Compulsory Jobs Guarantee

Debate between Iain Duncan Smith and Stephen Timms

Wednesday 11th February 2015 Commons Chamber

[Stephen Timms]

We were left with a legacy of a very large number of people who have been out of work for a long time. It is welcome that at long last the economy is growing and jobs are being created; the long-delayed recovery is now, finally, in place. The question is: are those who have been left out of employment by the events of the past few years going to get the opportunities that these new jobs will create? Addressing that is exactly the purpose of this afternoon’s debate and of the proposal I am commending to the House.

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

If the right hon. Gentleman wants to be completely fair, will he take the chance now to apologise for the fact that under the last Government long-term unemployment doubled and youth long-term unemployment rose by a half? Should Labour not be saying, “We are really sorry, we got something very badly wrong”?

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[Stephen Timms]

I can assure my hon. Friend that these will be jobs for at least 25 hours a week and paid at least at the level of the national minimum wage.

The persistent unemployment that we still see today could be contributing to a continued cost of living crisis tomorrow, weakening the productivity and the growth potential of our economy as well as undermining efforts to keep social spending under control and to bring down the deficit. We must take urgent and effective action now to tackle the problem.

What action have we seen from the Government? One of their very first acts on entering office was to abolish the future jobs fund, breaking, incidentally, the promise that the current Home Secretary made during the election campaign. Eventually, the DWP published an evaluation of the future jobs fund and, to the surprise of nobody on the Opposition Benches, it was glowing. It found a net benefit to society—net of all the Exchequer costs—of £7,750 for every single young person who took part. It reckoned that, within three years, half the cost of that intervention came back to the Exchequer because participants stopped claiming benefits and started paying tax and national insurance. It was an exceptionally cost-effective policy.

By late 2012, when the evaluation was published, it was too late. The future jobs fund had gone. In the time since its abolition, unemployment had risen to more than 2.5 million and youth unemployment had risen to more than 1 million.

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

As the right hon. Gentleman is referring to the research, may I just read out what it says? It says that

“even under the most optimistic combination of assumptions…the FJF programme is still estimated to result in a net cost to the Exchequer…there might never be an estimated net benefit to the Exchequer.”

That is what the analysis said.

[Stephen Timms]

If the right hon. Gentleman looks at the previous paragraph, he will see that the evaluation said that half the cost of an intervention came back to the Exchequer within a three-year period and that the wholly inadequate replacement for it was the Work programme, which sends more people straight back to the jobcentre after two years than it places in sustained work. It also performs shockingly badly not just in Edinburgh, as we were hearing earlier on, but for those in need of support, such as older workers and people with health problems for whom it has so far recorded failure rates of 87% and 93% respectively. The Work programme has been a failure and we must replace it with something that works better.

On youth unemployment, the Deputy Prime Minister saw what was going on and had an attack of conscience. He announced the Youth Contract, which the Government promised would lead to 160,000 work subsidies for young jobseekers. It started in April 2012 and it was an utter flop. It was not promoted. That was undoubtedly because DWP Ministers, with the possible exception of the Minister for Pensions, did not have their heart in it. Employers knew nothing about it. Those who did hear of it were confused by it and had nothing to do with it. The Government’s own advisers on poverty and social mobility said that it was not working, so last summer it was unceremoniously shut down early, after it had achieved fewer than 10% of the promised placements that were budgeted for. Ever since then, unemployment among young people has been going up.

The latest proposal from the Government is time-limiting support for young people without giving them the opportunity to train, after which they will simply be required to do community service. That is not an employment policy, but a policy for punishing the victims of the negligence and ineffectiveness of this Government.

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[Mr Duncan Smith]

May I say to my hon. Friend—I repeat, my hon. Friend—what an excellent job he has done in championing his constituency? He is right—it is about getting private sector businesses to create real jobs for young people and older workers to go into.

I want to deal in some detail with the jobs guarantee versus the future jobs fund. A Labour press release that I saw in 2014 extolled the Opposition’s pet project as

“building on the success of the Future Jobs Fund”.

The right hon. Member for East Ham carried on the Labour line. I hope that was noted back at headquarters. He is clearly to be trusted through the election, and I give him a lot of support for that.

As for the claimed success of the future jobs fund, the DWP analysis that I quoted earlier is important. It was commissioned under Labour and was subjected to extensive peer review by the National Institute of Economic and Social Research, which, as I said earlier, found that not only was the fund estimated to result in a net cost to the Exchequer but that, as I pointed out, the future jobs fund was not estimated to benefit the Exchequer at any stage, and the Exchequer would not be able to get back the money that it had spent on the programme.

By contrast, as the hon. Member for Ealing North said, young people want work experience. I remember that early on, when I first went into jobcentres, I was accosted by young people who said that the problem for them was that at job interviews they were asked whether they had job experience, and when they said they had none, they were told that they could not be given a job without work experience, but their response was that they could not get work experience without a job.

