House of Commons

Wednesday 9th March 2011 Commons Chamber

Wednesday 9 March 2011

The House met at half-past Eleven o’clock

Prayers

Wednesday 9th March 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 9th March 2011 Commons Chamber

The Secretary of State was asked—

[Mr Philip Hollobone (Kettering) (Con)]

1. What recent discussions he has had with ministerial colleagues and Ministers in the Scottish Executive on funding for higher education institutions in Scotland.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

I have regular discussions with ministerial colleagues on matters related to higher education in Scotland. Funding for higher education in Scotland is largely a devolved matter, and my hon. Friend may be aware that the Scottish Government concluded the consultation on its Green Paper on the future of higher education funding on 1 March.

[Mr Hollobone]

In our United Kingdom, is it right that students from England studying in Scotland can be discriminated against in favour of students from Scotland or from other countries in the European Union?

[David Mundell]

My hon. Friend will know, as I have stated, that higher education is devolved, and it is for the Scottish Government to decide how to determine the funding of students from both Scotland and England. The fact that £75 million is being spent funding students from the European Union in Scotland will be the subject of considerable discussion at the forthcoming Scottish Parliament elections.

[Angus Robertson (Moray) (SNP)]

Not long ago, the Secretary of State unwittingly told The Daily Telegraph that

“tuition fees are the biggest, ugliest, most horrific thing”,

and that breaking his word on the issue is

“the worst crime a politician can commit”.

Does the Minister agree with him?

[David Mundell]

I agree with Sir Andrew Cubie, who commented on the Scottish Government’s proposals on higher education, and said that their response was “too late” and that they had had the opportunity to lead the way on higher education in the United Kingdom, but chose to follow.

[Angus Robertson]

The Minister chose not to answer the question. Returning to the comments of the Secretary of State, at the same time, he said that accepting tuition fees of £9,000 was a “car crash” and “a train wreck”. Will the Minister confirm that, because the issue is devolved, Scotland does not have to follow the hare-brained policy of the Liberal Democrats and Conservatives in government in England by introducing a car crash of a policy in Scotland?

[David Mundell]

My concern for students in Scotland stems from the failure of the Scottish National party Government to address the issue of higher education funding in Scotland. As the hon. Gentleman will know, a funding gap of up to £260 million in higher education in Scotland has been identified as a result of the SNP’s governance. By my definition, that is a car crash.

[Iain Stewart (Milton Keynes South) (Con)]

The aspect of the reform of higher education funding in England that I most applaud is the fact that, for the first time, part-time students will receive the same treatment as full-time students. Will my right hon. Friend do all he can to persuade the Scottish Government to do all they can to support part-time students in Scotland?

[David Mundell]

My hon. Friend identifies a positive and progressive aspect of the Government’s higher education policy as it applies to England, and it is a policy that deserves to be introduced in Scotland.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

2. What recent discussions he has had with the Chancellor of the Exchequer on the implementation of a fuel duty derogation for rural areas.

[The Secretary of State for Scotland (Michael Moore)]

I have regular discussions with the Chancellor of the Exchequer on a wide range of issues. The Government have already announced that they intend to introduce a pilot scheme that will deliver a discount on petrol and diesel in rural areas, including the inner and outer Hebrides, the Northern Isles, the islands in the Clyde, and the Isles of Scilly.

[Mr MacNeil]

Through the rural fuel derogation we must ensure that there is transparency in fuel distribution in the highlands and islands. Nine months ago, there was 8p difference between Stornoway and Inverness; now there is 18p difference in the price of a litre of fuel. Will the Secretary of State make sure that the Office of Fair Trading looks at issues surrounding fuel distribution, so that any savings from a rural fuel derogation are passed on to families, businesses and the community in the islands?

[Michael Moore]

I welcome the hon. Gentleman’s implicit recognition of the importance of the derogation, which we are seeking and on which my right hon. Friends in the Treasury will make formal submissions in the near future. As for distribution issues, the hon. Gentleman is right to highlight the complexities of the price of fuel across the country. He knows that better than most people, and I am happy to meet him to discuss the issue further.

[Mr Alan Reid (Argyll and Bute) (LD)]

I greatly welcome the introduction of the fuel duty discount pilot scheme on the islands, and I also welcome its extension to the Isle of Bute. While we wait for permission from the EU, however, urgent action is needed to stop the price of fuel going up even further. Will the Secretary of State speak to the Chancellor and tell him that he must cancel the 4p fuel tax rise that Labour planned for this year’s Budget?

[Michael Moore]

My hon. Friend will be the first to acknowledge that the fuel duty increases over the past year reflect the previous Government’s plans to increase duty by 1p per litre over the retail prices index this year and for years to come, and, as we have already discussed, the derogation is now being sought. The Chancellor and the Chief Secretary to the Treasury will have heard my hon. Friend’s strong representations on behalf of his communities, and I recognise how serious an issue petrol and diesel prices are throughout the country.

[John Robertson (Glasgow North West) (Lab)]

3. How many small businesses in Scotland (a) applied for and (b) received research and development tax credits in the latest period for which figures are available?

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

In the financial year 2008-09, figures for the United Kingdom show that there were 350 claims for research and development tax credits from small and medium-sized businesses, and that the total amount of relief awarded was £15 million. Figures for Scotland are not currently held centrally.

[John Robertson]

Well, there we are: once again, a question not answered. The right hon. Gentleman probably does not even know that there is no R and D specialist unit in Scotland to help small businesses get tax credits—but there is one in Wales and six in England. Does he think that that is fair?

[David Mundell]

What I am aware of is that Her Majesty’s Revenue and Customs R and D tax and credits unit held a workshop in Glasgow on 9 February, and it was well attended by businesses from the Glasgow area.

[Fiona Bruce (Congleton) (Con)]

Do the Government intend to abolish the intellectual property restrictions on R and D tax credits, which would make it much easier for companies in Scotland in the biotechnology and micro-electronics industries to benefit?

[David Mundell]

The Government do indeed intend to abolish that restriction, and I believe that it will have the benefits that my hon. Friend outlines.

[Ian Murray (Edinburgh South) (Lab)]

4. What assessment he has made of recent trends in levels of employment in Scotland.

[Jim McGovern (Dundee West) (Lab)]

8. What assessment he has made of recent trends in levels of employment in Scotland.

[The Secretary of State for Scotland (Michael Moore)]

Although the final quarter of 2010 saw falling unemployment and rising employment in Scotland, helping people into work remains a key priority for this Government.

[Ian Murray]

Gross domestic product in the economy has contracted by 0.6%, confidence is being shattered by the increase in VAT, unemployment is rising, with the full effect of public sector job losses to come, and employers all over my constituency are really concerned that the banks are getting away scot-free while they are being hit the hardest. Does the Secretary of State have any plans at all for growth in order to get jobs back into the Scottish economy?

[Michael Moore]

In a compendium of issues, the hon. Gentleman forgets to mention the role that his own Government played in the management of the economy up until last May. Our overriding priority is to get a path to sustainable growth, and that means stabilising the economy, which is what the deficit reduction plan is about, and ensuring that we support businesses by reducing tax, maintaining interest rates lower than they would otherwise have been and helping businesses to access finance. We have a real programme of action, unlike the previous Government.

[Jim McGovern]

Rising unemployment is a great concern in my constituency of Dundee West. In fairness to the Secretary of State, he did visit Dundee to see for himself the importance of the computer games industry to the city, but does he continue to support the Government’s stance of not implementing a tax break, which both the Lib Dems and the Tories claimed to support prior to the general election? If so, what plans does he have for job creation in my city of Dundee?

[Michael Moore]

As I have said previously to the hon. Gentleman, our visit together to Abertay university was very worth while, and he makes a strong case for the computer games industry. Taxation is clearly a matter for the Chancellor, and the Budget is coming along soon, but, as I said in answer to his hon. Friend the Member for Edinburgh South (Ian Murray) a moment ago, the overriding thing, which will help the computer games industry and everybody else, is to get us back on a sustainable path to growth. That is our overwhelming priority.

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

My right hon. Friend will know that marine renewable energy offers tremendous employment prospects in Scotland. Is he aware of the proposal by Department for Energy and Climate Change Ministers to create renewable energy parks; and will he use all his powers to ensure that the first such park is in Caithness, where all the ingredients already exist?

[Michael Moore]

Caithness could not hope for a finer advocate of its cause, and my hon. Friend has spoken with me on many occasions. The importance of renewables to the far north of Scotland—indeed, the whole of Scotland—is second to none, particularly in the context of the rundown of Dounreay, something that I know is close to his heart and on which he works very carefully.

[Ann McKechin (Glasgow North) (Lab)]

In December I highlighted to the House that in Campbelltown 13 claimants were chasing every available job. Unfortunately the situation today is far worse: the Scottish Trades Union Congress reports that currently 27 jobseeker’s allowance claimants are chasing every advertised vacancy in north Ayrshire. The Secretary of State says that he is concerned about high unemployment in Scotland, so can he tell the House when he last visited north Ayrshire and spoke directly to those people who are struggling to find work?

[Michael Moore]

I have carried out a range of visits around Scotland and will continue to do so; I am very happy to take up the hon. Lady’s suggestion. However, may I gently remind her that unemployment was rising under her Government when she was in the Scotland Office? She should not look so pleased about the situation as it is now.

[Ann McKechin]

Yet again, the Secretary of State fails to tell us what his alternative is. Thousands of our young people have been worst hit. This Government claim that their Work programme will be much better, but officials are saying that there will be 250,000 fewer places next year than the number who entered Government schemes this year. Can he therefore confirm what percentage of 18 to 24-year-olds currently unemployed in Scotland will be allowed to participate in the new Work programme, and whether it will be less than in the current year?

[Michael Moore]

The hon. Lady is right to highlight the issue of youth unemployment, which is a key priority for the Government. Again, it is something that rose significantly throughout her time in office, and it needs to be tackled very seriously. We have already introduced elements of the Get Britain Working programme, the work clubs and the Working Together programme, and the Work programme will come along in the summer. We look forward to debating that further with her.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

5. When he expects next to discuss with ministerial colleagues trends in the level of youth unemployment in Scotland.

[The Secretary of State for Scotland (Michael Moore)]

The Government are determined to deal with the long-term legacy of youth unemployment, and this is a key priority in my discussions with ministerial colleagues. Our Get Britain Working measures and the new Work programme will provide the best possible support for young people struggling to find employment.

[Mr Donohoe]

I thank the Secretary of State for that answer. He will be aware, however, that levels of unemployment among the 18-to-24 age group have soared over the past few months. As a result, in north Ayrshire in particular, we have the highest levels of youth unemployment. What is he going to do about that?

[Michael Moore]

First, I commend the hon. Gentleman for his consistent campaigning on this issue, which is a very significant one in his part of the world. However, I think that he would also acknowledge the point that I made to the hon. Member for Glasgow North (Ann McKechin) a moment ago—that youth unemployment has been a serious problem for a long period. I discussed the issue with the Work and Pensions Secretary only last night. As I have said to the hon. Gentleman previously, I look forward to convening a meeting in his constituency where we will discuss all these issues with the relevant individuals and organisations from across Scotland. I look forward to his being part of that event.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

I think the whole House shares the concern that the Secretary of State seems to indicate that he has, but can he share with the House the number of young unemployed people to whom he has spoken this year?

[Michael Moore]

I have spoken to many young unemployed people across Scotland, not just this year but over the whole course of my time as a Member of Parliament, and not just in my own constituency but elsewhere too. They all want to see a sustainable route out of the difficulties that the country is in. This is not only about the Work programme measures that I have already mentioned but about getting the country back on its feet and tackling the deficit, making sure that we have a sustainable way to growth by focusing on bank lending, keeping interest rates low, and providing support by cutting taxes, be they corporation tax or national insurance. All those measures will help.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

6. What assessment he has made of the likely effect on families in Scotland of the changes to benefits proposed by the Secretary of State for Work and Pensions.

[Mrs Anne McGuire (Stirling) (Lab)]

7. What discussions he had with the Secretary of State for Work and Pensions prior to the publication of the Welfare Reform Bill on the likely effect on Scotland of the measures in that Bill.

[Fiona O’Donnell (East Lothian) (Lab)]

10. When he last met anti-poverty campaigners in Scotland to discuss the potential effect in Scotland of the measures in the Welfare Reform Bill.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

The Secretary of State for Scotland and I are in regular contact with ministerial colleagues in the Department for Work and Pensions. We also meet regularly organisations in Scotland with an interest in welfare and combating poverty.

[Michael Connarty]

That was not an answer to the question that I asked. I cite two cases to the Under-Secretary: a family with a son born with fragile X syndrome and autism and another family with an absolutely outstanding young teacher who suffered a massive stroke. Both of them now require 24-hour residential care. Their lives will be damaged irreparably if the Government go ahead with the withdrawal of benefits for people in residential care—benefits that give them a quality of life that makes residential care not a prison sentence. Will the Secretary of State and the Scotland Office campaign with the people of Scotland against this proposal by the Government to withdraw benefits from people in residential care?

[David Mundell]

The hon. Gentleman will be aware that there was a debate this morning in Westminster Hall on that specific issue. The Government have indicated that they are listening to the concerns. The fundamental issue with disability living allowance is that it is not fit for purpose and needs change. The Government are taking those changes forward.

[Mrs McGuire]

I have been contacted by Mr Ron Skinner, MBE, who is a non-executive director of Order of Malta Dial-a-Journey Ltd, which operates in my constituency. He expressed grave concern about the impact of the removal of mobility allowance from those in residential care. What specific discussions has the Minister had with his opposite numbers in the Department for Work and Pensions on this issue, which is causing great concern for those in residential care?

[David Mundell]

Yesterday, I met the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) and Lord Freud, the Minister in the House of Lords who is responsible for welfare reform, to discuss the implications of welfare reform for Scotland. The right hon. Lady raises one such issue. As was said in Westminster Hall this morning, DLA as it currently exists is not fit for purpose. It is applied randomly across care homes, not just in Scotland but across the United Kingdom, and it needs to be reformed.

[Several hon. Members]

rose—

[Mr Speaker]

Order. There are far too many private conversations taking place in the Chamber. Let us have a bit of order for Fiona O’Donnell.

[Fiona O'Donnell]

Like you, Mr Speaker, I am feeling in a generous mood, so I will give the Under-Secretary of State a third chance to redeem himself. The Prime Minister’s excuse for removing the mobility component was that it addressed an anomaly between those in hospital and those in residential care. Will the Under-Secretary of State at least acknowledge that residential care homes are based on a social model, and not a medical model?

[David Mundell]

I certainly acknowledge that residential care homes are social rather than medical institutions primarily. However, as the hon. Lady will know, having been present at this morning’s debate in Westminster Hall, many care homes operate the mobility aspect of disability living allowance differently. The basis on which it is applied to a person in a home in Scotland and what it is applied for is dependent on which home they are in. I am sure she will agree that that is not acceptable.

[Mrs Eleanor Laing (Epping Forest) (Con)]

Does the Minister agree that many families in Scotland are suffering economically and socially because of the disastrous policies not only of 13 years of Labour Government, but of four years of Scottish National party Government in Scotland? Will he undertake to work with the Secretary of State for Work and Pensions to ensure that people in Scotland who are in real need, especially those with disabilities, benefit under his Government’s policies?

[David Mundell]

I agree with my Friend’s analysis. Like many people in Scotland, I recognise that the Welfare Reform Bill provides a once-in-a-generation opportunity to radically overhaul the benefits and welfare system.

[Mike Freer (Finchley and Golders Green) (Con)]

Can the Minister indicate to the House how many low-paid Scots will be lifted out of income tax, and how many families in Scotland will benefit from the reform to tax credits that has been announced?

[David Mundell]

I will seek out that information for my hon. Friend and write to him.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

The changes announced last week to social fund crisis loans will cut the level and availability of loans for essential items such as beds and cookers. Does the Minister agree that that will push vulnerable people on lower incomes towards high-cost lending and into the arms of loan sharks, exacerbating problems that Scotland already has?

[David Mundell]

I do not agree with the hon. Lady’s analysis. I am surprised to hear again from the Scottish National party that it does not welcome the devolution of elements of the social fund to the Scottish Parliament.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

9. What recent discussions he has had with the Secretary of State for Business, Innovation and Skills on the operation of the green investment bank in Scotland.

[The Secretary of State for Scotland (Michael Moore)]

I have regular discussions with the Secretary of State for Business, Innovation and Skills on a wide range of issues, including the operation of the green investment bank. The green investment bank will support economic growth in all parts of the country and help us to meet our environmental objectives.

[Chi Onwurah]

Like the north-east, Scotland has great wind resources, and we are looking forward to getting a return on all that wind. Does the Secretary of State agree that the delays to and downgrading of the green investment bank are preventing us from making the best of that asset?

[Michael Moore]

First, as somebody whose constituency is not that far from Newcastle, I agree with the hon. Lady that we should appreciate all its wonderful characteristics, including its weather patterns. I agree that around the whole coast of the UK, we have much that we can exploit for renewable energy. On the specifics of the announcement on the green investment bank, we are taking the matter forward aggressively and she will hear further information announced very soon.

[Mike Crockart (Edinburgh West) (LD)]

Does the Secretary of State agree that the green investment bank could open up tremendous potential for rebalancing the economy and creating a great many new jobs? For that to happen, it needs financial experience, research and development experience in the academic institutions and renewable energy experience, all of which are available in abundance in Scotland, and particularly in Edinburgh. It would therefore be a perfect location for the institution.

[Michael Moore]

I commend my hon. Friend for his efforts to locate the green investment bank in Edinburgh. I welcomed the opportunity to meet him and the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) recently to discuss that very issue. I and other Ministers look forward to hearing further details on the proposal in the near future.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

When I asked the Secretary of State about the green investment bank in October, he said that he would make the best possible case for its location in Scotland, yet his Department has been forced to concede under freedom of information that he has had no correspondence with Department of Energy and Climate Change Ministers on the issue and that there are no notes of meetings with them about it. How is he actually pressing the case rather than just dealing in rhetoric?

[Michael Moore]

I am aware of the hon. Gentleman’s commitment to freedom of information, and I am delighted to say that, as he knows from his time in the Scotland Office, those are not the only ways in which Ministers meet. I have had many conversations with the Secretaries of State for Energy and Climate Change and for Business, Innovation and Skills, the Deputy Prime Minister and others on the issue. Like the hon. Gentleman, I hope that my colleagues will support the case for the bank coming to Scotland.

[Several hon. Members]

rose—

[Mr Speaker]

Order. There is still far too much noise in the Chamber. It is very unfair on people asking questions and Ministers answering them.

[Margaret Curran (Glasgow East) (Lab)]

11. What discussions he has had with the Chancellor of the Exchequer on the effect on the economy in Scotland of the increase in the standard rate of value added tax.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

The Secretary of State and I have regular discussions with the Chancellor of the Exchequer on a range of issues. The VAT rise is a tough but necessary step towards Britain’s economic recovery.

[Margaret Curran]

Is the Minister aware of the sense of outrage throughout Scotland that on this Government’s watch, the increase in VAT means that low and middle-income families now pay a higher rate of tax on purchases and earnings than the banks are to pay on their profits? How can that possibly be fair, and why do the Government continue to insist that those with the least should pay the most?

[David Mundell]

I am aware of the sense of outrage, not just in Scotland but throughout the UK, at the state of the economy that the last Labour Government left us with, which has required such measures to be taken.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Does the Minister not accept that the recent increase in VAT, particularly on fuel such as petrol and diesel, is having a more dramatic effect on the economy in rural areas? Does he not think that his Government should address that?

[David Mundell]

The hon. Lady would be much more credible on that point if she had spoken out against her Government’s rises in duty. The issue of fuel prices in rural areas is serious, and it is already clear that my right hon. Friend the Chancellor has heard the concerns.

[Harriett Baldwin (West Worcestershire) (Con)]

12. What discussions he has had with the Deputy Prime Minister on the establishment of a commission to examine the West Lothian Question.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

The Secretary of State and I have regular discussions with the Deputy Prime Minister on various issues, including those concerning the constitution. The Government remain committed to establishing a commission this year to consider the West Lothian question.

[Harriett Baldwin]

The Deputy Prime Minister told us that the commission would be established by the end of 2010, then the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), told us that it would be established in the new year. Does the Minister know on what date in 2011 the commission will be established?

[David Mundell]

I am not able to give my hon. Friend an exact date, but as she will know, it is a commitment of the coalition Government to proceed with the commission, and I am sure announcements will be made shortly.

[John Stevenson (Carlisle) (Con)]

13. What recent discussions he has had with the First Minister on support for private sector employment in Scotland.

[The Secretary of State for Scotland (Michael Moore)]

In my recent discussions with the First Minister, we spoke about a range of issues, including economic policies. Returning the United Kingdom to sustainable economic growth is the Government’s overriding priority. We are doing everything we can to create the conditions that enable UK businesses to be successful and create more jobs.

[John Stevenson]

If the Scottish economy is to be rebalanced, the future clearly lies with employment in the private sector. Can the Minister therefore give some indication of how much Scottish businesses will save from the Government’s changes to the employers’ national insurance threshold and rate, and of how many businesses will benefit from the payment holiday for new businesses?

[Michael Moore]

My hon. Friend is right to point to the importance of reducing the tax burden, and we are determined to do that. We estimate that the national insurance reductions will bring a benefit of £280 million to businesses in Scotland, or the equivalent of helping 59,000 jobs.

The Prime Minister was asked—

[Ian Mearns (Gateshead) (Lab)]

Q1. If he will list his official engagements for Wednesday 9 March.

[The Prime Minister (Mr David Cameron)]

I am sure the whole House will wish to join me in paying tribute to Lance Corporal Liam Tasker from the Royal Army Veterinary Corps, who died on Tuesday 1 March. The whole country has been touched by the story of this true hero, who selflessly worked with his search dog, Theo, to locate improvised explosive devices, weapons and bomb-making equipment to save many, many lives. He will not be forgotten, and our deepest condolences should be with his family, his friends and his colleagues.

This morning I had meetings with ministerial colleagues and others, and in addition to my duties in this House, I shall have further such meetings later today.

[Ian Mearns]

I am sure the whole House will join me in passing on their condolences to the family and friends of our fallen service personnel.

The Prime Minister will be aware that today is no-smoking day. Will he join me in congratulating the organisers of the “Making Smoking History” lantern parade which takes place this evening in Wrekenton, a part of my constituency that is particularly blighted by that addiction? Will he also comment on British Lung Foundation research that shows that more than half of children surveyed across the UK have been exposed to cigarette smoke in cars, and that 86% of children want adults—

[Mr Speaker]

Order. We have got the drift.

[The Prime Minister]

The hon. Gentleman makes a good point with great passion. I certainly support no-smoking day, and unlike in some previous years, I hope to meet its requirements in full this year. His point about smoking in front of children and babies and smoking in cars is a good one. Whatever people have done in the past, the facts show that they really should change their behaviour. I am not sure whether it is possible to legislate in that area—we need a change in attitudes, which he is helping to lead with the British Lung Foundation and others.

[Mary Macleod (Brentford and Isleworth) (Con)]

Yesterday was international women’s day, and today great trade figures and export growth were announced. Does the Prime Minister agree that we would have even better figures if we managed to get more women on the boards of companies across the UK?

[The Prime Minister]

My hon. Friend is right to draw attention to today’s trade figures, which show a big increase in exports, which is exactly the sort of rebalancing that our economy needs. It is absolutely right that we need to get more women involved in the work force and at board level. In addition, in terms of entrepreneurialism, if we had the same rate of women setting up small businesses as America, we would have tens of thousands of extra businesses creating wealth and jobs.

[Edward Miliband (Doncaster North) (Lab)]

I start by paying tribute to Lance Corporal Liam Tasker from the Royal Army Veterinary Corps. He was doing a job that put him in such danger, and he showed extraordinary bravery and courage. We remember him, and we pass on deep condolences to his family and friends.

Can the Prime Minister tell us who authorised the mission in Benghazi last weekend?

[The Prime Minister]

The Foreign Secretary set out the position absolutely in full in the House on Monday, but let me say clearly that I take full responsibility for everything that my Government do.

[Edward Miliband]

I am grateful to the Prime Minister for saying that, and I want to support him on Libya wherever I can, but there is increasing concern about the Government’s competence on the issue. We have had the flights fiasco, talk of Colonel Gaddafi heading to Venezuela when he was not, overblown briefing about potential military action, and the setback last weekend. Does the Prime Minister think that it is just a problem with the Foreign Secretary, or is it a wider problem in his Government?

[The Prime Minister]

I am not sure that I particularly want to take a lecture from Labour about dealing with Gaddafi and Libya. The first thing that we should have from the Labour party when it comes to Libya, Gaddafi and the release of Megrahi is an apology, which we still have not had. When it comes to this Government’s conduct, we have led the way in getting a tough UN resolution on Libya, getting Libya thrown out of the Human Rights Council and making sure that the world is preparing for every eventuality, including a no-fly zone.

[Edward Miliband]

Everybody will have heard the deafening silence about the performance of the Foreign Secretary. There is an issue of competence at the heart of this Government, and I want to turn to another example of incompetence. Does the Prime Minister think that people will notice the loss of 12,000 front-line police officers?

[The Prime Minister]

First, the right hon. Gentleman raises the issue of the Foreign Secretary. Let me tell him: I think we have an excellent Foreign Secretary. When it comes to it, there is only one person around here I can remember knifing a Foreign Secretary, and I think I am looking at him. [Interruption.] Right, I think we have dealt with that.

We want to see police on the streets fighting crime, not stuck behind their desks fighting paper. That is what we want to achieve. Let me say to the right hon. Gentleman that whoever was standing here right now would have to be reducing the Home Office budget and the policing budget. Labour was committed to a £1.3 billion cut. The question is not “Are you reducing the budget?”; the question is “What are you doing to cut the paperwork, freeze the pay, deal with the allowances and make sure the police are on the streets?”

[Edward Miliband]

The more that the right hon. Gentleman brings my relatives into this argument, the more that we know he is losing the argument. I have a second cousin in Belgium he will be going after next, I am sure.

On the question of crime, the Prime Minister says that he wants to improve front-line policing, but the West Midlands is losing 1,000 officers, Bedfordshire has scaled back gun licence checks, and now we hear that companies that have been burgled are to be sent fingerprint kits in the post. I know that he believes in the big society, but solving your own crimes is a bit ridiculous, even by his standards. You have to ask, Mr Speaker: does the Prime Minister actually have a clue what is going on out there?

[The Prime Minister]

I think the leader of the Labour party is getting a little bit touchy about this issue.

The point that I would make is that if we listen to what chief constables are saying about what they want to do—[Interruption.] Here is the chief constable of Thames Valley:

“what I haven’t done at all is reduce the number of officers who do the patrol functions, so the officers you see out in vehicles, on foot, in uniform, on bicycles. We haven’t cut those numbers at all.”

Listen to the chief superintendent in Surrey, who says:

“We are determined to increase our frontline capability by recruiting…extra”

police constables. The fact is that all the leadership of the police is engaged in the exercise of keeping costs under control to make sure that we get more officers on the beat. Whether we have to divert them to protect the right hon. Gentleman’s relatives, I do not know, but they are going to be on the beat.

[Edward Miliband]

Ten months, and so out of touch with people up and down this country. The Prime Minister talks about police officers; in case he had not noticed, it is the Association of Chief Police Officers that says that 12,000 front-line police officers are going to be lost. Why are they being lost? It is because he chose to go beyond the recommendation by Her Majesty’s inspectorate of constabulary of 12% cuts. If he had made 12% cuts, the savings could have been found from the back office, but he went too far and too fast, and insisted on 20% cuts in policing.

[The Prime Minister]

The right hon. Gentleman is wrong. The Association of Chief Police Officers is not talking about front-line officers, so he is simply wrong about that. Let me remind him what his home affairs spokesman said at the time of the election, when asked

“Can you guarantee if you form…the next government that police numbers won’t fall?

Alan Johnson: No”.

That was the position, and this is what he said after the election:

“if Labour had won the general election, the Home Office budget would have been cut and the police would have had to make savings”.

What we see today, once again, is jumping on a bandwagon and total opportunism. The right hon. Gentleman has no plans to reform welfare, no plans to reform the NHS and nothing useful to say about policing.

[Edward Miliband]

We know that the Government are out of touch, and now we know that they are incompetent as well: incompetent on Libya and incompetent on policing. The Prime Minister may act like he was born to rule, but the truth is that he is not very good at it.

[The Prime Minister]

The usual pre-scripted questions that he dreamt up earlier. The question is: has he got a reform plan for the NHS? [Hon. Members: “No!”] Has he got a police reform plan? [Hon. Members: “No!”] Has he got a plan to cut the deficit? [Hon. Members: “No!”] It is no wonder that the former Foreign Secretary has just said that

“the…Left is losing elections on an unprecedented scale because it has lost control of the political agenda…it is also losing key arguments”—

and it has a

“deficit in ideas”.

That is what he said, and he is absolutely right.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Will my right hon. Friend join me in congratulating the people of Suffolk, who, in less than a year, have raised more than £3 million to build a new children’s hospice through the Treehouse appeal? This is an example of the community coming together to support a local project that will really make a difference. It is also supported by BBC Suffolk, the Evening Star and the East Anglian Daily Times.

[The Prime Minister]

My hon. Friend is absolutely right. I know that Members right across the House back the hospice movement, with its hospices for adults and for children. The Government have put extra money into hospices, but that is a great example of the big society, where people come together and make sure that there is real provision to look after those who need it most.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Q2. The coastguard stations, our maritime insurance policy, have been treated badly by the Maritime and Coastguard Agency, which has started threatening to close stations without carrying out any risk assessment whatever. The proposed savings were not even highlighted in the comprehensive spending review, and they will be very small compared with the huge risks involved. Will the Prime Minister ensure that our coasts, islands and mariners are protected by saving our stations? As the campaign says: SOS!

[The Prime Minister]

I will look at this issue carefully, because it is being raised by Members across the House. What I would say, however, is that this is not about the UK’s front-line rescue capability. The key changes are about how the coastguard service co-ordinates services and rescue missions, so the aim of the consultation is to get the resources on the front line, to those people who are actually carrying out the rescues and to those in the voluntary sector who are helping. That is what the consultation is about, and I would urge the hon. Gentleman to engage in the process.

[Neil Carmichael (Stroud) (Con)]

Q3. The alternative vote system is unfair, expensive and discredited. Even members of the support team for the yes side do not really want it. What is the Prime Minister going to do to ensure that we defeat this system, because it can produce distorted outcomes?

[The Prime Minister]

I thank my hon. Friend for his question. I will be campaigning hard for a no vote in the referendum. I think that it is a relatively simple argument to make. We have a system that is simple, clear and easy to explain. The alternative vote is used in only three countries. They are Australia, Fiji and Papua New Guinea—and Fiji is beginning to change its mind. There are clear arguments, and it is a referendum, so people in the coalition will be able to make those different arguments.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

At Prime Minister’s questions on 27 October, the Prime Minister agreed that Ministers would work with me and with our leading children’s charities on an affordable alternative to the child trust fund for looked-after children. I can confirm that, since then, the Financial Secretary to the Treasury and the Children’s Minister have both worked constructively with us on that issue. However, the time has come to turn good intentions into action. Today, Barnardo’s and Action for Children have published a report that sets out a compelling case for a new system of savings accounts for children in care. I know that the Prime Minister wants to do more for such children. Will he read the report, then write to me to confirm that provision for such a system will be made in the Budget?

[The Prime Minister]

I will certainly read the pamphlet, if the right hon. Gentleman will leave me a copy. We are looking at whether we could replace funds, particularly for children in care, with some form of child ISA, and I hope that my right hon. Friend the Chancellor will have something more to say about that in the Budget.

[Tom Brake (Carshalton and Wallington) (LD)]

Q4. The coalition Government’s principal objective is to cut the eye-watering deficit that we inherited from the previous Government, yet we want to support people on low and middle incomes. [Interruption.] Can the Prime Minister confirm how many people will see their incomes—[Interruption.]

[Mr Speaker]

Order. I apologise for having to interrupt. Members must be heard when asking their questions, and the Prime Minister heard in answering them. It is a very simple principle. I think that the hon. Gentleman has completed his question, and we are grateful to him.

[The Prime Minister]

The truth is that Labour Members do not like being reminded of the massive deficit and the huge mess that they left this Government to clear up. My hon. Friend makes a good point—that in spite of difficult decisions, we will lift the tax threshold for income tax payers in April this year, and 880,000 people will be removed from income tax altogether. That is a major step forward, a big help with the cost of living, and will be welcome to families up and down the country.

[Gloria De Piero (Ashfield) (Lab)]

Many parents in my constituency are worried sick because a number of school bus services are being withdrawn, with no guarantee of an equivalent replacement—meaning that timetables, routes and fares will be at the discretion of commercial operators. What is the Prime Minister doing to ensure that families are not subject to big fare hikes just to get their children to school?

[The Prime Minister]

What we are doing—it was one of the difficult decisions we took in the spending round—is to make sure that the per pupil funding in place is not going down; it is being maintained. That meant taking difficult decisions elsewhere in the Budget, but we took that decision for the good of the country’s schoolchildren.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

Q5. Do the Prime Minister and the Chancellor recognise the severe impact of exceptionally high petrol and diesel prices on rural communities in England such as Northumberland, where prices tend to be 5p to 10p a litre higher than in the cities, where people have long distances to travel to work and where public transport is very limited? May we hope for some relief in the Budget?

[The Prime Minister]

My right hon. Friend makes an important point. The argument has been made about high fuel costs, and we are listening to it very carefully. He will have to wait for the Budget. I know that prices for heating oil are also a big issue in rural areas like the ones that he and, indeed, I represent. We have asked the Office of Fair Trading to look at it, but I make the additional point that we have maintained the cold weather payments at £25, which has meant that something like £430 million has been spent this winter on helping people with their heating bills.

[Mr David Winnick (Walsall North) (Lab)]

However serious the situation in Libya—no doubt Gaddafi is now using arms sold to him by British companies—will the Prime Minister give an assurance to the House today that no military action will be taken regarding Libya without direct authorisation from the United Nations Security Council?

[The Prime Minister]

What I discussed last night with President Obama is making sure that we plan for every eventuality, including planning for a no-fly zone. If that becomes necessary, everyone would want it to have the widest possible backing, which is why we are currently drafting a UN Security Council resolution. I think that is absolutely the right thing to do.

[Nigel Adams (Selby and Ainsty) (Con)]

Q7. It is no secret that council tax doubled under the last Government. In my constituency, both local councils—Selby district and Harrogate borough council—are freezing council tax this year. Will the Prime Minister tell me and the House how many other councils have chosen similarly to help hard-pressed council tax payers?

[The Prime Minister]

I am delighted to say that a huge number of councils have done that. I think it was right to announce a freeze in council tax, which will bring real help to households across the country, saving the average family up to £72 a year at a time when they face difficulties with the cost of living. That compares, as my hon. Friend said, with a doubling of council tax under the last Government. As to whether they have learned any lessons from that, I have to say that Labour’s shadow Local Government Minister, the hon. Member for Derby North (Chris Williamson) attacked this freeze as

“nothing more than a gimmick”.—[Official Report, 17 January 2011; Vol. 521, c. 531.]

Yet it is bringing relief to hard-pressed families up and down our country and it is absolutely the right policy.

[Mark Durkan (Foyle) (SDLP)]

Is the Prime Minister aware of a commitment in the programme for government of the coalition Government who are taking office in Dublin today to move to an opt-out system for organ donation? As well as whatever consideration his Government might give to that proposal, will the Prime Minister undertake to work with all other Administrations in these islands through the British-Irish Council to increase the number of organ donors and to improve networks for sourcing and sharing donor organs and transplant services for people who need that life-saving and life-changing treatment?

[The Prime Minister]

I will certainly agree to do that. It is important that we try to increase the amount of organs available for donation. In the last Parliament, there was a debate about whether we should move formally to an opt-out system, and there are difficulties with that, but there is a huge gap between where we are now and a formal opt-out system, in encouraging patients and talking to them about what can be done. I am sure that we can make steps forward, and my right hon. Friend the Health Secretary will do that.

[Mr Peter Bone (Wellingborough) (Con)]

Q8. Mr Speaker, 373,000 Daily Express readers want it, 80% of Conservative Members support it, the Deputy Prime Minister would love it, and my wife demands it. The British people, Conservative supporters, the leader of the Liberal party and especially Mrs Bone cannot all be wrong. Prime Minister: may we have a referendum on whether the United Kingdom should remain in the European Union?

[The Prime Minister]

I wish that my wife were as easy to please. I was worried about where that question was going.

I am afraid that I must disappoint my hon. Friend and Mrs Bone. I think that we are better off inside the EU but making changes to it, in the way that we are setting out.

[Jim Dobbin (Heywood and Middleton) (Lab/ Co-op)]

Q9. There are 1.5 million individuals throughout the United Kingdom who suffer from involuntary tranquilliser addiction, which is not a misuse of drugs by the individual but prescription addiction. It has horrendous side-effects. Can the Prime Minister ensure that special withdrawal programmes are set up across the country to give those people their lives back? I understand that the Government are reviewing the situation, but the reviews keep being put back. These people are victims of the system, and they are suffering all the time.

[The Prime Minister]

The hon. Gentleman has raised this matter with me before. He speaks very powerfully on behalf of people who have that addiction, which is an extreme problem in our country.

We published a drugs strategy which set out an ambition to reduce drug use, including the use of prescription and over-the-counter medicines. That should include programmes to help people to withdraw from and come off those drugs. However, as I have said to the hon. Gentleman before, I think that we must deal with the problem at source. That is part of the purpose of our health reforms, which is to ensure that the national health service is genuinely concerned with the health of the whole person rather than being a national drugs service in which there can sometimes be too much prescribing of drugs.

[Mr Steve Brine (Winchester) (Con)]

The German company Storck UK, which owns and makes Bendicks chocolates in my constituency, has announced that it is consulting on plans that could involve production being moved to Germany. In the area that I represent, 115 jobs depend on that factory. Will the Prime Minister ask one of his Ministers in the relevant Department to meet me and representatives from the company as soon as possible to establish whether we can help?

[The Prime Minister]

I will certainly do that. My hon. Friend is right to speak up for his constituency and for that business. Through the growth review—we will confirm this in the Budget—we are taking steps to ensure that this country is the best place in Europe in which to do business. We have set out plans for the lowest rate of corporation tax anywhere in the G7, but we will also take further steps to ensure that we encourage companies to stay here, come here and invest here.

[Karl Turner (Kingston upon Hull East) (Lab)]

Q10. The Prime Minister is beefing up his office to help sell the Government’s unpopular and wasteful £2 billion reorganisation of the NHS. Does it concern him that Baroness Williams of Crosby feels that she is“under no obligation to support policies outside the agreement”?The Prime Minister’s Back Benchers do not want this; no one wants it. Is it not possible for the Prime Minister to halt—

[Mr Speaker]

Order. We have got the drift, but we must have an answer.

[The Prime Minister]

The questions drafted by Labour Members have got a bit longer. I think that those in the Labour Whips Office need to go to remedial writing school.

If the hon. Gentleman was asking a question about the NHS—as I think he was—and asking who supports the NHS reforms, let me say this. I think that one of the greatest proponents of the NHS reforms is Labour’s shadow Health Secretary, the right hon. Member for Wentworth and Dearne (John Healey), who has said:

“The general aims of reform are sound—greater role for clinicians in commissioning care, more involvement of patients, less bureaucracy and greater priority on improving health outcomes—and are common ground between patients, health professions and political parties.”

If life gets too tough for the right hon. Gentleman on the Opposition Front Bench, there is always plenty of room over here.

[Jeremy Lefroy (Stafford) (Con)]

Q11. This month, soldiers from 3 Mercian (Staffords), including many from my constituency, are being deployed to Afghanistan, and our thoughts and prayers are with them. Will the Prime Minister ensure that if our brave soldiers are injured while serving our country, they will receive compensation that recognises their sacrifice?

[The Prime Minister]

My hon. Friend makes a very important point. The bravery of our servicemen and women, who are often deploying to Afghanistan for the third or fourth time now, should be uppermost in our thoughts. I think the whole House can unite on that, and on the results of the review of the armed forces compensation scheme carried out by Admiral Boyce. That will lead to significant increases in the value of awards—on average in excess of 25% to all lump sum payments, except for the top award which was recently doubled to £570,000. We are also trebling the maximum award for mental illness to £140,000. We can never compensate people for their injuries in battle, either physical or mental, but we can, as a generous, tolerant, warm and welcoming nation to our armed forces, do so much more, and I am glad that we are doing this.

[Jessica Morden (Newport East) (Lab)]

Q12. Does the Prime Minister appreciate that the 1,500 women in Newport who are now going to have to work for up to two years longer because the Government have accelerated the introduction of the increase in the state pension age feel very angry that they are not being given long enough to plan properly for a delayed retirement?

[The Prime Minister]

I know this is a difficult reform, but as well as dealing with the short-term problems of our deficit and making spending reductions across Government programmes—which, frankly, any Government would have to do right now—it is also right to try to make some long-term changes to reduce the long-term costs of our pension system, and as life expectancy is increasing, I think it is right to ask people to retire later. This is a difficult and long-term decision, but I think the arguments for it are absolutely right.

[Ms Louise Bagshawe (Corby) (Con)]

Will my right hon. Friend join me in welcoming the good news on jobs announced this morning by KPMG: that February saw the fastest rate of permanent positions being filled for 10 months and that those jobs came from the private sector?

[The Prime Minister]

My hon. Friend is right to draw attention to that as well as the trade figures. We are engaged in a very difficult operation to rebalance the economy, which for too long was dependent on government, housing, finance and, frankly, on immigration as well. We need an economy that is based more on manufacturing, technology, exports, enterprise and small business. It is going to be difficult, but there are good signs that the private sector economy is growing, and growing well.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Q13. Last year, Newcastle citizens advice bureau dealt with more than 26,000 cases, supported by 75 volunteers, yet its budget has been slashed and there is no clarity from Lib Dem Newcastle city council on funding from the end of this month. How can this shambolic situation possibly contribute towards the big society?

[The Prime Minister]

The Government have made sure that the national funding for the CAB debt service has been maintained, and that is a vital part of it. I urge all local councils, whoever controls them—I have had this conversation with my own council—to make sure we do as much as we can to support CABs, which do such a vital job in our communities.

[Jake Berry (Rossendale and Darwen) (Con)]

I am sure all Members agree that one of the most important jobs we perform every year is to represent people who have lost their lives in war on Remembrance Sunday. It is certainly something I do with great pride in my constituency. With that in mind, does the Prime Minister think a £50 fine is an appropriate punishment for those who burn poppies and chant during the silence?

[The Prime Minister]

My hon. Friend will have spoken for many people in their reaction to that court case. It is difficult unless we are sitting in the court and making that decision ourselves, but many of us look at such cases and feel that as a country we should be making a stronger statement that that sort of behaviour is completely out of order and has no place in a tolerant society.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

Q14. May I take the Prime Minister back to the question on AV, and ask him to look at early-day motion 1550 tabled yesterday, which challenges the funding from the Electoral Reform Society? As, like me, he is a firm supporter of first past the post, will he look at that and write to me afterwards to tell me that there will be an investigation?

[The Prime Minister]

I have to admit that I have not got round to early-day motion 1550, but it sounds as if I should. We have been looking for all these years for something for the hon. Gentleman and I to agree about, and it is a delight to have this issue. I think some people will be surprised to find that what they thought was an organisation running elections is funding a campaign, but in the interests of coalition unity, I will leave it at that.

[James Morris (Halesowen and Rowley Regis) (Con)]

I recently met a number of manufacturing businesses in Cradley Heath in my constituency. Does the Prime Minister agree that the Government must do all they can to support manufacturing, particularly in areas such as the black country, to drive private sector jobs growth?

[The Prime Minister]

My hon. Friend is absolutely right. As I have said, we need a rebalancing of the economy whereby we see more technology, more aerospace, more manufacturing and a greater emphasis on such things. We are seeing recent figures showing good strong growth—up to 5% a year—in manufacturing output and even stronger figures for manufacturing export. What the Government can do to encourage that is ensure that we are delivering what manufacturing businesses want: less regulation, lower taxes and a real boost in apprenticeships, which this Government are providing—an extra 75,000 apprenticeships over and above what Labour planned.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Q15. Does the Prime Minister agree that the bankers do a bad job in lending to small businesses and the real economy and that the police do a good job in helping to cut crime? Can he explain, therefore, why he is cutting police pay while letting the bankers walk away with millions?

[The Prime Minister]

What we are doing is introducing a £2.5 billion levy on the banks each and every year, which will raise more in every year than Labour’s bonus tax raised in one year. We are getting money out of the banks into the Treasury. We are seeing the bonus pools come down and bank lending go up. None of those things happened under the last Government.

[Mr John Baron (Basildon and Billericay) (Con)]

The law courts have agreed with Basildon council that the illegal Dale Farm Travellers’ site should be cleared, but because the previous Government stopped the council taking action, the site has mushroomed in size. Would the Prime Minister meet me to discuss the case to ensure that justice is done?

[The Prime Minister]

My hon. Friend has persistently raised this case and this issue in the Commons. I know he speaks for many people about the sense of unfairness that one law applies to everybody else and, on too many occasions, another law applies to Travellers. What I will do is arrange a meeting between him and the Secretary of State for Communities and Local Government so that they can look at what more can be done to ensure that we have real, genuine fairness for all communities in our country.

Education Maintenance Allowance

Wednesday 9th March 2011 Commons Chamber

Keith Vaz (Leicester East) (Lab)

- Hansard - - Excerpts

A few weeks ago, my hon. Friends the Members for Leicester South (Sir Peter Soulsby) and for Leicester West (Liz Kendall) and I launched—

Mr Speaker

- Hansard - - Excerpts

Order. I apologise for interrupting the right hon. Gentleman, but may I appeal to Members who are leaving the Chamber to do so quickly and quietly, so that we can hear him present his petition?

Keith Vaz

- Hansard - - Excerpts

Thank you very much, Mr Speaker, for your protection, which I appreciate greatly.

As I was saying, a few weeks ago, my hon. Friends the Members for Leicester South and for Leicester West and I launched a city-wide petition against the Government’s proposals to abolish the education maintenance allowance. Over the next few evenings, we will each be presenting petitions from various educational institutions. This petition has been collected by those who study at Gateway college, in Hamilton, in my constituency, where the principal is Suzanne Overton-Edwards.

The petition states:

The Petition of residents of Leicester and the surrounding areas,

Declares that the Petitioners oppose the abolition of the Education Maintenance Allowance; notes that a substantial number of young people are in receipt of the Education Maintenance Allowance in Leicester; and further notes that education can provide a better future for young people.

The Petitioners therefore request that the House of Commons urges the Government not to abolish the Education Maintenance Allowance.

And the Petitioners remain, etc.

[P000897]

Teaching Assistants

Wednesday 9th March 2011 Commons Chamber

Tony Cunningham (Workington) (Lab)

- Hansard - - Excerpts

I would like to present this petition on behalf of Marie Steele and more than 120 classroom assistants from west Cumbria who are both angry and upset at Cumbria county council’s single status proposals.

The petition states:

The Petition of residents of Cumbria, and others,

Declares that the Petitioners are concerned about the plight of Teaching Assistants in Cumbria, who feel they are being unfairly treated and whose professionalism is severely under threat. The Teaching Assistants/support staff across the county are currently fighting a change to their terms and conditions that affects their hours and a considerable loss of pay. Support staff are a vital resource for the running of a school. Senior Teaching Assistants also cover classes when teachers are absent or on planning time.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Education to look into the plight of Teaching Assistants.

And your Petitioners, as in duty bound, will ever pray.

[P000898]

Points of Order

Wednesday 9th March 2011 Commons Chamber

12:31

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

On a point of order, Mr Speaker. On yesterday’s Order Paper, a debate was scheduled on coastguards, one of two debates that I had planned to speak in—

[Mr Speaker]

Order. Before the hon. Gentleman completes his point of order, may I appeal to hon. and right hon. Members who are leaving the Chamber to do so quickly and quietly so that we can proceed with subsequent business, including the point of order.

[Mr MacNeil]

On yesterday’s Order Paper a debate was scheduled on coastguards, one of two debates that I planned to speak in tomorrow. Today, it is not on the Order Paper. I found out about the change yesterday in a series of Chinese whispers and I was livid, Mr Speaker. I have not heard of a debate being changed at 48 hours’ notice. Coastguards are dismayed that the bread-and butter-issue of jobs is being overlooked in this House. Coastguards have been badly treated by the Committee, which is an alleged Back-Bench Committee, made up of Conservative, Liberal and Labour Members who have utterly dismayed me in their treatment of the coastguards. The name “Back-bench Committee” is utterly wrong. It has made this change on a whim, Mr Speaker—

[Mr Speaker]

Order. I have got the point. First, on a point of fact, people can raise points of order and with those points of order I will deal, but we are not referring to the work of an alleged Back-Bench Committee. The Backbench Business Committee is established, it is functioning in an orderly way and it is chaired extremely assiduously and conscientiously. I will not have aspersions cast on the work of the Committee. I will not have that in this Chamber.

On the point of order, let me simply say to the hon. Gentleman that I am grateful to him for giving me notice and I understand his extremely strong feeling on this matter on behalf of his constituents and on behalf of others as well. I understand that the coastguards debate is now scheduled for a three-hour debate on Thursday 24 March—

[Angus Robertson (Moray) (SNP)]

That is too late.

[Mr Speaker]

Order. The leader of the Scottish National party must not chunter at the Chair from a sedentary position in that way. It is very uncharacteristic of him and quite unnecessary. That three-hour debate will take place in Westminster Hall. As the House knows—the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), who is an experienced Member, can certainly not claim to be unaware of this—the order of business is not determined by the Chair. The hon. Gentleman is free to raise the matter with the Backbench Business Committee if he wishes. The Chair of the Committee is in her place, and although I will not have a whole series of exchanges on this—that would not be right—if the hon. Member for North East Derbyshire (Natascha Engel), who chairs the Committee, wishes to respond to the point of order and to offer explanation or clarification to the House, she is perfectly welcome to do so.

[Natascha Engel (North East Derbyshire) (Lab)]

Further to that point of order, Mr Speaker. I thank the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) for giving me notice of his intention to raise his point of order. I do not want to go into the difficulties of scheduling business, but I want to say that the Committee absolutely emphatically recognises the importance of the coastguards debate. Far from cancelling it, we rescheduled it in order to protect the full three hours of debate that it so clearly deserves. However, the notice given was very short, and I apologise for that, and I deeply regret any inconvenience that this rescheduling has caused to any Member of the House. Parliamentary business changes at a moment’s notice, but I do regret any inconvenience caused to the hon. Gentleman.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I see other members of the Backbench Business Committee bidding to catch my eye. I just said that I am not going to have a protracted exchange on this; that would not be right or a proper use of the time of the House. I think I can say, and will command general assent for this proposition, that we have had a very clear and gracious response from the Chair of the Backbench Business Committee. Other Members may agree with it or they may disagree with it; such is the stuff of democracy. But a point of order was very properly raised by the hon. Gentleman; I have responded to it; the hon. Lady has said her piece. It is not a continuing debate. The position is clear, and that is the end of the matter.

[Mr MacNeil]

rose—

[Jim Shannon (Strangford) (DUP)]

rose—

[Mr Speaker]

If, on an unrelated point of order, Mr Jim Shannon wishes—

[Mr MacNeil]

Come on!

[Mr Speaker]

Order. I have made the position very clear. It is no good the hon. Gentleman shaking his head. He asked his question, in order, he raised the point of order and I have responded to it. There has been a further come-back on the point of order. I think most Members of the House would accept that the matter has been properly aired in the Chamber this afternoon.

On an unrelated point of order, Mr Jim Shannon.

[Jim Shannon]

On a point of order, Mr Speaker. First, I thank the hon. Member for North East Derbyshire (Natascha Engel) for her response; I understand that. On the procedure, given that the coastguards issue was to be debated, and that it was on the annunciator at 10 am this morning, is it in order for the business listed in Tuesday’s Order Paper—

[Mr Speaker]

Order. I am sorry; I do not wish to be unkind. The hon. Gentleman is an extremely assiduous new Member. I very clearly said, “On an unrelated point of order.” We are not continuing this exchange. So, nice try, but I am afraid it is not in order. I shall take any unrelated points of order.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

On a point of order, Mr Speaker. On Channel 4 news yesterday evening, the Secretary of State for Energy and Climate Change described 50 kW as “an enormous amount of power. That’s the equivalent of 1,500 domestic roofs.” That is just plain wrong, and either this is startling incompetence by the Government or they have based their review of solar feed-in tariffs on a completely false premise. The review is already causing uncertainty; these comments make it worse. I wonder, Mr Speaker, whether you can use your good offices to ensure that the Secretary of State clarifies the Government’s position to this House and to the public as quickly as possible.

[Mr Speaker]

As the hon. Lady knows—and as far as I am concerned, this is very fortunate—the content of ministerial statements or answers is not a matter for the Chair. If a Minister has made an incorrect statement, there is a procedure for setting the record straight, and that will be well known to all Members on the Treasury Bench. Meanwhile, the hon. Lady has put her concerns and her interpretation of the facts very clearly on the record, and that statement and interpretation will have been heard by Ministers.

[Paul Flynn (Newport West) (Lab)]

On a point of order, Mr Speaker. There is a matter that is causing great concern within the country, but on which the Government are silent in this House: the alleged conduct of certain official representatives of this country who are cultivating friendships with some of the emergent tyrannies in the world, including Azerbaijan. Should we not also be debating in this House whether we choose our trade representatives on the principle of inheritance?

[Mr Speaker]

There is every opportunity for the hon. Gentleman to raise this matter at business questions tomorrow, and he may well choose to do so. I have got a feeling that he will be hot-footing it to the salon, as the Leader of the House describes it, of the hon. Member for North East Derbyshire, who chairs the Backbench Business Committee, because I think the hon. Gentleman will probably be pursuing a debate on this matter in that Committee’s time.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

On a point of order, Mr Speaker. Yesterday, I apologised to the House and I wish to make a further apology. Yesterday, I apologised for suggesting that the reason why the Liberals had come sixth was because the nationalists and the—

[Mr Speaker]

Order. The hon. Gentleman must resume his seat. I listened very carefully to what he said yesterday. He is very dexterous in his use of parliamentary language and he has a great sense of humour, but what he must not do—I say this in all seriousness—is abuse the point of order procedure to make apologies that transpire to be nothing of the kind and are really carefully crafted partisan points which suit his book. I cannot believe that he would ordinarily want to do that, but I think he was planning to do it today and I cannot allow him to continue with it.

[Naomi Long (Belfast East) (Alliance)]

On a point of order, Mr Speaker. On two occasions during Prime Minister’s Question Time—both this week and in previous weeks—the Prime Minister has asserted that money that is going to be released by reform of the coastguard service will be redirected into front-line rescue missions. However, this is actually done by charitable organisations such as the Royal National Lifeboat Institution, and it is unclear as to how the transfer will take place. Would it be in order to request that the Minister responsible provide either a written or an oral statement to the House to clarify the link between the two?

[Mr Speaker]

The decision on whether to make a statement is a matter for the Government, as is the form that the statement takes. Otherwise, my earlier remarks about the procedure for correcting ministerial inaccuracies apply to the hon. Lady’s point of order.

If there are no further points of order, we will move on to the ten-minute rule motion, for which the hon. Member for Cheltenham (Martin Horwood) has been patiently waiting.

Tied Public Houses (Code of Practice)

Wednesday 9th March 2011 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

12:41

[Martin Horwood (Cheltenham) (LD)]

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to introduce a statutory code of practice to require certain pub owning companies to provide their tied lessees with a guest beer option and the option to become free of tie accompanied by an open market rent review; and for connected purposes.

I should straight away express my appreciation for the support that this Bill has received from hon. Members on the Liberal Democrat, Labour and Conservative Benches; the hon. Member for Na h-Eileanan an Iar (Mr MacNeil); the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd); the hon. Member for Brighton, Pavilion (Caroline Lucas); the Campaign for Real Ale; the Federation of Small Businesses; and the all-party Save the Pub group. I am grateful for all their support.

In bringing the subject of beer and pubs before this House, I stand in a fine Cheltenham tradition: my Liberal Democrat predecessor, Nigel Jones, now Lord Jones of Cheltenham, was chair of the all-party group on beer; his Conservative predecessor, Sir Charles Irving, was himself a licensee; and the longest-serving Member for Cheltenham, another Conservative, the right hon. Sir James Agg-Gardner, was a local brewer. In 1848, the very first MP for Cheltenham, a great Liberal, the hon. Craven Berkeley, risked the wrath of the religious lobby in the town by trying to delete the fixed opening hours for pubs on Sundays from the Sale of Beer Bill. All of them shared an appreciation of the very special and much-loved role that pubs play in our national life. As Lord Jones has said,

“a pub does not just sell beer. It is a social centre, providing meals and snacks, raising money for local charities and diversifying offerings all the time.”—[Official Report, House of Lords, 11 December 2008; Vol. 706, c. 559.]

He might have added that pubs are places where national sports are watched in good company and local sports teams are formed—indeed, hugely popular skittles leagues operate almost nowhere else.

The pub is the hub scheme, another one of those inspired initiatives for which His Royal Highness the Prince of Wales gets insufficient credit, has shown that, imaginatively used, pubs can provide a location for community shops, post offices and even youth centres. Of course, perhaps most importantly of all, they provide a social drinking environment, open to families and pensioners, and to new drinkers and old regulars. Pubs are personal enough to exert peer group pressure on those who might be tempted to drink irresponsibly and people who really have had too much are refused another in them, as they should be everywhere.

The British pub is a unique institution—it is a product of history that would be very difficult to recreate if we ever lost it. But we are losing our pubs, at the rate of as many as 40 a week; we are losing thousands a year. The list of lost pubs in Cheltenham includes the Greyhound, the Cat and Fiddle, the Bass House, the Duke of York and four others since just 2007. Whole communities, such as Whaddon in my constituency, are now without any local pub. Even where the pub does not close, many publicans are finding it harder and harder to make ends meet, and many go bust only to be replaced by a rapid succession of new tenants or lessees.

The reasons given for the decline are many, and I acknowledge that they are not restricted to the tied public houses which are the subject of this Bill. Such reasons include everything from happy hours to economic downturn, supermarkets and lifestyle changes.

In 2004, the Federation of Small Businesses was so concerned about a particular issue that it asked the then Select Committee on Trade and Industry to investigate. That issue was the profoundly unequal relationship between tenant and lessee landlords and the big new pub companies, or pubcos. At the heart of this relationship is the tie—a strange addition to the normal landlord and tenant business relationship that applies to short-term tenants and long-term lessees. In what should be a relationship of mutual benefit, tenants and lessees have to pay a premium of 40% or more on the open-market rate for beer. I have seen invoices side by side for the same quantity of the same beer to support this contention. Those tenants and lessees also have to pay rent based not on the normal calculations of square footage but on the rather obscure and highly subjective judgment of the pub company of estimated earnings of a reasonably efficient operator. In other words, the pub company calculates the maximum amount it can extract from the business and charges it. In return, publicans get apparently valuable business and marketing support from the pubco.

That first Select Committee inquiry rang alarm bells about the state of the industry but was pretty gentle on the tie itself, weighing up the benefits and costs for publicans. Self-regulation appeared to be the name of the game and the Committee shied away from recommending a legally binding code of practice, although it did say that

“Government should not hesitate to impose a statutory code”

if matters did not improve. The follow-up report in 2008 by the Select Committee on Business and Enterprise was much more damning and included its own commissioned research into the state of lessees’ businesses. The research found that 78% of lessees were dissatisfied with the tie, that 67% were earning less than £15,000 a year and that 50% were earning less than that even when their pubs were turning over more than £500,000 a year. The majority believed that the tie with the pubco did not add value to their business. The Committee concluded:

“The imbalance of bargaining power persists”

between pubco and publican. It went on:

“The arrangements for assessing rents remain opaque…Rental assessment should be the basis for negotiation, but incumbent lessees often risk loss of their home as well as their business if they cannot reach agreement.”

This time, the Committee concluded that it had

“no confidence that the advantages of the tie outweigh its drawbacks.”

Another follow-up report by Select Committee on Business, Innovation and Skills in the following year reviewed the new British Beer and Pub Association framework code of practice and concluded that it represented only “modest progress” and that the issues surrounding the tie had not been resolved. The Committee suggested a deadline of June 2011 for self-regulation to give way to statutory regulation. Its message to the pubco industry was clear:

“If it fails to deliver on its promises by June 2011, it should be in no doubt what the reaction will be.”

Well, June 2011 is not far away and I can tell the House that new FSB research still paints a gloomy picture. According to its preliminary findings, 91% of its tied pub members do not think the tie allows them to make a fair profit. More than 85% believe it prevents them from competing effectively in the marketplace and the same number would like to be free of the tie. One FSB member told researchers:

“Enterprise Inns are happy for any tenant to fail. They would sell a pub and land for top market value and only then reinvest in other property to suit. They are, after all, property and land developers”.

That might be harsh but there is a serious breakdown in the relationship between the pubcos and their tenants and lessees, whose businesses continue to fail at an alarming rate while we continue to lose pubs at the heart of many communities.

A quick glance at the latest BBPA framework code of practice and the codes of practice used by the two leading pubcos, Enterprise Inns and Punch Taverns, highlight the inequality of the situation. Potential tenants and lessees are given a terrifying list of responsibilities. They are urged to engage solicitors, get structural surveys, talk to the police, environmental health and other appropriate authorities, check if a Highways Act licence is in place, engage their own qualified accountants and stocktakers, apply for their own gaming licences, obtain an asbestos survey, a full electrical report and a gas safety certificate, and so on—all at their own expense. The pubco helpfully offers training in food safety, health and hygiene, drug awareness, first aid and door management, along with repairs, maintenance and insurance—but also at the publicans’ expense. Indeed, publicans are not allowed to get insurance from anywhere else.

The real support that the pubco provides, outside the rather opaque area of the rent, is in marketing and advice on the product mix, legal compliance and cash-flow and financial management. That is helpfully explained in one of the codes of practice: it is given face to face, typically for one and half hours, once every 12 weeks. That adds up to less than one working day of face-to-face business support a year, in exchange for which the pubco could extract between £15,000 and £20,000 of value from lessees’ businesses.

