Universal Credit

Debbie Abrahams Excerpts

Monday 7th July 2014 Commons Chamber

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

If ever a debate title were a misnomer, it is this one, because it should be “The failure to implement universal credit”. Failure is pretty much par for the course for the Department for Work and Pensions, certainly in the implementation of its policies, which aim to reduce costs to the benefit of claimants and taxpayers. My hon. Friend the Member for Aberdeen South (Dame Anne Begg), the Chair of the Select Committee, has detailed the fantastic amounts of public money that have already been lost in a failed IT system. She has also touched on the unwillingness of Ministers in the DWP to answer questions from the Select Committee. I point out in passing that every Select Committee is appointed by this House of Commons, and its sole purpose is to scrutinise the Department which bears the same name.

We see constant failure in the implementation of the work capability assessment. On four occasions, Professor Harrington has attempted to ameliorate the agonies which individuals who are subjected to the work capability assessment are put through, yet we are still receiving letters from our constituents detailing the humiliating experiences. This is a really serious matter. An individual claimant can be sanctioned for failing to attend a work capability assessment. We have all had examples from constituents of the letter detailing the appointment arriving two or even three days after the specified date. We have also heard about those who have turned up for the assessment only to be told by the assessors, “Sorry, we can’t take any more people today.”

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

As usual, my hon. Friend is making a passionate speech. I have mentioned this story before, but let me repeat it. One of my constituents was sanctioned for having a heart attack during his work capability assessment. The nurse undertaking the assessment told him he was having a heart attack, but he was still sanctioned.

[Glenda Jackson]

It is not usual for me to be gobsmacked, but I certainly am by that story, even though I have heard from constituents who, while not necessarily experiencing heart attacks, have had absolutely disgraceful treatment. We are also seeing a rise in the number of appeals concerning employment and support allowance, and the appeals that have been lodged are taking longer and longer to come to a conclusion. I will not go into the whole debacle of the personal independence payment, but it is simply scandalous that some of the most vulnerable people in our society, whom the DWP is supposed to be assisting, are being left in many instances with no financial support whatever. To add insult to injury, this Government have also reduced the funding of local authorities. Many local authorities were absolutely central to ensuring that people with disabilities could live human, productive lives. That money has now been taken away.

I hope to bring home to the Chamber the absolute chaos out there at the moment, and to concentrate on the questioning that an individual claimant has to go through and the kind of questioning to which the Secretary of State responds. It is clear that he is burdened with delusions of adequacy, but some of his responses to my hon. Friend the Chair of the Select Committee at his most recent appearance in front of us were absolutely disgraceful.

Let me detail the experience of an individual claimant. A 71-year-old pensioner, dubbed by Her Majesty’s Revenue and Customs to be self-employed, applied for housing benefit. It has now taken 17 weeks and still there is no final cut-off point where she has been assured that she will receive housing benefit. The most recent inquiry that came to her was to detail the cost of a bill of £3.40; the second was to detail the cost of a bill of £7.47. Both of those claims took place in 2012. The mind boggles at that, when the Secretary of State, who has lost millions and millions of pounds on a failed IT system, has categorically refused to give the Select Committee any detail whatever about his newly trumpeted business plan. He has refused to discuss the costs of the plan or whether there will be any direct savings either to the taxpayer or to the overarching benefit system. It is an absolute disgrace that the Select Committee, which has been appointed to scrutinise the DWP, is being buffeted away. It seems that the Department is opting for some kind of bunker mentality, but it will not work.

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[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Although I have huge regard for the hon. Member for Newton Abbot (Anne Marie Morris), I must disagree with some parts of her speech, most notably because there has been a swathe of errors not just in universal credit but, as we debated last week, in the other programmes for welfare reform. My hon. Friend the Member for Hampstead and Kilburn (Glenda Jackson) remarked on the unfortunate way in which the welfare reforms have been framed and debated in the media, including irresponsible press releases that perpetuate the vilification of people on benefits and paint them as the new undeserving poor. I have found that deeply offensive and such an approach has been used in Ministers’ speeches. Many people have found that offensive.

[Anne Marie Morris]

The hon. Lady is a fine contributor to our Select Committee and adds a lot of intellectual rigour and brings a lot from her previous background. My challenge is: would it not be lovely if we could control the media? She is absolutely right, I am sure, that some inappropriate things have been said by the wrong people, but when it comes to who said what and whether what is reported in the press is true, I find it a very hard leap of faith to make to accept her other point. I do not believe that any member of the Government would wantonly wish to put out any message in the way that she describes—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Lady has already had 14 minutes. Let somebody else in—we need short interventions.

[Debbie Abrahams]

Language such as that about “shirkers” and “scroungers” has been used in the House by Ministers, and I reiterate that I find this deeply offensive.

If we consider welfare reforms in the round, we can see that there have been huge errors in how they have been delivered. If we consider them in the context of other reforms to the welfare state, we can see that we are experiencing a decimation of the welfare system that was set up after the second world war, with people who are sick and disabled through no fault of their own increasingly being denied access to a basic standard of living. In addition, the changes to access to health care and to justice are also affecting benefit claimants and because of the changes there has been a 20% reduction in the number of benefit claimants whose appeals are successful. We need to look at the situation in the round. I find it disappointing that a debate such as this is not seen in the context of everything else that is going on.