Under the previous Government, people were allowed only two weeks’ work experience before they were expected back at the jobcentre. What we did instead was to allow them up to two months’ work experience in a business, and an extra month if they were offered a job or an apprenticeship. So, by contrast, work experience under this Government—this is the interesting point—has achieved the same success rate at least as the future jobs fund achieved, but at a twentieth of the cost—£325 per place as opposed to £6,500 per place. Another difference is that the vast majority of positions under the work experience programme are in the private sector, whereas I can think of hardly any private sector companies that offered jobs under the future jobs fund. It is a success versus a costly failure.

[Stephen Timms]

As the right hon. Gentleman knows—he has the evaluation in front of him—there was a net benefit to society of £7,500, net of all Exchequer costs, for each person who took part. Is he surprised that youth unemployment has been going up over the past three months, at a time when overall unemployment is coming down, or was that what he expected?

[Mr Duncan Smith]

Youth unemployment is now lower than it was under the previous Government, and it has been falling consistently. I will wait for the figures for the next few quarters, and when they show that youth unemployment has continued to fall, I expect the right hon. Gentleman to write me a note saying, “Sorry about that; that’s another thing we got wrong.”

Oral Answers to Questions

Debate between Iain Duncan Smith and Stephen Timms

Monday 26th January 2015 Commons Chamber

[Mr Duncan Smith]

What went wrong was the Youth Contract, full stop. The money used for the Youth Contract actually went to invest in people who had greatest disadvantage, and when we set up our other programmes, including the Work programme, we outperformed anything the Youth Contract had. Furthermore, work experience was not available to young people under the previous Government for any great length of time, whereas we have had more than 50% of people on those work experience programmes go back to work. More young people are in work now than when we came into office; they were left by the disaster of the previous Government.

[Stephen Timms (East Ham) (Lab)]

Young people remain at a distinct disadvantage in the labour market. The statistics published last week show that for the third month in a row overall unemployment came down but youth unemployment rose. Does the Secretary of State have any new proposals to tackle this problem of currently rising youth unemployment?

[Mr Duncan Smith]

I do not know whether the right hon. Gentleman has actually looked at the figures correctly. He will find that under this Government youth unemployment has fallen; there are now more young people in work; and youth unemployment is at a lower level than the previous Government left us in 2010, after they crashed the economy. I might also remind him that they used to put young people on short-term programmes. As soon as they did that, they took them off the register and started them as though they had begun looking for work then, rather than being six months in. The previous Government gerrymandered the figures and they still failed.

[Stephen Timms]

At the time of the general election the rate of youth unemployment was two and a half times the overall level of unemployment. Since then, the relative position of young people has steadily worsened, to the point where last week the youth unemployment rate was 2.9 times the overall rate of unemployment. Judging by his answer, the Secretary of State may not have noticed that youth unemployment is currently going up. Is it not now high time for a compulsory job guarantee, so that young people have the chance of a job at the start of what should be their working lives, instead of spending years on unemployment benefit?

[Mr Duncan Smith]

The reality is quite different from that set out by the right hon. Gentleman. Youth unemployment is down 171,000 on the year—nearly a fifth; 7.1% of all young people are unemployed and not in full-time education; and the number of young people on jobseeker’s allowance has fallen every month for that past three years. The truth about this is quite the opposite to that he suggests. The previous Government left us with young people unable to get work experience and unable to get jobs, and a real stagnation problem, with young people not being able to get the skills necessary. Youth unemployment is now falling. Youth employment is rising—[Interruption.] No; since the last Parliament youth unemployment has fallen. Youth employment is rising. Once in a while it would be nice if the right hon. Gentleman got up and said, “You know what, the last Government got it wrong. Thank you for getting it right.”

Food Banks

Debate between Iain Duncan Smith and Stephen Timms

Wednesday 17th December 2014 Commons Chamber

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

I have made it clear that I have met members of the Trussell Trust. I have never denied meeting members. The right hon. Gentleman needs to reveal his sources.

[Stephen Timms]

The chairman of the Trussell Trust wrote to him repeatedly last year asking to meet him, but he did not meet him.

[Mr Duncan Smith]

I met members of the trust.

[Stephen Timms]

We have all met members of the Trussell Trust. The Secretary of State refused to meet the chairman. [Interruption.] Ah, I think we are getting somewhere. He tells us that members of his staff met—

[Mr Duncan Smith]

And me.

[Stephen Timms]

And him, too. Why did he not meet the chairman of the Trussell Trust, who wanted to explain—

[Mr Duncan Smith]

I have met members of the Trussell Trust.

Oral Answers to Questions

Debate between Iain Duncan Smith and Stephen Timms

Monday 8th December 2014 Commons Chamber

[Mr Duncan Smith]

Each local authority is dealing with this matter differently. We have given a huge amount of support, through the discretionary housing payments, so some will move, some will not, and some have had their rents dealt with and have stayed in place. We have trebled the support to £345 million, and more than 392,000 DHP awards were made last year. As I said, each authority is doing it differently. For example, Sheffield city council is using DHPs to pay removal costs and provide decorating, while Southwark and Islington councils are paying additional incentives through mutual exchanging with overcrowded households. They are all doing different things, but they are basically getting it right. We were warned that arrears would rise, but actually housing association arrears are lower than they were last year.

