Oral Answers to Questions
Esther McVey Excerpts(6 years, 1 month ago)
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Eleanor Smith (Wolverhampton South West) (Lab)
The Secretary of State for Work and Pensions (Ms Esther McVey)
There are 12 Carillion defined benefit schemes in a PPF assessment period. The PPF is working with scheme administrators to determine whether they can pay pensions at or above PPF benefits. Where a scheme cannot do this, the PPF will assume responsibility and pay compensation.
Eleanor Smith
The workers in the Carillion defined contribution scheme should not have to suffer any detriment to their pension. Will the Government be looking to draw back bonuses paid to the Carillion executives to put back into the pension funds?
Ms McVey
As I said, the Carillion schemes are at present in the assessment period for the funds, and we are looking at what happened in those instances. The hon. Lady will be pleased to know that we have brought forward our White Paper on defined benefits and increasing the regulator’s powers to support these schemes in the best way possible, to make sure pensioners get those pensions that they so rightly deserve. It is the Conservative party that will be strengthening that for workers, to make sure we look after such pensioners.
James Gray (North Wiltshire) (Con)
Will the Secretary of State pay particular attention to that group of public sector workers who transferred into Carillion and are now retired, and who were covered not so much by the PPF, because they were given ex gratia payments rather than pensions, at the time they transferred?
Deidre Brock (Edinburgh North and Leith) (SNP)
Does the Secretary of State agree that the Carillion pension crisis, as well as the many pensions crises over the years, support the Scottish National party calls for the UK Government to urgently set up an independent savings and pension commission to take a robust look at the pensions landscape?
Ms McVey
The regulator is independent, and that is what it does: look at pension schemes. We have, through the White Paper, strengthened the regulator’s powers and now for the first time brought forward criminal sanctions should any director or employer bring into harm wilfully and neglectfully the workers’ pension scheme.
Jack Dromey (Birmingham, Erdington) (Lab)
The catastrophic collapse of Carillion saw thousands of workers pay the price, including with their pensions. It was a monumental failure of governance and by Government, who knew Carillion was sinking into difficulties and went on awarding contracts despite profit warnings. The Secretary of State has said before the Select Committee that the Pensions Regulator knew about the mounting problems in 2014; were the Government alerted and did they choose to ignore those warnings, or did the regulator chose to ignore them and fail to alert the Government?
Ms McVey
The regulator and assessors are now looking into a whole series of issues. Fundamentally, one of them has to be how Carillion’s books went from being a healthy balance-sheet to, a year later, not being a healthy balance-sheet. The auditors and accountants who had signed those books are now being thoroughly examined to establish what happened there before the regulator would have had to look into things, so a lot of investigations are going on.
Richard Graham (Gloucester) (Con)
The Secretary of State for Work and Pensions (Ms Esther McVey)
Universal credit is a modern flexible benefit which provides tailored support to claimants. Three separate research studies show that UC is having a positive impact on employer outcomes. The changes announced in the Budget are giving even more support for claimants.
Richard Graham
Before Christmas, many on the Opposition Benches predicted disaster as more of our constituents claimed their benefits through universal credit. In fact—and I believe the changes made by the DWP have made a significant difference—the early anecdotal evidence in Gloucestershire, from the Jobcentre Plus and Gloucester City Homes, is that things are moving smoothly ahead. Does my right hon. Friend agree that this is broadly the case across the country, and that the introduction of trusted landlords is making a significant improvement to relationships with housing associations, and will she do more to roll that out?
Ms McVey
My hon. Friend is correct. Three independent studies are saying that universal credit is getting people into work quicker, and that they are staying in work longer and also looking for more work. He is exactly right about the trusted partner status. The reason he has started to do extra work with his jobcentre, looking at tenants who might not have a roof over their head, was the false information cited in Prime Minister’s questions by Jeremy Corbyn, who said that one in eight would be evicted. That was not the case, and, as we are seeing, people are now getting into work and their homes are being protected.
Mr Speaker
I say gently to the Secretary of State that one must not refer to other Members by name. The right hon. Member for Islington North is the Leader of the Opposition, but he should not be referred to by name.
Frank Field (Birkenhead) (Lab)
I ask the Secretary of State not to give an immediate reply to this question but to ponder it. The Secretary of State has told me that the 98 members of jobcentre staff on temporary contracts in Birkenhead are going to be laid off because they have come to the end of their contract period. Unlike Gloucester, we are having real problems with the roll-out of universal credit. I had five cases last week, including one involving a woman who had been reduced to living on 7p. Might not some, if not all, of those staff be redeployed to ensure a smooth transition from traditional benefits to the new one?
Ms McVey
I appreciate the right hon. Gentleman saying that I could speak to and work with him to see what is happening in Birkenhead. What I know is that we on this side of the House brought forward up to 100% advances, so that anyone in need of money could have it. We have also stopped the waiting days, and from April we are providing the two-week housing payment. That is what we on this side of the House have done to protect the most vulnerable, but the Opposition voted against it.
Craig Tracey (North Warwickshire) (Con)
Ms McVey
My hon. Friend is correct, and I want to thank him for going to meet people at his Jobcentre Plus and for speaking to the dedicated work coaches who are working tirelessly to help people to get into work. These are the tales that I am hearing. Universal credit is an in-work and out-of-work benefit. We are about getting people into a job and then helping them with progression, so that they can get into a job and have a career and also have job progression. That is why we have over 3 million more people in work.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Ms McVey
We have had this debate before, and this has been corrected many times. Actually, 50,000 more children are going to have free school meals. These scaremongering stories are not true at all. Let us look at what is happening. We now have 1 million fewer people in absolute poverty—a record low. We now have 300,000 fewer children in absolute poverty—a new record low. There are also 500,000 fewer working-age adults in absolute poverty—a record low. This Government are about helping people to get into work, which is the first step they can take towards taking control of their life. From there, they can have career progression.
Jeremy Quin (Horsham) (Con)
I commend my right hon. Friend for the roll-out of universal credit. How does that compare with the debacle that was the implementation of tax credits under a previous Government?
Mr Speaker
Order. No dilation is required. A pithy encapsulation of what the Secretary of State regards as her personal triumph is one thing, but a lengthy denigration of the policies of the previous Government would be another.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
The Secretary of State for Work and Pensions (Ms Esther McVey)
On average, more than 1,000 people have been employed every day since 2010. There are 816,000 vacancies—a rise of 10,000 since the last quarter and 56,000 since a year ago.
Stephen Metcalfe
I thank my right hon. Friend for her excellent and informative answer. However, to make sure that the vacancies get filled, we need to link up jobseekers with those vacancies. What action is she taking to ensure that people know what opportunities are out there for them?
Ms McVey
My hon. Friend is correct. This Government have brought forward new schemes like work experience, sector-based work academies and support for childcare to enable people who are job-seeking to go for those jobs. Universal credit, which is an in-work and out-of-work benefit, is giving that extra support. Let me just say this: BT Openreach, 3,500 new jobs across the country; UPS, 1,000 jobs in the east midlands; Siemens, 700 skilled jobs in Yorkshire; and Toyota, 3,000 jobs in Derby and Wales. That is what this Government are doing in supporting those people into those jobs.
Ruth George (High Peak) (Lab)
Ministers have repeatedly said this afternoon that the best way out of poverty is through work and education, so why have they introduced the limit on free school meals under universal credit, which is a work disincentive and will prevent more than 1 million children in poverty from receiving free school meals and the educational achievement they deserve to get out of poverty?
Ms McVey
The Opposition have been putting across fake news, or maybe it is clumsy research or just misinformation. Even “Channel 4 News” had to put up a factsheet correcting what the Opposition are saying. Some 50,000 more children will be getting free school meals. We are helping those who need support, with not only childcare but free school meals and progression in work. Please listen and learn.
Paul Blomfield (Sheffield Central) (Lab)
The Secretary of State for Work and Pensions (Ms Esther McVey)
An estimated 50,000 more children will benefit from a taxpayer-funded free school meal by 2022 under universal credit. I will repeat that: 50,000 more children will get a free school meal. We are already ensuring that all existing children receiving free school meals will continue to receive them until roll-out or that phase of education is complete.
Paul Blomfield
There clearly is a serious mismatch between the Secretary of State’s figures and those published by the highly respected Children’s Society, which tells me that 7,000 children will lose out in Sheffield alone. Will she undertake to publish the basis on which she has calculated those figures?
Ms McVey
The Department for Education will be doing that. Sometimes charities are given the wrong information and therefore say the wrong information, having been led astray by Opposition Members. The Opposition voted against those free school meals. They voted against the removal of waiting days. They voted against advances of up to 100%, and they voted against two weeks of housing benefit support for the most vulnerable people in society. Shame on you.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
The Secretary of State for Work and Pensions (Ms Esther McVey)
We are pleased with the progress we have made on the roll-out of universal credit, which is now live in 250 jobcentres. Universal credit is a modern, flexible benefit that helps people move into work and, importantly, progress in work through tailored support from dedicated work coaches.
Mrs Hodgson
The Department is always quick to act in cases of overpayment and sanction claimants for any breach of rules, yet an investigation by the National Audit Office revealed that the Department has underpaid an estimated 70,000 people over the last seven years. What will the Department do to ensure that those who have been left out of pocket are repaid the money they are entitled to as soon as possible?
Scott Mann (North Cornwall) (Con)
Margaret Greenwood (Wirral West) (Lab)
Had the Secretary of State read the full article that she refers to on Channel 4’s FactCheck, she would have seen that it said that our numbers were in fact correct.
Margaret Greenwood
Well, it did. I recommend that the Secretary of State rereads it.
In less than two weeks’ time, support for mortgage interest will change from a benefit to a loan. Government figures released on Friday show that, even at this late stage, the DWP has still not managed to contact 40% of claimants by phone to explain the change, and 30% of all claimants have already declined a loan. A large proportion of claimants are pensioners, and Age UK is warning that many may instead try to manage by cutting back on essentials such as heating. Why have the Government failed to give claimants adequate notice, and will they call a halt to this policy, which risks inflicting hardship on thousands?
Mr Gavin Shuker (Luton South) (Lab/Co-op)
Ms McVey
You can’t have it that we are not helping enough people and then, on the other hand, that we are. What we have said is that this has always been for people who were not in work or those on low incomes. What we have done is slightly raise the threshold, and now more children who need free school meals are getting them. That is something that this Conservative Government are doing. I would also like to welcome the rise in employment in the last quarter in the south-west area and the hon. Gentleman’s seat by another 48,000 people. That is more people in work who can help their children.
Ms McVey
In Scotland we have seen a rise of 207,000 people in employment. This is what universal credit is doing too: making sure people are in work, and making sure they are in work quickly. We are sorting them, and work coaches are supporting them. We have given Scotland the flexibility to do additional work on the ground.
James Cartlidge (South Suffolk) (Con)
Auto-enrolment has been a great success, but does my hon. Friend agree that we need to do more to encourage the self-employed into it? What steps is he considering in that regard?
Maggie Throup (Erewash) (Con)
On Saturday, I was delighted to launch a new bus route from Ilkeston to East Midlands airport, through Long Eaton and Sandiacre, which will undoubtedly open up more opportunities in terms of the many vacancies in the logistics hubs at the airport. Does my right hon. Friend agree that transport providers and employers working together will really make sure that my constituents have every job opportunity?
Ms McVey
It has always been about everybody working together. This Government, and this Department in particular, want to make sure that we step outside the silos and work across Departments and that work coaches stand outside what they need to do to make sure that they are reaching into people’s lives to help them progress.
Helen Goodman (Bishop Auckland) (Lab)
What is the Minister going to do about employers such as the one in my constituency who sacked a lot of young people without paying them the wages they were owed, with the result that one of them—a pregnant woman—ate nothing but Smash for three weeks?
Philip Davies (Shipley) (Con)
We often hear from Opposition Members that all the new jobs created are zero-hours contract jobs. Given their track record on accurate information, will the Secretary of State set out what proportion of workers are on zero-hours contracts and how many new jobs are actually full-time jobs?
Kate Green (Stretford and Urmston) (Lab)
A number of childminders in my constituency are reporting problems with late payment from their customers who are in receipt of universal credit, partly because of the waiting time for the first payment and partly because of bureaucratic requirements. Will the Secretary of State or one of her colleagues meet me to discuss this pressure on childminders?
