Willott quizzes Purnell on Welfare Reform

1.49.42pm BST (GMT +0100) Tue 22nd Jul 2008

• ' . . MAY I recommend that the Secretary of State implements the Liberal Democrat policy of a single working age benefit?'

[Jul 21] Jennifer Willott (Shadow Minister, Home Affairs; Cardiff Central, Liberal Democrat): It is good to have the opportunity to talk about welfare reform. I think that all my predecessor Lib Dem spokespeople have done so, given that this is the seventh Green Paper on the subject to be produced in the past 10 years. I thank the Secretary of State for giving us an advance copy of his statement, although I think I learned more from what I saw on television on Friday than I did from today's statement.

I welcome the emphasis today on helping everyone back into work and the focus on the assumption that many more people are capable of contributing if they are given the right support. It is also good to see that the Department has persuaded the Treasury that a new funding model will be essential if this system is to work. I am also glad to see that there is finally recognition that the benefits system is far too complicated, which is something that the Liberal Democrats have been going on about for a number of years.

However, I would like to raise a number of concerns with the Secretary of State. The first is that these policies are very centralising, and that individuals do not appear to be at the centre of the reforms, no matter what he says. Every jobseeker is different. Many can easily find themselves a job within a few months and with very little assistance, but for others that simply is not the case. Instead of adopting centralised timetables, we should devolve more discretion to advisers in job centres and employment providers so that they know who is able to get jobs themselves and who will need assistance right from the start, rather than waiting a number of months before support can kick in-and the same should apply to sanctions.

My second concern is about privatisation in the current economic downturn. We agree that private and voluntary sector organisations should be involved in back-to-work support, but the Government's approach is too centralising and large scale and the regional contracts are far too big for voluntary sector organisations to have much of a role in providing them. That will be exacerbated by the right to bid, as the only organisations with the capacity and resources to put in speculative bids will be big private sector companies rather than voluntary organisations.

That brings me to my biggest concern, which relates to the economic climate. Under the right to bid, there could be very little state provision left, but if it became apparent that the companies were finding it insufficiently profitable to provide those services or could not afford to run certain ones, there would be problems. Has the Secretary of State looked at the evidence and can he assure us that that will not happen?

My third concern is the system's complexity. The Green Paper reflects what we have said for a number of years-that the benefit system is too complex-but genuine simplification seems to be on the backburner. Will the Secretary of State provide more detail on what he wants the simplification of the system to achieve and a timetable for doing so? Given that the Conservatives say that the Government have adopted all of their ideas, may I recommend that the Secretary of State implements the Liberal Democrat policy of a single working age benefit?

Tackling poverty is the next matter of concern. The Green Paper is based on welfare to work-getting people into work as the route out of poverty-but more children with working parents were living in poverty last year than were children with no parents in work. The number of children of working parents living in poverty has risen over in the past three years, whereas the comparable number of children in poverty with parents out of work has fallen. The lesson appears to be that, under this Government, work does not pay. How do the Government plan to tackle that problem? If this is a genuinely cross-departmental initiative, will the tax credit system be taken into account when looking at benefit simplification?

The final matter I want to raise with the Secretary of State is that of mental health. The Green Paper talks about drugs misusers, but does not mention people with alcohol problems. In fact, more than a million people on incapacity benefit have mental health problems, which is barely mentioned at all. Although we welcome some elements of the Green Paper, I would be grateful for more suggestions about what it will do to help that large group of people. I look forward to the Secretary of State answering my questions and to seeing the legislation that results from the Green Paper.

James Purnell (Secretary of State, Department for Work and Pensions; Stalybridge & Hyde, Labour): I welcome the hon. Lady's backing for our support measures, the new funding mechanism and the simplification measures. We are, of course, happy to continue to reflect on proposals for a single working age benefit, but I think that the Liberal Democrats have to say how they would achieve that. Which benefit rates would they cut in order to have that harmonisation; or, if they are not proposing to cut any benefits, where would they find the extra money to lift everybody up to the level of the highest benefits within the system? [Interruption.] I note that the hon. Lady says that she is happy to have that conversation and I would happy to hear her set out her proposals.

It is also important to say that we want to give greater discretion to our advisers. They already exercise quite a lot of discretion, but we want to go further-for example, by giving them more time to discuss issues with people who may need half an hour or a bit longer, so spending correspondingly less time with those who are already looking for work and may need only a couple of minutes to arrange the next interview. We also want to give more discretion to our providers. That is why we are following the so-called black-box approach, where we set the outcomes and the results we want to achieve, but we also free up the people involved to determine how they actually achieve those ends. Where the private and voluntary sector is concerned, it is important that we do not curtail discretion with too many centralised rules.

The hon. Lady is absolutely right that the third sector and social enterprise have a vital role to play in the delivery of services. Indeed, they already do so, and we are determined that, as we bring in these prime providers, that will be a way of improving our work with the third sector. That is exactly why I have asked the Association of Chief Executives of Voluntary Organisations and Tony Hawkshead from Groundwork to lead a taskforce looking specifically into this issue. If the hon. Lady has any suggestions, we would be happy to consider them.

The hon. Lady is wrong to say that the Green Paper does not mention the important issue of mental health. It says specifically that our interventions with pathways for people with mental health problems have not been as successful as others. They have had some success, but we want to look at how to make them more effective, how we can dovetail that with improving access to the psychological therapies roll-out-the roll-out of talking therapy led by the NHS-and how we can work with local areas to improve the co-ordination of mental health and back-to-work services. Work is often the best way of helping people to improve their mental health. We also need to work with employers to change the culture of stigma that too often still applies to people who have mental heath problems.

The hon. Lady asked about child poverty, and we all agree that its eradication is an important goal. I am not sure that she agrees with us, however, on the target of eradicating child poverty by 2020. [Interruption.] I am glad that the Liberal Democrats are now formally committed to the 2020 and 2010 targets. [Interruption.] I am not sure that their commitment is entirely clear. I am interested in how they could achieve that commitment given that their leader wants to cut £20 billion of public expenditure. It will be hard for her to square that circle. I look forward to her trying to do so, but also to working with her on those parts of the Green Paper on which we agree.