Oral Answers to Questions

Stephen Timms Excerpts

Monday 1st September 2014 Commons Chamber

[Esther McVey]

I thank my hon. Friend for the work he is doing in his constituency by helping to set up the Wolverhampton employment network, bringing employers and the local college together. We are doing many more things: not only are there over 1 million more young people on apprenticeships now, but we have had 150,000 on work experience placements since 2012, and 60,000 in sector-based work academies. In his constituency, we have had 370 on work experience, and 120 in sector-based work academies.

[Stephen Timms (East Ham) (Lab)]

Youth Contract wage subsidies were an attempt, albeit half-baked, to tackle youth unemployment, but they were abruptly scrapped just before the summer recess, despite an official promise that they would be available for people applying up until next April. Why have they been scrapped? Has the Minister seen that the CBI is pointing out that “young people are struggling”, and that the biggest single cause of long-term disadvantage is “unemployment early on”?

[Esther McVey]

It seems that only the Labour party is still calling for incentive schemes and guarantee schemes. Even Europe is now saying what a good job the UK is doing on youth unemployment and looking at how we are moving forward. We had a wage incentive scheme, but that has stopped because we are moving the money into other areas where it is needed more. That is the right thing to do—spending the money where it will be used most effectively and efficiently. As I said, we have had the greatest annual number of young people going into work since records began.

Jobcentre Plus

Stephen Timms Excerpts

Thursday 10th July 2014 Westminster Hall

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

I am delighted to lead this debate on the report by the Select Committee on Work and Pensions, “The role of Jobcentre Plus in the reformed welfare system”. It is a bit of a mouthful, but the report contains a lot of interesting things. We published it at the end of January this year, and the Government responded at the beginning of April. It seems a long time between that and this debate, but that is because Parliament prorogued somewhat earlier than expected and our debate got dropped as a result. Some of our findings, therefore, might be slightly out of date, but in general, most of what we discovered when we considered the work of Jobcentre Plus is as relevant today as it was in April and May.

Jobcentre Plus is at the coal face of the benefits system. It is part of an administrative system that processes out-of-work benefit claims from hundreds of thousands of people each year. At the same time, its staff work with people one-to-one to help get them off benefits and hopefully back to work. They are both difficult tasks, but Jobcentre Plus performs them well with limited resources. It is well organised, has hard-working staff and has been officially recognised by the National Audit Office as offering value for public money. Jobcentre Plus has also coped well with the inherent uncertainty that it faces, not least from the large fluctuations in the claimant count brought about by the economy’s shifting fortunes. It has even coped with the innumerable policy changes imposed by the Government.

It was in the context of the unprecedented change brought about by the current Government’s extensive welfare reform agenda that we considered Jobcentre Plus’s effectiveness now and the challenges that it will face in future. Our central finding was that JCP is not currently good at prioritising those claimants who need the most help looking for work and providing them with the personalised support that they need. I know that that is no easy task, and given the volume of out-of-work claims made each year, Jobcentre Plus does remarkably well, but a range of witnesses, particularly those representing the most vulnerable groups, told the same story: there is generally very little in-depth assessment of claimants’ needs at the start of the job-seeking process, meaning that claimants facing particular disadvantages—the homeless, people with disabilities or people with drug or alcohol problems—all too often go unrecognised and get no help beyond a brief fortnightly signing-on meeting at the jobcentre.

Not for the first time, my Committee called for a much more systematic approach to the initial assessment of claimants’ needs. A classification instrument, to use the jargon, was the first of our key recommendations. In plain English, that means making a thorough, systematic assessment of each claimant’s needs and categorising them according to the level of support they require. That must surely be the logical first step in all effective employment support; otherwise, claimants with the most challenging barriers to employment will continue to be poorly supported and will remain unemployed for much longer than they should.

For some reason, however, the Government continue to dither on the issue. The Department for Work and Pensions told us that classification instruments are the holy grail. I thought universal credit was the holy grail of welfare reform—if so, it has not been found—but if the holy grail is classification instruments, it has already been found. They are already in use in Australia, where a jobseeker classification instrument has been used to good effect for more than 15 years and has been honed and improved through several iterations during that time. I would be grateful if the Minister could offer a proper explanation as to why we in the UK cannot replicate something similar here.

[Stephen Timms (East Ham) (Lab)]

I welcome the report. One of the points it makes is that the Government’s response on that issue was not entirely clear: was it that they cannot do that kind of segmentation assessment, or was it that they are developing something along those lines? It was not clear to me from the Government response which of those was the Government’s position. Has my hon. Friend been able to work that out?

[Dame Anne Begg]

I am not sure whether I can shed any more light on that than my right hon. Friend. Perhaps the Minister can reply. Certainly, in our briefings with the DWP and relevant officials, they have suggested that the Government are trying to work something out, but that they believe either that it is not effective—although the figures that they quoted to us did not necessarily have the interpretation that could have been made from the reports that have been published—or that it might cost too much money in the long run, because an up-front payment would inevitably be involved in setting up a classification system.

The Committee contends, however, that doing it properly at the beginning would ultimately save the Government money by ensuring that the correct level of help was given and that the barriers to work were identified early, so that a much more personalised approach could be taken to jobseekers in particularly vulnerable groups. We are talking about more vulnerable and difficult-to-reach groups, because we know that by any measure, Jobcentre Plus is relatively successful in getting mainstream jobseekers into work. That is what it does; it is Jobcentre Plus’s bread and butter. It is what staff do week in and week out.

[Stephen Timms]

One point in the Government response is that if there were such a tool, it would be only 70% accurate. That struck me as not bad, actually, compared with what happens at the moment. What did my hon. Friend think of that particular statistic?

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Mr Amess. It is also a pleasure to follow my colleague on the Select Committee, the hon. Member for Newton Abbot (Anne Marie Morris), who, as always, made a balanced speech. I am particularly pleased to speak on behalf of my constituents, many of whom are claimants and use their Jobcentre Plus, but I also speak on behalf of those who work within the Jobcentre Plus network and more widely within the Department for Work and Pensions system. I have been contacted by a number of people since the Select Committee started looking at this issue, and I want to air their views as well.

My speech will focus on sanctions, which both the previous speakers have touched on. The Select Committee’s report raised concerns on whether sanctions are being applied

“appropriately, fairly, proportionately and in accordance with the rules, across the Jobcentre network.”

The principle of conditionality has been accepted across all the parties represented in the Select Committee and beyond. It is that if claimants are receiving financial support from the state, there are conditions around that—on job search and on having regular meetings with jobcentre advisers, for example. That principle is long established and has in recent years been extended to involve financial penalties or sanctions being applied to the claimant, with benefit payment being stopped for a limited period if the conditions are not met. Even more recently, it has been extended to people who are sick or disabled, who can have work preparation conditions, with associated sanctions, applied to their benefits.

As many know, two thirds of those who receive social security payments are in work. The Government have already mooted that in-work conditionality and conditionality for in-work social security payments is likely. We should remember that and reflect on the particular issues we are facing with those on out-of-work or ill-health payments. The Welfare Reform Act 2012 introduced a new regime of sanctions. Instead of a maximum of six months of sanctions, the maximum period of a JSA benefit sanction is three years. The minimum is a month. Under the previous system, people could perhaps tide themselves over for a week’s sanction—they might have been able to borrow off family members or friends. A month, however, is a different kettle of fish. Later, I will come on to what that change means for so many individuals and families.

Many fair-minded people would say, “If you’ve done something wrong, it is only right that you should be punished for it.” That was raised by the Committee and has been mentioned today. My colleagues and I, however, have received overwhelming evidence, and investigative journalists have highlighted, that people are being sanctioned for doing nothing wrong at all. They are being set up to fail.

A whistleblower—a former JCP adviser—came to my constituency office and said that stitching up claimants was part of the job. He referred to a “bullying” culture, driven from above, in which claimants were constantly harassed to get them “off flow”, off benefit and off register. If advisers resisted pressure from managers, they were issued with a performance improvement plan, which is the start of a disciplinary procedure. Targets were set for advisers to cover targets for decision makers, resulting in perverse behaviour. He described advisers setting claimants up to fail, including making appointments about which they had no knowledge so that they were automatically sanctioned when they did not turn up. That is absolutely outrageous and there is growing evidence that it is happening up and down the country.

Another whistleblower from the midlands this week reported the pressure that she is under to meet targets to push people, including the sick and disabled, off benefits, such as being told to “disrupt and upset” claimants. The article states:

“Managers repeatedly question them on why more people haven’t been sanctioned. Letters are sent to the vulnerable who don’t legally have to come in, but in such ambiguous wording that they look like an order to attend. Tricks are played: those ending their contributory entitlement to a year on ESA need to fill in a form for income-based ESA. But jobcentres are forbidden to stock those forms. These ill people’s benefits are suddenly stopped without explanation: if they call, they’re told to collect a form”—

but of course the jobcentre does not stock them. The article continues:

“If someone calls to query an appointment they are told they will be sanctioned if they don’t turn up, whatever. She said: ‘The DWP’s hope is they won’t pursue the claim.’”

It is shocking.

Figures for the new sanction regime introduced at the end of 2012 show that sanctions have increased by 11% on the same period and that 1.35 million people on JSA were sanctioned in the first six months, with 553,000 upheld on appeal. For the same period, 11,400 people on ESA were sanctioned, including a constituent of mine who had a heart attack in the middle of a work capability assessment. The nurse said, “You’re having a heart attack. We’re going to have to stop. You’re going to have to go to hospital.” He received a letter two weeks later to say that he had been sanctioned.

The work that Citizens Advice in Manchester did on the effects of benefit sanctions on claimants showed that 40% did not receive a letter informing them of their sanction; they just had their money stopped. Over half of claimants said that they had not received any information about how to appeal.

When the Minister attended the Work and Pensions Committee in November, I asked her how sanctioned JSA claimants would affect JSA claimant figures and she said that, as long as they kept signing on, they would be counted. What she did not say, however, is that the Department does not keep such data. No one knows how many sanctioned JSA claimants keep signing on. If more than half of those sanctioned do not know that they can appeal, how many will know they need to sign on stay on register? Will JCP tell them? I would query that. I did some basic maths: taking the May JSA claimant figure, if 5% of 1.09 million people are sanctioned every month, the actual JSA claimant figure would be 1.147 million. It is apparent how the number can be distorted because the actual JSA claimant figures are not being kept.

I also asked the Minister whether she would commit to a second, broader independent review, as mentioned by my hon. Friend the Member for Aberdeen South (Dame Anne Begg), to look at inappropriate sanctions. At the time, she agreed. The Work and Pensions Committee certainly believed she had—it was one of our recommendations—but it is disappointing that the commitment has since been reneged on. I ask the Minister once more whether she will commit to that important piece of work in light of the compelling and growing evidence that has come forward since our inquiry and the potential distortion of the JSA claimant count.

The impact of benefit sanctions on people’s lives is becoming well documented. The Trussell Trust, which runs so many food banks up and down the country, cites benefit changes and delays, including sanctions, as the main reason why people visit it needing help. People are not able to feed themselves and their families. The principle of social security conditionality is well established and supported, but it needs to be examined in the round, as my hon. Friend said, to ensure that it is effective and produces the desired behaviour.

[Stephen Timms]

My hon. Friend is making a powerful case. Regarding the documentation of problems with benefit sanctions, has she seen the website devoted to the topic? It is entitled “A Selection of Especially Stupid Benefit Sanctions” and contains a raft of ludicrous examples, including the case of her constituent not completing his work capability assessment because he had a heart attack in the middle of it.

[Debbie Abrahams]

I have seen that website. Following the inquiry and people becoming more aware, a whole raft of unbelievable examples are coming forward.

As I said, the principle of social security conditionality is well established and supported, but the reports of punitive, unfair and inappropriate sanctioning and bullying behaviour in JCP offices should be a cause for concern. I urge the Minister not to turn her back on the issue and the people it is affecting this time and to do the right thing by committing to an independent review of inappropriate sanctioning.

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

Like everyone who has spoken in the debate, Mr Amess, I want to say what a pleasure it is to serve under your chairmanship. I thank the Select Committee, and welcome the work that it has done on such an important topic.

It is disappointing, however, that the Government’s response to a very good report has been so negative. Of 24 recommendations only five were agreed to; five were rejected outright and the remaining 14 were partly agreed, although in quite a number of cases it struck me that the amount of agreement was very partial indeed. The Committee is right to affirm the value of a public employment service for unemployed people. Jobcentre Plus has been admired around the world, and we have been reminded, rightly, of the recent conclusion by the National Audit Office that it continues to do an efficient job. I very much concur with that judgment.

Jobcentre Plus does an efficient job. It also does a very important job. My hon. Friend the Member for Edinburgh East (Sheila Gilmore) is absolutely right to draw attention to the links between having employment and having good health. I noticed that the Prince’s Trust recently undertook research on that issue. Martina Milburn, its long-serving chief executive, makes this point:

“Unemployment is proven to cause devastating, long-lasting mental health problems among young people.”

Whether someone is in a job is a very important issue, so the task that Jobcentre Plus has is very important.