On the implementation of universal credit, I do not understand how the Secretary of State can still be in a job. Mistakes and errors have cost hundreds of millions of pounds of taxpayers’ money. That has been accompanied by cover-up and claims that the system has been reset.

I endorse all the positive comments that have been made about the Chair of the Select Committee, my hon. Friend the Member for Aberdeen South (Dame Anne Begg). She is a fantastic Chair, always allowing people to engage and giving them the opportunity to speak, but she has been shown such disrespect. If anybody has not seen how the Secretary of State behaved in that Select Committee meeting in February, I invite them to watch it. It was a disgrace.

[Dame Angela Watkinson]

I thank the hon. Lady for allowing me to intervene. I hope she will also allow that the Secretary of State was sorely provoked. If we are going to look at the behaviour of one person, we need to look at the behaviour of others who took part in that exchange.

[Debbie Abrahams]

I am sorry, I do not agree with that. The exchange is on record and people can watch it. It was clear that when the Chair of the Select Committee asked in February why we had not had the information that was available, the democratic role that Select Committees play in our parliamentary system was ignored. The response to the Select Committee’s report is a further justification for my comments. I am not alone in my views. There has been criticism from the Major Projects Authority and the National Audit Office.

[Mr Jim Cunningham (Coventry South) (Lab)]

The previous Conservative Government had form in this area, particularly in relation to benefits, although my hon. Friend probably was not in the House at the time. We heard a lot of ballyhoo about the horizon project, but at the end of the day it cost billions to put right. Again, it was the people on benefits who suffered as a result. The Conservatives have form. They come up with all sorts of excuses over the years, and claim to be compassionate. They are not. We have only to look at people with disabilities, who still have to go through medical tests.

[Debbie Abrahams]

I am grateful to my hon. Friend. No, I was not in the House at that time. We recognise that we did not get everything right either—I am sure there will be an intervention about that—but this Government and this Secretary of State are now in power. It is their programme that we are scrutinising and it is a categorical failure. It is a mess. I have spoken about the waste of money. The Major Projects Authority said that there have been so many changes to universal credit that it cannot be seen as the same project: it must be seen as a new project.

As I said last week, and as was mentioned also by the Chair of the Select Committee, we started off with four pathfinders, including one in my constituency, Oldham. Those were announced in 2011 and were meant to be followed by a national roll-out in October 2013. On the day that the Secretary of State was supposed to provide evidence to the Select Committee, we learned that there was not to be a roll-out. Again, he was very indignant that we were questioning him about that. It was appalling arrogance.

As we have heard, there are supposed to be 7.7 million people on universal credit when it is fully implemented. Currently about 6,000 people are on it. The Secretary of State thought it was highly amusing when I asked him last week how long it would take at the present rate for 1 million people to be on UC. It is a matter of simple maths. Perhaps he, like the Chancellor, has problems with that. The answer is 2091. The Secretary of State did not like answering that.

Last September the National Audit Office reported IT problems that the Government had known about for 18 months but had failed to tell us about. That is deceptive and dishonourable. Some £40 million spent on software has had to be written off and a further £91 million written down. Good money is being poured after bad as the Government continue to spend £37 million to £38 million on the old IT system, while at the same time spending extensive sums on an end-state solution or, as it is now called, enhanced digital—whatever.

In addition to saying that it was now treating universal credit as a new project, the MPA, together with the NAO, reported its concerns on significant issues of governance, transparency, financial controls over supplier spending, and ineffective departmental oversight. It could not get worse. How is the Secretary of State still in his job? In any other profession, he would have gone. Why is he still there?

We supported and still support the principles of a simplified benefits system and one that makes work pay, but whether that will happen is questionable. There is real concern that the aim of making work pay will not be achieved. Recent evidence has shown that by 2018 cuts to the basic and work allowances will mean that universal credit is £685 a year less generous for a lone parent with two children, saving the Government £1.7 billion a year. There are also concerns that UC will weaken the incentive for second earners in couples to work. One in five children in poverty now lives with a single-earner couple. Ensuring that more second earners, principally women, are able to take up employment will be critical to reducing child poverty rates. Finally, the decision to leave council tax support out of universal credit means that the aim of simplicity is being undermined, with many claimants facing two rates of benefit withdrawal when they move into work or when their income increases.

The introduction of universal credit has been a car crash—a demonstration of how not to implement policy and of how the policy intention of making work pay is failing. This Government and this Secretary of State are failing to reform our welfare system. Of course, we need to make sure that welfare spending is not profligate, but in reforming our welfare system so that it is fit for the 21st century, we must remember why we developed our model of social welfare, retaining its principles of inclusion, support and security for all, protecting any one of us should we fall on hard times or become sick or disabled. It is a hand-up, not a hand-out.

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[David Mowat]

As I said, I have not been serving on the Select Committee and I have not heard about the confidence she mentions. My point is that decisions are made during the life cycle of a programme that effect changes, and if, every time that happens—

[Debbie Abrahams]

There was a two-week difference between the Department saying that everything was fine in a memo that we received and the NAO’s publication of its cataclysmic report condemning what the Department is doing. Is that the sort of time scale that the hon. Gentleman has in mind?

