Benefit Sanctions

Eilidh Whiteford Excerpts

Wednesday 16th December 2015 Westminster Hall

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I beg to move,

That this House has considered benefit sanctions.

I am very pleased to have the opportunity to lead this short debate this afternoon. Members will be aware that I have debated this topic with Ministers several times in the past, and that I have been at pains during those debates to raise concerns about the impact of conditionality on vulnerable claimants. At the forefront of those debates has been the disproportionate level of sanctions imposed on people with mental illness. I met the Under-Secretary of State for Disabled People not long ago to discuss some of the ways in which the Government might address the acknowledged shortcomings in the regime for those with serious mental illnesses and other fluctuating conditions. However, I am glad that the Minister for Employment is responding to today’s debate, because I think the wider issues sit far more appropriately in her portfolio.

As I have argued before, one of the reasons why the sanctions regime is failing vulnerable people so badly is the underlying problem with the work capability assessment. High levels of sanctioning among people who are ill or very disadvantaged is, in part, symptomatic of people being found fit for work when they are not really fit for work. Until that gets fixed, I fear we are destined to go round in circles. But that is not the whole story. Although I do not think anyone would dismiss the value of conditionality in the benefits system per se, the conditions that the Government set need to be proportionate and fair, and I do not think we can say that at the moment, particularly for the more vulnerable claimants.

The Government’s announcement a few weeks back that they intend to pilot a so-called yellow card scheme for sanctions in the new year is, I think, an acknowledgement that the system is not working very well at present. I hope the Minister will take the opportunity today to set out in more detail how that warning system will work in practice, and, specifically, what protection there will be for those who are identified as vulnerable.

My main call today echoes the calls I have made previously, and that the Work and Pensions Committee made in the previous Parliament, for a full independent review of the benefit sanctions regime. That is necessary and long overdue. I fear that tinkering around the edges of the system will not resolve the systemic weaknesses, and this afternoon I want to highlight a growing body of evidence that sanctions are not only failing to support claimants into work, but are actually having a counterproductive effect, undermining the Government’s policy objectives and causing unacceptable levels of hardship and destitution to vulnerable and disadvantaged people.

Last week the homelessness charity, Crisis, published a major piece of research undertaken at Sheffield Hallam University into homeless people’s experiences of welfare conditionality and benefit sanctions. It is a significant and timely piece of work; it is the largest study of its kind ever carried out, and it provides a robust qualitative evidence base for how sanctions are affecting vulnerable claimants. The researchers drew on the experiences of more than a thousand people who use homelessness services in England and Scotland, and looked specifically at the impact of sanctions on their lives and employment prospects. Distressing individual stories are documented in the report, and I urge the Minister and other hon. Members to read it. It deserves to be widely read.

There are many reasons why people become homeless or precariously housed. Often in the past, relationship breakdown has been cited as the single biggest reason why someone will end up homeless, but more recently that has been overtaken by problems with benefits, particularly among those who have been sanctioned. In many cases, though, homelessness is itself a symptom of underlying vulnerabilities. Young people leaving care; people with long-term mental health problems; people with addictions; and people with borderline learning disabilities who have trouble with literacy or numeracy—those are all high risk factors for becoming homeless, but what the Crisis research found was that the most vulnerable claimants were those at the greatest risk of being sanctioned. They also found that, far from pushing people to secure work, sanctions were actually pushing people further away from the labour market. To my mind, that is an extremely serious finding, because it undermines the Government’s assertion that sanctions are helping to bring down claimant numbers and are playing a positive role in getting people into work.

As far as vulnerable claimants are concerned, that is simply not where the evidence leads. Research from the University of Oxford and the London School of Hygiene and Tropical Medicine, published earlier this year, found that

“Sanctions do not appear to help people return to work. There is a real concern that sanctioned persons are disappearing from view.”