I visited Germany last year to look at the way in which youth unemployment was being tackled and visited an office in the town of Wolfsburg, Hanover, where the Volkswagen plant employs 60,000 people. I went into the office, which is jointly run by the local authority and the federal employment service, to talk about how it was supporting unemployed people, and one thing that struck me about it was that above the door it said “Jobcentre”. The people there had chosen to adopt the English term for that establishment, and the reason was that 10 years ago, when the Germans made the big reforms to their welfare system—the Hartz IV reforms—they took inspiration from what had happened in the UK. Jobcentre Plus was quite new at that time. They wanted a name that showed their ambition for a very effective, modern service, and they were inspired by the English system, so they have adopted the term “Jobcentre” for their establishments.

As we have heard, jobcentres in the UK are still doing an efficient job. Nevertheless, I am afraid that something has gone quite badly wrong in recent years. I do not think that anyone else in the world today would be inspired by what they hear is happening in our jobcentres, and the issue of sanctions, which has been highlighted in this report and debate, is a big part of the explanation for what has happened. I agree with the hon. Member for Newton Abbot (Anne Marie Morris) that it is clear that too often sanctioning goes wrong.

Of course, there are a lot of statistics about benefit sanctions. One that interested me was one that I got in a written answer on 25 March 2013 at column 986W of Hansard. I asked what the total amount withheld from jobseeker’s allowance payments as a result of benefit sanctions was, and the answer came back that the benefit withheld from fixed JSA sanctions was, in 2009-10, the year leading up to the general election, £11 million, in 2010-11 £43 million, in 2011-12 £45 million and in 2012-13, up to October 2012 only—in other words, just the first half of 2012-13—£60 million. That suggests that the amount being withheld in benefit sanctions had gone up tenfold up to October 2012, compared with the year leading up to the general election.

It is important to underline the truth that sanctions are an indispensable part of a benefits system designed to promote employment. No one should read into anything that I am saying—or, I think, what anyone else in the debate has said—that we should scrap sanctions, but there is a pertinent question, raised in this report, about whether something has gone quite badly wrong in the way in which they are being applied at the moment.

[Nigel Mills]

I apologise to the right hon. Gentleman, the hon. Member for Aberdeen South (Dame Anne Begg) and you, Mr Amess, because I need to leave for a constituency engagement shortly, but on the point that the right hon. Gentleman raises, will he therefore join me in regretting the fact that when the unions came to give evidence to us in this inquiry, they did not support sanctions having any part in the benefits system?

[Stephen Timms]

In the discussions that I have had with trade union members about this issue, the point has not been put to me that there should not be any sanctions. Sanctions have been part of the benefits system ever since the system was invented; there is nothing new about sanctions. I have not heard a case that sanctions should be entirely scrapped, but I do think that there is justified concern, partly expressed in this debate and certainly expressed by trade unions and others, including citizens advice bureaux and disability organisations, about the way in which the system is working at the moment.

We heard a good deal in the debate, and I was very interested to hear the contributions about what hon. Members have been told by whistleblowers because I have had a similar experience. One of my constituents, who works at a jobcentre, raised with me very similar concerns to the ones that we have heard about what is going on. I was very concerned by that. I forwarded her concerns to the Minister. The Minister responded, for which my constituent and I were grateful, and my constituent subsequently wrote to the Minister directly and copied me into what she said. I will quote from her letter, which said that

“staff at the Jobcentre are actively encouraged to impose benefit sanctions and are threatened with PIPs”—

I was not sure what they were, but I gather from my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) that they are performance improvement programmes—

“if they fail to get certain numbers of people off benefit per week…all too often it is the more vulnerable in society it is affecting, and probably not the customers who are too smart to be caught out by the sanctions. The large increase in people using the food banks is mainly due to the unfair benefit sanctions being imposed upon customers. I know the food bank in Hoxton has actually had to ask the JCP in Hackney to stop making so many referrals to them as they are unable to cope with the numbers”.

My constituent goes on to say that staff

“have never experienced working conditions like they have in the last few years…people who have worked so hard implementing the unpopular policies have been treated in an awful manner.”

My hon. Friend the Member for Edinburgh East raised the concerns that people have repeatedly drawn attention to that staff in jobcentres are being given targets. There have been the odd, well documented examples of where that has been the case, although in those instances Ministers have stepped in to make it absolutely clear that there are no formal targets, but it is the case, as I understand it, that in regular staff appraisals—this was confirmed, I think, in a written parliamentary answer—the number of sanctions that an adviser has issued is one of the bits of data on the table for the appraisal. Staff understand that, understandably and probably rightly, as indicating that they are, in part, being evaluated by how many sanctions they have issued—not whether those sanctions were accurate or appropriate, but whether there are enough of them. I think that it is clear that a culture has been developed in which staff are under pressure to issue more sanctions. My constituent talked about the awful working conditions. Let us be frank: that is part of the background to the industrial action taking place today.

A good deal of the external interest in this report has focused on the question of sanctions. There is no doubt that the dramatic increase both in the number of sanctions and in the amount of money taken off people—the duration of sanctions, which my hon. Friend the Member for Oldham East and Saddleworth also talked about—has been a big factor in the growth of food banks. The hon. Member for Banff and Buchan (Dr Whiteford) is absolutely right to say that no one should hide their head in the sand about that. I had not quite twigged it, but my hon. Friend the Member for Oldham East and Saddleworth made this telling point. Will people who have been sanctioned for a period of months, a year or even three years carry on signing on every fortnight just so that they appear in the claimant count? Of course they will not, and undoubtedly the claimant count is being depressed as a result.

Of course, all these reports, from whistleblowers, charities and food banks, can be and sometimes are dismissed as anecdotal. However, the pretty distressing picture that staff whistleblowers are painting is consistent with what a lot of jobseekers say. A few weeks ago, I was invited by Tesco to visit a new store with its HR director. Through the impressive regeneration model that Tesco has developed in partnership with the Union of Shop, Distributive and Allied Workers, the company had been very careful to recruit and train a large number of staff at the new store who had previously been unemployed. Tesco put them through an eight-week training course before the store opened. I was introduced to four of the staff who had been recruited in that way, and we talked about their experience. I asked them about their experience with Jobcentre Plus, and all four said that the main aim of the jobcentre had seemingly been not to help them but to catch them out and sanction their benefits. I think it is a real tragedy how badly the reputation of Jobcentre Plus has been damaged by the aggressive approach to sanctioning that has been introduced. It will take a lot to repair that damage.

In its briefing for the debate, Crisis told us about somebody called Billy

“who was sanctioned for turning up to a meeting that turned out to be cancelled and then failing to attend another appointment he knew nothing about because the letter arrived six days after the date of the interview”.

We have heard several such stories during the debate. I draw attention to the website “A Selection of Especially Stupid Benefit Sanctions”, which has pages of this stuff:

“You get a job interview. It’s at the same time as your job centre appointment, so you reschedule the job centre. You attend your rearranged appointment and then get a letter saying your benefits will be stopped because going to a job interview isn’t a good enough reason to miss an appointment.”

That one came from the Daily Mail.

“Your gran dies during the night. The next morning your partner calls the job centre and asks if you can come in the following day instead. The centre agrees, and you sign in the next day. Then you get a letter stating that you failed to sign in and would be sanctioned if you don’t reply within seven days. You reply, explaining the situation. The job centre gives you a six-week sanction for not replying.”

That one came from NetMums.

“You get a job that starts in two weeks time. You don’t look for work while you are waiting for the job to start. You’re sanctioned.”

That was from The Guardian.

“You apply for three jobs one week and three jobs the following Sunday and Monday. Because the job centre week starts on a Tuesday it treats this as applying for six jobs in one week and none the following week. You are sanctioned for 13 weeks for failing to apply for three jobs each week.”

That was from the Pontefract and Castleford Express.

“You have a job interview which overruns so you arrive at your job centre appointment 9 minutes late. You get sanctioned for a month.”

That one was from Consumer Action. As I say, there are pages and pages more on the website. Of course, those are anecdotal, but the jobcentre network now has that reputation and it will take a great deal to repair the damage that has been done.

A number of references have been made during the debate to the report that the Government commissioned. It is rather rare for the Opposition to be able to force the Government to do anything, but we were able, because the Government needed legislation quite quickly, to force Ministers to set up the review on sanctions, which was carried out by Matthew Oakley. Like everyone else, I am eagerly awaiting the report, which we thought would be published by the end of May but which has still not been published. I asked the Minister about that in a written answer the other day, and characteristically—of Ministers in the previous Government as well as in this one—the reply came back that it would be published “in due course.” Can the Minister give us any more detail? If she can, it would be welcome.

As we have heard, the Minister appeared to agree in her evidence to the Work and Pensions Committee that there should be a further review to consider not only Work programme or employment programme sanctions, but sanctions more generally. It was a disappointment to everybody that that commitment was not reflected in the Government response to the report, and I hope that the Minister might reaffirm the view that she expressed to the Committee.

It is particularly disappointing, although not surprising, that the Government have rejected recommendation 17 on page 47 of the report about recording the number of people who are signposted to food banks. There is no doubt that the increase in sanctions has played a big part in the remarkable growth of food banks over the past few years. The Committee recommended, as we have heard, that the Department should

“take urgent steps to monitor the extent of financial hardship caused by benefit sanctions, including by collecting, collating and publishing data on the number of claimants ‘signposted’ to food aid by Jobcentres and the reasons for claimants’ need for assistance in these cases.”

The way in which the Government have dealt with the Trussell Trust has been pretty disgraceful. When the Secretary of State was appointed, he rightly took a good deal of pride in announcing that he was lifting a ban on jobcentres referring people to food banks if they were in hardship and did not have enough money to buy food. I was the Minister for employment for a while, and I did not know that there was a ban on referring people to food banks, but apparently there was. The Secretary of State rightly said that that was wrong, and lifted the ban. The problem was that food banks started counting the number of people who were being referred from jobcentres and the reasons why they were being referred, which became far too embarrassing, so the Secretary of State reintroduced the ban on jobcentres referring people to food banks, although he said that it was all right to “signpost” people. I believe that the difference between signposting and referring is that when someone is signposted by a jobcentre to a food bank, they are not allowed to fill in the piece of paper issued by the food bank that states why they are being referred. The former approach enabled the Trussell Trust to collect data on how many people were being referred to food banks because they had been the victim of sanctions, benefit delays or other problems at the jobcentre, and the whole thing became too embarrassing for the Secretary of State so he said that he did not want it to continue.

It is a great shame that the Secretary of State has refused to meet the Trussell Trust and talk about the matter, because it has a number of sensible ideas about how the system could be made to work better, which would not cost the Government anything. The Secretary of State has accused the trust of having a political agenda simply, as far as I can tell, on the basis that it insists on publishing numbers about how many people go to food banks. That is a completely innocuous and public-spirited thing to do, but because the trust refuses to stop publishing that information, the Secretary of State accuses it of having a political agenda and being opposed to welfare reform.

Given that the Secretary of State has not been willing to meet the Trussell Trust, a couple of months ago I asked the Prime Minister if he would be willing to do so. He said that he would, and I am pleased to say that that meeting has taken place and the discussion was constructive and useful. Why on earth the Secretary of State is not willing to meet the trust for a similar discussion is a mystery to me, and I still hope that he might change his mind. I share the despair expressed by my hon. Friend the Member for Airdrie and Shotts (Pamela Nash) about the extent of the reliance on food banks nowadays. The Trussell Trust makes it absolutely clear that it expects the need for food banks to continue. The scale of the dependence—a million people over the past 12 months—and the rate at which it is growing are causing the trust great concern and prompting questions about whether it can cope with the demand.

I want to mention two other points that my hon. Friend the Member for Aberdeen South (Dame Anne Begg) has highlighted as the main recommendations in the report. Recommendation 21 on page 48 argues for

“the formulation of JCP performance indicators which promote and measure sustained job outcomes and better reflect the changing role of JCP consequent on the implementation of universal credit”.

The Committee makes the point—it is often suggested, and I think it is right—that the current measure incentivises behaviour that nobody wants. For example, if somebody goes in and out of claiming benefit—they do a couple of weeks’ work, then go back on benefit because the job fails, then do a couple of weeks’ work somewhere else, then go back on benefit—it makes a big positive contribution to benefit off-flow, because that person is coming off benefit a lot and the fact that they go back on benefit straight away is not picked up in the statistics. Of course nobody would regard that as a success in any meaningful sense of the word. It is certainly not what Ministers want to happen in jobcentres.

The Government’s response to that recommendation says:

“The current JCP performance metrics, focussing on off-flows, make best use of the data currently available to the Department, but do not track people once they leave benefit, as this is not cost-effective.”

That is the bit that I want to query. I do not understand why the Government are suggesting that it is not cost-effective to track what happens to people after they go off benefit, because the Government require Work programme providers to do exactly that. Work programme providers are remunerated entirely on the basis of whether somebody is in sustained work. Clearly, the Department has taken the view that it is cost-effective to require Work programme providers to find out that information, so why is it not cost-effective for Jobcentre Plus to do so? That seems to make no sense, and the Committee is right to highlight it in a recommendation. I hope that the change will be made before too long.

The other recommendation that I will mention was highlighted by the Chair of the Committee, and I agree with it. It is about segmentation. Recommendation 4 on page 44 of the report says that the DWP should

“continue to work to develop a ‘segmentation’ tool, to be conducted by Jobcentre advisers face-to-face with claimants, to allocate claimants to separate work streams according to their distance from the labour market and relative need for intensive employment support.”

