Oral Answers to Questions

Debate between Justin Tomlinson and Debbie Abrahams

Monday 7th October 2019 Commons Chamber

[Jessica Morden (Newport East) (Lab)]

3. What assessment her Department has made of the effect of the introduction of universal credit on the financial circumstances of disabled claimants.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

18. What assessment her Department has made of the effect of the introduction of universal credit on the financial circumstances of disabled claimants.

[The Minister for Disabled People, Health and Work (Justin Tomlinson)]

Universal credit targets additional support at a wider group than the system it replaces, with a much higher rate for severely disabled people than the employment and support allowance equivalent. Around 1 million disabled households will gain, on average, £100 a month on universal credit compared with legacy benefits.

[Justin Tomlinson]

We continue to work with stakeholders and claimants to make sure the system is improved and can operate as quickly as possible. I encourage Opposition Members to support the £600 million of additional support for the severe disability premium and not pray against those regulations.

[Debbie Abrahams]

Despite what the Minister says, the reality is that a new claimant on universal credit will be £180 a month worse off as a result of disability premiums not being available. That is in addition to the increasing number of disabled people who are dying after being found fit for work or being refused PIP. When will the Government ensure that disabled people are not discriminated against and are adequately resourced, as they would be under the Labour party’s policy?

Personal Independence Payments: Supreme Court Ruling

Debate between Justin Tomlinson and Debbie Abrahams

Tuesday 23rd July 2019 Commons Chamber

[Justin Tomlinson]

I understand the thrust of the hon. Lady’s point, and I know that she works hard in this area. As I have said, our collective understanding is getting better, and we are working with stakeholders—people with real frontline experience—to help shape our training. All the assessors—trained health professionals—have people behind them who are experts in all conditions, not just mental health. Remember, many claimants have a menu of health conditions to be navigated. Where an assessor feels that they need additional support, they will get it from those experts before the assessment and while writing the report afterwards.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

To be dragged to the courts yet again in relation to PIP and the totally inadequate support that it provides to disabled people is a shame on this Government. According to Mind, two thirds of people on DLA for mental health conditions have had their PIP refused or reduced, which is just not good enough. On top of that, 60 disabled people a month—a month—die after being refused PIP. To say that PIP is an okay support system for the most vulnerable people in this country is an absolute disgrace, so will the Minister write to me and answer the questions that I put to him in my letter of over two months ago?

[Justin Tomlinson]

I remind the hon. Lady that the Government took this case to the Supreme Court because we wanted to get clarity on this important issue. I also remind her that, under DLA, only 6% of claimants with a mental health condition got access to the highest rate of support. Under PIP, 33% of claimants are getting that support—more than five times higher than under DLA. We are doing everything we can to support people, and we are continuing to work with stakeholders and disabled people to ensure that the process continues to improve. I am proud that this Government are spending a record amount of money on supporting the most vulnerable people in society, something that Opposition Members continue to vote against at each Budget.

Universal Credit Fraud

Debate between Justin Tomlinson and Debbie Abrahams

Wednesday 10th July 2019 Commons Chamber

[Justin Tomlinson]

As is very clear, any claimant can access financial support from day one where it is needed. We will continue to do all that we can to ensure that everybody benefits from the personal, tailored approach that universal credit offers, which is an integral part of how we are helping to deliver record employment across all regions of this country.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I am grateful to the Minister for saying that, where there has been fraudulent activity and claimants have been transferred on to UC, he will consider revoking that. Can he explain and enlighten us all on the testimony of the DWP officials at the most recent Select Committee hearing, who said exactly the opposite?

[Justin Tomlinson]

This is in relation specifically to the cases of fraud relating to advance payments. I understand the point that the hon. Lady raises, and as ever we will continue to consider all our operational activities to ensure that we continue to deliver much-needed improvements.

Oral Answers to Questions

Debate between Justin Tomlinson and Debbie Abrahams

Monday 13th May 2019 Commons Chamber

[Justin Tomlinson]

My hon. Friend has worked really hard to promote opportunities for employers in his constituency to employ people with disabilities. I welcome the fact that, over the past five years, this Government have seen an extra 930,000 more disabled people in work and that, for the first time ever, there are now more disabled people in work than not in work. The key is to give businesses the confidence to realise that they can benefit, and that this is a win-win for the disabled person and for the business.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

My concern relates to the number of people who are dying after being found fit for work. Further to my letter to the Secretary of State, will she commit to publish the Department’s internal reviews of the cases of those who have died? Will she also commit to an independent inquiry? Will she ensure that if any evidence of wrongdoing by someone in public office is found, that information will be forwarded to the police?

