(5 years, 1 month ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
It is a pleasure to serve under your chairmanship, Ms Buck. I congratulate my hon. Friend the Member for Ogmore (Chris Elmore) on securing this afternoon’s debate, and thank him for the case that he has outlined.
As we have heard, pension credit is not working. Over £200 million of pension credit is not reaching older people in Wales each year, including almost £6 million that is not reaching people in my constituency. As many as 80,000 people in Wales, and over 1 million in total across the UK, are currently missing out. The financial support that pension credit provides would be a life-changing event to a great number of those people, who are finding it harder and harder to get by due to years of Tory austerity. That is certainly the case in constituencies such as mine in the south Wales valleys, where it can often be easy for geographic isolation to cause older people to suffer from loneliness and poor mental health. Pension credit can enable people suffering from loneliness or isolation to take part in a range of social activities they would not otherwise be able to, not to mention make shopping and other bills affordable.
I also want to mention free TV licences for the over-75s. Following the Government’s cruel decision to offload responsibility for that concession to the BBC, there is a policy to means-test pensioners’ eligibility for free TV licences through pension credit. That is not a suitable test, since the current take-up of that benefit is so low. Not only will about 3,220 pensioner households in my constituency and many thousands more across the UK continue to miss out on that essential benefit, but they will now be hit by a bill of over £150 for a TV licence.
As my hon. Friend the Member for Ogmore said, almost 2 million older people in the UK are living in poverty. It is shocking that more than two in five pensioner households are not receiving the pension credit to which they are entitled, an average of £49 per week. That money would make a huge difference to some of the poorest people in my constituency, across Wales and across the UK. Those pensioners have paid into the system their entire working life, but that very system is now letting them down.
The Government must now act to improve the take-up of pension credit and launch a campaign to create wider awareness of it, in order to lift pensioners out of poverty and give them the quality of life that they deserve. I plead with the Minister to consider the real and grave concerns that have been raised during today’s debate, and come forward with answers, not words, to address an injustice that is causing hardship to those who can least afford it.
(5 years, 1 month ago)
Commons ChamberThat is largely correct. The only issue here is about the evidence that people now have to supply which they did not have to supply before. I know that there are a number of places where people were able to claim benefits and they now no longer qualify for universal credit. We are looking at those individually to see whether it is an issue with their application for settled status or something else.
In answer to the first part of the hon. Gentleman’s question, which is about assistance in getting the applications through, we announced in April this year the help-to-claim arrangements so that applicants who are struggling to apply for universal credit can have the additional support they need from citizens advice bureaux. I hope that he will find that that is working well in his local bureau. On the second part about getting money to people earlier, as he will be aware, we have made advances available and we are extending the amount of time over which people have to repay it and the amount that is deducted from their core amounts so that they do not feel it as badly as they would have previously.
(5 years, 2 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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I beg to move,
That this House has considered the Hoover pension fund deficit.
It is a pleasure to serve under your chairmanship, Mr Robertson. We are here to discuss the Hoover pension fund deficit, which was once a surplus of more than £100 million. Hundreds of former longstanding Hoover employees from my constituency and the surrounding area have faced appalling cuts to their well earned retirement money, and they deserve justice.
Like other prosperous UK pension schemes in the 1980s, the 1987 Hoover pension scheme, with 7,500 members, had a large surplus, which totalled £123 million in 1986. Changes to the pension scheme, withdrawals from the fund by Hoover to cover its financial difficulties, payments to the Government required by a short-sighted surplus tax implemented by the then Tory Government, and financial difficulties posed by the global financial downturn have resulted in the surplus shifting to become an overwhelming deficit. At the last valuation, in March 2016, it stood at approximately £500 million on a buy-out basis, and approximately £300 million with the Pension Protection Fund.
Hoover had long been in talks with the Pensions Regulator and the PPF to offload the deficit pension scheme, which it could no longer support without risking the company’s insolvency and the loss of the remaining employees’ jobs. The pension scheme is now transferred over to the PPF, after a regulated apportionment arrangement was agreed with Hoover, along with a 33% share in the business for the scheme, and a £60 million lump sum payment.
When the pension scheme entered the PPF, all Hoover employees in it who were still working and/or under the scheme’s retirement age, stopped gaining benefits. The annual value of those employees’ pensions, when they retire, was capped at the level for the scheme’s retirement age, which is 65. Retired employees now receive 90% of either the actual annual value of their pension, or 90% of the pension level for their age, whichever is lower. Those who have already retired from Hoover and are older than the retirement age have not had a cap on their pensions, but only the part of their pension funds earned after 1997 will be index-linked with inflation, which means that people who worked all or most of their careers with Hoover before that date are losing income because of inflation.
As always, the hon. Gentleman is bringing an important issue to Westminster Hall. Does he agree that the fact that those still under retirement age could receive an immediate 10% cut in their pension pot, and that 7,500 members will be affected—5,319 pensioners and 2,184 who have deferred pensions—shows a need for the Government, and the Minister in particular, to step in and help not only those members but their families, who rely on the pension they paid into all their working lives?
I agree 100%. The hon. Gentleman outlines the fact that people yet to reach pension age will experience a 10% reduction, which will cause huge difficulty.
Unfortunately, the case of Hoover pensions is not an isolated one, and we have become used to hearing in recent months and years of cruel injustices suffered by former employees of British Coal, British Steel and BHS. The evidence also suggests that we are likely to see many more such cases in the future. Before I go into more detail, and pose questions for the Minister, I shall provide some background on the history of Hoover in Merthyr Tydfil and explain the financial background that has led to the unacceptable injustices that its former employees now face.
Hoover has been an important employer in Merthyr Tydfil and Rhymney for 71 years, since the Pentrebach factory was established in 1948 to make the well-known Hoover washing machine. Only about 300 people were employed at the factory when it opened, but over the following 20 years, because of product demand, the figure rose by the thousands. By the time of Hoover’s 25th anniversary in Merthyr in 1973, more than 5,000 people were employed at the site, all contributing to the company’s pension scheme. Counting the company’s Glasgow plant, Hoover’s British workforce once peaked at 16,500 people. At its peak, the Hoover factory was the largest employer in Merthyr Tydfil County Borough, providing much-needed employment opportunities for generations of local people formerly employed in the iron and coal industries for which Merthyr Tydfil is famous.
