothold in the work place. It could be very valuable for somebody with a disability, for example, to get their first experience of work for a long time and get a sense of what they can and cannot do, then gradually begin to build up on that.

Let us be absolutely clear that if somebody is doing a full-time job and earning a reasonable wage, it is not likely that we would seek, in any way, to monitor their progress. It is about helping people to a point where they have moved out of that lower level of activity to a much greater degree of self-sufficiency, while still potentially receiving support under universal credit. There are clearly limitations, however, to the degree to which we could or would practically seek to monitor people beyond a certain stage. I do not think that it is unreasonable to say to somebody, who is going into a short-hours, part-time job to start off with, that they would come back into the jobcentre from time to time—periodically, every few months—to talk about their prospects, and that we would seek to put some additional conditionality on them, as and when it became possible to do so, to move to a job with longer hours.

A practical example of that might well be a lone parent who does a part-time job during her children’s younger years. As the children grow up, the parent can move on to a greater degree of employment. I do not think it unreasonable that we should talk to that person at that point about their options or have a degree of push within the system to encourage them to step up the number of hours that they work.

Kate Green (Labour, Stretford and Urmston)

I am interested in what the Minister is describing. Does he accept that the same argument could apply to one member of a couple who works very low hours while the other member also works relatively low hours? To return to a point discussed earlier this week, one of the things that most disconnects women in particular from the labour market is that they spend long periods either doing a series of short-term low-hours jobs or having no job at all. Where there is a couple claim in play, does he envisage that one or both members could be required to come in for reconsideration of their engagement with the jobcentre, irrespective of what is happening to the other member of the couple?

Chris Grayling (Conservative, Epsom and Ewell)

Yes. There are clearly circumstances in which that could happen, although it would not necessarily happen in all circumstances. It will depend on the circumstances surrounding the individual. However, the situation now is that someone who works up to 16 hours a week is still subject to job-search conditions. If someone receives employment and support allowance, there is permitted work, which still requires contact with the system. We want to create an environment in which we help, support, encourage and cajole to move forward to the next stage in their working life as and when circumstances permit.

Stephen Timms (Labour, East Ham)

Will the Minister say a little about the position of people who work more than 16 hours but not full time? Does he envisage that they will be within the scope of the cajoling and encouraging that he describes?

Chris Grayling (Conservative, Epsom and Ewell)

Yes, I can perfectly well see such a situation. As the right hon. Gentleman will be aware, we have argued over the years that there should be clear limitations on how many hours we expect a lone parent with a child in primary school to work. When a child is very young, clearly we want the mother to be around, where humanly possible, to pick up the child from school and care for it after school. We have set definitions, as did he and his Administration, of a reasonable job offer—we do not expect lone parents to work night shifts, for example—but as children get older, the opportunity arises for parents to work longer hours, and it is perfectly reasonable that we should encourage them to do so in order to reduce their reliance on the state, increase the amount of money coming into their household and, where the household is still on low income, help them lift their family out of poverty.

Yes, we envisage using the work-focused interview periodically with people who claim universal credit: not those who have advanced into a full-time, reasonably paid job but those who work fewer hours and whose circumstances might permit them to work more hours. We envisage that they will be asked to attend work-focused interviews, although not in a way that clashes with their current employment or requires them to undertake training that would make it impossible for them to continue their current employment. That would not make sense. We would bring them in every few months to discuss their circumstances. Where it has clearly become practical for them to move on to the next stage of employment, we expect them to do so, and there will be a degree of conditionality as well of support and help to do so.

Kate Green (Labour, Stretford and Urmston)

Is the intention of those conversations to encourage people to move into jobs for better pay and at longer hours, or into a series of jobs added together that will apparently improve pay but certainly increase working hours? There is plenty of evidence that a patchwork of mini-jobs will be extremely difficult for many people to sustain and is likely to undermine the simplicity of the universal credit payment.

Chris Grayling (Conservative, Epsom and Ewell)

Ministers’ intent is certainly not the latter. It is all about people moving closer to full-time employment in a single job and us providing them with support and encouragement to do so. It is not simply about saying, “You’ve got two hours to spare on a Monday morning, so go find a job for those two hours.” It is all about supporting people who have taken a step into employment to progress towards full-time employment. Our goal—the goal of the work programme and, where practical, of Jobcentre Plus—is, where it is conducive to their life and surrounding issues such as child care responsibilities, to enable people to move into full-time, single-job employment if possible.

Stephen Timms (Labour, East Ham)

May I press my point about self-employed people? Could a jobcentre adviser look at a self-employed person and say that they were not earning very much, that they could earn more if they went for another job, and that therefore they should give up their business? Is that possible?

Chris Grayling (Conservative, Epsom and Ewell)

That is not our intention. There would inevitably come a point when, if a person is in self-employment and is barely continuing above the threshold of support, we will look quite carefully. The right hon. Gentleman and I have discussed before the issue of self-employment. There has to be a point below which self-employment is so virtually non-existent over a sustained period that a degree of job search has to come into play. A person cannot simply say, “Well, I am self-employed for an hour a week” and then do nothing else. It certainly would not be our intention, however, to prevent somebody who was building a business from doing so—if they were showing good purpose, good intent and working hard—to make them apply for a different job. It is our desire to see self-employment grow and develop, and we recognise that building a business is a slow grind sometimes and has its ups and downs. So it would not be our intention for that to be the case. Clearly, if somebody was pursuing a self-employment option that just was not working, then at that point we might say no, they will have to look for something else. Our intention, however, would always to be to support people in self-employment.

I hope that gives shadow Ministers and other members of the Committee a sense of what we are trying to achieve. This is a development from where we stand at the moment in and around the 16-hours rule. It is about helping people, where they can practically and sensibly do so, to move to a point where they are much more financially independent of the state.

Sheila Gilmore (Labour, Edinburgh East)

I wonder whether the Minister has made any assessment of whether this additional task will require additional staff in jobcentres, and whether provision have been made for that.

Chris Grayling (Conservative, Epsom and Ewell)

We have some provision in the plans for Jobcentre Plus, particularly in the budgets for universal credit, to provide for an element of conditionality. We have more detailed work to do to establish exactly the kind of frequency and the parameters for doing so, because that has clearly got to fit within the resources that are available to us as well. If we can succeed in helping people move further up the work ladder, that will help reduce their dependence on the universal credit and help increase their contribution in tax and national insurance, and therefore it is a benefit to the nation as a whole.

Lilian Greenwood (Labour, Nottingham South)

I want to come back to the point about encouraging people to shift jobs in order to move into one that perhaps has a few more hours, or a slightly higher pay level. It just occurred to me that people who are returning to the labour market and perhaps trying to develop their CV will be looking to acquire a degree of stability with an employer that demonstrates to other employers that they have got staying power. Also, if they stay with an employer for longer, they will start to build up employment rights, which might be important for people with a young family; for example, for access to maternity leave at a higher level. How does the Minister envisage Jobcentre Plus staff balancing that with people’s wish to develop that sense of being a reliable, committed employee, rather than someone who changes jobs on a regular basis?

Chris Grayling (Conservative, Epsom and Ewell)

I get the hon. Lady’s point. I think it is about the application of common sense. This is not about getting someone to apply for a new job every month. Let us take the case of somebody with a disability who goes back into work for 12 hours a week, spends a year doing that work and is by then performing well and has clearly settled back into the working environment. That person has the potential to do more, but that particular employer does not have the opportunity for them to do more. At that point, it makes logical sense for them to be given help and assistance to move on into something with longer hours. That is how we envisage the system working.

I hope that that provides reassurance to members of the Committee. It is about doing the right thing for people. It is about helping to lift them and their families out of poverty by their moving up the income scale. I hope that hon. Members will feel able to support the clause.

