Budget Resolutions and Economic Situation

Stella Creasy Excerpts

Friday 22nd March 2013 Commons Chamber

[Mr Byrne]

My admiration for jobcentre staff working under this regime is unbounded. They are good people trapped in bad systems, with a Secretary of State who, I fear, is out of touch.

I have a copy of the e-mail that Mr Wintour reports today, and this is its concluding paragraph:

“Guys, we really need to up the game here”—

on the issuing of sanctions—

“The 5% target is one thing—the fact that we are seeing over 300 people a week and only submitting six of them for possible doubts is simply not quite credible.”

The e-mail says, “So the bottom line. I have until 15 February, along with other area managers, to show an improvement, and then it is a performance improvement plan for me.” He continues:

“Obviously if I am on a PIP…to improve my team’s Stricter Benefit Regime referral rate I will not have a choice but to consider implementing PIPs for those individuals who are clearly not delivering SBR within the team.”

That is why it is important that we have assurances that the independent review, set out in the Jobseekers (Back to Work Schemes) Bill, will get to the bottom of every sanction issued.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I was extremely disappointed to hear the Secretary of State’s response just now, because we are talking about the jobcentre that serves both our constituencies. The e-mail also states:

“Our district manager is not pleased”.

“James Corbett is not pleased and neither is John”, states the e-mail. It says that because John is

“under pressure to improve our office output and move up the league he has to apply some pressure downwards.”

The e-mail is talking about league tables. Will the Secretary of State comment on that? Who does my right hon. Friend think is putting together these league tables and applying this pressure on staff, from a regional perspective down to our jobcentres, to find reasons to sanction people in our community, not because of their behaviour, but simply to meet a target?

[Mr Byrne]

I congratulate my hon. Friend on bringing that to the House’s attention. This is an incredibly serious matter.

--- Later in debate ---

[Stella Creasy (Walthamstow) (Lab/Co-op)]

It is an honour to follow my hon. Friend the Member for Westminster North (Ms Buck), whose expertise on these issues is unparalleled. My remarks will focus on two matters: debt and welfare.

Given the landscape that the Budget has put this country into, the Labour party will never again take lessons from Government Members about the management of the public finances and public debt. We will not listen to them seeing that they are borrowing £245 billion more than they planned and will not meet the promises that they have made year after year. We have the embarrassing spectacle of the British Government being a bad partner by delaying the payment of bills and putting people at risk with their contracts, as the OBR makes clear.

While the Government are trying to avoid the debts that they have incurred, the British public cannot avoid the debts that will be incurred as a result of the Budget and the Government’s actions. I tell the House plainly that any financial director of a company who came to the board three years in a row asking for more money, having got their sums wrong, would be sacked, and rightly so. That is the situation in which we are leaving the British public. The British public are struggling.

The hon. Member for Wycombe (Steve Baker) is not in his place, unfortunately. He suggested, in a rather cavalier manner, that the country is awash with suffering. We see that every single day in our local communities. We see people for whom any increase in the personal allowance will be wiped out by cuts to tax credits and child benefit. We see people suffering from pay freeze after pay freeze, when prices have risen five times as fast wages. We see people who are feeling the squeeze—those are not my words, but the words of Which?. It talks about a “squeezometer”, with 40% of people feeling the squeeze, and an increase in people who are using credit or overdrafts to make sense of it. In particular, it reports that 9% of people are defaulting on their bills and loans, and that 49% are now worried about their level of debt—that is up by 5% on last month alone.

That is the context in which the Budget needed to make sense. It is in my own community, where 60% to 70% of income is spent on housing costs alone, that we see the struggles we face. The problems raised by my hon. Friend the Member for Westminster North have not been addressed and so will not go away, whether they are problems with the cost of energy, food or transport.

Most people would say that people in my community need to get a job. Many people in my community want to work. Unfortunately, we have a stubbornly high level of unemployment in Walthamstow. We have a much higher level of unemployment than other areas of London, and one of the highest levels of youth unemployment in London. Our rate is 10%, compared to just 6% in London and 7% nationally. That is why our welfare system is so important to the people of Walthamstow—important to ensure that it is fair, supportive and helps people get back into the work they want to do.

That is why I am horrified by the comments of the Secretary of State. We have seen today the revelations that there are targets for sanctions in my local jobcentre. Those targets mean that people, whose behaviour may well be understandable or rational, are still being sanctioned and having their benefits taken away as part of the Work programme, which we know is a terrible failure from the figures we have already seen. It is clear that the sanctions, and how they are being applied, are damaging people’s lives. For the first time we have conclusive proof that that is not by accident, but by design.

The e-mail contains the shocking allegation that staff in my jobcentre are so worried about losing their jobs if they do not sanction people that they are making up reasons to sanction people. What does that mean? That means sanctioning people with family commitments, sanctioning parents who have informal shared custody arrangements, sanctioning people caring for their family members, sanctioning people who may struggle with the English language, and sanctioning people who cannot find an interpreter to go with them.

The e-mail is not the work of one over-enthusiastic member of staff. When it mentions league tables and the role of divisional managers, it is clear that this is not happening by accident. I do not blame the person who sent me this whistleblower e-mail and I do not blame the scared jobcentre staff who are desperate to meet the target for sanctions that they have been told to reach— 25 sanctions per week, when they are only finding six. They are clearly frightened for their own jobs. I blame the Government who are asking everyone but themselves to take the blame for their failed economic policies. They are now setting up my community to fail, just so they can meet their own targets.

That is why the independent review into the use of sanctions in the Work programme is critical. I trusted Ministers when, on Tuesday, they claimed that there are no targets whatsoever. I now see that that means that they are either simply admitting that they do not know what goes on in their own Department, or that they were not giving us the full truth on Tuesday in this House. We need an independent review to get to the bottom of this problem, and to understand just how out of control this toxic Work programme is.

