Welfare Benefits Up-rating Bill

Cathy Jamieson Excerpts

Tuesday 8th January 2013 Commons Chamber

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

A lot of figures have been bandied about, so I will start with a few. There have been 34 Back-Bench speakers, including 13 from the Government Benches, two of whom were critical of the Government; and the Government ran out of speakers an hour before the debate was due to finish. What message does that send to people who want to know what the Government’s plans are and what will happen to their benefits?

We have heard a number of powerful speeches and a number of others that I do not think were what people watching the debate would have wanted to hear. There have been so many speakers that I cannot list them all, but Opposition Members have been consistent in standing up for the people whom the Government have consistently let down.

Ahead of the debate, this was described as a watershed moment. Perhaps it has turned out to be one, but maybe not in the way that the Government expected. On the very day of their coalition relaunch, the former Minister with responsibility for children and families, the hon. Member for Brent Central (Sarah Teather), condemned the coalition’s policy on welfare, the Leader of the House of Lords resigned with an admission that he had criticisms of his coalition partners, and we heard that the Deputy Prime Minister is apparently not entirely comfortable with the coalition’s approach to welfare, but as ever he is going to go along with the policy anyway. On the back of a report showing that the Work programme has been worse than doing nothing, we hear that a senior Minister briefed that the much heralded universal credit plans are not just in disarray but a “disaster waiting to happen”. Far from a Ronseal relaunch, the Government have had to reach for the Polyfilla to try to plug the gaping cracks in their own ranks and in the coalition in general.

Let us talk about the Bill. We have been clear that we need to get the overall costs down, but we have heard that there are different ways to do that. There is the way that the Government propose, which we do not support, and there is the way that Labour proposes—getting people into work. Welfare spending is rising to pay for the costs of the Government’s failure on the economy. As we have heard time after time, the Bill will mean a real-terms cut in support for both people in work and those looking for work. It will mean a rise of 1%, while inflation is set to rise by between 2% and 3.7% over the same period.

The Chancellor, who I understand has not been able to make it back in time for the winding-up speeches, talked about the unfairness of those on benefits keeping their blinds down while others head out to work. Sadly, some Government Members—not all, to be fair—have used such language today. The Tories in particular have tried to continue the myth that the Bill will only hit people who are somehow slacking or skiving. As we have heard time and time again, the Library analysis shows that just 23% of the savings will come from out-of-work benefits. The harsh reality is that most will come from people in work and on the lowest incomes, whether from tax credits, child benefit, maternity pay or sick pay. It will come from the most vulnerable in our society—the people we should be protecting most.

We have heard about the research by the Joseph Rowntree Foundation which shows that more than 6 million people in working households are in poverty, while the Department’s own research shows that 60% of children living in poverty come from families in which at least one parent works. As the projections of the Institute for Fiscal Studies show, an extra 1 million children will be pushed into relative poverty by 2020 as a result of Government measures. Ministers ought to listen to that and take account of it, because that is all before we take into account the effect of the cuts that we are debating today.

The IFS figures confirm that all the measures announced in the autumn statement, including the rise in the personal allowance and the measures in the Bill, will mean that a one-earner family with children will be an average of £534 a year worse off by 2015. That might not seem much to some Government Members, or to the millionaires who will get a tax cut that will give them £2,000 a week while those who get jobseeker’s allowance will have an extra 71p and there will be an extra 20p on child benefit. However, as we have heard time after time from Opposition Members, for a family on a low income those few pounds every week make the difference between a nutritious meal on the table for the children and just a snack. It is the difference between a child being able to go to a club, after-school event or school outing, or keeping the heating on during the coldest days of the year.

The Chancellor’s view is of people who are out of work lying in bed with the blinds down, but many of those I know who are out of work are staffing charity shops, volunteering for food banks or helping out at the local youth centre. Those people would jump at the chance to have a job if there was one for them, and as we have heard, although they are unemployed at the moment, many have not always been so and may have moved in and out of work or had to reduce the number of hours worked during the week. Such people would take up the opportunities offered by our work guarantee scheme; they want to pay their way but need a job that will allow them to do so.

We are calling for an approach to welfare reform that focuses on getting people back into work. Some Members have asked what the Labour party would do were it in government, and we would look at the position of the economy at the time. We will, however, be tough and fair, and under our jobs guarantee scheme every adult who is long-term unemployed will get a job that will be paid at the minimum wage for at least six months. If a job exists, people have a responsibility to take it. Our scheme will be structured—this point is important for those who have asked about how it would work—in a way that will allow people to look for permanent work at the same time as getting experience, and over the course of a year we expect it to help around 263,000 people.

I was pleased to hear that the SNP will support the Labour party in today’s vote, but will the Minister clarify a point relating to disabled people—[Interruption.] There was me thinking that the cheer was for me being about to ask the Minister a hard question, but that turns out not to be the case.

I have a question for the Minister and if he does not know the answer perhaps he will check with the Secretary of State. Questions have been raised about the impact of these measures on disabled people, particularly those in the support group. Will the Minister clarify that the changes will indeed penalise disabled people, even those in the support group, because 70% of the out-of-work support they rely on comes from benefits that will be subject to the 1% uprating? That needs to be clarified in the context of the Secretary of State’s suggestion that disabled people will not be affected.

[Several hon. Members]

rose—

[Cathy Jamieson]

I must conclude because I have only a couple more minutes left.

If the Government will not listen to Opposition Members or to those on their own Benches, including the hon. Members for Brent Central and for Bradford East (Mr Ward), both of whom raised concerns, perhaps they will listen to the voices of people outside this House and the 69% of the public who believe that benefits should rise at least in line with inflation because that is the fair thing to do. Perhaps they will listen to those who work on the front line and see the effects of poverty day in, day out, or to charity leaders across the UK, including Oxfam, the Children’s Society, Citizens Advice and Barnardo’s who wrote an open letter earlier this week.

If that is not enough, will the Government at least listen to what they themselves have said in the past? It is good to see the Chancellor back in his place because in the 2011 autumn statement he said that he wanted to

“protect those who are not able to work because of their disabilities and those who, through no fault of their own, have lost jobs and are trying to find work.”—[Official Report, 29 November 2011; Vol. 536, c. 802.]

If the Prime Minister and the Chancellor really believe that, they need to show it in their actions. Unfortunately, we have today seen a real divide between the Government’s approach and the fair approach from the Opposition.

This watershed moment shows that those warm words have been replaced by a chilling reality—that the Government simply do not care. The true character of the Government has been exposed. There are tax cuts for millionaires while millions of working people pay the price for their economic failure. We need real welfare reform—Labour’s jobs guarantee—that is tough and fair, and that works. We do not need an unfair attack on striving families trying to do their best from this out-of-touch and failing Government.

Oral Answers to Questions

Cathy Jamieson Excerpts

Monday 10th September 2012 Commons Chamber

[Mr Duncan Smith]

I will follow through on that very good suggestion. We are already consulting. My hon. Friend might be aware that in July we had a series of consultations in the Committee Rooms with Members of the other place and of this House. We intend to continue that consultation and to set up demonstrations of how it works at the front end and of what they will need to do. We are determined to ensure that Members understand how to claim it—I hope that some of them may have to use it in due course.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

T4. We were told that universal credit would ensure that every additional hour that people worked would pay. Is the Secretary of State aware of concerns of the Children’s Society and others that many thousands of families face a cliff edge at the point when eligibility for free school meals kicks in? What is he doing to ensure that families do not lose out or find themselves better off working fewer hours?

[Mr Duncan Smith]

We are discussing that with the Department for Education and others, and consulting the relevant bodies and interest groups outside. We are looking for the best way of integrating the process to eradicate such problems and cliff edges in order to create a seamless process that allows people smoothly to engage and improve the quality of their lives, rather than having to negotiate at the edges of those difficulties.

Work Capability Assessment

Cathy Jamieson Excerpts

Tuesday 13th March 2012 Westminster Hall

[Sheila Gilmore (Edinburgh East) (Lab)]

It is a pleasure, Mr Crausby, to serve under your chairmanship. I hope that the Minister is not tired of hearing from me this morning. During this debate on the employment and support allowance, and the independent review of the work capability assessment, I want to concentrate on the recommendations for new mental, intellectual and cognitive function descriptors, which is a fairly narrow part of the overall picture. Before the Minister jumps up to remind me, I am well aware that the work capability assessment was introduced by the previous Government, and I hope that I would say exactly the same now if my party were in power.

