Social Security (Jobseeker’s Allowance and Employment and Support Allowance) (Waiting Days) Amendment Regulations 2014
Lord Freud Excerpts(9 years, 6 months ago)
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Lord McAvoy (Lab)
My Lords, I, too, thank and congratulate the noble Lord, Lord Kirkwood of Kirkhope, on moving this Motion which allows us to elaborate further on this pernicious policy. Like many others, I am still waiting for the rationale behind what the noble Lord described as a mean policy. I do not get the stated—or, rather, not yet stated—rationale behind it.
I would like to repeat some of the comments made by the Secondary Legislation Scrutiny Committee. It stated:
“DWP estimates that this change will generate savings of approximately £50 million in 2015-16, although these will decrease in subsequent years as Universal Credit is rolled out”.
Can the Minister say whether there has been any change in that estimate? If that is the case, I would like to hear what it is. The Secondary Legislation Scrutiny Committee also says:
“DWP states that these savings will be invested in new measures to support people into work”.
Therefore, work must have been done on allocating money to these new measures to support people into work. I would like the Minister to indicate what new measures are planned and their estimated benefits.
The Social Security Advisory Committee has issued a report on this measure, which, again, has been referred to. The Secondary Legislation Scrutiny Committee states:
“An Impact Assessment is now attached to the instrument which indicates that approximately 70% of JSA claimants and 40% of ESA claimants will serve waiting days ... reducing the value of their first benefit payment by an average of £40 for JSA claimants and £50 for ESA claimants”.
I fully understand why the noble Lord, Lord Kirkwood, described this measure as mean. There is no doubt that the country faces a difficult situation caused by the downturn initiated in America in 2008 to 2010 and that difficult decisions would have to be made by whoever was in authority. The noble Baroness, Lady Thomas of Winchester, mentioned the Labour Party. We have repeatedly expressed concern about how the administration of universal credit will impact on those on low incomes. The reform represents a significant change in the rhythm of social security payments for a group for whom this is a main source of income and whose well-being will be profoundly affected by any delays or problems experienced in receiving it.
My noble friend Lady Lister of Burtersett and the noble Baroness, Lady Thomas of Winchester, both referred to the role played by food banks and charities. Like many people, I am outraged that food banks have had to be established to deal with the society that we live in. This measure has not taken into account the dire straits that some people will find themselves in when trying to deal with it. The Labour Party convened a universal credit liaison committee which reported in June 2014 and made several recommendations on the payment of universal credit which we believe the Social Security Advisory Committee should have considered, including one on the scope of the regulations.
I ask the Minister whether consideration was given to making the first payment of universal credit earlier. If that was the case, it should be widely publicised. The cost of allowing claimants that choice of payment date, as with direct debit payments, should also be looked at. Has that happened or was any consideration given to it? Did the Government ever seriously consider implementing it?
In order to mitigate any hardship that may arise from the recommended move to a seven-day waiting period, we asked that sufficient attention should be drawn to the recourse available to claimants through short-term benefit advances. Noble colleagues have mentioned this aspect. In fact, the Social Security Advisory Committee itself recommended that the DWP should:
“Strengthen the existing process for highlighting the availability of STBAs and ensure that they are proactively and consistently signposted. In particular, it will be important to ensure that staff (through training and appropriately worded scripts) are encouraged to identify potential hardship and, where it has been identified, explain the process to the claimant. It is also important that the Department ensures that all supporting information channels, such as GOV.UK, highlight the existence of STBAs”.
Will the Minister give the Government’s response to that view and say whether they have given any consideration to implementing it?
The claimant should be made fully aware of budgeting advances and more discretion should be shown in order to mitigate any hardship that may arise from the recommended move. Attention should be drawn to the existence of budgeting advances and, in certain circumstances, we hope that discretion is given to advisers to waive the eligibility criteria whereby claimants need to have been in receipt of benefits for a period of six months in order to apply for an advance. I ask the Minister to respond and indicate what consideration was given to the measures that I have outlined or other measures from a variety of sources. The Minister has an overriding duty to explain the rationale behind the measure and go into detail about its implementation.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
I thank noble Lords for their many helpful contributions to the debate. It is clear that this measure has generated a great deal of interest, not just within this House but outside among voluntary and public organisations, which have also presented their views to the Government. The principle behind this extension from three to seven waiting days is that benefits are not intended to provide financial support for very brief periods, for instance when someone is between jobs or during a short period of illness. This measure will generate savings of £125 million over five years. It is money that, as noble Lords have touched on, will be reinvested to help those most at risk of long-term welfare dependency. As noble Lords know, the measures will fund schemes including additional support for lone parents and improving literacy and numeracy skills.
To pick up the question from my noble friend Lady Thomas about any change in those estimates, they were based on departmental forecasts which themselves were based on OBR economic assumptions at the Autumn Statement 2013 and in Budget 2014 and there have not been any updates to this analysis since then, although we are, of course, awaiting another financial event quite shortly.
On the related question from my noble friend Lord Kirkwood and the noble Baroness, Lady Lister, about what and where these investments are, we are expanding on measures that are already in place. They will introduce more rigorous scrutiny on the hardest-to-help claimants. The English language provision is new and will ensure that claimants have the language skills for the workplace. Those methods should enable the claimants to enter the workplace sooner than they otherwise would, which means that they will be earning sooner and not receiving benefits.
Baroness Lister of Burtersett
Perhaps I may ask the noble Lord the question raised by SSAC. Is it likely that the people who are going to be adversely affected by this change will be the people who will be helped by these measures?
Lord Freud
Yes; I thought that I had made that clear—that the intention is to focus on the people with longer-term difficulties. So, yes, the intention is that it will be those people.
This measure means that many people who make a new claim for jobseeker’s allowance and ESA will see a reduction in their first benefit payment. However, we have measures in place through exemptions and the offer of advances and signposting advice to ensure that claimants who are most in need will continue to be protected.
I hope that I can pick up all the points that have been raised. On the point raised by my noble friends Lord Kirkwood and Lady Thomas on the exemption of ESA claimants, if there had been a differentiation between the two types of claimant there would have been a perverse incentive for people to self-certify sickness for a week and claim ESA rather than JSA in order to get an additional four days’ benefit. There is no evidence that ESA claimants are at greater risk of financial hardship than JSA claimants. Furthermore, to exempt ESA claimants to make that differentiation would be inconsistent with future proposals for universal credit, where our intention is that all ESA-type claimants will be placed in the all work-related requirements group and therefore subject to waiting days. Clearly, waiting days themselves have been a feature of ESA since its introduction in 2008. This measure has simply extended that existing provision for those who do not qualify for an exemption.
