Universal Credit: Private Rented Sector

David Simpson Excerpts

Tuesday 9th January 2018 Westminster Hall

[Tracy Brabin (Batley and Spen) (Lab/Co-op)]

It is a pleasure to speak under your chairmanship, Mr Gray. I thank the hon. Member for Eastbourne (Stephen Lloyd) for securing this important debate.

As a young child, my father was out of work for quite a long period and we could not pay the mortgage. My mum handed the house keys to the building society and for several hours we were physically homeless until the council found us a flat. That experience has stayed with me all my life. I will always be grateful to the council for saving us, because being homeless is not about being physically on the street. It is about people not having a permanent roof over their head, and that is something that all children should be entitled to.

Although the Labour party supports the idea of universal credit, sadly—as we have seen in our constituencies—the Government’s wilful determination to roll it out, glitches and all, means that some of the most vulnerable people living in the private rental sector are at risk of building up rent arrears to such a point that they are evicted and made homeless. That is something that, in particular, no child should have to experience.

[David Simpson (Upper Bann) (DUP)]

Northern Ireland has been mentioned. When we were negotiating with the Government, we were concerned about people living with mental illness, people living with disabilities and single parents. That was a major issue in helping us to come to the conclusion and agreement we have in Northern Ireland.

[Tracy Brabin]

I totally support what the hon. Gentleman says: this is about not just families, but people with extra needs. Single parents in particular are most vulnerable to bullying landlords.

Youth Employment

David Simpson Excerpts

Wednesday 6th December 2017 Westminster Hall

[Gillian Keegan]

I agree, and I would love to come along. The figures are really good news, as my hon. Friend said, and they are even more impressive when compared with those of some of our near neighbours in Europe, although one should not take the success for granted.

At the start of the last global recession, I was working in Spain. In that time, I saw youth unemployment reach nearly 50% at its peak, and I saw at first hand the devastating effect that can have on young people’s lives. I lived in a block of flats in Madrid, and it was difficult to watch as many of my neighbours were made redundant. Even worse was seeing young people graduate from university or college and applying for job after job with no success. It is heartbreaking to watch talented and qualified young people spend years trying to get on the first rung of the ladder. Being continuously rejected is demoralising for anyone, and I wish I could say that the situation has improved in the eight years since I left Madrid, but it has not. Many of the same people are still out of work and struggling to get by. The youth unemployment rate in Spain remains very high at 38.7%, and the situation has been ongoing for almost a decade. They genuinely have lost a generation of opportunity.

The wider EU average unemployment rate is currently at 16.7%, with Greece at 43.3% at the top of the list above Spain. In the UK we compare comparatively well, with youth unemployment at 11.9%. Although we can celebrate the success we have seen in getting more young people into work, still our goal must be to ensure that all 16 to 24-year-olds are either earning or learning. That is crucial, as we need to increase our skills for growing businesses and raise the career aspirations of the next generation. The priority must be to remove the barriers to young people getting into work. To do this we need to ensure our younger generations have a variety of routes into the workplace.

When I left school at 16 there were no decent sixth-form colleges in the area that I lived in in Knowsley. I had 10 O-levels, but where was I to go and what was I to do? I was fortunate enough to get an apprenticeship. I really was lucky because only five places were available. Many of my fellow school leavers would have benefited from the wide variety of apprenticeships on offer today.

[David Simpson (Upper Bann) (DUP)]

On the subject of apprenticeships, one of the difficulties that we face in Northern Ireland, certainly in my constituency, is that 25 young people will start an apprenticeship but five will finish it. How can we change that mindset?

[Gillian Keegan]

That is an important point. I would like to put in a plug for apprenticeships, but they need to be high quality.

Child Maintenance Service

David Simpson Excerpts

Tuesday 18th April 2017 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Member for Motherwell and Wishaw (Marion Fellows) for setting the scene for us in detail. As elected representatives, we are all well aware of the issues because we see them in our offices every day. I will comment on some recent cases that I have seen.

The system is supposed to help people, but we often see cases in which it does not. It is meant to ensure that parents who do not have full custody of their children are still responsible for part of their care. Such a system is needed because, unfortunately, there are those in our society who believe that leaving their children’s mother entitles them to leave their children behind too. That does not need to happen—indeed, it should never happen—and the system is in place to address that. We are highlighting the system’s shortcomings today, but to be fair, the CSA has been able to sort out some of my constituents’ problems, whether those problems have been on the father’s or the mother’s side. There are occasions when things go right, but unfortunately there are more occasions when they do not. The system is in place to ensure that responsibility is spread, but as the hon. Lady pointed out, every time it is not used successfully, the loser is the child. It is also clear that the system is in no way addressing all the issues. I believe that a better and more effective way can be found.

