Housing Benefit (Wales)

Guto Bebb Excerpts

Thursday 1st May 2014 Westminster Hall

[David T. C. Davies]

I think a lot of people who would consider themselves poor pay taxes and would rather resent the fact that some of their taxes are supporting people with excess bedrooms. However, I suspect that I am getting a little far from my role as Chairman of the Select Committee in reporting the facts. The hon. Member for Swansea West (Geraint Davies) is correct to say that 40,000 people within Wales were affected by the measure. I do not know what the updated figure is; it might be somewhat different now. I hope so. It worries me to hear evidence that some people would have to move 50 miles to find suitable accommodation in order to downsize, and I hope that the Minister will address that.

Due to the shortage of smaller-sized social housing, it is possible that benefits will have to move into the private rented sector. The Committee heard evidence that higher rates in the private rented sector compared with the social rented sector might lead to increased public expenditure, thus defeating one of the key purposes of the policy. As somebody who believes that we must reduce the deficit as much as possible, I would obviously be concerned about any policy that increased spending levels.

[Guto Bebb (Aberconwy) (Con)]

Is it not also the case that we heard evidence as a Committee that the housing market is dynamic in nature? As some people move from social housing into the private sector housing market, others will move from the private sector housing market into social housing freed up by the change.

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[Nia Griffith]

I am sure we can all imagine major adaptations such as changes to bathrooms and additional rooms. The only one that might be considered less significant is a stair lift that could be put in or taken out, but any other form of adaptation should be taken into consideration. Further to that, it should be noted that legislation passed by the Welsh Government has enabled local authorities in Wales to desist from selling off some types of properties. They have largely chosen to keep in their stock properties such as those suitable for old people who downsize precisely because adaptations have been made that suit older people as they become less physically active.

Another point in the Government’s response is that the bedroom tax

“may encourage more claimants to move into work”.

That sounds like forcing people to look for work. People are already looking for work. People who have the capabilities are already looking for work. We must take into account the fact that some of them have significant disabilities and there are not many suitable jobs available.

Transport and child care are problems in rural areas, which are multiplied because of trying to fit in transport to work with picking up children and getting home from work. It is not easy to find jobs with hours that fit in.

I have taken issue with the Minister about the fact that the issue is not just a matter of obtaining a few extra hours. We all know that because of the complex way in which housing benefit is worked out people effectively lose around 60% of the benefit for additional earnings. The equation does not involve simply a few extra hours. The matter is much more complex. On tapering or claw back, I am extremely concerned about the proposals for universal credit because 76p in the pound of each tax credit will be clawed back when people take on more hours of work. The Centre for Social Justice suggested that it should be only 55%. That is another enormous hurdle for people taking on more work or going out to find work.

What progress has there been on collecting information and monitoring rental costs? That was promised in the Government’s response.

I turn to discretionary housing payments. The whole point about them is that they are discretionary, but they are imposing an enormous work load on local authorities because everyone on housing benefit is deemed to have insufficient funds to cover their rent. That was our definition of housing benefit. It was provided for people whose residual money after deducting various items was not sufficient to cover their rent, so it is inevitably massively oversubscribed.

The Government have said that they have provided extra money, but let us look at what that really means. I will use the example of Torfaen, which was given £193,000 of additional money for its discretionary housing payments but the shortfall in housing benefit is approximately £1 million, or five times the discretionary amount allocated. Torfaen was then told that it could spend up to £430,000, but that extra money must come from its own funds. In other words, it must make sweeping cuts elsewhere when it is already facing significant cuts.

The Welsh Government have provided £1.3 million of extra money throughout Wales to help with the additional administrative burden, but what a waste of money. If housing benefit was paid, none of that would be necessary. Having gone through the process once, it will have to be repeated because the whole point of discretionary housing payment is that it is supposed to be a temporary measure, as the Government noted, to tide people over. However, if there is nowhere for them to move to, the process will be repeated.

The officer in charge of housing benefit for Monmouth and Torfaen, Richard Davies, summed up the situation when he said that administering the huge demand for help has dramatically increased council work load and dealing with discretionary housing payment

“applications is like dealing with a totally separate benefit scheme. It’s shifted everything from statutory to discretionary”

so

“it’s a huge burden of administration.”

[Guto Bebb]

I am interested in the hon. Lady’s comments about Torfaen, but she could mention the situation in Denbighshire and Conwy where a report from Eryl Rowlands, who is responsible for the matter in both counties, makes it clear that the anticipated problems associated with the so-called bedroom tax have not come into play.

[Nia Griffith]

There may be differences in different areas because of the availability of different types of property and work. In my county, we are building bungalows in, for example, Seaside and Kidwelly, but we know perfectly well that the rate of building will not keep up with more than 1,000 households in Carmarthenshire that are waiting to be moved or to be given an alternative option to their present situation.

I want to respond to the criticism that the Welsh Government have not had a building programme during the past 15 years. Many properties have been built, especially adapted properties for disabled people and a range of supported housing and housing association housing. However, when we have small communities with a limited housing stock we need it to be as versatile as possible. It is always possible to put a small family unit in a three-bedroom house, but it is not possible to squash a large family unit into a one-bedroom flat. Our tradition in Wales, where land is relatively plentiful, has been to build houses rather than flats. That is the situation we find ourselves in. It is not the fault of tenants that they may have been allocated a two or three-bedroom property when under the bedroom tax theory they should have a one or two-bedroom property.

The Government must rethink their policy, particularly bearing in mind Lord Freud’s comments that there may be issues in particular areas. More than that, we would like them to monitor the situation. Many people are now finding it almost impossible to make ends meet, with arrears running at more than 50% in many areas, often involving people who have never been in debt in their lives.

On a slightly different note, landlords are also affected. One issue that has been raised again and again, and has not been terribly well answered by the Government, is direct payment to landlords. There has to be two months of being in arrears before it is possible to get somebody switched across to having a direct payment. That is causing us real problems, in terms of availability of property. Some whom we might call “amateur” landlords—people who have perhaps become landlords by accident, because they cannot sell a property—are now becoming very reluctant to rent out properties to people who are on housing benefit, whereas before they would have had a guaranteed cheque from the council. That is also affecting bigger landlords—the social housing providers. So will the Government take another look at the response they have made about those direct payments? I am not the only person to mention that; it has been mentioned very vigorously by lobbyists on behalf of landlords. On that note, I shall finish.

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[Mrs Siân C. James (Swansea East) (Lab)]

Thank you, Sir Roger, for the opportunity to speak in the debate. I will be concentrating on the impact of the changes on my constituency of Swansea East and responding to some of the points that we made in the report. I have carefully considered the evidence in the report and tried to cross-reference it with how the changes are affecting people every day in my constituency.

We are clearly suffering in Swansea East. I do not think that it is too strong to talk about the vicious effect, or the pernicious effect, that the legislation is having in my constituency. We have heard the hon. Member for Ceredigion (Mr Williams) speak very eloquently about the effect that it is having on a rural community, but Swansea East is a typical city or urban constituency, with high demand for social housing in both the public and the private sectors. There are increasing levels of hardship in Swansea East. Most of the people affected are approaching the citizens advice bureau, ourselves and the local authority. Wave after wave of people are appearing on our doorsteps as their problems deepen and they become more concerned, and it is becoming increasingly difficult to help them or to point them in the right direction, because they are at the end of their tether, both figuratively and financially. I have spoken to many individuals who are currently struggling to balance the books—to meet their budgets—but the biggest cause of anxiety by far is the changes to housing benefit and the bedroom tax.

The amount of rent that people in the private sector can claim—their local housing allowance—has been cut back to 30% of the rental value that is available on the market. For many people, only the lowest-value properties are open to them within their already stretched budgets. That places a huge question mark over the suitability and quality of the properties that they can now access or afford. On a daily basis, I hear stories about tenants being housed in properties that are well below any acceptable standards, are too small for their needs and/or are lacking in what people would consider acceptable. Unfortunately, there is one key word that all those properties have in common. The Government would call them affordable; I call them cheap, and cheap usually means not a good enough standard.

That is the reality for far too many people in Wales. It is a sad indictment of the policy and doctrines of the current Government. Their short-sightedness is pushing many people ever closer to homelessness and possible destitution. These are not my words; they are the concerns of well regarded, well respected organisations, such as the Chartered Institute of Housing and Citizens Advice.

[Guto Bebb]

Those concerns were also highlighted in north Wales before the changes to the spare room subsidy were implemented, but the three largest social sector housing providers in Conwy and Denbighshire have seen their arrears either fall or remain static, so were the concerns exaggerated by those individuals and organisations?

[Mrs James]

I thank the hon. Gentleman for his intervention. He is very fortunate, because that is not the pattern that we are seeing in the urban areas, the cities, of south Wales. I will come to some figures later and try to demonstrate the effects that the policy is having on the local authority and the ever-increasing problems that the legislation is creating.

Already, 30,640 homes that are part of the available rented housing stock in Wales are beyond the reach of people on housing benefit. I got these figures from the Chartered Institute of Housing. It estimates that already more than 30,000 homes that are part of the available housing stock in Wales are outside the reach of people who are seeking other homes or cheaper homes or wanting to downsize because of the legislation. In fact, 89% of tenants in Wales will see their benefits cut, and the loss will be on average £8 a week or £416 a year—before we even take the bedroom tax into consideration. Significant amounts of money are disappearing from people’s daily budgets. I know that that is popular in some areas and will make many readers of certain tabloid newspapers feel better, but if they had to live with the reality of it all, they might feel differently about it.

The proposals make a complete travesty of the rented housing sector. We are constantly being told that they are justified and that the Government are attempting to encourage mobility in the social rented sector, strengthen work incentives and make better use of social housing. My response is that they are not doing any of the above, and I seriously doubt whether they ever will. The policies do not encourage mobility in the social rented sector; in fact, I believe that they are creating a dependency on the substandard lower end of the market, regardless of the condition of the homes available for rent at an affordable price. The policies certainly have not strengthened work incentives. Many tenants I come across are suffering from housing-related health problems and are so overwhelmed by their housing issues that seeking work is not an option. They are absolutely ground down into depression by the problems that they face.

It is worth pointing out that the social housing sector simply cannot meet the demand for good-quality, up-to-standard housing when there are insufficient numbers of smaller properties to move tenants into. The Government have wrongly assumed that moving tenants to smaller properties is an easy option. The reality in Wales is that a vast percentage of local authority housing stock consists of traditional three-bedroom properties. That is a direct result of the post-war boom in house building, when properties with three or more bedrooms were needed to accommodate families, which were traditionally larger than they are today. In the 21st century, families have changed, housing needs have changed and there is a clear shortage of smaller one or two-bedroom properties for families to move into. Even when smaller properties are available to rent, they may be unsuitable for the needs of those who seek homes.

I hope that the Minister can provide me with some figures on a matter that the city and county of Swansea has come across. For more than 20 years, its policy has been not to house children, disabled people or elderly people in flats on or above the second floor, for the good reason that there have been tragic accidents in the past, which have been frightening for tenants. It is not deemed proper to house those with mobility problems or children on upper floors, where they have to deal with stairs, balconies or windows at a height. Has the Minister looked at the issue, and can he tell us how many other local authorities are in a similar position? I applaud the city and county of Swansea, because the policy is an eminently sensible one. Obviously, however, it reduces the available housing stock.

A Labour party freedom of information request showed that councils will be unable to help 19 out of 20 families who are affected by the bedroom tax. The figures from the 37 local authorities that responded suggest that 96,000 families will be hit by the bedroom tax, but there are only 3,688 one or two-bedroom council properties available for families who wish to move to avoid the tax. The entire exercise is proving similar to moving the deckchairs around on the Titanic; it is not a good idea when many other more pressing issues need to be addressed. I would be happy to work with the Government on those more pressing issues in our communities. We seem to be pursuing the policy just for the sake of making things look better, and it is simply not working.

Benefit claimants are being treated as though they were part of some sort of social experiment that is being undertaken to appease certain sectors of the community. We already know the outcomes. The policies do not work. They punish and condemn those who are dependent on benefits, and they do not remotely encourage improvement or change for the better.

