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.]

Mesothelioma Bill [Lords]

Debbie Abrahams Excerpts

Monday 2nd December 2013 Commons Chamber

[Kate Green]

I can say that the Opposition will be pushing for payment levels to be increased, and we believe they can be, given that the industry has accepted that a levy of 3% of gross written premiums is affordable and given that the impact assessment has shown that payments set at even 80% or 90% of average civil damages are affordable within a 10-year period. The Minister said that the proportion of GWP that the levy represented was more important than the 75% level derived from that 3% figure. It is our reading of the figures, however, that there is scope for the industry to be more generous, even within its own accepted cap of 3% of GWP. I hope to explore that in more detail with the Minister in Committee. As the hon. Member for Arfon (Hywel Williams) said, there is a strong moral argument, of course, for setting payment at 100%, as is the case, for example, for the Motor Insurers’ Bureau scheme—all the more so because under the Bill recovery of any benefits paid will be set at 100%.

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

My hon. Friend is making a powerful speech. Is this not a familiar tune we are hearing from the Government? Whether it is, in this case, the insurance companies, or, in the case of the statement earlier, the energy companies, they do not seem prepared to stand up to powerful vested interests or to stand up for vulnerable people in need of support.

[Kate Green]

I hope that collectively the House can strengthen the Minister’s arm and send a strong message to the industry that we do not consider the scheme to be good enough yet and that we expect and demand improvements.

Oral Answers to Questions

Debbie Abrahams Excerpts

Monday 18th November 2013 Commons Chamber

[Mr Duncan Smith]

I shall take my hon. Friend’s plaudits and congratulations in the spirit in which they were meant. The benefit cap is intended to be fair to those who pay tax to support people who are out of work by ensuring that people cannot earn more through being out of work than they can through being in work. Of course we keep the whole issue under review, but the cap is working very well at its present level.

How interesting it is that not one Opposition Member wants to talk about issues such as getting people back to work and being fair to the taxpayer. The only policy that the Opposition have come up with so far is reversal of the spare room subsidy. That is a pathetic indictment of the lack of welfare policies in the “welfare party”.

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

I welcome today’s figures showing a reduction in unemployment, but what are the implications for the targets relating to inappropriate sanctions on jobseeker’s allowance claimants? This is a real issue, and it needs to be addressed. It is distorting the JSA figures.

[The Minister of State, Department for Work and Pensions (Esther McVey)]

I can give a very short answer: there are no such targets.

Pensions Bill

Debbie Abrahams Excerpts

Tuesday 29th October 2013 Commons Chamber

[Gregg McClymont]

That is a lesson in not posing a rhetorical question. Whatever my hon. Friend believes, I do not see this as an evil Government—in particular, no one doubts the Minister’s good intentions—but our amendment must be understood in the context of the Beecroft report.

As you will remember, Mr Speaker, Adrian Beecroft is a Tory donor who has produced a report in the last 18 months arguing that red tape and bureaucracy on small businesses are far too heavy and that micro-employers should be removed from auto-enrolment. I know the Minister does not support that and said the Government had no intention of doing it—no one is suggesting he would do such an awful thing—but he will not be there for eternity. Given his recent comments about God being a liberal, perhaps he does intend to be around for eternity, but for those of us of a more sceptical temper, I think we can say he will not be around for ever, so it would be sensible to constrain a future Government, or even this Government—anything could happen—who might be under pressure from the Beecrofts of this world, in a way that is consonant with the best objectives of public policy.

The Minister said that amendment 53 did not even define a small and medium-sized enterprise, but he will know that the Companies Act 2006 clearly defines an SME as an enterprise with 50 or fewer employees. That is a common definition of an SME. The broader point, however, is exactly the one I have already expressed: we are trying to do him a favour by protecting him from those within the coalition Government who take a less enlightened view of the benefits of auto-enrolment. We tabled the amendment in that spirit.

On clause 29 and the debate around schedule 16, the Minister mentioned the Australian example. I was at the National Association of Pension Funds last week, and I have even watched him in the video—I was hoping he would entertain us with the song from “Les Misérables”, but I will come to that when I deal with costs and charges. He said that Australia is doing pot follows member—the inference is that I often point to the benefits of the Australian system—but that is not surprising, because Australia has several hundred schemes, whereas we have 200,000, and that is not including personal private pensions. To compare a system so scaled with our system is to let one’s a priori views of the world get in advance of the evidence, or to put it more simply: he is comparing apples and pears. Australia has several hundred pension schemes; we have 200,000, and that is a fundamental problem with comparing our system. Australia is in a much better place in terms of scale.

