Pensions
David Gauke Excerpts(7 years, 4 months ago)
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The Secretary of State for Work and Pensions (Mr David Gauke)
In February this year, the Department for Work and Pensions published a Green Paper looking at what more needs to be done to ensure consumer confidence and secure the future of defined benefit (final salary) pensions schemes.
Building on this Green Paper, the Department intends to publish a White Paper later this year which will set out proposed next steps on what reform is needed to support the sector. It will address the commitments in the Government’s manifesto in relation to the regulation and rules governing defined benefit private pensions. The paper will also consider innovative delivery structures, such as consolidation and measures to drive efficiency within the sector.
While the sector is broadly working as intended, the White Paper will consider the need to evolve and adapt the regulatory regime to improve security for members. With more than £1.5 trillion invested in these schemes, people need to have confidence that they are resilient and robustly regulated.
The Government wish to ensure that the defined benefit pensions system continues to balance the needs of consumers, the schemes themselves and business for the future.
Throughout the Green Paper process the Department has worked closely with a range of external stakeholders to develop sensible policy proposals. We are grateful to those who have contributed to the consultation and it is our strong intention that this collaboration should continue throughout the White Paper process.
[HCWS48]
Jobcentre Plus: Closures
David Gauke Excerpts(7 years, 4 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Margaret Greenwood (Wirral West) (Lab)
(Urgent Question): To ask the Secretary of State for Work and Pensions to make a statement on his plans to close Jobcentre Plus offices, and the impact on local communities and Department for Work and Pensions jobs.
The Secretary of State for Work and Pensions (Mr David Gauke)
Yesterday’s announcement confirmed the proposals that were published in January. These changes will mean that the DWP will be able to offer a more efficient service, while delivering good value for the taxpayer, saving more than £140 million a year for the next 10 years. Eight out of 10 claims for jobseeker’s allowance and 99% of applications for universal credit full service are now made online, which means that DWP buildings are used much less, with 20% of the estate currently underutilised. Our estate plans must reflect the way customers interact with DWP now and in the future, not how they behaved in the past. I can assure the House that these changes will not lead to a reduction in the number of frontline jobcentre staff; in fact, to continue improving the service provided to customers, jobcentres are actively recruiting in many areas.
These changes are being made in consultation with DWP employees and their trade unions, which will ensure that the important connections that jobcentre staff have with the local community are preserved and customer services can be maintained.
The DWP’s private finance initiative contract with Telereal Trillium expires next March, which gives us an opportunity to review how we deliver our services. We have sought to rationalise our estate in a way that delivers value for the taxpayer and makes best use of the space available, while continuing to deliver vital support to our claimants and enabling the delivery of our reform agenda.
Margaret Greenwood
Members will recall that in December last year the Government announced that they were planning to close half the jobcentres in Glasgow. In January this year, they set out plans for further closures, amounting to the closure of more than one in 10 jobcentres across the UK. These closures have the potential for the loss of up to 750 jobs. Yesterday, the Department announced via a written ministerial statement that just six of the original 78 jobcentres earmarked for closure will remain open, and only 11 of the 80 planned to co-locate with local authorities have been given a reprieve. Two additional jobcentres that were to stay open have been added to the closure list.
The impact of the closures will undoubtedly be felt most by the poorest and most vulnerable in our society. By closing such a large proportion of the DWP estate, the Government would be forcing claimants to travel further to access the vital services that they need, thus having an impact on the lives of sick and disabled people, carers and parents with young children, so will the Minister commit now to publish the equality analysis on each site that is being closed? Currently these are secret, and they should be made public. Furthermore, the Government plan to subject an additional 1 million claimants to in-work conditionality, a process under universal credit by which people in work may be required to attend jobcentres. What assessment has the Minister made of the impact on demand for jobcentre services as a result of increased in-work conditionality?
The decision to close jobcentres on this scale at the same time as accelerating the roll-out of the universal credit full digital service makes no sense. It is simply not good enough to quote figures about online claims to justify closure plans. Universal credit will place other, new demands on staff, who will, for example, have to assess whether self-employed people claiming universal credit have a viable business plan. What assessment has the Minister made of the increased demand placed on jobcentre staff as a result of the roll-out of universal credit?
Finally, the closures will have an impact on jobs within the DWP. Will the Minister outline the number of jobs that will be lost as a result of these closures, among frontline jobcentre staff and in the corporate centre sites as a result of the new “hub strategy” for the corporate centre? The Government must immediately pause these closures to allow proper scrutiny of their plans.
Mr Gauke
I shall begin with the hon. Lady’s first point about Jobcentre Plus staff. The reality is that in every nation and region there will be an increase in the number of jobcentre staff, from the beginning of the process to its end. Job numbers are going up, particularly as we roll out universal credit. She talks about 750 job losses, but only a small minority of them are likely to be redundancies among frontline jobcentre staff. She asked how many; we are probably looking at a range of 80 to 100 or so—I do not want to be too precise about that, but that is the maximum we are looking at, and we hope to be able to bring it down.
The fact is that the reforms take account of the changes in the welfare system resulting from the rolling out of the universal credit full service. It is absolutely right that we make use of the fact that it is the end of a contract and take the opportunity to find savings. We are talking about taxpayers’ money. We can find savings in the DWP’s estate and, at the same time, provide modern, up-to-date jobcentres that provide the service that is needed. That is the right thing to do. I am disappointed that the Labour party is going to stand against the careful and sensible use of public money, which is exactly what the Government are delivering.
Robert Halfon (Harlow) (Con)
In these difficult times, will my right hon. Friend praise Harlow jobcentre, which does a huge amount not only to support my jobs fairs but to encourage apprenticeships? Will he ensure that jobcentres throughout the country do everything possible to employ apprentices and to encourage employers themselves to have apprenticeships?
Chris Stephens (Glasgow South West) (SNP)
Compassionate conservativism lasted fully two days. There should have been an oral statement and a vote in the House on this issue. Does the Secretary of State accept that there is a direct link between the index of multiple deprivation and those jobcentres earmarked for closure? Will he publish an equality impact assessment, particularly on the effects on those with disabilities and those with caring responsibilities? What engagement has there been with the devolved Administrations throughout the UK? What will be the effect of the roll- out of universal credit, given that some of the jobcentres earmarked for closure were included in the statement on the roll-out published by the Department?
Mr Gauke
I make the point to the hon. Gentleman that when it comes to jobcentres—this was touched on by the hon. Member for Wirral West (Margaret Greenwood) in her remarks about Glasgow—after these reforms have been completed there will be a reduction in the number of jobcentres there, but Glasgow will still have more jobcentres per head of population than any other city in the United Kingdom. Also, a number of the Glasgow jobcentres were particularly under-utilised. It is sensible that we rationalise the estate and can deliver modern services. In some cases, we need much improved jobcentres, with improved facilities and greater capability to do more things. That is exactly what the strategy involves.