Before I finish, I want to touch quickly on discretionary housing benefit. We have heard about other local authorities that do not seem to be having a problem and that are quite happy with the situation, but we have a small shortfall in Swansea in the money that is coming in. Currently, the shortfall is some £1,200, which sounds great, but I am concerned that the combined funding from the Department for Work and Pensions and the Welsh Assembly Government is not enough. If the situation continues, we will see an ever-increasing burden on the local authority and its finances. In Swansea, there were 3,198 applications for discretionary housing payment in 2013-14. The local authority awarded 1,871 discretionary housing payments, but it refused 1,327. It is pretty clear that there is a funding gap. In addition, the discretionary housing payment is awarded only for a maximum of 52 weeks. I echo the request of the hon. Member for Ceredigion for further clarification on the future of the discretionary housing allowance.

The housing benefit changes have adversely affected almost all claimants in Wales.

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[Glyn Davies]

The hon. Gentleman makes a perfectly fair point, and I do not think that the policy can be freestanding. I wanted to discuss this later, but there must be a responsibility for extra provision, and we must also have policies that deliver that. It seems logical to the people who have raised the issue with me that the problem is that there are not sufficient properties for people to move into.

When my hon. Friend the Member for Aberconwy (Guto Bebb) spoke earlier, I was struck by the fact that it is important for us all to see how the policy works out in practice in our constituencies, because it is now in practice. I decided to write to the county council—the housing authority in my area—and the local housing association to ask how it had worked out. The senior officer in this policy area at Powys county council came to my office and we spent an hour going through it, and I must pay huge tribute to the council for the way in which it managed a difficult situation. But the reality is that it did manage the system. No one has been evicted and the arrears have not gone up. Nearly all the people affected have access to the discretionary fund.

I think that about 600 tenants in the Montgomeryshire local authority were affected, and about 570 or 580 of them had access to a discretionary grant payment. I must say that when I started asking questions about whether the discretionary payment was enough, I was anticipating having to write to the Minister to say, “It is not enough—we want some more.” However, I found that the local authority was advertising, putting out press releases begging people to put in applications because the money was not going to be spent. The discretionary budget dealt with almost all the issues that mattered in the constituency.

Inevitably, a certain proportion of households—I think about 40 or 50—have moved, and because of the housing availability in the authority, quite a number of them have moved to the private sector. That is another issue. The differentiation between the private sector on one side and Government social housing provision on the other is one that we need to soften a little. We need to see people moving to make the best use of the available housing.

[Guto Bebb]

I agree with my hon. Friend that the difference between the private and social sectors should be reduced. Nevertheless, my experience is that housing associations in the social sector seem to have been more willing to work together as a result of the policy than they were previously. Is that the experience in Powys?

[Glyn Davies]

I think that it is. It might not be the same in all local authorities—I can speak only for my own—but I must say that, on this issue, Powys county council has been brilliant. It knew that things would be difficult for some tenants—it is not an easy situation—but it employed three specialist officers to help everyone affected to deal with their situation by giving them the best advice, and they have done that. I pay continuous tribute to the work that Powys county council has done with a policy that it may well not have agreed with. It has delivered coalition Government policy and done a magnificent job.

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[Glyn Davies]

Again, we have a complete separation, as if the private sector is over here and the public sector is over there. The issue is not the funding of the public sector; we must allow the private sector to deliver the housing we want. The private sector will deliver what we want if we create a situation in which it can. For the past few years, all I have seen is local and national Government making it more difficult for people to deliver what the people of Wales want.

[Guto Bebb]

On that point, it is important to state that the provision of social housing in Wales fell dramatically throughout the early part of the noughties—2000 to 2007—under successive Labour Administrations in the Assembly. The problem is not recent; social housing provision in Wales has been an issue of concern over the past decade.

[Glyn Davies]

I have nothing more to do, Sir Roger, other than to thank you.

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[Jonathan Edwards]

I did not read that report, but it makes a point about the unbalanced nature of economic growth across Britain. I am referring to the rising housing benefit bill in the UK context. The statistics I have cited do not refer to Welsh house prices in particular.

The Committee’s report found that Wales is being hit hardest by the lack of single social properties in the social rented sector. Wales is therefore being hit by a policy designed to address the public expenditure implications of the dysfunctional London economy. As I have consistently argued, we need a range of reforms. Before becoming an MP, I was heavily influenced by the reforms in the Republic of Ireland. I used to be a policy officer for the citizens advice movement in Wales, and some of these issues were prevalent then. The 2004 reforms in the Republic of Ireland were welcome. The Residential Tenancies Act 2004 achieved a number of objectives. First, it set up a private residential tenancies board. Secondly, it regulated the private rented sector, with an extension of tenancies to a more European model of longer-term tenancies. Defined rights and obligations were provided for both tenants and landlords, and access was provided to an inexpensive dispute resolution system. The bonds that individuals who rent often have to pay were safeguarded—unfortunately, on too many occasions people lose those bonds—and rents were capped, which is a policy that exists across the world. There are rent caps in New York, the home of global capitalism, so it is difficult to define them as some sort of socialist trap.

[Guto Bebb]

I do think that rent caps are a socialist trap. The fact that they are supported by the Committee’s Labour members, Liberal member and Plaid member is unfortunate because, in Wales, many people who have invested in buy-to-let properties have done so because of the previous Labour Government’s anti-pension policies. For many of those people, their private rented property is their pension provision. I find the attack on those individuals, who are trying to take care of their own situation in retirement, unfortunate to say the least.

[Jonathan Edwards]

The point I am trying to make is that if the Government are serious about bringing down the housing benefit bill, the only way to do it is to cap the cost of rents in the private rented sector. That is what all the OBR projections indicate. It is interesting that the Select Committee Chair referred to the evidence of the TaxPayers Alliance. When I gave the alliance a choice of either reducing the housing benefit bill or preserving free markets, it said that it preferred preserving free markets, which is more important to the TaxPayers Alliance than the Government’s tax liabilities. Perhaps it should change its name to the Free Market Alliance.

[Guto Bebb]

I think it has already been accepted in this debate that there is a link between private sector provision of housing and social sector provision of housing. Would rent controls result in any increase in private sector provision of social housing? If not, how will it help anyone looking for rented housing in Wales?

[Jonathan Edwards]

My point is that the OBR’s figures indicate that the Government will not achieve their objectives with the bedroom tax. If the objective is to bring down the housing benefit bill, the only way to do that is via rent control in the private rented sector. I welcome the fact that the leader of the Labour party made a case overnight for some of the reforms for which I have been making a case for a number of years. Rent caps would drive down artificially high rental costs, and they would also curb boom and bust property speculation, which is a cycle we have seen far too often in the UK economy in recent decades. Rent caps would also help working people to remain in the cities, rather than being forced out, as they are in inner London. They would also stop the current policy’s social cleansing, through which people are forced to move from where they have lived for many years.

[Mr Clive Betts in the Chair]

We also need to consider supply issues, which many Members have highlighted. The recovery of the 1930s following the great depression was largely driven by a massive public housing building programme. Rents paid for public housing provide a steady stream of revenue, so it is an ideal vehicle for drawing down private sector funds to deliver economic growth and address some of the social problems that we face.

I will now quickly return to the local indicators in Carmarthenshire, and I will finish on this point. Applications for discretionary housing payments have rocketed in south-west Wales. Between 2012-13 and 2013-14, the budget increased by 64% in Carmarthenshire, by 106% in Pembrokeshire and by 118% in Swansea. There were only 327 discretionary housing application payments in Carmarthenshire in 2012-13, but between April and May 2013 there were 534 applications. That is a 63% increase in the first two months of that year, compared with the whole of the previous year.

Nearly 2,000 people have had changes to their housing benefit entitlements in Carmarthenshire since this policy was introduced. As I mentioned, this policy only makes savings if people stay and pay.

I finish on a point made by my colleague, the hon. Member for Ceredigion (Mr Williams). He mentioned the work of Paul James, a Plaid Cymru councillor for Llanbadarn Fawr, a veteran of the UK Army and also a servant of the French Foreign Legion, so he is not a man to be messed about with—[Interruption.] He has the Minister’s number! He is upset about the impact of the bedroom tax on veterans and their families, who were under the impression that veterans would be exempt full stop from it. Yet it appears that only people on active service are exempt. If that is the case, obviously, military personnel from Wales in barracks or in training would be outside Wales and not exempt, because our regiments are not held domestically. Our servicemen are not home-based; they go to barracks in England. Yet their families are being hit by the bedroom tax. The Minister must look at that. I should be grateful to hear his remarks at the end of the debate.

Work Programme (Wales)

Guto Bebb Excerpts

Thursday 1st May 2014 Westminster Hall

[Guto Bebb (Aberconwy) (Con)]

I am pleased to contribute to the part of the debate I intended to speak in. It is a pleasure to follow the hon. Member for Blaenau Gwent (Nick Smith), who is my colleague on the Public Accounts Committee. I acknowledge that the report that we produced on the Work programme was disappointing, but it is fair to say that in that report we acknowledged that it was early days for the programme.

I am encouraged by my recent meetings with providers working for the Work programme, and the statistics show that performances are now significantly improved. Most importantly, the figures will show that the value for money being derived for the taxpayer is significantly better than under those programmes superseded by the Work programme. As we move forward, we have a success story on our hands. It is delivering both for people who need support and for the taxpayer, by delivering jobs at a lower cost.

I turn now to the report by the Welsh Affairs Committee. It is a genuinely constructive report that highlights some of our concerns at the time of writing. The performance of the Work programme in Wales has improved since the report was published—certainly, the figures from my own constituency indicate that—and we are now working against a background of a much stronger employment situation in Wales. We have seen unemployment fall. It is fair to say that the unemployment rate in Wales is now lower than the average for the UK, and I welcome that. In my own constituency, unemployment has fallen significantly and is well below the figure that we inherited in 2010. There is good news on employment.

My specific experience of the Work programme is of a committed work force working for Work programme providers in my patch, who are attempting to make sure that they give full support to individuals who want to get back into the workplace. One example I can offer is of a young lady from the village of Llanfairfechan in my constituency, who had her transport costs paid for the first month of employment, to allow her to work, and also had costs paid to allow her to go to an interview—indeed, the provider supplied the young lady in question with a new outfit for the interview. She was successful and is now working in continued employment. I can certainly offer examples—I accept they are anecdotes—from my own constituency that are different from the examples I have heard from other parts of Wales and are generally very positive.

The Minister visited Merit Motors, an employer in my constituency that has taken on not one, not two, but three individuals on the Work programme, and has described them as the best prepared individuals they had ever had the pleasure of working with. Those individuals are three young lads between the age of 18 and 24, who are now working in Llandudno Junction as a result of the support they have had from the Work programme and of the willingness of a local employer to take a chance on young employees.

I should also say that we cannot leave the whole issue to the Work programme. MPs should become active on this issue. I have written to all employers in my constituency not just to raise the prospect of the support available to employ people through the Work programme but to highlight the support available to employ young people. I have even highlighted the programmes available from the Welsh Government. As a local MP, I want to see increased employment and employment opportunities in my patch. I take very seriously my responsibility to work with providers, employers and the unemployed to make sure those employment opportunities are there.

Indeed, I would recommend that all hon. Members in Wales hold job fairs. I did. We got the local paper involved, and had pictures of people on the front page of the Weekly News under the headline “We want to work”, dispelling the myth that the unemployed do not want to work. The story I want to put out is that we have people who want to work and we have a support structure in place to make sure that they have the opportunity to. The Work programme is part of that success.

I do not want to be negative, but I have to reiterate the concerns expressed by the Chair of the Welsh Affairs Committee about the way in which the Work programme interacts with Government programmes in Wales financed by the European social fund. We highlighted that in a report agreed unanimously on a cross-party basis, but I have not seen any progress since then. Unfortunately, the issue is becoming more and more problematic. On a recent visit to a charity in my constituency, I was told categorically that they were now having difficulty recruiting people because individuals were being referred from the jobcentre to the Work programme and then were not being referred back to the charity because it was partially funded from ESF funding. That is a huge problem.