Clause 16

Stephen Timms (Labour, East Ham)

I rise to speak to amendment 71.

James Gray (Conservative, North Wiltshire)

With this it will be convenient to discuss amendment 72, in clause 17, page 8, leave out line 22.

Stephen Timms (Labour, East Ham)

Amendment 71 is on the amendment paper because I was puzzled by clause 16, which states what actions might be specified and then lists half a dozen or so different actions. The last states:

“any action prescribed for the purpose”.

I could not understand why there was one list in the Bill and then potentially another list in the regulations. I have now had the opportunity to read the note on regulations, which explains that the Government do not have any other item to add to the list, but that they want the ability to do so in future if a useful idea occurs to them. That seems to be a perfectly sensible explanation, and if I had had the notes on regulations earlier, I would not have tabled the amendment.

I do not know whether I can not move the amendment, having explained why it is on the amendment paper. If I can, I will happily not do so.

James Gray (Conservative, North Wiltshire)

It is perfectly in order not to move the amendment.

Stephen Timms (Labour, East Ham)

I have a few questions for the Minister about other aspects of the clause. Work-focused, health-related assessments are a good idea, and were introduced by the previous Government to assess how someone’s impairment affects their ability to work, and how to overcome the barriers they face in getting into work, leading to a plan for moving towards work. The practice has been criticised for a couple of reasons, and I think I am right in saying that these assessments are not currently carried out, and were suspended last year.

As I understand them, the criticisms are, first, that the assessment must be carried out by medical professionals who do not know much about work places. It has been suggested that it would be better if they were carried out by someone not necessarily with medical training, but with training in the individual’s specific impairment and the support that they might require. Secondly, they were criticised for being carried out late, often long after someone had started on their plan for moving back to work.

What are the Government’s plans for the assessments? Having suspended them last year, do they intend to bring them back into use, and what will be different about them in future? When will they be carried out, and who will conduct them, given the widespread view that Atos Healthcare professionals may not be the best people to conduct them.

Ian Swales (Liberal Democrat, Redcar)

The right hon. Gentleman mentioned the company that has been carrying out many of the assessments. Does he agree that an appeal rate of more than 50%, given that some people do not appeal, is far too high? The suggestion that it may be getting as many as 60% of its assessments wrong shows that something is wrong with the system. Does he believe that part of the problem may be the payment-by-results framework?

Stephen Timms (Labour, East Ham)

I hope that the hon. Gentleman’s latter suggestion is not the case, although I agree that the rate of success on appeal is high. That certainly raises questions, although I understand, having been on the other side of the debate, how difficult it is to put in place a system that gets the assessments right. I think the figures he mentioned refer to work-capability assessments. Work-focused, health-related assessments are rather different, and the idea was simply to come up with contributions towards a plan to get back to work, a wholly positive and constructive contribution to helping people. In practice, that is not what happened, so the Government suspended them.

Charlie Elphicke (Conservative, Dover)

The right hon. Gentleman hides his light under a bushel. He will recall that this and the previous clause build on a whole load of machinery under the regulations that he signed in 2008. Given the problems that he identified with work-focused, health-related assessments, and if he were still in Government, what would he do to put right the problems that he correctly outlined?

Stephen Timms (Labour, East Ham)

I am grateful to the hon. Gentleman for his tribute to my modesty. I have made it clear that I think work-focused, health-related assessments are a valuable contribution to the system. I have indicated what I think the problems were that led the Government to suspend them. If I had still been in office, I am not sure that I would have suspended them, but I can understand the thinking that led the Minister to conclude that they should be suspended. I will certainly be very sad if the whole idea were to be dropped entirely, so I am glad to see that the assessments are still in the Bill. I want to find out what the Minister’s intentions are for taking them forward and I hope bringing them back into use, so that that particularly good set of regulations can have effect once more.

The second aspect that I want to ask about is what is often referred to as workfare. Subsection (3)(e) refers to

“undertaking work experience or a work placement”.

Working for benefit is often referred to as workfare. I do not object to the principle of mandatory work for benefit, but I want to know what the Minister makes of the evidence, which is now fairly substantial, around the effects of workfare. He will know of the academic report provided for the Department in 2008, which was called “A comparative review of workfare programmes in the United States, Canada and Australia”. It found that evidence on the effectiveness of workfare is still rather limited. The report points out that the number of people who undergo workfare in any of those countries, even in the US, is actually quite low. Some conclusions caught my eye:

“There is little evidence that workfare increases the likelihood of finding work. It can even reduce employment chances by limiting the time available for job search…Workfare is least effective in getting people into jobs in weak labour markets where unemployment is high. Levels of non-participation in mandatory activities are high in some workfare programmes.”

Lastly, but perhaps most significantly, the report stated:

“Workfare is least effective for individuals with multiple barriers to work”

who

“often find it difficult to meet obligations…This can lead to sanctions and, in the most extreme cases, the complete withdrawal of benefits that leaves some individuals with no work and no income.”

I am keen to ask the Minister about the Government’s thinking and how subsection (3)(e) should be applied in the new system. In the light of the evidence, how does he plan to use workfare, and to what extent does he see the provision being applicable to individuals with those multiple barriers, who are picked out in that evidence?

Chris Grayling (Conservative, Epsom and Ewell)

The shadow Minister made points in relation to two areas. Let me take those in turn. First, the work-focused, health-related activities are known in the Department as the WFHRAs. The reason we took the decision that we did was because at the time there was a genuine issue about the ability to deliver them, but most particularly it was because we believed that the WFHRAs would be best delivered by the Work programme providers as part of their own induction process for someone being referred to the Work programme. Our fear was that the WFHRAs would tend to be used for people moving off ESA or incapacity benefit as the ones with the prime issues to be addressed.

We expect everyone who is referred to the Work programme to be triaged at the start and to undergo a detailed assessment with the Work programme provider. We envisage the Work programme providers themselves doing a lot of the things that were envisaged to take place within the Work programme environment. It seemed illogical to have a parallel process in which, from this summer, we would effectively be saying to people, “You will be going to the Work programme and you will go through a detailed assessment when you arrive, but before you get there we will do another assessment that will sit between your work capability assessment and your arrival on the Work programme.” The reason why we made the change was no more and no less than that.

A detailed assessment of someone’s potential may not always need to be done by a medical person; sometimes, it may need to be and, in those cases, I envisage that the Work programme providers will have a significant amount of medical or related expertise in their teams. I do not know if the right hon. Gentleman has been to New York to see some of the work there. In centres that cater for its equivalent of our incapacity benefit and employment and support allowance clients there is a greater intensity of support, including a degree of condition management support. I expect some of that to be replicated within Work programme networks.

It seemed logical not to duplicate the process, and that was the reason for the change. We have left the powers in, because it seemed sensible to do so for the future and in relation to the rules applying to Work programme providers. It is necessary to have the powers set out in the Bill but, operationally, it seemed foolish for there to be duplication.

On workfare, the only programmes that we have set out so far are the short-term placements in mandatory work activity. The origin of that concept was in a lengthy consultation that we undertook last summer with front-line staff in Jobcentre Plus, who were asked about existing support networks and the rules and regimes that surround their work. The one consistent message that came back was that advisers want to have the opportunity to help jobseekers who become detached from the process, perhaps through a loss of confidence. Anyone who has been unemployed knows that after a few weeks people become fed up and depressed, and quickly lose familiarity with the working environment. Members of Jobcentre Plus teams work with people who would benefit from getting back into that working environment for a period of time, and that is why we have introduced the provisions on mandatory work activity.

