Statement on Welfare Reform

- Monday, 21st July 2008


Date of Proceeding: 21.07.2008
Reference: 479 c537-8
Member: Lilley, Peter
Title: Welfare Reform
Description: The Secretary of State will not be surprised that I welcome him announcing policies that I originally enunciated ahead of the 1997 election. I congratulate the three people responsible for today's statement: himself for delivering it; David Freud for persuading him to do so; and my hon. Friend the shadow spokesman for his powers of ventriloquism in spelling out the policies that the Secretary of State has enunciated today.

However, has the Secretary of State committed himself to David Freud's central proposal, which is based on his realisation that getting people into work is good for the workless person and the taxpayer, but that those who find jobs and help people back into work are not rewarded? Will he reward the success of those in the public sector and in the private and voluntary sectors who bid for programmes getting people back into work? Will he pay them by their results? If so, why has he not spelled out how he will deal with the two central problems-parking people who are difficult to get back into work, and creaming off those who are easy to get back into work. Those are the central issues, and he has not even addressed them in his statement.

James Purnell: I am happy to do so. I confirm, as I said in my statement, that we will pay people by results. We are already doing that in the flexible new deal contracts that we are letting, and in pathways. We will take that approach further with the new funding mechanism-the awfully named AME-DEL mechanism. That will enable us to pay people out of future benefit savings. Instead of leaving people on benefits and then paying the cost, the money will be brought forward and invested. That will improve those people’s lives and ensure that we save money, which can be reinvested elsewhere.

In the flexible new deal, for example, we will avoid people being parked-as the right hon. Gentleman called it-and left without any help, or cream-skimmed, as he also said, by requiring everybody to do at least four weeks mandatory work. As that requirement will be expensive, it will give providers an incentive to get everyone back to work so that they do not have to spend the money. As we develop our new contracts, we will ensure that people are given the right incentives to help everyone-from those who are hardest to help to those who are closest to the labour market.



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