That charity highlighted another issue, which I think is shameful. Work programme representatives take the view that we need to make sure that youth offenders and prisoners are put on the Work programme before they leave prison. That is a fantastic initiative—we are trying to make sure that those people do not end up not having a support structure when they leave prison. But, lo and behold, if they go on to a Work programme provided in Wales and it is highlighted that they need numeracy or literacy support, there is no such support available in the Welsh context because of decisions taken by the Welsh European Funding Office.

Frankly, the situation is unacceptable. We are damaging the prospects of individuals, whether they be former prisoners, youth offenders or people who need support to get back into the workplace, simply because we are failing to knock heads together and get some common sense from the Welsh European Funding Office.

When asked about this issue by the hon. Member for Llanelli (Nia Griffith) during our inquiry, the then Minister, my hon. Friend the Member for Fareham (Mr Hoban), made it clear that the problem was primarily in Cardiff Bay. I have seen no evidence to contradict that, yet a year after the publication of the report we are still seeing Work programme providers in Wales underperforming, mainly because they do not have the support structure in place in the rest of the United Kingdom.

If anything comes out of the debate today, it should be a strong message from all members of the Welsh Affairs Committee and all Welsh Members of Parliament that the Welsh Government need to work with, not against, the Work programme to serve the unemployed of Wales.

[Several hon. Members]

rose—

amendment of the law

Guto Bebb Excerpts

Tuesday 25th March 2014 Commons Chamber

[Sir Tony Baldry (Banbury) (Con)]

Coventry and Banbury are not that far away from each other. When the hon. Member for Coventry South (Mr Cunningham) and I entered the House of Commons together about 30 years ago, I think that the unemployment rates in our constituencies were not dissimilar at about 15%. Unemployment in my constituency today is 1%, so it is possible to make progress if the community works together and drives forward jobs.

[Guto Bebb (Aberconwy) (Con)]

Indeed, progress is being made in Coventry South, where the number of jobseeker’s allowance claimants has fallen 17% year on year. In the 18-to-24 age group, it has fallen 20% and the number of long-term unemployed in Coventry South has fallen 16% in the past year.

[Sir Tony Baldry]

But, of course, Opposition Members simply are not willing to acknowledge that there has been a persistent fall in unemployment. I am not sure that their dirge of pessimism will resonate with electors, however. This past week was a defining week. By Friday, the shadow Secretary of State for Work and Pensions was acknowledging on “Any Questions?” that the Opposition would support the Government’s pension changes. She obviously had a busy weekend, because on Sunday she acknowledged in The Observer that Labour

“will vote for a cap on welfare spending to keep the overall costs of social security under control.”

Of course, the Chancellor has attached the welfare cap to the charter for budget responsibility in such a way that tomorrow, essentially, the Opposition will be voting for the coalition’s deficit reduction programme. Having spent pretty much all of this Parliament resisting every welfare reform and every attempt to reduce the budget deficit, at the end of the Parliament with just over a year to the next general election the Opposition are suddenly trying to catch up, accepting the fundamentals of the Government’s economic policy and recognising the strength of the Government’s long-term economic plan.

The Opposition can do the big stuff, but when it comes to the detail they still cannot quite bring themselves to acknowledge what they must do. They say that they will reverse the spare room subsidy. I still do not understand why they want to treat tenants in the social housing sector differently from the way in which they treated tenants in the private rented sector, notwithstanding that they will have to find nearly £500 million to reverse that policy. Where do they say the money will come from? The shadow Secretary of State for Work and Pensions said again from the Dispatch Box today that it would come from taxing higher rate taxpayers through the winter fuel allowance, but that would bring in only £100 million. We can already see that they are about £400 million adrift on just that simple question. It is all very well talking the talk about signing up to the welfare cap, but they cannot bring themselves to acknowledge what they will have to do to enforce that. Welfare budgets were completely out of control under the previous Government. The number of households in which no one had ever worked nearly doubled under Labour. This Government have taken difficult decisions to bring the benefits bill down, saving £19 billion a year for the taxpayer. The new welfare cap will ensure that never again will the costs of welfare be allowed to spiral out of control and never again will the incentives to work be distorted. The level of the cap will be allowed to rise only in line with forecast inflation. Of course people who have worked hard all their life deserve security in their retirement, so the cost of the state pension will be excluded from the cap, as will cyclical unemployment benefits. We need to see a welfare system that returns to the safety net that Beveridge intended, instead of the entrapment that it had become.

We have seen the Government make some brave and positive moves to get the welfare budget back under control. The latest workless household figures show a dramatic fall of 450,000 since 2010. We have record employment figures. I can recall at the beginning of this Parliament Opposition Members all saying that the Government’s long-term economic plan would lead to the disappearance of a million private and public sector jobs. What has actually happened since 2010 is that more than 1.7 million more people are employed in the private sector, which is more than four times the number of jobs lost in the public sector.

As we heard in an intervention from the hon. Member for North Tyneside (Mrs Glindon) in the speech of the hon. Member for Coventry South (Mr Cunningham), the Opposition’s answer to any conundrum is more public sector jobs. Their default position is still more public spending and more public sector jobs. In reality it is in the private sector that more jobs are being created. Indeed, almost 80% of the rise in private sector employment has taken place outside London, in constituencies such as mine and Coventry and in the constituency of probably every Member who has spoken in the debate. Almost 90% of the new jobs went to British nationals.

There are those, such as the Bank of England, who argue that the increase in employment has to a certain extent been as a consequence of the tightening of the eligibility requirements for some state benefits, which have caused people to see whether they cannot find their way back into the world of work. I visited one of the Work programme providers in my constituency the other day, which is doing a really good job of ensuring that the long-term unemployed get back into work. So the increase in private sector employment is now more than four times the number of jobs lost in the public sector. The rise in employment is being driven by businesses and entrepreneurs across the country who are feeling increasingly confident with the improving economy.

I have few large employers in my constituency. The continuous driving down of the unemployment rate month on month, week by week, in constituencies such as mine is being achieved by the private sector and by entrepreneurs, all of whom found measures in last week’s Budget that were supportive and which they supported.

We heard much about young people in the debate, but the number of young people in work has increased by 43,000 in the last three months alone, and the proportion of 16 to 24-year-olds not in employment, education or training is at its lowest in five years.

Employment is at a record high, up by over 1.3 million since the election. For the first time in three decades, the number of people employed in the UK is better than that in the United States. Unemployment in other European countries is going up, whereas unemployment in the UK is going down. That bodes well and will bode well for the Government come the general election next year.

--- Later in debate ---

[Guto Bebb (Aberconwy) (Con)]

It is a pleasure to follow the hon. Member for Wigan (Lisa Nandy), who spoke passionately and eloquently on behalf of her constituents. It should be stated, however, that the figures imply that the success of Wigan’s economy is much greater than she indicated. Figures from the Library show that the number of jobseeker’s allowance claimants in Wigan is down by 35%, and the most fantastic thing is that youth unemployment has gone down by 55% in a year. We would kill for such a reduction in Wales, but we have the dead hand of a Labour Welsh Government in Cardiff who have no intention whatever of working with the national Government to deal with youth unemployment.

In my constituency, we have seen a drop in unemployment, including youth unemployment and long-term unemployment, which the people of the constituency have welcomed. However, young people on the Work programme are not allowed access to educational programmes, because the Welsh Government refuse any Work programme client access to any programme using funding from the European social fund. They do that to try to ensure that the Work programme fails, and it is left to me and other Conservative Members from Wales to put on job fairs.

[Susan Elan Jones (Clwyd South) (Lab)]

Will the hon. Gentleman give way?

[Guto Bebb]

The hon. Lady makes comments from a sedentary position, but—

[Susan Elan Jones]

No, I want the hon. Gentleman to give way.

[Guto Bebb]

I will happily give way after I have made this point.

My comments about the Welsh Government’s failure to support the Work programme are endorsed not just by Conservative Members but by the Welsh Affairs Committee, on which the majority of those voting were Labour Members.

[Susan Elan Jones]

The hon. Gentleman has returned from Patagonia as partisan as ever. Why does he not commend the fact that 80% of traineeships under Jobs Growth Wales are in the private sector? Surely, as a former small business man, he welcomes that.

[Guto Bebb]

The hon. Lady makes an interesting point about Jobs Growth Wales. When I wrote to local businesses in my constituency, I mentioned the possibility of young people getting on to the Work programme, but I also mentioned the possibility of using Jobs Growth Wales. I find it odd, however, that because somebody who is about to leave a youth detention centre in England, for example, is automatically enrolled on to the Work programme, they cannot access Jobs Growth Wales owing to the policies of the hon. Lady’s party. It would be well worth her while to read the criticisms that the Welsh Affairs Committee made, with cross-party consensus, of the Welsh Government’s actions on programmes that are there to support and train young people and to give them skills to take up opportunities that exist in their communities. She should raise that issue with members of her own party.

We have a success story on jobs. We are seeing a fall in unemployment in my constituency, with positive measures to support small businesses. We depend entirely on the small business community for the growth and development of jobs, and one key thing that we are doing is reducing the burden of employers’ national insurance contributions on small businesses. The reduction of £2,000 in the next financial year will be a great boost to small businesses that are looking to employ members of staff, and that is crucial.

The hon. Member for Wigan mentioned the need to ensure that we deal fairly with small businesses. Again, we can compare and contrast the efforts of the UK Government under difficult financial circumstances with what is being done in Cardiff. For example, there have been calls, demands and cries for help from small businesses in the retail sector, which have stated clearly that they need help with business rates. The Chancellor has responded so that, for example, any small business in England that has a rateable value of less than £50,000 will not only have a cap on their business rates this year but get a £1,000 rebate. That might not sound like a lot of money to some Members, but for a small retail business in my constituency that is struggling to survive, £1,000 could make the difference between success and failure. Again, though, what is happening to that £1,000 rebate in Wales? It is not getting through to small businesses. The Welsh Government are retaining it in Cardiff to support another of their pet projects.

We hear from Opposition Front Benchers—we heard it from the shadow Secretary of State for Work and Pensions today—that people in this country face a cost of living crisis. I invite them to look at the situation in Wales. In my constituency, a Labour-Plaid Cymru council has increased council tax not by 5% or 10% but by 23% since 2010. That increase could have been avoided if the money made available by the UK Government had been passed down to local authorities in Wales, so that they could try to support hard-working families at this difficult time by freezing council tax. It is a fact that only one council in Wales has managed to freeze council tax for two years. Conservative-controlled Monmouthshire has done so for two successive years, despite the lack of financial support from the Welsh Labour Government.

In my own authority of Conwy, we have had increases of 5% and 4.8%, with a total increase of more than 25% since I was elected, simply because the Labour party in Cardiff and in my constituency is happy to place further burdens on hard-working families at a time when they need support. The situation is unacceptable, because money has been made available under difficult circumstances by the Chancellor but the Welsh Government have decided that they would rather keep it than to support hard-working families in north Wales. That is clearly a disgrace.

This is a solid Budget that will allow us to look to the future with confidence. I would be delighted if some of the changes in England were also to be implemented in Wales. Unfortunately, that is not the case, but I hope that the people of Wales will be wise enough to identify the failures of the Welsh Government in that respect.

The other key thing that has been welcomed with open arms by my constituents is the change to pensions. We have heard some reservations from Opposition Members, but not perhaps from Front Benchers, who seem to be aware of the popularity of the change. The change is popular, because it is right to tell people that they need to take more responsibility for their own lives. We have seen that in relation to the changes in personal taxation, on which the coalition have said, “Let’s increase the personal tax allowance and allow people to keep more of the money they earn.” The Labour version is to say, “Give us the tax, and we’ll put it through a bureaucratic system and then we’ll give you something back, which you must be grateful for.” I must say that when it comes to a general election, it was very handy for people to be able to phone up and say that the Conservatives are getting rid of tax credits.