On the equality impact assessment, the Government have, as always, fulfilled their obligations in terms of the assessment they have made. I make the point again: I hope that the Scottish National party is not going to stand against the sensible use of Government estates to deliver public services in the most efficient and cost-effective way.
Richard Graham (Gloucester) (Con)
Rationalising the use of the DWP’s property assets has to be a good thing, for the reasons that the Secretary of State has outlined. That is also true in city constituencies like mine where there is no danger of the JCP closing, but an opportunity perhaps to co-locate it alongside other services. Does my right hon. Friend agree that the more serious issue ahead is making sure that we have the right resources in the JCPs for the expanded roll-out of universal credit that is starting early next year?
Mr Gauke
My hon. Friend hits the nail on the head. That is exactly right. It is very important that we have jobcentres that are able to deal with the new and important role of providing the support that claimants need. I am talking about having the work coaches and the facilities in place. In some cases, that requires new, improved estates, and we should not be stuck just on the footprint that we happened to have a few years ago, particularly as there is now an opportunity to make those changes, given that the contract is coming to an end.
Gloria De Piero (Ashfield) (Lab)
Annesley DWP office has 130 workers, three quarters of whom are women. The close proximity of the office to their home enables many of those women to have a career and be a parent. There are no nearby offices to relocate them to, so I ask the Minister to pause the closure and conduct and publish an equality impact assessment in this special case.
Mr Gauke
It is the case that there are sites in Chesterfield and Mansfield, which are within half an hour by car from the site that the hon. Lady mentions. It is anticipated that at least 75% of the staff—probably more—can be redeployed to other sites and will not be in a position in which redundancy is relevant, and of course the DWP is seeking to ensure that that number can be maximised.
Nigel Mills (Amber Valley) (Con)
Does the Secretary of State agree on the importance of getting jobcentre staff to work outside jobcentres, in places such as food banks, to ensure that we are getting the right welfare claims in the right way?
Tom Brake (Carshalton and Wallington) (LD)
Sutton is a pilot for universal credit. I support the principle of universal credit, but the difficulty is that it is extremely complex and is leaving some people completely unable to plan their expenditure. When universal credit is rolled out more widely, how will the Minister ensure that those who cannot register their claims online, or, indeed, those who feel that they have to go to the jobcentre because they cannot rely on the post delivering certain items, are not severely disadvantaged?
Mr Gauke
As I have said, 99% register for universal credit online. Also, those who are seeking work are expected to spend up to 35 hours a week searching for work, and that includes the time taken to get to jobcentres, for example. In very particular cases, if there are those who are not able to make it to jobcentres, other arrangements can be made.
Philip Davies (Shipley) (Con)
The Secretary of State is aware that I am unhappy about the closure of Shipley jobcentre. I have many questions for him that you would not allow me to go through now, Mr Speaker. Perhaps my right hon. Friend will meet me so that I can go through some of them with him. Just for now, will he confirm that some of that outreach work will continue to be delivered within the Shipley constituency, and will he also guarantee that the staff there can choose which other office to work at, which may be much closer to their home, so that they do not all have to move to Bradford?
Mr Gauke
I can give my hon. Friend an assurance that outreach work will continue in Shipley. Not just in Shipley but more generally, DWP will look to work with staff as much as possible to accommodate their preferences. I know that my hon. Friend has already met the Minister for Employment to discuss this matter, but I dare say that he and I will have further conversations on this point in the near future. Given previous experience, we will probably have many such conversations.
Ben Lake (Ceredigion) (PC)
The Government seem obsessed with the spreadsheet economy to the detriment of our communities, which must suffer the consequences of austerity. The National Assembly for Wales does not have control over our own employment services, meaning that we too are quite vulnerable to the closure of jobcentres and the loss of hundreds of jobs. I urge the Secretary of State to reverse these planned closures, and ask him whether he would consider devolving Jobcentre Plus functions to Wales.
Mr Gauke
Let us be clear about the employment record over the past seven years. We have nearly 3 million people in work, youth unemployment has fallen by 375,000, the employment rate is at a record high and unemployment is at the lowest level since 1975. Some of the credit has to go to what jobcentres are delivering and the policies that the Government have pursued—those things have assisted. It is right that we continue to seek good value for money for the taxpayer, and I do not foresee any move towards further devolution in this area.
Jo Churchill (Bury St Edmunds) (Con)
What arrangements are being made to help vulnerable claimants to access jobcentres? I am thinking particularly of those in rural areas, for example by offering help with travel.
Mr Gauke
My hon. Friend raises an important point. There are steps that we take to assist more vulnerable claimants, such as being able to make visits, where necessary, in particular circumstances. That will continue, but it is absolutely right that we require those who are able to visit a jobcentre to do so.
Mr Dennis Skinner (Bolsover) (Lab)
Is the Secretary of State aware that when we embarked on finding jobs when the pits shut in the Derbyshire and Bolsover area, we set up Markham Vale straight off the M1 and created several hundred jobs in the process? That has not yet finished with the local authorities concerned. The Bolsover jobcentre played a significant part in ensuring that those 700 jobs were available, and, as a result, needs to continue. We are enlarging the site to provide several hundred more jobs. Surely it is not appropriate to shut the Bolsover jobcentre that has played a magnificent part in providing work for the miners and families of miners who lost their jobs. Surely he should reverse this.
Mr Gauke
I thank the hon. Gentleman for his recognition of the work that has been done to help those who were working miners. I think I am fairly confident in saying that employment numbers and unemployment numbers have moved in the right direction in his constituency over the past seven years, which may reflect the changing political nature of his constituency. The staff at the Bolsover site are moving to Staveley. Jobcentres do have a valuable role to play, as I have outlined, but it is right that we should have modern facilities and that is what these plans involve delivering.
Alex Burghart (Brentwood and Ongar) (Con)
Obviously, we are having this debate in the context of record employment. On both sides of the House, we should be welcoming the fact that fewer people are unemployed now than ever before. That has brought with it enormous social benefits—[Interruption.] If the hon. Member for Garston and Halewood (Maria Eagle) is patient for a moment, she will hear the question. In Wirral West, for example—
Alex Burghart
I will, Mr Speaker. The important thing is that we ensure that people have the support they need, rather than be obsessed with bricks and mortar.
Paul Blomfield (Sheffield Central) (Lab)
Sheffield’s Eastern Avenue jobcentre is rooted in the community that it serves. Its staff therefore understand local people and can do the job, better supporting them because of that. The Secretary of State talks about a much improved service, but does he not recognise that centralising the service, breaking that link with the local community, will damage the work that the jobcentre can do? Will he think again?
Mr Gauke
On the hon. Gentleman’s point about Sheffield Eastern Avenue centre closing, let me reassure him that outreach will be put in place in the local community, so there will continue to be a service in his area. The number of jobcentres in Sheffield is being reduced from seven to six, but in the context of that city that is the right move so that we have got six properly functioning, fully utilised centres rather than more.
