Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 22nd November 2010 Commons Chamber

[Mrs Anne McGuire (Stirling) (Lab)]

2. What steps his Department plans to take to assist employers to provide real-time pay data for universal credit computations.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Her Majesty’s Revenue and Customs is continuing to consult with employers on how best to collect real-time pay information. I should stress that the information required for the universal credit is already being collected by HMRC as part of its reforms to the pay-as-you-earn system, which are on track. The adoption of the new real-time information system, for the benefit of employers, universal credit customers and taxpayers, is already well on track.

[Mrs McGuire]

Can the Secretary of State tell the House what proportion of the £2 billion allocated in the comprehensive spending review to implement the universal credit will go to support HMRC’s IT project, and what proportion will go as compensation, so as to avoid losers in the transition to the new universal benefit?

[Mr Duncan Smith]

The right hon. Lady will forgive me if I do not give her the absolute details. We will be publishing the details shortly—well, soon, anyway—but I can tell her now that she can expect to see a significant amount, as a proportion, for the computer change. All this is covered by the money already granted through the settlement in the spending review—more than £2 billion—which will go to protect those who would have nominally been losers and to implement all the necessary IT changes, and to cover every other detail too.

[Mr Julian Brazier (Canterbury) (Con)]

I welcome my right hon. Friend’s earlier answer. In the light of several terrible cases in my constituency, does he agree that it is extraordinary that the whole system of credits was introduced at all without a proper real-time information system?

[Mr Duncan Smith]

The PAYE system is ultimately the responsibility of my colleagues at HMRC, although we will obviously require an element of that to implement the change. That change will make life considerably easier for us in delivering those benefits without the normal mistakes that are made—mistakes that have caused overpayments to people, followed by attempts to claw them back that cause hardship for many people on low incomes. I believe that in due course the change will deliver a net benefit to everybody.

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

Under the Secretary of State’s proposals, councils are to use the real-time data to calculate entitlement to council tax benefit, although the entitlements will vary according to each local authority. What is his estimate of the cost to the Department for Work and Pensions of supporting councils in creating their own mini-benefits system in each locality?

[Mr Duncan Smith]

I will give those details soon. I will not give them today, but I can say that we have already been working on the issue. We believe that, as things stand right now, we will manage the cost within our present budgets—it will not require anything extra for us. Of course, as the right hon. Gentleman said, it forms a challenge to us—I accept that—but localising elements of benefits is important to local people, and councils have very much wanted to do this. I will definitely give him the figures for that in due course, but we believe that we will be able to manage it, and I am more than happy to discuss that with him.

[Hazel Blears (Salford and Eccles) (Lab)]

3. What steps he is taking to encourage social enterprises to become providers under the Work programme.

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[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

We believe that universal credit will make work pay. We have done some assessment and we can announce that we believe we should reduce by 1.3 million the number of workless households facing a participation tax rate of more than 70%. We also believe that we will improve earnings incentives for some 700,000 people and that we could reduce the number of workless households by about 300,000.

[Karen Bradley]

I thank the Secretary of State for that response. Caudwell Children is a charity that has significant experience in helping the parents of disabled children back into work. Could he give some assurances as to how the universal credit will make that process easier?

[Mr Duncan Smith]

I hope and believe that if we implement universal credit correctly, it should allow people with caring responsibilities to meet those responsibilities with greater flexibility in the number of hours they can work. At the moment, it is very difficult for many of them to work the sort of hours they need to work without damaging their ability to fulfil their caring responsibilities. We think that flexibility would be most effective for them and, strangely enough, for lone parents.

[Ms Karen Buck (Westminster North) (Lab)]

The universal credit has the desirable and indeed the shared objective of reducing the rate at which tax and benefits are withdrawn as earnings rise. But for every pound that will go into the universal credit, £8 is being removed as a result of the June Budget and the comprehensive spending review. When the Secretary of State says that nobody will be worse off, is he making the comparison with the period before or the period after those cuts come into effect?

[Mr Duncan Smith]

What I said originally was that we believe that from the position we inherited, the implementation of the universal credit will have a net beneficial effect for the poorest people in this country who are trying to achieve work. So it is not just a case of people not being worse off; we believe that people will be far better off than they were when the hon. Lady’s Government left us.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

14. Whether his Department plans to publish a gender impact assessment of the changes to be made to the benefits regime as a result of the comprehensive spending review.

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[Stephen Hammond (Wimbledon) (Con)]

16. What assessment he has made of the likely contribution of the proposed universal credit to his Department’s objective of encouraging people to work.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I refer my hon. Friend to the answer I just gave.

[Stephen Hammond]

I listened carefully to my right hon. Friend’s previous answer. Given the benefits for so many of the introduction of the universal credit, what chance is there that the Government might be able to accelerate its introduction beyond the 2017 time scale currently announced?

[Mr Duncan Smith]

I will resist the temptation to accelerate anything. I simply say to my hon. Friend that the plan we have put in place allows us to spend the right amount of time making sure that we are integrating those on the current benefits correctly and that we are not making any mistakes. We do not plan to accelerate that, but clearly we hope that this process will go smoothly—we believe it will. That is the most important thing.

[Graham Jones (Hyndburn) (Lab)]

Can the Secretary of State give an estimate as to how many parents with young children will return to work under his universal credit, and can he explain the incentives?