[Justin Tomlinson]

This Government are committed to working with stakeholders and those with frontline experience to continue to make improvements. There have been two independent reviews of the work capability assessment, and we have accepted and implemented over 100 improvements. We will continue to do all that we can to improve the process for claimants.

Ten Years of the Work Capability Assessment

Debate between Justin Tomlinson and Debbie Abrahams

Wednesday 24th April 2019 Westminster Hall

[Justin Tomlinson]

I cannot give a broad-brush answer. I know what the hon. Lady is saying and I am coming on to the use of evidence and how we can do more earlier and, potentially, then with paper-based assessments. I will come on to that. I understand, but I cannot give a definitive answer, because every claimant has their own unique challenges that have to be addressed.

In addition, SMS text message reminders about appointments have been welcomed, and there has been a lot of work on the website, which includes mock assessment videos so that people can get an idea of the sort of things to expect. Those things are all looking to remove some of the anxiety and worry about assessments. There is more to be done in that area, but we recognise that.

The improvements in the training and the extra healthcare professionals have meant that median clearance time halved from 25 weeks in March 2015 to 10 weeks in 2018, and customer satisfaction has exceeded the 92% target since that point. However, that does not mean that we are getting it right every time, and that is what I want to turn to now in focusing on MR and appeals.

All of us as Members are frustrated when what seem to be clear-cut cases come to our constituency surgeries asking for our help. There are times when we think, “How on earth can this have happened?”, and ultimately the person could have a very long appeal process to go through to get the right decision. In the majority of cases, appeals are successful because of additional oral and written evidence. That has to be addressed. We rightly are going to tackle it and will do so in two stages—first, with the MR process. We have started doing this with PIP. We are seeking to contact the claimant who is disputing a decision and talk to them directly to get the additional oral and, potentially, written evidence at that stage to see whether we can improve decisions at that point, rather than waiting for the evidence to come at the end of the appeal process.

[Debbie Abrahams]

Does the Minister think that it is unacceptable that any Government policy should cause their citizens to take their own life or to die? If he does, should there not be a moratorium on this policy until it is got right? Surely one death is one too many.

Social Security

Debate between Justin Tomlinson and Debbie Abrahams

Monday 4th March 2019 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

What assessment have the Government made of the changes to pension credit that will come in in May this year, making it unavailable to people whose partner is under 65? How many more pensioners will be driven into poverty as a result?

[Justin Tomlinson]

There are two elements to that. First, it depends on individual circumstances and the impact of factors such as different arrangements in whether people are working, their caring responsibilities, and their health conditions. Secondly, it is about the principle of fairness, in that those of working age should not be accessing pension-related benefits. We should not be taking people of working age out of the workplace. Pensioner poverty continues to stand at one of the lowest rates since comparable records began, and we intend to keep it that way.

--- Later in debate ---

[Justin Tomlinson]

I will just make some progress.

Many speakers talked about poverty. Income inequality has fallen—it increased under the previous Labour Government. Rates of low income and material deprivation for children and pensioners have never been lower. There are 300,000 fewer children in absolute poverty and 200,000 fewer pensioners in absolute poverty. In the past five years food affordability has almost halved and is well below the EU average.

[Debbie Abrahams]

According to the Child Poverty Action Group, 100,000 children are in severe poverty as a result of the benefits freeze. Would the Minister like to accept that fact?

[Justin Tomlinson]

The stats are very clear: there are now 300,000 fewer children in absolute poverty. Where we are in agreement in this debate is that all speakers rightly welcomed the additional £1.7 billion for the universal credit work allowances. We continue to support those who are seeking to enter work, increase their hours or increase their pay.

Overall, this order is about striking the balance between targeting support to those who most need it and what is fair for the taxpayer. Under the previous Labour Government, who increased welfare spending by £84 billion—the equivalent of £3,000 per working household—that was not a fair balance.

Oral Answers to Questions

Debate between Justin Tomlinson and Debbie Abrahams

Monday 19th November 2018 Commons Chamber

[Justin Tomlinson]

The reality is that the poorest fifth in society are £400 a year better off in real terms, and the richest fifth in society are £800 worse off.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

The report from the UN special rapporteur on poverty in the UK was scathing. Professor Alston referred to a

“punitive, mean-spirited, and often callous approach”

and the “misery” that it caused, in relation to the cuts and changes to the social security system, including universal credit and the freeze on benefits. Does the Minister agree with him that in the UK, poverty “is a political choice”?

