Employment

Lord Forsyth of Drumlean Excerpts

Wednesday 4th November 2015 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, does my noble friend agree that the problems of the steel industry have been greatly exacerbated by our inability to deal with dumping from China because of our membership of the European Union and the huge levies imposed on high-energy businesses as part of the green agenda, promoted by the Liberals with such vigour?

[Baroness Altmann]

I think the issues for the steel industry go wider than that; there are macroeconomic factors as well.

Universal Credit

Lord Forsyth of Drumlean Excerpts

Wednesday 10th December 2014 Lords Chamber

[Lord Freud]

I re-emphasise that the Treasury has signed off the strategic outline business case. This plan is being done in a way that makes sure that we do it safely and securely—not the big bang method. As I said, it is being done more cheaply than originally envisaged. It is vital that we do not do the kind of thing that happened with tax credit when it was opened on one day and was a total shambles for millions of people.

[Lord Forsyth of Drumlean (Con)]

Will my noble friend resist the carping criticism coming from the opposition Benches and take credit for the fact that when they were in government for 10 years they did nothing about the fact that some people were worse off in work than out of work? My noble friend and his colleagues are to be congratulated on taking very difficult and complex decisions to solve this problem and seeing more people coming into work as a result.

[Lord Freud]

My Lords, I have developed an extraordinarily keen appreciation of why politicians do not like to do fundamental reform, but this reform is absolutely essential because the present system is a shambles. It does not encourage people into work or reward them systematically for doing that. The whole point of universal credit is that you join up the out-of-work and the in-work systems so that there is a smooth progression that everyone can understand.

Universal Credit

Lord Forsyth of Drumlean Excerpts

Monday 24th November 2014 Lords Chamber

[Lord Freud]

The number of people claiming housing benefit has come down by more than 2% in the last year, which makes the point that for the first time in a decade housing benefit has fallen.

[Lord Forsyth of Drumlean (Con)]

My Lords, can my noble friend help me? Why does he think that the official Opposition are ignoring the considerable funds—the hundreds of millions of pounds—that have been made available to local authorities to deal with difficult bedroom tax cases? What possible motive can they have?

Introduction: Baroness Smith of Newnham

Lord Forsyth of Drumlean Excerpts

Tuesday 21st October 2014 Lords Chamber

[Lord Freud]

I will respond to the noble Baroness in a moment, but first I would like to take this opportunity to repeat briefly the apology that I made last week. I want to make a full and unreserved apology for the comments that I made at the Conservative Party conference. Of course disabled people should be paid at least the minimum wage, just like everybody else, and I am profoundly sorry for any offence that I caused.

I turn to the noble Baroness’s question. Matthew Oakley found that benefit sanctions provide a vital backdrop in the social security system for jobseekers, and the OECD has ranked the UK as mid-table for the strictness of its sanctions regime. My right honourable friend Esther McVey has looked at these recommendations more widely and has made sure that we are reviewing claimant communications for all JSA claimants, not just the ones whom Matthew Oakley looked at, and that we are introducing a new IT interface to make sure that our relationship with local authorities works more smoothly.

[Lord Forsyth of Drumlean (Con)]

My Lords, does my noble friend think that the largest annual fall in unemployment ever recorded, which was announced the other day, and the fact that 116,000 more disabled people are in work, might just have something to do with the painstaking work that he has done, both for the previous Government and for this Government, in bringing about the welfare reforms that are bringing to so many people, able bodied and disabled, the opportunity of a place in the workplace?

[Lord Freud]

As my noble friend said, the issue is that we are doing everything we can to help people into the workplace. It was a very encouraging assessment from the Monetary Policy Committee of the Bank of England, which said:

“A tightening in the eligibility requirements for some state benefits might also have led to an intensification of job search”.

That echoes something that the deputy governor had said a little while before. It is apparent that our reforms are working, with employment up by 1.7 million since 2010 and record numbers of people now in work.

Jobseeker’s Allowance

Lord Forsyth of Drumlean Excerpts

Monday 21st July 2014 Lords Chamber

[Lord Freud]

I did not need a huge amount of preparation for this Question because it is a slam dunk. The figures for employment are very good. If you are looking at part-timers, the number who do not want to be full time are down by 1.5 percentage points—the fastest decline on record. Depending on the figures you take, we have between 2% and 4% of people on zero-hour contracts, and the CIPD says that people on those contracts are as satisfied with their jobs as people on other contracts.

[Lord Forsyth of Drumlean (Con)]

Does my noble friend share my disappointment that the Opposition can do nothing but carp at this very good news on jobs? Could he remind us what the shadow Chancellor predicted would happen to unemployment as a result of our policies?