The Minister says that pot follows member will be simple and effective and that we will regulate for quality, by which he means there will be minimum standards—or at least he tells us there will be minimum standards, but, guess what, that is also currently part of a consultation. There is a broader theme to which I shall return; when the Minister feels under pressure from the Labour agenda on private pensions, he calls for consultation. He says that this and that will happen but when we study the detail, we see that what he has called for is a consultation. That is not the same as decisive action.

On pot follows member, the problem is that the UK has a fragmented pensions system; we have 200,000 pension schemes. We have—to put it in a simple fashion—great variations in quality. The Minister is being asked repeatedly by the pensions world how pot follows member will work in those circumstances. It is again worth listening closely to what he says, because he has not yet explained how it will work. He has set out his plan and objective to get to pot follows member but not how the mechanism will work. One of the reasons for that is that it is very difficult to do. To go back to the Australian point, pot follows member would be a sensible approach if we started from a very different place, but we do not. We start from a very fragmented private pensions system with a massive variation in quality.

On costs and charges, the Minister does not actually know what is going on in the pensions world. We had a very interesting conversation, or debate on this in Committee. In arguing a point with me, he pointed to DWP evidence. It turned out that the way in which he quoted that evidence was not appropriate, but my point is not to criticise him for making a mistake, which does happen; it is much broader. The DWP is forced to take surveys of employers to try to find out what pension providers are charging them. The Minister talks about evidence. Would not a much more effective way to approach things to have the costs and charges laid out for everyone to see in the first place? Why has he not got on with ensuring that costs and charges are disclosed? Instead, the DWP has to take surveys of employers who, in many cases—as his own survey evidenced—are not aware of what they are buying in terms of a pension scheme.

That brings us to the broader issue of who buys pensions. The Minister wants to move to pot follows member and says that there will be quality criteria; these will be minimum quality criteria. But, as things stand, he could not explain to the House all the costs and charges that exist in a pension scheme. Neither the Government nor the regulator gather that evidence. That is a fundamental point about the pensions market today.

Similarities are often drawn between energy and pensions. One way in which they are similar is that the vertical integration of pension providers—the same as with energy companies—means that it is very hard to crack where the costs and charges lie. I put that point on the table. The Minister wants to move to pot follows member but has not set out in detail the mechanism and the IT by which he would do this. More widely, he is not able to say at this stage what the costs and charges are in pension schemes. So how can he be sure that no one will move from a superior to an inferior scheme? He will say, and has said, that he will ensure that this happens. Again, I do not doubt his good intentions, but he has not so far delivered on costs and charges. More widely, if he does deliver—as I am sure he has every intention of doing—the amount of regulation that it will take to make a pot follows member pension automatic transfer system work is enormous. That is why so many stakeholders in pensions do not think it is a feasible way to proceed. The Minister said that the Association of British Insurers supports it. That is hardly surprising, because this is a system that will have the least detriment to the ABI’s members.

1.45pm

The Minister feels that he is now catching up with the pension charges debate; that is evident from his language and from the extent to which he talks about the Labour agenda, which is quite striking for the Report stage of a Bill. But he is still caught in the mindset of “If only I can get the industry round the table, it will deliver.” There is no evidence of delivery so far and no evidence therefore that that will happen. The reason that there is no evidence relates to a point made by my right hon. Friend the Leader of the Opposition in his powerful 2013 conference speech, which still reverberates around British politics. He asked, rightly, why one would expect an industry to take the decisions necessary to reform a market when it is not in its interests to do so. Why, indeed? I say to the Minister that, on pot follows member, he has to look beyond the ABI’s interests and look to the interests of the wider pensions community and of the most important people, savers.

The Minister mentioned the National Association of Pension Funds conference, where he mentioned pot follows member. I am sure that he got a very warm reception, because the national association is very clear not only that pot follows member is not the best way to proceed, but that there is a serious possibility of significant consumer detriment, which, in everyday language, means rip-offs. The national association, which the Minister so eloquently addressed the other week, is very clear on that. Not only is the association clear that we should have no truck with pot follows member, but it supports—the House will be surprised to learn—aggregators.