That proved to be the high point for the factory: in the 1990s, amid financial difficulties, Hoover was sold to the Italian manufacturer Candy, which over the next few years would decline to invest further in the company or its operations. Job cuts continued over the next 10 years and in 2009, 61 years after the factory opened, production stopped altogether. Since 2009, only 100 staff have remained employed at the Pentrebach factory, in the company’s warehousing, distribution and sales operations. However, in May 2019 Hoover took the decision to move 45 jobs from Pentrebach to its headquarters in Warrington, in a move to centralise its operations, leaving only 60 posts, primarily in distribution, at the Merthyr Tydfil site.
I want to give some background on how the company’s pension scheme arrived at the state it is in today. According to the Pensions Commission set up by the Labour Government in 2004, from 1974 until 2000 the average annual real return on UK equities was as high as 13%, with investments in pension schemes during that time allowing them to flourish and pension contribution rates to increase. However, by the early 1980s the Thatcher Government had become concerned that UK companies were using large contributions to their pension schemes to lower their liability for corporation tax during years of high profits. During that time of prosperous UK pension schemes, what the Conservative Government saw as surplus funds to be taxed in a period of high equity returns were, rather, risk barriers against years of low financial profit and the rising longevity of workforces, as well as a reserve for future workers’ pensions.
The Finance Act 1986, passed by the Tory Government, required companies’ pension funds to declare any surplus of 5% or more, and either remove it within five years or lose part of their tax-exempt status. Many companies made much lower pension contributions in the years after the 1986 Act came into law, but market returns during that time remained so positive that many companies still had large surpluses left in their pension funds. Various UK companies took pension contribution holidays or looked to make improvements to their pension schemes to eliminate the surplus. It was no different in the case of Hoover, which in 1986 looked to wind up the existing pension scheme and replace it with a new scheme with improved benefits for members.
At that time Hoover had 5,500 employees in the UK, half of whom were based in Merthyr Tydfil, and the company’s UK pension scheme had a surplus of approximately £123 million, as I have mentioned. It proposed to take £87 million from the surplus, of which £42 million would go towards improved pensions and £27 million to the company’s general fund, with £18 million to be taken by the Conservative Government under the Finance Act 1986. In 1993, Hoover moved £16.8 million from the surplus to its general fund. It denied that it was being used to cover the £20 million in losses that it suffered from its infamous “free flight” sales promotion—when it promised two free airline tickets to customers who purchased more than £100 worth of products—but said it was for the general financial stability of the company. Hoover accordingly paid £11.2 million in tax to the Government, again under the terms of the Finance Act 1986.
During the 1980s and 1990s, therefore, Hoover paid the Conservative Government a total of £29.2 million. As I have explained, the terms of the Finance Act 1986 were established based on the average annual return on UK equities being 13%, as it was between 1974 and 2000. The Pensions Commission reported a considerably lower long-term average of just over 5%. The Government were incredibly over-optimistic if they assumed that 13% returns could continue into the long term. That is another classic example of the short-sightedness of a Government who placed the employer first, ignoring the employee, thinking only of short-term gain and completely neglecting the long-term potential impact of a policy on hard-working people.
I want to highlight the case of one of my constituents who has had to bear the brunt of this mess: Mr Phillip Little. Mr Little worked at Hoover in Merthyr Tydfil for 35 years, working at several departments and in various jobs across the company over a long and dedicated career. When he took his pension at age 55, he faced an immediate loss of 47%, resulting from payment holidays and Government and company withdrawals from the scheme in previous years, following the Italian company Candy’s takeover of Hoover in the 1990s and its refusal to invest or contribute further to the company’s pension scheme. Now, with the Hoover pension scheme being transferred to the Pension Protection Fund, Mr Little has had to suffer a further 10% reduction in the value of his pension due to the rules and caps, meaning he has taken a hit of 57% in total, losing over half the total value of his pension.
I think we would all agree that nobody should have to make do with less than half the pension they rightfully earned from their decades of hard work. Having been looking forward to retirement after 35 years with the company, Mr Little is devastated, and feels as though, in his words, he has been “mugged” three times over by company withdrawals from the pension scheme, payments to the Government and latterly the scheme’s transfer to the PPF.
Mr Little is one of many hundreds of former long-standing Hoover employees in the Welsh valleys who have been told that the retirement money that they worked for decades to build up has had to take yet another cut and that there is nothing they can do about it. They have had to sit and watch as the company and Government take money from what was once a surplus fund and is now in hundreds of millions of pounds of debt, and their well-earned retirement has been taken away from them.
I ask the Minister how his Government can justify this legacy of the short-sighted and irresponsible actions of the 1980s Thatcher Government, which imposed the 1986 Act on hundreds of UK companies’ pension funds such as Hoover’s, thinking only of short-term gain. Will the Government now do what is right by the many hundreds of people, such as Phillip Little, who have seen their pensions hit over and over, and repay them with the money they took from the fund under that Finance Act, so that these hard-working people can have the retirement that they deserve and that they worked for decades to build?
In Labour’s 2017 manifesto, we committed to carrying out an immediate review of current pension surplus tax and sharing arrangements, since many of the people at companies across the UK affected by this, such as Hoover, British Coal and British Steel, do not have another private fund to fall back on. The Government must now follow suit. Will the Minister commit to at least reviewing these arrangements, and to giving justice to the many former Hoover employees in my constituency who have been robbed of the pensions they worked to build and on which, having left the workplace, they now depend?
I congratulate the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) on his speech, and the hon. Member for Strangford (Jim Shannon) on his intervention in this debate. It is a pleasure to serve under your chairmanship, Mr Robertson.
I accept entirely that this is a sensitive and important matter that the House should debate in the context of the long-term viability of defined-benefit schemes—a matter of concern to the House and to our individual constituents up and down the country. In this particular case, we are concerned with the constituents of the hon. Member for Merthyr Tydfil and Rhymney and the members of the Hoover pension scheme, who feel very strongly about this issue. I hope that I will be able to reassure hon. Members that the Pensions Regulator has done everything in its power to achieve the best possible outcome within the current legislative framework.