[David Mowat]

I do not know, because I was not aware of that. The hon. Lady’s intervention, like much of her speech, is along the lines of, “We’re doing our job; if only the Secretary of State would do his job and hurry up and get this delivered, everything would be all right.” My substantive point is that delivering this application is harder than delivering the Olympics, and it behoves all of us to get behind the 1,000 or 2,000 people who are trying to do it. That is not to say that individual mistakes have not been made. There have almost certainly been lots of mistakes; it would be odd if there had not been.

As to progress, the issue is not that things have not been done; it is what we do now and how we deal with it. I am going to be kind to the Opposition and talk about the Olympics rather than the national health service project that wrote off about £10 billion. The Olympics was a joint success—a success for our country—and yet its budget increased by a factor of four. When the right hon. Member for Dulwich and West Norwood (Dame Tessa Jowell) came to the House and announced that the budget was going up by a factor of four, Members on both sides of the House, broadly speaking, tried to understand why that had happened, accepted it, and knuckled down to get the project delivered. In the end, there was not a cigarette paper between the two parties in terms of the approach to that project of national significance—as this one is. The Secretary of State and his team are trying to do a very difficult thing in delivering this application, to be used by 10 million people, in parallel with existing systems which, every week, continue to be used by 10 million people. Of course mistakes have been made; as I say, it would be odd if they had not. The issue is whether, on the whole, it is being managed correctly and whether, structurally, we are doing the right thing.

I had thought that Labour supported the basic tenets of universal credit, but some of the comments by the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) about scope implied that she has severe reservations. She may be right; I am not an expert. It seems odd that Labour Members are raising issues such as scope at such a late stage of the programme. To some extent, they are the Opposition and perhaps it is reasonable that they oppose, but there is a difference between opposing and what I would call opportunistic carping—not only that, but opportunistic carping that is destructive, not constructive.

That brings me to Labour’s four-point plan, to which Mr Baldrick would have been delighted to give his name. Point 1 is to stop the programme and think about it for three months—not to review it, not to stop rolling it out, but to stop it completely. It is not totally clear to me what they would be stopping—development, implementation, the front end, the legacy systems and interface work, or perhaps all of it. It is not totally clear to me what they would do with the 1,000 people—to take a round number—who are currently doing all these tasks. They are saying, “No, let’s just stop it, with an immediate write-off of all that.”

Point 2 is to get the NAO to have a look at the programme. That is fair enough; one cannot argue with asking the NAO to look at something. Of course, it would have to use people with expertise in programmes of this type, of whom most of the good ones are in the civil service and working on this programme. Nevertheless, let us do it anyway.

The really interesting thing about the plan is points 3 and 4, which represent major, significant scope changes. If we make such changes to a programme right near the end, that is when everything goes wrong—when things have to be retested, budgets change, and all the rest of it. The great thing about these major scope changes is that, according to the four-point plan, they will be done at “no additional cost”. The two points propose to remove some of the onus on self-employed people and to continue to pay the primary carer.

On the train this morning, between Watford and Euston, I costed Labour’s four-point plan at £89,611,207.31. That costing—I am very happy to take an intervention on it—includes 11 new applications, 47 new screens, 190 database changes, 201 reports, a 40% test rerun, and 88 new interfaces. I may have spent only 11 minutes on the calculation to come up with that number, but that is 11 minutes more than Labour Members have spent on putting it into their plan and saying they can achieve it with “no additional cost”. I would be delighted if one of them wants to intervene on me—but intervention came there none.

DWP: Performance

Debbie Abrahams Excerpts

Monday 30th June 2014 Commons Chamber

[Mr Duncan Smith]

This is what is so interesting. Over the weekend, the lid was lifted on what is really going on. [Interruption.] They do not like this, because it is the truth. The hon. Member for Dagenham and Rainham said of the Opposition employment policy announced the other day:

“We managed in the political world to condense it into one story about a punitive hit on 18 to 21-year-olds around their benefits. That takes some doing, you know, a report with depth is collapsed into one instrumentalised policy thing which was fairly cynical and punitive.”

He was making the point, I think, that the Opposition are failing to say what they really want to do. The hon. Lady let the cat out of the bag when she made it clear that the Opposition want to spend more on welfare and to reverse our changes to the welfare system.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Perhaps we could get back on track and scrutinise the performance of the Department for Work and Pensions. Will the Secretary of State confirm when he anticipates actually delivering 1 million people on universal credit? Will it be by 2191? At the current rate, it will be.

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[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

It is a pleasure to follow the hon. Member for Harlow (Robert Halfon), and I congratulate his constituent on finding a job, but we need to understand in the round the impact that the social security and welfare reforms are having on most people.