The point that my noble friend made about exempting vulnerable groups is clearly one into which we put a lot of consideration, particularly around care leavers, sufferers of domestic violence and ex-prisoners. Bluntly, they were exempted on grounds of practicability. It would have introduced an unworkable, three-tier system and these groups are already required to serve three waiting days, so the only other option would be a full exemption which would go beyond the scope of this change. Despite what my noble friend said about the UC provisions in this line, we are able to make an exemption for these groups in the UC-equivalent provisions. Perhaps that will leave my noble friend somewhat more relaxed about those.
Baroness Lister of Burtersett
I am sorry to intervene on the Minister. I was not asking about savings, because that is in the public sphere. My question was whether there was any information about people who come out of work in debt or arrears?
Lord Freud
I was coming on to that. The noble Baroness asked a series of questions. We do not currently have the information on the proportion of people coming on to benefit who are likely to be in arrears or debt. I am not aware of any published analysis that would allow us to estimate this quickly. All noble Lords who spoke raised the question of short-term advances. SSAC recommended that communications about them should be strengthened.
Lord Freud
A number of noble Lords raised the communications issue around short-term benefit advances. We have taken the recommendation of the committee and issued communications to all staff to improve staff awareness of benefit advances and to remind them of the circumstances in which an advance can be considered.
On the point made by the noble Baroness, Lady Lister, on the report on food banks, I was not at today’s press conference but no one takes the decision to use a food bank lightly. The factors driving food-bank use are many and complex, as today’s report recognises. The report said:
“The immediate income crisis that predominantly led to food bank use was often one incident in a complex life story, in which several other factors had combined to leave people vulnerable and less able to cope with dramatic changes”.
Baroness Lister of Burtersett
I agree that we are talking about very difficult lives here, but it is very clear from this research, which is not a huge study but it is from a number of different places using a number of different methodologies, that benefit delays were a very important factor. Given that, does the noble Lord not accept that this measure could well make it worse?
Lord Freud
My Lords, I would be the last person to say that the current benefits system was easy to navigate. One of the things that has been driving the reform that we are introducing, universal credit, is the production of an in-work and out-of-work benefit that is easy to navigate. I started researching this area in some depth in 2006 and the irony is that benefit delays under the existing, rather complicated system have actually been improving. That is why I revert to the point that this is a complicated matter, as is acknowledged in today’s report and in other reports. That is the only point I want to make.
There was a series of questions on universal credit and the noble Baroness raised the point about TUC concerns about the length of time claimants have to wait for payments under universal credit. Clearly we have an advances process built in, but probably more important is the system that is now developing of universal support delivered locally, which is designed to work in the local community, both with councils and with voluntary organisations, to bring the support that is specifically required by vulnerable people. The estimated saving from increasing the waiting days in universal credit is £200 million per annum once it is fully rolled out, but this figure will be reviewed and updated with the Autumn Statement. I have talked about exemptions within universal credit.
The noble Lord, Lord McAvoy, asked about our consideration of whether we add waiting days to the assessment period in universal credit or whether we have partial periods of universal credit. We spent a great deal of time considering that issue. Universal credit is an in-work and out-of-work benefit, paid on a monthly basis. That monthly basis is designed to help households to budget on a monthly income and eases the transition from and back into paid work. The one-month assessment period is therefore central to universal credit, and the waiting days in universal credit are days of non-entitlement. I need to remind noble Lords that because universal credit is an in-work and out-of-work benefit, one might not experience waiting days anything like the same number of times as, especially if one is moving from low-paid work to being out of work, one is likely to be consistently on universal credit. That is one of the safety features of universal credit in this regard.
With that I think I have dealt with all the questions raised today and thank my noble friend—
Lord McAvoy
I may have missed it, but I do not think I did. Does the Minister have any response to the point made by the Social Security Advisory Committee about short-term benefit advances?
Lord Freud
Yes, we have accepted the communications issue there and have already, on the basis of that recommendation, issued communications to our staff to improve awareness of the availability of short-term advances and remind them of the circumstances in which those advances can be considered.
As I say, I think I have dealt with everything. I thank my noble friend for the opportunity to discuss this important topic and to address all the concerns and matters that have been raised.
Underoccupancy Charge: Carers
Lord Freud Excerpts(9 years, 6 months ago)
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Baroness Pitkeathley
To ask Her Majesty’s Government what consideration they have given to exempting unpaid carers from the underoccupancy charge.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
An unpaid resident carer is allocated a bedroom, unless they are the partner of the housing benefit claimant, in which case they will share a bedroom. A non-resident unpaid carer who regularly undertakes overnight care in respect of the claimant or their partner is also provided with a bedroom.
Baroness Pitkeathley (Lab)
Does the Minister really think it justifiable to make carers who are providing round-the-clock care apply repeatedly for a discretionary housing payment in order to remain in their own homes—a process which, by the way, is lengthy and bureaucratic, and very uncertain in terms of getting the discretionary payment? Is this really a fair way to treat people who are providing vast amounts of care and saving the state vast amounts of money—often at great personal cost, as the Minister knows? I ask him again: will he consider an exemption for carers from this pernicious tax?
Lord Freud
We clearly value carers greatly, and we have put support into the system at different levels for them. In this case we have given local authorities some guidance to make it absolutely clear that they can make longer-term determinations of discretionary housing payments. We have also made it clear that DHPs will be paid next year as well as this year.
Lord German (LD)
My Lords, the Government’s own review of the spare room subsidy shows that discretionary housing payments are inconsistent, short-term and temporary. Indeed, the evidence is that most of the applications for those payments are made by the very groups who should be exempt—carers and those who have had adaptations made to their homes. Many local authorities are now means-testing the disability benefits of people in receipt of those allowances. Regardless of what may happen to this policy next year, is it not now time for the Government to fully exempt people in those groups, such as carers and those with adapted homes, so that they are not subject to this inconsistent approach to government funding and can get certainty in their lives?
Lord Freud
As I said, we have made sure that long-term discretionary housing payments can be made. We have also provided guidance to make it clear that where claimants are using their disability payments for needs caused by their disability, such as paying for care or Motability schemes, those would not be included in the calculation.
Lord Christopher (Lab)
My Lords, is it not the case that it is not just outrageous but downright cruel to require a partner—presumably a wife or a husband—whose day may be appalling anyway, to sleep in the same room as the disabled person? I find that statement utterly outrageous.
Lord Freud
About 40,000 couples in which one is looking after the other were covered by the spare room policy when it was introduced. That is about 6% of the total. The discretionary housing payment system was set up precisely to look at circumstances in which the couple could not share a room—because, of course, many of them could, even though there was a disability.
Baroness Greengross (CB)
My Lords, a lot of people are looking after severely disabled children, or older adults with long-term conditions—particularly dementia. In order to get some sleep, they have to chop and change, and need additional carers such as other members of the family coming in. They desperately need the extra room. Can those sort of carers usually get an exception to the rule and be allowed to have an additional bedroom?