[Stephen Timms (East Ham) (Lab)]

Research published last month by the Trussell Trust, Church Action on Poverty, the Church of England and another organisation—Oxfam—showed that more than half the rocketing demand at food banks was caused by problems in the benefits system, not least by the hated bedroom tax, but also by escalating payment delays, contrary to what the Minister for Disabled People, said a moment ago. Will the Tory welfare waste party now follow the U-turn its coalition partners took and realise that the bedroom tax has to go?

[Mr Duncan Smith]

The right hon. Gentleman went a long way round to get to his usual comment, but most of his facts are incorrect. Let us get the facts right on benefit processing. Each year, we provide £94 billion in working age benefits, and benefits have been paid in arrears for the last 25 years, so there is not an unusual delay. People are often confused about whether or not there is a delay. On benefit processing times, 93% are processed absolutely on time, which is up seven percentage points since Labour left office. The vast majority of the delays are pre-decisions awaiting additional evidence. Of course there is more we can do. I am looking at a report today, and I am going to be positive about ensuring that we can do other things. I can thus announce today that we are looking to new measures committing the Department to raising much more awareness, as was asked for, of the short-term benefit advances. We are doing that through websites, on posters and by providing information in jobcentres. We are testing that and hoping to roll it out at the beginning of the new year. We are also issuing fresh guidance to advisers to make sure that they constantly advise those at risk of the availability, should they need them, of interim payments.

Oral Answers to Questions

Debate between Iain Duncan Smith and Stephen Timms

Monday 3rd November 2014 Commons Chamber

[Mr Duncan Smith]

There has been very little movement of more than about five miles from people’s existing homes as a result of the benefit cap. Most people have settled, and many—two thirds—have either gone back to work or found alternative employment. Let me say to the hon. Gentleman that there is something called the discretionary housing payment, and his local council, like any other, can make decisions about how it modifies the process. It is up to councils to do that, and we leave it with them.

[Stephen Timms (East Ham) (Lab)]

The flagship of welfare reform was supposed to be universal credit. The Secretary of State’s former adviser told Radio 4 last week that the Secretary of State had known that the project was going badly wrong since May 2012, but he continued to tell the House that it was “exactly on track”. The Chair of the Public Accounts Committee expects IT write-offs to exceed half a billion pounds after the election. What is the right hon. Gentleman’s estimate?

[Mr Duncan Smith]

Yet again, the right hon. Gentleman has got his facts completely wrong. The reality is that, as was announced only a few weeks ago, universal credit is not only doing well, but is to be rolled out nationally. The right hon. Gentleman may be smiling because he has the idea that Labour might somehow get into government, and might inherit a success. I can tell him that Labour will not get into government, but universal credit will get more people back to work. It is already the case that it will give the economy net benefits of more than £30 billion, and there will be direct benefits of some £9 billion a year as a direct result of the roll-out that we are planning successfully.

[Stephen Timms]

According to page 34 of the “21st Century Welfare” Green Paper,

“The IT changes that would be necessary to deliver”

universal credit

“would not constitute a major IT project.”

Is not the problem—as I pointed out to him at the time—that the Secretary of State failed to grasp the scale of the undertaking at the outset, and that hundreds of millions of pounds have been wasted as a result?

[Mr Duncan Smith]

Again, the right hon. Gentleman is wrong. No money has been wasted. The roll-out means that, with all the work that we are doing, the vast majority is reusable through the digital system. I should be happy to invite him into my office to discuss the issue; the door has always been open to him.

Let me also say this, however. I wish that the Opposition would stop trying to play silly games and would recognise that this benefit, which is now being rolled out successfully and whose national roll-out has been announced, will be a massive benefit for those who are seeking work and those who are in work. It is time that the Opposition sat down with jobseekers and those who run the jobcentres, and got their story straight. The hon. Member for Leeds West (Rachel Reeves) spent about half an hour in a jobcentre, and then disappeared without talking to anyone there.

Oral Answers to Questions

Debate between Iain Duncan Smith and Stephen Timms

Monday 24th February 2014 Commons Chamber

[Mr Duncan Smith]

I have two points for the hon. Lady. First, I have just said that all of us have at some point met representatives of the Trussell Trust. Secondly, I absolutely think that those involved in food banks and in supporting those who are in difficulty or in need are very valuable members of the community, and I celebrate the work they do. I believe that it is the right thing for them to do. I think that all those involved in food banks are decent people trying to do a decent bit of work for those in need of help, and we support that in general terms as constituency MPs. However, I must say that the over-politicisation of this issue has done no help at all, as some leaders of food banks have attested over the past week.

[Stephen Timms (East Ham) (Lab)]

The Trussell Trust has been exposing the real impact of Ministers’ policies, so out of pique they have refused to meet the trust’s representatives since last summer. Now that they have been overruled by the Prime Minister, who met trust representatives last week, will DWP Ministers at last step up to their responsibilities? Was not the Cardinal Archbishop of Westminster absolutely right when he said last week that

“there shouldn’t be people living with nothing, in destitution, in a country which is as prosperous as this”?