I know that it is a long-held view among numerous people, including senior Jobcentre Plus staff, that segmentation is a rather illusory thing—my hon. Friend the Member for Aberdeen South used the term “holy grail”—that everybody would like to be able to do: “We would like to be able to tell how much help a person will need to get back into work, but it is unachievable in practice.” However, like my hon. Friend, I am mystified as to why it can be done in Australia but not in the UK.

I know that that point has been made to Jobcentre Plus staff, who respond by saying that Australia and the UK are different, but they are not that different. I visited Australia last September to, among other things, see how the jobseeker classification instrument worked. Nobody is claiming that it is infallible. In Australia, if someone is placed in one stream and it subsequently turns out that they need a different level of support, they can change. It is not a completely inflexible, wooden instrument, and it is certainly helpful. It means that people are more likely to get the right amount of help than if there were no segmentation. Even the length of time that someone has been out of work, which is easy to establish, is a big indicator of how much help they will need.

Of course, we already have segmentation in the UK. In the Work programme, customers are placed in different payment groups, based not on the kind of segmentation for which the Committee rightly calls but on which benefit they receive—jobseeker’s allowance or employment and support allowance. That does not necessarily tell us anything about how much help someone needs to get back to work, and in practice, as I think is pretty widely recognised, it has proved hopeless.

That is one reason why people a long way from the labour market have been so badly let down by the Work programme, as the National Audit Office pointed out last week. Among claimants of employment and support allowance who spend two years on the Work programme, the latest data suggest that the rate of failure to achieve sustained job outcomes is 93%: only 7% of those attached to the Work programme achieve a sustained job outcome.

In an earlier intervention, I asked my hon. Friend about the Government’s statement, in their response to the report, that their efforts to develop a tool have produced only 70% success. Of course it would be great if we could do better than 70%, but given that it is possible for people to change their stream after they have been streamed initially and that 70% success is certainly better than streaming people simply on the basis of what benefit they have been on, it seems to me that it strengthens the case for the Committee’s argument that it would be a worthwhile thing to do.

It would be the intention of a Labour Government, should one be elected next spring, to implement a segmentation tool as the Select Committee recommends. We would like to see it in place, again as the Committee recommends, in time for the commissioning of the Work programme’s successor. It will be possible, in designing that tool, to draw on the fantastic data that providers have gathered during their experience of the Work programme. There are now numerous rich data sets giving useful evidence about how much help individuals in a variety of circumstances need in order to get into work.

I welcome the report. The Committee has done the House and the cause of employment support a great service by providing it to us. Along with everyone here, I look forward to hearing the Minister’s response.

--- Later in debate ---

[Esther McVey]

We know that at the heart of the Government’s plan is the desire to build a stronger, more competitive economy.

[Stephen Timms]

Will the Minister give way?

[Esther McVey]

I will give way in a moment, but I want to ensure that we hear what Jobcentre Plus is actually delivering, which is a significant amount. I want people to understand how the more than 26,000 jobcentre staff are helping people and how many people come through the doors each day.

[Stephen Timms]

I have just been looking at the National Audit Office report, which seems slightly different from the impression the Minister is giving. A press release on the NAO website from 2 July says:

“After a poor start, the performance of the Work Programme is at similar levels to previous programmes, according to a report today by the National Audit Office.”

It also says:

“The Programme has…not improved performance for harder-to-help groups compared to previous schemes.”

[Esther McVey]

I will give the right hon. Gentleman greater clarification: that was at the very start of the scheme in June 2011, but the report says that, given the way performance has increased and what would be expected by the end of the programme, it would be 17% better than the pathways to work programme.

[Stephen Timms]

As the Minister says, the report does make the point that the Work programme got off to a rocky start and has improved, but its conclusion is currently that the programme has

“not improved”—

this is now, not at the start—

“performance for harder-to-help groups compared to previous schemes.”

[Esther McVey]

If the right hon. Gentleman looks into all the footnotes, everything associated and all the figures about what is expected by the end of the programme, he will find the numbers I cited. I can get the report out and go through it—I know that he has been flicking quickly to various points on his iPad, but I can give the full report because I went through it in quite some detail.

We are here to look at what Jobcentre Plus has been doing. It has carried out more than 25 million adviser interviews to help to prepare people for work. We talk about the scale; it is huge. Jobcentre Plus advertises 4 million job vacancies for around 390,000 employers. More than 97% of our JSA claims were processed within 16 days—an improvement of 10% from last year. The process of continual improvement that we talk about is happening.

We have reduced the average time taken to answer calls at our call centres from 4.55 minutes in 2012-13 to 1.07 minutes in 2013-14. According to our last survey, nine out of 10 employers were satisfied and a quarter were extremely satisfied with what we are doing. More than eight in 10 claimants on disability, carer or unemployment benefits report that they are satisfied with the DWP’s service. All that shows—

--- Later in debate ---

[Esther McVey]

I will not take another intervention for the time being; I will move forward with some of these answers.

Claimants are given the opportunity to explain why they have not complied with a requirement. If they provide good reason, they will not get sanctioned. Once sanctioned, claimants are informed of how to apply for these hardship payments. Vulnerable claimants, including any claimant with responsibility for a child, can receive payments immediately. We believe that we get the vast majority of our decisions right. In 2013, our decision makers considered nearly 2 million cases that were brought to them, but they imposed just over a million sanctions. So the information comes from the adviser and it goes to a decision maker, who looks at all the evidence before deciding whether a sanction will be given. Of those cases, only 130,000 were overturned on reconsideration or appeal—just over 13%—not the figures that I heard from the Opposition Benches; I am not sure where they get those from.

[Stephen Timms]

I remind the Minister of the letter from a whistleblower—a constituent of mine—with whom she has been in touch, who says:

“I am not sure if the providers are aware of a ‘good cause’ clause in the process…I don’t think it is being exercised much within the Jobcentre either as it would affect the number of off flows”.

I understand the theory, which the Minister set out, but the reality is rather different.

[Esther McVey]

The right hon. Gentleman quotes an anonymous whistleblower, but I am the Minister replying and I am not anonymous. We do know what good cause is. For example, if there were confusion about someone going to a job interview who thought they should have been at Jobcentre Plus, that would be good cause, and if somebody had to go to a funeral of an immediate family member, that would be good cause, too. There is a list of various good causes. If it makes common sense, that has to be right and those people have to be looked after.

Of course, we are far from complacent and continue to look for ways to improve the system and ensure that sanctions are applied appropriately. Some improvements have already been made, including introducing a telephone line for providers to check whether a sanction is appropriate, and we have introduced a new quality assurance framework, to improve standards and consistency in decision making—that has to be key.

The Matthew Oakley review will make a significant contribution to our drive to improve the system. The scope of this review was JSA sanctions for claimants on mandatory back-to-work schemes, focusing on clarity of information and claimant understanding. He has been generally positive about the sanctions system and we welcome his recommendations, which we accept and which will, as I said, be with us before the end of this month.

We need to know where we are going and we are now focusing our attention on the hardest-to-help claimants. Record numbers of people are now in work—[Interruption.] I am glad the right hon. Member for Birkenhead is listening rather than laughing, because many extra people are in work in his constituency, too, and right across Wirral. However, we must concentrate our efforts.

--- Later in debate ---

[Sheila Gilmore]

rose—

[Stephen Timms]

rose—

[Esther McVey]

Being able to provide for themselves and their family is people’s best way out of poverty I will now give way.

[Stephen Timms]

The Minister told us she met the Trussell Trust, by which I take it she means that she met people at the local food bank. I welcome that. Is she willing to meet the chief executive of the Trussell Trust, to discuss these issues with him?

[Esther McVey]

I have always said that I am there. Really, the key person who met him is the Prime Minister, and it is right that he did so.

[Stephen Timms]

Is that a yes?

[Esther McVey]

I have always agreed. I have met the Trussell Trust in my area and the food bank. We decided that the Prime Minister should meet him to discuss the issues.

We are increasing the percentage rate for our processing and getting more people into work.

Universal Credit

Stephen Timms Excerpts

Monday 7th July 2014 Commons Chamber

[Glenda Jackson]

It is not usual for me to be gobsmacked, but I certainly am by that story, even though I have heard from constituents who, while not necessarily experiencing heart attacks, have had absolutely disgraceful treatment. We are also seeing a rise in the number of appeals concerning employment and support allowance, and the appeals that have been lodged are taking longer and longer to come to a conclusion. I will not go into the whole debacle of the personal independence payment, but it is simply scandalous that some of the most vulnerable people in our society, whom the DWP is supposed to be assisting, are being left in many instances with no financial support whatever. To add insult to injury, this Government have also reduced the funding of local authorities. Many local authorities were absolutely central to ensuring that people with disabilities could live human, productive lives. That money has now been taken away.

I hope to bring home to the Chamber the absolute chaos out there at the moment, and to concentrate on the questioning that an individual claimant has to go through and the kind of questioning to which the Secretary of State responds. It is clear that he is burdened with delusions of adequacy, but some of his responses to my hon. Friend the Chair of the Select Committee at his most recent appearance in front of us were absolutely disgraceful.

Let me detail the experience of an individual claimant. A 71-year-old pensioner, dubbed by Her Majesty’s Revenue and Customs to be self-employed, applied for housing benefit. It has now taken 17 weeks and still there is no final cut-off point where she has been assured that she will receive housing benefit. The most recent inquiry that came to her was to detail the cost of a bill of £3.40; the second was to detail the cost of a bill of £7.47. Both of those claims took place in 2012. The mind boggles at that, when the Secretary of State, who has lost millions and millions of pounds on a failed IT system, has categorically refused to give the Select Committee any detail whatever about his newly trumpeted business plan. He has refused to discuss the costs of the plan or whether there will be any direct savings either to the taxpayer or to the overarching benefit system. It is an absolute disgrace that the Select Committee, which has been appointed to scrutinise the DWP, is being buffeted away. It seems that the Department is opting for some kind of bunker mentality, but it will not work.

[Stephen Timms (East Ham) (Lab)]

My hon. Friend is making a powerful case. Was she as surprised as I was to learn in the evidence given by Sir Bob Kerslake to the Public Accounts Committee this afternoon that the business case that she has just mentioned, which, according to the report, is due to be finalised by the end of April, has still not been agreed by Her Majesty’s Treasury?

[Glenda Jackson]

I am sure that my right hon. Friend, and I would hope every Member of this House, would be shocked to realise that the DWP is still not giving the right answers—it is ludicrous to expect the right answer to come from the Department for Work and Pension, as simple humility is not part and parcel of its make-up. The Committees and Government Departments that scrutinise where public money goes are being pushed to one side. I have already referred to the bunker mentality of the DWP, and the example that my right hon. Friend gives me is just par for the course; it happens constantly. Arguments are not even being put up. We are all being told, “Oh no, it’s none of your business; it’s our business.”

My hon. Friend the Chair of the Select Committee has given details of the actual answers. There is a pattern, which I find very disturbing. I have already touched on the issue of disregarding any serious questioning on costs. Ever since this major benefit change came into being, the Department has employed what I would call a programme of black propaganda, and every single one of the red tops has taken it up with glee and run with it. That black propaganda told the people of this country—I am paraphrasing; the DWP would never be this cogent—that everyone who was claiming benefits was doing so because they were too lazy to work. Nothing could be further from the truth. I have already touched on the agonies that are being endured by people with serious mental and physical disabilities, and the pattern is ongoing.

A report from the Office for National Statistics last week scrutinised the level of complaints made against all the Government Departments about the misuse of statistics, and guess which one came top of the list! It was the Department for Work and Pensions. Throughout the time I have been a member of the Select Committee, we have raised again and again the issue of the misuse of stats and the misuse of the English language to proselytise this black propaganda and to confuse and distort what should be central to the Committee’s concerns—namely, the well-being of the people who require benefits, not because they are lazy or workshy, or even because there are no jobs, but because they should be supported by the people of this country, as they always have been.

After the last debate on this issue, I was touched to receive a response from the people of this country. If there is a silver lining to the black cloud that is the DWP, it is that the majority of people in this country still believe that the welfare state should do what it was meant to do, which is to support people who, through no fault of their own, cannot maintain themselves without the support of the rest of us. That support is alive and well out there in the country. The one place where it is certainly dead is within the Department for Work and Pensions.

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

The Work and Pensions Committee has done the House a service with its report, and the tributes to its Chair from both sides of the House are well deserved.

The hon. Member for Newton Abbot (Anne Marie Morris) is absolutely right to say that there is widespread agreement that universal credit is, in principle, a good idea, but I am afraid the universal credit project has had all the hallmarks of disaster right from the start, as a number of us pointed out at the time. Everybody hoped, as we were assured, that the lessons of previous failures had been learned, but unfortunately they had not.

It started to go wrong within just a few weeks of the general election. Ministers published a Green Paper entitled “21st Century Welfare”—I have my well-thumbed copy with me—which introduced the idea of universal credit. Paragraph 7 of chapter 5 stated:

“The IT changes that would be necessary to deliver a more integrated system would not constitute a major IT project”.

There was an utter failure, right at the outset, to grasp the scale of what the Government were about to embark on. How on earth the phrase “would not constitute a major IT project” came to be written in a Green Paper, I have absolutely no idea, but I am quite sure that no official in the Department would have been responsible for writing such a ludicrous claim. I am afraid that from that moment on, things have got progressively worse.