Ms McVey
We would be happy to meet the hon. Lady, who does so much in this area. What I will say, however, is that I do not understand why Opposition Members voted against advance payments up to 100%, why they voted against the two-week home payment and why they voted against the extra support we are giving.
Tom Pursglove (Corby) (Con)
On Friday, I met a number of Corby employers who were all raving about the apprenticeship route. What steps is the Department taking to promote apprenticeships to jobseekers?
Access To Work Scheme
Esther McVey Excerpts(6 years, 2 months ago)
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The Secretary of State for Work and Pensions (Ms Esther McVey)
In March 2015, as part of a package of improvements to access to work, the former Minster for Disabled People, Health and Work, my right hon. Friend the Member for Forest of Dean (Mr Mark Harper), announced the introduction of an annual limit on the amount of an access to work grant of 1.5 times average salaries in order to encourage better use of public funds and to enable Access to Work to support more people—particularly traditionally under-represented groups. The cap has been in place since October 2015, but a period of transitional protection was granted to enable those who were spending above the level of the cap on introduction time to adjust to the new limits.
During this transitional period for people to adjust to the need to source their support within a limit, we have seen considerable progress. The average spend among the remaining transitionally protected customers has fallen from around £57,000 each to around £45,000 each. This suggests that it is achieving the intended incentive effects on individuals and employers to make best use of funding as well as freeing over £2 million per year, to support growing numbers of people benefiting from the scheme, alongside the extra resources provided in the spending review. I am therefore persuaded that the principle of the cap is sound, balancing the need to provide support to the largest number of people, and at a significant level for some, with the need to make the best use of public funds.
At the same time, the Government have always said that we would also use this time to monitor the impact of the cap on individuals and work with customers and other stakeholders to see if any further practical mitigations could be applied to those whose needs still remain above the cap. This includes emphasising the duties that employers have to play their part and make reasonable adjustments under the Equality Act 2010. At the same time it was agreed that we would lead a review of communication support for deaf people, which we published last year.
I am therefore pleased to announce that as a result of this engagement—particularly with the UK Council on Deafness (because the majority of capped customers are deaf), but also with others groups and individuals that as of April 2018, the cap will not rise to £43,100 in line with 1.5 times average earnings. Instead it will rise to £57,200, double average earnings, and will be up-rated annually on that basis. This means that considerably fewer British sign language users now remain affected by the cap. I believe it is important to retain this link to average earnings so that high-value awards, which are overwhelmingly used to purchase human support, retain their purchasing power over time.
Alongside this change, existing capped customers will, where applicable, have their needs considered against this new limit when their awards are due for their annual review.
As we continually seek to improve Access to Work, which last year approved provision for 8% more people than in 2015/16—including 13% more people who were deaf or had hearing loss—we will introduce the following measures:
extra support to customers with high-value awards via automatic workplace assessments promoting available technology and reasonable adjustments and voluntary cost-share from employers as well as signposting to advice and guidance provided by third parties;
working with stakeholders to co-produce guidance and share best practice as well as continued monitoring of the impacts on the cap;
discretion in exceptional cases of multiple disability, to consider award limits averaged over a longer period—for example where a customer’s on-going need for a support worker may be below the cap but when coupled with a periodic need for, say, a wheelchair, would exceed the cap in that year;
introduction of managed personal budgets to enable greater choice and control for customers in the way grants are spent;
taking applications 12 weeks ahead of a job start date rather than the current six weeks to allow more time for support to be agreed and put in place;
continuing to invest in our digital improvements such as developing the facility to submit invoices online;
allowing more flexibility in how people can use Access to Work to support short periods of work experience where there is a likelihood of a paid job in the near future; and
encouraging uptake of technological solutions that can both reduce costs and promote independence, we will allow risk free trials of technological solutions so that customers can revert to their old award if they wish, and also introduce a “Tech Fund” that will mean the mandatory cost-sharing contributions from employers for such items are waived where their use will save the taxpayer money.
[HCWS563]
Private Pensions
Esther McVey Excerpts(6 years, 2 months ago)
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The Secretary of State for Work and Pensions (Ms Esther McVey)
Today the Government are publishing a White Paper “Protecting Defined Benefit Pension Schemes” which sets out our proposals to improve confidence in defined benefit pensions. It builds on last year’s Green Paper, “Security and Sustainability in Defined Benefit Pension Schemes”.
As we said when we published the Green Paper, defined benefit schemes are an important pillar of the UK economy. Around £1.5 trillion is invested by about 5,500 schemes. More importantly, these pensions are a key part of many people’s retirement income. There are 10.5 million members in the UK with a defined benefit pension: it is crucially important that the system delivers the retirement income they have saved for over many years of hard work.
We know that the vast majority of employers with these schemes want to do the right thing by their employees. Our 2017 Green Paper examined the evidence around defined benefit scheme affordability, and concluded that the majority of employers can and do fund their schemes appropriately. The responses to the Green Paper supported this. However, to help trustees and employers work even more effectively towards a long-term goal, we are introducing changes to scheme funding. Where employers want the best for their employees, we want to ensure that the system supports this.
However, it is clear that not all employers want to act fairly. At the heart of the White Paper is a strong message for employers tempted to act in a way that is detrimental to their pension scheme. We will not tolerate such behaviour, and will come down heavily on attempts by employers to avoid their responsibilities. We are supporting the Pensions Regulator to be a clearer, quicker and tougher organisation by giving it new and improved powers to gather information and require employer co-operation. Where there is evidence of unscrupulous behaviour, we are introducing measures including a punitive fines regime and, in the most serious cases, a new criminal offence for those who deliberately and recklessly put their pension scheme at risk.
Finally, we are consulting on the legislative framework and accreditation regime for consolidation, providing industry with the opportunity to innovate while ensuring there are robust safeguards in place to protect members’ benefits. This will be the first step in enabling schemes greater opportunities to realise the benefits of scale achieved through consolidation, and will benefit both members and employers.
The White Paper relates only to private sector defined benefit schemes and is not concerned with other types of pension provision, such as public service pension schemes or defined contribution schemes. A response to our consultation on the future of the British Steel Pension Scheme (BSPS) is included in chapter four of the White Paper.
Defined benefit pensions are a subject of great importance to many people, representing their hopes for the future. We are determined to ensure that these hopes are protected. This White Paper is a key step towards a more secure future for members of these schemes.
[HCWS557]
Employment and Support Allowance
Esther McVey Excerpts(6 years, 2 months ago)
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The Secretary of State for Work and Pensions (Ms Esther McVey)
On 14 December 2017 my predecessor provided a statement to the House on how the Department will be undertaking work to correct underpayments that may have occurred as a result of how a proportion of incapacity benefit claims were transitioned to employment and support allowance between 2011 and 2014. I wanted to take this opportunity to update the House on how this work is progressing.
My Department will be reviewing close to 300,000 cases, of which just under a quarter have been underpaid. We have begun contacting individuals and making payments. We are actively recruiting staff and have scaled up the team undertaking the work from 10 to 50 in December last year, which will grow further to 400 from April, allowing us to deal with the situation at pace.
I know many Members will want to provide reassurance to their constituents who think they may have been affected. I can assure the House that my Department will be contacting all those identified as potentially impacted. We have been engaging with external organisations that often provide support and advice to our claimants, so that they too can be confident that we have a robust process in place, and can provide individual advice should they be contacted.
Today I can confirm that, based on departmental analysis, we will be prioritising any individuals whom we know from our systems to be terminally ill. Thereafter we will work through the cases identified as most likely to have been underpaid according to our systems. We have also undertaken an equality analysis to support this prioritisation approach.
Once an individual is contacted, and the relevant information gathered, they can expect to receive appropriate payment within 12 weeks. I can also confirm that once contacted, individuals will be provided with a dedicated free phone number on which they can make contact with the Department.
Like my predecessor, I am committed to ensuring that all cases are reviewed and paid by April 2019.
[HCWS549]
Universal Credit
Esther McVey Excerpts(6 years, 2 months ago)
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The Secretary of State for Work and Pensions (Ms Esther McVey)
As the hon. Member for Wirral West (Margaret Greenwood) is on the Opposition Front Bench, may I start by congratulating her on her promotion? I am sure that she would have liked to have got it in happier circumstances, but none the less I welcome her to her role. I hope that she does not fall victim to the bullying culture of the Leader of the Opposition’s office, as the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) has.
Well, well, well, what a strange old topsy-turvy world we find ourselves in. Measures so strongly fought for and won by claimants, MPs, stakeholders and charities only months ago are now being opposed by the Opposition. These changes were proposed by the most vocal defenders of benefits, and they are now being obstructed. We in the Chamber should not be giving the public misinformation, but unfortunately that is what has been happening so far.
Last month, stories emerged from Opposition Members—particularly the hon. Member for Ashton-under-Lyne (Angela Rayner)—that have been repeated today: namely, that our plans for entitlement to free school meals would deprive more than a million children. It took a “Channel 4 News” FactCheck to point out that no child who currently receives meals would lose their entitlement and that, in fact, some 50,000 more children would benefit under our proposals when compared with the previous system.
I understand that it is the nature of the Opposition to oppose, but the scaremongering and misinformation from the Opposition has surely reached a new low as today they seek to annul regulations that consist largely of changes that were introduced purely to support benefits claimants—changes that Opposition Members have themselves called for. All this after a recent intervention by the UK Statistics Authority, which made it clear that the claims made by Opposition Members about universal credit causing poverty, debt and eviction were not supported by the evidence.
Of course, the scale and nature of the change represented by universal credit means that scrutiny is inevitable and important, and I welcome that, but unsubstantiated and exaggerated claims about widespread problems caused by universal credit amount to nothing less than scaremongering. They cause claimants alarm and, in the worst cases, stop them getting the money that they are entitled to, yet we find ourselves here again, debating universal credit, with the same false alarms coming from the shadow Cabinet—only this time we are debating the very regulations that we have designed to address the legitimate concerns of Opposition Members and our stakeholders.
Ruth George (High Peak) (Lab)
The Secretary of State has said that claims should not be made when they are unsubstantiated. I have been asking parliamentary questions about the £50,000 increase that is in the consultation response, and I have received no facts about how the figure has been arrived at—none whatsoever. Will that be published, please?
Maggie Throup (Erewash) (Con)
Will my right hon. Friend dispel some of the myths and scaremongering that have been put out by the Opposition and reassure my constituency, where universal credit is being fully rolled out, that those already in receipt of free school meals will not lose that eligibility?
Several hon. Members rose—
Ms McVey
I will carry on for a bit, and then I will gladly take some more interventions.
We are not just debating these regulations today, but trying to save them from the Opposition, who would be happy to destroy this extra support for our benefit claimants. Perhaps I should remind the House of some of the changes that are in these regulations and what benefits they will bring to claimants. After all, the policy underpinning these regulations has been widely debated and supported both inside and outside this Chamber. The regulations abolishing waiting days will help many claimants by, on average, £160, while reducing the time taken to receive the first monthly payment. These regulations bring into effect the housing benefit transitional payment, which amounts to two weeks of housing benefit at the start of the claim. That is worth, on average, £233 towards helping claimants stay on top of their housing costs as they move into universal credit. These regulations increase the work allowances and are worth around £68 a year in further support for those who are striving to enter work.
Neil Gray (Airdrie and Shotts) (SNP)
The Secretary of State is attempting to provide a stout defence of the impact of universal credit. Why is it then that, only last month, her colleagues on Stirling Council proposed three years’ worth of mitigation against the impact of universal credit, worth more than half a million pounds?
Ms McVey
Actually, if the hon. Gentleman looks at what this Government introduced in the Budget, he will see that it was a package of support worth £1.5 billion for the country. What we are doing is supporting people as best we possibly can. Additionally, these regulations fund temporary accommodation through housing benefit, which has been widely called for and unanimously welcomed by local authorities.
These regulations follow on from a host of other changes that we have already implemented, including making our telephone lines Freephone numbers, extending the maximum repayment period for advances from six months to a year, increasing the maximum advance that claimants can receive to up to 100%, changing the guidance to ensure that, when private sector housing claimants come on to universal credit, we know whether their rent was previously paid directly to the landlord and can ensure that that continues.