We have not yet brought forward any other proposals for workfare, but there are potential options for us to consider. There is also the question of what happens to people after they have been through the Work programme. I absolutely hear what the right hon. Gentleman has said about the experience elsewhere. The advantage of a workfare-type activity, structured in the right way, for someone with multiple needs is that the alternative is for them to sit and do nothing for prolonged—and unacceptably long—periods.

There are clearly many people in the labour market who are a long way away from the workplace. The right hon. Gentleman’s colleagues in government, the former Secretary of State James Purnell in particular, were keen to pursue the concept of getting long-term claimants with difficulties to do things at least to bring them into an environment in which they could do something positive and constructive with their life and where they could receive guidance, help and support that might in time bring them back closer to the workplace.

We certainly do not regard the sort of longer term workfare programmes that have been tried in other countries as a punishment vehicle within the system. They have the potential in some circumstances to offer a valuable additional developmental element to the support that we provide to people, but as yet we have not brought forward any such proposals. It is sensible to have the powers in the Bill so that we can deliver a variety of options to help people to get closer to the workplace. At the moment, however, our focus is on the mandatory work activity programme for jobseekers which, as the right hon. Gentleman knows, is due to be rolled out shortly.

Clause 17

Stephen Timms (Labour, East Ham)

I beg to move amendment 73, in clause 17, page 8, line 29, after ‘locations’, insert

‘, which shall include consideration of the length and expense of the claimant’s travel’.

James Gray (Conservative, North Wiltshire)

With this it will be convenient to discuss amendment 74, in clause 18, page 9, line 1, after ‘locations’, insert

‘, which shall include consideration of the length and expense of the claimant’s travel’.

Stephen Timms (Labour, East Ham)

I am grateful to the Minister for the information that he has just given the Committee.

Amendment 73 is intended to broaden, or at least to clarify, the limitations on the requirement for people to search for work, so that undue time and expense might be avoided. I am particularly interested in the position, which we discussed a few minutes ago, of people who are required to search for a new job when they already have one. It clearly would not make sense to force people to move to a different job for higher pay if they incurred more than the difference in extra travel costs. It would make sense to the Exchequer because the cost to the Exchequer would be reduced, but it would be unreasonable to require somebody to change their job if they saw no benefit to themselves. Will the Minister assure us that that will not happen even though it might save money for the Government, and that the cost and expense of the travel that would be required to take up “work in particular locations”, as stated in subsection (5)(c), would be taken in to account before imposing any such requirement?

Chris Grayling (Conservative, Epsom and Ewell)

The right hon. Gentleman makes an important point, so let me seek to reassure him. He knows that rules in Jobcentre Plus define what is and what is not reasonable, and they include issues such as travel time to work and the logistics for somebody’s life if, for example, they have a caring responsibility. We would certainly not instruct Jobcentre Plus staff to sanction somebody for not applying for a job that would leave them worse off as a result of moving back into work. That would undermine the principles behind this measure. I do not think that it is something that needs to be written into primary legislation, but I can certainly give him an assurance that we would not issue guidance that said otherwise.

Stephen Timms (Labour, East Ham)

Does the Minister accept that the considerations are a bit different for somebody who is already in work and might be required to move to a better paid job in the way in which we discussed earlier? Will he also build on the point that he has already made, and accept that it would not be reasonable to require somebody to move to a different, better paid job, if their take-home pay did not go up because the difference was consumed by higher travel costs?

Chris Grayling (Conservative, Epsom and Ewell)

That would be entirely reasonable, and I would be very comfortable about saying to Jobcentre Plus staff, who are seeking to impose conditionality on people in part-time work who might move to full-time work, that they have to take a reasonable approach to that. If circumstances dictated that somebody would be worse off as a result, then applying conditionality would go against the principles of the universal credit. It would not be our intention to force somebody to change jobs to something that would leave them worse off. I hope that that provides the right hon. Gentleman with the reassurance that he needs.

Stephen Timms (Labour, East Ham)

I am grateful for that reassurance. I beg to ask leave to withdraw the amendment.

Clause 18

Stephen Timms (Labour, East Ham)

I beg to move amendment 30, in clause 18, page 8, line 37, leave out

‘(or more paid work or better-paid work)’.

Amendment 30 deals with the new in-work conditionality being proposed by the Government. In the past, when someone started work, obligations imposed on them by the benefit system came to an end. Under this Bill, that will no longer be the case. A person can still be required to meet conditions imposed by the jobcentre to increase their income. Potentially, that is a much more nannying regime than has been in place before with—to borrow language favoured by some of the newspapers that support the Government—snoopers from the civil service checking up on people’s hours and their pay and ordering them to change jobs if they do not think that they are earning enough. That is not language that I would use, Mr Gray, but you understand my drift.

Sarah Newton (Conservative, Truro and Falmouth)

That is one interpretation of it, but I see a lot of people in my constituency who really want to go back to work and to improve their chances. They may have taken seasonal employment. A lot of people in agricultural areas take low-paid seasonal work. They feel pretty written off at the moment. Jobcentre Plus can tick the box and say that that person has got a job. People appreciate work-focused interviews and knowing that somebody is looking out for them and offering support to improve their job prospects.

Stephen Timms (Labour, East Ham)

The hon. Lady is absolutely right, and there are certainly ways that such a provision could be helpful. She will accept, however, that it will depend on how it is done and that some people might be pretty aggrieved at being required to change their jobs in some circumstances, depending on their other commitments and obligations.

Will the Minister tell us a little more about how he envisages the legislation will work? The amendment would remove the obligation on someone to change job. Quite a new feature of the system is being introduced, and I am keen to know, as is the Committee, how the Minister intends that new power to be used by Jobcentre Plus and what constraints he expects to impose to avoid what in some circumstances could be an unwelcome and undesirable intervention by the jobcentre.

Chris Grayling (Conservative, Epsom and Ewell)

The key point to add to my earlier comments about the philosophy behind the approach is that the automated system that we are introducing to deliver universal credit will provide real-time monitoring of income and enable us to adapt universal credit payments accordingly. The snoopers’ charter—those are the hypothetical words of a third-party newspaper, not of the right hon. Gentleman—would not apply because, by definition, to make universal credit payments, to ensure that people can move seamlessly into and out of work and to respond quickly to changes in circumstances, the system will enable us to track what people are earning and set the appropriate amount of universal credit for them to receive.

Ian Swales (Liberal Democrat, Redcar)

The rewards of work are not always entirely about money; they are sometimes to do with training and career prospects. Could a younger person in a job with good career prospects get caught by the measure? For example, in North Yorkshire, some of the best paid work is in the bacon factory at Malton, although that work has no career prospects. Will jobcentres be cognisant of such flexibility when considering longer-term situations, rather than instantaneous earnings?

Chris Grayling (Conservative, Epsom and Ewell)

Absolutely. I will give the hon. Gentleman a practical example. Suppose an unemployed young person who has been out of work for a few months goes through our new work experience programme and, as a result, succeeds in getting an apprenticeship. In one or two places, we are beginning to see the first apprenticeships to result from that programme. An apprenticeship is an 18-month, two-year or three-year programme, and Jobcentre Plus would have no intention of intervening to say that the person must resign their apprenticeship to work in the bacon factory. That would be crazy, and we would not countenance such a situation.

The Bill is aimed more at the situations that I described to the hon. Member for Nottingham South. I mentioned the case of someone with a disability—perhaps someone who has been in an accident or suffered a chronic disease—making a first return to the workplace. That is a step-by-step process. They get back into the workplace and understand what they can do. As they build confidence and get back into a daily working habit, they might realise that they have the capability to do more. The Bill is about nudging them along to do more.

Stephen Timms (Labour, East Ham)

The Minister said that we should not talk about a snoopers’ charter, but he said that jobcentre staff will track people’s earnings. I understand the use of real-time PAYE data for calculating universal credit, but to say that that information will go also to jobcentre staff to track people’s earnings and see whether they ought be encouraged to earn a bit more sounds as though he is envisaging quite an intrusive arrangement.