The hon. Lady referred to a report by the charity Gingerbread. I also read that report—I am sure the Minister did too, because she is very thorough. The report, which was launched in June last year, found that

“hundreds of millions of pounds of child maintenance arrears owed to children are failing to be collected by the government”.

[David Simpson (Upper Bann) (DUP)]

My hon. Friend mentions children, who are the most vulnerable ones in these cases. Surely it is time we revamped the whole system—it would not be the first time that a Government scrapped a system and put in place a new one that worked. We have to think of the vulnerable.

[Jim Shannon]

My hon. Friend is absolutely right: it is the children who are vulnerable. In many cases it is the mother, too, and on the odd occasion it is the father—it depends on the issues—but the focus of our attention should be on the children, as it is in this debate.

Gingerbread referred to

“new debts piling up in the new system worth an average of £668 per family.”

That is a huge amount of money to a single-parent family; it could be the uniform or the lunch money. There must be a way of getting that money paid or the matter addressed. Gingerbread also notes that

“almost £4bn of unpaid maintenance arrears has accumulated over the 23-year lifespan of the Child Support Agency…which is in the process of being shut down and replaced by its successor, the Child Maintenance Service”.

We hope that the CMS will learn from the mistakes of the CSA and deliver a better system. I look to the Minister to explain how such a better system will be unveiled and how it will ensure that parents and children get their money when they should. However, the Government estimate that only 12% of that amount is ever likely to be recovered. Although I may look to the Minister for a positive response and for guidance, I am well aware that the Government have already stated that they will not get all the money anyway—they have almost drawn a line in the sand and said, “We can’t do it.” I have to say that that is very disappointing.

The hon. Member for South Down (Ms Ritchie), who is no longer in her place, referred in an intervention to the staff. Although the administration of the system is devolved, the rules, regulations and laws on the CSA and the CMS are decreed by Westminster. Staff are moved about all the time. In all my years of dealing with child maintenance issues, I cannot remember ever speaking to the same person twice about the same issue. More often than not, people phone up and say, “They said they would phone me back, but they didn’t.” How many times have I heard that? It is unbelievable how often staff move about and that happens.

The hon. Member for Eddisbury (Antoinette Sandbach) referred to cases in which a father moves job and becomes self-employed. Off the top of my head, I can think of a couple of cases in which a father in a very comfortable position, earning big money, has said to his wife and two children, “I am not going to be self-employed any more—I am going to go and live with my dad,” and has run away from his responsibility for maintenance. I believe that is wrong. There are others who go on the dole or who take up a job as a taxi driver—I have nothing against taxi drivers, but their earnings are all cash in hand and they can declare their own figure after their expenses. We need to look at this.

There are also delays in the system. I am now in direct contact with the manager of the system in Northern Ireland. To be fair, contacting him seems to initiate a response, but what about all the other people who are not MPs? What about the mother who is at her wits’ end because she does not have the money to look after her children? I expect—as you and other hon. Members would, Mr Bone—the same response to mothers like her as there is to us.

Gingerbread has found that

“evidence suggests that decreasing effort is being put by the government into collecting more than £700m of arrears on existing cases…Meanwhile, within the new CMS, a new system of incentives and penalties was intended to prevent arrears arising in the first place. Yet, after almost two-and-a-half-years of full operation, £52.5m has accumulated in CMS maintenance arrears, with almost half of all non-resident parents in the system having some child maintenance debt. And these figures will increase as cases are gradually transferred across from the old system.”

I have also seen cases of parents—I have to say that in all cases they were fathers—who have moved out of the country and got a job abroad. I wonder how we can chase up non-residents of the United Kingdom.

I echo the cry of Gingerbread’s former chief executive Fiona Weir, who said in June:

“Britain’s child maintenance system is contributing to a culture where too many parents think it’s optional, rather than obligatory, to pay their child’s maintenance…The accumulated level of CSA arrears is staggering and completely unacceptable. With analysis showing that one-in-five families are lifted out of poverty by child maintenance payments, this is vital money that parents, and their children, can’t do without.”

She clearly outlined the issue and where we are on it. She went on to say:

“And with the Institute for Fiscal Studies calculating that poverty rates for single parent families will double by 2020”—

therefore, the situation will get worse—

“more than ever that child maintenance owed for children needs to be collected by the Government.”

We look to the Minister and the Government to see how best they can do that.

There are also parents who are separated or divorced who come to a financial arrangement, which is an agreement by the two people. It is quite a good system, because by and large they come to a financial arrangement that is equal to what the CSA or the CMS would have arranged. However, I am frustrated, because sometimes the CSA—or, now, the CMS—will pursue those making financial arrangements to see if they can get more out of them. They almost look at them as easy targets and I find that most frustrating.