Clive Lewis (Norwich South) (Lab)
Meaner even than the master in Oliver Twist’s workhouse, the Secretary of State seeks not just to stop the second helping, but to stop any meal at all. I ask her to come to Norfolk. If these changes go through, 12,500 children will be denied a hot midday meal. How does that square the circle in relation to making work pay? Please, can she tell us —anything?
Ms McVey
Unfortunately—I think that I was taught this as a child—when someone has totally lost the argument, they make up the facts, and that is what we are hearing from the Opposition. Although we have brought in all the requests that they wanted to support more people into work—I have just read out the list—they just scaremonger and make things up as they go along. I hope that it is clear to the whole House that these regulations will bring in real and tangible benefits for claimants and that, as promised, we are making the changes necessary to continue to deliver universal credit safely and securely, with all the necessary support that claimants need.
I want to be clear about another thing, too, because Members have stood up during past universal credit debates to recount stories of cases where their constituents have reported difficulties with universal credit. Where that has happened, we have immediately sought to address the concerns, because it is vital to us all that we get this right, so that we can deliver the most modern, forward-thinking, flexible benefit in the world, and that is what this Government are seeking to deliver. This benefit will be at the cutting edge of support throughout the world—that is what this Government are delivering.
Stephen Timms (East Ham) (Lab)
On problems with universal credit, the Secretary of State will, I think, recognise that the last thing that families earning a bit less than £7,400 a year will want is a pay rise, because if they get it, they will immediately lose their free school meals and be much worse off as a result. That is a very serious problem for work incentives, which used to be a big priority for her Department. Does she recognise that major problem?
Ms McVey
The right hon. Gentleman raises a fair point that I would like to address. By contrast, the other points that we have heard so far have been fabrication. He mentioned people earning £7,400. Actually, with universal credit, we are talking about people who will be bringing home somewhere between £18,000 to £24,000. He is quite right—[Interruption.] If Members will kindly let me finish this answer to the very pertinent question asked by the right hon. Gentleman, as this is now a personalised benefit where people will have their own work coaches, we will not seek to put someone in a less advantageous situation. Therefore, if people look at the money that is coming in and the extra support that is coming from school meals, they can see that we will not seek to do that to an individual. A work coach will be working with individuals to help them to progress in work, so that they are in a better situation.
Chris Philp (Croydon South) (Con)
On work incentives, can the Secretary of State confirm that there have been two studies—one in December 2015 and another in September 2017—both of which showed that people on universal credit were more likely to get back into work than those people on the predecessor benefits? Therefore, this is helping to get people back into work.
Ms McVey
My hon. Friend is quite correct. Further studies show that people on universal credit are much more likely to look for work than people on jobseeker’s allowance—86% of those on universal credit, compared to 34% of those on jobseeker’s allowance. Under the legacy benefits came things that I am sure we all remember, such as the 16-hour rule, which trapped people on benefits. That will not happen under universal credit because it pays people to work, every hour that they work.
Mr Duncan Smith
My right hon. Friend is doing a fantastic job. She has pointed out the absurdity of the Opposition’s position, whereby they will now vote against the changes that will benefit those who most need them. Alongside that, they are now voting for a policy that would deliver free schools meals to families earning £40,000 a year. Does not she think that the Opposition are for the few, not for the many?
Ms McVey
My right hon. Friend makes a very good point. Perhaps these are honest mistakes by the Opposition; I am not sure. Under universal credit, people can be in work and not in work. Perhaps the Opposition do not understand the complexities of this system, which is helping people into work and then to progress at work. As my right hon. Friend said, if we allowed free school meals in every family on universal credit, those families could include parents earning £40,000 a year. As has always been the case, we support people on free school meals from families who are either not in work or in low amounts of work.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Again, can we listen to the Secretary of State? It is fine if she wants to take interventions and she has indicated that she will take some more, but I do think that hon. Members should be a bit calmer.
Helen Whately (Faversham and Mid Kent) (Con)
Jobcentres in my constituency tell me with some passion that universal credit is really helping them to get more people into work. The Government have also listened to concerns about universal credit and are making improvements. Does it not baffle the Secretary of State and is it not bizarre that the Labour party is trying to block those improvements, when the Government are doing exactly the right thing?
Ms McVey
My hon. Friend is spot on, and the incredulity with which she says what the Opposition are stopping points out the ridiculousness of their position. Not only have we helped an extra 3.1 million people into work, but these regulations help the most vulnerable and will bring in an extra £1.5 billion of support.
Several hon. Members rose—
Ms McVey
I will carry on for a little bit more before taking more interventions from Opposition Members.
I turn to the Free School Lunches and Milk, and School and Early Years Finance (Amendments Relating to Universal Credit) (England) Regulations 2018. The Government have recently published their responses to two consultations on the earnings thresholds to receive free school meals under universal credit. The scope of these consultations includes entitlement to free school meals, the early years pupil premium and free early education provision for two-year-olds. The intention of these regulations is to replace the transitional criteria introduced in 2013. These transitional measures made all families on universal credit eligible for these entitlements—a move that was necessary so that no household should lose out during the early stages of the universal credit roll-out. Having fully considered all the responses to the consultation, the Department for Education laid these regulations before the House on 7 February to replace the temporary criteria with the new earnings threshold. This is what much of the debate has centred on so far. I hope that we have given clarity and the Opposition now understand why accepting these regulations would be so helpful to their constituents.
Catherine West
This change to benefits shows how untrusted the Government are on benefits. If they are trying to sell something good, they cannot, because they are so untrusted on benefits. If the system is so fantastic, why do 80% of people who come to see MPs get their benefits? Why should not the system just work? [Hon. Members: “What?”] Some 80% of appeals for universal credit—
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. May I help a little bit? Would hon. Members make short interventions? I want to ensure that all Members get in. The sooner we get this speech over, the sooner we can get to the Back Benchers.
Ms McVey
It would be helpful if hon. Members did not just make up statistics and facts as they went along, as we just heard from the hon. Lady. Hon. Members should listen to us regarding the support that we are now providing to claimants. As I said, it is a topsy-turvy world. There was a ding-dong when the Opposition were calling for the changes. Now that we are introducing the changes, we are back to another ding-dong and they do not want the changes—but never mind.
I turn to the regulations concerning national insurance contributions and childcare. These regulations align the tax and national insurance treatment of employer-supported childcare, where parents opt into the new tax-free childcare scheme. They remove the national insurance disregard to new entrants to the scheme, once the relevant day has been set. They are vital to ensure that the tax system operates fairly and consistently and that the Government can target their childcare support effectively.
For many parents, being able to afford good-quality childcare is essential for them to work and support their families. That is why we are replacing the childcare vouchers with tax-free childcare, which is a fairer and better-targeted system. Tax-free childcare is now open to all eligible parents, who can get up to £2,000 per child per year to help towards their childcare costs. More families will be able to access support through tax-free childcare because only about half of employed working parents can access vouchers, and self-employed parents were excluded from vouchers. Therefore, 1.5 million families are now eligible for tax-free childcare compared with about 600,000 families currently benefiting from vouchers.
Mr Ivan Lewis (Bury South) (Ind)
Will the Secretary of State clarify something she said in relation to people getting pay increases that then perversely lead to them being worse off? She appeared to say that she would instruct personal trainers to put that right financially. I can hear a shudder going around benefits offices up and down the country at the idea that she has unilaterally said that if any constituent of ours faces being worse off as a consequence of a pay rise, perversely, her personal trainers will compensate them for that loss.
Ms McVey
I thank the hon. Gentleman for that intervention, because it allows me to explain that universal credit works on a tailor-made basis, so that the claimant will always be in contact with their work coaches to work out what is better, how progression would be better and why they would be taking reasonable work because it makes them better off. I am not saying this unilaterally. I ask all Opposition Members please to go to their local jobcentre and meet the work coaches, who can then explain how the system works.
In 2013, the Government announced the introduction of tax-free childcare as the successor to childcare vouchers. The passing of the Children and Families Act 2014, which legislated for tax-free childcare, had cross-party support. Tax-free childcare is now fully rolled out, and the date for the closure of the voucher scheme to new entrants is April this year. This was set out in the 2016 Budget, giving two years’ notice. Parents receiving childcare vouchers can continue to use them while their current employer continues to offer the scheme.
Mr Marcus Jones (Nuneaton) (Con)
Is not the bottom line that under the previous tax credits system people got 75% of their childcare costs but under universal credit they get 85% of their childcare costs, and they can work all the hours that they want to?
Ms McVey
Universal credit is far more generous, as my hon. Friend points out. Up to 85% of childcare costs will be given to people who need it.
Under the childcare voucher scheme, the estimated cost to the Exchequer of forgone employers’ national insurance contributions is £220 million per year. This is paid to employers and voucher providers to administer the schemes, so it is not surprising that voucher providers are lobbying hard to keep the scheme open. However, we are focused on delivering a better childcare offer for working families. Tax-free childcare is simpler to administer for childcare providers, who will not have to deal with multiple voucher providers. These regulations will bring the national insurance contributions relief in line with the income tax treatment. They are an essential step in reforming Government childcare support to provide a fair and well-targeted system. Closing the childcare voucher scheme to new entrants will ensure that more Government support goes directly to parents and helps working families to reduce their childcare costs.
Dr Philippa Whitford (Central Ayrshire) (SNP)
With the consultation that the Government are carrying out on abuse of women, does the Secretary of State recognise the threat of financial control and abuse posed to women by the single payment? Would she be willing to consider making individual payments of child tax credits to the mother, and so on, the norm? Charities have demonstrated that women who are being abused will not apply for exception because they feel they will come under physical abuse.
Ms McVey
The hon. Lady makes a good point, and that is why it is possible to split payments according to need. The devolved Administration in Scotland have the right to alter these rules and provide extra support, should they wish to, but it is safe to say that payments can now be split, and we have listened to those concerns.
We are also listening to colleagues in Northern Ireland, who have raised specific circumstances relating to certain public sector service employers, and have committed to ongoing engagement with them to look at these issues, as tax-free childcare continues to roll out to replace employer-supported childcare. We have seen the success of 30 hours’ free childcare for three and four-year-olds in England, so we are committed to working with the Northern Ireland parties to administer childcare support of that kind in Northern Ireland, in the absence of an Executive.
For the reasons I have set out, annulling these regulations would deprive families and their children of the important and positive support that this Government are determined to offer and would have a range of very negative effects, so I call upon the House to oppose the motions.
Universal Credit
Esther McVey Excerpts(6 years, 2 months ago)
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The Secretary of State for Work and Pensions (Ms Esther McVey)
On 8 February 2018, the Work and Pensions Select Committee, published a report into the universal credit project assessment reviews. From this publication, the House will be aware that my Department has been involved in a request under the Freedom of Information Act, for the release of the project assessment reviews conducted between March 2012 and October 2015 on the universal credit programme.
Project assessment reviews are an assurance tool used to assess major projects and programmes. The reviews are conducted by project professionals and subject matter experts drawn from across the public and private sector. The effectiveness of the reviews relies on confidentiality: information within the reports is non-attributable to encourage candour and a frank exchange of views. The reports act as advice to the senior responsible owner on the delivery aspects of their programme—they are not advice to Ministers. They are intended to give the senior responsible owner a project delivery perspective on their programme, independent of the programme management function. They represent perspectives for the senior responsible owner to consider and not absolute truths. The senior responsible owner, not the review team, is accountable to Parliament.
It should be noted that the reviews I will place in the Library are historical, conducted between March 2012 and October 2015. Come 2018, the universal credit programme is in a very different place since those reports were written. Universal credit is in every jobcentre and we are rolling it out safely and securely to all categories of claimant. We are focusing on the continued safe delivery of universal credit, so people continue to be helped to improve their lives.
In recognition of the confidential nature of these reports, the Work and Pensions Select Committee viewed the full set of project assessment reviews up to 2017 and published a report on 8 February 2018. The Work and Pensions Select Committee agrees that the historical issues have now been addressed and “substantial achievements” have been delivered since 2013. In the Committee’s report, they commended the Department for running the universal credit programme
“more professionally and efficiently with a collective sense of purpose”.