Will the Minister comment specifically on my intervention on my hon. Friend the Member for Hampstead and Kilburn (Glenda Jackson) about this afternoon’s announcement by the head of the civil service, Sir Bob Kerslake, in evidence to the Public Accounts Committee, that the Treasury has not yet approved the revised business case? A week ago today, the Minister said in response to a question from my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Secretary of State for Work and Pensions:

“The Chief Secretary to the Treasury has approved the UC Strategic Outline Business Case plans for the remainder of this Parliament (2014-15) as per the ministerial announcement (5 December 2013, Official Report, column 65WS)”.—[Official Report, 30 June 2014; Vol. 583, c. 434W.]

The Minister said that the Treasury had agreed the business case, but today the head of the civil service told the Public Accounts Committee that the Treasury has not agreed the business case. The Minister owes us an explanation of the discrepancy between her answer a week ago and what the head of the civil service has said today.

The project has suffered from three levels of failure: policy failure, delivery failure and governance failure. I will say a little about each of them. First, policy failure is perhaps the most serious one. As the hon. Member for Hornchurch and Upminster (Dame Angela Watkinson) has rightly pointed out, the point of universal credit was to make sure that people would be better off if their income increased because they got a job or did extra hours or for some other reason. However, the difficulty involved in achieving that apparently simple goal was never understood by Ministers, and the hard graft of delivering it has therefore never been done.

Last September’s National Audit Office report, which my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) has rightly described as cataclysmic, noted:

“Throughout the programme the Department has lacked a detailed view of how Universal Credit is meant to work.”

That has been the central failure: the Department simply has not worked out what the system is supposed to do.

More than three years after the implementation of universal credit started, we still do not know, as we have been reminded in this debate, which recipients of universal credit will be entitled to free school meals for their children. That is not a minor detail; it is a very serious problem for the aim of making sure that people are always better off if their income goes up. If the truth is that a household will suddenly lose their entitlement to free school meals if they reach a specific income threshold—that appears to be where we are heading—of, for example, £9,000 a year, their income will be a great deal less than it was before the small increase that triggered that change. The Citizens Advice briefing for today’s debate has an example of a lone parent who, if free school meals are decided on the basis of income threshold,

“will be worse off by taking on extra work however many hours she works”.

Solving that genuine policy difficulty is at the heart of what the Government are trying to do with universal credit. As my hon. Friend the Member for Edinburgh East (Sheila Gilmore) has reminded us, she and I served on the Welfare Reform Bill Committee. On 24 March 2011, the Secretary of State said:

“we have to resolve some of these issues like free school meals…You asked when. I believe that during the Committee stage we should be in a much stronger position to make it much clearer how we will do that.”––[Official Report, Welfare Reform Public Bill Committee, 24 March 2011; c. 154-55, Q299.]

The Committee stage ended on 24 May 2011, just over three years ago. When I asked the Schools Minister about the subject last Thursday, he said that an announcement would be made “shortly”. It appears that we are heading for some sort of income threshold. If that happens, it will create a huge new work disincentive in universal credit for a very large number of people that will be far worse than anything in the current system, for all its flaws.

The universal credit rescue committee—I am grateful to the hon. Member for Warrington South (David Mowat) for drawing attention to its work—submitted its report to the Labour party two weeks ago. It pointed out that the work incentives for second earners in a couple are a good deal worse in universal credit than they are in the current system. My hon. Friend the Member for Oldham East and Saddleworth underlined the importance of that point.

Leaving council tax support out of universal credit undermines simplicity, with many claimants facing two separate rates of benefit withdrawal when they move into work or their incomes increase.

The decision to pay universal credit to only one member of a couple, rather than reflecting the current system in which payment with respect for children is paid to the main carer—an arrangement with which you, Madam Deputy Speaker, are particularly familiar—raises significant risks for many women and their children.

Universal credit also creates an extraordinary new red tape burden for self-employed people and partners in small partnerships who want to claim universal credit. The Institute of Chartered Accountants in England and Wales says that about 60,000 partners in small partnerships will want to claim universal credit and that it will be virtually impossible for them to meet the proposed red tape challenge.

It is the policy failures that are the most serious, but it is the delivery failures that are the most spectacular. As the Minister for the Cabinet Office said in a television interview, implementation has been “lamentable”. I wrote to the Secretary of State on 16 November 2010 to point out that his timetable was unrealistic, and I wrote to him again on 18 April 2011. The Secretary of State wrote a perfectly friendly response on both occasions, but simply denied that he had a problem.

In November 2011, the Secretary of State announced that 1 million people would be claiming universal credit by April 2014; in fact, there were approximately 6,000. In May 2012, he announced that new applications for existing benefits and credits would be entirely phased out by April 2014; Ministers now say that that will not happen until 2016. Even assuming that everything goes well from here, which it will not, the project is at least two years late.

Late last year, it was finally admitted that the transition to universal credit will not be complete by 2017. Everybody has known that for months. The hon. Member for Amber Valley (Nigel Mills) was right to make some very thoughtful comments about that. However, while everybody knew about the problems, Ministers flatly denied them. The Secretary of State told the House on 5 September 2013:

“The plan is, and has always been, to deliver this programme within the four-year schedule to 2017…that is exactly what the plan is today. We will deliver this in time”.—[Official Report, 5 September 2013; Vol. 567, c. 472.]

That was complete fantasy. He was still doing it on 18 November, when he said that

“universal credit will roll out and deliver exactly as we said it would.”—[Official Report, 18 November 2013; Vol. 570, c. 947.]

Everybody knew that that was untrue. Why do Ministers not simply tell us the truth about what is going on? Some £40 million has been written off so far, with more undoubtedly to come.

I was worried about achieving one universal credit IT system in anything like the proposed time scale, but we are now in the extraordinary situation of building two different universal credit IT systems. How much more will that cost? The Select Committee asked that question—surely that is what Select Committees are supposed to ask about—but the Government response simply does not provide any answers. Surely we can at least be told how much extra it will cost us to have two IT systems instead of one.

Lessons also need to be learned from another group of serious failures—the governance failures in the project. To answer the question quite rightly asked by the hon. Member for Warrington South, five different officials have had responsibility for the project since it started. However, the central problem is that the project has been managed primarily with a view to minimising embarrassment for the Secretary of State. That is essentially what decisions have been about. Problems, when obvious, have simply been denied; information that would have shed light on what was going on has been buried; and the people who have asked difficult questions have been fobbed off. Members of the public have made freedom of information requests to see the risk register, the milestone schedule and the project assessment review, but applications have of course been refused, and when the Information Tribunal found in favour of those members of the public, the Department simply appealed again.

Ministers are absolutely determined that nobody should know what is really happening. With this project, there is an obsession with hiding things; of pretending that all is well when it obviously is not; and, as the National Audit Office has pointed out, of only admitting to good news. That is not a culture that will deliver a successful project, and it certainly has not delivered success in this case. My hon. Friend the Member for Hampstead and Kilburn referred to a “bunker mentality”, and there absolutely is such a mentality.

Obsessive secrecy has no doubt spared the blushes of the Secretary of State, at least for a time, but it has hindered progress on the project. It has meant that it has taken longer than it should have done to recognise problems and to deal with them, and a large amount of money has been wasted. If, two years ago, the Secretary of State had put up his hands, and recognised that he and his advisers had got it wrong and that the project would take longer than they first said, much of the subsequent waste and delay could have been avoided. Instead, they just kept on denying that there were any problems, so the problems kept on getting worse—and the project is not finished yet.

The project is at least two years late, and it will have wasted much more than the £130 million already acknowledged. It is essential, as the universal credit rescue committee has argued, that the project is now paused. Central policy decisions still have not been made—Ministers cannot spend hundreds of millions of pounds on an IT system if they do not know what it is supposed to do—and Ministers have not made such decisions. As has rightly been said by the rescue committee, taking advice from the former chief information officer of Rolls-Royce, who served on it with distinction, we need a plan that is published, is audited by the National Audit Office and contains milestones with dates, so that everybody knows how the project is going. Why pretend that it going well when it clearly is not?

[David Mowat]

The point I made was that the review could be done in parallel with continuing the programme. Let us say that 1,000 people are working on the programme at the moment. What will the right hon. Gentleman do with those 1,000 people during that three-month review?

[Stephen Timms]

As I have said, the idea for the pause is based on the recommendation of Jonathan Mitchell, the retired chief information officer of Rolls-Royce, who has managed extremely large IT projects in that company—possibly even larger than those for which the hon. Gentleman had responsibility. He has said that when a project is as out of control as this one clearly is, it is essential to stop, to make policy decisions and to draw up a plan before simply shovelling in hundreds of millions pounds more.

[David Mowat]

Will the right hon. Gentleman give way?

[Stephen Timms]

I will not, because I should conclude.

Outstanding policy issues need to be decided, the work incentive design flaws need to be fixed and a hard-headed view needs to be taken about whether this project can be rescued within an acceptable time and cost. Opposition Members hope the answer to such a question will be yes, but we cannot assume that it will be. The question needs to be asked frankly and answered honestly. It should not be left until the election; it should be done now.

--- Later in debate ---

[Esther McVey]

I thank my hon. Friend. That is why we are learning as we are rolling the system out and using that to inform what we are doing.

We have a multi-disciplinary team of 90 people, 30 of whom are digital specialists. They are developing the digital system as we go along. It is not a twin-track approach. We are continually learning and informing. We have one system. That is what we are doing. I hope that that goes some way towards answering the questions that have been asked about IT. One thing that we can all agree on is that it is complex. We will learn as we go along and we have the right person doing the job.

[Stephen Timms]

Is it the case, as the Minister said in her written answer on Monday last week, that the Treasury has approved the universal credit business case—yes or no?

[Esther McVey]

I have just had the answer that I gave last week checked. It stated:

“The Chief Secretary to the Treasury has approved the UC Strategic Outline Business Case plans for the remainder of this Parliament (2014-15) as per the ministerial announcement (5 December 2013, Official Report, column 65WS)”—[Official Report, 30 June 2014; Vol. 583, c. 434W.]

That was the response and I have just had it verified.

[Stephen Timms]

Will the Minister tell us, then, why the head of the civil service today told the Public Accounts Committee that the Treasury has not approved the universal credit business case?

[Esther McVey]

I will look into that additional point and get back to the right hon. Gentleman. On his last point, I have had the answer checked by my officials and it was correct.

On the roll-out, the new service is now available in 24 areas across England, Wales and Scotland, where it is providing people with stronger incentives and support to get into work, stay in work and increase their income. On 23 June 2014, we began rolling out universal credit for single people to jobcentres across the north-west of England, starting with Hyde, Stalybridge, Stretford, and Altrincham. Last week, it went live in Southport, Crosby, Bootle, Bolton and Farnworth. I am pleased to say that today, Wirral, Birkenhead, Bromborough, Hoylake, Upton and Wallasey began accepting claims for the new benefit. Once the north-west expansion is complete, 90 jobcentres—that is one in eight jobcentres in Britain— will be offering universal credit.

From 30 June, we expanded the service to couples in five of the existing live areas: Rugby, Bath, Inverness, Hammersmith and Harrogate. That meets our commitment to expanding the new service to more areas and to more claimant types from this summer. We will continue to roll out universal credit carefully in a safe and secure manner—starting small, testing and learning from delivery. That remains the right approach. Later in the autumn, it will be expanded to include families.

My hon. Friend the Member for Warrington South answered the question about whether somebody will be able to feed in information about how many hours they work per week. Such real-time information is another part of the programme that we had the foresight to put in place. That is working well and the roll out of it is nearly 100% complete—it is more than 99% rolled out.

I have just received a quote from a claimant in Warrington who is working 20 hours a week:

“I’m currently working 20 hours a week but am able to pick up extra hours when overtime is on offer because UC is flexible in that way and I don’t have to worry about my benefit just stopping if I work more than 16 hours. I know I will still get support until I earn enough to completely pay my own way”.

That is what we always intended to happen. There is a cushion of benefit to support people, but they are able to take extra hours and to progress in work without being stopped from working by the old-fashioned rules and regulations that Labour Members allowed to continue for so long. That is what we are trying to change. We all agreed, including the Select Committee, that those changes were needed. That is an example of a claimant saying what is happening to them right now under this system.

Sadly, I come to the questions that were asked by the hon. Member for Oldham East and Saddleworth (Debbie Abrahams). One thing on which we agree is that the media must talk about people and depict people carefully and sensitively. Nobody wants to point the finger at anybody. Nobody on the Government Benches has used any inflammatory language, because that is not right. I have always been very careful about the words that I use, because we all know people who have fallen on hard times and have needed the support of the state. It is imperative that each and every one of us checks our language, because it means a lot, whether it is on the internet, in newspapers or on the radio. I totally agree with her about that.

However, I totally disagreed with the hon. Lady—I am sure she will understand this—when she asked how the Secretary of State is still in his job. I had to smile at that rather absurd comment, given what he has delivered in four years. We have a record number of people in work. We are delivering on youth unemployment: it has gone down consistently for nine consecutive months. It is now 100,000 lower than when Labour was in office. Under Labour, youth unemployment went up by 45%. We have had the biggest fall in long-term unemployment, which doubled under Labour, since 1998. There is not just a record number of women in work, but a record rate of women in work too. All of those things are why the Secretary of State is still in his job: he has changed things around fundamentally.