[Mr Duncan Smith]

I have two points for the right hon. Gentleman. First, he, his party and others have deliberately set out to politicise the issue of food banks—[Interruption.] Well, those are not my words. The person who runs the Oxford food bank has said:

“I think this whole debate has become hopelessly politicised.”

Food banks do a good service, but they have been much in the news. People know they are free. They know about them and they will ask social workers to refer them. It would be wrong to pretend that the mass of publicity has not also been a driver in their increased use. The Opposition, notwithstanding the fact that under them the number of food banks increased tenfold, are trying to make a political issue out of this. They have done no service to those who need help and support and no service to those who run the food banks.

Oral Answers to Questions

Debate between Iain Duncan Smith and Stephen Timms

Monday 20th May 2013 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

The Secretary of State will recall that I wrote to him in November 2010 to warn that the IT system could not possibly be delivered in the time scale he was claiming—unfortunately, that has proved to be the case. In November 2011, he announced that 1 million people would be receiving universal credit by April 2014. What is his latest estimate of the number of people who will be receiving universal credit by April 2014?

[Mr Duncan Smith]

Let me remind the right hon. Gentleman of a quote from the Institute for Fiscal Studies about the way we are rolling the system out. It said:

“The level of problems caused to tax credit claimants and employers as the new tax credit systems went live in April 2003 demonstrated that there were undetected gaps in the design of the testing regime for the systems.”

This system is a success. We have four years to roll it out, we are rolling it out now, we will continue the roll-out nationwide and we will have a system that works—and one that works because we have tested it properly.

[Stephen Timms]

In November 2011, 1 million people were going to be claiming by next April: now, the Secretary of State has not the faintest idea how many there will be—so much for this project being on schedule. There were supposed to be four pathfinders, but now there is only one, under which the only people who can get universal credit are those in the most straightforward circumstances. How long will it now realistically be before he has an IT system that can cope with, for example, applicants with children?

[Mr Duncan Smith]

Interestingly enough, I had the right hon. Gentleman and the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) in to see me last year and I told them exactly how we were rolling the system out—[Interruption.] No, no. I told them that the pathfinder would continue first of all with single claimants. As for the idea that somehow things have changed—he knew about that then and the situation is exactly the same now.

Oral Answers to Questions

Debate between Iain Duncan Smith and Stephen Timms

Monday 11th March 2013 Commons Chamber

[Mr Duncan Smith]

Yes, I would be very happy to meet my hon. Friend and any group of people, such as the YMCA, he wishes to bring to me. I simply say this: we have a significant problem, because we inherited a welfare budget approaching £200 billion that had risen out of control under the previous Government. He is fully aware that we have to reform it both to get people back to work and to ensure that we get the cost under control. Those are all areas we have looked at, but in those discussions we decided that, in the round, it was not a priority.

[Stephen Timms (East Ham) (Lab)]

On Friday morning I met a 19-year-old autistic young women whose family home, which is rented from the council, with housing benefit, has been adapted at public expense, but now they are very worried because they are deemed to have one bedroom too many. Surely the bedroom tax should not apply when a council house has been specifically adapted for the occupants at public expense.

[Mr Duncan Smith]

The right hon. Gentleman knows very well that that is the point of discretionary housing payments—[Interruption.] Opposition Members can groan, but we have put more money into discretionary payments to sort these things out than they ever did when they brought these in. The reality is that there is money for them to do just that. I remind him that the National Housing Federation has estimated that in his area of Newham some 3,000 people are under-occupying and some 5,000 are overcrowded. Perhaps he would like to take his own side to task for never doing a thing for those struggling in overcrowded accommodation.

Romanians and Bulgarians (Benefits)

Debate between Iain Duncan Smith and Stephen Timms

Tuesday 5th March 2013 Commons Chamber

[Mr Duncan Smith]

I will, and I am at the moment. Since last year, we have been talking to colleagues in various countries, including Germany, about the need to deal with the Commission’s view. In a sense, the Commission is using free movement to enter the realm, I think, of social security, which has never been within its remit, and we have to challenge that. Up until now, Germany has been a little more ambivalent, but interestingly in the past two or three weeks it has suddenly begun to change its tune, and other countries, such as Spain, are coming into the group too. We have asked for urgent meetings immediately with that group—in the next two weeks—and I will raise this matter with it.

[Stephen Timms (East Ham) (Lab)]

I, too, welcome the urgent question from my right hon. Friend the Member for Birkenhead (Mr Field), but I am sorry that the Secretary of State answered it in such partisan terms.

The benefits system needs to be fair, and to be seen to be fair. Over many decades, people have come to the UK and made a huge contribution to our economy and our society. The Government now need to look at the benefits and services to be provided, given the prospect of future European migration. We need a sensible and serious debate about credible changes, but the Secretary of State seems only to be floating some rather vague ideas without any sense of whether they can be delivered.