The Minister sets out my approach to aggregators as being, “Labour wants several aggregators, but how would they work?” He said that aggregators stop individuals engaging with their pension, or make that engagement impossible. He knows very well that the whole logic of auto-enrolment, which Labour began and which he has followed through, is that we have to use the power of inertia in pensions, because all the evidence is that many people will find it difficult to engage with pensions whatever the circumstances, given their complexity. Also, as he must be all too aware, auto-enrolment involves employers buying pensions, not the saver.

A criticism that I would make more widely of the Minister is that he approaches the pensions market as if it were a functioning market; functioning in the sense that we can and do have a consumer who is engaged, informed and sovereign, and a seller. The Minister knows that that is not the basis on which auto-enrolment proceeds because it is the employer who buys the pension. In other spheres, he has shown that he is fully aware that there is a big problem in the pensions market, which develops from the fact that the saver in many cases cannot be the sovereign—the person who makes the decisions—first, because the employer buys the pension and, secondly, because the pensions are so complex and their annual statements so opaque.

In those circumstances and with the Minister being aware of that, to claim that the aggregators should be excluded and rejected on the basis that they do not allow consumer engagement is a bit of a straw man. Let me say a little about why I think aggregators are so important. This relates to my other new clauses and I should iterate at this stage that these new clauses must, if we are to develop a serious policy to improve auto-enrolment outcomes, go together. For example, the Minister talked about trustees and said that the OFT says that the key is the quality of the trustees. He is of course right. My view, and that of the Labour party, is that trustees, in scaling up the pensions system, and aggregators go together to try to make a significant difference to the 10 million people being automatically enrolled in pensions.

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

My hon. Friend is making an excellent speech. I recognise that the Minister is sincere in his intention to improve pensions but, in relation to costs and charges, does my hon. Friend think that the inertia might be a result of the Government not wanting to challenge the vested interests of the big pension providers in order to stand up for ordinary, hard-working people?

[Gregg McClymont]

I thank my hon. Friend for her shrewd intervention.

The Minister has been slow to understand the depth of the problems in the pensions market, and the House does not have to take my word for that. Earlier this week, I wrote to the Conservative MPs in the 40 most marginal Conservative seats, who have recently published a manifesto-cum-policy document. The language therein is—how shall I put this?—tougher on the private pensions market even than mine. The document, “40 Policy Ideas from the 40”, describes it as a failed market. It also states:

“Pension providers still refuse to clearly identify hidden charges such as churn and related fees…91% of retirees buy their pension annuity from their fund manager without checking other market options…the problem is that the private pensions market in the UK is a failed industry with higher charges than in any other country.”

That was not written by the Labour party. It was written by the Conservative MPs in the 40 most marginal constituencies. It seems a bit odd that they should take a tougher line on the pensions market than the Liberal Democrat Pensions Minister.

The way to explain that conundrum—I will not call it a paradox—is to say that anyone who believes in markets and thinks that they should work properly will support Labour’s proposals on reforming the private pensions industry. We want to reform it to ensure that the 10 million new savers going into automatically enrolled pensions get a fair deal. This pertains in particular to clause 29 and schedule 16, and the amendments thereto. It comes down to whether we believe that the pensions market is ready and able to proceed with pot follows member, given its fragmentation. The evidence shows that it clearly is not. Again, Members need not take my word for that. The National Association of Pension Funds has made it clear that we need to move to an aggregator system.

Given that the Minister was kind enough to spend a considerable period of time talking about the Labour amendments, I will do the same. I want to say a little about why aggregators are important. When the Minister addressed the NAPF, he gave a lucid, walk-around-the-stage performance that I enjoyed very much. He referred to two songs from “Les Misérables”. It would be unfair of me to sing either of those songs to him now. I have to confess that I am not a musicals man, although I suspect that the Minister might be a man for musicals—

Oral Answers to Questions

Debbie Abrahams Excerpts

Monday 14th October 2013 Commons Chamber

[Esther McVey]

If it was good enough for my hon. Friend the Member for Fareham (Mr Hoban), it is good enough for me, and I will be there.