I will start with defined benefit generally, and make the simple point that the majority of defined-benefit pension schemes in this country are run effectively. We are fortunate to have a robust and flexible system of pension protection in the United Kingdom. The Pensions Regulator, which is based out of Brighton and is obviously independent of Government—although I meet with it on a regular basis—has a range of powers to protect pension schemes and works closely with all involved.
For schemes where the employer goes insolvent, the Pension Protection Fund is there to help to protect the members. Anybody already in receipt of their pension will continue to be paid and other members will receive at least Pension Protection Fund compensation levels. However, we are in the process of reviewing the defined-benefit system; the hon. Gentleman will be aware of the defined benefit White Paper issued a little while ago and the proposals put forward for a future private pensions Act, which we hope to bring forward in this House in due course.
In respect of the Pension Protection Fund itself, I want to ensure that hon. Members fully grasp that the Pensions Regulator has done everything in its power as an independent regulator to achieve the best possible outcome for scheme members. The employer, the Pensions Regulator and the Pension Protection Fund have considered different solutions to address the scheme’s funding deficit. On 31 March 2016, that deficit was approximately £500 million. Given that that funding deficit was putting the solvency of the company and its pension scheme members at risk, the Pensions Regulator intervened.
Turning to the Pensions Regulator’s intervention, on 30 May 2017 it approved a proposal by the 1987 Hoover pension scheme. The approved plan, known as a regulated apportionment arrangement, helped to secure the future for UK employees and gave protection to the pension scheme. The Pensions Regulator agreed to the regulated apportionment arrangement only after ensuring that Hoover had met its very strict criteria. The agreed arrangement between the company and the Pensions Regulator secured a £60 million payment from Hoover into the Pension Protection Fund in May 2019. That lump sum is significantly higher than what it would have received had Hoover fallen into insolvency. In addition, as part of that arrangement the pension scheme would also receive shares representing a 33% stake in Hoover.
That balanced approach addressed the need to protect scheme members’ pensions while preserving jobs in the sector and in the hon. Gentleman’s constituency—a matter that I know he is passionate about. The trustees of the scheme acknowledged that it secured a significantly better outcome for the pension scheme than it would have received through the normal insolvency process, and the best achievable solution for the pension scheme given the circumstances.
Matters proceeded, and I will address the protection for pension scheme members. The Hoover pension scheme left the Pension Protection Fund assessment period and transferred into the Pension Protection Fund itself in May 2019. The hon. Gentleman will be aware that the Pension Protection Fund is effectively an independent lifeboat. It is a fund established to provide a meaningful level of compensation to members of private sector occupational defined-benefit pension schemes who have lost their pension as a result of employer insolvency or impending insolvency.
Crucially, the Pension Protection Fund is funded by a levy on all other defined-benefit schemes. The framework under which the Pension Protection Fund operates means that favouring any one group will place a corresponding burden and risks on other levy payers and Pension Protection Fund members. I accept that the hon. Gentleman sought to persuade me that we should make radical change to the Pension Protection Fund as a whole, but he and I need to agree something: the previous Labour Government, who were in charge between 1997 and 2010, had opportunities to correct many things, and one of the corrections they made was the creation of the Pension Protection Fund.
We must have a very robust discussion that makes it clear that, were the Pension Protection Fund not in existence, the situation for any scheme member facing this situation would be considerably worse. The Pension Protection Fund, set up in 2005, has transformed the landscape for many people who would otherwise have been left desperately vulnerable and considerably impoverished. It pays a guaranteed level of compensation that was not previously available to pension scheme members in similar circumstances.
Pension Protection Fund compensation guarantees 100% protection to members who are over their scheme’s normal pension age at the date of the employer’s insolvency or to members under normal pension age who retired on ill-health grounds. All other scheme members are paid compensation based on 90% of their pension, subject to a cap.
The Pension Protection Fund is largely seen as a success across all Governments, with respect, and has received strong cross-party support. While the hon. Gentleman is clearly right to champion his constituents’ cause, it is right that the House should celebrate the fact that, without the Pension Protection Fund, things would be considerably worse. Setting it up was a success of the last Labour Government, and it has been endorsed and supported by all other Governments since.
I appreciate the Minister’s point about the Pension Protection Fund and how different the situation would have been had it not intervened. However, the central point I was trying to get across was whether there is any opportunity to review the position of surpluses taken under that Finance Act by a previous Conservative Government, maybe not to fully reinstate what the pensioners have lost but to go some way towards defraying some of the difficulties that pensioners now face, in my constituency and beyond.
I will answer that with three points. The first is slightly political but has to be made, given the way that the hon. Gentleman put his case. There was an opportunity between 1997 and 2010 to make such a reform if that Labour Government wished to.
However, perhaps it would be appropriate to explain why we got into this situation. Clearly, this is a tax issue. The hon. Gentleman will understand that I am answering on behalf of the Department for Work and Pensions, but I will endeavour to do my best impersonation of Her Majesty’s Treasury and address this. The Treasury’s view is that the Finance Act 1986 addressed what were then considered to be excessive pension scheme surpluses, as there was an absence of clear rules on how surpluses should be dealt with. Pension schemes with funding in excess of a certain amount could reduce certain surpluses in a number of ways, including by suspending employer or employee contributions, making taxable payments back to the employer, improving member benefits or providing new benefits to members.
It was entirely a matter for the trustees and employers to decide which method of reducing the surplus to use. If, and only if, they chose to make a refund, the employer was liable to tax at 40% of the amount refunded, so as broadly to recover the tax relief previously given. Those laws on pension scheme surpluses were repealed in 2006, with the introduction of a new pensions tax regime. As to whether the Government can commit to reviewing the terms of the Act and possibly returning the money to the schemes, Her Majesty’s Treasury is clear that it is right and fair that everyone, whether individuals or businesses, must pay the tax that is due.
Before 1986, some employers could use surpluses as a way to avoid tax. They could pay contributions into the pension scheme and receive tax relief, then apply for a return of a surplus. There were no provisions for tax repayments on the return of a surplus. The 40% tax on a return of surplus was introduced in 1986 so as to broadly recover the tax relief previously given. It was not mandatory to return the surplus; a company could instead have a contribution holiday or improve member benefits.
