Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 23rd January 2012 Commons Chamber

[Sarah Newton (Truro and Falmouth) (Con)]

5. What assessment he has made of the information technology systems which will support universal credit.

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

Universal credit is on track and on budget. The systems are not new or complex. After all, more than 60% of the total developed system is based on reusing existing IT. New developments will use tried and tested technology. The key difference between how this Government are doing things and how they were done before is that we have adopted commercial “agile” design principles to build the IT service for universal credit in four stages, each four months long.

[Sarah Newton]

I thank my right hon. Friend for his answer. Given the billions of pounds that were wasted by the previous Government on failed IT programmes, this matter is vital to me and my constituents. Will my right hon. Friend therefore explain to colleagues more about the testing regime before the new system is implemented?

[Mr Duncan Smith]

I should tell my hon. Friend that I am not complacent about delivery. Hon. Members on both sides of the House know that IT developments can have difficulties and can go wrong at key points, even when we are not expecting them to do so. I am trying to ensure that Ministers are directly involved at every turn. We get weekly updates and have fortnightly meetings with those in charge. I set up a programme board, which I chair, and a senior sponsorship group, which includes Her Majesty’s Revenue and Customs, the programme board and the Department for Work and Pensions. The major projects review group has regular reviews. “Agile” principles make it easier for us to pinpoint where there might be failures.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

This morning on the “Today” programme, the Secretary of State declared that he knew where and who the families were who would be most adversely affected by the introduction of universal credit. They will lose their homes, their children will lose their schools and they will have to find new medical treatments. Why does he need that system, and has he begun the process of informing those families about the cataclysm that he will bring down on their heads?

[Mr Duncan Smith]

With respect to the hon. Lady, she is mixing up policies. This question is about universal credit, but she is referring to the cap. I am sorry that no Opposition Member tabled a question on the cap—there might be a reason for that, but I do not quite know what it is.

What I said this morning was quite clear. I said that when it comes to the cap and smaller numbers of people, we have worked very hard over the last nine months or so to ensure that we know who will be eligible to fall within the cap. We know exactly all their details, which will make it easier for us to help them through the process. She should have a word with Opposition Front Benchers, and ask them why they did not ask a question about the cap.

[Mr Peter Bone (Wellingborough) (Con)]

When the Secretary of State introduces the new IT system, will he consider introducing a skills database for all those who want a job, enabling employers to dial into the database and match the skills required with the person seeking a job, as against the other way round as at present?

[Mr Duncan Smith]

That is a very good idea and I am certainly ready to discuss it with my hon. Friend. If we can make something work, it would be brilliant.

[Nick Smith (Blaenau Gwent) (Lab)]

The information technology necessary for university credit will depend on the Revenue’s new PAYE real time system. Is the Minister confident that every employer will be using the system successfully by next October?

[Mr Duncan Smith]

We are working towards that, and so far it has been a success. Small companies of nine employees or fewer will have access to free software upgrades, so those that do not have a software payroll system will not incur any great charge. We are running trials that will start in April and that will join with the DWP in October. We are on target and we will continue to work towards that date. That is our expectation and ambition.

[Priti Patel (Witham) (Con)]

6. What steps he plans to take to reduce the cost of sickness benefit paid to UK citizens living abroad.

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

We are bound by EU rules to pay sickness benefits abroad when people are eligible. I emphasise that they need to be eligible, and the same rules apply to the contributory element on employment and support allowance and incapacity benefit—there are no additional limits. We are determined to clamp down on people claiming when they are not eligible, and we are arguing that through at the moment, even in the Commission.

[Priti Patel]

In the light of the significant sums being paid in sickness benefits to UK citizens abroad will my right hon. Friend update the House on the legal dispute between the Government and the European Commission? Will he assure me that he will fight the Commission all the way on this matter?

[Mr Duncan Smith]

The Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), is in the Councils on this one. My hon. Friend refers to the Commission’s idea that the habitual residency test should be abolished. That is quite wrong and we disagree with it fundamentally, but we are not alone: a large number of European nations disagree with the Commission and we join them in saying that this is a step too far—a leap into an area that has always been preserved for national Governments and in which it has no right. We will fight this, and I believe that we will win.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

This is a very serious issue, but will the Government’s programme of closing the DWP’s overseas network in many countries around the world help or hinder efforts to ensure that benefits are paid only to those entitled to them?

[Mr Duncan Smith]

I believe that the hon. Lady’s question is not directly relevant to whether we are able to spot whether people are eligible, because anybody who claims will have to go through exactly the same checks as they would in the UK. That in itself will be a bit of a deterrent in their trying to claim something from a foreign doctor.

[Chris Kelly (Dudley South) (Con)]

9. What recent progress he has made on delivering universal credit.

[Caroline Dinenage (Gosport) (Con)]

19. What recent progress he has made on delivering universal credit.

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

Design work is well under way. As I said earlier, we are continually testing with staff and claimants to ensure that it works and that we make progress. On 8 December the major projects review group panel report acknowledged that significant progress had been made over the past few months.