The key point is that we believe in increasing the personal allowance because we trust the people. In the same way, we are making the change to pensions simply because we trust people to make the right decision about their own money. What is key is that if people are willing to save and invest for their own pensions, surely they have the right to make their own decision about how they best make use of their pension pot on retirement. The change will be welcome in my constituency, in which the average age is among the highest of all constituencies in Wales; indeed, my postbag tells me that it is being welcomed now. The key thing is that we are making the change not because we have a party political agenda, but for the simple reason that we trust the people to make the right decision about their own money.

Welfare Reform (Sick and Disabled People)

Guto Bebb Excerpts

Thursday 27th February 2014 Commons Chamber

[Ian Mearns (Gateshead) (Lab)]

I am grateful to my hon. Friends the Members for Hayes and Harlington (John McDonnell) and for Easington (Grahame M. Morris) for securing this debate via the Backbench Business Committee and for bringing to our attention the fact that the WOW campaign has gathered 104,000 signatures on its petition on the Directgov website.

The fact that this motion has to be considered by Parliament is an indictment of our political system. It is an issue and a cause that I brought to the House’s attention via a debate in Westminster Hall a little over a year ago. I am pleased to say that it continues to receive the deserved consideration of this House as a wrong that needs to be righted. The truth is that we do not need an independent cumulative impact assessment to tell us what is going on. Every week, Members in this House have to deal with the devastating damage caused by the so-called welfare reforms.

In my own constituency of Gateshead, the reforms are having a profound impact on people’s lives, disproportionately affecting disabled people, their carers and their families. The policies and their implementation are causing immeasurable anxiety and tangible human suffering. We all know what the effects of them are. We support this motion as a means of exposing the truth, which is that the Government are driven by one consistent ideological principle—a determination to protect the privileged by demonising and attacking the poorest and most vulnerable in our society.

[Guto Bebb (Aberconwy) (Con)]

rose—

[Ian Mearns]

I will not give way for the moment.

How else can we explain the fact that of the £63.4 billion of public expenditure cuts forecast by 2015, 29% of them fall on disabled people who make up only 8% of the population? Even worse, how else can we explain the fact that those with the most severe disabilities, who make up only 2% of the population, have to endure 15% of the cuts? In the face of that, can we continue to regard ourselves as a civilised society? What kind of civilised society seeks to finance its deficit recovery programme out of the suffering of the poorest and most vulnerable while managing to target tax cuts to the most privileged?

Thirty-one people died in the three years to October 2011 waiting for their appeals against the assessments which said that they were able to work. The BBC’s “Panorama” programme reported in July 2012 that, on average, 32 people died every week whom the Government had declared could be helped into work in the medium term.

--- Later in debate ---

[Guto Bebb (Aberconwy) (Con)]

It is a pleasure to follow the right hon. Member for Stirling (Mrs McGuire). I pay tribute to the hon. Member for Hayes and Harlington (John McDonnell) on securing this debate and representing the 104,000 petitioners. The National Audit Office report published this morning on the implementation of PIP is a disappointment, but it is important to point out, at the outset, that the report talks about the implementation, rather than the policy aims. That is important. The report is not a criticism of the policy aims. It makes it very clear that it is far too early to give any view of the implications of the policy change that is being implemented through PIP.

This issue and this debate are framed in the context of the idea that changes to the welfare state are being undertaken in response to the need for austerity. I would argue that the issue is far more important than that; it is very important that it is dealt with, not because of austerity but despite it, because we have a failing welfare system. Anybody in this Chamber who argued that, prior to 2010, we had a system that we could be proud of would be very brave indeed. It is to the credit of the Government that the welfare reform agenda is being implemented not primarily to save money, but to ensure that the system does not trap people in a way that is unproductive and unfair.

Today’s debate highlights the significant problem that the Opposition have in relation to welfare reform. When I spoke to Welsh Labour Members last night, I was surprised to hear that they were on a one-line Whip for this debate. I am staggered by that, and I am pleased to see the hon. Member for Bridgend (Mrs Moon) here. Given that the Welsh Labour Government have produced significant documents—they are not particularly impressive, when one reads the detail—complaining about the impact of welfare reform in Wales, I would have expected Labour Members from Wales to highlight their concerns in a debate as important as this one. Surprisingly, they are not here. Perhaps that is because they know full well that the Labour party is committed to a zero-growth spending review. We have heard Members express a lot of passionately held points of view today; it is important to point out that in a zero-growth spending review, it is very difficult to envisage any increase in the welfare budget. That is a point that any honest Member should be happy to make from the Opposition Benches.

My hon. Friend the Member for Meon Valley (George Hollingbery) highlighted the fact that work capability assessments, the abolition of which the motion calls for, have been changed and reformed throughout the Government’s period in office. Most of the recommendations of Professor Harrington’s reviews have been accepted, and the number of complaints coming through my constituency office has reduced. The implication of Labour Members’ speeches is that there should be no work capability assessments whatsoever, although I do not think that that is Labour’s policy. Are they saying that there should or should not be some sort of work capability assessment? If we have work capability assessments, as I believe that we should, any responsible Government should obtain medical advice from experts and implement their recommendations, which is exactly what the Government are doing.

Is the system perfect? Clearly not yet. Is it a problem that 40% of cases are won on appeal? I take it as a badge of pride when I win an appeal, but of course the figure of 40% is too high. However, we are implementing the changes that have been recommended, and it is irresponsible to call for the abolition of any work capability test because that is not in keeping with the whole purpose of welfare reform—to target support at the poorest in society.

The hon. Member for Hayes and Harlington talked about the impact of removing the spare room subsidy—the so-called bedroom tax—on people with disabilities, and Labour Members told us that the policy has had a tremendous effect in many local authorities throughout England. I take a keen interest in the issue and regularly speak at length with my local authority in north Wales. Figures for Conwy county borough council and Denbighshire county council, which are both close to my constituency, show that the discretionary housing funding will probably not be spent in full and that rent arrears in north Wales housing associations are falling in two out of three cases. The statistics shows that more than two thirds of discretionary housing awards have been made because of a need arising owing to factors outside welfare reform. From listening to Opposition Members, one would think that every single change is having a huge impact, yet figures from a Labour-controlled local authority clearly show that that is not the case.

The Work programme is a success. It attempts to treat people as individuals and is getting people back to work. However, on getting people back to work, I want to highlight a disgraceful fact. Wales has European-funded projects that give people training and skills, and ensure that they get closer to the workplace, yet the Welsh Labour Government have denied any Work programme client access to those training programmes. If Labour were genuine about helping people back into work, they would allow disabled people in Wales who need training and support to access those programmes.

--- Later in debate ---

[Kate Green (Stretford and Urmston) (Lab)]

This important debate is very welcome, and I thank my hon. Friend the Member for Hayes and Harlington (John McDonnell) and the Backbench Business Committee for arranging it. Like others, however, I pay particular tribute to the 104,000 people who signed the War on Welfare petition that forms the basis of the motion, and who were the driving force behind today’s debate. The volume of signatures is testimony to the strength of public feeling about these matters. I have had the opportunity to meet War on Welfare campaigners in my constituency and here at Westminster, and I can testify to the anger and fear that many feel about the impact of the Government’s policies on disabled people. It concerns non-disabled people as much as disabled people, which is not surprising in view of the fact that—as my hon. Friend the Member for Bridgend (Mrs Moon) so powerfully reminded us—only one in five disabled people is born with a disability.

It is to our shame that, in all walks of life, disabled people face injustice and unfairness. They are twice as likely to be treated unfairly at work as non-disabled people; they are more likely to be victims of crime; they face additional living costs associated with their disabilities; they are twice as likely to live in poverty; and they are less likely to be in work. Today the employment rate among disabled people is 45%, while the rate among the working-age population as a whole is 71%. The hon. Member for Banff and Buchan (Dr Whiteford) rightly identified some of the labour market barriers that disabled people face. Moreover, shamefully, they are on the receiving end of a virtually non-stop flow of hostile and abusive rhetoric.

One would expect that, faced with that grim picture, the Government would focus their efforts on tackling the injustice and discrimination that confront disabled people, but the policies of the current Government so often make matters worse. That is why Labour wholeheartedly supports the call for a cumulative impact assessment of the effect of those policies on disabled people, and why we called for such an assessment last year.

The Government have argued that Labour never carried out such an assessment, but Labour never unleashed such a deluge of negative policies on disabled people. Let me say to the hon. Member for Aberconwy (Guto Bebb) in particular that our record speaks for itself. [Interruption.] He should listen to this. Poverty among disabled people, which stood at 40% when Labour came to office, subsequently fell to about one in four, and the employment rate among disabled people rose by 9 percentage points. We introduced a host of measures to strengthen the rights of disabled people. We passed the Disability Discrimination Act 2005 and introduced the Equality Act 2010, we formed the Equality and Human Rights Commission, and, in 2009, we signed the United Nations convention on the rights of persons with disabilities.

Let us contrast that with the damaging policies of the current Government, which have been highlighted today. Cuts in local authority budgets have meant swingeing cuts in social care. The independent living fund has been closed to new applicants, and its future remains unclear. The Work programme is failing disabled people badly—only 5% of disabled participants have found work—and the Work and Pensions Committee has established that there is just one specialist disability employment adviser for every 600 people in the work-related activity group.

[Guto Bebb]

If the hon. Lady is so proud of the record of Labour, can she explain why training and skills programmes financed by the European social fund in Wales are not being made available to Work programme planners because of a decision by the Welsh Labour Government?

[Kate Green]

I can tell the hon. Gentleman that exactly the same is happening in my constituency. I am glad that he mentioned training and skills, because this Government are placing the future of residential training colleges in jeopardy. They closed 33 Remploy factories last year, and 12 months later two thirds of former Remploy employees were still out of work. Funds from the closures were promised to help those former workers into jobs, but they seem to have disappeared.

Work Programme

Guto Bebb Excerpts

Thursday 10th October 2013 Westminster Hall

[Guto Bebb (Aberconwy) (Con)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Walker. It is also a pleasure to follow the Chair of the Select Committee, who has shown a great interest in this subject, as has her Committee. This is a weighty report, which I am sure the Department will take very seriously.

It is worth clearly stating that there are success stories in the Work programme that we should all acknowledge. Yes, there are issues to be dealt with, and that is the nature of a programme that is as ambitious as the Work programme. However, we should acknowledge the success.

We should also acknowledge—this has been acknowledged by the National Audit Office, for example—that the fact that the statistics were collected at a very early stage has resulted in media stories claiming that the programme has failed. It is worth noting that, of those individuals who have completed the 104 weeks—the first cohort—about 41% are still in employment, which is a significant figure.

It is also important to understand that we—I say “we” because I feel passionately that the coalition Government should be proud of the Work programme—are delivering this programme in the context of the austerity facing the public finances. Yet, it is delivering job outcomes at a rate that is beneficial to economies such as that in my constituency. More importantly, success is being delivered at a cost that is significantly below that of the predecessor schemes. For example, the average cost under the Work programme is about £2,097, compared with about £7,500 under the previous programme.

[Anne Marie Morris (Newton Abbot) (Con)]

Does my hon. Friend agree not only that we have the cost benefits to which he alluded, but that, despite the criticism that the programme did not meet its targets, those targets have been better met than the targets set by the previous Government in their schemes?

[Guto Bebb]

That is a fair point. When people try to score political points on this issue, it is worth bearing in mind that the performance of the previous programmes was not as good as what we are seeing under the Work programme.

[Stephen Timms (East Ham) (Lab)]

I will have something to say about the performance of previous programmes if I catch you eye later, Mr Walker. However, I want to pick the hon. Gentleman up on his point, which I agree with, about the programme’s performance at the beginning being particularly disappointing. With the benefit of hindsight, would he agree that the cliff-edge approach of shutting down the previous programme and immediately trying to set up the Work programme—inevitably, it took many providers quite a long time to get going—was not a good way to go about things?

[Guto Bebb]

In view of the fact that we were looking to shake up the way we were supporting people into work, I am not sure there was any other way around that. The summary to the Select Committee report highlights the fact that it was an achievement on the part of the Department to deliver the Work programme so soon after the announcement in Parliament and after the legislation was passed. Despite the circumstances, the programme was delivered.

