Oral Answers to Questions
David Gauke Excerpts(6 years, 11 months ago)
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James Morris (Halesowen and Rowley Regis) (Con)
The Secretary of State for Work and Pensions (Mr David Gauke)
Over 5,000 employers have signed up to Disability Confident since its launch in November 2016. The Disability Confident business leaders group, made up of prominent national businesses, is promoting the scheme to other employers. I am pleased to report that all the main ministerial Government Departments have now achieved Disability Confident leader status.
James Morris
Does the Secretary of State agree that Disability Confident will prove to be an effective way of breaking down barriers for disabled people to get into work, particularly by addressing the issues of stigma that a lot of disabled people still feel? In that regard, would he consider attending my Disability Confident event in Halesowen on 26 January?
Mr Gauke
I will certainly consider my hon. Friend’s kind invitation. I agree that a lot of Disability Confident events have been very productive in engaging employers at local level and encouraging them to see the benefits of employing disabled people. The Department for Work and Pensions continues to support local authorities and MPs in holding such events, so maybe I will have the opportunity to attend one in his constituency.
Melanie Onn (Great Grimsby) (Lab)
The truth is that this simply is not working. My constituent, Alan, has just graduated with a BSc honours degree in computing technology. He is blind and has a guide dog to assist him, but when he tells prospective employers about this in advance, they just do not take his applications. He has applied for 857 jobs but he has got absolutely nowhere. What is he going to do?
Mr Gauke
I am grateful to the hon. Lady for her question. We have undoubtedly made progress in the last few years. We have 600,000 more disabled people in work than was the case in 2010, but there is more to do, which is why the Government have an ambition to increase the number from 3.5 million to 4.5 million over the course of 10 years. It is also why we published our recent Command Paper on the subject. It is really important to bring about a culture change among employers so that people like Alan can have those opportunities.
Mr Philip Hollobone (Kettering) (Con)
How many of the FTSE 250 companies have signed up to this excellent campaign?
Mr Gauke
That is a very good question, and I will have to write to my hon. Friend with the answer. I can tell him that businesses small and large have participated in the scheme, including large organisations such as Microsoft, GlaxoSmithKline, Sainsbury’s and Channel 4, as well as many small businesses up and down the country.
Neil Gray (Airdrie and Shotts) (SNP)
May I take this opportunity on behalf of my colleagues on the Scottish National party Benches to offer our sincere condolences to Mr Deputy Speaker after the weekend’s tragic incident? Our hearts, thoughts and prayers go out to Lindsay and his family.
The Chancellor told the Treasury Select Committee earlier this month that
“far higher levels of participation by marginal groups and very high levels of engagement in the workforce, for example, by disabled people, may have had an impact on the overall productivity measurement”.
The Chancellor belittled the efforts and contribution of disabled people in the workforce. How disappointed was the Secretary of State by that unhelpful statement?
Mr Gauke
First, I should like to associate myself with the hon. Gentleman’s remarks about the Deputy Speaker, who has the thoughts of the whole House with him at this time.
In respect of the hon. Gentleman’s question, however, I disagree with him. The point that the Chancellor of the Exchequer was seeking to make is that we have made great progress in recent years on increasing the level of disabled people in work. That is a good thing to do, and he made it clear that he considered it to be a good thing. That is what the whole Government want to achieve.
Mark Pawsey (Rugby) (Con)
The small employment adviser at Rugby jobcentre has just signed up 15 new employers to become Disability Confident. Does the Secretary of State agree that the role of those officers in building links with small employers in local areas is crucial to ensuring that more disabled people get access to the workplace?
Mr Gauke
Yes, I do. My hon. Friend makes an excellent point. It is really important that that engagement happens up and down the country, and I am pleased that we are making progress. As I have said, we have over 5,000 Disability Confident employers, and I hope that we will continue to increase that number. My Department will certainly be doing everything it can to achieve that.
Marsha De Cordova (Battersea) (Lab)
In the recently published “Improving Lives: Helping Workless Families” paper, the Government said that they wanted to work in partnership with employers to help them to draw fully on the talents of disabled people. However, following the Chancellor’s recent comments scapegoating disabled people as being the reason for low productivity, does the Secretary of State agree that there is a need for a clear and coherent message from the Government that employing disabled people can enhance productivity and make a real contribution to organisations and businesses across the UK?
Mr Gauke
There is a clear and coherent message from this Government. We have seen significant increases in the number of disabled people in work, which is good for disabled people, but it is also good for the economy as a whole. That continues to be our message, and that is why we published our “Improving Lives” document. We will continue to work to improve the opportunities for disabled people in the labour market.
Martin Vickers (Cleethorpes) (Con)
Helen Hayes (Dulwich and West Norwood) (Lab)
The Secretary of State for Work and Pensions (Mr David Gauke)
There is no reason for people to go without support while they wait for their first UC payment. New benefit claimants starting on UC today will be able to access an advance. This is normally paid within five working days, but can be delivered in a day if needed. Changes announced in the Budget will allow claimants to receive larger advances and for advances to be recovered over a longer period.
Ms Lee
Given the waiting period for universal credit, people face a choice: they can have no money to buy food, so either use a food bank or starve, or they can get a loan, as the Secretary of State says. Does he agree that pushing people who are already on a low income because they are on a benefit into debt in this way is totally unacceptable?
Mr Gauke
I do not accept the hon. Lady’s categorisation at all. The complaint that has been made about universal credit is about the cash-flow point—that people have to wait a period of time before they get their first payment. To address the cash-flow point there is a system of advances in the universal credit system so that people have the flexibility to receive the money earlier. It is an advance, they get it paid earlier—they do not get it paid twice, I accept that, but they get it paid earlier—and it is a perfectly sensible way to address a cash-flow issue.
Helen Hayes
The Peabody Trust estimates that 60,000 households will have made a new universal credit claim in the six weeks before Christmas and will not receive their first payment before the holiday period. The need is already being felt in my constituency, where last week Norwood food bank provided food for an extraordinary 128 people in a single session. What is the Secretary of State’s advice to families who are trying to provide a happy Christmas for their children without the means to afford even basic necessities?
Mr Gauke
We should be clear: if people need cash before Christmas, they are able to get it under the universal credit system, which is designed so that they can do that. People trying to discourage claimants from taking an advance, which I am afraid is the tone that we hear too often from the Labour party, are causing unnecessary anxiety for claimants.
Margaret Greenwood (Wirral West) (Lab)
The chief executive of the Financial Conduct Authority has recently warned about high levels of debt among young people incurred just by their covering basic household bills such as rent. Young people aged 18 to 21 are not entitled to housing support under universal credit. Why did the Government ignore a Social Security Advisory Committee recommendation that young people on the edge of care should be exempted from that?
Mr Gauke
As the hon. Lady will be aware, there are a whole host of exemptions that do allow 18 to 21-year-olds to access housing benefit, if those exemptions apply to them. I have to come back to this point, which the Labour party does not seem to accept: the best way in which we can sustainably lift people out of poverty is to have a welfare system that encourages them to work and to progress in work. That is what universal credit does and it is what the legacy system failed to do, which is why we are making these changes.
Ms Nusrat Ghani (Wealden) (Con)
Robert Jenrick (Newark) (Con)
The Secretary of State for Work and Pensions (Mr David Gauke)
The number of people in employment has increased by more than 3 million since 2010 to reach 32 million in the last quarter. The employment rate is close to the record high and has increased by almost five percentage points since 2010.
Robert Jenrick
Despite a small recent decline in total employment, unemployment has continued to fall. Does my right hon. Friend agree that this suggests that the Government’s policies and the work of our great jobcentres across the country are making all the difference in matching jobseekers with available jobs? As it is Christmas, would he thank Ian Spalding—the manager of the Newark jobcentre—and his fantastic staff for ensuring that unemployment in Newark is now at 1%?
Mr Gauke
I will very happily join my hon. Friend in thanking Ian Spalding and, indeed, Jobcentre Plus staff up and down the country, who do a fantastic job in helping to reduce unemployment. I think that the claimant count in Newark has fallen by 42% since 2010. In the meetings that I have had with jobcentre staff across the country, I have seen that they are enthusiastically implementing universal credit because they can see that it will help them to make further progress.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Is the Secretary of State not aware that hundreds of thousands of people in this country are yearning for a good and well-paid job? Many are young people who cannot get an apprenticeship. Apprenticeship starts are down by 62% this year and further education colleges are in trouble. When is he going to do something about training young people and really giving them the chance of a good job on good pay?
Mr Gauke
The hon. Gentleman will be aware that the recent apprenticeship numbers were affected by a spike at the end of the previous period, but the reality is that we have substantially increased the number of apprenticeships in recent years. We have introduced the apprenticeship levy, which puts apprenticeships on a sustainable financial footing. It is this Government, with our industrial strategy, who are ensuring that we create the highly skilled jobs that the country needs.
Jeff Smith (Manchester, Withington) (Lab)
Laura Smith (Crewe and Nantwich) (Lab)
The Secretary of State for Work and Pensions (Mr David Gauke)
Since 2015, the level of social security spending for families on in-work benefits has reduced from £28.9 billion to £26.7 billion in real terms. This has happened during a period when we have introduced the national living wage, employment has reached record levels, free childcare has doubled, the personal allowance has increased and income inequality has continued to fall.
Laura Smith
With 8 million people living in poverty in working households and 28% of my constituents earning below the voluntary living wage, what action is the Secretary of State taking to address labour market inequalities with low-paid, low-skilled and insecure work?
Mr Gauke
Let me give the hon. Lady two examples. First, there is the industrial strategy. Secondly, if we want to address in-work poverty, one way in which we can do that is to ensure that people are able to work extra hours. We need a benefits system that does not trap them in working 16 hours a week, because if they can work extra hours, they can increase their income.
Tom Pursglove (Corby) (Con)
Looking back over these trends, has the Secretary of State drawn the conclusion that every Labour Government leaves office with higher unemployment than when they took office? What impact does he believe that that has on working families?
Daniel Zeichner (Cambridge) (Lab)
The Secretary of State for Work and Pensions (Mr David Gauke)
Since automatic enrolment was introduced in 2012, 9 million people have been enrolled in a workplace pension by over 900,000 employers. Today, I can announce the Government’s ambition to extend automatic enrolment to support more people to achieve greater financial security in later life. The Government’s 2017 review of automatic enrolment, published today, sets out the next steps we intend to take as we continue to develop a culture of routine pension saving. We will help young people to save by lowering the age for automatic enrolment from 22 to 18. We will also enable people to start saving from the first £1 of their earnings to provide a better retirement income for lower earners and for those in multiple jobs. I have today tabled a written statement setting out further detail, including trialling a number of targeted approaches to identify the most effective ways to increase pension saving among the self-employed.
Daniel Zeichner
The universities superannuation scheme is a strong pension scheme that recently closed its defined-benefits section, moving to a defined-contribution scheme and, in effect, transferring all risk to the employee. Many argue that over-cautious accounting rules drive these changes, creating a poorer scheme that leaves many people less well off in future and puts pressure on our universities. What is the Secretary of State doing to protect the future of our higher education sector?
Mr Gauke
Any changes that might be made to this scheme are a matter for the scheme’s joint negotiation committee, not for the Government. The independent Pensions Regulator remains in ongoing discussion with the USS’s stakeholders. Nothing has been brought to the DWP’s attention that we consider to be of concern. It would be improper for the Government to tell the joint negotiation committee how to run the scheme.
Luke Graham (Ochil and South Perthshire) (Con)
Neil Gray (Airdrie and Shotts) (SNP)
Reports suggest that the Foreign Secretary, the Environment Secretary and others used this morning’s Cabinet meeting to start the campaign to scrap the working time directive after Brexit. That directive protects us when it comes to hours worked and paid holidays, as well as giving extra protection to night shift workers. Can the Secretary of State confirm what representations he has made at Cabinet to ensure that his Brexiteer colleagues are not successful at ripping up our workers’ rights?
Stephen McPartland (Stevenage) (Con)
Mr Gauke
I can certainly assure my hon. Friend that we will continue to listen to constructive critics and those who want to make sure that universal credit works. In doing so, I thank him for his positive and constructive engagement. It is very clear that Conservative Members are united in ensuring that we deliver universal credit successfully.
Laura Smith (Crewe and Nantwich) (Lab)
Carolyn Harris (Swansea East) (Lab)
With the uncertainty of universal credit payments following the roll-out in Swansea last week, my local paper, the South Wales Evening Post, has co-ordinated the collection of food and warm clothes to help those in need. Will the Secretary of State join me in congratulating the South Wales Evening Post on doing what the Government are failing to do, and making sure everyone has a good Christmas?
Mr Gauke
What I would say to anyone—Members of Parliament, newspapers, advisory bodies and food banks—is that we need to make sure that the facts are set out to new claimants: if they need to get access to support, they can get it quickly; they need to get in contact with their jobcentre; and they are able to access an advance, and they can get that money before Christmas.
Julian Knight (Solihull) (Con)
Does the Minister agree that auto-enrolment has been a success to date and it is right to lower it to the age of 18, but that politicians—of all hues—and the pensions industry must work together to meet the savings and pension challenges facing this country?
Steve Double (St Austell and Newquay) (Con)
Every year, billions of pounds of taxpayers’ money is lost due to fraud or errors in benefit claims. Will the Secretary of State say whether the introduction of universal credit will improve this situation?
Mr Gauke
My hon. Friend makes a very good point. One of the areas of good news about universal credit is the fact that it will enable us to reduce fraud by over £1 billion. That in itself is an important step, and there are of course many other very positive reasons why universal credit is a good thing.
Imran Hussain (Bradford East) (Lab)
Automatic Enrolment
David Gauke Excerpts(6 years, 11 months ago)
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The Secretary of State for Work and Pensions (Mr David Gauke)
The Government have published their “Automatic Enrolment Review 2017: Maintaining the Momentum” as a Command Paper (CM 9546). A copy of the accompanying analytical report, which underpins this review, has been placed in the House Library.
Since 2012, over 9 million people have been automatically enrolled into a workplace pension and over 900,000 employers have met their duties. The workplace pension participation rate for eligible men and women in the private sector is now equal. By 2019/20 we estimate an extra £20 billion a year will go into in workplace pension savings as a result of automatic enrolment. This is helping people achieve greater financial security in later life, and encouraging a culture of saving.
The review sets out our ambition to build on the success of automatic enrolment to date, with a comprehensive and balanced package of proposals to continue to normalise pension saving, namely:
confirming that automatic enrolment should continue to be available to all eligible workers regardless of who their employer is;
making saving the norm for young people, by lowering the age for automatic enrolment from 22 to 18, to bring an extra 900,000 people into workplace pensions;
supporting all those who are automatically enrolled, particularly those with low earnings and multiple jobs, to save more for retirement by removing the lower earnings limit so that their contributions are calculated from the first pound of earnings.
Recognising the diversity of the 4.8 million classified as self-employed, for whom a single saving intervention might not be effective, we will work to implement our manifesto commitment by testing targeted interventions aimed at the self-employed, which are set out in the review report, to identify the most effective options to increase pension saving among self-employed people.
We will also work to ensure that the rules around automatic enrolment for those working in atypical ways or in non-standard forms of employment are clear, and that enforcement of the automatic enrolment duties for employers remains robust. The Government’s forthcoming response to Matthew Taylor’s review of modern working practices, which is due to be published shortly, is relevant to this work. My Department will continue to work closely with the Department for Business, Energy and Industrial Strategy, HMT and HMRC to ensure suitable alignment and clarity is achieved across our policies.
The review also calls upon the pensions industry, employers, and the wider advisory and intermediary community to work with Government on better, simpler, engagement. Our aim is to help savers understand the benefits of workplace pension saving, so that they are better able to plan for security in retirement.
It is the Government’s ambition to implement changes to the automatic enrolment framework in the mid-2020s, subject to discussions with stakeholders around their detailed design in 2018/19, finding ways to make the changes affordable, and followed by formal consultation with a view to introducing legislation in due course. The discussions with stakeholders will allow us to build consensus on the shape and design of the package, helping develop our detailed plans and implementation timetable, which can then form part of the formal consultation.
The Government are grateful to the review’s external advisory group, chaired by and made up of experts from within the pensions industry, and those representing member interests and employers. This group has provided invaluable insights and constructive challenge in shaping the review.
The 2017 review also outlines findings from the statutory review of the alternative quality requirements for defined benefit schemes (under section 23A of the Pensions Act 2008), and the alternative quality requirements (under section 28 of the Pensions Act 2008).
Annual thresholds review
Running concurrently with this review of automatic enrolment, the statutory annual review of the automatic enrolment earnings thresholds has been completed for the 2018/19 tax year.
The Government will lay an Order before Parliament in the new year which will include the following thresholds for 2018/19: £6,032 for the lower earnings limit of the qualifying earnings band and £46,350 for the upper limit of the qualifying earnings band.
The automatic enrolment earnings trigger will remain frozen at £10,000.
This will ensure that a period of stability and consistency is maintained ahead of the increases in contributions from April 2018, while also ensuring that those, for whom it makes economic sense to save, continue to be brought into workplace pensions and have the opportunity to build up meaningful savings.
A copy of the automatic enrolment earnings trigger and qualifying earnings band for 2018/19: supporting analysis has been placed in the House Library. These papers will be available today on www.gov.uk website.
“Automatic Enrolment Review 2017: Maintaining the Momentum” sets out a clear direction of travel to build on the successes of the policy to date, and move forward the Government’s ambition for a more robust and inclusive savings culture; specifically supporting younger generations, lower earners, and women with the opportunity to build up pension assets for a more secure retirement.
[HCWS366]
Employment and Support Allowance
David Gauke Excerpts(6 years, 11 months ago)
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The Secretary of State for Work and Pensions (Mr David Gauke)
In 2013, the Department was made aware of individual cases which were transferred in error to contributory ESA, rather than to income-related ESA, and therefore which may have had an unidentified entitlement to additional premiums, such as the enhanced disability premium. These premiums are only payable to those on income-related benefits. From 2014 additional guidance was put in place to ensure all claims transitioning from that point forward were more fully assessed for both contributory and income-related benefits, and therefore the relevant premiums paid.
At the time officials did not identify the need to explore the potential impact of the earlier error. This was reconsidered in the light of analysis following the preliminary fraud and error statistics published in May 2016. In February 2017, Ministers were first informed of the results of this analysis and a sampling exercise began in preparation for a full repayment process. The Department has already started contacting individuals to establish if there has been an underpayment of premiums. A small number of claims have already been corrected and the appropriate arrears have been paid.
As a result of the sampling exercise, the Department estimates that around 75,000 claimants may have been underpaid. This amounts to about 5% of those people who transferred over from incapacity benefits, or around 3% of the current ESA caseload.
We realise how important it is to get this matter fixed. The Department has established a special team to begin contacting all individuals whom we believe may be affected. There is therefore no need for individuals to independently contact the Department on this matter. Once an individual is contacted and subject to establishing the relevant information, we expect to make a decision on each case and repay the appropriate arrears within 12 weeks. The Department expect to complete the review and correct cases during the course of 2018/19.
This relates to a specific group that transferred to contributory ESA between 2011 and 2014, for which applicable underpayments will now be corrected and paid. Arrears are payable to those who qualify from 21 October 2014 following an upper tier tribunal ruling in the case of LH v. SSWP on that date. Under section 27 of the Social Security Act 1998, when a tribunal establishes the meaning of a legislative provision, payments of arrears which pre-date the tribunal ruling are barred.
The Department is reviewing its processes to ensure any lessons are learnt and that this error is avoided in the future.