It is difficult to escape the conclusion that unless Parliament steps in, we will see those pubcos manage even more traditional British pubs into oblivion. The Bill does not ban or abolish the tie, but it does aim to replace the codes of practice with a statutory one, as recommended by the Select Committee, and almost in time for its deadline, along with a guest beer option and the option for lessees to relinquish the tie in a process that is fair and transparent to both parties. My illustrious and sociable predecessors would be proud of us if we saved the pub that they all enjoyed, and future generations will thank us if we help to save the traditional British pub for them to enjoy as well. I hope the Bill will help us to do just that, and I commend it to the House.

Question put and agreed to.

Ordered,

That Martin Horwood, Greg Mulholland, Tony Cunningham, Neil Carmichael, Mr Angus Brendan MacNeil, Mr Elfyn Llwyd, Caroline Lucas, Stephen Metcalfe, Lisa Nandy, Lorely Burt, Stephen Williams and Jackie Doyle-Price present the Bill.

Martin Horwood accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 10 June, and to be printed (Bill 160).

Welfare Reform Bill

Wednesday 9th March 2011 Commons Chamber

[Relevant documents: The oral evidence taken on 26 January and 9 February 2011 by the Work and Pensions Committee on the White Paper on Universal Credit, and the written evidence received, HC 743.]

Second Reading.

[Mr Speaker]

I have selected the amendment in the name of the Leader of the Opposition.

12:52

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I beg to move, That the Bill be now read a Second time.

The Bill before us today covers a number of areas, but I hope that it sets a new course for the welfare state. I believe it will enable us to reach out to some of the groups of people who have become detached from the rest of society—trapped, too often, in a permanent state of worklessness and dependency. For the sake of the House, I will go through the relevant clauses of the Bill. I am sure that colleagues on both sides of the House will want to intervene. I hope they will recognise that we shall get to most of the clauses that they want to discuss, but I will take interventions as and when they come.

The problem is that although from 1992 to 2008 this country saw some 63 consecutive quarters of growth, and 4 million more people were in employment by the end of that period, before the recession had even started we still had some 4 million-plus people on out-of-work benefits. The question is: where did all those jobs go? Under the previous Government, over half of the jobs created went to foreign nationals. This is not an immigration point; it is a point about supply and demand. There were a group of people in this country completely unable, it appears, to take advantage of that long period of growth and job creation. In essence, the key point about the Welfare Reform Bill is that it is intended to help that group.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I am grateful to the right hon. Gentleman for giving way so early. I wondered whether, at the outset, he would like to comment on the reports in today’s Telegraph that the cancer charities are warning that his proposals for employment and support allowance will penalise those who do not recover soon enough. How could anyone think that that is a fair approach, in a Bill like this?

[Mr Duncan Smith]

I think the report was in The Guardian. I do not know whether it is in The Daily Telegraph.

[Steve McCabe]

The Telegraph too—you’re famous.

[Mr Duncan Smith]

I read The Guardian; he reads the Telegraph. What can I say? Times really are changing.

I have read the report, and I think that a number of elements in it are simply not altogether correct. I say that rather carefully because the point about the cancer aspect is that, as the hon. Gentleman knows, we inherited from the previous Government a process of reform and change to the employment and support allowance, which included the work capability assessment. We supported that, with the previous Government, because it was the right thing to do—to look at the 1.5 million people on incapacity benefit and check them over. We did not inherit any real allowance for cancer sufferers. It is important to make this clear. The Employment Minister, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), immediately accepted the internal reviews, but went further. He asked Professor Harrington to conduct a review of what we did regarding cancer patients and others, and the hon. Gentleman, being a generous individual, will know that we then incorporated a big change, so that a person in cancer treatment—chemotherapy—who is between treatments will go straight on to the support element. Thus the contributory aspect will not affect them, because while they are on the support element they will continue to be supported when they are out of work.

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Mr Duncan Smith]

One second. Would the hon. Lady forgive me? I have been asked to answer a question and I shall try to answer it. We have already made some very substantial change to support people in cancer treatment. The concerns of Macmillan and others relate to oral chemotherapy. I understand that. We have already asked Professor Harrington, in his second review, to undertake to give some advice on that. We have a slight problem with that from the start, because it is a fairly new form of treatment and a limited number of people are on it. So far, much of the medical evidence suggests that it does not affect people in the way that intravenous chemotherapy does; it is not as debilitating. We remain open to that evidence.

Although there is no provision for oral chemotherapy right now, my right hon. Friend the Employment Minister has made it clear that Professor Harrington will review the subject and take evidence, and we have asked the cancer groups to offer up their thoughts and advice, in addition to the medical fraternity. We will take account of what Professor Harrington says. As the hon. Member for Birmingham, Selly Oak (Steve McCabe) knows, last time we adopted all the recommendations in the professor’s report in their totality. So we are not in the business of trying to harm or affect cancer patients; quite the contrary. We made some very serious changes to what we inherited from the previous Government—I would like to think that they would have done the same—and we will continue to do so. I hope that answers the hon. Gentleman’s question. If he will let me get on with the rest of the Bill, I will.

[Naomi Long (Belfast East) (Alliance)]

Will the right hon. Gentleman give way on that point?

[Mr Duncan Smith]

I would like to make a bit of progress, if the hon. Lady does not mind. I think I have been pretty generous on that aspect. I will return to it.

The key is that I hope the Bill in general—we shall get to the more specific elements later—represents a whole new concept: a contract with people who are in need of support. For those who are able to work, work should pay, and for the most vulnerable in society we will continue to provide the support that that they need. I think it is our duty to do so. We can debate the levels of that support, but it is our duty none the less.

The Bill says to the taxpayer, “Your hard-earned money must be spent responsibly.” We sometimes forget, in our debates on welfare, that the taxpayer is also a player in this, because taxpayers—many of them on low and marginal incomes—are constantly being asked to pay in taxes towards support for others. That is fair, but we have a responsibility to ensure that taxpayers too are properly supported. I shall now outline some of the principles of the Bill, and then I will try to get through the various clauses.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

Forgive me; I want to make progress before I take more interventions, but I certainly will not shy away from interventions.

I note the comments by my opposite number, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), that his party agrees with more than

“three quarters of the principled and burden-sharing”

changes that the Government are making. Obviously, in his interventions he will make clear what he does not agree with. I have read his amendment and there will be some questions about some of that; I am sure we will get to that in a minute.

I intend to take the House through the Bill stage by stage. Let me start with universal credit. I shall begin with an overview, and then consider some of its detailed aspects. The universal credit obviously sits at the heart of this welfare reform. I do not think I would want to embark on this process if that were not the case. I believe it is a commitment to the public that work will always and must always be made to pay, particularly critically for that group of people who are probably the most affected—the bottom two deciles of society—who have too often found it really difficult to establish that work does pay.

I am pleased to say that those principles seem to have received support from a number of stakeholders, including Citizens Advice and the Institute for Fiscal Studies. The IFS said that by and large the measure was a progressive change. We anticipate that the universal credit will make some 2.7 million households better off. Over 1 million households will be better off by more than £25 a week—clearly, those will be down in the bottom deciles—and 85% of that increase will go to households in the bottom 40% of the income distribution.

We have agreed a package of transitional protection which will ensure that there are no cash losers as a direct result of the migration to universal credit, where circumstances remain the same. The universal credit should also start making inroads into the couple penalty. Members on both sides of the House agree that that is necessary. I know that the right hon. Member for Birkenhead (Mr Field), who is in his place, has made great play of that over the years, and many of us have agreed with him.

[Mr David Evennett (Bexleyheath and Crayford) (Con)]

I am listening with great interest to my right hon. Friend’s speech. Can he give me some further detail on how the benefit cap will be introduced?

[Mr Duncan Smith]

I was coming to that, but I shall touch on it now; I may make some further comments later. The principle is that people who are unemployed and on benefits should not be receiving more than average earnings. It is a matter of fairness, so that those who are working hard and paying their taxes do not feel that someone else will benefit more by not playing a full part in society. We recognise that there must be transitional arrangements. We will work intensively with the families affected once the cap comes in. We will help them move into work, to change their circumstances so that they are not affected. We will make sure that families who need transitional support will receive it. We will make more detailed statements about that later.

The idea is that we should encourage people back into work, and most of all that people who are in work and paying their taxes should feel that it is fair that while they earn and they work hard, others realise that the best way to increase their income is through work, not through benefits. That is a great principle.

[Mr Slaughter]

According to the right hon. Gentleman’s Department, 70% of those affected by the benefit cap live in social housing. The Housing Minister is building only unaffordable housing, because of the rent levels set. Is not the cap just a crude piece of social engineering, forcing people not to live in expensive areas, such as the constituency that I represent? Is it not directed at vulnerable people and the poorest in society, making it possible for them to live only where the Secretary of State chooses for them to live?

[Mr Duncan Smith]

With respect to the hon. Gentleman, it is not about where I choose for them to live. As with everybody else, it is about where their income and their ability to earn allow them to live. There are many people in London, for example, who work hard and who commute well over an hour to get to jobs because they cannot afford to live in parts of central London. We may argue that the cost of living in London is too high. One of the arguments that I would make is that the way that the previous Government’s local housing allowance was set drove up rents in both the private and the social housing sector. The hon. Gentleman should consider that what we are doing is reasonable. What we are trying to do is not to damage people, but to get them in locations where they can afford both to live and to work. I will return to that.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I shall make a little more progress.

May I confirm that we shall move from the universal credit making inroads into the couple penalty to a subject on which I am sure many right hon. and hon. Members will want to speak—child care costs in universal credit? I can confirm that support for child care costs will be provided by an additional element paid as part of the universal credit award. We will invest at least the same amount of money in child care as in the current system, and we will aim to provide some support for those making their first moves into work, so that the support available is not restricted to those working more than 16 hours.

This is an important point. Although there is a debate about it, we must remember that working tax credit gives that child care support to those in the relevant band. Universal credit will allow claimants to adjust their hours of work to suit their child care responsibilities. It will allow people to set their hours of work more in line with their caring responsibilities. It will cover all the hours that people are planning to work. We will be much more flexible, and we intend to work closely with relevant groups to take further advice about the rates that we will set. By the time the Bill reaches its Committee stage, we will be able to be more specific.

[Kate Green (Stretford and Urmston) (Lab)]

Can the right hon. Gentleman confirm that as a result of that further consideration, there will be no circumstances in which, as a result of child care costs, a parent could be faced with a marginal deduction rate of more than 100%, as some models prepared for us by Family Action have suggested?

[Mr Duncan Smith]

That is not our intention, and it is why we were are proceeding carefully and consulting about our proposals. The purpose is to maintain incentives to go to work. Universal credit is designed to encourage lone parents to go to work, but it recognises their need to meet their child care responsibilities. We can debate the various elements, but the principle is that the measure should be more than helpful to them. We will move on to the finer detail as we get to Committee stage.

As we increase support to make work pay, it is right to ensure that claimants do everything they reasonably can to find or prepare for work. As the House knows, we will tailor conditionality to individual circumstances, and require all claimants to accept what I call a claimant commitment. From the outset they will be asked to sign up to the idea that we will provide them with the necessary support and access to universal credit, but we will also expect them to recognise that the sanctions regime is applicable. It is easy to understand. If they do not comply with that as they go further through the process, they are likely to encounter that sanctions regime at key moments.

The toughest sanctions will apply to those who are expected to be seeking work but fail to meet important conditions. They should understand that if they keep on crossing a series of lines, they will invoke the sanctions regime. The problem at present is that the regime is often confusing. I have visited jobcentres a number of times—and I see on the Opposition Benches one of the Members who used to be a Minister in the Department. As he knows, if one talks to jobcentre staff, they will say that the problem is that when claimants reach the point where they are about to hit sanctions, it comes as a big surprise to many of them that sanctions will be imposed and that the situation is real and serious.

By letting claimants know much earlier and by introducing a regime that is easy to understand, with a simple tripwire process, they will know from the word go. That should disincentivise people from taking the wrong turns. Benefits will be taken away for three months after a first failure, six months after a second, and three years after a third. That will apply to those at the top level—in other words, those who are fully able to search actively for work and to take it. There are, however, other categories. The same conditions would not apply to lone parents, for example.

[Hywel Williams (Arfon) (PC)]

The rate of worklessness and the availability of jobs vary from area to area. What account will the sanctions regime take of that variation?

[Mr Duncan Smith]

The sanctions regime is about work being available. If work is not available, people cannot be expected to take jobs, so I give the hon. Gentleman the assurance that no one will be told that they are on sanctions if there is no work available. The sanctions apply only if a job is available, the claimant has been offered it and for one reason or another has not taken it, or if they are not complying with the details of what they are meant to be doing to seek work. That is only fair. People who pay their taxes want to know that everybody out there is seeking work. If they are seeking work sanctions should hardly ever apply, and in most cases they will not apply.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The right hon. Gentleman is making a thoughtful speech, and I know him to be a thoughtful and caring politician. I will give careful consideration to much of the Bill and I will not vote against Second Reading. Is it not spoilt, however, by what is happening to the mobility component of disability living allowance? I visited a residential home in Huddersfield, in Edgerton, only last week. The Bill will destroy the lives of most of those people, 60% of whom are in wheelchairs.

[Mr Duncan Smith]

I thank the right hon. Gentleman—although I am not sure: is he a right hon. Gentleman? [Interruption.] An hon. Gentleman—okay. That is something that his party should do—it is not for me—given his record of service.

Yes, I accept that there were issues. In fact, when we looked at the decisions taken at the time of the spending review, I reviewed the matter, after discussing it with the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller), who is the Minister responsible for these matters. We visited lots of care homes—my hon. Friend went out to see people and talk to them—and we realised that there was a lot of chaos out there about what should be given to people in care homes, what care homes themselves provide, and what local authorities believe it is their statutory responsibility to provide. Some of them say that they do not have any such responsibility to provide mobility services, but others say that they do, and provide access to such services.

We have therefore changed the provisions in the Bill, as the hon. Member for Huddersfield (Mr Sheerman) has probably noticed. That will be incorporated in the review of disability living allowance. Our objective is to get rid of the overlaps, genuinely to find out what can be provided at local level, and to figure out what the amount should be to support someone in a care home, bearing in mind that mobility needs in a care home are likely to be variable, and different from the needs of someone living in the community completely independently. Adjustments will be necessary, but my hon. Friend and I give the hon. Gentleman and the House an undertaking that we are going to try to figure out what the right answer is. We will work out a set of figures, and how they can be applied. That is the purpose of the review; I guarantee that.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

Reflecting on what the Secretary of State has just said, does he recall that on several occasions, the Prime Minister has been given the opportunity to say that he has listened to the evidence and accepts that there is virtually no support for withdrawing the mobility component of disability living allowance for people living in residential accommodation? To what extent does the Secretary of State’s position differ from the position taken again and again by the Prime Minister?

[Mr Duncan Smith]

We are as one. I say that immediately, before I explain the position.

The reality, for the Prime Minister and for me, is that when we understand that certain facts are slightly different from what we thought they might have been, we always modify what we are doing to make sure that the effect of what we are trying to do is reasonable and produces the best results. All I can say to the right hon. Gentleman is that the Bill is not the same as the one that he would have seen some weeks ago. We are not knocking out the mobility component from care homes, and we have included it in the review of what mobility provisions are necessary and required for people in care homes. That is the real principle behind the measure. My previous comments were about finding the overlaps, and how we made sure that they did not cost people money in one area, but found those costs in other areas. That is the main point of the review, and I have asked my hon. Friend the Under-Secretary to make sure that that is the case. The Bill covers that, and I hope that most people will see that it is quite reasonable to try to recognise what that figure is.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I shall try to make progress, if hon. Members do not mind, because I have given way quite a lot on that subject.

Before the introduction of the universal credit we will introduce many of the changes to conditionality and sanctions that I discussed. Claimants, I hope, on that principle will accept the claimant commitment, as they will be subject to tougher regimes that are fair and reasonable. Turning to other benefit changes, we are making changes to the income support regime for lone parents before the introduction of universal credit. Lone parents who can work will be expected to claim jobseeker’s allowance when their youngest child reaches the age of five. We want as many people as possible to get help to engage with the labour market, and we know that about 80% of all lone parents are working or would like to work.

There will continue to be safeguards to allow parents to fit their job-search requirements with their caring responsibilities and child care availability. There are other relevant changes, too, and I accept that there have been concerns about them. I would be interested to learn the Opposition’s position on that. We are making changes to contributory employment and support allowance, time-limiting receipt to one year for those in the work-related activity group. There will be no change for those in the support group, as we have made clear, and people claiming income-related employment and support allowance will be unaffected.

I note the comments that have been made by the right hon. Member for Birmingham, Hodge Hill, who accepted, in his speech to the Institute for Public Policy Research, that time-limiting ESA is the right thing to do, but disagreed about the period—in this case, a year, whereas he was talking about two years. However, that is not clear in the amendment to the motion, so I wonder whether he could clarify the position. The amendment opposes the limit altogether, rather than the number of years. I would happy to accept an intervention from the right hon. Gentleman if he wished to clarify the position. [Interruption.] He will cover it in his speech—very good. I hope that we will understand that, as principles and practicalities need to come together.

I would point out to the right hon. Gentleman and to everyone else that the one-year limit is twice as long as that currently in place for jobseeker’s allowance. There has been discussion of people undergoing cancer treatment and others. That is best dealt with under the ESA regime and reviews, so that we can decide which groups are relevant, and which not, as we have done with some cancer patients undergoing chemotherapy. They have been taken out of that provision because they are in the support group. Professor Harrington’s review is the best way of doing that. We have established the principle of receipt for a year, and the rest is about the details of the conditions that best apply, and that can be dealt with in the Harrington review.

That best reflects the different nature of ESA and the different needs of those who claim it. However, we simply cannot pay those benefits indefinitely. I wonder whether that would have been the previous Government’s position if they had undertaken further reviews. For limited contributions under ESA, it would have been feasible for someone to receive ESA for their rest of their life. That was one of the big issues that we had to tackle.

[Sheila Gilmore]

rose—

[Mr Duncan Smith]

I will give way to the hon. Lady, because she has been persistent.

[Sheila Gilmore]

I thank the Secretary of State for giving way. ESA is not given indefinitely, because there are constant assessments and reassessments. I have constituents who have been reassessed twice in the past two years and who are due for another assessment. It is not true that someone who receives contributory ESA will receive it for ever without assessment. The assessment process should cover that, without an arbitrary cut-off date.

[Mr Duncan Smith]

I remind the hon. Lady that in the support group, the contributory element does not apply. It applies to people with finances that take them above the line. The income-based measure continues—that is not the issue. The issue is whether we think that people who have contributed for a certain time have the right to contribution-based benefit, regardless of their income, for a period of time. That is the debate. The income-based measure is exactly the same—it is not going to change, so that meets the hon. Lady’s concerns.

[Sheila Gilmore]

rose—

[Mr Duncan Smith]

I think that I have dealt with that.

There are other changes, including the consumer prices index uprating, in the Bill. We must get to grips with the housing benefit system, which ran out of control under the previous Government. I have a deep suspicion that they knew that before they called the election, and I sense that there were big differences about whether they would do something about this. Over the past 10 years, overall spending on housing benefit has almost doubled from £11 billion to £21 billion, which is a huge increase. I accept some of the arguments about the reasons for that—the fact, for example, that house building fell to a record low, and more and more people had to be moved into the social rented sector—but the reality under the local housing allowance regime was that we lost control of spending. We have therefore introduced a number of changes to the local housing allowance, including a move to annual uprating in line with CPI. Restricting uprating should enable us to keep downward pressure on rents. Only if an increase in local market rents exceeds the annual rate of CPI will the restriction apply. That will also be an important step towards the integration of housing support with the universal credit.

We accept that those changes will not be easy for some people, which is why we want to provide a great deal of transitional protection. Essentially, we have put up a total of about £190 million to smooth the transition to those measures for those who are most likely to be deeply affected. That includes £130 million in discretionary housing payments, £50 million to assist people with housing advice and removal costs and £10 million for homelessness prevention, particularly in London. That, coupled with the other changes that we have already made through regulations, where we are looking at making direct payments to those who are able to lower their rents and at delaying the point at which the measure comes in by some nine months, was a product of listening to people’s main concerns and trying to ensure that what we bring in is doable and manageable by councils.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

On the right hon. Gentleman’s point about housing benefits, what discussions has his Department had with housing associations and their lenders about the disaggregation of housing benefit under the universal credit and the direct payment to housing associations? They are deeply worried that, without that direct payment capacity across the piece, arrears will rise and lenders will become more nervous.

[Mr Duncan Smith]

We have had, and continue to have, those discussions, and I understand the concern. There is a debate, on both sides of the argument, about whether we basically continue with the principle that we should pay people and deal with certain elements of what they receive because they are not capable of doing so themselves, or whether we try to get people to the point where they are capable of managing their own money more and more. I recognise from the hon. Lady’s intervention that, on this matter, there is no absolute, but there is at least a debate on both sides, and that is simply where we are at the moment—trying to discuss the issue with those who feel that they would be most affected.

[Mr Stewart Jackson (Peterborough) (Con)]

Was it not a moral catastrophe and economic madness when, under the previous Labour Government, registered social landlords had no incentive to tackle welfare dependency, because their main funding stream was housing benefit? Under this Bill, registered providers will have an opportunity to tackle welfare dependency among their tenants.

[Mr Duncan Smith]

What we want from the Bill is to encourage people to get involved in the process—to help people to use it as part of the incentive of trying to make the right decisions about taking work and providing for their families.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Will the right hon. Gentleman consider the example of a married couple who are at work and have five children from previous marriages, but then lose their jobs because, for instance, they work for the local council? Because they have five children, they would get almost £500 of personal allowance and £200 of housing benefit, taking them over the £500 cap. Rationally, they might choose, because of the £500 cap, to split up their family so that there are three children and two children in two houses, each with £250 of personal allowance and £200 of housing benefit, making a global total of £900, when it would have been £700. Surely his policies of breaking up families and making demands for more and more social housing, alongside making people unemployed, do not add up to fairness or competence.

[Mr Duncan Smith]

I understand the hon. Gentleman’s point and can, I hope, assure him that as the Bill progresses, and as he will see as we reach Committee, our objective is to recognise that unemployment, for those who fall unemployed, is probably a temporary condition. He will understand that point more as we get into the detail, but trying to find some way of protecting such people through that process is critical to us, as the vast majority will be back in work within a set period: 90% of people will be back in work within a year. Most people will get through that process, and it is for us to ensure that the transition is met and dealt with, but I think that he will be very happy in due course to hear what we propose.

[Charlie Elphicke (Dover) (Con)]

Will my right hon. Friend give way?

[Mr Duncan Smith]

I am going to make a little progress, because I am conscious that we have a limit. Mr Speaker is looking at me benignly, but he might not look so benignly shortly.

It is time for fundamental reform of the social fund, which is poorly targeted and open to abuse. Some 17,000 people have received 10 or more crisis loans in the past 12 months, and we have already taken steps to limit the number of crisis loans for living expenses to three in a 12-month period. Those are important steps, because the fund has been somewhat out of control and is complex. The Bill will then pave the way for local authorities in England to deliver a system of assistance that should replace the community care grants and some crisis loan provision. This is a complex area, and many will know more about it than I do, but the key point is that we are trying—

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

In a second. I think that the hon. Member for Bolton South East (Yasmin Qureshi) was slightly before the hon. Lady.

The key thing that we are trying to do is to give local authorities an element of control over some of the process, including in particular what I call the crisis loans short-term element—the hiatus moment in the payments,—and some of the community care grants. The point is that, when the fund became only distantly linked to the Department, the telephone concept behind it allowed people to push up the number of claims, because they were not seen or understood, so their cases were not properly known and it was very difficult to decide whether they were true or false. Local areas will be far better able to recognise who such people are, what conditions they are in and what circumstances apply to them. Therefore, localising the process will be very important. Of course, huge swathes of it will remain centralised, but we feel that those two elements in particular will most respond to localisation.

[Yasmin Qureshi (Bolton South East) (Lab)]

I understand the Minister’s explanation of the social fund, but a linked point is that thousands of young children currently receive a free school meal, the only hot meal that most of them get, and that some people also receive free prescriptions. Can the Secretary of State assure us that those who receive free prescriptions and free school meals will continue to do so?

[Mr Duncan Smith]

That is exactly what we plan to do, but, because of the universal credit, we will have to be a little more specific, and we will be so in Committee. We are still looking at the best approach to take, but that is exactly what we plan to do. We do not want—the purpose is not—to disadvantage anybody who receives such support, but, because of the way the universal credit works, we will have to think through carefully how we achieve that. The principle behind the measure will remain that we want to support those who are in difficulty and receive support as it stands.

[Mr Slaughter]

Will the Secretary of State give way?

[Mr Duncan Smith]

I think that the hon. Member for Banff and Buchan (Dr Whiteford) was before the hon. Gentleman, and he has had a shot.

[Dr Whiteford]

Returning to crisis loans, my greatest concern is that people who go for them will not be able to buy essential items such as cookers and beds. That will push them straight into the arms of loan sharks and other high-cost lenders, and that issue has been overlooked. I also question the view that the increase in the uptake of such loans has not been down to the recession and the hardship that people have faced.

[Mr Duncan Smith]

The answer to the hon. Lady’s question is that budgeting loans will still be available for those cases. On the second question that she raises about crisis loans being down to the recession, the trend of upward claiming was on track and had started long before the recession.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

With the telephones.

[Mr Duncan Smith]

My hon. Friend has made that point to me again and again. The key problem resulted from the changes that were made to dislocate much of the process from people—face to face—who knew what was going on in their communities. I think—I hope—this Bill will change that, because local communities will now be able to determine how best to deliver that critical service, and they will be closer, I hope, to people who need it. That is the principle behind it, and I hope the House recognises that.

The remaining discretionary elements of the social fund, as I indicated earlier, will stay in the wider benefit system, and we will introduce payments on account to replace alignment payments and the interim payments of benefit when crisis loans are abolished, a point that my hon. Friend the Minister has also made on several occasions. We will extend the provision of budgeting loans so that they are available to help people, as I said to the hon. Lady just now.

On disability living allowance, the personal independence payment and the changes to and reforms of them, I believe—and the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke, in her consultations, has by and large obtained widespread agreement—that we need to start reforming disability living allowance. I think most people accept that the system we inherited does not deliver for some of those in genuine need, particularly given its confusing nature. Disabled people often tell us that the claims process is incredibly complicated and decisions are not consistent. We need to sort that out.

Many people—a significant number—still wrongly believe that DLA is an out-of-work benefit, so, as people said on several occasions during the consultation, “Being in receipt of DLA is a reason why you wouldn’t want to be getting involved with work; you might lose your DLA.” Such confusion is absurd, because that is not the case, so we need to sort the issue out, and I hope people recognise that it is important.

About 50% of those currently receiving DLA did not have to provide any additional evidence to support their original claim, and more than two thirds of current recipients have an indefinite award. That means basically that no one is ever going to see them again, yet their condition may change; it may worsen or it may get better. That is why we propose to replace DLA with a new system—the personal independence payment, or PIP. This benefit will be awarded on the basis of a more objective assessment of individual need; that assessment is vital. The money will continue to be paid to people in and out of work, and it will not be means-tested. I want to be clear that we do not intend to take away the mobility of people in residential care. As I explained earlier, this is about overlapping payments. The review will cover all that. The key thing is reform.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

There is a great deal of uncertainty about how children might be affected by the reforms to DLA. Is the Secretary of State proposing further consultation? Is there any information that he can give about future processes regarding children?

[Mr Duncan Smith]

We are consulting on that. However, this is going to be done later on, so we will have plenty of time to hear many more representations concerning children before we make any decisions. My hon. Friend the Under-Secretary is already talking to various groups about this particular issue.

[Jim Shannon (Strangford) (DUP)]

In relation to the indefinite awards, there is already a system in Northern Ireland whereby people have periodic checks, and I am sure that Northern Ireland is no different from the rest of the United Kingdom. If there is already a system of regular checks in place, why change that?

[Mr Duncan Smith]

Because it does not apply to everybody; it is very patchy. The honest truth is that no award we make should say to people, as has happened too often in the past: “You are in receipt of a particular benefit and we don’t want ever to see you again.” If the hon. Gentleman is arguing, as I think he is, that it is right to see people, surely we should be arguing that it is right to see them all to ensure that when their condition changes, that is met. That is surely fair both to them and to the taxpayer.

[Mr Tom Clarke]

Despite the right hon. Gentleman’s assurances, I ask him to look again clause 83(2), which says:

“The condition is that the person is an in-patient of a hospital or similar institution, or a resident of a care home, in circumstances in which any of the costs of any qualifying services provided for the person are borne out of public or local funds by virtue of a specified enactment.”

That is absolutely clear, but, with great respect, it is not what he is telling us.

[Mr Duncan Smith]

I am afraid that I do not agree with the right hon. Gentleman, because that is exactly what I was saying. The provisions gives us the opportunity to do just that; it does not specify what we do, but it tells us that this is what we are going to be doing. We are looking at all this because, in our view, we need to come forward with an amount that is relevant to the mobility that is necessary for people in care homes.

[Mrs Anne McGuire (Stirling) (Lab)]

The Secretary of State is playing with words. The hon. Member for Strangford (Jim Shannon) is right. Although reference is made to an indefinite award, these awards have always been liable to review. If someone has an irrecoverable disability such as permanent blindness, what is the value in regular reviews to assess whether they are still entitled to DLA or the PIP?

[Mr Duncan Smith]

As I said to the hon. Member for Strangford (Jim Shannon), it is assumed straight away that this is a terribly intrusive process, but in reality what goes on is patchy. For many people, their condition may well have worsened. Do we simply want to say that we should not speak to them or see them, and that it is therefore left up to the vagaries of the system? It is not built into the system that they will be seen.

[Mrs McGuire]

rose—

[Mr Duncan Smith]

Wait a minute. The right hon. Lady has made a point and I am trying to respond to it. As this is not built into the present system, it is left to decision making, which can be very ad hoc, about who someone sees and when they see them. All I am saying is that if we believe it is right to see people, we may then be seeing somebody whose condition has worsened, and surely that is an advantage.

[Mrs McGuire]

rose—

[Mr Duncan Smith]

I am going to press on, because I think that I have dealt with the right hon. Lady’s point. She may not agree with me, but I think that this is the right position for us to take.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

This is an extremely important point. Is the Secretary of State saying that someone who is deaf-blind will be recalled for regular checks under the regime that he is aspiring to put in place—yes or no?

[Mr Duncan Smith]

The detail of how that works will be looked at during the passage of the Bill. My point is that built into this should be the requirement that it is necessary to see people. There is the question of who and what conditions we can look at specifically, but it should be right that it is bound into the system that we are going to look at people. In some cases, it may be entirely self-evident that the individual’s condition has not changed and there is not much to be done; in other cases, an assessment may be required because their condition has changed quite fundamentally. I do not understand why the need to see somebody who may be in receipt of a benefit should be such an issue for people. It should not be worrying; it is part of a process. [Interruption.] Before right hon. and hon. Members object to that change, they need to ask themselves what they would say to those people whose conditions have changed for the worse and who are confused and never make it back to make a proper claim. This is a debate that we can and will have.

[Mr Byrne]

rose—

[Mr Duncan Smith]

I think, with respect to the right hon. Gentleman, that I have dealt with this point, and I am going to make some progress. [Interruption.] Oh, go on then.

[Mr Byrne]

I am genuinely trying to be helpful to the Secretary of State. He says that his Bill is incomplete and that he has not been able to furnish the House with full details on how the powers that he seeks from us will be put into practice. Will he consider exempting people with certain kinds of conditions from the need to go back to go through check after check?

[Mr Duncan Smith]

I say to the right hon. Gentleman, despite his best intentions, that the mess that the previous Government got into over incapacity benefit—[Interruption.] It is all very well for Labour Members to sit in opposition and pretend that nothing went wrong under the previous Government. We are picking up an incapacity benefit system in which they left people parked, never seen by anybody for years and years. All we are putting into the Bill is the requirement that people be seen to check on their condition. That has to be in their interests, and it is not in any way a problem that it should happen. Of course, if the right hon. Gentleman wants to try to make amendments as the Bill goes through Committee, we will always be happy to debate those and listen to him. My point is simply this: it is right to see people, and wrong to leave them parked for ever on set benefits. Seeing them is more humane than inhumane, and that balance is the way that we should go.

As we introduce our new welfare system, we will have to take steps to clamp down on benefit fraud, as Opposition Members know. The system that we have is inefficient and too often ineffective. Despite significant overlaps between benefit and tax credit frauds, fraudsters are subject to different treatment in their cases as they are handled by different groups—DWP, Her Majesty’s Revenue and Customs or even a local authority. The mess and overlap is enormous. The Bill introduces powers enabling a new single fraud investigation service to investigate and prosecute all cases of benefit and tax credit fraud. I hope that the House supports that process. We will ensure that anyone found committing lower-level fraud will face a tough minimum fine as an alternative to prosecution. For all other fraudsters, we will seek prosecution whenever we can. We need to ensure that fraudsters get the message that repeated criminal behaviour will not be tolerated, so those found to have committed fraud may face losing their benefit for certain periods; I have already dealt with the detail of the timings.

I simply say to the House, because this was raised in the Select Committee, that I am absolutely clear that not every problem with overpayment or difficulties with those payments was down to fraud. I fully accept that with the complexity of the system, officials made mistakes and that we were often too ready to badge people as fraudsters when in fact they were not necessarily fraudsters but caught up in a system that left them confused and perhaps not making the right or necessary level of statements to the authorities. This process is about separating those people out. A recent trial of a changed reconsideration process at Jobcentre Plus led to a fall of some 15% in the number of appeals being heard. The general view is that process will be sustainable and will work.

We are also changing child maintenance. Much of the current system is designed to drive people into acrimonious disputes during family breakdown. We should all agree that we want to take the heat out of such situations, as far as we can. That is why we are reforming the system and introducing a gateway to the statutory scheme so that parents consider making their own arrangements. We will offer parents a calculation-only service to make it easier for them to make their own arrangements. Of course, if they choose to take matters further, they can.

We are introducing measures to allow non-resident parents to pay through Maintenance Direct when the case is within a statutory scheme. That will provide further flexibility for parents. We need to keep the burden of the cost of collection under control. In 2009-10, the cost of collecting every pound was more than 40p. However, should the non-resident parent fail to pay in full or on time, we will move the case swiftly into the collection service and take enforcement action where necessary.

[Sheila Gilmore]

Why was it necessary to introduce provisions in the Bill before the consultation process has concluded? The consultation process on this matter is due to conclude on 3 April. Because the conditions have been published in the Bill, rather than being legislated on later, many people feel that the Government’s mind is set in stone.

[Mr Duncan Smith]

The measures in the Bill set the framework for the details. We will obviously work through the details in time for the Committee stage. It is reasonable to do that. The Bill does not set out the detailed prescriptions, as is right. I do not agree that the process is wrong.

In conclusion, the Bill is not just about balancing budgets, although that is part of the process. It is also about transforming lives and moving people—hopefully—from the entrapment and tyranny of doubt and dependency, to some kind of opportunity, enterprise and change to their lives that they can make themselves, through assistance and support. Surely it is our duty together to ensure that no one is written off, discarded or left behind. I believe that that is what the Bill will achieve. Notwithstanding criticisms and individual issues, I hope that the House will recognise that the purpose of the Bill is positive, and that it will transform the lives that we seek to transform.

13:42

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I beg to move an amendment, to leave out from “That” to the end of the Question and add:

“this House, whilst affirming its belief in the principle of simplifying the benefits system and good work incentives, declines to give a Second Reading to the Welfare Reform Bill because the proposal of the Universal Credit as it stands creates uncertainty for thousands of people in the United Kingdom; because the Bill fails to clarify what level of childcare support will be available for parents following the abolition of the tax credit system; because the Bill penalises savers who will be barred from the Universal Credit; because the Bill disadvantages people suffering from cancer or mental illness due to the withdrawal of contributory Employment Support Allowance; because the Bill contains no safeguards to mothers in receipt of childcare support; because it proposes to withdraw the mobility component of Disability Living Allowance from people in residential care and fails to provide sufficient safeguards for future and necessary reform; because it provides no safeguards for those losing Housing Benefit or appropriate checks on the Secretary of State’s powers; because it fails to clarify how Council Tax Benefit will be incorporated in the Universal Credit system; because it fails to determine how recipients of free school meals and beneficiaries of Social Fund loans will be treated; and because the proposals act as a disincentive for the self-employed who wish to start up a business; and is strongly of the opinion that the publication of such a Bill should have been preceded by both fuller consultation and pre-legislative scrutiny of a draft Bill.”

I start with a word of thanks to the Secretary of State for meeting me and my right hon. Friend the Member for East Ham (Stephen Timms) a week or so ago to discuss the Bill. As I said to him then, we genuinely want to approach the vital question of welfare reform in a spirit of national consensus. We believe that if we can forge such a consensus it will be good for our country, it will reduce the deficit and, crucially, as he said before he sat down, it will be good for the fight against poverty in this country. We have been forced to table the amendment to oppose the Bill because it fails such fundamental tests that we believe the Government should go away and bring back a better Bill that will deliver genuine and lasting welfare reform.

We could begin to forge that national consensus by drawing the right lessons from the past 13 years. The Secretary of State presented his view, but elided one or two prominent features of the past 13 years, such as the fact that the number of people on out-of-work benefits before the depression came down by 1 million and the fact that the claimant count halved. We did not once, let alone twice, see unemployment go through the 3 million mark. We can draw important lessons for this debate from that period, the first of which is that if the Secretary of State wants welfare to work to work, we need more jobs. Labour consistently put that approach in place.

The Secretary of State said to his spring conference at the weekend—

[Mr Duncan Smith]

You were listening?

[Mr Byrne]

I not only listened carefully, but checked the transcript because I could not believe what the Secretary of State said:

“It’s not the absence of jobs that’s the problem.”

Given that five people are chasing every vacancy in this country and that 120 Members of this House have more than 10 people chasing every vacancy in their constituencies, the absence of jobs is very much a problem at the heart of his welfare reform programme.

[Mr Duncan Smith]

Does the right hon. Gentleman recall that I also said that notwithstanding the period of growth and the number of jobs created, more than half the jobs created by the Government did not go to British nationals sitting on unemployment benefit?

[Mr Byrne]

The employment rate under the Labour Government reached a record high and there were 64 quarters of consistent economic growth. The idea that welfare to work can work when the number of jobs is not growing is frankly laughable. There is an important lesson that we must draw from the past to get welfare reform right.

[Mr Oliver Heald (North East Hertfordshire) (Con)]

rose—

[Mr Byrne]

I want to move on to a second lesson before I give way.

When we brought laws to this House to set new obligations for people to work, we ensured that set alongside them were new opportunities to work. We also brought determination and care to the business of legislation. In the Bill, there is determined carelessness.

[Mr Heald]

Is the right hon. Gentleman seriously saying that at a time when it is more difficult on the jobs front we should not make the effort to help people off welfare and into work? If people are capable of working, they should get help. That is what this Bill does. Should we sit on our hands and say that all is hopeless?

[Mr Byrne]

That was an extraordinary contribution. Of course we believe that extra help—for example, the future jobs fund, which the hon. Gentleman’s party closed down—should be given to get people back to work.

In looking at this Bill over the past few weeks, I could not but remember Lord Birkenhead’s description of Baldwin’s method of Government:

“He takes a leap in the dark, looks around, and takes another.”

That is the approach that this ramshackle Bill proposes for millions of people in our country—a leap in the dark. I hope that we can begin to sort out, as is appropriate on Second Reading, where the Government have got their principles right—some of their principles are right—and where they have got them wrong. The Secretary of State says he wants to set a new course. The problem is that we are not quite sure where it will lead.

[Mr Slaughter]

Did my right hon. Friend notice that almost every time the Secretary of State was asked a question on free school meals, housing benefit or disability living allowance, his answer was, “I’ll get back to you.” There are no answers to those points. I have here a few of the letters from my worried constituents, just on disability living allowance. Thousands or millions of people are worried that they will not be able to make ends meet, and the Secretary of State has no answers.

[Mr Byrne]

The purpose of this House, when it gives new powers to the Executive, is to have at least some idea of what they will do with them. I hope that a bit of enlightenment will come from this debate, but we have not heard much yet.

[Charlie Elphicke]

I take issue with the right hon. Gentleman’s statement that the Bill is a leap in the dark. We know that 5 million people of working age could work but do not. We know from December’s labour market report by the Office for National Statistics that 1.2 million of the people who took the jobs that were created came from overseas. We need to get our 5 million countrymen who are out of work back into work. Surely that is the priority.

[Mr Byrne]

Will the hon. Gentleman intervene again and tell me how many of his constituents are chasing each vacancy?

[Charlie Elphicke]

Of course there are quite a few people chasing each vacancy. As the right hon. Gentleman knows, the issue is not with this Government but with the mess left by the previous Government. This Government are trying to grow the economy and make Britain great again.

[Mr Byrne]

I am grateful for that observation. I say gently that, with five people chasing every job in the economy, if we are serious about getting people back into work—I think that the Government do want to do the right thing—we have to do more to create more jobs. We can pass laws and put in place extra help for unemployed people, but there must also be an economic policy that creates more jobs to absorb the very deep public sector job cuts that we know are coming down the line.

[Geraint Davies]

Does my right hon. Friend accept that the deficit was the price paid to avoid a depression caused by the bankers, and that the best way to get rid of it is to focus on economic growth, make bankers pay their fair share and make sensible savings over time, not to make the poorest pay the most while the richest are lavished with massive bonuses, which is what the Bill is about?

[Mr Byrne]

I will avoid getting into an extended debate about macro-economic policy, although I would happily discuss it all afternoon, but my hon. Friend is right. Under our approach, despite the fact that we faced the worst global crash since the 1930s, unemployment did not go beyond 3 million, as it did not once but twice under the Conservative Administration.

[Mr Evennett]

We are listening to the right hon. Gentleman with great interest, but is he not ashamed that although his party was in power for 13 years it failed to make work pay and that the UK now has one of the EU’s highest rates of children living in workless households? Is that not a disgrace?

[Mr Byrne]

I would do no more than encourage the hon. Gentleman to look at the analysis of his noble Friend Lord Freud, who examined our work to get people back to work and remarked on how fast the number of people on out-of-work benefits had fallen. He examined the number of children lifted out of poverty and said that our record was truly remarkable.

[Mr Stewart Jackson]

I fear that the right hon. Gentleman is going through the motions. He was a gifted and talented Chief Secretary to the Treasury, and I do not think he truly believes what he is saying. Will he at least concede that people who are no friends of the Conservative party, such as the Scottish TUC, have said that worklessness was exacerbated by the decision to import millions of low-skilled, low-wage workers from eastern Europe, which drove down wages and conditions and made it much more difficult for indigenous British workers to secure jobs and get off welfare dependency?

[Mr Byrne]

I do not think I should veer into a debate about immigration this afternoon, because you, Mr Deputy Speaker, would quickly call me to order. I would, however, make the point that, after consistent economic growth, employment went up, the number of people on out-of-work benefits came down and the number of people lifted out of poverty, including pensioners and children, was at a record high. The Government can learn something from that record.

Of course, that has to be put alongside the right legislation to encourage people back to work, which is where I fear the Bill will fall short, for a very simple reason. It fails the basic tests of whether it fosters ambition and whether it reinforces and consolidates our obligations to each other. Fostering ambition and nurturing compassion are the basic tests of welfare reform, and I am afraid the Bill fails both.

[John McDonnell (Hayes and Harlington) (Lab)]

I oppose the Bill, and given any opportunity I will vote against it.

As my hon. Friend the Member for Hammersmith (Mr Slaughter) said, the Government’s response to every representation that has been made by external organisations or today in the House has been, “These matters will be dealt with in regulations”. Attached to the Bill is a quantity of regulations that we have not seen before with a Bill of such stature. May I suggest that my right hon. Friend link up with the Secretary of State to discuss the procedure to be followed after Committee and before Report, so that the bulk of the regulations are published in time for us and others to consider them before our final debates on the Bill?

[Mr Byrne]

That is an extremely sensible proposal, and perhaps the Minister of State, the right hon. Member for Epsom and Ewell (Chris Grayling), will reflect on it in his winding-up speech. It is important for the other place to be involved in discussions, too, to ensure that the Bill leaves this House in better shape.

[Mr David Lammy (Tottenham) (Lab)]

May I align myself with what my hon. Friend the Member for Hayes and Harlington (John McDonnell) just said?

Will my right hon. Friend put on record the fact that words that we used to use in the Chamber—equality and non-discrimination—must exist for people in the work force with disabilities and from ethnic minorities at a time when there are few vacancies? I think in particular of Haringey Phoenix Group, which represents blind people, whose representatives came to see me in my constituency.

[Mr Byrne]

That is a challenge that I know well, representing the constituency that I do. I will say a little more later about the challenges and the reforms that are needed on disability living allowance.

There are some principles in the Bill that we support. The principle of universal credit builds on the changes that we made to ensure that work pays, and we welcome some of the proposed reforms to the claimant commitment. We certainly welcome tougher and tougher measures on fraud, but the basic truth, which many hon. Members have rehearsed this afternoon, is that the Bill is not a pamphlet. It is not about theory; it is about practice. It is therefore important that we consider whether it will foster ambition and strengthen compassion in a number of important areas. I start with child care, with which the Secretary of State started.

For millions of families in this country, and especially for women, the truth is that extra help with child care is needed if they are to get back to work. Many families in our country receiving a combination of housing benefit, council tax benefit and child tax credit have up to 97% of their child care costs supported. The Secretary of State said today that he wants that budget to be frozen, which at least shows some progress, but he also confirmed that the number of people who will have a claim on that budget will grow. That of course means that some people will get less help with their child care than before. What we have not learned this afternoon is what that will really mean for people.

My hon. Friend the Member for Stockton North (Alex Cunningham) asked the Secretary of State a very straight question on 9 February: had he decided which child care option he would propose? “Not exactly, no,” said the Secretary of State.

“Can you give us a clue?”,

my hon. Friend persisted, gamely.

“I will give you a clue when we are a bit closer to the finalised detail”,

said the Secretary of State. Now, the right hon. Gentleman is asking for powers to end child tax credit. I am not sure how much more finality one could want, but there are still no answers other than the comment that the Government are still consulting. We hear rumours that for some people the cover for their child care costs will be reduced to 70%—a gigantic new bill for many families that could prevent people from getting back to work. Helen Dent, chief executive of Family Action, has said:

“The possible reduction in help with childcare costs could mean that many parents might end up being worse off under universal credit”.

I say today, on behalf of the 486,000 families who get child care help from the Government, that they need to know more.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

I absolutely agree with my right hon. Friend, but is there not a further black hole in the Government’s proposals, which is the failure to acknowledge regional variations? The cost of child care in London, for example, is massively higher than it might be in another metropolitan area of the country. The Bill reflects that lack of definition and flexibility and a complete ignoring of regional variations.

[Mr Byrne]

My hon. Friend is right, and I am afraid it gets worse. The Secretary of State has made much of his effort to reduce the disincentive to work, which we genuinely welcome, but, like me, he will have noticed that earnings are now growing at about half the rate of prices. He will also doubtless have noticed that once people begin to earn £43,400, they will lose their child benefit, which is worth several thousand pounds a year. That all puts pressure on second earners to go out to work, so the question must therefore be what marginal deduction rates will confront those second earners. The answer is not easy to find, but it is buried away in paragraph 69 of the impact assessment. Having read it, I am not surprised that the Government did not put it up in spotlights, because it states that twice as many earners will see their marginal deduction rates go up than will see them go down. Who is most likely to be hit? It will be couples with children, whose median deduction rates will go up.

That is what we do know, but what is worse is what we do not know. We do not know what will happen to those entitled to free school meals; what will happen to free prescriptions; which working families will be exempt from the benefits cap; or how unearned income such as widow’s benefit or child maintenance will be treated. We do not know about sick pay or maternity pay, and we have no idea how on earth council tax benefit will work. As the House knows, the council tax benefit system is going local, but the rules on universal credit are to remain national. The Secretary of State for Communities and Local Government, who likes to be straightforward with the House, boldly asserted on 17 February that he was in charge of drawing up the new rules on council tax benefit, but surely the final word must come from the Work and Pensions Secretary. Once again, there is total confusion. The questions for families are stacking up, and there are no answers to any of them. That is the story for families.

[Grahame M. Morris (Easington) (Lab)]

Would my right hon. Friend care to comment on reports in today’s papers that representatives of 30 cancer charities have written to the Secretary of State expressing concern about people who are recovering from cancer? Specifically, they are likely to lose their employment and support allowance after a year, but 75% of them or not in a position to return to work after a year.

[Mr Byrne]

That is deeply concerning, and I will dwell on it in a moment.

[George Hollingbery (Meon Valley) (Con)]

The right hon. Gentleman makes a persuasive case on the detail—clearly a lot of it remains to be found, but this is a confusing and complex matter. Will he admit that the current system is unsustainably complicated? There are 8,600 pages of guidance on benefits administration at the DWP and 2,000 pages for local government, and there are 30 different benefits to administer. Change is required. If we have a framework and consult widely, we will have a better system.

[Mr Byrne]

The Opposition want welfare reform that sticks. When so many details are unclear, the danger is that the Bill will unravel progressively as it comes into effect.

We have discussed whether the Bill passes the test of fostering ambition for families and have shown that a great number of questions remain unanswered. Let us now consider savers. All hon. Members want to nurture the ambition to save. The amount that people must save for a deposit for a house is heaven knows how much, but now that tuition fees have been trebled, more families have to save harder to get their young people into college. One might have thought, therefore, that the Government would provide more incentives to foster the ambition to save, but the noble Lord Freud told the House of Lords that

“the £16,000 savings threshold would extend to all households eligible for universal credit.”—[Official Report, House of Lords, 15 December 2010; Vol. 723, c. WA204.]

There we have it. The Government are so keen to foster the ambition to save that once someone has £16,000 in the bank—the price of two and a half years at university—their tax and in-work benefits are taken away.

[Mr Duncan Smith]

Will the right hon. Gentleman give way?

[Mr Byrne]

I will give way in a moment, but first I want to tell the House what James Browne of the Institute for Fiscal Studies said:

“This is a much harsher treatment of capital than we have in the tax credit system.”

Will the Secretary of State tell us how that measure rewards savers?

[Mr Duncan Smith]

May I remind the right hon. Gentleman that his system became completely absurd, because it allowed people with huge savings and income to claim benefits? The previous Government’s system supported not the bottom two or three deciles but people further up the income scale. That is one reason so few people from the bottom income deciles got back into work, and why poverty was so high.

[Mr Byrne]

Does the Secretary of State accept that, on current figures, taking away the in-work benefits of people who have £16,000 in the bank would mean 400,000 families with children losing benefits? Surely that is not a good way of fostering the ambition to save.

[Mr Duncan Smith]

The right hon. Gentleman’s figures are incorrect. When universal credit comes in, the figure is more than likely to be no higher than about 100,000—[Interruption.] Wait a minute. I know where the right hon. Gentleman gets his figures from. Those 100,000, of course, will be transitionally protected, so they will not lose.

[Mr Byrne]

The Secretary of State can say that only because he is taking tax credits from so many families over the next two or three years. He has not given a guarantee for future savers. What will happen to their incentive to save under his new system?

[Mr Duncan Smith]

Will the right hon. Gentleman give way, because he needs to answer my question?

[Mr Byrne]

The Secretary of State needs to answer my question. The Minister of State told my right hon. Friend the Member for East Ham that getting rid of the savings cap would cost only £70 million. Will the Secretary of State therefore look again? He must recognise, as I do, that he is currently not fostering the ambition to save for hundreds of thousands of people.

[Mr Duncan Smith]

I completely disagree with the right hon. Gentleman on that, but I want to challenge him to give an answer to taxpayers, who ask whether the welfare system is about supporting people who are most in need, or whether it is about casting money wider and wider to people who can support themselves in particular periods. How much more money does he really want to spend?

[Mr Byrne]

I am afraid that the Secretary of State has still not provided an answer to my question—he still cannot tell us how he will encourage people to save. Tuition fees have trebled, and people in my constituency are asking, “How on earth do we encourage our young people to go to college, and how on earth can we afford to get our young people into university?”—[Interruption.] I know the Secretary of State does not have those challenges to face, but thousands of people in our constituencies need to save to get their kids to university. The regime that he is proposing will strip in-work benefits from them, kicking the ladder away from aspiration in our country.

[Angie Bray (Ealing Central and Acton) (Con)]

Surely the right hon. Gentleman must recognise that tuition fees are not payable until such time as people come out of university and earn a salary of £21,000 or more. His argument is a red herring.

[Mr Byrne]

I do not know what the hon. Lady’s constituents are saying to her, but many in my constituency live in fear of debt—they want not to burden their children with debt, but for them to get a first-class education, so that they can contribute to the future of our country.

The wider point that is emerging is that we do not know enough about how the Bill affects families and savers, but there is also a question over how it will affect the self-employed. Over the last few weeks, we have heard a great deal of pitch-rolling from the Chancellor and the Prime Minister, who are now worried about the damage that their last Budget did to our economy. All of us hope that the Chancellor can upgrade his growth forecast at the forthcoming Budget after doing so well over the last year, and the Prime Minister is now promising that his next Budget will be the most pro-growth Budget in the universe. He told his spring conference:

“At its beating heart this is still a party of start-ups, go-getters, risk-takers…We’re the party of practical men and women, people with a passion and a mission to build a business and see it grow...We are the party of enterprise.”

No doubt, then, the Bill is part of that plan—no doubt the Bill will make it simpler, easier and more encouraging for people in this country to start a business and to make that entrepreneurial leap. Well, my hon. Friend the Member for Stretford and Urmston (Kate Green) asked the Secretary of State about the self-employed on 9 February. To be fair to him, I think he recognises the problem. Surveying the position of the self-employed, he told her that

“we are conscious that that area is the slight blip in the system.”

This is what the blips in the system at the Federation of Small Businesses told me yesterday. Mike Cherry, the FSB national policy chairman, said:

“We are concerned that the Government has assumed that entrepreneurs with a new business will be paying themselves…and will therefore lose all benefits under the Universal Credit system…A measure such as this simply creates yet another barrier towards self-employment which is particularly unhelpful at a time when we are relying on the small business sector to grow the economy”.

So much for the party of enterprise.

[Mr Duncan Smith]

rose—

[Rehman Chishti (Gillingham and Rainham) (Con)]

rose—

[Mr Byrne]

I will give way to the hon. Gentleman.

[Rehman Chishti]

Considering that the right hon. Gentleman agrees that it is absolutely right and proper to support families, does he concede that the Labour party got that wrong because couples were paid to live apart?

[Mr Byrne]

I do not know whether the hon. Gentleman was in the Chamber when my hon. Friend the Member for Swansea West (Geraint Davies) spoke of the disincentives for families to stay together under the new regime, but if he wants to pretend that the Bill ends the couple penalty in the welfare system once and for all, perfectly and immaculately, I look forward to him setting out his argument.

[Mr Duncan Smith]

rose—

[Mr Byrne]

I think the Secretary of State wanted to say a word about the encouragement that he will provide for small businesses.

[Mr Duncan Smith]

The right hon. Gentleman raises the issue of the self-employed. I made this point to him privately and I will now make it publicly: they will fall within the universal credit. The point that I was referring to was how complicated and counter-intuitive the current systems have become, as he knows very well. We are seeking the best way to ensure that the right reporting structures are in place for those people, who will be inside the universal credit.

[Mr Byrne]

Perhaps the Secretary of State can tell the House this afternoon when those proposals will be ready for us to look at. [Interruption.] “In time for Committee,” he says from a sedentary position. We all look forward to seeing that.

It is now clear that for the self-employed, savers and families, this Bill at the very best poses more questions than it answers. The other question that the House has to ask the Secretary of State this afternoon is not about how we foster ambition, but about how we nurture compassion. How do we strengthen and reinforce our obligations to each other? That is something that we will hear a lot more about, when we talk about the reform of disability living allowance. What we know about the detailed reforms is not good. I welcome what the Secretary of State has said about the mobility component of DLA. I think that he has confirmed that he is withdrawing the proposal to cut £135 million from the mobility component of DLA. If that is true, it is welcome, because we are talking about a measure that the chief executive of Scope pronounced as “callous” and an

“assault on the most vulnerable”.

The rationale presented by the Minister of State has this morning been taken apart by 39 charities. I am afraid that I have to agree with the words of those campaigners who have said that

“many of these people”

—those in residential care—

“will be prevented from enjoying the freedom of movement that is taken for granted by people who are not disabled.”

Those are, of course, the words of the motion at the Liberal Democrats’ spring conference this weekend. I hope that together we may be able to prevail and get this measure dead and buried.

[Mr Tom Clarke]

On the crucial issue of the mobility component for people in residential accommodation, when my right hon. Friend put his question to the Secretary of State, I understood the Minister of State to be indicating dissent. Will my right hon. Friend give the Minister another opportunity to clarify this important issue?

[Mr Byrne]

I am grateful for my right hon. Friend’s suggestion. The Secretary of State has £135 million scored against the saving. I now invite him to intervene and say whether that saving is off the table, or whether the measure is going forward.

[Mr Duncan Smith]

The right hon. Gentleman knows very well, because we had this conversation privately. As I assured him, and as I assure him now, what we have done is roll the proposal into the personal independence plan. We are reviewing what is necessary. I said to him then, as I have said to the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke), that what we are looking for is the amount necessary for people who are in residential care. That is the commitment that I have given. That is the exact fact, that is how it remains, and all other things will fit around that.

[Mr Byrne]

The argument that the Secretary of State has rehearsed this afternoon is that the Bill will give him the flexibility either to withdraw or to reform the proposal, but what he has not set out for the House is whether he will reduce the savings target of £135 million that has been scored by the Chancellor against the measure.

[Mr Duncan Smith]

I have just given an answer.

[Mr Byrne]

I therefore look forward to the Government reflecting on this debate and perhaps giving slightly more clarity when the Minister winds up.

More alarming for many people is the lack of any safeguards on what the Government have in mind for the future of DLA, especially as we know that the Chancellor is determined to take £1 billion off the bill and then ask what kind of reform will be necessary to deliver his sums. Not for him the subtleties of asking what kind of reform might make sense. This is what the Multiple Sclerosis Society had to say about the measure: “We share serious concerns”—[Interruption.] It is incredible that when such organisations present their arguments, those on the Government Front Bench would rather talk among themselves than listen to what they have to say. This is what the Multiple Sclerosis Society said:

“We share serious concerns with a large number of other disability organisations that the Bill in its current form could lead to those most in need losing out on the support they rely on”.

The Secretary of State’s own equality assessment says that 13% of disabled households could be entitled to less help under the new system. He has simply not provided assurances on that point. When my hon. Friend the Member for Stretford and Urmston asked him about that, he said:

“I am sorry to be cagey about this. It is simply because this will become very clear when we publish the Bill.”

Well, here is the Bill, but where are the answers to the question?

[Mr Duncan Smith]

I am interested in what the right hon. Gentleman is saying. He is going on about the review and the issues around disability living allowance, but I notice that the Opposition make no mention of that in their amendment. I notice also that both he and his leader have said that they support the reforms to disability living allowance, so perhaps he would like to make it clear: is he in support of them or not?

[Mr Byrne]

Everybody is in support of reforming disability living allowance, but we have not said that £1 billion should come off the bill and that we should then work out what kind of reform would deliver those numbers. The Secretary of State must realise that this is why millions of people up and down the country are so alarmed about the reform proposals being put in place. Now he—or, indeed, his Minister—has a chance to say that he will listen to campaign groups that are worried about the proposals, that he will listen to amendments and that he will try to put in place safeguards to ensure that DLA reform is done in the right way. Yes, we should reform DLA, but we should not abolish it.

[Charlie Elphicke]

Would not one key reform be to ensure that those claiming the allowance are seen, to check that they are still in need of it? Some 140,000 people have not been seen by the Department for Work and Pensions in the last 20 years, going back to 1992. Surely that is unacceptable.

[Mr Byrne]

There is a strong case for reform of DLA. The lobby groups agree with that, as do we, but we do not agree with the way the Government have approached the issue. First, we had an announcement by the Chancellor of the Exchequer that DLA would be cut £1 billion, then we got a consultation, which has only just finished, and while all that was happening a Bill was published with no detail or safeguards dealing with how that reform would be conducted. The Secretary of State must realise that that is a serious concern for millions of people up and down this country.

That alarm is simply magnified by the proposals to set a one-year limit for those who can receive contributory employment and support allowance. I, too, think that there is a case for time limits—there is a good case for considering two years, for example—but this morning 30 cancer charities have written to the Secretary of State urging him to think again on that measure. His own Department’s statistics, they say, show that 75% of cancer patients still need ESA after a year. Their message is blunt:

“this proposal, rather than creating an incentive to work, will lead to many cancer patients losing their ESA simply because they have not recovered quickly enough.”

If this indifference is not addressed in Committee, the Secretary of State will have single-handedly dismantled any notion that compassionate conservatism is truly a reality. This simply cannot be right, and it needs to be looked at again.

[Mark Durkan (Foyle) (SDLP)]

I support the crucial points that my right hon. Friend is making, but has he noted that the impact assessment on the proposed changes to DLA makes no mention of the impact on carers? There clearly will be a consequential impact on carers, depending on what benefits the people for whom they care receive and which rates of the daily living component or the mobility component will entitle carers to claim carers allowances. There is no mention of that whatever. Is my right hon. Friend aware of whether the Government have even made an estimate of the number of carers affected, and if so, why it has not been published?

[Mr Byrne]

I am not aware of those estimates, and I hope that we will have a long and important debate about carers this afternoon and in Committee.

[Several hon. Members]

rose—

[Mr Byrne]

I will give way in a moment.

My final point is about the small question of whether the Bill will actually save any money in and of itself. The Bill would save money if it got people back to work, but it will not create a single job. By the time we get to Royal Assent, there will still be five people chasing every job in this country, and for 120 of us, there will still be 10 people chasing every job in our constituencies. The only way that this Government are going to save money through welfare reform is by cutting the benefits of working families. Indeed, once we take out the shift to a lower form of uprating, we see that half the benefit cuts hit working families, starting with 10 raids on the family budget, taking out £1.5 billion from this April. Two thirds of that bill would not be necessary if unemployment were not as high—in fact, if it where down it would have been under Labour. Nowhere is that muddle about whether the Bill saves money more confusing than when it comes to the housing measures.

[Several hon. Members]

rose—

[Mr Byrne]

I will give way in a moment, but I want to make this point first.