The key problem with the statistics that people originally looked at is that there is a natural delay in the system before we can talk of a positive outcome in terms of generating a job for somebody. That delay has allowed the statistics to be used to try to make a political point about the programme. I know for a fact that the trade body representing Work programme providers has been particularly annoyed and upset at the way in which some of the statistics that have been released, which often have not indicated the time lag in the programme’s performance, have been used to try to make a point about the way the programme is performing.

Another interesting, key point highlighted in the report’s summary is about the importance of the relationship between Work programme providers and jobcentres. That relationship is highlighted as a weakness of the programme, but I have to say—I can speak only from personal experience in the area I represent—that one of the key factors behind the success of the Work programme in north Wales has been the positive relationship between jobcentres and Work programme providers. A key recommendation in the report is that different areas of the country, with different providers, should learn from each other. If providers in other parts of the country are having difficulties co-operating with their local jobcentres, and they want to learn some lessons, they are more than welcome to come to north Wales, where the relationship is working particularly well. That is not to say that the figures in north Wales are particularly good, but I will come to that, because there are problems facing the programme in different parts of the country that are not necessarily of the programme’s making. That is something I need to put on record.

Another point I want briefly to touch on is whether the Work programme can support all user groups. One of the programme’s crucial successes is in supporting young people back into employment. We have a youth unemployment problem, although it is not as bad as in some other European countries, and we should be thankful for that. There is no doubt that the youth contract and the financial support we offer employers to engage with young people looking for a job who are on the Work programme have been a success.

The report also highlights the fact that there is sometimes a lack of publicity, and of appreciation of what is happening and the support available to employers who want to recruit young people and to understand the Work programme. There is an obligation on Members of Parliament to highlight the support that is available. It does not matter what political party a Member represents; they will obviously prefer the Work programme to be a success. I wrote to hundreds of businesses in my constituency about the Youth Contract, highlighting the financial support available for young people on the Work programme who were job-ready, and willing and able to work, and explaining that if there were opportunities in those businesses the Work programme providers were ready and willing to help. I am glad to say that the initiative resulted in at least 20 young people securing jobs; I know that because employers have contacted me. That might be a small contribution, but as well as highlighting failures politicians have an obligation, where there is lack of publicity or understanding, to let employers know what support is available; because they are the ones who create jobs.

We have identified those under 24 as needing particular support, because of the challenges that they face in getting access to work. As everyone knows, it is easier to get into a job from a job. A young person without experience on their CV needs support to get a position. The Youth Contract has been a significant benefit to many young people, certainly in my part of the world, but perhaps there is a need to extend such support to other hard-to-reach groups. I have been keen to support young people looking for jobs in my constituency, but I am also aware that the average age of my constituents is among the highest in any constituency in the country, and certainly in Wales. A significant problem that we need to re-examine is how proactively to help those over 50 who are desperate to work. They may, despite having skills, have been out of the job market for some time. There is an argument for something similar to the Youth Contract, if funds permit at some point, to support those people. Perhaps we need to persuade employers that there is an advantage in recruiting such people from the Work programme.

[Anne Marie Morris]

My hon. Friend makes an extremely good point. There is a challenge for older people who have been made redundant. Does he agree that an area in which the Work programme could do better is in helping to provide advice and support to those who could think about self-employment? That seems appropriate for the older person. The all-party group on micro-businesses did a survey showing that only half the Work programme providers could provide such advice and support.

[Guto Bebb]

I agree entirely with my hon. Friend. One of the strengths of the Work programme in rural Wales is the fact that providers have been able to vary their targets for attracting people to self-employment. Originally, the significant targets for self-employment were given to providers in south Wales. However, statistics clearly showed that the self-employment option was not doing well in south Wales, but that in rural and north Wales there was considerable interest in taking that route. There is a significant amount of support available from Work programme providers, but, more importantly, there is flexibility in the system to allow the numbers to be switched, and that has benefited many in my part of the world.

[Stephen Timms]

The hon. Member for Newton Abbot (Anne Marie Morris) raised an interesting point. Does the hon. Gentleman agree that it could be useful if eligibility to the new enterprise allowance were to be extended to participants in the Work programme? It is not available to them at the moment.

[Guto Bebb]

That, indeed, is one of the recommendations that I would make to the Department. I have been a key advocate of the new enterprise allowance. A long time ago I was an adviser to people starting out on the old enterprise allowance scheme. There are still businesses in my constituency that were established under that scheme. It is important to provide such joined-up support. I am not making a criticism; Work programme providers are giving valuable support in my constituency to people interested in self-employment. I appreciate the fact that they have developed strong relationships with local enterprise support providers, which is very important; the black box approach is a key issue for Wales. I agree that it would be helpful if the new enterprise allowance were available, especially when there is flexibility in the programme to allow figures and targets to be swapped between different parts of the country. We must not put barriers in the way of people who want self-employment.

Flexibility is a key part of the Work programme. There is no such thing as a standard client. That flexibility is crucial for reaching those who most need support and are most difficult to place. Work programme providers in various parts of the country have sometimes got access to quite specialist support services for individuals, to ready them for the jobs market, and often that support has been partially funded through European funding. For example, the European social fund has enabled some providers to refer Work programme clients to support schemes to make them more work-ready. The Welsh European Funding Office, an arm’s length body fully controlled by the Welsh Government, has decided not to allow Work programme clients access to any programme partially funded by the European social fund. That has been a great barrier to the black box approach. Indeed, Work programme providers in Wales that I have talked to—and certainly the two operating in my constituency—have been unable to get support for their clients that is available elsewhere. That might be support with numeracy, confidence-building or skills, but the providers are not allowed to refer clients to the programmes because of a decision that in Wales if a project is funded by the European social fund the support is not available to Work programme clients.

That is a matter of huge concern. As the report highlights, Welsh performance levels are not as impressive as those in other parts of the country. It could be argued that the economy and employment level in Wales are not as high as elsewhere, but private sector employment growth there, while not spectacular, has been positive since 2010. An extra 69,000 jobs have been generated in the Welsh economy and there is less dependence on the public sector than for a long time. It is bizarre that people who everyone recognises need to be supported into work—and often the ones who most need support—are denied access to programmes provided by further education colleges and specialist providers, just because they are Work programme clients. I am happy to say that evidence from the Welsh Government and the Department for Work and Pensions to the Select Committee on Welsh Affairs, for its report on the Work programme in Wales, will highlight that discrepancy. It is worth pointing out that often the individuals who are worst affected by the decision not to allow Work programme participants to use the schemes may be exactly those who, according to the report we are considering today, are least well served by the Work programme. There is an issue for the DWP, but I also want the message to go out that the Welsh Government should carefully examine the reason why their definition of additionality in European funding differs so markedly from the one used in England.

I have written to small employers in my constituency; and I do not have many large ones. During the general election campaign the present Chancellor of the Exchequer, who was then the shadow Chancellor, wanted to visit my constituency. He asked for a list of employers with more than 500 members of staff, and I could offer him nothing but the local authority. My constituency is very dependent on small businesses; so I have tried to highlight the support available for small businesses from the Work programme. The other thing we have done in my constituency is to undertake a jobs fair, which was a success. We managed to get significant participation and, again, have seen positive outcomes in terms of jobs created. I said clearly to the local newspaper that if one person found a job as a result of the jobs fair, it was my time well spent. Two weeks later, we are up to seven, which is very positive, with another six interviews in the offing.

The key point from that meeting was the fact that a number of small businesses came up to me and said they were confused by the number of organisations telling them that they offered support. This is an important point that we need to get across: we have to ensure that the streamlined level of support and the understanding of what support is available is also part of the way in which we deliver the Work programme. The last thing we want is for employers to feel that it is too difficult to engage with such an important scheme as the Work programme.

My experience of the Work programme has been positive, but I am not somebody who says there is no way in which we can improve the system. We have had two years, and in my view, the programme is delivering well, but there are problems with specific groups who are being supported by it but are not particularly successful, at this point, in getting into employment. We need to look at such things as why there is a delay before somebody can be referred on to the Work programme. In many cases, the delay is because the job centre will be able to support individuals, because, as everybody knows, the opportunity for people to re-engage with the workplace is much higher when they have recently lost a job than it is after several months.

However, there is an issue about identifying individuals who might have specific barriers in terms of getting back into the workplace. Why would it not be possible for such people to be referred immediately on to the Work programme? I am not sure whether there would be a huge additional cost, but we would avoid the period in which somebody loses their confidence for a period because they are in the job centre system and perhaps feeling increasingly dejected as they are unable to get back into the workplace. When identifying someone as needing particular levels of support, it might be worth considering that such individuals could be referred to the Work programme earlier. If we have confidence, as I do, that the Work programme is adapting and meeting the challenges of helping people back into the workplace, the sooner we can refer some people on to it, the better. I would like people to consider that point.

It is also fair to say that the programme was established quickly. The Select Committee recognises that it was an achievement to get the contracts signed and the programme up and running so quickly, but there is always an opportunity to regroup and readdress some issues. I talk to providers in my constituency and yes, they are very enthusiastic about the scheme, yes, they are confident that they will deliver in due course, and yes, they are frustrated with some restrictions in a Welsh context, but one comment that comes out strongly is that the assessment of individuals based on the benefits that they currently claim is a blunt tool, in terms of identifying the required support.

I understand that the reason why that was the way forward initially was that we needed to get the scheme up and running, and obviously, we assess people in terms of what sort of benefits they qualify for. However, as we have more confidence in the providers of the Work programme—and increasingly, we are confident that in most parts of the country we have Work programme providers who know what they are doing—we need to have an increased level of understanding about individual clients’ needs. Ultimately, if there are barriers because of somebody being categorised for a particular benefit, and that barrier is stopping them getting the support they need, we should, at least, try to recognise that and address it in due course. There is an argument for looking carefully at the way in which we assess individuals in terms of the level of support that they need, rather the using the blunt instrument of the benefits that they are receiving.

We also have to look carefully at the fact that we are now coming to the end of the initial two-year period. Clearly, the aim and aspiration is that the vast majority of people in due course will find employment. Current figures show about 56% being returned to job centres and about 41% going into employment, while some have been lost, or have left the system in some way. That is not a bad performance—obviously, I would like to see a majority gaining jobs—but we need to start thinking carefully about what we do now. Do we extend the programme? I have talked to individual Work programme clients—and advisers—and what has been striking is that a number have said that it has taken them a significant period of time simply to rebuild their confidence, and to feel that they can face an employer across a table and try and sell themselves. The coalition Government and, certainly, the DWP need to think carefully about whether there is mileage in extending the Work programme for particular clients for longer than two years. The two-year period is, again, a blunt instrument, because it is one rule for all, despite the fact that we recognise that some individuals need more support than others.

Nobody would deny that we can look at ways to improve the system, but we should be doing so from the point of view of claiming that there are great success stories and significant developments in the Work programme that are helping people get back into employment. As politicians, we need to be constructive friends of the Work programme. Where concerns exist, we need to highlight them, but we need to do so in the context of acknowledging that with a significantly better value-for-money ratio, the programme is delivering support and delivering people back into the workplace. Can it do more? Of course it can. Do we want it to do more? Of course we do. Can the Government look at ideas about changing elements of the programme to be more supportive of those who find it most difficult to find employment? Yes, I think the Government should, but we should also recognise that to date, the programme is a success story. I only hope that that success continues and is enhanced, and if changes result in that enhancement being even greater, no one would be more pleased than me.

--- Later in debate ---

[Guto Bebb]

According to House of Commons Library figures, 96,000 participants have completed 104 weeks, of which 54,000 have returned, meaning that 40,000 have gone into employment.

[Stephen Timms]

The numbers I have are slightly different, but we can look up the figures. Certainly, 50,000 people spending two years going back to the jobcentre is a disappointing start, but I hope that we will see better figures in future.

I was struck forcefully by something that the Chancellor of the Exchequer said in his spending review statement about the task facing the Secretary of State for Work and Pensions. He said:

“That will require a difficult drive for efficiency, and a hard-headed assessment of underperforming programmes.”—[Official Report, 26 June 2013; Vol. 565, c. 314.]