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

Is it not the case that the Secretary of State has been rebuked not once but twice by the chair of the UK Statistics Authority for the misleading, if not false, claims that he is making about the welfare reform programme? Will he take the opportunity to apologise to the House and to the public at large, not least to those on social security, whom the Government continue to denigrate?

[Esther McVey]

I will not be taking this moment to apologise, but I hope that those on the Labour Benches will apologise for the mess they left us, which we have corrected. Employment is up by 1 million since the election and unemployment is down by 400,000. Inactivity records are at an all-time low and the number of people not in employment, education or training is at the lowest rate for a decade. That is what we are doing, and the statistics we are putting out are correct. I am really disappointed that we cannot all celebrate the great work this Government have done.

Work Programme

Debbie Abrahams Excerpts

Thursday 10th October 2013 Westminster Hall

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

I apologise for being a few minutes late, Mr Walker. I had the debate down in the diary for 3 o’clock, but I am glad to be here.

It will come as no surprise that I take a slightly different view from the rosy one portrayed by the hon. Member for Aberconwy (Guto Bebb). In fact, my right hon. Friend the Member for East Ham (Stephen Timms) alluded to a different view in his remarks about the start of the programme. As hon. Members probably know, in spite of the difficult economic circumstances faced by the Work programme—which the report acknowledged—the levels of employment achieved through the programme in the first 14 months would have been achieved without it. For the first 14 months, therefore, it was not a success.

I want to focus on a number of points today. We need a 21st-century welfare-to-work system that reflects not only our current economic reality, but the dynamic economy and flexible labour market that we need for the future. I am afraid that the Work programme fails in that regard on a number of levels. It fails, first, in terms of the efficacy of welfare-to-work providers, and I shall try and pick out a few points on that in a moment. Secondly, in contrast to the remarks made by the hon. Member for Aberconwy, it fails to address the growing number of long-term unemployed, and that was really the thrust of the message in our report. The Work programme is also not helping with the change in our economy. It is perpetuating a low-skill, low-aspiration economy. We need to ensure that a welfare-to-work programme complements the type of economy that we want, but it is failing to do so.

I shall focus now on the Work programme providers. We have seen a pattern across public services of private sector providers delivering public services, whether in the Work programme, in adult care, or, increasingly, in the NHS. I do not have a problem with that where private providers innovate, add value or capacity. However, I do have a problem where private providers put profit before people and the services that they deliver. When that is the case, I find it totally unacceptable. It is not acceptable that staffing levels in some Work programme providers mean caseloads of 120 to 180 jobseekers per adviser. It is not acceptable that advisers are not adequately accredited or qualified to fulfil their role. It is not acceptable—my hon. Friend the Member for Aberdeen South (Dame Anne Begg) mentioned this—that small specialist organisations, which are disqualified from applying for contracts separately because they are too small and do not have the financial capacity to bid for them, are lured in and used as bid candy for contract bids, but are then not used. They have a track record of achieving success, particularly for jobseekers with specialist needs, but are not being used. It is not acceptable that there are no minimum standards other than job outcomes, that there is no effective regulation and that there is a lack of transparency of Work programme data, which prohibits effective scrutiny.

One of the Select Committee’s biggest concerns was that the Work programme is failing to address the growing number of long-term unemployed people, particularly young people. The Work programme was supposedly designed to cater for that through a payment-by-results system, with differential pricing based on the type of benefit that jobseekers received, but evidence received by the Committee shows that that is clearly not working, with those furthest from the jobs market being parked and providers creaming off those who are job-ready and easiest to place.

The Select Committee recommended a more holistic approach to identifying the barriers to work—for example, health problems or housing. A number of specialist providers cater for people who are homeless, and homelessness is an increasing problem. That comprehensive, more holistic assessment must be needs-based, and funding models must be developed that reflect an appropriate level of up-front funding.

Related to that, two years after the Select Committee’s report on the work capability assessment, which highlighted our growing concerns at the time, the Committee took more evidence that the WCA is not fit for purpose. One example involved a claimant with terminal cancer whose life expectancy was shorter than the WCA work-ready prognosis, but who had been referred to the Work programme. What is happening about that issue? It has been mentioned before. We are now two years on, but certainly in my constituency surgery, I frequently encounter such cases. Why are the Government not doing more on that?

