Oral Answers to Questions

Anne Begg Excerpts

Monday 14th February 2011 Commons Chamber

[Steve Webb]

The budget for discretionary housing payments across the country will be trebled over the coming years, so that additional funding will be available for particular difficult cases. One thing we want to do is enable people to get back to work, where jobs are available, and the universal credit process will increase the financial return and people who take low-paid jobs will have a greater ability to afford somewhere to rent.

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

18. If he will put in place provisions to ensure that the expertise of small employment providers is retained in the transition from existing employment programmes to the Work programme.

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

I am pleased to inform the House of two things. First, the Work programme bidding process closed this morning, and we have had a substantial number of bids, which is very encouraging. It looks as if the Work programme is going to go ahead according to plan, which is good news. I would also say to the hon. Lady that, shortly before the start of these parliamentary questions, I placed a written statement before the House, giving details of an extension to the welfare-to-work contracts under existing programmes through to next June. I have also written to the hon. Lady and her Committee, setting out the details of those changes. We believe that we have now put in place all the mechanisms needed to ensure a smooth transition through to the start of the Work programme, which remains very much on track.

[Dame Anne Begg]

I am glad to hear that my letter has had some effect, but will the Minister confirm that the contractors who are currently delivering Pathways to Work and whose contracts are due to expire at the end of March will not have to issue redundancy notices to their staff in the next couple of weeks, because they will be able to continue until they know whether they will be part of the Work programme?

[Chris Grayling]

Transitional arrangements will involve the existing providers in all programmes except Pathways to Work. In that instance, we are setting up an interim support programme which will be more substantial than such programmes have been in the past. As the hon. Lady will know, Pathways to Work was severely criticised by the Public Accounts Committee. Our interim arrangements will cover those who would otherwise have received support through Pathways.

Housing Benefit (Scotland)

Anne Begg Excerpts

Tuesday 8th February 2011 Westminster Hall

[Gregg McClymont]

I thank my hon. Friend for her intervention. She raises a very good point about Glasgow in particular, although I should say that I do consider myself a Glaswegian. Cumbernauld is not very far away. However, although I may consider myself a Glaswegian, Glaswegians may have a different view.

Every week, my local YMCA deals with young people who are out of a home and out of a job. Those are the most vulnerable young people. Many are unable even to provide the right documentation to make an initial claim for housing benefit within the narrow window open to them. Those are often young people with psychological and dependency problems, coming from difficult family backgrounds. Things that we find easy are sometimes difficult for people in a vulnerable situation.

The YMCA and other local charities tell me that the cut to housing benefits for JSA claimants will leave the young unemployed at greater risk of falling into rent arrears if they do find a place to live. I know that Ministers say that they want to encourage the unemployed to move to different areas to find work, but the Government underestimate perhaps the social, cultural and psychological challenges that are sometimes involved in that process.

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

Has my hon. Friend considered that the issue is not just that young people find it difficult to move? Very often, the areas where jobs are available are the areas where there is the biggest pressure on housing, so even if young people move and find a job, they might not be able to find somewhere to live.

[Gregg McClymont]

My hon. Friend makes a good point. I was just going to suggest that Ministers will also be aware that there is a relationship between the number of jobs available and the cost of accommodation in an area. That is an extra problem facing those dealing with this aspect of policy.

Cuts to local housing allowances will make the private rented sector less affordable in more prosperous areas where work might be found. As I observed, the extension of the shared-room rate will make it harder for young people to find affordable accommodation once they leave home. Existing claimants in Glasgow will lose £7 a week on average as a result of that single change. That £7 could render a tenancy unaffordable for somebody moving in search of work. Research conducted by the Joseph Rowntree Foundation shows that there is already a shortage of private rented accommodation that meets the shared-room rate criteria.

Meanwhile, restricting payments to the 30th percentile of market rents, rather than the median, as was previously the case, will put many properties in major cities further out of reach. In north Lanarkshire, that single change will reduce the support available for a single room by £5 a week and that available for a one-bedroom flat by £7 a week. Switching uprating to the consumer prices index will, over time, compound the problem.

Oral Answers to Questions

Anne Begg Excerpts

Monday 10th January 2011 Commons Chamber

[Steve Webb]

The hon. Gentleman is right that, on average, people of lower social classes and on lower incomes tend to have a shorter life expectancy. The good news is that life expectancy is rising for people on all income levels, so as we raise the state pension age, it is only right and proper that we raise the starting point for pension credit. It would be very strange to go on paying at 60 something called pension credit when the state pension age rises, as under the previous Government’s plans, to 66, 67 and 68.

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

In a reply to a written answer, the Minister admitted that half a million women will have to carry on working for longer than a year as a result of accelerating the equalisation of the state retirement age. In particular, women who were born in 1954 and expected to retire in 2018 aged 64 will not now get their state pension until they are 66 in 2020. That strikes me as incredibly unfair. What is the Minister going to do about it?

[Steve Webb]

The hon. Lady is right: of the 5 million people who will be affected by the increase in the state pension, a relatively small age group will be affected as she describes. It would be an option to go more slowly, as the previous Government did, but, if we deferred all changes until 2020 in order to deal with the point that she makes, it would cost an extra £10 billion. Once again, we have a suggestion for £10 billion of extra spending but no suggestion of where the £10 billion might come from.

Oral Answers to Questions

Anne Begg Excerpts

Monday 22nd November 2010 Commons Chamber

[Maria Miller]

My hon. Friend raises an important point. It is important that we have personalised care for disabled people. Every disabled person has different needs and, working with colleagues in the Department for Communities and Local Government and the Department of Health, we will ensure that the correct level of support is being delivered locally.

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

Will the Minister take this opportunity to clarify exactly who will lose the mobility element of their DLA? There is quite a lot going around the blogosphere about who might be affected. Will the changes affect children in residential schools? Will they affect those in residential care who are self-funders as well as those who are funded by the local authority? Will there be exemptions, or will everyone in residential care lose the mobility element of their DLA?

[Maria Miller]

I thank the hon. Lady for her question. This does not affect self-funders, and we will be making clearer as we get towards the Bill exactly how the measure will affect all other groups. I reiterate that it is important to get clarity in the funding streams as we move towards personalisation, which is overwhelmingly welcomed by disabled people.

--- Later in debate ---

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

I thank my hon. Friend for his question. We can be clear that individuals such as his constituent are able to undertake volunteering opportunities. Indeed, that is something we have been encouraging as part of the Olympics and Paralympics, and it does not cause any problems if they are in receipt of state benefits.