[Lord Freud]

My noble friend asks me to remind the House that the leader of the Opposition predicted a million job losses as a result of our policies. I am very happy to remind the House of that fact.

Pensions Bill

Lord Forsyth of Drumlean Excerpts

Tuesday 8th April 2014 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, I say to my noble friend that the noble Baroness makes a devastating case in favour of those people who take advantage of flexible labour markets. All my political life we have been trying to create more flexibility in the labour market and more opportunities for women. As at an earlier stage, the noble Baroness, with her characteristic incisive, forensic approach and her considerable knowledge of social security and other matters, this afternoon has made an overwhelming case. It all goes to show that the Whips’ advice of never listen to the arguments before you vote is well founded for those people who only want to win the votes.

The noble Baroness has won the argument on this and so I have a question for my noble friend. He is going to carry out a survey: what are the criteria by which he will decide what to do on the basis of that survey? Is this a numbers game? Does it depend on a certain number of people being affected by it? If it does, what is the number? To my mind, if it is one, that is one too many. The Prime Minister constantly talks about supporting strivers and people who do the right thing. In my book, someone who does not sit on benefit but goes out and does the kind of jobs to which the noble Baroness has referred has exactly that character. Such people have considerable difficulty in doing the right thing and yet find themselves penalised when they are at their most vulnerable in old age.

I understand the Government’s position. My noble friend said that the amendments were unnecessary because the Government already have the power to deal with this matter. I have two questions for him: first, what will the criteria be by which they decide whether to do something; and, secondly, what is the timetable for this? Can we have a commitment from my noble friend? If as a result of the survey the noble Baroness is proved right and it is 250,000, is that not a quarter of a million too many? If it is 10,000, is that not too many? What are the criteria?

What is the timescale? My noble friend will carry out his survey and we will have the results by the summer. Can we have an assurance that if he finds there is a problem he will do something this side of Christmas and that he will not use it as a delaying tactic? Certainly when I used to stand at the Dispatch Box there were certain techniques that one could apply when one had run out of arguments and could no longer win the debate. One was to set up a commission and the other was to commission a survey and hope that by the time the survey had been reported the matter would have gone away. One thing we can be sure of is that the noble Baroness will not go away.

[Baroness Dean of Thornton-le-Fylde (Lab)]

My Lords, I support the two previous speakers, particularly my noble friend Lady Hollis. This issue was well aired in Committee and at later stages. At the moment it predominantly affects women. I welcome the Minister’s statement, but I am aware that we are not too far away from a general election and that things may change. The work that is to be carried out will obviously be done only after this Bill becomes an Act of Parliament, so what specific assurances can the Minister give to disabuse me of the notion that in reality this is being kicked into the long grass because it is rather inconvenient?

--- Later in debate ---

[Lord Freud]

My Lords, again, I record my thanks to those who have contributed to the discussions on this issue, in particular, of course, the noble Baroness, Lady Hollis, who has shone a spotlight on this group of people.

I will pick up a few of the points that have been made today. The first was raised by my noble friend Lord German and the noble Baroness, Lady Sherlock, and concerned zero hours. There has been quite a lot of conflation between this issue and zero hours, which is probably, on balance, unhelpful, because people on zero-hours contracts do not necessarily have more than one job. Indeed, they can be working quite a large number of hours. I think the title “zero-hour contracts” does not do justice to what should perhaps be called “flexible-hour contracts”. The mean in the Labour Force Survey of people on these contracts is 21 hours and the median—I know that people like both—is 18. When you look at the average usual hours, it is a higher figure: 25 mean and 23 median. There is quite high satisfaction with that.

On the point about the labour market, the percentage of women in two or more jobs has hardly changed in the past 10 years. It is approximately 10%. The number of women who work part-time because they cannot find a full-time job is currently standing at 13.3%.

The noble Baroness, Lady Hollis, asked about the forum. We do not want to prejudge the outcome of the forum. I am sorry; the question was about the commitment to further research, if necessary. We will consider further research if it can fill the gaps in the evidence and we need it to aid our policy. If we need to take more evidence, we will need to take the time to do it properly. The rough timing is that from the initiation of qualitative research to carry out and publish takes roughly six months.

My noble friend Lord Forsyth asked about timing. We will hold the forum in July, we hope. Our analysis of existing data should be published roughly at that time, before the break. My noble friend also asked what the criteria are. The criteria are that we want to ensure that people with multiple short-hour jobs are not disadvantaged, and we would need to consider the most appropriate and proportionate means to ensure this. We need to ensure that any remedy does not place an undue burden on the business.