Mr Christopher Chope (Christchurch) (Con)
May I say to my right hon. Friend that when the Labour Government closed down the Christchurch jobcentre the sky did not fall in. Would it not be sensible now, with fewer jobcentres, to ensure that they are open at weekends so that they are more accessible?
Mr Gauke
My hon. Friend makes a good point. Other Governments have also changed the estate system for jobcentres, and I do not think that was by any means disastrous. His point about opening at weekends is interesting. We would have the facility to do that, and we will keep it under review, considering value for money and so on. If there was a good case for that, it is certainly something we could do.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
Having conducted a survey outside Batley jobcentre, I know that the majority of users walk there—often every day—to use the computers to look for jobs. With Batley’s closing, they will have to walk to Dewsbury, a journey of 20 minutes—if they are able-bodied. Will the Secretary of State confirm whether new sanctioning guidance will be provided for those who are late or miss appointments?
Mr Gauke
We do not expect people to miss appointments. As I said earlier, people looking for jobs are expected to spend 35 hours a week doing so, which should enable them to travel from Batley to Dewsbury in the time available. We would expect people to make appointments, but we would look at the individual circumstances if somebody has missed an appointment, to take into account whether there might be any mitigating factors.
Tom Pursglove (Corby) (Con)
Has my right hon. Friend made any assessment of the direct benefit that jobseekers will experience as a result of co-locating jobcentre services with other sources of support? Surely it is outcomes that matter here.
Mr Gauke
My hon. Friend is right—it is outcomes that matter. In some circumstances co-location in itself may have benefits and in others having a jobcentre that is modern, properly designed and of sufficient scale to provide a range of services to claimants helps to improve outcomes. It is improved outcomes that we want.
Deidre Brock (Edinburgh North and Leith) (SNP)
Evidence to the Scottish Affairs Committee from the Public and Commercial Services Union suggested that jobcentre closures were likely to lead to increased numbers of people being late for appointments and therefore being sanctioned, and the director of Poverty Alliance argued that the Government should therefore reconsider sanctions for lateness. Will the Minister now confirm that he is committed to doing so?
Mr Gauke
Let us put this in context: 97% of JSA claimants are not sanctioned every month. Given the number of hours we expect people to spend looking for work, I think travelling to a jobcentre, just as people travel to work, is the way life operates for most people. If there are particular circumstances that result in someone being late for an assessment or meeting, they can be taken into account.
Dr Matthew Offord (Hendon) (Con)
Does the Minister not realise that jobcentres are always needed under a Labour Government, whereas under this Government, with unemployment falling and 2.9 million more people in work, we should be spending money on getting more people into work and not on empty office space?
Mr Gauke
My hon. Friend makes a good point. One could be drawn into a comparison of the records on employment of Governments of different sorts. I am proud of this Government’s record. We have an important role in supporting people in getting into work, staying in work and improving their position. I would prefer to spend the resources we have on doing that as efficiently and effectively as possible, and we would not be doing that if we were wasting £140 million a year on an estate that is no longer fit for purpose.
Mrs Madeleine Moon (Bridgend) (Lab)
I appreciate that the DWP makes considerable savings from the closure of jobcentres, including the one in Pyle in my constituency, but it is passing on a huge cost to those who will have to fund out of their benefits the costs of travelling by bus to their new jobcentre. According to the Minister, it takes 39 minutes to get from Pyle to Porthcawl, but it is clear that he has never tried to make that journey on a bus. Will he undertake to ensure that no one travelling from Pyle to Porthcawl is sanctioned because of a bus service that is not regular?
Mr Gauke
Those who have been out of work for 13 weeks or more have access to a jobcentre discount card, which reduces their travel costs by half. A lot of people in their daily lives have to travel distances and be somewhere on time. We expect people to spend 35 hours a week searching for work, and that can include allowing good time to travel from home to a jobcentre. I think that is perfectly reasonable, but I repeat that if there are particular circumstances that result in someone missing an appointment, there is discretion regarding sanctions.
Stephen Kerr (Stirling) (Con)
Does my right hon. Friend agree that
“the purpose of the estates review is to make sure that the estate is effective and reflects demands on the…service”?
Those are not my words but those of the Scottish National party Government Cabinet Secretary for Justice, Michael Matheson MSP, in relation to Police Scotland. They show that the SNP argue for rationalising the public services estate when it suits them.
Mr Gauke
My hon. Friend makes an excellent point. Governments have to ensure that public money is spent sensibly, and one of the ways of doing that is by rationalising the estate. Keeping open under-utilised jobcentres is simply not a good use of taxpayers’ money, and it does not do claimants any good either.
Ian Murray (Edinburgh South) (Lab)
The Scottish Affairs Committee published a report at the end of the previous Parliament that was hugely critical of the Government’s approach to jobcentre closures, particularly in Glasgow, where some claimants are having to take three buses to reach other jobcentres, at huge expense. The Secretary of State has said three times this morning that he will not review the sanctions regime for people who are late for appointments. Will he look at that with the compassion that I know he has, he having been a good Minister in the previous Parliament, to see whether anything can be done to ensure that people are not put into significant deprivation as a result of these sanctions?
Mr Gauke
I make the point to the hon. Gentleman that there are many more appointments for which claimants are late than there are sanctions. It is simply not the case that being late automatically means a sanction; a judgment is made. I think we also have to recognise that many people in work have to catch three buses to get to work and are expected to be there on time, so I do not think it is unreasonable to expect people to travel to a jobcentre if they are able to do so. Glasgow continues to be the most generously provided for, in terms of the number of jobcentres, of any city in the United Kingdom.
Several hon. Members rose—
Mr Gauke
The reality is that services will improve. I strongly believe that universal credit, in particular, will result in an improved welfare system, and we are increasing the number of work coaches. Every region and nation in the United Kingdom will see an increase in the number of frontline staff providing services, and Scotland is no exception. I have visited jobcentres to see the sort of work that is now happening, and I am encouraged by the improved services and the collaborative and effective way in which jobcentre staff are working with claimants to help them get jobs and improve their circumstances.
Mr Speaker
No one could accuse the Secretary of State of excluding from his answers any matter that might be judged by him to be in any way, or at any time, material. “Comprehensive” would be a polite way of describing it.
Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)
Norris Green jobcentre serves some of the most deprived neighbourhoods of Liverpool. Will the Secretary of State meet my hon. Friend the Member for Liverpool, Walton (Dan Carden) and me to discuss the plans to close the jobcentre and explore alternatives, including co-location with local authority services?
Mims Davies (Eastleigh) (Con)
There has been a 70% reduction in the number of jobseekers and unemployed people in my constituency since 2010. One of the best ways to reach vulnerable claimants who have not managed to get into work is outreach based at local colleges, where educational support could be tailored at the same time. Can the Secretary of State confirm that innovation is at the heart of these changes?