We must not forget that the issue is about people, such as my constituent with mental health problems who has twice scored nil points on a work capability assessment, and who was twice placed in a support group after appeal, having waited seven months and nine months respectively for those appeals. He is currently awaiting the outcome of his third assessment, and the stress of that has affected his recovery.

The issue is a narrow one, but with 35% of the people going through work capability assessments being recorded as having a mental or behavioural condition as their primary condition, it is the largest single group of employment and support allowance claimants, so it is of considerable significance. The Scottish Association for Mental Health, using Government data, says that 43.9% of incapacity benefit claimants who are undergoing reassessment have mental health problems, and in Scotland the figure is 46% of claimants. Getting the assessment right is critical.

In his first review in November 2010, Professor Harrington acknowledged that inadequacies in the descriptors for mental, intellectual and cognitive function were likely to play a substantial role in the high rate of successful appeals. In September 2010, three organisations—Mind, Mencap and the National Autistic Society—were asked to provide recommendations on refining the descriptors. They presented initial recommendations to an independent scrutiny group in December 2010, and both groups jointly submitted their report to the independent review in April 2011.

Following two written parliamentary questions and some initial reluctance to publish, the Minister was good enough to place a copy of the document in the Library on 1 December 2011. Professor Harrington endorsed the report and its recommendations in his second independent review, which was published in November 2011. Parallel with that, there was an internal review by the Department for Work and Pensions, and as a result the descriptors were changed in March 2011.

In the report prepared for Professor Harrington, the charities reaffirmed the importance of getting the descriptors right, and said:

“Some of the problems...are probably attributable to procedural or training factors. However...it is inconceivable that the descriptors do not contribute substantially to this unacceptably high error rate in decisions.”

It concluded that the internal review had not resolved the concerns, and it noted specifically that measuring just one of the relevant aspects of an applicant’s condition, or trying to include more than one aspect on a single linear scale are part of the problem. Although that makes the assessment quicker and easier to carry out, it fails to take account of the multiple features of impairment, and how they interact.

The document explains that the existing assessment does not take systematic and consistent account of the frequency of particular problems, or their severity. If a problem or difficulty is likely to occur infrequently, it could have a very different effect on potential for employment compared with the situation when the problem occurs several times a day.

How will the proposed new descriptors vary? First, the Department for Work and Pensions has been asked to consider reversing the previous reduction in the number of descriptors from 10 to seven. That was done in the internal review. The charities’ view is that by doing that

“Features which have been combined in this way represent separate impairments and…need to be considered separately to ensure a comprehensive assessment.”

Secondly, the proposed descriptors are multi-dimensional. Let me give a brief example:

“Michael experiences frequent spells of anxiety when he finds it…difficult to engage socially with almost all people. These episodes reoccur on average once a month, and tend to last for a few days at a time, after which Michael is usually able to bring them under control with some basic techniques from a short spell of cognitive behavioural therapy which his family paid for.”

It is considered that he is likely to score no points under the current descriptors, two of which relate to social contact. The first is:

“Engagement in social contact is always precluded due to difficulty relating to others or significant distress experienced by the individual”.

That covers engagement with anyone, and scores 15 points on the current descriptors. The second is:

“Engagement in social contact”—

with someone unfamiliar to the claimant—

“is always precluded due to difficulty relating to others or significant distress”.

The word “always” appears in both those current descriptors, and the report’s writers suggest that that is not taken into account in the complexity and difference in that individual’s situation.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Does my hon. Friend agree that the problems tend to be compounded when people have to appeal, particularly as appeals require advocates who have some knowledge of mental health issues? They are few and far between, and services are stretched at the moment.

[Sheila Gilmore]

They are indeed, and the issues involve both the still considerable waiting times for appeal, and the fact that appeals may be specialised. We know that those who are represented have a different outcome from those who are not.

Work Capability Assessments

Cathy Jamieson Excerpts

Wednesday 1st February 2012 Westminster Hall

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Williams. I thank my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) for securing the debate and for his tenacity—I think that would be the best word—in pursuing this issue. He has submitted what is probably a record number of parliamentary questions on it, and my constituents and I are grateful for that, because we have seen that someone is taking it seriously and cares passionately about it.

I want to concentrate on a number of issues raised by constituents. They were keen that I should take this opportunity to make representations to the Minister. People often feel that they are on their own and that they are the only ones having particular difficulties. Given what we have heard already, my constituents’ experiences appear to be very similar to those of constituents elsewhere, and I hope the Minister will take account of that.

I want to echo what my hon. Friend said. Neither I nor my constituents have a problem in principle with the notion that someone who is fit and able to work should do so if work is available. Many people with disabilities wish to hold down jobs and they can do so. Other people will require support, adaptations and particular circumstances to enable them to work. The constituents who come to me most frequently about work capability assessments, however, are those with fluctuating and perhaps long-term conditions. They tell me and my caseworker that the work capability assessment report does not accurately reflect their day-to-day experiences. They often say that they feel as if the wrong report has been sent in. They wonder whether people are making generalisations on the basis of their answers to questions.

People with these conditions also make the point that if they are having a good day, they will probably get along to the work capability assessment. However, if they are having one of their bad days, they simply will not be able, in some circumstances, to attend or to cope with the assessment. In addition, people with mental health issues, in particular, tell me that they do not get a fair assessment. They feel that because their condition is apparently invisible the assessor often seems to know little about it.

Of course, there are problems. Chronic but intermittent conditions can mean that claimants sometimes find themselves moved from ESA to jobseeker’s allowance and back to ESA, with all the work capability assessments in between. That leads to real difficulties because people often find themselves with no financial support while DWP processes are under way, with one claim being closed while another is being opened.

The most frequent cause of concern for constituents is apparent inconsistency. In a recent case in my area the maximum 15 points were awarded by the health care professional; that award was overturned by the DWP decision maker. The GP, the hospital consultant and Atos agreed that the person was unfit to work, but the decision maker in the DWP disagreed. In another example from my constituency a man with a progressive and incurable kidney condition, which requires him to undergo surgical operations every six months, was awarded 15 points; but that award was overturned by the decision-maker in the DWP, even though the decision-maker stated in correspondence:

“I am satisfied that the descriptors have been fully justified with clinical findings, observations and extracts taken from the typical day history provided by Mr A. The medical report…was appropriate, complete and covered all the area of incapacity described by Mr A as well as including a comprehensive typical day history and full set of clinical findings.”

We can understand why constituents find it difficult to understand why, when all the medical professionals and, indeed, Atos, appear to agree, someone in the DWP without a medical background apparently can overturn their findings.

I should like the Minister to tell me how many people—and what percentage—he is aware of who, having been awarded that maximum 15 points, have had the award overturned by the DWP decision maker, and how many of those have had appeals upheld. That may be useful for our understanding. As my hon. Friend the Member for Rutherglen and Hamilton West mentioned, there is concern about the cost of appeals, and I hope that the Minister will tell us the average cost of an appeal, and how much time is spent processing all the associated paperwork.

[Kerry McCarthy (Bristol East) (Lab)]

My hon. Friend makes a powerful case. I went to an appeal with someone with ME who scored zero points. She took with her the medical evidence from the experts at the hospital; when the panel looked at it, it was a case of giving it a tick and telling her that of course she was not fit to work. However, those dealing with the form-filling and Atos stage were not prepared to consider it. It seems ludicrous that my constituent must go through the expense and stress of an appeal, and that the expert evidence cannot be considered earlier.

--- Later in debate ---

[Cathy Jamieson]

My hon. Friend makes an important point. I wanted to give some examples of constituents who have had to appeal. One is a man almost at retirement age who has worked in a manual job since leaving school at 15, who became unfit to work. He requires a tube to be inserted into his gullet so that he can eat and drink. He could not bend forward during the assessment process or when he came to speak to me, because if he did so anything in his stomach would be emptied out; he has no muscular control. Initially he was told that he was fit for work. With our assistance he won his appeal. On the other hand I have another constituent, with a progressively degenerative eye condition, who is registered blind and can just about read a 42 point font, which is fairly large. She lost her appeal. There seem to be different circumstances and different approaches.