Lord Freud
This is precisely the kind of circumstance for which the discretionary housing payment is designed. It has not been found possible to have a general rule, and that is why this system, which has gone through the courts in quite some detail, has been found to supply support where necessary.
Baroness Hollis of Heigham (Lab)
My Lords, if, as the Minister suggests, disabled families with family carers are effectively covered by DHPs, why not simply exempt them? If he is wrong—which I suspect he is—why are we, quite knowingly, making lives that are already hard even harder, perhaps thus ensuring that the family carers will themselves become disabled?
Lord Freud
The courts have gone through this in some detail now and found that it is reasonable for the Secretary of State to take the view that it is not practicable to provide a further exemption for an imprecise class of persons, and that the flexibility of the DHP scheme can be relied upon to provide the additional help.
Lord Cormack (Con)
Does my noble friend not accept that this policy, which appears to be insensitively applied, does not sit happily with Conservative philosophy?
Lord Freud
We have aimed to get rid of some of the areas where people are just not taking part in the economic life of the country. One of the things that has been happening is that the proportion of people who have been outside the labour market and in social housing has dropped dramatically from a peak of 49% at the beginning of this Parliament to 41% now—the lowest-ever level. We need to look to help all people that we possibly can to take a full part in the economic life of this country.
Lord Bradley (Lab)
My Lords, the Minister’s department claims that the focus and scope of the family test is on strong and stable family relationships, with particular focus on extended families, particularly when they are playing a role in raising children or caring for older or disabled family members. Can the Minister explain to the House how the bedroom tax passes this test?
Lord Freud
The removal of the spare room subsidy is designed, at its heart, to save money—it saves £500 million a year—and make sure that housing is allocated more efficiently. There are signs of that policy now working.
Work Capability Assessment
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Lord McAvoy
To ask Her Majesty’s Government how many people were awaiting a Work Capability Assessment on the latest date for which figures are available.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
As of 30 September 2014, there were around 580,000 cases awaiting work capability assessments at Atos Healthcare, down from 616,000 at the end of August. These figures do not include cases where the claimant has yet to return the claimant questionnaire.
Lord McAvoy (Lab)
My Lords, will the Minister confirm the number of disabled people who are waiting for their first work capability assessment? The figures show that the suffering of hundreds of thousands of disabled people is being increased on a daily basis by a Government who are failing in their duty of care. The Minister is quite keen to say how he is clearing up this mess. Does he not also owe an apology to the people affected?
Lord Freud
The service that we provided is not where we want it to be—we have been clear about that. We are pulling down the backlog; it is down by 20% since February. We announced in March that Atos would be leaving the contract, and we were able to announce last week that Maximus Health and Human Services is taking it up from that date.
Lord German (LD)
My Lords, we now have a new supplier of these work capability assessments. Most of the staff are being transferred using the transfer of undertakings. May I and the House be reassured that the transfer of undertakings will not include a transfer of working practices? In particular, perhaps my noble friend can tell us whether he agrees with the recommendation from the Government’s own assessor of this policy, Dr Litchfield, that less emphasis should be placed on the number of points attained in the test and that the calculation should be used,
“simply to determine whether the threshold for benefit has been reached”.
Surely that is a much fairer way of doing these assessments. Does the Minister agree?
Lord Freud
We are not changing the actual assessments, but we are improving the quality of those assessments; expanding the number of medical professionals, particularly in mental health; understanding how fluctuating conditions work, and so on.
Lord Alton of Liverpool (CB)
My Lords, in his reply to the noble Lord, Lord McAvoy, the Minister said that the new contract between Maximus and the DWP had now been signed. In view of the phenomenal sums of public money which are involved in this, can the Minister tell us when that contract will be placed in the public domain, whether it will be possible properly to scrutinise it and whether it will be possible for the public to see the operating systems and all the other issues involved, in contrast to way in which the Atos Healthcare contract was administered?
Lord Freud
Details of the new contract will be published on Contracts Finder by the end of November.
Baroness Uddin (Non-Afl)
My Lords, only recently, almost half of work capability assessment appeals were successful. New leaked papers tell us that even where eligibility is conceded and faulty work capability assessment decisions are reversed, employment and support allowance is providing less support to disabled people. Can the Minister rule out an announcement of new cuts to ESA in this Parliament?
Lord Freud
If the noble Baroness is referring to a newspaper story about 50p, I can assure her that that is not government policy.
Earl Attlee (Con)
My Lords, what progress is being made in getting more disabled people working, which is so important for their self-esteem?
Lord Freud
We have seen 116,000 disabled people return to the workforce this year. That is a 4% increase and is faster than the 2.6% rate of increase which is the average.
The Lord Bishop of St Albans
My Lords, great concern has been expressed by some people about how work capability assessments are being carried out and whether those undertaking them have the right skills and expertise. Indeed, in one anecdotal case, the health professional who undertook a complex mental health assessment was a physiotherapist. If that is the case, surely it cannot be right. What are Her Majesty’s Government doing to ensure that those undertaking the assessments have the right skills and experience to be able to do them properly?
Lord Freud
The important thing about doing these assessments is that someone assesses correctly in terms of capability of performing functions and capability of working; that is, what people are able to do. As I said earlier, we have more specialist professional support going into the system to make sure that those assessments are done accurately.
The Countess of Mar (CB)
My Lords, is there any foundation to the report in the Independent last week that some 6,000 people with diseases such as Parkinson’s, multiple sclerosis and severe CFS/ME have been put into the work-related activity group? If that is the case, how many of those people have been got into work? What is the point of putting them in the WRAG if they are not going to get better?
Lord Freud
Clearly, I am not able to respond on specific people going into specific places. The whole point of the assessments is to focus on functional capability or needs at the point of assessment.
Baroness Hollis of Heigham (Lab)
My Lords, 40% of people appeal against their assessment, some of them terminally ill. The DWP has added an extra stage to the appeals process, mandatory reconsideration by the department, but—and this is key—there is no time limit for staff to meet. Tiny numbers of appeals are being processed; the rest are being seriously delayed by six months or more. What is the Minister doing to speed up those appeals?
Lord Freud
The noble Baroness is quite right that the rate of appeals has fallen very steeply, by 92% in the latest quarter compared with a year earlier. It is too early to tell the definitive reasons for that. It may well be due to many of the changes that have gone through—75 recommendations have gone through—or to mandatory reconsideration so that we look at it early. However, when you look at the backlog of mandatory reconsiderations, you see that the pure numbers do not seem to be a huge influencing factor in this fall in appeals.