This issue is continually raised in my office. Just last week, I had a father in my office who has children from a previous relationship. His ex is in a better job than he is and is much better off financially. He has not run away from his obligations to support his children, but there must be a financial equation that is fair and realistic, and that enables everyone to do what they have to do. Fewer than half the eligible families receive child maintenance, an estimated 70% of closed CSA cases involve outstanding arrears, and £52.5 million is already owed under the CMS system.

Communication is also vital. Whenever a lady phones up looking for her CSA payments, I expect the Department to phone her back, so we must initiate a better system, because communication is so important. In the life that we live as MPs in this House, communication—how we relate to and respond to our constituents—is so much of our bread and butter.

I am conscious of the time, so I will finish with this. There are failures that are clear, and these must be addressed, so we must look at the rules, regulations and guidelines that come out of Westminster and consider how we can change them so that the system can work better, whether in Northern Ireland, Scotland, Wales or England. I look to the Minister for assurance that these past debts will be actively sought and that changes will be made to prevent that situation from continuing. With that in mind, we must do better than collecting just 12%.

Supported Housing

David Simpson Excerpts

Tuesday 29th November 2016 Westminster Hall

[David Simpson (Upper Bann) (DUP)]

The bedroom tax was mentioned earlier. Does my hon. Friend agree that the Northern Ireland Executive made a wise decision not to move forward with the bedroom tax?

[Jim Shannon]

Yes, absolutely; my hon. Friend is right. That was a very wise decision. It was supported by all and was done for the very best reason: to help vulnerable people in society. I will focus on those people in the short time that I have.

We must surely consider that saving when looking at housing benefit and supported housing schemes over the long term. In March 2016, the Government confirmed that people living in supported and sheltered housing would be exempt from the LHA cap for a year to allow the Government to carry out a proper strategic review of how supported housing is funded. That is good news. Let us give credit where credit is due: that is a step in the right direction. I have been furnished with the results of the consultation carried out by members of the National Housing Federation, which represents housing associations. More than 200 organisations contributed their views to that consultation.

State Pension Age: Women

David Simpson Excerpts

Tuesday 15th November 2016 Westminster Hall

[Jim Shannon]

The hon. Lady is very clear. Many of my constituents are equally furious. They might not have been born in June ’54, but they are equally furious. The lady she mentions and the lady I spoke about, who worked for 35 years in a sewing factory and 11 years in a school, are representative of ladies across the United Kingdom of Great Britain and Northern Ireland.

[David Simpson (Upper Bann) (DUP)]

Will my hon. Friend join me in congratulating the Northern Ireland pensioners’ parliament, which has done tremendous work? One person in my constituency, Mr Nixon Armstrong, has been a great ambassador in getting rights for these women.

[Jim Shannon]

All Members from Northern Ireland have had a chance to meet the pensioners’ parliament, which has lobbied us on this issue. We are here today to speak on their behalf.

We all know the background to this debate. The Government changed the timetable because of the increase in life expectancy, but as we have illustrated, the numbers do not equal the human cost or the health implications. Even for women who have a job in an office and are expected to continue working for another six years, the repetitive strain of typing, and so on, has not been taken into consideration and has been ignored.

Women born in the 1950s are justified in their argument that they have been hit particularly hard by the significant changes to their state pension age, which was imposed without appropriate notification. They have not been looking to the future and thinking, “I’ll take a high-tech job at night-time and do a course to get a qualification. I can’t do this hard-labour job for the next 30 years.” The fact is that these women have been subject to the whim of Government, with no notice for them to change their future potential.

I understand how the world works. If the Government continue to borrow, the debt continues to rise. We all know the story. Changes must be made, but how we make those changes is a problem. I fully support the Women Against State Pension Inequality campaign in calling for a fair transitional state pension arrangement that translates into a bridging pension between the age of 60 and the increased state pension age.

Social Fund Funeral Payments

David Simpson Excerpts

Wednesday 14th September 2016 Westminster Hall

[Gavin Robinson]

My hon. Friend is absolutely right. When the Government talk about choices, they also express a desire for the ideal situation that people make provision for their own end of life. Ideally, that is what we should do. Ideally, it should come from our estate and from our savings, but those who are most in need are recipients of benefits from this society because we recognise that they cannot pay for themselves.

I ask this question of the Minister—I do not do so glibly, but it starkly illustrates the difficulty we have. Take JSA as one example. A recipient of JSA gets £73.10 per week. How much of that £73.10 do Government believe should be set aside for funeral provision? I do not wish to be facetious: that is the serious concern of many people who struggle by themselves and do not get enough from Government. We are saying, “Really, you should be saving for after life as well.”

[David Simpson (Upper Bann) (DUP)]

I congratulate my hon. Friend on obtaining this debate. Does he agree that there is a degree of humility when it comes to folk who cannot afford to pay for a funeral? They also need more help when it comes to the form filling and the process itself.