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

The hon. Lady makes an important point. My concern about people who must go to appeal is that they do not get the advice and support they need. People who get it are more likely to succeed in their appeals, but Citizens Advice talks about a threefold increase in impact on its services since the process was introduced. I am sure that many hon. Members have had increased mail in that time.

[Cathy Jamieson]

The hon. Lady makes an important point. I do not think that anyone would doubt that there is pressure on advice services. Organisations for individual conditions, such as Parkinson’s UK or the Multiple Sclerosis Society in my area, will talk about their concern that, although they can help so many people, there are others they cannot reach. I know from my case work that more people are coming to me to raise their concerns. They want to be put in touch with advocacy services to help them with appeals; my office cannot take on the job of representing people at every appeal, on account of the numbers involved.

[Nia Griffith]

Does my hon. Friend agree that, given the evidence we have heard today, and our own experiences, the DWP should seriously consider what to do about people with long medical histories of degenerative disease who are continually called in? It seems a complete waste of taxpayers’ money and it is a disgrace that we do that to those people. Will my hon. Friend suggest to the Minister that we might consider some way to exempt such people?

[Cathy Jamieson]

My hon. Friend makes a powerful case, and I am sure that the Minister is listening. On the point about people with long-term degenerative conditions, another constituent called at my office in great distress, when I happened to be there. The lady could hardly open the door to come in without assistance. She was extremely upset having just had a phone call to tell her she was deemed fit for work. She told me that she had had MS for 20 years. She has poor eyesight, mobility and memory. I was so concerned about her plight that I immediately contacted her GP, who assisted with taking up her case. He subsequently wrote:

“I have today issued Mrs E with a Med 3 for 13 weeks stating she is not fit for work (as she is patently NOT”—

he underlines that—

“fit for work). Like her I have not received any written communication stating that she is fit for work, as I would have expected. She should receive such written confirmation and the way to appeal clearly outlined in that letter. My role is twofold, firstly, to continue to issue a Med 3 (medical statement) and secondly to provide written information for her appeal Tribunal.”

He has done that. I do not think that we can overestimate the stress and worry that that incident has caused my constituent.

[Julian Sturdy (York Outer) (Con)]

The hon. Lady highlights the stress that individuals go through during assessments. Several constituents have visited my surgery to explain how they went through such stress. Does not the assessment have to be fair, both to the individual and to the taxpayer, as has been mentioned? Also, is not the assessment becoming a tick-box exercise with a one-size-fits-all approach that does not take into consideration the fluctuating conditions from which people suffer?

[Cathy Jamieson]

The point about fluctuating conditions is well made. That is exactly the problem. Some people with such conditions, in some circumstances, will be able, with the right support, to hold down employment, but others will not be able to do so, perhaps because of the cycle of their condition or because their mental health is affected. I am concerned that the process in question appears to be a tick-box exercise.

One more example from my case work involved a gentleman who lost a leg and badly damaged the other in a childhood accident. Clearly he suffered as a result of that disability. He was awarded zero points. If the system is to have the confidence of the public and the people being assessed, it must be seen as fair. My constituents tell me that there are so many inconsistencies that they feel that they are not treated fairly, that their individual circumstances are not taken into account, and that the procedure is indeed a tick-box exercise.

[Fiona O'Donnell (East Lothian) (Lab)]

My hon. Friend is making an excellent contribution to the debate. The information in question is in the public domain, and part of the problem is that that means people facing the process have no confidence in it. It causes such stress, particularly for people with mental health problems, that it has even driven some to take their own lives. How can that be defended?

[Cathy Jamieson]

I hope that my hon. Friend will understand that I take such issues seriously. I am very concerned to hear that she is aware of people being driven to such drastic action as taking their own lives. Going by the correspondence and contact that I have with constituents, I can say only that I know just how difficult it is for people, and that many feel they cannot face the appeal process—particularly those who have suffered from a condition for years and who feel that the process is undignified and that they do not get the right help and support, and who perhaps do not know to whom to turn.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

I echo everything that my hon. Friend says about the appeals process and the total lack of credibility of Atos. Earlier, she mentioned the systemic problem of DWP officers overruling all of the evidence, even that from Atos. Will the Minister address the fact that many people who are told that they cannot work again are suddenly taken off the support system in the DWP and put on to the other system, thus causing them great problems? They are made to go through rituals of training and work interviews when everyone agrees that they cannot work again. Surely that power should be clearly defined. If someone is told that they cannot work again, DWP officials should not be allowed to overrule that decision.

[Cathy Jamieson]

I am sure that the Minister will respond to that point, which is also one that I raised earlier. As I had concerns about the work capability assessments for people with a range of conditions, I tabled some parliamentary questions in a bid to find out how many people had been assessed in my constituency. I was disappointed to be told that such information could only be provided at a disproportionate cost.

After hearing about the experiences of a number of my constituents, I tabled another parliamentary question to find out how many assessments had been carried out on constituents who had cerebral palsy, osteoporosis, MS, who were registered blind, who had hearing impairments, who were on the autistic spectrum, who were carers themselves and who had learning difficulties or mental health problems. Those are the people who had come to me saying that they had had difficulties with the work capability assessment. Again, I was told that such information was not available at constituency level. I hope that the Minister can respond to that and tell me whether that kind of assessment, analysis and reporting will be available by parliamentary constituency in the future because it is in the interests of transparency and it would enable us to make comparisons across different parts of the country.

Finally, I have a couple of points around the issue of Parkinson’s, which my hon. Friend the Member for Rutherglen and Hamilton West mentioned in his opening remarks. The Parkinson’s Disease Society says that increasing numbers of people with Parkinson’s are being rejected from the support group. Between October 2008 and November 2010, it says that 45% of people with Parkinson’s who had undertaken the work capability assessment were referred to the work-related activity group instead. As an example, the organisation cited the case of one man who was placed in the work-related activity group despite the fact that his tremor was so severe that he could not hold a pen, walk more than a few steps or button up his trousers himself.

The organisation gives examples of people having long waits for appeals and receiving inconsistent or inadequate support in the work-related activity group. It talks about the ESA assessment process impacting disproportionately or inappropriately on other benefits, the worry for carers and the knock-on effect on other statutory services.

The Parkinson’s Disease Society also gives examples of people who are clearly not fit for work being told that they should get work. A 59-year-old man with Parkinson’s says:

“I feel I could work in the right job, with the right support, but none of this has been forthcoming from the job centre, who wished me well but basically said there are no jobs for able-bodied people let alone someone like me. I’m not surprised that only 6% of people in my position get back into work in 12 months. Everything I’ve done to get back into work I've had to off my own bat.”

On the one hand, we have people who say that they want to work and to cope with their condition and feel that they can do so but who are getting no help, and on the other we have those who feel that they are being hounded. That is not the sign of a caring, compassionate and decent system. I hope that the Minister will take account of what Citizens Advice and others have said and that he will not make this a party political issue. There is agreement across all parts of the House that this system is not working in the way that it should. I hope that in his response, the Minister will consider making some changes and give us some hope for the future.

Unemployment

Cathy Jamieson Excerpts

Wednesday 14th December 2011 Commons Chamber

[Alex Cunningham]

I welcome all schemes that will encourage employers to take on workers and, in particular, increase the number of young people in employment.

In 1997, my Stockton borough inherited from the Tories an unemployment rate of 14.9% among young people, while the national rate was 8.1%. Hard work by the Labour Government more than halved the Stockton rate to 6.7%, but since then the Tories and their Liberal Democrat allies have allowed it to soar almost to its previous level. It is now 12.9%, which, although it may not seem a huge number, represents 2,300 young lives.

In my constituency, I see countless young people wandering the streets of Billingham, Norton and Stockton, and I worry about their future. I see them peering into shop windows, knowing that all they can do is look. They certainly cannot buy, as they see no positive prospects. They know that there is no longer any support that would enable them to go to college, and that even if they had qualifications, possibly even degrees, their prospects would be extremely low in an economy that is stagnant at home and across the country.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Will my hon. Friend endorse the work done by Glasgow city council? It has launched a scheme aimed specifically at young graduates, and is using some of its pension fund to give them an opportunity to gain employment.