Once again I was absolutely stunned by the Secretary of State’s hubris in his speech. The DWP is in absolute chaos. The welfare reforms have been nothing short of catastrophic. Not one of the projects, from the introduction of universal credit to the revision of the work capability assessment and the replacement of DLA with PIP, has been delivered with even a modicum of competence. I just await the next fiasco in the replacement for the Child Support Agency. Ministers have wasted hundreds of millions of pounds of public money—these are Ministers who pose as the defenders of the hard-working taxpayer. Such is their arrogance that they blame everyone for the problems they have experienced, from their own civil servants to the Trussell Trust, which runs so many of our food banks. What has been reported, and what I have had confirmed by Trussell Trust members, is disgraceful. Anyone who tries to investigate these Ministers or hold them to account, including the Select Committee on Work and Pensions, has been subject to hostility and obfuscation.

We supported the principles of universal credit, and the Secretary of State would be sensible to remember that. We support the simplification of the social security system and the principle of making work pay, but the Government’s reforms are not working. The introduction of universal credit has been an unmitigated disaster, with delays, increasing costs and fewer participants than predicted. In November 2011, four pathfinders, including one in my Oldham constituency, were meant to pilot UC before the national roll-out in October 2013. In July 2013, it was announced that there were to be six more pathfinder areas, yet by December 2013 we were informed that the national roll-out was not taking place but UC would be extended to couples and families. Members of the Select Committee were informed of that on the very day of the announcement. The latest figures show that fewer than 6,000 people are claiming UC, so I repeat my question to the Secretary of State: when exactly will 1 million people be on it?

In the middle of all that, in September we got the National Audit Office report on the various IT problems that the Government had known about for at least 18 months. Some £40 million spent on software has had to be written off and a further £90 million has been written down. Good money is being poured after bad as the Government continue to spend millions—the estimates are between £37 million and £58 million—on the old IT system while spending extensive sums on an end-state solution. As the NAO and Major Projects Authority reported, there are significant issues to address in governance, lack of transparency, inadequate financial controls over supplier spending and ineffective departmental oversight.

The Government’s incompetence on universal credit is matched by the measures to which they have subjected people on PIP. Anyone attending the Macmillan Cancer Support report launch last week could not have failed to be moved by the people there and their stories. In my constituency, I have encountered numerous cases where PIP has been delayed. One constituent made an application for PIP on 5 August 2013, but there were mix-ups with assessment appointments and delays with reports—the left hand did not seem to know what the right hand was doing—and only nine months later was a decision taken. The Public Accounts Committee report was rightly critical of PIP’s introduction. In the first 12 months, the Department made decisions for 84,900 people, or 7,000 a month, at which rate it is expected to be 42 years before the 3.6 million people who have been targeted will be seen.

I could go on about PIP, but I just want briefly to mention the work capability assessment. The Select Committee is undertaking an inquiry on its revision, and I was stunned by what we heard when we visited Newcastle. The final point I wish to make is this: if a Department judges people as fit for work and they subsequently die, can we possibly regard that Department as competent? No, we definitely cannot, as that is not what we expect in a civilised society. We must remember why we developed our model of social welfare and retain its principle of inclusion, support and security for all. Any one of us could be struck down by an illness or accident and we would need our social security support system—we should value it.

Pensions Strategy

Debbie Abrahams Excerpts

Thursday 20th March 2014 Commons Chamber

[Steve Webb]

We know that many people will still choose to have an income for life rather than a capital sum, so we do not think this is the death of the annuity. We think it will give a bit of a jolt to the annuity market and make providers do better. For example, Standard Life, a major annuity provider, said yesterday:

“Today’s wide ranging reforms of the UK savings and pensions regime have the potential to provide the simplicity, choice and flexibility for savers we have been calling for.”

A representative of the Association of British Insurers was on the radio this morning, and the providers are realising that this is an opportunity. They will have to up their game, but this is a chance for them to provide new and innovative products and we are happy to work with them on that.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

How will the Government’s measures protect people like a constituent of mine who is a baker in his mid-70s? He had a lump sum pension pot of £250,000 and received independent advice, but that advice was poor and he lost almost everything. He is in his mid-70s and does not think he will ever be able to retire.

[Steve Webb]

As the hon. Lady knows, there are redress mechanisms for people who receive poor quality independent financial advice. It is a regulated process. [Interruption.] I cannot hear what she is shouting at me. When there is a process of regulated advice, there are compensation mechanisms, which is right and as it should be.

Welfare Reform (Sick and Disabled People)

Debbie Abrahams Excerpts

Thursday 27th February 2014 Commons Chamber

[John McDonnell]

People thought that they were contributing to a scheme that they would see the benefits from. They now find that they have contributed, but that they will no longer get the benefits. That is unjust.

One in five of the people on JSA who were sanctioned is disabled. Sanctions mean the loss of benefits altogether for weeks or even months. That is compounded, as my hon. Friend the Member for Makerfield (Yvonne Fovargue) said, by the increasing difficulty in securing advice or advocacy to appeal or challenge sanctions.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I wonder whether my hon. Friend is aware of the case of one of my constituents. He was receiving ESA, but had a heart attack during his assessment and was sanctioned as a result of leaving it. I called on the Government to hold an independent review of the inappropriate use of sanctions. They committed to do so in the Work and Pensions Committee, but are now reneging on that. Is that not a disgrace?