Similarly, the Economic and Social Research Council has questioned the effectiveness of conditionality in getting people into work, and the Department for Work and Pensions’ own evaluation of Jobcentre Plus in 2013 concluded that there was no evidence to suggest that knowledge of jobseeker’s allowance conditionality led to actual movement into work. However, there is mounting evidence that sanctions are a key driver of the growth in demand for food banks and are causing unprecedented hardship, and now there is evidence that they are fuelling homelessness.

The number of people being sanctioned has fallen from its peak in the year to October 2013. Since that time, the labour market has improved significantly, and the number of people claiming jobseeker’s allowance or its successor benefit, universal credit, has fallen by 41%, so we would expect to see a corresponding fall in the number of people being sanctioned. What is more revealing is that we have also seen a smaller, underlying downward trend in the proportion of claimants being sanctioned, which has fallen to 4.92% a month in the year to June 2015, from a high of 6.77% a month in the previous year. That, however, is still dramatically higher than the pre-2012 rates prior to the introduction of the new regime, and a staggering proportion of sanctions—more than two thirds—are now overturned on appeal, where claimants challenge the decision. I know from speaking to colleagues in Citizens Advice that it now urges people who are sanctioned to appeal against that first sanction. If people do not appeal against that first sanction, there is a real risk that if they are sanctioned again, the consequences will be devastating for their incomes.

Research carried out by Dr David Webster of Glasgow University highlights a couple of very important statistical limitations of the data that we have on sanctions. First, the recorded stats show sanctions only after reviews, considerations and appeals, so there is a time lag in the data, and the figures do not tell us how many people actually had their benefit money stopped in the first place. Also, and more significantly, as the DWP has been making the transfer to universal credit, new single claimants of unemployment benefits are going on to that benefit instead of on to JSA, and absolutely no data have been published on universal credit sanctions. This is now having what researchers describe as a “significant distorting effect” on analysis, because the number of those at risk of JSA sanctions is being reduced. Moreover, the young single claimants now more likely to be on universal credit—almost half of them are under 25—were previously twice as likely, statistically, to be sanctioned under JSA, so the distortion in the data could be amplified by that, but without hard data, we simply do not know. So we need that data on universal credit.

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

I congratulate the hon. Lady on securing this debate. She has made an interesting point about jobseeker’s allowance, but there are data to show that in the past couple of years there has been a significant increase in the number of disabled people in receipt of employment and support allowance who have been sanctioned, up from 1,400 in March 2013 to 5,400 in March 2014, according to the Crisis figures that I believe the hon. Lady was citing.

The hon. Lady made comments about improving the work capability assessment. Even if the WCA were improved, what is her solution to the sanctions on disabled people on employment and support allowance?

[Mrs Cheryl Gillan (in the Chair)]

May I remind hon. Members that interventions are supposed to be short and pithy?

[Dr Whiteford]

The hon. Gentleman makes an important point about employment and support allowance. I was particularly addressing the universal credit figures, on which, at the moment, the data are lacking, although I believe that in August the UK Statistics Authority called for those data to be published, along with data on actual numbers of sanctions applied. Will the Minister tell us when the Government plan to publish those figures?

The wider issue about the move to universal credit is that it introduces critical differences to the conditionality regime that applied for JSA. First, under universal credit, sanctions run consecutively, not concurrently, so they will potentially be much longer. Also, any hardship payments made are repayable, so if, for example, someone is repaying a hardship payment at the rate of 40% of their benefit, their sanction will effectively become three and a half times longer in real terms than its nominal length. That seems unduly punitive. Moreover, the 80% hardship rate for vulnerable claimants will be abolished under universal credit. Again, given what the Government have already said about recognising the needs of vulnerable claimants, they really should go back to the universal credit changes and look at how they are going to impact on people.