[Alex Cunningham]

I have always been a great admirer of Glasgow City council and I am certainly not going to disagree with my hon. Friend there, but it saddens me that for so many young people, the first taste of adult life will not be starting their first job and getting on the career ladder, but waiting in the dole queue and competing for the tiny number of vacancies available, while being lectured by the Tory-led Government that there are jobs out there for them if only they look hard enough. However, in my constituency there are 10 people fighting for every job vacancy. There are 2,335 jobseeker’s allowance claimants aged between 18 and 24—an increase of 18% on the previous year.

Earlier this year, the employment Minister singled out the north-east as his “top priority” in safeguarding and protecting jobs. However, the money received from the regional growth fund—believed to be the cure for all our economic woes—is but a fraction of what has been invested in recent years through the regional development agency. I am grateful for the money we did get in my constituency from the regional growth fund, and I was pleased to visit one of its recipients, Darchem Engineering, last week. It is a fine example of the great British manufacturer we need to encourage, and the Government cash will help to attract new investment to the north-east. However, while that one example is a positive one, the amount of cash available through the fund is extremely limited in my area, and many other companies with strong plans for growing their businesses and increasing the number of jobs found that the Government cash chest was slammed shut in their faces.

In my constituency alone, 166 young people aged between 18 and 24 took up employment and after 26 weeks, 162 of them—98%—were sustained in employment as a result of using part of Stockton’s allocation of the working neighbourhoods fund, thanks to our future jobs fund. Add to that the fact that those successful young people undertook 628 pieces of individual training and achieved 80 NVQs at levels 2 and 3, and we can celebrate an excellent achievement.

Labour also introduced the education maintenance allowance, which subsidised poorer students through the sixth form, helping 650,000 16 to 19-year-olds from low-income families and tackling the long-standing problem of a high teenage drop-out rate from education, particularly among poorer students. However, both these effective programmes were recklessly cut by the Tory-led Government, who dismissed them as bureaucratic and wasteful despite their strong success in helping young people to reach their potential.

The £180 million bursary scheme the Tories replaced the EMA with has instead succeeded in giving 70p extra a week to 12,000 of the poorest students—while at the same time taking away £30 from many of their classmates whose finances are only marginally better. It is simply insulting that the Secretary of State for Education believes that this is concentrating resources

“on removing the barriers to learning faced by the poorest”.—[Official Report, 28 March 2011; Vol. 526, c. 52.]

I strongly urge the Government to reassess their priorities, given that they are currently bent on making access to education far more difficult and are cutting everything in sight—the very things that were helping young people. Such a blatant disregard for the future of young people really is shameful. We should be under no illusions about the damaging effect that unemployment among young people can have. Failing to harness the energy of the younger generations is eating away at the foundations of all our futures.

Work largely defines us and as a society, and we cannot afford to ignore the talent and potential of so many young people. Those one in five young people who cannot find work therefore often cannot leave home. They remain financially dependent on their parents and are trapped in a confidence-sapping cycle of application after application, rejection after rejection.

The current jobless figures are a wake-up call for the future for young people. Youth unemployment scars people for life, particularly if it is prolonged, and at today’s levels it will be costing the country millions of pounds a week. We must not let the scourge of unemployment leave a permanent mark on the hundreds of thousands of young people living through it today. We need to give those young people, and everyone else window-gazing in towns and cities across the country this Christmas, real hope for the future. They see very little of it now.

Credit Unions

Cathy Jamieson Excerpts

Wednesday 23rd November 2011 Westminster Hall

[Tracey Crouch (Chatham and Aylesford) (Con)]

As always, Mr Streeter, it is a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for East Hampshire (Damian Hinds) on securing the debate.

The hon. Member for Islwyn (Chris Evans) spoke passionately about financial literacy. He might be interested to learn that a young lady doing work experience with me this week is watching the debate from the Gallery. She told me before we came to Westminster Hall that, as part of her enrichment class, she has just studied the role of credit unions. I have no idea what an enrichment class is, but the fact that it is studying credit unions is a fantastic way to ensure that youngsters learn about a variety of sources—

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

The hon. Lady makes an important point. Does she agree that it is important that credit unions can operate from an early stage in schools and involve young people much more directly than by simply learning about them?

[Tracey Crouch]

I agree. As many providers as exist should be entitled to teach children about the variety of sources of financial awareness. I have been to primary schools in my constituency and seen big banks supporting financial education programmes, which I think is fantastic, but we should get as many people in there as possible.

I proudly declare, like many Members here, that I am a member of a credit union: Kent Savers, the county-wide credit union. I am also soon to be a member of Medway credit union, which covers part of my constituency. Like others, I am passionate about tackling high-cost credit, lending and financial inclusion, and see credit unions as part of the answer. That stems from my experience of living the high life in London as a young graduate and stupidly running up debts, from which I was saved by my bank manager, and of representing a constituency that has pockets of deprivation and associated personal debt problems.

In the current economic climate, we must pay particularly close attention to how much debt people take on as pressure inevitably increases on household budgets. As Members of Parliament, we have a duty to promote accessibility to fair and equitable credit, particularly, although not exclusively, for those on low incomes. That is why I share the enthusiasm for credit unions and believe that we must raise their profile. I am sure that I join many hon. Members here in having done so through local media.

I have met representatives of Kent Savers and Medway credit union, the latter as recently as last Friday, and have learned a great deal more about credit unions’ services, benefits and duties. Northern Irish Members will be interested to know that they spoke favourably of the credit unions in Ireland and Northern Ireland. One director is from Ireland and is helping to bring that experience to Medway.

As a mutual, a credit union has an ethos of responsibility and inclusion—traits especially welcome in Medway, which, sadly, has problems with unmanageable debt. Responsibility and inclusion go hand in hand and are crucial features in running credit unions fairly and equitably. Much is admirable in credit unions’ ability to open up opportunities to take out reasonable loans for people on low incomes or with bad credit history. The alternatives, as I have found in Medway, are far less appealing. As in the constituency of my hon. Friend the Member for Thurrock (Jackie Doyle-Price), several high-cost credit lenders have set up shops prominently situated on busy high streets. They are the antithesis of credit unions.

Consumers took out £1.9 billion in payday loans last year, which is £500 million more than in the previous year. That trend is a concern and it is broadly reflected in the Medway area. Shockingly, at the local citizens advice bureau recently, a record £3 million in unsecured personal debt walked through the doors in one week. I have since been informed that loans and the interest associated with payday lending account for a worrying proportion of that £3 million. That is a great shame, and I have campaigned against it as a local Member of Parliament.

Such businesses deal in large sums of money and small print. They are identifiable by their glossy shop fronts, but they offer less attractive interest rates, targeting people on low incomes who are in financial difficulty. Sure, if they pay back the loan in time, the rate might be lower over 30 days than a high street bank’s overdraft charge, but the very fact that someone has gone to a payday loan company rather than a bank might indicate that they are a credit risk. No controls are placed on borrowing—a remarkable difference from credit unions.

The emergence of payday loan shops on high streets and the accessibility of easy credit on the internet appear to offer a quick fix. It might be financial inclusion of a sort, but the reality of high-cost credit is very different. It can be irresponsible on the part of the lender and self-defeating for the consumer, placing them deeper into debt and excluding them from accessing the lending market in the future, which credit unions do not do.

On Monday, I was pleased to note the Government’s response to the consumer credit and personal insolvency review. I was particularly encouraged to learn that they will consider the possibility of imposing a variable cap on the cost of high-cost credit that can be charged in the short to medium-term high-cost credit market, while talking up the credentials of credit unions as an alternative.

It is worth making the point that credit unions are more than just a lending service. To take out a loan, members must first commit to saving, which is an equally important feature of managing their finances. Given that only 20% of people in the UK reportedly put aside money each month, more clearly needs to be done to encourage saving. Credit unions offer a great opportunity to help to reverse that trend with a more innovative method of depositing cash, receiving a dividend and earning the possibility of taking out a loan. By committing to saving, members provide a cushion for those unexpected emergencies that we hear so much about from payday loan lenders, while avoiding astronomical interest rates.