The hon. Lady talks about a £40 million write-down. Projects of this size usually have about 30% write-down rate—this has a 10% rate. Labour’s track record of IT failure is £26 billion written off with no scope whatever, so we can move on to why universal credit is so important. Even the Joseph Rowntree Foundation is very clear about the benefits of universal credit, recently stating:

“Universal Credit is a once in a generation opportunity to reform a failing and overly-complex system. It will revoke the worst work incentives of the current system, smooth transitions in and out of work and make it easier for people to access all the support they are entitled to.”

Those are the reasons why we are correct in pursuing universal credit.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 23rd June 2014 Commons Chamber

[Mike Penning]

I am afraid that that is factually incorrect. I read Judge Martin’s comments, and I do not think that that is quite what he said. There has been a reduction of more than 80% in the number of people who are appealing. That is because better decisions are being made, which is right and proper for everyone.

[Stephen Timms (East Ham) (Lab)]

It is high time that Ministers took responsibility for their failings. It was their decision, after the election, to migrate all recipients of incapacity benefit to employment and support allowance. That was the decision that triggered the delays and backlogs about which we have heard. Now, the memos that were leaked last week have revealed that ESA

“is not delivering more positive outcomes for claimants”

than incapacity benefit did, and the Work programme has proved hopeless, with a 94% failure rate. How long will Ministers allow this shambles to continue?

Bedroom Tax (Scotland)

Stephen Timms Excerpts

Thursday 8th May 2014 Westminster Hall

[Stephen Timms (East Ham) (Lab)]

I am delighted to serve under your chairmanship, Mr Bone. I congratulate the Scottish Affairs Committee on its report and my hon. Friend the Member for Glasgow South West (Mr Davidson) on his introduction of the debate this afternoon.

It is refreshing to see an official document—the two reports from the Scottish Affairs Committee—that finally calls a spade a spade and uses the term “bedroom tax”. My hon. Friend the Member for Livingston (Graeme Morrice) drew attention to that as well. I was disheartened and my heart sank when I started to read the Government’s response to the report. Their very first point states:

“The Government has noted with some dismay the title of the Scottish Affairs Committee’s current inquiry”.

The complaint is about using the term “bedroom tax”, but everybody uses that term. Both parties that have spoken in this debate have used that term. The Minister for Welfare Reform in the other place used the term “bedroom tax” on more than one occasion. It is sometimes claimed that the term was invented by the Labour party, but I can reassure the House that that certainly was not the case. In fact, it is what the people call this hated measure. The Committee is absolutely right to reject specious arguments from Ministers that some other convoluted form of words should be used. I noticed in the Government response to the report that there is a long-winded phrase, which I cannot recall, but it has 10 syllables instead of the three in the phrase “bedroom tax”, and that is what it is absolutely right to call it.

My hon. Friend the Member for Glenrothes (Lindsay Roy) is right to say that the measure reflects straightforward Tory ideology. It is not a surprise that the Government’s housing benefit changes have hit the most vulnerable in our society the hardest. This has been explored to some extent, but it is disappointing to hear that the Scottish Government held back from protecting vulnerable claimants on the grounds that to do so would be to let Westminster off the hook. I welcome the progress that has been made in the past few days in overcoming that constraint.

The bedroom tax is the most hated of all the changes that the Government have introduced. The report is absolutely right to say that it is cruel and unfair, and is making a big contribution to the cost of living crisis faced by families in Scotland. Research by Sheffield university shows that it is the poorest who are picking up the tab, when we have seen tax cuts for the highest paid and a huge increase in bankers’ bonuses since the Government were elected. One of the biggest drivers of the loss in household income for ordinary families in Scotland is the bedroom tax.

The uniquely dreadful feature of this measure is that it cuts the income of people who are already hard up, without giving them any realistic options for making up the loss. We know that only 6% of those affected across the UK have been able to move, so 94% are taking the hit. The smaller social rented homes that would be needed to make the policy work—as we pointed out in the Welfare Reform Bill debates three years ago, and as Ministers must have known when they introduced the policy—are simply not available in many areas. We have heard from my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) that in Edinburgh 3,300 people are affected by the tax and 22 one-bedroom homes are available—less than 1%—and that is not an uncommon percentage being reported from cities around the UK.

There are also particular difficulties in rural areas. In some of them, there is almost no one-bedroom accommodation available at all. I noticed the submission made by the Orkney Islands council on the Scottish Affairs Committee’s website that made a strong case for a derogation from the bedroom tax for remote and rural island areas. But the truth is, whether we are talking about cities, towns or rural areas, the bedroom tax needs to be scrapped.

Given that there are not smaller homes to move to, many people simply have to take the hit. Many are now in rent arrears, and those who simply cannot afford the extra and cannot find anywhere to move to are going to lose their homes.

[Mr Davidson]

Does my right hon. Friend the Member for East Ham—my party’s spokesman—accept the recommendation of the report that all bedroom tax should be written off and all payments made refunded? Would he, like me, welcome the opportunity to go into a general election with the slogan, “Vote Labour and get your bedroom tax back”?

[Stephen Timms]

That sounds a very good slogan, but, sadly, I cannot give my hon. Friend the assurance that he seeks. I agree with him about the distinction between the Scottish Government currently in power in Scotland and the position that would face a newly elected—hopefully, Labour— Government.

The point has also been made in this debate—absolutely rightly—that across the UK two thirds of the households affected include someone with a disability. My hon. Friend the Member for Airdrie and Shotts (Pamela Nash) indicated that the proportion is even higher than two thirds in Scotland. It seems particularly ridiculous that homes on which public money has been spent specifically to provide adaptations for families living with disabilities should be affected by the bedroom tax, and some people are being forced to leave them, even though public money has been spent to adapt them specifically to their needs.

We had a debate last week about the impact of the bedroom tax in Wales. The Committee’s interim report acknowledged that Wales was the part of the UK worst affected by the tax. The Government’s response to the report by the Welsh Affairs Committee once again rejects the idea of an exemption for adapted homes. That is very disappointing, and it is another aspect of the wastefulness of this measure. It contributes to the likelihood, as pointed out by researchers at York university and elsewhere, that the bedroom tax will end up costing more than it saves. Without smaller homes to move to, the measure is simply a tax on the poor. As my hon. Friends have said, the right thing to do is to scrap it.

I welcome the agreement that will enable the effects of the bedroom tax to be nullified in Scotland. Can the Minister tell us why the same provision cannot be made for Wales? Why are the Welsh Government not allowed to offset the effects of the bedroom tax? And what about the Greater London Assembly, so that my constituents could also be spared this pernicious measure?

Last week, my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) rightly brought to the attention of the House the issue of panic rooms, which are not exempted from the bedroom tax.

We have long argued that the hated bedroom tax was a mistake. Even the Conservative Chair of the Welsh Affairs Committee has recognised that it is a mistake in Wales. Our policy is that it should be scrapped. We will continue to press the Government to scrap it. That was the aim of the private Member’s Bill moved recently by my hon. Friend the Member for Wansbeck (Ian Lavery). If our efforts do not succeed and the bedroom tax is not scrapped by this Government, we have made it absolutely clear that it will be scrapped by the next Labour Government.

Work Programme (Wales)

Stephen Timms Excerpts

Thursday 1st May 2014 Westminster Hall

[Stephen Timms (East Ham) (Lab)]

After three years of virtually no growth in the British economy after the general election, we are now finally seeing a recovery taking shape, which is very welcome. We all hope that the recovery will be sustained. The central labour market challenge now is that, following that period, we have unprecedentedly high numbers of people who have suffered unemployment in the long term. That needs to be at the centre of policy over the period ahead.

Tackling long-term unemployment is very urgent. As the Welsh Affairs Committee has pointed out, the Work programme is not up to that task. In fact, long-term unemployment rose inexorably to the highest level for 20 years in the two years after the Work programme was introduced. We need to do much better.

The facts about the Work programme’s performance in Wales have been set out fully in the report. The Government’s response says, “Well, it is not quite as bad as it looks, because 14.7% of those who started on the Work programme in Wales have achieved a sustained job outcome.” The Chair of the Select Committee said that it had gone up a bit to 15.1%, and I think that is right, on the most recent data. However, 85% of those who went on to the programme have therefore not achieved a sustained job outcome. It is very difficult to see how 15.1% can be regarded as good performance, and we should bear in mind that people have spent two years on the Work programme and that they have already been out of work for a year, usually, when they start on it. We are therefore talking about people who have had three years out of work, and it looks as though 85% of those who started on the Work programme do not have the sustained job outcome that is the purpose of being there. That looks pretty disappointing to me.

As my hon. Friend the Member for Blaenau Gwent (Nick Smith) rightly said, the policy has been particularly disappointing for young people. The youth contract has been a serious damp squib. Wage subsidies provided under that have had minimal take-up. I understand that Ministers have now given up on achieving the take-up that they initially forecast, and it is expected that spending on the youth contract will be much less than was originally thought. If the Minister could tell us her current expectations about that, it would be helpful.

It is true in Wales, as it is elsewhere, that the Work programme has been terrible for people who are out of work on health grounds and in receipt of employment and support allowance. Only 5% of them across the UK have secured a sustained job outcome after two years, so the failure rate has been 95%. If I am reading the Committee’s report correctly, at table 4, the proportion in Wales is less than 3%. Again, those people have spent two years on the Work programme, but it appears that less than 3% of them have a sustained job outcome. The Work programme has been very disappointing for jobseekers generally; for that particular group, it has been terrible. The report tells us that 2,630 former recipients of incapacity benefit were referred to the Work programme in its first two years. Of that 2,630, 10 secured a sustained job outcome.

We were told at the outset that the design of the Work programme would enable extra support for those facing the greatest barriers. In fact, many of those with the greatest barriers—such as people with health problems—have simply been parked by the Work programme and have not had any serious help to get back into work.

The report refers to alignment between programmes in Wales and in the whole UK. As my hon. Friend the Member for Llanelli (Nia Griffith) pointed out, the Welsh deputy Minister for Skills and Technology, Ken Skates, who I think is doing a fantastic job, made a statement on Tuesday about his discussions with the Minister. I hope that she will be able to tell us something from her perspective about the progress of those discussions.

Inspired by the success of the future jobs fund, which was in place across the UK before the election, the Welsh Assembly Government have established Jobs Growth Wales, which my hon. Friend the Member for Newport East (Jessica Morden) drew to our attention and the report mentioned. By contrast to the disappointment of the Work programme, my hon. Friend the Member for Swansea West (Geraint Davies) was absolutely right that Jobs Growth Wales has delivered for young people in Wales.

The shadow Secretary of State for Work and Pensions, my hon. Friend the Member for Leeds West (Rachel Reeves), and I visited Cardiff last month to find out more about how that success has been achieved. We visited a rapidly growing software company employing 150 people in Cardiff. It has taken on young people through Jobs Growth Wales. It told us that it took on 12 young people last year. The company is Israeli-owned, and it had quite a tough job making a pitch to the board in Israel that it should take on those 12 people. It was able to win that argument only because of the wage subsidy from Jobs Growth Wales, but having taken on those 12 young people, 11 have now become permanent employees. The 12th was not kept on, but that young person has gone on to get a job in another firm. We met four of the recruits at the company’s offices in Swansea. They all told us that they had found it extremely difficult to find a job. One told us they had applied for hundreds of jobs; it was Jobs Growth Wales that gave them a break.

As my hon. Friends have said, the performance figures from Jobs Growth Wales are very impressive. The most recent figures that I have seen suggest that of those who have completed the Jobs Growth Wales programme up to 10 April, 45% continued in employment after their six-month job subsidy ended with the same employer. Another 8% were able to get work with another employer and 26% went on to an apprenticeship. Most of the employers recruiting under Jobs Growth Wales are small and medium-sized enterprises. The programme has very strong support from the Federation of Small Businesses and, as my hon. Friend the Member for Swansea West said absolutely rightly, the lessons from that success should be applied right across the UK, and that is precisely what Labour’s compulsory jobs guarantee will do. We want to guarantee a choice of job offers to 18 to 24-year-olds who have been in receipt of jobseeker’s allowance for a year and—this is different from what is happening in Wales—to over 25-year-olds who have been in receipt of jobseeker’s allowance for two years. Every European Union member state, except for the UK, is now introducing a youth jobs guarantee. We should do so as well, and I very much commend what is being delivered in Wales.

The Select Committee was right to point out the extent of the disappointment in Wales about how the Work programme has done so far—less well than elsewhere, and it has been rather disappointing elsewhere, too. It has been at its worst in Wales. Jobs Growth Wales, by contrast, has established a much more encouraging record. In our view, the lessons from that need to be applied in a compulsory jobs guarantee in every part of the UK.

Housing Benefit (Wales)

Stephen Timms Excerpts

Thursday 1st May 2014 Westminster Hall

[Stephen Timms (East Ham) (Lab)]

I am also delighted to serve under your chairmanship, Mr Betts. I congratulate the Welsh Affairs Committee on its report and its Chair, the hon. Member for Monmouth (David T. C. Davies), on the position that he has taken in the debate.