I urge the Government to act now and undertake an immediate evaluation of the WCA, with a view to revising the assessment process into work-related and health-related components. That, too, was a key recommendation in the Select Committee’s report. It would identify the help that claimants with health conditions or disabilities need in order to get into work.

Let me move on to consider how we develop a welfare-to-work programme that will help to skill up our economy. The WCA is just one example of how the system is not fit for purpose. The Work programme, as the flagship welfare-to-work programme, is failing to help to develop a high-skilled work force. There are indications that opportunities to train beyond, for example, level 3 skills training are being denied to jobseekers. Instead of that type of training being supported, jobseekers are being told that they must attend the training provided through the Work programme and only that. Our welfare-to-work programmes must be more flexible than that. We must be developing our skills base, not restricting it. Just as our economy demands increased flexibility from our labour market, so must our welfare-to-work programmes be more flexible.

Finally, I want to express my concerns about the Work programme in the context of other welfare reforms. Last month, the National Audit Office published a damning report about universal credit. I see direct parallels in how the Work programme and universal credit have been developed and implemented. A key failing identified in the NAO report was the culture and leadership of the Department, which created what was described as a “fortress” culture. I hope that, in addition to responding to my remarks about the work capability assessment, the Minister can explain how she will deal with that culture and ensure that there is more openness and transparency in her Department.

Disabled People

Debbie Abrahams Excerpts

Wednesday 10th July 2013 Commons Chamber

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

It is a pleasure to follow my right hon. Friend and neighbour the Member for Oldham West and Royton (Mr Meacher). I fully support what he said.

I support the motion for a cumulative impact assessment by October 2013, and, like my right hon. Friend, I too speak in particular on behalf of my constituents. I am increasingly in contact with constituents who are struggling and bearing the brunt of the welfare reforms. In addition, other people have contacted me through various social media. As others have said, the effects are beyond a scale that has ever been experienced and unfortunately I believe that they will increase.

We already know from the Institute for Fiscal Studies analysis of the Budget that the 40% of poorest households in the country will be worse off as a result of Budget cuts. Within that group the sick and the disabled are even more vulnerable. We have heard that analysis undertaken on behalf of Scope estimated that the six separate social security cuts, including changes to disability living allowance, employment support allowance, the bedroom tax, and the 1% cap on social security measures and the independent living fund will affect 3.7 million people by 2018. In total they will lose £28.3 billion.

From that analysis we know that more than 26,000 people will have the triple whammy of losing ESA and DLA and having their ESA capped at 1%, losing between £17,000 and £23,000. That is in the context of a flatlining economy. Many disabled people do work and many more want to work, but it is impossible in the current economic climate, with an employment rate that is now lower than in 2008. On top of that there is the spiralling cost of living, with energy prices rising by 11% last year and food prices by 29% since 2009.

Councils’ allocation of funding has been pared to the bone, with the average budget being cut by 28%. In my own council area nearly 50% of the budget has been cut, with another £50 million to find by 2015. As social care represents 25% of the council’s budget, the further impact that the cuts will have on this most vulnerable group is frightening.

I attended a meeting with disabled people, their families and carers in Oldham recently, along with my right hon. Friend. Their fear for the future was palpable. They were terrified, particularly parents with adult disabled children, who did not know what would happen to their children and what they could expect. Their fear was born out of their experience in the past and what had been before. We have seen changes in opportunities for disabled people to live more normal lives. They feel that their situation is going backwards.

The Joint Committee on Human Rights has stated that

“we conclude that there is a risk of retrogression of the UK’s obligations under Article 19”—

which enshrines the right to independent living for disabled people—

“as a result of the cumulative impact of spending cuts and reforms.”

The Committee called on the Government

“to improve its capacity to conduct equality impact assessments, in particular to go beyond piecemeal analysis of each measure by assessing the proposed provisions as a whole, including their cumulative impact on individuals and groups, from an equality perspective”.

As has been said, if Demos can do that on behalf of Scope, why on earth cannot the Government do it? It is disgraceful.

We have heard about some of the issues relating to the work capability assessment. There was a case in my constituency of somebody having a heart attack while he was in the middle of going through a WCA. He was told by the nurse conducting the WCA that he had to go to hospital, and then he received a letter telling him that he had been sanctioned. What on earth is going on? This is not the behaviour of a civilised Government.