[Justin Tomlinson]

We disagreed with the findings, but we did take the opportunity to share our record of delivering record employment, a simplified benefits system that helps some of the most vulnerable people in society and 1 million fewer people in absolute poverty, as well as our proactive work with stakeholders, which is delivering real life opportunities for all in society.

Widowed Parent’s Allowance

Debate between Justin Tomlinson and Debbie Abrahams

Wednesday 5th September 2018 Commons Chamber

[Justin Tomlinson]

Actually, as part of the commitment to bringing in the new bereavement payments, we will do a full impact assessment, which will be shared with the House. One of the key changes is the additional £1,500 in the initial payment for those in a marriage or civil partnership who had children. We understand the importance of making sure that those with children get additional support.[Official Report, 13 September 2018, Vol. 646, c. 6MC.]

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I echo the calls for compassion and fairness when dealing with children affected in this way. I also gently remind the Minister that this is the seventh ruling in the last 18 months against different aspects of the Government’s social security policy. It would be appropriate for the Government to show some humility and listen.

[Justin Tomlinson]

I thank the hon. Lady, but those are the principles that govern us. The new system that we have brought in provides immediate support; it prioritises help for those on the lowest incomes; and it recognises that those with children, regardless of age, need additional immediate support. We will continue to assess both the ruling of the Court in relation to Northern Ireland and the wider implications of the new benefit.

Financial Guidance and Claims Bill [Lords]

Debate between Justin Tomlinson and Debbie Abrahams

2nd reading: House of Commons
Monday 22nd January 2018 Commons Chamber

[Debbie Abrahams]

Again, my hon. Friend makes a very interesting point, and I would look to work with him on the details of that to understand exactly what he wants to achieve.

I also want to talk about the need for a duty of care on financial service providers and a breathing space for those trying to manage their debt problems.

On clause 4, we welcome the Government’s commitment to ban cold calling, which is the leading driver of pension scams. The scope of the clause is still too narrow, and the clause is not nearly urgent enough. Every day that passes without a ban, people are being avoidably conned out of their life savings.

However, there are also scams that work against businesses. In the last four years, the Association of British Travel Agents has recorded a 520% increase in gastric illness complaints. As a result, hoteliers in the markets affected are now threatening significant price increases, and some are even considering withdrawing the all-inclusive product from UK holidaymakers entirely. ABTA has recently released shocking statistics showing that one in five people have been contacted about making a compensation claim for holiday sickness, with cold calling being the most common method of approach.

On clause 5(2), within 24 hours of the collapse of Carillion last week, adverts started to appear online encouraging people to cash in their pension pots. That reflects the experience of BSPS members. The Minister will have noted the evidence to the Work and Pensions Committee, before which the extent of pensions scamming was revealed. That involved some advisers travelling hundreds of miles in the hope of capturing high fees for each pension pot they succeeded in transferring. The Select Committee described retirement savings sharks reportedly circling around the British Steel pension scheme members, providing a “honeypot for scammers”. One steelworker is reported to have missed out on £200,000 of his pension transfer value after being advised, and as I have said, we are already seeing a similar targeting of Carillion pension members.

The law does not currently prohibit firms from acting as introducers, provided that they do not stray into providing services for which they require FCA authorisation. That applies to any non-regulated firm. Last year, the FCA received 8,612 reports of potential unauthorised activity in the United Kingdom. If the firms and/or individuals reported are within the remit of the FCA, it can investigate and take action, which ranges from publishing unauthorised firms’ and individuals’ warnings and taking down websites, to taking civil court action to stop activity and freeze assets, insolvency proceedings, and, in the most serious cases, criminal prosecution. Last year, the number of enforcement cases taken was 69. Given the current climate, it is clear that enforcement action needs to increase, but most of the funds that the FCA collects from penalties on financial services firms go directly to the Treasury. What consideration has the Minister given to removing the exemption of introducers from the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, and allowing the FCA to keep the financial penalties that it receives so that it can expand its enforcement work?

Free and impartial Pension Wise guidance is essential at times like this, and it is greatly valued by those who use it, but take-up is nowhere near high enough. Far too many people are currently making vital decisions in the dark, which puts them at greater risk of suffering irrevocable financial detriment through scams or choices that are contrary to their interests, such as transferring pensions to savings accounts. Those problems will only grow as people become more reliant on income from direct contribution pensions in retirement. The existing Pension Wise promotion regime of signposting by pension providers—who have no business interest in promoting the service—and advertising has proved insufficient.