I learned last week that Medway credit union is developing a Christmas savings scheme that encourages members to put aside money for Christmas essentials. Christmas is an expensive time of year. Given the pressure on families to spend, the temptation for those on low incomes to buy now and pay later is strong. However, under the scheme, reserves gradually built up over time will be on hand to cover the cost of the festive family season and steer families away from alternative high-cost credit. Most importantly, what makes the Christmas saving scheme attractive is that it is secure.

Credit unions have an important role to play for older people, who are often financially excluded. I have spoken before in this Chamber about my concerns for the financial welfare and education of our pensioners. Financial difficulty is not limited to younger generations seeking loans to cover rent, bills or insuring the family car. I read a worrying report called “Debt and generations” commissioned by the Consumer Credit Counselling Service, and I urge hon. Members to read it. It revealed a minority of older people with extremely high levels of debt and a notable number of older households with high repayment-to-income ratios.

For instance, 12% of over-55s have a repayment-to-income ratio of 30%, compared to only 9% of those aged 18 to 24. Also, a great many older people are less able to mitigate the effect of an unexpected bill or change in circumstance. A reduction of just £50 to their monthly income, for example, doubles the likelihood of the oldest age groups becoming financially vulnerable and, potentially, taking out costly loans to meet the shortfall. I think we all agree that it would be far more preferable for older people faced with those difficulties to approach credit unions instead.

I am conscious of the time, so I will finish by saying that the Government have taken some welcome steps with the legislative reform order and other measures. I think we all welcome those steps and I look forward to reading the Government’s study, to which their formal response on consumer credit alludes, on credit unions and how they will be encouraged to grow and prosper.

Pensioners and Winter Fuel Payments

Cathy Jamieson Excerpts

Tuesday 22nd November 2011 Commons Chamber

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I thank the right hon. Member for Belfast North (Mr Dodds) and his colleagues for bringing this important matter before the House today. The debate is extremely timely, as we are at that point in the year when pensioners are already worrying about what the coming winter weather has in store for them. In my constituency—and in the right hon. Gentleman’s too, no doubt, since he is just across the water from me—we are already experiencing rather colder weather than we have here in London.

All of us on the Opposition Benches know, and many on the Government Benches also know, although they may not openly admit it, that people are feeling the squeeze of rising prices. They are increasingly worried about the basic costs of living, particularly food and fuel prices. With unemployment at its highest level for 17 years, and more women out of work than at any time since 1988, more and more people are struggling to make ends meet.

The real problem is that this out-of-touch Government seem to have no idea what it is like for ordinary people who are trying desperately to keep their heads above water. It is time that out-of-touch Ministers realised how tough things are for pensioners right now and how their policies are making things even harder. This year, pensioners are facing not just a double whammy, which was referred to earlier, but a triple whammy of higher VAT, soaring energy prices and what is effectively a cut to the amount of money that they receive in their pockets to assist with winter fuel payments.

I do not think that the Government understand why people are so outraged that the energy companies can increase their profit margins eight times over at the same time as every household in the country is seeing their bills go sky high. The “Plug the Debt” campaign launched by Consumer Focus and Citizens Advice has highlighted:

“The average energy bill has risen by over 21% since autumn 2010 from £1,069 per year to £1,273.”

I have heard the Minister say that that is only a pound a week, or a small amount, and £200 a year might not mean much to the well-off or the millionaire, but believe me it is a huge amount for a pensioner household with a fixed income, where every penny is a prisoner.

[Andrea Leadsom (South Northamptonshire) (Con)]

Is it the Opposition’s policy to reverse the decrease from £250 to £200 a year that they proposed and increase it back to £250?

[Cathy Jamieson]

I will spend some time dealing with that point during the course of the debate, but I want to say at the outset that it is time this Government took responsibility for their actions, rather than constantly blaming someone else for unpopular decisions.

[Mr David Hamilton]

Last week a Mr and Mrs Watt visited my constituency surgery. They do not make the distinction when losing that £50. They believed that they had a promise of £250. When £50 is taken off, a technical argument about whether or not that £50 is there is inappropriate. I also wish to point out that when the winter fuel allowance was first introduced—before some Members came into this place—it was temporary for the first few years and then we made it permanent. This Government could have done exactly the same.

[Cathy Jamieson]

I am sure that Mr and Mrs Watt are fairly typical of many of the pensioners we all see in our surgeries. It is not only my hon. Friend’s constituents who see this as a cut. The charity director of Age UK said earlier this year:

“While the uplift was billed as a temporary measure, renewed annually, for those older people struggling to pay fuel bills, this is a question of semantics and they will view the measure as a cut.”

Pensioners view the measure as a cut as less money is going into their pockets.

I know from my hon. Friend the shadow Secretary of State for Northern Ireland, as was mentioned earlier in the debate, that the average household energy bill is around 14% higher in Northern Ireland than in England and Wales. In the 21st century, it is absolutely shocking that around 1,300 are estimated to have died from cold weather-related illnesses in Northern Ireland last year.

I must also gently point out to the Minister and other Government Members that, although advising consumers to shop around and switch suppliers might make sense to some people, many of the pensioners I have spoken to find the range of tariffs and options on standing charges completely baffling. If people do not have access to the internet and the price comparison sites that the better-off might use, where are they to start? Pensioners do not want the hassle of complicated forms and do not always trust advice given over the phone, particularly after the bad publicity about people feeling under pressure to switch suppliers.

I heard what the Minister said about there being an 0800 number to call for advice. I do not know whether he has sat with constituents and tried—[Interruption.] He mentions pension credit, but I do not know whether he has sat with constituents who use a range of advice lines and sometimes find them difficult to use. They might be pensioners who are unused to speaking in detail over the phone and find it an off-putting experience. It is important that people can have face-to-face advice and I would welcome any effort he can make in that regard.

I also want to mention briefly those who are off-grid, and there are similarities between Scotland and Northern Ireland, particularly in rural areas. It is not so simple for people in those areas to shop around, although some helpful work has been done, for example, in ensuring that there are co-operative ways for communities to come together to purchase fuel. I hope that that is something the Government will support.

With consumer prices index inflation at 5.2%, pensioners on low and fixed incomes are among the most tightly squeezed, and again Age UK states that

“older people have experienced a rate of inflation on average 5% above headline measures and this is, in part, because the proportion of their income spent on food and fuel is higher than for other age groups.”

The harsh reality is that, instead of supporting pensioners, this Government’s actions are making life even tougher— [Interruption.] Right on cue, the Minister starts again the usual orchestrated chorus from Government Members, attacking the previous Government rather than looking at what his Government are doing today.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

On the additional costs of food and fuel, is it not really beholden on the Government to realise that those are the areas where pensioners, in particular, feel the pinch? We are in a situation whereby many pensioners say that it is a matter of either heating or eating, so the Government should adjust not their philosophy but the reality of life to the fact that these inflationary measures are hitting pensioners, who do not have the money or the resources to back up the costs when they come in with the bills that they have to pay.

[Cathy Jamieson]

My hon. Friend makes an important point. Many pensioners do not want to admit the financial difficulty that they are in. Often, they try to hide it from their family, friends and local community, so they go behind closed doors and curtains, do not put the heating on for fear of the huge bills that may come in, and choose at times when their money is tight to cut down on nutritious food and other essential items. That is the stark reality for many pensioners living in our communities today, and it is time that the Government realised that they have to take responsibility for their own decisions.

The Government have to take responsibility for their actions and face up to the consequences, so let us take a look at the facts. I am sure that I will get more sedentary comments from Government Members, but it is important to remind people that the UK economy has flatlined over the past year, with just 0.5% growth well before the eurozone crisis, which cannot therefore be entirely to blame for choking off recovery. In the European Union, only Greece, Portugal and Cyprus have grown more slowly than the UK, and the United States has grown more than three times as fast as us over the past 12 months.

The Government’s mistaken decision to raise VAT to 20% in January has hit pensioners hard. Estimates are that it will cost a pensioner couple on average £275 a year, and I return to my earlier point: that may seem like a small amount to some Members; it is not a small amount for someone who is facing the rise in prices, trying to make every penny go that bit further and facing such difficulties every day.