[HCWS356]
Universal Credit Project Assessment Reviews
David Gauke Excerpts(6 years, 11 months ago)
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The Secretary of State for Work and Pensions (Mr David Gauke)
Let me deal first with the motion. The challenge for any Government—and, one would think, for any aspiring Government—is to strike the right balance between transparency, and encouraging candid evaluation and debate. There is a reason why project assessment reports commissioned by the Infrastructure and Projects Authority, and formerly the Major Projects Authority, have not been released by Governments. The Public Accounts Committee has already recognised that there is a need to protect information that is commercially sensitive, and for there to be a safe space for candid evaluation and debate. The assessments we are discussing represent an important period of reflection and, by their very nature, are useful only if everyone involved is able to offer their views freely and frankly to evaluate fairly the project on which they are working. Ultimately, this is about protecting the interests of the taxpayer.
Successive Governments have continued to improve project delivery. The PAC supported the creation of the Major Projects Authority, and its objectives of strengthening project assurance and improving the transparency of information on the costs, risks and performance of major Government projects. The PAC recognised the challenges that the Government face in improving project delivery within government. Supporting all that is the rigorous scrutiny of individual projects by the National Audit Office, with full access to all papers.
Parliament has consistently directed the Government to manage projects professionally, more efficiently and effectively, and with due consideration for commercial imperatives. Consequently, I hope there is a consensus that the disclosure of information beyond the existing well-established and robust transparency policy that the PAC supports must not undermine the integrity and validity of the review process, risk weakening our commercial negotiating position, or expose us to possible legal challenge.
Stephen Timms
The Secretary of State refers to the National Audit Office, which he will know at one stage characterised the universal credit project as having a “good news” culture in which staff were not allowed to acknowledge and draw attention to problems. Does he agree that that should not have prevailed? Will he reassure the House that that culture has been dealt with?
Mr Gauke
I very much agree about the importance of a culture in which problems can be identified and passed up the command chain, with that system understood across the board. Clearly, when that does not happen, something needs to be addressed. When I entered this House in 2005—the right hon. Gentleman was a Minister at the time—we were wrestling with the problems of the tax credit fiasco, which was causing misery for vast numbers of people. If Members want an example of a project that failed because there was not a willingness to identify problems early, that is it.
The Infrastructure and Projects Authority’s policy that review reports remain confidential is founded on the position that an effective and trusted system of assurance in government is in the public interest, and that the premature disclosure of review reports undermines that public interest. Those considerations must be balanced with the desire for transparency and parliamentary scrutiny. In exceptional cases, sharing information with a Select Committee, in confidence, can be appropriate.
The motion refers to a number of reports, many of which date back some years, as my hon. Friend the Member for South Cambridgeshire (Heidi Allen) pointed out. To disclose those papers without subsequent reports showing how well universal credit has progressed would give a partial picture. In line with the motion, I will provide, by the time the House rises for the Christmas recess, the reports directly to the Work and Pensions Committee. Let me point out to the shadow Secretary of State that her motion does not require us to publish these reports or to lay them before the House. Specifically, it says that those reports should be provided to the Committee. In those circumstances, it is acceptable for us to do so. As is customary, I will need to consider redacting any appropriate material, such as the names of junior officials and information that is commercially sensitive. I wish to emphasise that it is the Government’s view that this is an exceptional request that will be agreed to on an exceptional basis, and does not set any precedent for future action. Against that background, I shall provide the reports to the Select Committee on a confidential basis. In those circumstances, I hope and expect that the documents will not be disclosed further.
Frank Field (Birkenhead) (Lab)
The Secretary of State has hit on a very important distinction between the motion that we are debating today and the one about Brexit documents. That motion said that the documents should be made available to the Brexit Committee and then laid before the House. Today’s motion does not say that; it says that the reports should be given to the Work and Pension Committee. We are not a Committee of Privy Counsellors. We have never been in a position like this before so, if I catch your eye, Madam Deputy Speaker, I would like to develop this theme, because we are in totally new constitutional waters. The motion, which has now been accepted—we can all go home in a minute, or bring on the next business—is different, and puts us in a different constitutional position than the one that was outlined for the Brexit Committee.
Mr Gauke
The right hon. Gentleman is absolutely right. I can only assume that those who tabled the motion worded it carefully. They chose its wording on the basis that it was about providing information to the Work and Pensions Committee. As I have said, I do believe that, in these circumstances and for the reasons that I have set out, the Select Committee will treat this matter confidentially, but he is absolutely right to draw attention to that distinction.
Mims Davies (Eastleigh) (Con)
I thank the Secretary of State for pointing out the collective amnesia of some about the fiasco of tax credits, although I am absolutely sure that many Conservative Members have not forgotten it. I was told by my Jobcentre Plus staff, who have been training Basingstoke Jobcentre Plus staff, that this extremely agile system allows them to feed in impacts and changes, and to listen and to learn. The Government are doing this because it is right for everybody.
Mr Gauke
My hon. Friend hits the nail on the head. That is exactly how we are rolling out universal credit, which is why we are able to make changes and why the process is being done gradually. As my hon. Friend the Member for South Cambridgeshire pointed out, these reports go back some years, since when there have been a number of changes. At one level, I would love to be able to publish the most recent IPA report because it makes it very clear that we were right to expand the roll-out of universal credit in the autumn. I am not publishing it, however, so in effect, I am tying one hand behind my back, because I respect the principle that these reports as a whole should not be published. None the less, in accordance with the motion, I am prepared to provide the reports to the Select Committee.
Stewart Hosie (Dundee East) (SNP)
The Secretary of State is very generous in giving way. He says that he is unhappy that he cannot publish the most up-to-date report, because it would give the Government—I am paraphrasing here—a glowing report card. I wonder what was assessed. Is he not aware that housing providers, housing associations and others say that every single one of their tenants who has moved on to universal credit is now in arrears or has increased rent arrears? Is he not aware of what is actually happening on the ground? I would like him to publish that report, because it would contradict everything that all of us on the Opposition Benches are seeing in our communities.
Mr Gauke
Let me turn to the substance of universal credit then. Universal credit is the biggest modernisation of the welfare state in a generation. The old system traps people in a cycle of benefits dependency, incentivising working only 16 hours or fewer a week and preventing people from reaching their potential. Universal credit frees people from those hours limits and lets them keep more of what they earn. Under universal credit, people are moving into work faster and staying in work longer than under the previous system. Once universal credit is fully rolled out, it will boost employment by around 250,000, which is equivalent to 400 extra jobs per constituency. It is improving the welfare system and the lives of those who use it.
Ms Nusrat Ghani (Wealden) (Con)
My right hon. Friend was talking about transparency. One thing that we do know for certain is that, in each constituency, 400 people are able to go back to work when they are on universal credit. The new system helps people back into work. There is nothing more demoralising for people than to be told to lower their gaze, stay in line, stay on welfare, and not even to try to go for a job, because the risk is too great that if they try to secure a job, they might lose their benefit. If people lose their job, the palaver of getting their benefits back can be incredibly demoralising and time-consuming.
Mr Gauke
My hon. Friend is absolutely right. One problem with the legacy system is that it does not cope with those people whose hours might fluctuate below and above 16 hours. The difficulties of moving from one regime to another can discourage people from taking extra hours. That is why it is so disappointing that we do not have cross-party support for these reforms. The Labour party has consistently called on us to pause and fix universal credit. It has done it again today, but in doing so, it has, on more than one occasion, resorted to scaremongering. It is increasingly clear that when it says pause and fix, it means scrap and rewind to the failed system of the past.
Ruth George
If the Minister is so convinced of all the facts about universal credit that he claims, why does he not release the post-implementation review that the Department was apparently putting together and give us the full details of how universal credit is working, instead of relying on a study of a tiny sample of single people without jobs that was conducted more than two years ago, before the cuts, in order to make these wild claims?
Mr Gauke
What we have released is analytically robust. It enables us to compare with a matched sample, which becomes harder to do as there are fewer single people on jobseeker’s allowance. The reality is that the evidence points to universal credit getting people back into work quicker and ensuring that people are more likely to progress in work.
Ian Mearns (Gateshead) (Lab)
We have had a number of debates about the roll-out of universal credit throughout the autumn. Government Ministers, including the Secretary of State, said from the outset and subsequently that the system was working fine and going very well indeed, but they recently made a number of concessions. If everything was working so well, why did they make any concessions at all?
Alex Chalk (Cheltenham) (Con)
Is it not also critical that we send out clear and accurate messages? Can we put to rest the myth that if a claim is made today, it will not be possible to get benefits before Christmas? Is it not the case that advance payments mean that people can get the payments they need on time? This is a humane system.
Mr Gauke
My hon. Friend is exactly right. He highlights just one of the examples of what we have heard from the shadow Secretary of State for Work and Pensions. She said in The Times on 28 November that new claimants would not receive any money before Christmas, and that anyone claiming universal credit in 2018 would
“wait five weeks for any support”.
That is simply not accurate.
Under universal credit, any claimants can access support within days. Advances are currently available at 50%. They will be available at 100% in the new year, effectively providing a full payment within five days if that is what the claimant wants. Let us draw a contrast. If people were going on to jobseeker’s allowance, they might enrol several weeks before Christmas but receive no money until after Christmas.
Neil Gray (Airdrie and Shotts) (SNP)
The Secretary of State has announced the partial publication of these reports. Of course, the fact remains that there is a live case from the Information Commissioner’s Office. Will he confirm whether he will release these reports to John Slater, who has campaigned for them for two years?
Mr Gauke
We will continue with due process on that. I have said today that I will comply with the motion, which requires us not to publish the reports, but to provide them to the Work and Pensions Committee.
Let me give another example of scaremongering. On Friday, The Daily Mirror ran a piece about a woman who had been scared by all the media and political attacks on universal credit. She was so worried about her universal credit payments being stopped that she felt that she would have to cancel Christmas. Thankfully, we looked at her case. It turned out that the family’s universal credit payment for December would be £20 lower than that for November, but that the family’s total income and earnings alongside universal credit would be higher this month than last month. The conclusion is clear: the Opposition’s irresponsible scaremongering is causing unnecessary anxiety for people who are getting support from the system as they should. Let me give another example.
Mr Gauke
I will come to that one.
The shadow Secretary of State has promoted the BBC “Money Box” piece that suggested that 100,000 people would lose their benefits over Christmas. The BBC subsequently apologised for the story and admitted that it was misleading. Will the hon. Lady do the same? I am happy to give way to her if she wants me to. She also suggested in The Times that only 600,000 people would receive the housing benefit transitional payment. I was clear in the House on 23 November that all of the 2.3 million people currently on housing benefit would be eligible. Will the hon. Lady therefore retract her assertion?
Let us not forget—my hon. Friend the Member for Cheltenham (Alex Chalk) has clearly not forgotten—that the Leader of the Opposition suggested that Gloucester City Homes had
“evicted one in eight of…its tenants”—[Official Report, 11 October 2017; Vol. 629, c. 324.]
One in eight is 650 people. In fact, eight people on universal credit had been evicted by Gloucester City Homes, and all had significant debt arrears before universal credit was introduced. One had moved out of their property 18 months earlier and another had moved abroad. I hope that the shadow Secretary of State will take the opportunity to correct the record and apologise on behalf of the Leader of the Opposition.
Jo Churchill (Bury St Edmunds) (Con)
We have had a number of conversations about the roll-out of universal credit, which in fact started in my constituency six or seven weeks ago when we first debated the issue. Some 148 claimants have gone through the system in my constituency. I speak to them regularly, and I also speak to everybody involved in dealing with vulnerable people around my constituency. So far, universal credit has been successful, and people very much welcome what was done in the Budget to ensure that as we change the system, it will be flexible, and something that looks after people positively and helps them to move back into work. I thank the Secretary of State for what he has done.
Mr Gauke
I am grateful to my hon. Friend for highlighting the experience in her constituency. Members of Parliament have a role in ensuring that people are aware of the advances system and the support that is available. That is the responsible role for us to play, instead of trying to scare people with concerns that do not necessarily materialise.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Since 2013—as leader of the Highland Council and then as an MP—I have been reporting the difficulties of rent arrears. Rent arrears with the Highland Council are now approaching £2 million, and a number of people have been put directly into rent arrears due to universal credit. We have invited the Secretary of State to come to Inverness to hear about this directly. In the light of what he said, will he now come to the highlands and hear about the experiences of rent arrears since 2013?
Mr Gauke
Let me assure the House that I visit many parts of the country to see how universal credit is operating. The response I get back, which is consistent with the comments of my hon. Friend the Member for Bury St Edmunds (Jo Churchill), is that it is working on the ground, providing more support to people, and giving jobcentres better tools with which to help people into work.
Several hon. Members rose—
Mr Gauke
Let me make a little bit of progress.
In the autumn Budget, the Chancellor announced a comprehensive package of improvements to put more money into claimants’ hands earlier and to ensure that there is extra support for those who need it most. This month, new guidance will be issued to staff to ensure that claimants in the private rented sector who currently have their housing benefit paid directly to landlords will be offered that option when they join universal credit. In January, we are making changes to advances by extending the recovery period from six months to 12 months, and increasing the amount of support a claimant can receive to up to 100% interest-free. In addition, from spring next year, we will be making it possible to apply for an advance online. From February, we are removing the seven-day waiting period. From April, we are providing an additional two weeks of payment to new claimants already receiving housing benefit as they transition on to universal credit, which, for the avoidance of doubt, will benefit 2.3 million people.
Jamie Stone
I know that I am beginning to sound like a stuck record, but the Secretary of State talks about doing things online. I am a new Member—I am not a Privy Counsellor; I do not go to these smart Committees—but I still have the problem that there are people in my vast and remote constituency who cannot go online. This is a big problem. What discussions has the Secretary of State had with the Scottish Government about trying to get broadband rolled out exactly where we need it?
Mr Gauke
The hon. Gentleman raises an important point about broadband roll-out, which obviously, as he knows, is not my responsibility. I understand that there are significant concerns about how that is progressing. It is the case that jobcentres provide the ability for people to complete forms, and they can also provide information about the availability of wi-fi.
Rachel Maclean (Redditch) (Con)
My right hon. Friend touched on the measures announced in the Budget. Does he agree that this £1.5 billion has been found to prioritise help where it is most needed in our society? Given the pressures on the public finances, that demonstrates that this Government really care about getting this right for the people who really need it.
Mr Gauke
My hon. Friend puts it very well. We are determined to deliver this policy successfully and to ensure that it helps more people to have better opportunities. That is what universal credit is about. That is why we have allocated £8 million over four years to conduct a number of tests and trials to support the development of evidence about what works to help people progress in work—this is about not just getting into work, but progressing in work.
This comprehensive package responds to concerns raised inside and outside the House. Our clear objective is to ensure that as many people as possible get the opportunity to work and to maximise their potential to better their circumstances. This is Labour Members’ last Opposition day of the year, and what have they achieved?
Alex Cunningham (Stockton North) (Lab)
We got what we asked for—the report published.
Mr Gauke
We are not publishing reports, but we have been able to highlight the inaccurate scaremongering by the Labour party. We have underlined the benefits of the policies announced in the Budget. We have underlined the wholehearted support for universal credit among Conservative Members, and we have further confirmed Labour’s position as a roadblock to welfare reform—seeking not to pause and fix, but to scrap and rewind.
As the evidence builds that universal credit is positively transforming lives, it will become clearer and clearer that Labour Front Benchers are on the wrong side of the argument. So I say this to whomever had the idea for the debate: thank you, because I welcome the chance to argue the case for universal credit—a reform that puts work at the heart of our welfare system; a reform that increases opportunity; and a reform that will positively transform the lives of millions of our fellow citizens.
Mr Speaker
Well, certainly this Christmas. I certainly was not thinking of 2018. There is probably a default presumption that it means this Christmas—[Interruption] —but it is always better to be explicit. I grant that to the right hon. Member for Birkenhead (Frank Field), who is chuntering from a sedentary position in evident dissatisfaction at the inadequate clarification thus far provided, but help may be at hand, because the Secretary of State is perched like a panther—[Laughter]—if you can perch like a panther. He is poised like a panther, ready to pounce.
Mr Gauke
You have done my job for me, Mr Speaker. It is correct that, as I said in my opening remarks, we will provide this information before the House rises for Christmas 2017. On the question raised by the right hon. Member for Birkenhead (Frank Field), we will of course want to go through the documentation to take out, for example, the names of junior officials and any commercially sensitive information. As I say, we will provide that information before the House rises this Christmas.
Mr Speaker
I am inclined to leave it there for now. If the right hon. Member for Birkenhead has further points that he wishes to raise, he can, but I am not sure it will greatly profit him to do so now.
Work, Health and Disability
David Gauke Excerpts(6 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Mr David Gauke)
With permission, Madam Deputy Speaker, I would like to make a statement on the Command Paper being published today by my Department and the Department of Health.
Good work promotes good health. It enables people to be economically independent, and gives them more choices and opportunities to fulfil other ambitions in life. A country that works for everyone needs to ensure that all who can work or undertake meaningful activity have the chance to do so, and that the right care and support is in place to enable all to thrive in work throughout their lives. Our labour market is in its strongest position for years, with the United Kingdom’s employment rate at a near historic high of 75% and around 600,000 more disabled people in work than four years ago. Despite this, only around half of disabled people are in work, but many disabled people and people with health conditions can and want to work. That means that too many people are missing the opportunity to develop their talents and connect with the world of work, and the range of positive impacts that come from doing so, including good health and social outcomes. That is why it is important that we act now.
With around one in six working-age adults reporting a disability, it is clear that health and disability issues affect the working lives of millions of people. The majority of long-term health conditions are acquired in adulthood, and inclusive workplaces are imperative in an ageing population. That is why in our manifesto, the Government pledged to see 1 million more disabled people in work over the next 10 years. That is as much about preventing people from falling out of work as it is about supporting them into work, and it requires a comprehensive and wide-ranging programme of action.
Last year, we published “Improving Lives: The Work, Health and Disability Green Paper”, which set out the Government’s new and ambitious approach to the issue and marked the start of a new era in joint working between the welfare and health systems. Our 15-week consultation on the next 10 years of reform sought input from disabled people and those with health conditions, their families, employers and a range of stakeholders. The consultation was supported by 166 accessible events, and received around 6,000 responses. Today, we are publishing “Improving Lives: the Future of Work, Health and Disability”, setting out our responses to the Green Paper consultation, as well as the next steps we will take to deliver our vision.
Changes in the nature of work, and more flexible working models, benefit a wider range of people, and new advances in technology offer more opportunities than ever before. For example, accessible hardware and software, and developments in apps and wearable technology, make it easier for employers to offer flexibility and adaptations to their staff. Small businesses and large employers alike are already implementing these solutions for their employees, and it is for Government to help set the direction and stimulate good ideas.
We know that the barriers to moving into work and staying in work are different for each person, depending on the nature of their health condition or disability, their aspirations and their individual circumstances. We need to work directly with people who experience these barriers to identify solutions that will work. We want to build an approach that is responsive and caters for every scenario, with the individual at its heart.
The change needed is not one that the Government can deliver on their own. Across the country, there are striking examples of what can be achieved when employers, charities and healthcare professionals work together locally, but Government can help create the conditions for success.
In the workplace, employers should have the confidence to recruit and retain disabled people and those with health conditions, and to create healthy and inclusive workplaces where all employees can thrive and progress. The best employers have already realised the business benefits of hiring disabled people, and while there are many examples of good practice, we want to go further.
This Command Paper responds to what we heard in the consultation and to the findings of “Thriving at work: The Stevenson/Farmer review of mental health and employers”. We will improve advice and support for employers of all sizes, working in partnership with them, together with disabled people and other stake- holders, to bring together information and advice that meet businesses’ needs. We will also make significant enhancements to the Access to Work scheme, including by increasing the capacity of its mental health support service.
To support a key recommendation of the Stevenson/Farmer review, we will establish a voluntary framework approach for large employers to report on mental health and disability within their workforce. We are also preparing a consultation on changes to statutory sick pay, and we will run a cross-Government programme of analysis and research to examine the incentives and expectations that influence employers’ decisions in this area. We will report back on the preliminary work next year.