The Secretary of State plans to introduce universal credit from October, but roll-out has already been drastically delayed and fundamental questions are now being asked about the deliverability of the IT. If, as he suggested a moment ago, the Government are to change the rules in the system ahead of implementation, they risk making the delivery of universal credit even more chaotic than it is already set to be. Will he explain how the changes he now envisages will fit in with what is supposed to be being introduced already?

Over the weekend, we were tantalised with hints from Ministers that they wanted the system to be more contributory, but the changes they have made so far, as my right hon. Friend pointed out, are making it less contributory. Has the Secretary of State had a change of heart in favour of a more contributory approach? One other suggestion floated is for the introduction of ID cards. Are these the same ID cards that Ministers announced were scrapped straight after the election? Furthermore, will he and his colleagues do a much better job of enforcing the minimum wage? There have been no prosecutions for minimum wage infringements over the past two years, which has been part of the problem. Will he now put that right?

[Mr Duncan Smith]

The changes are long overdue, and I would like to know why the right hon. Gentleman did not explain why the last Government did nothing about resolving the issue. He says that we should not be partisan, but he just has made a very partisan statement when an apology was all he needed to make. He needed only to say that he was sorry for the mess Labour left us in.

What we are talking about will have no practical effect on the implementation of universal credit, which, by the way, is proceeding exactly in accordance with plans. On the contributory principle—this is the point I wanted to make to the right hon. Member for Birkenhead—there is no magic wand. Let us bear it in mind that if it was a blanket contributory principle, we would end up paying a lot of benefits, such as winter fuel payments—an issue that, as the right hon. Member for East Ham (Stephen Timms) knows, was not resolved by his Government—to lots of people who had long since departed Britain. We are considering the matter, and universal credit will give us an ideal opportunity to embrace tax credits and, through this requirement, to start the process of change so that we can resist the pressure of paying tax credits—because they would no longer exist—to people who come to the UK for the first time and claim to be self-employed. That is the area I am looking at.

We need no lectures from the right hon. Gentleman about prosecutions for minimum wage infringements. The last Government’s record on this was so bad I wonder why the Opposition bother mentioning it at the Dispatch Box. We are trying to change it, and will change it, whereas the last Government gave way on every single issue in Europe from the moment they arrived.

Oral Answers to Questions

Debate between Iain Duncan Smith and Stephen Timms

Monday 5th March 2012 Commons Chamber

[Mr Duncan Smith]

I accept the hon. Gentleman’s positive involvement. I simply say to him that the scheme as it stands is incredibly positive. More than 50% of those who enter the work experience scheme go into work, many with the employers who took them on for work experience. The reason we set up the scheme is what young people said, and they told us, “Our problem is that when we go to an interview, employers ask us, ‘What experience have you got?' We say, ‘We don’t have experience.' They say, ‘We can’t employ you.' But without employment we can't get work experience.” I genuinely believe from our discussions with employers that the scheme is a positive move, but I will certainly look at the scheme that the hon. Gentleman talks about.

[Stephen Timms (East Ham) (Lab)]

I echo the Secretary of State’s good wishes to the Chair of the Work and Pensions Committee.

Work experience is a very good thing. The Minister of State has emphasised that the scheme is voluntary—his U-turn last week underlined that—but jobcentre letters say the opposite. They say:

“If, without good reason, you fail to start, fail to go when expected or stop going…Jobseekers Allowance could cease to be payable”.

The Department for Work and Pensions website says the same. Until recently the website also said that the minimum wage applied unless work experience was compulsory. That point has mysteriously disappeared from the site. Will the Secretary of State get a grip, clear up this extraordinary muddle and end the confusion in his Department?

[Mr Duncan Smith]

I will do a little deal with the right hon. Gentleman: I will ensure that any little discrepancies are sorted out, providing that he and his party step forward and publicly welcome the whole idea of the work experience programme and condemn the many unions, such as Unite, GMB, Unison and others, that are backing this ludicrous Right to Work programme. Will the Opposition state that the unions should withdraw their backing? Last week, we held discussions with employers, and they asked that no sanctions be taken unless they say that something has happened to damage the business or cause a problem. We have agreed that in essence, and that is how it will stand.

Pensions Bill [Lords]

Debate between Iain Duncan Smith and Stephen Timms

Tuesday 18th October 2011 Commons Chamber

[Mr Duncan Smith]

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

I welcome the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) to his place. Notwithstanding our earlier little exchanges, I unreservedly welcome him. I am sure that he will be a great asset to his party, and I look forward to other clashes and debates that we may have as time goes on. I thank the Members on both sides of the House who served with distinction on the Public Bill Committee for their help in scrutinising the Bill. They have had to hang around for quite a long time, but we are where we are now. I also thank the Opposition for their approach to many of the positive debates on the Bill’s clauses. May I also extend my appreciation to my hon. Friend the Member for Altrincham and Sale West (Mr Brady) and the hon. Member for North Ayrshire and Arran (Katy Clark) for chairing the Committee sittings through those longer moments?