We know that the Government’s policies are hurting ordinary people, because we hear it every day from constituents, as my hon. Friend the Member for Midlothian (Mr Hamilton) said, so we, like the right hon. Member for Belfast North who moved the motion, believe that the Government should look again at the impact of their polices on winter fuel payments and on VAT, which in combination have hit pensioners hard.

The Government have the opportunity to ease the squeeze on pensioners, and they should take it by temporarily reversing the VAT rise. At the very least, they could do so immediately and put that £275 back into the pockets of pensioners.

When Labour introduced winter fuel payments, it did so as part of a drive to help tackle fuel poverty among pensioners, and I accept that some Government Members genuinely want to see the problem tackled. The payments were specifically designed to give older people the reassurance that they could afford to heat their homes in winter—and do so in a way that would allow them to continue to buy their food and to pay the rest of their bills.

At the time there was, and indeed there has been since, criticism that the winter fuel allowance was not targeted in the way that some anti-poverty organisations might have wished. Some people wanted the allowance to go further, and others wanted different groups of people included, but we know from research by the Institute for Fiscal Studies that households receiving the winter fuel payment are almost 14 times more likely to spend the money on fuel than they are if their incomes are increased in other ways. That is quite important, and the IFS specifically stated:

“Households receiving the Winter Fuel Payment spend 41% of it on fuel even though there is no obligation to do so. When the same households receive additional income which is not labelled in any way, they spend just 3% of it on fuel. To put it another way, simply increase the income of a pensioner household by £100 and they will increase their spending on fuel by £3. Label that increase a ‘Winter Fuel Payment’ and £41 will go on fuel.”

Indeed, the IFS went further by stating:

“The winter fuel payment was introduced to encourage older households to spend more on heating in the winter. Remarkably it appears to have had just that effect.”

To be fair to the Government, at least for a moment, they do seem, to be fair—

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

“They do seem to be fair.”

[Cathy Jamieson]

On one or two things, and on this point the Government do seem to have moved on from the days when some people who are now in prominent Government positions thought that winter fuel payments were “gimmicks”. To be fair again to the Pensions Minister, back in May he answered a written parliamentary question by stating:

“The winter fuel payment provides a significant contribution to an older person’s winter fuel costs and provides vital reassurance that people can afford to turn up their heating.”—[Official Report, 23 May 2011; Vol. 528, c. 493W.]

Today, he seemed to suggest that he still agrees with that in principle, and I am glad to hear it, although I disagree with him on whether the amount of money going into pensioners’ pockets has been cut.

The coalition agreement, which has been referred to, states:

“We will protect key benefits for older people such as the winter fuel allowance”.

Most reasonable people reading that statement or hearing those words coming from the mouths of Ministers might reasonably have expected the coalition to have protected all winter fuel payments. They were certainly the words that people heard in the run-up to the election, but as we know the winter fuel payment will be £50 lower this year than it was in each of the last three years for eligible households aged 60 or over, and £100 lower for those aged 80 or over. The Department for Work and Pensions estimates that 9 million households benefit from the winter fuel payment, so 9 million households will be worse off this winter.

People will no doubt seek to make the usual criticisms of the former Labour Government at this point, but when Labour left office no decision had been taken, and it was absolutely in the Chancellor’s power to continue with the extra payment, as Labour Chancellors had in previous years. It is therefore absolutely wrong for any Government Member to say that the decision was taken by the previous Government; the decision to axe the additional payment was taken by this coalition Government —no one else.

[Steve Webb]

Leaving aside the fact that the shadow Work and Pensions Secretary was the man who left the note saying, “There’s no money left,” I must ask, if the previous Government planned to keep the winter fuel payment at £250, why did they not set the money aside in their Budget plans?

[Cathy Jamieson]

The decision was taken year on year, and it would have been entirely open to a new Government —indeed, if a Labour Government had been elected, there would have been the option—to look at the measure year on year, so no matter how many times Ministers raise the issue, they cannot get away from the fact that the very people who decided not to go ahead with the payment are the coalition Government.

I am astonished to hear the Minister seemingly suggest that this Government had to follow everything that the previous, Labour Government did. If that had been the case, we would still have had a future jobs fund, and perhaps youth unemployment would not be rocketing. No one wants to intervene on that point, so perhaps we will hear more from the Under-Secretary in her winding-up speech. Rather than harking back to the past, it is time that this out-of-touch Government came back to reality and dealt with the real-life issues facing today’s pensioners.

Let me give the last word on this to the voice of pensioners. Speaking about the Chancellor’s decision to axe the additional payments, Dot Gibson from the National Pensioners Convention has said:

“It’s a shabby way to treat Britain’s older generation. If we really are all in this together, why is he going to take £100 off the winter fuel allowance for the oldest members of society at a time when fuel bills are rising and winter deaths amongst older people are a national scandal? He should be ashamed of his behaviour”.

--- Later in debate ---

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

I thank Opposition Members for raising this important subject. We have had a lively debate.

Let me begin by emphasising that the coalition Government take the issue of pensioner poverty very seriously. Our record demonstrates that. We pay more than £2 billion in winter fuel payments, and we pay it to more than 12.5 million pensioners, including more than 300,000 in Northern Ireland last year. The payments go to pensioners regardless of their income, and most do not even have to make a claim. I think that Members on both sides of the House agree that the winter fuel payment makes a real difference, ensuring that pensioners can turn up their heating in the knowledge that they will receive the help they need in order to meet their heavy winter bills.

It is regrettable that the last Administration decided not to provide for a temporary increase to become permanent—to last beyond the year of a general election. People can draw their own conclusions about why a temporary increase in winter fuel payments extended in the year running up to a general election but not beyond. It is most telling that the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), who spoke for the Opposition, failed to pledge to make concrete the previous Government’s temporary increase. I say that because she is a shadow Treasury Minister and if she does not know whether the Opposition would make that permanent, who would?

[Cathy Jamieson]

Will the Minister accept that it is time that this Government took responsibility for their actions? The decision whether to pay this increase is entirely down to this Government, and it would be irresponsible for anyone on the Government Benches to suggest otherwise. It was not the previous Government but this Government who took the decision on this budget.

[Maria Miller]

I think the House will draw its own conclusions from the fact that the hon. Lady again failed to take the opportunity to make clear what the Labour party’s policy is on this issue. The coalition Government have made permanent the increase in the cold weather payment from £8.50 to £25. Again, hon. Members on both sides of the House will be pleased to hear that that money is going to the most vulnerable of our constituents. Some 2.7 million pensioner households receiving pension credit also receive the cold weather payment.

The coalition Government are taking real steps to protect pensioners, which is why one of our first actions was to restore the earnings link with the basic state pension. We also gave a triple guarantee that pensions will be increased by the highest of growth in average earnings, price increases or 2.5%. Pension credit is also available for those who have low incomes, and we have continued key support for older people such as free NHS prescriptions, travel concessions and free television licences. For the longer term, we will need to help prevent people from retiring into poverty. Again, our actions are speaking louder than mere words, through the automatic enrolment in workplace pensions.

Hon. Members have made a strong case as to why fuel poverty is a real issue for many vulnerable people, including pensioners living in Northern Ireland. The differences in Northern Ireland are clear, and hon. Members have made that point in this debate. That is why Northern Ireland receives not only the support from pension credits, winter fuel payments and cold weather payments, which are provided for the rest of the UK, but a block grant of some £10.4 billion in funding for the Executive to address the particular priorities of Democratic Unionist party Members and other Northern Ireland Members. That money goes along with some £6 billion to pay for the cost of social security and pensions. We should not forget that Northern Ireland receives almost 25% more in spend per head of population than England, in recognition of the real issues that individuals living in Northern Ireland face.

Pensions Bill [Lords]

Cathy Jamieson Excerpts

Tuesday 18th October 2011 Commons Chamber

[Gregg McClymont]

No, I will not.