We will build on the key role that the welfare system plays in supporting disabled people and those with health conditions to enter work where possible, by developing a more personalised and tailored approach to employment support. We will continue to learn, for example, through voluntary trials to help us build an effective offer of support that meets the needs of those in the support group. We will also continue to improve the assessment process, while building our evidence base, including by working with external stakeholders to take forward reform of the work capability assessment.
Health and care professionals are vital to supporting disabled people and those with health conditions to achieve their employment potential. We will work with and support health professionals with the tools and techniques they need to have supportive conversations with patients about work and health. We are doubling the number of work and health champions and investing about £39 million to more than double the number of employment advisers in improving access to psychological therapies services. We will also conduct large-scale randomised controlled trials delivering employment support in a health setting in the west midlands and the Sheffield city region, beginning by March 2018.
Alongside this Command Paper, I am also announcing the next steps for the Fit for Work service. Established in December 2014, it offers general health and work advice to employees, employers and GPs through a phone line, a webchat service and a website. Since 2015 it has also provided occupational health assessments for employees at risk of long-term sickness absence, with advice on how they can be supported to return to work and remain in employment.
However, referrals of cases to the service by employers and GPs have been much lower than expected. For instance, there have been only 650 referrals a month in England and Wales, compared with the 34,000 forecast, and 100 a month in Scotland, compared with the estimated 4,200. By contrast, use of the advice line, webchats and Fit for Work website has exceeded expectations. I am therefore ending the contracts for the provision of the assessments service in England and Wales and in Scotland, while ensuring continued access to the Fit for Work online and phone services, which will continue to offer general health and work advice as well as support on sickness absence.
The Government are also announcing the appointment of an expert working group on occupational health to champion and drive a programme of work, taking an in-depth look at the sector.
To inform policy development, we have commissioned research to better understand current market supply and the delivery of occupational health provision. This research will look at local partnership models to integrate health and wider support, and it will report in 2019. We will also take account of the lessons from the Fit for Work service as we move forward.
The Government are laying the foundations for a 10-year programme of change. Everyone has their own part to play to achieve this ambitious vision of a society in which all disabled people and people with long-term health conditions are able to go as far as their talents will take them. I commend this statement to the House.
Mr Gauke
It is important that we all seek to remove barriers to work and to increase opportunities for disabled people to get into work. I think we should have a constructive debate on that shared objective, and I will take that contribution as a constructive contribution, even though it did not always sound quite like it.
May I pick up one or two points in what the hon. Member for Battersea (Marsha De Cordova) said? Let us be clear: what has actually happened over the past four years is that the number of disabled people in work has increased by 600,000. To go now from 3.5 million disabled people in work to 4.5 million people in work over the course of the decade is an ambitious objective; it will require a great deal of work. I hope there can be a constructive debate in delivering that. I welcome the Mayor of London’s remarks this morning, in the context of the Work and Health programme in London, in which he recognised what we have done and said it was time to put party politics aside on this matter. I hope that we can maintain that spirit across the board.
Let us remember what we are already delivering. The hon. Lady refers to Access to Work. Well, the budget of Access to Work—the expenditure of Access to Work—increased by 8% last year. We have in place the personal support package, helping people, where we are spending £330 million over the next four years. Let me be clear as to how we approach this. We recognise that there will be some disabled people and people with health conditions who will not be able to work, and we need to continue to support them—it is worth noting that we spend record amounts on benefits for disabled people. However, there are also very many people who want to work, and we are determined to do everything we can to support them, whether that is by using our capabilities in the welfare system and the health system or working with employers, because we want to put work at the centre of this.
Work matters. It should be at the heart of what we do in delivering a welfare system. That is exactly what this Government do across the board. I can draw a parallel with our debates last week about universal credit, which helps people into work. That is the approach that we are delivering, and I hope at some point we can have the support of the Labour party in achieving that objective.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
May I first welcome this 10-year plan? I am delighted that the Secretary of State and the Department continue to focus on this area. He knows that I have campaigned for many years to improve the life chances of people with autism, but sadly still only 16% of adults with autism are in full-time employment, and only 32% in full-time or part-time employment, and that percentage has not really shifted much in a decade. I pay tribute to the Secretary of State for International Development, to whom I presented, on 21 February, when she was a Work and Pensions Minister, a cross-party petition, signed by 30,000 people, about the autism employment gap. Can he give me an assurance that he will continue to focus on the needs of people with autism and close that gap once and for all?
Mr Gauke
I thank my right hon. Friend for her question and pay tribute to the work that she does on autism, including the work that she has done for many years now as chair of the all-party autism group. Yesterday she published a very good report on the issue and we are studying its contents closely. She highlights this issue. That is the challenge: we have made progress across the board, but is there more to do? Absolutely; there is more to do. She highlights the employment gap for those with autism. That is something that we do have to address as a society.
Kirsty Blackman (Aberdeen North) (SNP)
I thank the Secretary of State for advance notice of the statement.
The SNP is extremely disappointed in the statement and the Command Paper that have been produced today. We believe that the UK Government, as a priority, need to reverse the cuts they have made to these benefits and need to scrap the freeze on benefits, because they are harming people.
Mencap has released a statement that says:
“We are alarmed that the needs of hundreds of thousands of people with mild or moderate learning disabilities have been overlooked.”
The Government seem to have abandoned their pledge to halve the disability employment gap, and the gap is even worse for those people who have learning disabilities.
The Disability Benefits Consortium has said:
“We are extremely disappointed that they have chosen to focus on the design of ESA, instead of the broken Work Capability Assessment.”
Sixty-eight per cent. of those challenging their work capability assessment results are successful in that challenge. The system is discredited and broken. We want to see the UK Government committing to scrapping the work capability assessment. We want to see them committed to putting in a new system that puts fairness, dignity and respect for disabled people at the absolute heart of the system.
Mr Gauke
First, in response to the hon. Lady’s comments on behalf of the SNP, I know that the Minister for Disabled People, Health and Work, my hon. Friend the Member for Truro and Falmouth (Sarah Newton), has spoken to Scottish Government Ministers today and got a much more constructive response. It is the launch of the innovation fund for the Dundee gateway today and we look forward to working closely with the Scottish Government in a constructive manner.
We have consulted on the work capability assessment. It is not clear that there is consensus at this point as to the way in which the work capability assessment should be reformed, but we acknowledge that there are improvements that should be made. We have indeed made improvements in how the work capability assessment works; for example, those with severe long-term disabilities will not be reassessed in the way that they were previously. So we continue to make improvements on that. If we can reach consensus on the way in which the work capability assessment should be reformed, I will be happy to proceed with that.
Alex Burghart (Brentwood and Ongar) (Con)
I strongly welcome the statement that the Secretary of State has made this afternoon. I also welcome the news that the disability employment rate has risen by nearly 5% since 2014. The Government are obviously a major employer of people. What are the Government doing to ensure that the civil service leads by example in this area?
Mr Gauke
My hon. Friend makes a good point. The Government are a large employer. I am pleased to say that all Government Departments are Disability Confident employers. One of the points that we make in the Command Paper is that, as an employer, it is important that the civil service leads by example in terms of how it operates and the support that is provided to disabled people.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I thank the right hon. Gentleman for his statement and welcome the passage in which it sounds as though he will introduce significant improvements to the Access to Work programme. Does that include abolishing or raising the cap on support for deaf people that was introduced in March 2015?
Mims Davies (Eastleigh) (Con)
My father was made disabled at work. When that happens to someone, it can really affect their life chances. I congratulate Microlink, a company in Chandler’s Ford that has been going for more than 23 years, which enables people with certain conditions and disabilities to get back into education or employment by helping them with the challenges that they face. Will the Secretary of State undertake to listen to such companies, which do so much to keep people in work and education and give them opportunities at every point in life?
Chris Stephens (Glasgow South West) (SNP)
The Secretary of State will be aware of evidence presented to the Select Committee about individuals’ frustration with the Minicom service and text relay operators. It is not acceptable for people to wait 45 or 50 minutes to access those services, or to be hung up on. Can he assure me that the Minicom service and text relay operators will be adequately staffed?
Kevin Foster (Torbay) (Con)
I welcome the statement. I am sure the Secretary of State agrees that, particularly when it comes to mental health, we need to tackle the taboos that may prevent people from accessing help when they first think that there may be an issue. Will he make that a key part of his strategy, to help to keep people in work and make employers more confident about employing people who have a history of mental health issues?
Mr Gauke
There has clearly been a very welcome change in attitudes in respect of mental health in recent years. We need that sort of cultural shift more broadly in the recognition and understanding of disabilities or health conditions that may have held people back in the past, but can be dealt with and accommodated. Employers can take steps and put in place adaptations to enable people to continue to work, as the Command Paper argues strongly.
Chris Bryant (Rhondda) (Lab)
Will the Secretary of State start a specific job of work looking at support for people with acquired brain injuries, whether they result from concussion in sport, which might lead to chronic traumatic encephalopathy, or from other injuries sustained in, for example, a car accident? The truth of the matter is that we do not have anywhere near enough rehabilitation units around the country. Rehabilitation can get people right the way to cure and get them back into work, and it is immensely cost-effective for the Government. I urge him to meet the brand new all-party group on acquired brain injury, which I chair, and to look specifically at this job of work so that we can get those people the real-life opportunities that they need.
Rachel Maclean (Redditch) (Con)
I wonder whether the Minister or other Members watched the programme “Employable Me” on BBC2 the other night. When I watched it, I was struck by the courage of the disabled people who were very keen to get back into work but faced insuperable challenges, and by the enlightened employers who gave them a chance. It demonstrated the life-enhancing power of work for people who make a positive choice to work and who are supported. Will the Minister think about how difficult it is for small businesses and charities, which featured in the programme, to give the right support? Will he tell us how this welcome statement will make that go further?
Mr Gauke
I confess that I have not had the opportunity to see the programme that my hon. Friend mentioned, but she is not the first person to recommend it strongly to me. I will perhaps endeavour to watch it over the weekend. She raises an important point about small businesses. We need to help small businesses to find the best way of providing support to disabled people. That will give small businesses access to people who, as I understand the programme demonstrates, have significant ability, are very talented and could bring a lot to the labour market, but who have not had the opportunities that they should have had, partly because of attitudes, culture and so on.
David Linden (Glasgow East) (SNP)
I note that the statement mentioned taking forward reform of the work capability assessment. I have certainly found that to be a major issue in my constituency case load. I think of Jean Birrell, my Fullarton Park constituent, who was treated really quite poorly in the work capability assessment process. May I ask the Secretary of State when he last sat in on a work capability assessment?
Mr Gauke
I have not done so, but we have made reforms to the work capability assessment process. As I said earlier, those with severe disabilities no longer need to be reassessed in the same way. I have dealt with the matter as a constituency Member of Parliament, and I recognise the concerns that exist. I also recognise that there is not, as yet, a consensus on exactly how the work capability assessment should be reformed.
Stephen Kerr (Stirling) (Con)
In welcoming the Secretary of State’s statement about helping more people with health conditions back into work, may I ask what is being done to enhance the Jobcentre Plus offer, specifically in relation to helping people who have mental health issues and learning disabilities with universal credit applications?
Mr Gauke
My hon. Friend makes a good point. We have 300 disability employment advisers in place. I have met them and discussed their work, and I am struck by the specialist support that they can provide. We are also putting in place 200 community partners to assist further on the matter. We are trying to ensure that Jobcentre Plus is well placed to provide the support that people need.
Paula Sherriff (Dewsbury) (Lab)
Are we in danger of setting a very dangerous precedent, whereby constituents who are in possession of a sick note from a health professional—whether that be a consultant, a doctor or perhaps a psychiatrist—have it overridden by the work assessors, who declare them fit for work? I had a disabled constituent visit me just two weeks ago; her disability is clear for all to see. She was asked how she did her shopping, and she said that she did it online every couple of weeks. She was told that she was therefore fit to work in an office for 37 hours a week.
Wendy Morton (Aldridge-Brownhills) (Con)
Today’s Command Paper is a huge step forward, and it should be welcomed. When it comes to attitudes, does my right hon. Friend agree that we need to tackle the culture, in some quarters, of failure to harness disabled people’s potential in the workplace?
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
The timely payment of PIP is an important support for disabled people, whether they are in work or not. My constituent Margaret has had two strokes, and she had to make a 70-mile round trip for a PIP assessment with her daughter, who had taken a day off work. Her meeting was cancelled on the day she turned up, despite the fact that she had received written confirmation, and there was no record on the DWP system. Will the Secretary of State investigate the growing problem of PIP appointments being cancelled because of a lack of resources, and the impact that it has on disabled people in the highlands and elsewhere?
Mr Gauke
Clearly, what happened in that particular case was unacceptable, and we need to address those issues. When it comes to delays in payment of PIP and assessments of PIP, we have made progress in the last couple of years or so, but we need to continue to ensure that the standard is adequate.
Paul Flynn (Newport West) (Lab)
How does the Secretary of State react to the fact that Lord Shinkwin, an applicant for the post of disability commissioner, complained last week that he believes the post is about to be downgraded or abolished? Lord Shinkwin is a magnificent example and role model of someone who has overcome a severe disability. How does the Secretary of State react to a visible defect in the Government’s failure to act on a complaint I made some years ago about a constituent working in the civil service whose career came to an end because he could not get wheelchair access to the Box in the corner of the Chamber?
Mr Gauke
I was not aware of the latter case, but the hon. Gentleman raises an important point. I agree with him that Lord Shinkwin is a great example. My understanding is that that decision is for the commissioners of the Equality and Human Rights Commission, without any ministerial interference as to whether there is a particular disability commissioner role. That is my understanding of the situation.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
I thank the Secretary of State for the important work on this issue that has been done by his Department with the all-party group on disability, which I chair. A clear recommendation from our inquiry report is that a significant improvement could be made in employment if we leveraged public procurement contracts towards Disability Confident employers. Will he consider that further, and write to the all-party group with his thoughts?
Mr Gauke
First, I thank the hon. Lady for the work she does with the all-party group, and for her kind words about its engagement with my Department. She raises an interesting point about procurement. She will be aware that, when it comes to procurement issues, Departments and sectors very often have different asks, and the Cabinet Office obviously has to take a view. However, we are considering the issue, and I encourage all major companies, particularly those that have engagements with the Government, to look very carefully at what being a Disability Confident employer involves.
Diana Johnson (Kingston upon Hull North) (Lab)
Will the Secretary of State update the House on the progress made for people damaged by the state when they received contaminated blood products during the contaminated blood scandal, particularly in relation to passporting benefits to them so that they do not keep having to go through regular assessments?
Alan Brown (Kilmarnock and Loudoun) (SNP)
My constituent Jade Minto suffered mental health problems and had to give up her work, but she subsequently gained a qualification to enable her to work in the care sector and has been offered a job. That sounds like a good news story, except for the fact that she is on ESA and allowed to work only a maximum of 16 hours of week, and the DWP will not allow her to take up the position because she needs to do an internal training programme that would take her over the threshold of 16 hours a week. Will the Government look at ending this crazy situation?
Stephanie Peacock (Barnsley East) (Lab)
One of the major concerns of disabled people in my constituency is about the impact of universal credit. I note that in the right hon. Gentleman’s statement last week, he postponed the roll-out of universal credit in his constituency and those of the Prime Minister and the First Secretary of State. As he is in the mood to reconsider the policy, will he do the same and pause the roll-out of universal credit for the people of Barnsley East?
Mr Gauke
The previous question provided an example of how universal credit will actually be much better for disabled people. We are rolling out universal credit in a way that is safe, and we are making adjustments as and when we need to, but I am pleased to say that the date on which universal credit will be fully rolled out remains unchanged—March 2022. If it could be earlier, I would make it earlier, but that is the safest point at which we can do it. As I have said, universal credit will be an advantage for many disadvantaged people, because they will not be faced with some of the current disincentives, such as not working more than 16 hours a week.
Universal Credit
David Gauke Excerpts(7 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Mr David Gauke)
With permission, Mr Speaker, following the announcement made by my right hon. Friend the Chancellor in his Budget speech yesterday, I shall make a statement on universal credit.
Universal credit represents the biggest modernisation of the welfare state in a generation. It supports those who can work and cares for those who cannot. Under universal credit, people are moving into work faster and staying in work longer than under the previous system. Once it is fully rolled out it will boost employment by about 250,000, which is equivalent to about 400 extra jobs for every constituency. It was introduced to replace the complex and failed benefit system run by the last Government, which created cliff edges, discouraging people from working more than 16 hours a week and trapping 1.5 million on out-of-work benefits for nearly a decade. Members on both sides of the House have voiced their support for the principles underpinning universal credit. It is a modern welfare system which—through one simple monthly payment—ensures that work always pays, mirrors the world of work, and helps people to earn their way out of financial insecurity and welfare dependency.
As we introduce universal credit, we are constantly improving the way in which the system works. We recently introduced changes to ensure that everyone who needs advance payments has access to them, and we are making our telephone lines Freephone numbers. I have consistently made it clear that we will continue to introduce universal credit gradually. Of the total number of households that will eventually move on to it, 9% are currently receiving it, and the number will increase to 12% by February. That will enable us to make improvements over time.
Colleagues have had concerns about the waiting time for the first payment, and I am grateful to my parliamentary colleagues for their constructive engagement on this issue. There have been several debates here and in the other place. This statement responds to them and fulfils the commitment made on behalf of the Government by my right hon. Friend the Leader of the House in relation to the resolution of the House on 18 October 2017. We are now offering a balanced package of improvements that puts more money into claimants’ hands earlier, ensuring extra support for those who most need it.
Next month, new guidance will be issued to staff to ensure that claimants in the private rented sector who have their housing benefit paid directly to landlords are offered that option when they join universal credit. In January we will make two changes to advances. First, the period over which an advance is recovered will increase from six to 12 months, making it easier for claimants to manage their finances. That will apply regardless of the level of advance claimed. Secondly, we are increasing the amount of support a claimant can receive from up to 50% of their estimated entitlement to up to 100%, interest free. In practice, that means that new claimants in December could already receive an advance of up to 50% of their estimated overall entitlement, and may receive a second advance to take it up to 100% in the new year. Taken with the first payment, that means that claimants in need could receive nearly double the money they would previously have received. In addition, from spring next year we will make it possible to apply for an advance online, further increasing accessibility for those who need it.
From February, we will remove the seven-day waiting period, reducing the length of time claimants might wait to receive their first full payment. From April, for new claimants already receiving support towards their housing costs, we will provide an additional payment of two weeks of their housing benefit to support them as they transition to universal credit, helping to address the issue of rent arrears for those who most need it. That is a well-targeted measure that will support 2.3 million people, including the most vulnerable, with an unrecoverable automatic payment worth an average of £233 each. This is a one-off investment of £550 million to ensure that universal credit supports those who need it.
In April, as a short-term measure, we will change how claimants in temporary accommodation receive support for their housing costs to ensure that local authorities can recover more of their costs and can therefore continue to offer this valuable support to those who need it most. We will also consider longer-term solutions.
The majority of claimants are comfortable managing their finances. However, personal budgeting support and digital skills training are provided to claimants through universal support, delivered through local authorities. Building on this, we are exploring with Citizens Advice the scope for greater collaborative working to help claimants locally as they move to universal credit.
We must remember that universal credit is aimed at supporting those out of work to move into work, and, once in work, to progress and increase their earnings. That is why, in addition to these measures, the Government have allocated £8 million over four years to conduct a number of tests and trials to support development of the evidence about what works to help people progress in work. This is a comprehensive and wide-ranging package worth £1.5 billion, offering significantly more support than a simple reduction in the wait for the first payment to one month.
To deliver this package, we have carefully revised the UC roll-out plan to ensure that we continue to safely and gradually roll out this important welfare reform. I will place the updated roll-out plan in the House of Commons Library. This does not change the final point at which the roll-out of universal credit will be completed.
