Universal Credit and Welfare Reform

Iain Duncan Smith Excerpts

Tuesday 11th September 2012 Commons Chamber

[Mr Byrne]

It absolutely does. Our chief concern is that that open and fair system of assessment will not fall into place for universal credit, with enormous consequences for our constituents.

The final point about the basic principle of whether people will be better off in work or on benefit is the evidence published by the Secretary of State’s own Department in the impact assessment that he signed earlier in the Parliament. The evidence shows that the marginal deduction rates will not go down for many people but will go up—2.1 million people will see their marginal deduction rates go up when universal credit is introduced. The incentive for them to work does not increase with universal credit; it goes into reverse. We have problems with free school meals and with council tax benefit, a short-changed personal allowance, the lock-in of cuts to tax credits and a worse incentive to work. That raises fundamental questions about a system that is about to go live in 150 days. That is why in this debate we want some answers on how these problems will be solved.

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

I will just give the right hon. Gentleman some answers on the marginal deduction rates. The fact is that 1.2 million people will receive a reduced marginal deduction rate as a result of what we are doing with universal credit. At the moment, 500,000 families see marginal deduction rates of well over 80%. Virtually nobody will see that once universal credit comes in. Some 2.8 million households will gain and 80% of those gains will go to the bottom 40%, improving their life chances dramatically.

[Mr Byrne]

But the Secretary of State refuses to admit that the marginal deduction rates will get worse for 2.1 million people. Until he answers the question about what will happen to free school meals and to council tax benefit, he cannot give us the assurance that that number of people will be better off in every single part of this country. He has to come clean about a system that is about to go live in 150 days. He is cutting it too fine, which is why No. 10 is worried, why the Treasury is worried and why his old friend the Minister for the Cabinet Office is worried.

--- Later in debate ---

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

This debate cannot take place in a vacuum, as the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) would wish. Let me start by saying that he is wrong: we are not over budget on the programme and we are not out of time. Both are proceeding much according to the plans that we laid. He referred to a report or note that mentioned £3.1 billion. That was considered as a possible end position and the Office for Budget Responsibility, which is independent, looked at it well before Members of both Houses had completed their scrutiny of the legislation. It was done in July of last year. Since then we have had a series of discussions with the OBR. It has looked at the modelling in detail, and continues to do so.

[Mr Byrne]

rose—

[Mr Duncan Smith]

Wait a minute.

As far as the OBR is concerned, we are progressing in the right direction and the modelling seems to be about right. We are committed to the £2.5 billion a year and the £2 billion of investment in our IT programmes.

[Mr Byrne]

I am grateful to the Secretary of State for being characteristically generous in giving way so early in his remarks. Will he explain what policy designs resulted in the £3.1 billion estimate, made by his own Department, dropping down to £2.5 billion? Will he also confirm to the House that everybody affected will be on universal credit by 2017, as initially planned?

[Mr Duncan Smith]

First, I will answer the second question. That is exactly what we intend and we believe that we are on track to do just that. The right hon. Gentleman and the House should realise that this is not, as has been the case with previous IT programmes, a “waterfall” approach whereby everything explodes and is launched on one date, which I think the previous Government used to realise was probably not a good idea. This will be a progression over four years, so that, as we bring in different groups, such as jobseeker’s allowance recipients, and first address the flow, then the stock, and then look at tax credits and how they fit in, we can make sure that we get this absolutely right at every stage. We know that there are important things to consider so that people do not suffer as a result of universal credit. We want to get this right, even as we do it.

We agreed on the £2.5 billion figure. That is our position. As we look at all these things, including the disregards, we see that we can realise better ways of doing them. It is a work in progress. That is how we are able to achieve these things, just as when we looked at them originally.

The right hon. Member for East Ham (Stephen Timms) has peppered us with freedom of information requests, which is exactly what an Opposition Member should do. However, it does him and the shadow Secretary of State ill to lecture us about releasing business cases. When they developed employment and support allowance, a system about as large and complicated as this one—I think that the right hon. Member for East Ham was a Minister in the Department at the time—at no stage, despite the request, did they ever release their business plan to us.

[Kate Green]

I wonder whether the Secretary of State will clarify something that he said in response to my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne). He said that the change would be implemented in stages, with first the flow, then the stock and then tax credits. Surely the tax credits for the first claimants to receive universal credit will have to be brought in on the first day of universal credit.