Chris Grayling (Conservative, Epsom and Ewell)

The right hon. Gentleman has misunderstood what I was saying. We do not need to send someone round to spy on the pay cheque. We will be aware over a period of time, and when the jobcentre adviser sits down with someone after six months to talk about their situation, they will be able to look at their benefit history, as they can today. We will not be able to track income in between times and watch over someone if they do not earn a certain amount and haul them back in. This is about looking at their circumstances and the amount of universal credit that they receive and about booking a work-focused interview, for example, in six months’ time, to come back to talk about how they are getting on and how they have progressed. There is no intention of having a snooper’s charter—either electronic or otherwise—in between times to monitor their income, relay that back to the adviser and haul them in for an interview to get them to increase their hours.

Stephen Timms (Labour, East Ham)

Is the Minister confirming that jobcentre advisers will have access to real-time PAYE data?

Chris Grayling (Conservative, Epsom and Ewell)

No, I am not suggesting that for a moment. I am suggesting that Jobcentre Plus advisers will know when the six-month interview comes along what universal credit someone is receiving. That is my expectation. Today, the adviser is aware of what benefit someone receives and can discuss their needs—how otherwise could they discuss child care, for example? How could they discuss an individual’s circumstances? When the adviser sits down to talk to that person, I would expect them to have an idea of how many hours they work and what universal credit they receive. We will not have a real-time flow of data from the adviser’s desk top, so that they can track someone they have been working with over a period of time.

We are trying to create a system that supports and guides people for every step up the ladder that we can help them with, into longer-term, more sustained employment. This is not about taking that process into full-time, well-paid work. We are not considering trying to track someone who is paid £20,000 a year and persuading them to earn £21,000 a year. This is all about helping those who are taking the first few steps into the workplace, as a lone parent, as someone who has been long-term unemployed, as someone who is doing a mini-job to get themselves re-established in the labour market or as someone who is overcoming a disability to move back into the workplace. In those circumstances, we aim to put in place a structure that both supports them and nudges them on the way.

Stephen Timms (Labour, East Ham)

I am grateful for that explanation. I still feel some alarm at what precisely is envisaged here, but I do not intend to press the amendment to a vote, so I beg to ask leave to withdraw it.

Anas Sarwar (Labour, Glasgow Central)

I beg to move amendment 38, in clause 18, page 9, line 3, at end insert—

‘(e) the Claimant having guaranteed and predictable access to high quality, flexible and affordable child care acceptable to the parent and child or children.’

James Gray (Conservative, North Wiltshire)

With this it will be convenient to discuss amendment 52, in clause 24, page 11, line 44, at end insert—

‘(9) Regulations must make provision to secure that in prescribed circumstances where a claimant has caring responsibilities for children under the age of 16, the Secretary of State must not impose requirements under this Part which would significantly interfere with the claimant’s ability to discharge those responsibilities. No regulations in this Part shall supersede the provisions set out in The Jobseeker’s Allowance (Lone Parents) (Availability for Work) Regulations 2010 or The Social Security (Lone Parents and Miscellaneous Amendments) Regulations 2008, Clause 11.’

Anas Sarwar (Labour, Glasgow Central)

We had a lengthy discussion this morning about child care costs. My right hon. Friend the Member for East Ham made a lengthy contribution to the debate, so hon. Members will be pleased to know that I do not intend to speak for a long time. The amendment—alongside amendment 41, which will be debated under clause 26— aims to ensure that it is recognised that limitations in the work available to claimants include a lack of suitable child care.

The Government have repeatedly made the point that the main purpose of their welfare reform proposals is to make work pay. The Secretary of State for Work and Pensions has stated on several occasions that the Government reforms mean that people will always be better off in work than out of work. However, one of the main problems with the Bill relates to access to suitable child care, which makes it difficult for households to tell whether they will be better off in work. Some 480,000 families currently receive support for their child care costs through tax credits, and 64% of them are single parents.

A report by the Scottish Parliament’s Local Government and Communities Committee, published in January 2009, found that the greatest barrier to entering the labour market for those who were in economically active age groups and did not have health problems was undoubtedly child care. A briefing paper produced by Oxfam highlights the problems with the following quote from a young woman called Anne Marie, who coincidentally comes from the great city of Glasgow. It says:

“Child care is a big barrier. You are giving your child to a stranger and paying them a full time wage to look after your kids. But if you are on the minimum wage, the person looking after your kids is earning more than you. How do you work that one out?”

Unfortunately, that question is being asked by a number of households across the country.

By not indicating how child care costs will be covered under the new universal credit, the Government are creating even more uncertainty at a time when most people are unclear what the future holds for them and their families. I appreciate that the Secretary of State for Work and Pensions said during oral questions last week that child care support would be provided as part of universal credit, and I appreciate that the Minister made comments this morning to a similar effect. As yet, however, we still do not have a clear indication of the details.

We have no details of how support for child care costs will be included in universal credit. We do not know the proportion of the cost that will be covered by universal credit, or whether there will be support for those working less than 16 hours, as well as for those working over that threshold, nor how the payments will be made and to whom. Until there is more information on how much support will be provided for child care costs, households will find it impossible to assess whether universal credit will mean that it is worth being in work and whether it pays to be in work rather than out of work.

I have a couple of questions for the Minister. First, does he accept that the quality and availability of child care is a barrier to employment? Secondly, what measures will he take to ensure that parents are better off in work than out of work and that they have access not only to a certain level of child care but to quality child care throughout the country?

Stephen Timms (Labour, East Ham)

My hon. Friend makes a strong case. I should add that existing regulations have carefully defined the requirements that it is appropriate to place on lone parents without preventing them from discharging their child care responsibilities. My reason for tabling amendment 52 is that I hope that the Minister will confirm that he does not intend to override those safeguards in the regulations that he will make under the clause.

The amendment refers to two specific regulations. I shall quote the explanatory notes for each, the first of which states:

“It is normally a condition of entitlement to jobseeker’s allowance that claimants are willing and able to take up employment of at least 40 hours per week, but regulation 13A provides for an easement in the case of lone parents to whom the new provision applies. They will be able to restrict their availability for employment to the child’s normal school hours.”

Will the Minister confirm that that is the Government’s intention in the regulations to be made under the clause?

The explanatory note for the second statutory instrument explains that

“Regulation 11 makes various amendments to the Jobseeker's Allowance Regulations concerning good cause for refusing or failing to carry out a jobseeker’s direction, or to apply for or accept employment to which a jobseeker has been referred by an employment officer, by setting out the circumstances in which child care expenses must be taken into account. Those circumstances relate to where the person necessarily incurs, or would incur, unreasonable child care expenses as the result of the employment or direction. Regulation 11 also provides that for the purposes of determining good cause the availability and suitability of child care must be taken into account when considering whether a claimant’s caring responsibilities for a child make it unreasonable for the person to undertake a particular employment or carry out the jobseeker’s direction. It further provides that those matters must also be considered in relation to just cause for voluntarily leaving employment.”

I simply seek the Minister’s reassurance that the regulatory safeguards will be carried over into the new measure.

Chris Grayling (Conservative, Epsom and Ewell)

I should like to reassure both hon. Members, and I shall address their comments in turn.

We agree that it is important to balance any requirement to be available for work with a claimant’s child care needs. The amendment raises the concern that we will not take those needs into account, but I give the Committee a clear undertaking that that is not the case. As the right hon. Member for East Ham said, there are already specific limitations on the requirements that can be imposed on parents to allow them to care for their children. We do not intend to change that.