Jessica Morden (Newport East) (Lab)
The DWP is proposing to relocate the service centre out of Newport to some location north of Cardiff, but the exact location is unclear. My hon. Friend the Member for Newport West (Paul Flynn) and I clearly want to keep those jobs, the expertise and the services. The centre provides 249 jobs right in the heart of our city. Will the Minister meet us, so that we can put the case in person?
Hannah Bardell (Livingston) (SNP)
My constituents in Broxburn are facing the closure of the DWP office. They faced the closure of Hall’s of Broxburn just a few years ago, losing 1,200 jobs. Like the constituents of other hon. Members, they are very reliant on the service, and the Government’s Google Maps approach does not reflect the true amount of travel they will have to undertake. Will the Secretary of State review the decision and undertake to carry out a full review of the vulnerable areas that are reliant on the vital services provided by these centres?
Maria Eagle (Garston and Halewood) (Lab)
Does the Secretary of State accept that requiring some sick and disabled people to travel further to attend compulsory interviews is likely to lead to more cost, hardship and worry for our most vulnerable constituents who are looking for jobs? What will he do to ensure that his plans do not leave these vulnerable people to be hit the hardest?
Mr Gauke
Let me be clear. We do not expect claimants of employment and support allowance to attend jobcentres regularly. We are not looking to reduce the number of health assessment centres. This is very much focused on jobseekers, but we must also ensure that we rationalise the estate and use our resources as effectively and efficiently as possible.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
The closure of local services will have a hugely negative impact on the local economy in towns such as Merthyr Tydfil. It will also have an impact on the quality of life of employees with caring responsibilities, who will have to travel longer distances. What consultations and impact assessments have been carried out with staff, customers and trade unions? Will the Department change direction if the consultation does not support the planned closures?
Alison Thewliss (Glasgow Central) (SNP)
These are not reforms; they are cuts. Closing Bridgeton jobcentre is a cut in support for the people who need it the most. As I see in my surgeries, these people are already getting hit and being sanctioned by this Government. People having to travel from Bridgeton jobcentre to Shettleston jobcentre will have to take two buses and use money from their income. Will the Secretary of State guarantee that not one person will end up being sanctioned for being late because of that?
Vicky Foxcroft (Lewisham, Deptford) (Lab)
The jobcentre in Deptford closed in November 2010. Now the jobcentre in Lewisham will close. Young people from New Cross and Deptford will now need to travel to Peckham for support with finding employment. With youth violence on the rise, how will the Government ensure that our young people travelling to Peckham are kept safe?
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
More than 300 jobs will move from the Lonend site in Paisley to Glasgow, and this follows hundreds of job losses and transfers at Doosan Babcock and Chivas Brothers. This is the very last thing the Renfrewshire economy needs. Will the Secretary of State assure me that there will be zero redundancies as a result of this move?
Stewart Malcolm McDonald (Glasgow South) (SNP)
Knowing me as you do, Mr Speaker, you will know that I have no ambition to be churlish on this matter, so I will say to the Secretary of State that I am grateful to see that Castlemilk jobcentre has been removed from his proposed closure plan. However, there is more than a hint of disappointment that Langside jobcentre remains on the list, as it serves the second most densely populated council population in Scotland, and there is a clear need for it to be there. Let me ask a very specific question: is there an equality impact assessment, and will he publish it?
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
The original jobcentres inquiry clearly did not respond to West Dunbartonshire Council’s offer of shared premises—it was just about assets. The closure of Alexandria jobcentre creates the situation in West Dunbartonshire whereby not only Jobcentre Plus staff but DWP staff administering benefits now feel as though they are under threat. What assurances can the Secretary of State give to my constituents and those working at the DWP in Clydebank and at Jobcentre Plus in Clydebank and Dumbarton that they will not be moved from my constituency?
Mr Gauke
On co-location, let me be clear that we are happy to work with other authorities, but signing on does have to take place on jobcentre premises. In terms of guarantees and so on, any Government Department has to look sensibly at its estate to ensure that it is deployed efficiently. As I say, we are in an environment where we are in fact increasing frontline staff, not reducing them.
Martin Whitfield (East Lothian) (Lab)
Given that the Joseph Rowntree Foundation used Glasgow as its study centre in its report on disconnected communities, and suggested very strongly that a well-distributed employment support network is vital, how have the cuts now being applied to Glasgow been objectively, evidentially based?
Patrick Grady (Glasgow North) (SNP)
I have porridge for my breakfast, Mr Speaker, with just a little bit of salt in it, like my granny taught me.
The Secretary of State said that people will not be sanctioned if they make reasonable efforts. Who will judge what is a reasonable effort? Constituents of mine in Maryhill now face a six-mile round trip, with all the expensive bus routes and potential delays that that entails. He keeps saying that Glasgow has far more jobcentres per head of population. What does that mean for the remaining jobcentres in Glasgow? Will he guarantee that Springburn jobcentre will not close? Will he meet his Scottish Government counterparts before any further decisions are taken?
Mr Gauke
We have settled the estate now, and we do not have any immediate plans to revisit this. In terms of the sanctions process, a comprehensive system of appeals is available. As I say, there are far more missed or late appointments than there are sanctions, and I would expect that to continue to be the case.
David Linden (Glasgow East) (SNP)
Yesterday’s statement about the closure of Easterhouse and Parkhead jobcentres is another body blow to the east end from this callous Tory Government. Written parliamentary questions that I have lodged have shown that the Secretary of State and his Ministers have never bothered to visit jobcentres in Glasgow. Will the Secretary of State come to Glasgow and do the bus journeys from Gartloch to Shettleston to see how idiotic these plans are?
Mr Gauke
I think that the hon. Gentleman might want to have a word with the hon. Member for Glasgow South (Stewart Malcolm McDonald) on the subject of churlishness. The fact is that Glasgow, as I keep saying, has more jobcentres per head of population than any large city in the whole of the United Kingdom, and that will continue to be the case. I have to say that if the Scottish Government took the approach of SNP Members in this House with regard to good use of taxpayers’ money, then they would be in even bigger trouble than they appear to be.
Housing and Social Security
David Gauke Excerpts(7 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Mr David Gauke)
It is a great pleasure to conclude this day’s debate on the Gracious Speech. I thank all hon. Members from all parties who have contributed. Members from all parts of the United Kingdom have covered a wide range of subjects and it has been a very good and insightful debate.
I will not respond to every Member who has spoken, but I will respond particularly to those who made their maiden speeches, beginning with the hon. Member for Kensington (Emma Dent Coad). It is difficult to imagine that there has ever been a Member of Parliament who has faced such a daunting challenge in their constituency in their first few days in office, and she has conducted herself with great sensitivity and energy. She made a very moving speech earlier today in which she spoke of her constituency generally, but she particularly and rightly focused on Grenfell Tower, the families she has met and the tales of the desperate situations that her constituents have faced. I congratulate her on the way she spoke and the way she has conducted herself as a Member of Parliament.