[Mr Duncan Smith]

No; it has always been part of the process that jobseeker’s allowance will be the first to move across. I am happy to discuss that further. Universal credit will run in parallel with the other systems until we shut them down and move them across. That is the way it will work. That has always been clear. I think that the Chair of the Work and Pensions Committee knows that, because I have been open with her about it from the word go.

[John Healey]

Will the Secretary of State give way on that matter?

[Mr Duncan Smith]

I have explained the plan that we have and I want to make some progress, but I will give way.

[John Healey]

The Secretary of State maintains that the project is on track, when everybody else seems to think that it is in serious trouble and way off track. Rotherham Jobcentre Plus staff have told me that he has told the public that jobseeker’s allowance and new claims for out-of-work support will be treated as new claims for universal credit from October 2013. Is that still the case?

[Mr Duncan Smith]

I thought that I had been pretty clear about that. The plan is that, starting in October 2013, we will move through the different groups of benefits and tax credits progressively over the four years, bringing in different groups at different stages. That is how it will work. We will be giving a big presentation next week for members of the media.

[John Healey]

Has the timetable not slipped?

[Mr Duncan Smith]

The timetable is not slipping at all. We are on target. The right hon. Gentleman needs to be happy about that.

It is all very well for the Opposition to carp, while saying that they support universal credit, but let me be absolutely clear why I believe that we have to do this. First, we inherited a complex mess of 30 different benefits. There are seven additions relating to disability alone, which are complicated for people who are disabled. They are often confused about what to do. Some payments are available when a person works for 16 hours, some at 24 hours and some at 30. Some are withdrawn at 40%, some at 65% and some even at 100%. Some are net and some are gross. One needs to be a mathematician to figure them out.

My previous permanent secretary admitted that one day, when he was listening to a lone parent who had come in for guidance on what benefit she would receive and how it would work if she took extra hours beyond the 16 hours at which she was already being supported. It took the adviser about 40 minutes to figure out whether she would be better off, marginally in the same position or marginally worse off because of the dramatic rise in the deduction rates. How can we expect every lone parent who is worried about authority and may not come in for help to understand what these things mean? The complexity and confusion are a problem. The decision whether to go to work is often a marginal one, and many people do not feel that it is worth while.

It is small wonder, therefore, that even before the recession there were over 4 million people on out-of-work benefits and 1.4 million people who had never worked at all. Things then got a lot worse because of the recession. The inheritance that we received included 5 million people on out-of-work benefits, youth unemployment already high and more children in workless households in this country than in the rest of the EU—that is a staggering thought. And that came after years of growth and plenty, which the previous Government wasted.

Ending that failure is a monumental task, and we have undertaken it because it has to be done, whether there is a Labour Government, a Conservative one, a coalition one or even a Liberal one. Universal credit is one of the most fundamental reforms to the welfare system, and it deserves to be supported and helped.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

rose—

[Mr Duncan Smith]

I have given way quite a bit. If the hon. Lady will give me a little leeway I will give way again later, but I want to make some progress.

A single payment, withdrawn at a clear and consistent rate when people move into work, will make work pay at each and every hour and remove the stumbling block in the current system whereby, as I said earlier, some people lose out dramatically. They lose 96p in every pound that they earn, which cannot be an incentive to go to work. Nobody here would take work at that rate, and trying to get the deduction rate down has to be a good reason for our reform.

The Opposition say that they are concerned about work incentives under universal credit. I reassure them that, as I said earlier, the flat 65% withdrawal rate will mean reduced marginal deduction rates for 1.2 million households. What is more, 80% of those gainers are in the bottom 40% of the income distribution. Why am I, as a Conservative, having to stand here and tell the Opposition that that is positive? Surely they should have ensured that it happened during all the years when they were in power.

[Stephen Lloyd (Eastbourne) (LD)]

The Opposition have mentioned the Work and Pensions Committee a few times. I am a member of that Committee, and although the Opposition are absolutely right to say that there were some concerns about universal credit, the Secretary of State might be interested to know that the Committee universally supported the concept of universal credit to make work pay.

[Mr Duncan Smith]

I thank my hon. Friend for those comments.