The universal credit programme does not lack scrutiny as the ongoing Work and Pension’s Select Committee inquiries demonstrate. Given the Select Committee has seen the reports subject to the freedom of information challenge, and commented upon them publically I can see no point in continuing to argue that case. Accordingly my officials will be writing to the Information Commissioner and to the first-tier tribunal to advise them of my decision to release copies of the requested project assessment review reports to the requestor.
With regard to future reports, I emphasise that the steps I have decided to take today, to disclose the material subject to proceedings, are exceptional. I remain of the view that it is critical to the effectiveness of the Infrastructure and Projects Authority assurance framework for participants to be confident that their comments will be non-attributable and that review reports will be treated as confidential.
I accept that this House and the wider public have significant interest in major Government projects. I support the principle of transparency, and the universal credit programme regularly publishes independent research and analysis into the effectiveness of universal credit. I believe that there are better ways of addressing this concern, rather than undermining the mechanism that provides senior responsible owners with an independent external perspective on the programmes they are responsible to Parliament for.
Universal credit is a flexible benefit, which has simplified the welfare system and ensures that people are always better off in work. We know that the legacy system trapped people in benefit dependency. We needed a new approach to reflect the 21st-century work environment. The evidence shows universal credit is working, with people getting into work faster and staying in work longer than under the old system.
I am sure this House joins me in recognising the great progress we have made since 2010, with 3 million more people in work and unemployment at a near record low. Universal credit builds on this success, delivering welfare reform that works for everyone.
[HCWS524]
Motability
Esther McVey Excerpts(6 years, 3 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
John Mann (Bassetlaw) (Lab)
(Urgent Question): To ask the Secretary of State for Work and Pensions if she will make a statement on executive pay and cash reserves held at Motability.
The Secretary of State for Work and Pensions (Ms Esther McVey)
I am here today to address the concerns that have been raised about the structure of the Motability scheme. Let me first say that the scheme provides important support for more than 600,000 disabled people and has improved and extended its offer over the past few years. For example, in 2013, in my role as Minister for disabled people, I summoned the chief executive and chair to explain the excessive pay and bonuses of Motability scheme staff and the sums of money held in reserves. Despite being told that the charity needed such money for capital reserves, and the Charity Commission agreeing with that, I pursued the matter with the Department and ensured that the funds were used to benefit disabled people. The result was that £175 million was used for transitional support for claimants.
In April last year, after firm encouragement from the then Minister, my right hon. Friend the Member for Portsmouth North (Penny Mordaunt), Motability extended that transitional support. After direction from the Department, the charity is now piloting a Motability scheme to help children under the age of three who are not eligible for the mobility component of child disability living allowance but who rely on bulky medical equipment. The scheme has the potential to help up to 1,800 families.
I must emphasise that Motability is an independent charity that is wholly responsible for the strategic direction of the Motability scheme. It has oversight of Motability Operations, the commercial partner that operates the scheme under contract to the Motability charity. As a company, Motability Operations is an independent commercial business regulated by the Financial Conduct Authority. Although the remuneration of its directors and managers is a matter for Motability Operations to decide, from the outside one has to question whether it is really right. That view is endorsed by the Charity Commission, which said yesterday that the Motability trustees may wish to consider the reputational issues raised by the salaries being paid to its commercial partner’s executives.
Motability was set up 40 years ago, with cross-party support. It has done much good in that time, but today, anybody who looked at the size of the reserves and pay packages would question the direction that Motability has taken in allowing that to happen. Motability must listen to the criticisms it has faced, not only in the media this week but over the course of several years, and be receptive to change. As Secretary of State, I want to see a clearer commitment from Motability that it will maximise the use of funds to support disabled people’s mobility and independence.
As we have seen in so many instances, what was deemed correct in the 1970s is not necessarily correct by today’s standards. In the light of the current focus on corporate governance issues and the use of public money, I have today asked the National Audit Office to consider undertaking an investigation into this matter. I am keen for the NAO to look at how Motability is using taxpayers’ money.
John Mann
I thank you, Mr Speaker, for granting this urgent question, and the Secretary of State for her initial response.
It is grotesque that this registered charity, which is funded by the taxpayer through a direct grant from Government, is carrying cash reserves of £2.4 billion and has been underspending its budget by £200 million a year, and it is grotesque that this charity is paying its chief executive £1.7 million a year. Will the Secretary of State commit to an urgent review of executive pay at Motability and to publishing its results? Will she commit to urgently examining the finances of Motability and the audit arrangements made by her Department in previous years, and again, will she publish that review?
The point is that there is no risk; this is a no-risk situation. It is a very good scheme for the disabled, but there is no risk. The reserves are only half the picture—the banks are also profiting, possibly to the tune of billions over the years, because they are bearing some of the risk. Will the Secretary of State commit to reviewing the lack of competition in the financing arrangements with the banks, which see the large four banks making huge amounts of profit out of this scheme? How can the banks be allegedly covering the risk, when Motability has £2.4 billion in reserves allegedly to cover that risk? It is the same risk, yet in fact there is no risk at all because the taxpayer is guaranteeing the scheme.
Will the Secretary of State also make it abundantly clear to the disabled people in receipt of Motability that they need fear nothing and that the scheme and the service that they get will continue as is? What we as Members of Parliament are interested in is the finances behind the scheme, the excessive profits and the scandal that a no-risk scheme has banks profiting so much and the charity itself quite unnecessarily holding £2.4 billion in reserves.
Ms McVey
First, I thank the hon. Gentleman for his work and for his courage in pursuing the matter. I also thank the media for exposing the situation. Now that I am back in the House as Secretary of State for Work and Pensions, I can say that the situation needs to come under the spotlight. I would like to work with him on that, to bridge the divide of party politics and do what is right. We need to uncover what is happening in the Motability scheme and to ensure that the money held in the company’s reserves goes to the people that it should be supporting. He quite rightly says that having such an amount of money in reserves is grotesque, and that it should really be going to support disabled people.
As for where we go next, an urgent request has gone to the National Audit Office to ensure that if disabled people choose to spend money on the Motability package, that is a good use of the benefits that they get, and to check how taxpayers’ money is being used. Motability has been a lifeline for many disabled people who have chosen to take part in the scheme. As I have said, it is helping more than 600,000 people, and we must not throw the baby out with the bathwater. For those whom the scheme is helping, it is an essential lifeline, but if it could be helping many more disabled people then that is exactly where the money should be going.
Philip Davies (Shipley) (Con)
May I commend the hon. Member for Bassetlaw (John Mann) for his customary tenacity in pursuing this issue? Is it not the case that not only has the taxpayer been overpaying over the years, but disabled people have been overpaying from their benefits for this scheme? Surely those disabled people could be getting exactly the same benefits from it for a lower amount per week. The money saved could then be given back to them to help pay for their other living costs. Will my right hon. Friend consider allowing the scheme to progress, but at a lower cost to disabled people so that they can retain more of their benefits? Motability seems to be losing sight of what it was set up to do in the first place.
Margaret Greenwood (Wirral West) (Lab)
I congratulate my hon. Friend the Member for Bassetlaw (John Mann) on securing this urgent question. I also thank you, Mr Speaker, for granting it.
The news that the chief executive of Motability Operations Group plc took home £1.7 million last year and that the group is sitting on reserves of £2.4 billion has shocked people around the country. Particularly shocked are disabled people, 51,000 of whom, according to Motability’s own figures, lost access to the scheme last year after being reassessed for their personal independence payment. More than 3,000 were reinstated on appeal, but many lost their car in the meantime.
From Carillion to Motability, excessive executive pay is completely out of hand. With Motability Operations Ltd paid about £2 billion a year directly by the Department for Work and Pensions on behalf of disabled people in receipt of social security support, there are serious questions for the Secretary of State to answer. When did she or her officials last meet with either Motability or Motability Operations Group? The National Council for Voluntary Organisations’ “Report of the Inquiry into Charity Senior Executive Pay and Guidance for Trustees on Setting Remuneration”, published in April 2014, says that charities should include their highest earners in their accounts, regardless of whether they work for a subsidiary company. Does the Secretary of State agree?
Motability Operations Group is sitting on a surplus of £2.4 billion. That is a staggering amount given its VAT exemption from the Treasury, which means that it does not compete on a level playing field.
When the National Audit Office last examined Motability in detail in 1996, it found that the then £61 million reserves
“exceeded the necessary margin of safety”.
What assessment has the Secretary of State made of the current necessary margin of safety, and what assessment has she made of the £200 million annual underspend that has allowed such a large surplus to accumulate? Given that the funding of Motability effectively comes from the taxpayer via social security payments, what assessment has she made of value for money for disabled people who rely on their cars for independence? Finally, value for money for taxpayers is not currently one of the criteria for Motability’s remuneration committee. Does the Secretary of State believe it should be?
Ms McVey
The Department has worked closely with Motability to ensure that disabled people get good value for money for the cars that they choose to spend their money on. The Charity Commission, which recently undertook a detailed review of the charity’s financial accounts and its relationship with the non-charitable company Motability Operations, said:
“That review did not identify regulatory concerns about the charity’s governance or its relationship with the commercial company. It is not for the Commission to comment on the pay of the CEO of a large non charitable commercial company. However, we have made clear to the trustees of the charity Motability that the pay of the CEO of its commercial partner Motability Operations may be considered excessive and may raise reputational issues for the charity.”
It also found
“the level of operating capital held by the company in order to guarantee the scheme to be conservative”,
but said that it should be “kept under continuous review.” I would say that that review needs to start again. The Charity Commission should again look into what has happened.
It is the Government who permit disabled people to have a benefit, but where that money is spent is always the choice of the people who receive it. When the scheme was originally set up in the 1970s, with cross-party support, that was deemed the best way forward, but as I said, the NAO must now look into the matter. When I personally looked into it in 2013, I ensured that Motability paid £175 million more to disabled people, and I will continue with that direct action from my new elevated position.
Bob Blackman (Harrow East) (Con)
Only a third of those who can get grants from this operation currently do, so will my right hon. Friend ensure that the eligibility criteria are reviewed? Will she also look into the marketing to those who are eligible, so that people who are disabled and who can get this service actually get it and use the money?
Ms McVey
That is exactly what we want to ensure. My hon. Friend is right that the people who could benefit from this scheme should be benefiting from it, but obviously it is their choice whether they want to do so. If we could widen the scheme by allowing the money held in reserves to go to those disabled people, surely that would be right.
Chris Stephens (Glasgow South West) (SNP)
These reports of taxpayers’ money being held unused in charity accounts are extremely concerning. It is not the first time that the accounts of Motability Operations have been questioned. Will the Secretary of State launch an urgent investigation into the status of this estimated £2 billion of taxpayers’ money? Will she lay out what discussions she has had with the Charity Commission to determine whether this matter requires further investigation? Will she report her findings back to the House as a matter of urgency?
Michelle Donelan (Chippenham) (Con)
Does my right hon. Friend agree that it is essential that private companies that indirectly receive taxpayers’ money to operate their services have a particular duty to limit executive pay and excessive reserves? What more can the Government do on that?
Ms McVey
My hon. Friend is directed by true compassionate Conservative beliefs. The Government are bringing forward a new review and new law on corporate governance to cover all these matters. We want transparency—that is what will drive correct behaviour. We want accountability, and we want people to do the right thing. If that takes shining a sharper spotlight on their actions, then that is what we should do.
Frank Field (Birkenhead) (Lab)
The Work and Pensions Committee will be undertaking an urgent inquiry into this issue. We will be seeking your support, Mr Speaker, so that we can co-opt my hon.—very honourable—Friend the Member for Bassetlaw (John Mann) on to our Committee to pursue the issue. As we are drawing up our agenda over the next few days, will the Secretary of State say which questions she would find most helpful for us to seek answers on?
Jeremy Quin (Horsham) (Con)
I am pleased to follow the Chairman of the Select Committee. In the recent past, with regard to BHS, his Committee and this House have raised grave concerns about corporate governance in private companies. Does my right hon. Friend agree that those concerns are particularly pertinent when private companies are so reliant on the public sector? If she shares those concerns, will she ensure that that is included in the remit of the NAO report?