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

T4. May I ask Ministers to look again at the proposal to reduce housing benefit by 10% for people receiving jobseeker’s allowance for a year? The Minister for Housing and Local Government said this morning that people in social rented housing will be kicked out of their homes if they go into work, and under the proposal on housing benefit, people will be kicked out of their homes if they do not go into work.

[Mr Duncan Smith]

I always appreciate the hon. Lady’s advice. We certainly keep all that under review and intend to do so all the way through until we introduce the Bill. However, having said that, there is a lot of good evidence out there to show that we have to give people some sort of incentive not to decide to refuse that work. We believe that that is one of the areas where a lot of international evidence shows that such a spur actually helps people to do that.

Welfare Reform

Anne Begg Excerpts

Thursday 11th November 2010 Commons Chamber

[Mr Duncan Smith]

I understand the point that my hon. Friend is making. The reality is that we will reform the whole jobcentre process to make sure that it dovetails with what we are trying to do. Yes, of course, there are areas where some of the advice that is given is not always necessarily of the highest quality, but most jobcentres, and most of the people who work in them, are determined to help the individuals they meet, to advise them properly and to get them back into work. Of course, the Work programme will include private and voluntary sector organisations, so we will tap into the very best qualities and skills that lie outside the jobcentres. My hon. Friend should rest assured that this will only get better.

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

The creation of a single working-age benefit is the holy grail of welfare reform, and the Government will need to be congratulated if they can pull this off, especially if they fulfil their promise that there will be no losers. I am sure that the Work and Pensions Committee, which I chair, will watch the issue carefully. However, I am still not clear as to where the tax credit system fits into the universal credit. The Secretary of State did not answer the questions from the shadow Secretary of State about where they will fit. Will there, for instance, be a single application form to cover the Treasury-delivered benefits and the DWP benefits?

[Mr Duncan Smith]

The problem right now is that when people make applications, they have to make at least two completely separate applications at the same time if they are going back to work. There is literally no communication between HMRC and the DWP about what they are sitting on and what they are making their calculations about. That is why the reconciliation at the end of the year is so gross and why we so often have major overpayments and then try to claw money back. The purpose of these proposals is to bring everything together so that we have one single point from which to take information. Therefore, the tax credit system and the DWP system will come together to create this single taper withdrawal. In future, as people’s circumstances change as they go into work—in the past, if they did not inform HMRC or the DWP, they might have been overpaid because they did fewer hours—the information will automatically cascade back to the centre, and we will know what people are doing, so they will be paid exactly what they are meant to be paid. There will be no chase for the money at the end of the year, which, as the hon. Lady and many others know, causes fear and worry among far too many constituents who find that they have been overpaid and have to pay the money back.

Housing Benefit

Anne Begg Excerpts

Tuesday 9th November 2010 Commons Chamber

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

I am grateful for the opportunity to contribute to the debate. I am keen to make sure that we do not get bogged down in a debate about what is happening to the caps in London, which has been the tenor of the debate in much of the media and, indeed, here today. I understand why my hon. Friends representing London constituencies feel angry and annoyed about the impact of the changes on their constituents, but I would like to look further afield at the impact across the country.

The difficulty with the emphasis on the caps that might apply only in London is that we need to acknowledge that the real cap is the 30 percentile that will apply in each of the broad rental area markets. It is not right to look at four-bedroom houses that can be had for less than £400 a week in an individual constituency and then say, as did the hon. Member for Ealing Central and Acton (Angie Bray), “Well, that’s fine; you can get that if you are on housing benefit”. That is simply not the case.

We already know, as alluded to by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), that even at the present 50 percentile level many of our constituents still have to supplement their housing benefit to pay the rent. We know that people, even today, before any of these changes come into place, have to spend perhaps £10 or £20 out of their benefit to pay their rent. We know that because on a Select Committee visit, we encountered an elderly gentleman at a citizen’s advice bureau who had found it very difficult to get a house or a one-bedroom flat within the money afforded under the BRMA—broad rental market areas—level at 50 percentile. He already had to spend £10 a week out of his pension credit to supplement his rent.

Another point worth noting is that the people who receive housing benefit are not all of working age, so the Government’s purpose of incentivising work does not apply to them. What incentive does an old-age pensioner have if they stand to lose perhaps a considerable portion of their rent, and what incentive is there for such a pensioner to have to move home in order to find an affordable rent?

I hope that we can start to concentrate on some of the people who are not in the percentages quoted—the people who can move and can find somewhere affordable. For every 50% of the people who can move, there are 50% who cannot move; for every 50% who can easily find affordable rented accommodation, there are 50% who cannot. As my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander) said, only £65 million of the savings on the housing benefit budget will come from the cap, which will apply predominantly in London, whereas the full savings amount to £1.8 billion.

I would like us to consider what is happening in Aberdeen—not a typical place and probably an exception, but it might help to highlight some important issues. Only 6% of housing benefit claimants—910—in Aberdeen are in the private rented sector. Of them, only 370 of them—about a third—are likely to be worse off. Moreover, only 9% in the private rented sector actually claim housing benefit. If we accept what the Government are saying, this 9% should find it easy to find a house within the 30 percentile—obviously, because only 9% of them are trying to find it. That appears to be a no-brainer, but that is not the case. The reason is that they are competing with people who are already on low pay but perhaps do not have housing benefit and are trying to find somewhere else to live.

We also know that there is a housing shortage in Aberdeen, as there is in many other places, so many landlords will not rent for housing benefit. That might not be true elsewhere, but it is true in an area where we have a buoyant housing market. If only 6% of housing benefit claimants are in the private rented sector, it cannot be true that it is housing benefit rates that are pushing up the rents in Aberdeen. We know that rents are going up. It cannot be true that landlords will therefore reduce their rent because we know that there are plenty of other people who will be willing to take these houses if the housing benefit person cannot afford them. There will be areas in which the market will not operate effectively, as my ‘hon. Friend’—I call him that, because he is on the Select Committee with me—the hon. Member for North East Hertfordshire (Mr Heald) said, but although it may be true in some areas, it will definitely not be true in other areas that already have a buoyant market.

Lastly, even if we accept the Government’s argument that landlords will reduce the rent, there will inevitably be a time-lag for all that to happen. I do not think that people will move all that often in Aberdeen. Constituents have come to see me because they cannot afford the deposit on their new house or they cannot afford their first month’s rental or they cannot afford the bond that they are expected to find—I believe that applies just in Scotland. The cost of moving is difficult for people to meet. Landlords, however, will not reduce the rent initially; they will need to be persuaded in some way that they cannot get that rental anywhere else. In the meantime, individuals will have had to move at great cost and it might be difficult for them to find somewhere until the market adjusts. Even accepting the argument that the market will adjust, we are still looking at a six-month period in which people will be either forced to move or build up a huge amount of arrears. It is going to be difficult for this group of people to negotiate lower rents.