To answer the hon. Gentleman’s point, it is not Her Majesty’s Treasury’s present intention to reform or reinstate anything relating to the situation under the Finance Act 1986, as he sought to persuade me to do. However, I will briefly explain the changes to improve scheme funding. The Pensions Regulator can track pension scheme funding and will react appropriately when there is a large funding deficit. The scheme funding measures proposed in our White Paper will ensure that trustees put in place a more robust plan to ensure that the statutory funding objective is achieved. We intend to use new and existing powers to be clearer in legislation about what is an appropriate length for the recovery plan when there is a funding deficit.
We will take steps to require trustees to explain to the Pensions Regulator their funding and investment strategy, how they intend to mitigate risks to the scheme funding position and how they are complying with funding standards in legislation. The changes are intended to support trustees in their decision making and to strengthen the Pension Regulator’s enforcement regime, to protect members, sponsors and the Pension Protection Fund from future shocks or events such as these. The system will retain some flexibility to ensure that sponsoring employers can balance their obligations to the pension schemes with business needs. The reality is that the Pension Protection Fund is a significant organisation with more than £30 billion of assets and responsibility for more than 236,000 pension scheme members, more than half of whom are current pensioners. It is able to cope with these schemes.
However, the hon. Gentleman and the hon. Member for Strangford, who has now left the Chamber, made points in respect of other cases, including British Coal, British Steel, BHS and others. I will return to those before I finish, because while the constituents of the hon. Member for Merthyr Tydfil and Rhymney would like to receive 100% of whatever they thought they were going to receive—no one disputes that—without the changes that successive Governments have brought in, their position would be considerably worse.
The reality of the situations that the hon. Gentleman outlined is that the difficulties that those companies have got into have been addressed, by and large—there have been some tweaks or changes to the way they have been treated, particularly in respect of British Steel—by the Pension Protection Fund stepping in, by way of introducing a levy on the defined-benefit schemes out there and ensuring that a substantial payment is made from a pension that otherwise would have been lost under the old law. That has been addressed by successive Governments. Clearly this is a matter of great import to his constituents, and I thank him for bringing it to the House. I hope I have addressed some of the points raised.
Question put and agreed to.
(5 years, 2 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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It is a pleasure to serve under your chairmanship, Sir Henry. I congratulate my hon. Friend the Member for High Peak (Ruth George) on securing the debate.
There is an argument for a simplified benefit system, but what we know of universal credit is that it has led to many cases where people are trapped in further poverty owing to the way the system is administered. In its current form, it is causing too much hardship and stress. Every week my constituency office, like many others, supports local people who have been placed in difficult situations. I also work closely with the citizens advice bureau, providing support jointly to constituents in need of advice and support. According to my local citizens advice bureau, the issue of universal credit was raised with it on 1,882 occasions last year. I think that that highlights the scale of the need.
I want to mention advance payments. Because of the wait before people get their first payment, many fall into debt. People clearly need the advance in the initial period, as they have no money to live. However, the repayments are often too high and that leads to continuing debt problems, which cause anxiety and stress. There is much confusion about the repayment period for advance payments. In my constituency, although the maximum period is 12 months, I have heard of cases where repayment is expected within three months. Again, that causes further debt, anxiety and stress. Claimants have a choice of repayment period up to a maximum of 12 months, and up to 40% of their claim.
As we have heard this afternoon, the Government are planning changes to the repayment period, which will be a maximum of 16 months, with deductions of no more than 30% of the claim. Those changes are in the right direction, but they do not go far enough. We have heard more today about looking at other debts, and that is an avenue that it is important to explore. The disappointing thing is that we have to wait until the end of the year for the changes to take effect.
I ask the Minister to give us clarity about the changes and to make them a lot sooner. People need help now, because they are in debt now. They are using food banks more than ever. Will the Minister and the Government take note and take action as soon as possible?
(5 years, 3 months ago)
Commons ChamberUrgent 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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I do not recognise that point. As a Government, we are spending £5 billion more a year on supporting people with disabilities and long-term health conditions through the main disability benefits. We are rightly targeting support at those most in need in society. Through universal credit, that is coupled with a personalised, tailored and bespoke service.
The loss of the severe disability premium continues to cause hardship to people in my constituency and throughout the country. In some cases, it has forced people into rent arrears and extreme poverty. What are the Minister and the Department doing specifically to support people in those situations?
Through the universal credit system, for the first time, they will have a named work coach who can help them to navigate not only any individual challenges that they face, but the additional support that they can get. Rightly, we are making sure that the most vulnerable people in society get both the financial support and the time from their named work coach to make sure that they are in their best position.
(6 years, 3 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
I remind hon. Members that the debate is now scheduled to finish at 4.45 pm. I call Gerald Jones to move the motion.
I beg to move,
That this House has considered the proposed closure of DWP offices in Merthyr Tydfil.
It is a pleasure to serve under your chairmanship, Mr McCabe. Early in 2017, the Department for Work and Pensions announced that it intended to close many of its offices, sites and jobcentres across the UK. About 250 staff work in the DWP office in Merthyr Tydfil town centre, and they clearly make a contribution to spending in the community and our town centre. The office is well established and is close to the town centre, so our local economy would really notice the loss of this large workplace.
I have a very similar situation in Cwmbran town centre, as Cwmbran pension centre makes that type of contribution. Does my hon. Friend agree that it is economically illiterate to take such jobs out of local economies across the valleys?
I thank my hon. Friend for that intervention. I agree with his point, and will comment on that further in the course of my contribution.
Job opportunities for local people would be limited if the DWP pulls out of Merthyr Tydfil. Such a proposal goes against what I believe the Government should be doing: helping to support local communities, the local economy and local jobs. The proposed move could mean services being more difficult to access for claimants and hundreds of jobs being moved out of deprived communities, where every job counts. In 2008, the Welsh Government moved several of their Departments out of Cardiff and located one of their regional offices in Merthyr Tydfil, bringing secure jobs to the town and supporting the local economy. The UK Government would do well to follow the Welsh Government’s example in that and, if I may say, many other areas.