Liz McInnes (Heywood and Middleton) (Lab)
Yesterday I raised the issue of my constituent, Natasha, who was in receipt of lifetime DLA. That was removed following a PIP assessment, and she was threatened with having her vehicle taken from her on Boxing day—I am sorry, Mr Speaker, but this is particularly pertinent for me. I am grateful that the Secretary of State is having an investigation. Will she pay particular attention to the conduct of the trustees?
Nigel Huddleston (Mid Worcestershire) (Con)
Does the Secretary of State agree that while the Government Benches may be full of people who are instinctively pro-free market and respect commercial operations, we have no qualms whatsoever about interfering or raising questions when things have gone wrong? Does she believe that things have gone wrong in this case?
Ms McVey
We have to get the results from the NAO, from the Select Committee, and from the Charity Commission. However, my hon. Friend is right. This scheme, which was set up with the best intentions and good purposes, and has helped people, appears to have lost its way. It is only right that we help it to get right back on track to help the people it was set up to support.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Secretary of State says that she got a concession five years ago, but nothing has changed in five years on executive pay and concerns about reserves. Why is the National Audit Office only now being asked to do this, five years late? Is it just because of newspaper publicity?
Ms McVey
It is because of the tenacity of certain Members, for sure, and the freedom of our press, which has aired the case. This has been looked at for quite a few years, and I got concessions from Motability, as did my right hon. Friend the Member for Portsmouth North, but now we need to take the matter further.
Nick Thomas-Symonds (Torfaen) (Lab)
Motability has been a lifeline, but it is obscene that this money has not been going to the neediest in our society. I appreciate the Secretary of State’s urgent request to the National Audit Office, but what steps will she take to monitor the level of reserves, to ensure that they are not hoarded in this way again?
Ms McVey
We have to bring in the correct people to do the oversight, whether that is the FCA or the NAO, and those are the parameters we will use in a cross-party way to make sure we check out what reserves are needed, what reserves are not needed and what reserves need to go back to disabled people.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Given the shocking news of Motability’s £2.4 billion in reserves, does the Secretary of State agree that Motability’s policy of removing cars before constituents’ PIP appeals have taken place is even more reprehensible? Will she urge Motability to reverse that policy with immediate effect?
Work and Pensions
Esther McVey Excerpts(6 years, 3 months ago)
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Mr Philip Hollobone (Kettering) (Con)
Financial directors must not cause detriment to any private sector pension scheme. Will my right hon. Friend ensure that the rules and regulations regarding the investigation of this sort of practice are toughened up, because we cannot allow this to happen in future?
Ms McVey
My hon. Friend is absolutely right. The Government are seeking to ensure that the regulator will—our new Bill will come out later in the year—have more rights to fine, follow criminal procedures and look into mandatory clearance. Those of us who have studied corporate governance realise that the rules changed in 1991—the Cadbury report and the OECD corporate governance rules—and were strengthened in 2002. I believe that now, under this Conservative Government, we will be strengthening the corporate governance rules again. [Official Report, 5 February 2018, Vol. 635, c. 1187.]
Letter of correction from Ms McVey:
An error has been identified in the response I gave to my hon. Friend the Member for Kettering (Mr Hollobone).
The correct response should have been:
Ms McVey
My hon. Friend is absolutely right. The Government are seeking to ensure that the regulator will—our White Paper will come out later in the year—have more rights to fine, follow criminal procedures and look into mandatory clearance. Those of us who have studied corporate governance realise that the rules changed in 1991—the Cadbury report and the OECD corporate governance rules—and were strengthened in 2002. I believe that now, under this Conservative Government, we will be strengthening the corporate governance rules again.
Oral Answers to Questions
Esther McVey Excerpts(6 years, 3 months ago)
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Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
The Secretary of State for Work and Pensions (Ms Esther McVey)
Where all sponsoring employers of a defined-benefit pension scheme have declared insolvency, they will enter a Pension Protection Fund assessment period. The Pension Protection Fund will actively work with the scheme administrator to assess whether it is able to buy out the pensions at a higher level than the PPF benefits. Where a scheme cannot do this, PPF will provide compensation. Defined-contribution schemes do not need PPF help, because they do not promise a level of pension—the member keeps the pot they have built up.
Mrs Ellman
The Government have presided over a regulatory scheme where a deficit of about £1 billion has been allowed to build up in the pension fund at the same time as shareholders were receiving dividends. Can the Secretary of State guarantee that all former Carillion employees will receive in full their due pension?
Ms McVey
What the Government did successfully back in 2004 was set up the Pension Protection Fund, which is there to compensate people should their businesses become insolvent. This is what the fund will be doing: affording protection at 100% for those who have a pension. Those not yet on a pension will be getting 90%. The Government are ensuring that businesses are responsible to their employees and their pensions. We will be bringing in stronger corporate governance rules to make sure that boards, trustees, shareholders and stakeholders hold company executives to account.
Mr Philip Hollobone (Kettering) (Con)
Financial directors must not cause detriment to any private sector pension scheme. Will my right hon. Friend ensure that the rules and regulations regarding the investigation of this sort of practice are toughened up, because we cannot allow this to happen in future?
Ms McVey
My hon. Friend is absolutely right. The Government are seeking to ensure that the regulator will—our new Bill will come out later in the year—have more rights to fine, follow criminal procedures and look into mandatory clearance. Those of us who have studied corporate governance realise that the rules changed in 1991—the Cadbury report and the OECD corporate governance rules—and were strengthened in 2002. I believe that now, under this Conservative Government, we will be strengthening the corporate governance rules again.[Official Report, 8 February 2018, Vol. 635, c. 8MC.]
Nick Thomas-Symonds (Torfaen) (Lab)
My constituents who have paid into pension funds deserve to have those moneys protected. Will the Secretary of State be a bit more specific? What specific changes to corporate governance does she want to see to ensure that high risk behaviour towards pension funds does not happen again?
Ms McVey
We are getting feedback from various businesses on how they think we can best enable and support them. Any knee-jerk reaction might result in unintended consequences. Shining a spotlight on one area could close down loopholes, only for others to open up. This has to be looked at in the round, but, as I said, stakeholders, shareholders and the executive team should be held to account. We will make sure that that happens.
Alex Burghart (Brentwood and Ongar) (Con)
Can my right hon. Friend reassure my constituents that the UK’s pension protection system has responded effectively to the Carillion situation?
Ms McVey
I can indeed reassure my hon. Friend that what it is doing, and the avenues it is pursuing, are correct and thorough. I met the regulator last week. It is making sure that it investigates these key matters and provides the necessary pension support. Where we need to strengthen in future, we will do so. Equally, I would like to make Members aware of what the pension regulator has done in the past. With regards to the British Home Stores fiasco, which is totally different from this situation, it employed an anti-avoidance measure and got Philip Green to pay his pensioners £363 million. Further prosecutions are coming forward for Chappell, who bought that company for a pound. That is the kind of good work the pension regulator is doing.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
As the Government have responsibility for the pensions regulatory framework, how would the Secretary of State describe a regulatory framework that allows the administrator of a pensions scheme to help to bring about the downfall of the company and the employees it represents, and to profit from that downfall?
Ms McVey
When I hear some of the hon. Lady’s comments, particularly those that are out of context, I think about the letter that she has received in the past two days from the UK Statistics Authority, which states that many things she has said are not accurate. The letter said that her remarks—whether about children waking up in poverty at Christmas or linking universal credit with poverty—were not supported, that they were not true statistics and that the sources could not be relied upon. If you will allow me to ask this, Mr Speaker, will the hon. Lady make a statement straightaway about the letter from the UK Statistics Authority?
Debbie Abrahams
I will indeed do just that, Mr Speaker, especially as there was absolutely no answer to my original question. Hundreds of thousands of ordinary working people including my constituent, Philip Wild, have lost half their retirement income because of the Government’s failure to tackle pensions governance—from Carillion to Capita, and BHS to the British Steel Pension Scheme. How many more pensions scandals does the Secretary of State need to see before she introduces the robust regulatory oversight needed to protect people’s pensions for the future?
Ms McVey
Obviously, in the light of the letter from the chair of the UK Statistics Authority to the hon. Lady, it needs to be put on the record that the vast majority of defined-benefit pension schemes are working very well indeed. When we do see instances of abuse or illegal goings-on, they are investigated and the people responsible are brought to account. We have a strong Pension Protection Fund, supported by other businesses that are looking after pensioners across the country.
Gillian Keegan (Chichester) (Con)
Colin Clark (Gordon) (Con)
The Secretary of State for Work and Pensions (Ms Esther McVey)
Universal credit has had a positive impact since its start, as shown through published research and analysis. Independent research shows us that people are spending more time looking for work, applying for more jobs and even doing jobs they would not have considered doing before.
Colin Clark
Constituents in Gordon will face longer waiting times for payments due to the Scottish Government’s policy of fortnightly payment. What support can my right hon. Friend offer the devolved Administration in Edinburgh to help reduce those times?
Ian Austin (Dudley North) (Lab)
The introduction of universal credit is not helping to keep 250 highly skilled HMRC staff working on tax credits in Dudley in work. They were told they would be transferring to the Secretary of State’s Department to work on universal credit. Last week, they were told that her Department has cancelled that, their office will close and they will be made redundant. Will she ensure that the transfer goes ahead as originally planned, so that my constituents can keep their jobs, and will she meet me to discuss it?
Ms McVey
I will indeed meet the hon. Gentleman to discuss that. Back in 2016, HMRC announced that move and transfer of jobs. It now seems that as many jobs were not needed for UC. I know that it wants to retain the staff and their skills and knowledge, but I will meet him to discuss the best way forward.
Luke Hall (Thornbury and Yate) (Con)
Does the Secretary of State agree that universal credit is helping all those people who are stuck in a situation where they are only paid to work 16 hours a week and that it is fairer to those employees, the other employees in those businesses and taxpayers, who end up supporting the bill?
Ms McVey
My hon. Friend makes a very good point. The reason we are making this significant change from the legacy system is to ensure that every hour of work counts. We will not have a situation where people are stuck not working or paying punitive rates of income tax of 90% and above if they take work after 16 hours. This is cutting-edge technology. The UK is leading the way on flexible benefits that accompany flexible working, which nowhere else has.
Lucy Powell (Manchester Central) (Lab/Co-op)
May I welcome the Secretary of State to her position? Perhaps she might think to show a little more humility when answering some of these difficult questions on universal credit. Has she considered some of the other benefits that are not included in universal credit, such as free school meals, free uniforms, free bus passes and so on? Many low-paid working families will lose out on those benefits under universal credit, which will make them worse off in work than if they were still on benefits.
Ms McVey
These are precisely the things that have been considered in bringing forward universal credit. What support are we giving? The extra childcare support. What is the extra support? Tailor-made career advice and support. We all need humility, but, equally, we all need to hand out and deliver the correct facts to people, not embellish them, resort to sound and fury or drama, or provide obviously incorrect information, as the UK Statistics Authority has levelled against the Labour party.
Martin Vickers (Cleethorpes) (Con)
Last month, I visited Grimsby jobcentre, which serves my constituency, and it is very clear that the staff are handling the changeover to universal credit very efficiently. Will the Secretary of State join me in complimenting the staff, including the work they do in motivating claimants and improving their self-confidence so that they can seek employment?
Ms McVey
My hon. Friend makes a very good point, and I have actually met the tremendous work coaches in his constituency. I go out to speak to work coaches all the time, and they are saying to me that the change we are delivering through universal credit is the best thing they have ever delivered. The support they can give—[Interruption.] Rather than Opposition Members laughing, they would be well advised to come and join me or others in meeting work coaches. I will tell them how we know this is working: if it were not working, we would not have an extra 3.1 million people in work.
Neil Gray (Airdrie and Shotts) (SNP)
Contrary to the “SNP bad” broken record from the hon. Member for Gordon (Colin Clark), will the Secretary of State join me in welcoming the Scottish Government’s recently introduced flexibilities for universal credit payments, and will she consider implementing Scotland’s model down here, especially as her colleague in the Scottish Parliament, Adam Tomkins, has said he is “very much in favour” of them?