To help to ensure a smooth transition to full service, we have also decided to close new claims to our prototype universal credit live service. That will not affect any existing claims. In addition, currently any new UC claim from a family with three or more children will be routed back to tax credits until November 2018. With the extension to the roll-out plan that will now shift to the end of January 2019.
This is a comprehensive package that responds to concerns raised inside and outside the House. We have a clear objective: to ensure that as many people as possible get the opportunity to work, and to maximise their potential to better their circumstances. We will continue to roll out universal credit in a steady and considered manner, and in doing so deliver a welfare reform that will positively transform lives. I commend the statement to the House.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I thank the Secretary of State for giving me early sight of his statement. There was little surprise when the Government announced reforms to their embattled universal credit programme in the Budget yesterday following months of Labour campaigning, a unanimous defeat on the Opposition-day motion and discontent across the whole House about the rising debt, arrears and even evictions that the social security reforms are causing to so many constituents. We of course welcome any steps to improve the programme, not least the small reduction in the so-called long hello, meaning that those on the lowest incomes will now only be expected to wait five weeks for support to arrive, compared with six under the current design.
Before I address the detail of today’s announcement, let us step back and look at the big picture. The Government introduced universal credit with three promises: to reduce child poverty by 350,000; to simplify the social security system; and to ensure that work always pays. As the mounting evidence has shown, universal credit is not living up to those ambitions. Now it is our task see whether the Chancellor’s announcements meet the Government’s own tests. First, the most immediate matter: the reforms announced today will not be introduced until next year and will do nothing for the tens of thousands who are stuck in the six-week waiting period over Christmas. Anyone who has tried to claim universal credit since Tuesday 14 November will not get their first payment until after Christmas day. That will mean tens of thousands of families going without over the festive period.
Secondly, we are concerned that the Government have decided to remove only a single week from the waiting period, taking it down to five weeks. Under existing Department for Work and Pensions guidance on alternative payment arrangements, claimants should be offered the option of being paid every two weeks, reflecting their previous employment patterns. A report published by the Resolution Foundation has found that 58% of those moving on to UC from work were paid more regularly than monthly. Can the Secretary of State tell us whether there is capacity in the system to offer claimants more regular payments if the Government do not change the payment period to fortnightly as opposed to monthly?
There is no change to the monthly assessment period that is particularly affecting the self-employed, and I want to press the Secretary of State on why that is the case when the current arrangements are clearly so punitive. In relation to the advance payment, we have concerns over the details of the extended repayment period. What additional debt does the Secretary of State expect the average claimant to incur? What does his Department predict will be the average monthly repayment amount deducted from a claimant’s income? Our position remains the same: the social security system should prevent people from getting into debt, rather than making matters worse. It is contrary to the ambitions of universal credit that instead of alleviating poverty, it is going to cause it. It is also an insult to ask people who are unable to make ends meet under the Government’s punitive reforms to bear even more risk, stress and concern.
The Government’s housing benefit proposals are not due to be introduced until April next year, nearly six months after the Budget. Support for rent will be available for the first two weeks of the five-week period before claimants receive their first payment. That will leave a three-week gap, which is still too long for many people to cope with. It will lead to arrears and even evictions, as we have said already seen from the programme.
Finally, this announcement did nothing to restore the key ambition that work will always pay. The swingeing cuts to UC have not been addressed, condemning more disabled people, children and their families to poverty. Taken together, these announcements equate to putting in £1 for every £10 that the former Chancellor cut. In a further nonsensical approach, he has downgraded planned increases to the national living wage, leaving a full-time worker on the minimum wage £900 a year worse off by 2020. Why have the Government failed to give our workers the pay rise they deserve? The Government seem content to leave us with 17 years of pay stagnation.
In summary, these measures for UC are not enough. They must be brought forward, amended and added to. We stand ready to work with the Government to make the necessary changes. Failing that, they should stand aside and let a Labour Government get on with the job.
Mr Gauke
Where to start? Let me begin with the point about people having to wait five weeks. People do not have to wait five weeks; they can get a payment within five days. As for the dismissal of an interest-free advance as immaterial, that is just completely unreasonable and wrong. An advance enables people to have control over when they receive their payments. We are making it more generous and giving people a longer period over which to repay it, but we are also making it more flexible by enabling people to get a larger advance if that is what they want and need.
The hon. Lady suggests that we should move towards paying fortnightly, saying that the system should reflect how people’s previous employment packages worked, but only 3% of people in employment are paid fortnightly. If we are to have a system that has the flexibility to cope with people who are out of work moving into work, a monthly approach is absolutely sensible, but we need flexibility in the first assessment period, so that people can get access to money earlier. That is exactly what we are delivering.
The approach of the Opposition Front-Bench team is not one of constructive engagement. They are a roadblock to welfare reform. They have sought to stand in the way of delivering universal credit—[Interruption.] They have just asked for a pause. I am unsure whether we heard a request for a pause from the hon. Lady today, but I would be fascinated to know what they mean by a pause. Do they mean not rolling universal credit out to any new jobcentres, or do they mean stopping any new claimants going on to universal credit at all? I am not quite sure which it is.
Mr Gauke
Does the hon. Lady mean stopping the roll-out for new jobcentres or for everybody? We are not getting an answer. If it means stopping universal credit across the board, that would show a woeful lack of grasp of the operational realities. The idea that we could suddenly switch everybody back on to jobseeker’s allowance and employment and support allowance is ridiculous, and the idea that we could do that overnight betrays a lack of understanding of how the system works.
We listened to the constructive comments of Members on both sides of the House and made some sensible reforms to help people, but let us not forget that this is a welfare reform that will positively transform lives. I am proud that this Government are delivering it. I think the Labour party might reflect on the fact that it is seen as a roadblock to this welcome reform.
Several hon. Members rose—
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
In support of my right hon. Friend the Secretary of State, may I say that the whole roll-out of universal credit was set up deliberately to allow the Government to respond to any problems and make the necessary changes? I will not rehearse my views about some of the previous Budget discussions, but I congratulate my right hon. Friend on having secured from the Chancellor what is nearly £1.5 billion to help the roll-out process, particularly the transferring of people who are on housing benefit and, of course, the waiting days, which will help enormously by giving flexibility to advisers.
Universal credit is not just about getting people into work. It was deliberately designed to find the people who have the greatest problems and, alongside universal support, to help change their lives. I urge my right hon. Friend to look carefully at universal support to ensure that it is rolling out alongside universal credit to make the roll-out a success. I give my congratulations again to a very good Secretary of State.
Mr Gauke
First, I thank my right hon. Friend for his kind words and once again acknowledge the tremendous work he did in driving universal credit forward. Its delivery will be a truly great achievement for the Government. On universal support, he is absolutely right. I will give one brief illustration, if I may, Mr Speaker. I recently visited a jobcentre where someone had got in contact and, because of the IT support they received in making a universal credit claim, they were much more confident and competent and had just made their first grocery order online. That might seem a small matter to some of us, but it was helping someone make progress in life, and that is what universal credit and universal support are delivering.
Several hon. Members rose—
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I thank the Secretary of State for advance sight of his statement. I suppose we should be grateful that, in making these changes, the Chancellor and the DWP have accepted that universal credit is failing, but this was not the robust and comprehensive response it should have been. Universal credit should be halted and fixed. The response does nothing to address the structural failings, the delays and errors, the arrears by default, the evictions and the misery they are causing. The reduction in the six-week wait is welcome, but five weeks is still too long—and let us not forget that many people wait far longer than that.
I was disappointed by the Secretary of State’s earlier answer. The Scottish Government are allowing people to receive payments fortnightly, taking account of and showing respect for working people on universal credit and those on zero-hours contacts paid weekly or fortnightly. Will the Government reconsider the freeze on benefits? As the Resolution Foundation has pointed out, work does not pay for people on universal credit, because, with the consumer prices index so high, working claimants lose money, which creates disincentives. Will he also look into the number of DWP cancelled personal independence payment assessments? Finally, at no cost to the Treasury, will the Government reinstate the third-party consent and legacy benefits removed by universal credit for people in difficulty, especially the disabled, cancer patients and the terminally ill?
Mr Gauke
On the last point, people can get explicit consent—they just need to get the consent. On the delays and moving to fortnightly payments, I am aware that the Scottish Government have taken a different approach, but they are doing so by ensuring that the second payment, at the end of the second assessment period, is half what it would be in England and Wales, deferring it and then paying it a fortnight later. If the Scottish Government are happy with that and want to defend it to the Scottish people, they are welcome to do so, but it seems a strange way to deliver the benefit. On the public finances, we fought the 2015 general election with a commitment to find savings in the welfare budget, and we will deliver those savings.
Sir Desmond Swayne (New Forest West) (Con)
I congratulate the Secretary of State. Does he anticipate any increase in the number of very short-term claims and did he consider spending the money on the taper rather than on reducing the number of waiting days?
Mr Gauke
I am sure that there will be an ongoing debate about the taper, which, as we made clear yesterday, we will continue to keep under review, but we acknowledge that there is a particular issue with the first assessment period and helping people over that period, which is why we made changes to the advances system back in October. I said at the time that we would continue to look at this, and that is why we have announced the package we have.
Frank Field (Birkenhead) (Lab)
Will the Secretary of State please commit now to bringing forward the loans scheme and keeping open the jobcentres and helplines due to be closed for eight out of 10 days over Christmas, to prevent any of my constituents from going hungry? May I also congratulate him on applying the financial armlock he learned in the Treasury to his then boss to such good effect?
Mr Gauke
Steady.
The right hon. Member for Birkenhead (Frank Field) raises a serious point about Christmas, and it is worth bearing in mind that people who open a new claim in, for example, mid-December can get a 50% advance, knowing that they can come back and get the other 50% in the new year. DWP will continue to operate as usual over Christmas, and a lot of effort is put into ensuring that the payment system works over the Christmas period.
Dr Sarah Wollaston (Totnes) (Con)
I thank the Secretary of State for listening to colleagues on both sides of the House in this welcome package of changes to universal credit, and particularly for scrapping the seven waiting days, for improving the loans and advances that are available and for the changes to housing benefit. Will he join me in thanking Citizens Advice? Citizens Advice does so much to support all our constituents, and it too welcomes the changes.
Mr Gauke
My hon. Friend is right to draw attention to Citizens Advice, with which we have strongly engaged. Indeed, I spoke to its chief executive yesterday, and I have a meeting with her—the chief executive—later today. We will continue to work closely with Citizens Advice, and I am keen to ensure that, when it comes to universal support, we continue to work closely with Citizens Advice because it provides people with a huge amount of practical support and help.
Stephen Timms (East Ham) (Lab)
The Secretary of State’s characterisation of the tax credits system is wrong, but I welcome the helpful steps he announced today to start clearing up the problems he inherited. Will he make available large-print versions of the documentation about these changes? Does he accept that, if someone who is paid weekly and has no savings loses their job, denying them any income at all for five weeks will cause a serious problem that offering a loan does not resolve?
Mr Gauke
The flexibility of the advance system means that nobody is left without any financial support at all. Compared with the legacy systems, such as JSA, universal credit will provide more support to people earlier. I will consider a large-print version of the documentation and, perhaps on another occasion, I would happily debate the tax credits system with him at some length—not only the disincentives within the system but the huge difficulties that its roll-out caused back in 2003, which were still reverberating when I entered the House in 2005.
Maria Caulfield (Lewes) (Con)
I welcome the statement, in which the Secretary of State said that there will be extra support for tenants in the private rented sector. Will he expand on that? Will it include private landlords having access to the portal available to social landlords?
Mr Gauke
We have to remember that, since the reforms in 2008, most tenants in the private rented sector receive their housing benefit directly, rather than the benefit going to landlords, but about 30% of tenants have alternative payment arrangements in which the money goes directly to the landlord. Once we change the guidance, the presumption will be that such alternative payment arrangements will continue and that the money will therefore go to the landlord, rather than to the tenant. We are constantly considering ways in which we can ensure there is support, and let us not forget that housing benefit transitional payments will provide two weeks of support—the payments are not recovered, they are additional support—to help people as they migrate on to universal credit.
Ms Karen Buck (Westminster North) (Lab)
The changes and additional resources to help tackle some of the glaring problems emerging in universal credit are welcome, but social landlords and others are still extremely worried about the impact of potential arrears. Will the Secretary of State work with his colleagues in the Department for Communities and Local Government to ask social landlords to ensure that they do not go for “ground 8” possession, which reduces the flexibility of the courts in dealing with arrears? It is critical that we do all we can to prevent the eviction of tenants who fall into arrears.
Mr Gauke
I welcome the hon. Lady’s warm words, and I note the constructive approach taken by a number of Labour Back Benchers. On evictions, it is important that the pre-action protocols are respected. The Leader of the Opposition’s comments on what happened with Gloucester City Homes turned out to be wildly inaccurate, for which he should apologise. We are keen to work constructively with landlords in both the social sector and the private sector, and it is important that we debate this in a reasonable way, without causing unnecessary stress by scaremongering, which the Leader of the Opposition did.
Peter Aldous (Waveney) (Con)
I welcome the Secretary of State’s announcement. Successful completion of the roll-out requires ongoing dialogue with a variety of organisations, including Jobcentre Plus offices, local housing authorities, charities, food banks and local landlords. Can he provide an assurance that he will continue to liaise and work with such bodies?
Mr Gauke
I can give that assurance. A pleasing aspect of the response to the announcement made by my right hon. Friend the Chancellor is the warm and broad support for the changes from, for example, the Trussell Trust, Citizens Advice, landlords associations and so on. Engaging closely with all those organisations and partners is key to delivering universal credit successfully.
Toby Perkins (Chesterfield) (Lab)
The most significant part of the statement is that we must remember universal credit is aimed at supporting people who are out of work to move into work. That makes perfect sense if universal credit was just replacing JSA, but, of course, many people going on to universal credit are nowhere near work and are very seriously disabled. Those people seem to be entirely missing from the statement and from the steps the Chancellor announced yesterday. Will the Secretary of State at least acknowledge that universal credit is failing the most disabled and tell us what he plans to do to address the concerns raised by the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) about the most seriously disabled people, who are being failed by universal credit?
Mr Gauke
I do not accept the hon. Gentleman’s characterisation of either universal credit or what I actually said. I make it clear that universal credit provides support for those who need it. On the severe disability premium, which he raised yesterday at Prime Minister’s questions, it is worth bearing in mind there is no reduction in the overall amount of support. When universal credit was introduced, it was designed to widen the support that is provided. Universal credit is about providing support to everyone, and getting people closer to work and into work, where possible, is absolutely the right thing to do.
Alex Burghart (Brentwood and Ongar) (Con)
As a member of the Select Committee on Work and Pensions, I warmly welcome the £1.5 billion and the loss of the seven-day waiting time announced yesterday. Will the Secretary of State confirm that, as the roll-out of universal credit continues, test and learn will continue to be an essential part of the process?
Mr Gauke
Absolutely. I make it clear that we must constantly consider ways in which we can refine and improve the system. I have set out a number of things we will be doing over the months ahead to make the system work as well as it possibly can. As of today, universal credit is already better than the legacy system.
Chris Stephens (Glasgow South West) (SNP)
Small housing associations in Glasgow tell me that they do not know whether a person is on universal credit until they fall into arrears. I press the Secretary of State to ensure that all housing associations, no matter their size, have access to the landlord portal, to eliminate rent arrears and to make sure that housing associations do not fall into financial difficulty.
Mr Gauke
The hon. Gentleman makes a perfectly reasonable point. The landlord portal is a good step forward. We are starting with the largest landlords because that is the quickest way to ensure as many people as possible benefit, but the increased use of the landlord portal as it is rolled out will be helpful for housing associations and councils, as well as for the DWP.
Mims Davies (Eastleigh) (Con)
On a recent visit to Eastleigh jobcentre, I found that staff were hugely positive about universal credit, as IT skills and computer access for their claimants was vital. Will my right hon. Friend join me in thanking jobcentre staff across the UK for remaining positive about the benefits of this, particularly for those stuck on the 16-hours contracts?
Mr Gauke
My hon. Friend makes an excellent point. I have similar experience of visiting jobcentres and being struck by the enthusiasm of the staff for UC. I urge Members from all parts of the House to visit their local jobcentre and talk to the staff there. The work coaches and jobcentre staff generally are doing excellent work, transforming lives, and they believe overwhelmingly that UC is giving them the tools to help people to transform their lives. That is what this reform is all about, and it is why I am so determined to deliver it and why I am so pleased we have united support for it today on our side of the House.
Melanie Onn (Great Grimsby) (Lab)
Given the Government’s assumptions on minimum incomes—the so-called floor, which penalises self-employed people on low incomes—will the Secretary of State review these rules, as they are putting people such as my constituent Tracy out of business and into debt?
Mr Gauke
The minimum income floor is an important part of our system. If we do not have it, we can leave the system in a place where we are simply not able to help people in self-employed jobs that are not giving them sufficient income to have the living standards they want. We have to provide support to those people, so that they have a sustainable job that provides sufficient income to them and does not provide an unfair burden on the taxpayer.
Jeremy Lefroy (Stafford) (Con)
I congratulate my right hon. Friend on these welcome changes. When does he expect to have the new guidance out on managed payments to landlords? Might this be available to existing UC claimants as well as new ones?
Mr Gauke
We will have that guidance out in December, so we will be moving quickly on that. This is designed for those who have previously been on housing benefit with an alternative payment arrangement. Of course where work coaches, as they engage with new claimants, identify that the right approach is for an alternative payment arrangement to exist—in other words, the money goes to the landlord—they can take that forward.
Kate Green (Stretford and Urmston) (Lab)
I very much welcome the announcement about the housing benefit run-on, and I was even more pleased to hear the Secretary of State say it would not be an advance but an award. Can he say why it will not be available to those who have not previously been in receipt of housing benefit? As he will know, rent arrears have been one of the features of UC that has caused the most difficulty and high levels of debt.
Kevin Foster (Torbay) (Con)
As the Secretary of State will know, the UC full service is due to be rolled out to Torbay in May 2018. What efforts will he be making to ensure that staff are fully trained on these changes and, in particular, that people are aware of the advances available? People may not be quite so confident in doing this when they first put in a claim.
Mr Gauke
On the advances, we changed the guidance in October. It was already the case in July and August that about half the people were taking up an advance. From my visits to jobcentres, I can say that this system has improved. Of course, with the increased flexibility on advances, it may well prove to be even more widely used—we shall see. My hon. Friend raises a good point about training. I have visited jobcentres that have just launched the full service, and I am impressed by the level of training and by the support that a jobcentre that has had this for a while then provides to a new jobcentre. That degree of co-operation is proving to be very effective.
Tom Brake (Carshalton and Wallington) (LD)
The Secretary of State is putting up £8 million to develop evidence about what works to help people progress in work. I have done the job already, for nothing: he needs to restore the £3 billion-worth per annum of work allowances that he cancelled from 2015 onwards. To help to reflate the economy, he could start lifting the benefits freeze. Will he do that?
Mr Gauke
If that is an attempt by the Liberal Democrats to find an economy saving, I am not sure the right hon. Gentleman has managed it. I understand the case he is making. Obviously, we have to balance what is affordable within the public finances. I make the point that we may find some savings in terms of fraud and error in the UC system, but this is not an overall reduction on what we were previously spending on the legacy benefits.
Bob Blackman (Harrow East) (Con)
I warmly welcome my right hon. Friend’s statement. Will he update the House on exactly how many people in receipt of UC have gone on into work as a direct result of going on to this new system? Obviously, that is the intention and we should be singing it from the rooftops.