On Tuesday, my right hon. Friend the Member for East Ham (Stephen Timms) set out 10 questions for the inquiry. I would add another: are sanctions being made to reach a target to help ensure that the Department for Work and Pensions reaches its own budgetary requirement? The clock is ticking for Ministers to come clean about what is going on, and to stop saying that there are no targets for sanctions in the Department. They admitted to newspapers last night that the whistleblower e-mail that I brought forward was true, yet today the Secretary of State has tried to claim that it is not. The clock is ticking. I urge others not to be frightened and to use the whistleblower legislation to come forward and tell the truth, so that the independent review can hear what is really going on.

This issue is too important. We must get welfare right. We have a system that, yes, offers something for something, and, yes, uses sanctions where appropriate, but this is not appropriate. This is not about behaviour; this is about budgetary targets. This is about telling people, “However hard you are working does not matter to us, we will penalise you.” That is not fair. That is not right. That is not appropriate in the 21st century. It will do nothing to help this country get back on its feet, and the Government should be ashamed that this is happening.

--- Later in debate ---

[Mike Gapes (Ilford South) (Lab/Co-op)]

At times of economic crisis, historically and all over the world, we have seen people moving towards blaming scapegoats, attacking weaker and poorer communities and trying to damage the interests of those who are not in their own environment. Today the potential for this global economic crisis can be seen in Europe with the rise of neo-Nazi groups in countries such as Hungary and Greece in the EU, and potentially in some other countries. We have to remember that it started in 2008 in the United States with the Lehman Brothers collapse, not with a policy determined and decided by the Labour Government in this country, as some Government Members would have us believe. It was a global, western European, north American economic crisis, with terrible consequences that we are still dealing with today.

In the 1930s, at the time of a similar global economic crisis, bold measures were eventually taken by some countries in an attempt to solve the problems. Unfortunately, it was the rearmament and the second world war that led to more people being in work in some other countries. We face real dangers today, and unless the Government and the politicians—not just in this country, but in the rest of Europe—adopt a different approach, we will see some very nasty developments over the coming years. The Government still claim, I think, that we are all in it together, but from references made by other hon. Members here today, we know how the poorest people in this country are being damaged and scapegoated while millionaires get tax cuts.

I do not have time to talk about all the issues I would like to, but I will say one positive thing about the Chancellor’s Budget. I support the Enough Food for Everyone If campaign and am pleased that we still have, at least on paper—it will be interesting to see if it happens in practice, as my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) mentioned, quite pertinently—the commitment to spend 0.7% of GDP on international development and aid projects. Over the past couple of years we have seen some fudging at the edges, as items previously funded from the Foreign and Commonwealth Office budget have been redefined and rebadged so that they now come out of the aid and development budget. Nevertheless, I take the Government’s commitment at face value and hope that over the next two or three years they will resist the pressures from the far right of their party, and from some newspapers, to cut the budget for helping the poorest people in the world’s poorest countries.

I want to touch on some of the points made by my hon. Friend the Member for Walthamstow (Stella Creasy) in what I thought was an absolutely fantastic contribution. She highlighted the problems that are coming out of the Department for Work and Pensions employment service in her constituency. I, too, am a north-east London MP. Some of my constituents have come to me with interesting information in recent weeks. I understand that the DWP staff in north-east London who deal with my constituents have now been told to refer to them no longer as “clients” but as “claimants.” There is apparently an instruction to that effect. That clearly changes people’s attitude. The approach is no longer about customer service; it is about dealing with supplicants who are asking for help.

[Stella Creasy]

My hon. Friend might be interested to know that one of the people mentioned in the leaked e-mail about the conduct in my jobcentre is a regional manager who also covers his part of the borough of Redbridge, which might explain why the issue of sanctions and targets is emerging. I would also like to take this opportunity to apologise to you, Mr Deputy Speaker, for not explaining in my earlier contribution that, owing to a previous commitment, I will unfortunately be unable to stay for the wind-ups, but the Minister can be assured that, even if Members are not here in person, we will all be listening very closely to what he has to say.

[Mike Gapes]

I am grateful to my hon. Friend for her intervention, which also gives me the opportunity to speak for another minute.

I have been pursuing a number of cases on behalf of my constituents in recent months, and for several weeks now we have received no written responses to any representations we have made to the DWP. The reason was not clear. We received telephone calls, but nothing in writing. We have begun to receive some responses by e-mail, but they are late and do not contain much detail. I do not know whether that is a policy position, because under the previous management of the Department’s services in my area I used to receive detailed written responses to the representations I made in respect of individual cases. The responses are no longer so detailed and they are delayed. I wonder whether that is because of the pressure on staff because of the cuts within the Department, or whether it is because of an attitude that says, “We don’t want MPs to have the information because then they can make effective representations about the inadequacies and failures of the Department.”

I also want to highlight what is happening with levels of unemployment. At a superficial level, because more people are in work the Government are claiming that everything seems to be fine. We have the paradoxical situation in which real living standards and real wages are falling, yet despite the double-dip recession and the flatlining economy more people are in work. However, if we dig into the statistics for the Ilford South constituency this week, we see that between February 2012 and February 2013, although the number of young people unemployed and registered for the claimant count is down, the number over 12 months of people out of work has gone up by 44%. The number of over-25s who have been claiming for more than two years in my constituency has gone up from 140 to 420—a 200% increase in one year. It seems to me that the organisations being used by the Department are concentrating on getting people into low-paid jobs quickly but not on those who might have mental health or alcohol problems, poor work records or a lack of confidence. The difficult cases are there, and they will add up in the future. That is really worrying.