No lone parent will be required to look for or to be available for work if the youngest child is below school age. If the child is under five, we will ask lone parents only to attend work-focused interviews. They will, of course, be able to volunteer before then for back-to-work support should they wish to do so. We are also making provision for some lone parents with children under the age of five to attend the access to work programme, but that will be purely their choice; it is not something that is mandated by us. If the child is five or over, parents who are capable of work will be required to look for and take up employment, but we shall ensure that the requirements are limited to take account of child care needs.

Clause 18 will give the Secretary of State the power to set limitations on work availability requirements, and subsection (4)(d) makes clear that that can include restrictions to work

“for a certain number of hours or at particular times”.

Regulations will specify that a lone or nominated parent of a child under the age of 13 may limit their availability to work to their child’s normal school hours. We therefore intend to apply clear safeguards to ensure that child care needs are properly reflected in a claimant’s work availability requirement. That is important. It is not our intention to make lone parents—mums bringing up young kids—go out to work at times that make it impossible to do the things that their kids want, which is for their mum to drop them off at school in the morning and so on.

We will take a case-by-case approach to children over the age of 13, because the needs of that age group differ, depending on factors such as the maturity of the child. Any of us with kids will know from them and their friends that there are huge differences. Some children are perfectly mature and utterly untouched and untrammelled by being latchkey kids at the age of 13; but for others, there are real issues and a need for parental involvement and responsibility. We will deal with each circumstance on a case-by-case basis.

If child care is still needed to help claimants meet work availability requirements in, for example, the school holidays, advisers will work with parents to help them identify the child care available. Indeed, we already have very good expertise to do that among our lone parent advisers in Jobcentre Plus. The right hon. Member for East Ham is right that it is necessary to ensure that good child care is available. This Administration take the view—as did his party when in government—that it is always necessary to take what steps we sensibly can to encourage the availability of good child care provision. For example, we currently refer claimants to the local family information service, and we hold information about where people can go to access child care.

The right hon. Gentleman will know, however, that many parents make their own arrangements for holiday child care. Returning to my point about informal child care, I am not in any way suggesting that it is a statutory or policy alternative, but many people find it much easier and choose to make arrangements among themselves for holiday times. We are therefore reluctant to set in stone legislative frameworks, but we recognise and give guidance to our staff that they should work with claimants to try to find the best support available for children. School holidays are more of a headache than term times, although parents are off on leave at certain times of year anyway.

Amendment 38 stresses that child care must be acceptable to the parent and the child. We agree with the principle behind that. It is not and will not be our policy to require parents to take up child care or to assume that they can take up any available place. It is for a parent to decide whether a child care place is acceptable. However, we must have the ability to check that, when a claimant turns down child care, they are acting responsibly. We do not want that to become an excuse for not working, which is why we have to be careful about how the legislation is framed. Where an adviser feels that a parent is not acting reasonably, they do not have to take that into account when deciding the extent of any limitation on a work availability requirement. Failure to meet that requirement—failure to take up a job offer if child care is the excuse—may result in a reference to a decision maker for a sanction, but only in circumstances in which the adviser feels that the system is being abused and that there is no genuine reason for the decision taken.

The regulations mentioned in amendment 52 provide that a lack of suitable and affordable child care can be considered good cause for leaving a job, not taking up a job or failing to meet a jobseeker’s direction. Once universal credit is introduced, the availability of suitable child care may be considered a relevant factor when determining whether a claimant has good reason for such a failure. For example, if child care costs mean that taking up a new job would amount to an unreasonably high proportion of a claimant’s pay, the claimant may cite good reason for not accepting or applying for a job. The right hon. Gentleman made that point in relation to transport a few moments ago.

We think that the balance is fair and that it does not need to be written into primary legislation. This is the application of common sense on the ground. There are already clear rules within Jobcentre plus, for example, for what does or does not constitute a reasonable job offer given someone’s circumstances. We share the aspirations of the right hon. Gentleman and the Labour party. There is no division on this issue in the Committee. I hope that Opposition Members will take that as sufficient reassurance not to press the amendment to a vote.

Anas Sarwar (Labour, Glasgow Central)

I thank the Minister for his detailed reply, and I apologise if any hon. Member was seeking to intervene just as I closed my remarks. Although we all need to see the plans in action, I am reassured by what the Minister said, so I beg to ask leave to withdraw the amendment.

Clause 19

Kate Green (Labour, Stretford and Urmston)

I beg to move amendment 67, in clause 19, page 9, line 15, leave out

‘under the age of one’

and insert

‘under such age as may be prescribed’.

In the light of the Minister’s comprehensive remarks on clause 18, many of the issues that I was seeking to investigate under this clause and clauses 20 to 22 have been well addressed by the absolute clarity that he gave us about what will happen to parents of children at the specific ages. It has been extremely helpful to have explanations about what will happen up to age 13 and thereafter to know that there will remain a degree of flexibility and discretion beyond that. That has been very useful and has considerably clarified many of the points that I might have raised.

I should therefore be grateful if the Minister could reassure me on one point. We will now be in a situation where JSA conditionality will come in at age five—a two-year reduction on what was proposed by the previous Government in their Welfare Reform Act 2009. Conservative and Liberal Democrat Members suggested on Report that no financial sanctions should be imposed on parents of a child aged under five and Lord Freud moved an amendment in the other place to state that nothing should cause any financial sanction to be imposed in the case of a single parent of a child under the age of five. I do not need to rehearse all the different circumstances that the Minister has helpfully taken us through, but does the position that was held by the noble Lord, who is now a Minister in the Dept, remain the Government’s position in relation to any obligations that they may be required to fulfil in subsequent clauses? I look forward to hearing what he has to say.

Chris Grayling (Conservative, Epsom and Ewell)

Let me start by saying that I am grateful for the hon. Lady’s comments. My view was that it was not appropriate to increase the age from one, or at least to put the potential to vary it in regulations. I take the view that the lone parent or the parent of a child under one should not be subject to any kind of job search requirements. We have given due consideration to the points she raised. We have listened quite carefully to the arguments that were articulated by the previous Administration. I do not want to see lone parents of young children sanctioned very often. There are obligations in the welfare system in return for the receipt of income support. Particularly as the children get closer to the age of five and are likely to be going to school there should be an obligation to at least engage with the system.

Any lone parent in that situation who faces any kind of financial sanction is certainly entitled to receive hardship payments. We have also looked at whether other forms of sanction may be appropriate, for example, the requirement to attend a work-focused interview at a Sure Start centre. At the moment we have not decided to change the policy we inherited from the previous Administration. It is something that I envisage should be administered only very lightly. It is something that the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller) feels very strongly about. We listened quite carefully to the arguments articulated by the previous Administration and have, for now at least, decided not to change the situation.

Kate Green (Labour, Stretford and Urmston)

I am grateful for that clarification and the Minister’s assurance that he expects that financial sanctions would be imposed only very rarely and with careful thought about the circumstances. Clearly financial sanctions are not the only penalty that is available to the Government. They could impose activity sanctions, such as a requirement to attend interviews more frequently or undertake other work preparation or work-related activities. We understand that the Government are promising a graduated approach, with early sanctions to precede the financial ones that may come down the line, and that would be right for us to support.

I am concerned that lone parents with the sole responsibility for a young child could be put in a position where a meagre budget with which they support that child could be cut further. I note what the Minister has said about hardship payments, on which we will no doubt have a further debate later on. I am grateful for his assurances this afternoon to ensure that any financial sanction on parents of young children are imposed with incredibly great caution and with the impact on those children given the fullest consideration. It is vital that sanctions are imposed within the context of the best interests of the child in the household. The Minister’s assurances have been welcome, and on that basis, I am prepared to withdraw the amendment, but with a large note of caution attached.

James Gray (Conservative, North Wiltshire)

For the sake of correctness, the Member proposing the amendment seeks leave of the Committee to withdraw the amendment.