Ms McVey
The underlying principle of how we get people into work is working right the way across the United Kingdom. It is working in Scotland, and that is correct. Equally, we agree with giving extra powers to devolved Governments, and Scotland has the right to do things in its own way. As we pointed out earlier, however, some of the changes taken on board in Scotland have actually resulted in slower payment to people who need their benefits.
Vicky Ford (Chelmsford) (Con)
The Secretary of State for Work and Pensions (Ms Esther McVey)
The UK has the joint fifth lowest unemployment rate in the EU—better than France, the Netherlands and Denmark. The UK’s unemployment rate, at 4.3%, is the lowest in 42 years. It is less than half that of the euro area, which is 8.7%, and 3 percentage points below the EU28 average of 7.3%.
Vicky Ford
Unemployment in my constituency of Chelmsford is now less than 1.5%, and those who are able to work are finding jobs, but will the Secretary of State reassure my constituents who need our financial support that they will continue to be supported when universal credit is rolled out later this year?
Ms McVey
I congratulate my hon. Friend on the work she is doing as a new MP, and her constituents on the work they are doing to find employment, getting on in their careers and moving forward. As I have said, this Government believe in hand-up support and opportunity. The support of universal credit—a benefit that supports people in and out of work—will continue not only for her constituents, but for people right across the country.
Tony Lloyd (Rochdale) (Lab)
Will the Secretary of State confirm that of those who have gone into work as a result of this Government’s policies—and that is a good thing—many are living in poverty because of low pay and the inadequacy of our benefits system?
Ms McVey
It is interesting how differently people measure getting into work, poverty and life chances. Children born into workless households are actually five times more likely to be in poverty than those in working households. Under this Government, we have seen 3.1 million more people in work, and the number of workless households has gone down by over 600,000. We are helping people out of poverty: we are helping them get a job.
Philip Davies (Shipley) (Con)
Earlier the Secretary of State mentioned dodgy statistics from the Opposition. I have heard people say that lots of the new jobs created are on zero-hours contracts and for part-time work. Can she say what the actual figures are for the number of jobs created that are full-time, permanent jobs?
Ms McVey
It was not me talking about dodgy statistics, it was the chair of the UK stats authority who said that, but I thank my hon. Friend for pointing that out. The overwhelming majority of jobs are full-time and permanent jobs, and the vast majority of those in part-time jobs have chosen to be in part-time jobs.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
On job searching, has the Secretary of State had the opportunity to review the very helpful and generous offer made by Liverpool City Council to her predecessor to provide office space for closure-threatened jobcentres? There are two jobcentres in my constituency—not one, but two—that her Government wish to close, leaving my constituency with zero jobcentres. They are due to close in just a few weeks’ time. Has the Secretary of State had an opportunity to review that offer, to ensure that my constituents continue to receive employment support?
Ms McVey
It is really important that everybody gets the support they need, and a lot of the support going forward will be outreach work, so that people do not need to go to Jobcentre Plus, thanks to further support in the community. Obviously I am pleased that in the Liverpool city area—and in the north-west area—which is my hometown, employment is now far higher than it was in 2010. The unemployment rate under the Labour party was 2.8 million in 2008, even before the banking crisis, but now it is 1.4 million, so we are supporting people and we will continue to support people, because that is what this Conservative Government do.
Thelma Walker (Colne Valley) (Lab)
Bridget Phillipson (Houghton and Sunderland South) (Lab)
The Secretary of State for Work and Pensions (Ms Esther McVey)
We had a record-breaking 2017 for employment, and I am delighted to see the trend continue as we enter the new year. The proportion of people in work is at an all-time high at 75.3%—so 32.2 million people are now in work, 415,000 more than were working last year. Figures also show that there are a record 810,000 vacancies in the economy at any one time, which proves that the Government are delivering on our promise to build a strong economy.
Bridget Phillipson
No child in modern Britain should grow up in poverty, but figures from both the End Child Poverty coalition and the Secretary of State’s own Department reveal that we face a growing crisis. Does she seriously believe that ploughing ahead with universal credit will do anything to help the millions of children who are trapped in avoidable poverty in our country or will bring that number down?
Ms McVey
One thing on which both of us will agree—on which, indeed, Members in all parts of the House will agree—is that no child should be growing up in poverty. If we take action to ensure that families are working, those children will not be in poverty. We know for certain that if a child’s family are working, that child is much less likely to be in poverty when it grows up and is more likely to attain higher school qualifications. That is the action that this Conservative Government are taking.
Kevin Hollinrake (Thirsk and Malton) (Con)
Maria Eagle (Garston and Halewood) (Lab)
Ms McVey
The first decision I made was to make sure we did not appeal that question about PIP and what we on this side of the House were going to do to live up to the expectations of PIP, and I think it is a very true, honourable and correct thing that we have done. However, to make sure we deliver it correctly and give the correct amount of money to the people who need it, it will take time for us to thoroughly research what needs to be done.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
The attractiveness to many of the two-weekly payments of UC are obvious, but does my right hon. Friend share my concerns that the Scottish Government’s decision to offer this to my constituents and other people across Scotland will leave those who choose it to be worse off than claimants in the rest of the UK?
Stephen Morgan (Portsmouth South) (Lab)
Alex Burghart (Brentwood and Ongar) (Con)
We had a very interesting session on assistive technology in the Select Committee on Work and Pensions recently. Will the Government commit to looking at how assistive technology can be used to help more disabled people into work?
Lucy Allan (Telford) (Con)
The GKN takeover proposal announced last Thursday seeks to pay a £1.4 billion sweetener to shareholders, despite a £2 billion pension deficit. Does the Minister agree that the Government should act to protect the interests of GKN pension fund members?
Ms McVey
Of course the Government agree that we have to look after the concerns of the GKN workers. Here we have actually seen the trustees of the pension fund coming out, being bold and wanting reassurance from the other company that it can indeed pay for the pension scheme. We can look at the argument from two sides. GKN has to be strong and robust, but also Melrose should voluntarily ask the regulator to look into the implied costs in that benefit scheme to make sure that it can afford to take over the other company.
Thelma Walker (Colne Valley) (Lab)
Vicky Ford (Chelmsford) (Con)
I am a mathematician and a mother, so I am concerned that the head of the UK Statistics Authority had to write to a shadow Minister to point out that statements that they made were not based on real sources or real statistics. Does my right hon. Friend agree that the shadow Minister should apologise?
Mr Speaker
Even mothers and mathematicians have to respect the method, and the method in the House is that Members question Ministers about the Government’s policies. I do not blame the Secretary of State for taking the opportunity to ram home her point with force and alacrity, but Members must understand that this is not Question Time about the policies, tactics or preferences of the Opposition; this is Question Time about the policies of the Government. Even if there is some Whip handout saying, “Ask the Minister about the behaviour of the Labour party,” that does not make it in order. It is not in order—end of subject.
Mr Speaker
I think not. [Interruption.] The Secretary of State for Work and Pensions is gesticulating at me in a mildly appealing fashion, but she has made her points with considerable force and requires no further opportunity now.
Mr Speaker
That is a perfectly reasonable course of action for the Secretary of State to take, but it is not a point of order. It might be called a point of information that some colleagues will find helpful.
Personal Independence Payment
Esther McVey Excerpts(6 years, 3 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Peter Grant (Glenrothes) (SNP)
(Urgent Question): To ask the Secretary of State for Work and Pensions to make a statement on the recent ruling by the High Court over the judicial review on the application of personal independence payments to persons with mental health problems.
The Secretary of State for Work and Pensions (Ms Esther McVey)
After careful consideration, I took the decision not to appeal the High Court’s judgment on this case. I informed the House of my decision immediately by tabling a written statement on Friday last week. The written statement set out my decision and the steps that my Department will now take to implement that judgment, although I welcome coming to the House today in addition to that.
I repeat once again my commitment to implementing this judgment in the best interests of our claimants and through working closely with disabled people and key stakeholders over the coming months. The Department for Work and Pensions will undertake an exercise to go through all affected cases in receipt of PIP and all decisions made following the judgment in the MH case to identify anyone who might be entitled to more as a result of the judgment. We will then write to the individuals affected and all payments will be backdated to the effective date in each individual’s claim.
In accepting the outcome of the High Court judgment, the Department does not agree with some of the details in it. The 2017 amending regulations were introduced in response to an upper tribunal case that broadened the interpretation of eligibility for mobility 1—the ability to plan and follow a journey. Our intention has always been to deliver the original policy intent through clarifying how symptoms of overwhelming psychological distress should be assessed. We are not appealing the outcome of the recent High Court judgment to provide certainty to our claimants.
Our next steps will build on the positive work that the Government are already undertaking: spending on the main disability benefits—PIP, the disability living allowance and the attendance allowance—has risen by £4.2 billion since 2010 and real terms spending on disability benefits will be higher every year to 2020 than in 2010. The Government have commissioned two expert-led reviews and invested a record £11.6 billion in mental health services. Access to Work’s mental health support service has been expanded with a two-year trial of targeted support for apprentices with mental health conditions. We have also accepted all the recommendations in the independent review by Lord Stevenson and Paul Farmer, including establishing a framework for large employers to voluntarily report on mental health and disability within their organisation.
With regard to the next steps following this judgment, the DWP will write to those who may be entitled to a higher rate of PIP. Where relevant, all payments will be backdated to the effective date in each individual claim.
PIP is a modern, dynamic and fairer benefit than its predecessor, DLA, and focuses the most support on those who are experiencing the greatest barriers to living independently. At the core of PIP’s design is the principle that awards of the benefit should be made according to the claimant’s overall level of need, regardless of whether they suffer from physical or non-physical conditions. The Government are committed to furthering rights and opportunities for all disabled people and we continue to spend over £50 billion a year to support people with disabilities and health conditions.
Peter Grant
I am grateful to the Secretary of State for attending the House today and welcome her to her recent appointment. It seems that Secretaries of State for Work and Pensions change with astonishing regularity, but the Government’s callous and chaotic attempt to attack the rights of the poor, sick and disabled continues unabated. Although the Secretary of State said that she is pleased to come to the House to make this statement, she did not take the two or three opportunities she had over the past few days to do so, without waiting for an urgent question. Instead, she waited for a month after the High Court decision and then submitted a written statement on a Friday morning, when she knew nobody would be here to read it.
The High Court has ruled yet again that the Government have been acting unlawfully in their incessant attack on the very people the DWP should be seeking to protect. We now know that up to 164,000 people will get higher disability payments—or, to put it another way, that the Government have unlawfully been seeking to withhold benefits from up to 164,000 people who are not only entitled to them but who need them if they are to have anything like the normal life that the more fortunate among us take for granted.
This is not the first time the Government have been overturned in the courts. We have previously seen the courts ruling against the Government on the imposition of benefits sanctions, where the Government were acting unlawfully, and before that on the iniquitous bedroom tax. That one is particularly poignant for my constituents just now because the man who stood up to the DWP over the bedroom tax and won, Davie Nelson, a Glenrothes man through and through, sadly died very suddenly last week. His family and friends will be pleased that others are continuing the campaign for social justice that Davie fought so bravely.
The Secretary of State has promised that her Department will now seek to identify anyone who should be receiving higher benefits. My office has estimated, on the basis of preliminary constituency casework, that there could be 71 people in my constituency alone not getting the money they are entitled to. Will she update us on how many people she now thinks have been underpaid? How long will it take to carry out the review? How much longer will these people have to wait to receive the money that they rely on and which is rightfully and lawfully theirs? Will she explain why her Department is amassing such an appalling record of defeats in the courts? Does that not tell the Government something about how they are making these cuts to benefits? Finally, will she now commit to delivering a social security system whose fundamental principle is not to work down to a budget but to protect and respect the dignity of those who rely on it, and not continue to punish people for having disabilities?
Ms McVey
There have been changes in the DWP. Some people have come back, having previously worked here and seen what the changes were, and I am back here, several years later, and hence was probably a good person to say that we would not be appealing the court case.
On the timetable, I made the judgment just a week and a half after being made Secretary of State. It took up most of my time. It was a Friday—and could not have been any other time—because that was the deadline I had to meet for the legal judgment. At the same time, I made sure, following all protocol, that there was a written statement on exactly what had been done.
