Ann McKechin MP

Labour Member of Parliament for Glasgow North

Incapacity Benefit - 23 January 2003

I welcome the Government's paper on issues surrounding incapacity benefit, and I congratulate the Department on the imaginative solutions that it propses to encourage and support substantially more claiments back into the labour market. Sadly, it is in Glasgow that the worst Incapacity Benefit problems exist. I believe that Glasgow needs special attention, and I hope that I can establish a case for that today. Glasgow, by a very long way, has the highest number of claimants — 39,000, which is more than any other city outside London. Although the city population of Glasgow is only 609,000, we have more than 25 per cent. more incapacity benefit claimants than Birmingham and almost double the number in Manchester—both are cities which, like Glasgow, have experience of heavy industry in their recent past.

According to the latest statistics, seven of Glasgow's constituencies are in the top 100 United Kingdom employment blackspots. Last year, the Child Poverty Action Group rated three Glasgow seats, including my own, as the worst constituencies for child poverty in the UK. Glasgow also has the highest concentration of heroin injectors in Europe, and the Greater Glasgow health board estimates that we have 15,000 drug addicts, four times the national average. Glasgow also has rising suicide rates among the young, continuing alcohol misuse and chronic ill health statistics that are among the worst in Europe.

Problems of that nature are not unique to my city, but the sheer scale and concentration of deprivation mark Glasgow out as a place that deserves special treatment. I commend the Government on the programmes introduced in the past five or six years, which have already made a significant contribution towards Glasgow's renewal. During that period, the total unemployed count in Glasgow has fallen by more than 15,000. Glasgow is enjoying substantial expansion for the first time in many years: last year, the job growth rate was more than 7 per cent., the highest in any UK city. The consequent new build of office space in the city centre, together with substantial capital investment in our schools, housing and hospitals, has led to many additional jobs, for example, in the construction industry. In fact, there are already skills shortages in that sector. The proposed transfer of the city council's rented housing stock—the largest in western Europe—to the new Glasgow housing association this year will offer the basis for substantial new capital investment and rebuilding, which will create even further demand for jobs in the construction sector. Our commitment to quality public services in schools, child care, community care and hospitals, as well as considerable expansion in our private sector, particularly in the financial sector, will inevitably lead to further job opportunities.

The challenges that we now face are is to harness those opportunities for the benefit of Glasgow's citizens and to tackle the social problems that afflict so many of them. The opportunities have never been better and the rewards to our society for overcoming long-term non-employment would be enormous. The social justice argument is overwhelming and there is an equally strong economic argument.

According to the evidence given by Scottish Enterprise to the Scottish Affairs Select Committee at the end of last year, Scotland is the only country in Europe that is currently depopulating. It is estimated that by 2016 there will be 300,000 more people over 50 and 220,000 fewer people under 50 in the job market. If we do not improve the employment rate in Scotland's largest city, the economy of the whole country—not just Glasgow—will suffer substantially.

Currently, only one in every two new jobs in Glasgow goes to a person who actually resides there. In substantial areas of the city, including my constituency, the majority of the adult population is not in work: people are either on the unemployment register, or they are on some other form of benefit such as incapacity benefit. In some areas, that group comprises as much as 70 per cent. of the total adult population. The Government's paper correctly states that many Incapacity Benefit claimants have been out of the labour market for a substantial period, and many lack basic skills. Many in my city suffer from chaotic lifestyles and the majority lack confidence or knowledge of the current job market.

Many of those people were encouraged in past years, when employment was dropping sharply, to enter the Incapacity Benefit system. In fact, a network of welfare officers was established with the principle of maximising income for those who were considered to have little prospect of re-entering the job market. We need to do the opposite, by taking more deliberate and structured action to convince and encourage those claimants who do not suffer from serious and permanent disablement or incapacity—it was said earlier that such people are clearly in a different category—to rejoin the labour market within a relatively short time. Longer-tem support and training are vital if we really want to get substantial numbers back to work. I fully support the Government's proposals to merge the Employment Service and the Benefits Agency into Jobcentre Plus in order to offer an increasingly personalised service and to target the hidden unemployed in such areas.

Many applicants still have a poor view of their local social security office. Unfortunately, the local drug dealers in my constituency often hang around outside the benefits office, and many people find the place intimidating. In addition, the agency is perceived—rightly or wrongly—to be more interested in investigating abuses than in positively assisting applicants into the most appropriate programme. That is why I encourage the Minister to ensure that any new proposals incorporate a close partnership with other agencies that do not suffer the stigma of being an enforcement organisation, as social security offices do. Jobseekers are likely to be more relaxed when talking about an application or any problems with agencies such as the local enterprise network than they are when dealing with the social security office. I know that my local enterprise company has had considerable successes in getting people who have been non-employed or unemployed in the long-term back into work. It has supported them in their application, their job interview and, most importantly, during their first months of work, when their confidence can still be very fragile. We must be sensitive to what is the appropriate support for those who suffer from addiction problems. I know that the Government have already made proposals for special money to be set aside for those suffering from drug abuse, but they must also consider the fact that a large number of people who claim Incapacity Benefit also suffer from addiction problems.

The Green Paper examines the current monetary barriers to making work pay. The so-called housing benefit trap is often viewed as afflicting only London and the south of England, but hon. Members might be surprised to know that we in Glasgow suffer from exactly the same problem. We have the highest council tax rates in the United Kingdom—£1,140 for a band D property—and historically high social rents. At the same time, the largest group of workers in the city are in the £10,000 to £14,000 per annum wage bracket. The steep withdrawal of housing and council tax benefit that occurs when applicants move from unemployment to work continues to act as a significant barrier to seeking work. Most of those moving from incapacity benefit back into the workplace are likely to start in low-paid, often part-time jobs—the very jobs that are affected by the housing benefit trap. That is why I commend the proposal for a substantial and distinct financial incentive for a good length of time to encourage the move back into work. We can encourage people, once they have got back into work, to seek further training so that they get out of very low-paid jobs into better-paid employment as their career progresses. To be frank, without such an incentive, there is little prospect of persuading many incapacity benefit claimants to make the move to work.

Finally, the Minister may be aware that throughout 2002, the Glasgow group of MPs engaged in a dialogue with the Department about the need for action and greater resources to tackle our city's employment problems. Unfortunately, after a promising start, we have yet to make any progress. None the less, I trust that the group's discussions with the Department for Work and Pensions will be much more productive in 2003. I also encourage her and her colleagues to visit the city and to support the efforts of our civic agencies, which are very keen to assist the Government's efforts to eliminate long-term non-employment and to end this blight on our city once and for all.


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