Welfare Reform Bill

David Evennett Excerpts

Wednesday 9th March 2011 Commons Chamber

[Mr Duncan Smith]

Forgive me; I want to make progress before I take more interventions, but I certainly will not shy away from interventions.

I note the comments by my opposite number, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), that his party agrees with more than

“three quarters of the principled and burden-sharing”

changes that the Government are making. Obviously, in his interventions he will make clear what he does not agree with. I have read his amendment and there will be some questions about some of that; I am sure we will get to that in a minute.

I intend to take the House through the Bill stage by stage. Let me start with universal credit. I shall begin with an overview, and then consider some of its detailed aspects. The universal credit obviously sits at the heart of this welfare reform. I do not think I would want to embark on this process if that were not the case. I believe it is a commitment to the public that work will always and must always be made to pay, particularly critically for that group of people who are probably the most affected—the bottom two deciles of society—who have too often found it really difficult to establish that work does pay.

I am pleased to say that those principles seem to have received support from a number of stakeholders, including Citizens Advice and the Institute for Fiscal Studies. The IFS said that by and large the measure was a progressive change. We anticipate that the universal credit will make some 2.7 million households better off. Over 1 million households will be better off by more than £25 a week—clearly, those will be down in the bottom deciles—and 85% of that increase will go to households in the bottom 40% of the income distribution.

We have agreed a package of transitional protection which will ensure that there are no cash losers as a direct result of the migration to universal credit, where circumstances remain the same. The universal credit should also start making inroads into the couple penalty. Members on both sides of the House agree that that is necessary. I know that the right hon. Member for Birkenhead (Mr Field), who is in his place, has made great play of that over the years, and many of us have agreed with him.

[Mr David Evennett (Bexleyheath and Crayford) (Con)]

I am listening with great interest to my right hon. Friend’s speech. Can he give me some further detail on how the benefit cap will be introduced?

[Mr Duncan Smith]

I was coming to that, but I shall touch on it now; I may make some further comments later. The principle is that people who are unemployed and on benefits should not be receiving more than average earnings. It is a matter of fairness, so that those who are working hard and paying their taxes do not feel that someone else will benefit more by not playing a full part in society. We recognise that there must be transitional arrangements. We will work intensively with the families affected once the cap comes in. We will help them move into work, to change their circumstances so that they are not affected. We will make sure that families who need transitional support will receive it. We will make more detailed statements about that later.

The idea is that we should encourage people back into work, and most of all that people who are in work and paying their taxes should feel that it is fair that while they earn and they work hard, others realise that the best way to increase their income is through work, not through benefits. That is a great principle.

--- Later in debate ---

[Mr Byrne]

I will avoid getting into an extended debate about macro-economic policy, although I would happily discuss it all afternoon, but my hon. Friend is right. Under our approach, despite the fact that we faced the worst global crash since the 1930s, unemployment did not go beyond 3 million, as it did not once but twice under the Conservative Administration.

[Mr Evennett]

We are listening to the right hon. Gentleman with great interest, but is he not ashamed that although his party was in power for 13 years it failed to make work pay and that the UK now has one of the EU’s highest rates of children living in workless households? Is that not a disgrace?

[Mr Byrne]

I would do no more than encourage the hon. Gentleman to look at the analysis of his noble Friend Lord Freud, who examined our work to get people back to work and remarked on how fast the number of people on out-of-work benefits had fallen. He examined the number of children lifted out of poverty and said that our record was truly remarkable.

--- Later in debate ---

[Mr David Evennett (Bexleyheath and Crayford) (Con)]

I welcome the opportunity to contribute to this debate on a Bill that will radically reform our welfare system, and I congratulate my right hon. Friend the Secretary of State on proposing these much-needed and long overdue reforms to our benefits system. He is well known and respected for his work on social justice, and the Bill marks a genuine step forward. I also commend him on the thoughtful, moderate and constructive speech he gave this afternoon.

This measure is to be supported as it places individual responsibility at the heart of the benefits system. That approach will, in general, be welcomed across the country and certainly by the vast majority in my constituency.

