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Welfare Reform

With permission, Mr. Speaker, I should like to make a statement on our White Paper ““Raising expectations and increasing support: reforming welfare for the future.”” This White Paper will transform lives. We know that the support that we offer helps people get back to work. It can turn lives around. We want to make sure that as many people as possible have this chance. That is why we want virtually everyone claiming benefits to be preparing for, or looking for, work. It is a fair deal—more support, in return for higher expectations. That is a deal that has always underpinned the welfare state. As early as 1911, those claiming from the unemployment exchange could be disqualified if they refused a suitable job offer. It is a deal that was extended by the Beveridge report, and one that was championed by the 1945 Labour Government. In 1947, Herbert Morrison said that"““we have no hands or brains to waste, and no resources to fritter away on those who don't contribute to our national effort.””" Today, when the national effort is about a global downturn, we can no more afford to waste taxpayers' money on those who play the system than they could then. But most of all we cannot afford to waste a single person's talent. We inherited a welfare state in which fewer than a third of claimants had to do anything in return for their benefits. Even that third got paltry support to get back in to work, while the rest got nothing. That truly was a welfare state that wasted talent and money. We paid for the costs of failure because we were not prepared to invest in the possibility of change. This Government set about putting that right. We taxed the excess profits of the privatised utilities to create the new deal. We merged the Benefits Agency and the Employment Service to create Jobcentre Plus, so that everyone who signed on for benefits signed up for work, too. That was the first phase of reform—deepening the obligations to work, so that there was no fifth option of just staying on benefits. We saw that those obligations caused youth unemployment and long-term unemployment to tumble, so we set about the second phase of reform and widened the scope of those obligations to work. We piloted helping those on incapacity benefit, first with the new deal for disabled people and then with the groundbreaking pathways to work programme, which increases a person's chance of being in work by 25 per cent. Now we are rolling that out. Since April, we have required all new claimants to take part, except those with the most severe conditions, and in October, we replaced incapacity benefit with the employment and support allowance, which focuses on what people can do, not what they cannot do. We improved help for lone parents. With the help of the new deal for lone parents, over 300,000 more lone parents are in work, but we wanted more people to benefit, so we are requiring lone parents of children between the ages of seven and 16 to look for work. We expect that to increase employment and lift 70,000 children out of poverty. The White Paper will kick off the third phase of welfare reform. It is based on the simple idea that no one should be left behind, and that virtually everyone should be required to take up the support that we know works. It is built on the recommendations of two independent reviews, the Freud and Gregg reviews. The White Paper confirms that we will implement the Freud report in full, including his ““invest to save”” proposal, in which private and voluntary providers invest money in helping more people back in to work, and get paid out of the resulting benefit savings. Professor Paul Gregg's report was published last week. The White Paper confirms our support for his vision. It sets out how we will put it into legislation and pilot his recommendations so that nearly all claimants are either preparing for work or looking for work. We will migrate everyone on incapacity benefit on to the employment and support allowance. Under the new benefit, the poorest and most disabled will get nearly £16 a week extra. Everyone else will get support to manage their conditions and prepare for work. They will be required to attend interviews to develop their plan to do so, and advisers will be able to require them to implement that plan. We agree with the Gregg report's recommendation that parents should not be left until their youngest child is seven before they are given help to get back into, or prepare, for work. The support that we offer lone parents has been transformed since 1997. We pay a £40-a-week bonus to any lone parent going back into work. We pay 80 per cent. of their child care costs. We pay for travel costs to job interviews, and for interview clothes, if necessary. When the parent finds works, there is a £300 emergency fund to help them, if needed. We can also help people with more serious problems such as depression, debt or drug addiction. Most of all, we have made work pay. A lone parent who has one child and works 35 hours a week will be on at least £304 a week in April next year, compared to £182 in 1999. Thanks to the minimum wage and tax credits, such parents are now more than £100 a week better off. Our goal is simple: we want more parents to benefit from help, so that they can help themselves and their children. That is why conditionality is so important in the welfare state. Only 5 per cent. of incapacity benefit stock claimants voluntarily take up the support that the pathways to work programme offers, and only around one in four lone parents takes up the support offered by their new deal. Partners in couples in which no one is working face even fewer obligations than lone parents. The Gregg report found that"““Conditionality backed with a regime of sanctions improves outcomes.””" As a result of such a regime, the UK enters the downturn with the second lowest unemployment rate in the G7. However, the report also found that countries such as Denmark and the Netherlands had lower unemployment and child poverty rates than the UK, so if we want to abolish child poverty and improve social mobility, we need a welfare state that learns from the example of those countries. The Queen's Speech made it clear that we will reinforce our commitment to ending child poverty in legislation that the Government will introduce in this Session. The White Paper is the other side of the coin, matching higher support with higher expectations. Some people say that we should be slowing down the pace of welfare reform because of the downturn. The Government believe that we should do exactly the opposite. We should not repeat the mistakes of the recessions of the '80s and '90s, when hundreds of thousands of people were shuffled on to inactive benefits to keep the unemployment count down, and trapped there without support, abandoned and scarring our communities. In contrast, we are investing £1.3 billion in helping people find work, but we will have increasing requirements of people the longer they are out of work, to make sure that they do not fall out of touch with the world of work. After a year, everyone will be allocated to a private or voluntary provider, and expected to do four weeks' full-time activity. After two years, we will pilot requiring people to work full time for their benefit. The White Paper will also support children whose parents' relationship has broken down. We will bring forward legislation so that it becomes the default option for both parents to register the birth of their child, whether they are married or not. And we will fully disregard child maintenance when working out income-related benefits from April 2010, so that children can take full advantage of the money provided for their upbringing. The White Paper also makes clear our intention to apply new benefit rules for problem heroin and crack users. Instead of receiving jobseeker's allowance, or the employment and support allowance, crack and heroin users will receive a treatment allowance, alongside an obligation that they address their problem. There needs to be help for people to find and keep work, as well as responsibilities to look for work, so we will double the access to work budget to allow more people than ever before the support that they need to stay in work, and because we recognise that disabled people are the experts in their own lives, we will legislate for disabled people to have the right to exercise choice and control over the support they receive from the state. This right to control will be a major step forward towards achieving equality for disabled people by 2025. It will be a transformation in the rights of disabled people. These reforms point the way to a fairer society where children do not grow up in poverty, disabled people enjoy real equality, and everyone is given real help to overcome the barriers to fulfilling their potential. Yes, the reforms are about looking after taxpayers' money, but they are also about looking after the future too, by making sure that we do not waste anybody's talent. I commend the statement to the House.