The Select Committee is right to address key issues underpinning the underperformance of the Work programme identified by the Chancellor. The Centre for Economic and Social Inclusion has been commissioned to carry out the official evaluation of the Work programme, and I think that it will produce an interesting piece of work. In its analysis of the 26 September on the most recent performance data, it points out that two years in, the Work programme is not performing as well as the flexible new deal. The percentage of those over 25 entering the programme who secured a job in two years is 35%; it was 38.9% under the flexible new deal. The Minister’s predecessor but two used to castigate the flexible new deal. It turns out, according to CESI observations, that it was better than the current programme.

One thing that would help, and that the Minister could do quickly, would be to lift the ban on providers publishing data about what is going on in their areas. The ban was introduced—let us be frank—to safeguard the career prospects of the then Minister who introduced it, to whom I recall that the present Minister was Parliamentary Private Secretary, and in that it was successful. The right hon. Gentleman was promoted to his current post in September 2012 and a few weeks later we saw the first Work programme performance data, by which time he was safely off the scene. The ban means that information about what works well has been disseminated much too slowly and the underperformance that concerns the Chancellor, and I suspect all of us, would have been less if providers had been free to publish their performance data, as they were in the past.

The Government’s “Open Public Services” White Paper says:

“To make informed choices and hold services to account people need good information, so we will ensure that key data about public services, user satisfaction and the performance of all providers from all sectors is in the public domain”.

Actually, we had a complete ban on any data at all for the first 18 months of the Work programme. There are still no data, as the Select Committee has pointed out, about subcontractor performance. The “Open Public Services” White Paper, published by the Cabinet Office, uses the phrase

“all providers from all sectors”,

but we have still had nothing at all from the subcontractors. From that quote, I want to pick up the point about user satisfaction, which the Select Committee report also mentions. The Select Committee called, quite rightly, for regular surveys of user satisfaction on the Work programme, which would be valuable information. The “Open Public Services” White Paper had an effusive foreword written by the Prime Minister and the Deputy Prime Minister, in which they signed up to its goals. We should understand the user experience on the Work programme. The Government’s response to that recommendation is simply to tell us that there will be a couple of surveys of people who have been on the Work programme. That is not what the White Paper stated was going to happen. There should be much more information about what people are experiencing. The fact that there is not is one of the reasons for the underperformance that the Chancellor has pointed out.

The hon. Member for Eastbourne was absolutely right to highlight concerns about the performance of the Work programme for people on employment and support allowance. The Work programme invitation to tender stated that if nothing was done, 15% of those people would find a sustained job outcome within two years. The minimum performance standard was set at 10% above that, which is 16.5%. Paragraph 3.18 of the invitation to tender states:

“DWP expects that Providers will significantly exceed these minimum levels.”

They have actually achieved, as the hon. Gentleman stated, 5.8%. The Royal National Institute of Blind People tells me that 690 people with sight impairments were referred to the Work programme in its first 22 months, and 20 of them got sustained job outcomes. St Mungo’s has sent us a briefing for the debate, which tells us that 54% of homeless people surveyed for St Mungo’s, Crisis and Homeless Link reported seeing their Work programme adviser once a month or less frequently. It is not surprising, therefore, that very few of those who face serious hurdles—people with health problems and people who are homeless—have got into work.

I was in Australia last week, where I talked to people about those issues. There are quite a few providers that operate both in Australia and in the UK, and they said that the Work programme model was wrong and that “creaming and parking” was endemic; the hon. Member for Eastbourne has touched on that. I agree with the Select Committee that specialist voluntary sector providers have not been used enough. They have been squeezed out. In Australia, I was told that 50% of provision is from the voluntary sector, and I think in the Work programme it is about 20% and going down. As others have said in this debate, some good resources are not being utilised. St Mungo’s is a very good example. It had a contract with several prime providers in London, which was signed when the Work programme started in June 2011. By April 2012 it had not had a single referral, and it had to pull out and give up.

I agree with the suggestion that we should have a proper jobseeker classification model, which we do not have at the moment. There are many things that should be said, but I will conclude with this. The Chancellor of the Exchequer is right: the programme is underperforming. The Minister, who I welcome once again to her new role, has the opportunity to address that underperformance. Some of it can be addressed quite quickly, and the Select Committee report can be a real help. I wish the Minister well in her new role and I look forward to her reply.

Pensions Bill

Guto Bebb Excerpts

Monday 17th June 2013 Commons Chamber

[Mr Byrne]

The hon. Gentleman will be as familiar as I am with the research published by the Institute for Fiscal Studies showing that, under Labour, £11 billion more was spent than if we had pursued the policies that we inherited in 1997. We lifted gross income for pensioners by more than 40%; 2.4 million pensioners had been lifted out of absolute poverty and nearly 2 million out of relative poverty by 2010-11. It was the IFS that confirmed that both the absolute and relative measures of income poverty fell markedly among pensioners. We inherited a tragic and grotesque state of pensioner poverty in 1997 and we set about dealing with it with focus and alacrity. We are proud of the inheritance and legacy that we left the Government.

[Guto Bebb (Aberconwy) (Con)]

Does the shadow Minister accept that over the 13 years of the previous Administration, nothing whatever was done to improve the situation of the self-employed who depend on the state pension system?

[Mr Byrne]

We are very proud of the reforms that we set in place. They tackled the grotesque pensioner poverty that we inherited in 1997. That is not simply my conclusion; when the pensions Minister spoke in the House back in 2000, he pretty much confirmed the same line of argument and the same thesis. The job we did on pensioner poverty was important and we made great progress. The foundations that we left are those that the Secretary of State has built on.

The purpose of the Bill is, in essence, to address one of the matters flagged by Lord Turner in his report and one for which we legislated in 2007. As the Secretary of State mentioned, the noble Lord recommended a new pension supplement for the 21st century—one that is universal and, crucially, one that reduces means-testing, an important part of the Secretary of State’s argument. As the Secretary of State also rehearsed, the noble Lord recommended a system that provides clear incentives to save.

The commission proposed an approach different from that proposed by the coalition. It was in the interests of preserving the consensus that Lord Turner had so assiduously constructed that we chose to follow his approach rather than the one set out by the coalition today. Indeed, at the time Lord Turner flagged a number of risks in the strategy that the Government are now pursuing. The Government have taken an approach different from Lord Turner’s. That comes at the price of some big notional losses for state second pension members. The goalposts on the state pension age have now been moved three times in three years. However, there has been some improvement in means testing and potentially something about incentives to save. I want to touch on those.

Let us take means testing first, however, as it was an important part of the Secretary of State’s argument. Today, about 80% of people are free of the pension credit means test; that pension credit is now available for 20% of people. By 2020, that would have fallen to about 16% anyway. Under flat-rate pensions, there will be a further fall of about 8%. If we put savings credit to one side, the improvement is just 2%, and of course about 35% of pensioners will still be eligible to access council tax benefit, which is about 238,000 people, and 12% will be able to access housing benefit—84,000 people. We are still an awfully long way from the end of means testing, but none the less a small step forward has been taken and we welcome it.

The Secretary of State was anxious to stress the point about savings. The judgment of the IFS was that the effect of proposals on the incentive to save were complex and varied. As the Bill reduces the long-run generosity of the pension system—that is one reason why we support it—it should increase the incentive to save. However, although some will see lower effective marginal tax rates when pension credit and savings credit are withdrawn, some will see higher marginal tax rates. The IFS says, therefore, that the direction on the effect of savings is ambiguous.

Under the proposals, some pensioners who have saved absolutely nothing will be better off in real terms each week than those who have saved substantial sums. A pensioner who has saved nothing will enjoy the flat-rate pension of £144 a week and will be entitled to housing benefit and council tax benefit, which is another £94 a week. That is a total of £238 a week, which is considerably more than what someone who has saved £24,000 will receive. They might enjoy a notional income from savings of about 30 quid a week, plus the flat-rate pension, which is a total of £174 a week. That is much less—36% less—than what the pensioner who has saved nothing will get. In fact, the pensioner who saves nothing will be better off than someone who has put £50,000 away in the bank. So there are still problems and disincentives to save, but none the less, we think that, on balance, the Bill represents progress, which is why we support it in principle.

--- Later in debate ---

[Guto Bebb (Aberconwy) (Con)]

It is a pleasure to follow the right hon. Member for Birkenhead (Mr Field). I welcome the Bill as warmly as he did in his initial comments, but I suspect that my comments will carry on being positive throughout.

It is important to put the changes in context, because the truth is that we have a coalition Government, without a majority in this House unless the two parties work together, making significant proposals on the welfare state and changes to the state pension system. Every Opposition speaker so far has welcomed those changes before moving on to criticise various specific individual points that will, I suspect, be addressed in Committee. The important point is that, despite the terrible financial background, these changes have been taken on by the coalition Government after three years, whereas for 13 years under the previous Government we saw precious little change that would have allowed people to save for their own well-being in retirement.

[Sheila Gilmore (Edinburgh East) (Lab)]

I am, perhaps, risking making the debate more political than it needs to be, but cannot this reform be introduced now only because a lot of the platform is in place thanks to steps taken by the previous Government and, to a lesser extent, the Government before that?

[Guto Bebb]

That is a very interesting comment. As I saw it, the previous Government dealt with the worst circumstances faced by some pensioners, but only by creating the view that the only way to deal with people in retirement was to ensure that the state could provide through a means-tested system. The worst thing about the previous Labour Government was that those individuals in pension schemes within businesses who were saving up for retirement were punished for trying to do the right thing by ensuring that they provided for themselves in retirement. Yes, the previous Administration offered some benefits in dealing with the worst aspects of poverty for pensioners, but at the expense of the concept of self-reliance.

[Sheila Gilmore]

The platform I was trying to describe did not simply include the introduction of things such as pension credit, which has helped to finance the Bill by a considerable amount. The Labour Government introduced the state earnings-related pension scheme; a Labour Government introduced S2P. Those elements were part of the platform that makes it possible to move forward.

[Guto Bebb]

They were certainly part of the platform that created the degree of confusion and complexity that has resulted in people not saving up for their retirement. Yes, there was a state system imposed on the British public by the previous Administration but in many ways that was at the expense, I would argue, of the simple concept of a basic state pension that meant that anything and everything that a person saved above it would be beneficial to them. It should be noted that the only people who suffered significantly as a result of the changes introduced by the previous Administration were many of the self-employed and many of those in schemes operated by companies that stopped operating because of the tax charges that resulted from those changes.

The context is that this is an important and significant change. These changes to the pension provisions go hand in hand with what we are trying to do as a Government with the welfare state. All our welfare reforms are trying to ensure that work pays. In the current circumstances, it is not easy to make the changes as radical as we would like, but their implication is clear: the more someone works, the more they will benefit from that work. If they take on added hours, they will be better off. If they manage to get a promotion, they will be better off. That message is key to our proposed changes.

[Sheila Gilmore]

rose—

[Guto Bebb]

No, I will not take another intervention for the time being.

We need to send out the same message about pension saving. We need to ensure that people understand that they will be offered a basic level of state pension as a result of the changes, but—this is where the communication issue highlighted by so many Members needs to come into play—that that basic state entitlement will not be sufficient for most people to have the standard of living that they anticipate. People will understand that that basic state level of support will be there, regardless of any further savings they make towards their own retirement pots. Anything and everything above the basic level will be additional and that, in my view, will change people’s behaviour, simply because they will no longer feel that they will be punished for trying to do the right thing.

The shadow Secretary of State, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), gave some examples of where there would still be an element of means-testing in the system. We all regret that, but the truth is that we are moving significantly away from means-testing for pension provision. We should all applaud that because we want to ensure that people in work are encouraged to do the right thing, to do more for themselves and, at the same time, to save towards retirement. These are crucial changes that will change how the British public view the support offered by the state.

[Hywel Williams (Arfon) (PC)]

I agree entirely with the hon. Gentleman about the virtue of making the system less complex and more understandable and about the requirements for better information that have already been mentioned by Members on both sides of the House. Will he concede, however, that there is a regional element? As a Welsh Member, he will know of the long-term mass unemployment in parts of our country that means that some people will just not have had the opportunity to amass the national insurance contributions required to qualify for the pension. That is a regional effect.