[John McDonnell]

Members have brought forward example after example like that one. We are simply looking for some compassion and logic in the governance of the system. The Government have ignored that, tragically.

Many people report that, as a result of sanctions, they are dependent on doorstep loans and are using credit cards for everyday items. Some people have fallen into long-term debt. Some Members met a representative of Disability UK on Monday. He described all this as a route into destitution for many people.

Disabled people who are on ESA are placed on the Work programme and offered support from Work Choice. The latest figures on the success rate of the Work programme in finding employment for disabled people show that only 5.3% of them secured employment. That is a 95% failure rate. Work Choice is meant to assist those with complex needs, but it has helped only 58 people since 2011. The forced closure of the Remploy factories under this Government has taken away the opportunity of sheltered work for many thousands of disabled people.

Housing Benefit

Debbie Abrahams Excerpts

Wednesday 26th February 2014 Commons Chamber

[John Hemming (Birmingham, Yardley) (LD)]

This morning, I received an e-mail that says:

“Hi can you help me, I am in a council flat 1 bed room, I have 2 kids and a partner so that is 4 of us in a 1 bed room flat”.

I actually received two e-mails, but I have left the other one in my office. We must not forget the people who are in overcrowded accommodation.

The shadow Secretary of State said a couple of weeks ago that Labour would cap the structural social security budget. She used the word “structural” on the basis that, as unemployment goes up and down, it does not affect the structural deficit, and Labour has said that it will cut the deficit. We have to find the money from somewhere.

This policy encourages people to make better use of rooms. To give an example from my constituency, a lady who is in a three-bedroom house has arranged for her relatives to join her and give up their private rented accommodation, which was costing the taxpayer £5,000 a year through the welfare budget. Therefore, there is a saving of £5,000 a year and better use is being made of the property. They now have only one TV licence, one water bill, one gas bill and one electricity bill. Financially, it is a far better situation for everyone. We are not having to attack or cut any other benefits. We are able to maintain the value of benefits.

The shadow Secretary of State said—not in this debate but at the Institute for Public Policy Research—that the Opposition would cap the welfare budget. The difficulty with their position is that they would give an exemption just to those who have been out of work since 1996 and not to people with disabilities. There is no question but that there are people with disabilities who need a spare room. I have managed to get discretionary housing payments for such people. I am pleased that, due to the announcement on DHP for the next two financial years, we should be able to provide it for a longer period. Furthermore, I want the rules to be changed to provide an automatic exemption. I accept that it is difficult to do that. That is why the Department won the case in the Court of Appeal. The Department is working on the detailed regulations.

This policy encourages better use to be made of accommodation, saves money for the public purse and reduces overcrowding. It also means that we do not have to cut other parts of the welfare budget. The real challenge is how we manage the overall budget.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

In Oldham, 2,048 households are affected by the bedroom tax, with 500 properties suitable for them to move into. Where does the hon. Gentleman suggest they go?

[John Hemming]

I can talk about Birmingham better than I can about Oldham. In Birmingham, by mid-January roughly a quarter of people in council properties had ceased paying extra rent for a spare room due to changed circumstances—they might have found family members to join them or have downsized. Some 521 households wanted to transfer, but sadly, 380 had arrears, and for some reason the council was blocking them from transferring. I think that that is appalling. Let us suppose somebody is happy to downsize to a flat such as the one I mentioned a moment ago. There may be a four-person family in a one-bedroom flat, and 380 people who want to downsize because of having to pay for the spare room, but the council is blocking that because of arrears. I am told that it is sorting that out, but I still see loads of people in overcrowded situations. I am sure that the situation is similar in Oldham, although I obviously do not have the same figures. I do, however, have figures for discretionary housing payments.

Job Insecurity

Debbie Abrahams Excerpts

Wednesday 5th February 2014 Commons Chamber

[Vince Cable]

It is not clear to me from the intervention whether we are talking about avoidance or evasion. I need to be clear before we take action, so if either the hon. Gentleman or the hon. Member for Darlington (Jenny Chapman), or both, give me the details, I will deal with the issue.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I am grateful to the Secretary of State for giving way; he is being generous with his time. Is he aware that the health effects of insecure employment are exactly the same as those for people who are unemployed? He will be aware that mental health problems, as well as physical health problems such as cardiovascular disease, are associated with unemployment, but there is clear evidence that insecure work also has these detrimental effects. Has his Department made any assessment of the effects not just on individuals—which can obviously be traumatic if they have a myocardial infarction, for example—but on the health service?

[Vince Cable]

Yes, we are well aware that insecurity in general has negative health effects. It is important, therefore, that we restore security.

It is worth quoting a study that was carried out a year or so ago, which contrasted people’s attitude towards their work now with their attitude roughly a decade ago, in 2003-04. The workplace employment relations study said that despite recession, the level of work satisfaction is higher than it was before. Of course, these are qualitative judgments and we cannot quantify these things, but I accept the basic point—we need job security and confidence—so let me take the various policy issues raised in the motion, and that the Opposition spokesman raised.