It is also right that I pay tribute to my hon. Friend the Pensions Minister for his commitment to taking this important legislation through this House. If there is anybody in government who has championed the cause of the low-paid in pensions, it is him. It is a privilege and pleasure to work with him in this coalition—a very firm coalition in our case. On a departmental point, may I back him up on what he said about one of our civil servants, Evelyn Arnold, whom the right hon. Member for East Ham (Stephen Timms) knows? She is retiring after a long time and has seen so many of these things go through, and it is right for us to thank those who serve us without normal comment. So, without question, I thank her for the time she has spent, on behalf of all parties in government, getting this sort of legislation through.

Over the past few months, a number of amendments were made that I believe have improved the Bill, and I shall run through them. With the blessing of the House, I do not intend to spend much time on them because we have been through them a lot. Amendment 1 related to the consumer prices index underpin, where we have listened to concerns and responded by ensuring that schemes that use the retail prices index will not have to uprate by CPI in the years when it is higher. We have heard the issues raised on deferred member charges and, having listened, we have extended an existing reserve power to cap charges to also cover deferred members. That enables the Government to protect all scheme members from high charges regardless of what might come in the future, which is an important feature. Thirdly, we have also made an amendment to clarify the definition of money purchase benefits in light of the Supreme Court’s recent judgment in Houldsworth v. Bridge, ensuring that schemes and members continue to have adequate protection.

The House will be aware that we have listened and responded to concerns about the women most affected by the accelerated rise in the state pension age. Last week we announced that no women will see their state pension age increase by more than 18 months. We have always been clear that our policy will not change and we will still equalise the state pension age by 2018 and increase it to 66 by 2020. We have, however, honoured the commitment I gave on Second Reading to ease the transition process for those who are most affected. I listened with interest to the debate, but the point that is sometimes missed is that the adjustment means that nearly 250,000 women will have a lower state pension age as a result of the change, as will a similar number of men: 500,000 people at a cost of just over £1 billion in the next spending period. We should not sniff at that.

[Stephen Timms]

rose—

[Mr Duncan Smith]

Before I give way to the right hon. Gentleman, let me make a small point. I understand why the Opposition want to trumpet a great deal about this. Having sat in opposition, I understand that getting self-righteous about such things in defence of others who raise them is exactly what Opposition Members do. As some of my hon. Friends said earlier, however, unless the Opposition can guarantee that they will reverse the measure if and when they come into government, in essence they are doing something quite cynical by raising the hopes of women outside, knowing only too well secretly that they will never make the change. If I give way, I would like to hear that the Opposition absolutely plan to reverse this measure and change it in government.

[Stephen Timms]

One thing the Opposition are entitled to do is ask the Government to explain why they are doing what they are doing. At a time when the Government are increasing the state pension age by one year for many people, what is the justification for picking out 500,000 women and treating them more harshly than everybody else?

--- Later in debate ---

[Mr Duncan Smith]

I think the right hon. Gentleman knows the answer to that question. It is wholly part of the process of equalisation and of moving everybody on at the same time for the extra year’s increase. That answers his point, but, as he knows in his heart of hearts—I consider him a reasonable man in his dealings most of all—the real point is that had Labour been in government, I suspect that they would have done almost exactly the same things.

The generation below my generation is likely to retire on a lower income in retirement, the first generation to do so, as a result of all the problems we have had with the economy—which the previous Government left for us and for which we never get an apology—and the reality that not enough people have been saving. We are about to condemn a generation of people who will struggle to save for their pensions and who will have to pay off elements of the debt that we—this generation going through Parliament—have overseen while at the same time paying for those who are already in retirement, and we must do something to help them rid us of that debt so that they do not pick up such a large proportion of it and are not saddled with it as they attempt to bring up their children and earn a living at the same time.

[Stephen Timms]

The Secretary of State is explaining why the state pension age needs to be raised and our amendments did not oppose the increase of one year. We are still waiting, however, for some justification why this particular group of 500,000 women must wait more than a year—longer than everyone else—to reach their state pension age.

[Mr Duncan Smith]

I think I have explained that. As I said earlier and as the right hon. Gentleman knows well, the acceleration is about reaching equalisation in time to move the age to 66. We can bandy this subject about, but the point remains that the Opposition must come to terms with something quite important. The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East, who opened the debate on Report, suggested that £11 billion—he insisted on saying £10 billion, but I must tell him that the figure is £11 billion—was no great problem and not an issue in the great scheme of things. That is, in a sense, the problem. I remind him that to save £5 billion in real terms today straight off, we would have to cut the education budget by 10%. That is the nature of how we would have to find the money.

I simply say to the Opposition that I understand the rules of opposition—goodness gracious, we spent enough time in opposition ourselves—and the temptations that come with opposition, but realistically they should be saying to all those women that we have made a major move. We are prepared to spend an extra £1 billion to make sure that those who were excessively caught in that trap are not any more. I think that is fair and reasonable and that the Opposition need to explain to women up and down the land why they are making a big fuss about this when they know, cynically, that they would not overturn this if they came to government. That is a very cynical position to be in—to whip up this emotion outside and then calmly and quietly say, “Of course, we can’t change it.” I am afraid that is bad politics and bad decision making.