[Gavin Robinson]

I agree with my hon. Friend, and I will come on to some of those issues later in my speech, as well as recognising the particular difficulties we have in Northern Ireland when it comes to those choices. The Select Committee did a good bit of work on the application process and the SF200 form, which I will refer to later as well.

The Minister will know that the social fund payment is broken into two categories: what is considered to be a non-discretionary award and what is considered to be a discretionary spend. The Committee has canvassed this issue. The Members I mentioned previously—the hon. Member for South Shields and others—have recognised that the £700 award, which was formulated at a time when it met discretionary spend needs, was frozen in 2003. The Bank of England’s calculator suggests that that £700 is now worth £495.68, yet the costs have not frozen; they have risen exponentially. That figure was set at a time when Government said they would meet the costs, but I am afraid this policy is now compounding the debt and the pressure on families who look to Government for support. That is 13 years of diminished spend, and the cost of discretionary items has risen exponentially, at more than three times the rate of inflation year on year since 2003.

Let us consider what is discretionary. I do not find it comfortable that the provision of a representative of the clergy or an officiant at a ceremony is a discretionary spend. I know that people have different views on faith, but for me it is not a choice. I recognise that there are many in our country who do not live a faithful life but who, when they approach the end, build that relationship for what is to come. I do not believe that that spend—whether it is a faith-based clergyman or someone who will simply officiate at an ordinary funeral—should be discretionary, nor do I believe that the hiring of a place of worship should be. We cannot expect it to be a discretionary cost for people at a time of grief and sorrow to sort out a place aside from their home to welcome family and friends who want to pay their respects to their loved one.

Discretionary cost is also associated with a cremated remains plot or storage space. Cremation is a non-discretionary spend, so its cost is covered; burial is also a non-discretionary spend and interment is covered. Burials cost substantially more than cremations and the Government will cover the cost of interment of a body in a burial, yet providing a plot for ashes or a safe place for them to be kept is non-discretionary. Given that there is a huge saving for the Government in the discretionary element of cremation, the provision of a cremated remains plot or storage space should be moved from non-discretionary to discretionary.

Embalming is a discretionary spend. The Government say a family choose whether a body will be embalmed. It is not required scientifically, but is most important, should a family choose to have an open coffin or to spend time with their deceased loved one. As part of that categorisation of non-discretionary spend, the Government are making the choice more difficult for those in receipt of benefits or who can ill afford it. They are saying, “We will pay £700”—which in no way represents the cost of the non-discretionary items added together; indeed, it has been frozen since 2003 and is now worth less than £500—“but you choose: are you going to use it to have an officiant at a ceremony, to have a place to put the ashes of your loved one, to embalm the body before disposal or to mark their final resting place with a memorial?” It is appropriate to spell out these aspects of the end of life sincerely and earnestly, to illustrate some of the choices that the policy is asking people without sufficient means to make.

In an evidence session during the Select Committee’s inquiry, an official from the Department for Work and Pensions said that, ideally, eligible claimants should know what their entitlement is before a funeral. It is sensible and plausible that people do not go to a funeral director and ask for these discretionary items, amassing a substantial cost that they can ill afford. That is sensible and, when I consider the delay in having a funeral in England and Wales, it is also practical. People may wait two, three or four weeks for a funeral. That is not so in Northern Ireland, where traditionally people are buried two or three days after death. So at a time of sorrow and grief, we not only ask people to come to terms with loss and their inability to provide for their loved one and to make arrangements, contact family and friends, but to contact DWP’s advice line to see whether support is available. Three weeks sounds practical, but three days is less so, yet the constraints are the same across the country. Colleagues from other parts of the country may wish to add their experience, but in Northern Ireland the short time frame does not allow people to do what the DWP official described as ideal.

All this—the question of discretionary or non-discretionary and the cap in 2003—has led to a crisis of funeral poverty in this country. The Local Government Association has highlighted its concern. In 2009-10, there were 2,200 public health funerals, at a cost of £1.5 million to local authorities. In 2010-11, there were 2,900, at a cost of £2.1 million. The BBC survey of all local authorities in this country had a response rate of three quarters. It is estimated that there will be 3,500 public health funerals this year.

We know what they are. Paupers’ funerals have been described as funerals for which there is simply no one to pay, no family support and no ability to give someone a send-off from a loved one, so the state steps in. The number of such funerals has risen exponentially to 3,500 this year. That has led the National Association of Funeral Directors to ask why, if funeral poverty is rising, social fund funeral payments have decreased. The social fund payments of £40 million in 2016 represent a 10.9% decrease from £44 million in the previous year. The number of public health funerals is rising and funeral poverty is rising, yet Government support is falling. With a fall of £4 million between last year and this year, we are returning to 1993 in real terms, when the Government spent £90 million on social fund funeral payments.