Baroness Manzoor (LD)
My Lords, looking at the number of people who will be moved across under TUPE, can the Minister say what percentage of new staff will be introduced to ensure that we have a faster and more effective service?
Lord Freud
All the providers within Atos were retested in 2013, so those will transfer. Maximus will bounce up the numbers—the precise numbers are not available yet—to do this particular contract.
Unemployment: Young People
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Lord Holmes of Richmond
To ask Her Majesty’s Government what assessment they have made of the recent figures on youth unemployment.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, youth unemployment has fallen by a record-breaking 253,000 in the last year. This brings total youth unemployment down to 733,000, one-third of whom are full-time students looking for work. Excluding these students, 6.4% of all young people are unemployed —this is a lower figure than that immediately before the recession.
Lord Holmes of Richmond (Con)
My Lords, these figures are indeed good news. However, as we all appreciate, any case of youth unemployment is a tragic waste of talent, both for the individual and for society. Will my noble friend consider working with ministerial colleagues to insert a condition into all public procurement requiring bidding businesses to offer high-quality apprenticeships? That is a small step but could be significant.
Lord Freud
I accept my noble friend’s point that every case of a youngster being out of work is a tragedy, and that is why we have put so much energy into getting youngsters back into work. We support the appropriate use of apprenticeships in procurement and that can be important for local skills and growth, but we do not support the blanket inclusion of apprenticeships in all contracts. It is up to individual departments. For instance, for longer-term contracts, my department the DWP requires suppliers to take reasonable steps to ensure that 5% of their workforce are on apprenticeships, but there are other contracts where that is not appropriate—for instance, contracts with healthcare professionals.
Lord McAvoy (Lab)
My Lords, youth unemployment is still extremely high, as mentioned by the noble Lord who put the Question. Can the Minister say what further things the Government are going to do to reduce youth unemployment? Will the Government, for instance, commit themselves to matching Labour’s commitment to guarantee a paid job for every young person who has been claiming jobseeker’s allowance for a year or more—a job they will have to take?
Lord Freud
My Lords, when the noble Lord says that youth unemployment is very high, it may be higher than we would like, but if you look at the record, it is now at very low levels. If you look at the real figures, which I have used in this House for the last four years, for all workless youngsters who are not in full-time education—that captures the unemployed and the inactive—that figure is now at 14.9%, or just over 1 million. That figure has only been lower in one year since records began—in 2001. You can see that all the measures we have been taking to get youngsters into the workforce are really beginning to achieve results.
The Lord Bishop of St Albans
My Lords, I congratulate Her Majesty’s Government on these figures, which are very encouraging, not least in London where the number of unemployed young people has declined by 57,000, which is significant. However, the figures also reveal that in the north-east of the country, the figures have declined by only 8,000. There, the levels of unemployment among young people remain stubbornly high. Can the Minister tell us what Her Majesty’s Government are doing to help in these areas, where the problem is much worse?
Lord Freud
My Lords, we have a number of programmes aimed at getting youngsters into the workforce all around the country. There is a mixture of the Work Programme, the flexible support scheme, the sector-based work academies and work experience. We are using a whole range of programmes to help youngsters into the workforce. They are working not just in London but right around the country. Clearly, we just have to stay on the issue and make sure that we get everyone in every part of the country into the workforce.
Lord Roberts of Llandudno (LD)
My Lords, do these new figures, which have a bit of sunlight about them, depend upon our continued membership of the European Union? Is there not something we could do to encourage young people to cross borders to other countries so that they get work experience in different places and build bridges of understanding for the future?
Lord Freud
The fundamental driver of these much sunnier figures is clearly our economy, which is now the fastest growing of the major economies. It is vital that we keep that process going. It is also vital that we have a benefits system that encourages and enables people to go into the workforce rather than being blocked from going into it.
Lord Kennedy of Southwark (Lab)
My Lords, any reduction in unemployment is to be welcomed, particularly youth unemployment. Can the noble Lord tell the House how many of those new jobs are part of the 5.2 million people on low pay in this country? Low pay is now a huge problem for us to deal with.
Lord Freud
The Governor of the Bank of England has said that the only way that we are going to get growth in real wages is by recovering productivity in the economy. One way is clearly to reduce dependency and to get 1.7 million extra people into work. The second way is to get the skills base up, and there are now some really good signs that we are moving that up by serious percentage points. The third way is progression in work, so that people earn more. That is what universal credit is all about.
Earl Attlee (Con)
My Lords, is it not the case that we have never had as many people in work as we have now?
Lord Freud
We now have 30.7 million people in work. It is not just about the number; we are now at a 73% rate of employment, which is little short of the all-time high.
Employment
Lord Freud Excerpts(9 years, 7 months ago)
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Lord Haskel
To ask Her Majesty’s Government what measures they are taking to tackle under-employment and to help those working part-time who want a full-time job.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
The Government’s long-term economic plan is working. A record number of people are in work and the proportion of part-time workers wanting full-time work has fallen for the last 11 months. Under universal credit we are, for the first time, creating clear incentives and supporting claimants to progress in work and increase their earnings.
Lord Haskel (Lab)
I am not sure where the Minister gets his numbers from but recent figures show that there has been rise in the number of people seeking more hours. Could this be due to the low pay that people who are already in work are getting—that they need to work more hours? This is partly due, I should have thought, to the government policy of subsidising low wages through the welfare system. Instead of incentivising these low wages, would it not be better for the Government to encourage businesses to raise their game, and become more productive and efficient? In this way, people can earn more and employers can get more of a return from people’s work.
Lord Freud
My Lords, the simple fact is that the number of people working part-time who want to work full-time has had the largest but one drop over the last 12 months that we have ever seen—down 1.7%. Clearly, one needs an economy recovering. We have had a terrible shock to this economy—it went down 6%. We are now pulling people back and, as the Bank of England Governor said, what will get everyone working to the extent that they want to work will be improving productivity in this economy.
Baroness Gardner of Parkes (Con)
The Minister will be aware that I have often raised the issue of carers, who are grossly underpaid because they are paid only for the jobs they do—going in for 15 minutes or half an hour—and nothing for travel between jobs. Is he also aware—I have met such cases—that there are people who have worked as carers for all their lives but when their client dies and they go for re-employment, because they have been so loyal to them over many years they are told that they must take voluntary work? What they desperately need is an income to live on and they have to take voluntary work before they will be considered even for a job paid at the very poor rate of something like £2 an hour, which they get because they are considered to be self-employed. Does he not think that that is an abuse of this whole employment system?
Lord Freud
We are most concerned that people should be able to work as much as they want to. We are creating a new system to allow that, supporting people as they progress, in universal credit, into full-time work. We have extensive in-work progression trials right round the country, to find ways in which we can most effectively support people to work the amount that they want to and get the earnings that they need.