It is no surprise that, as we have heard, the Government’s housing benefit changes have hit the least well-off the hardest. My hon. Friend the Member for Llanelli (Nia Griffith) was among those who made the point effectively that a greater proportion of housing benefit claimants have been hit by the bedroom tax in Wales than elsewhere. My right hon. Friend the Member for Torfaen (Paul Murphy) said that this is a “wicked” measure. I, and I think many who have contributed to the debate, share that view. The bedroom tax is certainly the most hated of all the Government’s changes.

The Minister might not be inclined to take as much notice as he should of the representations made by my hon. Friends the Members for Ogmore (Huw Irranca-Davies) and for Bridgend (Mrs Moon), but I hope that he will at least take notice of the views of the Social Liberal Forum, an organisation that he has been associated with. It says that the bedroom tax is

“easily the most disgraceful of all the Government’s welfare reforms.”

The Minister who, when in opposition, espoused a progressive position on social security will, in a few minutes, endeavour to defend this most regressive of changes, which is making a big contribution to the cost of living crisis being suffered by people in Wales.

My hon. Friend the Member for Swansea West (Geraint Davies) reminded the Committee that the Minister is a Liberal Democrat. I wonder whether the Minister can help us resolve a puzzle. It would be helpful to know what his party’s policy is on the bedroom tax, as that is a bit of a mystery. The president of the Liberal Democrats, the hon. Member for Westmorland and Lonsdale (Tim Farron), spelt out a clear position in Inside Housing in February. He said that his party will be opposing the bedroom tax at the next election. He explained why:

“It’s creating more hardship, it’s wrong and unnecessary…it’s impacting on people and the most vulnerable. It’s also having an impact on housing associations—it means that they have less to invest in social housing.”

He is absolutely right about that and that is why, no doubt, the Minister’s party conference voted overwhelmingly against the bedroom tax last September in a motion that condemned it as discriminating against the most vulnerable in society. The hon. Member for Ceredigion (Mr Williams) said that he has voted against the policy in the past. It would therefore be helpful if the Minister could tell us what his party’s position is on the bedroom tax. It rather looks at though it opposes it, but it does not vote against it. I hope that he can shed some light on that in this welcome debate.

The uniquely dreadful feature of the measure is that it cuts the income of people who are already hard up without giving them any options for making up the loss. We have heard in the debate that only 6% of those affected throughout the UK have been able to move; 94% are taking the hit. We pointed out in debates in the Welfare Reform Bill Committee three years ago that smaller homes for rent are simply not available in many areas. The Committee drew attention in the report, as its Chair did in his speech, to the particular difficulties in rural areas, with people reported as having to move 50 miles or so. Most people have therefore just taken the hit. Many of whom, as we have heard, are now in arrears and some who simply cannot afford the extra and—like the great majority—cannot find somewhere smaller to move will, in due course, lose their homes.

In Wales, the bedroom tax affects a larger proportion of claimants than in any other region and the Select Committee is right to draw that point to our attention. It affects 40,000 households, 62.5% of which are households with a disability. Some of the homes we are talking about have been specifically adapted to support their tenants’ needs. We argued, again in the Welfare Reform Bill Committee, that this pernicious measure should not apply to such homes to avoid the problem identified in Bron Afon Community Housing’s evidence, which is in the document before us today. Unfortunately, the Government rejected our proposed change and again rejected the idea of an exemption in response to the report. The Minister, in his intervention, at least hinted at some sympathy for that case and that, for homes with perhaps major adaptations, there should be some exemption. If he is able to encourage us that he might take that thought further, that would be welcome.

The Select Committee told us that local authorities have been asked to report on

“the number of awards that have been made to help with ongoing rental costs for disabled people in adapted accommodation.”

Will we be told how many disabled people in adapted accommodation will be refused discretionary housing awards? Can the Minister offer any reassurance to those affected?

We have heard about the survey undertaken by Rebecca Evans, the Member of the Welsh Assembly who has established that, in a survey of housing providers, the number of one-bedroom properties available was about 1% of those needed. The bedroom tax is simply a tax on people who are hard-up.

In some areas, larger properties are being left empty because smaller households cannot afford to live in them. That is another aspect of the waste being caused by this tax: good homes are being left empty. On Tuesday, my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) brought another aspect to the House’s attention: panic rooms, which have been installed in some homes, reflecting the serious domestic violence problems that some people face. Such rooms are not exempted from the bedroom tax either. Surely it makes no sense to force people in that position to move, even if there was anywhere for them to move to.

For many, the bedroom tax has proved a hit too far on their household budgets. It has been one of the major drivers of the extraordinary increase we have seen in demand for food banks in Wales, as my hon. Friend the Member for Newport East (Jessica Morden) rightly pointed out. Her survey showed powerfully just what a big increase there has been in the number of housing association tenants in rent arrears because of the introduction of this tax. She also calculated the loss to housing associations as a result of that.

In January, a loophole was discovered in the bedroom tax legislation that, in effect, exempted those who had held the same tenancy since 1996. This is a mess. The Government claim that only 3,000 to 5,000 people are eligible for a refund of their bedroom tax payments, but freedom of information requests to local authorities have already identified 23,000 who are affected and at least 1,800 of those live in Welsh local authority areas. Can the Minister give us an estimate of the cost of reimbursing tenants affected in Wales? That is, however, another reason why my right hon. Friend the Member for Torfaen said that it is likely that this measure will end up costing more than it was ever likely to save.

Labour’s policy, and I think the Liberal Democrats’ policy—it was at least its policy at its conference—is that the bedroom tax should be scrapped. We will continue to press the Government to scrap it and, if they do not, the next Labour Government certainly will.

--- Later in debate ---

[Steve Webb]

No, I will not. Labour cannot explain why it is right to say that private tenants have to pay for the size of the house that they live in, but that social tenants should not have to. Some suggestions were made about our views on excluding pensioners from the measure. They are generally excluded because, for example, expecting them to take work would be unrealistic. We have excluded pensioners for that reason, but it is pretty obvious why the Labour party wants to exclude social tenants, but not private tenants.

Someone said during the debate that we cannot both save money and make better use of the housing stock, but we are doing both of those things. The original estimated savings from the measure for the whole country of some £0.5 billion remains our expected order of magnitude. In addition, some people are moving to more suitable accommodation and freeing up accommodation for the people whose voice never gets heard—as has been said in the debate.

[Stephen Timms]

Will the Minister give way?

[Steve Webb]

No—I have only one and a quarter minutes left. Why did we not hear about the 13,000 people in Wales living in overcrowded social sector accommodation? Where was their voice in the debate? What about the people living in overcrowded private sector accommodation, or the 90,000 people on housing waiting lists?

There is a whole set of unmet housing need while we have people under-occupying social rented accommodation —through no fault of their own, so it is not a criticism of them, but it is a fact. The hon. Member for Swansea West (Geraint Davies) said that when people’s kids grow up, they should go on being able to live in a big family house, but what about the people who would love a big family house, but cannot get it because it is under-occupied? We have to help people with the transition, but that is why substantial additional DHPs have been found.

Finally, on the specific issue of adapted accommodation. We would have loved it had we been able to write a law in Whitehall that said, “This is adapted; this isn’t. Here is how we define it in an Act of Parliament or a statutory instrument. We will have a blanket exemption.” That would have been great. We looked hard, but we could not think of a national and consistent way of defining what it was. We therefore found the money instead—£25 million across Great Britain, which was our estimate of the cost of buying out the impact on substantially adapted properties. No one in the country living in a substantially adapted property who goes to a local authority should be turned away because there is not the money for DHP. We have given the local authorities the money, and that should not need to happen.

There is lots more that I would love to say, but I am constrained by time. I hope that I have been able to give some responses to the questions asked by the Chairman of the Committee.

Sanctioning of Benefit Recipients

Stephen Timms Excerpts

Thursday 3rd April 2014 Commons Chamber

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

This is obviously a day for my Select Committee’s reports. My right hon. Friend the Member for Oldham West and Royton (Mr Meacher) referred to the report that we published a few months ago called “The role of Jobcentre Plus in the reformed welfare system”, in which we had a whole section on sanctions. Very helpfully, the Government published their response to that report today, so the debate is timely.

Sanctions as we know them today have probably existed from the 1980s, although there has always been conditionality as part of the rules for getting unemployment allowance. I suppose the question today is to what extent the use of sanctions has increased in recent years. Certainly there has been a huge increase since the Welfare Reform Act 2012 was passed. Dr David Webster of the University of Glasgow, the leading academic authority on benefit sanctions, told my Committee that

“the severity of the regime has increased drastically under the Coalition Government and is increasing further.”

He also highlighted the common misconception that benefit sanctions affect only a small minority of benefit claimants. In the period 2008 to 2012 around one fifth of JSA claimants were sanctioned, approximately 1.4 million people. Official data show that, since the introduction of the new rules which have already been referred to, the proportion of JSA claimants sanctioned every month is around 5%, which is approximately 60,000 people. In the period from the introduction of the new JSA rules to June 2013 there were 553,000 sanctions, an increase of 11% on the same period a year earlier. There were 860,000 JSA sanctions in the year to June 2013, the highest number in any 12-month period since records began in their current form, and probably the highest number ever. The number of employment and support allowance sanctions—it is a new development that people on a disability benefit can be sanctioned—in the period December 2012 to June 2013 was double that in the same period a year earlier.

Despite all this, by May 2013 the report to the Secretary of State found

“no evidence of a secret national regime”

to set targets for the number of sanctions imposed. However, the Public and Commercial Services Union told my Committee that the expectations placed on Jobcentre Plus staff to sanction claimants were “targets by another name”. The argument about whether such targets exist continues to this day.

Both Members who have already spoken talked about inappropriate sanction referrals. We received evidence of quite a number of those, but in the light of Mr Deputy Speaker’s strictures, I will not detail them. Suffice to say that many were silly and inappropriate. With the application of common sense—that was the phrase that we used in our report—they could have been avoided or should have been picked up at review stage. About 50% of sanctions are overturned on review by a decision maker.

Many hon. Members will have received postcards from constituents that were probably sent to them by Church Action on Poverty and Oxfam, which asked my Select Committee to hold an inquiry into the use of food banks. Those postcards arrived in my office when we had already embarked on our inquiry into Jobcentre Plus. We had already decided that that would form part of the inquiry. Church Action on Poverty and Oxfam, in their report, “Walking the breadline”, found that sanctions were a significant factor in the recent substantial rise in referrals to food banks. They estimated that some half a million people in the UK were “reliant on food aid”, and that “up to half” of people who are referred to food banks need help

“as a direct result of having benefit payments delayed, reduced, or withdrawn”.

DWP was unable to provide information on the number or proportion of JSA claimants who chose to sign off benefit during a sanction period, or for longer, which is the reason that they would come off the claimant count. That might explain why there is some disparity between the figures for the number of people looking for work and the official unemployment figures.

The Committee recommended that Jobcentre Plus should look at the impact of sanctions on the use of food banks, but the Government have effectively rejected that in their response.

The Committee was also keen to see a second independent review of the sanctions regime, in addition to the one already being conducted by Matthew Oakley. Indeed, we thought that we had got the Employment Minister, the right hon. Member for Wirral West (Esther McVey), to agree to that when she gave oral evidence. Matthew Oakley is considering the clarity of DWP’s communications with claimants, the whole issue of sanctions, the appeals process and the availability of hardship payments.

We had wanted that second independent review to examine: whether sanction referrals were made appropriately, proportionately and fairly across the jobcentre network; whether there is a the link between sanctioning and the claimant count that could explain some of the disparities in the figures; and whether the regime was achieving its aim of encouraging claimants to engage more effectively with employment support. There is no point having sanctions if we do not know whether they work. Are they making people look for work more thoroughly than they otherwise would? That is our question. We do not think that Matthew Oakley’s inquiry will answer that, because it is not in its remit.

The Committee thought that the Employment Minister had promised that second review, which is why our report states that we welcome that commitment. Unfortunately, that is not what she meant, because the Government’s response states that there will be no second review along the lines we were asking for, and which we thought the Government had agreed to.

I appeal again to the Government to consider setting up a second independent review, and not just of the administration of sanctions, but of their effectiveness. Do they actually work? Do they change the behaviour of the people affected? If they are not changing people’s behaviour and so are purely punitive, the Government should be honest about that, because they must be saving money as a result. I do not think that most people would accept the application of sanctions that are purely punitive. If they are changing people’s behaviour, that is a different matter.

[Stephen Timms (East Ham) (Lab)]

Does my hon. Friend share my puzzlement about the Government’s about-turn, given that the Minister wrote to my right hon. Friend the Member for Oldham West and Royton and referred to the second review’s terms of reference? It is therefore very surprising now to be told that it will not happen at all.

[Dame Anne Begg]

I share my right hon. Friend’s disappointment, because we honestly thought, even before we published the report, that we had got the Minister to agree to such a review. I hope that the Government will think again, because they need to be satisfied, just as everybody else does, that the regime is not intended simply to save money in the welfare system through punitive sanctions, but has a real purpose in ensuring that people who are not fulfilling their obligations under the agreements they signed and who are trying to play the system should be sanctioned in certain circumstances. Sanctions should certainly not be applied if there is no reason other than to punish the individuals concerned.

I know that my time is up, Mr Deputy Speaker. I hope that the Minister, who is listening patiently, will take that back to the Department and that we can get a second independent review of the workings of the sanctions regime.