Mr Gauke
Three studies have compared this system with the legacy benefits and all three showed that a higher proportion of people have gone into work and progressed there than did so under the legacy benefits. There is greater flexibility in the system, so that people are not stuck on doing 16 hours, as is undoubtedly the case at the moment. The analysis we have done, which has been peer reviewed, suggests that there will be about 250,000 more jobs in the economy than would have been the case had we not made that reform. That works out at about 400 people per constituency, and I am proud of that.
Liz McInnes (Heywood and Middleton) (Lab)
Weekly paid workers in receipt of UC are set to lose their UC next month simply because there are five paydays in December. What urgent action is his Department going to take to address this ridiculous anomaly?
Mr Gauke
I saw that report on “Money Box”. It was confused and misleading in its alarmist tone. It was inaccurate in the numbers it was using. The principle of UC is that if someone earns more, they get less UC, whereas if they earn less, they get more UC. That is the principle that applies and it should not be shocking to anybody.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
I warmly welcome the Secretary of State’s statement, and I thank him and the Minister for Employment for their hard work and for this additional support to the most vulnerable in society. Can the Secretary of State confirm that the housing benefit payments will not be repayable and that that again will help the most vulnerable as they make the transition on to UC?
Martin Whitfield (East Lothian) (Lab)
I acknowledge much in this statement. On citizens advice bureaux and local authorities and the indication of greater collaboration, I wonder whether the Secretary of State will confirm two things. The first is that additional funds will be available to the third party sector to help with this collaboration and advice. Secondly, has he looked at having implied consent, which would cut a huge amount of waiting time in respect of advice given?
Mr Gauke
There are confidentiality issues that we have to deal with. I am not going to get drawn on the funding today, but I will say that we do fund universal support, providing the support that my right hon. Friend the Member for Chingford and Woodford Green was talking about, which is helping to transform lives.
Eddie Hughes (Walsall North) (Con)
I chair the board of a housing association that has 20,000 homes, operating across 18 local authorities. I do not want those residents unnecessarily disturbed by the scare- mongering from Opposition Members. Will the Secretary of State therefore confirm that those claimants can get an emergency payment of up to 100% of their monthly entitlement within only a few days?
Mr Gauke
My hon. Friend is absolutely right to say that we will have that 100% advances system available in the new year. Let me come back to a point I made. The Leader of the Opposition said that one in eight people in Gloucester City Council had been evicted because of UC—that would be 650 people. It turned out that it was not one in eight—it was eight. And it turned out that it was not because of UC; it was because of other problems that had arisen, including in one case someone who had not lived in the property for 18 months.
Chris Ruane (Vale of Clwyd) (Lab)
Until recently, my local authority, Denbighshire, had the highest levels of household debt in the whole country. People were forced into the arms of loan sharks, pawn shops and payday-loan usury. Will the Government’s decision to encourage universal credit recipients to apply for and accept Government loans increase or decrease household debt in Denbighshire?
Mr Gauke
If we want to stop people falling prey to loan sharks, the flexibility of advances in the system, with the addition of budgeting loans to help people with white goods, is exactly the right way to go about it. If we do not offer that, the risks that the hon. Gentleman set out would be real.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
The Government say they are allocating £8 million over four years to conduct trials and get evidence of what works. What trials will be put in place specifically for disabled people—other than the trial of universal credit itself, of course? Will the Secretary of State meet the all-party group on disability, which I chair, to listen to disabled people’s voice on what works?
Mr Gauke
We do engage and listen to the voices of disabled people; indeed, our announcements yesterday were strongly welcomed by some disabled groups. On the test and learn approach, we obviously only made the announcement yesterday, so we are designing the trials. The purpose is to ensure that people can progress in work.
Alison Thewliss (Glasgow Central) (SNP)
The Secretary of State claims that universal credit is constantly improving and that he is responding to concerns. Will he respond to my concerns and those of the Child Poverty Action Group and others, that the Government are knowingly putting 200,000 children into poverty as a result of the two-child cap, that they know the two-child cap is having a disproportionate impact on religious minorities and that their vile rape clause is stigmatising women in Northern Ireland and putting them in danger?
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
The Secretary of State might be interested to know that Citizens Advice Scotland recently carried out a survey in my constituency and determined that 32% of my constituents do not have any access to the internet and a further 32% would have difficulty accessing the online full service universal credit system. In the context of half the jobcentres in Glasgow being closed, will he consider additional measures to ensure that the interface for the full service universal credit system is improved, so that those claiming universal credit can have increased confidence that they can access the system efficiently?
Oral Answers to Questions
David Gauke Excerpts(7 years ago)
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Paul Blomfield (Sheffield Central) (Lab)
The Secretary of State for Work and Pensions (Mr David Gauke)
Advances are interest free and repayable over six months for those making a new claim, or 12 months for those who were on benefits before claiming universal credit. Our objective is to strike the right balance between supporting claimants with their living expenses and ensuring they have the ability to repay the advance.
Paul Blomfield
The Secretary of State knows that the guidance states that 40% of the standard allowance can be used to repay an advanced payment, and that 40% can be deducted to pay back creditors. It is not clear from the guidance whether a claimant might end up paying both, meaning that they will have more than 40% deducted from their award. Will the Secretary of State clarify the maximum amount repayable? Does he recognise that, as it stands, this is a charter for loan sharks?
Mr Gauke
The deduction from subsequent payments that take into account an advance does not apply to the 40%. We have to remember that it is an advance. An advance gives people greater flexibility to access universal credit early, so they are able to cope during the initial assessment period.
Mark Pawsey (Rugby) (Con)
We hear a lot from Opposition Members about universal credit, but we have to remember that it is a much more effective system at getting people into work. Nationally, 113 people move into work under universal credit for every 100 under the previous system. My constituency, which was a pathfinder for universal credit, is seeing very substantial falls in the number of people claiming. Is it not a better system all together?
Mr Gauke
My hon. Friend is absolutely right. Universal credit is helping people to get into work and to progress in work. It is also clear that people on universal credit are spending more time looking for work than those on legacy benefits. It is really important that we all work to ensure the success of universal credit. We believe it will result in 250,000 more jobs—something worth achieving.
Helen Goodman (Bishop Auckland) (Lab)
What the Secretary of State has repeated again this afternoon falls into the trap of treating everyone on universal credit as if they were out of work. Surely one big issue is the problem of applying conditionality to people who already have jobs?
Mr Gauke
The point about universal credit is that it operates when people are out of work and when they are in work. What we will not get is what happens with the legacy system: people worrying about working extra hours in case they find that their claim is closed. That holds people back from progressing. I believe that in-work conditionality has a role to play within our system to ensure that people progress. There is an issue in terms of people who are in work but are none the less receiving substantial support from the taxpayer. We want them to be able to progress to be less dependent on the state. That is what universal credit will deliver.
Stephen Kerr (Stirling) (Con)
What steps has the Secretary of State taken to increase awareness of advance payments?
Mr Gauke
We have changed the guidance that applies in jobcentres on advanced payments and increased publicity in jobcentres. I visited a jobcentre in Bedford and saw myself how the operation of advances is working. We believe there will be an increase in take-up, which will ensure that people receive the support they need. The suggestion that people under universal credit will face weeks and weeks and weeks without any financial support whatever is, I am afraid, scaremongering. That is what is happening under the system as it is operating now.
Neil Gray (Airdrie and Shotts) (SNP)
Yesterday, the Scottish Finance Secretary, Derek Mackay, wrote to the Chancellor ahead of his Budget appealing for universal credit to be fixed, and today 114 academics published an open letter in The Daily Telegraph criticising the advance payments system and echoing Derek Mackay’s call to reduce the first payment wait time, move to a twice-monthly payment system and reverse cuts to work allowances. Does the Secretary of State agree that the Chancellor should act?
Mr Gauke
On universal credit and early payments, of course the Scottish Government have flexibility, which they are exercising, but that means that at the end of the second assessment period people get only 50% of what they are entitled to, the rest being deferred and paid in the third assessment period, which strikes me as making the situation more difficult, not easier, for claimants, although it is for Scotland to decide how it wants to do it.
Neil Gray
If the Secretary of State is looking for the Scottish Government to show him how it is done, he should devolve universal credit in full, and we will get on with it. Has he seen the report from the Child Poverty Action Group and the Institute for Public Policy Research saying that cuts to universal credit will leave an extra 1 million children in poverty? Is 1 million more children in poverty not evidence enough for the UK Government to reverse their cuts to work allowances and make work pay?
Mr Gauke
My point was that the Scottish Government are delivering universal credit differently and in a way that I think is worse than the situation in England and Wales. The point about universal credit is that it will help people into work. I will give one brief example: I heard of an account last week of a single mother on income support not previously able to claim for her childcare costs but now able to do so under universal credit. She is taking up a job, working eight or nine hours a week, which she could not do previously—a first step on the ladder. That is an example of what universal credit is delivering.
Margaret Greenwood (Wirral West) (Lab)
A recent report by the Resolution Foundation using new data based on bank transactions shows that 58%—the majority—of new claimants moving on to universal credit as a result of leaving employment in the last year were paid either fortnightly or weekly in their previous job, which is a far higher percentage than in the economy on average, where about one in four of all jobs is paid fortnightly or weekly. The Government should ensure that no claimant has to wait more than 10 days, so will they end the six-week wait and ensure that universal credit mirrors the world of work for those who claim it?
Danielle Rowley (Midlothian) (Lab)
The Secretary of State for Work and Pensions (Mr David Gauke)
We are committed to ensuring that claimants receive high-quality, fair and accurate assessments. The DWP monitors assessment quality closely through independent audit. Assessment reports deemed unacceptable are returned for reworking. A range of measures, including provider improvement plans, address performance falling below expected standards. The DWP continually looks to improve the assessment process.
Danielle Rowley
My constituency office is inundated with people dissatisfied and distressed after their personal independence payment assessment. In the light of statistics showing an almost ninefold increase in complaints to the Department, what analysis has been made of the assessment process?
Mr Gauke
We are of course constantly striving to improve the assessment process. It is worth pointing out that the total number of complaints is about 1% of the total number of PIP assessments, but we continue to work closely with the assessors to ensure that this can be delivered as effectively as possible.
Justin Tomlinson (North Swindon) (Con)
The vast majority of successful appeals are successful because of late additional evidence. What further consideration has been given to sharing data between the two different assessments and to providing for automatic access to health records—where the claimant is willing—in advance of an assessment?
Mr Gauke
My hon. Friend raises an important point and is absolutely right about the reason for the majority of overturned decisions. We continually look at how to increase co-ordination between the PIP and employment and support allowance assessment processes, and that is certainly something we are considering.
Paula Sherriff (Dewsbury) (Lab)
My constituent has a life-limiting illness, and her medical consultant has confirmed that it affects even the most basic daily activities. Without a transplant, she has approximately two to three years left to live. She has just been turned down for a personal independence payment. Will the Secretary of State please undertake to look into the position as a matter of urgency? Will he also confirm that compassionate Conservatism is officially dead?
Helen Whately (Faversham and Mid Kent) (Con)
For our constituents a health assessment is an incredibly important moment, and it can be very distressing. I have been calling for routine recording of assessments, to provide evidence if they go wrong and also because recording in itself should sometimes change behaviour for the better. Will my right hon. Friend give me an update on the recording pilots?
Mr Gauke
We are indeed looking into that. My hon. Friend has made an important point about the need for independent auditing of assessments to ensure that the advice provided by the decision-makers is of suitable quality, fully explained and justified, and recording is one of various options that we are considering to bring about those improvements.
Marsha De Cordova (Battersea) (Lab)
Let me start by welcoming the Minister for Disabled People, Health and Work, the hon. Member for Truro and Falmouth (Sarah Newton), to her place.
There has been a 900% increase in the number of complaints about personal independence payment assessments. Statistics from HM Courts & Tribunals Service show that both the number of appeals lodged and the proportion of DWP decisions overturned have increased. There was a 67% increase in the number of appeals in the first quarter of 2017 in comparison with the same period last year. Just last week, Britain’s most senior tribunal judge said that most of the benefit cases that reach the courts are based on bad decisions when the DWP has no case at all. The quality of evidence—
Marsha De Cordova
I certainly am, Mr Speaker. What action is the Secretary of State taking to improve the PIP assessment framework, the accuracy of decision-making and the standards of mandatory reconsiderations, and will he stop wasting taxpayers’ money on unnecessary and lengthy tribunal appeals?
Mr Gauke
Let me put the position in context. Since personal independence payments were introduced in 2013, the DWP has carried out more than 2.6 million assessments. As I said earlier, the total number of complaints received equates to fewer than 1% of all assessments. Our latest research shows that 76% of PIP claimants are satisfied with their overall experience. Of those 2.6 million decisions, 8% have been appealed against, 4% successfully. Of course, we constantly strive to improve the PIP system, but, as I have said, it should be seen in context.
Luke Graham (Ochil and South Perthshire) (Con)
Last week I was able to spend a day at the Alloa jobcentre in my constituency and observe what is going well and what is going not so well with some of our welfare reforms, including universal credit and PIP. One issue that arose was the length of time that people are waiting for health and work capability assessments. What penalties are being levied against some of the third-party companies that are involved in the assessments, and what could be done to close the gap for our constituents?
Carolyn Harris (Swansea East) (Lab)
Ms Karen Lee (Lincoln) (Lab)
The Secretary of State for Work and Pensions (Mr David Gauke)
The availability of advances at the start of a universal credit claim ensures that those who need money immediately can access it. Our data shows that around half of claimants are receiving advances, and we have recently undertaken an exercise to improve awareness and access to this support.
Ms Lee
The manager of a food bank in Lincoln has said that there is evidence of a clear correlation locally between the introduction of universal credit—in Lincoln, we have only had it partially so far; we are getting full roll-out in March—and an increase in the use of food banks. I ask for your comments on that, and do Government Members, including yourself, think it is acceptable that people in Lincoln and across this country are starving but for food banks because of waiting for universal credit payments.
Mr Speaker
I would not presume to say what is acceptable for the people of Lincoln—that is way above my pay grade—but the Secretary of State might wish to proffer an opinion on the matter, and we look forward to it with interest and anticipation.
Mr Gauke
This is why I repeatedly make the point that nobody needs to wait a long period of time for cash support under the universal credit system, and to suggest otherwise is causing unnecessary anxiety for those who are not on universal credit—and I think we should all discuss this in a slightly more responsible manner.
Robert Jenrick (Newark) (Con)
When I visited Newark’s jobcentre a week or so ago, I found that 80% of the jobs on offer were paid either four-weekly or monthly. Does the Secretary of State agree that we have to be careful not to patronise working people and not to prevent them from entering the workplace with as much ease as possible? The vast majority of jobs in my constituency are paid monthly.
Mr Gauke
My hon. Friend is absolutely right. Part of the purpose of universal credit is to close the gap between being out of work and being in work. Most jobs are paid monthly, and getting people used to that monthly system is a sensible approach. I also very much welcome the fact that my hon. Friend has visited a jobcentre, and I recommend that other hon. Members do so, to hear how universal credit is operating on the ground. I know that many hon. Members have found the experience to be extremely positive.
Frank Field (Birkenhead) (Lab)
I will not ask Government Front Benchers for a fifth time whether I should believe the Secretary of State’s statement that the roll-out of universal credit in Birkenhead will be hunky-dory, or the opinion of the food bank, which says that it will need an extra 10 tonnes of food to prevent people from going hungry—if he cannot abide the word “starving”. We will have a debate on this on Thursday, which Members across the House have signed up to. This will be the first time that Conservative Members will have an opportunity to vote on whether they want to reform universal credit. Will the Secretary of State open that debate, hear it and take the message directly back to Cabinet, please?
Mr Gauke
The position that we have made clear for a long time is that we want to ensure that universal credit works. This is a test-and-learn system, and we are always looking at ways in which we can improve it, particularly for that first period. I would say to the right hon. Gentleman and to the House as a whole that universal credit is helping us to address the best way to deal with poverty, which is to ensure that people can get into work. That is the argument that I and my right hon. and hon. Friends will continue to make.
Bill Grant (Ayr, Carrick and Cumnock) (Con)
I, too, have visited jobcentres, and I know that work coaches are an integral part of the universal credit system. Will my right hon. Friend tell me how the new work coaches will assist jobseekers in my constituency in their eager quest to find employment?
Mr Gauke
My hon. Friend is absolutely right. This is why we are recruiting work coaches up and down the United Kingdom to provide the personalised support that people need to help them get into work. I come back to my experience of meeting work coaches in jobcentres up and down the country. They believe that they have a system in place that is helping them to do more to transform lives, and that is hugely important.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
One of the original objectives of universal credit was to reduce child poverty. In 2010, the Government said that UC would reduce child poverty by 350,000. That figure was revised to 150,000 in 2013, but last year, Ministers failed to produce a figure in answer to a question from my hon. Friend the Member for West Ham (Lyn Brown). What is the Government’s current estimate of how many children will be lifted out of poverty as a result of universal credit?
Mr Gauke
Universal credit gives people a better opportunity to work, and it gives parents, including single parents, greater support with childcare. I come back to the example I gave the House a moment ago. Someone who had previously been on income support and unable to get help with childcare can now get that help and get on to the employment ladder, thanks to universal credit. That is what universal credit is delivering.
Debbie Abrahams
That was a really disappointing answer. As we have already heard, the Child Poverty Action Group published data last week predicting that 1 million more children will be pushed into poverty as a result of universal credit cuts, 300,000 of whom will be under the age of five. Another objective of universal credit was always to make work pay. Given that four out of 10 people on UC are in work and will be on average £2,600 a year worse off, when will the Government admit that UC is not fit for purpose or fit to meet the challenges of a new labour market and stop its roll-out?
Mr Gauke
May I just point out that child poverty is down since 2010? I think the hon. Lady has rather given the game away: she does not want to pause and fix universal credit; she wants to scrap it. She wants to rewind to a system under which claimants faced marginal deduction rates of over 90% and had to cope with a multitude of benefits. We had a benefits system that was not an aid but an impediment to working people and that trapped people in poverty and dependency. That is what universal credit will bring an end to.
Deidre Brock (Edinburgh North and Leith) (SNP)
Victoria Prentis (Banbury) (Con)
The Secretary of State for Work and Pensions (Mr David Gauke)
Advances are available at the start of a universal credit claim to ensure that those who need it have money to tide them over until their first payment. Our data shows that around half of claimants are receiving advances, and we have recently undertaken an exercise to improve awareness and access to this support.
Victoria Prentis
I thank the Secretary of State for his very reassuring answer. In Banbury, we are fortunate to have very low unemployment rates. Can he tell me what will be the likely impact on jobs of universal credit roll-out in my constituency?
Mr Gauke
In total, it is estimated that universal credit will help around 250,000 more people into employment. On average, that works out at around 400 extra people in work in each parliamentary constituency, but universal credit will, of course, have larger impacts in areas with a higher proportion of benefit claimants or a higher prevalence of single-parent and out-of-work families.
Liz McInnes (Heywood and Middleton) (Lab)
The Trussell Trust says that food bank use has increased in areas where universal credit has been rolled out. Universal credit has not been rolled out yet in my constituency, but this weekend the Heywood food bank ran out of food. What safeguards will the Secretary of State put in place to ensure that universal credit claimants do not have to rely on the charity of their neighbours, a system that sometimes fails?
Mr Gauke
We are improving the advances system, and we are improving awareness of it. Importantly, support is available, and that is a message that we can all take to our constituents. Nobody needs to wait six weeks because advances are available within jobcentres, and they are being taken up. The majority of new claimants are taking up those advances.
Nigel Huddleston (Mid Worcestershire) (Con)
Last week, I heard from one of my constituents who was having difficulty getting an advance payment and who had to resort to a food bank. When the error was corrected and he got his advance payment, he took the food back to the food bank. First, does that not show that, when mistakes are made, every effort is made to correct them? Secondly, does it not show the basic human decency of those claiming universal credit?