I have tried to show that there are issues beyond what is happening in London. Different areas can have different problems. There is no single solution that will have the same effect across the whole country. I hope that the Government will listen to that argument.

Work and Pensions (CSR)

Anne Begg Excerpts

Thursday 4th November 2010 Westminster Hall

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

I am delighted to have been given the opportunity, as Chair of the Select Committee on Work and Pensions, to open the debate, but I should thank the Backbench Business Committee, because this is one of the first Westminster Hall debates whose subjects have been chosen by that Committee. I pay particular tribute to the hon. Member for Colchester (Bob Russell) and to my hon. Friend the Member for Stretford and Urmston (Kate Green). They did not quite suggest the subject of this afternoon’s debate, but they put in suggestions relating to this subject, and I think that the Backbench Business Committee decided that the impact of the comprehensive spending review on the Department for Work and Pensions would be a worthy subject for debate. I agree, because that Department is to suffer some of the largest cuts of all the Departments, in terms of both the percentage of its budget to be cut and the money to be saved.

The Department is to face a budget cut of £18 billion per annum by 2014-15. That is made up of the £11 billion announced in the Budget and a further £7 billion announced as part of the CSR proposals. However, the Department for Work and Pensions is different from other Departments, as most of its budget is in the form of money paid straight to people who qualify for one benefit or another. It is not managing budgets or delivering services as other Departments are. Much of its money ends up in the hands of real people, who spend it in their communities. The Department’s annually managed expenditure depends on how much money is paid out in benefits, which is where the large cuts are to be made.

It is quite easy, if we say it quickly, to cut benefits. We just do not give people any money. That can be a tempting thing for Governments to do, but of course the people do not go away; they still need the money to live. By my reckoning, there are four ways in which it is possible for the Department to cut the annually managed expenditure. It can reduce the amount that is paid out for certain benefits. It can change the criteria to narrow the number of people who qualify for a particular benefit. It can time-limit how long a person can qualify for a benefit. It can abolish a benefit completely. If we look at the proposals in the Budget and in the CSR, we see that the Government are doing a bit of all four of those things.

It is worth remembering that the cuts are being made against a backdrop of rising unemployment as other cuts in the numbers of people employed in the public sector take effect, and it is during times of high unemployment that the Department for Work and Pensions spending goes up, as more people qualify for benefits—benefits that many feel they have already paid for through national insurance contributions.

More than half the benefit spending of the Department goes to people who are over retirement age. The basic state pension and pension credit, for instance, account for 50% or slightly more of the Department’s budget. Generally, the benefits received by retired people are not being cut, although there will be some cuts in the benefits that they receive, because of the proposed changes in housing benefit and the mobility element of disability living allowance for people in residential care, and possibly the changes in relation to council tax. Perhaps the Minister can explain what those mean in reality, because I have found that quite difficult to grasp.

While I am talking about the council tax proposals, I want to point out that they seem to fly in the face of other things that the Government are doing. I am referring to their plans for a universal credit to make the benefits system much simpler and more straightforward, which I would certainly welcome. To devolve payments in relation to council tax down to local authorities, which will all have their own criteria, seems to go against the principle that I understand the Government are trying to create for the benefits system.

Of course, I never let a chance go by to get in my own gripe with regard to people over 65. Someone who happens to be my age and is a woman may have started her working life assuming that she would receive her basic state pension at 60. Until a few weeks ago, I thought that I would receive my basic state pension at 65. That has now gone up to 66, and I cannot be alone in wondering whether, by the time I approach 66, the age will be 67 or higher and I will never get the chance to retire at all. However, my constituents might make the decision for me sooner than that.

The result of protecting the elderly from the worst of the spending cuts is that the vast bulk of the cuts will fall on those of working age, on families and on people who are disabled or ill. For those groups, the cuts are much harsher and deeper. Where are the Government planning to make those cuts? I said that they could consider four areas, so I shall go through those one by one. First, they could reduce the amount paid out for certain benefits. The clearest example of that is the proposed cap on housing benefit payments. However, all benefits that are currently uprated according to the retail prices index will be cut over time, because they are soon to be linked to the consumer prices index, which is usually below the RPI level. That means that the value of almost all benefits will diminish.

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

Does my hon. Friend agree that there is interesting research in that regard? Conducted for the Joseph Rowntree Foundation, it suggests that linking benefits to CPI will reduce by £1 a year the value of the incomes of families on safety-net benefits. For a person on jobseeker’s allowance, for example, that will mean a loss of £10 over 10 years, representing between 15 and 20% of their income.

[Miss Begg]

I thank my hon. Friend for her intervention. Certainly I recognise the 15% figure. We are not talking only about benefits for those of working age. I was briefed this morning that if occupational pensions—both private and public pensions—are to be linked to CPI, the figure of 15% is not unrealistic. In fact, people on an average occupational pension could lose the equivalent of three years’ worth of their pension if they were to live for the average time from retirement, which is 24 years.

The switch from RPI to CPI will, in the long term, mean that the amount of money that people on benefits receive is reduced. Let me explain what I find particularly perverse about the housing benefit changes. The difference between RPI and CPI is that CPI does not take account of housing costs. Again, perhaps the Minister can explain the rationale for why the CPI measure is being used for housing benefit when it does not take into account housing inflation, which runs at a higher level than consumer inflation.

As my hon. Friend the Member for Stretford and Urmston suggested, the change in uprating will also affect levels of child benefit, income support, jobseeker’s allowance and incapacity benefit, as well as the employment and support allowance and the carer’s allowance. The value of all the benefits in payment will diminish with the changing of the linking rules or the indexation to which they are subject.

There will also be reductions in what can be claimed in such things as the child care element of the working tax credits, as well as changes to the eligibility rules for the working tax credits. Some of those changes would also appear to fly in the face of the perfectly correct cause being espoused by the Government—to ensure that those who can work do work. However, some of the changes might put barriers in the way of getting people into work.

The second way that the Department can reduce spending on benefits is by changing the criteria, to prevent many people who would have previously qualified for the benefit from qualifying in future. We shall see people who have been on jobseeker’s allowance for a year losing 10% of their housing benefit, or people in residential homes no longer qualifying for the mobility component of the disability living allowance. I am glad that it is the Minister responsible for disabled people who will be winding up for the Government, because of a phrase in the CSR attached to the announcement about the mobility component of the DLA for people in residential homes being cut:

“where such costs are already met from public funds”.