I congratulate my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) on an excellent maiden speech. He spoke powerfully about his constituency and his particular constituency focuses, and showed his depth of knowledge of the borderlands. I also noted that he managed to deliver a perfectly timed speech, which is an attribute that I am sure will attract the attention of the Whips. I suspect he will be much in demand in future months.
I also congratulate my hon. Friend the Member for Aldershot (Leo Docherty), who spoke of his town and told us much about its history. As a former soldier, he has an appropriate background for an Aldershot Member of Parliament. He paid tribute to his predecessor, Gerald Howarth, who was a good friend to many of us here. On that note, I also congratulate the hon. Member for Enfield, Southgate (Bambos Charalambous), who spoke about the tolerance and diversity in London and within his constituency, and about his own family’s story. He also paid generous tribute to David Burrowes, with whom I shared an office for five years and who is a good friend. I welcome the opportunity to wish him well, as the hon. Gentleman did.
I also congratulate my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) on an excellent speech. He spoke warmly of all of his many predecessors and demonstrated a great love of Teesside and a desire to represent it as the first Conservative MP for his constituency for some time.
They did not give maiden speeches, but I welcome back to the House the hon. Member for Eastbourne (Stephen Lloyd), with whom I suspect I will debate on many occasions, and my hon. Friend the Member for Richmond Park (Zac Goldsmith). I also thank the shadow Work and Pensions Secretary for her welcome to me in my new position. I congratulate her on her reappointment. Today may mark one of our friendlier debates, but I hope that we can have a constructive working relationship in the period ahead.
I referred to the maiden speech of the hon. Member for Kensington. Clearly, Grenfell Tower has cast a large shadow over our debate. There have been several excellent contributions, particularly that of the hon. Member for Westminster North (Ms Buck), who previously represented that part of London. It is a terrible tragedy and all our thoughts are with those affected and the families who are grieving.
Our priority is to ensure that the people affected by the fire get the financial help they need. We have staff on the ground who are handling people’s benefits claims sensitively and flexibly. For example, they are ensuring that payments continue if appointments are missed and that jobseeking requirements are suspended for as long as needed. The Department for Work and Pensions has also made sure that people’s benefits will not be affected by payments from the discretionary fund. The local authority has assigned key workers to affected households to ensure that they have continuity of support—wraparound support—and we are working closely with them to provide benefit advice and support.
Money is available from the £5 billion discretionary fund to meet funeral costs. The Department for Work and Pensions administers funeral expenses payments and the local authority also has funds to support people who cannot afford funeral costs. It is important that all parts of government work together to provide the necessary support for the people of Grenfell Tower and the surrounding areas.
The debate on Grenfell Tower has also shone a light on the wider issue of housing. My right hon. Friend the Secretary of State for Communities and Local Government set out the Government’s position. It is worth reminding the House that we have a proud record since 2010. We have overseen the building of nearly 1 million new homes and helped around 400,000 households to get on the property ladder through Help to Buy. However, with housing becoming increasingly unaffordable, there is much more to do. My hon. Friend the Member for Hertsmere (Oliver Dowden) made that point. We have set out our strategy in the housing White Paper and we are introducing a Bill to ban unfair tenant fees.
We will drive that forward by investing £7.1 billion through the affordable homes programme, implementing the Homelessness Reduction Act 2017 and continuing to support the regeneration of housing estates. We have not built enough homes in this country for generations. We need to build more of the right homes in the right places and ensure that the housing market works for all parts of our community.
Let me deal with some of the welfare issues that have been raised in the debate. Our welfare reforms are restoring fairness and supporting people into work. Having a welfare system that offers work for those who can, help for those who could and care for those who cannot is part of our plan to build a fair society for all. The Government have improved the chances of finding employment and we will continue to build on that achievement.
The employment rate stands at a joint record high of 74.8% while the employment rate for women is at a joint record high of 70.2%.
Mr Gauke
There is a sedentary comment that it is all zero-hours contracts. The employment numbers that came out last week are striking because the increase was overwhelmingly a consequence of full-time employment. We must bear in mind that those on zero-hours contracts constitute, what, 3%? [Interruption.] Less than 3%: 2.8% of the overall workforce. The majority of those people, when surveyed, say that that is what suits them. Moreover, the average number of hours worked by people on zero-hours contracts is 25. Let us not mischaracterise the nature of our labour market.
Let me now deal with universal credit, a landmark reform of the welfare system that will maximise people’s chances of getting work, staying in work, and progressing into better-paid work. Universal credit is working. People move into work faster, and there are encouraging signs in that connection. The roll-out of universal credit continues to deliver to plan. It is being rolled out in a gradual, safe and secure way to ensure a successful delivery and the best service for claimants. The programme has recently passed an important milestone, with well over a million claims made and the number of claimants higher than the number of people claiming jobseeker’s allowance.
Stephen Lloyd
I am grateful to the Secretary of State for giving way, because I am aware that time is short. Does he agree that the current taper is simply inadequate in comparison with what we planned a few years ago? Given that taper, what is the advantage of going into low-paid work?
Mr Gauke
We reduced the taper rate recently, so we have taken steps in that direction. One of the attributes of universal credit, however, is that it does not have the cliff edges of the legacy system that we have run up to now, which features all the disincentives to work for more hours and take on more work. We believe that one of the great benefits of universal credit is that it will always be sensible to do more work. I do not know whether I am being over-ambitious, but one of my objectives as Secretary of State is to convince Opposition Members at some point that this is an important and beneficial reform, and that they should get behind it rather than opposing it. That, however, remains to be seen.
Let me now say something about disability and health. There are more than half a million more disabled people in employment than there were three years ago, and the unemployment rate is at a record low. However, we know that we have further to go. My right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) spoke about the disability employment gap, and referred to our excellent record on the issue. I want to put on record that the Government are committed, and remain dedicated, to continuing our work in improving employment outcomes for people with disabilities and health conditions. We have made a commitment to get 1 million more disabled people into work over the next 10 years. That will enable them to enjoy the benefits that we know good work brings.
Let me now deal briefly with the issue of pensions. We are committed to ensuring economic security for people at every stage of their lives, including retirement. We are also clear about the fact that fairness must be maintained between the generations. The new simplified state pension provides a firm foundation on which to plan for retirement. Alongside the state pension, automatic enrolment has been introduced to ensure that the UK builds pension systems that enable individuals, with the help of their employers, to save towards achieving the lifestyle to which they aspire in retirement, and which is sustainable in the future. About 10 million people will be saving more for a private pension to top up their state pension by 2018.
The Government have worked hard to improve people’s lives. We are focusing on delivering more housing, and we have introduced successful welfare reforms on which we will continue to build. I am proud of this Conservative Government, of what we have achieved to date, and of what we have committed ourselves to achieving in this Parliament.
This is an important Gracious Speech. Part of what we will continue to do as a Government is ensure that we get people to work, reform welfare and deliver for the British people. Consequently, I commend the Gracious Speech to the House.