Mr Gauke
I entirely agree with the point my hon. Friend makes. It is worth pointing out that, in the normal course of events, someone’s advance takes about three days to go through the banking system and for the money to be paid, but that, if need be, people can get support on the same day.
Layla Moran (Oxford West and Abingdon) (LD)
Mary Robinson (Cheadle) (Con)
The Secretary of State for Work and Pensions (Mr David Gauke)
Since 2010, more than 3 million more people have found employment. The employment rate is close to the record high, while the unemployment rate is the lowest it has been since 1975.
Mary Robinson
In addition to those almost record employment levels, 11% of people in Cheadle are self-employed. My constituent Alexandra Singer is a self-employed wheelchair user who finds that valuable opportunities to attend networking events are lost because they are not always accessible for disabled people. Does the Minister agree that to unlock the talent and energy of disabled entrepreneurs, organisers must make provision for successful businessmen and women, such as Alexandra Singer, to attend their events?
Mr Gauke
I agree with my hon. Friend on that. It is right that service providers have a duty to anticipate these things and provide adjustments, where reasonable, for disabled people. In the case of her constituent, this may include arranging events at an accessible venue. It is also worth pointing out that one in five of those taking up the new enterprise allowance, which is designed to help people set up businesses, are disabled people.
Tony Lloyd (Rochdale) (Lab)
Every new job is welcome, but we have a country where 55% of people new into work are in receipt of benefits and living in poverty and where the better-off are now disgustingly well-paid. What are the Government really going to do about this?
Mr Gauke
Of course the highest earning 1% pay a bigger proportion of income tax than they ever have done before. I am also pleased to say that our Government have substantially increased the personal allowance; we have introduced the national living wage; and the support that universal credit is going to provide will help more and more people progress in work.
David Morris (Morecambe and Lunesdale) (Con)
Theresa Villiers (Chipping Barnet) (Con)
The Secretary of State for Work and Pensions (Mr David Gauke)
Universal credit is transforming and modernising the welfare state, ending complicated rules around employment hours and the cliff edges of the old system. Universal credit has a clear system of allowances and tapers to ensure that claimants know that they are always better off in work.
Theresa Villiers
Does the Secretary of State agree that one of the fundamental flaws of the system that we inherited from Labour is that people who wanted to work more than 16 hours a week could lose 90p of every pound that they earned?
Mr Gauke
My right hon. Friend is absolutely right, and it was about not only the high marginal deduction rates, which obviously we do not see with universal credit, but the fact that people who moved in and out of work, or whose hours fluctuated, could find themselves moving from one benefit system to another. That created additional hassle and uncertainty for claimants, and discouraged people from taking on additional hours.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
Eleanor Smith (Wolverhampton South West) (Lab)
The Secretary of State for Work and Pensions (Mr David Gauke)
This Department’s mission is to support people through all stages of their lives. Universal credit is being introduced slowly, and it is steadily and positively transforming people’s prospects by bringing about the satisfaction and financial security of entering work and increasing earnings. We are also helping citizens to prepare for later life with our work on pensions, and we are committed to helping people from all walks of life at all stages of their lives. We will continue to build on that body of work to achieve our aims.
Eleanor Smith
How does the Department plan to respond to its own research, which shows that universal credit is a driver of rent arrears among families who rely on it for support?
Mr Gauke
As my ministerial colleagues have already said, we must recognise that a number of the statistics that have been quoted show that rent arrears have arisen before people have entered into universal credit, and that after time the numbers in rent arrears starts to fall. We continue to improve the system to ensure that payment timeliness is improved, for example, and that people are able to access advances when they need to.
Mr Laurence Robertson (Tewkesbury) (Con)
Alex Chalk (Cheltenham) (Con)
Mr Gauke
I agree. May I give one example? Speaking from the Dispatch Box opposite recently, the Leader of the Opposition said:
“Gloucester City Homes has evicted one in eight of…its tenants because of universal credit.”—[Official Report, 11 October 2017; Vol. 629, c. 324.]
If that were true, it would amount to 650 tenants being evicted due to universal credit. Gloucester City Homes has described this as “not factually accurate”. In fact, a total of eight—not one in eight—tenants on universal credit have been evicted, all of whom had considerable rent arrears well before moving on to universal credit. I understand that one tenant had not been resident in their property for 18 months.
Carol Monaghan (Glasgow North West) (SNP)
Henry Smith (Crawley) (Con)
A constituent who recently contacted me is concerned about how long they are having to wait for a tribunal hearing. Will my right hon. Friend make representations to the Ministry of Justice about the efficiency of Her Majesty’s Courts and Tribunals Service?
Mr Speaker
I call James Frith. Not here—where is the feller? I call Gavin Newlands.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Mr Gauke
Universal credit will help to transform lives positively. It is already doing so by giving people the opportunity to work and to progress in work. The Scottish National party can join the Labour party in being on the wrong side of the argument, but history will not forgive it for that.
Colin Clark (Gordon) (Con)
Since 2010, this Government have overseen remarkable levels of job creation. My predecessor, who used to sit on the SNP Benches, has just secured a very well-paid media position with Russia Today. Does the Minister agree that people must be flexible about their career choices to get on?
Stephen Lloyd (Eastbourne) (LD)
Sir Hugo Swire (East Devon) (Con)
Great unhappiness continues to surround the issue of pensions and the WASPI women, many of whom have come to see us in our constituencies. I believe that there will be a debate next April on a private Member’s Bill on the matter. Given the continuing accusations and counter-accusations about whether people were told about the changes, does my right hon. Friend agree that such a debate will be worthwhile?
Mr Gauke
I am grateful to my right hon. Friend for his question, and I have no doubt there will continue to be debates on this matter. However, as the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), has declared, we are not going deviate from the policy we have set out.
Helen Hayes (Dulwich and West Norwood) (Lab)
Mr Gauke
Again, I come back to this throwing around of accusations. We had the Leader of the Opposition claiming that 650 people had been evicted because of universal credit. We are not seeing evictions in the social rented sector and there are clear reasons why that does not happen. What we are getting for potential universal credit claimants from the Labour party is scaremongering, which is creating unnecessary anxiety.
Anna Soubry (Broxtowe) (Con)
Will my right hon. Friend join me in congratulating Broxtowe citizens advice bureau, which I met on Thursday? Universal credit is being rolled out for us next year, and the CAB is already putting together all the relevant agencies to make sure that we are ready. Will my right hon. Friend also have a look at whether, for a very small amount, my CAB could have one person to deal with all the cases so that we can make this system work as we all know it should?
Mr Gauke
I will take that as a spending bid from my right hon. Friend. She is right to highlight the role of citizens advice bureaux. I met citizens advice bureaux in St Albans and Bedford last week, and where a CAB works closely with jobcentres, it helps to deliver the support that people need, which I very much welcome.
David Linden (Glasgow East) (SNP)
My Tollcross constituent Margaret Laird was moved on to universal credit in January 2016. She has been given a 132-day sanction. She is being treated by psychiatric services and helped by the local food bank. Will the Secretary of State undertake to look into her case, because it is very sensitive?
Stephen Kerr (Stirling) (Con)
What are Ministers doing to close loopholes used to avoid child maintenance payments?
Universal Credit Roll-out
David Gauke Excerpts(7 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Mr David Gauke)
Today we have seen yet another excellent set of labour market statistics: unemployment is 1 million lower than in 2010 and youth unemployment has gone down by 415,000 over the same period. Underneath those raw statistics lie the work and effort of millions of families across the country who are keen to get on and make the best of their lives: people who are in work but want to earn more, people who are out of work but really want to get a job. Young and old all deserve the opportunity to maximise their potential. That is what universal credit is all about.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Will the Secretary of State give way?
Mr Gauke
Let me make a little progress.
When it comes to universal credit, there is much talk about supporting the principles behind the reform, and I welcome that. Before turning to the issues raised by the hon. Member for Oldham East and Saddleworth (Debbie Abrahams)—and I will be taking plenty of interventions—I think it would be helpful to the House to articulate what those principles are.
The fundamental purpose of universal credit is to assist people into work. It is through work that people can support themselves, obtain greater economic security and progress in life. Universal credit does that by making work pay.
Several hon. Members rose—
Mr Gauke
Let me finish on the principles, and then I will take plenty of interventions.
We inherited a welfare system that puts in place barriers to people fulfilling their potential. If those on jobseeker’s allowance do more than 16 hours of work, they must go through the disruption of stopping their benefit claim only to start another. Many on employment and support allowance can be faced with a choice between financial support or work while we know that many thousands would like, and would benefit from, both. Once a person is in work, they are all too often caught by the hours rules in tax credits. Universal credit cuts through that by taking six different benefits and replacing them with a single system: a system where claimants receive tailored support to get them into work; a system where claimants have to deal with only one organisation, not three; and a system that ensures it always pays to work and always pays to progress.
Clive Efford (Eltham) (Lab)
It is not the principle, but the practicality that is at issue. [Hon. Members: “Ah!”] The principle of getting people back into work is something that we on the Labour Benches accept. The citizens advice bureau, the Trussell Trust and even John Major are saying that universal credit should be delayed, because it is increasing poverty and leading to debt and rent arrears. Are they wrong?
Mr Gauke
My argument is that we should not be pausing this. May I just say that I welcome the clear expression of support for the principle of universal credit? That is helpful. The case I will make today is that the principles lead us to a design that is focused on making work pay. It is diminishing the differences between being out of work and being in work, and can make a significant difference.
Mr Speaker
The hon. Member for St Albans (Mrs Main) has just been promoted. The Secretary of State needs to gesticulate whom he means with greater clarity.
Mrs Main
I thank the Secretary of State for that promotion. I look forward to receiving it in the post.
Is the Secretary of State any more aware than I am of the topic of this debate? Yesterday, the Opposition wanted to fix universal credit. Today, the word “fix” has been dropped. It seems that the Opposition want to pause but not fix. Has he any greater awareness of this matter?
Stephen Timms (East Ham) (Lab)
Has the Secretary of State seen the survey of 105 local councils, which showed that of claimants who claim universal credit, over half of the council tenants are in rent arrears compared with only 10% of those on the old housing benefit? Does that not show that this system needs to be paused and fixed?
Mr Gauke
Part of the issue is that that is not comparing like with like. The right hon. Gentleman will understand that the selection of people who will be on universal credit will be of a different group than the housing benefit population as a whole. [Hon. Members: “Why?”] The reason is that in many cases, going on universal credit involves a change of circumstances, and that change of circumstances may in fact be a reason why people are in arrears. [Interruption.] May I just make this point? I know that the right hon. Gentleman has concerns about how we address the issue of the early period, so I will say a little bit more about it. We are seeing improvements in payment timeliness, and people are getting more support early so the reasons for increased rent arrears will not necessarily apply.
I want to make this point about what universal credit does. The work done within universal credit to give people the support to prepare for work can be too easily missed from debate.
Several hon. Members rose—
Mr Gauke
I will just make a little bit of progress.
Universal credit gives a person a work coach, who provides personalised support, helping them to stay close to the labour market and overcome barriers to work. A universal support package provides people with assistance to build confidence and competence with IT, manage their universal credit account online and access online job search facilities and training. Universal credit makes being out of work more like being in work, because people are paid monthly, as 75% of employees are, and because it is paid directly to tenants instead of to their landlord. It also stays with recipients during the transition from being out of work to being in work.
Lucy Frazer
The Secretary of State makes a really important point about the unemployment figures and the importance of getting people into work. Will he join me in congratulating my constituency, which has one of the lowest levels of unemployment—the sixth lowest—in the country, with only 375 people unemployed or claiming unemployment benefit?
Several hon. Members rose—
Stephen Crabb (Preseli Pembrokeshire) (Con)
The Secretary of State is being very generous with his time. Did not the shadow Secretary of State rather give the game away when she denied any link at all between universal credit and the increase in employment levels? Since 2010, the Labour party has set its face against welfare reform. In 2010, Labour Members ran to the barricades to defend an outdated system that trapped people in poverty and worklessness for years.
Mr Gauke
I am just making a point about the speech we just heard from the shadow Secretary of State, who has set her face against any form of conditionality in the benefits system, as far as I can tell. She fails to appreciate that the best way of helping claimants is to get them into work. That sometimes requires a change of behaviour, and a degree of conditionality within the system is required to ensure that people change their behaviour so they can make progress.
Mr Speaker
Order! I am sorry to have to shout, but the hon. Gentleman, though he speaks with great force and eloquence, took too long. We must have shorter interventions, as it is not fair on others.
Mr Gauke
I will give way, but not for a moment.
Throughout this period, claimants have a flexible, clear and tailored claimant commitment so they fully understand their responsibilities. The commitment supports and encourages them to do everything they can to move into or towards work, or to improve their earnings. The only thing we ask is that claimants meet reasonable and agreed requirements that take into account their individual circumstances and capability, including mental health conditions, disability and caring responsibilities. I hope that this approach to benefit conditionality will have the support of both sides of the House, including the hon. Member for Wallasey (Ms Eagle).
Ms Angela Eagle
The Secretary of State must surely realise that the way in which the system is being administered is leaving people penniless and possibly destitute. He must address that point. The Government are rolling all the six benefits into one; if that is then not available to people for six weeks, there are people who cannot afford to survive in that time. The loans, which have to be paid back, are not an adequate response. Will the Secretary of State admit the human suffering that is happening in all our constituencies and deal with that particular point?
Mr Gauke
Let us be clear: if people need support under this system, they do not have to wait for six weeks. [Hon. Members: “They do!”] They do not have to wait for cash in their pocket from the state because they can get an advance, which is normally paid within three days. If someone literally does not have a penny, they can get that money on the day. There is a responsibility on all of us as constituency MPs, when we meet our constituents who face difficulties of this sort, to inform them of the availability of advances, not to scare them with the belief that they have to wait six weeks when they do not.
Richard Graham (Gloucester) (Con)
The points being made by Opposition Members are disappointing in one particular way. There is a strong responsibility on all of us as Members of Parliament to help our constituents when they get into problems, rather than trying to weaponise them politically. One way this could be done is to encourage our largest housing associations to have an implant inside the Jobcentre Plus so that at the very moment somebody goes on to universal credit, the housing association is there and able to make sure they get the necessary advance so that they can pay their rent. Does the Secretary of State agree?
David Morris
My constituency was a pilot scheme for universal credit, and I regularly meet the jobcentre and the citizens advice bureau. The important point is that there were teething troubles in the early days, but people can now get a loan on the day. The worst wait is seven days, depending on the individual’s circumstances. The problem—if there is a problem that has to be addressed—is how the loan is paid back. The repayment cap is currently at 40% of payments. Would the Secretary of State look into a 10% rate instead, to help the system flourish even further?
Several hon. Members rose—
Mr Gauke
I have given way numerous time already, probably a multiple of the number of times the shadow Secretary of State gave way. I do not want the House to miss this point: universal credit represents a generation-changing culture shift in how welfare is delivered and how people are helped, creating a system that allows people to break free from dependency, take control of their lives and move into work. Our analysis shows that 250,000 more people will be in employment as a result of universal credit when it is fully rolled out. Universal credit is picking up from a deeply flawed system and striving to solve problems that were previously thought unsolvable.
Caroline Lucas (Brighton, Pavilion) (Green)
If the Secretary of State’s intention really is not to cause hardship and distress, why will he not get rid of that automatic six-week wait? Many people still do not know about it. Many do not know to go to their MP to seek solutions. Get rid of it. What he is talking about is a loan, which has to be paid back over six months and which many people are not eligible for. The point is that the way the system is designed is making people fall into hardship, and it is deliberate. It is not an accident. It is absolutely an integral part of the design. Change it.
Mr Gauke
I will come back to the six-week period.
We have to remember that we have inherited an old system, in which complexity and bureaucracy often served to stifle the independence, limit the choices and constrain the outlook of its claimants. The disincentives in the legacy system to work or earn more have been removed, along with the complex hours rules and cliff edges.
Several hon. Members rose—
Mr Gauke
I have to make some progress.
Claimants now no longer need to switch between benefits if they move in and out of work, so they are free to take up short-term and part-time work without worrying about being worse off or their claim ending. It is working: our research shows that compared with people in similar circumstances under the previous system, universal credit claimants spend more time looking for work, apply for more jobs, take up jobs that they would not even have considered previously, and take on more hours or extra jobs. That is not an abstract discussion; this is real people’s lives being improved because of universal credit.
Mims Davies (Eastleigh) (Con)
Eighteen months ago, I visited Radian, a housing association in my constituency. Radian expressed to me and to our hon. Friend the Minister for Employment concerns about the impact of universal credit on tenants. Eighteen months later, those people are in work, paying the rent and working with the housing association. The outcome is positive. Labour Members are simply scaremongering.
Anna Soubry (Broxtowe) (Con)
Thanks to a Conservative Government, we now have almost full employment in this country. For a number of people who claim unemployment benefits, their mental health is a barrier to getting work. What assurances can my right hon. Friend give us that the universal credit system will either help people with low-level mental health conditions to get back into work, or give them the support they need for their future?
Mr Gauke
My right hon. Friend makes a good point. I was about to give an illustration of the way universal credit can work involving a claimant with learning difficulties, who was out of work when he came to the jobcentre. His work coach provided tailored support, building his confidence and capability. That man is now in work. He told us that he is proud of himself for getting into work, and that he did not think it would have been possible without universal credit. He is now looking forward to the future. That personalised support, tailored to individual circumstances, is much more widely available.
Let me give another example. A university graduate had not previously had a job but was desperate to get into work. Her work coach helped to build her skills—interview skills and application writing—and she was soon successful in gaining a 16-hours a week job. When she was offered overtime, the work coach supported the claimant flexibly, rescheduling her Jobcentre Plus appointments so they did not clash with her new hours. The claimant could accept the overtime, confident that she would remain on universal credit and continue to be supported by her work coach.
Those are true testimonies of the powerful potential of the reform to change lives for the better.
Tom Brake (Carshalton and Wallington) (LD)
Does the Secretary of State agree that one of the best ways to help people into work and support them is to deal not only with the six-week wait, but with the fact that—according to Citizens Advice—one in three people now wait longer than six weeks, and one in 10 wait longer than 10 weeks?
Mr Gauke
Let me deal with the points on the waiting period and timeliness. I acknowledge the concern. Returning to the intervention from the hon. Member for Brighton, Pavilion (Caroline Lucas), we have to remember that a waiting period is fundamental to the structure of universal credit, which pays people monthly, mirroring the world of work. Universal credit also automatically adjusts payments to take account of a claimant’s income in a particular month, meaning that a claimant will always be better off in work. To do that, payments necessarily have to be made in arrears.
We know that some people cannot afford to wait six weeks for their first payment, which is why we have advances that provide those in financial need with up to their first universal credit payment. Increasing numbers of people claim that; the numbers from July show that the majority of claimants did so. Claimants who want an advance payment will not have to wait six weeks; as I said, they will receive the advance within five working days, and if someone is in immediate need the advance can be paid on the same day. I recently improved the guidance to DWP staff to ensure that anyone who requires an advance payment will be offered it up front.
Several hon. Members rose—
Mr Gauke
I will make a little more progress before giving way again.
Of course it is important that we get people the right money at the right time. As UC full services roll out, there have been significant improvements in verifying claims and making payments on time. Our latest data show that 80% of new claimants are being paid in full and on time; 90% receive some payment before the end of their first assessment period; and, taking into account advances, 92% of new claimants receive some support within six weeks. More than 1 million claims to UC have been taken. The live service is available in every part of the country and the full service version is already in 135 of our jobcentres for new claims across all claimant types.
Neil Gray (Airdrie and Shotts) (SNP)
The Secretary of State says that advances are typically paid within three days. Of course, an advance in crisis funding is an admission that the system is failing, but aside from that, what evidence does he have for saying that payments are made within three days? The answer to a written question that I received this week shows that the DWP is not collecting those data.