[Chris Kelly]

How many households are expected to receive a higher entitlement as a result of the universal credit, and how will it help hard-working families in constituencies such as mine?

[Mr Duncan Smith]

Universal credit will be a major sea change for my hon. Friend’s constituents, who will appreciate the fact that for the first time ever we will guarantee that work pays. Figures show that 2.8 million households will have higher entitlements under the universal credit.

[Caroline Dinenage]

Is there any flexibility in the way in which the universal credit will be paid? For example, could it be paid weekly rather than monthly, and could its housing component be paid directly to landlords in order to protect vulnerable families?

[Mr Duncan Smith]

I thank my hon. Friend for that question. She has raised an issue that has been raised by a number of people. The reason why we want to try to pay universal credit monthly is simply that when unemployed people go back to work, they sometimes have to adjust to their wages being paid monthly rather than bi-weekly, which often causes them problems. One of the reasons why they often fall out of work is that they cannot settle on that. We want to try and pay the universal credit monthly, so that it assists them. We will give every bit of assistance we can to all those who have difficulty to help them manage their budgets, which will include a new test on the way we pay housing benefit and the way it will be allocated through their bank accounts. I also give my hon. Friend this undertaking: we will have set-back proposals to make it absolutely certain that we can assist those who genuinely cannot do so to pay their relevant bills.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Before Christmas it was announced that, at least initially, local authorities would have no role in the universal credit assessment. Will the Secretary of State tell me what impact that will have on those working in housing benefit departments in local authorities? Will his Department be helping with redundancy costs if large numbers of people working in housing benefit departments lose their jobs?

[Mr Duncan Smith]

The reason is that we will be talking full time, all the time, to local authorities. We receive a huge amount of information from them, so we are not talking about stand-alone assessments being made; rather, the functioning of universal credit requires that, at its best, it should be done in one location. However, we will be in constant contact with local authorities about the needs in their areas, and we will be with them all the way through in the way this is applied.

[Tessa Munt (Wells) (LD)]

May I press the Secretary of State a little further on the matter of paying housing benefit directly to landlords? A number of my constituents have found that when they are overdrawn or beyond their overdraft, the bank snatches the money, leaving them still unable to pay their rent, so that they get into worse and worse difficulties. Will he reconsider?

[Mr Duncan Smith]

I recognise that, and the point is that although the vast majority of those who receive local housing allowance make their payments on time, there is always a group that does not. The way to deal with that is to recognise that we need to help landlords by not allowing those kinds of people to get away with it—for example, by paying a little bit at the two-month point, which sets the clock back to zero. We can make adjustments that way, and we can also deal with those who have difficultly by assisting them and, where necessary, making direct payments. However, those payments should always be the exception, to try to help people manage their budgets.

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

10. What estimate he has made of the average cost to a small business of real-time reporting of PAYE information to enable calculation of universal credit entitlement.

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

Real-time information—there was a question about this earlier—should not be an additional cost to business, and I do not believe it will be. Ultimately, it will help to reduce administration burdens for employers. RTI will also be good for Her Majesty’s Revenue and Customs, because it will help to eradicate some of the errors caused by HMRC waiting a year before adjusting what it has already paid and then trying to chase people for that money. The fraud and error savings that will arise from the RTI programme—which the DWP considers vital for the universal credit—should be around £700 million, which is an important feature.

[Dame Anne Begg]

I do not think that the businesses I speak to have any idea whatever that this is about to hit them ahead of the introduction of auto-enrolment, which they are more conscious of and worried about. However, that may be academic, because from what I am hearing, HMRC’s timetable for real-time information has slipped. It will not be ready to roll out RTI universally across the country on the date that the universal credit is introduced. What happens to universal credit if RTI is not in place on its launch date?

[Mr Duncan Smith]

From the word go, we have not needed the full system of real-time information to be ready for universal credit. We get our information from essentially two feeds, which we have already been working on with HMRC, long before any further timetables. The reality is that RTI will dovetail nicely with universal credit, but we do not need it for that, and we are not expecting it to be ready at the start of universal credit. We were never expecting that, and we have been working on that basis. However, RTI will come in—it is “on timetable”—and those involved will be working hard to produce it.

[Grahame M. Morris (Easington) (Lab)]

11. What recent progress he has made on the introduction of the workfare scheme.

--- Later in debate ---

[Mr Tobias Ellwood (Bournemouth East) (Con)]

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

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

Today in the other place they will be debating an amendment on the benefit cap. I believe that that system will help to restore fairness by setting a cap for those on benefits of £26,000 a year after tax or £35,000 a year before tax. I cannot understand why those who have said they would support this and were in favour of it have voted against it as often as possible.

[Mr Ellwood]

I congratulate my right hon. Friend and his team on the work they are doing to modernise the benefit system following the mess that was left by the previous Government. On the benefit cap, does he agree that those who oppose it need to explain to those who are in work but who earn less than £35,000 a year why people on benefits should be better off than they are?