I want to put on the record that this is about Government choices. The choices that the Government make are underpinned by their ideology. They are demonising people who are receiving benefits, creating antipathy and resentment in people who are not receiving benefits, creating an “us and them” culture through this antipathy to social security recipients, and then quietly dismantling our welfare system.

As I have said before, and as I will carry on saying, I am proud of the welfare system we developed. It was born out of the second world war, when we really were all in it together. I want to retain that model, with its principles of inclusion, support and security for all, protecting any one of us should we fall on hard times or become disabled. It ensures that we have the basics and dignity in our lives.

Fortunately, the British public are starting to see through what the Government are doing. As British social attitudes surveys consistently show, they want a fairer and more equal society, not a divided one. Trend analysis that I have undertaken in conjunction with sociologists from Oxford university shows that, rather than losing support for social security, the British people are a good barometer of what is right and just. When the myths about what the Government are doing are exposed, most people do not want a further downgrading of social security.

Instead of demonising the poor and the disabled, we need to get the economy moving and tackle the massive private sector debt of our financial institutions, which is 400% of GDP and rising. That is the real issue, not sovereign debt, as the Government like to say, and it is getting worse. We should not be giving tax breaks to the wealthiest in society—£3 billion to over 300,000 people earning more than £150,000 a year—at the expense of the most vulnerable. I think that says it all.

Jobseekers (Back to Work Schemes) Bill (Allocation of Time)

Debbie Abrahams Excerpts

Tuesday 19th March 2013 Commons Chamber

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

I beg to move,

That the following provisions shall apply to the proceedings on the Jobseekers (Back to Work Schemes) Bill—

Timetable

1.–(1) Proceedings on Second Reading, in Committee, on consideration and on Third Reading shall be completed at this day’s sitting.

(2) Proceedings on Second Reading shall be brought to a conclusion (so far as not previously concluded) four hours after the commencement of proceedings on this Motion.

(3) Proceedings in Committee, on consideration and on Third Reading shall be brought to a conclusion (so far as not previously concluded) six hours after the commencement of proceedings on this Motion.

Timing of proceedings and Questions to be put

2. When the Bill has been read a second time—

(a) it shall, despite Standing Order No. 63 (Committal of Bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;

(b) the Speaker shall leave the Chair whether or not notice of an Instruction has been given.

3.–(1) On the conclusion of proceedings in Committee, the Chairman shall report the Bill to the House without putting any Question.

(2) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.

4. For the purpose of bringing any proceedings to a conclusion in accordance with paragraph 1, the Chairman or Speaker shall forthwith put the following Questions (but no others) in the same order as they would fall to be put if this Order did not apply—

(a) any Question already proposed from the Chair;

(b) any Question necessary to bring to a decision a Question so proposed;

(c) the Question on any amendment moved or Motion made by a Minister of the Crown;

(d) any other Question necessary for the disposal of the business to be concluded.

5. On a Motion so made for a new Clause or a new Schedule, the Chairman or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

6. If two or more Questions would fall to be put under paragraph 4(c) on successive amendments moved or Motions made by a Minister of the Crown, the Chairman or Speaker shall instead put a single Question in relation to those amendments or Motions.

7. If two or more Questions would fall to be put under paragraph 4(d) in relation to successive provisions of the Bill, the Chairman shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.

Consideration of Lords Amendments

8.–(1) Any Lords Amendments to the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(2) Proceedings on consideration of Lords Amendments shall be brought to a conclusion, if not previously concluded, one hour after their commencement; and any proceedings suspended under sub-paragraph (1) shall thereupon be resumed.

9.–(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 8.

(2) The Speaker shall first put forthwith any Question already proposed from the Chair.

(3) If that Question is for the amendment of a Lords Amendment the Speaker shall then put forthwith—

(a) a single Question on any further Amendments to the Lords Amendment moved by a Minister of the Crown, and

(b) the Question on any Motion made by a Minister of the Crown that this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.

(4) The Speaker shall then put forthwith—

(a) a single Question on any Amendments moved by a Minister of the Crown to a Lords Amendment, and

(b) the Question on any Motion made by a Minister of the Crown that this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.

(5) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown that this House disagrees to a Lords Amendment.