Hardship payments are not made automatically. People need to know that they exist, whether they are eligible for them, and how to apply. My hon. Friend the Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) has introduced a ten-minute rule Bill, which we are due to debate early in the new year, that would make hardship payments automatic and non-repayable. In the wake of the Oakley review, the Government accepted in principle the need to: make hardship payments available from day one of a sanction; remove the requirement for those who are vulnerable or have children to complete a separate application process; and extend vulnerability markers. Given that acknowledgement that there are vulnerable people in the system, that people are being sanctioned who are not really in a position to comply with the conditions placed on them, and the growing evidence that those claimants are at much greater risk of sanctioning, will the Minister look at this again as universal credit is rolled out more widely?

The rate of sanctions for those in receipt of ESA is very much lower than for JSA, but it is nevertheless a serious issue. We would expect ESA sanctions to be less prevalent, but one of the deeply worrying issues that emerges from the figures released by the DWP in November is that around half of the ESA sanctions imposed between April and June this year were on claimants who had previously been sanctioned. That makes it crystal clear that sanctions are not having a deterrent effect on sick and disabled claimants; rather, it suggests that people are simply unable to comply with the conditions imposed on them. That echoes case studies in the Crisis research, which showed that when sanctioned claimants on ESA had support from professionals, they were subsequently assigned to the support group.

One of the key issues that emerged from the Crisis research with service users was that overall, 21% of respondents who had been sanctioned said that they became homeless as a result of the sanction. The Government have to take that extremely seriously. If someone becomes homeless, it becomes significantly more difficult for them to find work. Communication becomes difficult if someone does not have a stable address, reliable internet access, and cannot present themselves in a smart and work-ready way. It also puts untold pressure on relationships with family and friends. Indeed, it puts financial pressure on family and friends who are trying to support loved ones but might not have the means to do so. It also has a very costly knock-on effect on local authorities, which have statutory responsibilities in such circumstances but also face significant financial pressures.

A critical and perennial problem is that sometimes when a person is sanctioned their housing benefit is also stopped. I know that it is not supposed to happen, and the Government claim that it no longer happens, but very recent research makes it clear that it is still happening. The issue was highlighted in the Oakley review back in 2014, and the Government responded by advising claimants to keep local authorities informed of their situation. They also said that they would implement an IT fix. When the previous Employment Minister appeared before the Work and Pensions Committee in February, prior to the election, it was suggested that the problem had been resolved, but it had not. In early October, DWP issued an urgent circular to local authorities confirming that sanctioned claimants should continue to receive housing benefits without interruption.

It is clear that there has been an ongoing problem that has not been resolved. That is backed up by the evidence in the Crisis report: more than a third of those it surveyed who claim housing benefit reported that it was stopped when they were sanctioned. That rate rose to 38% for those in the ESA work-related activity group—that is, those people currently not fit for work and in an inherently vulnerable situation. It is clear that not all councils’ systems have caught up with the new guidance yet, and it is still a bit of a lottery. This has been happening for a long time now, and the Government really need to get a grip of the issue. Will the Minister update us on that, and tell us what the Government are going to do to protect vulnerable claimants who face housing benefit cuts?

It is important to understand that for many people in rented accommodation, housing benefit or local housing allowance will not cover all their rent in the first place. Many people in private rented accommodation make up the rent out of their JSA or ESA, and some folk in social housing will be liable for the bedroom tax—although thankfully not in Scotland. In a lot of cases, sanctioning is pushing people into arrears, even where the system is working as the Government intend it to.

It is abundantly clear that the sanctions regime is causing real hardship for the most vulnerable people. The Crisis report lays out in very stark terms the extent to which some claimants find it immensely difficult to comply with the conditions placed on them. It is really notable in the research findings that the overwhelming majority of claimants want to work and have every intention of meeting their responsibilities, but simply cannot always meet the demands placed on them. Sanctions need to be reasonable, proportionate and fair, but for those who face the biggest hurdles, the current regime is none of those things.