Ordered, That the debate be now adjourned.—(Mike Freer.)
Debate to be resumed on Monday 26 June.
Pension Schemes Bill
David Gauke Excerpts(10 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Mr David Gauke)
It is a great pleasure to respond to this Second Reading debate. As we have heard, it has perhaps been shorter than it might have been, but none the less I thank all those who have contributed to it from the Back Benches: my hon. Friend the Member for Cities of London and Westminster (Mark Field), the hon. Member for Aberdeen South (Dame Anne Begg), who is the Chair of the Select Committee, my hon. Friend the Member for Amber Valley (Nigel Mills), the right hon. Member for Neath (Mr Hain), my hon. Friend the Member for Birmingham, Yardley (John Hemming) and my hon. Friend the Member for Fareham (Mr Hoban), who takes a very close interest in these matters. By and large it has been a thoughtful and constructive debate and the most heated areas of controversy have been when we have considered the pensions records of previous Governments.
I reiterate the points made by my hon. Friend the Member for Fareham and my right hon. Friend the Minister for Pensions about this Government’s proud record on pension reform. We have implemented the triple lock, which has meant that pensions are uprated by earnings, prices or 2.5%, whichever is highest. That means that the full rate of the basic state pension is £440 a year higher in 2014-15 than if it had been uprated by earnings since the start of this Parliament. We have introduced auto-enrolment. I acknowledge the point that has been made that the previous Government intended to introduce it in the end, but as my right hon. Friend the Minister for Pensions set out, we as a Government have taken a number of steps to make the policy workable and successful. The number of those who will benefit and who are benefiting from that is considerable. The introduction of the single-tier pension has made our state pension simpler and clearer. The single-tier pension has enabled us to go forward with some of the reforms that we are discussing today which will allow greater pension flexibility.
The debate today and the debate on the Bill has essentially focused on two areas: first, defined ambition in terms of risk sharing, and secondly, pensions flexibility —particularly, in the context of the Bill, on issues related to the guidance guarantee. Let me turn first to the case for defined ambition, which, as we have heard, is to find a middle way—greater flexibility within our pension system, which has traditionally been somewhat binary, with defined-contributions schemes and defined-benefits schemes but nothing really in between. The Bill redefines the framework to recognise explicitly the middle ground and encourage provision of shared-risk pensions where risks are shared more equitably between employers and employees. Let me respond to the various points and questions that have been raised in respect of that area.
My hon. Friend the Member for Fareham asked to what extent and how defined-ambition schemes are guaranteed. The Bill does not prescribe benefit design and that is intentional. Our consultation presented a number of ways in which that could be done and our measure is intended to encourage a variety of designs. So there is no one set answer; indeed, one could argue that that is the point. In response to my hon. Friend’s question about guarantees and the cost to the individual, it is not always the case that the member bears the cost of the guarantee. Some employers may choose to stand behind the promise. Capital requirements and scheme funding requirements already apply to pension vehicles and will continue to apply to schemes called defined ambition in respect of the promises.
A number of contributors to the debate, including the shadow Pensions Minister, asked to what extent there is an indication that there is employer interest in defined ambition. DWP research found that more than a quarter of employers are already interested in offering a pension involving greater risk sharing between members and employers. Over half of employers—52%—said that they would like to set up a scheme where the employer pays fixed contributions and where there is more certainty for the employee, such as DC plus. The response to our “Reshaping workplace pensions for future generations” consultation also demonstrated a strong desire from unions for collective models.
In terms of that demand, the DWP has had discussions with interested employers, but I am sure the House will understand that employers will want to see the detail and communicate with their work force. We do not want to pre-empt those processes, but we believe that the addition of a defined ambition of risk sharing to our pension framework is advantageous.
On inter-generational risk sharing and whether a risk transfer is desirable, we do not want to disallow all inter-generational risk sharing within schemes offering collective benefits, but we want to ensure that it is open and transparent. That is a lesson that we have learned from the way in which such schemes have operated in other jurisdictions.
On governance of collective defined-ambition schemes, we will use governance powers from the Pensions Act 2014 and make regulations using those powers. On issues around making decisions about retirement income in collectives, we want to create innovation. We do not want to constrain or prevent part of the market, and insurance firms or schemes that are not occupational schemes, from offering such scheme. Of course it would always be a fiduciary making a decision about the retirement income, but the measures in the Bill provide for requirements around the specific features of collectives.
We heard questions about collective investment strategies and the risk of an over-cautious strategy, so it is worth highlighting the example of a New Brunswick scheme that is required to operate with a 97.5% probability that base benefits will not reduce. The scheme has 40% investment in assets and 20% investment in real estate and other assets, so the probability requirement has not led to an over-cautious investment strategy.
The hon. Member for Aberdeen South cited several questions that have been raised by the Law Society of Scotland. Shared-risk schemes will cover existing and new schemes. If a scheme shares longevity risk, it will be a defined-ambition scheme. She asked about the definition of a promise made during the savings period, as well as whether a promise made at
“times before the benefit comes into payment”
relates to when the annuity is set up or the repayment is made. The intention is that a promise made at a time before the benefit comes into payment describes a promise made by a scheme during the savings phase, rather than a separate promise made at retirement. She also asked whether a third-party promise would include an arrangement whereby the promise is made by an insurer, rather than the scheme, and the answer is yes. If she wishes to raise further queries on behalf of the Law Society of Scotland, we will be happy to respond to them.
Let me turn to the freedoms that the Chancellor set out in the Budget, which will be implemented by this Bill and the pensions taxation Bill that I am sure we all look forward to debating in the not-too-distant future. Although Labour Members appeared to reserve their judgment about whether they support the policy, the tone of the contributions of Labour Front and Back Benchers suggested that they were far from enthusiastic about the reforms announced in the Budget, to put it mildly. This was not just the questioning and scrutiny that any Opposition would undertake; it seemed to me that, philosophically, the Labour party was uncomfortable with the reforms.
The shadow Pensions Minister asked whether flexibility and guidance would address inertia in the annuities market, but prior to the Budget announcements, consumers were not incentivised to shop around for annuities. They will have more options and more reasons to engage with the market as a result of greater flexibility, and access to impartial, good-quality guidance will be key to having better informed and more empowered consumers. They will be equipped to look for products that work for them, and the decumulation market, including the annuities market, will be incentivised to respond to the demands of more empowered consumers and will have the freedom to do so.
It is sometimes said that people simply will not be able to make good choices, but leaving aside concerns that that view is somewhat patronising, I argue that the existing system restricts choice at the point of retirement, and the Government do not believe that that is right. The Government recognise that with more choices at retirement, consumers’ decisions will become more complex, so we have introduced the guidance guarantee to help consumers to understand their options.