Kate Green (Labour, Stretford and Urmston)

I beg to ask leave to withdraw the amendment.

Stephen Timms (Labour, East Ham)

I beg to move amendment 36, in clause 19, page 9, line 16, at end insert

‘, which shall include that the claimant is either receiving, recovering from, or expected within 6 months to receive treatment with chemotherapy or radiotherapy’.

James Gray (Conservative, North Wiltshire)

With this it will be convenient to discuss the following: amendment 32, in clause 19, page 9, line 16, at end insert—

‘(e) the claimant is receiving chemotherapy or radiotherapy, is recovering from that treatment or is likely to receive such treatment within 6 months.’.

Amendment 37, in clause 56, page 40, line 35, at end insert

‘, which shall include that the claimant is either receiving, recovering from, or expected within 6 months to receive treatment with chemotherapy or radiotherapy’.

Amendment 33, in clause 56, page 40, line 35, at end insert—

‘(e) the claimant is receiving chemotherapy or radiotherapy, is recovering from that treatment or is likely to receive such treatment within 6 months.’.

Stephen Timms (Labour, East Ham)

Probably all members of the Committee have received representations from Macmillan Cancer Support, on behalf of 30 cancer charities, for a change to the current treatment of cancer patients in employment and support allowance. The amendments that we have tabled address that point, as does the similar one tabled by the hon. Member for Meon Valley.

The concern is that people receiving chemotherapy or radiotherapy orally are currently treated by ESA less thoughtfully than people who are treated through injections, when people receiving oral treatment could have symptoms that are just as bad as those who are being treated intravenously. I asked the Minister in a written question some weeks ago why someone receiving oral chemotherapy who applies for ESA is placed in the work-related activity group, and so subject to obligations set out in the Bill, when a person receiving non-oral chemotherapy is placed in the support group, and so is exempt from the obligations and incidentally receives a rather higher payment in benefits. The Minister, in his answer to me, said:

“The purpose of this policy is that those experiencing the most severe functional limitations as a result of cancer treatment are automatically entitled to enter the Support Group”—[Official Report, 2 February 2011; Vol. 522, c. 831W.].

However, the point of the cancer charities is that the functional limitations suffered by patients of oral chemotherapy and radiotherapy can be just as severe, and logically they should be treated in the same way.

The Secretary of State commented on the issue on Second Reading when he was asked about it. He asserted:

“It is not as debilitating.”—[Official Report, 9 March 2011; Vol. 524, c. 920.]

However, that is certainly not the view of the cancer charities. I note that Professor Harrington has commented on the matter as well. He said that oral chemotherapy and radiotherapy

“can sometimes be equally as debilitating”,

contradicting the Secretary of State’s claim.

The matter is becoming increasingly important because the percentage of oral treatment is rising. Macmillan draws to our attention the statistics from the United States where, in 2007, 10% of cancer chemotherapy treatment was administered orally. It is expected that, by 2013, that proportion will rise to 25%. Macmillan tells us that it expects a similar increase in the application of oral treatment for cancer patients in the UK. Will the Minister accept that the system needs to be updated in light of the growing application of oral treatments, and the clear evidence that that is not necessarily any less debilitating than the alternative?

George Hollingbery (Conservative, Meon Valley)

It is a pleasure to serve under your chairmanship, Mr Gray, and to be discussing my first ever amendment—although that is perhaps rather less exciting for everyone else.

I am grateful to the shadow Minister for his comments. As is clear from the list of amendments, we have both tabled a very similar amendment. I have very little to add to what he said, except for pointing out one or two extra details for the Minister and asking him to respond to one or two of my comments. I have a bit of extra detail on one or two of the oral therapies. A specific example is fludarabine, which is commonly used for a number of cancers. That drug has the effect of immunosuppression, allowing a range of diseases to take hold in some of those taking the therapy—for example, pneumonia and other things. It causes nausea, diarrhoea and considerable fatigue. A second treatment that Macmillan was keen to put on the record is capecitabine. Again, that is increasingly used across the treatments for cancer. Considerable fatigue can result from taking that drug and it can be extremely debilitating, particularly if someone is in the work-related activity group and is required to attend sessions to seek education and to explore work possibilities and so on.

That is at the core of the issue. As the shadow Minister mentioned, the amount of extra money available to someone if they are put in the support group is only £5.45 per week. As always, I am mindful that the my hon. Friend the Member for Dover will be interested in the amount that it will cost. The charities estimate that around 2,500 people will end up in a support group who might otherwise have ended up in the work-related activity group. At £5.45 a week, that is about £640,000 a year, which is not an enormous amount of money for any Government.

I further suggest that if people are not required to attend meetings, there may even be some savings that will make the amount the Government have to invest even less. However, it is not about the money; it is about the fact that attending some of those meetings can be further debilitating and can be very challenging for people who are on oral chemotherapy. The very nature of chemotherapy is changing. There is a migration from intravenous to oral chemotherapy. Indeed, some of the chemotherapies that are prescribed can be taken either intravenously or orally. Clearly, many patients opt for the oral version, even if it has slightly worse consequences, so that they do not have to go through the process of being injected every day.

Chris Grayling (Conservative, Epsom and Ewell)

There is a uniformity of view from all parties on that matter, and the subject is of concern and on our minds. We are seeking to do the right thing about the issue. I pray in our defence the decision to implement the internal review into the work capability assessment carried out by the previous Administration. One of the key reasons for doing that was to ensure that people in between courses of chemotherapy were also placed in the support group, given the fact that those going through chemotherapy cannot possibly be expected to work in a conventional setting.

The issue arises over the nature of the cancer treatment. I have no doubt that some forms of oral chemotherapy make it impossible for an individual to work and that that should require them to be put into a support group. The only issue is that there are a wide variety of treatments. Some are extremely debilitating and some are less so. The same applies to new techniques that enable chemotherapy to take place in a targeted way, with new equipment that allows treatment to be done over a few minutes, rather than the extended period that has been the case up to now. There are a mixture of oral treatments, some of which have a low impact on the individual and that are designed to treat relatively—in so far as these things can ever be—lesser outbreaks of cancer as opposed to the more serious treatments. To date, we have formed the view that oral chemotherapy is not yet something to which it is possible to apply a one-size-fits-all approach in terms of the rules applying to the work capability assessment and the decision whether to put people into the support group.

Ian Swales (Liberal Democrat, Redcar)

As a supporting point—I speak from personal experience—nobody has talked about the psychological effects of cancer treatment. Whatever the physical effects, some of which my hon. Friend the Member for Meon Valley graphically described, somebody undergoing chemotherapy might not be psychologically okay to go through some of the work-related procedures. That is another comment in support of the amendment.

Chris Grayling (Conservative, Epsom and Ewell)

That is also an entirely fair point. The right hon. Member for East Ham is right that Professor Harrington raised concerns about the issue, although he used the phrase “can sometimes” as opposed to “does always”. We have asked Professor Harrington if he will consider the issue specifically and make recommendations. Money is genuinely not the issue here. If it is the right thing to do to put all chemotherapy patients into the support group, I am perfectly happy to do so.

At the same time, I am instinctively reluctant, on any matter of health problems or disability, to use a one-size-fits-all approach that says that anybody in a particular group automatically ends up in a particular place. My reluctance has more to do with the fact that circumstances vary. I want the system to be responsive to those varying circumstances. My message to all those who have expressed concerns is that the Government have an open mind and are willing to make changes if we feel that it is appropriate to do so. We have taken steps to ask that question by asking Professor Harrington to work with Macmillan to identify the right approach.