Can the Minister explain what that means?

Does that phrase mean that some people in residential homes will keep the mobility DLA, if their costs of travel and transport, presumably, are not being met from public funds? However, I am not aware of any residential homes that have a travel budget. I am not aware that public funds are available. Some people in residential homes might get a taxi card, for instance, but like, I suspect, many others, my local authority is tightening its criteria: Aberdeen has decided that someone on the upper rate mobility DLA does not get a taxi card. Anything that I can think of that might be the provision of travel from public funds does not, I think, apply to people in residential care.

On the issue of residential care, it is worth remembering that, generally, people in residential care who are on the mobility DLA will be a younger cohort, because people do not qualify for a DLA once they are over 65. Many of them might be in work—their care needs might require them to be in a residential home, but they might have work or go out daily to day centres or whatever. Without the DLA, they would not be able to get out of the confines of the residential home. Sometimes there is a perception that someone who lives in a residential home is elderly and not able to lead a fulfilling life, but nothing could be further from the truth. I would welcome some clarification from the Minister on that point.

Probably the best example of the Government’s changing the criteria to exclude previous claimants is the move from incapacity benefit to employment and support allowance. This migration was always on the cards—it was introduced by the previous Government—but I get a sense that some of it is being accelerated. The other thing that is different is the numbers involved. The number of those whom the previous Government thought might lose out as a result of the migration appears to be quite different in reality, certainly in regard to the new benefits. At the moment, we do not know the actual figures for the number of people currently receiving IB who will no longer qualify for the new employment and support allowance. The first trials of the migration are taking place in Aberdeen and Burnley, and it will be at least a couple of months before we have any robust figures and find out how many people are not getting through the new gateway.

The Government expect somewhere between 30% and 40% of IB claimants will not qualify and will therefore end up on jobseeker’s allowance. For those individuals, that is a loss of £20 a week. What makes me doubt whether that is the final figure is that we know that the number of new claimants qualifying for employment and support allowance is much less than the previous Government were projecting. While they thought that 20% might end up on the support element of the ESA, the figure is much lower, at around 4 to 6%, and it looks as though around 60% will not be getting ESA at all, because either they have dropped out of the system or they have been awarded jobseeker’s allowance. As many as 60% of those who are currently on incapacity benefit might not qualify for the new ESA, therefore, but, as I said, the trials are going on in Aberdeen and Burnley, and we will have the figures in a couple of months’ time.

[Damian Hinds (East Hampshire) (Con)]

Does the hon. Lady think that the change in those numbers is as a result of a change of Government or of the experience of having run the pilots?

[Miss Begg]

The original numbers I gave were those projected by the previous Government for new claimants, but they did not work out in practice—even for the previous Government. In other words, the work capability assessment, which is the test acting as the gateway to getting the benefit, is turning out to be much tighter than either the previous Government or, I suspect, this Government were expecting.

The figures are quite different from what the previous Government expected. I do not have any evidence to suggest that the new Government were expecting anything different. However, the reality is that many fewer people than expected are getting through the gateway of the work capability assessment, and they are accessing either the support element or the work-related element of the ESA.

There has been a lot of criticism of, and a lot of research has been done by organisations such as Citizens Advice—nationally and in Scotland—about the operation of the work capability assessment. At the moment, I am not sure that it, as an assessment tool intended to look at employability, is very effective in determining who is fit for work and who is not.

I was not going to go into the issue, because it is probably a debate for another day, but part of the problem is that illness and disability are being mixed up. So, people who are ill at the moment are being declared fully fit for work when, clearly, they cannot work—but that is not to say that they would not be able to work in the future. The assessment also does not take into account the employability of an individual—because the end of the whole process is to get people into work, if they are not employable and employers will not employ them, then the process will have failed.

[Neil Carmichael (Stroud) (Con)]

rose—

[Kate Green]

rose—

[Miss Begg]

I give way to the hon. Member for Stroud (Neil Carmichael).

[Neil Carmichael]

Thank you. Will the hon. Lady welcome, when it comes, the report of Professor Malcolm Harrington on the work capability assessment? He was appointed by the Secretary of State for Work and Pensions in the summer, and he will be reporting shortly. She might find some good news in the report, in the context of what she is saying.

[Miss Begg]

I certainly hope so. I was not intending to go into the WCA and its faults, but the hon. Gentleman tempts me. I am looking forward to seeing the report by Professor Harrington. However, there is concern that by the time he reports, whether at the end of this month or the beginning of next month, the trial in Aberdeen and Burnley will be coming to an end, and there will not be a lot of time to change things. There might be time to change the procedure, but not to put in place any major changes in how the work capability assessments are carried out before the full roll-out begins in March or April next year. The volumes will be quite large and it will be interesting to find out, in Aberdeen in particular, whether Atos Healthcare can manage the volumes that will be coming through. It is a big process, but there are still some fundamental flaws in how the work capability assessment is in operation.

Does my hon. Friend the Member for Stretford and Urmston want to intervene?

[Kate Green]

No—the hon. Gentleman for Stroud asked the same question.

[Miss Begg]

That leads me to the third way in which the Government are planning to cut the benefits bill: limiting how long a person can be on a particular benefit. Even if a person is successful in being assessed as only partially fit for work, and qualifies for the work-related activity part of the employment support allowance or ESA—it gets no easier to say, but I do not know another way of doing it but to use acronyms or to give the full title—the CSR proposes that they will qualify for the contributory element for only a year. That means that people who have worked all their lives, and paid their national insurance contributions in the hope that they will act as an insurance against ill health, will get the benefit for only one year unless their household income is below the qualifying level for income support.

That poses the question of how much the Government want to continue with the contributory principle. Already, people receive unemployment benefit, or jobseeker’s allowance, for only six months, and the contributory element of ESA is to last only for a year, yet they will have worked all their lives thinking that was why they were paying national insurance.

Lone parents will qualify for income support only if they have a child under the age of five. After that, they will be moved to JSA. If they do not get a job within a year, they will lose 10% of their housing benefit. I have been told by several Ministers that the Work programme will result in people being helped back into work. However, the lone parent whose youngest child has turned five will not go into the Work programme for a year. That is when lone parents are to lose part of their housing benefit.

Here we have an individual who has done everything that the Government have asked of her, or him. Such people will have turned up to all the work-related activities and may have moved house to find somewhere cheaper so that they are at the 30th percentile in the housing benefit changes. They will have done everything that the Government have asked of them, but in these economic times they simply cannot find a job. It is not that they have not tried. They will have been to lots of interviews, but not managed to find a job. Even then, they will still lose their benefits.