Let me restate our case. The Bill fails our two tests: first, it fails to give fair and due notice of the rise in pension age to the 500,000 women concerned; and secondly, the burden falls disproportionately on this group of women.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I thank my hon. Friend for giving way and I am conscious that people watching this debate who are affected by it will begin to wonder whether we have somehow lost the plot. I have a constituent who has taken early retirement under deficit cuts and expected to get her pension when she was 64. She will now have to wait until she is 66 and she tells me that there will be a period when her money will simply have run out and she will have nothing to fill that gap. Does my hon. Friend agree that that could not by any stretch of the imagination be deemed to be fair?

[Gregg McClymont]

That bears precisely on the point. We are talking about real women and we must give due credence to their fears and anxieties, especially about due notice.

On fair notice, the fact remains that under the Government’s amended plans some women will have only five years to prepare. The shock of having to adjust at such short notice to a rise in the pension age of between 12 and 18 months cannot be overestimated—this reflects the point made by my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson). These women feel genuine anxiety. The 500,000 women in question made decisions based on what they thought was a contract with the Government that they had paid into the system for a certain amount of time and would get their state pension at a certain age. The Government have moved the goalposts dramatically for these women; there is no getting away from that and it is another way in which the Government are breaking the consensus we appeared to have in 2010.

The Government are going down a dangerous path with this Bill, which sets a precedent by which the principle of reasonable notice of changes in citizens’ state pension age is dramatically reduced. The precedent is important because as longevity rises and as the Minister already suggested, there will inevitably be further uplifts in the state pension age. The principle of reasonable notice is broken by this Bill.

The independent Pensions Policy Institute was very clear in its evidence to the Select Committee on Work and Pensions on that point. The 1995 Act gave women 15 years’ notice and although the Pensions Policy Institute understood that longevity is rising and that it is necessary to make changes more quickly, it still maintained that 10 years needed to be the minimum notice that any woman was given.

Pensions Bill [Lords]

Cathy Jamieson Excerpts

Monday 20th June 2011 Commons Chamber

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I welcome the opportunity to contribute to this important debate. Like many hon. Members on both sides of the House, I have been contacted by a huge number of constituents about the measures in the Bill. Indeed, I expect that the e-mails are continuing to flood in even as I speak.

The debate today has rightly focused on women’s pensions, but it is important that we also remember the wider context. The majority of people want to plan ahead for their retirement, and they are happy to make their contributions during their working lives in the knowledge that they will reap the benefit when they retire. I am pleased that today’s debate has not had more heat than light, and that we have heard thoughtful contributions. All too often, insulting comments are made to suggest that people who have a decent pension might be getting something for nothing, or getting more than they deserve. I am genuinely glad that we have not heard any of that today.

For many working people brought up to do the right thing, pensions are like deferred wages. They have carefully planned for their later years because they believe that it is right to avoid being a burden on the state or on their families. Unfortunately, however, it is those thrifty, careful planners who are being let down by this Government in the Bill. It is sad that the Government have broken their promise in the coalition agreement not to raise the women’s state pension age to 66 before 2020. As we heard at the beginning of the debate, the coalition agreement clearly stated that the state pension age would rise to 66 but that this would

“not be sooner than 2016 for men and 2020 for women.”

Ministers have performed dramatic U-turns on a whole range of issues, some of which have been welcome, but this one is most unwelcome. The legislation will now accelerate the equalisation for women to 2018, and then increase men’s and women’s state pension ages to 66 by 2020. Anyone reading the coalition agreement when it was published would not have expected that to happen.

Some 2.6 million women will be affected by the Government’s proposals. The state pension age for women born between 6 December 1953 and 5 October 1954 will increase by more than 18 months. I should say that I do not have an interest to declare in that regard; the increase will not affect me, but it will affect many women in my constituency. The Government’s own impact assessment estimates that the measure will affect about 330,000 women. In the most extreme cases, some 33,000 women born between 6 March and 5 April 1954 will see an increase of two years. Those are the points that constituents are contacting me about, because they are worried about the impact that the Bill will have on them.

To put this in context, a woman born in April 1953, as one of my good friends in my constituency was, will be able to get her pension at the age of 62 years 11 months. However, another friend who was born just a year later, in April 1954, will have to wait until she is 66 before she can draw her pension. It is completely understandable that people feel that the measures are unfair. We have heard that comment time and again this afternoon. They are certainly not fair to the 1,200 women in my constituency aged around 56 and 57 who are set to lose the most from these changes, and who will have very little time to prepare or to amend existing plans. Many of them have worked in a series of jobs, raised families and perhaps worked part-time over the years. It is difficult enough for those women on low pay to plan for their retirement without this additional burden being placed on them. I think the most significant part of the issue before us is allowing people time to plan adequately for retirement.

Age UK has highlighted a number of concerns, not simply about the plans, but about the fact that people are not necessarily aware of them. It estimated that about 32% of the women it polled said that, following the Government’s proposals, they did not know when the state pension age would reach 65 for both women and men. Just one in 10 correctly said 2018. Almost half expected equalisation to happen before the planned date, while 9% thought it would be later than planned. As we can see, there is confusion.

In the last few months, despite the public outrage and a campaign supported by different charities and organisations, Members of all parties and affected individuals, it appears that, although Ministers might have begun to listen, they have certainly not come forward with any clear proposals on what they intend to do.

We all understand the simple truth that our society is ageing. The previous Labour Government recognised it and, as we have heard, established the independent Turner commission and built a consensus for change around a number of key areas: linking the basic state pension to earnings, raising the retirement age to 68 by 2046, starting the rise from 2024 and making private pensions opt out instead of opt in, with employers also making a contribution. After trying to build that kind of consensus, it is simply wrong to penalise women who have worked hard for their whole lives and now have no time to plan for their retirement.

As I have said, many women of this generation are already at a disadvantage when it comes to pensions. They have perhaps been denied access to private pension schemes and have had to take career breaks to bring up children. Raising the state pension age for women so rapidly could result in some women currently in their 50s having to work for two years more than they had previously thought. That might not seem a great deal if people are not at the stage of life when they are thinking about planning for retirement, but for people working in an arduous job with long hours or working very early in the morning, as many in the cleaning or hospitality sector have to do, or late at night, that means a lot. The women affected are being made to accommodate the changes within fewer than seven years and it will not be possible for them to make up the time and earnings that they would have wanted. They are at a significant disadvantage. We have also heard that the median pension saving for a 56-year-old woman is just £9,100—almost six times lower than that of a man, which stands at £52,800.

During our debate, we have also heard about the number of people eligible to be auto-enrolled in a pension scheme. I have concerns about that. I was a bit disappointed to hear some of the attacks on the shadow Secretary of State when he raised these issues. We all need to hear the Minister respond to the issues raised. I am concerned that limiting the coverage of the scheme could exclude women disproportionately. It has been estimated that 7 million people are not saving enough to ensure an adequate income for their retirement. We have heard genuine concern about that from Members of all parties. That is why there was cross-party consensus to introduce auto-enrolment.

Combined with a minimum employer contribution and the creation of a pension scheme that could be used by any employer, the principles behind the legislation could be expected to lead to a step change in the level of participation in pension saving. Concerns have been expressed today, however, that the Government are proceeding with the introduction of auto-enrolment in a way that will limit its scope, including raising the salary level at which someone is automatically enrolled from about £5,000 to about £7,500. The Government predict that up to 600,000 fewer people will be automatically enrolled in a pension scheme as a result—as I have said, disproportionately affecting women.

My concerns about that could be summed up briefly. I am worried that this will rise in line with the income tax threshold, and therefore looks set to increase to £10,000 over the next few years—excluding a considerable number of people who will be earning less. Compared to Labour’s original plans, it will exclude in the region of 1.5 million to 2 million people, of whom 1 million to 1.5 million would be women. I hope that the Minister will respond to these points later. Having a three-month waiting period before auto-enrolment could mean 500,000 fewer people automatically enrolling in a pension scheme, which does not improve the position on encouraging people to save for the longer term.

As other Members have made clear, there are also concerns about people who work in call centres, and perhaps others in the retail and the hospitality sector, as they might work a relatively low number of hours at various points in their careers. Some people might have two or three different jobs to hold down, each of which might be under the threshold, but not when they are viewed cumulatively.