[Mr Duncan Smith]

My hon. Friend makes a powerful point. The reality is that almost everybody out there beyond the politicians and the game playing believe it is reasonable to say to people who are on benefits that if they are not working, they should not earn more than those who are working and paying their taxes. I am astonished at the Opposition, who do not seem able to get it. I understand from a recent poll that even their supporters are overwhelmingly in favour of the proposal.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I hope that the Secretary of State will not mind if I sustain his attention on the benefit cap for a moment because there will be an important debate in the other place this afternoon on the cap. This is a policy we support because, like him, we believe that people should be better off in work than on benefits. However, I want him to be absolutely straight with the House about what the cap will and will not achieve. Will he tell the House how much the housing benefit bill is going to rise over this Parliament as a result of his failure to get people back to work?

[Mr Duncan Smith]

There are two things to say about that question from the Opposition. If the right hon. Gentleman is, as he says, in favour of the cap, why does his party keep voting against it? Today, in the other place, it has tabled what is officially a wrecking amendment on the cap. Labour Members cannot weasel their way out and say that they are in favour on the one hand and against on the other. On housing benefit, I remind him that under his party, housing benefit pretty nearly doubled in 10 years, and it was set to rise far more than it will under us.

[Mr Byrne]

Perhaps I can help the Secretary of State: the truth is that over the course of this Parliament—over four years—the housing benefit bill is set to rise by an extraordinary £4 billion. We do not want, on top of that, another bill for council tax payers—a bill to clean up the cost of homelessness. The Secretary of State for Communities and Local Government has already warned us that 20,000 people will be made homeless as a result of the way in which the cap will be introduced, and this morning, the Department for Work and Pensions published an impact statement that puts up the number of families who will be affected by the cap by a third. It is almost as if the Secretary of State for Work and Pensions is making the policy up as he goes along. I hope that this afternoon he will accept Labour’s safeguards against a new risk of homelessness. If he dismisses that risk—if he wants to be so glib about it—why does he not accept the amendment this afternoon? If he does not, we will support the lord bishops’ amendment to safeguard against a new bill for council tax payers. That is the way that we will get this vote—

[Mr Speaker]

Order. The right hon. Gentleman has had his say, and we are most grateful to him.

[Mr Duncan Smith]

First, I do not accept the bishops’ amendment, because of course it would raise the cap on the level of income to roughly £50,000; it would be rather pointless having a cap set so high that nobody could ever hit it. Interestingly, I have just had an e-mail from a vicar, who wondered why the bishops fail to recognise that he is paid only £22,000 a year. He wonders why they are getting excited about £26,000 being a poverty-level figure. As regards housing benefit, let me remind the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) that we are saving £2 billion a year; housing benefit doubled under him.

[Mr Andrew Turner (Isle of Wight) (Con)]

T4. Will my right hon. Friend tell me what the Government are doing about migrants who live in the UK and claim benefits without working or paying tax? Will the Government consider recording the nationality of benefit claimants?

--- Later in debate ---

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

May I assure the Secretary of State that a great many of my constituents object strongly to paying through their taxes for people to get more in benefits than they can get on a working wage, or to live in property far beyond anything that they could afford on their wage? It is important that we get the transition right, but the principles are sound.

[Mr Duncan Smith]

I absolutely agree with my right hon. Friend. It is remarkable that there is overwhelming support. Yes, he is right about making sure that we get the transition right, but the principle behind this and its application are vital. I simply cannot understand why the Opposition snigger and wriggle on this issue, failing to do what is right, and failing to do what is proper or to face up to their responsibilities.

[Katy Clark (North Ayrshire and Arran) (Lab)]

T7. The disability advocacy group Black Triangle has said that 11 disabled people have committed suicide in circumstances in which the coroner said that it was as a result of assessments as part of the work capability assessment. Is that figure right? Can the Minister advise whether he has looked into what legal liability the Government may have and, in particular, whether there is exposure under the corporate manslaughter legislation?

[Margot James (Stourbridge) (Con)]

Average earnings in my constituency, Stourbridge, are £23,700 a year, on which there is a tax liability of some £5,000. Does my right hon. Friend agree that to oppose or to equivocate on the policy of a cap on benefits is an outrageous insult to all hard-working people in this country?

[Mr Duncan Smith]

My hon. Friend is absolutely right. The cap is fair and popular, and it helps to put right the welfare system that we inherited, which is in a mess and is trapping people in dependency when we could free them. My hon. Friend is right that the Opposition position is ludicrous. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) has taken more different positions on the issue than a Jane Fonda work-out.

[Mr Speaker]

I call Mr Jim Cunningham, not necessarily on the subject of work-outs, but on whatever appeals to him.

--- Later in debate ---

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

Does my right hon. Friend agree that those well-intentioned but misguided individuals who oppose the introduction of a benefits cap are in serious danger of killing with kindness the very people they seek to help, by condemning them to a lifetime of benefits dependency and worklessness, which the benefits cap will seek to reverse?

[Mr Duncan Smith]

I fully understand those who on every principle and in every regard oppose the cap, but I cannot understand those who say they are in favour of it and then vote against it.

[Several hon. Members]

rose—