We welcome the Government’s acceptance that people should be given more encouragement to take guidance, but we believe that there should be a stronger nudge. Although clause 5(2) is welcome, we think that it can be improved through exemptions to avoid unnecessary burdens and stronger core requirements to make taking guidance a true default option. While individuals could choose not to take free and impartial guidance before accessing their pension pots, that would no longer be the consequence of passivity: as with the highly successful automatic enrolment policy, people would have to actively opt out. Default guidance would promote shopping around, better-informed decision making and protection against scams. Combined with a ban on cold calling, it would represent a step forward in consumer protection in an era of pension freedoms. Will the Minister agree to introduce new provisions in Committee to impose an immediate ban on cold calling and to introduce default guidance to assist people accessing or seeking to transfer their pension assets, with strong penalties for advisers who wilfully and detrimentally scam pension members?

Clause 25 gives the FCA the power to impose a cap on the fees that claims management companies can charge for their services, and a duty to exercise that power in respect of financial services firms. The Government have also introduced an interim cap on the fees that CMCs can charge consumers in relation to payment protection insurance claims. However, that does not go far enough to protect consumers from paying disproportionately high fees for what is often very little work. The Ministry of Justice estimates that the average amount of commission charged to consumers by CMCs is 28%, plus VAT. The FCA estimates that the average payout for PPI mis-selling is around £1,700, which means that a CMC would, on average, charge a successful claimant £476 plus VAT. Although the proposed fee cap would reduce the amount that consumers must pay CMCs, it would still mean an average charge of £340 with VAT on top. If the Government want to take meaningful action to protect consumers from high fees, they should propose a solution that would allow them to keep 100% of PPI compensation.

The Government should require firms to pay CMC costs for PPI claims, capped at 20% plus VAT, when they are at fault and when the consumer has used a CMC rather than claimed directly. This measure would apply only for the interim period until the new FCA regulations came into force or until August 2019, the deadline for making PPI claims, whichever was the sooner. This would incentivise firms still paying compensation to proactively reach out and encourage consumers to make claims directly to them, and to allow that to be done easily. It would also protect consumers from paying high charges to CMCs.

We support the strengthening of the regulation of CMCs, but we look forward to a regulatory regime that better protects consumers from high charges, poor value for money and unacceptable behaviour on the part of far too many CMCs. We also welcome the improvements made during consideration of part 2 in the other place, notably clause 28, which introduces an interim cap on the fees that CMCs and law firms can charge for claims in respect of PPI. This is an important protection for consumers in the run-up to the FCA’s claims deadline of August 2019. Customers can claim directly from their PPI provider for free, but those who choose to enlist support should not have to face the fees currently being charged by some CMCs.

However, the clauses introduced by the Government at the urging of Baroness Meacher apply only to PPI claims, even though the Ministry of Justice’s original consultation considered other bulk claims by CMCs, notably in respect of packaged bank accounts. In the vast majority of cases, the pursuit of such claims does not require a significant amount of work, but in its response to the consultation, the MOJ merely asserted that

“analysis of the evidence received”

suggested that

“PBA claims should be grouped with other financial-services claims due to additional work needed on these types of claims.”

It is far from clear that CMCs undertake significant work or add significant value in submitting PBA claims on behalf of consumers. If the CMCs’ approach to PBA claims truly differs little, if at all, from their approach to PPI claims, the Bill should cap their charges in exactly the same way. If the Government cannot provide justification or act to protect customers from millions of pounds of excess charges for PBA claims before the FCA introduces its own rules a year or more from now, we will table amendments in Committee to achieve that. We ask the Government for a better justification of their decision not to apply the interim fee cap to PBA claims.

I shall move on to the breathing space scheme. An estimated 2.4 million children live in families in problem debt in England and Wales, and the FCA estimates that half the UK population is financially vulnerable. It is shocking that an estimated 600,000 families in England and Wales are spending more on overdue bills than they spend on food. A measure that would protect such families is a breathing space scheme. Such a proposal would introduce a legal freeze on interest and charges, collections and enforcement action to give people time and space to stabilise their finances and put in place an affordable and repayment-sustainable plan. Such a scheme, which has been championed by the Children’s Society, StepChange Debt Charity and many others, was included in our manifesto and that of the Conservatives, and I am delighted to see that, following pressure in the other place, a commitment is now on the face of the Bill. Yet again, however, the timescales for implementation are too slow.