[Mr Duncan Smith]

We believe that we will lift some 350,000 people in that category out of the poverty that we inherited. I am not going to give any significant answer to the second part of the hon. Gentleman’s question, simply because I am happy to write to him in due course and give him the figures. His party says it accepts and supports this process, and the reality is that the universal credit has the biggest effect on the poorest people trying to get back into work. That surely has to be welcomed by him and the whole of his party.

[Jo Swinson (East Dunbartonshire) (LD)]

17. What assessment he has made of the likely effects of the Work programme on unemployed people who volunteer.

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[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I repeat that the universal credit will benefit a large number of people, improving work incentives for some 700,000 people who will see their marginal deduction rates fall from about 96% to 76%. The specific group that the hon. Gentleman is talking about will have their withdrawal rates rise marginally, although that will be met by our guarantee that nobody will be a loser in the course of this.

[Simon Danczuk]

I genuinely welcome the Secretary of State’s attempts to get more people incentivised and back into jobs, but does he accept that his proposals are more likely to fail because the regional development agencies that created many jobs in Rochdale and other parts of the country are to be replaced by what Lord Heseltine has called a “high-risk” regional growth fund?

[Mr Duncan Smith]

I do not accept that point. We recognise that it is critical to create those jobs and we expect them to be created as the economy grows. The big problem with creating jobs under the previous Government was that 70% of all the jobs created in 15 years went to people from overseas and not from the UK. The big issue for us is getting people in the UK ready and able to do that work, which the Minister with responsibility for employment, the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), is busy doing through the Work programme.

[Andrew Bridgen (North West Leicestershire) (Con)]

The Opposition seem convinced that the introduction of the universal credit will be dogged by IT difficulties. Does that not reflect their lamentable experience in this area? What reassurance can the Secretary of State give us that we will succeed where the previous Government failed so badly?

[Mr Duncan Smith]

The previous Government had problems with IT development, as did lots of Governments—both sides accept that. To be fair, I have spoken to the shadow Minister, the right hon. Member for East Ham (Stephen Timms), who has been very positive about general developments. In his time, the development of the employment and support allowance computer was a very positive development, for which I compliment him. That is a very good example of the scale of computer development that we can undertake with the universal credit.

[Nicky Morgan (Loughborough) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

We are busy working very hard on employment programmes. I draw my hon. Friend’s attention to the very positive employment figures from last week, which indicate that the Government’s direction of travel places employment growth at the heart of all we do.

[Nicky Morgan]

I thank the Secretary of State for his answer and I note the earlier comment by the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), that economic growth should not be talked down and that jobs are being created. How are the providers of the Work programme going to work with employers to identify those jobs and make sure that people are placed in private sector jobs as we go forward?

[Mr Duncan Smith]

My hon. Friend is absolutely right. The difference between this Government and the previous Government will be that the Work programme—the most comprehensive, integrated work programme in existence, certainly, since the war—will make a huge effort to get those who have been out of work for the longest periods ready for work so that they actually get to work. As the economy grows, those jobs will be greater in number. A key point that I made earlier is vital to her question: for all the growth under the previous Government, prior to the mistakes they made that brought us the recession, most of those jobs went to people from overseas because British people simply were not capable of doing that work. That has to change.

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

May I take the Secretary of State back to his claim that job creation will be vital and ask him specifically about what the Office for Budget Responsibility has stated will be the estimated saving from threatening the long-term unemployed, about whom he has just spoken, with the 10% figure? Do the OBR’s estimates on how much that policy will save include an expectation that it will move more people into work, or is no significant saving in terms of work incentives expected? Do the calculations simply show OBR figures for the number of people who are going to continue with no job but less money? What do the OBR figures indicate?

[Mr Duncan Smith]

The OBR figures show two things: significant growth during the course of this Parliament and significant growth in private sector employment. Our changes in housing benefit will get rid of a disincentive to taking those jobs, which a significant number of people failed to take under the previous Government, who failed to do anything about it.

[Mark Lancaster (Milton Keynes North) (Con)]

T2. My constituent Rachel Clark, who has learning difficulties, enjoys working as a volunteer at a coffee shop run by the charity MacIntyre. Until recently, she received a therapeutic allowance but unfortunately that practice has had to stop for fears that it is in breach of national minimum wage legislation. Given that all parties were happy with the arrangement and that Rachel is happy to carry on as an unpaid volunteer, can we look into this grey area of the law?

[Miss Anne Begg (Aberdeen South) (Lab)]

T4. May I ask Ministers to look again at the proposal to reduce housing benefit by 10% for people receiving jobseeker’s allowance for a year? The Minister for Housing and Local Government said this morning that people in social rented housing will be kicked out of their homes if they go into work, and under the proposal on housing benefit, people will be kicked out of their homes if they do not go into work.

[Mr Duncan Smith]

I always appreciate the hon. Lady’s advice. We certainly keep all that under review and intend to do so all the way through until we introduce the Bill. However, having said that, there is a lot of good evidence out there to show that we have to give people some sort of incentive not to decide to refuse that work. We believe that that is one of the areas where a lot of international evidence shows that such a spur actually helps people to do that.

[Karen Bradley (Staffordshire Moorlands) (Con)]

T5. What can the Secretary of State do to assure unemployed people in Staffordshire Moorlands that the Work programme will help them to find not just employment, but sustainable employment?

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[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I, like many other hon. Members, have been contacted by a number of constituents whose pension provision has been seriously affected by the collapse of the former Ford UK parts manufacturer, Visteon. Will the Secretary of State meet me to explore how we might best help those who have been most adversely affected?

[Mr Duncan Smith]

I will, indeed, and my hon. Friend must give me a date.