[Guto Bebb]

That will need to be considered. As I am well aware, parts of north Wales have long-term unemployment issues that might have an impact on the changes. We need to consider the detail, but the changes should still be welcomed. As I conceded in my opening remarks, some issues will need to be considered in Committee, but the overall direction of travel should be warmly welcomed, whether one is a Member in Wales or in any other part of the United Kingdom. A key point that should be mentioned is that there has been no mention from Government Members of a regional level of state pension. Having heard some of the comments from Opposition Members in recent weeks, I shudder to think what the Labour party might propose in due course on a regional level of basic state pension.

[Mark Durkan (Foyle) (SDLP)]

The hon. Gentleman has made the point that he wants work to pay and for people to know that doing the right thing will not cost them. Does he accept that we must take care with the transitional arrangements in that regard? People could find that they lose out in the tight transition, not least because of the costs that could be imposed on schemes that might force their closure—for example, those schemes that were contracted out would now have to be contracted in. The opportunity to simplify those schemes does not really exist, as such direct benefit schemes are notoriously complicated and some people could find that their schemes close as a result of the costs imposed.

[Guto Bebb]

I will come back to some of the important points about the transitional changes, but I suspect that I will have to allow the hon. Gentleman’s specific points to be debated in Committee.

In introducing pension changes, this Government have tried to deal with the excessive level of support offered to public sector workers. At the time we were constantly accused of wanting to level down pension provision in this country, but it is clear that with auto-enrolment being brought forward by this Administration and with the single-tier state pension, we are trying to ensure a more level playing field between those people who are doing extremely important work in the public services and those who are earning a living differently. We are trying to make sure that there is a more equitable system for both.

It is interesting to note that the vast majority of people whose employers might need to pay more in national insurance contributions as a result of these changes are in the public sector. Only today I received a briefing on the issue from the National Union of Teachers. For the National Union of Teachers to state that it has no real concerns about the impact of these proposed changes on its members says a lot about the fact that the changes are very beneficial. I had not previously seen a single press release from the National Union of Teachers that had not attacked this Administration. Despite the 1.4% average increase in national insurance contributions that would have to be made by those who are currently contracted out of the system, there is an acknowledgement that a higher level of pension will then be enjoyed. That comment was made clearly by a union.

I want to emphasise how extremely welcome this change is for the self-employed, and express my amazement at the comments from the right hon. Member for Birkenhead (Mr Field). If it is said that the pensions Minister is introducing these changes for the self-employed because he believes there are votes in it for Liberals, long may he continue to bring in changes that will benefit the Liberal vote. In my constituency of Aberconwy and in many parts of rural Wales, a significant percentage of the population are self-employed, and a significant percentage of the population were paying their 9% class 4 contribution and did not know what they were getting for their money. The class 2 contributions made by the self-employed ensured that they got the basic level state pension. Anything that they paid into class 4 was deemed to be on top. That could amount to a significant sum and there was no feeling that anybody was getting anything for that contribution.

In an area such as mine, where about 27% of the population are self-employed, it is imperative that they feel that the state is treating them fairly. It is not their fault that they have had to create their own job in order to stay employed in their own community, and it is unreasonable to argue that because there is no employer making a contribution on their behalf they should be treated worse than other employees. If the self-employed are contributing on a par with or at a similar level to the employed, we should not bring into the equation the employer contribution, because the employee, the worker, the person making an effort to pay their way, support their family and ensure a future for themselves should have the confidence that when they come to retire, they will be treated by this Government in the same way as any employee.

[Mark Reckless (Rochester and Strood) (Con)]

My hon. Friend is right to note that some people who are self-employed might prefer to be in employment. Others do it because they are entrepreneurial and it is what they want to do, but the problem at present is the complexity of the system. One great benefit for those who are sometimes self-employed, then employed and then go back to being self-employed is that they will now have clarity.

[Guto Bebb]

I agree with that point. It is an important consideration, especially for people who, because of family connections and so forth, after a period of unemployment decide to take the option of self-employment as a means of staying within their community. They will value greatly the certainty that there will be a basic level of support in the future. A divide exists between those working in the public sector in parts of rural Wales and those working in a self-employed capacity. The change will not make it a level playing field, but it will reduce the inequalities.

There are a few other points that I would like to make. There has been some comment about the increase from 30 to 35 in the number of years of contributions required. That must be seen in the context of the significant increase in the state retirement age that has been accepted reluctantly by hon. Members on both sides of the House. Somebody starting work at 21 would be expected to work for the next 44, 45 or 46 years, depending on their age. Therefore to expect 35 years of contribution is not unreasonable and should be considered.

Another issue that I would like to touch on is the fact that, despite the changes being comparatively cost-neutral, the savings implied may not be as significant as stated by the right hon. Member for Birkenhead. We are moving from 8.5% to 8.1%. It is a reduction, but not a huge one. In that context, to come up with a system that is better for the worse-off or the less well paid in society, and which is better for women and carers than the current system, is not a bad record for the Government. The Bill is moving in the right direction. It tries to protect and enhance the support for those who are less well treated by the system, and that should be welcomed.

On the subject of transition, there has been some discussion about the issue of women born between 6 April 1951 and 5 April 1953. When I started receiving e-mails on the issue—I have now received a couple of dozen—it appeared on the face of it to be a very unfair situation. But we need to bear it in mind that this could be an issue of communication rather than of the change in the legislation. Making a comparison between a woman born between those two dates and a man born between those two dates takes out of the equation the fact that they will be retiring at different times.

If women born between those two dates decided to defer their retirement, about 85% of the women affected should be able to retire with a level of pension support equivalent to that enjoyed by a man born during the same period. There is therefore a message to be conveyed. Does somebody retire before the age of 65, which is the relevant age for men at that point, or do they opt to retire a couple of years earlier and accept a slight reduction in their pension? We need to ensure that the DWP takes that type of communication into account so that when people see what they perceive to be an unfairness, they see the issue in context rather than on the basis of a campaigning e-mail.

The Bill is a huge step forward in ensuring that people understand that the state is there to support them, not to be responsible for them. That is a crucial difference. People need to be aware that the state will ensure that they have the basic level of protection. More importantly, the state should make sure that it provides the focus for an individual to make decisions that will allow them to help themselves. That is what we are doing throughout our welfare changes, and I am glad to say that it is what the Bill does. Yes, there are some details that need to be looked at in due course, but in general the House should welcome this brave and ambitious proposal to make sure that the state’s pension system is fair to the vast majority of the people who pay their national insurance contributions.

Oral Answers to Questions

Guto Bebb Excerpts

Monday 20th May 2013 Commons Chamber

[Mr Hoban]

The hon. Gentleman needs to remember that his party in government introduced the work capability assessment, so Labour Members cannot shirk their responsibilities. Since we came into office we have implemented the findings of Professor Harrington, and the fourth independent report is under way. The proportion of people going into support groups has tripled under this Government. That is a consequence of the reforms that we have introduced to fix a system that the previous Government created.

[Guto Bebb (Aberconwy) (Con)]

T10. Will the Minister join me in welcoming last week’s figures from the Office for National Statistics showing a fourth consecutive quarter of significant growth in the employment of UK nationals? Will he contrast that performance with the performance of the previous Government between 2004 and 20011, when we saw a significant increase in the employment of non-UK nationals in the economy?

[Mr Hoban]

The former Prime Minister used to bang on about British jobs for British workers, but in reality the majority of new jobs went to non-UK nationals. We have reversed that trend, and now nine out of 10 new jobs go to UK nationals.

Under-occupancy Penalty (Wales)

Guto Bebb Excerpts

Tuesday 22nd January 2013 Westminster Hall

[Jessica Morden]

I thank the hon. Gentleman for his intervention. I will come on to mention that later in my speech. Other hon. Members have raised the issues of people with disabled children and of rural housing. As he says, there is very little housing stock available for people to rent anyway.

Let me talk about the Underwood estate, on the outskirts of Newport. It has 138 three-bedroom properties, 45 two-bedroom properties and no one-bedroom flats, apart from 12 that are reserved for pensioners and disabled people. In the past, we needed larger properties, so that is what councils built. Wales will be hit hard because of a relative shortage of smaller housing. Newport is clearly not alone, as many housing associations across Wales face the same issue. Scarcity of larger properties is a problem in big cities in England, but in Wales, there is a scarcity of smaller properties.

[Guto Bebb (Aberconwy) (Con)]

I congratulate the hon. Lady on securing what is undoubtedly an important debate in a Welsh context. The point that she makes about the shortage of smaller properties in Wales is one that I fully accept. Does she share my surprise therefore that the Wales and West Housing Association has decided that the coalition Government’s policy will be imposed on all tenants regardless of whether or not they are on housing benefit? Surely, that is a restriction on people who might be willing to pay the going rate for a three-bedroom house.

[Jessica Morden]

I am here to talk about under-occupancy and housing benefit. I appreciate what the hon. Gentleman is saying, but I want to continue to press my point.

Even if someone is able to move from a community such as Underwood, they will often leave behind family who are able to care for their children while they work. I cannot be alone in often meeting people in my surgery who seek houses near their parents precisely so that they can have help in looking after their children. Those with two children of the same sex under 16 could have to move to a two-bedroom property. In somewhere such as Underwood, the likelihood is that the children would have to move schools, with all the disruption that that would cause.

Atos Work Capability Assessments

Guto Bebb Excerpts

Thursday 17th January 2013 Commons Chamber

[Dan Rogerson]

The problem with that suggestion is that all the people who have been through the process and have won appeals will have to go back to square one. I am therefore in favour of improving the current system. Every time we renew a system, we go back to square one. Those who have been through an assessment and an appeal and have finally got the right result should not be sent back to square one. The hon. Gentleman articulates the anger that is felt, and there are clearly problems with the process, but I do not think scrapping it and going back to square one is the best way to proceed. Professor Harrington has not suggested that course of action, either. What he has said is that there are problems that need to be resolved.

[Guto Bebb (Aberconwy) (Con)]

Will the hon. Gentleman give way?

[Dan Rogerson]

No, I want to conclude so that others can have a chance to speak.

There are certainly questions to be asked about the company operating this process. The hon. Member for Stafford (Jeremy Lefroy) said it was drinking in the last-chance saloon. We have heard in other contexts that people can remain in that saloon for a long time, however, and this debate serves to show the Government that we are taking this issue very seriously.

There is another issue, too. Those who are found capable of work even after an appeal should be supported into work. We must do that properly. I hope we will address that issue on another day, as it is the second part of this process and there are problems to be solved.

--- Later in debate ---

[Guto Bebb (Aberconwy) (Con)]

I was not expecting to be called to speak, Mr Deputy Speaker, but I shall say a few words.

The debate has been very valuable and there has been cross-party consensus, which shows that there is a great deal of concern about how Atos is performing against its contract. That is not to say that all the language used today is acceptable, and I feel that some of the constructive changes that have been implemented have been ignored. For example, when I was on the Welfare Reform Bill Committee, one of the key issues of concern for me was how the work capability assessments would deal with cancer patients. It is a fact that more cancer patients now qualify for unconditional support than ever before, yet we have had no mention of that. In the midst of making constructive and, in many cases, justified criticisms of Atos, it is important that Members are careful not to frighten people listening to this debate who might be cancer patients and might feel that they have no hope whatever of a fair hearing from Atos. I also want to highlight the fact that more people—double the number from two years ago—now qualify for unconditional support.

Those two points—about cancer patients and the number of people getting unconditional support—are important reasons why the proposal made by some Opposition Members that we should simply throw the whole system out and start again is dangerous. It does not take into account some of the constructive changes that have been implemented.

[Sheila Gilmore]

I do not deny that there have been some improvements—although one speaker said that they had happened at a glacial pace, which was probably a fair comment—but we must bear it in mind that the unconditional support is not available without the person being re-subjected to an assessment. One complaint is about the frequency of reassessment, even for people whose conditions are so serious that they have been put in the support group but who sometimes, a year later, still have to come back and go through the whole process again.