Last year, the social fund proudly stated that it had reduced outstanding debt and returned more than £150 million to the Treasury. The number of public health funerals is rising, spend is decreasing and the cost to local authorities and funeral poverty are rising; rather than proudly stating that they are handing £150 million back to the Treasury, the Government have the choice to use the money more appropriately and to provide the support that is needed.

To be fair, the Government gave a timely response to the Select Committee’s report. The Minister has had the chance to consider some of her narrow brief—DWP is not a narrow Department and has many considerations—and today gives her the opportunity to add some meat to the skeletal response and skeletal commitments that were offered.

The Government have talked about dialogue between funeral directors, interested third parties and stakeholders. I will be interested to hear what the Minister says to update the discussions that have been taking place since 2015. We should have an appropriate response from the Government today on how those discussions are progressing without just placing the onus on funeral directors.

There was much in the Select Committee’s report about funeral directors doing this and that. The Government could define what a simple funeral is. There are choices, as I have outlined, about what is discretionary and what is non-discretionary. I will be interested to hear not just what stakeholders, funeral directors and their association are prepared to do, but what the Government are prepared to do.

Employment for People with Disabilities

David Simpson Excerpts

Tuesday 5th July 2016 Westminster Hall

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Member for St Ives (Derek Thomas) on securing this debate. Many of us are reminded every day in our constituencies of the lack of services for disabled people, especially when young people leave full-time education. Today, as we focus on employment for disabled people, we must look at the shortage of careers advice available, which in itself leads to low numbers of registered disabled people engaged in paid employment.

Like other hon. Members, I appreciate all the excellent efforts of various Government Departments, outside organisations and, most of all, carers and volunteers, but there is still a vast gap when meeting the needs of disabled people and getting them into employment. The Equality Act 2010 has gone a long way in protecting the rights of disabled people. Included in the Act is the provision that employers must make “reasonable adjustments” to avoid a disabled person being put at a disadvantage compared with a non-disabled person in the workforce, but we cannot ignore the fact that that there are over 6.9 million disabled people of working age, which represents 19% of the working population. Of that, 1.3 million disabled people in the UK are available and want to work. Only half of disabled people of working age are in work compared with 80% of non-disabled people.

What we are seeing is a very clear difference in the employment statistics for disabled persons and non-disabled persons. I do not want to appear to be having a go at businesses but those figures suggest that non-disabled people are being favoured for jobs. Why is that happening? Is it because of the level of training required, the lack of qualifications, poor social skills or apprehensive employers? I believe it to be a cocktail that includes all those factors. That is why Government need to increase the accessibility of jobs for disabled people.

[Mr Robin Walker]

The hon. Gentleman is making some excellent points. One thing that has changed and improved in many ways is assistive technology, particularly for people with conditions such as blindness or deafness. Does he agree that disseminating information about the assistive technologies that are available and making sure that businesses are aware of them and how easy they are to use is an important part of this?

--- Later in debate ---

[David Simpson]

Yes, the hon. Gentleman makes a very good point. The need to promote awareness of the technologies and what is available to help companies to take on people with additional needs is a valid point.

There are two special schools in my constituency. We fundraise every year for them and try to help them to get young people into employment. Principals, staff, parents and pupils are trying to provide an excellent level of care. The detailed attention that each child receives to ensure that they are developing to their full potential is exceptional. Schools are doing their best to get the best out of young people who have additional needs, but once the child reaches the age of 19—I am referring on this point to Northern Ireland—and is due to leave full-time education, support diminishes. The Department of Health in Northern Ireland recently have set IQ tests for young people. If they reach a score of 70 or above they are deemed ineligible for specific services provided through the Department. This is simply devastating for young people and for their families as they struggle to fulfil the needs of their sons and daughters. The principals of the special needs schools have expressed to me their utter frustration at how quickly all the great work carried out in their schools is being lost as the correct level of support is not available for young people. The reality is that so many of those young people could be out working and adding to the economy, but they cannot get over the initial application phase because the support services are just not there.

I recently visited a social enterprise in my constituency that is providing excellent support, skills and qualifications. Sadly, it is under constant threat of closure due to lack of funding. Its staff train young people in essential social skills that not only equip them for the world of work, but boost their inner confidence. The social enterprise focuses on preparing young people for adult life, encouraging them to reach their goals and giving them invaluable skills. I am currently working closely with a local supported employment organisation, Ulster Supported Employment Ltd, on how we can do more after people turn 19. USEL goes some way in addressing the setbacks faced by disabled people, but we should go further in supporting such organisations and social enterprise initiatives.

Parents have said that there is no flexibility of benefits for their sons and daughters who are heading into work. That has created a significant reluctance for young people to come off benefits and start working. The challenges in their new job may not be something that they can sustain, and if they have given up their entitlements they may have to wait a number of weeks, or even months, before they can claim benefits again; indeed, they may not even receive them at all.

