HC Deb 19 March 1996 vol 274 cc158-60
4. Mr. Hawksley

To ask the Secretary of State for Social Security if he will make a statement on how his benefit reforms will help people off benefit and into work. [19702]

6. Mr. John Greenway

To ask the Secretary of State for Social Security what reforms of the benefit system he is planning to help unemployed people back to work. [19704]

The Minister for Social Security and Disabled People (Mr. Alistair Burt)

The Government's benefit-to-work programme has made a substantial contribution to the reduction in unemployment in the United Kingdom. In addition to family credit, which has helped 300,000 families leave income support in the past three years, about 750,000 people will be helped this year by a range of new measures. From April, the four-week extension of housing benefit will remove worries about rent for new job starters. The national insurance contribution holiday will help employers who take on the long-term unemployed. Help with child care costs in family credit and disability working allowance will increase from £40 to £60 a week. Family credit claims will be speeded up to get the extra help to people more quickly.

Mr. Hawksley

I thank my hon. Friend for that answer, which is good news for everyone. Does my hon. Friend agree that the so-called welfare-to-work schemes, which often involve minimum wage levels, result in people being put out of work rather than in more jobs? Does my hon. Friend agree that such proposals are best described as work-to-welfare schemes and are the sort of schemes that the Labour party pushes?

Mr. Burt

My hon. Friend rightly points out the main flaw in the welfare-to-work package, which includes the minimum wage. The minimum wage does not help the poorest—studies show that the majority of low-paid workers are the second, or even third, income earners in high-earning households. In addition, the minimum wage tends to squeeze out jobs, particularly for the lowest-paid and those with the fewest skills. Our programme of finding ways to improve job opportunities for people and to help them to gain work through benefit offers the unemployed a far better option than a minimum wage.

Mr. Greenway

Will my hon. Friend do what he can to encourage flexibility in the setting of benefits so that those who may have the opportunity of part-time employment, which may be seasonal, are better off taking a part-time job than sitting at home doing nothing? Will my hon. Friend ensure that staff in benefit offices are properly acquainted with all the rules?

Mr. Burt

My hon. Friend is right about the importance of the flexibility of the benefit system. I hope that my answer encouraged him, because that is precisely what we have been trying to do. Increasing earning disregards for those who remain unemployed is not necessarily the best approach as it may be a disincentive to their taking up full-time work, which we want to encourage. Those who are working part time on benefit will, from October, be able to build up a back-to-work bonus—a substantial lump sum that will help them into work.

Mr. Barry Jones

There are 2,500 jobless people in my constituency. How many of them will be helped into work by these measures?

Mr. Burt

We expect that some 750,000 people will benefit from the £600 million-worth of changes that the Budget made to work incentive measures last year. The hon. Gentleman should be able to do the division and work out how many people in his constituency are likely to benefit from these measures.

Mr. Pike

When the Minister is next in his constituency, will he come a few miles north into Burnley and note the wage levels that are being offered to many people? Does he understand that they cannot afford to go to work—even with the type of help that he has spoken about this afternoon—because they are out of pocket if they do? What the Tories have done to wage levels and working conditions since they were elected is an absolute disgrace.

Mr. Burt

I am not sure whether the hon. Gentleman fully appreciates the links between the benefits system and the wage system. I do not know whether his idea of a minimum wage—which would put even more of his constituents out of work—would help in any respect. If the hon. Gentleman studies the types of measure that the Government have introduced and the earnings top—up pilot that we are introducing this year—which will provide an opportunity for people on low incomes to see whether they can have their wages increased to help them into work—he will see that what we are providing will assist many of his constituents. I would guess, without looking at the figures too closely, that fewer people are now unemployed in his constituency than was the case at the last election—that shows the benefit of the measures that we have been passing.

Mrs. Peacock

I welcome the Government's decision to give an extra £10 a week to people who are working 30 hours a week or more and are in receipt of family credit. Does my hon. Friend know how many families it will help?

Mr. Burt

The extra £10 a week premium for those currently working 30 hours or more and in receipt of family credit will help a substantial number of people. It helps a substantial number of families at the moment. The exact number of people who will benefit from this extra measure has slipped my mind, and I shall write to my hon. Friend.