That is a fundamental change to our welfare system. Sanctions and taking benefits from people has always been linked to negative behaviour—the individual not doing what the Government ask of them. The worrying message that the Government may be sending out is that even if people do the right thing they could still be in danger of losing part of their benefit.

[Kate Green]

My hon. Friend is absolutely correct to say that there is confusion, with people doing the right thing but still facing sanctions. Does she agree that it is illogical to sanction one benefit in respect of behaviours that are desired in connection with participation in the labour market but that are covered by other benefits—in this case, the jobseeker’s allowance—and with no suggestion that the individual will necessarily be facing a sanction?

[Miss Begg]

My hon. Friend is absolutely right; the issue seems to arise particularly with sanctions on housing benefit. When giving evidence to the Select Committee yesterday, Lord Freud suggested that sanctions on housing benefit would follow people wherever they went. The only way for them to get rid of the sanction would be to find a job, but some might simply not be able to do so. It could depend on where people live, as in some areas it is difficult to find a job.

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

I am pleased to hear that the hon. Lady will not be retiring. It is good news for our Select Committee, as she is an excellent Chairman. What is her take on the fact that, for the first time, we are to have a really focused Work programme and a universal credit? That will remove many of the problems with withdrawal rates that the Committee highlighted in the past. Of course it is an expensive thing to do, but it is the right thing to do. Is it not right to praise the Government for doing that rather than concentrating on the cost savings that need to be made to make it affordable?

[Miss Begg]

I shall call the hon. Gentleman my hon. Friend, as he is a member of the Select Committee. I shall deal with the universal credit in a moment. However, my hon. Friend is right about the Work programme.

The point is that the Work programme does not kick in until people have been out of work for a year, unless they have come through the incapacity benefit and employment and support allowance route or unless they are young and unemployed, when they will come into the Work programme after six months. The sanction will kick in before the individual has had the very expensive help that we hope the Work programme will rightly provide. It is a combination of there possibly not being a job and there not being any specialist help. Even if the youngest child has just turned five, lone parents might have been out of the workplace for 20 years looking after the older children. They will need extra help, but they will not get it because the Work programme does not kick in until the year is up.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

All Liberal Democrats support the Work programme—it is focused on the need to do things—and everyone understands incentives to get people into work and out of the benefit trap. However, I and many of my colleagues share the hon. Lady’s concern about there being an absolute rule that when people have been out of work for a certain time they will lose a certain part of their income, through no fault of their own and irrespective of the job market in their area. It is too absolute, too draconian and too firm. I hope that the hon. Lady’s measured argument about how it will have more impact on some than on others, together with the arguments put by my colleagues and me, will persuade the Government that this is one area that should be revisited in order to find a different answer.

[Miss Begg]

I echo that point. In many cases, we are not arguing about the principle but the detail.

The last way in which the Government can save money is to do away with some benefits. This aspect has both positives and negatives, as we heard from my hon. Friend, the hon. Member for North East Hertfordshire (Mr Heald). Extra money has been identified in the CSR, and £2 billion will be set aside over the next four years for the introduction of a universal credit. That will get rid of many benefits, and probably almost all working-age benefits, which will be subsumed into the universal credit. That is the right thing to do, and it certainly takes us in the right direction of travel, but as with all these matters the devil is in the detail. I look forward to the White Paper, which I hope will give more detail on how things should work. I hope that, within the next couple of weeks, the Minister will give us some indication of when it will be published. We are all waiting with bated breath, as it will make sense of some of the other things that the Government have been doing.

[Richard Graham (Gloucester) (Con)]

Given the hon. Lady’s approach to the difficult question of restructuring benefits at a time of economic depression, from which we are slowly emerging, does she accept that for some of us the concept that benefits can only ever increase is philosophically difficult? For instance, in my constituency of Gloucester 10,000 jobs in the private sector were lost during the five or six years between 2004 and 2009, wages went down in many companies and people often worked fewer hours and fewer days to enable companies not to cut jobs. Charities prefer to see housing benefit linked to RPI rather than CPI, but RPI went down sharply in 2008-09. Does the hon. Lady not agree that, in that situation, benefits paid from taxpayer revenue have to be tailored according to how much is available—

[Richard Graham]

I apologise, Mr Turner. Does the hon. Lady agree that in this situation, whichever party was in power, it would be incumbent on the Government to find ways of reducing the ever-increasing benefits bill?

[Miss Begg]

There is no dispute about the fact that we would like to see the benefit bill reduced. The best way of doing that is to get those who can work into jobs so that they do not need benefits on which to live. As for pensioners, the Government, with their triple lock, have taken the decision that they do not want to see them getting less benefit. That is partly why the cuts have fallen so heavily on working-age people. The Government have protected benefits and increases in benefits for those who are on the basic state pension and other related benefits. They have made a value judgment and decided that some people deserve increases in their benefits while others do not.

Let us not forget the bigger economic argument. Poor people will spend their benefits in the local community. Problems can arise if benefits are cut: the money going into the local economy drops, jobs are lost and shops close. Cuts will cause problems in the local economy. Very often it is the benefits’ pound that keeps many things working in some of the poorer communities. There is not an absolute answer as to whether benefits should go up or down depending on the economic wealth of the country, but there is an absolute measure of poverty in which we should not expect people to live. Sometimes, some of our benefits are at a level that keeps an individual living in poverty.

[Sajid Javid (Bromsgrove) (Con)]

The hon. Lady said that when benefits are paid to individuals, the money is used in the local economy, and that that can somehow be helpful. I have heard such comments quite often and they are based, I believe, on an economic fallacy. If the Government did not make payments—benefits or otherwise—the money would not be borrowed by them in the first place, and those who had lent the money would have spent it in the economy anyway. Such a point is worth making because we should base our discussions on the known facts.

[Miss Begg]

We live in a welfare state and a civilised society, and we have benefits that are paid to people who are in work as well as to those who are out of work. One reason why we take such decisions is that we believe that it is bad for a society to have an enormous gap between the rich and the poor. That is partly why we have our tax and benefit system.

[Mr Marcus Jones (Nuneaton) (Con)]

The hon. Lady is quoting a system that she appears to support, but is it not the case that over the past 13 years of the Labour Government, in which this type of policy was actively encouraged and pursued, the gap between rich and poor widened?

[Miss Begg]

The rich have got richer, which I would have thought the hon. Gentleman would welcome. The poor have also got richer, but the gap is wider because of what has happened at the top end. There is no doubt that those who live in poverty have a relatively higher income than they would have done without the measures that the previous Government put in place.