All Members of this House are trying to be proactive in their constituencies. In Upper Bann, I am planning a jobs fair for disabled people in the autumn. I have spoken to the local council, further education colleges, the special needs schools and a number of other organisations in my area, and all are keen to come on board. During the summer recess, we will try to get businesses interested, and see whether we can help people with additional needs and disabilities to fulfil their ambitions in life.

Under-occupancy Penalty

David Simpson Excerpts

Tuesday 23rd February 2016 Westminster Hall

[Jo Stevens]

My hon. Friend makes a very good point; the tax increases uncertainty. People cannot budget. Their circumstances change and the fluctuating nature of the tax impacts on them more heavily at different times. Then there are victims of domestic violence and rape whose lives are at risk and need the protection of a panic room.

The particular focus of this debate is the regional impact of the bedroom tax, and I want to outline its impact on my constituents in Cardiff Central and more broadly within the nation of Wales, where 31,217 people are affected by the tax. Across Wales, just under 500,000 people live in social rented accommodation. The tax has had a huge impact, affecting proportionally more housing benefit claimants than anywhere else in Great Britain. Some 46% of claimants in Wales pay the tax, compared with 31% for the UK as a whole. In Cardiff, 3,015 households currently pay the tax, and nearly 500 of those live in my constituency of Cardiff Central.

The cost of the bedroom tax to each household affected will be £3,500 during this Parliament. I am sure I do not need to explain to most hon. Members what £3,500 means to the families in our constituencies, especially the poorest families who visit our surgeries every week. That £3,500 would otherwise be spent on basic necessities such as food, heating, clothes and shoes. The Secretary of State for Work and Pensions claimed that the bedroom tax would encourage societal movement. However, when the bedroom tax was introduced, it affected about 3,500 households in Cardiff, and only just over 100 smaller properties were available for people to move into. I readily admit that maths is not my strong point, but even I can work out that that sum does not work.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Member on securing this debate. She knows that Northern Ireland did not implement the bedroom tax, although it has cost us financially not to do so. We looked at the issues that she has rightly highlighted, especially those affecting our older generation. In the first place, we did not have the housing stock, but, from a moral point of view, we felt that the hardship was simply too great to impose on older people.

[Jo Stevens]

I thank the hon. Gentleman for his intervention, which again shows the iniquitous nature of the bedroom tax.

Therein lies the truth about the bedroom tax and its impact and the number of properties that are available for people to move to. The Government knew before they introduced the policy that insufficient smaller properties were available for people to move to. That was the picture right across the country. Even if we gave the Government the benefit of the doubt about their motives before implementation, their own interim report on the bedroom tax after implementation revealed that the policy was not meeting its key aim of freeing up larger council properties. Only 4.5% of affected tenants have been able to move to smaller accommodation. At the same time, with just 4.5% of people able to move and be rehoused, 60% of people affected were in arrears within the first six months of the introduction of the tax. The policy is simply not working. People are not able to move to smaller accommodation because that accommodation simply does not exist, so long-standing, reliable tenants who were previously able to budget and pay their rent regularly now cannot pay it and have built up significant arrears.

Social Security

David Simpson Excerpts

Tuesday 1st December 2015 Commons Chamber

[Ms Margaret Ritchie (South Down) (SDLP)]

Tonight we are dealing with the Welfare Reform (Northern Ireland) Order, which implements provisions contained in the Welfare Reform Act 2012. Specific changes include top-up powers and a different sanctions regime.

Unfortunately, owing to the actions of the Democratic Unionist party and Sinn Féin, we see the surrender and return of these welfare reform powers to Westminster, and the reintroduction of the undemocratic Orders in Council, which we thought we had consigned to the legislative dustbin when devolution returned on 7 May 2007. Orders in Council are undemocratic, because no provision is made to allow amendments. I do not think that anyone would deny that.

As Members are aware, last week the SDLP tabled a number of amendments to the enabling Bill at Committee stage which dealt with the detail of this Order. Although I do not intend to reiterate our rationale, I will say this: the amendments would have restricted the Secretary of State’s powers to interfere with Northern Ireland’s welfare system.

On one amendment in particular, namely the sunset clause, the Secretary of State for Northern Ireland and the Minister made no attempt to justify voting it down. That sunset clause was set at 31 December 2016—

[David Simpson (Upper Bann) (DUP)]

Will the hon. Lady give way?

[Ms Ritchie]

If the hon. Gentleman will let me complete my point, I will come back to him.

There was no response to the point made by my hon. Friend the Member for Foyle (Mark Durkan) when he asked why the sunset clause should not be made more temporary, and set at 1 June 2016. That would have reflected the new mandate following the elections in May. The arbitrary date seems to have been chosen more for neatness than for any consideration of the processes and structures in the Assembly.