Sheila Gilmore (Labour, Edinburgh East)

The claimant is obliged to report any change in circumstances, so someone receiving such a form of therapy who is placed in the support group and becomes much better will presumably have an obligation to report that. Also, regular assessments are built into the system; indeed, many of my constituents have been assessed several times in a year. Given that, is there really any major disadvantage to placing people who are receiving such forms of therapy within the support group?

Chris Grayling (Conservative, Epsom and Ewell)

There may not be. My message is that we have asked Professor Harrington to consider the issue for us and to work with Macmillan. Not all treatments have the same effect; some have much less effect than others. As I have said clearly today, if Professor Harrington comes back and says, “Put everyone who is going through any form of chemotherapy into the support group,” we will.

Stephen Timms (Labour, East Ham)

When does the Minister expect to receive that advice from Professor Harrington?

Chris Grayling (Conservative, Epsom and Ewell)

We have asked him to come back in the relatively near future. I cannot put an exact time frame on it, as it is down to him to make recommendations to us, but I will encourage him to give us a view sooner rather than later so that if changes are needed, we can progress them. I have said all along that we want the work capability assessment process to involve ongoing improvement. If changes need to be made, we will make them as quickly as possible. One reason why I did not leave Professor Harrington to wait a year before his second review was so that we could continue to review the issues. I give the Committee an undertaking that if his advice is that we should do this, we will. I hope that on that basis, the Committee will allow him to make his recommendation and suggest an approach to us. I am happy to commit to adopting that approach.

Stephen Timms (Labour, East Ham)

I am grateful to the Minister for his thoughtful response. He says that he does not support a one-size-fits-all approach, but that is the problem with the current arrangement: everybody who receives oral chemotherapy, irrespective of its effects, is placed in the work-related activity group rather than the support group. However, the Committee will have been encouraged by what he said about his willingness to implement Professor Harrington’s recommendations. I hope that they will be put to him within the next couple of months rather than later.

Chris Grayling indicated assent.

Stephen Timms (Labour, East Ham)

I am encouraged by the Minister’s nodding. On that basis, I beg to ask leave to withdraw the amendment.

Stephen Timms (Labour, East Ham)

This has been an interesting and useful debate. I want to raise one other set of issues about clause 19. It arises from the note on regulations that was circulated to us yesterday evening, because that explains which people will be excluded from work-related requirements—this clause deals with those claimants who will be subject to no work-related requirements. The note on regulations explains that people will be excluded from these requirements if their,

“working hours, earnings, amount of universal credit payable or all three, are above a certain level …The threshold will be set at least as high as the point people lose entitlement to current out of work benefits”.

But it also says that it will be a household threshold, not an individual threshold and it concludes:

“We want to consider the options carefully”.

That raises a whole range of questions in my mind. Taking the Minister back to the exchange we had a little while ago about whether jobcentre advisers will have access to real-time PAYE data, if a threshold is set on the basis of earnings, that implies that the jobcentre is expected to know what people earn. It also suggests, because of the reference to working hours, that jobcentre advisers will know how many hours people are working. It adds,

“amount of universal credit payable”

and the Minister has perfectly fairly pointed out to the Committee that one would expect the jobcentre to know how much universal credit people are receiving, but it is more of interest—or more of a surprise—that jobcentre advisers are supposed to know how many hours people are working and also their earnings.

The note on these regulations says that these regulations, when they have been drawn up—and there is clearly a lot of work still to be done before they are concluded—will be subject to the negative procedure. I put it to the Minister that, surely, in an area such as this, where there is quite a lot at stake—the note on these regulations tells us very frankly that we do not know how to do this yet, but this is the kind of area we are looking at—a regulation such as this should be subject to the affirmative procedure, so that Members of the House get the opportunity to see precisely what these arrangements are going to be, or at least a bit more precision than we have at the moment about how the arrangements will apply. What will be the working hours beyond which people will not be subject to work-related requirements? What will be the level of earnings beyond which they will not be subject to work-related requirements? Also, how will the household threshold work? The implication seems to be that, if two members of a couple work, between them, above a certain number of hours, they will both be exempted from work-related requirements.

This seems to me to open up a whole new area, potentially, of intrusiveness on the part of the jobcentre into people’s lives. It will require information in the jobcentre which has not been available in the past. I am reassured by the comment in the note on regulations that

“We want to consider the options carefully”,

but I think there is a very strong case for the Minister to come back to the House once those options have been concluded, to enable a Committee of the House to consider the regulations under the affirmative procedure.

The Government have indicated that they want to move away from hours rules; it is one of the points that they have made in criticism of the current system that the 16-hour threshold has many implications. However, this clause and the note on regulations that the clause gives power for seem to me to put something like the 16-hours rule back in the frame again. We ought to know more about the Government’s intentions. I will be grateful for anything the Minister can say this afternoon about how he envisages these regulations working. I particularly urge the Minister to acknowledge that this is an example of regulations that ought to come back under the affirmative procedure.

Chris Grayling (Conservative, Epsom and Ewell)

Let me reassure the right hon. Gentleman to some degree. Although I will not give a definitive answer this afternoon, the question is: at what point do we set the barrier above which we do not seek to interfere in any way with people’s working lives, alongside their entitlement? At what point on the ladder that I described earlier—the ladder of moving back into employment—are they effectively freed from a work search requirement?

There are a number of ways in which one could establish that point. One obvious example would be to extrapolate the number of hours worked—a working week, for example—against the national minimum wage. If there was a household that had an income coming in, and the principal earner was working 35 hours a week on the national minimum wage, the argument could be made perfectly well that above that level it would be unreasonable to seek to impose some kind of conditionality that required that person to try to get a pay rise. Equally, let us take someone at the other end of the scale, who is working nine hours a week at the national minimum wage; it is not unreasonable to encourage them to try to increase the number of hours that they work, if their circumstances permit. We should not look at it as being automatically one or the other, and we would not necessarily need to track the hours that every individual worked. However, there is a point at which we need to define a threshold, below which people are still subject to an improved job search requirement and above which we do not seek to look over their shoulder and find out what they are doing.

What we must establish in the next few weeks and months is where that line should be drawn, and I am very happy to get the right hon. Gentleman’s input and suggestions on that. My suspicion is that, in the end, it will be a matter of some kind of combination of the elements rather than one individual threshold, but it is a question of identifying where the threshold should be.

Stephen Timms (Labour, East Ham)

What puzzles me is how staff at Jobcentre Plus will know the working hours of two members of a couple, and their earnings, separately or together. It is not clear to me how that information will be available to the staff. I can see how the information about the amount of universal credit payable will be available to someone in Jobcentre Plus, but I cannot see how or why the staff at Jobcentre Plus will know what the couple’s working hours and earnings are.

Chris Grayling (Conservative, Epsom and Ewell)

It is not necessarily staff at Jobcentre Plus who would monitor that information. Clearly, the staff at Jobcentre Plus could not monitor the exact working hours on an ongoing basis. The universal credit system will show what income someone is receiving, and it will adapt the amount of universal credit to that income. As I have said, the mechanism that one might conceivably use—this is the reason why it is in the Bill—is to say that the threshold is the equivalent of a certain number of hours multiplied by the national minimum wage; that would provide a financial threshold above which someone is not subject to conditionality. The right hon. Gentleman should not look at that threshold as an attempt by us to track the number of hours worked. It would simply be used, potentially as a reference point, in deciding where the line should be drawn, below which conditionality would apply and above which conditionality would not apply.

We have not made a definitive decision about where that line should be drawn. It is likely that it will be devised through a combination of factors. Ultimately, once that decision is taken, the process will not be particularly complicated. As for the affirmative procedure issue, I am happy to go away and give that due consideration. It is not something that needs to be decided in debate this afternoon. I understand the point that the right hon. Gentleman makes. For his information, clause 43 sets out the process for regulations made under part 1 anyway.