The benefit was always intended to be a dynamic benefit. Hon. Members on both sides of the House understood that DLA was focused on physical disabilities, and all parties decided there needed to be a more dynamic benefit that reflected invisible disabilities, which we all know are very difficult to assess. The extra money and support went into acknowledging that.
There has been massive change, and also massive understanding, in terms of what is going on. When I stood here all those years ago in 2013 talking about what the budget would be, people said we were cutting it. I explained the matter very clearly, though it fell on deaf ears, and I was often vilified. People still said it was being cut, but it was not. When I arrived, the budget was just over £13 billion, and it has gone up every year since, and will continue to go up. That is in real terms. Much of the vilification, therefore, was not only unnecessary but deeply untrue, and that again is why I welcome the opportunity to come to the Dispatch Box to explain what is going on.
Changing benefits is not always easy. Expanding support is not always easy. We knew at the time we were taking on a very difficult change and that there would no doubt be legal challenges. When there are legal challenges, however, we must look at them, make a true and fair judgment and carry on along that path, and I believe that in this instance I made a fair judgment. Today, the Glasgow Herald welcomed the decision—although I accept that the piece in question picked on various other issues—and it was also welcomed by Paul Farmer, the chief executive of Mind. My hon. Friend the Minister for Disabled People, Health and Work has met her Scottish counterpart; they, too, welcome the decision and look forward to establishing closer working relationships and making plans for its implementation.
I hope that what I have said explains what we have done, and I hope that what we have done is welcomed by Members on both sides of the House. If the hon. Member for Glenrothes (Peter Grant) would like to talk to me about a specific case or constituent, my door is open, and I will meet him.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
I welcome my right hon. Friend to her post, and I welcome her knowledge in making this decision. In supporting her, I remind the House that it was our predecessor Labour Government who put off changes in disability living allowance deliberately before the election and that afterwards we were faced with the decision to make those necessary changes. More money is now spent on disability benefits year on year, and more people, including those with mental health conditions, will receive them. DLA never delivered that to those people before.
Ms McVey
I thank my right hon. Friend. He spent many years working on social issues and cases, and established the Centre for Social Justice. The change that he brought about was not just about changing the benefits, but about reaching out to people who are sometimes left alone. Some of those people did want to be helped to get back into work. They did want to talk about their hopes and aspirations. There are now over 600,000 more disabled people in work, because they chose that path towards self-determination and the fulfilment of their ambitions and hopes.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Thank you for granting the urgent question, Mr Speaker, and I congratulate the hon. Member for Glenrothes (Peter Grant).
Any disabled person who listened to what was said by the Secretary of State will have been gobsmacked by the suggestion that there is a commitment to disabled people. The United Nations Committee on the Rights of Persons with Disabilities has described the Government’s action as a “human catastrophe”. The cuts that they have wrought on disabled people are an absolute disgrace.
As my hon. Friend the Member for Battersea (Marsha De Cordova) said when she raised a point of order yesterday, the Government sneaked out a written statement late on Friday, announcing that they would not appeal against the High Court judgment of 21 December, in effect reversing the emergency PIP regulations that they had introduced in February last year. Those regulations were introduced without a vote or a debate, despite two urgent questions and an emergency debate, and despite widespread concern about their impact. The Government’s own Social Security Advisory Committee was not consulted. I warned at the time:
“The move to undermine and subvert independent tribunal judgments is unprecedented, and ... marks very troubling behaviour by the Government on cases they lose that could weaken such social security tribunal judgments’ reach, influence and effectiveness in making independent decisions.”—[Official Report, 28 March 2017; Vol. 624, c. 145.]
I am pleased that the Secretary of State and her Department have finally seen sense, but there are a number of questions that the Secretary of State must answer—questions that have already been put by my hon. Friend the Member for Battersea. How many people does her Department estimate have been affected? How quickly will her Department be able to identify affected claimants, and by what process? Given the issues relating to letters from that Department, it is a little worrying if that is the only means.
How soon after identification will the Department make back payments? Will there be an appeal process for PIP claimants who are not contacted by the Department and who believe they should receive such payments? Will the Department compensate claimants who have fallen into debt and accrued interest charges? Will applicants be entitled to a reassessment if they were given the standard rate of the PIP mobility component after the February 2017 changes to PIP regulations, when the cause of the claim was “psychological distress”?
Finally, just how much public money has been spent by the Department on lawyers and legal advice seeking to defend the indefensible in the initial tribunal and the more recent court case?
This sorry debacle should serve as a warning to the Government of the dangers of seeking to undermine and subvert the decisions of our independent judiciary and the House of Commons.
Ms McVey
Can we start the dialogue on a firm and factual footing, which I set out before, and dispel the myth about the spend on disabled people? The facts speak for themselves: in real terms, the money has gone up. In this place, we are supposed to have the definitive facts of an argument, so I seek to give those here.
This was not about a policy change; it was about implementing the correct regulation after a court case. It came about after taking advice from and working with experts in the field on how to help people with severe psychological disorders. It was about support by prompting and by aid and assistance; at the time, it was not deemed to be something for people with severe learning disabilities, who might want a constant companion. That was how the regulations were set down, after advice was sought on the best approach, because this is a tailor-made benefit. However, the judgment in the case went the other way. We will work with MIND and with charities and stakeholders in the field to implement this as quickly as possible, but it is not just about speed; it has to be right and effective and to work for the people it is made for. That will take some time, but we will do it as quickly as possible.
Up to 220,000 people could be affected. That is why we are taking the process very seriously. We as a Department will reach out to those people, once we know exactly what we are doing. I reiterate that, according to figures from 27 October, 66% of PIP recipients with mental health conditions get the enhanced daily living component, compared with 22% who received the highest DLA care component; and 31% of PIP recipients with mental health conditions get the enhanced mobility rate, compared with just 10% of DLA recipients. Those facts speak for themselves. We know that this is a highly emotive issue, but it would be helpful if all MPs when working with their constituents offered them the help and guidance they need, and not ramp up some of the rhetoric and incorrect information we have heard here.
Finally, I was asked about legal costs. The cost in these cases was £181,000, but a Department as big as the DWP expects the costs of court cases to be that high, and they are comparable with those of other Departments engaged in similar judicial review cases.
Heidi Allen (South Cambridgeshire) (Con)
I am so pleased the new Secretary of State has decided to accept the court ruling, and I thank her very much indeed. As I and colleagues said last year, we should have listened to the message the courts were giving us. Accepting their ruling will be a significant step forward in achieving parity of esteem for mental and physical health. The Select Committee on Work and Pensions, of which I am a member, is about to publish a report on PIP and employment and support allowance. Will the Secretary of State seriously consider our recommendations on how to improve both those benefits? We all want the same thing—the best possible support for people who need it.
Ms McVey
I thank my hon. Friend, who is a vocal champion of people with disabilities, as is every other Conservative Back Bencher—and Members in all parts of the House. That is why this is sometimes such an emotive issue—everybody wants to be heard. I will indeed listen to her and take on board the recommendations of the Select Committee.
Neil Gray (Airdrie and Shotts) (SNP)
Thank you, Mr Speaker, for granting this important urgent question. I congratulate my hon. and assiduous Friend the Member for Glenrothes (Peter Grant) on securing it.
The High Court ruled that the UK Government’s PIP regulations were “blatantly discriminatory” against people with mental health impairments. That follows the damning report from the UN Committee on the Rights of Persons with Disabilities, which found “systematic violations” of disability rights. Although I welcome the Secretary of State’s acceptance of the High Court ruling—a position I hope the Government will adopt more regularly in response to High Court defeats on social security policy—I was worried by an aspect of her written statement, which was sneaked out on Friday. She said on Friday and again today that
“Although I and my Department accept the High Court’s judgment, we do not agree with some of the detail contained therein.”—[Official Report, 19 January 2018; Vol. 634, c. 30WS.]
Will she clarify that she will implement the ruling in full? Will she make an oral statement on the Floor of the House, so that we can consider whether the response follows the High Court ruling? Will she answer the pertinent questions put by my hon. Friend regarding the timescales—a matter she has not covered? Finally, in the light of the ruling and other external interventions, will the Government admit that their policies are causing harm and commit to widescale review of the social security system in the United Kingdom?
Ms McVey
We will implement the judgment in full, but we will work with stakeholders and charities to understand and implement what was said. When we said we did not agree with the detail, it was a reference to the language and terminology that went above and beyond a legal ruling and judgment, but we saw through that to the facts and that is why we decided not to appeal.
I reiterate that I am not the kind of person who sneaks anything out. I have come to this House and answered every question. I set out the timetable. The matter had to go to the Court for a decision on Friday. The House was not sitting by the time I made the decision, so I put out a written statement. I hope that all hon. Members understand that it is better to get a decision right than to rush just to answer in a different way. Nothing was sneaked out.
Again, I reiterate the support the Government give and have said they will give to people with mental health conditions. The Prime Minister has made that a key issue that she wants to deal with, and she and I came to that decision to do so.
Alex Burghart (Brentwood and Ongar) (Con)
I strongly welcome the Secretary of State’s decision, which will benefit a lot of disabled people. We all know that DLA was a far worse benefit for people with mental health problems than PIP. Will my right hon. Friend confirm that, even before the ruling, far more disabled people were receiving PIP than had ever received DLA?
Frank Field (Birkenhead) (Lab)
I welcome the right hon. Lady to her place and I welcome her statement. Given the size of the task before her, with up to 220,000 people affected, may I again press her to give some sort of timetable for meeting that objective? Might she start by writing to the oldest claimants first, and might she put a monthly report in the House of Commons Library on progress to that end?
Philip Davies (Shipley) (Con)
I very much support the Secretary of State’s decision, and I am sure that she is delighted that the Opposition parties called for an urgent question so that they could tell her how much they support her decision on the court case. Or at least I think that is what they were saying. I also very much welcome the fact that we are now spending far more money on people with disabilities than the last Labour Government did, which probably explains the anger with which the shadow Secretary of State gave her performance. Will my right hon. Friend look at measures to try to get the decision making on PIP right first time? In too many cases, the right decision is not made the first time, and I hope that she will look at that urgently, and early in her time in office.
Ms McVey
I thank my hon. Friend the Member for his comments. He always likes to see things in his own inimitable way, and he is quite right. Both sides of the House are meant to be supporting this decision, but listening to the tone and the noises coming from the Opposition Benches, it is difficult to believe that. He makes a fair point about getting the decisions right first time and helping the decision makers to get it right. There was an independent review—the Gray review—and we will be taking its advice on board.
Ruth George (High Peak) (Lab)
I, too, welcome the right hon. Lady to her post. I also welcome the decision that she has made. Bearing in mind the fact that many disability benefit claimants with mental health issues struggle to get out of the house, does she share my concern and that of the Work and Pensions Committee about the great discrepancies between contractors and between regions? There are discrepancies relating to the number of people being allowed a home visit for their benefits assessments. Will she please review this, to ensure that those people can get the benefits they deserve and not be sanctioned because they cannot leave their house?
Ms McVey
The hon. Lady has raised a good point about how some people are visited while others have to go in for assessment and support. That was part of the freedoms of contracting, so that we could get best practice. Were some people better seen at home? Were other people better seen in their local community? We constantly gauge and value that, and we will continue to do so.
Justin Tomlinson (North Swindon) (Con)
Building on this very positive announcement, we all need to do more to support people with mental health conditions, and one of the biggest challenges is identifying people with those conditions. The PIP process can play a crucial role in that. Will the Secretary of State therefore bring forward plans to enable us to signpost those identified for the additional targeted support that is available across all parts of the Government, so that they can get the maximum amount of help?
Steve McCabe (Birmingham, Selly Oak) (Lab)
How many staff in the Department for Work and Pensions will be directly deployed on the rectification process? I ask because the evidence is that the number of staff in the DWP used to complete any kind of task involving a complaint or a rectification is directly relevant to how long it takes them to complete the process.
Sir Desmond Swayne (New Forest West) (Con)
As for the comments from the United Nations, how do the figures that my right hon. Friend has given compare internationally?
Ms McVey
My right hon. Friend raises another good point. The UK is one of the most generous countries in the world when it comes to supporting its disabled people. In the G7, only Germany spends more. We spend what is deemed appropriate and available, which is more than £50 billion. I reiterate that we are one of the most generous countries in the world.