[David Simpson]

I have the greatest respect for the hon. Lady. I wish to give her an opportunity to express her regrets—or does she, along with her party, in fact express any regrets?—that £100 million was sent back to the Treasury, which could have been used for the benefit of the people of Northern Ireland. Will she express that regret?

[Ms Ritchie]

On that point, I can well recall that there was robust opposition to those fines by my colleagues in the Assembly. Let me ask the hon. Gentleman this: do he and his colleagues regret the fact that there was an in-and-out approach to ministerial office by the DUP back in September, which resulted in very long waiting lists for health and in many people still having to wait for surgical procedures?

This debate and this order reflect the Government’s attitude and the disregard for the Assembly’s democratic processes on the part of the Government and Sinn Féin and the DUP. This sunset clause has been presented by other parties as the cut-off point in the Secretary of State’s interference in our welfare system, but of course that is not the case. The legislative consent motion voted through by the DUP and Sinn Féin locks Northern Ireland into the welfare provisions.

May I remind you, Mr Deputy Speaker, that DUP Members walked through the Lobby with us to vote against the provisions, yet they have joined Sinn Féin in signing up to this? My colleague in the Assembly, Mr Attwood, received a letter from the DUP Minister for Social Development last week, confirming that our constituents would face a benefit freeze for four years up to 2020 and that Westminster would have the power to impose an even lower benefit cap—lower than £20,000 for the North. That is what the DUP and Sinn Féin have locked us into. Such a four-year freeze will mean real reductions year on year for people on income support, jobseeker’s allowance, employment and support allowance and universal credit. It will mean a freeze for constituents, whether those of my hon. Friend the Member for Foyle (Mark Durkan), of the hon. Members for East Derry (Mr Campbell), for East Antrim (Sammy Wilson) or for Upper Bann (David Simpson), or of the right hon. Member for Belfast North (Mr Dodds).

Allied Steel and Wire (Pensions)

David Simpson Excerpts

Tuesday 10th February 2015 Westminster Hall

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

Thank you, Mr Hollobone—it is a real delight to see such a cheery face in the Chair for a debate so early in the morning.

I want to raise an issue that has been of concern to a group of my constituents for the past 13 years. That group comprises ex-ASW workers who lost their pensions when the company went into receivership in July 2002 and was declared insolvent the following year. Of course, it was not just ASW workers in Cardiff and Sheerness who faced the loss of their pensions in that era, when a large number of final salary pension schemes were wound up. Indeed, 40,000 people were affected at the time, and many more have been affected since. However, I would like to concentrate most of my remarks on members of the ASW pension plan or the ASW Sheerness Steel Group pension fund, which were defined-benefit payment schemes based on final salary and length of service.

Many of those workers lived in my constituency, and they were treated disgracefully. Their story really starts following the raid on the Mirror pension scheme by Robert Maxwell, which led to the introduction of legislation in 1997 with the intention of ensuring that all company pension schemes were correctly funded and protected. The benchmark used was the minimum funding requirement. Pension schemes had to be funded to a level that met the MFR. Therefore, a scheme funded to 100% of the MFR would be properly funded and safe—or so most people believed. However, nothing was further from the truth. In fact, should a scheme funded at 100% of the MFR have been wound up, it would have bought only about 60% of the expected benefits.

The problem was that there was nothing in the legislation to force the higher levels of funding needed to deliver the expected pensions. The MFR was heavily criticised by the parliamentary ombudsman in the report “Trusting in the pensions promise”. The reality was that companies were penalised through increased taxation if their pension schemes were funded at more than 10% above the MFR. Pension funds considered able to finance full pensions were deemed to be overfunded. That led many companies to introduce pensions holidays during the 1990s. That included ASW, whose pension scheme was very healthy, standing at about 130% of the MFR. To avoid taxation, the company introduced a pensions holiday for several years, during which it made no contributions to its pension fund. It eventually reduced the scheme to just over 100% of the MFR.

When the ASW pension plan and the Sheerness Steel Group pension fund were terminated in 2002 and started to be wound up, it was found that there were insufficient assets to meet the schemes’ liabilities. Under the legislation in place at the time, if there were insufficient assets when a scheme was wound up, the employer was required to make up the difference, but an insolvent company such as ASW might not be able to do that. In such cases, those assets that were available had to be distributed in accordance with a statutory priority order—a provision introduced in 1997 under the Pensions Act 1995. Normally, that ensured that existing pensioners got all their due pension, but active and deferred scheme members might get only a small proportion of their entitlement. The proportion of their promised pension to which ASW workers were entitled was about 40%.