[Guto Bebb]

The hon. Lady’s point is important, because although we all subscribe to the principle of a review, when a condition has been assessed as demanding unconditional long-term support there is a question about whether an annual review is justified. That is an issue that a constituency MP who takes case work seriously would not ignore, so I take her point on board.

There are a couple of aspects that I welcome, but about which I still have concerns. One is the way in which the system deals with patients who suffer from mental health problems. Mental health services are often the Cinderella service of the NHS, but when it comes to people who have difficulty accessing work and feeling confident to do so, the way that Atos deals with such patients has been less than acceptable. I understand that the Department and Atos are putting in 60 champions, but given the number of issues that I have seen in my own constituency, I question whether 60 will be sufficient for the whole of the United Kingdom. The way in which we deal with people with mental health problems is not acceptable in the health service and it is not acceptable at this point in time in Atos, even though the problem has been recognised and work is being done to try to deal with it.

The other matter, which has been touched on by several hon. Members, is the issue of people with chronic long-term illnesses. The problem that I have seen in my constituency surgeries is that quite often somebody may turn up at an assessment centre and on that particular day would be capable of a certain type of work, but the situation could be completely different the following day. The problem with the system that we have put together is that it does not take into account those long-term chronic conditions that could result in somebody occasionally being able to take on work, but not on a long-term basis. That is another weakness in the system.

[Meg Hillier]

Does the hon. Gentleman agree that people with HIV/AIDS, where the side-effects can cause many day-to-day problems, are not properly assessed in the work capability assessment?

[Guto Bebb]

I entirely accept that point. The same is applicable to cancer patients, for example. However, there is a counter-argument that often people who suffer from HIV/AIDS or who are dealing with cancer would enjoy the opportunity of working. My father, who passed away owing to lung cancer, was working until three weeks before he died, and there is no doubt that being able to work for such a long period was a contributory factor to the way in which he fought the disease. We need to make sure that we do not categorise everybody who has a long-term chronic illness as incapable of any type of work.

On a specifically Welsh issue, despite the promises made by Ministers in the Welfare Reform Bill Committee when I tabled an amendment to allow assessments through the medium of Welsh, I have encountered numerous examples where assessments have been requested through the medium of Welsh but that service has not been provided. An excellent example was that of a young woman in my constituency who had a stroke at the age of 42, I believe. As a result, she largely lost the ability to communicate through the medium of English. Despite numerous requests for the service to be provided in accordance with the promises made by the Department, as yet we have not been able to ensure that she has that service through the medium of Welsh, which is her right under the Welsh Language Act 1993.

I subscribe to the general views expressed in the debate that the system is not performing as it should and that there are real concerns about the way that Atos is performing. However, I believe that what the Government are trying to do is right, as it is important that we recognise that we have a higher number of long-term unemployed in the United Kingdom than any comparable western state in Europe, and we need to question why that is so.

I do not think it is necessarily wrong, harsh or unreasonable to say that people who could work should be supported into work, but we need to do that in a way which recognises the dignity of individuals going through the system. Despite my support for the welfare changes that this Government are making, the examples that I have seen in my own constituency surgery leave a lot to be desired. We should not throw out the baby with the bathwater, but we need to make sure that the recommendations that have been made time after time are implemented as soon as possible. We owe that to the constituents we represent.

Jobs and Social Security

Guto Bebb Excerpts

Wednesday 28th November 2012 Commons Chamber

[Guto Bebb (Aberconwy) (Con)]

It is a great pleasure to follow the maiden speech from the hon. Member for Manchester Central (Lucy Powell). I agree with much of what she said about Manchester—I can certainly attest to the fact that the city has been renewed dramatically—but it is fair to say that my son would not support the same football team as she does, although the fact that he supports a team in Manchester, rather than Liverpool, would probably go down well with the Manchester electorate.

It is a great pleasure to contribute to this debate. This issue constantly comes back for debate and is rightly being scrutinised, because the Government’s investment in the Work programme is probably among the most important things the coalition is doing. It is right that the Opposition scrutinise how the Work programme operates, but this debate is premature and the motion is not based on any reality that I recognise. I certainly want to challenge some of the assumptions—lazy assumptions, I would argue—behind the debate.

As the Secretary of State made clear, the Labour Front-Bench spokesman provided no context for the debate. I reiterate that, despite the difficult economic circumstances that the coalition is dealing with, we have seen sustained employment growth. We have the highest number of people employed in this country ever, yet we get no recognition of that from the Opposition. I almost think they begrudge employment creation in the private sector under the coalition. Nothing typifies Labour’s behaviour better than the way it constantly dismisses some of the jobs being created by the private sector. As I have said before, if I ever hear another Labour Member talk about jobs that are “nothing more than shelf-stacking”, I will finally blow my top.

[Nick de Bois]

Is it not also worth highlighting the fact that Jobcentre Plus has a successful record of getting those who have been employed for less than one year into work? Not only is that an achievement that we should celebrate, but it has the effect of leaving a tough challenge for those in the Work programme who are finding it hardest to get placed.

[Guto Bebb]

That is an important point. I have visited Jobcentre Plus in my constituency to pay tribute to the work it is doing. Jobcentre Plus has been successful in getting people back into employment quickly, which means that the Work programme providers are not dealing with the low-hanging fruit, but with difficult-to-place individuals who need support and guidance over a longer period than Labour is willing to admit. It is also important to say that a job is not just a job, but an opportunity to change one’s lifestyle, gain respect in one’s family and community, and show that one can make a contribution.

[Jane Ellison]

The rather dismissive attitude towards jobs in retail that my hon. Friend has described drives me to distraction as well, particularly as I am co-chairman of the all-party retail group. Retail is an industry in which a great many people have started at the bottom and, from that chance on the shop floor, have risen to the very top through their application and talents. There can be no more meritocratic industry, so he is quite right to castigate the Opposition for being so dismissive.

[Guto Bebb]

Indeed. My experience of going around Tesco’s partnership stores, for example, has been quite inspiring. I found somebody who had been unemployed for eight years and was given an opportunity to work in the bakery section; 18 months later she was the manager, and famously said, “They’ll be carrying me out of here in a box, because I’ve been given an opportunity.” That is the reality of what creating a job and helping people into a job is all about.

[Sheila Gilmore]

The points the hon. Gentleman makes about the importance of employment are clearly correct. The reason I have any criticism of jobs in the retail sector, for example, is not because they are not important jobs, but because people are increasingly being offered short-hours jobs, on zero-hours contracts and with little security, which simply does not work for those trying to organise child care. That is the problem.

[Guto Bebb]

I disagree on the whole. Quite often the current restriction means that when people go over a certain number of hours, they are penalised. That will be dealt with when we introduce universal credit. What I have found is that there is a feeling out there that people are still being penalised for wanting to work more. Universal credit will certainly deal with that, which is an important change that is required.

We have heard a lot in this debate—from the Opposition Front-Bench spokesman and some Opposition Back Benchers too—about youth unemployment. Obviously it is absolutely problematic if too many young people are not working, but between 2004 and 2010, youth unemployment in my constituency of Aberconwy increased by 192%. If I recall it correctly, I think the Labour party was in government at that point.

[Rehman Chishti (Gillingham and Rainham) (Con)]

Does my hon. Friend agree that a number of councils out there are working in partnership with Jobcentre Plus? They include Medway council, which reduced youth unemployment from 1,600 to 1,200 between April and October. That clearly shows that where there is the will, the Government’s policies, with local councils working in partnership with Jobcentre Plus, are reducing youth unemployment.

[Guto Bebb]

Indeed, and that example should be replicated in other parts of the country, where partnership working can make a difference.

Despite a 192% increase in youth unemployment in my constituency of Aberconwy during the last six years of the Labour Government, we have seen a 21% reduction in youth unemployment since this coalition came into play. Twenty-one per cent is not enough—the fact that I still have young people not working in my constituency is unacceptable—but we should recognise the success in getting young people back into employment. Every young person who is not claiming unemployment benefit or lying around doing nothing is a success story as far as I am concerned. When Labour Members talk about youth unemployment, it is important that they consider their performance in government.

However, I suspect that this debate is more about the Work programme than about the general context. I have talked about the general context, but it is important to bear in mind that the Work programme is the Department’s flagship programme, and a lot rests on its success. My concern is that this debate is premature, because it is difficult to look at a long-term programme—which is looking at paying people based on their performance over the long term, not the short term—and say after a year that it is failing. Even going on the figures that came out yesterday, it looks as though the programme is doing exactly as it was supposed to be doing. They show that 56% of Work programme starters in June 2011 are no longer on benefit, that 30% of them have been off benefit for 15 weeks and that 19% have been off benefit for 26 weeks.

[Paul Flynn (Newport West) (Lab)]

The results that we heard about yesterday cannot be compared with anything else that ever happened. It is probably true that if the Government did nothing at all, there would be a better outcome. Can we therefore conclude that the best we can expect from the Government for the next two and a half years of their miserable existence is a long period of inactivity?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We have a lot of speakers to get in, and we need shorter interventions. Otherwise, Members are going to be disappointed.

[Guto Bebb]

The hon. Member for Newport West (Paul Flynn) seldom sees the bright side of life. The truth is that I am not willing to see 31,000 job outcomes so far as immaterial. That is something that we should be proud of. To be perfectly frank, if that is failure, give us more.

The Opposition seem unwilling to accept that we should be concerned about value for money for the taxpayer. Obviously, I am not going to mention the comment made by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) about our financial position, but the Government should be aware of getting value for money for the taxpayer. The figures that I have here show that some of the previous employment support projects have not been particularly successful in that regard. The flexible new deal cost £7,500 per job created, and £770 million was spent. The employment zones cost £993 million, with an average spend of £7,800 per job. The new deal for young people—which was successful, it has to be said—cost £3,300 per job created. At the moment, the Work programme is coming in at about £2,000 per job created. I think that that is a sign of success. Even though it is still premature to look at the outcome figures, we should take a great deal of comfort from the fact that it is giving that level of value for money.

The proof of the pudding is in visiting the Work programme providers in our own constituencies and localities. I have visited the providers operating in the county of Conwy, and I was very encouraged by that visit. I found teams of dedicated members of staff, but an organisation that was taking a huge financial hit because of the performance-related concept that the Department for Work and Pensions insists that the Work programme providers deal with. Interestingly, however, none of the providers that I spoke to suggested that they had any intention of leaving the programme. That was because they could see that they were going to be successful as time moved on. Indeed, separate data published by the Employment Related Services Association, the trade association that speaks for the Work programme providers, show that job starts have increased in the months since yesterday’s figures were collated. That is reinforced by what I have been told in my constituency.

Nothing gives a feeling for the importance of the Work programme better than talking to the participants. They feel that they are finally being taken seriously. They are getting support in areas such as presenting themselves and putting together a CV. Even more impressively, they are getting support with transport to take them to job interviews and training opportunities.

On the visit that I made, I was also impressed by the flexibility of the Work programme to deal with the local issues affecting that particular part of the world. One of the key issues for the Work programme providers in rural north-west Wales is the need to be more flexible in supporting people into self-employment. The original contract that the provider signed included a comparatively low number of members of staff dealing with self-employment. However, it became apparent in no time at all that self-employment was going to be a key deliverer of outcomes in a constituency such as mine, and the contract was flexible enough to allow the provider to up the number of people being supported into self-employment.

A great example of partnership working in that context was the business support structure of the Labour Welsh Government giving its full support to the Work programme providers who were helping unemployed people who wanted to start their own businesses. So the flexibility is there, and the outcomes will potentially be there in due course. What I am seeing is work in progress and a programme that is aimed at ending our long-standing dependency culture. That needs to be targeted and dealt with.

When I visited these Work programme providers, the most impressive thing was that a number of the job outcomes highlighted on the whiteboards were job outcomes in local hotels and local restaurants. That is important in a constituency such as mine, which is heavily dependent on tourism, because previously over the past five or six years—and certainly from 2003-04 onwards—the jobs created in the leisure and hospitality sector in my constituency were being filled by hard-working individuals from eastern Europe. The wonderful thing about the Work programme is that we are seeing evidence that those jobs are now being filled by people living in my constituency and being willing to take the opportunity to work.

[Several hon. Members]

rose—