Clause 68 puts into the Secretary of State’s hands unprecedented powers to do whatever he wants with people’s rents. Normally, we would object to that kind of sweeping power because we would not know what a Minister was going to do with it. This time, however, we object because we know exactly what the Secretary of State is going to do. He has proposed a housing benefit cap, which he says will save money, but the Mayor of London has now said that the measure will cost more money because homelessness costs will rocket.

The Secretary of State says that his measures will bring rents down, but the Secretary of State for Communities and Local Government is putting rents up in the social housing sector to 80% of market value. The House of Commons Library says that that could cost up to £200 million. One half of the Conservative party does not know what the other half is doing, and taxpayers are picking up the tab. In fact, it was left to the Pensions Minister to tell the House on 3 February that, on his estimate, the housing bill would go up by £1 billion over the course of this Parliament. So how is this Bill going to save money on housing benefit?

[Alison Seabeck]

Before I ask my question, I need to draw the House’s attention to the entry in the Register of Members’ Financial Interests for my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), with whom I have an indirect interest: he is my partner. Now I can get on with my question.

My right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) has mentioned the increase in costs resulting from the impact of rents going up to 80% of market value. The Localism Bill contains measures designed to put homeless people straight into the private rented sector. That will put further pressure on that sector, which is already being squeezed, and push rents up. There is no evidence that rents will come down. Does he agree that the Government’s left hand does not know what the right hand is doing?

[Mr Byrne]

That is the evidence from the Mayor of London and the Secretary of State for Communities and Local Government.

[Sajid Javid (Bromsgrove) (Con)]

At the last election, the Labour party manifesto contained a pledge to reform housing benefit to ensure that the people claiming it would not live in the kind of homes that ordinary working families could not afford. We believe in that policy. Is the right hon. Gentleman now renouncing it?

[Mr Byrne]

Not at all. The point that we are making is about the way in which this reform has been adopted and steamrollered through, and about the lack of consultation between the Department for Communities and Local Government and the Department for Work and Pensions. This has been so mismanaged that many people—the Mayor of London, Shelter, the Secretary of State for Communities and Local Government—are now saying that the cost of housing benefit could go up. Surely that is not the DWP’s intention. We need a bit more detail about a policy that might actually deliver the necessary savings on housing benefit.

[Angie Bray]

I was recently talking to some constituents in Acton, and I discovered that these proposals for changes to housing benefit are among the most popular proposals that the Government have introduced. My constituents like the idea that it pays to work, and that those on benefit will not be able to afford better houses than those in low-paid work can afford. They also wonder why it has taken so long for any Government to introduce a measure that is simply fair, regardless of the money it might save. They wonder why the Labour Government never did anything about this when they had the chance to do so.

[Mr Byrne]

I am sure that the hon. Lady will have set out, with equal eloquence, the view of the Mayor of London that the measures might actually cost more taxpayers’ money than they will save.

[Jim Shannon]

Will the right hon. Gentleman give way?

[Mr Byrne]

I will take a couple more interventions in a moment.

I want to put on record my thanks to the scores of charities and campaign groups that have helped to brief us and offered to work with us to draw up amendments to improve the Bill in Committee. I am even more grateful to them for their commitment to mobilise their millions of members to help the Government understand why the Bill needs urgent reform. If the Government persist with the illusion that the Bill is immaculate, perfect and beyond improvement, and if they decline to hear the voices of those millions of members of charities and campaign groups that have worked with us, we will have no alternative but to vote against it on Third Reading.

In today’s debate, we will hear a lot of statistics; we will also hear about this record and that proposal. I just hope that the House will remember that behind every statistic is a person—one of our constituents. They are people like my constituent, Colin Hulme, who wrote to me at the end of last week. Mr Hulme suffers from Chiari malformation, a condition that affects about one in 1,000 people. It hit him in 2007, and he had to give up his job as an IT consultant and move home. He is a very brave man. He told me that his disability living allowance means that

“at least I can pay my household bills, my kids will have food on the table and clothes for school. More importantly, it means my wife can provide the care that I need.”

His view is that the Bill is about

“cutting costs and shifting responsibilities rather than improving the lives of sick and disabled people.”

It is a worry for him, and I think that the whole House will acknowledge that that worry is shared by millions of people up and down the country today.

My real point to the Secretary of State in this debate about principles is this: in the debate ahead, let us together put aside the politics of fear and division, and let us have the politics of hope—people’s hope for a job, the hope that they can get the help that they need, and the hope that they can get on and move up in work. That is what welfare reform should be about. That is the instinct expressed in our amendment, and I hope that the House will back it this afternoon.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. A lot of Members wish to participate in the debate, and we have introduced a six-minute time limit on Back-Bench speeches, with the usual amount of injury time for up to two interventions. Clearly, however, Members do not have to take interventions, and if they do not, that will allow more people to speak.

14:19

[Mr Oliver Heald (North East Hertfordshire) (Con)]

I welcome this opportunity to support the Bill, which will bring about probably the biggest change in the welfare state for 60 years. I disagree with the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) on certain points. The Bill is about helping people into work and establishing big principles for the future, and it really is not good enough to make a speech saying, “We want to help people into work,” but then to deny the means to do that. He is saying that the Bill should not go ahead. He is saying that the details—which should be debated, I agree with him on that—are sufficient to allow him to deny this major Bill a Second Reading. Well, he is wrong about that. He has issues that he rightly wants to discuss in Committee, and he has the support of numerous groups throughout the country that want those points of detail to be considered. Yes, he is right about that, but, my goodness, he is wrong to say that the Bill, which does such important things, should not go ahead.

Let us consider the idea of the universal credit. We will finally be able to say that a person will always be better off in work. That is a big principle; that is important. I venture to suggest that the right hon. Gentleman agrees with that in his heart of hearts, yet he is saying that we should not introduce those measures. I notice that he is not prepared to listen to this—

[Mr Byrne]

I am listening.

[Mr Heald]

At the moment, it takes 45 minutes in a jobcentre to work out whether someone will be better off in work or not. The Bill will change that at a stroke. People will know that they will always be better off in work. That is an important principle.

My second point involves helping people to get into work, giving them support through the “black box” approach. This is something that Labour agrees with; the right hon. Gentleman actually trialled it when he was in government, and it worked. It is recognised internationally—

[Mr Byrne]

It is not in the Bill.

[Mr Heald]

Yes, it is in the Bill. The sanctions are about making the Work programme work. It will not work without sanctions and without the measures in the Bill. To deny the Work programme to people all over the country who should have help into work would be a big mistake. The right hon. Gentleman should support the principle behind the Bill.

My third point is that it is essential to make proper training available so that people can avail themselves of those training opportunities and then get the jobs that are available in this country. There are 500,000 jobs advertised in the jobcentres every month, but many of them are jobs for which people do not have the necessary skills. To introduce a system, through the “black box”, that will enable people to acquire those skills and get into those jobs is something good, and it is something that the right hon. Gentleman should support.

As for whether jobs are available, when the right hon. Gentleman’s party were in government many jobs were created, as he said, but the problem is that many of them went to people who were not from this country and had not been languishing on benefits for years. Members of the Select Committee visited Burnley earlier this week and we met people who were being helped to move from benefits into work. We found that many of them did not like the work capability assessments, so I hope that it will be possible for the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) to make the Harrington changes before that scheme is rolled out nationally. I see him nodding. Some people there had not worked for 10 years, and said that they were pleased to have the opportunity to be trained and to look for a job.

Burnley is not an area where there are as many jobs as there are in Hertfordshire, which I represent, but even in areas where there are not many jobs, it is wrong to say to someone who could work, “No, we’re not going to do anything about it; we’re not going to train you; we’re not going to give you those chances; we’re not going to provide the Work programme.” By denying this Bill a Second Reading, the right hon. Member for Birmingham, Hodge Hill would be depriving people of all those things.

Let us take some of the other issues that the right hon. Gentleman raised, such as child care. The Secretary of State has said from the Dispatch Box that there will be child care; the black box works only if child care is available. Support for single parents to get into work is necessary, but it is to be provided. If the right hon. Gentleman wants to talk about the details in Committee, we would all fully understand that. I believe that it is a mistake for him to try to deny this Bill a Second Reading.

Time is whizzing by, but I would like to make two further points. Child support is an important issue in the Bill, and it has been troubling for a long time. If single parents are to get into work, it is important for them to be able to rely on child support payments coming in. America has a system whereby, once the figure is set, it is automatically deducted from the salary of the parent who has to pay it. In this country we have always denied that possibility, and said that we should not do that. However, if we are to say to many lone parents, “Look, we really want you to go to work”—and we shall be saying that to a lot more lone parents—we must find ways of ensuring that the essential payments from the other parent come through.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

This will provide my hon. Friend with an extra minute to conclude his remarks. We very much welcome the work of the Select Committee, and I assure him that the points that he and the Select Committee raise will help us to shape some of the outstanding issues and the Committee debates that lie ahead.

[Mr Heald]

I thank my right hon. Friend for that. One encouraging development is that many of the proposals in the recent Select Committee report on housing benefit change—proposals for improvements such as monitoring the changes as they are implemented—were accepted when the Government responded to it. It is particularly welcome that the original proposal for people to lose 10% of their benefits after 12 months has been abandoned. I see that the Chairman of the Select Committee is in her place, and she may catch the Deputy Speaker’s eye in a moment; we are all pleased that the Committee has been able to make a difference in that way.

Finally, let me say a few words about how the contracts for the Work programme are dealt with. It is important to have proper implementation.

[Charlie Elphicke]

With housing benefit rising 45% in recent years, does my hon. Friend agree that it is a matter for serious concern?

[Mr Heald]

Yes, absolutely right. It is important to bear down on that through the sort of changes now proposed.

To return to the Work programme contracts, it is important to monitor carefully the performance of the contractors and sub-contractors to ensure that there is an equal level across the country. The Select Committee looked at the issue in a previous report on a pilot scheme in Glasgow. We felt that there were differences between the performance of the different contractors. Clearly, if there are weaknesses, it is important to address them, for the sake of all the people who want to find work. I am grateful for the opportunity to support this great Bill.

14:35

[Dame Anne Begg (Aberdeen South) (Lab)]

This is a huge Bill with a huge amount in it, so it is impossible to cover it all in a six-minute speech. I always call my Select Committee colleagues my hon. Friends, and I shall point out that our report on housing benefit, which my hon. Friend the Member for North East Hertfordshire (Mr Heald) mentioned, will be debated in Westminster Hall tomorrow afternoon. I hope that many Members will come along so that we can go into greater detail than we can today. Other elements of the Bill include the abolition of the social fund, and the moving of responsibility for council tax benefit to local authorities and how that cuts across the universal benefit principle and the sanctions regime; I shall not have time to go into that, but perhaps others will.

The biggest fundamental change to the welfare system in the Bill is, of course, the proposal for the introduction of a universal credit. As has already been said, and as confirmed in almost all the briefing papers I have received, the idea of a universal credit has been accepted in principle. I have always said, however, that the devil is in the detail. That is where the problem lies for Labour Members, who are well aware that we do not yet have much of the detail.

Despite what the Secretary of State said today, we still do not have any detail on how child care will be incorporated into the universal credit. We know that housing costs will be included, but we do not know how they will be dealt with. We are not sure about the disability premium or about the issues that my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) raised about passported benefits, free school meals and all the other aspects of the present benefit system that put significant amounts of money into the hands of those who have the least. That often includes people in work, but low-paid work. As I say, we do not yet know from the Bill how all those matters will be dealt with; we will not know until the regulations come out.

We know that carer’s allowance will be outside the universal credit, but we do not know how kinship carers will be treated. Changes are proposed to the disability living allowance, which is the key benefit that allows carers to access their benefits, and a lot of questions remain to be answered.

Furthermore, we still do not know what the marginal deduction rates will be. We know that 65p in the pound is proposed, but when we look in detail at someone in low-paid work paying income tax, we find that the marginal deduction rate will go up—and in connection with child care costs, it could go up by more than 100%. Child care costs will, in any case, go up, simply because more people will need child care if the Government proceed with their proposals to start imposing obligations on lone parents to start looking for work when their youngest child reaches five. Extra expenses are therefore associated with the Bill, but we do not know how they are to be dealt with.

We do not yet know how some of the claims will be fulfilled—whether, for example, the Bill will succeed in making work pay. The previous Government did make work pay in almost every case—apart from where there were high housing costs and many children. What we did not do was make work pay enough.

[Harriett Baldwin (West Worcestershire) (Con)]

I thank the hon. Lady, who is such a marvellous Chair of the Select Committee, for giving way. Does she agree that it is disappointing that the Labour party is not supporting Second Reading of this Bill, because the points that she rightly raises are the sort of detailed issues that could addressed in Committee?

[Dame Anne Begg]

I hope that they will be addressed in Committee, but the problem is that there are still too many unknowns about the Bill. That makes it impossible at this stage to give that kind of support to it. That is the danger.

There are reasons for suspicion, particularly among disabled people, about the Bill’s intentions. The Bill was published two days before the consultation on what amounts to the abolition of disability living allowance was announced. Again, we do not know the details. I do not understand why the Government need to change the name of the disability living allowance. Yes, there might be a case for reform, but this is a wholesale replacement. That is what worries people, particularly when the evidence suggests that it is going to be based heavily on the test.

Discussion this afternoon has been about the test for disability living allowance—but our experience is of the work capability assessment. We know that that is discredited and not fit for purpose, and disabled people fear that that is what is going to be imposed. As soon as the Government announce a proposal to change or reform a measure in order to make a 20% budget saving, suspicions enter people’s minds. Given the Government’s proposal to remove the mobility element of disability living allowance from those in residential homes, it is no wonder that some people are now frightened.

I realise that most of the time allotted to me has gone, but I want to say something about the proposal to withdraw contributory employment and support allowance after only one year. I believe that the Government should reconsider. I have always said that it is easy to reduce welfare bills: all that is necessary is to stop giving people any money—and that is what the proposed withdrawal of the allowance would do.

[Glenda Jackson]

My hon. Friend, and other members of the Work and Pensions Committee, will be aware that one of the most shocking pieces of evidence presented to the Committee was that under the present system, in which people are tested by Atos, it is not unusual for an Atos centre to be completely inaccessible to the disabled. Furthermore, we have been hearing for some time that when people appeal against the denial of benefits, whatever those benefits may be, a staggering number of appeals are upheld. What is particularly frightening is the fact that there may be a long gap between refusal of an application and the upholding of an appeal—a problem that will inevitably increase in the absence of the detailed provisions that the Bill so markedly lacks.

[Dame Anne Begg]

Indeed. We heard on Monday, in Burnley, that the appeal process can take anything from a year to 18 months. There are real doubts about the ability of the tribunal system to cope.

[Chris Grayling]

At present, the appeal process takes 17 weeks on average. A year or more is absolutely not the norm. I would be happy to discuss the matter in the Select Committee, but I should grateful if the hon. Lady would note what I have said for the record.

[Dame Anne Begg]

Interestingly enough, a constituent of mine is having to wait for six months. I thought that that was ridiculous enough, but two or three weeks ago, when the Committee was taking evidence, we were told that someone was having to wait for between nine months and a year. Perhaps the Minister should talk to his officials, because it seems that in some areas, at least, the wait is much longer than 17 months.

I mentioned the withdrawal of contributory ESA after a year. Many of the people who will lose that benefit will not qualify for a means-tested benefit, particularly in my constituency, where there will probably be a partner or someone else in the household who has an income. Such people will lose all the money that they have.

We have heard today what has been said by cancer charities, but it is not just cancer sufferers who will be affected. Many other people may not have been given a diagnosis, or may have had a mental breakdown from which they have not recovered. It may take at least a year for those people to get anywhere near the Work programme, although they will be in the work activity group because their disabilities will not be severe enough for them to qualify for membership of the support group. They will be told to come back after another three months, because they will still not be fit for work. They may find that they have used up the whole year’s worth of contributory benefit before they are anywhere near even looking for a job. Many with other illnesses and disabilities will fall into the same category.

I was going to read out a letter from Heather Bennett that would have summed up the position far better than I have. Unfortunately I have no time to do so, but I ask the Government please to reconsider.

14:45

[Jenny Willott (Cardiff Central) (LD)]

I welcome the Bill, especially the introduction of the universal credit system. It is a huge improvement on the current over-complicated and burdensome benefit system, which has spiralled out of control under a number of previous Governments. I think that several elements of the Bill require further work, and I look forward to their being discussed today and during the Bill’s later stages, but I do not consider that a good enough reason not to give it a Second Reading.

I am glad that a couple of earlier proposals have already been reconsidered. Both have been mentioned by other Members. I am delighted that the Government listened to Liberal Democrats, the Select Committee and others throughout the United Kingdom who called for the proposal for a 10% cut in housing benefit for those who have received jobseeker’s allowance for a year to be dropped, because it was unfair. It is very good news that the proposal has indeed been dropped, and I am sure that Members on both sides of the House welcome that.

I am also glad that the Government are listening to those who are concerned about the removal of the mobility component of disability living allowance from those in residential care. A number of Members have mentioned that today, and I expect that it will be mentioned again before the end of the debate. I am pleased that the proposals have gone back to the drawing board, and I hope that the Government will take account of the serious concern that many Members have expressed and will, I am sure, express again during the Bill’s subsequent stages.

I welcome wholeheartedly some measures that are in the Bill, as well as the absence of some measures that are not. As I said earlier, those that I welcome include the introduction of universal credit, which will finally end the absurd circumstances in which people can be better off on benefits than in work. I am sure that many Members have met people who are frustrated and desperate because they know that although their lives would be better if they were in work, financially they would not be better off in work. I think that everyone should welcome the fact that universal credit will put right that wrong.

A number of Members have expressed concern about the changes in employment and support allowance. As the hon. Member for Aberdeen South (Dame Anne Begg) pointed out, and as the Secretary of State acknowledged earlier, there is particular concern about the decision to time-limit contributory ESA. I hope that during the Bill’s passage the Government will consider, for instance, whether the period before the cut-off should be longer than a year, whether it is appropriate to include the 13-week assessment period in the calculation, and whether those with certain conditions could either be entirely exempt from the cut-off or be allowed extensions at the discretion of Jobcentre Plus staff. A good many people will be affected by the limit, especially if, as is currently planned, it is applied retrospectively.

I mentioned the controversy surrounding disability living allowance. As I have said, I am delighted that the proposals affecting those in residential care are being reconsidered. However, concern remains about the increase from three months to six months of the period before people are eligible to apply for the allowance. I understand the logic of trying to ensure that it is given only to people with long-term conditions, but in the case of sudden-onset conditions such as cancer, strokes or accidents, the greatest financial need is at the start. I hope that thought will be given to whether people in those circumstances can be helped to deal with the serious financial implications of such conditions.

I agree with the hon. Member for Aberdeen South that a huge number of issues could be raised in relation to the Bill, but today I can focus on only a few of them. The last issue that I want to raise is the total cap on benefits. Again, I understand the rationale. Many working people with low incomes find it very difficult to see others receiving more money from the state than they themselves can earn, and I understand their frustration and resentment. However, we have yet not been given enough detail to establish the precise impact of the Government’s proposal.

Some people also resent the fact that families, particularly large families, are living on benefits, but the choices made by parents are not the fault of their children. By the time the Bill has completed its passage, we must ensure that any cap has been set at an appropriate level, that there is no prospect of children being pushed into poverty, and that families—especially in London, where housing costs are so high—will not be disproportionately hit. Given that the housing benefit cap is £400, a total benefits cap of £500 could leave a large family with just £100 a week to cover all their other living costs. I hope that the Government will consider excluding housing benefit from the calculation, or, preferably, excluding child benefit. Given that child benefit reflects the size of families, that could have an impact on child poverty. I am very concerned about the implications of that policy, and we will need to know the impact on children, in particular, before I can agree to support it.

Most of the Bill is well thought out with a strong sense of principle, and I wholeheartedly support the overwhelming majority of its measures. I welcome the moves to simplify the benefits system and to create a more individually tailored welfare system, but I also have concerns, and I hope the Government—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Time is up. I call Mr Tom Clarke.

14:50

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

I should begin by declaring an interest: I am co-chair, with Lord Rix, of the all-party group on learning disability.

Members will not be surprised to learn that I intend to oppose the Bill and support the reasoned amendment. In the short time available to me, I shall speak in direct opposition to this Welfare Reform Bill, because if it is implemented it will devastate the lives of people who are sick, people with disabilities and many vulnerable people throughout Britain, not least in my constituency.

Since before I was elected to this House, I have firmly held to the principle that people with disabilities should have the same opportunities as everyone else, no less and no more, and I have to say that the election of this new coalition Government does not in the least diminish the need for a principled stand to be taken on behalf of people who require support. That is because of the highly punitive measures that are being proposed, and which have not been denied today, and I hope to have the time to address some of them later.

On Tuesday 30 November I secured a Westminster Hall Adjournment debate on Government plans to remove the mobility component of the disability living allowance for disabled people who live in a residential establishment. At the beginning of that debate, I said:

“To put that into context, it is important to establish which members of our society qualify for that benefit. The first, and by far the most common group, is where the claimant is unable—or virtually unable—to walk. The second group consists of people who are both blind and deaf. The third category comprises people with a severe mental impairment, and/or severe behavioural problems. In truth, we could not be discussing people who are more vulnerable or deserving in our communities.”—[Official Report, 30 November 2010; Vol. 519, c. 197WH.]

I also pointed out that of all the proposals on welfare reform, this is the most brutal and cruel. I have had no assurances on this issue during the course of the debate

[Chris Grayling]

It might be helpful to put on the record that we have been very clear that we intend mobility provision to continue for people in care homes. There is an overlap between a number of provisions however, and we have formed the view that it is better not to include a stand-alone clause in this Bill, but to include the issue as a whole as part of our review establishing exactly what needs to be done and through which channels.

[Mr Clarke]

So in place of the clear threats we had from no lesser a person than the Prime Minister and in the face of a lack of clarification today from the Secretary of State, we are expected to wait for a review. I am sorry to have to tell the Minister that, as my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) said in opening for the Opposition, organisations representing disabled people throughout the country are simply not prepared to accept what appear to be assurances at the 13th hour, given what is written in the Bill and given the opposition to my colleagues’ amendment.

I urge the Government to consider the opinions of voluntary organisations and of the independent Social Security Advisory Committee, which obviously took the same view as I did:

“We consider that the proposal to remove the mobility component from people in residential care should not go ahead.”

That remains our determination today. I trust that the Government will take on board the view expressed by such an influential and informed body.

[Dame Anne Begg]

It is, perhaps, worth putting the record straight on DLA. This afternoon, the impression has been given that there are no checks on people on DLA and that they are just left to languish, but everyone on DLA gets a letter every year saying they must report any changes to their condition.

[Mr Clarke]

I am grateful to my hon. Friend, who has considerable knowledge of these important matters.

Even today, we have heard much about the deficit, but the sick, the poor and the vulnerable in our society simply do not deserve to be punished for the financial greed and recklessness of the banking sector. That is what this Bill is proposing, and if anyone doubts that then let them address the planned 20% reduction in DLA. We are cutting a lifeline on the basis not of a necessity, but of a statistic plucked out of thin air.

I work closely with disability organisations that are at the forefront of supporting disabled people and their families at every stage of their lives. Today, I speak up on behalf of the many constituents who have been in touch with me on this subject. Indeed, I have had more representations on this Bill from both constituents and disability organisations than on any other Bill in my entire time in Parliament, and it is a bit too late for the Minister to make the intervention he has just made. Organisations working in this field have long been striving to achieve a balance between providing practical help and listening to those who need support, and that informs me in this debate. Incidentally, almost all the caring organisations, from Mencap to Scope to Enable in Scotland, are united in condemnation of what is on offer.

We are told the Government plan to simplify the benefit system for claimants and to remove financial disincentives to moving into work. I have no problem with those two objectives if that is what is really meant. As my hon. Friend the Member for Aberdeen South (Dame Anne Begg) said however, the devil remains in the detail. Where is the commitment to promoting social justice for disabled people? We have rising unemployment on the one hand and spending cuts on the other, with reduced access to social care services as a consequence of reductions in local government funding. The latter is hitting disabled people disproportionately hard all over the United Kingdom, further compounding the poverty and disadvantage they already face. There appears to be a lack of recognition that we are talking here not about people who are fraudulent or feckless or who fear work, but about people who are incapacitated and cannot work and therefore must be supported. While disabled people who live at home are to keep the mobility component of their benefits—which is as it should be—it cannot be right, it cannot be fair and it certainly cannot be equitable for disabled people living in residential homes to be hammered with a 69% cut in overall benefits.

For that reason and many others, I ask the House to consider very carefully the words printed in the Bill, because it is the Bill that we are considering today. We are being asked to give it a Second Reading, and on the basis of its contents and what has been said by Ministers, I cannot support the Government.

14:59

[Mr David Evennett (Bexleyheath and Crayford) (Con)]

I welcome the opportunity to contribute to this debate on a Bill that will radically reform our welfare system, and I congratulate my right hon. Friend the Secretary of State on proposing these much-needed and long overdue reforms to our benefits system. He is well known and respected for his work on social justice, and the Bill marks a genuine step forward. I also commend him on the thoughtful, moderate and constructive speech he gave this afternoon.

This measure is to be supported as it places individual responsibility at the heart of the benefits system. That approach will, in general, be welcomed across the country and certainly by the vast majority in my constituency.

The welfare system under the previous Labour Government became a welfare culture in which people claimed everything they could. People not only acted irresponsibly but were encouraged to do so; as a result, some people were better off claiming state handouts than their neighbours who were working. To have 5 million people living on out-of-work benefits and 2 million children growing up in households where no one works is a disgrace, and the Opposition ought to be ashamed of that record after 13 years in power.

There are many problems with the welfare system that the Government inherited. It is complex, bureaucratic and contains perverse incentives to keep claiming rather than work. We have heard the interventions—a 45% increase in housing benefit since 1999 is an incredible figure and such problems cost the taxpayer a fortune. The Labour party had 13 years to simplify the benefits system and to increase the incentive to work and it did nothing but make the problems worse. The Opposition amendment is merely a prescription for doing nothing.

Those who can work should work; that is the responsible thing to do and the best route out of poverty. Our aim should be to encourage people to take jobs, and I believe that most people want to work and to find a job. The Government’s role should be to help match people to the vacancies on offer, to ensure that they have the skills they need to take on jobs, and to provide individual support in the meantime to help people to get there. The Bill offers opportunities for change to enable people to do that.

It is right to place a 12-month limit on contributions-based employment and support allowance claims. That ensures that those who need support when they lose their job receive payment, and underlines the principle that they cannot claim for as long as they want. I hope that the introduction of a claimant contract will increase individual responsibility by ensuring that people turn up for their appointments and interviews. The inclusion of a personal pledge to take up reasonable offers of work, with financial penalties for those who do not keep their obligations, is also a necessary reform.

Placing a fixed limit on the maximum amount that any one household can claim in benefits, together with the new housing benefit cap, will mean that the financial barriers to employment will be removed, and that will be fairer for the taxpayer, who will no longer subsidise high rents for others. A regular complaint from my constituents is that, as workers and taxpayers, they pay for some people to have a better life than they do when they are in full-time work. I therefore welcome the introduction of the universal credit, which will mean that once the Government’s reforms have taken effect, people will be able to see for the first time that they are better off for each hour they spend working rather than being on benefits. The reforms will ensure that work pays.

Benefit fraud has also been a problem, costing the taxpayer about £1.5 billion every year. That is simply not acceptable. I hope that the measures in the Bill will send a clear signal that fraud and the abuse of the benefit system will not be tolerated.

Issues have been raised this afternoon that we will need to consider carefully, including the point about the disabled. I recognise—and I know that the Government recognise—the important role that cash benefits play in supporting the disabled in overcoming the daily problems that they face. Life is often more difficult and more expensive for those with a disability. I hope that the personal independence payment system that the Government plan to introduce will be fairer and simpler, allowing vulnerable people to lead active and independent lives. Changes must be made to ensure that those who do not need personal independence payments do not receive them. It is important that the assessment system is right and fair and takes into account genuine needs. Change over time should be noted to prevent abuse, as well as to help to ensure that those with growing and additional needs caused by disability get what they need and genuinely deserve. I am pleased that the payments will not be means-tested and will provide people with support when they are both in and out of work.

The disabled issue is emotive and I have received a considerable amount of correspondence from constituents about it. Some of the information that they have been given has unfortunately not been accurate, which is to be regretted.

[Fiona O'Donnell (East Lothian) (Lab)]

On the subject of inaccurate information, a duty press officer from the Department for Work and Pensions told the BBC last night that the Government were not going to reduce the qualifying period from three to six months. Can we have clarity on that issue?

[Mr Evennett]

I understand the hon. Lady’s point and we have had some clarity from the Secretary of State already this afternoon. It is important that we urge those on the Front Bench to take into account the needs of the disabled, and I believe that they will do that in the policies that they seek to implement.

I strongly commend the work done in the Bill and the further consultation that will be undertaken by Ministers to ensure that all the needs of the disabled are considered when we bring in the new annual assessment. I welcome the fact that there will be an annual assessment for those who are disabled so that their real needs can be reassessed if necessary to ensure that they get what they need and what they deserve.

I am running out of time and, as other hon. Members have said, it is very difficult to cover all the aspects of such a complex Bill in such a short time, but I want to commend the work being done in further education by my hon. Friend the Minister for Further Education, Skills and Lifelong Learning to ensure that people get the necessary training to take up the jobs on offer.

I believe that the Bill will deliver real progress from a coalition Government who are determined to reform a system that is unwieldy, unfair and unacceptable. The Bill should be commended and supported this evening.

15:06

[Julie Elliott (Sunderland Central) (Lab)]

There have already been some excellent speeches in this debate on one of the most important issues that we have discussed so far in this Parliament. Before I talk about the issues, I want to align myself with the comments made by my hon. Friend the Member for Aberdeen South (Dame Anne Begg) about the problems with the Bill.

I support any attempt to reform the welfare system for the better, to make it easier to access and understand and to make people claim and receive the benefits to which they are entitled, and some measures in the Bill attempt to do that. For example, if universal credit can be made to work, that will be a good thing, but, as yet, I am not convinced that that will be the case. I await with interest the details of how the proposals will work. The jury is out for me on that point.

In the run-up to Second Reading, I have been contacted by many people who are extremely worried about the proposed changes and who are worried and frightened about the impact that those changes will have on their lives. The lack of detail about some of the proposals is one of the problems. The people contacting me have been, in the main, among the most vulnerable in our society. That was why I felt that I had to speak in this debate; I believe that, as an MP, I should speak up for the most vulnerable people I represent.

There are many reasons why I cannot support the Bill as it stands, many of which are set out in the reasoned amendment. The uncertainty about how the universal credit will work is creating fear for those people for whom benefits form all or part of their income. The Bill seems to contain disincentives to work, and that surely cannot be the intention.

I come from an area with long-standing high unemployment and I firmly believe that we need to incentivise work and to give people the opportunity to be aspirational about their lives and the chance to make things better for themselves. Although there is high unemployment in Sunderland and the north-east, there is also a strong work ethic. I was brought up in a family and community that believed that people should work hard and do their best, and I do not believe that that has changed over the years in the majority of families. Sometimes, people need help to do that. Such help includes the tax credit system, but there has been no clarification on what level of support parents will get for child care. The disincentives for people who save, who will be barred from the universal credit, seem unbelievable.

As the Bill disadvantages people suffering from cancer or mental illness through the withdrawal of the contributory employment support allowance, it is hitting hardest those whose needs are probably the highest.

[Stephen Lloyd (Eastbourne) (LD)]

Will the hon. Lady give way?

[Julie Elliott]

No, not at the moment, although I might in a minute.

As I said earlier, I want to focus my remarks on the most vulnerable. Many of the extremely vulnerable people who have contacted me are suffering from mental health issues and autistic spectrum disorders. Autism is a spectrum condition, which means that, despite some common characteristics, it affects sufferers in different ways and to differing extents. ASDs, as they are commonly known, are largely “hidden” disorders that affect a sufferer’s ability to communicate with others, which means that the annual review will be a real problem. ASD sufferers span the whole disability spectrum. Some are able to live relatively independent lives; others need a lifetime of care or receipt of specialist support.

Approximately one in 100 children and 350,000 adults of working age suffer from ASDs. Of the latter group, only 15% are in full-time employment in the UK. The disability living allowance has been a key benefit, providing for these people the help and support that the additional costs of their disability require. The £1 billion cut over the next three years, when the DLA is replaced by the personal independence payment—

[Jim Shannon]

At the beginning of her remarks the hon. Lady said that reform is necessary, which we all accept. However, does she share my concern that a target to reduce by 20% the number of people in receipt of DLA is the wrong approach, and that the issue should be dealt with through reform alone?

[Julie Elliott]

I totally agree with the hon. Gentleman. Reform is about making the benefit fit the individual need. If the benefit needs to be paid and if it fits the need, it would not be wrong if it went up by 20%.

It is vital that the Bill does not disproportionately hit those with autism and other disabilities, who are all too often overlooked despite being among the most vulnerable in our society. The goal surely must be to support people with autism who cannot work, so that they can live a full and happy life. However, for those who are able to work, DLA has been crucial in helping them into the workplace. Without the DLA, people with autism would be socially isolated and more likely to suffer from poor mental health. The reform of DLA may lead to people with mental health problems missing out, which could have huge knock-on cost impacts on health and social care services. Surely this cannot be this Bill’s motivation—to give less support to people with autism and to increase the knock-on costs to other Government Departments. As it stands, that is what the Bill is in danger of doing. Its implications for people with autism could lead to confusion and frustration, which in turn could lead to more serious health problems. The Government must ensure that the needs of those with ASDs are taken into account.

The proposals for face-to-face assessments are in themselves creating great anxiety among people with autism and with mental health issues. ASDs are a very specialist area of medicine, and the doctors who deal with such disorders are the people who understand them and their implications. Many of the doctors undertaking the assessments will not have a full understanding of ASDs and the specific needs of the people who suffer from them. When a detailed assessment by a specialist has already been undertaken, what is the need for a further assessment, for benefit purposes, to be carried out by someone without that expertise?

As I said at the beginning of my speech, for a welfare reform Bill to work, it must be, as it says, a “reform” Bill that makes benefits easier to access and to understand.

15:09

[Tracey Crouch (Chatham and Aylesford) (Con)]

May I begin by congratulating the Government on introducing the Bill? I firmly believe that its proposals have the potential radically to reform our welfare system for the better, and we are in dire need of such reform. Those trapped within the system, and the millions of taxpayers who pay for it, will note that Labour intends to vote against such reform later today.

It is vital that we assess the broken welfare system that this Government inherited, to put the need for reform into perspective. Under Labour, we saw ballooning welfare expenditure, an increase in workless households and the absurdity of some housing benefit awards dwarfing the average family income. The Government simply must urgently address that appalling legacy by establishing fairness and an ethos of individual responsibility as cornerstones of our welfare system.

I welcome the notion of a universal credit and the merging of a number of working-age benefits. By replacing housing benefit, the child tax credit, the working tax credit, income support and the employment and support allowance with one single benefit, we replace a tired, confusing welfare system with a simpler, more transparent one. This simplification will help to combat the serious issue of benefit fraud, which is estimated to cost the taxpayer £1.5 billion per year—another reason why the Bill ought to be welcomed on both sides of the House.

Undoubtedly the most progressive aspect of the universal credit is its potential to incentivise those who are unemployed back into work, with no one left worse off by entering employment. The previous Government created a welfare system that discouraged people from working. As a result, there is a troubling number of cases of people languishing on benefits who have become accustomed to that way of life. I see that in my own constituency.

I am proud that this Government recognise that more must be done to help get these people back into employment, either through personalised support for those who are seeking work or through tough sanctions for those who are not. Although the universal credit will act first and foremost as a safety net for those out of work, it has motivation and conditionality at its heart, which, coupled with the Government’s Work programme, which focuses on the long-term unemployed, ought to be welcomed.

I visited Canada a few years ago to study its rehabilitation programmes for those who had suffered some kind of personal injury, and I was struck by the completely different mentality. The programmes, which were often as much about psychological as physical rehabilitation, were entirely designed to get people back into work. Canada’s insurance system simply does not encourage a sit-at-home attitude; our current welfare system does precisely the opposite.

Although I am in no doubt about the positive impact the universal credit will have on our welfare system, there are areas that I believe we must be particularly careful in addressing. By creating an overarching single benefit, we have to take this opportunity to make sure that the flaws in the system are remedied. Although I congratulate the Government on addressing the way in which people with mental health conditions were treated under the previous Government, I would like a reassurance that, where necessary, carers will be able to accompany those with particular conditions to their work capability assessment. Assessments of the needs and suitability for work of those with mental health conditions must be more comprehensive, compassionate and consistent. I welcome the Government’s broad acceptance of Professor Harrington’s review of these issues.

The Bill presents the opportunity to restore faith in a broken system. Undoubtedly, we must provide the means for those who are out of work to re-enter employment, while supporting those in genuine need. A system based on conditionality, with strict requirements for out-of-work benefits, will also be fairer for the taxpayer. Most importantly, we must shift the emphasis from what claimants cannot do to what they can do.

These bold welfare reforms must be carefully implemented, and people will be understandably anxious about how they will affect their lives, but I share the Government’s belief that they are necessary and for the better, and I am confident that, in time, this will be proven.

15:18

[Mark Tami (Alyn and Deeside) (Lab)]

I recognise that a lot of Members want to take part in the debate, and I want to make just a few points about the possible effects of changing the disability living allowance and the impact on young people with cancer and their families.

Receiving a diagnosis of cancer for your child is devastating. Each day, 10 families get that terrible news. For my family, that news came on 31 July 2007, when what we thought was a viral issue with our son was in fact leukaemia. Your life and that of your family changes at that moment: you are scared, frightened, terrified—you do not know what is going to happen next—and when the treatment starts, it is quite an aggressive process. It is a long, helter-skelter journey; there is no quick fix. For girls the protocol is two years, and for boys it is three. Children will respond very differently to chemotherapy. Some will respond relatively well, whereas others will get quite ill, but few get through it without any side effects. There will be times when things will be fairly stable, with periods at home and out of hospital, but there will be other times when you are back in and out of the hospital with an infection or some other problem, which affects the family as a whole.

The financial impact of this illness on your family is probably the last thing you think about when you are told the devastating news, but it must be taken into account because, like the treatment period, it goes on for years, rather than days, weeks or months. We were fortunate because I have a well-paid job and an understanding employer. In my case, two parents can share the care, we have the use of a car, and we have a supportive family and friends. Many people I have met and know were not in that position, which is why disability living allowance is a very important, if limited, support, on which many people rely.

I ask the House to consider what it is like being in a hospital almost full time, day and night, perhaps with another child at home who cannot really grasp what is going on. Some people in this position are single parents. Some cannot drive or do not own a car, so the very task of getting to and from hospital becomes a nightmare. Some do not have any family network or friends on whom they can rely. Perhaps their employer, who at first was very understanding, later requires them to come back to work, but as they are not sure what the next day will bring they are not sure whether they can commit to doing that. They start to use up their paid leave, then start to take unpaid leave, and then perhaps they give up their job altogether.

A 2007 survey found that 83% of families incur significant extra costs associated with their child’s cancer and 68% get into actual financial difficulties. I think that the survey is wrong, because I believe that about 100% of people in this position find themselves incurring extra costs—I do not see how they can fail to do so. The current qualifying period for DLA already creates problems, as it takes no account of the sudden onset of many cancers—that point was made earlier. Families need help at the earliest possible time, and doubling the qualifying period will only make matters far worse. I ask the Government to look at that again, and I hope they do so.

I also ask the Government to recognise that cancer treatment is not a nice, smooth process; there are ups and downs, and a failure of the treatment or a relapse will result in a different protocol being used, which again can cause a number of problems. My son went down the transplant route, and a lot of issues arise there. Families may need just as much support a year or two years down the line as they did when they received the first news. There is no one-size-fits-all solution and any assessment criteria must take account of that. The Government need to rethink and to listen to charities such as CLIC Sargent, which deal with the families day in, day out and provide a very high level of care. They are the experts. Please listen to the experts and take their views on board.

15:24

[Chris Skidmore (Kingswood) (Con)]

I welcome the Bill, which marks a point at which we can send out this message: we cannot continue to spend on welfare as we have previously. Instead, we need to understand that there is no such thing as Government money, free to be given out; there is only hard-earned taxpayers’ money, which in these difficult times needs to be spent with caution and care.

Over the past 13 years, we saw no evidence of that caution, as the total annual expenditure on benefits mushroomed to £152 billion. Every year, £5.2 billion was lost in overpayments, of which £1.5 billion was lost to fraud. Some £3.5 billion was spent annually on administration costs and paperwork alone. As we have heard from the Minister, other benefits rose, with the cost of housing benefit having increased from £11 billion to £20 billion since 1997. That is simply unsustainable and we must act.

I wish to refer to the words of one commentator, who once said that

“we have reached the limits of the public’s willingness simply to fund an unreformed welfare system through ever higher taxes and spending”.—[Official Report, 14 May 1997; Vol. 294, c. 65.]

Those words could have been spoken today by the Minister, but they were spoken by Tony Blair in 1997. In opposition, Blair understood the problem. He understood, even 14 long years ago, that our welfare system prevents people from living independent and fulfilling lives. He understood that it creates a segregated society, which he stated was a “moral and economic evil.” In 1997, Labour’s manifesto promised:

“we will face up to the…issues that confront us. We will be the party of welfare reform.”

I see very little evidence of that, and, tied down by Members on the left, the party did nothing.

In this debate, we are having to deal with the tragedy that that inaction has left us. Millions of people of working age are locked in dependency on state benefits, with little incentive to get off them. They can exploit a system that provides hand-downs, rather than a hand up—a system that has become the engine of social failure and has driven a culture of “work does not pay”. That, in turn, has driven the importation of cheap labour, exacerbating the immigration problem.

I hope that this Bill can mark the turn of the tide and that it will usher in a new era—one that we were promised in 1997 but that was never delivered. I hope this will be an era of reform that will transform this nation. The stakes might be high, but we cannot afford to waver on welfare reform. We must deliver for the health of the nation, and I urge every Member to give the Bill their full support.

15:27

[Malcolm Wicks (Croydon North) (Lab)]

It is a pleasure to follow my Blairite colleague on the Government Benches. May I say, by way of introduction, that I judge, as many of us would, that wise social security policy seeks to relate the issues of benefits to the issue of employment? I would argue that we should start the discussion with work. I wish to analyse the Bill and some of its proposals in that important context, because surely for those able to work the best social security policy is a job—things start from there.

I often quote William Beveridge at this stage, partly because it reminds us that there was once an era of great Liberal reform. In his famous 1942 report, he talked about the giants of want, disease, ignorance, squalor and idleness standing in the way of social reconstruction once peace had come. He said that the giant of idleness, by which he meant unemployment, was the largest and fiercest of the giants and that if we did not overcome it all the other social goals of peacetime reconstruction would be out of reach. If one thinks about the implications for health and education, one sees exactly and empirically what he meant, so that is my starting point.

Skipping forward 65 years from the great Attlee reforms that implemented the Beveridge recommendations and many others to the present day, it seems to me that there are three issues or obstacles that we must address or overcome if we are to get right the balance and relationship between what I still prefer to call social security—I find the term “welfare” pejorative—and work.

The first issue is employment policy. Where is the Government’s full employment policy? Is it their ambition to move back towards full employment? In my Croydon constituency, literally hundreds of job losses have just been announced at the Home Office’s Border and Immigration Agency. In addition, the council will contribute hundreds of job losses and there will be job losses in the health service with the reform of primary care trusts. That is just the start in an area that is very dependent on public sector work. What we are seeing is not ambition for full employment but a move towards further unemployment, which concerns me greatly.

One of the great tragedies is that many of our fine young people leaving school and getting vocational qualifications and degrees are finding that no jobs are available. We must all think long and hard in the short, medium and longer term about whether we can somehow move towards a job guarantee for our young people, many of whom do so well in education and skills. We will betray a generation if we cannot soon offer them work that suits their skills, creativity and qualifications.

On the contentious issue of immigration, it is clear to me, from a London perspective, that eastern European immigration has made it more difficult for people on the margins of the labour market to get jobs. It is a simple matter: if an employer is presented with a British person of whatever ethnic group who is not job-ready, as opposed to someone from Lithuania or Poland who is clearly eager to work and will probably turn up on time, who will they employ? How, in those circumstances, can we enable British people to get the work that our country owes them?

[Stephen Lloyd]

That is an important point. Does the right hon. Gentleman agree that a key area in the Bill—within the black box that was discussed earlier—is the fact that the Department will pay providers upwards of £14,000 to help into work people who have been away from work for a while and to sustain them in work over a couple of years? Does he agree that that is a positive step?

[Malcolm Wicks]

Of course, which is why the Labour Government, under the former Secretary of State for Work and Pensions, my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), established such policies with Jobcentre Plus. Of course that is the right thing to do.

The second of the three issues I mentioned is wage levels. I recall from my history that the Speenhamland system was created in the late 18th century. As far as historians can judge, that was the first direct wage subsidy in Britain. Since then, we have had a number of policies, starting with family income supplement, tax credits and so on that could be said to subsidise low wages. I am proud that a Labour Government introduced the minimum wage, but Conservative Members will not be so proud that their party vehemently opposed it. As we move back towards economic growth and greater affluence, should we be talking about not just a minimum wage but a living, or adequate, wage, not least for people who are employed by multinationals that make large profits? Otherwise, the social security system will continue to subsidise low and sometimes exploitative wages.

The third issue is the work ethic, on which my hon. Friend the Member for Sunderland Central (Julie Elliott) touched. I believe the work ethic is alive and well in many parts of Britain. I also recognise that because of the de-industrialisation during the Thatcher years the work ethic among some individuals in some communities had the stuffing knocked out of it, and there are now communities where three generations of people have been nowhere near a job for a very long time. We need to think through the implications of that.

Where people can work and where jobs are available, working-class people on our estates are angered by spongers and shirkers. Those people do exist and we should not ignore that fact, but in a culture in which bankers can stick two fingers up to democracy, to Parliament and to the Government and in which multinationals brag about avoiding paying tax, we have become an amoral, if not sometimes an immoral, economy. If we are to preach honesty and responsibility to the poor, as I think we must, although it can be difficult at times, then responsibility is also good enough for the rich and powerful.

15:34

[Paul Uppal (Wolverhampton South West) (Con)]

It is an honour to follow the right hon. Member for Croydon North (Malcolm Wicks). I very much shared some of the sentiments that he expressed. His speech contained a good deal of common sense. I would not expect anything else from a fellow Wolverhampton Wanderers fan; that is the least I would expect from him. I do not think I am the third Blairite in a row to speak, but I will endeavour to add some thoughts, particularly from a personal perspective. Six minutes is not long enough to do justice to my full thoughts on the Bill, but I shall be brief. Hon. Members may be happy to hear that I do not intend to use all of my allowance.

This piece of legislation is a seminal Bill. It is one of the reasons that I hold the politics that I do. I am a Wolverhampton Member and Wolverhampton South West is a no-nonsense constituency, full of decent, hard-working folk who say it as it is and always wear their heart on their sleeve. The sentiment that has been repeatedly expressed to me is that the Bill has been a long time coming. Its central ethos is that work always pays. I shall sum it up by recalling my personal experience of my father.

My father came to this country with less than £5 in his pocket and no idea where he would sleep that night. He took that risk not only because he wanted to live in a country that had choice, freedom and opportunity, but because he wanted to work. Within 48 hours of his arrival, someone tapped him on the shoulder and said, “Do you know you can actually claim benefits?” That was anathema to him; it was not even in his mind. He came with the ethos of working, and working is what he has always done. That story has been replicated by those of scores of my relatives, who came over to work and had the ethos of working hard at their core.

I have actually been poor. I was brought up in poverty. I say this to Opposition Members—to all Members, actually: there is no nobility in poverty. It is something one strives to escape from. I went to a state school. My friends divided into two camps: those who had the ambition to move on, and those who, even then, in the late ’70s and early ’80s, would tell me to my face that they envisaged that the rest of their life would be on benefits, and that they were quite happy to live that way. The Bill, through its ethos of making work pay, tackles that problem head-on.

The right hon. Member for Croydon North said that a lot of people had the stuffing knocked out of them in the 1980s. I will use a personal example. Many of the uncles that I referred to earlier lost their jobs because they worked in industries in the midlands in that period, but almost all went on to establish their own businesses. They were driven by ambition and the ethos of trying to better their lives.

I have spoken a lot from an historical perspective, but I want to bring my remarks up to date with a personal story that I heard from one of my closest friends just after Christmas. He had run a motor salvage firm, which, through a bit of bad luck and for other reasons, had gone downhill and eventually folded. People said to him, “How about claiming? You’ve contributed enough in your life,” but he said, “No. I’ve worked for myself and that’s what I’m going to do.” He set up a new business—a cleaning business. He has worked hard, but whenever he tries to employ staff—this frequently comes up—people approach him and say, “I’m happy to work for you if you give me a bit of cash on the side.” What they are saying is that work does not pay in those circumstances.

I am glad, and absolutely proud, to be part of the Government who are introducing the Bill. To make a non-partisan point, this has been a long time coming. It should have been done, not just in the past 13 years, but very many years ago. I shall sum up briefly by paraphrasing a saying that was used by my hon. Friend the Member for North West Leicestershire (Andrew Bridgen): there is never a wrong time to do the right thing. As the Chinese always say, the first step of any journey is a long journey, and the most difficult step. I am happy to put my shoulder to the wheel and support the Bill, and push it through its very important journey.

15:39

[Teresa Pearce (Erith and Thamesmead) (Lab)]

All Members agree that the welfare system needs reform, and I welcome attempts to simplify the benefits system and make work pay. We need a welfare system that helps those who can work to do so, by supporting people into good, well-paid, meaningful work, and properly supports those who cannot work. However, I have serious doubts about the Bill’s effectiveness, and I am worried about the impact that some of its provisions will have on vulnerable people in my constituency.

I shall first raise some concerns that I have about how the Bill has been drafted and presented. Almost all the charities and organisations that I have been in touch with have raised legitimate concerns about the speed of the legislation and particularly the lack of detail. There is a heavy reliance on regulations and secondary legislation that makes it difficult for Members and others to scrutinise how the welfare reform agenda will work in practice. Clause 11 on housing costs, for example, is only 30 lines long. There is little detail or analysis of how child care costs, free school meals and council tax benefit will be covered under universal credit.

One of the most concerning aspects of the Bill is that some of its provisions are still under consultation. For example, clauses 69 to 72 propose the abolition of the social fund, yet the Department for Work and Pensions consultation on its proposed replacement is still open and does not close until 15 April. Abolishing the central fund and handing the emergency money to local authorities without ring-fencing is likely to create a postcode lottery. It is not right that this provision is included when we do not know its full impact and people have not had a chance to submit their views. I strongly urge the Secretary of State to withdraw any clauses on which consultation is still open.

One of the reforms in the Bill that will affect my constituency most is the changes to housing benefit. Capping local housing allowance rates and setting them at the 30th percentile of local rents rather than the median from April will create affordability problems. Many people will see a shortfall between their benefit and their rent. Plans to introduce regulations to uprate LHA rates based on the consumer prices index will make the problem worse. The DWP’s own impact assessment states that CPI is expected to rise by 2% each year, but rental costs will rise by 4%. This will break the link between housing benefits and actual rent costs, and means that many families will struggle.

The change will push many LHA claimants in London further out to areas like my constituency, Erith and Thamesmead, which has some of the cheapest housing in Greater London. This will place a great strain on our already overstretched housing and local services. The other possibility is that people will simply be unable to find any affordable accommodation, and will be at risk of debt and homelessness. Everyone should be entitled to a secure home. I urge the Secretary of State to think again.

Another of my concerns about is the proposal in clause 111 to apply a £50 civil penalty for claimant error. The proposal will affect the most vulnerable claimants—those who have difficulty filling out forms, those whose first language is not English and whose literacy skills are poor—and people who inadvertently miss out information. More importantly, it appears to link error with fraud, something that Ministers have done far too often recently and this afternoon, the most obvious case being the Chancellor’s announcement in the comprehensive spending review statement that over £5 billion was lost to benefit fraud. As we heard today from the hon. Member for Kingswood (Chris Skidmore), the figure is £1.5 billion. The DWP’s latest central estimates of total fraud and error across the Department shows that roughly the same amount of money was lost in claimant error as through official error by the Department, but we do not talk about departmental fraud. I urge the Secretary of State to reconsider the proposal to introduce a £50 civil penalty for claimant error, as well as the heavy sanctions in other clauses.

I was pleased that the Secretary of State decided not to proceed with plans to impose a 10% housing benefit cut on anyone who had been out of work for a year. That sanction did not make sense, and similar provisions in the Bill need to be reconsidered. A sanction-led approach does not make sense when we are facing huge public sector redundancies, a knock-on effect in the private sector and a weak growth rate which means that jobs simply are not available. There are 2.5 million people unemployed and fewer than 500,000 vacancies in the economy. I am already receiving a significant number of letters from constituents, many of whom were recently made redundant late in their careers, who are desperate to work but cannot find employment.

I have visited local colleges, where highly motivated young people are gaining qualifications in the hope of getting an apprenticeship or a job, but they are fearful because they know that the ratio of claimants to Jobcentre Plus vacancies is 12 claimants to every three vacancies. People need help overcoming barriers to work. They need personalised support, and a Government with a growth strategy to create jobs. A sanction-based approach will only cause severe hardship for the people who need the most support and further stigmatise people on benefits, setting neighbour against neighbour. I also fear that it will mean a significant increase in child poverty rates in this country.

Finally, I dispute the assertion by the Secretary of State that the welfare state is only for the most vulnerable. It is not: it is for each and every one of us. It is in effect a national insurance system into which people pay when they do not need it so that it is there when they do. It is a system in which contributions have just gone up by 1% for everyone in employment, but all they can expect is a cut in pensions and benefits. Overall, I support the principle of universal credit, and I am in favour of simplifying the benefits system and creating work incentives, but in the context of £18 billion of welfare cuts—

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

15:45

[George Hollingbery (Meon Valley) (Con)]

I pay tribute to my hon. Friend the Member for Wolverhampton South West (Paul Uppal), who made a compelling speech. My contribution is likely to be more technocratic, but I pay tribute to his eloquence.

I pay tribute, too, to the Opposition, who have a real passion for this subject and, Government Members will all acknowledge, are more likely to represent constituents who are subject to the vagaries and whims of the benefits system. We must encourage them, however, to accept that our ministerial team cares equally deeply about this complex, difficult and challenging issue. It has introduced a broad skeleton of proposals on which to hang the detail. In my conversations with Ministers, it has been quite clear that they know that that detail is missing at this stage. Indeed, the Secretary of State has made it plain that there is more work to be done on particular areas, but change is certainly required.

There are more than 30 different benefits out there that can be claimed. There are 14 manuals in the Department for Work and Pensions, with 8,690 pages of instructions for officials. There is a separate set of four volumes for local government, with 1,200 pages covering housing and council tax benefits alone. That is an astonishingly byzantine system. One of my constituents, Nigel Oakland, wrote to me:

“Nobody at the Jobcentre Plus can explain if it is beneficial if I continue to sign on. The last advice I was given is that I should Google the question.”

In such a situation, where even the experts at Jobcentre Plus cannot answer the questions that arise, we are clearly in difficulty.

It is confusing for clients. There is a 30-page form for housing and council tax benefit, including three pages of declarations. Employment and support allowance requires a 52-page form; jobseeker’s allowance, 12 online sections, each of five to 10 pages long; and disability living allowance, a 60-page form. Is it any wonder that people become confused and fill in the forms incorrectly and make mistakes? The system is extraordinarily expensive to administer. The DWP spent £2 billion last year administering working-age benefits, and local authorities a further £l billion administering housing benefit and council tax benefit. Even the tiny citizens advice bureau in Bishop’s Waltham, a town of 5,000 people in a rural and relatively affluent part of Hampshire, processed 2,176 queries about benefits in 2009-10, advising people how to claim them.

As we have heard from my hon. Friend the Member for Kingswood (Chris Skidmore), overpayments are rife, and I do not intend to rehearse the clear disincentives to finding work imposed by the benefits system, as that has been covered in some detail by the Secretary of State and my hon. Friend the Member for Bexleyheath and Crayford (Mr Evennett). There is absolutely no doubt that with some work having a marginal rate of tax of 95%, there are powerful disincentives that prevent people from going out to work. The taper in the universal credit of 65% at least allows some certainty, so that every time someone goes out to work they can be sure that they will earn a reasonable amount and get a reasonable amount in their pocket.

The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) discussed the difficulties for self-employed people in the new system. Only yesterday, I asked my right hon. Friend the Minister of State how that would be administered outside the PAYE system. He had a clear answer, and said that there would be mechanisms in place. In the present situation, my constituent Zehra Peermohamed wrote:

“For every £50 extra per week my new business may generate”—

a business that she started up herself—

“I would only gain an extra £4.81 of it to add to my overall income…It seems that there is little incentive for people in my situation who want to better themselves and not to rely on the benefit system.”

Whatever objections the shadow Secretary of State might have now, the existing situation is certainly no better.

Gemma Sword, a single mother with a child who has turned seven, says:

“In March…I started working part time 4 hours weekly over 3 days earning £96 monthly of which I was allowed to retain £80.”

From 15 November, she earned up to £150. Ms Sword continues:

“I was then transferred to Job Seekers allowance as my son turned 7 and was told that I can now only keep £20 of my monthly earnings”,

which did not even make it worth travelling to work. She was then told that she had to look for full-time employment but, to do so, had to leave her part-time employment. Those rules make no sense to anybody who looks at them carefully, and there is no doubt in my mind that there are powerful disincentives in the system to stop people going out and bettering themselves by finding work.

I do not want to spend a large amount of time examining the issue now, but we need sticks as well as carrots. There needs to be an understanding in the system that if someone does not perform as the system requires them to do in looking for work, they will pay a penalty in terms of the benefits to which they are entitled. Without that part of the mix, the new universal credit will not work.

I would love to examine in more detail the Work programme and its localisation, because the Communities and Local Government Committee has heard evidence that localisation will be peripheral. I would like to hear about the migration from disability living allowance to the personal independence payment, and in particular about the mobility component. I have talked to the Under-Secretary about that at some length and received considerable reassurances, for which I thank her. I would like more on the work capability assessment, the Harrington review of it and the ongoing review continually to refine that system and make it fairer and more equitable; and I also want to hear a little more at some stage and, particularly, in Committee about the appeals process and the proposed changes to it.

On the whole, however, this is a thorny, knotty problem, which the Government are grasping with some alacrity, and I for one will certainly vote for the Bill’s Second Reading.

15:49

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

These debates about our welfare system or, as I should say, heeding the comments of my right hon. Friend the Member for Croydon North (Malcolm Wicks), our social security system—whether in the House, the media or the pubs and living rooms of our constituencies—often become a magnet for two opposing arguments. The first is that everyone on welfare is somehow undeserving and all the money is spent incorrectly; the second is that every penny spent is 100% effective and should be beyond question. We have heard those views today, but both are extreme and neither is true.

I will always support our welfare state, and I want to live in a country where we accept collective responsibility for the people who are most in need. We would all be much poorer if we did not enable the most vulnerable members of our society to live with dignity, and it would be a far more daunting society without the support that we currently offer to people who are searching for work. I admit, however, that our system is not without its shortcomings, and it could benefit from some reforms. Unfortunately, those are not the reforms suggested in this Bill.

Our welfare system can be daunting and is too complex, and universal credit could be a positive step forward if it simplifies the system, but simplicity and transparency, welcome objectives that they are, are not enough on their own; the welfare system must also be fair and effective and, above all, enable the transition from welfare to work. The proposals in the Bill fall short of those measures, and as a result, despite being a supporter in principle of welfare reform, I cannot support them today.

The Government need to realise that we can support the welfare system and make it stronger only if we are also willing to support the labour market. Helping the transition from welfare to work will be successful only if there is work to take up, yet the scale and pace of the cuts that we currently see threaten to send unemployment soaring, just as happened under the previous Conservative Government, when it topped 3 million on two separate occasions.

Government Members tell us that the welfare bill is expensive, but so is mass unemployment. I believe enormously in the power of work. Employment brings dignity, respect and decency to life, and getting more people into work should always be one of the prime objectives of the Government. In my constituency there are 16 people chasing every advertised job, and, with some of our major employers, such as the council and the police force, axing hundreds of jobs, that will only become worse. Residents are concerned about their jobs, and with youth unemployment at record levels they are worried that there will be no work for their children.

The Labour Government took deliberate and positive steps to reduce youth unemployment by introducing measures such as the future jobs fund. By September, almost 700 young people in my borough had completed placements funded by the scheme. The scheme was an opportunity for participants to learn new skills, to develop confidence, and to learn about the things that might be holding them back in the jobs market. Many of the people who completed it went on to further education or training. Where was the sense in axing such a scheme, which was already proving successful in stemming the increase in youth unemployment?

It seems to me that schemes such as the future jobs fund were cancelled not for economic reasons but for political ones. The Government appear intent on spinning the myth—

[Stephen Lloyd]

Will the hon. Gentleman give way?

[Jonathan Reynolds]

I will, because I believe that I could not give way to the hon. Gentleman on Second Reading of the Health and Social Care Bill, and I do not want to be discourteous a second time.

[Stephen Lloyd]

I thank the hon. Gentleman. On the future jobs fund, does he agree that the percentage of people who went into paid work afterwards was incredibly low? One of the reasons why the Government have decided to focus more on apprenticeships, where they have invested much more money, is that with apprenticeships the jobs that people get tend to stick.

[Jonathan Reynolds]

When I looked into this, anticipating such an intervention, I found that it is difficult to get precise figures on a constituency basis, but the information that my local authority could give me shows that two thirds of the people who were employed through the future jobs fund in my borough went on to paid employment or training. I appreciate that that is not quite the answer to the hon. Gentleman’s question, but it is the best one I can give him.

The Government seem to want to create a year zero and pretend that no reform went on over the past 13 years, in order to create a benchmark by which they can measure their own progress. However, it is a false benchmark because it fails to recognise the progress that was made. Returning people to employment was an integral part of the last Labour Government’s policy, and many advances were made. The Benefits Agency-Jobcentre Plus merger, which is always identified as best practice, allowed people to look for work at the same time as claiming as benefits. We launched the new deal, under which, for the first time, people were told that they could not refuse help to find work, and it was the Labour Government who toughened sanctions against those who could work but refused to do so. Some of the measures now being proposed dilute the sanctions imposed by the last Labour Government.