Mr Gauke
For a start, it is not crisis funding; it is an advance giving people flexibility in when they receive their universal credit payments. Our commitment is to deliver within five days, and my understanding is that typically payment is made within three days. We are providing support to people earlier. I acknowledge the concerns. I have seen the hard cases of people who have apparently gone weeks—sometimes months—without support. What we are saying is that they can get an advance quickly, as long as we have verified their identity.
Helen Whately
May I back up my right hon. Friend, drawing on work I have done in my area and on discussions with citizens advice bureaux? When people have needed advance payments, they have received them incredibly quickly, within two or three days, and the jobcentre staff tell me that universal credit is helping them to help people to get into work. Does he share my frustration at hearing so much negativity from Labour Members and never any positives?
Mr Gauke
I certainly do. This is an important matter and strong views are held in all parts of the House, but I urge right hon. and hon. Members to engage with their local jobcentres. When they talk to jobcentre staff, many Members hear what my hon. Friend just described—that the universal credit system is delivering for people, giving them the opportunity to get jobs. That is exactly what we are determined to do.
Universal credit is working and the roll-out will continue—to the planned timetable. We are not going to rush things. It is more important to get this right than to do it quickly. At the moment, of the total number of households that will move on to universal credit, we are currently 8% of the way there. By January, it will be 10%. Across the country, we will continue to improve our welfare system to support further those who aspire to work.
Several hon. Members rose—
Mr Gauke
I have given way numerous times. I am conscious that, as the shadow Secretary of State repeatedly said, 90 speakers want to get into this debate, and I have spoken for nearly half an hour, which is more, I am sure, than the House can endure.
We are under no illusion but that we must continue to work together to resolve issues as they arise and ensure a successful roll-out. I want to improve the system. I want constantly to refine the system. I want to make changes where necessary to test and learn and improve. I am determined to do that. I have made an announcement today along those lines about telephone lines.
Karl Turner (Kingston upon Hull East) (Lab)
We all welcome the Government’s concession on the premium phone line, but I met the CAB on Monday and it tells me that advisers are sometimes waiting up to half an hour to get through. Would the Secretary of State consider an MP-type hotline for advisers from the CAB and other welfare advisers?
Mr Gauke
First, we have never had a premium line; it is the same sort of system that one of the hon. Gentleman’s constituents would find if he called him and booked into a constituency surgery. It has never been a premium line, but we are changing it. On the average waiting times, I think that in September it was five minutes and 40 seconds. As for his particular proposal, let me take that away. Very often the CAB needs to call the local jobcentre rather than the national centre, because if it wants to deal with an individual case, dealing with the jobcentre would be more helpful.
Simon Hoare
I thought that there was a helpline for MPs to deal with all our constituents’ cases—unless it is a courtesy extended only to North Dorset.
Mr Gauke
My hon. Friend is absolutely right, but to be fair to the hon. Member for Kingston upon Hull East (Karl Turner), I think that he wants to extend the helpline that we have or offer a similar service to advisers. As I say, I will look at that, but very often advisers need to contact the local jobcentre.
Several hon. Members rose—
Mr Gauke
I have spoken for a long time and I want to push on.
The approach that we are taking is to test, to learn and to improve, because we are delivering a really important and fundamental change, moving towards a more dynamic system that is already improving lives and has huge potential to do more.
Let me say something about the approach we have heard from Labour Members. We have adopted, I believe, a responsible approach. Of course, there are legitimate questions to ask, and no Government can object to scrutiny, but let us not pretend that that is what we are getting from Labour Members. What we are hearing today is not constructive opposition—not a plan to reform universal credit, but an attempt to wreck it. It is an attempt to paralyse a policy that will help 250,000 more people get into work and to block a reform that will increase opportunity. It is an attempt to play politics but with no attempt to set out a real alternative. I say to my colleagues, well, let them do that, but we will proceed. We will address the historical failures of our benefits system, we will increase opportunity, and we will deliver a welfare system that puts work at the heart of it.
Oral Answers to Questions
David Gauke Excerpts(7 years, 1 month ago)
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Mohammad Yasin (Bedford) (Lab)
The Secretary of State for Work and Pensions (Mr David Gauke)
The roll-out of universal credit is proceeding to plan, gradually and sensibly. People are moving into work faster and staying in work for longer. The most recent phase of expansion will only take the proportion of the forecast claimant population receiving universal credit from 8% currently to 10% by the end of January.
Hywel Williams
There is a great deal of support for the principles of universal credit. However, the roll-out has been characterised as
“operationally messy, socially unfair and unforgiving”.
These are not my words, but those of Sir John Major. If the Secretary of State will not postpone the roll-out—along with many other right hon. and hon. Members, I would like him to consider that again—will he consider two other remedies: to drop the waiting period, and to allow the benefit to be paid fortnightly?
Mr Gauke
Let me be clear: as I touched on earlier, the evidence so far shows that those who go on to universal credit are more likely to be working six months later than they would be had they been on the legacy benefits, and they are also more likely to be progressing in work. That is really important, and it is not something that I want to deny people. I believe that we should roll out something like this gradually and sensibly, and make changes as and when necessary, but that is exactly what we are doing.
Mr Carmichael
Those of us who remember the chaos around the introduction of tax credits can see the good sense in a phased, gradual introduction to universal credit. However, I have to say to the Secretary of State that if we do not learn the lessons from the pilots, we frankly risk losing any advantage that we will gain. Some 57% of applicants for universal credit are having to borrow money before their first payment. Is not that alone enough to justify a pause?
Mr Gauke
The system of advances is an integral part of the system. It has always been there, but we want to make that properly available. Nobody who needs support should have to wait six weeks before they receive any support. What we are doing is making it clear that people can receive an advance of their first month’s payment, which is then deducted over the next six-month period. That is helping people deal with cash-flow issues in that first month, which I think is a sensible and pragmatic response.
Mohammad Yasin
A recently bereaved constituent of mine, a working single parent, has seen her income reduced by £300 a month since transferring to universal credit. For her, work does not pay. Will the Secretary of State urgently review the link between agreement to support payments and universal credit, and will he stop the roll-out until he has done so?
Mr Gauke
The hon. Gentleman says that work does not pay. Let us be clear: universal credit always means that it is worth working an extra hour and worth taking a pay rise. It is always worth working more under universal credit, which was not the case with the legacy benefits. That is why the evidence is suggesting that people do work more and do work more hours than they do under the legacy systems.
Stephen Crabb (Preseli Pembrokeshire) (Con)
Does my right hon. Friend agree that one of the reasons why more people have gone out to work this morning than ever before in our nation’s history is that we as a Government have not ducked the challenge of welfare reform, we do not let people languish for years on out-of-work benefits, and universal credit is an essential part of the welfare reform programme?
Mr Gauke
My right hon. Friend is absolutely right. It has been the consistent policy of this Government—including under my predecessors, such as my right hon. Friend—to ensure that we have a welfare system that puts work at the heart of it. That is one of the reasons why we have record levels of employment, as he so rightly says.
Luke Graham (Ochil and South Perthshire) (Con)
Mr Gauke
My hon. Friend is right to highlight that point. As I said last week, we are refreshing the guidance to DWP staff to ensure that people who need support—who will struggle to get through to the end of the assessment period without financial support—have access to that money quickly. Increasing the eligibility for advance payments is one of the best ways in which we can address some of the concerns that have been raised and learn from that experience.
Heidi Allen (South Cambridgeshire) (Con)
Although I believe that advance payments are treating the symptoms rather than the cause, I welcome the Secretary of State’s additional guidance to make sure that jobcentres offer them. Advance payments cover roughly two weeks’ worth of money: what support is in place for people waiting three, four, five, six or seven weeks?
Mr Gauke
The level of advance payments of 50% is, we believe, the right balance between getting support to people early in the process—they can get it very quickly—and ensuring a reasonable level of deduction for that advance payment in subsequent months. Clearly, this is an issue that we will continue to look at, but 50% strikes the balance. I welcome my hon. Friend’s support for that announcement.
Neil Gray (Airdrie and Shotts) (SNP)
Rent arrears, food poverty and in-work poverty have all rocketed in areas where universal credit has been rolled out. The third sector has united to join in our call for universal credit to be halted, and we know that pressure is mounting on the Conservative Back Benches for that to happen. Is not the Secretary of State’s apparent climb-down on crisis loans and advance payments an admission that universal credit is failing?
Mr Gauke
Not at all. I come back to the point that universal credit is giving more people the opportunity to get into work and progress in work. The personalised support that is provided by jobcentres where universal credit has been rolled out is proving to be effective. To those people who call on me to stop the process, I say that once fully rolled out, universal credit is likely to mean that 250,000 more people will be in work than would otherwise have been the case. I will not deny those people that opportunity.
Neil Gray
The Secretary of State is either desperately deluded or ignorantly incompetent. In one of the areas in which universal credit has been rolled out, East Lothian Citizens Advice reports that more than half of its clients on universal credit are worse off by an average of £45 a week. The just under a third who are better off have gained just 34p a week. How much more evidence of social destruction will it take for the Secretary of State to have the strength to halt the roll-out?
Mr Gauke
Universal credit is adding to what the Government have already been doing—ensuring that work is at the heart of welfare. That is why we have 3 million more jobs than we did in 2010. Welfare reform is part of the reason for that, and it is part of the reason why we will continue to press on with reforming the welfare state to encourage work and help people to progress in work.
Andrew Selous (South West Bedfordshire) (Con)
May I warmly welcome advance payments within five days and immediate needs payments the same day as a definite step forward? Given the reasonably high levels of adult illiteracy and poor computer skills in some areas, can the Secretary of State say something about how volunteers might be able to work alongside personal advisers to help people fill in the application form in the first place?
Mr Gauke
It is important that people filling in forms receive the necessary support, but jobcentre staff provide that support. Voluntary organisations may be able to assist, but Jobcentre Plus staff are already giving the intensive support necessary to help people to complete the applications.
Frank Field (Birkenhead) (Lab)
Given the Secretary of State’s confidence in the roll-out of universal credit to another 150 Jobcentres Plus, can he give the House a guarantee that none of our constituents will face hunger or near destitution through lack of money over the Christmas period?
Mr Gauke
Universal credit is about ensuring that our constituents are in a stronger financial position. That is what we are trying to deliver by enabling them to work and providing the support they need. As I said earlier, if we look at where we want to get to by 2022, 8% of claimants are already on universal credit and by January it will be 10%. The process is gradual and measured, and that is enabling us to learn from the experience and make improvements, which we will continue to do all the time.
Mr Philip Hollobone (Kettering) (Con)
I support universal credit and its roll-out, but I am concerned about applicants with zero savings who, if they lose money for one or two weeks, have nothing to fall back on. Will the Department consider the possibility of jobcentres writing supportive letters to landlords to explain the situation in which benefit claimants find themselves, because the worst outcome for applicants is that they lose their home?
Mr Gauke
My hon. Friend makes a very good point. There is an obligation on social landlords, given the source of income through universal credit, to work constructively with tenants. If a tenant has a reasonable expectation of receiving housing costs as part of their universal credit payment but has not yet received them, the landlord should not take action and the tenant should not face risk of eviction.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
As we have heard, universal credit is causing debt, rent arrears, and even homelessness up and down the country, with many claimants already in work. Given that housing associations are saying that over 80% of rent arrears are down to UC, and that the Mayor of Greater Manchester is predicting that rough sleeping will double as a result of UC roll-out, how many more families does the Minister estimate will be made homeless this winter as a result of the Government’s refusal to pause UC roll-out?
Mr Gauke
Let us be clear: no one needs to go six weeks without financial support when there is a system of advances in place. I make the point to all right hon. and hon. Members that if they are aware of constituents who have not received an advance, they can make it clear to them. Let us be realistic: the fact is that we are now moving towards a welfare system that does not put in place barriers to work and does enable people to make progress. It is no good Labour Members saying they are in favour of the principles, but then trying to obstruct the delivery of a reform that will give 250,000 more people a job.
Kelvin Hopkins (Luton North) (Lab)
Kevin Foster (Torbay) (Con)
The Secretary of State for Work and Pensions (Mr David Gauke)
Payment in arrears has been in the design of universal credit since 2010, and was implemented by the coalition Government in 2014. Our latest data show that more than 80% of new claimants are being paid in full and on time, which is a significant improvement on the position earlier this year, and that more than 90% receive some payment before the end of their first assessment period.
Kevin Foster
Universal credit is due to be rolled out in Torbay in May 2018. What further assurances can the Secretary of State give that resources will be made available to ensure that people in my constituency who make claims under the scheme will receive their payments on time?
Mr Gauke
We are ensuring that sufficient resources are available in jobcentres. It is worth pointing out that we have made significant progress on universal credit timeliness this year—as I have mentioned, more than 80% of new claimants received their full payment on time, and more than 90% received part of their payment—and we expect to build on that positive trend. I am sure that my hon. Friend will join me in welcoming universal credit roll-out to Torbay next May.
Stephen Timms (East Ham) (Lab)
The problem is that “on time” means after a six-week delay, and that delay, as the Secretary of State knows well, is causing immense hardship up and down the country. Last week I met Maria Amos, who came within an inch of suicide because she had to live literally on nothing but water for six weeks, irreparably damaging her health. The Secretary of State can choose to ignore organisations such as Citizens Advice, but will he at least take some notice when Sir John Major calls for a pause?
Mr Gauke
What I would say—this is exactly the point I made earlier—is that I do not believe that anybody should be left without any support for six weeks when they do not have savings or an alternative source of income, which is why it is important that advances are available within the system. The majority of claimants now make use of advances. We need to ensure that that is properly communicated to claimants. I will certainly do that, as I am sure will all Members of this House.
Mark Pawsey (Rugby) (Con)
My constituency was one of the first to introduce universal credit, and it went on to full service in 2016. Staff in my constituency tell me that they are very familiar with the new system. Does the Secretary of State agree that we need to ensure that what we have learnt from the pathfinder jobcentres is quickly rolled out to those now taking up the new system?
Mr Gauke
We must constantly learn from experience—this is about testing, learning and improving. We must ensure that awareness of the advances system is high, and clearly that has increased in recent months. My hon. Friend makes a point about jobcentre staff, and my experience of meeting such people up and down the country is that they are enthused by what universal credit can do for claimants to help them to get into work.
Margaret Greenwood (Wirral West) (Lab)
Twenty-four per cent. of new universal credit claimants wait longer than six weeks to be paid in full. Only one advance payment is allowed for a new universal credit claim, and the maximum award is 50% of the claimant’s estimated benefit, so how will advance payments really prevent families from getting into debt while waiting for their first universal credit payment?
Mr Gauke
The timeliness of payments has improved since the figures that the hon. Lady cites were compiled, and we continue to improve it. As I have said, 90% of claimants receive some support within the six-week period. Advances are an important part of the system to ensure that people get the support they need. It is incumbent on all of us not to worry people that they will be left without any support whatsoever, but to draw their attention to the fact that they can access funds when they need to—generally waiting no more than five working days or, if necessary, receiving them straight away.
Margaret Greenwood
According to the Trussell Trust, food bank referrals have increased at more than double the national average in areas where the universal credit full service has been rolled out. Does the Secretary of State agree that the social security system should prevent people from having to visit food banks, rather than exacerbating need?
Mr Gauke
We are very keen to ensure that the advances system means that people can access funds so that they do not have to visit food banks. In recent months we have seen an increased use of that system, because we have done more to publicise it, and I want to go further on that. I think that is an important part of a system that, when we step back and look at it, is ensuring that more people are able to work and to progress in work, and that should not be forgotten.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Tom Pursglove (Corby) (Con)
The Secretary of State for Work and Pensions (Mr David Gauke)
We are delivering our promise to reform welfare provision in this country. Universal credit replaces the outdated and complex benefits system of the past, which too often stifled people’s potential. Universal credit is a flexible and personalised system that offers unprecedented support. It ensures that people are always better off in work, with payment gradually reducing as earnings increase. It is working: under universal credit, people are moving into work faster and staying in work for longer. We are fully committed to the scheduled roll-out for universal credit full service. It will be expanded throughout the country to the planned timescale, delivering a simpler system that encourages work and supports aspiration.
Tom Pursglove
Several of my constituents have raised with me the importance of ensuring that assessment centres are as accessible as possible. What steps is the Department taking to ensure that, on an ongoing basis, accessibility is checked regularly and improvements are made where necessary?
Ellie Reeves (Lewisham West and Penge) (Lab)
Mr Gauke
On jobcentres, the Department is sensibly making use of the fact that a contract has ended to make a number of improvements to the service provided. Yes, that does mean that some jobcentres will close, but it also means that the provision of services throughout the country will be done in a modernised and effective way. On employment, the fact is that more people are employed than ever before, including older members of the workforce.
Jo Churchill (Bury St Edmunds) (Con)
John Mann (Bassetlaw) (Lab)
Nicky Morgan (Loughborough) (Con)
Stephen Lloyd (Eastbourne) (LD)
Mr Gauke
The benefits freeze was a measure that this Government took to contribute to reducing the deficit. On the point about people having to wait 10 weeks before receiving universal credit, 80% get paid in full and on time after six weeks. The system of arrears is inherent in universal credit because the payment is based on how much a person has earned over the previous month. That has always been part of the design, and it was part of the design that, presumably, the hon. Gentleman voted for when the coalition Government passed the legislation.
Philip Davies (Shipley) (Con)
Rachael Maskell (York Central) (Lab/Co-op)
On 12 July, universal credit was rolled out in York. Many of the families affected also receive free school meals and therefore had a devastating time of food poverty over the summer. Will the Minister learn lessons from the pilot scheme and ensure that universal credit is not rolled out in advance of school holidays?
Mr Gauke
Universal credit was rolled out in 29 job- centres in July. It is important that we continue to make progress in the roll-out. We are doing it gradually and sensibly, but we are moving towards a system that helps more people get into work. Of course we are constantly learning lessons and finding ways to improve things, but it is a system that is helping to deliver more people into work.
Stephen McPartland (Stevenage) (Con)
Anna Soubry (Broxtowe) (Con)
I am grateful to the Government for the assistance given to my constituent, who had to leave Dominica because of the terrible damage caused by the hurricane. But on her return back to this country with her 22-month-old son, she has discovered that she is not entitled to any benefits whatever for three months. Will the Minister meet me to discuss how we can ensure that we have a right and proper system to make sure that people in such circumstances really are entitled to benefits?
Martin Whitfield (East Lothian) (Lab)
East Lothian is a pilot area for universal credit, and the third sector—particularly the citizens advice bureau and East Lothian’s local authority welfare service—has kept universal credit going by supporting a very high percentage of applicants. Will the Minister confirm when there will be additional funding for the third sector, so that it can carry on supporting the DWP with universal credit?
Mr Gauke
We obviously continue to engage with the voluntary sector. I know what the CAB was campaigning for, but it did welcome what I said last week about advances; indeed, I am meeting the CAB later this week to further discuss how we can work together to deliver a very important welfare reform.
Ruth George (High Peak) (Lab)
While the increase in advance payments is welcome, does the Secretary of State not share my concern that the CAB has said that, on average, claimants have only less than £4 a month to pay back creditors? Therefore, advance payments are simply storing up problems for the future. Will he commit to giving the House a statement on the numbers who are coming into universal credit, the time it takes to pay them and the numbers who are forced into debt, rent arrears or hardship because of this policy?
Mr Gauke
We do update the House on information, as we have it, about the number of claimants for universal credit, the timeliness details and other details, and we will continue to do that. When it comes to advances, there is a concern across the House that people are left six weeks without receiving any support. Ensuring that advances are there and that they are made known to people is really important, and I hope all Members will do that.
Chris Stephens (Glasgow South West) (SNP)
A constituent who relies on agency work from the shipyards finds himself in rent arrears of over £900 as a result of being on universal credit. Does that not show that the concerns of social housing providers should be listened to, or does a social housing provider have to go under before its concerns are addressed?