Perhaps I may correct something I said earlier. When I said “10% of women in two jobs”, I should have said “5%”. I apologise for that.

On the criteria and on the question of whether we would have the answers this side of Christmas—the noble Baroness, Lady Dean, was rather rude in referring to “long grass”—we are taking this issue seriously. We are making an enormous number of changes in this department. We are rebuilding the welfare system and the pensions system. We want to make sure that we incentivise flexible work. I do not think that your Lordships see before you a Minister or a department shy of taking action where it is required. I think that that is the best assurance about lawnmowers that I can give.

[Lord Forsyth of Drumlean]

I shall read my noble friend’s words carefully in Hansard, but they sounded to me like a commitment that he would address this problem one way or the other. Is that what he was saying?

[Lord Freud]

I was saying that we now have a base on which to look at this problem, see what it is and, on that basis, decide how to deal with it.

[Lord Forsyth of Drumlean]

When my noble friend has decided how to deal with it, will he then deal with it?

[Lord Freud]

I would be pretty surprised if, when one had reached a decision on how to deal with something, one did not get on with trying to deal with it.

On the timetable, we have the power to introduce credits anyway—that is a point that I have already made—but it would take time, working with HMRC, to get it right. We need to work through the impacts to ensure that there are not any significant burdens on business. However, I give the assurance that this is not a numbers game and we will look at the most appropriate action.

I think that I have dealt with most of the issues raised. I am glad that we can conclude the scrutiny of this important Bill with another example of how, through well informed discussions, this House can move a debate forward, in this case by ensuring that we have a robust evidence base on which to consider the issue of multi-jobs. On that basis, I ask that the House do not insist on Amendment 1.

Youth Unemployment

Lord Forsyth of Drumlean Excerpts

Monday 7th April 2014 Lords Chamber

[Lord Freud]

My Lords, the reason I am answering this Question is that I represent the Department for Work and Pensions, so it is fairly self-evident that I should be responsible for it.

[Lord Forsyth of Drumlean (Con)]

My Lords, will my noble friend confirm that neither the Opposition nor the Government can create jobs for young people, and that the fantastic work being done by the Government in encouraging apprenticeships, and the Budget measures that have reduced national insurance contributions by £2,000 for those who take on young people, will do far more than the kind of comments we have heard from some parties about offering youth job guarantees that are undeliverable?

[Lord Freud]

My Lords, the party opposite has a policy of guaranteeing jobs that cost more than its own costings. It thinks that the policy will cost £1.9 billion in the first year and £0.9 billion in subsequent years. The Treasury has looked at the Opposition costings and puts them at £2.6 billion a year. That money is anyway to be taken from a tax on bonuses that has already been spent. Apparently it has been spent 10 times over, but it is now to be devoted to this policy. Most disturbing of all is that to the extent that this is built on the Future Jobs Fund, the figures show us that we can get the same result for youngsters through the Work Programme, which delivers real jobs with mainly private sector employers. We are achieving the same outcomes at one-20th of the cost. You know what you get with Labour: tax and spend.

Pensions Bill

Lord Forsyth of Drumlean Excerpts

Monday 24th February 2014 Lords Chamber

[Lord German (LD)]

My Lords, the issues raised by this amendment are important, and I congratulate the noble Baroness, Lady Hollis, on her dedication to the issue over many years. She kindly told us in Committee how she was rebuffed by her own Government and today she repeated the argument that they used against her: one could not reasonably divvy up an employer’s national insurance—she used those words today again—if there were two or more such jobs. She further told us that women would not want to pay class 1 contributions. For that reason, this is an important issue. We are looking at people being able to contribute to their own pension and get the credits that they need to win a full pension in under 35 years.

Much of the discussion that noble Lords have heard today and in Committee has been about the way that people behave individually in response to the issues in front of them and about how people’s live are dealt with. The problem that we face is that there are no reliable statistics or evidence that show how individuals’ behaviour works. It is clearly possible—I heard it both in Committee and here today—to illustrate that in a way that works to the best of the argument that says that we need to move on this swiftly because there are so many people involved in a particular category. I do not mind people making contributions about the way people behave, will want to behave or are forced to behave, but I want to know how we can sort this problem out and do so in a realistic way that will result in a concrete outcome.

We are bound to hear more and more about zero-hours contracts. They are not a new phenomenon. Over the past 70 years, the notion of a job for life has all but disappeared. More and more people are spending time in self-employment, many people have more than one job and more people have part-time jobs. The single-tier pension itself is designed in such a way that an individual with a more varied work history will be able to build up their national insurance records to achieve the maximum state pension outcome, provided of course they get credited for their national insurance contributions.