If the closure goes ahead, the potential loss of jobs and incomes in the town would have a huge impact on Merthyr Tydfil and the surrounding communities across the heads of the valleys.
A number of towns throughout south Wales will be affected similarly to Merthyr Tydfil. I refer in particular to Caerphilly, where the local authority has told me that retailers and businesses will be hit badly if the DWP moves its office out of Caerphilly to Treforest.
I agree with my hon. Friend. His point, similar to that made by other colleagues, highlights the fact that many towns across the south Wales valleys are in a similar position. Their local economies are supported by such jobs, and any move to remove them would be detrimental.
My hon. Friend talks about the valleys. Does he agree that Newport is also affected? We are very proud of the civil service jobs we have in Newport; there are hundreds at Sovereign House, the DWP office. Does my hon. Friend agree that in a drive to centralise, the Government are overlooking the importance of local jobs and local expertise from local people? That would be lost, given the travel difficulties that people are experiencing getting to Treforest.
My hon. Friend makes a valuable point. I see Newport as part of the south Wales economic area. Job losses in that community would have a similar effect there as they do in other areas across south Wales.
To highlight the point made by my hon. Friend the Member for Newport East (Jessica Morden), I have constituents who commute to Sovereign House in Newport who will now face disrupted travel from having to go so much further to Treforest, rather than down the road to Newport.
Again, my hon. Friend makes an interesting point. I will come on to some of the travel pressures that I have recently experienced myself.
As I said, the closure would have an impact on the surrounding communities across the heads of the valleys —an area trying its best to regenerate itself amid ongoing austerity pressures, which have created a difficult financial situation for our area.
I congratulate my hon. Friend on securing this important debate. In my constituency, in Gabalfa, the DWP office is set to close. Does he agree that such job losses take away something very valuable from our local communities? There is a lack of understanding from the Government of the transport challenges that will be faced by my constituents and many other people across the south Wales valleys.
The geography of south Wales is quite unique and people have to navigate the transport difficulties to which my hon. Friends have alluded on a daily basis. There are huge difficulties in access across valleys and from parts of south Wales to others and the transport links need to be addressed.
If the closures go ahead, they will decimate the economies of town centres across south-east Wales—town centres that are already struggling to cope. The DWP is planning to relocate staff to a site that, until last week, was known only as “north of Cardiff”. Last week, we had confirmation that it has signed a lease for a site on Treforest industrial estate. It was probably the worst-kept secret, but anyway it has now been confirmed.
In January, I and my Welsh Assembly colleague, Dawn Bowden AM, along with members of the PCS union, undertook an early morning journey on public transport to the proposed new site. It proved that to get to the new location by public transport will, for some existing employees, involve travel by train and bus, and walking a distance through a poorly lit industrial estate, which will undoubtedly be a major challenge in the winter months. The journey took all of two hours.
The site has poor access from the nearest train station along a narrow road with no pavement and my understanding is that it will have 1,700 full-time equivalent roles, but initial observations show that the car parking provision would be limited. There is a clear expectation that members of staff will travel by public transport, but it is also clear that many would find it extremely difficult to make that daily journey by public transport. Some members of staff already commute long distances to get to their workplace in Merthyr Tydfil as a result of previous DWP workforce reorganisations. Having to travel even further would, in many cases, cause hardship.
The construction of a brand-new building with a view to lowering costs seems a little confused. In many communities across south-east Wales, there is an opportunity to look at existing buildings, which would undoubtedly have a competitive financial case and retain jobs and viable office space in town centres. Alternatively, if a large employer such as the DWP pulls out of town centres, buildings such as the former tax office in Merthyr Tydfil, which closed nearly a decade ago, will remain empty and become dilapidated over time, often becoming a blight on the local community and impacting heavily on the wider public purse in the medium to long term.
UK Government offices are currently based in a number of towns in south Wales, supporting local jobs and economies. I am bound to highlight the opportunities that exist in Merthyr Tydfil. The option of retaining current jobs and having an enhanced presence is more than worthy of consideration. The current DWP office in Merthyr Tydfil is well-established and the staff turnover rate is low. Many employees have worked in that location for a long time and are committed to providing a good service to the public, and the local jobs market means that vacancies in Merthyr Tydfil are filled quickly and applicants remain in jobs. The DWP office is modern and has space for additional staff. Traffic congestion coming into Merthyr Tydfil at peak times is minimal in comparison with larger towns and cities and would mean that staff and customers would gain easy access, whether for employment or accessing the service.
I hope the Minister will comment on the concerns I have raised. Has the DWP yet undertaken an equality impact assessment regarding members of staff? DWP announced the proposed closure of Merthyr Tydfil benefit centre along with others in the south Wales area, yet, to date, local, district and senior managers state that equality impact assessments have not been completed or even commissioned. I received a letter in July last year from the then Minister for Employment, stating that an equality analysis was due to take place, so I would be extremely disappointed and annoyed if, after nearly 12 months, that had not happened. I cannot understand how the decision to close a site that provides quality jobs in such a deprived area of south Wales can be made without an equality impact assessment being carried out and its findings being considered. Surely carrying out an impact assessment on such a move is an essential first step.
An announcement was recently made that staff on fixed-term appointments in Merthyr Tydfil benefits centre will not have their contracts renewed, meaning that there will be at least 40 fewer staff by the end of the year. Yet the work will still need to be processed. Staff at the centre are concerned that current workloads will be exported to other sites, some possibly outside of Wales. They are concerned that something is being kept from them. Does the DWP have plans to close the site earlier than originally announced?
Just last week, Virgin Media announced its intention to close a flagship site in my constituency of Swansea East, with the potential loss of 770 jobs. Jobcentre Plus will be the first port of call for all of those people who will be seeking new opportunities. Does my hon. Friend agree that any attempt to minimise local access to Jobcentre Plus can only add to the fear and frustration of those vulnerable people, who are already very fearful for their futures?
I wholeheartedly agree. My hon. Friend’s point reinforces the point about having access to quality jobs and services in local communities.