The welfare system under the previous Labour Government became a welfare culture in which people claimed everything they could. People not only acted irresponsibly but were encouraged to do so; as a result, some people were better off claiming state handouts than their neighbours who were working. To have 5 million people living on out-of-work benefits and 2 million children growing up in households where no one works is a disgrace, and the Opposition ought to be ashamed of that record after 13 years in power.

There are many problems with the welfare system that the Government inherited. It is complex, bureaucratic and contains perverse incentives to keep claiming rather than work. We have heard the interventions—a 45% increase in housing benefit since 1999 is an incredible figure and such problems cost the taxpayer a fortune. The Labour party had 13 years to simplify the benefits system and to increase the incentive to work and it did nothing but make the problems worse. The Opposition amendment is merely a prescription for doing nothing.

Those who can work should work; that is the responsible thing to do and the best route out of poverty. Our aim should be to encourage people to take jobs, and I believe that most people want to work and to find a job. The Government’s role should be to help match people to the vacancies on offer, to ensure that they have the skills they need to take on jobs, and to provide individual support in the meantime to help people to get there. The Bill offers opportunities for change to enable people to do that.

It is right to place a 12-month limit on contributions-based employment and support allowance claims. That ensures that those who need support when they lose their job receive payment, and underlines the principle that they cannot claim for as long as they want. I hope that the introduction of a claimant contract will increase individual responsibility by ensuring that people turn up for their appointments and interviews. The inclusion of a personal pledge to take up reasonable offers of work, with financial penalties for those who do not keep their obligations, is also a necessary reform.

Placing a fixed limit on the maximum amount that any one household can claim in benefits, together with the new housing benefit cap, will mean that the financial barriers to employment will be removed, and that will be fairer for the taxpayer, who will no longer subsidise high rents for others. A regular complaint from my constituents is that, as workers and taxpayers, they pay for some people to have a better life than they do when they are in full-time work. I therefore welcome the introduction of the universal credit, which will mean that once the Government’s reforms have taken effect, people will be able to see for the first time that they are better off for each hour they spend working rather than being on benefits. The reforms will ensure that work pays.

Benefit fraud has also been a problem, costing the taxpayer about £1.5 billion every year. That is simply not acceptable. I hope that the measures in the Bill will send a clear signal that fraud and the abuse of the benefit system will not be tolerated.

Issues have been raised this afternoon that we will need to consider carefully, including the point about the disabled. I recognise—and I know that the Government recognise—the important role that cash benefits play in supporting the disabled in overcoming the daily problems that they face. Life is often more difficult and more expensive for those with a disability. I hope that the personal independence payment system that the Government plan to introduce will be fairer and simpler, allowing vulnerable people to lead active and independent lives. Changes must be made to ensure that those who do not need personal independence payments do not receive them. It is important that the assessment system is right and fair and takes into account genuine needs. Change over time should be noted to prevent abuse, as well as to help to ensure that those with growing and additional needs caused by disability get what they need and genuinely deserve. I am pleased that the payments will not be means-tested and will provide people with support when they are both in and out of work.

The disabled issue is emotive and I have received a considerable amount of correspondence from constituents about it. Some of the information that they have been given has unfortunately not been accurate, which is to be regretted.

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

On the subject of inaccurate information, a duty press officer from the Department for Work and Pensions told the BBC last night that the Government were not going to reduce the qualifying period from three to six months. Can we have clarity on that issue?

[Mr Evennett]

I understand the hon. Lady’s point and we have had some clarity from the Secretary of State already this afternoon. It is important that we urge those on the Front Bench to take into account the needs of the disabled, and I believe that they will do that in the policies that they seek to implement.

I strongly commend the work done in the Bill and the further consultation that will be undertaken by Ministers to ensure that all the needs of the disabled are considered when we bring in the new annual assessment. I welcome the fact that there will be an annual assessment for those who are disabled so that their real needs can be reassessed if necessary to ensure that they get what they need and what they deserve.

I am running out of time and, as other hon. Members have said, it is very difficult to cover all the aspects of such a complex Bill in such a short time, but I want to commend the work being done in further education by my hon. Friend the Minister for Further Education, Skills and Lifelong Learning to ensure that people get the necessary training to take up the jobs on offer.

I believe that the Bill will deliver real progress from a coalition Government who are determined to reform a system that is unwieldy, unfair and unacceptable. The Bill should be commended and supported this evening.