Mr Gauke
The DWP has been working closely with social housing providers on putting in place what is described as the landlord portal, which enables information to flow between social landlords and the DWP. It has already been piloted and will be in operation later this month. That is one of the things we are doing to ensure that this process is constantly improving and that we can verify identity and get the right money to the right people as quickly as possible.
Ian Austin (Dudley North) (Lab)
How much does the Secretary of State estimate is being paid out through housing benefit, or will be paid out under the housing-related costs of universal credit, for unfit accommodation in the private rented sector? All too often, I meet vulnerable tenants living in completely unfit accommodation. A huge amount of taxpayers’ money is being used to line the pockets of dodgy landlords. It is a complete and utter disgrace, and I would like to know what the Secretary of State’s estimate is of the size of the problem and what he is going to do about it.
Stephen Timms (East Ham) (Lab)
I am very grateful, Mr Speaker. Apart from shocking delays, Citizens Advice highlights two big problems with universal credit. One is that it is too complicated; people cannot understand it. The second is that when there is a problem, there is nobody there to help people. I am glad that the Secretary of State is meeting Citizens Advice, but will he have anything to say to them on those two specific problems?
Mr Gauke
The personalised support available in jobcentres to people claiming universal credit is much more advanced than that which we have had in the past. In terms of complexity, universal credit is a much simpler system than that which has existed up to now, with six different benefits, leaving us in the absurd position in which people were unwilling to take a job that required them to work more than 16 hours because they would move from one benefit system to another, knowing that their hours might fall in the future, so they would move back to a different system. That complexity has discouraged people from working more hours and we should all seek to tackle that. That is exactly what universal credit does.
Pensions
David Gauke Excerpts(7 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Mr David Gauke)
With permission, Mr Deputy Speaker, I will make a statement on pensions.
Last year, the Government commissioned the Government Actuary and John Cridland CBE to produce independent reports to inform the first review of the state pension age required under the Pensions Act 2014. I am grateful to Mr Cridland for his contribution in producing a thorough and comprehensive review. Over the course of his review, evidence was put forward by a wide range of people and organisations. I am grateful to everyone who took the time to engage. Today I am publishing the Government’s report on this review.
The Government are determined to deliver dignity and security in retirement, fairness across the generations, and the certainty that people need to plan for old age. In the report, I set out how we will achieve these things. As part of this publication, we have set out a coherent strategy targeted at strengthening and sustaining the UK’s pensions system for many decades to come. This is about the Government taking responsible action in response to growing demographic and fiscal pressures. That is why I am today announcing the Government’s intention to accept the key recommendation of the Cridland review and increase the state pension age from 67 to 68 over two years from 2037. This brings forward the increase by seven years from its legislated date of 2044 to 2046, in line with the recommendation made by John Cridland, and following careful consideration of the evidence on life expectancy, fairness and public finances.
When the modern state pension was introduced in 1948, a 65-year-old could expect to live for a further 13½ years. By 2007, when further legislation was introduced to increase state pension age, this had risen to around 21 years, and it is expected to be nearly 25 years in 2037. As the Cridland review makes clear, the increases in life expectancy are to be celebrated. I also want to make it clear that, even under the timetable for the rise I am announcing today, future pensioners can still expect to spend on average more than 22 years in receipt of the state pension. But increasing longevity also presents challenges for the Government. There is a balance to be struck between the funding of the state pension in years to come while also ensuring fairness for future generations of taxpayers.
The approach I am setting out today is the responsible and fair course of action. Failing to act now in the light of compelling evidence of demographic pressures would be irresponsible, and place an extremely unfair burden on younger generations. Although an ageing population means that state pension spending will rise under any of the possible timetables we have considered, the action we are taking reduces this rise by 0.4% of GDP in 2039-40. That is equivalent to a saving of around £400 per household, based on the number of households today.
Our proposed timetable will save £74 billion to 2045-46 when compared with current plans, and more than £250 billion to 2045-46 when compared with capping the rise in state pension age at 66 in 2020, as the Labour party has advocated. It is the duty of a responsible Government to keep the state pension sustainable and maintain fairness between generations. That is why the Government are aiming for the proportion of adult life spent in receipt of state pension to be “up to 32%”. This is a fair deal for current and future pensioners.
We will carry out a further review before legislating to bring forward the rise in state pension age to 68, to enable consideration of the latest life expectancy projections and to allow us to evaluate the effects of rises in state pension age already under way. This Government have a proven track record on helping people plan for their retirement. Alongside our automatic enrolment scheme, which has already brought the benefits of private pensions to nearly 10 million people since its inception, we have also set out plans to enhance the availability of impartial consumer advice through schemes such as the single financial guidance body and the pensions dashboard. Today, people have a much better idea of what their pension will be, bringing more certainty and clarity. That is something the Government will build on; making it easier for people to seek advice and make effective financial decisions.
I want Britain to be the best country in the world in which to grow old, where everyone enjoys the dignity and security they deserve in retirement. At the same time, we need to ensure that the costs of an ageing population are shared out fairly, without placing an unfair tax burden on future generations. To deliver that, we need to make responsible choices on the state pension age, and that is what the Government are doing today.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I thank the Secretary of State for his statement, and for arranging to let me have sight of it 30 minutes ago.
Yesterday, the renowned expert on life expectancy, Professor Sir Michael Marmot, described how a century-long rise in life expectancy was
“pretty close to having ground to a halt”
since 2010, when this Government began their failing austerity programme. Last week, evidence from Public Health England showed how deep inequalities in healthy life expectancy remain, both regionally and between different groups in our society, including women, disabled people and black and minority ethnic groups. It is therefore astonishing that today this Government choose to implement their plans to speed up the state pension age increase to 68.
Most pensioners will now spend their retirement battling a toxic cocktail of ill health, with men expecting to drift into ill health at 63, five years earlier than this proposed quickened state pension age of 68, and women expecting to see signs of ill health at 64. This national picture masks even worse regional inequalities. Men who live in Nottingham are likely to suffer ill health from the age of 57, a full 11 years earlier, under this Government’s shortened plans, than a state pension age of 68. The Government talk about making Britain fairer, but their pensions policy, whether on the injustice that 1950s-born women are facing or on today’s proposal to increase the state pension age to 68, is anything but fair.
The Government claim that it is young people who will have to bear the burden of the state pension, but in fact it is the young who have to bear the burden of the cuts that they are facing already—cuts to education, housing and working age social security—as well as the Government’s endless extensions of the state pension age. Sadly, like much of the Conservatives’ policy platform, their approach to this matter appears to have changed little since their election manifesto. At that time, they promised to
“ensure that the state pension age reflects increases in life expectancy, while protecting each generation fairly.”
How does today’s statement meet the promise made in the manifesto, given the evidence on life expectancy that we have seen in the past week? What conversations has the Minister had with his new friends in the Democratic Unionist party, whose manifesto promised advocating
“for the interests of our older people”?
Perhaps, as the Pensions Minister astonishingly suggested in a debate earlier this month, the Government will force people in their mid-60s to seek out an apprenticeship. A constituent of mine, hearing that suggestion, visited our local jobcentre in Oldham, only to find that the adviser had no idea of any apprenticeship support or Government employment support available to a woman of her age. The Pensions Minister’s position was not one shared by Mr Cridland, who suggested that the social security system must be able to support those who find themselves unable to work. Perhaps Mr Cridland was unaware of the seven years of slash-and-burn policy on our social security system; the so-called “safety net” is increasingly inadequate, driving up pensioner poverty by 300,000.
Labour wants a different approach. In our manifesto, we committed to leaving the state pension age at 66 while we undertake a review into healthy life expectancy, arduous work and the potential of a flexible state pension age. We want an evidence-based approach to build a state pensions system that brings security for the many, not just the privileged few, so that we can all enjoy a healthy retirement.
Mr Gauke
Even by the standards of the Labour party, its approach to the state pension age is reckless, short-sighted and irresponsible. When the evidence in front of us shows that life expectancy will continue to increase by a little over one year every eight years that pass, fixing the state pension age at 66, as advocated by the Labour party, demonstrates a complete failure to appreciate the situation in front of us. Compared with the timetable set out by this Government, Labour’s approach will add £250 billion to national debt. Let us put that in context: it is almost twice as much as was disbursed into the financial sector following the financial crisis. Let us put it another way: spending in 2040 on the state pension would be £20 billion a year higher under Labour’s plans than under the plans we are setting out—that is almost twice the Home Office budget. Where on earth is this money coming from? Even the—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. In fairness, I want to hear both sides so that we can make a judgment, and I am finding it very hard to hear the Minister. This is in a reply to the shadow Minister, so we all ought to be able to hear the answer.
Mr Gauke
Thank you, Mr Deputy Speaker. Even the last Labour Government, who were not known for their fiscal rectitude, legislated to increase the state pension age to 68. Yet on top of a long list of unaffordable spending pledges, the Labour party now happily makes pledges on the state pension that it must know will cause unsustainable damage to the public finances.
The facts are, based on the most up-to-date evidence, and clearly set out in the Government Actuary’s report and John Cridland’s report, that life expectancy is going up. Healthy life expectancy at the age of 65 is also going up. The Government have to face up to this long-term challenge and not pretend that it does not exist. We should celebrate increased life expectancy, but it has consequences for fiscal sustainability that cannot be ignored. The Cridland review is a serious piece of work with a clear recommendation on the pension age. In contrast with the Labour party, we will act responsibly and accept that recommendation.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
I commend my right hon. Friend for his statement. The Labour party used to work on a consensual basis, given the facts, but it has now departed from that. He is aware that we have a proud track record in reform, for example, in respect of automatic enrolment and the single tier. We also got rid of the default retirement age, where people were forced to retire when they did not want to do so. It is the Conservatives who have a proud record. The single figure that stands out starkly from this review is that if we do nothing about this, it will cost £250 billion more. That is not just a figure, as it will be borne by future generations, as they will have to pay excessive moneys. Given that the Labour party at the last election promised to get rid of the student debt and now reneges on that, does my right hon. Friend think that Labour will be doing the same very shortly on this one?
Mr Gauke
I thank my right hon. Friend for his question. He makes some good points about the work the Government have done over the past seven years in terms of fuller working lives and helping more people to work longer, and he has a proud personal record in what he did on that as Secretary of State. He is absolutely right to highlight the irresponsibility of the position Labour Members had at the last election. Just as they have walked away from a deeply irresponsible position on student debt, I hope they will walk away from a deeply irresponsible position on the state pension age.
Kirsty Blackman (Aberdeen North) (SNP)
I thank the Minister for advance sight of the statement. I can see why the Department for Work and Pensions did not want to publish this report by the date it was supposed to have been published by—7 May—because it would undoubtedly have lost the Conservatives more seats than they did lose.
The SNP opposes plans to raise the state pension age above 66. We also have concerns about the fact that the Government have chosen the 32% rather than the 33.3%, which was the more gentle of the scenarios presented in the Cridland review. I am lucky enough to be a few days inside the 69 group, so I will get to retire at 69 rather than 70, which people a couple of weeks younger than me will retire at if the full extent of the 32% in the Cridland review is implemented.
The SNP continues to call for the establishment of an independent savings and pensions commission. The Government are not doing enough to recognise demographic differences across the United Kingdom, and an independent review would look at those and take them into full account.
Mr Gauke
John Cridland looked at exactly those issues and concluded that the divergence within the regions and nations on this matter was greater than the divergence between them. However, if the Scottish Government believe that there should be more support from the state for those approaching retirement age, they will have the power to provide it. If they wish to provide that support in Scotland—effectively, providing support a year or two years earlier than in the rest of the United Kingdom—they have the power to do that. I would not particularly advise them to do it, but that is their decision, and I really do not think there is a complaint to be raised with the UK Government on that front.
Stephen Hammond (Wimbledon) (Con)
I commend my right hon. Friend for his statement. He is right to be tackling the issues of intergenerational fairness, but retirement is not about the state alone. What other measures, alongside this one on intergenerational fairness, will he propose to ensure that younger people can save for their retirement alongside state provision?
Mr Gauke
One thing I would highlight, as my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) did a moment ago, is what we have done on auto-enrolment. That means 10 million more people saving for retirement, which is a huge step forward. I am delighted with the success of auto-enrolment—the very low opt-out rates—and that is one example of how the Government are ensuring that people will have a dignified retirement, but we must remember that the public finances need to be in good order as well.
Diana Johnson (Kingston upon Hull North) (Lab)
Bearing in mind regional health inequalities, what steps will the Government introduce in terms of social security to support those who will not be able to work until this later age?
Mr Gauke
As a country we spend very large sums—something like £50 billion a year—on support for people with health and disability issues, and we will obviously continue to do that. That is the best way of supporting people who have health difficulties, rather than by having a lower state pension age, which would be unaffordable.
Nigel Mills (Amber Valley) (Con)
I thank the Secretary of State, although perhaps with not too much enthusiasm, for delaying my retirement by a year. I think I am in exactly the range of people whose retirement has just been delayed. What plans does he have to learn from the issues that arose from previous increases in the retirement age about communicating to people that this change will affect them?
Mr Gauke
First, I should say that the longer we can delay my hon. Friend’s retirement, the better that will be all round.
In terms of communicating with those affected, we are giving something like 20 years’ notice today, but as we legislate in due course, it will of course be necessary to communicate properly with those who are affected. [Interruption.] It will be done properly. It is proper that we communicate with those people, and we will do so.
Paula Sherriff (Dewsbury) (Lab)
What steps is the Secretary of State’s Department taking to ensure that older people are not subject to the Government’s punitive sanctions regime?
Mr Gauke
The number of sanctions is down by about half in the last year. We have a welfare system that has at its heart the principle of conditionality for many benefits, and to enforce conditions it is necessary to have a sanctions regime. However, the vast majority—something like 98%—of benefit claimants are not sanctioned.
Kwasi Kwarteng (Spelthorne) (Con)
With respect to the statement, my right hon. Friend will be aware that 300 people reached the age of 100 in 1952, when Her Majesty the Queen came to the throne; last year, it was over 13,000. Is he surprised, as I am, at the irresponsibility and recklessness of the Labour party in resisting some of these measures?
Mr Gauke
I do not know whether I am surprised any more by anything that the Labour party does, but it is disappointing. The reality is that we have an ageing population, just as every similar country does. We all have to respond to the facts, and the facts are that, as the population ages, and as life expectancy—and indeed healthy life expectancy—improves, it is necessary for the state pension age to reflect that. To deny that is just to deny common sense.
Chris Bryant (Rhondda) (Lab)
I had hoped that the Minister was coming here today because he had seen the light; that he had realised that the women from the 1950s have been dealt a terrible set of cards by this Government; that he was going to compensate them; that he was going to make good on the injustice that has been done to them; that he was going to make sure that every single person who was not even notified by the Government that they would be caught by the proposed measures would be compensated; and that he was finally going to acknowledge that women in my constituency who are in their 60s, who say to me that they are completely clapped out because they have had tough, laborious jobs all their lives, are the very people one of his Ministers said should now take up an apprenticeship. How dull are Ministers?
Mr Gauke
I am not sure I would want to call my constituents clapped out, but there we go. The position when it comes to those born in the 1950s, just as with this announcement on those born in the 1970s, is that we have to balance the need and the desire to provide a dignified retirement with the fact that state pensions have to be paid for, and it is unfair on taxpayers if we do not have a state pension age that reflects life expectancy. That is all we are saying, and it seems to me to be very hard to argue against.
Richard Graham (Gloucester) (Con)
The Secretary of State is absolutely right to go ahead with the main recommendation in the Cridland report, which, critically, gives advance notice of more than 20 years to those who will be affected, thereby distinguishing this Government’s record from that of the previous Labour Government, who failed to communicate adequately their changes to women’s state pension provision. Will my right hon. Friend confirm, first, that there will be a comprehensive communication programme to make sure everybody knows about these changes in advance and, secondly, whether the Government accept the Cridland report’s other recommendations, on means-tested benefits, working past the state pension age and the auto-enrolment review?
Mr Gauke
We are looking carefully at the other Cridland recommendations. Obviously, there are issues that have an impact across Government, but it is right to move swiftly on the key recommendation—on the state pension age—to give people as much advance notice as possible. However, my hon. Friend makes a good point about the communication process and so on, and those things will need to be determined nearer the time. As I said, we are 20 years away from the point at which this change takes effect, but we are determined to ensure that it is brought to the attention of all those who are affected.
Mr Geoffrey Robinson (Coventry North West) (Lab)
On the issue of the WASPI women raised by my hon. Friend the Member for Rhondda (Chris Bryant), the essence of their complaint, in some respects, is the fact that some of them were not even notified of the change that had occurred. Some were notified late, some were notified after it happened, and some received no notification at all. This point has been put time and again to the Government, and it is about time they came up with an answer to it. Instead of driving the WASPI women to take court action, why do not the Government give them a fair deal?
Mr Gauke
Some 5 million letters were sent out to the addresses that the Government had. As I say, the changes made in the 1995 Act were many, many years in advance of when they took effect. None of those women born in the 1950s had had their state pension age put back by more than 18 months by the Pensions Act 2011.
Ms Nusrat Ghani (Wealden) (Con)
Demographic pressures are felt acutely across East Sussex, where we have the most 85-year-olds, most of whom live in my constituency. With life expectancy increasing at birth and at older ages, can my right hon. Friend confirm that, looking ahead, people, including those who live in my constituency, can expect to receive more state pension over their lifetimes than generations before?
Mr Gauke
That is absolutely right. Looking ahead, every generation will spend more years, on average, receiving a state pension than the previous generation. That is a very good thing, but it is right that we get the balance right. If Governments do not address this issue, we end up with a crisis, end up having to move quickly, and end up with sharp increases in the state pension age. That is what we are avoiding through the responsible approach we are taking today.
Robert Jenrick (Newark) (Con)
I am the father of three young daughters. Office for National Statistics figures say that one of them will live to be 100, and that by the time they retire, there will be only two workers in this country for every retired person. Does the Secretary of State agree that it is blindingly obvious that we need to take the steps that he has outlined today? It should not be a cause of regret—it should be a cause of celebration that our children and grandchildren are going to live to such a grand old age—and it should be treated on a cross-party basis as the perfectly responsible action that any Government should be taking.
Chris Philp (Croydon South) (Con)
Does the Secretary of State agree that thanks to the financial responsibility shown hitherto, we have managed in the past seven years to increase state pensions quite generously by £1,250 a year, and that is why pensioner poverty has gone down?
Kevin Foster (Torbay) (Con)
As someone who had their state pension age increased to 68 back in 2007, along with everyone slightly older than me and everyone younger than me, I have listened with incredulity to some of the comments made this afternoon. How does this compare with the situation in other countries—for example, the Republic of Ireland? Presumably it is not just a challenge unique to the United Kingdom.
Mr Gauke
My hon. Friend is absolutely right. We are seeing increases in the state pension age in the Republic of Ireland, in the Netherlands, and in Denmark. It is what responsible Governments do and what responsible parties support. Unfortunately we have only one responsible party in this country.
Matt Warman (Boston and Skegness) (Con)
I pay tribute to the Cridland report, which is, in part, as excellent as it is because John Cridland was educated at Boston Grammar School in my constituency. Does the Secretary of State agree that by taking responsible, brave decisions, and having reviews such as the Cridland review, we avoid the situation that countries such as Italy find themselves in, where the pension age has to be increased, in one go, by four and a half years? This is the responsible thing to do and the fair thing to do.
Mr Gauke
My hon. Friend is absolutely right. We could have put this off, failed to address it, or kicked it into the long grass, but it is important for the future of this country that we have a Government who are prepared to take these long-term decisions, securing intergenerational fairness and ensuring that we provide more certainty to pensioners that there will not be the need for the sudden changes that may be seen elsewhere.