[Mel Stride (Central Devon) (Con)]

Will the hon. Gentleman explain what progress was made under the last Government, given that the numbers claiming incapacity benefits increased from 700,000 to over 2.5 million?

[Jonathan Reynolds]

The benefits changed, so I am afraid that the hon. Gentleman is not comparing like with like. If he goes to the Library, he will see that the overwhelming rise in sickness benefits occurred in the 1980s, when take-up doubled. That is because when we went through the process of deindustrialisation the Conservative Government threw people on to the scrapheap, encouraged them to take that benefit until they retired, and did not care one bit about them. That is where he should look if he wants to find a reason behind these figures.

[Ian Paisley (North Antrim) (DUP)]

Does the hon. Gentleman acknowledge that in Northern Ireland there is over £700 million in unclaimed benefit that people should be claiming and have not claimed? If that is the case in Northern Ireland, the same must be true across the rest of the United Kingdom.

[Jonathan Reynolds]

I thank the hon. Gentleman for his point; I am pleased that he has been able to put it on the record.

I am proud of the Labour Government’s record on welfare reform, which stands in stark contrast to what occurred in the 1980s and 1990s, when there was no such reform at all until the end of the Conservative Government. Only now are the Conservatives coming back to it, but against the backdrop of public sector cuts and deficit reduction. The question that people will ask is whether the Bill is really aimed at getting people back into work or, once again, merely pursues the Government’s ideological goal of reducing the size of the state.

In principle, I welcome the move towards a single, simplified universal credit; few would not do so. That has the potential to ensure that people are clear about the income they will have if their circumstances change, and in principle I wish that we had done it. However, only through scrutiny of the detail of the Bill will we determine whether the reality of these reforms matches the promise, or whether they are really a cruel camouflage to hide savage cuts targeted at the most needy members of our communities. The measures in the Bill will penalise savers. Estimates suggest that nearly half a million families could lose all eligibility for financial support. Some reforms, such as the removal of the mobility element of DLA, are simply cruel and unfair. The Bill leaves many questions unanswered, such as how some benefits—crisis loans and council tax benefit, for example—will maintain any consistency if eligibility is decided locally.

Furthermore, we still know far too little about the Government’s plans for the most important area of all—child care. For all the good that any reform might do, unless the Government continue to provide support for childcare, we will not make anything like the progress that could be made.

I believe that the principles behind the Bill are right, but there is too much in the proposals that is ill thought through, and will be detrimental to many vulnerable people. The Bill is not ready in its present form, and the Government should recognise that. Welfare reform has a great many supporters in all parts of this House. The Government should have built on that consensus in creating the Bill, but they did not. That is why I will not support the Bill today, but will vote for the reasoned amendment moved by my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne).

16:00

[Sajid Javid (Bromsgrove) (Con)]

I welcome the Bill, and the excellent and thoughtful contributions that we have heard from all parts of the House. This Bill is important for many reasons, and it goes to the heart of the kind of society that we want to be. Do we want to be an opportunity society that rewards people for hard work, believes in equality of opportunity rather than equality of outcome, and believes that we should have a welfare state that stands behind people to cushion them if they fall, not one that stands in front of people and stops them progressing and reaching their ambitions and aspirations? That is the essence of the Bill. If one believes in an opportunity society, one believes in this Bill.

Some 1.4 million people have claimed out-of-work benefits for nine of the last 10 years. In that time, 600,000 people have gone straight on to the welfare register on leaving school and have never worked since. In short, many people have come to see welfare as a career option. I have seen that as an MP when meeting my constituents. In particular, I met a local farmer some months ago who employs 52 people on the national minimum wage for unskilled work. Of those 52 people, 40 are foreign workers from eastern Europe. When I asked him why that was the case, he said that our young people lacked a work ethic. In many cases, he had interviewed people but when they had considered the job and checked the numbers, they realised that they would be worse off if they took the job as opposed to staying on welfare.

Our welfare budgets have rocketed in such a way that today, 2 million children are growing up in households where no one works. Incredibly, the proportion of working-age adults living in poverty is the highest since records began. Worklessness and benefit dependency is costing our country a fortune. This entrenched poverty and worklessness throughout Britain is bad for benefit recipients and bad for society, and often leads to higher levels of debt, family breakdown, and alcohol and drug abuse.

At the heart of the problem is the lack of work incentives. We have a proliferation of benefits that makes the system so complex that people do not know whether they would be better off in work than out of work. I went to my local jobcentre a few months ago and asked the staff how long it would take them to tell somebody if they would be better off in work if they came in and said that they could get a part-time job tomorrow for 10 hours a week on the minimum wage. The answer was that it would take 90 minutes on average. They added that even when they give an answer and it happens to be yes—in many cases it is no—because it takes so long, many people have so little faith in the answer that they decide not to work in any case. That has to change.

We cannot address only the symptoms of poverty and worklessness; we have to address the causes, such as welfare dependency, educational failure, addiction, debt and family breakdown.

I will highlight three areas of the Bill that I believe represent the right way forward. The universal credit is the most important part of the Bill, because it will ensure that everyone is better off in work than out of work. The taper relief, at 65%, strikes a good balance between budgetary pressures and giving the right incentive to work. However, I hope that in the longer term, Ministers will look again at that rate with a view to reducing it. I caution that in implementing the universal credit, Ministers should look carefully at the IT systems, because they will have to work with other agencies, including Her Majesty’s Revenue and Customs. Many previous Governments have bungled new IT systems in terms of time or cost. This therefore has to be considered carefully. So does the passporting of benefits, to ensure that the nature of the taper relief is maintained and there are no cliff edges.

I also wish to highlight the changes to housing benefit, which are welcome because for the first time, they will ensure that people on housing benefit cannot live in properties that ordinary working people would have no prospect of being able to afford. That was a commitment in the Labour party’s manifesto, and I hope that all Members wholeheartedly endorse it.

The change to the consumer prices index for the uprating of housing benefit is also welcome, partly because it will save £300 million a year and we have to find savings given the budgetary pressures. Also, as such a huge proportion of people in social housing receive housing benefit, it may lead to a change in the rents demanded. Finally, I wish to highlight the welfare cap, which will be £500 a week for couples, meaning that no family can earn more than £26,000 a year in benefits net, or £35,000 gross, which happens to be equal to the national average household wage.

In summary, the Bill is a huge step forward in creating an opportunity society. It restores the dignity of labour and ensures that the Government will be standing behind people in case they fall, to help cushion that fall, but will not be in front of them to prevent them from progressing and meeting their ambitions and aspirations.

16:06

[Yvonne Fovargue (Makerfield) (Lab)]

Like many other Members, I welcome the concept of simplicity in the welfare system—of which I have experience, having worked in it. I also welcome the aim of ensuring that work is a route out of poverty. However, I do not believe that the Bill demonstrates fully how that will be achieved. Among two groups in particular, it could actually increase the number of people falling into poverty and debt. Like others, I am seriously concerned that people who are ill or have an accident, and have to take prolonged time off work, will suddenly be negatively affected by the plans to replace disability living allowance with the personal independence payment and by the changes to employment and support allowance, and will get less help from the universal credit, particularly during the first six months of their illness or disability.

People in that situation are coping with significant stress and coming to terms with a fundamental change in circumstances, as well as a sudden and dramatic drop in income. I had worked out some examples, but I shall not have time to give them. Suffice it to say that in months three to six, a single person who has worked all their life but has had a stroke and can no longer work is likely to be more than £130 a week worse off unless the qualifying period for the personal independence payment is brought forward to three months.

The importance of the severe disability premium cannot be overstated. It is a source of extra help for people who do not have a carer and have higher costs because of that. If it is not included in the Bill, the drop in income for hard-working people who suffer a life-changing illness or disability will be catastrophic. If they have a mortgage, the position will be even worse. Almost 20% of the people who attended an advice desk run by the citizens advice bureau at the county court said that an illness was the major factor in their falling into mortgage arrears, putting them at risk of losing their home. No fewer than three measures in the Bill will substantially reduce the amount of financial support available to people in that situation.

I now turn to families, particularly those paying for formal child care. If, as has been suggested, only 70% of child care costs are covered, many second earners on a low income will not have a realistic option of returning to work until their children are older and need less care. In some cases it could cost people money to return to work, which was not the intention behind the Bill at all. In fact, somebody’s problems might start not when their baby is born, as is usual, but when statutory maternity pay or maternity allowance is paid, because it is unclear in the Bill whether that will be treated as “income other than earnings” and lost pound for pound.

Clarification is also needed on other issues, such as whether benefit will be paid to the household rather than to the main carer. That is a big issue for many families.

[Ian Paisley]

Does the hon. Lady accept that there is a huge policy contradiction? The Government claim that they want to eliminate child poverty, yet at the same time they want to cut the social security payments that go right to the heart of benefiting children from low-income households.

[Yvonne Fovargue]

I totally agree with the hon. Gentleman, and I have evidence that some lone parents will not be able to work their way out of poverty.

To return to the question of to whom benefits are paid, I have seen mothers whose only source of stable, reliable income is child benefit, and many more mothers who do not know what their partners earn and who are given an allowance every week. That problem will be exacerbated if benefit is paid to main wage earner, which is usually the man.

Finally, if there is a query about one element of a claim there is often a delay, particularly when housing benefit and private landlords are involved. I can only hope that the other elements of the universal credit will be paid while such matters are investigated, and that the benefit is not so universal as to be “all or nothing” in such cases.

On sanctions, it is quite right that people refusing reasonable work should be penalised, as indeed they are under the current system. However, I urge the Government to ensure that great care is taken when sanctioning vulnerable claimants. For example, I dealt with a client who was sanctioned for not turning up for an interview to discuss his claim. Hon. Members might think that that is perfectly reasonable, but that client was in a secure institution—a secure mental health unit—and the letter requiring him to turn up for interview was sent there.

The £50 civil penalty for claimant error should be withdrawn. I am sure that, like me, many hon. Members deal almost daily with constituents who have been the victims of official error. The focus on claimant error is out of proportion. People who claim those benefits include the most vulnerable people in our society. They are the most likely to make errors, particularly with official forms, and the least likely to be able to afford the penalties. We should not simplify the benefit alone; the claiming process should also be simplified.

I hope that the amendment will be supported, because the Bill lacks clarity and detail. In fact, it will have the opposite effect of what is intended in terms of the Government’s stated broader goals and obligations, such as making work pay, reducing child poverty and protecting vulnerable groups.

16:09

[Harriett Baldwin (West Worcestershire) (Con)]

This is a profoundly important Bill. It is born out of the Secretary of State’s deep passion for helping people to get out of poverty—he has spent the last decade looking at that. There are few ways in which people who are born and grow up in poverty can find a way out. I can think of some, but winning the lottery does not happen very often and it is unlikely that someone will get a surprise inheritance from a relative whom they did not know existed. Marrying a top footballer is rare, and it would probably be quite hard work. The hon. Member for Makerfield (Yvonne Fovargue) spoke of work as “a” route out of poverty, but it is “the” route out. If Opposition Members have alternatives to work as a route out of poverty, I would be interested to hear of them.

The Bill removes the barriers that the welfare system puts in the way of people working their way out of poverty, which is important. We must recognise—this is why I am so disappointed that Opposition Members will not support Second Reading—that there are many barriers in the system’s construction that prevent people from getting the important message that they need to go out to find a job and to work, and that that is how they will improve their economic circumstances.

[Ian Paisley]

I appreciate what the hon. Lady says about people who are able-bodied and who can work working their way out of poverty, but how do people find their way out of poverty if their impoverishment is a result of disability?

[Harriett Baldwin]

As the hon. Gentleman knows, there are many provisions in our welfare system for exactly that sort of situation. I do not think that anyone is suggesting that people with no capacity for work should get out and work. We should have a generous safety net, as we do for people in those situations.

However, the system as currently constructed has many barriers that send the message that taking on full-time work is not worth while. With single parents facing a withdrawal rate of 96%, what kind of message does that send to people about the sense in going to work? We have all met people who work 16 hours a week. As we know, the way that working tax credits work gives people an incentive to find a job working 16 hours a week. At the moment, those working 15 or 17 hours a week find themselves financially worse off. That is why it is so important that the Bill tackles those cliff edges, ensuring a much smoother process and a linear relationship between the time that people work and the amount that they take home. At the end of the day, we all respond to the financial incentives that are inherent in the system.

As we heard earlier, the current benefits system also pays couples more to live apart than to stay together. I believe that I am right in saying that 2 million people in this country would identify themselves as being in a relationship but living apart. No one can deny that, in large part, that is down to the messages and the financial incentives sent through the welfare system, which will be reformed by this Bill.

I am sure that Opposition Members will welcome the fact that the distributional analysis of the universal credit shows that the vast proportion of additional money in the system will go to those in the lowest income deciles, with 85% going to those in the four lowest-paid deciles.

I should point out, however, to the Secretary of State that it was still a shock to realise that even under the changes that we are discussing today, the benefit withdrawal rates for those going into work will still be 65p in the pound. That is still a shockingly high marginal deduction rate, when our higher-rate taxpayers are on 51% or 52%. The Child Poverty Action Group, the Centre for Social Justice and Family Action have all argued for a withdrawal rate of 55%, with Save the Children arguing for a 50% withdrawal rate. I hope that everyone in the House will welcome the fact that the Bill gives the Chancellor in future the ability to stand at the Dispatch Box and say that he is making a change in the marginal withdrawal rate, because we would all like it to be reduced over time.

[Naomi Long]

I acknowledge what the hon. Lady says about the Bill giving the Chancellor the freedom to do that, but it does not require him to do it. Would it not provide people with more certainty if the Government indicated that that were the intention?

[Harriett Baldwin]

I think that we have heard the Secretary of State put that on the record on a number of occasions.

There are a few debating points that have arisen in this debate, particularly from the Opposition, that I would like to address in my few remaining minutes. On savers, we can have a debate about whether someone with £16,000 in savings ought to be in the benefits system, but we should all recognise that the welfare system should focus on those on the lowest incomes and with the lowest savings. That is one of the difficult decisions that it is worth tackling, and the Bill does that.

[Stephen Timms (East Ham) (Lab)]

That feature of the proposals will mean that, as a fine simply for having £16,000 in the bank, people will lose all their tax credits, which could amount to £5,000 a year. Surely that is not right.

[Harriett Baldwin]

The right hon. Gentleman probably also supports the proposition that I should continue to receive child benefit. We need to make these decisions, and they need to focus on certain levels of savings.

Passported benefits, on the other hand, are something that we will need to discuss in great detail. I hope that the Committee will do that, because things such as free school meals, which at the moment are passported in with other benefits, are also a trigger for early years payments for schools and the pupil premium. It will therefore be particularly important to have clarity about how free school meals are going to work in the future. Personally, I would favour putting that in with the universal credit, where it would be affected by the same withdrawal rates.

Another good point that has been raised in the debate was about entrepreneurs. We must ensure that people do not hear from the benefits system a message against entrepreneurial behaviour. The Committee needs to look closely at how the imputed income of new business start-ups will be treated for benefit purposes.

We have heard allegations that the Bill has been rushed. I disagree. We are talking today about changes that will not even come into effect until 2013. However, I agree with my hon. Friend the Member for Wolverhampton South West (Paul Uppal) that they cannot come soon enough, although I know that a major computer system needs to be changed. I welcome the measures in the Bill and I look forward to supporting its Second Reading.

16:21

[Mrs Anne McGuire (Stirling) (Lab)]

I am delighted to follow the hon. Member for West Worcestershire (Harriett Baldwin). In June last year, I made a contribution to a debate in the House on welfare reform, in which I congratulated the Secretary of State, then new to his post, on the sentiments that he had expressed on reforming the welfare system in this country. At that time, I said that he had used a broad brush, and that we had not yet seen any details. Frankly, we still find ourselves in that situation today.

Like other Labour Members, I welcome some aspects of the Bill. The introduction of the universal credit and the moves towards simplification are certainly proposals that we can endorse. Most of us, and most of the organisations that we communicate with, welcome those developments, but there is still serious concern about significant aspects of the Bill. In the time available to me, I want to concentrate on just a couple of those aspects.

First, the Bill is skeletal in the extreme. The clauses have definitely been drafted with a broad brush, declaring an intent rather than giving details of what will happen. For example, what exactly does

“benefit rates for people not in work will generally be the same as under the current system”

mean? How will “generally” impact on the specific? How will individuals know, when deciding whether to support the Bill, what is actually going to happen if work is not a realistic option for them? I have rarely seen a Bill in which so much depends on regulations that “may” happen—[Interruption.] I do not know which hon. Gentleman is chuntering over there, but I can give the House an example from clause 4 on entitlement. Subsection (2) contains the words “Regulations may provide”, and subsection (3) states that “regulations may specify”. Subsection (7) states that “regulations may specify circumstances”. And so it goes on.

We are not being asked to deal with a major piece of welfare reform here; we are being asked to buy a pig in a poke. We do not know the details. The Secretary of State made great play of the fact that this will form a contract. Well, in all contracts, the devil is in the detail. I welcome the comment of my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) today that he is not prepared to sign up to the Second Reading of the Bill until we have seen the details. We have so many unanswered questions. What will happen when council tax benefit is abolished? Is it going to be replaced by a grant? How will that be assessed? How is it going to be managed?

I must point out to Conservative Members that it is not only in Labour constituencies that the Bill will have an impact. It will do so in the constituencies of Members across the Floor of the House, and individuals in those constituencies are now worrying about whether they will be able to maintain themselves in their own homes. What will happen to those who fall off the edge when their employment and support allowance runs out? Surely it is the right of any disabled individual in a civilised society to be supported if they are unable to work. Frankly, the Secretary of State’s comment about reviewing people whose impairment will not change throughout their lifetime was absolutely astonishing, and I think it did him no great credit. I would not like to explain to the parent of a deaf-blind child that they needed to bring their child for a review every so often—just to make sure that the child was still deaf and still blind.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Like my right hon. Friend, I have received representations from many constituents who have a similar concern. Does she agree that, regrettably, those parents who have heard the Secretary of State today are likely to be even more worried than they were at the start of the debate by his very refusal to rule out the type of continued reassessment about which we are so concerned?

[Mrs McGuire]

I agree wholeheartedly with my hon. Friend. I believe that this is one of the issues causing the greatest concern among individuals and families.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

rose—

[Mrs McGuire]

If the Minister is going to clarify what the Secretary of State said earlier, I would be delighted to give way to her.

[Maria Miller]

I just wanted to clarify that these measures do not affect children.

[Mrs McGuire]

In that case, we can take the age forward and talk about a deaf-blind adult. Our case about people whose impairments or disabilities will not change and who can be assessed as such is not at all diminished, as they will still have to go through this review.

The type of review is also an important issue. For a long time, disabled people in this country have fought hard to be recognised as part of a social model of disability. What we are seeing now is the introduction of an assessment by a medical professional. Is it any wonder that disabled people out there are beginning to think that all those things for which they fought so long and so hard—the achievements they have made over the last 15 years, with cross-party support—are going to be thrown on the scrapheap? That, I think, is the danger posed by this Bill, and I have highlighted the questions that disabled people are asking.

The Minister might well be thinking that all this is a matter of hyperbole. I do not think it is, and I know that many of my hon. Friends would agree, because we are hearing daily quite tragic stories about people who are terrified about what is going to happen. They are worried not necessarily because the Government have bad intent, but because the Government are not explaining exactly what is in the Bill. I do not think that the Minister has bad intent and I certainly do not think that the Secretary of State has, but given that they are embarking on something that will radically affect individual people and families, we must have a better Bill than the one before us.

The Secretary of State is often cited as saying that this Bill amounts to the greatest change in the welfare system since Beveridge. The reason why Beveridge worked and was sustained for so long was that it was about engagement with the whole of society. It was about a contract that people recognised, knowing that if they put something into society, they could occasionally get something back—not just a cushion, but something that gave them a participatory role in that social contract. What we have now is a deconstruction of those Beveridge proposals. What we have is a system that effectively tells people that they cannot have welfare unless they meet all the criteria, which are not even known, in a Bill that is far more skeletal than many of—indeed, any of—the welfare Bills brought before this House.

We should not give the Bill its Second Reading today. If the Minister can tell us in her summing up that all those issues will be dealt with in Committee, we might be able to give the Government the benefit of the doubt later in the process. I welcome, however, the view of my right hon. Friend the Member for Birmingham, Hodge Hill, the shadow Secretary of State, that if the Bill is not radically changed and if its contents are not confirmed, we should not support it even on Third Reading.

16:29

[Mr John Leech (Manchester, Withington) (LD)]

I am delighted to have the opportunity to contribute to this important debate on the future of the benefits system.

I think that the whole House would agree that the way in which a Government treat the most vulnerable will always be a good measure of whether they can claim to have been fair. When the last Labour Government failed to restore the link between pensions and earnings during their 13 years in power and introduced the infamously derisory 75p pension increase, people rightly saw that as unfair. Similarly, their cut in benefits for single parents—described by one former Labour Member of Parliament for Halifax as “punitive and cruel”—was vindictive and unfair.

If the coalition Government are to be able to make that claim of fairness, we must ensure that we protect the most vulnerable. We have made a good start by restoring the link between pensions and earnings with the triple lock and committing ourselves to raising the personal allowance to take hundreds of thousands of the most poorly paid out of tax altogether. However, changes in the benefits system present a real challenge. If the Bill is not amended during its passage, it will certainly not receive my support.

I want to concentrate on housing benefit and possible changes in disability living allowance. Let me begin with the positives. Ministers in the Department for Work and Pensions have certainly been listening. I have had the opportunity to meet all of them to discuss the proposed changes and am pleased that the plans to restrict housing benefit to 90% of the full award after 12 months for claimants on jobseeker’s allowance have been abandoned. That terrible idea would have resulted in numerous people who were actively seeking work being worse off through no fault of their own. Many people and organisations inside and outside the House have worked hard to ensure that that does not happen, and I am glad that Ministers have recognised that it would have caused real hardship for many vulnerable people.

A great deal of attention has been paid to the proposal to remove the mobility component of disability living allowance from people in residential care. Last month, in an interview in The Guardian, the Minister sought to reassure disabled people in care homes and their families that the Government would not remove their ability to get out and about. I have no doubt that that is the Government’s intention and welcome their commitment to reconsider the proposal. Unfortunately, I do not share the Minister’s optimism that the mobility needs of those in care homes will be met if disability living allowance or its replacement is taken away, and I urge her to abandon any such plans.

The proposal has caused concern to organisations such as the Muscular Dystrophy Campaign, whose petition I submitted to Parliament only last night. The petition stated that the mobility component

“helps to meet the higher costs of accessible public transport”.

It also stated that

“without DLA mobility component, thousands of adults of all ages with severe disabilities who are supported by the state to live in residential care will be unable to retain voluntary employment or simply to visit family and friends”.

I urge the Minister to ensure that that does not happen.

[Ian Paisley]

I agree with much of what the hon. Gentleman has said. Does he believe that linking benefits to the lower consumer prices index rather than the retail prices index is “punitive” and “unfair” to those who have to claim benefit?

[Mr Leech]

I was just coming to that. Yes, I do think it is unfair.

The Bill proposes that from April 2013 the local housing allowance should be uprated in line with the consumer prices index rather than real rent increases. I shall avoid the temptation to reopen the debate about whether RPI or CPI is a better measure to use. I merely point out that the Government do themselves no favours by picking and choosing which measure to use. If CPI is a better measure of inflation, we should not allow train operating companies to increase train fares in line with RPI, but that is a debate for another time. I recognise that the current arrangements do little to keep rents low, but there is a real danger that rents will increase at a much faster rate than CPI. The Government must be prepared to keep a watching brief on increases in rent and to take further action if the changes fail to keep housing benefit in line with rent increases.

I do not think that any Member has raised the issue of under-occupation so far. The decision to restrict housing benefit in social rented homes when tenants are under-occupying properties is ill thought out, and will cause significant hardship to many families who are existing tenants. I recognise that this is designed to bring housing benefit for social-rented property into line with the private-rented sector, but it does not take into consideration local circumstances. In Manchester, for example, under existing rules a family with one child is entitled to queue for a two or three-bedroom property. That is intended to allow for the possible growth of young families and reduce the need for future moves caused by overcrowding. Similarly, in low or no-demand areas where there are a lot of two-bedroom flats, property has been provided to single people or childless couples either to allow children who live elsewhere to visit, or simply to fill the vacancies in hard-to-let properties. As a result, a significant number of families on housing benefit could face a reduction in benefit through no fault of their own. We need to look at this again and recognise that a one-size-fits-all approach will not work. I suggest at the very least applying a gross under-occupation test whereby restrictions to housing benefit could be applied if more than two rooms were unoccupied.

[Mark Lazarowicz]

Another possible circumstance could arise where people who have been in work all their lives and have never had to claim any benefit suddenly find that after 20 or 30 years they have to apply for housing benefit and face the prospect of having to leave the house that they have lived in for decades. Would that not be extremely inhumane as well?

[Mr Leech]

Yes, that is true, and it might lead to people being forced to go into private rented accommodation and not having a protected tenancy.

I want to comment on the proposals to cap benefit at £500 a week for families and £350 for a single person with no children. I recognise that a cap on benefit is justifiable to make work pay, but the cap should exclude housing benefit costs, which can vary dramatically in different parts of the country. Given that the cap on housing benefit for four-bedroom houses will be £400 a week, large families might be expected to survive on as little as £100 per week if total benefit is capped at £500 a week. Under other proposed changes, homeless families will receive only one reasonable offer, which might be of a private rented property that could swallow up the vast majority of their total benefit entitlement. The answer to this problem is to calculate a maximum benefit excluding housing benefit to ensure that families in receipt of benefit have enough to live on, regardless of the cost of housing locally. That is the only way to guarantee that they will have enough to live on.

Finally, although this point is not directly related to the Bill’s contents, I suggest to Ministers that the best way to tackle escalating housing benefit would be to invest properly in affordable social housing and bring more empty homes back into use. That would not only massively boost the construction industry but help reduce rents in the private sector, which is holding tenants to ransom. There would be a short-term cost, but it would give a major boost to the economy and there would be a long-term reduction in housing benefit costs.

16:38

[Geraint Davies (Swansea West) (Lab/Co-op)]

This is a mean-minded, ill-thought-out Bill that is not designed to promote fairness or help people into work. Rather, its purpose is to punish the poor, the disabled, those with children, those trying to save and those starting a small business for the cost of the greed and recklessness of City bankers, who created our deficit. That is laid at the door of the poor, while those responsible indulge in sharing £8 billion of banker bonuses under a system propped up by the taxpayer, whereby if risks go wrong the public pay and if they go right the bankers profit.

[Steve Baker (Wycombe) (Con)]

I share the hon. Gentleman’s sense that the banking system is responsible for the greatest injustices in our society, which I fight often, but, as has been pointed out, these reforms long predate the banking crisis.

[Geraint Davies]

I shall come on to the reforms.

The deficit was the price paid to avoid a depression, and the Government had a clear choice: they could halve the deficit in four years by focusing on economic growth and making the bankers pay their fair share while also making savings over time that are fair and do not harm economic growth. The alternative, which the Government have chosen, was to cut the deficit at twice that pace, clearing it in half the time—in four years. That is a “formidable” challenge, according to the Institute for Fiscal Studies, which says that the Government need a plan B.

There is an over-reliance on savage cuts, particularly to public sector jobs and the welfare benefits we are considering today. That will throw whole communities into poverty, with a third of a million public sector redundancies triggering a further 1 million private sector job losses, which will cost an extra £7 billion a year in benefit costs and lost tax. The benefits of those thrown on to the dole will be cut, forcing them, in the worst instances, into community projects like criminals when they cannot find work. Why is this happening? It is happening because the Government have thrown a bucket of water over the embers of economic growth that Labour had kindled.

[Mr Heald]

That is a nice soundbite, but the policy will cost the taxpayer money. The hon. Gentleman seems to think that it is not giving money to people at the bottom of the pile, but we are talking about £2.6 billion to help poor people into work.

[Geraint Davies]

The Bill will cost around £4 billion to implement, and save some £18 billion by taking from the poorest families. The Government’s plans are incompetent, unfair and counter-productive. The fact is that the cuts are choking growth and VAT is stoking inflation, and both are pushing the deficit up, not down. In Germany the focus is on growth, not cuts, and growth continues apace. In Britain, of course, growth is negative—and it is not just the snow. Alongside the £4 billion cost of the Bill is the £4 billion cost of dismantling the health service and the £7 billion lost through the unemployment created by the job cuts, and so it goes on.

What is the impact on people in Swansea? Some 40% of its workers are employed in the public sector. We face the second highest level of job cuts and very large benefit cuts. Some 65% of people employed in the public sector are women, and the combination of cuts in jobs and welfare payments will impact on families in particular as they pay their share of the £18 billion in savings that will be made.

The Bill will hurt children, the disabled and enterprise. Let us consider a Swansea woman with children who works for the council and is made redundant. She has savings of £18,000 and, being an enterprising person, wants to start her own business. She will get no benefits, of course, because she has saved more than £16,000 in good faith. She will have no wage, but she will be assumed to be getting the minimum wage as she is starting a business. Her business will face various start-up costs, such as a computer, setting up a website and promotional literature. She will be penalised for being a worker, penalised for being a saver and penalised for being an entrepreneur.

Let us assume for a moment that the woman is successful, despite those barriers. She will be threatened with the loss of her council house if she earns too much—hardly an incentive for people on council estates to start their own businesses. Let us say that she is in her second marriage and she and her husband have five children. Her husband was also employed by the council—they met working there—and both were made redundant. They have five children, so they have nearly £500 of personal benefits in addition to £200 in housing benefit, which means they get £700 in total. The £500 cap is imposed on them, so they are forced to split up. They now live in separate council houses, each drawing £200 in housing benefit, with one parent looking after three children and the other looking after the other two. This is a recipe not just for destroying jobs and crushing entrepreneurial activity, but for splitting up homes and increasing the cost to the Exchequer to £900 when it was £700.

The Government’s approach in Swansea and elsewhere in Britain will make people jobless, make them poorer, break up families, crush enterprise, punish saving and harm children and the disabled. This is a Bill born not out of fair-mindedness and enlightenment, but an unnecessary and unwise economic strategy of cutting too far too fast and punishing the poor for the reckless greed of the bankers. It should be opposed so that we can go back to the drawing board and think again.

16:44

[Julian Sturdy (York Outer) (Con)]

It is a privilege to speak in this debate, and I strongly suspect that our exchanges in the House are being replicated across our country, such is the importance of this matter. People rightly care passionately about Britain’s welfare system, as has been evident from hon. Members’ contributions, but I cannot quite agree with the most recent comments made by the hon. Member for Swansea West (Geraint Davies).

A society’s willingness and ability to help its most vulnerable individuals is a measure of its compassion and its economic and social well-being. Ensuring that Britain has an efficient, fair and caring welfare system is key. We do not necessarily have that at the moment, which is why radical and bold change is badly required. I am delighted to support the Bill, as it is radical and bold.

To accept the need for such reform, we must wake up to the facts. Over the past 10 years the welfare budget has grown disproportionately, by more than £56 billion. Despite that huge increase, almost 1.5 million people have been on out-of-work benefits for nine of those 10 years. Despite years of economic growth, job creation and increases in the welfare budget, a whole group of people have never worked at all. It is therefore time to review this broken system. After all, the simple truth is that Britain’s welfare arteries are clogged up. Too little support is reaching those truly in need and too much is being lost in bureaucratic incompetence—even more worryingly, it is being lost on people who should not be in receipt of such support at all.

In essence, the whole culture of our welfare system is wrong; the cost of maintaining it is out of control and the decision-making processes within it are woefully inefficient. The Bill is therefore right to focus on incentivising pathways back to work by ensuring that employment always pays more than benefits. That is fundamental to the Bill and, as a simple Yorkshire man, I feel that it is basic common sense.

[Chris Williamson (Derby North) (Lab)]

Would the hon. Gentleman care to comment on the fact that his Government are cutting 1 million jobs in our economy—500,000 in the public sector, with a further 500,000 to go in the private sector as a consequence? If he genuinely believes that work is a pathway out of poverty, why does he support measures that will cause greater unemployment rather than enable people to get back into work? He has expressed concern about people who have been out of work for a long time, but they would be more likely to get an opportunity of employment in the public sector if his Government were not forcing through so many cuts.

[Julian Sturdy]

I agree that this Bill offers an important pathway back to work. We have to get more jobs in the private sector and restore the balance between public and private sector jobs, which was skewed by the previous Government—certainly in my region and in the north especially. The measures that this Government are introducing—I hope we will see more of them in the Budget—will incentivise private sector growth and job creation which, alongside the Bill, will get more people back into work.

It is a sad but well-known fact that the current system discourages those in low-paid jobs from increasing their hours, as rates of tax and benefit reductions often leave them worse off. This ridiculous situation helps only to dampen aspiration while increasing dependency in the benefits system as a whole. In addition, hard-working, taxpaying families, who are feeling the squeeze in these difficult economic times, should not subsidise the small but still significant number of people in our society who see the welfare system as a career choice. That must stop. By annually capping benefits, withdrawing support from those who refuse to work and increasing the financial incentives for those who do work, the Bill includes specific measures that will make work pay.

[Naomi Long]

I agree with the hon. Gentleman on the need to change the system to ensure that people do not aspire to live on benefits, but is that not more about changing people’s aspirations and their pathways to opportunity, rather than simply setting caps and putting difficulties in the way of those claiming benefit when they are in difficulty?

[Julian Sturdy]

It is about changing aspiration, which is what the Bill does. As my hon. Friend the Member for Meon Valley (George Hollingbery) said, it is about taking a carrot-and-stick approach. It is important to have certain caps on benefits, but we must also encourage aspiration to get people back into work. The current system did not do that. Instead, it dampened aspiration, which is why it is fundamentally important that we change the system. As many hon. Members have said, it is a case of now or never—we must grasp the nettle. The DWP estimates that the reforms could reduce the number of workless households by as many as 300,000 and that about 700,000 low-earning workers will be better off as they keep more of their earnings.

Administrative reform to our welfare system is long overdue; it is simply wrong that taxpayers’ money should be squandered recklessly as often happened under the previous Government. The creation of the universal credit, which will bring together various and often overlapping elements, such as jobseeker’s allowance, income support and housing benefit, and pay them in a single lump sum will cut administrative costs and reduce the risk of fraud. It is predicted that, as a result of the universal credit, just over 2.5 million households will receive higher entitlements, with more than 350,000 children and 500,000 working-age adults being lifted out of poverty altogether, as the shadow Secretary of State acknowledged earlier. That was the only thing he said that I agreed with, but it is important to mention that acknowledgement.

Lastly, and returning to my initial comments, the overriding objective of the Bill must be better to protect, equip and support the most vulnerable in our society. Too many of this country’s welfare resources have been diluted and too little has been directed at those in most need. To maintain the status quo would be to champion the cycle of dependency and despair that Britain’s welfare culture, as constructed by the Labour party, currently promotes. I know that many welfare claimants are apprehensive about the Government’s changes, but let the message go out loud and clear that those who are truly in need will receive more support, better targeted assistance and higher standards of care. I truly believe that is the motivation underlying the reforms and I strongly urge all Members to support this important Bill.

16:52

[John McDonnell (Hayes and Harlington) (Lab)]

I have sat through the debate and listened to the contributions and I will try to address some of the points raised. First, let me say that no one in the House doubts the integrity of the Secretary of State. I commend him for the work he did in opposition in setting up various working parties, touring around and meeting various agencies. He met a particularly influential person in Scotland, Bob Holman—a comrade of ours who knows a lot about poverty and who has expressed his disquiet about the proposals. Also, a number of us have been campaigners for the citizen’s income, which I think the universal credit is a step towards, so I do not doubt the Secretary of State’s good intentions.

However, as we have debated at length over the years, if the universal credit is to work, three conditions need to be met. First, it needs to be set at a level that will lift people out of poverty; otherwise it will inflict universal misery. Secondly, there have to be jobs to go into. Thirdly, those jobs must have decent pay. The problem with the Bill is that it does not ensure that any of those conditions will be met. In that respect, it discredits the whole concept of the universal credit, which I find worrying.

On the first condition, I am worried about the amount being taken out of the social security system. In the comprehensive spending review in October, and before that in the emergency Budget, the Chancellor identified £18 billion that was being taken out of the system. When the Prime Minister was challenged about that, he said:

“We face a choice—make cuts in welfare or cuts elsewhere”.

I believe that is happening—that we are witnessing cuts in welfare. When the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller), was asked specifically about the disability living allowance cuts, we were told that the figure of £1 billion of cuts—or savings, depending on how one wants to describe them—had been set before any policy description had been laid out as to how they would be achieved. I think the Prime Minister and the Government did make that choice, because at the same time as the Government were taking £18 billion out of welfare they were reducing corporation taxes by £24 billion. Businesses are now taxed at the lowest level in 40 years, at the expense of the poor.

The debate then starts to degenerate, as it has in the House today, into attacking unemployed claimants as a justification for cuts. I remember the Deputy Prime Minister’s statements about alarm clock Britain, and today we have heard references to shirkers and so on. I have come to the view, and all the Government research under past Governments has demonstrated, that people are desperate to get back to work. Sanctions do exist already, and are implemented if people fail to comply.

Reference has been made to fraud. Let us get it on the record again: £1.5 billion of fraud, £16 billion of benefits unclaimed. Who is ripping off the system? It is not the poor. As was said earlier, £120 billion of tax has not been paid as a result of tax evasion and avoidance.

On the second condition—the existence of jobs to go to—with 2.5 million unemployed, including 1 million youngsters, even if we filled all the 500,000 vacancies, there would still be one in four chasing every vacancy, and it is going to be made worse, as was also said earlier. Another 1.2 million will be put on the dole queue as a result of the cuts.

On decent pay, I have asked others what is happening in their constituencies, but the jobs offered at the moment in my constituency are increasingly casual and increasingly low-paid, and large numbers of my constituents are now working on zero hours contracts, in which they are simply paid for the hours that they are brought in to do, on an irregular basis. According to the most recent survey, published only a month ago and based on Government figures, 1.7 million people are now in involuntary part-time and temporary work, and wages are so low that half the children living in poverty are in families that are in work. Even in the boom period, wages actually fell as a percentage of GDP. Last month, RPI was at 5.1% and wages were at 2.3%, and many in my constituency and elsewhere, especially in the public sector, are facing a pay freeze over the next two years. The reasons for the low pay are fairly straightforward. We now have less than a third of workers in this country covered by collective bargaining agreements, as a result of the weakening of trade union rights.

My fear is that, under these proposals, universal credit will fail, because none of the elements are in place to make it a success—a decent level of universal credit, the existence of jobs, or decent pay in those jobs. I think we will be left with the harsh residue of all the complaints and problems that have been described today: the sanctions—the loss of benefit for up to three years if a person refuses to co-operate in seeking work; cuts in housing benefit; the linkage of the housing allowance to CPI, which will inevitably result in cuts; the housing benefit caps; and the room unoccupied scheme, which I think is scandalous. All those factors will discredit a decent proposal, and that is why the Bill is not supportable today.

I want to use my last few seconds to say how appalled I am by the brutalisation of claimants by the privatised companies that have taken over the assessments and the administration of benefits. The brutal treatment of my constituents is a harshness that denigrates the entirety of the work of the House and the Government.

16:58

[Jackie Doyle-Price (Thurrock) (Con)]

I am very proud of the measures before us. The Bill is one of the most important pieces of legislation that the Government have brought forward to date. It has the opportunity to have a revolutionary impact, not only on the welfare system but on society more generally. It will contribute to building a fairer society—fairer for the millions of taxpayers, many of them on modest incomes, whose taxes are inflated by having to support the current welfare system, and fairer to claimants. It is fair that we target support to those most in need and fair that we give those who are fit and able to work every encouragement to do so.

I shall focus most of my comments on the universal credit and the impact that it will have on incentives to work. There are too many people in our society for whom work does not pay. In those circumstances, who can blame them for choosing not to work? It is a rational economic choice. If they can get as much income from sitting at home as they would from doing a day’s work, where is the incentive?

We must all have seen examples of that in our surgeries—the lone parent who wants to provide for herself and her family, but finds that the cost of child care and the loss of housing benefit make it more costly to go to work than to stay at home; someone who finds a job, then discovers that the rate at which they lose their housing benefit makes work punitive; someone on incapacity benefit trying to work part time around their disability, who finds their benefits withdrawn or clawed back, so that they are better off doing nothing; someone who has had a substantial career, finds they are no longer able to do that and wants to retrain, but who has their benefits withdrawn as they are judged not to be seeking work. All that must stop, and the Work programme will give incentives to those who want to get back into work, and the support and opportunity to do so.

We must repair decades of damage. It is easy for us on the Government Benches to blame the Opposition, but the problem goes back decades. The system has grown incrementally and the damage is there for all to see. In some households, generation after generation have failed to engage in the world of work. This has encouraged ongoing low aspiration and poor lifestyle choices. Some of my hon. Friends gave examples of that. My hon. Friend the Member for Wolverhampton South West (Paul Uppal) described how, when he was at school, there were two distinct camps—those who aspired to better themselves, and those who aspired just to live on benefits. I see the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) in his place. As someone who grew up on a council estate in his constituency, I had that experience too. We need to build aspiration, and we have policies in place to achieve that. The reform to welfare is crucial to getting our society working again. The reforms will set people free from dependency and set them free to take advantage of the opportunities that we will give them.

I want to say something about an end to the complex system of tax credits. I appreciate that the introduction of tax credits was well intentioned as a way of alleviating poverty for people in work, but they have had the opposite effect. That is because the system is retrospective, so people apply for tax credits in good faith, only to be faced with a whopping tax bill the following year because of a slight change in circumstances. That problem will be eradicated by the universal credit because it will be assessed on a pay-as-you-go basis, and for that reason must be welcomed.

I firmly endorse the benefit cap. Far too many of my constituents work hard and pay taxes, only to see their near neighbours enjoy a comfortable lifestyle living on benefits. I also welcome the obligations placed on claimants. As a condition of receiving benefit, people should surely do everything they reasonably can to find work. For many people that will be empowering. For someone who has been in the same job for many years and suddenly finds themselves workless, the loss of confidence can be considerable. The support that they will get from the Work programme to gain new skills will help them and give them the confidence to go back into the world of work. That will be empowering.

That is equally true of incapacity benefit claimants. Because a claimant is no longer able to do the job that they were doing before does not mean that they cannot retrain and do a different job. The support they will get from the Work programme will enable them to do that, and it will be empowering.

The Bill is radical. It is brave, and it is necessary if we are to tackle the endemic culture of benefit dependency that exists in our country. It has become more and more entrenched over the years, at the expense of the workless and the taxpayer. I am pleased to support the Bill.

17:04

[Naomi Long (Belfast East) (Alliance)]

I welcome the opportunity to participate in the debate, because this issue will have profound implications for the welfare and benefit system, and will impact on all our constituents.

Time is limited, and the scope of the Bill is extensive, so I shall focus on a few key issues, the first of which is the proposed changes to disability living allowance, particularly the work capability assessment. The Government appear to place more emphasis on the independence of those who judge someone’s fitness for work, rather than on their expertise, which is of concern to many people, particularly those who suffer from hidden, complex and often poorly understood conditions with variable symptoms, including autistic spectrum disorders, mental health issues and multiple sclerosis.

A medically qualified assessor may be independent, but not necessarily an expert in a particular condition. The single point assessment is unlikely to give a comprehensive view of an individual’s fitness to work that is more reliable than that provided by an expert in the field who has treated and monitored the patient over a long period. The clinician will also follow professional ethics in making judgments about a patient, which provides a safeguard for the Government. If expert written evidence is available, it should be used and should carry more weight than the opinion of a benefits assessor, who may not have detailed expertise in dealing with those matters.

[Dr Whiteford]

As someone who represents a constituency that was part of the work capability assessment pilot, one of the biggest concerns was that the evidence of I know that someone’s GP or consultant was not taken seriously by the medical assessors. Will the hon. Lady comment on that?

[Naomi Long]

That is a fundamental concern. One of my constituents recently came to Parliament, on behalf of the mental health charities Rethink and MindWise, to give evidence to the Select Committee on Work and Pensions about the impact of the assessment proposals on people with mental health problems. Members who met her at the round-table session would agree that she presented her evidence in a professional, competent and effective manner, as one would expect of someone with a medical degree. However, her evidence carried weight not because of her degree, but because she receives disability living allowance. She is not fit for work, and is not permitted to practise as a GP as a result of serious mental health issues, which developed in her final year of study.

If a benefits assessor, even a medically qualified one, witnessed her performance in Committee, they would doubtless assume that she was fully fit to work. However, her condition is unstable, and in periods of ill health, she is unable to leave her home or interact with people at all. Even when well, she is reluctant to take on additional stressful responsibilities because of her history of instability.

[Chris Grayling]

It is important, as people are listening to this debate, that the actual situation is placed on the record. Will the hon. Lady confirm that the system that she is describing is the one that we inherited from the Labour Government, which we have taken steps to change through the Harrington review? In cases where we have made changes to the assessment, the work was done by the previous Government, whose recommendations we accepted. Finally, does she accept that, at the end of all this, there is a collective desire to make sure that the system works as well as possible and that there is a commitment to continue to improve it where possible?

[Naomi Long]

I would like to confirm, on the first issue, that I am not making these points as a member of the Labour party or of the previous Government but as a member of the Alliance party, reflecting the concerns of my constituents. Furthermore, I would hope that there is a collective will to ensure that people are dealt with fairly in the system. However, the doubts that I am expressing to the Minister have been expressed to me by my constituents.

A problem with single point assessment needs to be taken into consideration, and I urge the Minister to look carefully at the issue. The young lady in question, for example, had a dual point assessment by the British Medical Association on her fitness to practise. One doctor said that she was fit to practise, and the other said that she was not, because of the complex nature of her condition. Neither of them was wrong when they dealt with the person in front of them, but her complex mental health condition prevented them from seeing the same individual in the same way.

I do not believe that the problem arises solely with mental health issues, but with many other conditions. People can have good days and bad days, and they may need additional support. As the Bill progresses through the House, it is hugely important that we address that issue.

Much has been said about the removal of the mobility component of the disability living allowance for those in residential care, so I will not rehearse the arguments, but I have corresponded at length on it with the Under-Secretary, and from her most recent correspondence I am aware that there is a valid concern about the inconsistent way in which the needs of some of the most vulnerable people in society are being met.

There is ambiguity and considerable variation in the way in which local authorities take the DLA mobility component into account when making financial assessments, and organisations such as Disability Alliance acknowledge that point, but having identified the problem it is incumbent on the Government to ensure that the solution does not end up disadvantaging the benefit’s recipient, who did not create the difficulty in the first place. Independent mobility is crucial to well-being and to social cohesion, and it must be protected more clearly than it is in the current proposals.

Finally on DLA, I am concerned about the change to the qualifying period, and its move from six months to three months, which could have profound consequences for those who develop sudden onset conditions, such as stroke, or experience the debilitating effects of treatment for an illness, such as cancer. It could also affect those who give birth to a child with a severe disability.

At a time when people are genuinely in need, when their energy rightly needs to be focused elsewhere on coping with diagnosis, treatment and recovery, and when additional stress should be avoided, the financial pressure of dramatically increased outgoings to cover expenses, such as travel to hospital and so on, could push them into poverty if that issue is not adequately addressed. I urge the Government to look again at that unintended consequence of reform, and to take action to ensure that the personal independence payment is available to support people at a time of genuine need.

I welcome the Secretary of State’s assurance on employment and support allowance for those taking oral chemotherapy. I trust, however, that he will also consider those who receive radiotherapy, which, although not as debilitating as chemotherapy, can nevertheless be exhausting and preclude people from holding down work.

Another concern that I want to touch on briefly is the abolition of some discretionary aspects of the social fund. Often, families who are trying to make ends meet on a day-to-day basis find themselves pushed into financial stress or even crisis by significant, unexpected and unavoidable expenditure. The replacement of a heating boiler, a cooker or a fridge, or the need to purchase a school uniform, for example, will often leave low-income families in a situation where only those discretionary elements of the social fund, such as interest-free crisis loans, stand between them and being forced to engage with alternative high-interest and often unscrupulous money lenders. There is an ongoing consultation on that and I urge Ministers to await its conclusion before proceeding to legislate to remove those discretionary elements.

In conclusion, and as I said at the outset, these are far-reaching reforms with far-reaching consequences. The Bill is arguably the biggest change to the welfare state since its inception, and it warrants careful and detailed parliamentary scrutiny. Despite that imperative, much of what is intended remains poorly defined and will be ultimately defined not in this Bill or in any subordinate legislation, but in regulations that the Minister will lay, which in turn will reduce the parliamentary scrutiny of their effects. That extensive reliance on unpublished regulations will make it incredibly difficult for people to make a detailed assessment of the cumulative impact of these broad and sweeping changes. The Secretary of State was clearly frustrated, too, because he felt that at times people had misunderstood the thrust of his proposals. Were there more substance to the Bill, that would be less likely.

Furthermore, the inclusion of clauses relating to child maintenance, when that matter is still the subject of public consultation, and the as yet undefined provisions on child care costs, creates uncertainty in an area—the employability of lone parents and second earners in households—that strikes at the very heart of the Government’s objective to make work pay.

One of the most remarkable yet disappointing things that struck me on reading through the briefings that Members received in the run-up to the debate is that, almost without exception, those organisations that actively support and lobby in this area support the principle of the Bill. Disappointingly, however, we have not had the detail that would give people the confidence to commit to the Bill itself.

17:15

[Andrew Bridgen (North West Leicestershire) (Con)]

I welcome not only the Bill but the fact that the coalition Government have recognised the importance of dealing with the huge financial and social failures of the current welfare system. Within 10 months of being in government, we are introducing a Bill that Labour Members and the previous Government shirked for 13 years. Because of the Opposition’s lack of will, we have the lamentable situation whereby welfare spending, which was £64 billion in 1997, is projected to be £109 billion this year, and 1.5 million people have spent most of the past decade on out-of-work benefits.

I have to say that I agree with the former Prime Minister, Tony Blair, who stated in 1997:

“We have reached the limits of the public’s willingness simply to fund an unreformed welfare system through ever higher taxes”.

If that was true in 1997, with the golden economic legacy that the previous Labour Government were bequeathed but went on to squander, one can only surmise that, 13 years later, we are well over the limit of the public’s acceptance of welfare spending. We all know what, or rather who, were the roadblocks to reform: the then Chancellor of the Exchequer, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), together with his protégés, the current leader of the Labour party and the current shadow Chancellor. How do we know this? Again, Mr Blair provides the answer in his memoirs when he states, with regard to welfare reform:

“I kept saying to Gordon, quite apart from the fact that both sets of proposals are manifestly right in themselves, if we don't do them, a future Tory government will”.

So here we are, as a Conservative-led coalition Government announcing the biggest and most overdue shake-up of the welfare system since the 1940s. We are replacing the previous Prime Minister’s micro-managed, command, dirigiste benefits system, which has created a benefits culture that is expensive, inefficient and bureaucratic—and, perversely, provides a major disincentive to work—with a system that will ensure that work pays and no one is better off remaining on benefits when offered a job. The universal credit will provide a more logical, efficient, secure and fair benefits system that will demonstrate and reinforce the value of being in work. All Members, and our constituents, should be aware that because of the transitional arrangements no one on benefits will be worse off as a result of the introduction of the universal credit.

Having supported the aims of the Bill, let me move on to the some of the specifics. I have been contacted by a number of constituents regarding the replacement of the mobility aspect of the disability living allowance with the personal independence payment. I am reassured by the Secretary of State’s remarks on this part of the Bill, when he said that DLA and its mobility component will continue and will be reviewed at a future time. However, the Government need to do as much as possible to reassure those who are severely disabled and unable to work that they will be protected and not lose their entitlement. I have had constituents saying that they fear they will lose their social interaction and effectively become prisoners in their own home. Those genuinely disabled people must be informed that these changes will be to their advantage.

[Mark Lazarowicz]

The fact that such an obviously ultra-loyal Government Member has been getting such messages from his constituents suggests that things are not all right on the Government Benches. Does he agree that that is another reason why a bit more consultation and time to consider the proposals would be better than the rushed way in which they are being brought forward?

[Andrew Bridgen]

The Labour party had 13 years to do something. Thirteen years ago, the right hon. Member for Birkenhead (Mr Field) was asked to think the unthinkable; he did so, and then was promptly removed from office. That shows Labour’s commitment to welfare reform. There will be plenty of time for consultation, and I can promise that plenty of Government Members will be fighting for the rights of these vulnerable constituents.

The detection of fraudulent claimants is key to the success of this Bill. It is inexcusable that the current system is costing the taxpayer in excess of £5.2 billion a year because of welfare error and welfare fraud. There could be a role for credit rating firms in helping to identify households where there is reasonable evidence that a fraudulent claim is perhaps being made. This can be achieved with greater data sharing across Government Departments, and with the credit rating agencies, to ensure that the widest possible range of data are available. We also need to ensure that fraud is indentified at the earliest point of the process; again, the credit rating agencies can play a role. I welcome the development of the single investigation service and the three-strike rule in the Bill. We will see a reduction in fraud only if false claimants have a serious fear of being caught, and of facing a penalty if they are caught.

In conclusion, the Bill gives our country the chance to reverse a benefits culture that has become a huge black hole sucking in large numbers of people and huge amounts of taxpayers’ money. The Bill will release millions of people from the misery of welfare dependency and break the intergenerational cycle of worklessness, which costs this country so much not only financially but socially. The Secretary of State deserves great credit for his relentless work over many years on this issue. The successful passage of the Bill will make welfare a floor on which people can build, rather than a ceiling that it is impossible for them to break through.

17:20

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

This has been an interesting and instructive four and a half hours. There have been some excellent contributions, including from some Government Members, although not from the hon. Member for North West Leicestershire (Andrew Bridgen), who has just spoken.

I say to the hon. Members for Bexleyheath and Crayford (Mr Evennett) and for Kingswood (Chris Skidmore) that we should not reinvent history but learn from it. Having been the Secretary of State for Education and Employment for four years and later briefly the Secretary of State for Work and Pensions, I think that there are real lessons to be learned from our efforts to change the system. Unless those lessons are learned, we will reinvent the wheel all over again and there will be disappointment for those who believe that this Bill is the bee’s knees. Unfortunately, it is not. In 1998, when we set about reducing the unemployment claimant count to under 1 million for the first time in a quarter of a century and the labour force survey figures to below 1.5 million for the first time in 30 years, we did so not just because the economy was expanding and there was growth, but because we were helping people from welfare into work.

Work is the best form of welfare; making work pay is the right thing to do; promoting independence is sensible and logical; encouraging people to be self-reliant, including through thrift and savings, really does make a difference; and honesty in the benefits system is something that we should all aim at. The only problem is that the Bill does not achieve those things. If it did, I would be wholeheartedly in favour of it. I ask Ministers to take another look at the Centre for Social Justice report and to compare it with what is on offer this afternoon in this Bill.

I will use the example of disability living allowance, purely because I know more about issues relating to sight loss than about most other aspects of disability and welfare, despite my ministerial experience. Both with the universal credit and DLA, we are in danger of moving in the opposite direction from that which the Government say is their policy. The introduction of the personal independence payment removes automatic entitlement for certain defined groups with specific challenges, including blind people. I do not speak about these issues very often in the House, but if we remove the care component we also remove the mobility component, which is about to be expanded in April, as was agreed to by Members in all parts of the House and hard fought for by those responsible over a considerable period. To do that will have a perverse effect, and the opposite effect to that which was intended. Instead of promoting a can-do approach that makes it possible for people to get out of a position of dependence, the proposal will trap people in that position.

The perversity is best demonstrated on page 16 of “Disability Living Allowance reform”, which was published in December. It gives examples of what the system will mean and talks about testing whether someone is capable of

“planning and making a journey, and understanding and communicating with others.”

However, the whole purpose of disability living allowance was that because they received it people were able to do those things, not that it trapped people by doing those things for them. Whereas the work capability assessment is about what someone can do, the new test for disability living allowance, under its new title, will be about what they cannot do. That leads to dishonesty, with people presenting what they cannot do in their worst circumstances, not in their best. With the new universal credit, people will be encouraged to save but then penalised when they do.

Every step in the Bill that will have a positive outcome is trumped by an administrative complexity that will make the situation worse. We are all in favour of simplicity, but the problem is that simplicity does not usually lead to equity. That is why we have ended up with the complex system that Members have described this afternoon. If we could have produced a simpler system quickly and easily, we would already have it. We laid out principles in September 2005 that I believe have stood the test of time, but unless the Government listen, and unless they review and understand what has happened in the past, we will go through the same problems all over again.

17:26

[Sarah Newton (Truro and Falmouth) (Con)]

Thank you for calling me to speak this afternoon, Madam Deputy Speaker. It is a great pleasure and honour to follow the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), who spoke so well from his own experience, as did my hon. Friends the Members for Wolverhampton South West (Paul Uppal) and for Thurrock (Jackie Doyle-Price). The debate has been enlightening.

Those of us who have worked as either paid employees or volunteers on behalf of people who come into contact with the benefit system know that reform is overdue. The overhaul enabled by the Bill, and by other actions that the coalition is taking to integrate and localise services, is most welcome for people in our society who need help. The daily battles of trying to claim benefits, appeal against decisions and fight through expensive bureaucracy are draining on the human spirit, let alone the taxpayer’s purse.

The practical improvements and efficiency savings that will come with benefit simplification are important. However, I believe that the importance of the Bill goes well beyond that vital endeavour. The contract between people in our society is expressed, in part, in our provision of welfare. That is part of our expression of the responsibility that we have for each other. I like the conditionality in the Bill, which underscores the principle of the contract that people in our society have. It is built on the clear and settled view that as British people, we are all responsible for ourselves and our families. Just as importantly, it is also our responsibility to care for our neighbours and our communities to the extent that we can. We are each responsible for doing all we can to provide for our own needs and those of our family and community.

Our social contract is also built on an understanding that not all people are able to look after themselves at all times throughout their lives. Sometimes individuals and their families need emotional and practical support to meet their needs, including financial support.

That contract has made us a progressive society. However, over the course of my lifetime, as overall standards of living have risen considerably, I have seen well-intentioned but unwelcome consequences of the development of that fundamental social contract into a welfare state. For too many people it has created a culture of dependency and robbed them of a sense of worth, well-being and good health. It has also brought into question the fundamental principle of fairness that is so characteristic of Britishness.

[Dame Anne Begg]

Does the hon. Lady believe that anyone who receives any welfare benefit is by definition welfare-dependent?

[Sarah Newton]

I am very grateful for that question, and the answer is absolutely not at all. A great number of people in our country absolutely deserve support. In fact, I shall argue later that I believe they deserve more support.

Let me explain what I mean by giving some examples. Can it be fair to encourage a couple who would otherwise want to live together and raise a family to live apart because single parents have a better chance of securing social housing, or to encourage someone who wants to work more hours to work fewer for fear of losing benefits? Can it be fair to abandon people who have lost their jobs and need help to retrain and build their self-confidence to a life of poverty without support? None of those things are fair. The intention of the Bill is re-establish the contract between all in society, and to give a clear message that if people are able to work and to play their part in society, we will help them to do so and it will be worth their while, and that if people have a problem that prevents them from looking after themselves and their family, we will be there for them.

Many people would like more rather than less help for our elderly citizens and our disabled citizens who are unable to work, and for carers who do the incredibly important job of caring for their loved ones. I hope we can provide such help by taking the tough decisions now to establish a sustainable economy with less public and private debt and a more sustainable level of public expenditure, and by growing more sustainable enterprise that will enable people to earn a living wage and to look after themselves better.

I am a Conservative MP because I want to create a fair compassionate society, in which people of all backgrounds have the opportunity and hope to reach their potential. “Jack’s as good as his master” is a great Cornish expression. It is ingrained in me to value and treat all people equally. Any civilised society should be judged by how it takes care of its weakest members. By that measure the previous Government failed, despite years of increased public expenditure and huge national debt.

I am sure that not every word in the Bill is perfect, but there will plenty of opportunity to make improvements as the Bill passes through the House and we learn the lessons of the consultations currently being undertaken. I am proud to serve in a Parliament that will deliver the fundamental reform that our country needs. The measures in the Bill will be introduced over a number of years, even stretching into the next Parliament, so I believe that we will look back on today as the start of a fundamental process that rebuilds the contract between people in our society. I am delighted to support the Bill today.

17:32

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Like many hon. Members on both sides of the House, many of my constituents and many organisations have contacted me about their concerns about the Bill. Given that many other hon. Members want to speak, I shall highlight only a few of those.

The changes in housing benefit will in due course feed into the housing element of the universal credit. Without going into all the details, there is no doubt that many people in my constituency will be seriously disadvantaged by those proposals. People will be driven into poverty, and in some cases, driven out of their current housing. The fact is that for all the press stories we read—they are sometimes repeated by Government Members—about people living in luxury housing benefit accommodation, any such cases are few and far between, if the ones we read about are genuine, which is doubtful. We should not allow the debate to be distorted by a few extreme examples that, if genuine, need to be tackled.

Hon. Members will recall that in his Budget statement last year, the Chancellor of the Exchequer referred to

“families receiving £104,000 a year in housing benefit.”—[Official Report, 22 June 2010; Vol. 512, c. 174.]

I pursued that with a number of written questions. I have still not had the exact figure from the DWP, which I suspect is because only a handful of families are in that situation. If we are to have a serious debate, we should talk about the realities on the ground, not fake figures that are designed to scare people and distort the real debate that we need to have.

There are precious few areas in which forcing down housing benefit costs will affect market rent. In most cases, the market rent will become further diverged from housing benefit. As I said, as a result, people will be driven out of their housing, and perhaps forced to leave their communities or forced to go to areas where they do not get support from family and friends either in or out of work.

It may be the case, as the hon. Member for Bromsgrove (Sajid Javid) said, that the Government’s changes will affect the market in cases where housing benefit tenants form a large proportion of the rented market. However, in constituencies such as mine, there are lots of student properties, holiday lets and those whom one might describe as young professionals. They are a major element in the rented housing sector, and they are certainly not going to go away, meaning that those on housing benefit will no longer be able to afford their existing housing. That is certainly a concern that has been expressed to me by housing associations in my constituency.