(6) The Speaker shall then put forthwith the Question that this House agrees to all the remaining Lords Amendments.

(7) As soon as the House has—

(a) agreed or disagreed to a Lords Amendment; or

(b) disposed of an Amendment relevant to a Lords Amendment which has been disagreed to, the Speaker shall put forthwith a single Question on any Amendments moved by a Minister of the Crown and relevant to the Lords Amendment.

Subsequent stages

10.–(1) Any further Message from the Lords on the Bill shall be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(2) Proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (1) shall thereupon be resumed.

11.–(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 10.

(2) The Speaker shall first put forthwith any Question which has been proposed from the Chair.

(3) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown which is related to the Question already proposed from the Chair.

(4) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown on or relevant to any of the remaining items in the Lords Message.

(5) The Speaker shall then put forthwith the Question that this House agrees with the Lords in all the remaining Lords Proposals.

Reasons Committee

12.–(1) The Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the appointment, nomination and quorum of a Committee to draw up Reasons and the appointment of its Chair.

(2) A Committee appointed to draw up Reasons shall report before the conclusion of the sitting at which it is appointed.

(3) Proceedings in the Committee shall (so far as not previously concluded) be brought to a conclusion 30 minutes after their commencement.

(4) For the purpose of bringing any proceedings to a conclusion in accordance with sub-paragraph (3), the Chair shall—

(a) first put forthwith any Question which has been proposed from the Chair but not yet decided, and

(b) then put forthwith successively Questions on motions which may be made by a Minister of the Crown for assigning a Reason for disagreeing with the Lords in any of their Amendments.

(5) The proceedings of the Committee shall be reported without any further Question being put.

Miscellaneous

13.–Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply so far as necessary for the purposes of this Order.

14.–(1) The proceedings on any Motion made by a Minister of the Crown for varying or supplementing the provisions of this Order shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.

(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to those proceedings.

15. Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.

16.–(1) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken or to recommit the Bill.

(2) The Question on any such Motion shall be put forthwith.

17.–(1) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.

(2) The Question on any such Motion shall be put forthwith.

18. The Speaker may not arrange for a debate to be held in accordance with Standing Order No. 24 (Emergency debates) on a day on which the Bill has been set down to be taken as an Order of the Day before the conclusion of any proceedings to which this Order applies.

19.–(1) This paragraph applies if the House is adjourned, or the sitting is suspended, before the conclusion of any proceedings to which this Order applies.

(2) No notice shall be required of a Motion made at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order.

20. Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.

21.–(1) Any private business which has been set down for consideration at 7.00 pm, 4.00 pm or 2.00 pm (as the case may be) on a day on which the Bill has been set down to be taken as an Order of the Day shall, instead of being considered as provided by Standing Orders, be considered at the conclusion of the proceedings on the Bill on that day.

(2) Standing Order No. 15(1) (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before the moment of interruption, for a period equal to the time elapsing between 7.00 pm, 4.00 pm or 2.00 pm (as the case may be) and the conclusion of those proceedings.

I do not wish to detain the House long, because I am sure that we want to spend as much time as possible discussing the Bill. We seek the approval of the House to consider all stages of this important Bill in a single day. The motion allows for a total of six hours of debate, with up to four hours on Second Reading, with the balance of time spent in Committee and on Third Reading. With the co-operation of the House, the Bill will ensure that the taxpayer does not have to repay previous benefit sanctions to claimants who have failed to participate in certain employment programmes, and it ensures that we can properly impose sanctions for such failures. Without this Bill, the cost to the taxpayer would be up to £130 million.

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

Is it not the case that test case law from 2012 refutes the argument that the Government are making in terms of the requirement for sanctioned benefits to be recouped?

[Mr Hoban]

The hon. Lady makes a helpful point, but the legal position is as follows. If the Supreme Court does not give us leave to appeal, the regulations will be quashed, and we would have to repay sanctions to claimants who had not participated in schemes to help them back into work. The Bill is therefore needed. Hon. Members may have received briefings from third parties saying that that was not the case, but I can assure her and others that it is.

The Department has applied for permission for leave to appeal to the Supreme Court, but there is no guarantee that that will be granted. We therefore need to expedite the Bill so that we are not in a position where we have to repay benefit sanctions to people who have neither participated nor accepted the help that we have offered them.