[Richard Graham]

rose—

[Miss Begg]

I had better make some progress. I was going to read out a list of other organisations, but I need to make some progress. I am sure that other Members have lots of concerns to voice from organisations such as Mencap, the Centre for Economic and Social Inclusion and so on. However, I have spoken for longer than I meant to. I thought that I had a 10-minute speech, Mr Turner, so I apologise.

In conclusion, the cuts in the DWP budget are not just to bureaucracy. They are far more profound than that. It is the benefits themselves that have been cut. The running costs of the Department are small in comparison to the costs of benefits paid. The DWP has already stripped £2 billion from its daily expenditure, so it is already quite efficiently run, which is why the big cuts have to come from the money paid out to individuals. None the less, behind the figures that I have mentioned are real people leading real lives. Finding £6 a week to make up the shortfall between the amount received in housing benefit and rent costs might not seem a lot to us, but it is a huge amount for someone who only receives £65 on JSA. That £65 has to cover all other living expenses, utilities and food.

Most people would feel the loss of £50 a week towards their transport costs. How much more acute is that loss for people who live in residential homes? Such people are to lose the mobility element of their disability living allowance. When their total income is only £22 a week as a personal allowance, how will they get out and about at all? I have given just two examples of people who will be directly affected by the cuts, but there are many more individuals who will be hit. Whatever Members believe philosophically about what the Government are doing, such individuals will have less income as a result of these decisions. It is beholden on all of us as politicians to recognise that for some of our constituents, life will be very hard as a result of the decisions in the comprehensive spending review. Even if Members believe that the Government are doing everything right, they should please remember that some of their constituents will have a really hard time in the years to come.

--- Later in debate ---

[Mr Heald]

The hon. Lady makes her point. There is some research, which I do not think has been published yet, that looks at the eastern region and London. It comes to the conclusion that the work capability assessments are working far better in the eastern region than in London. Talking to providers about why that might be, they raise the point that about a third of the population in London comes from minority communities. I thought the Minister might want to look at that issue.

My next point is one I mentioned before about getting CVs and help to young people early on. I made the point about going online. I hope that that is something that the Government will look at.

With regard to the movement from incapacity benefit and employment and support allowance on to jobseeker’s allowance, one issue that needs to be looked at is the fitness of our work force and the people who are moving from one benefit to the other. There is no doubt that there are a lot of people who start off with a back condition or possibly stress, and it is not treated quickly enough and becomes a chronic condition. I have made that point in debates such as this for years, and I think it is time that the Department of Health and the DWP looked more carefully at the issue of fitness. About two years ago, Dame Carol Black produced an excellent report about fitness and the work force. I know that she is still involved and I hope that it will be possible to build on her work and try to do more in this area, so that we end up with a work force who are fitter.

[Miss Begg]

Another problem is where employers employ occupational health professionals to assess people, and assess them as not being fit for work, when Atos has assessed them as fit for work for the work capability assessment. That is acting as a barrier very often for employers to accept people into the work force.

[Mr Heald]

That is right. Another point to make is that the Department of Health has a major group working on the issue of fitness, including aspects of fitness at work. I think that is something that the DWP should also be involved in. It should be a joint exercise, and Carol Black’s work should be continued.

I want to make a point about the consumer price index, and then a few general remarks. The consumer prices index is the European measure of inflation. There is no doubt that the retail price index distorts the measure, by including mortgage costs, which are erratic. I believe that in the longer term CPI is the better measure, and I understand that in Europe there are discussions about how to include housing costs in it. Over time CPI will be improved, whereas RPI has been rather erratic over the years, and has often led to poor results.

The overall effect of the changes is to give value for money to the taxpayer. It is an issue of fairness. I know that people say, “Housing and other benefits are being cut, and that is unfair on individuals who may have to move or who will have to negotiate with their landlords for a lower rent.” I understand that argument, but how can we explain to someone who takes home the average wage of £374 a week net that in difficult economic times, when they are hard pressed, it is right to spend more than £20,000 a year housing someone in a better house than they can afford? It is a hard argument to make.

--- Later in debate ---

[Neil Carmichael]

Thank you. The fact of the matter is that we are reviewing those processes. I have mentioned Professor Harrington and said that our processes must be fair and decent, and that is what the Government are working to ensure.

The saving from the changes to the ESA will be approximately £2 billion, which makes a difference to our target of saving money through the CSR. However, what is critical is helping people to get to work by introducing a Work programme that delivers and encouraging the voluntary sector to help with CVs and so forth. It matters that we help people fulfil their lives by getting work if they want it and can do it; we must recognise that.

The key tool for transferring from incapacity benefit to employment and support allowance is the work capability assessment, which was introduced in 2008. It has some imperfections that we will improve, but it was introduced by the Labour Government for precisely the purpose that we are discussing. That is another important point to make.

The assessment process, as I understand it, takes account of medical conditions, mental problems and so forth and considers carefully how health policy, initiatives and solutions are being advanced. It is a fair and relatively flexible tool—

[Miss Begg]

That is part of the problem; it is not flexible or sensitive to different conditions. It is very mechanistic. Some of the employability criteria from previous assessments for incapacity benefits have been removed, when those are the very issues that need to be assessed. Those of us who have examined it feel that that is a problem. It does not always assess the right things. As my hon. Friend the Member for North East Derbyshire (Natascha Engel) pointed out, the wrong decisions are being made. People who are clearly not fit to work are being found fit to work and vice versa. That is a problem.

[Neil Carmichael]

I thank the hon. Lady. This might get a bit boring, but I will simply repeat that we look forward to Professor Malcolm Harrington’s report, which I gather is coming soon.

To end on a political point, I note that the shadow Secretary of State for Work and Pensions, the right hon. Member for— [Hon. Members: “Paisley and Renfrewshire South.”] Thank you. He said on “The Andrew Marr Show” that he recognised that the changes were necessary, that the Labour Government would have been interested in that direction of travel and that he did not reject all our proposals out of hand but welcomed a lot of them. That is the point that we should rest on. Labour’s Front-Bench Members recognise the problems that we are dealing with, understand that people should be encouraged and helped to work and recognise the impact that that will undoubtedly have on the CSR. However, as I have stressed throughout my speech, we must give people a fair and decent chance to fulfil their lives. That is our view and, I hope, increasingly the view of the Labour party.