Oral Answers to Questions

Debate between Iain Duncan Smith and Stephen Timms

Monday 18th July 2011 Commons Chamber

[Mr Duncan Smith]

That is absolutely our intention. That is why we are listening carefully to what people have proposed. The whole point about child care is that it should be there to support particularly women going into work who have caring responsibilities. We are reviewing this to make sure that that continues to be the case under universal credit. That is the whole point about the consultation. In other words, where we may be wrong, we can get that corrected and make sure that we come forward with a really good package in time for the debates in the other place.

[Stephen Timms (East Ham) (Lab)]

What is now the Government’s policy on the benefit cap in universal credit? The Secretary of State has told us that the policy is not changing, but press reports from Liberal Democrat sources contradict that by saying that the issue is far from settled and that the cap might not apply to existing benefit recipients. Then, last week, the Minister with responsibility for employment confirmed in a letter to me that “easements” are indeed being considered for existing recipients. So was the Secretary of State mistaken, and is the policy changing or not?

[Mr Duncan Smith]

The policy is not changing. The right hon. Gentleman should have written to me and my colleague at the same time, and we would both have given exactly the same answer. We have always said that in the course of the cap, we will look at any difficult cases. [Hon. Members: “Ah!”] We have always said that. One would always do that in a transition, just as we are doing with housing benefit. I remind the right hon. Gentleman and his colleagues that the cap will come in at a gross level of £35,000 a year. I would very much like to know what their position is on the cap, because so far we have heard absolutely nothing about whether they support it or are opposed to it. Perhaps they will tell us now. Most people out there are in favour of it.

Welfare Reform Bill

Debate between Iain Duncan Smith and Stephen Timms

Wednesday 15th June 2011 Commons Chamber

[Mr Duncan Smith]

I was not going to pick up on that, but given that my hon. Friend has asked me, I will say that the reality, which is clear, is that the Government inherited the employment and support allowance reform from the previous Government. It was this Government who exempted cancer patients on chemotherapy in hospitals; they were not exempted by the previous Government. Our record on this is therefore quite good. As for the exchange at Prime Minister’s Question Time, it is also important to say that if somebody cannot take work, they will remain on the support group or be moved to the support group, where they will continue to receive full support indefinitely—and it will not be income-related.

[Stephen Timms]

rose—

[Mr Duncan Smith]

One moment, one moment. Let me finish, all right?

In reality, therefore, people on the work-related activity group will already have been seen to be able to do some work with some assistance—that is the key—and of course, as has long been the case, those benefits are income-related. It is also important to note that the figure that Macmillan produced today—of 7,000 people losing everything—is not altogether accurate, because—[Interruption.] No, no, because 60% of the people it was talking about will continue to receive some form of support; they will not be losing all their money. We will not be moving those on chemo. We are looking to review the situation under Professor Harrington to see how much further we can go, but the fact is that if someone is not capable of work and is too ill, they will be on the support group.

[Stephen Timms]

Can the Secretary of State confirm, however, that people receiving oral chemotherapy and oral radiotherapy are in the work-related activity group, and that if they are halfway through their treatment and it gets to a year, they will lose all their contributory benefit?

[Mr Duncan Smith]

Not if they are on income-related benefit. Of course they will absolutely continue to get the income-related support. The point is that this— [Interruption.] Wait a minute. The right hon. Gentleman knows very well—he should stop playing silly games—that we have asked—[Interruption.] No, no—[Interruption.] Grow up, for God’s sake! He has to recognise that we have asked Professor Harrington to review that, because that is a later form of chemotherapy, and he will report back. Whatever his recommendations are, we have said that we will accept that. The right hon. Gentleman knows that, and I suspect that he should have said it when he got up at the Dispatch Box. [Interruption.] I think I have done that; I just wish that the Opposition would not play politics with people’s fears and concerns. They made no arrangements at all for cancer patients on ESA, so we will take no lessons whatever from them.

We are now paying as a result of Labour’s mismanagement of the economy, which is causing all the problems and which is why, even in this Bill, we are having to find savings, with an eye-watering £120 million a day going to pay off the interest alone on the debt that the last Government left us. It is because of the deficit reduction plan that Britain has put in place that we have managed to keep our borrowing costs low and comparable to Germany’s rather than to those faced by Portugal, Ireland or Greece. These need to be seen in context, but I want to—

Oral Answers to Questions

Debate between Iain Duncan Smith and Stephen Timms

Monday 13th June 2011 Commons Chamber

[Mr Duncan Smith]

We estimate that universal credit as a static system, not even taking into account any dynamic effect, will lift 900,000 people out of poverty, about 350,000 of whom will be children. It is worth remembering that under the present child care systems that people have spoken about, at least 100,000 people do not get the child care for which they are eligible. Under universal credit, the take-up will be higher, so it will have a better effect.