[Stephen Lloyd]

Does the hon. Gentleman see nothing untoward about more than 5,000 families in the UK receiving more than £25,000 a year in housing benefit, which is equivalent to earning a salary of £80,000 to £90,000 a year?

[Mark Lazarowicz]

In each case, we have to look at the circumstances of the individuals concerned. However, the idea put forward by the Government that at the top end of the scale there are large numbers of people receiving £104,000 a year illustrates the distortions that some people want to introduce into this debate.

Another concern that housing associations in my constituency have raised with me is about the over-accommodation rules, which were mentioned by the hon. Member for Manchester, Withington (Mr Leech). Those rules will have many consequences that will be detrimental to both housing providers and individual tenants. One of the housing associations in my area has made the point that it may have a perfectly reasonable policy of providing people with an extra room, so as to allow access visits by children from a relationship, but those people would then no longer be entitled to housing benefit to reflect that extra room.

Parents and carers for adults with autism have also raised concerns with me, although other hon. Members have also discussed those concerns today, so I shall not repeat them. There have also been concerns about child maintenance charges being imposed on those still required to use the child maintenance system.

I want briefly to refer to concerns about the changes to DLA. When I intervened on my right hon. Friend the Member for Stirling (Mrs McGuire), I mentioned the concerns raised with me by a number of parents of children with disabilities in my constituency. Of course I recognise that the children concerned will not be subject to regular reassessments while they remain children. However, those parents have raised with me their concerns that in years to come their children may no longer have their support and assistance in submitting applications for DLA or its successor. Those children will find themselves in a vulnerable position if they are forced to undergo regular reassessments for conditions that will quite patently not change.

Those parents are right to be concerned—indeed, it is not surprising that they are—given that the backdrop to the Government’s policies is a 20% cut in the DLA budget. The Government may say that some of the fears that have been expressed are unfounded. However, if that is the case, they have brought it on themselves by rushing the consultation on DLA, which closed only nine days before the Bill was published, and because so many of today’s measures depend on further regulations being introduced at a later stage. Unsurprisingly, that has led to suspicions on the part of those who are likely to be affected by the changes.

Perhaps the underlying reason for those concerns is that we know that today’s changes are being driven in two ways: by a wish to reform the system—I accept the Government’s good intentions in that—but also by a wish to cut spending. The fact is that the Government’s prime concern is cutting the budget as soon as possible—that is the driver for today’s proposals—not, I am afraid, reforming the welfare system, which is something on which we should all able to agree across the House, if we had the time to discuss and debate it, and if we had the time to consider the views of outside organisations that have real concerns about it.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Just before I call the next speaker, may I point out that 14 Members are trying to catch the Chair’s eye? I want to get everyone in, so if Members can take as little time as possible, that would be helpful.

17:39

[Brandon Lewis (Great Yarmouth) (Con)]

I should like to thank the Secretary of State for the assurances that he gave to cancer sufferers and their friends and families. Will the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) also assure us that he will examine how we can deal with the inequality that exists between cancer sufferers who have intravenous treatment and those who have oral treatment? There is an unfair disparity between them at the moment. Science and medicine have moved forward, but our system has not kept up with that progress. It would be good if we could do something for those sufferers.

I represent an area with above-average unemployment. That is one of the legacies of the Labour Government, who forgot about the problems experienced by some of the coastal towns and about their regeneration. They took away public sector workers, and disincentivised people from working and businesses from investing and from employing people, through their heavy regulatory system. There are people in my constituency who are second and even third generation unemployed. That presents a problem that has two sides. On the one side, we have residents who work hard and who air their frustration at what they perceive to be the injustice of people who do not work and who stay at home having a lifestyle that is similar to that of the people who work all those hours. We need a system that will change that. The Bill is courageous in introducing some great changes, and it could start to change that as well, so that people who work hard would realise that they are not simply subsidising people who do not want to work.

On the flipside of that coin are the people who want to work but who cannot find a job or who are not properly trained for work. I have constituents who are crying out for the right kind of support and training to enable them to apply for the jobs that are out there. There are jobs beyond those that they might hear about in the jobcentre. The local press and organisations such as Jobcentre Plus do a great job in advertising the wide variety of jobs available, and this can enable people in areas such as Great Yarmouth to understand that they could be well trained enough to have the option to find work, not only in Great Yarmouth but in the wider community, perhaps in Norwich or even beyond, where jobs exist that they could reasonably commute to.

What I applaud most about the Bill is that it will introduce a move to a simpler system, and the evidence presented to the Select Committee shows that that is universally what people want. They want a system that they can understand. Too many people have come to my surgeries who simply do not understand the system and cannot get the support that they need because of that. Even some of the experts working in the system do not understand it.

A single mother with two children came to see me recently. She had a job which paid her £15,000 a year for working three days a week. She wanted to work five days a week, and her company wanted her to do that as well. She phoned the tax office to ask what the implications of that would be, so that she could work out whether she could afford to do it. It is crazy that we live in a society in which someone has to make a phone call to see whether they can afford to take a job that will pay £25,000 a year.

The most worrying aspect of the story, however, was the fact that the tax office could not answer her question. There are 30 different kinds of benefit, and a tax system that is set out over thousands of pages, so it is no wonder that, when someone is offered a well-paid job, they cannot work out—even with the help of experts—whether they can afford to accept it. I congratulate that person, because she decided to take the job even though the experts told her that the tax calculation would be done in arrears and it would be a year before they could tell her what sums would be involved, and whether they would need to claw any money back. She took quite a risk, and I applaud her for doing it. That is the kind of spirit that the new system will help to encourage. It will also provide support through the use of the taper.

Labour clearly does not understand the disincentive to work that exists at the moment. In some cases, there is a 96% marginal deduction, and that is simply not sustainable if we want to encourage people to work. I applaud the Bill, because it could really help to motivate and support people in my constituency, and help them to get back into work. That is what matters: people getting back to work and employers wanting to employ them. That is what this entire package can give us, and that is why I applaud the Bill.

17:44

[Mark Durkan (Foyle) (SDLP)]

Unfortunately, unlike the hon. Member for Great Yarmouth (Brandon Lewis), I am not in a position to applaud the Bill, simply because there are not enough provisions in it to tell us whether it will provide a working model for a benefit system that will achieve what the Government say they want to achieve—namely, a simplified benefit system with improved incentives to work. We could all agree with those principles, but our problem on Second Reading is that the Bill lacks significant content to show how many of the detailed provisions will work in practice. We are told that the details of various schemes and measures will be provided later—as the hon. Member for Belfast East (Naomi Long) said, it will be by way of regulation. That makes it unreasonable, on the basis of so little detail, to expect Members lightly to endorse such a Bill, which is so pregnant with implications for so many people in our society.

If Governments are to be encouraged to support evidence-based policy, this House should deal only with substance-based legislation. I often hear the Government saying that they agree with the principle and stated objectives of a private Member’s Bill, but because they see serious difficulties in how it might work in practice and because many of the details have not been worked out, they do not accept it and vote the Bill down. Frankly, that is exactly how I feel about this Government Bill. Although many of us endorse the objectives and recognise the problems in the existing system, we are worried about the direction in which the Government will end up travelling.

Members have already referred to the change from disability living allowance to the personal independence payment. Some of us participated in a Westminster Hall debate about that this morning. One important point is that we do not yet know from the Government what the implications of those provisions will be for carers. They have told us that they want to create a new deal for carers, but they have not given us any estimate of how many carers will be affected as a result of the changeover to personal independence payments. The Government have a lot more to tell us; only after they have told us would some of us be in a position to accept their assurances.

The universal credit is proposed to replace quite a number of existing benefits: working tax credit, child tax credit, housing benefit, council tax benefit, income-based jobseeker’s allowance and income-related employment and support allowance. We know about the existing complexities and difficulties with many of those benefits, so we cannot just take it on assumption that there will be no problems bringing them all together. We cannot take it on assumption that there will not be any serious transitional difficulties; neither, on the basis of past experience, can we take it for granted that the administration system, the infrastructure for delivery and the information technology used for the new system will not have any problems.

We know the stated intentions for tax credits, but we also know about all the problems that resulted. We know the stated intentions for employment and support allowance, but we also know about the many difficulties surrounding its delivery. It would therefore be naive if the House simply said to the Government, “Carry on regardless; we like your stated intentions; we are not going to frisk you for any further details or caution you against any possible risks to our constituents.”

Issues in the Bill might have complicated effects in the context of Northern Ireland. When it comes to universal credit, the Bill makes presumptions about child care provision, but Northern Ireland, of course, is not covered by the Childcare Act 2006 and it does not have the same infrastructure for child care as elsewhere. That poses serious challenges about how the scenario painted by the Government will work out for Northern Ireland.

Further issues stem from the fact that Northern Ireland does not have council tax, which affects rate relief. We will have to see how that will be administered from Whitehall and what degree of discretion the Whitehall Government will allow the Northern Ireland Assembly and Executive to have in respect of delivering locally for Northern Ireland the framework created by the Bill.

As I have pointed out before, many people in Northern Ireland live and work on a cross-border basis. Many people on benefit who want to get jobs might find one across the border. The issue of providing tax credits for cross-border workers is fraught with all sorts of difficulties and frustrations. We do not yet know how the replacement scheme is going to work. There is a danger that cross-border workers—those who live and work on either side of the border—could find themselves in serious difficulties.

That is why many of us are not just suspicious about some of the Government’s intentions, which we fear may result in punitive measures for many people on benefits, but sceptical about whether enough work has been done in terms of the detail of the Bill and how it will affect our constituents. That is why many of us do not feel able to support the Bill’s Second Reading, and if others are prepared to oppose it, I am prepared to join them.

17:50

[Stephen Lloyd (Eastbourne) (LD)]

Given the breadth of the Bill, I intend to focus on the work aspects.

The right hon. Member for Croydon North (Malcolm Wicks) is no longer in the Chamber, but I trust that he will not mind if I, too, quote Beveridge, who famously said:

“Want is one only of five giants on the road of reconstruction; the others are Disease, Ignorance, Squalor, and Idleness.”

As we all know, those words were written at a time of real poverty for many people in the United Kingdom. How do they apply today, in the 21st century? Indeed, do they apply today? My supposition is that they do. Today, 10.4 million people of working age in the United Kingdom are not working, 5.9 million are claiming out-of-work benefits, and more than 2 million children live in households in which no one is working. It was the great Nye Bevan who said:

“There is no test for progress other than its impact on the individual.”

Yet, today 3.9 million children still live below the poverty line. Some progress! Surely it is time to do something different.

I support the Bill’s Second Reading because I believe that, in the main, it approaches this intransigent issue intelligently and constructively. The nation has got stuck, and it has got stuck because of the system. I do not think that anyone in the Government is particularly at fault, because the problem has built up over the past 40 years. A key part of breaking the system, which I believe the Bill is doing, is making work pay—a concept that the Secretary of State has championed for some time—and that means changing the tax and benefit system.

I will not go into all the details, because I am sure that everyone in the Chamber is well aware of them, but, as some Members have already pointed out, more often than not there is no point in people coming off benefit and going into work because they will be worse off as a result. A constituent of mine, a single mum with three kids who is on housing benefit and the rest, has not worked for 15 years. The rational option for her is to stay on benefit, and if I were her that is what I would do. It would be insane for her to come off benefit: she would probably lose out under the system that we have had for years, and what would happen if she lost her job in a few months’ time? The system is insane, and the Bill attempts to transform it.

[Naomi Long]

Another potential benefit of removing the limit on the number of hours that can be worked by claimants—currently about 16—is that employers would be more likely to take on people part-time, such as lone parents, because they would have more flexibility.

[Stephen Lloyd]

I agree with every word that the hon. Lady said.

How are we to help people back into work when they have been receiving incapacity benefit, jobseeker’s allowance or a similar benefit? As I said when I intervened on the right hon. Member for Croydon North, the Bill will provide much more money for training providers to give them an incentive to focus on people who have been on benefit for a long time, and make it worth their while to spend extra time and resources helping those people back into work. The right hon. Gentleman said that the Bill copies measures taken by the previous Government in that regard. That is true to an extent, but it does a great deal more than that.

In the past 24 hours, I have been in touch with the National Audit Office, according to which the average payment from the DWP to training providers for pathways to work was £1,003 per job. Under the current proposals, providers will be paid a minimum of £3,800 and a maximum of £13,700. What lies behind the Bill is our recognition of the fact that people have been “parked” for years, which is outrageous. Whichever side of the Chamber we are on, we know that if the many people who have been out of work for a long time are to be helped, they will need that extra effort, extra mentoring and extra time. The only way in which we shall persuade training providers to do that is by stuffing their mouths with gold, as Bevan said in the ’50s in respect of the British Medical Association. The Bill attempts to achieve that by making training providers feel it is worth their while expending the extra effort to get people back into work, which is tremendous.

The previous Government introduced the black box concept, and I am glad that we are building on that to start using subcontractors’ imaginative ideas. That is all good and very rational, and it is a simple solution, too. Members on both sides of the House know that, where possible, work is the best route out of poverty.

There are downsides, however. The economy is challenged—that is the best word I can use. I spoke to a senior disability spokesperson the day before yesterday. I said, “Well, it’s obviously very hard for us to get all these extra people into jobs when we’re faced with such a difficult economic situation.” She replied, “Stephen, you’re absolutely right, but at least if we start doing the spadework now it is just possible that when the economy turns in a couple of years the foundations will have been laid and a lot of people who might have seen themselves as never working again could, through the mentoring, be in a position to be able to be swept along with the upswing in the economy.” I certainly hope so, because it is very difficult to achieve such radical reforms now when we face an economic crisis.

I want to give a message to the Minister, and I am sorry that all his colleagues are not present, as this applies to the entire ministerial team. The Bill is tremendous; it is a glass-half-full Bill and it recognises that we have to spend money, which is why I appreciate the Secretary of State getting the £2.5 billion from the Treasury. We have to pour money into this problem to transform the situation, but we must change the language if we are to get people who for years have been on IB or other benefits back into work.

The Bill is clearly designed to do that, which is why it approaches the issue in such a constructive way. I was in Burnley with the Work and Pensions Committee a couple of days ago. A training provider who is very successful in getting people into work said, “If there’s one message to give to the Government it is this: respect. Use the right words, and treat people who have been on IB and on benefits for a long time with respect.” I therefore say that we must use the right words.

The Bill is fit for purpose. I think it will transform the situation, and I will support it on Second Reading.

17:57

[Mr William Bain (Glasgow North East) (Lab)]

It is a pleasure to be called to speak in this debate.

With more than 2.5 million people unemployed, youth unemployment soaring to 20% and persistent levels of intergenerational unemployment, it is clear that the status quo is not working. The hon. Member for Eastbourne (Stephen Lloyd) cited Beveridge, but Beveridge and the Labour Government of 1945 envisaged the welfare state as a system that would redistribute not just wealth but power and opportunity. It was a welfare state built on reciprocity, but we cannot characterise the package of reforms in the Bill as being built on sufficient reciprocity. This is a Government who are introducing a Work programme that will help 250,000 fewer people than the programmes it replaces.

[Chris Grayling]

It is very important to deal with this point head on. That is absolutely not the case: every single person on JSA or ESA who needs and wants support through the Work programme will get it, and the total numbers will be higher than under the previous Government.

[Mr Bain]

If Members look at the details of what is being spent on the Work programme, they will see it does not match up to the initiatives of the previous Government.

We also foresee huge problems for the losers under these reforms. Labour supports a simplification of the universal credit system, but it must be a fair simplification. Yes, about 1 million households will benefit, but it is absurd that that is being paid for by 1.7 million households with incomes of between £16,000 and £24,000 losing out. The squeezed middle will not only be defined; they will be heard loud and clear in respect of the money they will lose as a result of this Government’s policies.

The Government have shown a bizarre lack of clarity regarding whether self-employed people hoping to start a new business will be eligible for the universal credit. The transition for individuals to the universal credit lacks detail and could create disincentives. The credit does not deal with transport costs to and from work, and the cash protection for individuals’ incomes will apply only until their circumstances change, which could be only a few weeks after taking up a job if their hours of work are altered. Changes to crisis loan alignment payments are also likely to affect many claimants. No work has been done to identify the costs of transferring delivery to local authorities, or to identify the most affected groups.

Labour Members know that one of the best means of reducing child poverty is to encourage more second earners to take on part-time work around their family or care commitments. It is extraordinary that the proposals in the Bill will reduce the work incentives for up to 330,000 second earners. This is not a strategy that will reduce child poverty in the short or medium term. Despite the Secretary of State’s statement today, there is a shocking lack of clarity about the provision of child care, the cost of which presents a huge barrier, particularly for women returning to the labour market. Council tax benefit is being devolved to local authorities in a completely unspecified way that lacks clarity and threatens to create new disincentives to work.

The Institute for Fiscal Studies has concluded that, overall, under the universal credit the incentive to work for low earners will be stronger for single people and for those in couples where one partner does not work, but that it will weaken incentives for couples to have both partners in work, owing to a higher withdrawal rate than the current tax credit system. It has also concluded that lone parents will lose out in the long term.

This week, the Social Market Foundation established that 400,000 families with children that currently receive tax credits will lose their entire eligibility for financial support under the universal credit if they have savings of more than £16,000, and that a further 200,000 families with savings of between £6,000 and £16,000 will lose some of their entitlements. As Ian Mulheim, the director of the foundation, said,

“The Universal Credit will punish working families trying to save for the future, such as those trying to get a foot on the property ladder.”

We urge the Government to reconsider the shambolic way in which they have designed the credit, and to introduce a more adequate Bill that is fit for purpose.

On housing benefit, the hon. Member for Manchester, Withington (Mr Leech) mentioned the incredibly harmful effects of the proposal to extend the shared-room rate from people aged under 25 to those up to the age of 35. Some 88,000 people across the country will lose out, with an average loss of £47 a week. In Glasgow, my home city, the impact will be to move people from the social rented sector into the private rented sector, with a resulting increase in rents.

The Secretary of State has not been able to give the House sufficient assurances on the disability living allowance. Yes, we hear of a review, but he has not taken back, nor has he had permission from the Treasury to recoup, the amount he proposed to save by withdrawing the mobility component. His own Social Security Advisory Committee has referred to the terrible impact of the loss of independence that people who lose the mobility component will experience. We therefore urge the Government not just to review these proposals but to withdraw them.

On the move to personal independence payments, we think it unacceptable to require a disabled person to wait six months—double the length of time under the present system—before coming eligible. Richard Hamer, director of external affairs at Capability Scotland, has said:

“The welfare benefits system is the UK Government’s strongest tool to promote equality for disabled people. The changes announced in the Welfare Reform Bill will instead push disabled people and those who care for them further into poverty.”

I encourage Members throughout the House to seek a better Bill than the one the Government have proposed today. I urge Members to vote for the amendment and to seek a better Bill than the shoddy and shambolic effort the Government have proposed today.

18:07

[Damian Hinds (East Hampshire) (Con)]

As some hon. Members are still waiting to speak, I shall strive for brevity. We are, of course, debating the principle of the Bill, which I am very proud to support, and we will vote on whether we get the chance to discuss in Committee many of the important issues that hon. Members on both sides of the House have rightly raised. We will also vote on whether to progress with the Bill’s central reform: the universal credit, which is ambitious, bold and compassionate.

I am sure that we have all had discussions with our constituents in which they say, “Why can’t we just have a benefits system that means that you are always better off in work than out of work? Why can’t we have a system where everybody who can work does work and where we provide proper support to those who can’t? Why can’t we just simplify the whole system so that people understand it and we do not spend so much money on bureaucracy?” This Government answer those questions by saying, “Actually, we can.”

This welfare package contains many elements. Hon. Members have focused on different ones, but I wish to focus briefly on the social fund. It contains many diverse elements but, as the hon. Member for Belfast East (Naomi Long) identified, it is the crisis loans that have been growing most recently. In the past year, there were 2.7 million loans to 1.1 million people. Although the number of people taking crisis loans has grown rapidly—it has doubled over four years—the number of individual loans has grown even faster. That, in itself, has driven a big increase in the administration costs of the scheme, which have risen from £70 million in 2007 to £120 million last year. Of course it is right that we provide extra support for people in times of personal crisis, but it is also right to question those rates of growth.

There are many other problems with the social fund: a lack of awareness, particularly about community care grants; the long processing times that sometimes occur; and, on occasion, perverse incentives. One such incentive results in families applying for loans for cookers and beds because they are “priority items”, even if they are not actually the things that are most needed at the time.

It is right to devolve these programmes to a local level, where the authorities know their areas more and are better able to put families in touch with other local services that can help them. Work can be done with, for example, citizens advice bureaux on referrals, and with food banks and furniture recycling programmes, such as Furniture Helpline, in Bordon, in my constituency. Credit unions can also play an enhanced role, although we must recognise the limits to that, both in terms of geographical coverage and the client groups they are geared up to serve. I wish to thank the Department for Work and Pensions for another announcement last week on support for credit unions. An extra £73 million is being provided for capitalisation and for the development of something that many hon. Members on both sides of the House have requested for a long time: a robust back-office system that will enable credit unions to work more closely with post offices. That, combined with the imminent legislative reform order, which will allow credit unions to grow more, will mean that they will be able to fulfil an even more important role in providing responsible, affordable financial services to some of the poorest people in this country.

The reforms to the social fund are just one part of a large and radical package of measures. Some issues still need extra attention, as Ministers acknowledged today. The position of cancer sufferers is one such issue, as is the mobility component of disability living allowance, but I suspect that, deep in their hearts, many Opposition Members support the principles behind this ambitious, bold and compassionate Bill, and I urge them to vote with us to move forward on those central themes.

18:08

[Mr David Lammy (Tottenham) (Lab)]

I approached this debate hoping that all of us in this House recognise the importance of the dignity of work for our population and recognise the dignity of living in a society where we are concerned for the welfare of people who fall on hard times. That is the basis of our social security system and we are judged on how we deal with the most vulnerable. So the remarks that have been made about people living with disabilities are particularly pertinent to the kind of society we want to live in. We have heard remarks from Members on both sides of the House that cut to the heart of that kind of society.

I am not able to vote with the Government on the Bill. I say that coming from a working-class background in which my parents, both of whom are dead now, would literally run out of the door to work because they valued work so much. We survived on income support. For us, child benefit meant being able to buy school uniforms and books, and there was a period when I experienced free school meals. Speaking in this debate, I am thinking about the many people outside the Chamber who rely on the welfare state and social security who will be very anxious about what has been said at the Dispatch Box.

The first reason why I cannot vote for the Bill concerns worklessness. One has to acknowledge the progress of moving to a universal credit system, but the reforms are being made against a backdrop of huge worklessness in communities such as mine, and we have a residual memory of the past. When Labour came to office in 1997, unemployment in Tottenham was at 28%; it is currently the highest in London. We remember a similar programme to the workfare programme called the youth training scheme. We remember the Manpower Services Commission and the 58% of people on YTS who did not finish it and who certainly did not leave it with any qualifications or job opportunities, so we scrutinise what this workfare programme will mean, and it seems lacking when we look at what is replacing the current system. We know there will be less money in the kitty than there is now and we cannot understand how the Government can move to the new system while withdrawing £6.2 billion from the current credit schemes. That is £6.2 billion that will not be available to some of the poorest families in the country. The Bill will need a lot of scrutiny in Committee in the context of worklessness, particularly the situation facing the young, and I hope to play a role in that.

The second reason why I cannot vote for the Bill is because of where it will leave women and families. Much has been said about the situation regarding the second earner when there are two earners in the home. The Bill will hurt both families and marriage, and I am surprised to see the coalition Government, who say they value marriage, doing something that will clearly hurt families by taking this punitive approach to the second income.

Also, many of us are dealing with local authorities that are withdrawing support for services in our communities, such as after-school clubs. I agree with the single mothers in my constituency who say to me, “Listen, those activities that our children take part in when school finishes at 3.30 pm are not a luxury but a necessity because we go out to work and work finishes at about 5.30 pm, and then we have to get home and pick them up.” That money is being cut against the backdrop of the proposal in the Bill massively to reduce child care allowances. How can we do that to women up and down the country whom we encourage, and want, to work? That is another reason why we should not vote for the Bill.

Another reason why I will not vote for the Bill is the visit I had from the Haringey Phoenix Group in my constituency—a wonderful voluntary organisation that supports the blind. I am particularly concerned by what the Secretary of State has said. He was vague at best about his proposals and much has been kicked into a review. Many people will be left in huge uncertainty and it is unfair that someone who is blind, who is trying to live an independent lifestyle and who perhaps has a family, will not know what kind of assessment they will receive, how regularly they will receive it and the scale of their benefits afterwards, because the Secretary of State cannot provide those answers. I welcome the simplification of the system and the desire to see people in work and gaining the dignity that comes with that, but people outside will be very concerned, and the son of anyone who has received benefits in the past could not support the Bill as it stands.

18:14

[Steve Baker (Wycombe) (Con)]

I rise to speak in support of the Government, very conscious that a large number of people will have legitimate and sincere concerns about the Bill. For example, I asked one local activist, who leads the Zacchaeus 2000 Trust, to critique the Prime Minister’s recent speech, and his response ran to 23 pages. I regret that due to the time I will not be able to share his concerns, but I will forward them to the Government, as a matter of interest.

I do not think there can be any doubt that the system is currently failing the very people that it is intended to help. I want to share with the House two stories from my constituents—one that shows the imperative for change and one that has slightly broader applicability.

Miss Rachel Pepin came to see me in a state of some anguish. She is a struggling single mum who wants to work more. She is in employment and the work is there for her, but she cannot take it because of the benefits system. She has two sons whose father will not support them. It seems that every time the Child Support Agency catches up with him, he drops out on to jobseeker’s allowance. Her current housing benefit receipt makes it profitable to stay on income support and actively not to seek work. She has reached the conclusion that it simply does not pay her to stay in employment. She sees her neighbours—on benefits—better off than she is.

I am glad to say that that is not how Rachel Pepin wants to live. She wants to work, and she is struggling against the treacle of the present system. It is letting her down, and that must end. Not everyone will share her admirable work ethic. Many will make the wrong choice when faced with the choice between being better off and doing the right thing. We must ensure that work is better for everyone, or we will encourage the decivilising consequences of the state encouraging bad choices.

My constituent Mr David Laws—[Interruption.] I expected that response from the House; I believe that he is not related. Mr Laws is most concerned about the recent changes that will end home loan interest payments after two years. He wishes to protest most strongly about the “unfairness of this legislation”, as he puts it. He has been out of work for some time. He says he is not workshy. He has a law degree and has experience of both public and private sectors. At the age of 51, he finds that many employers do not think him suitable for the low-paid jobs that are available. He finds himself willing to do anything but unable to find work. He therefore faces the very real possibility of losing his home if he fails to secure a job before April 2012.

That puts me in mind of two points. First, I think Mr Laws has a legitimate concern, which must be addressed. Secondly, if we cannot create an economy in which Mr Laws can find a job within a year when he is highly qualified and at the peak of his productivity, we will have failed. I urge the Government to impress on the Chancellor the need to fulfil his pledge for an enterprise-driven Budget. We simply must deliver those private sector jobs.

Given the time and the fact that other Members wish to speak, I conclude by echoing the sentiments put succinctly in the Centre for Social Justice report, “Breakdown Britain”:

“The more we struggle to end poverty through the provision of benefits, the more we entrench it. By focusing on income transfers rather than employment, the system makes people dependent on benefits. Habituation to dependency destroys individuals and communities, as well as reducing the overall competitiveness of the UK.”

I listened to my hon. Friend the Member for Truro and Falmouth (Sarah Newton), who made the case brilliantly that the moral and intellectual high ground is on the coalition side of the House, and I agree with her.

We have heard a range of Opposition speeches. I welcomed the speech by the right hon. Member for Stirling (Mrs McGuire), who accepted that the Government’s intent is good. I share her concern that the Bill, in a sense, is enabling, but unlike her I suspect that in a complex welfare system it is necessary to give the Government some flexibility.

[Mrs McGuire]

On flexibility, does the hon. Gentleman recognise that the 300-odd regulations defining what is meant by the Bill should be before us today?

[Steve Baker]

I hear the right hon. Lady, as have Ministers, but as I have so little time, I hope she will forgive me for finishing my contribution.

I was glad to listen to the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett). In an intervention, I agreed with another Member that the banking system is currently the source of great injustice, but some of the contributions from the Opposition seemed cynically opportunistic. There has previously been broad agreement across the House that there must be change. I urge Members in all parts of the House to get on board a welfare reform that is well intentioned and must be seen through.

18:20

[Kate Green (Stretford and Urmston) (Lab)]

Time is tight, so I shall mention a small number of issues which have not yet come up specifically in relation to the impact of the universal credit on women and children. My hon. Friend the Member for Glasgow North East (Mr Bain) alluded to the design of the universal credit as a breadwinner model benefit and the disincentive that that creates for second earners and households to work. That is important because women’s financial independence, whether in couples or on their own, is an objective that Ministers ought to be seeking, given their proclaimed wish to use the benefits system to help everyone stand on their own feet.

I am concerned, first, that the benefit will not deliver well for women. Half of women in poor households already do not have any money to spend on themselves. Money will now be paid only to one member in a couple. As the evidence of the pension credit shows us, where there is a choice as to which member of the couple is to receive the benefit—I understand that that is what Ministers intend for this benefit—77% of payments went to the man. I urge Ministers to examine closely the design of the benefit that they have created and its implications for women’s independence. That is important because women are more likely to spend money on children.

That leads me to my second concern: the impact of the benefits cap, particularly in relation to children. As other hon. Members have mentioned, the housing cap will force many families to go into arrears or to move. One of the important dimensions of forcing families to move is the disruption that that will create for children’s schooling, children’s social networks and child care arrangements. I urge Ministers to take careful note of the lessons to be learned from what happens to children who have been in temporary accommodation, and the damage that house moves can do to young children. I hope they will think again about the imposition across the board of that benefits cap.

The third thing that I ask Ministers to give attention to is payment of the universal credit on a monthly basis. I understand why they want to do that—to mimic the way in which many people receive their pay—but we know that one in four low-income families run out of money before the end of the month. Ministers must tell us what will be put in place to ensure that those families are not left struggling or destitute because of the design of a benefit payment that does not meet the needs of lower-income households.

The fourth aspect on which I would welcome clarification is an issue that has been highlighted to me. In some cases, because payment is made to one member of a couple in a household, benefit could be paid to a member of a household in relation to a cost borne not by them, but by another member of the household. That is the case particularly in relation to housing costs. One member of a couple could receive the universal credit, including the housing component; the other member of the household might be responsible for that rental obligation. I would welcome Ministers’ clarification on whether that is also to apply to mortgage interest assistance. That matters because it is likely to deter women from forming couple relationships, which Ministers are keen to promote, if women think they will be put in a position where money which is important for them to keep their home is to be paid to somebody else.

Finally, like other hon. Members, I am distressed that proposals are being introduced in the Bill so early on in the process of consultation on child support, when we are still waiting for the responses from the many experts in the field. I am concerned that we are moving to a system that will be almost entirely voluntary, with only a residual compulsory system. We all know that when voluntary arrangements are put in place—if they are put in place—it is women and therefore children who are most likely to lose out. Introducing the payment of a fee to access a voluntary child support system is highly likely to leave many women and children completely unprovided for, and I urge Ministers, on that point in particular, to think carefully and to think again.

18:25

[Charlie Elphicke (Dover) (Con)]

Government Members are all aware that behind the Bill stands the financial destiny and future of millions of people. There is a great human aspect to this. Only today, I spoke to my constituent, Kelly Banks, whose son Ben is 12 years old and has a serious heart condition. The allowances that he receives are going to be taken away because he can walk to school—never mind the fact that it takes him half an hour, and by the time that he gets there, he is out of breath. Those hard and difficult decisions must be taken, and we must make sure that the right balance is struck to ensure that people who need help receive it, and that those who do not, do not.

That is a particular concern, because the figures show that disability living allowance has gone up by 30% in eight years. Housing benefit has gone up by 45% in the past five years. In the past 13 years, the benefits bill for working-age people has increased from £52 billion to £74 billion. Those are the numbers in the years of plenty, but we have inherited a catastrophic economic situation and difficult decisions must be made. The Bill seeks to strike a balance between, on the one hand, the nation’s credit card having been maxed out and, on the other, the need to ensure that those who need help receive it. Most importantly, the universal credit will help people to be sure that work always pays.

We need to do more to crack down on fraud and error, which costs £5.2 billion in wasted benefits. We need to ensure that there is a proper cap on the number of people coming in to the country. We have 5 million people who could work but do not do so, yet we all know that in the past few years 1.2 million people who were born overseas came and took jobs. We should do more to ensure that those 5 million people who could work but do not do so receive help, support and encouragement to get into work. We have to do the right thing by our own countrymen and our neighbours. It is time to reform. It is time to make work pay, and it is time to bring the benefits bill under control and ensure that there is fairness for those in need and those who are paying taxes.

18:28

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I shall be brief, as I know that other Members still wish to speak. We have heard useful contributions from Members on both sides of the House. There is cross-party consensus that the welfare system needs to be reformed, and there is even common ground on the reasons for the reforms, such as making work pay, and on what we need to do about the problem, such as simplifying the benefits system.

I want to put on the record the fact that there have been some unhelpful and unhealthy remarks, particularly statements that equate the reforms on making work pay with, if not a kick up the backside for people who are deemed to be workshy, then its equivalent. I found that particularly objectionable. I began to make a list of the Members concerned, but I ran out of space.

I want to dispel some of the myths perpetrated about worklessness, which includes unemployment and incapacity, whether the result of illness or of disability, and to explain why the Bill not only fails to address key issues such as the taper of the universal credit but, in conjunction with the disasters of the Government’s economic and employment policies, risks increasing both child and pensioner poverty and inequalities, as well as creating a new underclass. We also know that there will be consequences for the health outcomes of the population as a whole.

On unemployment, constituents are coming to my surgeries having either had their jobs threatened or just lost their jobs, and it is insulting that we should consider some of them to be making lifestyle choices. Unemployment is not a lifestyle choice. There is clear evidence that unemployment has profound negative effects on the physical and mental health of not only the people who are directly affected, but their families. Studies suggest that there will be an increase in all-cause mortality as a result of unemployment, so we need to be very mindful of that.

Indeed, if we compare the level of incapacity benefits with health data, we find that it is a good indicator of population health. It is reliable, legitimate and not an indicator of malingering. There is overwhelming evidence that the driver that brings down worklessness is a high level of sustained economic growth, but the current fitful recovery will not help to get people back into work. Given the Government’s cuts, nothing will help those people.

In addition to the Bill’s appalling timing, it lacks an understanding of the importance of appropriate welfare to work programmes and fails to distinguish between job-ready and long-term claimants. That will again hinder people from getting back into work.

My final general point is about the Bill’s direction of travel. When we compare different international systems, we find that those with highly decommodifying state support packages—where state support ensures that a basic standard of living is maintained—have fewer income inequalities, a host of social benefits and no negative impact on health outcomes, as measured in particular by infant mortality.

Welfare systems also have an intergenerational effect. In the US we have seen that evidence, and I see patterns associated with what we have been introducing, and that effect also occurring here. Children inherit their parents’ poverty, and we cannot allow that, so I recommend that we look again at the detail of the Bill.

On the Bill’s specific measures, I have already mentioned concerns about the taper, and I hope that the Government will commit to an annual review of the rate and introduce it at 55% rather than at 65%. In addition, the payment of the universal credit needs to be more flexible, as many of my hon. Friends have said, so that we do not exacerbate child poverty any further.

I would also welcome some clarity about the earnings disregard—the amount a household can earn before they lose their entitlement—to ensure that work pays for all. Members have already mentioned the reduction in the child care costs that the working tax credit covers, and I hope that we can look again at that. Save the Children estimates that some families could lose more than £1,500.

Free school meals are another important source of support to low-income families, and I am concerned that the Bill does not describe how they will be maintained under the universal credit.

The withdrawal of employment support allowance after a year is absolutely disgraceful, and again we should learn from other countries. We have seen what has happened in the States, and the effect on families has been absolutely appalling.

Finally, the conditions, sanctions and penalties associated with the universal credit must be reasonable, take account of specific barriers to work and ensure that work does pay.

So, I will not be supporting the Bill—

[Mr Speaker]

Order. I am extremely grateful to the hon. Lady.

18:34

[Priti Patel (Witham) (Con)]

I congratulate my right hon. Friend the Secretary of State and his entire ministerial team on bringing forward this long overdue legislation, and I pay tribute to him for his passion and conviction in driving forward his policies to get people off dependency and back into work. It is imperative that the welfare and benefits system be reformed and improved, because helping people to get back into work, ending the culture of dependency on the state and restoring the British work ethic is absolutely the right thing to do. It is always easy for Labour Members to criticise from a position of opposition, but they are the ones who spent 13 years failing to get people into work and trapped yet another generation on benefits—and they opened the door to let 2.5 million people from overseas come into Britain and take British jobs.

I make no apologies for viewing the welfare system as a safety net. Welfare should be available to help those who have fallen on hard times and need support in getting through difficulties, illnesses or disabilities. However, this has not always been the case. Many Members who have spoken in the debate recognise that our constituents have gone through many bureaucratic processes, obstacles and hurdles in getting the support to which they are entitled. They face a lot of stress and anxiety in going through appeals processes and tribunals, and many go through terrible trauma, which is why they end up in our surgeries, when we have to intervene. The reforms outlined in the Bill must therefore ensure that such mistakes, bureaucracy, regulation and hurdles are reduced, and, importantly, that we restore confidence in the system to support those who are in need.

There must be three components in any programme of measures introduced by Government to get Britain working, take people away from benefits and get them back into employment. First, we need pro-business policies that promote growth, enterprise and wealth creation. Secondly, strong measures need to be in place to get people into work and to complement the measures in the Bill to reduce benefit dependency. I therefore welcome the introduction of the Work programme, which is long overdue. It is not covered by this Bill, but has to be viewed alongside it as a complementary measure. The Secretary of State should be congratulated on promoting the role of welfare-to-work providers in getting people into work, and recognising the opportunities that they will create for the unemployed. That is the best approach to take, and the sooner the Work programme is fully functional, the better. Finally, there must be a benefits system that is fair both to the taxpayer and to those who need benefits. I therefore welcome the measures in the Bill that will get people out of the benefits trap by making work pay and removing complexity with the introduction of the universal credit.

I press the Government to use the Bill to take strong action against those who are disregarding the traditional British value of fair play and have been using the benefits system as an alternative to work. We have heard a great deal about that during the debate. The House may be interested to know that more than 500 suspected benefit cheats have warrants issued for their arrest for failing to turn up in court. Despite the levels of suspected fraud, totalling over £50,000 in some cases, because of a ridiculous example of human rights law, defying common sense, the Secretary of State’s Department is unable to name these people to help to track them down and bring them to justice, because it would violate their right to privacy. I hope that the Secretary of State and Ministers will look to alter this ludicrous position, and use the Bill as an appropriate vehicle to do something about it. I would also like action to be taken to prevent Europe from ordering us to pay benefits to immigrants, including illegal immigrants, which causes bemusement to most people in this country.

This Bill is not about penalising the vulnerable but establishing a fair system that penalises those who flout rules, abuse the system and think it right that they should have a better life than those who go out to work. That is why I will support it.

18:38

[Sheila Gilmore (Edinburgh East) (Lab)]

Having sat here all afternoon listening to the debate, I see a substantial difference in attitude between the two sides of the House. We have heard the Secretary of State and many speakers talk about the distinction between taxpayers, on the one hand, and claimants, on the other, as though they were two completely different groups of people. They are not. At various times in our lives we may be either or both. It is unproductive to pit these people against each other. There are too many myths and exaggerations in this whole debate.

The Prime Minister launched this Bill by saying that the welfare system had put one in four people out of work. His figures were simply wrong. The figure for those of working age who are not working, and not students or carers, is only 14%, so why did he say that it was one in four? It was simply to try to build up a head of steam to justify what are in fact cuts in benefits. Before the universal credit and all the rest of it comes into force, there will have been two years of benefit cuts. That is why the Government are able to say that people will not be worse off. Most of the reductions in benefits will already have happened through housing benefit, and by taking people off incapacity benefit and putting them on much lower levels of benefit. That is why people will not be worse off, and it is quite unsatisfactory.

18:40

[Stephen Timms (East Ham) (Lab)]

We have had a good debate. The Bill contains one good idea and presents us with two serious problems. The good idea is the merger of out-of-work benefits with in-work benefits, such as the tax credits that we introduced, which make it much more worthwhile to be in a job. The creation of the universal credit has been widely welcomed across the Chamber in this debate, by my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), as well as by the Chair of the Select Committee on Work and Pensions, and by the hon. Member for Cardiff Central (Jenny Willott), my hon. Friends the Members for Sunderland Central (Julie Elliott) and for Stalybridge and Hyde (Jonathan Reynolds) and my right hon. Friend the Member for Stirling (Mrs McGuire), among others. It is a welcome change, and it is right that we should congratulate the Secretary of State, who has focused intently on this matter since the Conservative party sacked him as its leader. He went off and set up the Centre for Social Justice, which did the spadework, and he now brings the reform to the House.

That was the good idea, but unfortunately the bouquets end there, because the Bill is a mess. It was rumoured on good authority a few weeks ago that it would be delayed another month so that key decisions could be made—and now that we have the Bill, we can see why: fundamental points are missing. How will child care be supported? That is key to the Bill’s purpose of ensuring that people are better off in work. If the Government get this decision wrong, the Bill will fail. The Secretary of State told us that he would take further advice from relevant groups. However, the relevant groups have given him plenty of advice already; the trouble is that he has not taken it. The previous Government’s success on child care meant that the proportion of lone parents in work increased from 45% to 57%.

The decision on support for child care is crucial. The Secretary of State has told us that he wants to spread the same amount of money across many more people. People will therefore have to find not 3% of the cost of child care out of their own pocket—which is common at the moment—but perhaps 30%. That is a tenfold rise. It is therefore not surprising that lone parent organisations are reporting calls from their members saying that they will not be able to afford to carry on working.

At a time when benefits are being merged into a universal credit, the Government have, bizarrely, decided to do the opposite with council tax benefit and devolve it entirely to local councils. That appears to be the messy outcome of a dispute between the Secretary of State for Work and Pensions and the Secretary of State for Communities and Local Government, which unfortunately this Secretary of State has lost. Local authorities will apparently be free to design council tax benefit as they wish, except that it will have to cost 10% less than before. Again, that could completely scupper the advantages that the universal credit is supposed to deliver. Will the Department for Work and Pensions be able to step in if that happens? We simply do not know.

The Secretary of State was not able to tell us earlier who will receive free school meals in future. That is a crucial piece of information. How can we debate the new system without knowing that?

My hon. Friend the Member for Swansea West (Geraint Davies) made some telling points about the position of self-employed people. We have no idea how the self-employed will be handled under the new system. Employers will notify the DWP of the salary of people in pay-as-you-earn every month so that their universal credit can be calculated—that is, if the Government can get the IT to work. The Secretary of State knows that I am sceptical about his timetable for that. Self-employed people are not in PAYE, so how will their universal credit be worked out? We have no idea, and the Bill does not tell us.

Who will be entitled to free prescriptions? Who will be entitled to mortgage interest support? Which working families will be exempt from the benefit cap? How will unearned income such as child maintenance and widow’s benefit be treated? Will disability living allowance continue to be available indefinitely to children? My hon. Friend the Member for Alyn and Deeside (Mark Tami) made a powerful speech about that.

Those are enormous gaps in the Bill on crucial details, not minor matters. The whole purpose of reform, and the point that has been repeated over and over again in the debate, is that everybody wants a system that ensures that people are better off in work. Achieving that goal stands or falls by whether those questions are given the right answers, and at the moment we simply do not know.

The lack of answers is a serious problem with this unfinished Bill, but unfortunately it is not the worst problem. The things that we do not know are only the half of it: the things that we do know turn out to be even worse. Why on earth are Ministers launching an attack on saving? People who receive £80 or £100 a week in tax credits to supplement their earnings will in future receive absolutely nothing at all if they have £16,000 in the bank. They could lose perhaps £5,000 a year as a punishment for having £16,000 in savings. If they get rid of their savings, they will get their credits back. What is that about?

The Secretary of State told us earlier that child care support would be included in the universal credit. That would mean that those people, for the crime of having £16,000 in the bank, would lose all their child care support as well. Why are people on modest earnings to be punished for saving for a deposit to buy a home, or for the massively increased charges for higher education? The Secretary of State told us that 100,000 families would lose everything as a result. He said that he saw no problem with that, but he should go and talk to his colleagues in the Centre for Social Justice, who have made the point that the savings limit for out-of-work benefits is

“an unfair penalty to those who have saved”.

Instead of easing that limit, as the CSJ proposed, the Bill extends it to people in work.

The Secretary of State is wrong to say that the welfare system is only for the most vulnerable. My hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) made a telling point about that. It is there for everybody when they need it; that is why we have national insurance. My right hon. Friend the Member for Croydon North (Malcolm Wicks) was right to emphasise that responsibility should be expected from the rich as well as the poor.

Contributory employment and support allowance is to be time-limited to a year. My hon. Friend the Member for Aberdeen South (Dame Anne Begg) made a telling intervention about that, and my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) also spoke about it. The data suggest that probably less than 20% of those in the work-related activity group returned to work within a year. There is no way that someone on oral chemotherapy or with a serious mental health problem can be expected to return to work in a year, so that is clearly wrong.

[Robert Flello (Stoke-on-Trent South) (Lab)]

Does my right hon. Friend accept that there is already a problem with contribution-based ESA, because people are not passported through to other benefits as somebody on income-related ESA might be? There are already difficulties for people in the circumstances that he describes.

[Stephen Timms]

There certainly are problems. The Government have made much of marginal deduction rates and the impact on work incentives, but it turns out from the small print of the Bill that the changes will increase the marginal deduction rates of many more people than will have them decreased. Again, the Secretary of State’s own think-tank has pointed out the problem with the high taper rate that the Government have chosen.

My hon. Friends the Members for Makerfield (Yvonne Fovargue) and for Stretford and Urmston (Kate Green) pointed out that in the tax credits system, benefit in respect of children can be paid to their mother. Sometimes, if all the money went to the father, the children would never see it. The Bill completely ignores that issue.

A lot has been said about disability living allowance, and my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) spelled out powerfully the dangers of what is being done. It is being scrapped and replaced with the personal independence payment—whatever that might eventually turn out to be. A lot of disabled people are frightened, and the Bill to abolish DLA was published before the consultation even finished. We should reform DLA not abolish it, and it is wrong for the Bill to proceed in that way.

As I said earlier, the Bill presents us with one good idea—the universal credit—and two very big problems. The first is all the things that the Bill does not tell us—the large gaps of great significance that have been left in it—and the second is all the things that it does tell us. It needs radical improvement before it reaches the statute book, so I commend the amendment to the House.

18:49

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I am sorry to follow such a highly negative speech from the Opposition spokesman on an occasion when the Government are bringing before the House an historic Bill that lies at the heart of an historic set of reforms that will reshape the relationship between the Government, the citizen and the welfare system. The Bill strikes a balance between fairness and responsibility, and crucially, it sets out the framework for creating a more effective welfare system that is fit for the 21st century. Above all, the Bill puts in place many more of the building blocks that we will need if we are to tackle the blight of deprivation that affects too many of our communities and too many of our citizens. In the past 13 years, millions of our citizens were left on the sidelines of society, trapped by a culture of dependency, facing financial barriers to a return to work, and with inadequate support to help them to make a return to the workplace, even if their financial position made it sensible for them to do so. All that must now change.

We have had a good and lively debate, and I congratulate all hon. Members who participated in it. Time does not permit me to refer to all the points raised, but I will happily answer questions or letters, and indeed, those who serve on the Public Bill Committee can raise many of the detailed issues in the days and weeks ahead.

Not least among those contributions was a particularly disappointing start by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), the shadow Secretary of State. He and the Leader of the Opposition have both openly backed the principles of the reforms, and they even put some of the Bill’s measures, such as the housing benefit reforms, in their party’s manifesto. Yet what did we hear today? They have done a U-turn. They have been captured by the left wing of their party, and are reverting to the politics of type. That is a real shame, because the shadow Secretary of State was right to say that the reforms would benefit from consensus. It is therefore unhelpful to hear Opposition Front Benchers spend so much time seeking dividing lines rather than working with the Government to deliver reforms that will transform this country. The shadow Secretary of State may not realise it, but there is a great degree of consensus about the reforms out there in the country, among people who believe that it is time that we sorted out the mess that has built up around our broken benefits system—a mess that has left millions trapped in dependency.

One of the other disappointments of the debate was that so many Opposition Members reverted to type in the language that they used. Too many couched this debate in the kind of language that I thought we had left behind 20 years ago. Let us be absolutely clear. The reforms are designed to help those in our society who are struggling. The universal credit will help to lift hundreds of thousands of adults and hundreds of thousands of children out of poverty. We are challenging for the first time in far too long the cycle of deprivation that incapacity benefit represents for too many of our fellow citizens. We are providing more individualised support to help people to move back into the workplace.

There are some tough decisions, but for what reason do hon. Members believe that we must take those decisions? It might have something to do with the fact that the Labour Government left us with the biggest deficit in our peacetime history and we must pick up the pieces. As the shadow Secretary of State so aptly reminded us, there was no money left when we took office.

I pay tribute to the right hon. Member for Croydon North (Malcolm Wicks) for saying that the best social security policy is a job. He is absolutely right, and that principle—that simple premise—lies at the heart of our reforms and the change that we are seeking to deliver.

Let me also address the point about the gaps in the Bill, which was raised many times this afternoon. I remember being up against the right hon. Member for East Ham (Stephen Timms), the shadow Minister, in Public Bill Committees when he was in government. Some of those Bills had virtually no substance at all to them. This is a bit like the poacher turning gamekeeper, but it is pretty ripe for him to turn round and say that not all the details have been included. What I would say to the House is this. As we work through the Bill in Committee, we will deliver detail to the Opposition at each stage on how we plan to put the measures into practice. We will answer questions and be as open as we possibly can, including in saying where work still needs to be done. The Committee will, I hope, be an exercise in discussion and debate, and we will inform it to the best of our abilities, because these reforms are vital. Making work pay will transform lives, especially for the poorest, through the universal credit, the single taper and getting rid of the complexity that has dogged our system. Members on both sides of the House will know about all the problems that we have had with tax credits over the years and all the constituency cases that have come to us. They should realise that this Bill sweeps all that away. A simpler system for our constituents and a simpler system for society—this is a better way of doing things.

Many of the clauses in the Bill are also vital to the conditionality changes that will underpin the delivery of the Work programme, helping to deliver much better back-to-work support for those struggling to get into work. We have always been clear that there needs to be a clear two-way contract between individuals and the state. We will provide much better back-to-work support and a system that makes work pay, but refusing that support cannot be an option for those with the potential to work. This Bill will place clear and firm responsibilities on their shoulders, and will bring clear consequences if they fail to live up to those responsibilities.

This Bill is about taking a step in the right direction towards a more common-sense welfare system that targets resources more effectively to the vulnerable, but also restores credibility in our welfare system. That is why we have tackled the insanity of a system that can pay housing benefit to people in quantities far beyond what those in work might expect to be able to afford when finding a house for themselves. That is also why we are introducing the benefit cap, so that we remove perverse disincentives to work. Last week I sat with an adviser in a Jobcentre Plus office who said to me, “The thing I find strange is this: why am I organising payouts to people who get far more money than I do, and I’m doing a job?” That is the kind of situation that we have to address.

That is also why we are getting to grips with reforming the disability living allowance, so that we can move away from an unsustainable welfare state and a system where we leave people for long periods, untouched, uncontacted and unchecked. We do not ask the question, “Is this still right for you?” That is what the changes are about, and they are necessary.

Despite the rhetoric, Opposition Members have said that they believe that it is time for reform, and this is why we are pressing ahead with it. We are also sorting out the mess that is child maintenance in this country. Finally, we are doing something that I am very proud of—something that Opposition Members called for, but which the previous Government did not do: putting an end to jobcentres having to accept adverts from sex clubs or lap-dancing clubs in a way that exploits the most vulnerable women in our society. In short, the Welfare Reform Bill is about putting responsibility, fairness and common sense back into the heart of the welfare system, while ensuring that we deliver value for money for hard-working taxpayers.

[Andrew Gwynne (Denton and Reddish) (Lab)]

Will the Minister give way?

[Chris Grayling]

No, I am not going to give way.

Before I conclude, let me briefly touch on a couple of points raised by hon. Members. The Chair of the Work and Pensions Committee, the hon. Member for Aberdeen South (Dame Anne Begg), raised the issue of contributory ESA. I want to make two points to her. The first is that all those who move off incapacity benefit who fit into the contributory bracket will be given access to the Work programme regardless of their status. That is important in ensuring that they receive back-to-work support. However, I would also remind her that the changes to ESA simply bring it into line with JSA. It is a simple principle that, if someone has financial means in their household, the state will not support them. The state will be there to provide a safety net for those who do not have the means to support themselves. That is a sensible principle. We have extended the period beyond six months, so that we can deliver support to people with health problems, but it is sensible to have an aligned system. I will be happy to talk further with the hon. Lady in Committee or in the Select Committee.

[Clive Efford (Eltham) (Lab)]

Will the Minister give way?

[Chris Grayling]

No.

This is an important set of reforms and I commend the Bill to the House.

Question put, That the amendment be made.

18:59

Division 219

Ayes: 244

---

Labour: 232
Scottish National Party: 4
Plaid Cymru: 3
Democratic Unionist Party: 1
Social Democratic & Labour Party: 1
Alliance: 1
Green Party: 1

Noes: 317

---

Conservative: 265
Liberal Democrat: 47

Question put forthwith (Standing Order No. 62(2)), That the Bill be now read a Second time.

19:15

Division 220

Ayes: 308

---

Conservative: 260
Liberal Democrat: 47

Noes: 20

---

Labour: 12
Scottish National Party: 4
Plaid Cymru: 2
Social Democratic & Labour Party: 1
Alliance: 1
Green Party: 1

Bill read a Second time.

Welfare REform Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Welfare Reform Bill:

Committal

1. The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 24 May 2011.

3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.

Other proceedings

7. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Norman Lamb.)

Question agreed to.

WELFARE REFORM BILL (MONEY)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Welfare Reform Bill, it is expedient to authorise—

(1) the payment out of money provided by Parliament of—

(a) sums paid by the Secretary of State by way of universal credit or personalindependence payment,

(b) any other expenditure incurred in consequence of this Act by a Minister of the Crown or the Commissioners for Her Majesty’s Revenue and Customs, and

(c) any increase attributable to the Act in the sums payable under any other Act out of money so provided, and

(2) the payment of sums into the Consolidated Fund.—(Norman Lamb.)

Question agreed to.

Business without Debate

Wednesday 9th March 2011 Commons Chamber

Delegated Legislation

Wednesday 9th March 2011 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Social Security

That the draft Jobseeker’s Allowance (Work Experience) (Amendment) Regulations 2011, which were laid before this House on 26 January, be approved.—(Norman Lamb.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Environmental Protection

That the draft Waste (England and Wales) Regulations 2011, which were laid before this House on 8 February, be approved.—(Norman Lamb.)

The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday next (Standing Order No. 41A).

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Licences and Licensing

That the draft Licensing Act 2003 (Royal Wedding Licensing Hours) Order 2011, which was laid before this House on 9 February, be approved.—(Norman Lamb.)

Question agreed to.

Petitions

Wednesday 9th March 2011 Commons Chamber

19:27

[Keith Vaz (Leicester East) (Lab)]

A few weeks ago, my hon. Friends the Members for Leicester South (Sir Peter Soulsby) and for Leicester West (Liz Kendall) and I launched—

[Mr Speaker]

Order. I apologise for interrupting the right hon. Gentleman, but may I appeal to Members who are leaving the Chamber to do so quickly and quietly, so that we can hear him present his petition?

[Keith Vaz]

Thank you very much, Mr Speaker, for your protection, which I appreciate greatly.

As I was saying, a few weeks ago, my hon. Friends the Members for Leicester South and for Leicester West and I launched a city-wide petition against the Government’s proposals to abolish the education maintenance allowance. Over the next few evenings, we will each be presenting petitions from various educational institutions. This petition has been collected by those who study at Gateway college, in Hamilton, in my constituency, where the principal is Suzanne Overton-Edwards.

The petition states:

The Petition of residents of Leicester and the surrounding areas,

Declares that the Petitioners oppose the abolition of the Education Maintenance Allowance; notes that a substantial number of young people are in receipt of the Education Maintenance Allowance in Leicester; and further notes that education can provide a better future for young people.

The Petitioners therefore request that the House of Commons urges the Government not to abolish the Education Maintenance Allowance.

And the Petitioners remain, etc.

[P000897]

19:30

[Tony Cunningham (Workington) (Lab)]

I would like to present this petition on behalf of Marie Steele and more than 120 classroom assistants from west Cumbria who are both angry and upset at Cumbria county council’s single status proposals.

The petition states:

The Petition of residents of Cumbria, and others,

Declares that the Petitioners are concerned about the plight of Teaching Assistants in Cumbria, who feel they are being unfairly treated and whose professionalism is severely under threat. The Teaching Assistants/support staff across the county are currently fighting a change to their terms and conditions that affects their hours and a considerable loss of pay. Support staff are a vital resource for the running of a school. Senior Teaching Assistants also cover classes when teachers are absent or on planning time.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Education to look into the plight of Teaching Assistants.

And your Petitioners, as in duty bound, will ever pray.

[P000898]

Portsmouth-London Railway Line

Wednesday 9th March 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Norman Lamb.)

19:32

[Penny Mordaunt (Portsmouth North) (Con)]

I wonder, Mr Speaker, whether on your outreach trips up and down the country you travel by rail. If you do, I wonder whether you like to look at your speech en route and to travel with your elbows. These are pertinent questions should you intend to come to Portsmouth to give us the benefit of your wisdom, for it seems that South West Trains expects its passengers not only not to work while travelling in standard class but not to have elbows either. A report commissioned by South West Trains on the ergonomics of its class 450 carriages, which are now on half the Portsmouth-London line, found that 59% of people, when their elbows are taken into account, will not fit into the seats. My admittedly anecdotal evidence shows that most people prefer to travel with their elbows most of the time. The only sense that one can make of that bald admission by South West Trains is that it explains why there are no arm rests on those services.

Allow me to describe the conditions in the class 450 Desiro carriage. The seats are arranged in a two-plus-three formation, so there are five seats across the width of the train. Each seat is 43 cm wide, but, crucially, there is no space between them. They are hard, they have no arm rests and the seat closest to the window is compromised by the heating channel encroaching into the foot space. Earlier today, I took the liberty of measuring out, on this very Bench, 129 cm from the Gangway and invited three hon. Friends to attempt to squeeze themselves into the space they would have for a 90-minute journey on the London-Portsmouth line. I am sorry to say that if my hon. Friends had been in a class 450 carriage, my hon. Friend the Member for Gosport (Caroline Dinenage) would have been 90% in the aisle. I hardly need to remind the House that this is the usual seat of my hon. Friend the Member for Louth and Horncastle (Sir Peter Tapsell), who, as we all know, is not a man to be crowded. We are accustomed to regular games of sardines as we squeeze ourselves into a Chamber with too few seats; if we cannot do it, what hope do others have? Crucially, we are content with this arrangement; we approved of the decisions of our predecessors to create a Chamber deliberately short of seats, but Portsmouth commuters are not content to play sardines every day.

[Damian Hinds (East Hampshire) (Con)]

I congratulate my hon. Friend on securing this important debate. Is she aware that this issue affects not only Portsmouth commuters but many of my constituents in Liss, Liphook and Petersfield, and that the same trains are used on the Alton line? Sometimes it is an issue not just of comfort but of health and safety—people with back trouble and so on.

[Penny Mordaunt]

My hon. Friend is absolutely right. I know that he has done a tremendous amount of work liaising with his constituents, especially those who commute to London, on this issue. He might also be aware that in 2005, when the 550 operated from Waterloo to Basingstoke and Alton, the Rail Passengers Council—the forerunner of Passenger Focus—said that the 450’s seating arrangements were

“only reasonable for the route on which they were run”—

that is, not suitable for a mainline service. Why, then, were those unsuitable carriages introduced to the Portsmouth-London line on 65% of the services in October 2006, before being scaled back again to 49% late in 2007? South West Trains claims that it met an urgent need to address overcrowding on the route, based on the 2005-06 passenger figures—a full 12-carriage rake of 450s having 140 more seats than the 10-carriage 444 rakes. Those passengers-in-excess-of-capacity figures for peak times showed that of the 23 services operated with the 444 carriages, only five showed standing figures of almost 100 or more, the worst being 272.

[Mr Mike Hancock (Portsmouth South) (LD)]

I congratulate the hon. Lady on securing the debate. I am sure she would agree that South West Trains makes easyJet look luxurious. But the real problem, surely, was the way in which the figures were massaged to suit the financial interests of South West Trains rather than the interests of the paying passengers. Does she agree that we should be a little more optimistic that the Minister this time will be a bit more successful in persuading South West Trains to do something about that than was her Labour predecessor, who tried and never got anywhere?

[Penny Mordaunt]

I thank the hon. Gentleman for that intervention. I will come to precisely those points and lay them before the House. I make no judgments, but I think the figures will speak for themselves. I also wish to offer the Minister some solutions, because it is part of the frustration for many commuters that the answers in terms of volumes of rolling stock are there.

Overcrowding is concentrated between Waterloo and Woking—the leg of the route that just takes the first 25 minutes. It should be recognised that trains between those stations operate about every four minutes. Those commuters have options, and the journey is suitable for a 450 carriage. Also, it seems that it is acceptable to have 97 people standing, as the eight-carriage 450 service—the 6.32, I believe, from Haslemere—that showed that figure did not need to expand. Admittedly, there is not the option there simply add a single coach, but the point remains.

Further undermining the argument that overcrowding must be addressed is the fact that the 140 extra seats cannot actually be used. People either cannot fit into them or choose not to. Portsmouth city council’s March 2010 survey found that 80% of people boarding south of Haslemere are not confident of getting a seat at busy times in a 450 carriage.

[Caroline Dinenage (Gosport) (Con)]

The residents of Gosport hugely appreciate my hon. Friend’s securing of this Adjournment debate. I wonder whether she understands that South West Trains has an awareness that it is not just commuters from Portsmouth who board those trains; it is also commuters who then go across to the Isle of Wight, and of course those who catch a ferry over to Gosport, which is one of the largest towns in the country without its own railway station.