--- Later in debate ---

[Miss Begg]

Let me thank the Backbench Business Committee. I have sat in your seat, Mr Turner, on many Thursday afternoons with only three people in the Chamber. Today, however, we have had many contributions from a large number of people, which reflects the importance of this excellent debate. The subject transcends party politics, because the issues discussed today will affect thousands and thousands of our own constituents. I hope that the Government see those of us on the Opposition Benches as critical friends. We want the Government to get this right because it is our constituents who will suffer if they do not. I hope that this debate has been constructive and helpful.

There has been a problem with housing benefit. The debate was skewed by concentrating on the cap. Serious concerns were raised about the 30th percentile and the JSA sanction. I hope that the Minister understands that transitional arrangements will be required on a range of issues. I refer in particular to those issues on which the new Government’s policy is not yet in place and those policies introduced under the previous Government that have already stopped. There is a clear need for transitional arrangements.

All in all, this has been an excellent debate. I look forward to the White Paper, which is to be published shortly. We may be back here having another debate on these issues in a couple of months’ time. If today’s debate is anything to go by, it will also be a good and well-humoured debate. I thank everyone who has turned up this afternoon.

Question put and agreed to.

Oral Answers to Questions

Anne Begg Excerpts

Monday 18th October 2010 Commons Chamber

[Mr Duncan Smith]

As my right hon. Friend the Minister has made clear endlessly, it is critical in the whole Work programme process, which includes the element of work clubs, that we work on the basis of our understanding of previous information to bring people together and make sure that their shared experience can help them overcome some of the barriers. That is a critical component. That shared experience, as my hon. Friend and many other hon. Friends in the Chamber will know, can help people through the difficulties, so that they do not repeat the same mistakes. It will be an essential part of their work experience.

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

The Secretary of State is already aware that there will be a lot of pressure on Jobcentre Plus in Aberdeen and Aberdeenshire over coming months, because the Work programme—even with the best will in the world—will not be in place until next summer, and in the meantime there will be the migration from incapacity benefit to the employment and support allowance. On the Government’s figures, at least 200 people will end up back on jobseeker’s allowance, with perhaps another 400 needing the work-related activity element. The Minister has already announced £50,000, but, apart from that, what extra resources will be put into Aberdeen and Aberdeenshire to make sure that the excellent workers in Jobcentre Plus are able to give the specialist help that my constituents and others round about so richly deserve?

[Mr Duncan Smith]

We are, of course, aware of that, and the hon. Lady has, I think, discussed the matter with my right hon. Friend the Minister of State. As things stand, we think that the money that has been made available will be sufficient to cover the gap period, of which we are fully aware, so that nobody suffers a loss until they have gone through the system and had a chance to get on to the Work programme. We will, of course, keep the matter under review, and if there is an issue I guarantee the hon. Lady that we will make sure that it will not mean that people are penalised.

Oral Answers to Questions

Anne Begg Excerpts

Monday 19th July 2010 Commons Chamber

[Steve Webb]

It pains me to suggest that the hon. Lady is being selective in her use of statistics, but if she looks at the increase in pensions as a whole—the basic state pension and additional pensions—she will see that we have linked the basic state pension to earnings, which over the course of 20 years, for a typical person retiring this year, will add £15,000 in extra state pension compared with price indexation, which was the policy of her Government.

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

In a written statement, the Minister said that the Government would force occupational pensions to be linked to the consumer prices index instead of the retail prices index. What powers do they have, or will they have, to take to make that happen?

[Steve Webb]

I am grateful to the Chair of the Select Committee on Work and Pensions for her question, as this matter has not been well understood. Statute provides a floor above which occupational pension schemes have to operate. In other words, we will not force occupational pension schemes to cut their increases; we simply provide a floor, which used to be linked to the RPI and is now linked to the CPI. Schemes remain entirely free to go beyond that if they wish.

Jobs and the Unemployed

Anne Begg Excerpts

Wednesday 7th July 2010 Commons Chamber

[Yvette Cooper]

I can tell the hon. Gentleman what happened after 1997. In fact, there was a reduction of 350,000 in the number of people claiming inactive benefits, as a result of the extra support that was put in. That was in strong contrast to the early ’90s recession when we saw an increase of more than 450,000 in the number of people on incapacity benefits. In this recession, we have had a reduction of more than 70,000 in the number of people claiming those long-term sickness benefits, despite the difficulties in the world economy.

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

One reason why young people find it so difficult to get into work is that they do not have experience, and the future jobs fund and the youth guarantee were very good for young people because they gave them that experience and made them much more employable. Has my right hon. Friend done any analysis of the effect on these young people of the scrapping of both those schemes?

[Yvette Cooper]

My hon. Friend is right. She obviously brings great experience to the field, having been a member of the Select Committee on Work and Pensions for many years. She is now its Chair, and I look forward to hearing more of her views on this in the House. We have been talking to many young people about the impact of cutting the future jobs fund. Yesterday afternoon, I met 10 young people who have just started work thanks to the future jobs fund. They are all working for charities and social enterprises, have jobs in fundraising, in office work, in organising charity events and in repairs and maintenance, and some had fantastic jobs in creative design. Several are graduates who had struggled to find work because of the recession. Many had tried unpaid internships and voluntary work—anything to get a foot in the door. It was only the future jobs fund that had made the real difference to them. One of them said to me, “It’s a life saver.” Another said, “It’s given me confidence. It’s a proper job. It’s a huge boost to put this on my CV.” A young woman I spoke to in my constituency who was training to be a car mechanic, thanks to the future jobs fund, told me, “I tried and tried to get something, and this is just like the light at the end of the tunnel. In fact, it’s the only opportunity I’ve been given. I don’t understand why they want to cut it.”

--- Later in debate ---

[Yvette Cooper]

In fact, the additional support we put in through things such as the future jobs funds and support for the economy helped Scotland. Indeed, Scotland benefited from thousands of future jobs fund jobs, which were funded by the Government, in addition to the money that went directly to the devolved Administrations. Every part of the Government had to make efficiency savings, and unfortunately the Scottish Administration consistently set themselves efficiency targets considerably lower than those set and met in Whitehall Departments across government. It was fair to expect the Scottish Administration to pay their fair share and to contribute to those efficiency savings.

We believed, however, that it was right to keep supporting jobs in Scotland through things such as the future jobs fund, which is why the Association of Chief Executives of Voluntary Organisations said, in response to the cuts in the future jobs fund:

“We know of many third sector organisations in Yorkshire who were ready to place people into jobs and were mid-way through bidding for FJF money to make that possible when the funding was cut. Among the placements that were to be created were jobs to support women in the community through a Women’s Refuge. Now those women won’t get the extra support and Yorkshire won’t get the extra jobs.”