The plans for the Merthyr Tydfil office have caused real concern in my community. The workforce are clearly concerned. The local and regional branches of the PCS union have raised objections. I and a number of Parliamentary colleagues from across south-east Wales have raised concerns. My Welsh Assembly colleague Dawn Bowden and many of her Welsh Assembly colleagues have raised concerns. Local traders and employers in the town are also concerned.
Although the Minister may ignore some of those concerns, I feel sure that he would not wish to ignore the concerns of the newest Conservative Association in the UK, the Merthyr and Rhymney Conservative Association, which stated in March that it also objects to the relocation of those jobs. I understand that the association has written to the Minister to raise its objections:
“Merthyr Tydfil and Rhymney Conservatives are against this move as we believe the 200 jobs should be kept locally and not moved down the valley. We believe this would have a negative impact on workers by increasing commuting times and adding extra travel costs which would impact their cost of living.”
The deputy chairman for membership also said:
“I believe the proposed move of the DWP office to Treforest will have a detrimental effect on the current 200 strong workforce. I am a strong believer in the idea that local jobs should be for local people hence why we have contacted the minister in a bid to get him to re-think this decision which could potentially have a wide impact on the wider economy.”
Perhaps the Minister will share his response and confirm whether he agrees with his Conservative colleagues.
I have serious concerns that such huge changes for staff and customers are being taken forward at a time when universal credit is about to be rolled out in the area. Universal credit has proved to be challenging in many other areas. For the staff to be worried about their future while dealing with a major policy change is not a constructive or a timely mix.
Will the Minister confirm whether an equality analysis has been carried out regarding Merthyr Tydfil benefit centre? The DWP prides itself on being a diverse and inclusive employer and has many disabled and vulnerable workers. As we know, the public sector equality duty in section 149 of the Equality Act 2010 requires public authorities, including Government Departments such as DWP, to consider the potential impact on people with protected characteristics when making policy decisions and delivering services. The PCS union has been vocal in demanding that a full equality impact assessment and health and safety review be carried out.
Why is the DWP ignoring the Government’s green policy, which is trying to reduce the number of cars on the road, by relocating service centres to an industrial estate with poor public transport links? Why is the DWP ignoring the Welsh Government and the TUC’s “Better jobs in local areas” campaign by relocating away from local communities to centralised locations in cities or remote industrial areas?
Finally, why is the DWP suddenly not renewing the contracts of staff on fixed-term contracts, leaving sections decimated and unable to function? Is it planning to close the site earlier than announced? I would be grateful for the Minister’s answers to those queries in the hope that he can quell some of the concern, anxiety and growing anger about the decision, which does nothing to support local town centres and economies, or to protect local jobs.
I will talk about the Welsh Government in a moment.
By choosing Treforest, we will be securing quality jobs for the next generation in an area that still lags in terms of employment rates. The hon. Lady talked about the Welsh Government, and the hon. Member for Merthyr Tydfil and Rhymney talked about following the Welsh Government. The Welsh Government recently set out their “Our Valleys, Our Future” strategy. Their ambition is to see more public sector jobs relocated to the south Wales valleys, and we believe our investment in Treforest demonstrates our commitment to that. The announcement of the move to Treforest was welcomed by Rhondda Cynon Taf County Borough Council.
Does the Minister recognise that the Welsh Assembly’s “Our Valleys, Our Future” strategy is about bringing new jobs to the south Wales valleys, not relocating jobs from existing communities, thus decimating the economies of those town centres?
Of course, the Welsh Government’s Welsh Revenue Authority has also chosen to base itself in Treforest. The DWP’s site is able to house 1,700 jobs, which is more than the number of people who are moving, so there is the potential to locate more new jobs at that site in the future. I know hon. Members are keen on that, and of course I support it.
The question was asked in terms of the staff who will be required to move, as I said, although we did do a postcode mapping exercise. The hon. Member for Merthyr Tydfil and Rhymney also asked about the impact on claimants, but a jobcentre will continue to be located in Merthyr Tydfil—I confirm that again.
We shall seek to redeploy any staff, wherever possible, who are unable to move to the new location. We are also prepared to pay colleagues’ excess travel costs for up to three years to assist their transition. When it comes to the front-of-house staff, as I said, I reassure Members that we are committed to retaining a jobcentre in Merthyr Tydfil, so the impact on claimants should be minimal, because there will still be a jobcentre there. We are looking for alternative premises, and we want to be in the new location by the end of March 2021.
The Minister mentioned the discussions with staff and the impact assessments for those staff. Will he give us more information as to when those impact assessments are likely to take place? As I said, it would have been advantageous to the Department for that to have been done before the final decision was made—a case of the proverbial stable door being bolted after the horse has gone. Will he give us some indication of when the assessments are likely to take place?
We are talking about a move three years from now so, clearly, informal conversations will start now—that would be natural—and staff will be evaluating where they want to be located. We expect the formal process, however, to start nine months before the actual move. The reason for that is simple: individual circumstances may change during the period leading up to a move, so we want to deal with people and their circumstances in real time.
The hon. Gentleman also raised the issue of equality impact assessments, and I confirm that we have been mindful of our equalities duties throughout the process. The hon. Member for Cardiff North (Anna McMorrin) asked me whether I had visited any of the sites. I said that I had not. I confirm that I have visited Newport jobcentre but not any of the back-office sites due to be relocated to Treforest.
The move from the existing site at Merthyr Tydfil will be a change for the Department and for our claimants and staff. By choosing Treforest, however, the DWP is making a long-term commitment to providing quality jobs in an area of need. In securing the site on a 25-year lease, we shall provide job security for our staff. We are also committed, as I said, to retaining a jobcentre in Merthyr Tydfil itself.
Question put and agreed to.
(6 years, 6 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate my hon. Friend the Member for North West Durham (Laura Pidcock) on securing this important debate and on making a powerful opening speech.
At Prime Minister’s questions a few weeks ago, I asked the Prime Minister whether she agreed that the PIP assessment process was fundamentally flawed, and what action she intended to take to avoid the undue stress and hardship being caused to my constituents and thousands more across the country. It is very clear to hon. Members here and the people whom we represent that the process is not fit for purpose.
