Welfare Reform Bill

George Hollingbery Excerpts

Wednesday 9th March 2011 Commons Chamber

[Mr Byrne]

That is deeply concerning, and I will dwell on it in a moment.

[George Hollingbery (Meon Valley) (Con)]

The right hon. Gentleman makes a persuasive case on the detail—clearly a lot of it remains to be found, but this is a confusing and complex matter. Will he admit that the current system is unsustainably complicated? There are 8,600 pages of guidance on benefits administration at the DWP and 2,000 pages for local government, and there are 30 different benefits to administer. Change is required. If we have a framework and consult widely, we will have a better system.

[Mr Byrne]

The Opposition want welfare reform that sticks. When so many details are unclear, the danger is that the Bill will unravel progressively as it comes into effect.

We have discussed whether the Bill passes the test of fostering ambition for families and have shown that a great number of questions remain unanswered. Let us now consider savers. All hon. Members want to nurture the ambition to save. The amount that people must save for a deposit for a house is heaven knows how much, but now that tuition fees have been trebled, more families have to save harder to get their young people into college. One might have thought, therefore, that the Government would provide more incentives to foster the ambition to save, but the noble Lord Freud told the House of Lords that

“the £16,000 savings threshold would extend to all households eligible for universal credit.”—[Official Report, House of Lords, 15 December 2010; Vol. 723, c. WA204.]

There we have it. The Government are so keen to foster the ambition to save that once someone has £16,000 in the bank—the price of two and a half years at university—their tax and in-work benefits are taken away.

--- Later in debate ---

[George Hollingbery (Meon Valley) (Con)]

I pay tribute to my hon. Friend the Member for Wolverhampton South West (Paul Uppal), who made a compelling speech. My contribution is likely to be more technocratic, but I pay tribute to his eloquence.

I pay tribute, too, to the Opposition, who have a real passion for this subject and, Government Members will all acknowledge, are more likely to represent constituents who are subject to the vagaries and whims of the benefits system. We must encourage them, however, to accept that our ministerial team cares equally deeply about this complex, difficult and challenging issue. It has introduced a broad skeleton of proposals on which to hang the detail. In my conversations with Ministers, it has been quite clear that they know that that detail is missing at this stage. Indeed, the Secretary of State has made it plain that there is more work to be done on particular areas, but change is certainly required.

There are more than 30 different benefits out there that can be claimed. There are 14 manuals in the Department for Work and Pensions, with 8,690 pages of instructions for officials. There is a separate set of four volumes for local government, with 1,200 pages covering housing and council tax benefits alone. That is an astonishingly byzantine system. One of my constituents, Nigel Oakland, wrote to me:

“Nobody at the Jobcentre Plus can explain if it is beneficial if I continue to sign on. The last advice I was given is that I should Google the question.”

In such a situation, where even the experts at Jobcentre Plus cannot answer the questions that arise, we are clearly in difficulty.

It is confusing for clients. There is a 30-page form for housing and council tax benefit, including three pages of declarations. Employment and support allowance requires a 52-page form; jobseeker’s allowance, 12 online sections, each of five to 10 pages long; and disability living allowance, a 60-page form. Is it any wonder that people become confused and fill in the forms incorrectly and make mistakes? The system is extraordinarily expensive to administer. The DWP spent £2 billion last year administering working-age benefits, and local authorities a further £l billion administering housing benefit and council tax benefit. Even the tiny citizens advice bureau in Bishop’s Waltham, a town of 5,000 people in a rural and relatively affluent part of Hampshire, processed 2,176 queries about benefits in 2009-10, advising people how to claim them.

As we have heard from my hon. Friend the Member for Kingswood (Chris Skidmore), overpayments are rife, and I do not intend to rehearse the clear disincentives to finding work imposed by the benefits system, as that has been covered in some detail by the Secretary of State and my hon. Friend the Member for Bexleyheath and Crayford (Mr Evennett). There is absolutely no doubt that with some work having a marginal rate of tax of 95%, there are powerful disincentives that prevent people from going out to work. The taper in the universal credit of 65% at least allows some certainty, so that every time someone goes out to work they can be sure that they will earn a reasonable amount and get a reasonable amount in their pocket.

The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) discussed the difficulties for self-employed people in the new system. Only yesterday, I asked my right hon. Friend the Minister of State how that would be administered outside the PAYE system. He had a clear answer, and said that there would be mechanisms in place. In the present situation, my constituent Zehra Peermohamed wrote:

“For every £50 extra per week my new business may generate”—

a business that she started up herself—

“I would only gain an extra £4.81 of it to add to my overall income…It seems that there is little incentive for people in my situation who want to better themselves and not to rely on the benefit system.”

Whatever objections the shadow Secretary of State might have now, the existing situation is certainly no better.

Gemma Sword, a single mother with a child who has turned seven, says:

“In March…I started working part time 4 hours weekly over 3 days earning £96 monthly of which I was allowed to retain £80.”

From 15 November, she earned up to £150. Ms Sword continues:

“I was then transferred to Job Seekers allowance as my son turned 7 and was told that I can now only keep £20 of my monthly earnings”,

which did not even make it worth travelling to work. She was then told that she had to look for full-time employment but, to do so, had to leave her part-time employment. Those rules make no sense to anybody who looks at them carefully, and there is no doubt in my mind that there are powerful disincentives in the system to stop people going out and bettering themselves by finding work.

I do not want to spend a large amount of time examining the issue now, but we need sticks as well as carrots. There needs to be an understanding in the system that if someone does not perform as the system requires them to do in looking for work, they will pay a penalty in terms of the benefits to which they are entitled. Without that part of the mix, the new universal credit will not work.

I would love to examine in more detail the Work programme and its localisation, because the Communities and Local Government Committee has heard evidence that localisation will be peripheral. I would like to hear about the migration from disability living allowance to the personal independence payment, and in particular about the mobility component. I have talked to the Under-Secretary about that at some length and received considerable reassurances, for which I thank her. I would like more on the work capability assessment, the Harrington review of it and the ongoing review continually to refine that system and make it fairer and more equitable; and I also want to hear a little more at some stage and, particularly, in Committee about the appeals process and the proposed changes to it.

On the whole, however, this is a thorny, knotty problem, which the Government are grasping with some alacrity, and I for one will certainly vote for the Bill’s Second Reading.