I appreciate that the consultation on the breathing space scheme has now closed, but I want it to have certain fundamental tenets. First, it should include a legal freeze on interest and charges, collections and enforcement action. Secondly, as many debts as possible need to be included, especially debts to public bodies. Thirdly, there should be no gaps in protection between the initial breathing space period and the transition to a statutory debt management plan. Finally, the breathing space scheme needs to be implemented as quickly as possible. Again, I would be grateful for the Minister’s response to those points, either at the end of the debate or in writing to me.

I would now like to focus on an idea that received a great deal of support in the other place and that has been raised by Members here today—namely, a duty of care on financial service providers. That is not currently in the Bill, but we now have an important opportunity to discuss the support that banks provide to their vulnerable customers. Research from Macmillan Cancer Support, which was mentioned earlier, shows that four out of five people with cancer are affected financially by increased costs and loss of income following their diagnosis. As the Bill recognises, ensuring that people have access to the right help and advice is essential to stopping financial problems.

[Justin Tomlinson (North Swindon) (Con)]

On that point, will the hon. Lady join me in congratulating Nationwide Building Society, which has led the way by working with Macmillan to ensure that appropriate support is made available as soon as there is a diagnosis?

[Debbie Abrahams]

I congratulate Nationwide and all organisations that recognise that they have a duty of care to their customers. We need to put that duty of care on the face of the Bill, particularly for those who find themselves in vulnerable circumstances.

As providers of mortgages and other key financial commitments, banks and building societies have a huge influence—good or bad—on the financial wellbeing of many households. When the right support is put in place, that can lead to improved outcomes for customers, as we have just heard. However, that Macmillan research shows that problems still exist and that there is a lack of consistency in the support offered to people when they seek help.

With that in mind, will the Government support a revision of legislation to incorporate the recommendation made by the Lords Financial Exclusion Committee regarding a duty of care? The Committee concluded that the Government should amend the Financial Services and Markets Act 2000 to introduce a requirement for the FCA to make rules setting out a reasonable duty of care for financial services providers. I appreciate that any change as significant as that must be subject to proper consideration, and it is therefore welcome that the FCA has committed to publishing a discussion paper. However, the Government and the FCA have said this must wait until

“after the UK’s withdrawal from the EU”

becomes clear, but I do not think that we can wait, because people cannot wait. I therefore urge the Minister to look carefully at the issue and to bring forward suitable proposals in Committee.

In conclusion, we by and large support the Bill, but a number of areas can be strengthened significantly—for instance, the duty of care needs to be addressed on the face of the Bill—so I urge the Minister to act on those areas, and I look forward to his response.

Universal Credit Project Assessment Reviews

Debate between Justin Tomlinson and Debbie Abrahams

Tuesday 5th December 2017 Commons Chamber

[Debbie Abrahams]

My right hon. Friend hits the nail on the head. We must have greater openness and transparency about this and other Government schemes. For universal credit especially, the effect it is having on people now means that we must do the right thing. As I said, the ruling must be complied with.

[Justin Tomlinson (North Swindon) (Con)]

rose—

[Debbie Abrahams]

I shall give way in a moment.

As the ICO ruled, any failure to publish the reports would result in a High Court judgment.

--- Later in debate ---

[Debbie Abrahams]

My hon. Friend makes absolutely the right point. I commend her for her work on the Work and Pensions Committee to expose how important it is to get this right.

[Justin Tomlinson]

The hon. Lady is being generous in taking interventions. On the point about transparency, each and every single one of us can at any time visit jobcentres and talk to staff and claimants. I have done that three times and brought a Minister with me to visit, too. The overwhelming response I have had is that universal credit is positive and is making a genuine difference.

[Debbie Abrahams]

I thoroughly agree with the hon. Gentleman that our seeking the publication of these reports does not detract from the valuable work that jobcentre staff are doing under difficult circumstances.

The Information Commissioner’s Office found that

“the withheld information would provide valuable insight into the management of the UCP”—

universal credit programme—

“and allow for greater understanding of what the UCP did to identify and tackle the issues that it encountered.”

It found that the reports we are discussing

“provide a distinct insight into the governance of the UCP and allow for even greater transparency.”

That is in addition to the findings in National Audit Office, Select Committee and Office for Budget Responsibility reports.

The Government’s Budget announcements were a welcome step in the right direction, but not nearly enough. They still need to pause the roll-out of universal credit, not just slow it down, and they need to release the project assessment reviews so that we can fix the multitude of issues that still exist. The reports will help us to understand what needs fixing and how.