[Stephen Timms (East Ham) (Lab)]

The Secretary of State is right to recognise that support for child care is key to whether parents are better off in work or out of work. However, he promised the Welfare Reform Public Bill Committee that the Government’s proposals on child care support would be available before the Bill left Committee. That promise has been broken; he has simply been able to provide only a discussion of the options. When will he get a grip and come up with a policy?

[Mr Duncan Smith]

I will get a grip the moment the right hon. Gentleman’s team decide whether they are in favour of the Bill or against it. I gather that the Leader of the Opposition has today moved like a wriggly worm and decided that he is both for and against it, which is really not surprising. The point of bringing forward our proposals is that the right hon. Gentleman and everybody else will have a chance to look at them and decide whether they agree with them. After the consultation, we will make it clear what our final proposals are. I think that that is fair. Last time, he complained that we did not consult him—he ought to make his mind up.

Oral Answers to Questions

Debate between Iain Duncan Smith and Stephen Timms

Monday 28th March 2011 Commons Chamber

[Mr Duncan Smith]

Yes. The majority of existing and potential second earners will not, on the basis of the figures I have looked at, be affected by the reforms, because the household already has earnings that take them beyond the reach of the benefit system. Approximately—I stress this is an approximate figure—300,000 second earners may see a deterioration in the incentive to increase their hours, and it is possible that some second earners will choose—or may choose as a result of their home commitments—to reduce or rebalance their working hours or leave. However, universal credit will provide much better incentives for the first earner, giving a greater choice to the household about how it wishes to spread its income.

[Stephen Timms (East Ham) (Lab)]

The Secretary of State told us on Thursday that the Government have not yet decided how to support child care costs in universal credit. Is he yet in a position to assure women with children that in the new system they will be better off in work—after child care costs have been taken into account?

Social Security

Debate between Iain Duncan Smith and Stephen Timms

Thursday 17th February 2011 Commons Chamber

[Stephen Timms]

If that were the proposition, we would be happy to debate it and consider it, and perhaps work with the Government on it. Sadly, that proposition has not been made. The proposition before the House is that the change should be made for ever, and that is what I object to. It is not just me: the Civil Service Pensioners Alliance—

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

I had not planned to intervene, but I wanted to tease out the right hon. Gentleman’s meaning. He is being a little disingenuous, so I invite him to be a little clearer. He knows that commitments are made for a Parliament, at most, and that if there were to be a change of power, the next Government could do whatever they want. He talks about “for ever”, but decisions can be made at the next election. Can we tempt him to say on behalf of his party that during the lifetime of this Parliament—or perhaps for one year or two years—it supports the change to CPI? Or is he saying that his party utterly detests the change and will not support it?

[Stephen Timms]

The Secretary of State is putting a different gloss on this from the one that the Pensions Minister put on it. I asked the Minister directly whether this change was intended to be permanent, and he confirmed that. The Secretary of State suggests that it would be only for this Parliament—[Interruption.] Well, I am anxious to establish the Government’s position. We have had two contradictory positions set out now—

--- Later in debate ---

[Mr Duncan Smith]

The right hon. Gentleman may have failed to understand my point. The Opposition are not in government, by definition, and they have to decide what they will do in this Parliament. What is his position in this Parliament? We have said that the change is permanent. Do they support that for this Parliament or not? Do they support it for a year, two years, three years or four years? What is their position on CPI? All we need to know is whether they support it for this Parliament.

[Stephen Timms]

Well, the Secretary of State has shifted back a little way towards the Minister by suggesting that the Government view the change as permanent. As for the view of my party, I simply refer the Secretary of State to what the leader of my party has said, which is that the suggestion that the change should be made for a period—perhaps up to three years—would be something that we could consider. If that proposition were on the table, we would be happy to consider it. But sadly it is not. As we have heard from the Minister—and as I think the Secretary of State has now reluctantly confirmed—the Government’s intention is that this arrangement should be permanent. That is what I strongly object to.

I was just about to refer to what the Civil Service Pensioners Alliance said. It

“firmly”

rejects

“the assertion that the CPI is a ‘better’ measure of inflation for pensioners.”

It urges the Government

“to take account of the advice of their own statisticians before embarking upon a change which will adversely affect the incomes of pensioners for the rest of their lives and not just for the term of the current financial crisis.”

Age UK has made a similar point.

All the main public service schemes are contracted out of the additional state pension. Of course, in the current climate we need restraint over public sector pay and pensions, but one group that the proposed permanent change will hit particularly hard is those who serve in the armed forces and their dependants, who rely on their pensions at an earlier age than almost anyone else. A permanent switch would, as I understand it, mean that somebody who had perhaps lost both legs in a bomb blast in Afghanistan could miss out on half a million pounds in benefit and benefit-related payments over the rest of their life. War widows, too, will lose out severely. For instance, if this change were made permanent, the 34-year-old wife of a staff sergeant killed in Afghanistan would be almost three quarters of a million pounds worse off over her lifetime.

If Ministers are going to pursue this policy, they need to explain why those serving in Afghanistan—already in some cases, as we have heard in the last few days, facing redundancy of which they were informed by e-mail—should see their pensions reduced for the rest of their lives compared with the expectations that they have had until now, and why—