Lord McFall of Alcluith (Lab)
My Lords, in a speech in April this year the Chancellor was explicit in committing the Conservatives to the concept of full employment, and in a contradictory echo of a previous Conservative Chancellor said that unemployment was a price not worth paying. Can the Minister inform me what the Chancellor meant by “full employment”? Did he have a particular equilibrium unemployment target in mind, or was it just an empty rhetorical gesture to fit the occasion?
Lord Freud
As the noble Lord knows, that is an extraordinarily complicated economic question. The Chancellor has clarified that the target around full employment is a better employment rate than other countries are seeing. We are currently not far off the full employment rate, at 73%, that we have seen in the past.
Lord German (LD)
My Lords, as the unemployment levels fall, the focus naturally shifts towards in-work progression, with people wanting to earn more money and have more hours. Can my noble friend tell me whether we should in fact incentivise the Work Programme so that after someone being 26 weeks in work, when a company gets paid, there should be further incentives to help people earn more money and get more hours, so we can move people into better work in their lifetime?
Lord Freud
My Lords, we now have the real-time information system working, whereby we know what people are paid every month. That gives us a new opportunity with the Work Programme in its next stages to look not just at sustainment in work, which was the key new feature of the original Work Programme, but at progression in work. It will be entirely possible to devise ways to encourage providers to help people make that important progression.
Baroness Howe of Idlicote (CB)
My Lords, I am sure that the Minister agrees that many women want to work part-time, because it fits in well with their life plans. Can he reassure me that men have equal chances, in their employment, of getting part-time work? As I understand it, many men are felt to be able to work full-time and therefore not given the other option.
Lord Freud
We have one of the most flexible structures of work in Europe. In other countries you see a huge concentration of people working the full number of hours, whereas here there is a much smoother position. We have systems to support people doing partial and full work hours. In fact, in the way in which it is devised, universal credit will make the situation even more flexible in the future.
Lord Kinnock (Lab)
Does the Minister recall this week’s worse than anticipated borrowing figures, attributable in large part to worse than anticipated revenues from income tax? Does he recognise and share the view of many independent economists commentating yesterday, who said that this was because we are having a very low-wage recovery? Does he concede the truth of that and understand that on the present basis the recovery is very fragile and will remain so as long as wages are low in so many sectors of the economy?
Lord Freud
There are major flows going on in this structure. We have had a very large increase in employment, with 1.7 million more people in the workforce. Clearly, some of those coming in for the first time tend to be at the lower level and then work their way up. In 2012-13 the earnings of those who have stayed in work grew by between 3.7% and 3.9%—far more than the average, which was between 0.7% and 0.9%.
Introduction: Baroness Smith of Newnham
Lord Freud Excerpts(9 years, 7 months ago)
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Baroness Lister of Burtersett
To ask Her Majesty’s Government what progress they have made in implementing the Oakley report on Jobseeker’s Allowance sanctions.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
We welcome the findings of Matthew Oakley’s review and have published our response, in which we accepted all his recommendations. We know that sanctions play an important role in conditionality, and it is crucial that the system is operated effectively and fairly. We are taking forward all recommendations and have already completed a number of improvements.
Baroness Lister of Burtersett (Lab)
My Lords, as welcome as any improvements are to this punitive sanctions regime, given that Mr Oakley himself acknowledged the narrowness of his brief, the historically high level of sanctions and the accumulating evidence, including from food bank providers, of the hardship that they are causing, will the Minister now accept the growing demand for a more thorough, independent review of the whole sanctions system, as called for by the Work and Pensions Committee?
Lord Freud
I will respond to the noble Baroness in a moment, but first I would like to take this opportunity to repeat briefly the apology that I made last week. I want to make a full and unreserved apology for the comments that I made at the Conservative Party conference. Of course disabled people should be paid at least the minimum wage, just like everybody else, and I am profoundly sorry for any offence that I caused.
I turn to the noble Baroness’s question. Matthew Oakley found that benefit sanctions provide a vital backdrop in the social security system for jobseekers, and the OECD has ranked the UK as mid-table for the strictness of its sanctions regime. My right honourable friend Esther McVey has looked at these recommendations more widely and has made sure that we are reviewing claimant communications for all JSA claimants, not just the ones whom Matthew Oakley looked at, and that we are introducing a new IT interface to make sure that our relationship with local authorities works more smoothly.
Lord Forsyth of Drumlean (Con)
My Lords, does my noble friend think that the largest annual fall in unemployment ever recorded, which was announced the other day, and the fact that 116,000 more disabled people are in work, might just have something to do with the painstaking work that he has done, both for the previous Government and for this Government, in bringing about the welfare reforms that are bringing to so many people, able bodied and disabled, the opportunity of a place in the workplace?
Lord Freud
As my noble friend said, the issue is that we are doing everything we can to help people into the workplace. It was a very encouraging assessment from the Monetary Policy Committee of the Bank of England, which said:
“A tightening in the eligibility requirements for some state benefits might also have led to an intensification of job search”.
That echoes something that the deputy governor had said a little while before. It is apparent that our reforms are working, with employment up by 1.7 million since 2010 and record numbers of people now in work.
Earl Attlee (Con)
My Lords, the Oakley review suggested that some claimants do not understand—or even open—their correspondence about sanctions. What are we doing about this?
Lord Freud
Matthew Oakley was very concerned about the communications aspects of talking to claimants about sanctions. We have taken that point very seriously. Indeed, we have accepted his recommendations on that and are going further; we are reviewing and improving all our claimant communications on sanctions across every benefit, and we aim to ensure that people understand that they have received a sanction and why they have received it. We have introduced a claimant communications unit that tries to get the language right—because, as many noble Lords know, some of the language that the DWP put out in the past was clunky at best.
Baroness Sherlock (Lab)
My Lords, I wonder whether the Minister has taken the opportunity to read the evidence that was given to Matthew Oakley when he did this report. I accept that sanctions are a necessary part of the system, but it is quite clear that many people have been sanctioned who have done literally nothing wrong. Look at the evidence from the CAB of the man sanctioned twice for missing appointments with his Work Programme provider; in fact, he had been to all the appointments with a company to which it had subcontracted him, but he was sanctioned. Then there was the man who was sanctioned after being told to be in two different places at once and the woman who was sanctioned for being in hospital having treatment for cervical cancer, despite having given advance notice of her hospital appointment to the system before she went in. I could go on. There is a very real risk of claimants starting to believe that the Government are more concerned with cutting their benefits than getting them into work. Will the Government sort this?