As hon. Members can imagine, that was a huge shock to the ASW workers in my constituency, particularly because, before the Sheerness Steel Group pension fund was wound up, the Government had assured them and many other workers that their pensions were safe. One Government booklet on occupational pensions posed the following question:

“How do I know my money is safe?”

It obligingly gave the following answer:

“Occupational pension schemes in the private sector are set up under trust law. The trustees must run the scheme in the interests of the members and in line with…trust law…the trust deed (a legal document) and rules; and…specific laws about pensions.”

It went on to explain:

“Although your employer pays into the scheme and may be a trustee, the assets of the pension scheme belong to the scheme, not to your employer. As a scheme member, you are protected by a number of laws designed to make sure schemes are run properly and to make sure funds are used properly.”

Like workers in many other companies, ASW pensioners believed what they were told. If they had not been given those assurances, they might have transferred to a different scheme, although it is worth noting that independent financial advisers were told by the pension regulator at the time not to transfer people out of “safe” final salary schemes.

Helped by my predecessor in Sittingbourne and Sheppey, Derek Wyatt, and by my right hon. Friend the Member for Thornbury and Yate (Steve Webb), who is now the Pensions Minister, ASW made a complaint to the parliamentary ombudsman, whose subsequent report stated that the general public had every reason to believe that their occupational pensions were safe, because of statements repeatedly made by the Department for Work and Pensions and because of other Government actions.

The then Government rejected that report and took no action. The Pensions Action Group initiated a judicial review of that rejection, and the High Court found in its favour. The Government appealed the ruling, but the Appeal Court upheld the High Court judgment. In 2003, the Government sought to improve protection for members of pension schemes by proposing to introduce the Pension Protection Fund, a levy-based scheme that eventually came into being in April 2005. However, the PPF did not provide protection for workers who had lost pension rights before the legislation came into force.

Following considerable pressure from right hon. and hon. Members on both sides of the House and determined campaigning from the Pensions Action Group, the Government eventually introduced the financial assistance scheme in 2004. The FAS promised 90% of earned pension to workers who had lost their pensions before the introduction of the PPF. However, 90% of an earned pension was not the same as 90% of an expected pension based on any particular scheme, such as that in which ASW workers had invested. Compensation payments were much lower, so for the Government continually to quote a 90% figure was, at best, disingenuous. The FAS also provided little inflation protection. In addition, a £26,000 payments cap was introduced, badly affecting people with good salaries, such as steel workers, and particularly those with long service.

When the PPF was eventually introduced in 2005, it acted like an insurance scheme funded by pension funds and without the input of any Government money.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Gentleman on bringing this important issue to the House. What he has described thus far is almost a mirror image of a number of cases in my constituency, where adequate funding was not in place to deal with pensions and insolvency. After 15 years, families in my area are still suffering the aftermath. The attitude is that the funding of pensions was not regulated properly. Does he agree?

[Gordon Henderson]

Yes, I certainly do, and I will come to the problems relating to that.

Like the FAS, the PPF gives 90% of earned pension, and it gives protection against inflation for employment post-1997. That indexation ensures that protection under the PPF is much better than protection under the FAS, because it improves over time. Under the FAS there is very little post-1997 inflation protection, and the pre-1997 pensionable service has no inflation protection at all, even though most of the ASW workers in my constituency had paid for indexation with enhanced contributions to the Sheerness Steel Group pension fund. For most ASW FAS members, the pre-1997 element of their pension represents the majority, if not all, of their pensionable service.

I want to give an example of what that means in practice to a typical employee at the steelworks—and, I am sure, to constituents of the hon. Member for Upper Bann (David Simpson)who have been affected. Someone who joined the pension scheme in 1980, with an anticipated retirement date in 2010 at the age of 62—the Sheerness steelworkers’ retirement age—and a salary of £30,000 a year in 2002, would have expected when he retired in 2010, after 30 years of service, to receive a pension equal to 30 sixtieths of at least a £30,000 salary, which would equate to £15,000 a year. However, by the time the steelworks went into liquidation in 2002, that worker had only 22 years of service, so his pension entitlement would have been 22 sixtieths of £30,000, or about £11,000 per annum. However, the FAS paid only 90% of that amount, which is £9,900 per annum.

The FAS then applied limited inflation protection, at 2.5%, but only for service post-1997 until the steelworks went into liquidation—about 4.5 years in total. The employee would therefore have inflation protection on just 4.5 twenty-seconds of £9,900, which equates to £2,025—that sounds a bit complicated, and I have the figures before me which makes it easier for me, but trust me, they are right. However, there would be no inflation protection on the remaining 17.5 twenty-seconds, which would have been £7,875. The maximum indexation that the employee would get was therefore 2.5% of £2,025, which is £50 per year. That is equivalent to a total indexation of about 0.5% maximum over the full amount of the pension.