The shadow Pensions Minister referred to the apparent contradiction between auto-enrolment, which is predicated on inertia, and the Turner proposals and giving greater choice to savers. It is always right that people save and that we put in place a regime that encourages saving, but when savers reach retirement it is right that they have the opportunity to engage and have a full range of choices available to them. We believe that it is sensible to set out the detailed technical requirements in secondary legislation, which will allow time for consultation and to respond to evolving risks in the market.
The right hon. Member for Neath said that flexibility will result in people spending all their money at once, which is risky, but those people who have worked hard all their lives should be free to decide how to use their savings. At present the system allows those with the smallest and largest pension pots complete flexibility, but restricts those in the middle of the distribution who have worked hard and saved all their lives. The Government do not dictate how people spend their other money, so why should they do so for pension savings? However, we recognise that people do need support in making these decisions and that is why we are introducing the guidance guarantee.
Mr Gregory Campbell (East Londonderry) (DUP)
Many of the large number of people in the middle, as the Minister puts it, will be looking forward to retiring in 2015 and 2016. How clear is he that they understand the implications that will face them in six or seven months’ time that did not face previous generations?
Mr Gauke
That is why we are bringing in the guidance guarantee. That is why we want to ensure that people can make informed decisions. That is what drives everything we are doing here and that will be an important part of the Bill. My hon. Friend the Member for Cities of London and Westminster asked whether the guidance would undermine or replace financial advice. The Government intend that the guidance will be a critical first step for consumers at the point of retirement. It will be designed to help consumers navigate the options available and it is not intended to replicate the services of professional financial advisers. The Government expect that many consumers will go on to seek further advice and will ensure that the guidance equips consumers to choose the advisory service that suits their needs.
The guidance service will not stray into areas such as specific product or provider recommendations, which would be better handled by an authorised independent financial adviser. Guidance will signpost consumers to other sources of guidance and advice as appropriate, including professional financial advice. The Government expect that many consumers will go on to seek further advice and will ensure that the guidance equips consumers to choose the advisory service that suits their needs.
The Government believe that it is right that those firms that are likely to benefit from better informed consumers who are more confident about engaging with the financial services industry should help to fund the service. The FCA has proposed that advisers should be included in the cohort of firms paying the guidance levy, as they stand to gain from the better informed consumers who understand how regulated advice can help and protect them in their retirement needs. It is also worth pointing out that the FCA has committed to a proportionate approach. The levy will reflect the size of the firm and the nature and extent of its business.
My hon. Friend the Member for Cities of London and Westminster asked about the Australians’ system and to what extent they were looking to reverse their move to end the obligation to annuitise. The interim report from the Murray review suggests that a variety of different policy options should be considered to improve the Australian retirement income system. These options include maintaining the current system where individuals have access to their pension savings as they wish but with improved provision of financial advice and removal of impediments to product development. As for whether annuities are dead under the new regime, we do not believe so. The Government are clear that annuities will remain the right choice for many at some point during their retirement and believe that many people will still value the security of an annuity.
The right hon. Member for Neath asked how the FCA will protect consumers through regulation. The FCA has a statutory objective to protect consumers. It requires pension companies to comply with its rules and principles, including the principle of treating customers fairly. In creating the FCA, the Government gave it new powers in relation to financial products that it can use to restrict features or products or to prescribe how products must be sold.
I was asked whether the guidance will ensure that people understand the tax implications of flexibility. Guidance will cover the tax implications of accessing pensions in different ways in retirement. This is covered in the standards for guidance on which the FCA is currently consulting. As for whether the guidance will be delivered by qualified people, the FCA is currently consulting on the standards that providers of guidance will need to meet, one of which is that they are suitably trained and qualified.
The hon. Member for Birmingham, Ladywood (Shabana Mahmood) and the right hon. Member for Neath asked about flexibility increasing welfare and social care spending. We do not expect the impact to be significant in the context of the steps that this Government have taken to improve the sustainability of pensions spending. For example, regarding the changes to the state pension age and reforms to public service pensions, the estimated net impact of the Government’s key pension policy is a saving of about £17 billion in 2030 in today’s terms.
My hon. Friend the Member for Cities of London and Westminster asked me to explain the principles behind the Government’s pension reforms. We are putting the interests of savers first, but we also believe that people should be free to make their own choice about how to use their savings. Individuals who have worked hard and saved responsibly throughout their adult lives should be trusted to make their own decisions with their pension savings. The reforms announced in the Budget will deliver this, and it is an important part of the Bill. I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Pension Schemes Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Pension Schemes Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 6 November 2014.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Dr Thérèse Coffey.)
Question agreed to.
Pension Schemes Bill (Money)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Pension Schemes Bill, it is expedient to authorise the payment out of money provided by Parliament of:
(1) any expenditure incurred under or by virtue of the Act by a Minister of the Crown;
and
(2) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Dr Thérèse Coffey.)
Question agreed to.
Pension Schemes Bill (Ways and Means)
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Pension Schemes Bill, it is expedient to authorise:
(1) the imposition of charges for the purpose of meeting expenses incurred by–
(a) persons involved in giving pensions guidance, and
(b) persons having oversight of the giving of pensions guidance; and
(2) the payment of sums into the Consolidated Fund.—(Dr Thérèse Coffey.)
Question agreed to.
Budget Resolutions and Economic Situation
David Gauke Excerpts(11 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Exchequer Secretary to the Treasury (Mr David Gauke)
We have had a well-attended and at times lively debate on the Budget, and I will begin by thanking my hon. Friends for their contributions. My hon. Friend the Member for Rochford and Southend East (James Duddridge) spoke about the steps taken in the Budget to help businesses and ensure growth, and he rightly highlighted measures relating to stamp duty for shares on the alternative investment market. My hon. Friend the Member for Braintree (Mr Newmark) highlighted the extension of capital gains tax policy for seed enterprise investment schemes, and I thank him for his excellent work in promoting those schemes. They are an excellent opportunity to enable start-up businesses to expand, and for investors to find good investment opportunities to help grow jobs in this country.
I thank my right hon. Friend the Member for Sutton and Cheam (Paul Burstow), who I know had to depart early. He highlighted the further substantial progress that the Government have made on the personal allowance, benefiting millions of taxpayers and taking many others out of income tax altogether—a contrast to the record that we inherited. He also highlighted the work on social care reform that the Government have progressed, again in contrast with our predecessors. I know that my right hon. Friend was heavily involved in that process.
My hon. Friend the Member for Enfield North (Nick de Bois) highlighted specific matters relating to community investment tax relief. I know that he has had discussions with the Treasury about his ideas, and we welcome his engagement. My hon. Friend the Member for Wycombe (Steve Baker) dealt with monetary policy—an issue in which he takes a close interest—and we are grateful for his views. My hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) highlighted the progress that the Government have already made in dealing with the mess that we inherited, and particularly the fact that we have reduced borrowing by a third since we have been in office.