Lord Freud
My Lords, it is clearly utterly important that the sanctions regime is fair to people. We have put in layer on layer of protections and safety nets in the machine. People have, to start with, five days to respond to the letter saying that we are looking at a sanction. Then it goes to a decision-maker and then, if claimants do not like that, to a mandatory reconsideration, which is an extra layer. Then you can go into the tribunal process, and we have hardship. We are putting many measures in to make sure that we run this system as fairly as we possibly can.
Lord Kirkwood of Kirkhope (LD)
My Lords, I associate myself with the remarks made earlier by the noble Lord, Lord Forsyth. Having worked with him closely in the past four or five years, I think that the Minister plays an absolutely crucial and effective role in the important reforms that are designed to assist low-paid families in this country, and if he was not here, things would be harder to deliver on time and on budget. However, the scale of sanctions surprises me, with 800,000 or 900,000 sanctions per year. That is not something that I expected ever to see. The claimant commitment that we have is beginning to appear to be used as a coercion document to get people to do things that they do not really want. Will the Minister look again at the report that Professor Paul Gregg did some years ago, which suggested that the way in which to get an appropriate use of sanctions is to involve the claimants at an early stage in a joint enterprise to get a claimant commitment to work?
Lord Freud
My Lords, we have really transformed the role of the client-facing people in Jobcentre Plus and turned them into work coaches; that is what the claimant commitment does. It is something that has been done very recently. The relationship between claimants and the work coaches has changed very substantially already.
Universal Credit
Lord Freud Excerpts(9 years, 9 months ago)
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Lord McAvoy
To ask Her Majesty’s Government what measures they are taking to increase transparency and openness in the implementation of universal credit.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
We consistently and regularly update Parliament and stakeholders on universal credit implementation, and the universal credit programme continues to be subject to substantial scrutiny. We will maintain every effort to communicate openly and on a timely basis.
Lord McAvoy (Lab)
My Lords, I thank the Minister for his Answer, and I would like to wish him a peaceful and happy Recess. But in the mean time, many noble Lords will, like me, have been shocked to hear the head of the Home Civil Service say on 7 July that the business case for universal credit has not been approved by the Treasury. He said:
“We shouldn’t beat about the bush: it hasn’t been signed off”.
Does the Minister know of any other project on which £612 million has been spent without the business case for that project being signed off by the Treasury?
Lord Freud
I do not have a review of all the business cases, but I know that we have 44 separate business cases for change programmes in my department, the DWP, and that this is the most reviewed. What we have said—and I have said it in this House—is that the plans in the strategic outline business case for the remainder of this Parliament have been cleared, and that we are looking to get formal full clearance for the case shortly.
Lord German (LD)
My Lords, the universal credit is providing great opportunity for people and is being rolled out slowly. It is also giving Jobcentre Plus advisers an opportunity, for the first time, to advise customers so that they get comprehensive support. Most of the problems seem to be about the future. Can my noble friend therefore reassure the House that it will be rolled out to and engage a large number of people by May 2015? What milestones does he anticipate we will have passed by the time that we get to May 2015?
Lord Freud
My Lords, we are rolling out universal credit on a careful basis right the way through the north-west. We are currently at 38 jobcentres across the country, the bulk of which—32—are in the north-west. On Monday we moved from singles to couples as well, and that will be introduced right the way through the north-west as we finish this rollout this year. In the autumn we will move to families; so there will be a substantial number as we do that rollout. I must emphasise that we are not doing this rollout in the same way as past programmes have been brought in, on a big-bang basis; we are making sure that we understand what is happening and we go at the pace at which we can do it safely.
Baroness Lister of Burtersett (Lab)
My Lords, as universal credit rolls out to couples and families, the question of the impact of the payment into a single account on women who are subject to domestic violence becomes more urgent. In oral evidence to the Joint Committee on Human Rights recently, Women’s Aid expressed its fears that the new payment arrangements will endanger such women. It warned that the discretionary power to make split payments—which, of course, will require women to identify themselves as victims of domestic violence—simply will not work. Will the Minister therefore commit to work with Women’s Aid and similar organisations to find a more effective solution to try to avert this very real danger?
Lord Freud
One of the things that we are doing as we roll this out is to watch key factors very closely. That is the point of going at this pace, so that we can see small numbers to start with and see what is happening. I will watch this very closely. I talked to the Women’s Aid groups intensively on a number of things of great concern to them and to me, and I will keep watching this one very closely.
Baroness Sherlock (Lab)
My Lords, although I welcome the Minister’s commitment to transparency, I was reading this week about the DWP’s battle to stop the publication of the risk register and other documentation relating to universal credit. The Information Commissioner said that the other papers should come out, and a tribunal added the risk register, but the department has appealed. One journalist has pointed out that the judge said that he could see,
“no support for the argument”,
and that the department had not, “provided any persuasive evidence”. The department now wants to appeal again. I have two questions for the Minister. First, what exactly are the Government trying to keep from us? Secondly, how much public money have they spent in the attempt?
Lord Freud
This is a government policy; it was equally a matter for the previous Government as it is for this one not to publish particular information about the business case, risk registers and so on. It is something that we are maintaining not just for this programme but generally. I will say, however, that there has been an enormous amount of information put out on this programme, more than for any of our other programmes. There have been reports from the SSAC, from the NAO, from the PAC; it was in the MPA; and it was in our annual report. We are talking to the Select Committee and going through the contents and information within those business plans without breaking the norms of what Governments do in terms of providing a specific document.
Lord Grocott (Lab)
My Lords, I listened carefully to the Minister’s response to my noble friend Lord McAvoy, and although it was quite a lengthy response, it was pretty clear to me that, in relation to the Treasury at any rate, he did not answer the question. So given that it was a splendid question and a not-so-good answer, could the Minister please put a copy of the full details of a proper response in the Library and send a copy to my good friend Lord McAvoy to read over the Recess?
Lord Freud
I am always very pleased to provide the noble Lord, Lord McAvoy, with reading material, and I shall do so in this case. However, I must make the point that we have gone through this question in some detail both in the other place and here. I have explained here that we have got the strategic outline business case plans approved, and we are expecting that the actual full strategic outline business case will be approved shortly.
Lord Brooke of Sutton Mandeville (Con)
My Lords, does my noble friend accept that some of us feel that, as Ministers go, he is as transparent and open as anyone could be, and that he has the virtue of being comprehensible as well?
Youth Employment
Lord Freud Excerpts(9 years, 9 months ago)
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Baroness Sherlock
To ask Her Majesty’s Government what action they are taking to reduce levels of youth unemployment following the recent closure of the youth employment contract incentive scheme.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
Tackling youth unemployment remains a priority for this Government, and our successful Youth Contract will continue. The wage incentive will end as planned next March, just three and a half weeks earlier than anticipated. The youth claimant count has fallen by 134,000—the largest annual fall since 1997—taking it to its lowest level since 2008.