[Penny Mordaunt]

I thank my hon. Friend for her intervention. South West Trains cannot be anything other than aware of the enormous numbers of people who have been affected. As my hon. Friend the Member for Portsmouth South (Mr Hancock) said, the problems have been going on for many years, and it is a source of great frustration that no solution has yet been found.

Returning to the number of seats and the difficulty of getting a seat south of Haslemere at busy times, 25% of people cannot find a seat at all. If it were a simple matter of the number of seats, there would not be such problems. We have a situation in which similar numbers of people might end up standing, but in a much narrower gangway. Network Rail reports that food sales at its stations are up 5%. I am sure Portsmouth residents are doing their bit, stocking up before boarding in the knowledge that the at-seat trolley service will be hauled up somewhere around the lavatory, where it will be in good company with the similarly impeded train guard.

The Association of Train Operating Companies reported 1.32 billion passenger journeys in 2010, 7% up on 2009 and 37% up on 2000—indeed, a number not seen since commuters could enjoy the charms of steam power. We should not allow this top-line figure to distort the true pattern of travel on individual lines. Even as a response to increased demand, the provision of more unusable seats is hardly adequate. In any case, surely it was a disproportionate response to replace 450s on more than 50% of weekday services, when only 10 or so out of 133 weekday services showed high numbers of standing passengers.

We must wonder why, if overcrowding were the only motivation for change, services that were not overcrowded or had only, say, 10 standing passengers were replaced with the 450s. Outside peak times, the service is not at all stressed, yet during the week 53% of services are formed of 450 trains. Although I do not make any allegations—I merely offer the House the information—the carriage leasing company, Angel Trains, has confirmed that the 444 is as much as 20% more expensive to lease than the 450.

In the face of repeated lobbying from passengers of South West Trains, the company has held firm to the line that it must increase capacity. It has succeeded in increasing the number of seats. It has not succeeded in increasing the number of places to sit. A seat on which one cannot sit is a seat in name only. South West Trains dismisses criticism of the 450 carriages as mere “comfort” concerns and a simple preference for the 444. Well, quite. The 444s have two plus two seating, tables, arm rests and seats 45 cm wide, with a 4 cm space between them. What’s not to like?

What makes the situation even more frustrating for commuters is that South West Trains has 45 carriage units of 444 carriages. Passenger groups have devised service diagrams that show that a full 444 service could be operated with just over half that number. There is thus no need for passengers to endure the discomfort that at present is their lot. I accept that service programmes are a complex business and changes could have implications for other lines, although my research shows that these would not be detrimental.

The cause of passengers is not helped by the fact that there are no departmental guidelines on comfort. Comfort does not feature in any rail franchise agreements, or for that matter in the recent Reforming Rail Franchising consultation. However, the Department for Transport is alive to the dangers of inadequate provision being foisted upon passengers. The national rail franchise terms state that, excluding additional passenger services,

“the Franchisee shall maintain the composition of the Train Fleet during the Franchise Term, unless the Secretary of State otherwise agrees, such that there are no changes to the Train Fleet, including changes:

(a) to the classes or types;

(b) to the interior configurations; or

(c) which may reduce the journey time capabilities, of any rolling stock vehicles specified in the Train Fleet.”

It is true that franchises might be negotiated with a change of stock in mind, but patently the Department accepts the need to protect passengers. Furthermore, the coalition programme for government states:

“We will grant longer franchises in order to give operators the incentive to invest in the improvements passengers want.”

Such improvements include better services, better stations, longer trains and better rolling stock. The problem is that there is no incentive for train operating companies on mainline routes, as they operate in a protected market, and frequently have a monopoly. Contrary to what some TOCs said in their submissions to the consultation, inter-city lines have less competition than suburban lines. Cars and coaches are simply not viable alternatives, and certainly not if one hopes to work while travelling.

It is with hope and expectation, therefore, that I seize on the Government’s statement in their response to the franchise consultation:

“For intercity services revenue incentives may be sufficient to encourage operators to continue to strive to maintain and improve service quality. However, we may ask bidders to commit to quality improvements which are within their control, such as onboard environment; station environment; customer service and information.”

First, what is the need for better comfort, if not to improve the onboard environment? The Department for Transport should produce guidelines on passenger comfort for each type of railway line, and they should become mandatory minimum requirements in future rail franchise agreements. It should be made plain to franchise holders that failure to meet the guidelines before renewal dates will compromise their suitability to continue as operators.

Secondly, it is within the control of South West Trains to improve its service now. It has the carriages; the rail passenger groups have the service diagrams. If South West Trains contends that it could restore the 444 services to the London-Portsmouth line only by leasing more of them and putting up prices, I would ask why prices did not come down when the cheaper 450s were introduced. I hope that the Minister will prevail on South West Trains to look at how the distribution of carriages could be realigned so that no service is disadvantaged by the improvements to the Portsmouth line. South West Trains and the Department should look at what carriage capacity is available, and open dialogues with other TOCs if necessary.

Thirdly and finally, I would ask that a meeting be convened at which departmental Ministers and officials, Members of Parliament and passengers groups can discuss with South West Trains what must change and how quickly it can be done. People such as David Habershon, Bruce Oliver and John Holland, who have done so much to represent their fellow commuters, and to help me prepare for this debate, should be able to address their concerns directly to SWT executives across the table. Commuters on the London-Portsmouth line pay handsomely for their rail tickets. In return they should be able to travel to our capital for business or pleasure without being in discomfort or running the risk of doing themselves harm. South West Trains does a good job in many respects. It has the power to put right what it has got wrong, and I hope that it will do so in short order.

19:48

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I congratulate my hon. Friend the Member for Portsmouth North (Penny Mordaunt) on securing this debate. She made her case with great clarity and determination—she is a steadfast defender of her constituents’ interests. The first question that I should like to answer concerns the meeting she requested: I would be happy to meet her to discuss this further.

I fully appreciate how important rail services are for the residents of Portsmouth North—my hon. Friend’s constituents—and I am very much aware of the concerns that have been raised about the provision of class 450 rolling stock on the London-Portsmouth main line, which is an essential artery connecting communities across Hampshire, Surrey and south-west London. The provision of reliable rail services on the line is enormously important for economic activity and growth along the route. Nearly 7 million passenger journeys were made to and from Portsmouth stations in 2009-10.

To answer the questions asked by my hon. Friend, some explanation is required of the contractual history of the SWT franchise. The current Stagecoach South Western Trains franchise was competitively tendered by the previous Government in 2006, with the contract commencing in February 2007. All bidders were required to give a commitment to lease both the class 450 and the class 444 rolling stock for the life of the franchise term, because the Strategic Rail Authority—a body now disbanded but which at the time handled franchise decisions for the Government of the day—gave a statutory undertaking to the rolling stock company that owned the trains. That arrangement, known as a section 54 undertaking, was part of the funding package agreed to replace the older slam-door stock, which had operated in the south-west since the ’60s.

New-build class 444s and 450 electric multiple units were phased in between 2001 and 2007. If the previous Government had not required the operator to lease the trains, the taxpayer might have been left to foot the whole bill. Although the section 54 undertaking requires SWT to lease the trains, the operator takes the decisions on where to deploy the rolling stock across the different parts of the franchise network to address capacity problems as efficiently as possible.

As we have heard from my hon. Friend, SWT deploys a mixture of class 444s and 450s on services between Portsmouth and London. A 10-car maximum formation class 444 provides 598 seats, whereas a 12-car maximum formation class 450 provides 738 seats. My hon. Friend is rightly and understandably focused on the concerns of her constituents, but the train operator needs to balance the competing interests of different communities that use the services provided by the franchise.

[Mr Mike Hancock]

Is the Minister in a position to ask her Department to examine the figures that justified the decision by South West Trains to move the rolling stock away from Portsmouth to elsewhere? Is she able to argue that those figures are somewhat arbitrary to say the least and totally misleading in most cases?

[Mrs Villiers]

I am always happy to respond to the concerns of colleagues; I am happy to look at the numbers again and ask my officials to do that. As I shall point out later, however, there are very real capacity problems on the line that would be difficult to address without the use of class 450s.

[Penny Mordaunt]

The key part of my argument, which I hope the Minister will understand, is that South West Trains has not addressed overcrowding on the line. The fact that spaces for people to sit are provided does not mean that people have space to sit down. The group of people who suffer overcrowding potentially are the same group of people who suffer painful and uncomfortable seats. They are the same group of people who are asking for the new trains.

[Mrs Villiers]

I very much understand my hon. Friend’s concern, but in reality we—the Government and the train operator—have to balance the interests of different communities along the line. Even if it were affordable to replace all the 450s with class 444s, and even if they were used on all services, it would have a significant detrimental impact on people further up the line, many of whom would not be able to get a seat as a result. I shall come to that in a moment, however.

The most recent route utilisation strategy work makes it clear that the infrastructure is just too full to deliver additional trains. That leaves limited options for relieving overcrowding, one of which is to use longer trains with more seats, which the operator has chosen to do. The seats on the 450s provide vital capacity for passengers closer to London. If SWT were to use class 444s for all Portsmouth services, it would worsen peak crowding problems from stations such as Guildford and Woking. More passengers would have to stand between Woking and London than do today, and removing 450s from the Portsmouth to London route might have other knock-on effects, such as displacing the class 450 carriages on to the Weymouth line, where journey times are even longer than from Portsmouth to London.

We all accept that key crowding between Portsmouth to London occurs during peak hours. In response to public concern of the sort that my hon. Friend has raised, SWT has promised to use 444s in the off-peak where it can. The extent to which it can do this, though, is dependent on complex issues to do with timetabling and the availability of trains and train crew. These complexities flow from the intense use we make of our railways and the need to deploy rolling stock and staff in a way that generates maximum passenger benefits. That means that some off-peak trains have to be class 450s to ensure that they are in the right place for the peak-time slots.

My hon. Friend set out her view that three-plus-two seating is not suitable for services on journeys of the 90-or-so minutes that her constituents face in getting to London. I can understand her concerns. However, three-plus-two seating is currently deployed on a number of routes with comparable journey times—for example, journeys between London stations and Margate, and London Liverpool Street and Ipswich. Issues of health and safety are the responsibility of Her Majesty’s railway inspectorate and the Office of Rail Regulation. Neither of those bodies, I am afraid, has sought to restrict the use of class 450s on longer-distance journeys.

At the heart of my hon. Friend’s speech is the request that the Government should introduce new requirements on rolling stock seating into current and future franchises. I hope that she will understand that to intervene in the current franchise and require SWT to change its rolling stock would involve renegotiating contractual terms. This always comes at a cost to the taxpayer—a cost that I am afraid we can ill afford when we are striving to address levels of borrowing inherited from the previous Government which are the highest in our peacetime history. Looking forward to what might be included in the next franchise, she will be aware that the decisions that the Government make on the railways are constrained by a number of factors, including infrastructure capacity, affordability and value for money.

The experiences of my hon. Friend’s constituents reflect some of the very difficult trade-offs that are made on our railways every day of the year. I acknowledge, of course, that many passengers in Portsmouth would probably prefer the environment and the seating pattern of class 444 carriages rather than class 450s. However, for the practical reasons that I set out in my response about crowding levels further up the line and infrastructure limitations, I would be unwise to make promises on the pattern of rolling stock use on the Portsmouth line in the future. Changes of the sort that she would like in relation to the seating patterns on trains would have a significant impact on the affordability of the franchise process.

As well as these practical considerations, there is another reason why I am reluctant to make declarations on rolling stock deployment on the south-western franchise in years to come. We are in the process of reforming franchises, and we have recently completed a consultation on this. A significant element of the approach that we propose would involve giving railway professionals greater flexibility to make key operational decisions to enable them to react more effectively to passenger needs and to run their services in a more commercial way. We do not envisage specifying detailed operational issues such as the seating layout of rolling stock required on specific routes, as we do not believe that it makes sense to take that sort of decision in Whitehall. We want instead to put in place the right incentives to ensure that operators respond to passengers during the period of their franchises. We will therefore be looking to include demanding requirements on service quality.

[Penny Mordaunt]

I would very much like to hear from the Minister a commitment on this and an understanding of the implications of these types of seating, especially over long journeys. While I acknowledge that these trains are being used for longer journeys elsewhere, this is causing a tremendous amount of physical damage. People are having to employ osteopaths and chiropractors and are really suffering. It is not just a comfort but a health and safety issue. There are a wide range of options—for example, sticking the different trains together when they get to Guildford. Often, trains join up when they get to Guildford, and class 450 carriages can be put on when they get to Guildford and Woking to allow other commuters to use them. If they are in operation down in Portsmouth, people will sit on the comfier seats first. Also, there is other rolling stock that the Department is trying to do something with—I think that they are called class 460s and they used to be on the Gatwick line. There must be a solution to this out there, and I urge the Minister to pull the train operating companies together to try to find it.

[Mrs Villiers]

I am happy to work with my hon. Friend and the train operating company to see whether there are alternatives that have not been considered which can be brought into play without unfairly compromising the interests of passengers on a different part of the route, and without affecting the affordability of the franchise for taxpayers and fare payers. I encourage her to continue this dialogue with the train operator, and I am happy to take part in that. I think she will accept that I cannot promise to issue a directive to train operating companies on the detail of the seating plans of their rolling stock. That would not be affordable and it is not the right long-term option for the management of the railways in this country.

I appreciate the opportunity to debate this issue with my hon. Friend. As I have said, I am happy to continue to work with her to see whether a compromise can be found. I look forward to meeting her, and perhaps other colleagues who have attended this debate, to discuss the matter further.

Question put and agreed to.

20:00

House adjourned.

Petition

Wednesday 9th March 2011 Petitions

Wednesday 9 March 2011

Child Protection

Wednesday 9th March 2011 Petitions

The Petition of Jackie Goddard,

Declares that the Petitioner’s daughter T was removed from her care because of a burn and a number of incidents where her skin was inflamed. Initially the Petitioner could not explain the cause of these. However, it is now known that the burn was caused by the control panel on a heater which is now accepted by the manufacturers as being faulty. The Petitioner also received a new suite just before the inflammations were recognized. The lesions are also similar to those caused by Di-Methyl Fumerate, however, no test has been allowed to identify whether T exhibits such an allergic reaction.

When the Petitioner’s daughter was removed she was told her daughter would be going into foster care. Her father raised concerns that given that he was a justice of the peace and a registered child minder it would be surprising if he was rejected as a carer. The Petitioner also believes that the reason they took her younger daughter into care and left her older daughter was because the older daughter was of a darker colour and the objective was to satisfy adoption targets rather than protect her younger daughter. The younger daughter was, therefore, more “adoptable”.

The family believe that the medical evidence in this case should be reviewed as the courts decisions rely on information that has now been shown to be unreliable. The family also believes that this case demonstrates that Manchester Children’s Services have acted with a priority of achieving an adoption rather than a priority of protecting children.

The Petitioner therefore requests that the House of Commons urges the Government to take steps to reprioritise the child protection system to concentrate on protecting children and that the House of Commons institute a parliamentary inquiry into this case and the failure of the checks and balances involved.

And the Petitioner remains, etc.—[Presented by Chris Ruane.]

[P000899]

Westminster Hall

Wednesday 9th March 2011 Westminster Hall

Wednesday 9 March 2011

[Philip Davies in the Chair]

Disability Living Allowance

Wednesday 9th March 2011 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Bill Wiggin.)

09:30

[Hywel Williams (Arfon) (PC)]

I am glad to have secured this timely debate on the reform of the mobility component of disability living allowance—the debate could scarcely be timelier. I am also grateful to the hon. Members who are here, as well as to those who have expressed their interest but cannot be here. Lastly, I am grateful to the many organisations that have provided briefings to me and others for this debate.

Disability living allowance is highly valued. Currently, the lower rate is £18.95 and the higher rate is £49.85. As the response to the Government’s consultation states, DLA, and attendance allowance before it,

“had a major positive impact on recipients’ lives…DLA recipients of working age were unanimous in expressing views that DLA made a big difference to them.”

Many people depend on DLA. With some reservations, I say that the application and decision making processes are clear. I will refer to that later, but at least we know where we stand. Research also shows that DLA is unlikely to be subject to fraud: the Department for Work and Pensions estimates fraud at 0.5%, the lowest rate in the entire benefits system. The system seems to be working. As a rural MP in north Wales, I know that DLA is particularly valuable to people in rural areas, who generally face intense problems with mobility. The money can transform people’s lives.

My concerns about the Government’s proposals relate to the assessment system, the threats to automatic entitlement, the extension of the waiting period, mobility payments for people in residential care and assessments regarding the use of aids and adaptations. However, my overarching concern is about the prospect of cuts of up to 20%. If cuts are made, who will pay for them? I strongly suspect that it is people with a disability who will be hit.

To rehearse the history, the mobility element of DLA was introduced in its earliest form, mobility allowance, by the Conservative Government in 1973. At the time, the Government were responding to the consensus between parties and civil society organisations that something had to be done to address the changing circumstances in which people with disabilities were living. They were living, living longer and living in the community rather than in residential care, and they were often younger than the disabled people who would have been living in the community 10, 20 or 30 years earlier. The world was changing, and the attendance and mobility allowances were introduced in response.

I have personal experience of those allowances. A close relative of mine, a young person severely injured in a car accident, was in just such circumstances in the early 1970s and was living in the community after extended medical treatment. At the time, mobility allowance made all the difference. It transformed his life then, and it still does now, given that he lives in a remote rural area and depends on his own transport.

The Government say that DLA needs reform. I agree, but my grounds for reform might be somewhat different from theirs. I think that the application process can be a disincentive. Many people have come to me, as their MP, in dismay over the substantial form that must be filled in, and I have been glad to refer such people to the citizens advice bureau. I pay tribute to the CAB’s work in the benefits field in general, but its expertise in the particular instance of DLA is truly inspirational. The application process could be changed.

I worry about take-up. There are few current statistics about the level of take-up of DLA and the mobility element of DLA. I did a bit of research with a colleague and found a reference to research in 1998, more than 10 years ago. The family resources survey estimated take-up of the mobility element at between 50% and 70%. Will the Minister tell us, now or by letter, whether any more recent estimates of the take-up have been made? I think that many people do not claim DLA or DLA mobility, even though they would clearly benefit from it.

As I have said, the application process could be improved. The number of successful appeals suggests that the initial assessment is not what it should be. Also, the DLA mobility element is age-restricted. Mobility allowance was initially subject to age restrictions—it was confined to people between 25 and 45—which were gradually expanded over the years. However, as one elderly constituent said to me recently, that benefit, which would help older people with mobility problems, is deliberately denied them by the age limits, which seems somewhat paradoxical. Will personal independence payments for mobility awarded before retirement continue to be paid afterwards, as DLA is at present? People are worried, perhaps unnecessarily.

The Government are proposing changes, as we will see this afternoon, and introducing PIP. The proposals will be subjected to detailed debates. As I have said, I worry about the possibility of 20% cuts and share people’s concerns and perception that there is a problem.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Gentleman on his success in securing this debate. He has returned to the issue raised in the press of the possibility of a 20% cut in the numbers applying. If we take that figure with his earlier figure of less than 1% fraud or abuse of the system, we see the inevitable consequence that, even if the Government’s reductions target all those who fraudulently abuse the system, more than 19% of those targeted will still be genuine claimants, who will suffer unnecessarily.

[Hywel Williams]

The hon. Gentleman makes an excellent point. The fundamental question is who will pay if cuts are made. The people squeezed out of the system will be genuine claimants who are disincentivised, or people with lower-level needs.

I am concerned by the Government’s conflation of the arguments about promoting the take-up of work and the need for reform. DLA literally helps some people get to work, but it is not a work-related benefit; it exists to assist with the additional costs of living with impairments or long-term health conditions. There is a coincidence between receiving DLA and experiencing difficulty finding work, but that means only that work for people with a disability is scarce. DLA is a marker rather than a cause, as the consultation paper seems to suggest. The work problems that I see confronting people with a disability involve ignorance among employers about the value of disabled workers. But perhaps, Mr Davies, I am straying into a subject beyond the strict bounds of the mobility element.

I am concerned about mobility and people in residential care. When I first thought of applying for this debate, that was the main issue that I wanted to address, as it is of concern to a great number of people. I certainly welcome the Government’s decision to delay the provision and to review it until 2013. That is unsurprising, given the view of the Social Security Advisory Committee, which said:

“This measure will substantially reduce the independence of disabled people who are being cared for in residential accommodation, which goes against the stated aim of the reform of DLA to support ‘disabled people to lead independent and active lives’.”

I very much welcome the postponement, but it is only a postponement and people are concerned.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Gentleman on securing this debate. A Library research paper notes:

“The DLA mobility component is however not affected if a person is in a care home. In a written answer in 2005, the then DWP Minister Malcolm Wicks said that this was because ‘care homes do not cover mobility needs’.”

It is now 2011. Does the hon. Gentleman agree that nothing has changed and that more than 90% still do not provide that?

[Hywel Williams]

The hon. Gentleman makes an interesting point on a subject to which I shall refer later. Another concern is that the loss of the mobility component and of the Motability scheme in particular would have an effect on families with children in residential schools and their participation in family life.

The possibility of direct payment of money to claimants to fund their self-assessed mobility needs would be relatively simple compared with the complexity of ensuring that a residential setting provided similar, individually tailored mobility provision. We hardly need to think about the comparison. Many disability organisations have pointed out that current contracts do not provide an element of mobility. If the move is towards tackling duplication, as the Government see it, will we merely require the renegotiation of contracts as opposed to any other cost-saving change? Will such a renegotiation be at a further cost to the public purse?

I do not want to dwell on this issue—time is short—but I draw the Minister’s attention to the fact that health and social services in Wales are devolved. Changing the benefit system run from London does not necessarily mean that local authorities in Wales and the Welsh Government will follow what happens in England. I should perhaps point out the complications of a general welfare system that is run by two Governments—one concerned with care, the other with benefits—with possibly different priorities. I will not go down that route today, but it is a further complication that the Government need to consider between now and 2013.

[Jim Shannon (Strangford) (DUP)]

Some Members present will be aware that the level of those with a disability in Northern Ireland is greater than it has ever been compared with other parts of the United Kingdom. Does the hon. Gentleman share my concern, as an elected representative, that, under the proposal to reduce 20% of DLA claimants, which will save £2.1 billion, it will be those people who need DLA who will lose out?

[Hywel Williams]

I suppose that that is the overarching concern behind all this. Eventually, some money might disappear, and the question is who will pay it. That is unclear at the moment. Many years ago, I used to repeat endlessly to some of my more starry-eyed social work students that, “It is not as simple as that,” which is a general rule for politics.

I was a young social worker in the late ’70s. I have promised the Minister that I would not use a lot of Welsh, but, inevitably, I would like to make one little point. I used to take some of my clients out on social occasions to try to improve the quality of their lives, and the only practical way to do that at that time was by minibus. It was a big, yellow minibus, which said on the side, “Cymdeithas Plant Araf eu Meddwl,” which translates as the society for mentally handicapped children. Needless to say, the people with whom I worked were neither children nor mentally handicapped, which was a loaded term even then but, for the non-Welsh-speakers present, “araf eu meddwl” is even more loaded—it literally means “slow of mind,” so I was taking people out in a big, yellow bus that said that they were slow of mind. I would say, therefore, that social security and social and health provision have developed over the past 30 to 40 years towards a more normalised provision, based on autonomy and choice.

If we depend on institutions to solve people’s problems of mobility, we will soon get institutional answers, which is something we should avoid.

[George Hollingbery (Meon Valley) (Con)]

I congratulate the hon. Gentleman on securing the debate. Does he not think that there is room for some standardisation or effort by central Government to ensure that those who are in residential settings and need mobility have at least some consistency of provision across the board? Surely, without that, there would be as much confusion as there would be otherwise.

[Hywel Williams]

I agree entirely with the hon. Gentleman. The provision in the public and private sectors of residential care needs to be looked at, but should that be done by reforming DLA in the way proposed? Would that be a blunt instrument? Are there other ways that that can be done?

[Guy Opperman (Hexham) (Con)]

As someone who lost to the hon. Gentleman in the 2005 general election—I represented, in a poor standard, the Welsh Conservatives in the former constituency of Caernarfon—I am particularly enjoying his passionate reverie of the 1970s. It is beyond question that he represents his constituency very well indeed. We all accept that there is likely to be a degree of cuts ahead. Does he accept the need for this issue to be reformed?

[Hywel Williams]

We can take a look at DLA, but that is the budget that I would cut almost last, because of its targeted nature and its efficiency and because of the needs of those who receive it and a host of other reasons. I accept the hon. Gentleman’s general thrust—everything should be open to review and reform—but I would start elsewhere before addressing the provision under discussion.

[Jim Shannon]

Surely, the real concern for many people is that 20% will become a target that must be achieved. If so, the target, rather than the people affected, will become the be-all and end-all of the achievement. Surely, the Government must say, “Let’s make improvements, but not set a target.”

[Hywel Williams]

The problem with targets, of course, is that they must be fulfilled, perhaps at the cost of the needs of individual claimants. I would start by looking through the other end of the telescope to see what the system of assessment and so on generates, rather than—I do not think that this is what the Government are actually doing—by imposing a rough, across-the-board 20% cut.

I must press on, because other hon. Members are anxious to contribute to the debate. My further concerns centre on the proposed assessment system. The current system assesses via a variety of sources of information—the claimant, a carer, a support worker, a GP, a specialist, a physiotherapist and so on—and I worry that, by slimming down that evidence to one assessment based on specified activities, the impact of disability on the individual may be missed. We have experience of using medical assessments in employment and support allowance applications. Like many other hon. Members, a large amount of casework in my constituency has been generated by the operation of that system.

As I said, I have received a number of briefings. An interesting and striking one came from the National Autistic Society, which suggested that those carrying out assessments will possibly fail to recognise the needs of people with conditions such as autism. I am concerned that reassessments should be fair and accurate, especially in relation to the suitability of people who have fluctuating conditions or mental health conditions. We must accept that mental health conditions are particularly difficult to assess.

Another concern relates to the proposal on delay, because increasing the waiting time to six months may cause hardship, although people with terminal illnesses will continue to have no waiting period.

Automatic payment is also a concern. I shall not go into that now, other than to say that the current system allows automatic payment in certain self-evident and extreme conditions—for example, double amputations. I am worried that automatic reassessment of those cases might lead to a waste of public money. If we remove those automatic entitlements, it may increase the cost of assessment and lead to the same outcome as we had under the original system—such people might still receive the higher rate.

On aids and appliances, it has been pointed out to me that if too much notice is taken of their use—particularly in unfamiliar situations—and that leads to a loss of money, it might be a disincentive to people using them. Will that be a disincentive?

As I said earlier, I am very happy that attention should be paid to the needs of disabled people. I am happy to consider the benefits system for disabled people at any time, but I worry that the proposals will not be much help. I am glad that the provision in respect of people in residential care has been delayed until 2013, and I look forward to contributing to the debate between now and then.

In summary, I fear that the changes might limit lives and increase disability poverty and demand for mental health services. Consequently, they might increase the demand for primary care services and lead to a loss of employment. Those fears might all be laid to rest by the Minister’s response and as the debate progresses over the next months and days—I accept that entirely—but it is important to put such concerns on the record.

09:53

[Tony Baldry (Banbury) (Con)]

As co-chair, with Baroness Pitkeathley, of the all-party group on carers, I am grateful to be given the opportunity to speak in this debate. The reforms will affect carers as much as they will affect those who are being cared for. The hon. Member for Arfon (Hywel Williams), who introduced the debate, said that his main concern is about the mobility component of DLA for those in care homes. That is the matter that I wish to discuss.

In a letter to all parliamentary colleagues, the Minister states:

“We want support for care home residents which takes account of their individual needs and safeguards some of the most vulnerable members of our society, whilst also ensuring that the taxpayer is not paying twice for this provision. It is vital that we get this reform right, and that is why we are taking the time to do so.”

It is helpful that Ministers have decided to postpone any decision until 2013. I know that the Minister has taken enormous personal care to ensure that the Government get this right. I was grateful that, following our last debate on the issue, the Minister kindly came to Banbury and visited Agnes Court, which is a home run by Leonard Cheshire in my constituency.

I am trying to sort out in my mind how we approach the matter, and I have a number of questions that I wish to ask. As I understand it, Ministers are saying that local authorities, in the contract that they have with care homes, should provide sufficient funding for residents to have the opportunity for independent living. It would be helpful for hon. Members if the Department for Work and Pensions explained that route. Where in primary legislation is the responsibility on local authorities to provide for that element when residents go into residential care? That is an important point because if one does not have an understanding of the statutory basis upon which local authorities have that responsibility, apart from anything else, it is difficult to know when one could bring judicial review on the basis that they were not providing that which Ministers say that they should provide. Part of the reason for these reforms is that Ministers say there is an overlap and duplication of funding. We need to understand exactly where it is said that such duplication is occurring.

I also have a slight concern that if one puts a greater responsibility on local authorities to provide an increase in the contract fee that they pay to residential care homes, a number of local authorities will say that rather than sending those who may need care in a residential setting into residential care, they will try to provide them with care at home. The Minister met one or possibly two residents of Agnes Court in relation to whom the local authority funding their place is considering withdrawing funding because it is finding it too expensive and it wants the person to be supported at home or elsewhere.

We need to have an understanding of what Ministers believe should be the model contract between local authorities and care homes, and what the obligations on the residential care homes are in relation to this. Let me make it absolutely clear that everyone is doing their best in what are often very difficult circumstances. What was clear from talking to people at Agnes Court is that they have very little contact with the local authority. The local authority obviously rightly believes that Leonard Cheshire Disability runs a fantastic home and provides a fantastic service and that there is no need for a local authority to find out what is going on there. What is the model contract? What is it that Ministers believe, first, that local authorities should be funding and, secondly, that they should be requiring of care homes?

The Minister will have met people in Agnes Court who have used the mobility component of DLA to purchase a wheelchair of superior quality to that which they could have obtained through the NHS—one person in particular has certainly done so. I am talking about a very bright man who has been a long-term resident of Agnes Court. He is almost blind, but his intellect is razor sharp, as I know from the letters and e-mails he has sent to me over many years. Indeed, at one general election, he organised a hustings for parliamentary candidates, so that we could discuss disability issues. He has used his mobility competent to buy a wheelchair, which seems a sensible thing to do given his circumstances. Would that be possible if the funding were coming through a local authority contract to the residential care home?

[Nicky Morgan (Loughborough) (Con)]

I entirely agree with my hon. Friend about how helpful the Minister has been in responding to constituents’ concerns on the matter—her letters have been very much appreciated. Does he agree that some of the points that are unclear relate not only to the overlap between what the local authority should fund and what is covered by DLA, but to the activities that local authorities will pay for? Constituents have told me that local authorities fund travel only to a doctor’s appointment or to day care, and not to enable disabled people to participate in everyday activities. Such activities are important to them, but might not be important to the care home or the local authority.

[Tony Baldry]

My hon. Friend makes an incredibly good point. I—and I suspect many hon. Members—would like and welcome a route map from the DWP. I sometimes feel that policy relating to that Department is a bit of a secret garden. I am always a bit reticent about entering into the garden, because I usually use the wrong words—the mobility component of disability living allowance for those in residential care, is in itself quite a mouthful.

What is it—I entirely agree with my hon. Friend the Member for Loughborough (Nicky Morgan)—that we, or those in residential care settings, can expect to be provided? After all, let us remember that what we have here are a very wide range of human beings who are individuals and constituents. Stephen Argyll, the person to whom I just referred, is intellectually very bright, but almost blind and has difficulty getting around. Some are in Agnes Court because they have learning difficulties, and some are there because they are suffering distressingly from degenerative illnesses, such as Parkinson’s disease. There is not just one group of people, but a large number of individual human beings who have different histories. For example, many are married and still wish to maintain their relationship with their husbands or wives, go shopping, and so on. I also understand, however, that Ministers are concerned that this can be an expensive provision, if what is being provided are individual, tailored mobility vehicles that are not being used much each week by individual people. If there is an overlap with other funding that is supposed to go to care homes from the local authority, that is also a concern.

[David Simpson]

Will the hon. Gentleman give way?

[Tony Baldry]

I am conscious that lots of other hon. Members, including, I am sure, many from Northern Ireland, wish to take part in the debate.

I suspect that all of us want to engage constructively with constituents who have concerns about this matter, but we want to do so positively and be conscious of the legitimate concerns of Ministers that the system is not working. The Minister has stated:

“We will not remove the mobility of disabled people but we will remove the overlaps and gaps inherent in the current system.”

I want to understand where the Minister sees the overlaps. Where does she see the gaps? Please can we have a lay person’s guide that we, as colleagues, can take when we talk to constituents in this situation, so that they understand the issues and that we understand the examination question that we have been set. I know that there is an exam, but I am not confident yet that I fully understand the examination question.

I appreciate that the decision has been delayed until 2013, but Ministers will at some point have to be clear, and send a clear signal about post-2013, for the following reason. The Minister will have met, when she was at Agnes Court, large numbers of people who have entered into leases and other contractual arrangements for mobility vehicles. There need to be transitional arrangements so that if there is a change in the regime and the rules in 2013, people do not suddenly find themselves with a period of time to pay a contract without the wherewithal to do so. If Ministers are coming to the view that at some point they will change the rules, it would probably be helpful to give a clear signal of their intentions so that people have a clear understanding of that and make dispositions accordingly.

10:03

[Mr Wayne David (Caerphilly) (Lab)]

I should like to refer to one case in particular: that of Mr and Mrs Owen and their deaf and blind son Jordan. They attended my surgery some months ago and explained the situation in which they find themselves now and what they fear might happen in the future. Their son Jordan is a big lad—17 years of age. He currently attends the Trinity Fields special school in Ystrad Mynach and is in receipt of disability living allowance and the mobility component as well. The family put that to good use and provide mobility for him and the family. In the near future, when he becomes an adult, he will leave the special school and go to a residential home. However, it is likely that that residential home will not be anywhere near where he lives in Tir-y-Berth, Hengoed. It is likely to be in Monmouth, or possibly in England. There is a real concern among the family that, because of the changes that may come about, he will no longer be in receipt of the mobility component of DLA.

Jordan is a member of an ordinary working-class family. He has tremendous support from his parents, and from the charity Sense, which has done excellent work with the family. Naturally, however, when he does go to a residential home, the family will want to visit him and take him out from the home and give him the best experience of life possible for that young man. The family is concerned that, if the mobility component is taken away, they will not be able to visit him as frequently as they would like or to take him out from the residential home. In fact, they might have to leave to one side the opportunity of going to a residential home, even though that would probably be best for him, but ensure that he stays at home, so that they can give him proper love, care and support. That would obviously not be the best for him, and probably not the best for the family as a whole.

I should like to make it clear that I am not against welfare reform. In fact, I am strongly in favour of welfare reform. What I find difficult to understand, however, is the rationale of making someone like Jordan so fearful for his future. There could well be a cut. Of course, I can understand the financial saving to the state, but that is not what welfare reform should be about. That is why I am particularly concerned about clause 83 of the Welfare Reform Bill. It is important when we talk about welfare reform that such things are made fair and streamlined, but particular care must be taken to ensure that people such as Jordan do not lose out. For example, I was concerned that, when the Prime Minister was asked about changes to the mobility component at Prime Minister’s Question Time, he said:

“our intention is very clear: there should be a similar approach for people who are in hospital and for people who are in residential care homes.”—[Official Report, 12 January 2011; Vol. 521, c. 282.]

I simply point out that the needs of people in hospital are not the same as those of people in care homes. That is a fundamental point. We need to move away from the mechanistic, bureaucratic approach and to recognise that people in residential care homes have particular needs, and the Prime Minister, to start with, should recognise that.

I hope that we have a respite. The Government have said that they will delay implementation for at least 12 months. I hope, however, that in the interim the Government will look at cases, such as that of Mr and Mrs Owen and their son Jordan, and recognise that welfare reform must be tailored to the needs of individuals, so that young men like Jordan do not lose out.

10:08

[Richard Fuller (Bedford) (Con)]

It is a great pleasure to speak in this debate, and I congratulate the hon. Member for Arfon (Hywel Williams) on securing it. I wish to declare an interest—I am chairman of two domiciliary care service companies. They are not in receipt of disability living allowance, but they deal with adjacent issues. I welcome the debate. In particular, I welcome the Minister to her place.

The fundamental question that went through my mind when the announcement was made was what it said about our attitude towards the decency with which we allow people to lead their lives. What does it say about how we are prepared to protect the most vulnerable in our community at this difficult time, with the significant financial challenges inherited by the Government? That was made real for me by the visits of constituents; families who care for their sons, daughters, mothers, fathers, cousins and uncles, and who have to create that sense of independence every day for their loved ones in care homes.

In particular, it is my pleasure to recognise the campaigning work of Mr and Mrs Ogaza from my constituency—Mrs Ogaza is here today—on behalf of not only their son Paul, but other families. I thank the Minister for taking the time to meet me not once but twice—the second time to listen to Mrs Ogaza—and for her visit to a care home in Shefford, near my constituency. That is emblematic of how much she is trying to reach out and listen, and to understand this complex area. Indeed, that complexity is at the root of the Government’s attempts to deal with the question of decency. There is nothing decent about the system that is in place if it provides a patchwork of services for recipients in different parts of the country. There is nothing decent about a system that does not ask our care home providers tough questions to ensure that they are actually providing the services that we would like.

[Guy Opperman]

Is not the biggest test for the future to have a road map where things are clearly signposted and understood? Whatever the reason for the system being in the state that it is in, comprehension and utilisation would then be much clearer.

[Richard Fuller]

My hon. Friend is absolutely correct. He echoes a point that was made by my hon. Friends the Members for Banbury (Tony Baldry) and for Loughborough (Nicky Morgan). This is an opportunity to provide a clear map of the requirements and also to identify, not in a naming and shaming way but in a positive way, what local authorities and care homes should provide and where evidence shows that they are falling short.

I believe that this is the second debate on disability living allowance that the hon. Member for Arfon has secured. Is that correct?

[Hywel Williams]

No.

[Richard Fuller]

I am sorry. It is the second debate that I have attended on the subject. It shows how important it is to hon. Members that we get the correct answers. This debate is a bit more heartening in that it is not focused so much on cuts. The Minister needs to lay this to rest: the changes are not being made to reduce funding but to ensure that the funding that is available is directed in a way that gives clarity to families and the recipients of care in various care homes. It is extremely important that that message is made clear. [Interruption.] If hon. Members disagree, we need to continue to bring that to the Minister’s attention. I fundamentally do not believe that that is the intent of the policy, and I look forward to listening to those who think differently.

I should like to thank the 27 charities—the number is growing—that have provided information to other hon. Members and to me in their reports, “Don’t Limit Mobility”, and, more recently, “DLA mobility: sorting the facts from the fiction”. A number of them are in an expert position because they also operate care homes. I would be interested to hear from the Minister how many of them have come forward with examples from their own experience of the uniformity of provision across their network of homes. Has she received such representations or evidence from them about whether they experience differences in the various local authority areas in which they operate? That would be a useful body of evidence, and it behoves the charities to provide such information to the Minister, so that we can have a clearer picture.

In their reports, the charities provide some information about the rationales for the changes. I admit that several have been presented over the months, but I should like to pick up on two that are particularly pertinent and germane. I thought that the first one they listed was very interesting:

“The responsibility for mobility/transport costs should be met by the care home provider”.

What struck me in the evidence that the charities provided was that they saw a lack of clarity in what has been provided. They stated:

“Related legislation and guidance make no specific reference to mobility… While guidance places a responsibility…it contains nothing about how this is paid for… This guidance is not contract terms… the guidance does not provide a legal requirement.”

That points to the comments that were made earlier by my hon. Friend the Member for Banbury and others about the need for clarity and a road map.

[Mr Steve Brine (Winchester) (Con)]

I would echo my hon. Friend’s comments about the Minister. She has gone far out of her way to reach out to colleagues across the House, and I pay credit to her for that.

My hon. Friend the Member for Banbury spoke about contracts and specifics being written down. The Winchester and District Mencap Society has made the point to me many times that the mobility component is not necessarily used just for appointments at doctors or care homes, or for visits to friends or the hairdresser. Sometimes, for their own physical and mental health, people use it to get away from those with whom they live. Is not the key point that if we reform the system and move to personal independence payments, we will put power in the hands of disabled people who are individuals in their own right? They do not want the Government or the House to prescribe how they do everything, or how and where they spend their money.

[Richard Fuller]

My hon. Friend makes a good point. However, there are also requirements on the part of the Government to provide some guidance and clarity. If we can get clear evidence of the original intent—the changes are required because of differences in provision—people could move forward more confidently, empowered to exercise their rights. We are going through a process that we have not yet completed.

The second rationale that I wish to discuss—I will not take too much of hon. Members’ time—is No. 7 on the charities’ list:

“Local authorities’ contracts with care homes should cover personal mobility needs”.

The charities’ response focuses very much on ability to pay. Local authorities do not have the money; care home providers are not in a position to pay. That comes again to my earlier point: this issue should not be driven by the need to make cost reductions, but by the need to ensure that there is clarity about what we expect to provide on both a local authority and care home basis. If insufficient money is being provided, that should be the answer. If too much money is being provided and there is a better way of getting value for money, that should be the answer. That is what we are driving for in achieving an answer.

My final point is that this is not just about mobility. The issue is independence. A personal expenditure allowance of £22 a week is not sufficient for the broad range of an individual’s requirements. That measure was not set by this Government—they inherited it. It is a little insulting to tell someone, particularly someone who is vulnerable or people who have spent much of their own lives looking after a child or a mother who is in need and thereby saving the Government so much money, that we will leave them with just £22 a week to cover the wide range of their personal expenditure.

I ask the Minister, as she looks at the mobility component, to bear in mind the broader picture of providing decency overall for people in care. She has done an excellent job in reaching out and listening to people, and I hope that she will listen to the contributions to the debate.

10:17

[Mark Durkan (Foyle) (SDLP)]

Like the hon. Member for Bedford (Richard Fuller), I was present for the previous debate, which was specifically about the mobility component for those in residential care homes. There is a danger in this wider debate today that we will focus too much on that issue. My concerns about that issue are no less than they were before, but I do not want to concentrate on it today, as other hon. Members have adequately done so.

The Government paper that heralded these changes, “Welfare reform: Disability Living Allowance for the 21st century”, discusses focusing on those with the greatest need. We also know that the target is to achieve a 20% cut. I was struck by the comments of the hon. Member for Banbury (Tony Baldry) about the different people he knows at Agnes Court and the range of conditions that they have. Would any MP be able to say who of such a group of constituents is in greatest need, or where we could make a 20% cut? If we are not prepared to do that or to envisage others doing that, we should not support the Government in this measure and proposal.

Several issues arise. The first is assessment and, of course, reassessment in the future, which will come with it. The fact that particular conditions will not be screened out from assessment and reassessment—everyone will have to go through the process—raises fundamental concerns for those who are currently on benefits and their carers. We need to remember carers as well. They all think that they are facing a grand national, where everyone needs to try to get over and on to the benefit. As we have heard, that will cause great problems for citizens advice bureaux and the many others to whom people are turning for advice on what is likely to happen and the implications for them.

If the Government will not allow any specific conditions to be screened automatically from having to go through the assessment test now, or in the future, we need more clarity about what forms of evidence will be considered particularly telling in the context of the assessment test. What evidence from experts in neuromuscular conditions and so on will tell in that setting, or will the interview setting count more? On the cost of administering the assessment and reassessment process, many of us know that some people will pass every time, because of their circumstances. Should they have to go through the ordeal of assessment and reassessment every time, and should the Government carry the cost of that?

On moving to a six-month qualifying period, the hon. Member for Arfon (Hywel Williams) referred to cancer patients. We must question whether it is enough to tell people that if their illness is terminal, they will automatically qualify. Many cancer patients do not want to think of themselves or present themselves as terminal cases, and we might send out a dangerous message. If the Government are determined to remove the mobility component as was and to introduce a six-month qualifying period for the personal independence payment, perhaps there should be a distinct allowance for those who have been diagnosed with cancer and have been referred for chemotherapy or radiotherapy. Perhaps there should be a cancer care and support allowance that takes care of such circumstances, instead of cancer patients finding themselves caught up in the pursuit of personal independence payments, particularly as the system will become congested when the changes are introduced.

How will people with variable conditions be measured in the context of assessment and reassessment? Will they be unlucky if they are interviewed on a good day, or lucky to be seen and reported on on a bad day? The Government must tell us more about that.

There will be an impact on other entitlements. For example, currently the mobility allowance is a passport to the blue badge, road tax exemption and disability premium. What thought has been given to the implications of the move to personal independence payments? Will people who lose out in the change also lose out on those other benefits and entitlements? Will the conditionality link between the new benefit and the old benefit remain? If so, have the Government factored into their impact assessment the effect on other entitlements?

As the hon. Member for Arfon has said, there will be an impact on carers. We need to know, for example, whether eligibility for carers allowance will come from both levels of the personal independence payment daily living component, or only from one level. Those who are entitled to carers allowance will see the circumstances not only of the person they care for being jeopardised by the change, but their own. Entitlement to carers allowance may be affected, and we must consider that.

We have not heard enough from the Government about some age-related issues. For example, pensioners who received the mobility component of the disabled living allowance before pension age continue to receive it when they reach pension age. Will that continue to be the case with the personal independence payment?

[Fiona O'Donnell (East Lothian) (Lab)]

Does the hon. Gentleman agree that we also need clarity on how the changes will impact on children, especially those with sudden impact conditions such as acute myeloid leukaemia? Will they have to wait six months, by which time their treatment will be well and truly finished?

[Mark Durkan]

I thank the hon. Lady for making that point. I introduced my comments about pensioners by referring to age-related considerations, and I was coming to children, including children in residential care, residential schools, and on holidays. What periods will qualify? Again, there is not enough in the Government’s papers and subsequent answers about those issues. The hon. Lady has rightly pointed to circumstances in which children may suddenly be affected by a condition. Will they have to wait for six months? Will families who receive a disability premium receive the universal credit when their child is in residential care? We do not know what is happening.

We must remember that families must cope with the concerns, needs and often the emotional upset not only of the child who is affected by a condition, but of the other children. Families must not be mired in new difficulties and complexities by the change. We must ensure that people of all ages are supported, not least children and families. The Government must provide more clarification, and I hope that the debate will present the opportunity for the Minister to do so.

[Philip Davies (in the Chair)]

Two more colleagues are seeking to catch my eye, and I intend to call the Front-Bench speakers at 10.40 am at the latest, so co-operation would be much appreciated.

10:25

[Duncan Hames (Chippenham) (LD)]

I congratulate the hon. Member for Arfon (Hywel Williams) on securing this important and timely debate, and I thank the Minister for her attendance. The Government’s proposals on welfare reform are undeniably substantial, but reform is undeniably due. The best elements of the wider proposals have the potential to create a simpler, fairer and more efficient system than the current array of credits, benefits and allowances that developed under the previous Government. However, the proposals that caused the greatest consternation among my constituents—that consternation is clear from today’s attendance by colleagues from both sides of the House—are the proposed changes to the mobility component of disability living allowance. The issue presents a particularly difficult balancing act to reform a complex welfare system, but never to jeopardise the ability of disabled people to live full, independent and active lives. We have been right today to determine what is a modern, efficient and, most importantly, fair system to meet disabled people’s mobility needs.

I have actively expressed my opposition to the proposed withdrawal of the mobility component of disability living allowance for those living in residential care homes, and I am grateful for the time that the Minister has spent listening and talking to me about that on the Floor of the House and separately. Without the mobility component, many of the most vulnerable people in our society would be unable to meet the cost of living independent and fulfilling lives, and to engage in the social activities that most of us take for granted. As I politely suggested to the Prime Minister, parallels drawn between those in hospitals and residential care homes are crude and unfair. It is clear that the Minister in her investigation of the matter has reached much wider, and those of us who have had most reservations should recognise her efforts to obtain a clearer handle on the matter than those who considered it previously.

I associate myself with the comments of the hon. Member for Banbury (Tony Baldry), who demonstrated a clear understanding of some of the issues concerning care home funding. In the light of the responses to the proposals that the Government first tabled, and the representations from me and many others in the House, I warmly welcome the Minister’s decision to postpone the change until the nature of mobility funding for those in care homes is fully understood. It is absolutely essential that we do not rush into any of the changes, and it is good news that the Minister is listening and accepts that we must take a longer, clearer look at the issue.

Given the Minister’s intention to give due consideration to the mobility needs of those in residential care homes before moving forward with any changes, I ask her to consider two issues in particular as part of the development of wider changes to DLA: first, the process of medical assessment for personal independence payments; and secondly, how the support given to those in residential care homes can be most effectively personalised.

The Government have stated their intention medically to assess all those currently in receipt of DLA. Assessment can bring advantages and ensure that help goes to those who need it most. Potentially, it can make it easier for some disabled people to claim and allow the provision of more individualised support. However, there are also pitfalls and possible side effects to assessment such as the cost, both of contracting out the assessments and of financing the appeals that are bound to follow in the wake of any large-scale assessment programme. There is also the pain that face-to-face assessment may inflict on those suffering from autism and similar disabilities, and the danger that an assessment of the mobility needs of those with spectrum disorders, mental health issues and fluctuating conditions such as Parkinson’s, may be prone to error unless conducted by specialists. We have seen that problem in the conduct of work capability assessments for employment and support allowance.

[Nicky Morgan]

Does the hon. Gentleman agree—he may be about to cover this point—that there is a question mark over the need for repeated assessments of certain conditions? I speak as the vice-chair of the all-party group on eye health and visual impairment, and I think particularly of those who are blind. Some conditions, such as the loss of a limb, will never change and more costs may be incurred in reassessment than are necessary.

[Duncan Hames]

The hon. Lady makes an exceptionally good point. Certainly, it is written in my notes that there is the potential for certain conditions, such as blindness, to benefit from an automatic entitlement.

I suggest it is worth examining a tiered approach in which a paper-based assessment would be sufficient for those with the most obvious need, thus eliminating the requirement for a detailed and stressful face-to-face assessment. I support the emphasis on personalisation in many of the Government’s statements about the reforms. That could prove helpful in addressing the alleged duplication that has been mentioned with regard to funding for care home residents.

I have suggested to the Minister previously, and continue to believe, that if those funds currently allocated by local authorities to care homes for meeting the assessed needs of residents were transferred directly to residents as part of their personal independence payment, that would ensure that the freedom, choice and independence currently offered by the mobility component of DLA is maintained. It would also ensure that money given to care homes for use by their residents is used by those residents, and not lost in administration or meeting other costs. That is not what has been proposed to date, but it is in tune with the thrust of many Government changes, and I hope that it will be considered. The current confusion over where responsibility lies for the funding of mobility needs for those in residential care homes points to the need for reform. However, the fundamental reference point for that reform must be a guarantee that people who live with disabilities should be supported to live active and fulfilling lives.

I conclude by reiterating my welcome to the Minister’s decision to look again at the support given to those in local authority funded care homes, and by repeating my hope that she will investigate the suggestions I have made today, which are among several constructive suggestions raised during the debate.

10:33

[Guto Bebb (Aberconwy) (Con)]

I, too, congratulate the hon. Member for Arfon (Hywel Williams) on securing this debate. I feel nervous about contributing to the discussion that he has led, as he understands the issue and the field extremely well. I associate myself with the comments of my hon. Friend the Member for Banbury (Tony Baldry): although I feel unqualified to comment on the issue, as an MP, I respect the fact that people come to my surgeries with concerns, and it is important to raise those concerns with the Minister.

I also associate myself with the comments made about the active way in which the Minister has responded to correspondence, especially in relation to constituency matters that I have raised. An effort has been made to communicate, and that communication has been detailed and worth while, and it has been appreciated by constituents. The fact that we are looking at delaying changes to the mobility component until 2013 is welcome. It is a difficult and complex area, and that complexity must be looked at carefully before we implement any changes.

Before I look at the mobility component of DLA, I would like to make a point about the work capability assessment process. I am MP for a constituency where about 42% of the population are first-language Welsh speakers. Time and again, people who come to my surgeries are expected to attend a work capability assessment in which they must explain their position and say whether they are capable of working. Often, they have to do that in English, even though the Welsh Language Act 1993 requires them to be able to do it in Welsh. When someone is in a stressful situation such as that, it is unacceptable that the Department is unable to provide a bilingual service. I have received assurances that the Department is working within the demands of the Welsh Language Act, but time and again the situation on the ground in north Wales does not correspond with those assurances. I would like the Minister to respond to that point.

When I received a letter from the Minister, I almost felt as if she had been in my constituency surgery. The arguments about the complexity of the mobility care component in care homes show that the current situation is not coherent. From talking to people in care homes, it becomes clear that each care home deals with the mobility component in a different way. I have been quite proactive on this issue because I represent a constituency with a high average age—I think I am right to say that the constituency of Aberconwy has the highest average age of any constituency in Wales—and as a result, there are a lot of care homes. My office has spoken to 17 care homes to discuss how they deal with the mobility component and whether it is funded by the local authority. From those 17 care homes, we have had 17 different answers, so the chaos surrounding the issue is clear. It is difficult to move forward with a policy unless we acknowledge that the duplication mentioned by the Department is not constant or ongoing, and that the situation is very different from one case to another. The Government, and the Minister in particular, are trying extremely hard to address the issue in a fair and coherent manner, but to do that we need a long consultation process, which I will certainly feed into.

On a more personal level, it is crucial that consultations take place in a responsible manner. It was distressing to see the parents of a 57-year-old individual who has been in a care home all her adult life come into my surgery. Both those parents are over 80 years old, and are distressed because they believe that the mobility component will be lost. They feel distressed by that, and it is important to point out to constituents that we are genuinely undergoing a consultation process. It is important to ensure that that process is understood and communicated.

[Mr Nigel Dodds (Belfast North) (DUP)]

The hon. Gentleman makes an excellent point as part of an excellent speech. These are real anxieties and concerns because people see that the mobility component is scheduled to be removed. I welcome the fact that the consultation period has been extended, but that compounds the period of great uncertainty for people. There is a bit of a dilemma.

[Guto Bebb]

There is, but I am sure the right hon. Gentleman would agree that a Government who consult and listen are a Government who will succeed. The Department is genuine about the consultation and about listening, and that must be communicated to individuals. We do not want to create undue distress, but I do not think that the Government have communicated well on this issue, and we must take responsibility for that.

I understand that I must conclude my comments before 10.40 am, so I will raise a couple of important points. As I have said, the Minister has been good in responding to almost all my questions, but one question about the discussions the Department has held with the Welsh Assembly Government on this issue has not yet received a response. An excellent point was made about the fact that we are dealing with a complex situation in which the Welsh Assembly Government are responsible for care and social care, but the benefit system is with Westminster. I am slightly concerned that, as yet, the question about what discussions have been held between the Welsh Assembly Government and the coalition Government has not received a response. I am sure that the Minister will write to me or confirm that there have been discussions. We are trying to ensure that the system works, and it is imperative that the social care element and the benefit system interact positively. Part of that interaction in a Welsh context involves good, positive discussion between the Government in Westminster and the Government in Cardiff Bay.

10:39

[Margaret Curran (Glasgow East) (Lab)]

I am pleased to be back in this Chamber debating this issue; I was at the earlier debate. I congratulate the hon. Member for Arfon (Hywel Williams) on initiating this debate. He gave a passionate and eloquent description of the challenges in this field, and his knowledge will be of great assistance to this Parliament as we proceed. Of course, his timing is perfect, as the Second Reading of the Welfare Reform Bill takes place today. This subject includes many challenges and issues, and I am grateful to him for giving us the opportunity to focus on particular issues in this debate.

I shall say a few introductory words about welfare reform generally, but I want to focus on the mobility component of disability living allowance, particularly in relation to residential care, because the issue is of imminent importance. It presents a great challenge and is of great concern to many people. I still require much more clarity from the Government about the position, but I shall return to that, because a few hares have been set running this morning that we may need to catch.

The hon. Member for Arfon made very significant and reflective comments in relation to welfare reform. I am on record as having said during the last debate and in many of my exchanges with the Minister that I believe passionately in welfare reform. I have a background in this field and have been dealing with it for many years. Welfare reform will always be required, and we should never be frightened of it. Sometimes it is difficult. I absolutely accept that it presents challenges, because it affects so many people of great vulnerability. None the less, I have substantial criticisms of the way in which the reform has been conducted.

As the hon. Member for Foyle (Mark Durkan) said, many questions are still outstanding about the reform and the impact that it will have. In particular, many disabled organisations will tell you that they are very worried about the premise of the reform. Rather than being cuts-based reform, it should be evidence-based reform. We should work with disability organisations and try to take them through this. Fundamentally, it should be based on the social model of disability, but the Chancellor of the Exchequer and other people are espousing a medical model of disability, so there are tensions in what the Government are telling us.

We are told that the driving factor behind welfare reform is simplicity. That has been mentioned today. However, if you go along with the Welfare Reform Bill as it stands, you could end up with greater complexity. I have heard this directly from disability organisations, and the hon. Member for Foyle also pointed it out. You could have children under 16 on DLA. You will have adults between 16 and 64 on PIP—the personal independence payment. Then you will have attendance allowance. Elderly people are now saying that they have to get attendance allowance even when they reach that threshold age. There is some confusion from the Government about that, but perhaps the Minister will clarify it.

There are big issues about how we are doing reform, and the Government must think carefully before they charge around telling everyone else that they must just follow suit on the reform. They cannot criticise those of us who are in favour of reform if we say, “This is not how it’s done.” Many people are saying that the reform has been rushed and not thought through and that some of the implications, if the Government go ahead, will be very far-reaching for the most vulnerable members of our society. The Government must take stock and demonstrate that they are listening to people, but a demonstration that they are listening to people has not been evidenced yet.

[Chris Skidmore (Kingswood) (Con)]

Would the hon. Lady maintain the current spending of £12.3 billion on DLA under her own model of reform? She says that she is keen to see reform, but would she keep the spending at £12.3 billion? Obviously, it will increase, but can she tell us about any proposals for what she would do?

[Margaret Curran]

I can tell the hon. Gentleman what I would not do—I would not start from the premise of a 20% cut. I would work with disability organisations under a partnership approach. We do need to manage costs. Disabled people and their organisations agree with you that we need to manage costs. We do need to look at how the budget is increasing. I would be the first to acknowledge that, but we need to do it in a completely different way from how it is being done at the moment. You should not rush at it and you should not say that your only motive is cuts. I take the point made earlier. I intended to say that I would be polite in this debate. I may not have managed that so far and I may not manage it later, either.

[Jim Shannon]

The hon. Lady is always polite.

[Margaret Curran]

Thank you very much. Of course we shall be polite to one another in the House, but we must remind ourselves of the scale of the anger in the country about what is happening, particularly on the mobility component of DLA in relation to residential homes. People’s concerns are deeply felt. People are deeply worried, but there is also anger about how it is being done. We have all received representations from the voluntary sector, the charitable sector and local authorities that are confused about what is happening. The debate has also involved Members of Parliament. I had thought that it was cross-party—that it went across many parties, including the Government parties. Perhaps not, but we shall come back to that.

I have not yet heard the case for the reform. This morning, some hon. Members have said that we need to introduce the cut in relation to residential care homes because all of a sudden care homes are very confused by the funding and all of a sudden local authorities are very confused by the funding. I have not had any representations in all my time as a Member of the Scottish Parliament or in my time in this Parliament about that confusion. It seems to me that yet another argument is being put forward for why we are doing this.

I have asked the Minister a parliamentary question about how many people have advocated the change to the Government. How many people have gone to the Government and said, “This is a real problem and it needs to be sorted out”? I have not had an answer yet. Perhaps the Minister could give me an answer later today.

Many interesting points have been made in the debate. We have been given individual examples by the hon. Member for Caerphilly (Mr David). We heard from the hon. Member for the secret garden—I do not know whether I can call him that. I am referring to the hon. Member for Banbury (Tony Baldry), who also talked about the secret garden of policy in the previous debate. He has raised many significant questions that have still to be answered.

Perhaps the most substantial point came from the hon. Member for Arfon, who said that the mobility component of DLA for people in residential care is about normalisation. I have not heard any Government Member be able to challenge that. You do not give that payment to an institution; you give it to the person so that the person can make their own personal choices. With the greatest respect, ironing out the so-called overlap or trying to ensure that you give it to a care home does not address that fundamental point. That is the issue—the payment goes to the person.

Let me establish a few of the facts. Some 80,000 people are affected by the cut, and it is a cut. It represents a saving of £160 million. I fundamentally believe that it is driven by the need for that saving. It will affect not only people living in residential care homes, but young people in residential schools. I accept the comments made about the Minister. They were very flattering and positive, and I am sure that they are all true. I also welcome the review. However, I am not as optimistic as some people are that somehow we are going to see a change. Therefore, I would like to ask the Minister a few questions about the review. Who is involved in the review? What is being considered? Do you have on the agenda the option of completely cancelling the cut?

[Philip Davies (in the Chair)]

Order. May I gently remind the hon. Lady to refer to people in the third person, rather than dragging me into the debate?

[Margaret Curran]

I apologise, Mr Davies. I will not drag you into the debate. I am referring to the Minister. I would be grateful if she could outline the parameters of the review. Is there any possibility that the cut could be cancelled as a result of the review? Will she clarify that?

As other hon. Members have said, a document has today been published by 40 organisations in the sector, which represent a vast swathe of opinion in this field. Those very credible organisations have told us that the Government’s arguments have shifted eight times. I think that they will need to issue another document, because I think that there has been another shift in the argument. I say that because the “road map” has been presented to us today. Somehow that is the solution to the cut; everything will be solved by a road map. As long as people know exactly where the funding is coming from, all will be solved. I think that that is fundamentally wrong and I hope that we are not seeing yet another attempt to explain an unjustifiable cut. The cut is wrong. It should be off the agenda now. We have the opportunity in the Welfare Reform Bill to ensure that that is the case. Labour will be arguing very strongly that we reject the cut. We need to ensure that we continue to give people in residential homes the personal independence that they have now. That should be maintained. That is what the Government should be doing.

10:49

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

It is a great pleasure to serve under your chairmanship for the first time, Mr Davies. I am grateful to the hon. Member for Arfon (Hywel Williams) for calling the debate, which has given Members from across the House the opportunity to talk about their personal experiences on this issue.