Real jobs in Yorkshire gone—because of the Secretary of State’s plan!

[Miss Begg]

It is third sector providers who often help to get people facing particular barriers into work. It is hard enough for young people to get into work anyway, but if they have barriers such as drug dependency or homelessness, it is particularly difficult. The future jobs fund was being used by organisations such as Aberdeen Foyer in my constituency to get those marginalised youngsters into work and to break that cycle of poverty, which the hon. Member for North East Hertfordshire (Mr Heald), who sits with me on the Work and Pensions Committee, talked about earlier.

[Yvette Cooper]

My hon. Friend is right, which is why all young people, no matter what the difficulties they face, should have a guarantee of a job, training or support to get into work. She might also be interested to know that significant numbers of the people going into the future jobs fund were disabled, so it was providing additional support for people who might have found it more difficult to get their first job elsewhere in the economy and to get that start and get into work.

The former Chief Secretary to the Treasury, the right hon. Member for Yeovil (Mr Laws), told the House that DWP officials had advised that the future jobs fund was not effective and not working. That is not what young people and voluntary sector providers are telling us. For example, the Scottish Council for Voluntary Organisations said:

“It is obviously very disappointing that the Future Jobs Fund is not continuing as it was a highly successful initiative which was popular with employers and employees”.

Angie Wilcox, whom I met, from the Manor residents association in Hartlepool, said that

“in one area alone, manor residents have recruited 118 young people, of which the first 17 finished their six months last month, all 17 secured sustained employment...This is a vital programme that must stay”.

So what advice did DWP officials really give to the Treasury? The Employment Minister, the right hon. Member for Epsom and Ewell (Chris Grayling), has so far refused to publish any advice or evidence that it is not effective. That is because, in the end, he does not have any. He has commissioned a detailed evaluation of the future jobs fund for 2011, so there is no evidence to show that the fund is not working and plenty of testimony from young people and employers across the country that it is transforming people’s lives. The Government did not talk to a single voluntary sector provider before they axed the fund, and they did not talk to a single young person on the fund before they made their decisions—actually, the Prime Minister did. He talked to young people at a social enterprise in Liverpool, and told them he would keep the fund. He said that

“it is a good scheme, and good schemes we will keep.”

Was he setting out to deceive those young people, or does he just not care about the broken promises from the election?

The Employment Minister has, I understand, been back to that same corner of Liverpool to see the same social enterprise. He has told us in previous responses that he has not received any representations about the decision to cut the future jobs fund. Yet someone who was at the meeting said that

“when Chris Grayling visited Everton on the 26 May we raised with him the very negative impact cutting the Future Jobs Fund will have and 2 local people said the difference having a future jobs fund position was already having on their lives, their self esteem and their long term job prospects...We asked him specifically about whether his replacement scheme was going to give at least the minimum wage. He couldn’t guarantee that at all...The FJF has already made a big difference to us in Everton... Young people on the FJF have got their heads back up and are going for it.”

So what other excuses have the Government given us for cutting the future jobs fund and the support for the unemployed? The Secretary of State claimed on 8 June that the cost of the programme was “running out of control”. That is rubbish—it is a fixed-cost programme. It costs just over £6,000 per job and is paid when the job is delivered. Furthermore, the taxpayer saves six months of benefits too. It is a fixed cost, so it cannot escalate out of control.

The difference between us is that we want 90,000 people in jobs. The Government would rather have them on the dole than pay for the extra support that those young people and long-term unemployed need. So, from next year, they are cutting the rest of the guarantee. In total, they are cutting £1.2 billion from support for the unemployed—and they tell us it is all right because there is going to be a Work programme. But where is it? The soonest the Secretary of State will be able to deliver it is next summer, but what about the people in the meantime who need support and help? What about the young people leaving school, college or university this summer who need help? What about the people who have been unemployed for six months and who need support now? Yet now is the time when he is cutting future jobs fund opportunities in favour of a Work programme that cannot be in place for at least another 12 months.

--- Later in debate ---

[Yvette Cooper]

My hon. Friend is right. I know that his constituency was hit very badly in the 1980s as a result of the decisions that previous Conservative Governments took, and that that is why he feels so strongly that we should not take those decisions again. We have to do everything possible to help people back into work.

The Guardian has even reported that Ministers want jobcentres to give out charities’ food vouchers, so now they are turning the clock back not just to the 1980s but to the 1930s. It is looking less like welfare to work and more like welfare to the workhouse.

[Miss Begg]

Before my right hon. Friend moves off the subject of housing benefit, I wish to mention that Aberdeen is one of the areas where there are jobs—unemployment in my constituency is 2.6%, which is higher than we would like but relatively low. The problem is that rents are high. A constituent who came to see me on Friday is finding things very difficult, because in the private rented sector she is already subsidising her rent despite being on full housing benefit. It is therefore impossible for people to move into Aberdeen to get a house and a job without falling foul of the Catch-22 situation that my right hon. Friend describes.

[Yvette Cooper]

My hon. Friend is right, and that is why it is difficult to reform housing benefit without considering the consequences for the labour market. The two things should be examined together, not in isolation in a way that can have destructive consequences.

--- Later in debate ---

[Chris Grayling]

That is not my concern. My concern is to ensure that, if the OBR forecasts are correct and we see employment growth amounting to 1.5 million more jobs in the next few years, we do not make the same mistake in government as the hon. Gentleman’s party did and fail to get people off benefits and into work to take those jobs. I do not want to see a steady and unchanging level of millions and millions of people on out-of-work benefits over the course of a decade while jobs are created around them, effectively operating outside our mainstream society. That must change. I want opportunity for those people. I want to see them back in employment. I am sure the hon. Gentleman shares that goal, but what we aim to do is make it happen this time around.

[Miss Begg]

I am sure the Minister is well aware that the increase in the number of people claiming incapacity benefit is a result of mental health problems. He may also know that, in response to most surveys, 60% of employers say that they would not employ someone who has had a mental health problem. How will the Government solve that conundrum?

[Chris Grayling]

The hon. Lady has made an important point, which I am sure her Committee will want to address. In fact, I was going to refer to the work capability assessment. These are important issues, and we clearly face a big challenge. There are 2.2 million people on old-style incapacity benefit, and we must do all we can to help as many of them as possible to return to work. Of course, not all of those people will be able to work and many will need to continue to receive unconditional support throughout their lives; but every organisation I have ever worked with, come across or talked to that works with people with disabilities and long-term sickness problems would like to see more of them back at work. We all believe that work will help those people, and I am determined that this part of the Work programme will make a huge difference to them.