The chaos that is being caused is having a cruel impact on thousands of people across the country. The Prime Minister’s reply was that the assessments are being conducted as well as they can be, and that people are getting the awards that they should be getting and are entitled to. She also stated that since the Government introduced the personal independence payment, 8% of cases have been appealed and 4% of the decisions are changed on appeal. In my easy calculation, about 50% of decisions are overturned on appeal, and things are getting worse.
Does my hon. Friend agree with my view? My constituent, Sarah Hassell, has cystic fibrosis, a degenerative disease. She is 30 and will not see retirement. Not only was she taken to a tribunal, but after that process, she was brought forward again for assessment. Her benefit was taken away, and she tried to kill herself because of this process, which she had already gone through once. The system is simply not working, and the tribunals are not working. When I wrote to the Secretary of State to ask for a response, I was just sent to a civil servant and was not graced with a response. My constituents need much better from this process.
My hon. Friend outlines a very sad and tragic case. It is one reason among many why the Government have to take note and listen.
The Prime Minister also stated that in the majority of cases, the change at appeal is due to the presentation at appeal of new evidence that was not presented at the original case. However, in the vast majority of cases that are brought to my attention at my constituency office and through Merthyr Tydfil and Caerphilly citizens advice bureaux, no new evidence is presented at appeal. The appeals are agreed, because the appeal panel recognises that constituents are genuinely in need of PIP and it supports the appeal. Furthermore, a growing number of assessments are consistently refused, and people are forced to go to mandatory reassessment and to appeal. I understand that currently about 65% of claims are overturned on appeal at tribunal. The growing number of appeals means that tribunals are taking longer to get to court—in my area, they are taking anything between four and seven months.
Every one of us has an email inbox full of these claims. Every single week, a new claim comes forward. The Minister has spoken about home assessments, but home assessments are not being done. It can be seen in Westminster Hall today how supportive the Labour party is, and how unsupportive the Tory party is, in relation to the whole PIP process.
My hon. Friend makes an important point, with which I wholeheartedly agree. The number of cases being brought to appeal and the length of time taken highlight the unnecessary cost of taking the cases to a tribunal. It stands to reason that if a large percentage of appeals are accepted, the original decisions are fundamentally flawed.
Does my hon. Friend agree that for those with long-term conditions, such as muscular dystrophy, the right level of assessment is important to avoid the need for people to go to appeal, given that an understanding of the condition could avoid that appeal?
My hon. Friend highlights the current state of affairs and how necessary it is for the Government to take action.
I will conclude by briefly highlighting one of the many cases that has been brought to me. A client in my constituency—a gentleman who lives with his wife and three children in a housing association property—suffers with epilepsy, chronic obstructive pulmonary disease, anxiety, depression and heart problems. He was already in receipt of PIP and was awarded enhanced daily living and mobility at tribunal in February 2015; that award was backdated. He switched his enhanced mobility for a car through the Motability scheme.
My constituent was contacted about the renewal of his claim in April 2016, and the renewal was sent to him. The local citizens advice bureau assisted him with completing the form, and medical evidence went in. His condition had deteriorated, but he was awarded zero points for daily living and mobility. So he had to return his mobility car, which he relied on, and borrow money from a family member to purchase a car.
The mandatory reassessment was lodged, and my constituent was awarded nine points for daily living and eight points for mobility—on appeal, those were enhanced further. The case went to tribunal and the judge advised him to go back to the Motability scheme as soon as possible and get his car back, but in the meantime he had wasted money on purchasing one. Interestingly, no additional evidence was given at the appeal stage that the DWP had not had prior to the tribunal. That is just one of many cases, and I am sure that Members across the country have similar concerns. The situation is grave, as most Opposition Members and our constituents know.
Before my hon. Friend finishes, I want to make the point that there is a fundamental lack of understanding and compassion among assessors. Unbelievably, one assessor telephoned my deaf constituent and left them a message, which they would never, ever be able to access. How many penalties would they have for that? That is so basic that it is a disgrace.
My hon. Friend highlights an interesting point, and it is something that the Government need to get a grip on.
Unfortunately, the Government seem unwilling or unable to see the mess that is being caused or to do something about it. Will the Minister take stock of what she has heard in the debate this morning, give us some answers and get a grip on the situation?
(6 years, 8 months ago)
Commons ChamberThank you for calling me to speak in this important debate, Mr Deputy Speaker. I welcome the concessions that the Government have been forced to make on universal credit, but I do not believe that they go anything like far enough to relieve the hardship and stress that this roll-out is causing, and will continue to cause unless and until the Government take on board the concerns and take further action. There are so many issues with universal credit that it is essential that the full extent of all project assessment reviews that the Government carry out are placed with the Work and Pensions Committee. The Government must come clean about their assessments so that the risks can be identified and scrutiny can be provided by the Committee.
I know that many Members across the House share my concerns about the roll-out of universal credit. It might be convenient for the Government to ignore the views of those on the Opposition Benches who have expressed legitimate concerns on behalf of their constituents and, in the case of the Secretary of State, to pass them off as scaremongering. However, the Government should not ignore the concerns shared by many outside this House, too—by organisations at the forefront of supporting people through difficult periods and supporting those who are most vulnerable. These organisations include Community Housing Cymru, which acts as an umbrella body for housing associations across Wales, and Citizens Advice, Shelter, and the Child Poverty Action Group. Does the Secretary of State consider these organisations to be scaremongering, too? These organisations know the pressures and hardship that UC is causing, as they are picking up the pieces when people’s lives are turned upside down due to the debt and anxiety caused by issues created by the roll-out, and the Government should take note.
Recent research undertaken by Cardiff Metropolitan University has highlighted the fact that one in five claimants is not receiving their full entitlement on time, with some facing a delay of four to eight weeks. The Government should address the waiting time as it is what causes most hardship. Many people do not have savings or money set aside to cover day-to-day living expenses during this period. The Government have taken away the seven-day waiting time, thus reducing the period to five weeks, but this is still too long for people to wait. We should also note that this is a minimum waiting time, and many people are waiting longer, leading to arrears and claimants needing to use food banks, increasing their debts and living in poverty.