[Sheila Gilmore]

Has it occurred to my hon. Friend that there seems to be a mismatch here in respect of this Department’s policies? Just last week and all through the Committee stage of the Welfare Reform Bill, we heard great things about the importance of mini-jobs and the people who undertake them. Such people sometimes have more than one mini-job. At the same time, however, that does not seem to have been read across into this Bill.

--- Later in debate ---

[Cathy Jamieson]

My hon. Friend makes exactly the point that I was about to make. There does indeed seem to be a mismatch. I have to say that I am not a great fan of the term “mini-job”. Some people are getting up at 6 o’clock in the morning to work a shift as a cleaner, then have to take their kids to school and subsequently do perhaps four hours in a local retail establishment, after which they have to pick the kids up from school only to have to go out to another job in the evening. There is not much that is “mini” about that when all those jobs are put together. This is exactly the sort of issue that Ministers need to address if this Bill continues through its parliamentary stages.

I think the general public understand that as people live longer over the coming decades, the state pension age will need to rise to ensure that people who have longer retirements do not have them on much lower incomes leading to a lower quality of life.

I have heard many Members express concern this afternoon about the proposals in the Bill. We are being asked to vote on the Bill’s principles, but I have heard many Members express real reservations about them. I believe that if we are not happy with the principles, it is our duty to represent our constituents by voting against the Bill. My constituents—not just those directly affected, but many others who also have concerns—are asking me to vote against it. If the Secretary of State had given us a firm commitment today that something would change and problems would be addressed, my constituents would have understood if I went back and told them about those assurances. In all honesty, I have to say that when I heard the Secretary of State outline right at the beginning of the debate that the Bill will go ahead as drafted, that was not the assurance I was seeking. That is not what my constituents want, so I will vote against the Bill tonight.

Welfare Reform Bill

Cathy Jamieson Excerpts

Wednesday 15th June 2011 Commons Chamber

[Jenny Willott]

The hon. Gentleman shouts “Shame”, but this is an information-gathering exercise to obtain evidence on the basis of which a decision can be made. At that point, it will be appropriate for people to be consulted. When we know the evidence base, and what options are open to the Government, it will clearly be appropriate to consult. At the moment, the Government are communicating with local authorities to find out what funding is in place, and disabled people are probably no more aware of that than I am. It would not be appropriate, while gathering that information, to consult. Afterwards, when we have the evidence on which to base a decision, it will become appropriate to consult on the options.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I have to confess that I am astonished to hear the hon. Lady suggest that disabled people would have nothing to add to an information-gathering exercise. Would she support postponing the proposals until we have clarity on what the review will involve, to ensure that everyone with a view is able to put their view forward?

[Jenny Willott]

The hon. Lady completely misrepresents my words. I absolutely did not say that disabled people have nothing to add to this. I said that the Government are undertaking an information-gathering exercise so that we have an evidence base on which to look at the options for the Government to take forward. At that point, people with disabilities and others affected would, I hope, have an opportunity to be consulted and to participate in discussions. At the moment, it is my understanding that the Government are gathering information to provide the evidence that has been lacking. I have to say that I was taken aback to find that the previous Government had never done research to enable us to understand what funding is made available to care homes and what is made available to people through disability living allowance. Providing such evidence is seriously overdue.

--- Later in debate ---

[Maria Miller]

If the hon. Lady will listen to my full remarks, I hope that she will be satisfied. We have made it clear that we want to remove overlaps, and that we do not ever want to limit severely disabled people’s ability to get out and about, so we will not do what she describes.

[Cathy Jamieson]

rose—

[Maria Miller]

Will the hon. Lady forgive me if I try to complete my remarks? I will give way if I have not answered any questions. I will ensure that when we introduce PIP from April 2013, disabled people are treated absolutely fairly, regardless of their place of residence. We do not intend to undertake what the hon. Member for Edinburgh East (Sheila Gilmore) was talking about.

--- Later in debate ---

[Cathy Jamieson]

Given the concerns about the term “overlap”, will the Minister be absolutely specific about what she means by it? For example, is it overlap if a care home uses a minibus to transport residents?

[Maria Miller]

Obviously we are looking at whether an individual has access to support, not at whether a care home has access to it. I could not make it plainer than to say that we do not intend to remove somebody’s ability to get out and about. That is a plain and categorical statement, and the hon. Lady can interpret it as she chooses—I know that I interpret it as a plain and clear statement. Support for disabled individuals should be available in the social care packages that are available on the ground. If that support is not in place, there is no overlapping benefit.

[Cathy Jamieson]

rose—

[Maria Miller]

Will the hon. Lady forgive me for moving on and making some more comments?

Opposition Members will not be surprised to hear that I feel strongly that the Government have made our position clear on this matter.

--- Later in debate ---

[Maria Miller]

I had a meeting with Motability yesterday to talk about these issues, which was one of many meetings that I and officials have had with it. We will look at the issue in great detail. Motability provides a fabulous service to disabled people and we will ensure that the issues that the hon. Lady mentions are addressed.

[Cathy Jamieson]

Will the Minister give way?

[Maria Miller]

If the hon. Lady will forgive me, we are running very short of time.

Amendment 60 would have the unwelcome effect of allowing the automatic transfer of existing DLA claims on to PIP without any review of entitlement. PIP is a new benefit, with new entitlement criteria and a new assessment of individual need. To transfer people to PIP automatically without first determining whether they are eligible for the benefit would be inherently unfair and would perpetuate the failings of the current system. I cannot therefore accept that amendment.

I hope that I have started to give hon. Members a flavour of the scale of work that is being undertaken by the Department in putting forward a new benefit of this scale. I hear the loud reiteration of many of the arguments that I have had with disabled people and disabled people’s organisations over the previous months in hon. Members’ comments today. I am sure they will be reassured that disabled people and disabled people’s organisations are at the heart of the development of our assessment, which is now fully available for people to look at and comment on online. Some of the amendments proposed today are wholly inconsistent with the principles that I have set out for our reform of PIP, while others are unnecessary. I hope therefore that the hon. Member for Glasgow East will withdraw the amendment.

--- Later in debate ---

[Fiona O'Donnell]

I am delighted to contribute to the debate. I want to speak in particular about the review and possible removal of the mobility component of DLA, or PIP as it has become, and the extension of the qualifying period for PIP from three to six months.

I listened carefully to the Minister during the whole debate. I also attended a debate in Westminster Hall where many of the issues that came up today were raised, yet it appears that we are no further on in finding an answer to our questions. The Minister seemed to think that she weakened the Opposition’s case by saying that we agreed with the need for reform of DLA, but the point Opposition Members and our Front-Bench team have consistently made is that, yes, reform is needed but the Government have got it wrong in the Bill. I often understand the rationale and politics in some of the Government’s decisions and proposals, but I really feel that the proposals in the Bill that the amendments address are actually cruel. I thought long and hard about those words.

Constituents have contacted me from cancer, mental health and disability organisations, including the Disability Benefits Consortium, which represents 50 charities and thousands of people with disabilities and their families. Their mission is clear. The DBC document states that it is to use their combined knowledge, experience and direct contact with disabled individuals, people with long-term conditions and carers to ensure that Government policy reflects and meets the needs of all disabled people. But the Government simply are not listening. When so many people have come together, the Minister should take the time, as others in the Cabinet have done, to pause and reflect. We have seen in the movements to oppose some of the measures a unity and solidarity that has never been seen before. Is it not time to pause?

[Cathy Jamieson]

Does my hon. Friend agree that the organisations she has listed would have a great deal to contribute if there was a proper official review, instead of the behind-the-scenes unofficial review, or whatever it was that the Minister described?

[Fiona O'Donnell]

I agree and I thank my hon. Friend for her contribution. I listened with interest to the speech the hon. Member for Cardiff Central (Jenny Willott) made about her amendment. [Interruption.] She is thanking me now, but she may not thank me when I have made my comments, although I shall again try to be careful. It is extraordinary that a member of the Government should support legislation and an amendment, yet time and again blatantly admit that she did not know what the Government were proposing. The hon. Lady kept pointing us in the direction of the Minister, saying that she would answer our questions. She was not in the Chamber for the whole of the Minister’s speech, so I have to tell her that the Minister did not answer the questions.