The crucial issue, therefore, is whether universal credit will pick up and deal with this issue. I suspect that the answer given to the noble Baroness, Lady Hollis, when she raised this issue with her own Government, was that this is a very typically difficult issue for HMRC, given the range of information that it would require from every company in the land about who they employed and that it would have to combine the results and put them into a single file. That is of course precisely the process that is taking place, and will take place, through universal credit, which will pick up levels of flexible income including, by implication, that relating to zero-hours contracts. It is interesting that the lower earnings level, below which you do not have to pay or get credit for national insurance contributions, is £5,772 per annum at present. The Labour Force Survey figures show that those on zero-hours contracts work, on average, 20 hours a week at £9 an hour, which is enough to exceed the lower earnings limit. If the figures we have before us are to be believed, most people will be receiving enough income to receive the national insurance contribution.

The other issue about universal credit is that it will look very carefully at how it credits people and bring, as we have heard, another 800,000 people into the crediting system. For example, a single person without savings, earning below that £5,772 per annum level, will be eligible for universal credit and thereby eligible for the national insurance contribution. The question that I have to ask my noble friend is about the delivery of universal credit. In Committee, the Minister said it would be delivered in 2016-17 and the noble Baroness, Lady Hollis, said in 2019-20, although she hoped it might be earlier than that. I apologise if it was somebody else on her Benches but those are the sorts of span. If we believe my noble friend, and it is 2016-17, will this problem be dealt with from the outset by those who are then brought into the universal credit system? If that is the timetable, I ask noble Lords to consider how long it would take to put in the interim solution. In effect, what is being asked for is an interim solution between now and when universal credit comes in for a pensions system that comes into play in 2016.

What is the interim position? Do we need to ask HMRC to invent a system for itself? When the noble Baroness, Lady Hollis, asked the Labour Government for one in their time, they rejected it. I believe they said that it would be cumbersome and expensive. Do we need to have that in place or could we be reassured that, almost within the very short period of the implementation of the single-tier pension, universal credit will be in place in a sufficient and timely position so that the vast majority of people who are occupying two or more jobs that produce an income over a year of less than £5,772 at the current rates will be able to be credited? That is the key question.

[Lord Forsyth of Drumlean (Con)]

I did not participate in Committee but I am listening to my noble friend’s carefully constructed argument. Is not the point about this amendment that it is permissive? It simply provides the Government with an alternative; it does not oblige them to do anything. I cannot really understand why my noble friend is opposing the amendment while advancing that argument.

[Lord German]

It is because we have a response in place, which is the universal credit system. What matters more than anything is that the system is in place in time to capture the people who will be most affected by this in the implementation years, from 2016 onwards. That is the fundamental question and I await the answer in my noble friend’s response.

Universal Credit

Lord Forsyth of Drumlean Excerpts

Tuesday 10th December 2013 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, will my noble friend resist the bullying from the opposition Benches to move this programme at a speed that would result in difficulties? Will he gently remind them that the system he inherited was one where the poorest people in the land effectively paid marginal rates of tax of more than 95%? The Secretary of State is to be congratulated on taking this very complex system and making it worth while for people to be in work as opposed to being out of work and on benefits, and doing it with sensitivity that takes account of the needs of all groups. He should ignore the opposition, who considerably failed in government to tackle this appalling problem.

[Lord Freud]

My Lords, if you do these major cultural transformations, it is absolutely vital that you do them at the pace at which you can. One thing we are doing, which is a development from our thinking in 2010, is a huge programme of testing, learning and implementing. In particular, one thing we have introduced in the past two years—thanks, I must acknowledge, to help from this Chamber—is very substantial work with local authorities on the local support service framework. I think that will support the vulnerable in a way that they have never been supported in this country in the past.

Disabled People: Mobility Benefits

Lord Forsyth of Drumlean Excerpts

Monday 2nd December 2013 Lords Chamber

[Lord Freud]

My Lords, that is not the process which we are going through. It is difficult to draw a line between people with enhanced mobility and those on Motability. That is one of the things that we will be looking at as we do this review, which will report towards the end of next year—before large volumes of people are due to go in, so we will be able to look at this closely.

[Lord Forsyth of Drumlean (Con)]

My Lords, can my noble friend indicate whether he is satisfied that every penny that is available to Motability goes to those in greatest need? Can he tell the House what the salary is of the highest paid director?

[Lord Freud]

My Lords, Motability puts out a report and accounts. I was looking through the latest the other day, which was from 2012, and its highest paid director was paid something more than £800,000.