Ben Lake (Ceredigion) (PC)
Vulnerable people with severe mental health problems in my constituency have had to resort to a distressing appeals process in order to secure the support they are entitled to. This is wholly inappropriate. Pursuant to the answer that the Secretary of State gave to the hon. Member for Shipley (Philip Davies), may I ask when we can expect to see some progress from her Department to ensure that individuals are assessed for psychological conditions by mental health clinicians in the first instance?
Richard Drax (South Dorset) (Con)
I welcome my right hon. Friend to her place. We are all right behind her, whatever some people might say. From my experience as an MP in South Dorset, I suspect that the main problem relating to people slipping through the net is the lack of home visits. I agree with the hon. Member for High Peak (Ruth George) on this point. I suspect that such visits are more expensive, but I think that they would save money in the longer term because the assessment would be more accurate. Will my right hon. Friend look into this, to ensure that we hit the targets smack on, first time?
Chris Stephens (Glasgow South West) (SNP)
We on the DWP Select Committee heard some alarming evidence and unconvincing answers from contractors about the number of staff who had specialist knowledge of mental health. Can the Secretary of State confirm that she will take this up with the contractors and carry out a review of the assessment process?
Ms McVey
I have indeed got a date in the diary to be on a PIP decision-making process. I met the contractors last week. I had obviously done that when I was last in the House, but I need to be updated to see exactly what is going on. I have had meetings on this, but the hon. Gentleman is right to suggest that there is nothing quite like going through the process myself.
Mary Robinson (Cheadle) (Con)
I am grateful to the Secretary of State for her statement. I recently visited my local jobcentre in Stockport and met the great work coaches there who are doing so much to help people back into work. Will she join me in congratulating them, and perhaps explain how this is going to help us in our quest to help a further 1 million people into work?
Ms McVey
My hon. Friend and neighbour rightly acknowledges the work that the work coaches do in her constituency and right across the country. The aim of the Government in carrying out this transformation was to get a tailor-made benefit service, whether through PIP or universal credit, so that the work coaches know who they are dealing with and therefore how they can help and support them in the best possible ways. The Government should be proud of what they are aiming to do.
Stephen Timms (East Ham) (Lab)
This was an ill-advised attempt to reduce the amount of benefit payable to people with mental health problems, and I am glad that it has been abandoned. Will the Secretary of State take steps to ensure that, in future, her Department complies with its obligations under the Equality Act 2010?
Ms McVey
The right hon. Gentleman is very knowledgeable on this subject, and we spent hours debating these issues across the Dispatch Box when I was last in the House. He knows as well as I do that we always aim to fulfil all obligations. If we do not, this is what happens: we get a court case and we have to deal with the consequences. I hope that I have dealt with them correctly today and received support across the House. I will not be seeking leave to appeal, and that is right on this occasion.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
I, too, warmly welcome the Secretary of State to her post. I am visiting my local jobcentre in Poole on Friday, so will the Secretary of State set out how our new jobcentres will support my constituents and others across the country with mental health challenges into work?
Ms McVey
As I said to my hon. Friend the Member for Cheadle (Mary Robinson), this is about tailor-made and flexible support. We are putting in place more training so that people understand mental health conditions, and we are giving our work coaches and mental health assistants as much support as possible. As I say, this is about tailor-made and flexible support.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Secretary of State talks about the unnecessary vilification of her policies, but her Government were responsible for the vilification of so many mentally disabled people by presenting them as applying for benefits to which they were not entitled. I have seen the misery that such decisions caused many of my constituents, including those suffering from post-traumatic stress disorder as a consequence of sexual abuse. Will the Secretary of State now confirm the maximum amount of time that they will have to wait to have their cases reviewed?
Ms McVey
It is unfortunate when Opposition Members try to ratchet up the level of emotion in the Chamber, especially when the situation is as emotional as it is. Nobody has ever sought to vilify anyone, and we should get it on the record now that this is not about vilifying anybody—it is about the giving the right support to those who need it. Surely all of us want to focus resources and money on the most disabled people and on the disabled people who need that money. I hope that I can end on that note. The facts speak for themselves: we have spent more than Labour ever did.
Johnny Mercer (Plymouth, Moor View) (Con)
I welcome the Secretary of State’s decision. Does she agree that it is simply nonsense to suggest that the Government are not interested in this agenda? More money is going into the programme than ever. The life chances agenda, which has significantly challenged the welfare state that previously kept a lot of people out of work, is fundamentally changing our country, including communities such as Plymouth, for the better.
Ms McVey
My hon. Friend hits on an important point. The Conservative party and the law that it is bringing in are all about life chances. That is how we view the world. Social mobility, life chances, a foot on the ladder and a career ladder are what we aim to provide all the time.
This will sound like a bit of an advert, but I want to highlight the fact that the Minister for Disabled People holds PIP sessions that all MPs can attend. If anybody has anything that they want to bring to her, they can go to one of those sessions. The sessions take place regularly, and she is holding one today.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
What we are hearing about today is a court judgment that found the Government’s policy wanting, but the Secretary of State has come to the House seeking plaudits for now not appealing that decision, and that is frankly unacceptable. While it is right for those who were not given the help and support that they needed to get a backdated payment, that payment does not remedy the trauma that they faced during the years when they did not have support. Will the Secretary of State offer an unequivocal apology from the Dispatch Box for the consequences of her Department’s policy? Whether intended or not, it was her Government’s decision that led to people struggling at home, and that is simply not right.
Ms McVey
That was another reason for making a written statement, as well as the time constraints and what we had to do to adhere to the legal ruling. I have not come here today for plaudits. I have come here to do what is right and to explain what is right. That is what I have done, and that is the key thing for all our constituents and the people who are watching this closely at home. We have made a decision. I believe that it has been accepted on both sides of the House, and we are going to get things right.
Peter Heaton-Jones (North Devon) (Con)
I warmly welcome this decision, and it is worth noting that this new Secretary of State made it after only eight working days in her role, which represents a decisive course of action. Is it not the case that the entire focus of the Department, which I know well, is on ensuring that those with mental disabilities and challenges have opportunities to access the workplace and lead independent lives? In making this decision, the Secretary of State has shown that that is her focus.
Jim Shannon (Strangford) (DUP)
I thank the hon. Member for Glenrothes (Peter Grant) for securing this urgent question, but I also thank the Secretary of State for her response and promise of action. In my office, transfers from DLA to PIP occupy a large proportion of my staff’s time. For people with severe anxiety, depression and emotional and mental health issues, some of whom are suicidal, the system has pushed them to the very edge, even when there has been copious evidence and information from consultants, GPs and family members. I ask that the staff who process applications do so with more knowledge, more understanding and certainly more compassion.
Michael Fabricant (Lichfield) (Con)
The shadow Secretary of State said that she was gobsmacked by my right hon. Friend’s response. I am gobsmacked by the vilification of my right hon. Friend on social media and by the threats from Opposition Members to string her up, which are more unacceptable. Just for clarification, will she let the House know precisely by how much disability payments have risen since this Government came to power?
Ms McVey
I am glad that “gobsmacked” has become part of the language of the House. My hon. Friend is gobsmacked, but I was obviously greatly dismayed by the comments from the Opposition and by the personal attacks that I have suffered. However, I know that people make personal attacks only when they do not have workable policies to put forward, so that shows that the Opposition have no workable policies. We do not need to link politics with violence.
In answer to my hon. Friend’s question, the increase has been £4.2 billion.
Stephen Lloyd (Eastbourne) (LD)
I thank you, Mr Speaker, for allowing this urgent question, and I also thank the hon. Member for Glenrothes (Peter Grant) for requesting it. The Government have decided not to appeal only now, after putting many claimants with mental health problems through a year of hell. Does the Secretary of State really believe that that was a kind or fair way of treating people with mental health issues?
Ms McVey
This is a key issue for the Government. The Prime Minister has made supporting people with mental health issues a key pledge, and we have put in an extra £11 billion. Coming to the House with this decision is a step in the right direction towards helping people as best we can.
Tom Pursglove (Corby) (Con)
I welcome my right hon. Friend’s appointment, and my constituents, including those who come to my weekly advice surgeries, will welcome her announcement. Will she update the House on what steps are being taken to disseminate information about what all this means to local advice services so that they can best advise their clients about the next steps and the way forward?
Ms McVey
I thank my hon. Friend, because the point really is about the practicalities of getting this right. It is about engaging with stakeholders and charities. It is about working with our Department to get this right. Mind has welcomed the decision, as have other charities, and it is working with us. Once we have worked through that, obviously we will disseminate it through the whole system.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
The Secretary of State says that the Department will now be identifying the 164,000 disabled people who were wrongly denied the help to which they are entitled. Her Department also recently announced it is scrapping a target it previously denied existed—that of upholding 80% of initial decisions. When will the DWP be contacting the 83,000 disabled people who were potentially wrongly denied help under that equally dodgy practice?
Mr Philip Hollobone (Kettering) (Con)
I welcome my right hon. Friend to her post and congratulate her on her response to the urgent question. My constituents in Kettering would like to know whether there are more or fewer disabled people in work in 2018 than in 2010.
Ms McVey
There are considerably more people with disabilities in work than ever before, and particularly more than in 2010. That is true not just for people with disabilities but for all sorts of people, including young people and women. This Government have fundamentally achieved what we set out to do on life chances, social mobility and opportunities.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
I refer the House to my entry in the Register of Members’ Financial Interests. I welcome both the judgment and the response. However, this process has been extremely stressful for my constituents, many of whom have been plunged into poverty and absolute despair, with their mental health problems exacerbated along the way. What will the Secretary of State do to ensure that cognisance is taken of the opinion of professionals such as psychiatrists, who know what people are capable of doing and what support they need? How will she ensure that any further process does not add additional stress to those who have already been affected?
Ms McVey
As I have said in reply to many questions, we are actively recruiting more people, and we are doing more training on mental health conditions with our caseworkers. We have to make sure that we understand the judgment and that we work with partners to make sure that we can help people who come forward. I have heard the hon. Lady and, again, I would be happy to meet her if she would like to speak to me about anyone in particular.
Paul Scully (Sutton and Cheam) (Con)
It must be through gritted teeth that the Opposition have to rely on citing the views on human rights of Saudi Arabian, Russian and Chinese members of the UN Committee on the Rights of Persons with Disabilities. Meanwhile, Conservative Members do not want bluster; they want action and support. Will my right hon. Friend confirm the proportion of PIP recipients with mental health conditions who receive the higher rate of benefit compared with the figure under the DLA regime it replaced?
Ms McVey
I reiterate that 66% of PIP recipients with mental health conditions got the enhanced rate of the daily living component in October 2017, compared with 22% who were on the highest rate of the DLA care component in May 2013. Some 31% of PIP recipients with mental health conditions got the enhanced rate of the mobility component in October 2017, compared with 10% who received the higher rate of the DLA mobility component in May 2013. I hope that that is clear.
Chris Ruane (Vale of Clwyd) (Lab)
Two hundred sufferers of motor neurone disease have been interviewed by the Department in the past 18 months alone. In addition to their physical disability, many will have mental ill health, which is increased by the stress and anxiety of the interviews. Some MND sufferers die within a year of diagnosis. Will the Secretary of State prioritise this group of sufferers when reviewing those cases?
Julian Knight
Thank you, Mr Speaker. I had a one-in-two chance.
I warmly welcome my right hon. Friend the Secretary of State to her place and welcome her talk of engagement. Will she commit to providing specific guidance to MPs’ offices and council contact centres at the earliest possible opportunity?
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Many disabled people in the highlands, particularly those with mental health conditions, are often refused PIP appeals, despite overwhelming evidence from their doctors. Does the Secretary of State agree it is wrong and discriminary—[Interruption.] Does she agree it is wrong—[Laughter]—to accept a private company’s decision over that of highly trained medical professionals who know their patients, and their conditions, well?
Jeremy Quin
And finally, Mr Speaker.
Will my right hon. Friend confirm that PIP claimants, including those who will benefit from her decision, which I warmly welcome, will not be subject to the benefit cap in respect of these payments, and that payments will continue to be untaxed and, indeed, will rise by the rate of inflation?