We know that food bank use is increasing. A recent Trussell Trust report shows a 30% increase in people using food banks in areas where UC has been rolled out. Perhaps the Secretary of State thinks that report is scaremongering, too.
The hon. Gentleman mentions the Trussell Trust. Does he acknowledge that the trust’s chief executive has welcomed the measures the Chancellor announced in the Budget, and will he also welcome them?
If the hon. Gentleman had been listening, he would have heard that I welcomed those concessions earlier this afternoon, but, as I also said, they do not go far enough. I was with the Trussell Trust last weekend, collecting for the food bank in my area, because I know, as many other Members do, that that need is growing rather than reducing.
It appears that there are the same issues everywhere UC has been rolled out, and in my view it stands to reason that, with a hastened roll-out, these issues will only increase. We need a pause and fix. In Wales, as of October 2017 almost 25,000 people were in receipt of UC, meaning that the roll-out is just 6% complete; full roll-out is expected by November next year. I do not understand why the Government cannot see that hastened roll-out will lead to increased hardship, and why they will not act to pause and fix, to avoid families being subjected to undue stress and hardship.
There is not much evidence of any festive spirit coming from the Government on this issue, and talking about the Christmas period that is almost upon us, the news that thousands of low-paid people on UC will receive reduced payments or none at all over Christmas because they are paid weekly and their income
“will likely go over the universal credit limit”
is extremely worrying. A similar problem will re-occur in other months that, like this December, have five paydays, because UC is calculated on a monthly basis.
The Government must realise that Christmas puts huge pressure on family budgets and this situation will massively increase hardship. When people have five weekly earnings payments within an assessment period, their income might be too high to qualify for UC in that month, but the official advice is:
“You can re-apply the following month as you should only get four wage payments in your assessment period then.”
I am sure that will really help families through the Christmas period!
This flaw needs to be addressed and a fix found; it cannot be that difficult. Those paid weekly will find four times in a 12-monthly cycle that this “apparent” overpayment happens, and that could either reduce or cost them UC. Surely a mechanism can be found within Her Majesty’s Revenue and Customs. This is yet another glitch among a growing list that have beset UC.
We have heard today, and will continue to hear, the evidence that this roll-out is causing significant hardship and undue stress. The Government must listen to these very genuine concerns, and act to avoid further hardship.
I was glad to hear the Secretary of State’s comments, and congratulate my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) on introducing this motion.
(6 years, 10 months ago)
Commons ChamberLast Wednesday I came to this place to do what I, like everyone else here, was elected to do: to debate the issues that affect our constituents, and to vote on those issues in the way that we believe will best support them. The Ayes definitely had it last week, with 299 votes to zero in favour of pausing the full roll-out of universal credit until the problems encountered in the pilot scheme had been fixed. Not only did the Government forfeit their right to vote, but they are now ignoring the result, pretending that it did not happen and burying their heads in the sand.
Does my hon. Friend agree that it is one thing for the Government to ignore Opposition Members, but it is another thing—and foolhardy and irresponsible—for them to ignore organisations such as Shelter, Citizens Advice, Gingerbread and the Child Poverty Action Group, to name but a few, which are at the forefront of dealing with the chaos of this roll-out?
I certainly do. Such is the Government’s arrogance.
Coastal Housing, one of the leading social housing providers in my constituency, tells me that 90% of its tenants who are already on the pilot scheme are behind with their rent. In total, those tenants are over £73,000 in arrears, which means that, on average, each of them owes approximately £830. Coastal Housing and its tenants have told me of a series of problems with the scheme. The initial seven-day waiting period does not cover housing costs; the month-long assessment period, followed by a wait of up to seven days for the money to be paid into their banks, is putting too many people in debt before they even start on the scheme; and people are being forced to rely on food banks for the first time ever while they wait for their money. However, despite all those issues with the pilot scheme, the Government think that the best way forward is to plough on regardless.
I anticipate mayhem for far too many vulnerable people on 13 December, when the scheme is rolled out in Swansea. It does not take a mathematician to work out that if they transfer 12 days before Christmas and the payments take between 35 and 42 days to appear in bank accounts, a lot of Swansea residents will be in dire straits at the worst possible time.
(6 years, 10 months ago)
Commons ChamberThank you, Madam Deputy Speaker, for calling me to speak in today’s important debate.
I know that many Members on both sides of the House share my concerns, but they are also shared by many outside this House. They are shared by organisations at the forefront of supporting people through difficult periods and supporting the most vulnerable in our society, such as Community Housing Cymru, Citizens Advice, Shelter, the Child Poverty Action Group and the Trussell Trust—to name but a few.
Those organisations know at first hand how a system is meant to work and when something is not working, because they are generally the ones picking up the pieces when people’s lives are turned upside down by debt and anxiety, caused at this time by problems with the roll-out of universal credit.
We have heard and will continue to hear throughout the debate evidence that the roll-out causes significant hardship and undue stress. The Government must listen to the genuine concerns from across the country to prevent further hardship. Those concerns do not constitute negativity and scaremongering, as some Conservative Members suggest, but reflect reality.
Clearly, the first thing that needs reconsideration is the six-week waiting period. In most circumstances, people do not have savings or money set aside to cover day-to-day living expenses during that time. Advance payments are not a solution for claimants who cannot wait a minimum of six weeks for their first payment, as they cover only part of the claim and must be repaid through a deduction from future payments. In most circumstances, an advance payment will not cover the costs of a tenant’s rent, leading to arrears, claimants needing to use food banks, and to increasing debt and poverty.
I understand from some housing providers that they often receive conflicting messages from DWP staff while those staff are gaining the full knowledge and skills to administer the new system. A pause and period of reflection would allow the Government to address issues with the helpline, and offer training and support to DWP staff to ensure consistency of information for both tenant and landlord.
With the proposed roll-out being accelerated significantly from this month, it stands to reason that the problems identified so far will be magnified, leading to thousands of families facing an uncertain time in the run-up to Christmas and well into the new year. If the system is creaking now, rolling out at the proposed pace will make matters a lot worse.
In my view and that of many colleagues in this place and outside, the Government need urgently to reconsider the roll-out to address the very real concerns, undue hardship and anxiety that the policy is causing and look at how it can be improved.