No one should be made destitute because of the conditionality regime. That is not an acceptable outcome in a civilised and wealthy society. Neither is it a proportionate response to minor infringements, which are often the result of circumstances beyond the control of individuals. Only one in 50 people who are sanctioned is sanctioned for refusing a job. That seems like a heavy burden for people who have made minor infringements. They can potentially lose their homes and any means of supporting themselves. All Members know that we are witnessing destitution in too many communities. People are simply falling through the safety net, and at this stage we have no way of quantifying how many people simply fall out of the system altogether. I have seen them in my constituency, and they tend to be sick people who have long-term health conditions, but we have no systematic information. It is clear that we need a root-and-branch review of the sanctions regime and, as a matter of urgency, we need hardship payments to ensure an accessible safety net.

I am really conscious that it has been a balmy 12° to 15° here in London over the past few days, but I left Aberdeenshire this weekend in sub-zero temperatures. As winter sets in, those who cannot stay warm and cannot feed themselves properly are at the gravest risk. The Government are culpable if they do not protect our most vulnerable citizens. I urge them to listen and to respond to the specific points I have made. I thank the Members who have come to contribute to this very important debate so close to the end of term.

--- Later in debate ---

[Dr Whiteford]

Thank you, Mrs Gillan. I am glad to have the opportunity to sum up what has been a very wide-ranging debate, but nevertheless, the questions that have been posed in this debate have been very focused. They have been put repeatedly to this “Conservatist” Government, because they need answering. They were posed by the Work and Pensions Committee in the previous Parliament on more than one occasion, and some were posed in the Oakley review. Most of the questions relate to the impact of conditionality on the most vulnerable claimants, because there is mounting evidence that the sanctions regime is hitting those people disproportionately and that the measures that have been taken are not going far enough to mitigate the impact on people who should definitely not be sanctioned.

[Sir Roger Gale in the Chair]

We have heard powerful speeches this afternoon from my hon. Friends the Members for Glasgow North East (Anne McLaughlin), for Glasgow Central (Alison Thewliss), for Aberdeen North (Kirsty Blackman) and for Airdrie and Shotts (Neil Gray), and indeed from the Labour Front Bencher, the hon. Member for Islington South and Finsbury (Emily Thornberry). There is clearly a case to answer, because the detrimental impact of sanctions on the mental health and material wellbeing of people in the benefit system, particularly those in receipt of jobseeker’s allowance and employment and support allowance, is giving huge cause for concern across all our constituencies.

My constituency has one of the highest rates of sanctions in the UK, despite having one of the lowest rates of unemployment. I can only attribute that high rate to our rurality, the very poor and costly internet access, the limited transport links that people have, and the large numbers of people in seasonal, part-time and casual jobs. However, the questions that have been put to the Minister have come from right across these islands. They are about why people are using food banks in the 21st century, why people are being found fit for work when they are clearly not, and why the system is not providing a safety net.

I am glad that the Minister was able to give a bit more detail today about how the so-called yellow card system will work in practice, but is Scotland just one big constituency now? Which bits of Scotland will it work in? How will that be reported? How will that come back to this House? We still do not know the structure of that scheme, and we need to know.

My most important questions today were about how the conditionality regime becomes worse for the people on the receiving end of it under universal credit. The Minister did not touch on those questions at all, or on my questions about hardship payments. Instead she simply reiterated points that were made in the written statement—we know those; we have got that information. What we are looking for is more information about how the measures are going to be rolled out in practice.

I was also a bit surprised when the Minister mentioned the Scotland Bill, given that her Government voted down the amendments that we put to the Scotland Bill that would have devolved responsibility for these matters. I know that the Scottish Government have been committing £100 million a year to mitigate the impact of what is happening and to mop up the mess that the Government have created. Buried in the Blue Book, however, were some small lines about how the Work programme is to be cut drastically before it is devolved. That will significantly limit the amount of action that the Scottish Government can take. A set of powers are being devolved that are going to disappear before we get them.

I know that my staff in my constituency office work closely with very hard-working advisers in our benefits offices. I have paid tribute to them in this House before. They hear it and know that we appreciate what they do and the support that they give—

[Sir Roger Gale (in the Chair)]

Order.

Motion lapsed (Standing Order No. 10(6)).