We are already dealing with some of the issues the hon. Gentleman raised, as he well knows. The consultation on zero-hours contracts will finish on 13 March. We have made it clear that we would like to take action on exclusivity. We are discussing the practicalities of that and I will return to the House to report on it. He refers in the motion to penalties for minimum wage abuse. He may recall that I explained to the House just over a week ago—I think I was facing the shadow Chief Secretary —that the penalties are being quadrupled. We are bringing forward primary legislation that will extend the penalty system per worker, rather than per company, which will potentially be much more prohibitive.

Contrary to what it says in the motion, we are looking at local enforcement. Joint actions between Her Majesty’s Revenue and Customs and local councils are already taking place. Again, we have acknowledged that there are issues with false self-employment. The Treasury has admitted that this is a potential area of abuse. It has investigated it and a consultation is going out on how we can deal with the problem. Therefore, a lot of the issues raised in the motion are already being dealt with, as I think the shadow spokesman is well aware.

However, I want to deal with the areas where the hon. Gentleman reheats some of the criticisms of actions we took in the past. On the broad issue of employment rights, I have always made it clear that the hire and fire culture is not something I or we want to see. The people who argued that introducing a hire and fire culture into business was the only way to create employment have been proved as comprehensively wrong as the people who talked about a triple-dip recession, which is why we have not followed their advice.

It would also have been gracious to acknowledge that in some respects employment rights have been massively enhanced, and in two respects in particular: shared parental leave and paternity leave, and extending the right to flexible working. This affects hundreds of thousands of workers and potentially millions, whose rights at work have as a consequence been entrenched.

Oral Answers to Questions

Debbie Abrahams Excerpts

Thursday 30th January 2014 Commons Chamber

[Maria Miller]

My hon. Friend raises an important point. Tourism is a vital part of our economy. We have invested £137 million in our international GREAT campaign, but we also need to ensure that constituencies such as his, which have been hit by the recent problematic weather, receive support so that they can continue to be attractive tourist destinations.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

T2. Will the Minister join me in congratulating Manchester on attracting a world-class game developer to the UK? PlaygroundSquad will train 60 young people a year—some of them from Oldham, I hope—to work in the creative gaming industry. Does he agree that Manchester’s vision to be a digital production hub is helping to establish UK plc as the creative capital of Europe, and that these developments and industries will sustain our economic recovery, not a return to growth based on consumer debt?

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)]

The Government are extremely grateful for the hon. Lady’s support for our policies. We are looking forward to an announcement shortly on the video games tax credits to go alongside the television, animation and film tax credits, which have done so much to support our creative industries, with the support of Manchester city council, which plays a key role in helping to support creative industries in that part of the world.

Welfare Reforms and Poverty

Debbie Abrahams Excerpts

Monday 13th January 2014 Commons Chamber

[Jeremy Lefroy (Stafford) (Con)]

I congratulate the right hon. Member for Oldham West and Royton (Mr Meacher) and my hon. Friends the Members for Worthing West (Sir Peter Bottomley) and for Birmingham, Yardley (John Hemming) on securing the debate. I welcome the opportunity to discuss the impact of the Government’s welfare reforms on poverty.

Evidence from my constituency certainly suggests that an increasing number of people are finding it very difficult, or impossible, to make ends meet. That applies particularly to those who are out of work, but, as other Members have said, it also applies to those who are in work. However, I think it important for us not to restrict our review to welfare reforms. More and more people in my constituency, and indeed throughout the country, are entering work and finding a way out of poverty as a result of the Government’s focus on job creation and apprenticeships.

We also need to consider the overall effect of the work that is being done to cut the deficit. As was pointed out by my hon. Friend the Member for Monmouth (David T. C. Davies), the purpose of that work is to maintain confidence in the United Kingdom as a borrower, to keep interest rates down—let us not forget that we are currently spending nearly £50 billion a year in interest, and that the figure is rising—and to ensure that we as a country can maintain a proper welfare safety net for our people, not just in the short term but in the long term. A country that continues to run a 6.8% annual budget deficit will eventually be unable to afford not only a welfare safety net, but the other vital safety nets that we provide.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

The hon. Gentleman makes many very measured speeches, and I know that this will be no exception. Does he agree with my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) that the number of working people who live in poverty is now greater than the number in workless households?

[Jeremy Lefroy]

I do agree, and I shall say more about that in a moment. It is a matter that should concern all Members on both sides of the House, and I do not believe that the Government are immune to that concern.

A universal free health service and a universal free education service are also vital safety nets, but it is essential for the Government, on behalf of the nation as a whole, to keep a close eye on both open and hidden poverty. Poverty is often more hidden than open: many people do not complain and do not come to our surgeries, but get on with it, day in, day out. However, those people are really struggling, and it is incumbent on the Government to keep an eye on them. Governments exist for all their citizens, just as we as Members of Parliament represent all our constituents, whether they voted for us or not. Certainly, they do not exist only for the 20% or 25%—or fewer, if we count those below the voting age—who cast a vote for them. I know that Ministers in the Department have always taken that very seriously—especially the Secretary of State, not least when he established the Centre for Social Justice, of which I have been a supporter for some time.