I am giving the right hon. Gentleman a hypothetical example, but if one took a number of hours and the amount of the national minimum wage, that would be a vehicle that would enable us to set a threshold. Together, the use of those different elements will enable us to reach a point below which conditionality will apply and above which it will not apply. I hope that that gives him the answer to his question.

Stephen Timms (Labour, East Ham)

The problem with that formula is that it requires the staff at Jobcentre Plus to know somebody’s hours and earnings so that they can apply the threshold. The test that the Minister suggests is not the universal credit test. Again, it is not clear to me how the Jobcentre Plus staff will know that information.

Chris Grayling (Conservative, Epsom and Ewell)

I am not suggesting that this is necessarily an individual issue. One of the challenges we have is that if we try to work on the number of hours, somebody who is working one hour a week for £500 an hour is clearly way out of the support network, so we could not simply do it on the basis of the number of hours. Equally, there must be a sensible financial threshold, above which it is reasonable not to apply conditionality but below which it is reasonable to say that there is further progress to be made on what the individual is doing. The final answer will be a combination of the two.

It is absolutely not the case that we intend to introduce an additional mechanism to track the number of hours worked in real time. That would be impractical in any case. At the time of the work-focused interview, we may sit down with someone and say, “How many hours are you working? What is the nature of the job that you are doing?” That is a logical conversation with an adviser. We are not seeking an additional level of IT with a reporting structure for all hours worked. I hope that that provides the right hon. Gentleman with a degree of clarification and reassurance.

Stephen Timms (Labour, East Ham)

A final point from me: the Minister is right to refer to clause 43, but that says that all the statutory instruments will be subject to the negative procedure. I am grateful for his sympathy for the suggestion, at least, that the provision should be subject to the affirmative procedure. We may return to that point in debate on clause 43.

Chris Grayling (Conservative, Epsom and Ewell)

I have always found that the negative procedure is a good way of keeping Opposition research teams on their toes, because they have to watch out for things and pray against them. I am listening carefully to what the right hon. Gentleman says. I understand where he is coming from, and I am happy to commit to at least having a discussion on the issue in the Department. We may not move from where we are, but I am happy to offer that to him. In the meantime, I hope that he understands the point that I am making, and I hope that he is happy to accept the clause.

Clause 24

Stephen Timms (Labour, East Ham)

I beg to move amendment 49, in clause 24, page 11, line 21, at end insert—

‘(1A) When imposing requirements under this Part, the Secretary of State must provide the claimant with a written statement detailing how the requirement is intended to assist the claimant in securing employment.’.

The amendment would require people who have requirements imposed on them under this part of the Bill to be provided with a written statement that sets out how the requirement will help them to secure employment. It is a probing amendment, like others we have debated this afternoon. We all want as few people as possible out of work. All of us recognise that securing employment is as much about motivation as anything else. Implemented properly, I gladly recognise that the claimant commitment set out in the clause could help people understand their responsibilities. The written statement that would be required under the amendment would take us a little further, by ensuring that the individual understands why requirements have been placed on them. A written statement is specified so that the claimant has a lasting record to which they can refer back in the future.

The amendment stipulates that the written statement should explain to the individual how the requirements will assist them in securing employment. The requirements imposed on people must not be arbitrary. The statement would be clear on how the requirements will help. To use the example that the hon. Member for Redcar gave, if a requirement to attend a CV course is placed on someone, they would be given a written statement on how that will assist them in securing employment. A device along those lines would also encourage people to take responsibility for their circumstances. After receiving the statement, if they were told the purpose of what they were being asked to do, some people might feel that they could enter into useful discussions with their adviser on how they might meet the same objectives through alternative means. It might lead to a creative discussion on how best that purpose can be fulfilled, and might result in a slightly different proposal from that made in the first instance.

If a claimant is asked to take up a work experience placement, but is already doing valuable voluntary work—we will discuss this later—it may be better for their employment prospects to stick with the volunteering, rather than giving it up to take a work placement. Once the claimant is aware not only of the requirements being placed on them, but the reason why those requirements are being placed on them, it may be easier for them to discuss with their adviser how best that aim can be achieved. A written statement could be an important step in the right direction, and I hope the Minister will see the merit of the amendment.

Chris Grayling (Conservative, Epsom and Ewell)

As ever, the shadow Minister talks very sensibly about the nature of the challenge, but I fear that on this occasion he is being a tad bureaucratic. I am of the view, as he clearly is, that there should be a two-way process between an adviser and a claimant. The claimant should not be simply subject to being sent on a 13-week CV course, to refer to what the hon. Member for Redcar said, without a clear understanding of what needs to be done.

All the guidance and training that we will provide to our advisers, particularly now that we are trying to strengthen the link between an individual adviser and an individual claimant, will emphasise the need to make the process constructive and collaborative. We have stripped away many of Jobcentre Plus’s target frameworks, and we are trying to focus the organisation on one key outcome: moving people off benefits and into work.

The amendment requires advisers to set out in writing how the requirements that a claimant must meet are intended to help them into work. The requirements are designed with the objective of improving a person’s chance of obtaining paid work, or more or better-paid work. Asking advisers to write down every single thing that they decide to recommend would be bureaucratic and time-consuming. Over a period of time, even though little bits take a long time to add up, across the whole Jobcentre Plus network it would cost additional full-time employment positions to deliver that. I have seen it happen with the work capability assessment. We looked at introducing a personalised statement, as recommended by Professor Harrington, but there is a time factor that brings a cost with it. Any change such as the right hon. Gentleman’s proposal has a cost. For many requirements, such as work search, applying for jobs or drawing up a CV, writing a statement saying, “The reason for doing this is that it will help you move into work” would in some cases take us to the other extreme of being unduly patronising.

I assure the right hon. Gentleman that the claimant commitment will be drawn up in discussion with the claimant. The discussion will cover their circumstances and aspirations, and any barriers to work. The requirements placed on them will be shaped by the nature of that discussion. The guidance and training given to staff will tell them that that is what the process is all about.

The purpose of the requirement will be fully explained as part of the dialogue; the adviser will say, “I am sending you on an IT booster course, because I think it will help you with the vacancies that are available in this area.” The adviser will ensure that the claimant fully understands their responsibilities, and I would expect an adviser to respond to the question, “Why am I doing this?” with a proper explanation.

Being clear about the purpose of the requirements is a key part of ensuring that the claimant engages with them. If we identify something that will help, we want the claimant to roll up their sleeves and get on with it, rather than feeling that they are being asked to do something without knowing why.

If it turns out that the claimant does not fully understand the requirements in their claimant commitment, or how the requirements will help them to move into work, they will always be able to contact their adviser for clarification. Having a named adviser working with them makes that much easier. Indeed, they can explain when things are not working, because that could happen. One particularly important innovation at Jobcentre Plus is that it is, where possible, moving towards having one individual working with a claimant.

Requiring advisers to explain in writing how requirements will help the claimant move into work is unnecessarily bureaucratic and an unnecessary burden. Although I absolutely understand where the right hon. Gentleman is coming from—I give him assurances about the guidance that we will give to staff on how they should make the claimant commitment work—such a move is unnecessary.

Stephen Timms (Labour, East Ham)

I think the Minister is suggesting that he feels that my proposal would be good practice for advisers, and I hope that the practice will become increasingly widespread, but as I have indicated, I do not wish to press the amendment to a Division. I beg to ask leave to withdraw the amendment.

Stephen Timms (Labour, East Ham)

I beg to move amendment 50, in clause 24, page 11, line 44, at end insert—

‘(7) Regulations must make provision to secure that in prescribed circumstances where a claimant has been volunteering, the Secretary of State must not impose prescribed requirements under this Part.’.

The rest of the debate is in Hansard.