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

I, too, congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on his initiative, as a result of which we have had a very interesting debate.

The debate raises this question: what has become of Jobcentre Plus? As my hon. Friend the Member for Wansbeck (Ian Lavery) has just described, those who work in jobcentres say that they are under enormous pressure to sanction people’s benefits. In opening the debate, my right hon. Friend the Member for Oldham West and Royton referred to the “toxic” culture in Jobcentre Plus. People who depend on it for help say that too often its main interest is now in catching them out.

As we have heard, sanctions are vital to the system. They encourage effective jobsearch, and a sound rationale for them was set out in Professor Paul Gregg’s report for the Government in 2008. They featured in the new deal and the future jobs fund, and we have made it clear that they will also feature in our compulsory jobs guarantee. However, as my hon. Friend the Member for Makerfield (Yvonne Fovargue) argued, sanctions need to be applied fairly and proportionately. Claimants must understand their responsibilities and the consequences of not meeting them. That is not the case at the moment, as the hon. Member for Birmingham, Yardley (John Hemming) correctly pointed out. The Child Poverty Action Group has referred to the frequent very vague letters from jobcentres, which people cannot understand, telling them what they are supposed to have done or not done. The Work and Pensions Committee report in January set out an approach to sanctions that makes a great deal of sense, and I must say that I was disappointed by the quite negative tone of the Government’s response.

The hon. Member for Banff and Buchan (Dr Whiteford) was right to remind the House, as other hon. Members have done, that rocketing benefits sanctions have fuelled the extraordinary growth in food bank demand. Volunteers say that a lot of people at food banks have no idea why they have been sanctioned. We might expect that Ministers, after hearing that from the Trussell Trust, would want to find out what is going on. Instead, the Secretary of State for Work and Pensions has refused to meet the Trussell Trust and, quite bizarrely, has accused it of having a political agenda. The Trussell Trust therefore had to make do with meeting the Prime Minister. It is disappointing, but not surprising, that the Select Committee recommendation that the Department should compile data on the number of signposts to food banks it is making has been rejected.

The first that some people know about a sanction is when they find out that there is no money in their bank account. Sanctions are supposed to incentivise people to undertake fruitful jobsearch, but if people do not know which rule they have broken and they are not told, a sanction cannot incentivise them. What has gone wrong?

Last week, at the invitation of Tesco, I visited its new store in Woolwich. The company personnel director told me that of the 400 staff the store had recruited when it opened in 2012, 100 had been chosen who had previously been unemployed. She introduced me to four of them, and it was frankly inspiring to hear how the opportunity to work was changing their lives and to hear how they are now optimistic about their prospects.

I took the opportunity to ask the four members of staff about their experience of Jobcentre Plus. Their answers were uniformly depressing. They said that advisers wanted to catch them out and to come up with reasons for imposing a sanction. One of them told me as a matter of fact that Jobcentre Plus advisers have to impose eight sanctions per month. He might have a point, because I understand that eight sanctions per month is regarded as the norm for an adviser. The Minister will correct me if that figure is wrong, but I think that it is right. As my hon. Friend the Member for Bolton West (Julie Hilling) pointed out, the number of sanctions issued by each adviser features in their regular appraisals. It is therefore not surprising that jobseekers get the impression that advisers have such a target. Indeed, I suspect that jobseekers are probably quite close to the truth about what is going on.

The reputation of Jobcentre Plus is now terribly poor. Examples such as the one given by the hon. Member for Hornchurch and Upminster (Dame Angela Watkinson), make it clear why that is the case, and there are too many examples like those given by my hon. Friend the Member for Wansbeck.

[John Healey]

My right hon. Friend is talking about the disincentives in the system that lead to more sanctions. Does he agree that one problem may be that the single measure of performance in Jobcentre Plus is the benefits off-flow, and that anyone sanctioned is counted in that way, even though they are not coming off benefits to get into work?

[Stephen Timms]

I agree. There are several problems with the benefits off-flow measure, and my right hon. Friend is absolutely right that that is one of them. Citizens Advice has made that point in the briefing for this debate.

My hon. Friend the Member for Edinburgh East (Sheila Gilmore) drew my attention to a report from West Dunbartonshire citizens advice bureau called “Unjust and Uncaring: A report on conditionality and benefits sanctions and their impact on clients”, which was published just a few weeks ago. It is full of depressing examples of the kind that we have heard in this debate.

Community Links works in my constituency in east London. It produced a policy briefing on sanctions in January, which states:

“There is a culture of fear and misunderstanding surrounding sanctions: some people are afraid of making tiny mistakes such as being one minute late for a meeting.”

The briefing includes a case study of Rita, a young and strongly work-oriented woman who was employed for six years until being made redundant. She has a degree in journalism and aspires to a career, not just to a job. She was sanctioned for non-attendance at a meeting, even though she had agreed with her jobcentre adviser to participate in work experience elsewhere. We have heard a number of examples of that. She was also incorrectly sanctioned for missing a meeting while at a pre-arranged hospital appointment, even though she had informed her adviser in the official way. She avoided that sanction, but only by insisting on speaking to the line manager at the jobcentre. One sanction meant that she did not have enough money to attend a job interview. She blames the jobcentre directly for preventing her from potentially getting a job.

Rita made the following comments:

“I had times when I literally had no food and no gas. I just lay in my bed looking at the walls. I couldn’t travel or make any calls. I couldn’t even afford to get the bus to sign-on, but I knew that if I didn’t go I’d be suspended again. It’s like a vicious cycle. I turned up at the Jobcentre actually hungry. I hadn’t eaten for two days and I was scared that if I was five minutes late they would suspend me again.”

She was present on Monday this week at the launch at Church House of Community Links’ troubling study “Tipping the balance?” on the cumulative impact of welfare reform in Newham.

The evidence that we have heard in this debate makes it clear that there is a serious problem. A year ago, I asked a parliamentary question:

“what was the total amount of benefit withheld as a result of benefit sanctions in each of the last four years.”—[Official Report, 25 March 2013; Vol. 560, c. 986W.]

The answer told me that in 2009-10, £11 million was withheld and that just in the first six months of 2012-13, £60 million was withheld. In cash terms, that is more than a tenfold rise.

I have since requested an updated answer. The Minister of State, Department for Work and Pensions, the right hon. Member for Wirral West (Esther McVey), told me in an answer in February:

“The information is not available in the format requested. Trends in sanctions are better understood” —[Official Report, 5 February 2014; Vol. 575, c. 268W.]—

in some other way. It is not clear to me why the information was available a year ago, but is not available now. It is not the job of the Minister to tell us what questions she would like us to ask; Ministers are required to answer the questions that we do ask. I tabled the question again yesterday and I ask the Minister here today who is much more reasonable in these respects, to have a word with the right hon. lady and ask her this time to answer the question that she is asked.

A very large number of sanctions are overturned on appeal. Those sanctions should not have been imposed in the first place. The Policy Exchange report, which my right hon. Friend the Member for Oldham West and Royton mentioned, said:

“After reconsideration and/or appeal, 29% of those who receive their first ‘lower’ tier sanction have it overturned, meaning around 5,600 of them a month are wrongly sanctioned.”

In February, as my hon. Friend the Member for Wansbeck said, DWP statistics showed an appeal success rate of nearly 60%. Those statistics are gone from the Department’s website and have not yet come back corrected. I wonder whether the Minister can tell us what the correct figure is and when the figures, having been corrected, will be republished.

Last summer, as my hon. Friend the Member for Bolton West reminded us, the Opposition forced the Government to set up a review of sanctions. Ministers appointed Matthew Oakley to carry it out, although they drew up rather narrow terms of reference. I have appreciated the opportunity to discuss the issues with Mr Oakley, who has set about his task with thoroughness and diligence. I hope that his report, when we see it in a few weeks’ time, will lead to important improvements. However, it is very disappointing that today’s Government response to the January Select Committee report reneges on the commitment to a further wider review.

The Policy Exchange report says:

“we recommend a series of cumulative increases in sanction duration for those who consistently fail to comply with the conditionality regime. This reflects an aim to make sanctions less punitive for those who may have made genuine mistakes”.

As my right hon. Friend the Member for Oldham West and Royton said, that comes from the ideological standpoint of the Minister’s coalition partners. I hope that he will indicate whether he accepts that it is a helpful direction of travel.

Sanctions by Jobcentre Plus have become far more punitive. They explain a large part of the explosion in food bank demand. Many people have no idea why they have been sanctioned. It is agreed across the political spectrum that the system has gone wrong, as we have heard in this debate. I hope that the Minister will indicate that he understands the problem and that he intends to do something about it.

--- Later in debate ---

[Stephen Timms]

Will the Minister give way?

[Steve Webb]

Perhaps the right hon. Gentleman will allow me to continue.

A further point missed by a lot of hon. Members is that two thirds of sanctions are not disallowances. Someone’s JSA might be reduced because of a sanction, but they do not come off JSA and still count in the claimant count numbers. Of all the sanction numbers, only a third are disallowances. On the unemployment figures, the JSA numbers have been coming down because of reduced inflows, not because we have been sanctioning people off benefit.

[Stephen Timms]

rose—

[Steve Webb]

I wonder if the right hon. Gentleman will allow me to continue. I have not given way to anybody else, and I hope he will forgive me if I am consistent. [Interruption.] If the House would like me to take the intervention, I will happily do so.

[Stephen Timms]

I am very grateful to the Minister. Will he confirm, as my right hon. Friend the Member for Oldham West and Royton said, that sanctions contribute to the benefit off-flow figures, which are the key to incentivising jobcentres and advisers?

[Steve Webb]

As I say, in two thirds of cases where people are sanctioned, they do not actually flow off JSA. Their JSA claim is regarded as continuing, so only a fraction of those numbers count as coming off benefit. Most people are still on JSA, even though they are sanctioned. It is clearly not the case that this is anything to do with the claim—it patently is not.

I have sought to be as consensual as I can. The right hon. Member for Oldham West and Royton made extraordinary remarks about the Chancellor’s approach to the macro-economy. Given that we have record numbers of people in work and record rates of employment, the idea that that is somehow mishandling the economy is extraordinary.

The key point is that we recognise that the sanctions regime needs to be kept under constant review. An independent review is under way. We will publish that and respond to it positively. If right hon. and hon. Members have individual cases they wish to draw to our attention, we are very happy to look at them. I think the House is united in saying: yes people have responsibilities, and yes there are consequences when they do not meet those responsibilities, but we all want to see a sanctions regime that is fair and proportionate. That remains the position of the Government.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 31st March 2014 Commons Chamber

[Esther McVey]

My hon. Friend is correct, and he is meticulous in his homework and his figures and in everything he does. I would also like to explain to the House that long-term unemployment in the UK is half that of the eurozone—the figure is 2.7%—so what we are doing is right. Let us not get out of office, because when we are in office we run the country a lot better.

[Stephen Timms (East Ham) (Lab)]

The hon. Member for Ipswich (Ben Gummer) is absolutely right. Last year, the number of people who had been unemployed for more than two years reached a higher level than at any time since 1997. It then started to fall, but last week—contrary to what the Minister said a minute ago—it went up again. Does she accept that long-term unemployment is a terrible waste of human and economic potential, and will she now introduce a compulsory job guarantee for those who have been receiving jobseeker’s allowance for more than two years?

[Esther McVey]

It seems that the Opposition never really learnt anything. They want to introduce the future jobs fund and traineeships, for instance, because they enable them to manipulate the figures. They can take people off long-term unemployment and start the clock ticking again, but the figures that they give are unreal and untrue. We are ensuring that we measure the levels correctly, and that there is an honest assessment of what is happening to unemployment, including long-term unemployment. I can tell the Opposition, without fiddling any figures, that it is coming down.

Pensions and Benefits Uprating

Stephen Timms Excerpts

Tuesday 25th February 2014 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I thank the Minister for his explanation and confirm that I do not intend to express concerns about the draft Guaranteed Minimum Pensions Increase Order 2014. However, I do wish to make some comments about the draft Social Security Benefits Up-rating Order 2014. As he has said, this is a rather thinner debate than the corresponding ones he and I have enjoyed in previous years, because a big chunk of what we have debated previously is now covered by the Welfare Benefits Up-rating Act 2013, which imposed a 1% uprating this year and next, and so is outside the scope of these orders.

One thing I have not entirely understood—the Minister touched on this and I would be grateful if he explained it—is how the corresponding order for tax credits will be dealt with. Some elements of tax credits uprating are not covered by the 1% constraint. Clearly, with so few people in receipt of universal credit, he is not the Minister responsible for in-work benefits—that responsibility remains with the Treasury—but I wonder whether he could explain how the parliamentary process dealing with those tax credits is to be handled.

This is the fourth year since the announcement of the triple lock for the basic state pension. In rhetorical terms the triple lock has, no doubt, been successful, but, unfortunately, the reality has been rather different, because, once again, the increase in the state pension is less this year than it would have been if the uprating method previously used was still in place. In RPI terms, this is a real-terms cut for the third year in a row in the value of the basic state pension. The RPI last September was 3.2%, whereas the pension uprating delivered by this order is 2.7%. So in RPI terms, this is quite a big cut of 0.5%—a full half percentage point—in the value of the state pension, which is a bigger real-terms cut than last year. If the basic state pension had been uprated in line with RPI since 2010, the weekly rate for a single person would be more than a pound higher than the figure we are debating today, at £114.21.