It is also vital for Governments to consider both the short-term and the long-term effects of their policies. As I have said in the House before, I believe that in the short term we need to look again at the way in which the spare room rent subsidy is being implemented. Increasingly, arrears are accumulating. One social housing provider in my constituency already has arrears of 37%, and it is a good provider. Many others have far lower collection rates. That will eventually lead to evictions or write-offs, both of which are costly in human and financial terms. A suggestion I have made before is that the rate for the spare room rent should be substantially lowered from its current percentage levels to a fairly nominal amount initially if we are to maintain the principle, which I believe we should, and therefore make it affordable. It should be increased only as the supply of suitable accommodation approaches demand.

The right hon. Member for Oldham West and Royton mentioned sanctions, which are applied to some of my constituents in a rather arbitrary manner. I ask the Minister to consider the way in which the Department sanctions jobseekers. I think it important for sanctions to exist, because we cannot be taken for a ride, but those who are genuinely seeking work should not be sanctioned as a result of mere technicalities, as has happened in my constituency.

The Chancellor recently talked of removing benefits from those aged under 25. I shall say more in a moment about the £25 billion hole that needs to be filled. Certainly, everything possible should be done to ensure that the under-25s have all the support they need in the form of education, training and work. It is clearly important for people to see benefits as a safety net rather than a way of life, but removal of, for instance, housing benefit from under-25s across the board would have a drastic impact on young people who need to live away from home and who have no support from their families. The YMCA in Stoke-on-Trent is an excellent organisation. Its managing director, who is a friend of mine, drew my attention to the consequences that such action would have on its excellent provision for young people, most of whom it is trying to get into work. This is a case of supporting people during transition. For younger people, we need to recast this support almost as income for productive work for all those who are able, so they get used to the idea of work, which almost all of them want to take up; but that support must remain.

We need to do more to help councils deliver more homes, perhaps by relaxing the existing borrowing rules for local councils, particularly on affordable and social homes. We also need to look at the possibility of localising employment schemes. The Work programme is doing some very important work around the country, but I would like it to become more local, so local councils can take more responsibility for running it in their own areas. The universal credit is incredibly important and I wholeheartedly support it. When it is introduced in each area, we should look at localising support and giving responsibility for managing finances as much as possible to local councils.

Finally, let me return to the question of the £25 billion hole. This is a fact and it is something a future Government, of whichever party, will have to face. There are so many ways we can reduce it. We can raise taxes, we can cut departmental spending and we can cut benefit and pension spending, or we can increase growth, which clearly is the preferable option we would all like to see. However much growth is increasing by at the moment, however, it is not going to fill that gap in the coming years. Can we raise more in taxes? I would rather see whether we can remove some of the concessions, and I have mentioned before the high rate of pension tax allowance, which is not a tax rise but is reducing the allowances people on higher incomes can claim when making pension payments. That costs us several billion pounds a year.

I do not believe there is much room to cut departmental spending in certain areas. I would certainly not want to see any more cuts in defence and security and schools and education, but we do need to have a look at one or two of the existing ring fences, although perhaps over the coming few years and not immediately. For instance, I would look at different ways of maintaining the free-at-the-point-of-delivery national health service—more through a progressive contributory national insurance system than out of tax. That would be one way of raising the income required to pay for our free-at-the-point-of-delivery health service and giving the Chancellor a little more wriggle-room on the £25 billion.

In conclusion, I think it is vital to look at poverty not just in terms of welfare reforms—important though those are and though their impact is—but in the round at all the things the Government are doing, whether in the field of job creation or protecting the vital national health service and the vital schools budget. Therefore, although I support this motion, if this inquiry is to go ahead it should look at all those things in the round, rather than just focusing on one or two of the points that have been raised.

--- Later in debate ---

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

May I start by congratulating my parliamentary neighbour, my hon. Friend the Member for Rochdale (Simon Danczuk)? I agree with him that we must reform the welfare system and make it sensitive to the needs of the 21st century. I also congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher), who is another constituency neighbour of mine—I am in total agreement with the points he raised—and the other hon. Members responsible for securing this debate.

I want to spend the next few minutes discussing a few points, particularly those that constituents have raised with me in my surgeries and elsewhere. The Joseph Rowntree Foundation annually monitors social exclusion and poverty and produces data on them. Its most recent report, which was published last month, shows that 3.5 million children, or 27%, live in poverty. In some parts of my constituency, the figure is nearly one in two. The Institute for Fiscal Studies has said that it expects an increase of 1.1 million children living in poverty by 2020 as a result of tax and benefit changes.

Three million parents also live in poverty. The number of pensioners living in poverty has fallen to 1.5 million, or 14%, which is the lowest level in 30 years, but the number of working-age adults without children living in poverty has risen to 4.5 million, which is the highest level in 30 years.

That is only half the story, because those relative levels of poverty relate to median incomes. The average income has gone down by 8% since 2008, which means that 2 million people who would have been deemed to be in poverty in 2008 are not classified as such now, because incomes have dropped. Incomes are going down, but prices are rising. The energy prices of the big six have gone up by 37% since 2010 and food prices went up by 32% between 2007 and 2012.