Baroness Sherlock (Lab)
My Lords, I have asked repeatedly about the Youth Contract wage incentive scheme in this House, and the Minister has repeatedly assured us that all is well. On 20 March, in relation to youth unemployment, he talked about,
“just about the most comprehensive response that has ever been seen”.—[Official Report, 20/3/14; col. 280.]
On 5 February, of the Youth Contract, he said: “Our approach is working”. On 7 April, he said:
“Our approach continues to work”.—[Official Report, 7/4/14; col. 1129.]
On 17 June, we were back to “the most comprehensive response”, et cetera. Now we learn that the wage incentive scheme is being scrapped. Can the Minister tell the House, first, how many of the target 160,000 wage incentive payments have been made? The last note that I saw had a figure of 10,000. Secondly, when did he realise the scheme was not going to reach its target and why did he not tell the House sooner?
Lord Freud
My Lords, I am keen to reaffirm that the Youth Contract is both comprehensive and working. One element, the wage incentive, has now helped more than 65,000 youngsters into jobs. The other elements of the programme are performing powerfully: 148,000 youngsters have started work experience on the programme, and 46,000 have gone into sector-based work academies.
Lord Roberts of Llandudno (LD)
My Lords, while I congratulate the Government on what has been achieved, the Minister surely understands the great devastation of youth unemployment, not only in the UK but throughout Europe. It is destroying hope and potential. Can we not now initiate a new European-wide project to somehow lower that figure across the board and restore hope to so many young people?
Lord Freud
Youth unemployment is different in its nature from general unemployment in that there is a scarring effect for the young if they do not get into the workforce early. We therefore need to make extra effort to get youngsters into the workforce, which many of our measures are designed to do. There has been a real recasting of support for youngsters, whether through training, education or apprenticeships, and we are providing this support for them through the Work Programme, the jobcentres and work experience. We have myriad programmes, and they are actually having an effect. We are now seeing very steep falls. It is not yet good enough but it is moving aggressively in the right direction.
The Lord Bishop of St Albans
My Lords, a significant part of the problem is that there are some posts suitable for young people, but they are often in parts of the country where accommodation is prohibitively expensive or the cost of commuting simply precludes them from taking those jobs. In the light of that, have Her Majesty’s Government considered embracing the concept of the living wage for all people of working age?
Lord Freud
Obviously we have looked at the living wage. If the figure suggested for the living wage were to be adopted, we would have to consider the impact on unemployment and the particular impact on youngsters, who would be hit worst. The NIESR estimated that adopting the living wage as opposed to the minimum wage would knock 300,000 youngsters out of work.
Lord Davies of Stamford
My Lords, it is obviously very important to do everything that we possibly can to help young people into work for the first time or back into work from unemployment.
Lord Davies of Stamford
The coalition has already had time; I am sorry.
But what the Minister describes as a scarring effect can affect people at any age if they spend too long outside the workforce and cannot get back into a job. I have asked the Minister questions about this before and he has avoided them. Can he now tell us whether the Government keep evidence of age discrimination being practised against jobseekers? Can he also tell us what the Government do if they come across a prima facie case of age discrimination? Have they ever prosecuted or might they prosecute if a clear case arose?
Lord Freud
I have written to the noble Lord on this matter. We have not prosecuted in such a case but if we found something egregious we would consider doing so.
Baroness O’Cathain (Con)
My Lords, does my noble friend agree with me that it is about time those on the opposite side celebrated with us that there has been such an increase in youth employment in the last few months? Secondly, the way in which we are doing it is right. As my noble friend Lord Roberts said, the last thing we want is one EU policy. I want to know from my noble friend the Minister whether we are getting down into the local areas to get the local employment partnerships involved in training and giving apprenticeships to unemployed youths, which is what we need to do.
Lord Freud
My Lords, it is exactly right that we need to get to the real problems of youth unemployment and the structural level of unemployment—youngsters who are workless. That figure grew through the longest boom in our history and only now are we beginning to see it come down. We are going for the youngsters who have not been looked after properly in recent decades. The figure I always cite in this House is the full number of workless—both unemployed and inactive. In 1997 that figure was 17.7%. It remained flat through the boom and at the peak it was 17.4%—not much difference. At the end of the recession it stood at 19.1% and now it is right down below any of those figures at 16.8%. That shows that our policies are beginning to work on the people who are structurally disadvantaged in this country.
Housing: Underoccupancy Charge
Lord Freud Excerpts(9 years, 10 months ago)
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Baroness Hollis of Heigham
To ask Her Majesty’s Government whether they have any plans to change their policy following the publication of their report Evaluation of the Removal of the Spare Room Subsidy: Interim Report.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
We inherited a housing benefit system with costs spiralling and took steps to bring expenditure under control. This remains our policy. The interim report establishes an early baseline. Since the field work was completed, the numbers affected by the policy have continued to fall month on month, reported levels of arrears experienced by English housing associations have fallen, and there is emerging evidence that many landlords are adapting their building plans in response to this policy.
Baroness Hollis of Heigham (Lab)
My Lords, everything we feared about the bedroom tax has been confirmed by this research—everything. Two-thirds of affected families are disabled. As there are no small homes, only 4% have been able to downsize. They cannot move but as most cannot get discretionary housing payments, they cannot pay and stay either. So 60% are in arrears; one-third face eviction; meals are forgone; debts are mounting; grandparents are cutting back on grandchildren’s visits because they cannot afford to feed them; people cannot stay; people cannot move. Does the Minister agree and accept that the bedroom tax—the coalition bedroom tax—is profoundly wrong?
Lord Freud
This report was based on evidence from last autumn and we have had data since then that show that people are adapting. The numbers affected are falling and are now down 70,000 people; arrears have fallen in the past two quarters and rent collection remains for the Homes and Communities Agency for the social sector at 99%; homelessness numbers are reducing and are down 7% on the year. As for DHPs, we had a quarter of a million payments last year to people affected by this policy and we had £20 million returned to us unallocated. Finally, the Court of Appeal has upheld the Government’s position that DHPs are the proportionate remedy for looking after people with problems from this policy.
Earl Cathcart (Con)
My Lords, as a landlord I recall that the last Labour Government brought in this very same measure for the private rented sector. So why is Labour making such a fuss now—with the Liberals apparently jumping on the bandwagon—when all this Government are doing is rolling out to the public sector what Labour did in government to the private sector?
Lord Freud
My Lords, the private sector had the LHA introduced, as my noble friend pointed out, by the previous Government. We had to take steps to constrain the spending on that. We have taken £2 billion out of that benefit for savings. The results of that also came out last week. The final report was dramatically less in its impact than the predictions that we had. Instead of landlords pulling out of the market, they have increased their supply by 7%. There has been very little evidence of displacement; a very marginal probability of moving home; and again we have had homelessness acceptances coming down. We are on the same trajectory with the spare room changes as with the LHA changes.