[Steve Webb]

Clearly RPI is bigger than CPI—that is a statement of fact—but does the right hon. Gentleman think that RPI is a good measure of inflation?

[Stephen Timms]

I will come on to deal with that. The point I wish to make is that the triple lock is frequently presented to us, as the Minister did again today, as being extraordinarily generous to pensioners. It is presented as some great superlative, whereas in fact it has delivered a lower uprating than the previous formula—the one in place before the last election—in every one of the three years when it has been used, and in the first year it was due to be used it would have delivered such a low uprating that the Minister chose to override it. He was sensible to do so, but if he had used the triple lock in that first year, the gap between his uprating and the value of the basic state pension under the old method would now be almost £3 per week. So it is important in this debate to put on the record the extent to which the triple lock has delivered less than the long-established formula that was in place until the general election.

It is worth examining the history of the triple lock. In its first year, it was announced but not actually implemented, because it would have delivered a very small increase. So at its first outing, it failed.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

Was it not, however, the long-established formula, over the long run, that had put pensioners so far behind those earning?

[Stephen Timms]

I think the hon. Gentleman is referring to the change made by Mrs Thatcher when she was Prime Minister, and he makes an entirely fair point. However, the point I am putting to him is that he and his party, particularly the Minister, frequently present the triple lock to us as somehow being extraordinarily generous, whereas in practice it has provided less than the formula he has just criticised—the one introduced by the former Conservative Prime Minister. If that formula had continued after the 2010 general election, the state pension amount we would be debating today would be more than £1 a week more than the figure in this order.

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

The right hon. Gentleman will accept that the formula introduced by Mrs Thatcher was continued throughout the whole term of the previous Labour Government. As the economy is recovering, thanks to the coalition’s successful economic policies, will he not accept that linking pensions to earnings will mean higher pensions for people in the long run?

[Stephen Timms]

I certainly hope that that is the case, but in the short run, in the period since the general election, we are seeing a lower value for the basic state pension than if Mrs Thatcher’s formula had stayed in place. That point is not widely understood. I am sure that the hon. Gentleman understands it, but I want to put it on the record so that people are aware of the fact that the method that is currently in place has in fact delivered a lower value for the basic state pension than if Mrs Thatcher’s formula had continued to be used.

[Mr Reid]

Had the right hon. Gentleman’s party been in power, would the pension increases over the past three years have been at CPI or RPI?

[Stephen Timms]

If the arrangements in place before the last election had been maintained, the increases would have been at RPI. If they had been at RPI, we would be debating today a higher value for the basic state pension than the one in the order in front of us.

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

When we have debated such issues in the past, I have been quick to highlight the fact that both CPI and RPI are not particularly good methods of measuring inflation, especially its impact on low-income groups, including pensioners. Does the right hon. Gentleman agree that the real issue at stake here is that energy prices have increased by 37% in the past 10 years and that food inflation has grown ahead of inflation every year for the past eight years? We should be talking about the impact of inflation on low-income groups and not the technical measure. We should be finding technical measures that reflect that impact of inflation.

[Stephen Timms]

The hon. Lady makes an important point. I hope she will support Labour’s energy price freeze, which will have an important benefit for people on low incomes. She is also right to draw attention to the particular difficulties of pensioners on low incomes. It is for that reason that pension credit is so important. Pension credit, which is in the order in front of us—I believe that my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) will say more about that when he responds to the debate later—is being uprated at a significantly lower rate in percentage terms than the basic state pension.

I was talking about the history of the triple lock. In the first year, it was overridden, so it failed. In its second year, it was implemented and delivered an increase in line with CPI, along with working age benefits. Last year, it was applied again and, for the first time, it delivered something better than CPI, but that was only by 0.3 percentage points. This year, the Government propose to uprate the basic state pension by CPI, which, as of September last year, was 2.7%. That is only a 0.2 percentage point increase on the absolute bare minimum that would be possible under the triple lock. Had the previous uprating RPI mechanism been in place, there would have been a larger pension increase this year, and in the last two years, than has been delivered.

It was in 2011 that the Government first uprated pensions by CPI rather than RPI. In the debate then I pointed out that this was a direct hit on the income of pensioners, and it still is. In 2011, a contributory deal, understood and signed up to by pensioners, was broken. That was compounded last year, and the Government want to do it again this year. On the other side of the coin, it is worth noting that RPI will continue to be used for the uprating of a great many other things. The Minister has correctly quoted my comments on that in the past. There could well have been a case to uprate by CPI as a deficit reducing measure for a period. However, we do not accept that Ministers should have tied themselves to CPI indefinitely, and that remains our view.

As announced in 2010, the Government have also made a permanent switch to CPI uprating. Thanks to the Welfare Benefits Up-rating Act 2013, most working age benefits were capped at 1%, with provisions for them also to be capped at 1% for the following two years, and so are outside the scope of this order. As we have said in previous years, there would have been a reasonable case for the Government to make a temporary change to the methodology, but unfortunately they went further.

[Steve Webb]

Sometimes we ask for a one-word answer. I want a three or possibly four-letter answer. Were the right hon. Gentleman introducing these motions today, which index would he use?

[Stephen Timms]

Sadly, I am not in the happy position that the Minister describes. I hope that I will be before very long, in which case I will gladly give him the answer that he seeks. However, I am not in that position today.

[Mr Reid]

If the right hon. Gentleman hopes to be in power some time in the future, will he tell us the formula that he would use for the long term?

[Stephen Timms]

I can well understand why the hon. Gentleman wants to know the answer to that question. If, as we have heard, he and his party are to be involved in the next Government, it will be in coalition with a party other than the one that they are in coalition with at the moment. I am afraid that he will have to be a little patient to get an answer to his question. None the less, I well understand why he wants to know the answer.

The Chancellor proudly told us in his autumn statement last year that the increase formula for regulated train fares was changing from RPI plus 1% to RPI plus 0%, which means that regulated rail fares would increase by no more than July 2013’s RPI of 3.1% . What is not clear is why the Government apply RPI in that case and CPI in this. The answer, as far as one can make sense of all this, is that the Government use CPI when it is useful to have a small number and RPI when they want a big number. That appears to be the principle that has been adopted. The result is that pensioners will see their state pension increased in line with CPI, but their train fares by RPI.

Part 7 of the order in front of us relates to universal credit. As the House well knows, this is becoming an appalling fiasco. The Secretary of State told us yesterday that he expected 6,000 people to be in receipt of universal credit during the current pathfinder. It was not clear by what date he expected that figure to be achieved. Will the Minister let us know? He will recall that I have been warning since November 2010 that the time scale announced by Ministers for universal credit was unachievable. Unfortunately I have been proved right. Indeed, the position is now a good deal worse than I feared when I wrote to the Secretary of State in November 2010. There is now a real danger that the entire project could collapse.

As I pointed out at the time, the time scale for the IT was always unachievable. That goes back to the July 2010 Green Paper, which included the absurd claim that the IT for universal credit would not amount to a major IT system. Replacing the whole of the benefit information technology can hardly amount to anything other than a major IT system. Ministers have failed to deliver any IT system. It now appears that, while they continue to develop late the IT system they started out with, they are also going to develop a second universal credit IT system, in the hope that they can get it right second time around. Goodness knows how many hundreds of millions of pounds that is going to end up costing. It is clear that the next Government will have a major job on their hands to salvage universal credit after May next year if, as all of us must hope, it can be salvaged.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

Is the right hon. Gentleman at all reassured by the Secretary of State’s statement some time ago that universal credit would succeed because he believed that it would?

[Stephen Timms]

The hon. Gentleman correctly quotes the Secretary of State. He told us for a long time that universal credit was on track, then latterly he started to say that it was “essentially on track”. So one can be forgiven for not being entirely reassured.

I wonder whether the Minister can help us on another matter that has just come to light in connection with part 6 of the order on employment and support allowance. A freedom of information request by the advice service Benefits and Work revealed yesterday that the Department for Work and Pensions had issued an internal memo to staff on 20 January advising that, owing to a growing backlog at the assessment company Atos, all current ESA claimants would be left on the benefit without further medical checks until another company could be found to carry out repeat work capability assessments. The Minister of State, Department for Work and Pensions, the hon. Member for Hemel Hempstead (Mike Penning), frankly acknowledged in oral questions yesterday pressures and capacity problems at Atos and indicated that negotiations were taking place to find an alternative provider, but he made no mention of the suspension of repeat assessments in the meantime, which appears to have been introduced. The memo obtained by Benefits and Work suggests that DWP has deliberately chosen not to inform Members of the House or claimants about this change. Why has that been done? Can the Minister provide reassurances to the public about the scale of the difficulties—yet another emerging mess in his Department?

The decision by Ministers to take this action will confirm widespread scepticism about whether the system is fit for purpose. It certainly leaves an operational vacuum, apparently pending the appointment of a new provider. At this stage there is no indication of when such an appointment might be made. In the circumstances, it is surprising that the Minister did not take the opportunity to inform the House of the situation yesterday, when there was an extensive discussion on the matter and a number of questions were asked about the process for replacing Atos and the operation of the work capability assessment in the meantime. It appears that the operation has been significantly scaled back. Given that ESA is part of the order before us, I wonder whether the Minister can take this opportunity to provide us with the explanation that we were not provided with yesterday.

There is growing dismay in the country about the impact of the Government’s changes on growing numbers of people—with an extraordinary 750,000 people forced to go to food banks last year because they were unable to afford enough food for themselves and their families. The Cardinal Archbishop of Westminster expressed it powerfully last week when he said:

“Something is going seriously wrong when, in a country as affluent as ours people are left in that destitute situation and depend solely on the handouts of the charity of food banks”.

He is surely right. Something is going very badly wrong indeed, and it needs to be put right.

The increase of the state pension in line with the triple lock is worth having—I put it no stronger than that—but the Government have chosen to uprate state benefits and pensions permanently in a way that is meaner than the method used before. For that reason, we are unable to support the Government in the Lobby on the orders today.

--- Later in debate ---

[Steve Webb]

It is interesting to look at what has happened to benefit rates over the long run. In the seven years since the 2008 crash, the rate of jobseeker’s allowance has increased by more than the growth in earnings. While people with jobs—people would obviously far rather have jobs than not—have seen their wages grow over that period, the rate of JSA, which I still quaintly think of as unemployment benefit, has risen by more than that growth.

The hon. Member for North Ayrshire and Arran (Katy Clark) talked about pitiful increases and slashing benefits, but I can tell her that the Labour Government spent £181 billion on tax credits, benefits and pensions in their final year in office, yet in the first year of the next Parliament, we envisage spending not £181 billion, but £211 billion. Spending £30 billion more than six years previously is an odd definition of “slashing”, so we need to keep a bit of perspective in the debate. I respect the hon. Lady’s sincerity and clearly she wishes that the increases were greater but, as she well knows, her Front-Bench colleagues will not vote against the orders, and that is not because of a technicality, but because they would not allocate money for larger increases. I know that she disagrees with her Front Benchers. If she ruled the world, she would put in place greater increases—she would tax people more and spend more—but that is not her party’s position.

[Stephen Timms]

What is the Minister’s response to last week’s comments by the Cardinal Archbishop of Westminster about the significant number of people who find themselves in destitution as a result of the changes that have been made?

[Steve Webb]

I have great respect for the Cardinal Archbishop, whom I met some years ago, and I do not doubt his compassion for those in need, which is shared by Members on both sides of the House. However, I do not think that anyone believes that people were not in severe and urgent financial crisis before we saw the current network of food banks; they simply went somewhere else. The idea of urgent financial need has not suddenly arisen. As the right hon. Gentleman will know, people turned to charitable sources and churches. It was not uncommon for people to knock on a vicarage door to ask for a sandwich, and that is not very different from a food bank—it is a precursor to that. There were always people in urgent financial need, and we can debate the impact of a global economic downturn on the level of need. Church leaders who comment on such matters are sometimes briefed with partial information. It is sometimes suggested to them that there is a mad slash and burn on the welfare state, but I think that they would be surprised to learn that, at the start of the next Parliament, we will be spending £30 billion a year more on benefits, pensions and tax credits than in the final year of the previous Labour Government.

[Stephen Timms]

Surely the Minister accepts that comments such as those made by the Cardinal Archbishop of Westminster and in last week’s letter signed by 27 bishops are based on actual experience of what is happening in communities. Surely he cannot maintain, as he appeared to do, that nothing has changed and that things are carrying on as they were before—clearly that is not true.

[Steve Webb]

No one is suggesting that nothing has changed. The global economic downturn was far deeper than was originally thought, and we have had to recover from that. We had to make changes to the benefits system to try to balance the books, which the previous Government failed to do.

The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) said that he felt uncomfortable when I talked about over-indexation. Let me make it clear that under the pensions legislation that the Labour Government put in force, there is a legal duty to uprate pension credit by earnings, but we are doing more than that. The hon. Gentleman implied that we were doing less and that we were somehow putting in place a worse increase, but we are paying a £2.95 increase on the basic state pension, and we do not want to follow Labour’s approach of making an earnings increase to the guarantee credit because that would give the poorest pensioners less than £2.95. In our jargon, we are passing through the full £2.95. Far from paying less than the law requires, we are paying more, because we put the biggest priority on the poorest pensioners.