My hon. Friend the Member for Northampton North (Michael Ellis) highlighted to the House the expression, “There is no money left”, although I have forgotten for the moment who coined that phrase—[Interruption.] I am told that it was Winston Churchill. I was thinking of someone else, although there are certain physical similarities. I also thank my hon. Friend the Member for Hendon (Dr Offord) for highlighting some of the long-standing housing issues in Hendon that he is seeking to address.
Lilian Greenwood
The Minister mentioned housing. Is he as shocked as I am by figures that the Government have released today that show a 12% increase in the number of households with children accepted as homeless in the last year; an 11% increase in those living in temporary accommodation; and a 29% increase in the number of families living in bed and breakfasts? Is that not a disgraceful indictment of this Government?
Mr Gauke
If the hon. Lady is concerned about people on waiting lists or living in overcrowded conditions, she might want to think about what we could do about too many people who have got spare rooms.
We heard a number of speeches from the Labour party, and two points about the fiscal situation were consistently raised. First was the concern that borrowing is higher than we had wanted and expected it to be—borrowing is too high and debt is increasing too fast. We then had a number of speeches that called for more spending and said that we should not worry quite so much about borrowing and should be prepared to borrow more. Remarkably, a number of speeches made both points at the same time, but the reality is that the Labour party believes that the right approach to our current difficulties in the economy is to borrow more. The proposals from the shadow Chancellor involved £33 billion more spending.
The most interesting point in the entire debate was when the hon. Member for Glasgow North East (Mr Bain) called for more spending in a particular area, and my hon. Friend the Member for Battersea (Jane Ellison) intervened to ask how he would do that in a fiscally neutral way. At that point the hon. Gentleman paused and said, “Well, we are on a different path.” He is an articulate and eloquent speaker, but rather than say what that path was, he refused to answer. Labour Members are on the path that dare not speak its name. Their path is simply more borrowing.
Mr Newmark
I might be able to help my hon. Friend and the hon. Member for Glasgow North East (Mr Bain). The IFS says that the Labour pathway would cost the country another £200 billion in debt.
Mr Gauke
My hon. Friend is absolutely right to point that out. That would be the consequence of pursuing the policies advocated by Labour. That does not take into account the concerns about what going down that route would do for international confidence and the price we pay for our borrowing—interest rates. Such borrowing would jeopardise the economy.
We have made progress on, for example, unemployment. Since the first quarter of 2010, the private sector has increased by 1.25 million jobs and total employment is up by 890,000 in the period. A number of hon. Members, including the hon. Member for Houghton and Sunderland South (Bridget Phillipson), described the conditions in their constituencies. It is worth pointing out that, in the north-east of England, employment has risen by 1.4% and unemployment has fallen by 1.5% in the past year.
We are therefore making progress, but I will not deny that we, like most major economies in western Europe, do not have the level of growth we would like. Two big challenges face all of us. First, how do we get growth when there is no money left, and secondly, how do we live within our means—what do we do to get the deficit down? To deal with that question, we must first acknowledge that the problem essentially is that spending is too high, and not that taxes are too low.
We must take steps to address that, which means taking difficult decisions, as the Government have done, on departmental spending. Our decisions have, by and large, been opposed by Labour. We have had support on one element of departmental spending—the public sector pay freeze. We have announced that we have had to extend that for a further year into 2015-16, but I am not sure whether Labour supports that policy. I believe that freeze is essential if we are to meet our targets.
We have also had to take steps to reform welfare. I congratulate my right hon. Friend the Secretary of State for Work and Pensions on the leadership he has shown and on his bold vision for reforming welfare. We must address welfare. In the decade before the financial crisis, and despite a growing economy, welfare spending increased by 40% and has continued to rise—it went from 11% of GDP in 2008 to 13% of GDP in 2012. Put simply, welfare spending still costs the UK taxpayer more than £200 billion a year, which is almost £1 in every £3 raised in taxes, and more than the budgets for health, education and defence combined. We need to find savings across the government. Inevitably, savings on welfare need to be part of that. If we are to spend more money on other services, we need to tackle our growing welfare budgets.
As my right hon. Friend the Chancellor explained on Wednesday, the previous public spending framework divided Government spending into two halves: fixed department budgets and annually managed expenditure. We decided in the Budget to introduce a new limit on a significant proportion of the latter. That will be set in a way that allows the automatic stabilisers to operate, but brings control to areas of public spending that have been beyond our control. My right hon. Friend the Chief Secretary to the Treasury will provide an update on that at the spending round.
We must recognise that we are in a global race. There will be economies that succeed and those that fail. We must ensure that we are competitive. That is why we have cut the corporation tax rate again to 20%—the lowest rate in the G20. It is striking how the UK is now recognised as having a very competitive tax system. That is also why we are making it easier for start-ups. I have touched on the seed enterprise investment schemes and the measures on stamp duty on AIM shares.
From April 2014, every business and charity in the UK will be entitled to a £2,000 employment allowance each year to reduce their employer’s national insurance contributions. I can tell the House that we have set up a website to help businesses understand how that will work, with an online calculator to illustrate the effect of the allowance on the employer’s national insurance bill in 2014-15. It can be found at www.employmentallowance.com. The employment allowance will benefit up to 1.25 million employers, with 98% of the benefit going to small and medium-sized businesses with fewer than 250 employees.
The hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) said that the Labour party has proposals in this area, but the employment allowance is much simpler and is permanent, not temporary. It applies to all businesses and charities, not just the smallest, so there will not be a cliff-edge problem whereby people face disincentives in taking on a 10th employee. It will benefit all businesses and charities, not just those that are taking on new staff. It will be very simple to operate through the real-time information system. It could not be simpler. It is also worth pointing out that the Labour party fought the last election with the intention of increasing employer’s NICs. They wanted to put the jobs tax up, not cut it.
The previous Government’s plan for reducing the deficit was inadequate and had no credibility. The Labour Opposition have not stood by any element of that plan. They wanted to raise employer’s NICs; now they want to cut them. They proposed huge cuts in capital spending, which we have partially reversed. They now complain to us that capital spending should be higher. They put in place a fuel duty escalator, but have subsequently called for it to be scrapped. This Government have managed to freeze fuel duty and it is falling in real terms. The previous Government put in place a beer escalator. I think that the Opposition are supporting us in cancelling that as well.
The Labour party has one solution to our economic problems: borrowing and spending more. It spent and borrowed too much during the boom and it never accepted that there was a structural deficit before the crash. It has resisted all our attempts to control public spending and is not willing to accept that there is a need to constrain public spending in the years ahead. The truth is that the Labour party always wants to spend and borrow more. To be fair, when it is in government, it does spend and borrow more. However, the country cannot afford it.
We need to prepare ourselves for growth. We need to put in place incentives for companies to invest and expand. In government, the Labour party failed to do that and failed to control spending. That is why it cannot be taken seriously. That is why it is not the Labour party, but this Government who can achieve for the United Kingdom.
Ordered, That the debate be now adjourned.—(Joseph Johnson.)
Debate to be resumed on Monday 25 March.