I am sure that everyone here shares a deep concern to ensure that we get provisions right for disabled people in all our communities, and the coalition Government are certainly absolutely committed to doing so. That is why we have taken the Equality Act 2010 through to Royal Assent, put in place the right to control for thousands of people, driven a personalisation agenda and promoted a new project on access to elected office to help more disabled people to be involved in debates such as this, because, all too often, they are not.

I welcome the support across the House for the need for welfare reform. I think the hon. Member for Glasgow East (Margaret Curran) supports it—at least, the leader of her party does—and we obviously need to debate some of the details today. I certainly welcome the support of the hon. Members for Arfon and for Caerphilly (Mr David).

When it comes to the Welfare Reform Bill, what is certain is that the Government have inherited a mess after 13 years of Labour, and nowhere is that more evident than with DLA, which is almost a case study in how not to run a benefit. DLA lacks any objective test; it has no in-built system to check people’s continued needs for support; and there is a real chance that some people will continue to claim it when they are no longer entitled to. That is no way to manage a really important means of supporting disabled people, and it is certainly no way to manage the spending of £12 billion of taxpayers’ money—an amount that was never envisaged when DLA was first outlined.

It is good to hear the hon. Lady accept that we need to manage costs, and I welcome that acceptance. The previous Government allowed spending on DLA to spiral unchecked. This Government firmly support the principle behind DLA of providing a non-means-tested benefit to support independent living, but the simple truth is that we cannot let DLA go on as it has, especially at a time when we are committed to making the welfare system fit for the 21st century. DLA reform is long overdue, which is why we are proposing in the Welfare Reform Bill today that the personal independence payment should replace DLA, creating a more transparent benefit that is better targeted and more affordable in the long term.

[Fiona O'Donnell]

On transparency, the BBC carried a statement from the Government this morning saying that they had no intention of extending the entitlement onset from three months to six months. Can the Minister confirm that that is the case?

[Maria Miller]

In terms of the entitlement.

[Fiona O'Donnell]

Extending entitlement onset from three months to six months.

[Maria Miller]

The hon. Lady will know that it is absolutely our intention to make changes so that the new PIP assessment supports people with long-term conditions. That is the—[Interruption.] I cannot possibly comment on something reported in the media that I do not have sight of. It is probably easier for me to get back to the hon. Lady to clarify the point than to debate it today.

As part of the wider DLA reform, we have looked at how the mobility component affects people in care homes. As many hon. Members have indicated, we discovered that, much like DLA, the mobility element is characterised by a lot of uncertainty and red tape, and my hon. Friend the Member for Aberconwy (Guto Bebb) picked up on that extremely well. Like him, I have talked to care homes, and every one I have been to has had a different experience of trying to tackle what is one of the most fundamental issues for disabled people—how to get about. That is driving me to make sure that we not only reform DLA correctly, but ensure that people living in our care homes get the support that they need.

When it comes to determining care homes’ duties and contractual obligations, the interpretation is very wide. It is not that people thought it was all rosy in the garden in the past, as the hon. Member for Glasgow East perhaps implied, because there is long-term concern about the lack of clarity over these obligations. There has been almost a sticking-plaster, pragmatic approach to trying to ensure that disabled people, who are some of the most vulnerable people in our community, get the support that they need. The situation has not been helped by an array of very different legal duties and contractual responsibilities, which mean that service providers and residents are unclear in practice about where responsibility lies. Indeed, the hon. Lady might pick that up if she talks to even more of her constituents.

My hon. Friend the Member for Banbury (Tony Baldry) picked up on this issue in his contribution. I do not pretend to be able to give him answers to all his questions, but part of the problem is that responsibility for provision of mobility is spread across at least three separate pieces of legislation in a not entirely consistent manner. That is one of the issues that I will be looking at. We have the Health and Social Care Act 2008 (Regulated Activities) Regulations 2010. We also have the 2008 Act itself, which deals with the registration of care homes. It includes a clear obligation on care homes to promote independence, and mobility is part of that. There is also an important role for the Social Security Contributions and Benefits Act 1992, which makes it clear that local authorities should not take account of DLA when assessing people’s needs. All those things mean that care homes and local authorities have a complex set of measures to deal with. The previous Government could have taken time to provide more joined-up thinking on the issue, and we have put our efforts and energies into dealing with the issue.

[Margaret Curran]

Will the Minister give way?

[Maria Miller]

If the hon. Lady will forgive me, I am trying to reply to as many points as I can. Perhaps she can raise any points that she has separately with me.

I have been told of cases where DLA payments have not been passed on to the person who should have been in receipt of them. As hon. Members will know, that is a serious offence. Some people have told me that they are having to pay charges for basic services in care homes, which should, by rights, be freely available. I am sorry if all that is anecdotal, but it paints a worryingly consistent picture of arrangements that are no way to ensure the best support for the most vulnerable people in our society, no way to ensure accountability and no way to ensure the best value for disabled people or taxpayers. In short, the situation is really unsatisfactory.

As much as the hon. Lady may not agree, it is my job as Minister with responsibility for disabled people to stand up and speak about these things and to ensure that we get some action. I want a far clearer approach in the future, so that disabled people everywhere in the country can know what they can reasonably expect. That was one of the issues that was usefully raised in the “Don’t limit mobility” report. Only with a clearer approach will we achieve the outcome that all hon. Members present want.

In the remaining couple of minutes, let me move on to some of the detailed points that I hope to cover. The hon. Member for Arfon raised a number of issues, but he focused particularly on budgets. It might be useful for hon. Members to know that when we talk about the DLA budget, we are talking about ensuring that we keep control of the growth in it. The expenditure that we are talking about for the future will be the same as we had last year for DLA, after a 30% increase in the number of people claiming DLA over the past eight years. I hope that that reassures hon. Members that we are not talking about the sort of swingeing cuts that have been painted by some less responsible Members, but just trying to ensure that the rapid growth that we have seen is brought under some control.

The hon. Gentleman also raised important issues about the application process. Let me reassure him that this will not involve a medical test, but an objective test built on the social model of understanding the barriers that people face when they have disabilities that they need to cope with. He raised a number of other issues, including, in particular, eligibility after 65, and I assure him that the personal independence payment will continue past retirement, as long as an individual continues to be entitled to it. If I have not picked up any of the issues that the hon. Gentleman has raised, I am sure that my officials will ensure that I write to him.

The hon. Member for Foyle (Mark Durkan) raised a number of extremely important issues, some of which I have already covered. He also mentioned children, and I draw his attention to the report that my Department is doing with the Department for Education. It looks at how my Department will assess children in future in conjunction with the DFE, rather than putting children through multiple assessments, as at present.

My hon. Friend the Member for Aberconwy made an important contribution. I agree with his characterisation of the situation as chaotic. I will make sure that I get back to him about our communications with the Welsh Assembly and about the importance of making the work capability assessment available in a way that is consistent with legislation on the Welsh language.

My hon. Friend the Member for Chippenham (Duncan Hames) made a number of important and constructive suggestions, and I thank him for that. I will perhaps talk to him separately.

In an important intervention, my hon. Friend the Member for Winchester (Mr Brine) reiterated the importance of treating people as individuals. I am sure that he, too, will welcome the commitment to personalisation given by the Minister with responsibility for these issues in the Department of Health—

[Philip Davies (in the Chair)]

Order. We must move on to the next debate.

East London Tech City

Wednesday 9th March 2011 Westminster Hall

11:00

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

I am very grateful for the opportunity to address the House on the question of the east end tech city. As some hon. Members may be aware, in November, nearly six months ago, the Prime Minister made a speech that attracted the attention of all the east end. We are anxious to know what progress has been made with the plans that he outlined.

In his November speech, the Prime Minister said:

“We’re not just going to back the big businesses of today, we’re going to back the big businesses of tomorrow.”

Who could argue with that? He went on to say, thrillingly for us in the east end:

“Our ambition is to bring together the creativity and energy of Shoreditch and the incredible possibilities of the Olympic Park to help make East London one of the world’s great technology centres.”

That idea of the east end as Silicon valley was very engaging. The Prime Minister said:

“Something is stirring in East London”

and pointed out that

“three years ago, there were just fifteen technology start-ups around Old Street and Shoreditch”

but that as he spoke there were more than 100. Certainly anyone who knows and lives in Hackney can see how the Shoreditch and Old street areas—despite the challenging economic circumstances—continue to blossom and to show any amount of creative energy. As the Prime Minister pointed out, one reason for those two areas becoming a hub is to do with cultural and artistic life, quite outside Government planning. That is what happened in San Francisco, and it is happening in parts of the east end.

The Prime Minister made some specific points, however, and it is on those points that I want to press further. He said that the Olympic Park Legacy Company had agreed to create an accelerator space in the Olympic park,

“providing office space for companies that grow out of East London and beyond.”

I should like to know what progress has been made in creating the accelerator space. He also said that Imperial Innovations, the venture capital arm of Imperial college London, was to advise on making the accelerator space

“attractive to spinout companies from academia and beyond.”

What sort of advice has Imperial Innovations given? How many meetings have happened, and what progress has been made? The Prime Minister spoke also about University college London and Loughborough university agreeing

“to work with the Olympic Legacy Company to build a bridge between academia and enterprise in the Olympic Park.”

I assume that that will happen after the games, but I should still be interested in any information that the Minister may have.

One of the companies that the Prime Minister mentioned was Cisco. Last month, he and John Chambers, the Cisco chairman and chief executive officer, announced the details of the British innovation gateway, a five-year effort by Cisco to drive economic growth through high-tech innovation. The British innovation gateway aims to increase the number of pioneering high-tech companies. The programme will include the creation of two network innovation centres, the first of which will be in Shoreditch.

The Prime Minister went on, in his speech, to discuss other companies and businesses that would contribute. We understood that McKinsey and Company will share expertise, and that British Telecom has agreed to bring forward the roll-out of superfast broadband. I particularly want to know what is happening about that, because it is the key to the sort of businesses that we are considering. I understand also that Qualcomm, one of the world’s leading wireless technology companies, will provide expert advice.

The other issue that the Prime Minister touched on was finance. He said that Vodafone had committed to bringing its Vodafone Ventures investment fund to the capital. It would be interesting to know whether it has invested any money since then. He said that

“Silicon Valley Bank, a West Coast institution…will become a fully fledged bank in the UK”.

Has it become a fully fledged bank yet? He also said that

“Barclays will create a new facility in East London to provide specialist banking services to high growth technology”.

Again, we should like to know more.

The Prime Minister went on to talk about some of the US companies that are to set up research and development space. He mentioned Intel setting up a new research lab. I am not sure whether it has been set up yet. Google was to create an innovation hub. I am not sure whether that has happened. The speech also mentioned that

“Facebook has agreed to create a permanent home in East London for their successful Developer Garage programme”.

On all those issues, I would be interested to hear what those American businesses are doing, and what has been done about business and finance.

I want to talk a little also about the possible involvement of the local authorities in the exciting new developments that I have outlined. I could say, on behalf of Hackney council, that it very much welcomes the Prime Minister’s initiative—and not only Hackney council, but boroughs across London. However, I think that local government leaders—what we might call the big society—want to know when the Government will align their investment and support with Hackney’s local regeneration activities. It is one thing to bring in American and British businesses, make more money available and roll out the broadband; but it would make sense to align that with what the local authority is doing.

A number of small and medium-sized businesses have flourished in the creative digital centre in Shoreditch, Dalston and Hackney Wick, on the back of investment initiatives proposed by the previous Mayor, Ken Livingstone. We believe that the western half of the Olympic park in Hackney Wick holds significant opportunity. Will the Government work with Hackney borough council and the Olympic Park Legacy Company to ensure that our global ambitions for growth are integrated with our innovative local economy and the people of Hackney?

We are also concerned about investment in skills and training. It is fine to have coffee bars and cultural activity, and even to roll out broadband. However, we do not want a Silicon valley-type development in the east end that will be like a cuckoo in the nest, to which local people have no access, and where they cannot find opportunities. If local people are to be involved, skills and training are important. How do the Government see their further and higher education policies supporting what the Prime Minister announced in November and Hackney’s successful network for delivering training to local people of all abilities?

The Government are meeting and encouraging big global companies such as Google and Cisco, but we are concerned that they are not connecting them to the local economy and the local authority, which would mean that their investment could make a real difference. We are anxious that the Government’s activities, which we welcome in principle, should be aligned with what the local authority does. I have lived in Hackney for 23 years and I have seen every sort of Government regeneration programme going, all the way back to Michael Heseltine. Sometimes I have said about regeneration programmes, under Labour and other Governments, that if we stood on a street corner giving people bags of money, ordinary people might have benefited more. I have seen all that is good and all that is bad about Government-led regeneration.

I think that the Prime Minister is probably right that sometimes regeneration is a bottom-up activity. That is what happened in Silicon valley—and in parts of Hackney. It is extraordinary: Hoxton, which was a very run-down area when I first became an MP, is now the Soho of the east. If I go through it at night there are clubs and entertainment, culture and art galleries. Some of that was helped by local government and Government regeneration, but much was bottom-up. One of the things that helped the east end to regenerate was the amount of cheap warehouse space, which meant that artists such as the new British artists—Tracey Emin, and so on—found it cheap and practical at the beginning of their careers to go and work there.

I am very open. Having seen how the east end has developed over 20 years and how Government and local government intervention work, and sometimes do not, I appreciate and understand the bottom-up approach that the Government are taking. However, we must have a clear outline and infrastructure. I would like to know what is happening about broadband. I would also like to know what is happening in relation to the businesses and financial-sector people that the Prime Minister mentioned in his speech last November.

I am anxious to find out whether the Government are willing to align what they are doing with the successes that we have had, both at the London level under the Mayor and also at the borough level. I wait with interest to hear what the Minister has to say.

11:10

[The Minister for Universities and Science (Mr David Willetts)]

I congratulate the hon. Member for Hackney North and Stoke Newington (Ms Abbott) on securing this debate, on what is indeed an important subject. It is about our high-tech strategy for the nation as a whole, and for one of the crucial places where we are delivering it—the hon. Lady’s constituency, especially in and around Shoreditch.

I particularly appreciate the way in which the hon. Lady quoted so liberally from the Prime Minister’s speech on 4 November. I was at that event, as was the Mayor and many investors and entrepreneurs. She summarised an excellent speech, in which the Prime Minister made clear how committed the Government are to the area. At the heart of the area—it is part of the east London tech city initiative—is Shoreditch, which is increasingly becoming the location of choice for budding entrepreneurs.

The hon. Lady has given us these figures, but I remind the House that in July 2008, the area was home to some 15 high-tech companies; our latest estimate is that there are now 200, and there have been some conspicuous examples of successful companies being developed and sold on. Last.fm was sold to CBS for $280 million; others successes are TweetDeck and Songkick; and Dopplr was sold to Nokia for $22 million. Some valuable companies are being created there, and the coalition Government are committed to helping the area to continue with its impressive growth rate. We believe in it as a cluster.

The Government cannot create clusters out of nothing, but once clusters have emerged organically, it is absolutely the responsibility of Government to push them forward whenever they can and to remove barriers. That is what the Prime Minister’s speech of 4 November was about; it followed an announcement about the area. I assure the hon. Lady that progress is continuing. I shall give some examples.

John Chambers, Cisco chairman and chief executive officer, was in London recently, and I met him with the Prime Minister. He unveiled details of the British innovation gateway scheme on 31 January. That new $500 million scheme will see Cisco pledging a long-term investment of money, technology and manpower to help boost entrepreneurship in the United Kingdom, particularly in east London tech city. Having been present at the discussions between John Chambers and the Prime Minister that took place at No. 10, I can tell the hon. Lady that we got into the practicalities of encouraging John Chambers to consider investment in the east end of London. Indeed, that is where a significant part of his investment will go.

[Ms Abbott]

I was not at the Cisco meeting, but when I read the press reports of what was said it seemed quite unspecific. When will the programme of investment start? The Minister says that he urged the Cisco chairman to invest in the east end, but did he commit himself to doing that? If so, what proportion of that money will be invested in the east end?

[Mr Willetts]

We do not know exactly what the time scale will be or exactly what the allocation will be, but the decision has been made by Cisco’s CEO to commit $500 million. That key decision was taken by the CEO and discussed with the Prime Minister, and work is now under way in Cisco to allocate the funding.

Cisco is not the only example. Google has announced that it will open its innovation space in 2011 in Old street. That will be a creative space for its researchers to come together with developers and academics to create the next generation of applications and services.

[Ms Abbott]

Does the Minister have an opening date for the Google innovation space? How many staff members will there be, and what sort of investment will be made in that space?

[Mr Willetts]

We do not yet have that information. I admire the hon. Lady’s impatience on behalf of her constituents. She wants detail about the pounds, shillings and pence and the number jobs involved. I should explain that, in short order, we have delivered strategic commitments from big businesses. Decisions to commit to the area have been taken at the highest level.

Of course, the challenge—United Kingdom Trade and Investment is working hard on this—is to convert the big decisions into practical jobs on the ground. Having seen the commitments made by Cisco and Google, including when Google’s Eric Schmidt was in London recently, I have no doubt that the follow-up will happen and that we will get there. Commitment has been made at the highest level.

[Ms Abbott]

Will the Minister give way?

[Mr Willetts]

Yes, especially as she asks so plaintively.

[Ms Abbott]

I am touched by the Minister’s confidence in these declarations by the big moguls. However, we in the east end know that talk is cheap. The sooner that Ministers can come to us with dates, facts and figures, the happier we will be.

[Mr Willetts]

I understand exactly the point that is being made by the hon. Lady. There will be various opportunities, perhaps in a follow-up debate in a few months’ time, when I will be happy to report progress to the House and to the hon. Lady.

On behalf of the Government, I am also in close touch with the entrepreneurs and business community in east London tech city. I shall report to the House some of the activities that we have been involved in—and there are more coming. I was at the launch in the east end of the Google-Boston Consulting Group report, “The Connected Kingdom”, on 28 October.

I met a group of entrepreneurs and business people at London’s TechHub on 20 December. I visited the new branch of the Silicon Valley bank on 10 January, which the hon. Lady mentioned. It is a valuable business model, and I know that the Financial Services Authority is close to reaching a final decision on a banking licence. The Department for Business, Innovation and Skills sponsored an event with McKinsey on 17 January. The Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk) met 60 angel investors, specifically aimed at enabling entrepreneurs in tech city to pitch to them for investment; that took place on 26 January.

I have had meetings with the vice-chancellors of some of the universities that the hon. Lady mentioned, and with others. I can report to the House that the Secretary of State and I will meet University college London, Imperial college London, the Olympic Park Legacy Company and Loughborough university next week further to discuss progress on the Olympic legacy site. We are continuing to work actively on the matter, and there will be a series of further events. I shall be going to a workshop on access to finance at Shoreditch on 4 April, and I shall continue my close contact with that community.

As for local initiatives, I understand that BT will deliver on its commitment and that it will upgrade its services. It confirms that it will upgrade both telephone exchanges in the area, in Clerkenwell and Shoreditch, to its superfast broadband service.

The hon. Lady rightly asked about the involvement of the local community. I shall focus on that aspect in my closing remarks. She can play a crucial role. I know that she is committed to her community. It would be great if we could improve links between the entrepreneurs and the business start-ups at tech city and, for example, local schools. There is a really good atmosphere around the TechHub at what is called Silicon roundabout. It should be possible to involve Hackney schools more, so that teenagers could meet the entrepreneurs in tech city, see what software programmers do and some of the apps that they are developing. They could even come forward with ideas on apps for their mobiles and watch the software developers trying to rise to the challenge.

That would be fantastic. It would be for the good of the young people in the hon. Lady’s schools and a fresh challenge for the entrepreneurs. If she wants to work with me on this, I am confident that we could make those connections. Looking nationally, one of the things that I worry about is that, despite large numbers of students doing IT and computer science, we do not do very well on getting them into the right kinds of jobs that use their skills. If we can improve the links to entrepreneurial business leaders at an early stage, we could do better. I would be up for working with her on such a project, and hope that she would be willing to consider it.

[Ms Abbott]

The Minister makes an interesting point. In Hackney, children are very much interested in IT, but they do not make the move from an interest in IT to the IT professions. I would welcome the challenge of trying to link young people with what is happening in tech city. Moreover, there is the broader concern that young people in areas such as mine often have relatively narrow horizons. Anything that opens up their horizons and makes them understand the connection between studying today and an interesting and exciting job tomorrow is clearly a good thing.

[Mr Willetts]

I am grateful to the hon. Lady for her positive response. Let us try to work together on that. I bet the kids are much more sophisticated users of the apps on their mobile phones than either I am or she is. We should cut out the middle man and get them to talk directly to the software developers. I assure her that I will keep in very close touch with tech city. We will bring in another set of major venture capitalists from not just the UK but internationally to consider investing in businesses in the area. I know that the negotiations have not yet been concluded, but we are also focusing on specific businesses that are considering undertaking training and apprenticeships in the area. As well as the high-tech software programmer-type jobs that are on offer, we know that the local community wants to fill the technical jobs that can come through apprenticeships.

[Ms Abbott]

I mentioned aligning what the Government are doing with the local authority. There is a concern at local authority level that it is not involved or cited in the Government proposal. If the Government do not want to align themselves with the local authority, they could at least let it know what they are doing, but the local authority is sort of being kept in the dark.

[Mr Willetts]

I am sorry that the hon. Lady thinks that. I am sure that it will be possible to arrange for the chief executive of the council to have a briefing on what UKTI is doing. I am up for working with the local community. If it would be helpful for such a meeting to take place, I undertake to ensure that it happens—if it is not happening already. We want to work with the local community. This economic development is, of itself, good for the local community. As the hon. Lady rightly says, having all this activity has transformed the area in the past 20 years. If it would be helpful to have a meeting, I would be happy to suggest it to UKTI.

We are delivering on the ideas set out in the Prime Minister’s speech three months ago. We are making progress and we are absolutely committed to the scheme. I am confident that we will continue to achieve the high ambitions that he set us, and I am very happy to keep the hon. Lady closely in touch with progress as we advance.

11:24

Sitting suspended.

Water and Sewerage Charges (South West Water)

Wednesday 9th March 2011 Westminster Hall

[Mr David Amess in the Chair]

14:30

[Mr Adrian Sanders (Torbay) (LD)]

It is a pleasure to serve under your chairmanship, Mr Amess. I have not had the experience before, but it is certainly a pleasure.

Today, I am raising a matter that is of great concern to the people of Devon and Cornwall and has been for as long as I have been a Member of Parliament, and I suspect for longer than any of us here today have represented our local communities. I had the pleasure of raising this issue in an Adjournment debate previously, but this is the first time that I have been able to do so as a Member of Parliament on the Government side of the House. The fact that the problem has remained almost exactly the same for so long is both a reflection of the intractable nature of the issues involved and a sad reflection on the record of previous Administrations. They had time to tackle this injustice, but sadly they were unable to come up with a solution. I sincerely hope that the Minister who is here today will not let our Government follow the same path.

Of course, the problem is the disproportionately high water bills in the south-west. Although the new Ofwat settlement has only just been released, the indication is that the average bill in the region will be £517 a year and the price rise will be about 8.1%. Rather mischievously, Ofwat had initially told the press and the public that the rise would be only about 5%, but that forecast assumed that customers would adapt their behaviour in the future. It is accepted that more people will move to using water meters. Around 70% of water customers in the south-west already have one and Anna Walker predicted that that figure would rise to 80% by 2015. Moving to water meters would save those south-west customers around £400 per year, but the money still has to be found from somewhere. Metered bills will rise in response to the dwindling supply of high-paying unmetered customers, adding more than £200 to the bills of metered customers.

Metering and in-region social tariffs have long been identified by Ofwat and the Government as an easy solution, but they do not have an impact on the underlying problem. Even if one takes the price rise as a 5% average, that is still far too high for most people to cope with in this age of austerity. It is also important to remember that I am talking about average bills. Many of my constituents now face water bills far in excess of £1,000. That reflects a range of circumstances, from medical conditions that require extra water to simply having a larger family. As always, unmetered customers suffer the worst. The average bill of £517 in the south-west compares starkly with the average bill in London, for example, which even for unmetered customers is only £332 per year.

The privatisation of utilities was meant to open up sectors to competition and to empower consumers, but the privatisation of water has done nothing of the sort. Can one imagine the outcry if electricity prices were 60% higher in Newcastle than they are in London? Any electricity company that tried to implement such price disparities would simply see its regional market share evaporate.

Hopefully, we are all aware of the background to this problem. The privatisation of water in the late 1980s left South West Water with a backlog of infrastructure improvements to invest in. Combined with a tiny customer base and a lengthy coastline, that backlog meant that under the system of regional monopolies South West Water customers would pay higher bills in perpetuity, with their only recourse being to move somewhere else in the UK.

For all its inaction, the previous Government at least recognised the problem. The result is Anna Walker’s report on water charging, chapter 14 of which focuses specifically on the south-west. The coalition is about to respond to her report, which again makes this debate timely.

I want to cover briefly three points that are relevant to what is happening now and hopefully the Minister can take them into account when he is developing the final policy on this issue. First, the role of Ofwat needs to be assessed very closely. Ofwat’s role as the regulator must be to protect customers and as Regina Finn, its chief executive, said herself:

“People can shop around for the best deal on many things, but not water. Our job is to do this for them.”

I am afraid that the overwhelming view of my constituents is that that “job” is not being done. Many of them see Ofwat as hindering rather than helping the situation in the south-west. Whereas bills fell slightly ahead of inflation in other areas, the south-west has seen the very large rise that I described.

[Mr Ben Bradshaw (Exeter) (Lab)]

Is not the real scandal of this year’s price increase that customers were assured at the time of the last price review under the Labour Government that there would be reductions in their water bills in this price period? South West Water is hiding behind the current Government’s failure to control inflation. That is a sign of gross insensitivity compared with the situation in, say, local authorities, where everybody else is having their pay frozen.

[Mr Sanders]

I only half-share the right hon. Gentleman’s view, because Ofwat is the body that should protect the consumer and it has allowed South West Water to raise charges by the amounts that I described.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I agree with the hon. Gentleman’s assessment that Ofwat’s role in this regard is key, although I also accept the points made by my right hon. Friend the Member for Exeter (Mr Bradshaw). I have just received an e-mail from one of my constituents that makes exactly the same point as the hon. Gentleman. My constituent says that he lives in a three-bedroom house; there are two residents, and he has received a bill for more than £1,000 for the coming year. Ofwat has agreed these prices. My constituent’s question is, “Do they realise just how much individual customers are having to pay and the impact on those households?” I urge the Minister to look again—please—at the role of Ofwat in all this.

[Mr Sanders]

Indeed. I would rather like Regina Finn to spend perhaps a year in the south-west on average wages. If that were to happen, I think that we would see a change in Ofwat’s policy.

I also question the use of the retail prices index in setting price rises. Although Ofwat technically enforces price ceilings, it is de facto setting prices. We are moving to a system of uprating pensions and benefits by the consumer prices index. We should do that for water bills too, at least to make the price rise somewhat defensible.

On the wider issue, however, Ofwat has consistently failed to engage with the real problems highlighted in Anna Walker’s review. At the moment, Ofwat does not seem to be interested in finding a resolution to the south-west problem and so it cannot be seen to be standing up for south-west customers. When it comes to the protection of consumers’ interests in the south-west, Ofwat is as useful as a chocolate teapot.

In our discussions with Ofwat, its representatives have told us that solving this problem would be complicated and that we should focus on a social tariff instead, which is where Ofwat is investing its time and energy. Curiously enough, the official line is that Ofwat took that decision unilaterally. Parliamentary answers revealed that neither the Department for Environment, Food and Rural Affairs nor the Treasury gave any instructions or guidance and that Ofwat has not even written down a plan of its work for reviewing Walker. All we have had is a vague indication from the hon. Member for Ogmore (Huw Irranca-Davies), who was the Minister with responsibility for water in the previous Government, that Ofwat should look into reviewing Walker.

The plot thickens, however. When I submitted a freedom of information request on this issue, it emerged that the Treasury briefed Ofwat on what it wanted Ofwat to achieve in its work, but as yet, exactly what that entails has not been disclosed. Perhaps I have been unfair to Ofwat in that the Government are the reason why it is useless at protecting South West Water customers. Maybe the Minister will reveal the truth.

[Andrew George (St Ives) (LD)]

One of the reasons why Ofwat might not be particularly effective in protecting South West Water customers is that when water was privatised, a risk-free money-making system was effectively created. When somebody has a monopoly on services such as water and sewerage services, that is bound to happen. However, the problem in the south-west is that there is a national asset—the beaches—that has to be cleared up and cleaned up at great expense by a very small part of the population. The south-west has 30% of the national beaches, but only 3% of the national population. Of course, if we compare that with the National Gallery or the British Museum, which are funded from national taxation, we in the south-west have to protect a national asset on the basis of having only 3% of the population. That is simply unsustainable.

[Mr Sanders]

My hon. Friend makes a very important point, and I made that same point in a Radio Cornwall interview not an hour ago. It is amazing that that station can be picked up so far away.

My main point is that the development of a solution is fundamentally undemocratic and beyond scrutiny. Deciding which combination of Walker’s recommendations to implement should be down to the political will of Ministers and the Government. It should be for them to take the courageous decision to put an end to this injustice or suffer the political consequences. The solution should not be watered down—excuse the pun—by quangos and officials who have no inherent interest in standing up for water customers, especially not those in the far south-west. Ofwat claims that a levy on other water company areas to bring down bills in the south-west, or to equalise bills across the country, would breach Treasury rules, and it is not keen to explore changing those rules, but the nationwide social tariff suffers from that very same problem, because it involves moving money around between water customers, outside the Government’s coffers.

[Dan Rogerson (North Cornwall) (LD)]

I am very grateful to my hon. Friend for all his work on this issue over a great number of years, and I congratulate him on securing the debate.

Does my hon. Friend not agree that there is perhaps a misapprehension among some people that the south-west is a wealthy part of the country, and that that somehow informs the view that costs could not be shared across the country? There is an idea that many wealthy people are sitting down on huge estates in the south-west and being subsidised by poorer people in urban areas elsewhere when, in fact, areas such as Cornwall are some of the most deprived—there are very low incomes there. That is what ought to inform the decision about a more equitable way forward.

[Mr Sanders]

My hon. Friend is absolutely right. In my constituency of Torbay, the unitary authority area now has a gross value added level lower than Cornwall’s was when it qualified for objective 1 assistance, and there are other such pockets in the south-west.

[Alison Seabeck]

I would like to reinforce the hon. Gentleman’s point. Does he not agree that, with the current increase in water rates, we will see more pensioners, particularly in the area around Torbay and in my constituency of Plymouth Moor View, falling back down below the poverty line? The Government would not want to see that happen, but undoubtedly they will.

[Mr Sanders]

The hon. Lady is absolutely right on that point.

If Ofwat is not supportive, we at least have political unity around the idea that something more than a social tariff and something specific to the south-west needs to be done, and I need only consult the Hansard report from a previous debate on this very issue, in January 2010, to see that. In that debate, we had the support of the then Labour Members for Plymouth and some warm words from the then Minister with responsibility for water, the hon. Member for Ogmore. The right hon. Member for West Dorset (Mr Letwin), who is now one of the Prime Minister’s chief aides, stated that

“there seems to be a strong case for some kind of spreading of cost”—[Official Report, 27 January 2010; Vol. 504, c. 323WH.]

The Liberal Democrats have, of course, championed the cause for many years. I see that I am joined today by Members from all parties, who are united in wanting to get something done for their long-suffering constituents, and I hope that many of them will be able to contribute later in the debate.

The overarching problem, which Walker ably demonstrates, stems from privatisation. On privatisation, South West Water had the smallest asset base—what was called the regulatory capital value—per customer, and it now has the highest, at 210%. South West Water customers will therefore pay far more for longer. If that situation were to occur in any other utility it would be outrageous, but for some reason successive Governments have tolerated it in the water industry. The previous Government sadly never understood the damage caused by the failed privatisation. I describe it as failed not because the water companies have not provided a good service—on the whole they have—but because it has simply not delivered a market, not even a heavily regulated one. No domestic consumer can choose between water companies, and instead of being reinvested fully in the service, the surplus created is converted into profit for shareholders. The water customers in the south-west do not like that, and I suspect that if it happened to other regions they would not like it either.

That brings me to some potential hope in this doom and gloom. We have a new Government. We are in the era of new politics, and appear to have a listening Government, and so I invite the Minister to join in this spirit of new politics and listen to the people of the south-west. If he spoke to them, they would tell him that they do not want just a social tariff or some adjustments around the edges, but a fair and transparent system, whereby they pay the same as everyone else in the UK for the water and sewerage services they use.

The Minister’s party was in power at the time, so he might not join me in wishing that privatisation had never happened in this industry, but I hope that he will acknowledge that it was carried out in a wrong-headed way. The company in the south-west needed a much bigger customer base, and needed to be compensated for the poor state of its infrastructure. If the Minister does join me in this, I hope that he can take the next logical step and support something that addresses these historical problems and lifts the unfairness. I particularly mention unfairness because it is important not to conflate it with affordability, and it would be very foolish if the Government pretended that addressing the problem of water poverty also solved that of unfairness. I shall give an example to illustrate the problem. A family earning £35,000 would never come under the scope of WaterSure or any improved social tariff. They would, however, feel incredibly aggrieved if they had to pay anything up to £400 more for exactly the same service and product than if they lived anywhere else in the country, and that insult is made worse by the fact that the service is a basic necessity.

I understand, however, the Minister’s difficulty in being able to give concrete answers to many of the questions that will be raised today. There will necessarily be input from the Treasury as well as from No. 10, and in a way it is a shame that we cannot have Ministers from both Departments—the Treasury and DEFRA—here today, as some might argue that the solution is to be found at the Treasury. The Treasury can make or break another Department’s plans, but I hope that the Minister is pushing the case both for a social tariff and, more importantly, a solution to the south-west injustice.

Overall, we know the problem. Water bills for all customers in the south-west are far too high, as a result of the way in which the industry was privatised. We need a structural solution, through Government intervention, to remedy that unfairness. I am not sure how much detail the Minister can give in response, but I want him to recognise the difference between addressing water poverty and addressing unfairness. I hope that he can restore, or shall we say maintain, my faith, and that of others, in this Government, by promising to address both those issues.

[Alison Seabeck]

On a point of order, Mr Amess. To avoid any possible misunderstanding, I should draw Members’ attention to an entry in the Register of Members’ Financial Interests by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), in whom I have an indirect interest: he is my partner.

14:48

[Dr Sarah Wollaston (Totnes) (Con)]

I congratulate my hon. Friend the Member for Torbay (Mr Sanders) on securing the debate and on raising this really important issue.

I shall start by reading from an e-mail that I have received from a hard-working 52-year-old constituent of mine, Mr Bamber. This is the first time that he has written to his MP:

“I’m having a pay rise of 0.0% this year, but being a good bloke it’s for the good of the country. Then my water bill arrives—it’s risen by 9.75635%. I’m mad, and I’d like something done about it.”

He is not alone; I have received several e-mails. Another disturbing fact was raised in an e-mail from a constituent who pointed out that his elderly mother, who is 80, has a water bill of £1,040, despite existing on a post office pension and being in substantial difficulties.

Although we all appreciate schemes such as WaterSure, many constituents have great difficultly in accessing them. I was particularly disturbed by a visit to my surgery this week by the husband of a constituent who suffers from severe multiple sclerosis. He brought with him evidence that he had sent to South West Water of her very much increased water usage as a result of her condition, and of the fact that she is on the higher rate of disability living allowance. They have, however, been declined access to WaterSure, which I am sure hon. Members agree is a complete disgrace. I hope that South West Water address that matter immediately.

The issue is one of unfairness. As my hon. Friend the Member for Torbay has pointed out, our constituents do not have any choice in the matter, other than to live somewhere else in the country, which is clearly ludicrous. The rises have been described as 8.1%, but for many constituents, they are nearer 10%.

[Anne Marie Morris (Newton Abbot) (Con)]

Does my hon. Friend agree that there is a case for suggesting a cap, which would not allow the 8% rise to apply in the south-west?

[Dr Wollaston]

I agree completely. If Ofwat were doing its job properly, it would see that that is inherently fair. It is completely unreasonable to expect anyone to deal with a rise of more than 5%. Near 10% is totally outrageous, particularly given that our constituents have no choice whatever in the matter.

As other hon. Members have said, we are not, as is often assumed, a wealthy area. Some 22% of people in the south-west are pensioners, which is well above the national average. No one would suggest that pensioners are a wealthy group, but they are none the less being subjected to outrageous rises in their water bills. Will my hon. Friend the Minister take all those points into consideration? It cannot be fair for 3% of the population to shoulder the burden of cleaning up 30% of the coast. Of course, none of us feels that we could have continued using 200 sea outfalls to dispose of sewage, and we all welcome the economic boost from the infrastructure programme instituted by South West Water, but it is clearly unfair that the burden of that necessary programme should fall on our constituents.

14:52

[Andrew George (St Ives) (LD)]

It is a pleasure to serve under your chairmanship, Mr Amess. I congratulate my hon. Friend the Member for Torbay (Mr Sanders) on securing this important debate and articulating so well the case for taking action, and my hon. Friend the Member for Totnes (Dr Wollaston) on reinforcing his points.

My contribution will be relatively brief. I want to emphasise some of the points made by my hon. Friend the Member for Torbay. The privatisation of the water industry 20 years ago effectively created a risk-free money extortion system, as I said earlier. The company knows full well what the circumstances are in the south-west. It can almost print its dividend the year before, because it knows how the market works: it is not competing with anyone else, and the only variables are uncertainties about its input costs during the year and the risk that it might not be able to recover payments from all its customers, which is increasingly occurring in areas such as mine. Incomes in Cornwall have been at the bottom of the earnings league table since records began, and South West Water’s prices are and have always been significantly higher than in the rest of the country. In those circumstances, people have great difficulty paying the water charges with which they are presented. The legacy of basing water charges on the archaic and unjust rating system, which is not used for any other purpose, re-emphasises that significant reform is needed.

The one beneficial outcome of the circumstances in which the system operates is that it encourages people to recognise the advantages of water metering. South West Water has not engaged in an evangelical campaign to encourage people to install a water meter in their homes or premises; people have simply recognised that they can at least attempt to control their bills by various means, and in many cases the most effective way is to install a water meter. If there is a silver lining in the cloud, it is that people have pursued that. I think that it is accepted across all parties that the increasing move towards universal metering is broadly desirable in public policy terms, and certainly in environmental terms, if we are to address the proper management of natural resources.

In my intervention on my hon. Friend the Member for Torbay, I drew parallels with other, similar national assets. Our beaches are a national asset, which people come to from all over the country all year round. It is not just a summer thing, as it used to be; in my constituency, kite surfers come down from London and from other parts of the country throughout the winter months to enjoy the beaches and the sea around our coast, and they do so with some confidence that they will not go away with a bug, due to the efforts of South West Water to clean up those beaches and ensure a significant reduction in the public health risks associated in the past with bathing in some waters in the south-west.

Those beaches are a national asset, like the British Museum, the National Gallery and the Olympic stadiums, which are being funded by everyone in the country. We do not ask London taxpayers alone to fund them.

[Anne Marie Morris]

I support what the hon. Gentleman is saying, because the heart of his argument is about fairness. Everything that we have heard to date has been about affordability. As crucial as that is, I would be concerned if any future review or consultation did not address fairness. The points that he is making are absolutely right.

[Andrew George]

I know that Ministers are wrestling to produce a fair and equitable solution, and I know that this Minister has been engaging constructively and is well seized of the problem and the challenges that we in the south-west face—I have no doubt that he understands the issue fully. Discussions with other Departments, especially the Treasury, will inevitably be involved. I hope that the issues can be resolved to the satisfaction of the long-suffering water rate payers of the south-west. My hon. Friend is absolutely right that any solution must emphasise fairness.

It is worth while, when considering the issue, to compare water with electricity, telecoms and other utilities. In any other part of the country, it is at least possible to opt for another supplier of services. Therefore, whichever part of the country someone happens to live in, they will know that a regulator is regulating the market to ensure that there is fair competition and an even playing field, so that anyone in the country has the opportunity to at least obtain services—in this case, we are talking about water and sewerage services—that are no worse and no better than anywhere else in the country. We pay a significant amount more.

[Alison Seabeck]

On the glamorous subject of sewage, does the hon. Gentleman share my concern that, apart from the current pressure on bill payers in the south-west, we will have additional pressure from the transfer across of the private sewer network? It seems to be a completely unknown quantity—South West Water does not really know what it is taking on and what the impact will be. Will the hon. Gentleman join me in urging the Minister to offer reassurance on that?

[Andrew George]

The hon. Lady is absolutely right. I do not know whether this is area in which she is declaring her interest.

[Alison Seabeck]

Not in sewage.

[Andrew George]

I am sure that her interest is in something far more glamorous than the adoption of private sewers. I have raised the matter with the Minister and there has been consultation on it. Water companies are aware of the issue and some have undertaken their own calculations of the impact that it might have. I am confused and uncertain about how far down the water companies will have to go—it is possible to get stuck on these issues due to the number of metaphors that could be adopted in relation to them, but I shall not dwell on that for too long—before they take on those obligations. Other issues include the state in which those sewers would have to be in order for them to be fit to be adopted and, indeed, whether the companies will have the opportunity to assess the condition of those drains and sewers in the first place.

The information that appears to be coming from the marketplace and from those who are engaged in the industry is that both the previous and present Governments have not properly assessed the true impact that the proposal is likely to have. The knock-on effect will be on all customers—not only in the south-west, but countrywide—although it will be disproportionately worse for those in the south-west, because any increase in their bills will be on top of something that is already extortionately high. I know that the Minister is looking into the issue. The matter clearly needs to be resolved before we go down the track of finally forcing water companies to adopt private sewers and drains. I hope that the Minister will address the issue in his comments.

The hon. Member for Newton Abbot (Anne Marie Morris) has left the Chamber, but she raised the issue of fairness. When we have debated how we can address the legacy of unfairness that has been left to South West Water customers, we have talked about the potential adoption of a national levy, which is one of the options proposed by the Anna Walker review. A national levy would be a very small, gnat bite of a charge, which few people would notice and which would address some of the inherited legacy of additional unfairness in the south-west and other parts of the country. However, if we adopted such a levy, and if it were simply a flat rate charge for all water rate payers, poor water rate payers in one part of the country—the north-east, for example—might end up subsidising wealthy second home owners, who already pay, if they have water meters, significantly less than most people in their locality. Clearly, to address the issue of fairness, if we were to adopt a national solution, it would have to be significantly more sophisticated than a simple, flat-rate solution. I know that the Minister is well aware of the issues.

[Mr Sanders]

It is worth putting on the record the amount that would be asked of each customer. It is in the Walker review. It is £1.50 per customer per year.

[Andrew George]

I am grateful to my hon. Friend—he has the figure to hand, but I do not. As I have said, it is an imperceptible gnat bite of 3p per week throughout the year. It is not a significant charge for people, and the potential benefits to this country’s water rate payers, such as those in the south-west, who are significantly disadvantaged, would be considerable.

Finally, I have emphasised the benefits to water rate payers if they, in most cases, adopt a water meter. Many of those living in houses in multiple occupation, sheltered housing and so on are not able to install a meter in their own individual property. When they query that and ask South West Water how, given the unfairness of the system—particularly if they are elderly, do not use a lot of water and live n their own—they might reduce their bills and the exorbitant charges that they have to endure, they are told that they have a range of alternative options, one of which is to return to South West Water, which is obliged to offer them an assessed charge, which assesses their notional water usage and charges them on the basis of what they would have been levied had they had a water meter.

In all such cases with which I have dealt over the years, those charges have usually reduced bills by half or more. My point to the Minister is that, rather than expecting water rate payers—particularly those living in sheltered accommodation who do not have assessed charges—to believe that there might be an alternative solution and to then be articulate and confident enough to approach the company to ask for one to reduce their charges, it should be the company’s default position to make those customers aware of the availability of an assessed charge. Many vulnerable people live on their own in sheltered accommodation without the benefit of reduced charges on water meters, but they could at least be given the opportunity of an assessed charge. That is what the company should be doing in the first place.

I have run South West Water down something rotten this afternoon, and to be fair, the chief executive, Christopher Loughlin, is fully engaged with these issues. When I raised the issue of assessed charges, he accepted that the company can be much more on the front foot and assured me that it wants to tackle the issue. He is conscious of the impact on his customers of issues such as the fairness of billing and the charges levied by South West Water, and he is fully behind the campaign by Members from all parties. The company is aware of these issues and would welcome any solution that, while not giving it any particular benefit, would reassure its customers that arrangements can be put in place that are more equitable than those they have had to endure for the past 20 years.

15:10

[George Eustice (Camborne and Redruth) (Con)]

I congratulate my hon. Friend the Member for Torbay (Mr Sanders) on securing this important debate on the problem of water charges in the south-west. As he said, it is good to see colleagues from all parties here, many of whom have campaigned long and hard on this issue over a number of years.

I want to focus much more on the difficulty that we have solving this problem than on the problem itself, which has been comprehensively articulated by previous speakers. As I see it, the problem comes down to three key issues, which are often highlighted by Ofwat. First, half a dozen MPs from the south-west face the brutal problem of persuading 600 MPs elsewhere in the country that it is worth their while voting through legislation to require water customers in their areas to pay a sum of money—albeit only £1.50 a year—without, as they would see it, getting anything in return.

The second difficulty is one that the Minister has previously raised: someone on benefits or a very low income—someone living on the minimum wage in somewhere such as Manchester—could end up subsidising the bills of a millionaire with a second home in Cornwall.

The third problem that is sometimes cited is that we might set some sort of precedent. Thames Water is, for example, doing a lot of infrastructure work with the Thames tunnel, and the argument is that if we make an exception for the south-west, recognising what has been done there, the injustice that has been suffered and the infrastructure that has had to be put in place, we would be setting a precedent for other water companies.

The answer is to design a scheme to address those concerns—something that should not be beyond the wit of man. I have raised the issue with the Minister before, so he will be aware of my suggestion for a fair discount scheme. There would be two key criteria at the heart of that formula. First, there would be affordability. We would use the definition of affordability cited in Anna Walker’s report, which says that anyone who spends more than 3% of their household income on water bills is water poor. We should ensure that all those who spend more than 3% are eligible for some form of discount. That would catch about 70% of South West Water customers, and millionaires with second homes in Cornwall would not be eligible because they would not spend more than 3% of their household incomes on water. That would deal with the second argument that I set out about people on low incomes subsidising millionaires.

The second key criteria at the heart of the scheme would be recognising fairness. The scheme would recognise in absolute terms the scale of the bills in the south-west. People often have bills of £700 or £800 a year, and I have even heard anecdotally of people getting bills of £1,000 a year. That is why water charges are a political issue in the south-west in a way that they are nowhere else. There is a real issue of fairness just in terms of the absolute size of the bills.

We would, therefore, have a discount, which would be tapered depending on how much people’s bills varied from the national average. We would say that people in the south-west, whose bills are double the national average in many cases, were entitled to the full discount, which might be £80 or £100 a year. They would still pay more than anyone else, but they would receive a significant discount, which they would recognise as making a real difference.

In areas such as that covered by Thames Water, people might be technically water poor, but the fairness criteria would recognise that water bills in London are already very low and, indeed, below the national average. The taper would ensure that the discount given to those who were water poor in the Thames Water area was far smaller, because we would be recognising that their bills were not such a difficult issue and started from a low level.

The provisions would ensure that we had a national scheme that was open and available to all. Such a scheme would target affordability and not subsidise millionaires. It would also recognise unfairness and the fact that water charges are a political issue in places such as Devon and Cornwall by having a taper and changing the discount depending on the variants.

I put those thoughts to the Minister a couple of months ago, and lots of work is going on. I commend the approach that he has taken; he has worked incredibly hard to find a solution. The coalition has given a commitment to address the problem, and we all have a reason for wanting a successful outcome. I very much hope that we can find a solution together.

15:16

[Mr Jamie Reed (Copeland) (Lab)]

It is an absolute pleasure finally to serve under your chairmanship, Mr Amess. I congratulate the hon. Member for Torbay (Mr Sanders) on securing this debate. I have taken note of the attention that he has given these issues in parliamentary questions and, most recently, in early-day motions. I am well aware of the anger, frustration and even desperation that many of his constituents feel as a result of the long-standing problems with water and sewerage charges in his area.

As the hon. Gentleman will acknowledge, MPs of all political persuasions across the south-west have focused a great deal on this issue. I have talked about it at length with my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) and my right hon. Friend the Member for Exeter (Mr Bradshaw), who are particularly exercised by the lack of progress on the Walker review—an issue to which I will return—and by the continued suffering of their constituents, particularly the poorest ones.

It would be wrong of me not to pay tribute to the outstanding work of Linda Gilroy, who did a huge amount of work in ensuring that the previous Parliament was aware of and understood these issues, and any future progress will necessarily be down in part to the remarkable effort that she expended.

[Andrew George]

It is worth ensuring that that commendation for the work done by the former hon. Member, Linda Gilroy, has cross-party support. As a fellow officer of the all-party group on water, I know that her commitment and involvement took the campaign a great deal further than it would have gone otherwise. Her work certainly should be commended, and the Minister will no doubt recognise that, too.

[Mr Reed]

I thank the hon. Gentleman for those remarks. With his typical generosity, he demonstrates that a solution can be found on a cross-party basis.

As somebody who is closely associated with my own region, the north-west, I understand how Members of Parliament can form a regional identity and share concerns across party lines about issues that are of outstanding regional importance, as water is in the south-west. I also understand how politicians from other regions who pontificate about regional issues, where those almost certainly require national solutions, can quickly arouse suspicions among MPs from the region in question. As a Member of Parliament from Cumbria, which is surrounded by the Irish sea and the Cumbrian fells, which is partly within the Lake district, which is sparsely populated, where tourism is incredibly important and where water and sewerage bills have risen exponentially since 1989 to become the highest outside the south-west, I understand.

The average annual bill for water and sewerage services in the south-west has risen by 72.2% between 1989 and 2010-11—the highest increase in the country. As my hon. Friend the Member for Plymouth, Moor View stated in her Adjournment debate last year:

“The problem we face is simple: water rates in the south-west are 25% higher than the UK average, placing an unfair burden on…my constituents and all residents across the south-west of England.”—[Official Report, 14 June 2010; Vol. 511, c. 710.]

The average bill for South West Water customers is significantly higher for 2010-11 than elsewhere in the country, at £486, as opposed to a national average of £339, as I think has been mentioned. In addition, unmetered customers also face much higher bills, with an average of £721 for South West Water consumers, as opposed to a national average of £394.

As has been roundly discussed, that does not happen by accident. The widely condemned Thatcher privatisation of the water industry in the 1980s led directly to many of the problems that we face today, but the south-west’s significant demographic and economic characteristics reinforce the problems associated with high bills. They must be understood in an integrated way. They cannot be considered in isolation. As has been touched on, 22% of South West Water customers are pensioners, although being a pensioner should not be used as a blanket term to denote people living in financial hardship; many hon. Members would share that view. In addition, I think that it has been proved that lone parents have more affordability problems than single pensioners. The percentage of lone parents in the south-west is at the national average.

An extremely high proportion of the population live in sparsely populated rural areas—something that I am familiar with. That makes service provision more expensive and diminishes economies of scale. The policy solutions should address the problems that are faced today. The fact that housing affordability issues are the most acute in the UK outside London should be considered. As has been alluded to, the region is the UK’s top tourist destination. The population rises more than by 25% in peak tourist weeks, with the result that the demand for water is a third higher than for the year as a whole.

I understand that South West Water understands those issues, and it should be commended, as it has been, in part, by hon. Members on both sides of the Chamber, for investing more that £1.5 billion in the clean sweep programme, which has done so much to transform sewage treatment and the natural environment. However, bills for consumers in the south-west are now 25% higher than those in the rest of the country, and for the most vulnerable in the south-west community—those struggling alone on a pension, lone parents trying to raise their families and single people living in rented accommodation—water bills present a struggle. It has been estimated that their bills can take 10% of their incomes. Surely, that cannot be acceptable. I pay tribute to the Consumer Council for Water for the work that it has done and continues to do in trying to influence prices for consumers not only in the south-west but throughout the country.

We can talk at some other stage—I have no doubt that we will—about the current economic situation, its causes and its potential remedies, but it is certain that the people in our society who will feel the effects of the recession the most, and who will without doubt feel the brunt of the Government’s cuts the most, will be those who already suffer the most from rising water charges, by comparison with other consumers. It cannot be right for up to 10% of their incomes to go on purchasing what is a basic entitlement—a right—while food and fuel costs are rising, the Government have raised VAT to 20%, unemployment is rising and job insecurity is everywhere. Action must be taken sooner rather than later.

The issues associated with water and sewerage charging in the south-west are difficult. The hon. Member for Torbay called them intractable. The Minister knows that they are difficult and has said as much in this place and to the Select Committee on a number of occasions. He understands the difficulties of the decisions and recognises the difficulty for many people who face such water charges. I believe that the Minister wants to do the right thing, but wanting to do the right thing and doing it are very far away from each other. Intentions count for little. The difference between intention and action is the same as the difference between night and day. It is difficult for DEFRA Ministers, as the Secretary of State hovers around the exit door to get things done, and the Department risks becoming inert, like many others in Whitehall, as sackings loom and the near 30% departmental cut begins to bite, but a lot of the heavy work on this issue has already been done, in the form of the Walker and Cave reviews.

The Government announced in August 2010 that they would review the regulation of the water industry to assess whether the current framework, including Ofwat’s statutory duties, remained fit for purpose. Does the Minister believe that Ofwat is fit for purpose, and if not, why not? The industry review is also meant to assess how well Ofwat translates guidance from the Government and its statutory duties into its decision making. With that in mind, did the Government give any advice to Ofwat with regard to water pricing in the south-west before Ofwat set the price for the region for this financial year? Did the Government give any guidance to Ofwat about the problems being faced by south-west customers before the latest price rise was announced? Inflation is currently 4.7%, yet Ofwat’s allowed increase for South West Water customers averages at 5.1%. Have the Government discussed that with Ofwat at any stage, before or after the announcement, and is the Minister happy with that level?

I understand that the water review will directly inform the Government’s White Paper, to be published in June. Will the Minister confirm that the White Paper will be published no later than June? He will understand that it needs the fullest parliamentary scrutiny if it is to command broad support. The fundamental question is whether, almost a year after taking office, the Minister can explain what is halting the implementation of the Walker review. It was a superb piece of work that commanded support from hon. Members on both sides of the House and that held within it, as has been mentioned, many potential remedies to the problems of the south-west and South West Water consumers.

Will the Minister today give hon. Members a categorical assurance of a commitment in principle by the Government to implementation of the Walker findings and to a timetable for implementation? That is not much to ask. Further, will he confirm that the reduced capacity of DEFRA has in no way affected the implementation of the Walker recommendations? Will he also address fears that the Government’s review and the production of its White Paper have prohibited the implementation of Walker thus far? There are fears, which so far are justifiable, that the Government are backtracking on Walker. In the words of the American gospel hymn, “How long, O Lord, how long?”

Finally, the Chartered Institute of Environmental Health has defined water poverty as beginning when a household’s water bill equates to more that 3% of its income after tax. As we have heard, in the south-west, some households pay in the region of 10% of their income on water bills. Does the Minister know what percentage of people living in the south-west live in water poverty? Will he undertake to publish an assessment of how many people are living in water poverty by region and by constituency, and ensure that his White Paper will contain measures with which to eradicate water poverty? I believe that there is much common ground on which we can build.

15:27

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

It is a great pleasure to serve under your watchful eye today, Mr Amess. I congratulate my hon. Friend the Member for Torbay (Mr Sanders) on securing this important debate. I also congratulate him on his long association with this issue and on standing up for his constituents, like so many other hon. Members, of all parties, this afternoon.

My hon. Friend raised several issues, but a key point was about the role of Ofwat. Other hon. Members, not least the Opposition spokesman, mentioned its role, and it is important to understand how it operates. I am surprised that the hon. Member for Copeland (Mr Reed) has not quite grasped the fact that it is an independent body. It would be entirely wrong of me, as the Minister, to try to influence its approach to its independent role, which is written in statute. That is not to say that we are sitting back and allowing the status quo to go on existing. We are testing, deeply and in great detail, whether Ofwat is fit for purpose and in a suitable condition to go to the next phase. Twenty years after privatisation, it is right for us to examine all aspects of the water industry.

David Gray, a highly respected individual who has great experience in the regulatory world, is carrying out a detailed review. I urge the hon. Member for Copeland and all those who are interested in this fascinating subject to understand the review that is taking place, and the role that Ofwat plays. I am determined that the constituents about whom so many hon. Members have spoken so movingly should be at the forefront of our minds while we consider the issues in question. Ofwat has an important duty to protect and stand up for them, independently of the Government. When the Government get things wrong Ofwat has a duty to tell them so. It also has a duty to ensure that the water companies, which have monopoly interests, are responsible to the people concerned. I take that duty very seriously.

The hon. Member for Plymouth, Moor View (Alison Seabeck), who is no longer here, made a point about water poverty. My hon. Friend the Member for Torbay and others mentioned that there might be some people in the House—I am yet to meet them—who believe that the south-west is full of comfortable people who have moved there in retirement and are relatively wealthy. I know that, largely, the opposite of that is true and that many people and communities suffer high degrees of deprivation. Of course, there are wealthier communities. However, if people assume that any community in the south-west can take such a water bill increase because there is no poverty, they make a fundamental error. That is something I take very seriously.

Yes, I speak to people from the south-west, and, yes, I will listen. That point was raised by my hon. Friend the Member for Totnes (Dr Wollaston). I have listened and will continue to listen to people in the area. I know what an important issue this is and that it is a political as well as a social issue. The matter is fundamental to the concerns that hon. Members have voiced for much too long. I recognise that we must come forward with solutions and, in a moment, I shall talk about how we will achieve that.

I hope that I can address some of the other issues during my remarks and, of course, I remain willing to deal with them. A point was made about the adoption of private sewers. I cannot say precisely when we will introduce proposals on that, but the coalition has a very clear commitment to dealing with that important issue and to ensuring that we do so as equitably as possible. The hon. Member for St Ives (Andrew George) also has a long background in talking about the subject, and I appreciate the support, the many conversations that we have had and the assistance that he has given me on the matter. I accept his point about a default position, and I will follow that up with South West Water and continue to have conversations with him.

My hon. Friend the Member for Camborne and Redruth (George Eustice) has provided me with an interesting idea. I can tell him that officials are crunching his numbers as we speak and that he has contributed some thoughtful suggestions. At this stage, I cannot say how we will take that forward, but I will keep in touch with him. In passing, comments have been made about privatisation. All I shall say is that £90 billion has been invested in the water industry, which is a considerable achievement, and that other Governments have had endless opportunities to reverse what happened 20 years ago. I recognise the very real belief in the south-west that, in the case of that area, not enough thought was given. I will address some of those points, too.

First, I shall discuss the specific issue at hand. Ofwat has announced that average bills for household customers of South West Water in the coming year will increase from £486 to £517, which is an increase of 5.1%. Nearly all that increase is due to inflation, as water bill increases are linked to inflation.

[Dr Wollaston]

May I raise the point that the accepted figure is 8.1% because the figure that the Minister quotes assumes that people will be switching to water meters?

[Richard Benyon]

My understanding is that that is the figure over the piece. However, I am happy to look into that and give my hon. Friend an absolutely clear and unequivocal answer, because it is important that we know that figure. In her earlier remarks, I think she raised the point about why we use the retail prices index rather than the consumer prices index. [Interruption.] Sorry it was not her; it was my hon. Friend the Member for Torbay. Bills have been tied to inflation since privatisation because, when inflation is higher, water companies’ costs increase. As is the case with other regulators, Ofwat uses RPI. Although RPI was higher than CPI this year, it was actually lower than CPI when last year’s bills were calculated, so average bills that year were lower. We can argue about percentage points, but that is an important factor. Let us take that matter forward in our consultation, which I will come to in a moment.

I am acutely aware that nobody wants to see higher bills, particularly in these tough economic times. However, we should not lose sight of the fact that the money raised will pay for £159 million of investment in the region during the next financial year, which will benefit customers. I know that that sounds trite, and I am not diminishing the effect of the increase, but we must recognise that there are also benefits, including £14 million to improve tap water quality, £10 million to repair crumbling sewers and £28 million to further reduce pollution incidents.

[Mr Bradshaw]

Given the severe squeeze on family incomes, would it not have been better for South West Water to have delayed some of that expensive investment and to have frozen the rise? The Minister seems to be giving the impression that the Government do not bear any responsibility for inflation, but it is, of course, his Government who have let inflation rip.

[Richard Benyon]

I chose to ignore the right hon. Gentleman’s earlier remarks about the Government being responsible for the rise in inflation at a time when commodity prices and oil prices are rising. He only has to read the newspapers to see what is happening to food prices and how that is being influenced by so many other different factors. I think I shall move on, because I simply do not accept his point.

[Mr Bradshaw]

Why is inflation in Britain more than twice as high as it is in Germany?

[Richard Benyon]

We could debate that at great length and talk about our reliance on oil, how that might differ from other countries, where we were working from a year ago and the impact of the previous Government’s activities, of whom he was a part. I will be happy to have that debate at another time but, at the moment, I want to talk about the right hon. Gentleman’s constituents and the impact of the increase in water bills. I also want to talk about the actions that are in my power to take to improve that. I am happy to take any interventions that he may wish to make on that.

We have been carefully considering Ofwat’s final advice in relation to the south-west, which I only received in January. These are difficult issues, and, as has been said, there are no simple solutions. It is essential to ensure that our proposals are workable, fair and affordable, particularly in the current economic climate. We hope to issue our consultation on the Walker review soon, but it is essential that we get this right.

Hon. Members have discussed the differential between metered and unmetered bills. The average bill for a metered household in the south-west is around £400, while the average bill for an unmetered household is around £720. Hon. Members have given examples where both types of bill are considerably higher than those averages. That is because—as we have heard—70% of households in the south-west are metered. Average metered and unmetered bills reflect the estimated water consumption between those households. Unmetered households pay more, because, on average, they use more water than metered households. As hon. Members are aware from previous debates, bills vary between companies. That reflects the cost of providing water and sewerage services in an environmentally sustainable way in different regions with different circumstances.