The most worrying thing—this point has already been made—is that we are seeing an increase in the working poor. For the first time since the data series started back in the 1980s, poverty in working households is higher than that in workless and retired families combined. Therefore, work is clearly not paying. In spite of a shared objective of wanting our welfare system to make work pay, it is not. I was very interested in what the hon. Member for Stafford (Jeremy Lefroy) said about phasing in the introduction of some of the welfare measures. They have been brought in too soon, and they are having a huge impact on families.

Related to the increase in the number of working households living in poverty is the increase of the number of people in low-paid work. For 46% of working families in poverty, one or more of the adults is paid less than the living wage. In total, about 5 million people are being paid below that level, which disproportionately affects women, 27% of whom are paid less than £7.40 an hour.

If we look at the effects of welfare reforms on poverty, we find that instead of alleviating poverty, it is exacerbating it. Our social welfare model is based on principles of inclusion, support and security for all—protecting any one of us should we fall on hard times, or become ill or disabled. Welfare is there to assure us of our dignity, as well as the basics of life, and to give us a hand up, not a handout; the current welfare reforms are doing anything but that.

I want to mention Rebecca, who came to see me at my surgery on Saturday. She is blind, and not only has she had her care package reduced from 13 hours to eight hours, but she is absolutely terrified about what the migration from disability living allowance to personal independence payments will mean to her. She said, “I will not see anybody from when I see you”—her personal adviser was with her—“until Monday, because of the lack of support that I am getting.” She is not alone. A raft of measures is affecting the ability of disabled people to live as normal a life as possible.

We have heard about people on employment and support allowance, and the trials and tribulations of going through the work capability assessment. One constituent on ESA, who has a heart condition, had a heart attack in the middle of going through the WCA process. He was advised to leave and he went to hospital, but a week later he got a letter saying that he had been sanctioned because he had left the work capability assessment. That is not atypical. We have also heard about the bedroom tax, with 500,000 people affected nationally. In Oldham, where 2,048 people are affected, there are only 500 properties for them to move into, which is absolutely absurd.

We still do not know the cumulative effects of all these measures. Despite the valiant efforts of the people behind the WOW—War on Welfare—petition, which has got 100,000 signatures, we still do not have an agreement on a cumulative assessment of all the different measures.

Sanctions have been mentioned. One person who came to see me had been a Jobcentre Plus adviser until relatively recently, and he told me that there is a deliberate culture to develop a sanctions target mentality. Even if people have followed everything they are meant to do, they are still sanctioned, with bogus appointments being made to set them up to fail. That is not just, and it is not what we expect of our welfare system. The implications for health and the social effects on our communities are dire. I commend the commission—

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

Food Banks

Debbie Abrahams Excerpts

Wednesday 18th December 2013 Commons Chamber

[Dame Anne Begg (Aberdeen South) (Lab)]

At the moment, Aberdeen is doing well. Despite the recession, the economy there is booming. There is so much activity in the North sea oil and gas sector that we are experiencing a labour shortage, and today’s unemployment figure in my constituency is down to 1.5 %, which comes pretty close to full employment. In spite of all that, something else is booming: the use of food banks.

The Secretary of State said this morning that the rise in the use of food banks was a result of decent people wanting to help those who found themselves in temporary difficulty, but I do not think that that is the case. Like my right hon. Friend the Member for Birkenhead (Mr Field), I think that there is something fundamental going on.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Will my hon. Friend give way?

[Dame Anne Begg]

I give way to my colleague on the Select Committee.

[Debbie Abrahams]

Does my hon. Friend agree that it is a real worry that the demand for food banks seems to be related to the targets relating to social security sanctions? That is certainly the experience in my food bank in Oldham. One of my constituents has been waiting for an appeal against a sanction for four months without any money. For him, the food bank has been a lifeline.

[Dame Anne Begg]

My hon. Friend, like me, has been lobbied by a number of organisations saying that failures in the benefit system are causing much of the increase in food bank use.

If the use of food banks were just a passing phase born out of the global banking crisis and the recent years of austerity, we would not be seeing their growth in places such as Aberdeen. If their use is temporary, why is it still growing when the Government say that the economy is picking up? If their use is nothing new, why are more families depending on food parcels than at any time in history?

Universal Credit

Debbie Abrahams Excerpts

Tuesday 10th December 2013 Commons Chamber

[Mr Duncan Smith]

I can tell my hon. Friend that all the recommendations have already been implemented. They were drawn from our own reports internally—both the red team report that I instigated and the PricewaterhouseCoopers report—and all these changes have been made. This roll-out programme bears complete authority on the basis of that.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Yesterday, the Secretary of State claimed that 700,000 people would now not be expected to join universal credit by 2017 because he was having a rethink and wanted to introduce things more slowly for vulnerable claimants. However, on 18 November—three weeks ago—he said to my hon. Friend the Member for Aberdeen South (Dame Anne Begg):

“As I said to the hon. Lady when I appeared in front of her Committee in July, we have been very clear that we would roll out universal credit on the plan and programme already set out.”—[Official Report, 18 November 2013; Vol. 570, c. 946.]

Which is it?

[Mr Duncan Smith]

The funny thing about the Opposition is that they do not know what they want. They say that they support universal credit—[Interruption.]