Baroness Sherlock (Lab)
I am starting to wonder whether the Minister and I have read the same report—
Lord Best
Will the Minister confirm that when the space standards were introduced in the private sector, the measure was not retrospective and did not apply to all people already occupying the properties? Does he accept that it is quite different in this case, where it was applied to the lettings of existing tenants, which is why it has been so harmful and so hurtful?
Lord Freud
My Lords, I have told the House on previous occasions that the difference here is that there is very little changeover or moving within this particular group, so there is no way in which one could introduce this kind of policy on that kind of basis. It therefore has to apply to stock. I remind noble Lords that the impact assessment for this measure envisaged moving or downsizing on the part of about 50,000 people. Nineteen thousand people have moved during the first eight months, which is on the trajectory of our expectations.
Baroness Sherlock
My Lords, the Minister has read the report. The House will be aware that he has previously reassured us not to worry about the hundreds of thousands of people affected because of all the things that they can do. This report shows that every one of those has failed: they are not taking in lodgers; they cannot move; they cannot find additional hours; and they cannot downsize because there are no properties out there. This week, Chambers put “bedroom tax” into its dictionary. Is it not time for the Government to accept that they have got it wrong and make that term archaic for ever?
Lord Freud
The report was an early look at the policy. As the research says, it provides a baseline. There is evidence of people looking for work—18% of those affected are looking to earn more in work and 50% of the unemployed are doing so. As I told the House last week, the number of people in workless households in social housing is dropping dramatically. People are moving, as I just said. Nineteen thousand people have moved in the early months of the policy, which is in line with our expectation of 50,000. It is clearly stated in the report that, over two years, one might expect to see 20%.
Jobseeker’s Allowance
Lord Freud Excerpts(9 years, 10 months ago)
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Lord Brabazon of Tara
To ask Her Majesty’s Government what assessment they have made of the latest employment data released by the Office for National Statistics; and what implications that has for the number of claimants of Jobseeker’s Allowance.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, the employment rate has never been higher and the inactivity rate has never been lower. There are a record 30.6 million people in work and the number of people claiming jobseeker’s allowance has fallen for 20 consecutive months. It is down by more than 400,000 on the year to 1.04 million.
Lord Brabazon of Tara (Con)
I thank my noble friend for that reply. Can he confirm that those excellent figures are spread across the whole country, not just London and the south-east as some might have us believe? Will he also comment on the leader in last Thursday’s Times, which suggested that part of the responsibility for the reduction in unemployment lay with the Government’s welfare changes?
Lord Freud
Since 2010, 1.8 million people have got jobs. Nearly 80% of that growth was outside London, with all regions being up in that period. As for the role of benefit reforms in our economic recovery, my view—this is something that statisticians will work on for some time—is that we are beginning to move into some of the structural problems that we have had for many years now, and are moving through the cyclical effects into those structural requirements.
Lord German (LD)
My Lords, the jobseeker’s allowance is being subsumed into universal credit. Universal credit is being moved along and rolled out slowly; it is much better to get it right than hastily to put something in place that goes wrong. However, it is having a significant impact on the number of people who are being helped and getting into work. Will my noble friend help the House by identifying what the impact would be of the Labour Party’s proposal to hold up and stop the rollout of universal credit on those who are seeking jobs in this country and those who are getting help from joining universal credit?
Lord Freud
I think it would be pointless to slow down universal credit, which is now rolling out smoothly. This year, we are rolling it out right the way through the north-west, moving through couples and families. Any delay to that process withdraws support from the people who need it. We have, however, rolled out the claimant commitment, which is part of universal credit, right through the country. The whole drive of that reform is to help and coach people into work, and that seems to be having a good effect.
Lord Bradley (Lab)
My Lords, the Minister will no doubt have seen the recent report from the Resolution Foundation suggesting that the extent of the fall in real wages has been underestimated due to the rise in self-employment. What steps are being taken to ensure that we have an accurate assessment of real wages?
Lord Freud
The self-employment figures are up strongly, but I need to point out that 60% of the gain in self-employment since 2010 has been in higher-skilled, managerial and professional jobs. It is interesting, when you look at real, living wages, that recent settlements have moved above inflation. There is a lot of variation within the pay settlements, and those in finance and business services have fallen by 0.7%, whereas the figure for retail is up by 2.2% and for manufacturing by 1.8%, running with or above inflation. Some of the suffering being seen in the City is something that I suspect the party opposite would not weep too hard for.
Baroness Wall of New Barnet (Lab)
My Lords, can the noble Lord share with us how many of those jobs will lead to a strong career? For instance, how many lead to apprenticeships, and how many of those jobs give young people the aspirations to go on and make a career for themselves, rather than having a job for a very short time, perhaps without a permanent contract? There must be figures that show that. The importance that this and the previous Government put on apprenticeships must prevail for those permanent jobs to be gained.
Lord Freud
Apprenticeships are a cornerstone of this Government. Overall, we have had more than 1.1 million extra apprenticeships for youngsters since the election—a 40% increase on the equivalent period before the election, although I acknowledge that the previous Government were also pushing up the apprenticeship rate.
Lord Flight (Con)
My Lords, the figures on employment are extremely good news but the data on productivity, so far, are not quite such good news. Does the Minister have any views on why productivity has been so slow to increase? Might it have anything to do with Labour’s tax credits subsidising wages?
Lord Freud
A vigorous debate is going on among economists about what has happened to productivity. The most interesting study that I have seen lately was from the noble Lord, Lord Goodhart, and one of his colleagues, which looked at productivity as a cyclical impact, which we should be able to get through later on.
Lord Foulkes of Cumnock (Lab)
My Lords, since this Question and Answer show all the features of very careful preparation, I am sure that the Minister will be able to answer this. What percentage of the jobs that have been created are: first, part time; secondly, minimum wage; and thirdly, zero-hours contracts?
Lord Freud
I did not need a huge amount of preparation for this Question because it is a slam dunk. The figures for employment are very good. If you are looking at part-timers, the number who do not want to be full time are down by 1.5 percentage points—the fastest decline on record. Depending on the figures you take, we have between 2% and 4% of people on zero-hour contracts, and the CIPD says that people on those contracts are as satisfied with their jobs as people on other contracts.
Lord Forsyth of Drumlean (Con)
Does my noble friend share my disappointment that the Opposition can do nothing but carp at this very good news on jobs? Could he remind us what the shadow Chancellor predicted would happen to unemployment as a result of our policies?
Lord Freud
My noble friend asks me to remind the House that the leader of the Opposition predicted a million job losses as a result of our policies. I am very happy to remind the House of that fact.