In all cases, Ofwat—as the independent economic regulator of the water industry—ensures that bills are no higher than they need to be to finance the investment required to provide water and sewerage services. My hon. Friend the Member for Totnes and others have discussed how unfair it is that 3% of the population pay to clean up 30% of the coastline, and I know that that is the prevailing view in the south-west. The Walker review looked closely at whether environmental improvements are public or private goods and who should pay for them. Anna Walker concluded that spending on environmental improvements, such as cleaner beaches, is largely required to make sure that the disposal of sewage does not harm the local environment and that the benefits are mainly local. In particular, having a sewage system and beautiful clean beaches delivers huge benefits to the region through tourism. I know that there are many people—I am one of them—who enjoy the beaches and the coastline, but who do not pay those bills. The complication of trying to devise a scheme where we can hypothecate is something that not just I, but my predecessors and many others in this House, have sought to tackle.

Support is available now for low-income and vulnerable households. Currently, the national WaterSure tariff caps the bills of qualifying households at the average metered bill for their company. Households qualify for WaterSure if they are metered and in receipt of means-tested benefits, and either have three or more children living at home under the age of 19, or someone in the household who has a medical condition that necessitates a high use of water.

Individual cases were raised today. As they were described to me, those people should qualify, but are not receiving WaterSure. I want to take those cases up. My hon. Friend the Member for Totnes raised a case about a multiple sclerosis sufferer. I would like to know whether multiple sclerosis has an increased water requirement, and why that case is not covered by WaterSure. That is something that we may have to look at through the consultation that we are about to undertake.

WaterSure ensures that such households do not cut back on their essential use of water due to fears about the size of their bill. This year, some 31,200 households are benefiting from WaterSure and approximately one in three of those households live in the south-west. We are looking at whether WaterSure should offer a more generous cap, which could cap bills at the lower of the national average metered bill, or the company average metered bill, as recommended by Anna Walker. That would deliver substantially lower bills for those households that live in high-cost areas. We are also looking at whether it would be more fair to share the cost of WaterSure across customers in England, rather than fund WaterSure at the company-specific level. We will be inviting views on that when we publish our Walker consultation.

Some have asked why the Government have not made those changes already. We have been considering them alongside Ofwat’s advice on tackling the problem of high water bills in the south-west. I received Ofwat’s final advice only in January. I am sure that hon. Members agree with me that we must ensure that our proposals are workable, fair and have the support of interested parties. I am determined, as I have said frequently—I make no apologies for saying it again, although I wish that we had got there by now—to get this right.

[Andrew George]

On the various alternatives, I know that each one is not easy, as the Minister has made clear. He is clearly very seized of the challenges of coming to an equitable solution. Does he not agree with me that in having a solution that is simply within the company itself—a social tariff within the company boundaries—there would be inevitable unfairness, wherever the line was drawn? People on moderate incomes, who would have difficulty paying the bill, would be subsidising other people in the same company area, when they are already suffering from very high water bills.

[Richard Benyon]

I entirely accept what my hon. Friend has said, which is why I am sure that in the south-west it would be more popular for us to use the national average, which is one of the suggestions that we will be taking forward.

We have started to prepare our guidance on company social tariffs under section 44 of the Flood and Water Management Act 2010, which will enable companies to introduce social tariffs within their own areas to help households that would otherwise struggle to pay their bills in full. We hope to issue our guidance in the autumn, so that companies can consider it ahead of the 2012-13 financial year. Indeed, this afternoon the Department for Environment, Food and Rural Affairs is hosting a discussion with water companies and others to exchange views on what the guidance needs to cover. South West Water is participating in that discussion. I understand that it is very keen on the possibility of bringing forward a company social tariff. It has indicated to me that changes to how it levies sewerage charges could potentially raise about £7.5 million per annum to fund a company social tariff without adding a penny to household bills. That would potentially reduce the bills of 100,000 households in the south-west by about £75 per annum. I strongly encourage the company to look favourably at that possibility.

The hon. Member for Copeland asked when we are going to implement the Walker review. The Walker review identified a number of options. Implementing the review would involve implementing all those options, some of which were more-or-less dismissed by Anna Walker herself. She did, however, identify a number of options that would help to address the problems associated with high water bills in the south-west, in addition to proposed changes to WaterSure. Ofwat has been exploring those options, and we are currently considering the information that it has provided. Some options could potentially benefit all households in the south-west, and not just those on low incomes, which should address some of the comments that have been made today. Options include a one-off, or annual, adjustment funded by the Government, an annual adjustment funded by water customers nationally, a range of tariff options, rebalancing charges and the sale of surplus water. Decisions will be taken imminently, and we will set out our proposals for the south-west in our Walker consultation.

I recently received Ofwat’s final recommendations. I can address the concerns raised by the hon. Member for Copeland and others by saying that we will be taking those forward very soon. I should also mention some of the initiatives that South West Water is taking. Since 2007, its WaterCare scheme has helped households in debt by offering them a benefit and a water tariff check including, if appropriate, a meter. Metered customers also receive a free home water audit and simple low-tech water-saving devices. I have seen those schemes in operation, and they are successful in reducing the amount of water that households use, with minimal impact on their lives. In fact, in some cases there is an improvement, and I applaud any roll-out of such schemes.

South West Water recently announced that it is enhancing its current WaterCare scheme to WaterCare Plus. That will include home energy audits and advice on claiming grants. In addition, in the coming year, it is investing £1 million in its FreshStart programme to offer advice to customers with general debt problems. Both the WaterCare Plus and FreshStart schemes are fully funded by South West Water and do not impact on customer bills. The company will also be making free water-saving packs available to its customers, and it will be promoting them through the local media this month and next. I very much welcome and support those initiatives.

Metering offers an opportunity for some households to save money. Ofwat estimates that three in 10 single pensioners, working-age adults who live alone and, to a lesser degree, pensioner couples in the south-west are currently unmetered and could expect to see their bills go down, if they were metered. South West Water has already undertaken two advertising campaigns—in Plymouth, and in Exeter and Torbay—aimed at encouraging low-income unmetered households to look at whether a meter can reduce their bills. I believe that more can be done to build on that. For example, all unmetered households can investigate whether a meter can save them money by using the Consumer Council for Water’s water meter calculator, which is available at the Consumer Council for Water’s website.

May I reiterate to my hon. Friend the Member for Torbay, who secured the debate, and to other hon. Members for whom the issue is of great concern to them and their constituents, that the Government are very aware of the problem of high water charges in the south-west? Support is already available to help the vulnerable and low-income households with their bills. We will build on that, and our Walker consultation will point the way forward. I hope that hon. Members will bear with me for just a little while longer. I will, of course, be happy to meet any hon. Members with constituencies in the south-west to discuss this and to ensure that they have the understanding that they need to communicate our consultation, when we bring it out. I again commend my hon. Friend the Member for Torbay for bringing this matter to the Chamber today.

[Mr David Amess (in the Chair)]

Order. If no other hon. Members want to contribute to this debate, the sitting is suspended until the Minister arrives for the next debate.

15:50

Sitting suspended.

Animal Welfare

Wednesday 9th March 2011 Westminster Hall

15:57

[George Eustice (Camborne and Redruth) (Con)]

It is a pleasure to serve under your chairmanship, Mr Amess, for this debate on animal welfare and trade negotiations.

The importance that we place on the welfare of other animal species on the planet is a measure of how civilised our society is. We all know that animals feel pain and fear. They have maternal instincts. Anyone who has ever had a dog knows that they can even feel emotions such as loneliness and jealousy. How we treat sentient animals that are raised in captivity for food really does matter and says something about us as a society.

Animal welfare is an area in which legislators should be prepared to take action. The truth is that the public care deeply about the welfare of animals, but the paradox is that in a modern, sophisticated society, people are often separated from farming practices and the slaughter of the animals that they consume. There is therefore a danger that the human conscience of consumers ends up being dissipated by the simple fact that, for the majority of people, farming and slaughter processes are, frankly, out of sight and out of mind. The only way to bridge the gap between the empathy that people might feel for animals and the information that they have about farming is by legislators exercising judgment and implementing laws that recognise the ethical dimension of how we produce our food.

There is another element to this. Farming is sometimes described as an industry, but I would say that it is not like any other industry—it is unique. It is not just about churning out a product for consumption at a given unit price. Farming is intrinsically linked to life itself and entwined with the environment, of which humans are just one part. If we take the special nature of farming for granted, we end up in trouble with animal health problems, disease and even human health problems. In recent decades, that is exactly what has happened. Consideration of animal welfare standards has been trumped by an apparently more important theory about free trade. That is wrong.

I am a Conservative, and no one believes in the concept of free trade more than I do, but even I can see that the concept of free trade is frankly a lower order consideration when compared with more fundamental issues such as animal welfare and the health of our environment. All too often in recent decades, moves to take a lead and to improve animal welfare standards at home end up being stopped in their tracks by the threat that we will merely export our industry to countries that have even lower welfare standards. That fear is entirely justified.

When the UK unilaterally banned sow stalls for pig production, our industry lost out to that in other countries where pigs were treated less well. The concern that our farmers will lose out as a result of improved welfare legislation means that the policy response has typically been to trim our ambitions and to stifle our consciences, because the theory of unfettered free trade has been considered to be a concept that is beyond challenge in any circumstances, and seen as a principle that trumps concerns such as animal welfare.

It is time to challenge that muddled thinking. A civilised society should have a system that encourages competition to raise animal welfare standards, not to lower them. We should not jeopardise our farming industry simply because of some arbitrary rules set down many years ago in the general agreement on tariffs and trade and since enforced by the World Trade Organisation. I shall return later to some of the relevant articles in GATT, because I shall argue that many of the provisions to recognise animal welfare standards in the world trade system already exist, but we have not been good enough at taking them up.

First, I shall speak about the coalition Government’s position, and that of the Conservative party. Just a year ago, in February 2010, the Conservative party published a very good document, “A New Age of Agriculture”, which was our agenda for British farming. The section on animal health and welfare contained an explicit commitment:

“We will promote animal welfare at an international level and work towards the inclusion of production standards in WTO negotiations.”

That could not be more unequivocal or clear, but I decided a couple of months ago to follow it up and to see what progress there had been in making the case to the WTO and internationally for the changes. I tabled a parliamentary question asking what discussions had taken place on this important issue. The response was:

“None. The World Trade Organisation’s…Sanitary and Phytosanitary Agreement only allows controls on food safety, plant and animal health grounds. While we are totally committed to improving animal welfare standards the situation is that unanimous agreement of the WTO’s membership would be needed to change this to include production standards such as those relating to animal welfare. Such agreement is unlikely to be forthcoming because many of the WTO’s members would regard such standards as likely to facilitate protectionism rather than trade.”—[Official Report, 2 December 2010; Vol. 519, c. 957W.]

What I really want to know from the Minister is whether that represents a change in the Government’s position, and if so did the coalition require that? I would find that surprising. The Conservative party has its differences with the Liberal Democrats, but I would have thought that Liberal Democrats cared about such issues as much as we do. I wonder whether it is simply that the Department has other priorities and has not yet managed to put the matter back on the agenda. I would like some clarity on that from the Minister.

Returning to GATT and the WTO, I want to say a little about how we can get from A to B—from wringing our hands about the problems of animal welfare and how we improve it within the WTO system to being able to implement and obtain agreement. I am conscious that it is easy for people to say, “Oh well, it’s impossible to achieve change because of the difficulty of getting worldwide agreement.” The WTO is undoubtedly reluctant to recognise what are described as process and production methods—PPMs—when dealing with world trade disputes. As I said earlier, farming is unique and unlike any other industry. That is why we must ensure that the WTO opens its eyes to those wider considerations and takes a look at issues such as animal welfare. The truth is that the provisions to do that already exist in GATT. All we need is the confidence to get on and implement them effectively.

First, article XX makes it absolutely clear that animal health is a legitimate factor to be considered in trade negotiations, but the European Union has been weak in arguing that. It states that

“nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:

(a)        necessary to protect public morals;

(b)        necessary to protect human, animal or plant life or health”.

We should be arguing that the health of an animal is intrinsically linked to its welfare, and that under article XX that should be a legitimate consideration that is factored into trade negotiations.

Secondly, article III is also relevant to the issue. It deals with regulations within countries and says that there should be equal treatment for like products. It states:

“The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin”.

The debate is about the definition of “like products”. All too often in the recent past, people have said that a chicken is a chicken regardless of how it is produced. That is simply not the case. In the egg industry, it is recognised clearly that the method of production counts and that eggs are not all alike: all eggs sold in the UK must have a number from 1 to 4 to designate whether they were produced in cages, or are barn eggs, free range eggs or organic eggs.

The Minister will be aware that there is much discussion in the poultry industry about the danger that the new EU legislation being introduced to improve conditions for cage-reared birds may be implemented disproportionately. It may be implemented properly in the UK, but not elsewhere in countries such as Poland. That is causing a lot of concern in the poultry sector, and I understand that the Government may even be considering banning eggs from EU countries where they have not been produced to the new legally required minimum standard.

What an upside down world it is when we argue that it is okay to ban products that do not match our legal standards in the EU, where we supposedly have a single market and are all part of one happy family, but that adopting similar measures and a similar stance as countries outside the EU is considered to be a bridge too far and a step that simply cannot be taken, although the methods of production would be illegal in the UK. Clearly, something has gone wrong. When it comes to agriculture, we must be very clear that a “like” product must mean a product produced to the same standard of animal welfare. The principle that we have established in the egg industry, for example, should be applied to all meat products.

Before concluding, I want say a little about labelling and consumer choice. We have got ourselves into a bit of a muddle in some areas. We sometimes apply asymmetric legislation to farmers, and then tell them to compensate for those new laws by trying to command a premium in the market, to have better labelling and to try to obtain a higher price for their product. I think that is a cop-out because an important principle is involved. If a farmer makes the conscious choice to adopt farming practices such as organic farming, which go well beyond the legal minimum required, he does so voluntarily and having made a judgment that he will be able to command a premium in the market. However, if that farmer is forced by law to improve animal welfare standards, the responsibility is on legislators to ensure that he is not exposed to unfair competition due to others using practices that would be illegal in this country. Otherwise, we simply export cruelty abroad, and no one wants that.

My second point about consumer demand is that, notwithstanding my earlier argument about farming practices and slaughterhouses being remote from modern, sophisticated societies, in recent years there has been a sharp increase in demand for ethically produced food. There has been a huge growth in demand for free range eggs and other organic foods. Some argue that that is the solution, and that it is evidence that we do not need to change the rules of the World Trade Organisation, but I think it proves something different. If consumers are willing to recognise that there is a difference between products based on how they are produced, why cannot legislators recognise the same? During one test case at the WTO, it was held that

“differing consumer tastes and habits”

was a legitimate and relevant factor in determining whether products were, or were not, alike. The fact that consumers distinguish between food products based on the system of production strengthens the case for the Government to argue under article III that we should recognise higher animal welfare standards. Food produced to such standards is not like food that has had a lower level of production.

To conclude, it is time to modernise the World Trade Organisation and the world trade system generally. We should give nation states the right to safeguard their markets against imports produced in third countries to less civilised standards. We should not be asking the World Trade Organisation how to interpret articles III and XX, we should be telling it. Some say that such an approach risks protectionism and would undermine the interests of developing countries, but that claim does not stand up to scrutiny. It does not follow that welfare standards are lower in developing countries. Indeed, some of the worst excesses of the industrialisation of agriculture and factory farming tend to be associated with developed—not developing—countries. In many cases, developing countries pursue less intensive and more traditional farming practices that are better for animal welfare. Quite often, production processes in those countries are already informally regulated by large retailers in the UK who often insist that food produced in developing countries is produced to the same welfare standards as in the UK.

In truth, the latest Doha round of the World Trade Organisation has been stalled for several years. Rather than leave those negotiations in limbo, bogged down and making no progress, why should we not be realists and reconcile ourselves to the fact that, for all the reasons that I have identified, farming—especially livestock farming—is a special industry and a special case? That would free up the position as far as negotiations on other products and industries are concerned.

Requiring all exported meat to be produced at least to the same standards of the country to which it is destined is less radical than it sounds, and it could have a huge impact on our culture and on attitudes towards animal welfare. I hope that the Minister will take some of those points on board.

16:14

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

I congratulate my hon. Friend the Member for Camborne and Redruth (George Eustice) on securing this debate, and I am sorry that it is only a short Adjournment debate. The issues that he raises go to the heart of things that the Government and I hold dear. He started by reminding me of what I wrote in the Conservative document on agricultural policy about a year ago, and I do not resile from those objectives. I want to explain to the House what we are doing and how we are trying to take forward the objectives that we share. As part of the business plan for the Department for Environment, Food and Rural Affairs, we want to support and develop British farming, encourage sustainable food production and improve standards of animal welfare.

The previous Government’s Animal Welfare Act 2006, which had cross-party support, makes it an offence to cause unnecessary suffering to any animal and contains a duty of care and the five freedoms and so on. The 1999 treaty of Amsterdam requires the Commission and member states to consider animals as sentient beings. I was a Member at that time and know that that was seen as a significant step forward, and it was later reinforced by the Lisbon treaty. Therefore, a large body of EU legislation improves animal welfare. As my hon. Friend said, we have experience in this country of taking unilateral action for the most noble of motives, such as improving the welfare of pigs. I am thinking of pig stalls and tethers, but that action had a catastrophic effect on the pig industry in this country, and there was probably no substantial gain in pig welfare.

My hon. Friend referred to a chicken being a chicken. I was going to relate that not to production in the way that he described, but to concern for animal welfare. It may salve our consciences to raise standards of animal welfare in this country and not care about the rest of the world, but if that means that we simply export those lower standards of animal welfare, it is not a case of a chicken being a chicken—the chicken in England has moved to being a chicken in another country kept at a much lower standard. There is a tremendous amount to be said for doing our best to raise standards across the piece, not just unilaterally, and that is important.

My hon. Friend referred to the directive on caged hens, and I do not want to be led at this stage to say what we might do in this country if the situation does not improve. We have strongly emphasised our views to the Commission, and we believe that the matter must be dealt with at European level. It is abundantly clear that a number of European countries will not have complied by the end of the year with the requirement to replace all their conventional battery cages. Sadly, the Commission seems to suffer from the illusion that that is still possible, but I assure my hon. Friend that the Secretary of State publicly stated in an Agriculture Council meeting a fortnight ago that we are not prepared to contemplate any extension of the time scale, that the measure must work and that the deadline should not be delayed.

My hon. Friend also referred to competitiveness, which is what we saw in the pig industry. Extra costs can be involved in higher welfare standards, and the European Commission—thankfully—now considers international competitiveness as part of the impact assessment of new policies.

My hon. Friend made a significant point about the World Trade Organisation. What I said in the written answer to which he referred is factually correct. As we see it, the WTO does not allow measures to be taken to ban imports on the grounds of animal welfare. It is, of course, wide open to any member of the WTO—or in our case, the EU—to impose a ban on whatever it likes. However, that would be done in the knowledge that the ban might be challenged and various trade measures taken to deal with that.

My hon. Friend referred to the fact that the Doha round is in a complete state of stagnation. My colleagues in the Foreign Office and the Department for Business, Innovation and Skills are anxious to get those negotiations back on track, but that will take time. That is the reason for the perhaps somewhat terse written answer that I gave my hon. Friend. While all eyes are on Doha, we cannot start changing the very framework of the WTO.

I shall now deal with the specifics about the WTO, the general agreement on tariffs and trade and various other global agreements to which my hon. Friend rightly referred. He referred to article XX of GATT and read out the relevant justifications: protecting public morals and protecting human, animal or plant life or health. Another justification is conserving exhaustible natural resources. Whether animal welfare could come under any of those headings is, frankly, untested, and I fully understand his desire that we should seek to test that.

It is worth making the point that certain measures have been taken internationally. In some cases, they have been contested. They do not relate directly to farmed animals, at least not in the UK. My hon. Friend will be aware of the seal trade ban—the ban on products from sealing. The European Commission banned them and used the justification of a distortion of trade, but I stress that that is being challenged under the GATT treaty. There is a serious risk that the WTO court will find against it.

The Commission also imposed a ban on importing cat and dog fur, which came mainly from China. That was also done on the basis of distortion of trade. It has not been challenged, although it may be in the future, so one could argue at the moment that we have got away with it. A longer-standing ban, which the previous Conservative Government pressed hard for back in 1991, is the EU prohibition on furs and pelts—primarily from Canada—harvested by using leg traps. That has never been challenged.

I am giving my hon. Friend some encouragement that some ways through this issue have been found, but those are not mainstream agricultural issues, as I am the first to recognise. I fully agree that, in an ideal world, we would get this issue considered at WTO level.

I want to pick up some other comments and then, if there is time, I might return to one or two other aspects of the WTO. My hon. Friend referred to the sanitary and phytosanitary rules, known as the SPS rules. To refer to an issue that is closer to home, Europe has banned the use of hormones in beef production on the basis that we believe that there are public health risks in not doing so. However, the United States has challenged us, and the matter is progressing through the judicial process at the moment.

Again, we have a problem there and we have to think through carefully what we do, but we can do other things in the immediate term. I do not think that even my hon. Friend would expect us to get the WTO rules changed very quickly, and I want to spend a few moments on that. The first point to impress on people is that improving animal welfare standards can benefit producers, because quite often they get higher productivity from animals if they are kept in better conditions, although some costs can be involved.

The second issue, to which my hon. Friend rightly referred, is the role of what are sometimes called private standards—the role of the retailers in demanding higher standards. That has been very successful across the world in raising production standards. There is some evidence, as we might expect, that when the cash figures go the wrong way, retailers turn round. This example is directly pertinent to a point that my hon. Friend made. I was very concerned to hear only last week that one of our major retailers that until now has been sourcing all its organic pig meat from the UK—that meat is certified to Soil Association standards—has now decided to stop doing that and to source organic pig meat from abroad. That meat is up to European organic standards, but they are not as high as the Soil Association ones. If what I have said proves to be correct, it is a pretty shameful approach and does not show much support for our own industry.

My hon. Friend made the point, which I have to repeat, that many people and organisations see welfare restrictions as some sort of ban on trade. The same can apply to the private standards to which I referred. The EU made a commitment to support international initiatives to raise awareness and to create a consensus on animal welfare through its action plan for the period from 2006 to 2010, and we want that to be continued through the strategy for the period from 2011 to 2015.

It is fair to say that animal welfare has not been a major priority for many Governments in recent years, either because they have believed that it is a trade issue and market forces will work, as my hon. Friend described, or perhaps because the alleviation of human poverty has been the predominant concern. However, we are making progress. The EU has recognised that the first step in getting third countries fully engaged in the development of animal welfare standards is to create a wider understanding and awareness of animal welfare, including among Government officials and the exporters. A conference on global trade and animal welfare was organised by the Commission in 2009.

We also have to recognise the OIE—the World Organisation for Animal Health—with which the Commission is working closely. The OIE was created a long time ago, in 1924, and has 178 member countries. However, it began getting involved in animal welfare only in 2001. By the end of 2004, it had developed guiding principles for animal welfare, and it held a conference in 2008 with more than 400 participants. The most important outcome of the conference was the identification of key needs and the tools necessary to help OIE member states to strengthen their capacities, including in relation to good governance and relevant infrastructure. The world assembly of OIE delegates has adopted seven animal welfare standards. Therefore, there is clear evidence that most of the world is moving in the right direction. I hope that my hon. Friend will take a lot of comfort from that. On-farm animal welfare issues are now beginning to be addressed by the OIE, but that will take a bit longer. I cannot get away from that.

None of that prevents higher standards through bilateral agreements. The EU is now emphasising that. Since 2004, we have addressed animal welfare specifically in a number of trade agreements with Canada, South Korea, Colombia, Peru and central American countries. I understand that it is also part of the negotiations with the Mercosur countries that are taking place at present. That work is clearly a step in the right direction.

My Department is working hard to provide training in welfare science and legislation to the veterinary services and non-governmental organisations in a number of countries. We have made a significant contribution to the EU Better Training for Safer Food programme and on welfare-during-transport training for veterinarians. Of course, we also continue to invest in research, because that is hugely important.

My hon. Friend and I are in exactly the same place on this issue. There may be a slight variation in nuance on precisely how we go forward. However, the Government remain determined to do whatever we can to increase animal welfare standards, not just at home but across the world, and to ensure that our producers are not unfairly discriminated against by imports produced to lower standards. I conclude by reminding my hon. Friend that we are also committed, in the document to which he referred, to ensuring that Government money is not spent on buying food produced to lower standards than pertain in this country, and that policy commitment will come to fruition in the next few weeks.

Health and Safety (Construction Industry)

Wednesday 9th March 2011 Westminster Hall

16:29

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

It is a pleasure, Mr Amess, to serve under your chairmanship. May I express my sincere appreciation for being given time to debate this important subject?

I wish first to express my thanks and appreciation for the helpful information and advice given to me while researching for the debate by a number of organisations—none more so than the Union of Construction, Allied Trades and Technicians, the National House-Building Council, the National Federation of Roofing Contractors and the TUC.

As the construction industry hopefully recovers, the number of fatalities and serious injuries is likely to increase—an increase in fatalities followed previous recoveries in the construction industry. The rise was the result of good practices being lost when companies were forced to lay off staff. Due to inadequate training as the industry recovers, new inexperienced companies and workers will enter the industry, and their lack of safety knowledge will often prove fatal.

The cutting of corners to get one job finished quickly in order to start the next is a major killer. Another is workers working excessive hours. Working long hours leads to tiredness, which leads to mistakes. Indeed, the Prime Minister recently said on television that he does not work long hours, because it leads to bad decisions, so we have at least one supporter.

The most common cause of death is falls. In 2009-10, 25 workers were killed through falls, a 19% increase in deaths over the previous year. The number of people being killed as a result of being hit by a moving vehicle slightly increased in 2009-10.

As part of the comprehensive spending review, the Health and Safety Executive’s budget will be cut by at least 35% by 2015. It is impossible to make such large cuts without affecting front-line services. It has already been announced that the contracts of the 20-plus temporary construction inspectors, whose contracts run out later this year, will not be replaced.

As well as the loss of temporary inspectors, there will be a reduction in the number of front-line inspectors. That is directly contrary to the Donaghy report, which recommended an increase in the number of inspectors. Cuts in the number of inspectors will inevitably lead to a reduction in inspections, enforcement activity, prohibition notices, prosecutions and convictions.

[Mr Andrew Smith (Oxford East) (Lab)]

I am grateful to my hon. Friend for giving way. I congratulate him on securing this tremendously important debate and on the research that he has done for it. On the theme of the impact of the cut in the HSE grant, has he heard of the letter that was leaked to the BBC yesterday, which said that the Health and Safety Executive was proposing to reduce unannounced workplace inspections by a third? That would be disastrous if it affected the construction industry, as workers there are six times more likely to lose their lives than those in other industries.

[Jim Sheridan]

I have not seen the letter, but I have heard of it. My right hon. Friend is correct that it would be disastrous, not only for the HSE but for workers in the construction industry. We should watch this space and see what happens.

Recent research shows that the level of enforcement activity and the number of prosecutions being undertaken by the HSE is at a record low. Due to a lack of resources, the HSE can investigate only one in every 10 accidents. Cuts to the HSE’s budget are likely to increase the under-reporting of accidents under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995, which are otherwise known as RIDDOR.

Research by the university of Liverpool shows that only 32% of injuries involving employees were reported under RIDDOR—for the self-employed, the percentage was only 12%. The proposals under consultation will weaken those regulations, which were originally proposed by the Young review. That will increase under-reporting, and, as a result, poor health and safety practices will not be picked up early, which could result in further fatalities.

There have been several notable deaths recently. The circumstances are indicative of the industry. On Friday 21 January, four construction workers were killed in Great Yarmouth. The men were working on foundations when adjacent steelwork fell on them. It was the worst accident for more than a decade, given how many workers were killed. Despite that, there was little or no mention of the accident in the national papers. In October 2010, immediately following the announcement that the HSE could lose 35% of its budget, seven construction workers were killed. The deaths occurred all around the country.

[Mr Stephen Hepburn (Jarrow) (Lab)]

I congratulate my hon. Friend on securing this important debate. He speaks about the incidence of deaths. Does he not agree that the figures will inevitably increase with the reduction in the Health and Safety Executive budget? The story that is doing the rounds at present—we should be pressing the Minister on this—is that unannounced inspections at construction sites will be scrapped altogether. There were 42 deaths on building sites last year. Does my hon. Friend agree that that figure will inevitably increase?

[Jim Sheridan]

My hon. Friend is right. It is obvious that the cuts will result in increased fatalities. I am sure that the Minister will respond to this, but it is important to remember that even though we are trying to reduce the deficit—if, indeed, it is reduced—such people will not get their lives back, and they will not get their limbs back. It is important that we try to keep focused on health and safety.

We warmly welcomed the publication in July 2009 of Rita Donaghy’s report on construction fatalities. The then Government commissioned that independent report following strong lobbying by a number of trade unions and other agencies. It was the most significant and far-reaching report into construction safety for well over a decade. The 96-page report was entitled “One Death is too Many: Inquiry into the Underlying Causes of Construction Fatal Accidents”. It made a number of major recommendations, two of which were the extension of the Gangmasters (Licensing) Act 2004 to cover the construction industry, and the introduction of statutory directors’ duties. The extension of the 2004 Act was recommended in recognition of the fact that

“The further down the subcontracting chain one goes the less secure the worker and the less satisfied with the management of health and safety on site. Society should accept that there needs to be a standard below which no construction worker should have to work.”

We have long campaigned for the introduction of statutory directors’ duties. It is virtually impossible to hold individual directors to account if a worker is killed at work. The report states:

“As with most advances in society, e.g. seat belts in cars, drink driving, there comes a time when good practice has to become a legal requirement.”

Rita Donaghy explicitly said:

“I recommend that there should be positive duties on directors to ensure good health and safety management through a framework of planning, delivering, monitoring and reviewing.”

The introduction of directors’ duties would mean that if a worker is killed and it is discovered that a company disregarded health and safety legislation, there is the possibility of an individual director receiving a custodial sentence.

The construction skills certification scheme was set up in 1995 by the construction industry to maintain a record of construction site workers who achieve, or can demonstrate that they have already attained, an agreed level of competence. The CSCS card issued to successful applicants offers a vital means by which cardholders can record and provide proof of their skills and occupational competence. Cardholders are also required to take a health and safety test relevant to their occupation. The aim of the scheme is to help the construction industry reduce accidents and improve competency and safety for individual site workers.

There are currently more than 1.6 million cardholders, and the CSCS works with 10 affiliated organisations to cover more than 350 construction-related occupations. The scheme is now widely used on the majority of construction sites, and all major contractors and homebuilders—

[Ian Lavery (Wansbeck) (Lab)]

I congratulate my hon. Friend on securing this debate. Does he not agree that there is a need to enshrine the CSCS in legislation? Such a move would surely have a huge impact on the safety and health of people working in the construction and building industries. If legislation were passed and the scheme were rolled out—it has been rolled out for 1.6 million people at this point in time—throughout the industry, does he not think that that would have a huge impact on health and safety?

[Jim Sheridan]

My hon. Friend is absolutely right. As I understand it, there will not be any major financial impact if this card is introduced. Perhaps the Minister can give us an insight into his thinking on the CSCS when he makes his reply.

All the major contractors and homebuilders insist on those cards, as the cards demonstrate their commitment to safe and efficient working for construction workers and clients. CSCS cards provide additional security and peace of mind, as a fully carded work force is safer and better trained. Government should lead by example and require the use of CSCS on all public sector sites. Indeed, they already require the use of these cards or their equivalent on public sector sites as set out in the Office of Government Commerce common minimum standards for the procurement of built environments in the public sector.

The CMS recommendations state:

“Clients are to include a contract clause requiring that all members of their supply teams who are workers on or regular visitors to a construction site are registered on the Construction Skills Certification Scheme (CSCS) or are able to prove competency in some other appropriate way.”

The CSCS welcomed these recommendations, which were accepted by the previous Administration in their response to the report. The CSCS would welcome clarification from the Government on which of the Donaghy recommendations they intend to take forward.

In a parliamentary written answer, published in December 2010, the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), said that the Government will

“therefore progress those of the Donaghy recommendations accepted by the previous Administration which we consider are supported by the available evidence.”—[Official Report, 1 December 2010; Vol. 519, c. 867W.]

In his reply, will the Minister commit to raise awareness of the need to specify CSCS in all public sector contracts? Will he say what progress has been made on the review of the OGC common minimum standards and whether the requirement to specify the use of CSCS will be retained and promoted? Which recommendations in the Donaghy report do the Government intend to take forward, and what action do they intend to take to monitor the eligibility of migrant workers to work, and their qualifications and training?

Let me touch now on the issue of blacklisting in the construction industry, which also has a major health and safety perspective. Safety representatives have been targeted by their employers, and many have had to leave the industry as they were unable to find work. Despite being the most dangerous industry in Britain, construction has the lowest number of independent safety representatives, and all the major contractors have been involved in blacklisting.

In recent years, there has been a huge increase in employment agencies and gangmasters operating in the construction industry. That has further casualised and fragmented the construction industry, which has implications for safety in a number of ways. Often there is little effective screening of workers, and inexperienced workers are placed on construction sites without the appropriate training. The workers are highly vulnerable, so they are unlikely to complain about dangerous practices. Agencies are increasingly forcing workers to pay for their own personal protective equipment, which is illegal.

Agencies often flout the working time limit of 48 hours a week. With workers undertaking excessive hours, accidents are more likely to occur.

[Ian Lavery]

Is my hon. Friend aware that there is a huge problem in the construction industry with regard to safety wear? In a meeting last week with the Health and Safety Executive, I heard about the huge problems with fake safety wear—helmets, boots and protective clothing. If that continues, we will see more problems within the industry. Does he agree that the Government should do everything in their power to uncover the source of this crooked gear and get rid of it to ensure that people in the industry are safe?

[Jim Sheridan]

My hon. Friend is right. If workers are placed in the position in which they have to choose between buying their own safety equipment or feeding their families, one knows which option they will take. The Donaghy report made the clear link between agency labour and construction safety.

Finally, let me touch on the false self-employment that is going on in the construction industry. Well in excess of 50% of the industry are falsely self-employed. The falsely self-employed do not have employment rights, so they can be sacked at a moment’s notice. They are unlikely to raise safety concerns or refuse to undertake tasks that they consider to be dangerous. Sites which use false self-employed labour are unlikely to have independent safety representatives, as no one will be willing to undertake this role in the fear of being targeted, victimised and sacked. Research has found that independent safety representatives can help to reduce accident rates by up to 30%.

In conclusion, I recommend the leaflet that was published by the all-party parliamentary group on occupational safety and health. It sets out our concerns, if those cuts were to go ahead. I certainly hope the Minister will read this document, so that we can do what we can to protect those in the workplace. Fundamentally, I believe that when someone leaves for work in the morning, they have the right to return home safe.

16:48

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I congratulate the hon. Member for Paisley and Renfrewshire North (Jim Sheridan) on securing the debate, on all the work that he does as chair of the all party parliamentary group and on the well-informed and measured way in which he has raised these issues. As he rightly said, one death is too many, which is the title of the Donaghy report. There were 42 fatalities in 2009-10 and that is not something to be proud of. I should just say that the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), who takes the lead on these matters, is on the Front Bench in the Commons responding to the Welfare Reform Bill and so I am standing in for him today. I know that he welcomes the fact that over the past decade there has been a significant improvement in the number of fatalities in the construction sector.

Let me give a feel of the progress that has been made. The reason I mention this is that if we can see that progress has been made over a decade—although that until we get to zero deaths we should not rest, and even then we should not rest—the challenge for us is to see what delivered the progress and whether we can continue doing more of those things or whether fresh duties, fresh structures and fresh obligations are the best way forward. I want, therefore, to give some figures for the record. Ten years ago, in 2000-01, there were 105 fatalities, compared with 42 last year. There are also figures relative to the scale of the industry, which obviously fluctuates. Measured relative to every 1,000 workers, in every year except one of the last 10, the rate of fatalities has fallen. The Health and Safety Executive, the trade unions and the industry deserve some credit for the improvements that have been made.

The hon. Member for Paisley and Renfrewshire North quite properly asked, “But what of the future?” He speculated that fatalities would rise. I know that the HSE will be working very hard, in partnership with industry, the trade unions and the Government, to ensure that that does not happen. However, although he rightly says that there have been construction industry inspectors at the HSE on temporary contracts, they were always intended to be on temporary contracts. This Government have not decided to make them temporary. They were always fixed-term appointments that were due to end this summer. Nevertheless, even if we exclude those inspectors, as at January 2011 we have more HSE construction division inspectors in post than ever before.

I just want to give some idea of the sorts of people that I am talking about. Currently, 150 operational inspectors visit sites on a day-to-day basis—up by nearly 25 from three years ago. There are 24 line managers who also conduct inspections. In addition, there are 16 inspectors in construction sector and policy; 20 specialist inspectors who provide expert input on the causes of accidents and advice on technical issues; and 27 visiting officers in the construction sector. As things stand, therefore, there is a very significant commitment by the HSE to the construction sector.

As with all aspects of Government, budget cuts have been required of the HSE, but I stress that the HSE will inevitably continue to concentrate its work on the highest-risk sectors—

[Ian Lavery]

Will the Minister give way?

[Steve Webb]

I hope that the hon. Gentleman will allow me to continue for a moment. As I was saying, the HSE will continue to concentrate its work on the highest-risk sectors, such as construction.

I also want to respond to the specific point made by the hon. Member for Jarrow (Mr Hepburn) in his intervention. He suggested that there might be an end to unannounced inspections in the construction sector. I am happy to confirm on the record that there is no intention to stop unannounced inspections in construction and indeed the HSE will be paying greater attention to smaller sites, where we fully recognise that there are still poorer standards. Indeed, it is on those sites that the majority of fatal accidents happen.

[Mr Andrew Smith]

Will the Minister give way?

[Steve Webb]

If the hon. Member for Paisley and Renfrewshire North is happy for me to give way, I will give way, but I have only eight minutes left to respond to his speech. I am in his hands. If he is happy for me to give way, I will give way.

[Jim Sheridan]

indicated assent.

[Steve Webb]

I will give way.

[Mr Andrew Smith]

I am grateful. I welcome the assurance from the Minister. Can he assure us that there will not be a reduction in the number of unannounced inspections?

[Steve Webb]

Obviously, the HSE will introduce its proposals for responding to the budget changes. Indeed, the Government will announce our health and safety strategy relatively shortly, in response to the Young review and other changes. Details about all those things will be made clear to the House in due course. However, the key thing is that I have no doubt—in preparation for this debate, I have obviously had helpful discussions with the HSE—about the HSE’s commitment to an ongoing and high level of effective intervention in the construction industry.

One feature of the construction industry is that it is clearly different from other industries. At its best, it is capable of great things and great successes, and it has a great deal of expertise in controlling health and safety risks to workers. Of course, even many of those temporary inspectors I mentioned, who soon will not be working for the HSE, will go back into the industry and take their expertise with them.

I said that there were just over 100 fatalities a decade ago. Two decades ago, 154 construction workers were killed. Progress, therefore, has been made—fairly considerable progress over a period of 20 years or more. The hon. Member for Paisley and Renfrewshire North mentioned the Donaghy inquiry and the issue of the Gangmasters Licensing Authority. I know that he has been involved with previous private Member’s legislation on the GLA and I also know that there is a private Member’s Bill on the matter before the House at the moment.

[Jim Sheridan]

The Minister has just announced figures about fatalities. Do they include people who lost their lives as a result of occupational or industrial disease, such as mesothelioma?

[Steve Webb]

The figures that I gave—for example, the figure of 154 fatalities for two decades ago—were for construction workers who were killed in accidents at work. I entirely take the hon. Gentleman’s point that issues that emerge during refurbishment work, for example with asbestos, silica and so on, are also very important. Indeed, I will try to reassure him on that particular point, as he raised it. The HSE is undertaking work on refurbishment and even as we speak that work is ongoing. The national refurbishment inspection initiative targets small refurbishment sites where a disproportionate number of serious and fatal accidents occur. The current initiative has been run periodically for several years and it is going on now between 14 February and 11 March. Although full data are not yet available, to date nearly 1,200 sites have been visited, involving more than 1,400 contractors and, alarmingly, breaches of health and safety legislation were found to be so significant that enforcement notices were required at 254 of those 1,200 sites. I join all hon. Members who have contributed to the debate in not being remotely complacent about where we are now on health and safety in construction.

The challenge is to ask what effective regulation would look like. I fully respect the argument that says, “Bring the Gangmasters Licensing Authority supervision into construction”. I can see why that argument is made. My reservation is that the health and safety rights of people in the construction industry are there already. The hon. Member for Paisley and Renfrewshire North mentioned bogus self-employment. Whether somebody is self-employed or employed, they have health and safety rights. Regarding some of the points that the hon. Gentleman made about those in bogus self-employment, there are obviously issues about tax. However, there is not much evidence—if any—that construction fatalities are higher among those who are notionally classified as self-employed as opposed to those who are employed.

The Gangmasters Licensing Authority is clearly a generalist authority that looks at issues such as minimum wage compliance, tax and national insurance, as well as health and safety. The danger is that if we bring construction within the scope of that authority we might get, at one level, duplication and potentially we might get a sort of box-ticking mentality, whereby people think, “We’ve got to satisfy this regulator and that regulator”. There could be regulatory confusion if we have different bodies trying to enforce health and safety.

I also want to give an idea of the scale of what might be required if we bring construction within the scope of the GLA. At the moment, the GLA licenses 1,200 gangmasters. If the licensing scheme was extended to cover the construction industry comprehensively, we could be talking about 200,000 licences. The cost of regulating the 1,200 licences in the sectors covered by the GLA already—agriculture, horticulture, shellfish gathering and associated industries—is just over £4 million a year, of which the taxpayer pays about £3 million. Clearly, there would be economies of scale if the GLA’s licensing scheme was extended to cover the construction industry, but simply pro rata-ing those figures to the full size of the construction industry would mean licensing costs of £600 million.

[Jim Sheridan]

rose—

[Steve Webb]

I will give way shortly. Of that £600 million, the taxpayer would pay £400 million. On a pro rata basis, we would potentially need 8,000 new inspectors. I do not claim to be an authority on the subject, but I find it difficult to imagine that there are 8,000 spare inspectors out there to be had, although people could be trained to become inspectors. In addition, creating this type of parallel regulatory structure alongside the HSE’s work is problematic. If there was £400 million to be spent—or indeed anything like it—channelling it through what is quite an effective existing regulator, enabling it to do more, might be a better idea.

[Jim Sheridan]

The Minister has referred to £3 million of taxpayers’ money being used to pay the licensing costs of the GLA. However, does he take into account the fact that gangmasters are then registered and legalised, and migrant workers are registered and legalised and they then pay tax and national insurance, which they would not be paying otherwise, so there is a net benefit to the Treasury?

[Steve Webb]

The figures that I am referring to are the gross running costs of the GLA and the revenue from licences. I am not sure about the potential payback of such a scheme in the construction sector. One thing to consider is that we would end up licensing in practice the entire sector—as it were, the good guys and the bad guys—and there would be a lot of dead weight in areas where there already was compliance with tax and national insurance legislation.

The hon. Gentleman also asked about the role of the construction skills certificate scheme. That is certainly a well regarded industry-run scheme and a big one, although there are many similar schemes across the industry, as I am sure he knows better than I do. My understanding is that the CSCS or an equivalent is already required under Government contracts, which I very much welcome. However, when it comes to legislating for the CSCS, for example, one issue that arises is whether we should choose that particular scheme or others. On balance, the health and safety at work and construction regulations already require workers to be trained for health and safety.

To conclude, I take the issues that the hon. Gentleman has raised very seriously. We want to make more progress on them and further announcements will be made by the Government in due course, but we will continue to take construction industry safety and fatalities seriously, as the hon. Gentleman quite properly says that we should.

16:59

Sitting adjourned without Question put (Standing Order No. 10(11)).

Written Ministerial Statements

Wednesday 9th March 2011 Written Statements

Wednesday 9 March 2011

Tax Avoidance

Wednesday 9th March 2011 Written Statements

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The Government are fully committed to tackling tax avoidance and will take necessary steps to protect the Exchequer and maintain fairness in the tax system.

As part of their work to improve tax policy making and the stability of the tax system, the Government published a discussion document on 9 December 2010 setting out a draft protocol on tax announcements outside scheduled fiscal events. This set out the criteria that Ministers will apply when deciding whether an announcement of immediate change is justified.

In line with that draft protocol, the Government are making such an announcement today, to tackle an aggressive tax avoidance scheme that has been disclosed to HMRC. By acting immediately, the Government are seeking to protect the Exchequer and maintain fairness in the tax system.

A lessee under a plant or machinery long funding lease can claim capital allowances. Some large businesses have entered into contrived, circular transactions involving the sale, leaseback, and reacquisition of their plant and machinery, over a period of three or four weeks, with the aim of claiming tax relief twice on one amount of expenditure.

HMRC has recently become aware that the scheme has been widely marketed and implemented with associated significant risk to the Exchequer. To date instances of the scheme that HMRC are aware of have involved expenditure in excess of £1 billion, putting hundreds of millions of pounds of tax at risk.

Legislation, which will have effect from today, will be introduced in the Finance Bill 2011 to confirm that lessees engaging in transactions of this type are only entitled to tax relief up to the actual amount of their expenditure on plant or machinery. This ensures that the rules continue to apply as intended by Parliament and will protect future losses to the Exchequer.

There should be no impact on commercial leasing arrangements, as the intended amount of relief will continue to be available. The legislation will simply put beyond any doubt that it is not possible to claim relief for some expenditure twice.

The legislation will apply both to new arrangements and to existing arrangements where payment under a guarantee has not been made prior to today.

Further details have today been published on HMRC’s website together with the proposed draft legislation and a tax information and impact note.

Armed Forces Compensation Scheme

Wednesday 9th March 2011 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

I have today published a report entitled, “The Review of the Armed Forces Compensation Scheme—One Year On”. The report summarises the recommendations from the review and provides an overview of the work undertaken by the Ministry of Defence over the past 12 months to implement the recommendations. Copies of the report are available in the Library of the House or can be accessed at the following website: http://www.mod.uk/DefenceInternet/AboutDefence/CorporatePublications/PolicyStrategyandPlanning

The outcome of Admiral the Lord Boyce’s review of the armed forces compensation scheme was announced in February 2010. While the review found that the scheme was fundamentally sound, it made a number of recommendations for improvement. I made some early legislative changes last summer.

I am today pleased to announce the completion of all remaining changes that will lead to significant increases in the value of awards under the scheme. Most notable is the change to guaranteed income payments—paid from the point of service discharge for life—which will be increased to reflect the lasting impact of more serious injuries on future likely promotions and on the ability to work up to age 65.

Other changes include:

An increase, which averages in excess of 25%, to all lump sum award payments. This is except the top award which was recently doubled to £570,000;

Nearly tripling the maximum award for mental illness from £48,875 to £140,000 in order to reflect accurately the impact of the most serious mental health conditions;

The creation of a new independent medical expert group to advise on compensation for specific, relevant illnesses and injuries such as hearing loss and mental health;

A revised approach to awarding compensation for multiple injuries, whereby all injuries sustained will receive some compensation.

No one will lose out as a result of these changes. All those who have already received an award under the scheme will have their case automatically revisited and will receive an uplift.

EU Education Council (14 February 2011)

Wednesday 9th March 2011 Written Statements

[The Minister of State, Department for Education (Mr Nick Gibb)]

Andy Lebrecht, Deputy Permanent Representative, represented the UK at the Education Council, on behalf of the Department for Education and the Department for Business, Innovation and Skills.

Ministers adopted conclusions on the role and contribution of education and training to the implementation of the Europe 2020 strategy. These conclusions are consistent with the European Council conclusions agreed by the Prime Minister in June and we were therefore able to support them.

There was also a policy debate between delegations on the contribution of education and training to the European semester and annual growth survey. Member states supported the overall annual growth survey messages but there was wide agreement that national targets in member states’ national reform programmes (as part of the Europe 2020 strategy) should be realistic as well as ambitious.

Member states outlined their national reform programmes, with basic skills, adult education, the professionalism of teachers, and prevention of early school leaving given as key areas for action. Mobility issues were also raised, in particular by Germany, France and Finland. Germany also stated that, in their view, education should not be subject to the same Europe 2020 monitoring as fiscal areas and they specifically opposed country-specific recommendations in education.

The UK intervention supported the annual growth survey and recognised the importance of education to jobs and growth, explaining the focus of reforms in the UK following the education White Paper. On national targets, the UK was clear that we were not mirroring the EU targets. Instead we were using nationally owned indicators to measure and drive change. These indicators would enable us to measure progress against the headline targets.

Special Educational Needs and Disability

Wednesday 9th March 2011 Written Statements

[The Secretary of State for Education (Michael Gove)]

Today the Government publish “Support and aspiration: a new approach to special educational needs and disability”.

This Green Paper is about the children and young people in this country who are disabled, or identified as having a special educational need. It is about their aspirations and their hopes. Their desire to become, like every child and young person, independent and successful in their chosen future, and, to the greatest extent possible, the author of their own life story.

It is about their families—who have consistently called for better support for their children and themselves. It is about families of the most disabled children who are providing 24-hour care from birth, or the families of children struggling at school who do not know where to turn for help.

It is also about their teachers, their college lecturers, and the many skilled staff from the health and social care professions who do their best, day in and day out, to provide the right support and encourage the highest aspirations.

Case for change

Life chances for the approximately 2 million children and young people in England who are identified as having a special educational need (SEN), or who are disabled, are disproportionately poor. By the time they leave school these young people are more than twice as likely to be out of education, training or employment as those without a special educational need.

We know that there is much that is excellent in the support for these children, young people and their families. But we also know that this is not happening nearly enough. While the circumstances of children, young people and their parents differ greatly; from young people requiring a few adjustments in class to children with life-limiting long-term conditions, hundreds of thousands of families with have a disabled child or a child with SEN have many shared concerns. Parents say that the system is bewildering and adversarial and that it does not sufficiently reflect the needs of their child and their family life.

Successive reports, such as the 2006 report of the Education Select Committee and Brian Lamb’s report in 2009, have described a system where parents feel they have to battle for the support they need, where they are passed from pillar to post, and where bureaucracy and frustration face them at every step.

Disabled children and children with SEN tell us that they can feel frustrated by a lack of the right help at school or from other services. For children with the most complex support needs, this can significantly affect their quality of life.

Children’s support needs can be identified late; families are made to put up with a culture of low expectations about what their child can achieve at school; parents do not have good information about what they can expect and have limited choices about the best schools and care for their child; and families are forced to negotiate each bit of their support separately. According to the Council for Disabled Children, on average a disabled child experiences 32 assessments as they grow up. Resources that could be spent on support and teaching are diverted into bureaucracy.

Proposed reforms

Our proposed reforms respond to the frustrations of children and young people, their families and the professionals who work with them. The vision set out in the Green Paper is informed by the views and expertise of families and national and local organisations working with them.

We want to put in place a radically different system to support better life outcomes for young people; give parents confidence by giving them more control; and transfer power to professionals on the front line and to local communities.

To support better life outcomes for young people from birth to adulthood we will help professionals: identify and meet children’s needs early by ensuring that health services and early education and childcare are accessible to all children; work in partnership with parents to give each child support to fulfil their potential; and join up education, health and social care to provide families with a package of support that reflects all of their needs. We propose:

a new approach to identifying SEN in early years settings and schools to challenge a culture of low expectations for children with SEN and give them effective support to succeed. A new single early years setting-based category and school-based category of SEN will build on our fundamental reforms to education which place sharper accountability on schools to make sure that every child fulfils his or her potential; and

a new single assessment process and “Education, Health and Care Plan” by 2014 to replace the statutory SEN assessment and statement, bringing together the support on which children and their families rely across education, health and social care. Services will work together with the family to agree a straightforward plan that reflects the family’s ambitions for their child from the early years to adulthood, which is reviewed regularly to reflect their changing needs, and is clear about who is responsible for provision. The new “Education, Health and Care Plan” will provide the same statutory protection to parents as the statement of SEN and will include a commitment from all parties to provide their services, with local assessment and plan pathfinders testing the best way to achieve this.

To give parents confidence by giving them more control over the support their family receives, we will introduce more transparency in the provision of services for children and young people who are disabled or who have SEN. Parents will have real choice over their child’s education and the opportunity for direct control over support for their family. We propose:

local authorities and other services will set out a local offer of all services available to support children who are disabled or who have SEN and their families. This easy-to-understand information for parents will set out what is normally available in schools to help children with lower-level SEN, as well as the options available to support families who need additional help to care for their child; and

the option of a personal budget by 2014 for all families with children with a statement of SEN or a new “Education, Health and Care Plan”, many of whom will have complex support needs. Key workers will be trained to advise families and help them navigate the range of help available across health, education and social care.

To transfer power to professionals on the front line and to local communities we will: strip away unnecessary bureaucracy so that professionals can innovate and use their judgment; establish a clearer system so that professionals from different services and the voluntary and community sector can work together; and give parents and communities much more influence over local services. We propose to:

give parents a real choice of school, either a mainstream or special school. We propose to strengthen parental choice by improving the range and diversity of schools from which parents can choose, making sure they are aware of the options available to them and by changing statutory guidance for local authorities. Parents of children with statements of SEN will be able to express a preference for any state-funded school—including special schools. Academies and free schools—and have their preference met unless it would not meet the needs of the child, be incompatible with the efficient education of other children, or be an inefficient use of resources. We will also prevent the unnecessary closure of special schools by giving parents and community groups the power to take them over; and

introduce greater independence to the assessment of children’s needs, testing how the voluntary and community sector could co-ordinate assessment and input from across education, health and social care as part of our proposals to move to a single assessment process and “Education, Health and Care Plan”.

Next steps



The Green Paper marks an important milestone in the development of the Government’s approach to supporting children and young people with SEN or who are disabled and their families. This marks the start of a four-month consultation period on our proposals.

Central Government cannot achieve this ambitious programme of reform through directing and managing change itself. The proposals we set out are for practical testing in local areas. From September 2011, local pathfinders will help demonstrate the best way to achieve our key reforms. We will also be working across Government and with our local and national partners to set out detailed plans by the end of the year.

Copies of the Green Paper “Support and aspiration: a new approach to special educational needs and disability” will be placed in the House Libraries.

Parliamentary Written Question (Correction)

Wednesday 9th March 2011 Written Statements

[The Parliamentary Under-Secretary of State for Health (Anne Milton)]

I regret that the written answer given to the hon. Member for Gravesham (Mr Holloway) on 11 February 2011, Official Report, column 477W, was partly incorrect.

Having given further consideration to the issue raised, I realise that the answer provided did not make it clear that while the protections provided to “employees”, under the Public Interest Disclosure Act 1998 (PIDA), do not apply to general practitioners (GPs) who provide primary medical services as independent contractors engaged under general medical services (GMS) contracts for services by local primary care trusts (PCTs), there are certain other protections under PIDA which do apply.

PIDA, which is inserted into the Employment Rights Act 1996 (ERA), is primarily designed to protect individuals who raise certain whistleblowing concerns (as defined in PIDA) relating to their work or workplace from suffering a detriment as a result of speaking out. This legislation has two layers of protection.

The first is for those who are “employees” of a particular organisation, who are protected from dismissal as well as other detrimental treatment such as being overlooked for promotion, denied training or a bonus. The second is for “workers”, which is defined in section 230(3) ERA, and includes those who work under a contract to personally perform work where their status is not that of client or customer. They have a more limited level of protection of not being subject to a detriment but they do not have unfair dismissal rights.

Generally, “workers” would not include self-employed individuals such as self-employed doctors. However, for the purpose of whistleblowing, PIDA has widened the definition of “worker” specifically to include other individuals. Section 43K(ba) ERA, includes a person who

“works or worked as a person performing services under a contract entered into by him with a Primary Care Trust under section 84...of the National Health Service Act 2006”.

Section 84 of the National Health Service Act 2006 relates to GMS contracts with GPs, and accordingly GPs who enter into such contracts with PCTs will be deemed to be “workers” for the purposes of PIDA.

Therefore if a GP raises a concern in the public interest (that falls within the PIDA criteria), relating to their GMS contract to the PCT with which they have the contract, this would be a protected disclosure. They would have a right to bring a claim under PIDA if they should suffer a detriment as a result.

While the Government’s priority since May 2010 has been to raise awareness for NHS employees about their rights and protections and to ensure that staff have a contractual right to raise concerns, the hon. Member for Gravesham has raised an important point about awareness of existing protection for GPs.

Tobacco Control Plan (England)

Wednesday 9th March 2011 Written Statements

[The Secretary of State for Health (Mr Andrew Lansley)]

The Government are today publishing “Healthy Lives, Healthy People: A Tobacco Control Plan for England”.

The recently published “Healthy Lives, Healthy People” White Paper sets out the coalition Government’s determination to improve the health of the nation and to improve the health of the poorest, fastest. The White Paper recognises that reducing smoking rates represents a huge opportunity for public health, and makes commitments to publish a number of follow-on documents on how we will improve public health in specific areas. The tobacco control plan is the first of these.

Smoking remains one of our most significant public health challenges, and causes over 80,000 premature deaths in England each year. While rates of smoking have continued to decline over the past decades, 21% of adults in England still smoke. Smoking prevalence has fallen little since 2007 and we need renewed action to drive smoking rates down further.

Smoking has a devastating impact on health and well-being in our communities and we must keep up the momentum to reduce the health harms of tobacco use. Smoking contributes significantly to health inequalities and is the single biggest cause of inequalities in death rates between the richest and poorest in our communities.

Localism will be at the heart of the Government’s new radical approach to the delivery of public health services, with directors of public health, jointly appointed by local authorities, to be the strategic leaders for evidence-based public health. They will also lead action in their local communities to reduce health inequalities.

The tobacco control plan sets out how comprehensive tobacco control will be delivered over the next five years within the new public health system, and includes confirmation of our intentions for ending tobacco displays in shops and for further work to explore the plain packaging of tobacco products. The plan includes specific ambitions to reduce smoking prevalence by the end of 2015:

to 18.5% or less among adults (from a baseline of 21.2%);

to 12% or less among 15-year-olds (from a baseline of 15%); and

to 11% or less among pregnant mothers (from a baseline of 14%).

These ambitions represent faster reductions in smoking rates in these groups in the next five years than we have seen in the past five years.

The plan is built around the six strands of comprehensive tobacco control that are recognised internationally:

stopping the promotion of tobacco;

making tobacco less affordable;

effective regulation of tobacco products;

helping tobacco users to quit;

reducing exposure to second-hand smoke; and

effective communications for tobacco control.

Take-up of smoking by young people is a particular concern. Smoking is an addiction largely taken up in childhood and adolescence, and so it is crucial to reduce the number of young people taking up smoking in the first place. Nicotine is extremely addictive and young people can develop dependence on tobacco very rapidly. Each year in England an estimated 320,000 children under 16 first try smoking and the majority of adult smokers were smoking regularly before they turned 18 years of age. The plan recognises that we must do as much as we can to stop the recruitment of new young smokers.

We know that teenagers are susceptible to experimenting even when there is clear evidence of the dangers. We believe that eye-catching displays encourage young people to try smoking. They also undermine quit attempts by adults by tempting them to make impulse buys of tobacco.

This is why we are implementing legislation to end tobacco displays in shops. This will help to change perceptions of the social norms around smoking, especially by young people who are often the target of tobacco promotion.

While maintaining the expected public health gains, we will amend the display regulations to mitigate burdens on business. The growth review announced by the Chancellor of the Exchequer in November 2010 aims to reduce the regulatory burden on small and medium enterprises and micro businesses. In keeping with this approach, we will make the legislation more practical by:

giving retailers longer to prepare by delaying commencement until 6 April 2012 for large shops and 6 April 2015 for small shops;

increasing the size of temporary displays allowed when serving customers and re-stocking (from 0.75 square metres to 1.5 square metres); and

adding to the circumstances in which such displays can occur, for example, to carry out stock-taking and other activities necessary in running a business.

In this important area, I am interested in any measure with the potential to promote positive social norms around tobacco use and to diminish the impact of anything which promotes tobacco use, especially as this affects young people. We must continue to try new approaches, particularly those that may encourage behaviour change. We will, therefore, explore whether the introduction of plain packaging would bring additional public health benefits. The Government have an open mind on this and we want to hear what people think.

The tobacco control plan confirms a commitment to consult by the end of this year on options to reduce the promotional impact of tobacco packaging. To do this we must review the evidence and draw up an impact assessment on the costs and additional public health benefits of policy options. We will, as well, explore the competition, trade and legal implications, and the likely impact on the illicit tobacco market of options around tobacco packaging. While similar measures are currently being considered actively by a number of Governments around the world, we must be sure about the impacts of policy options in the legal and trading circumstances of tobacco control in this country. Only after this work, and gathering views and evidence from public consultation, will we be in a position to know whether, or how, to proceed.

An academic review “The Impact of Smokefree Legislation in England: Evidence Review” has been published today.

The Medicines and Healthcare products Regulatory Authority (MHRA) has also published today the outcome of the consultation on the regulation of nicotine-containing products. The MHRA will co-ordinate a period of further scientific and market research to inform decisions about the regulation of nicotine-containing products.

All documents have been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.

Supporting Community Transport

Wednesday 9th March 2011 Written Statements

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

Today I am announcing £10 million of new funding to be distributed to rural local transport authorities to kick-start the development of community transport services in their area.

In addition, we have formed a partnership with the Community Transport Association to provide each of the 76 rural local authorities in England with £2,600-worth of consultancy advice on how to establish, manage and make sustainable community transport operations within their area. There is the option for local authorities to supplement this with their own funds to receive further services.

This additional funding complements our recently announced local sustainable transport fund, which allows local authorities to bid for a share of £560 million over four years, aimed at encouraging sustainable transport solutions, including community transport, that will create economic growth and cut carbon.

Public transport remains a key element in the sustainability and independence of rural communities: offering young people access to education and employment opportunities, linking customers to shops and services, and providing a lifeline to those without access to a car.

Where commercial bus services are not viable, community transport can play a valuable role in preventing isolation. I therefore strongly encourage local authorities to work in partnership with operators and local communities to examine how more flexible services might be provided.

Services such as dial-a-ride can, in some areas, be more efficient, effective and sustainable in the long term. I know that there are already many good examples of community groups and local authorities working together to deliver innovative solutions to rural transport needs and this is something we wish to see increased.

Today’s package of support for community transport represents an important opportunity to invest in the future to provide more sustainable transport for local communities.