[Luciana Berger]

I listened closely to what the Secretary of State said about 1.2 million people having better marginal deduction rates, but his Department’s own impact assessment shows that 2.1 million people will be worse off in work as a result of universal credit.

[Mr Duncan Smith]

The reality about marginal deduction rates, as I have just said, is that the massive majority of the money that we are investing will go to those in the lowest income groups, which has to benefit them. People who would otherwise not enter work because of the margins will now find that it is beneficial to do so. Despite what the hon. Lady and the right hon. Member for Birmingham, Hodge Hill, have said about marginal deduction rates, the median increase will be just about 4%. The truth is that there will be a massive improvement in the marginal deduction rate for vast numbers of households. As I said earlier, half a million people who struggled under the previous Government’s complicated taxes had marginal deduction rates of well over 80%. That will not happen under universal credit, which is a critical point.

[Mr Byrne]

rose—

[Mr Duncan Smith]

I am going to make some progress, and I will pick up on some of the points that have been made as I go through my speech. If the right hon. Gentleman will bear with me, I will certainly give way to him later.

I turn to the delivery of universal credit. As I said earlier, its implementation is on time and on budget. Of course, the process is challenging, and I have never said anything else. The right hon. Member for East Ham knows that I have a huge amount of time for him and believe that he was an effective Minister. When we have discussed universal credit I have always told him that all our programmes have challenges and risks to them, but the job of Ministers and our officials is to manage that risk. Life has risks, and we deal with them and manage them. The universal credit programme is challenging, but we are investing £2 billion—I say again to the right hon. Member for Birmingham, Hodge Hill, that the figure is £2 billion—to get the infrastructure and IT systems right.

[Mr Byrne]

But the Secretary of State must have seen the parliamentary answers that his ministerial colleagues have provided stating that the implementation costs for parts of the programme are now running at £103 million, £391 million, £600 million and £1 billion. By my maths, that adds up to £2.1 billion, which is £100 million more than the budget that he has set out. Is the programme on budget or over budget?

[Mr Duncan Smith]

I am never keen to rely on the right hon. Gentleman’s maths—that is what ran us into trouble in the first place. Maybe this is a confessional now, and I will take that as a confession from him. All I can say to him is that we are investing £2 billion, but I will drop him a note about any detail that he is concerned about.

As I said earlier, we are making progress. We completed our first testing stages in August and have already held two open sessions with MPs, peers and the media and intend to hold many more. We will demonstrate the IT front-end systems next week and will do so again afterwards for many hon. Members.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Will the Secretary of State give way?

[Mr Duncan Smith]

Perhaps the hon. Lady will give me a little time. I think I have been reasonably generous—I am trying to be because I hope that we can discuss this issue in the right spirit. I will give way to the hon. Lady in due course, but first I would like to make a little progress.

We will be ready to roll out universal credit across the country in October 2013, and before that we will launch the pathfinder scheme in Greater Manchester in April 2013—perhaps some hon. Members do not know that yet, but that is the reality. As I have said, the phased transition from current benefits and tax credits is expected to be completed by 2017, and the safe delivery of universal credit will be my primary objective throughout. For what it is worth, I take absolute, direct and close interest in every single part of the IT development. I hold meetings every week and a full meeting every two weeks, and every weekend a full summary of the IT developments and everything to do with policy work is in my box and I am reading it. I take full responsibility and I believe that we are taking the right approach.

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

Will the Secretary of State give way?

[Mr Duncan Smith]

Perhaps I could make a little progress, and then I will give way because I know that hon. Members have questions.

I believe that we are taking the right approach; we have supported the scheme and our methods have received support elsewhere. Our use of the “agile” process has received good support from the independent Institute for Government, which in “Fixing the flaws in government IT” stated:

“The switch from traditional techniques—”

those used by the previous Government, and others—

“to a more Agile approach is not a case of abandoning structure for chaos. Agile projects”—

those used in the private sector—

“accept change and focus on the early delivery of a working solution.”

I do not underestimate the scale of the undertaking. Some 8 million households will be affected because they are in receipt, either wholly or in part, of some kind of support. I believe, however, that the Department is capable of implementing programmes of this kind. It has the best record, just as it did when the Labour party was in government, as Opposition Members will recall. The delivery of employment and support allowance was a good example of that, and the right hon. Member for Birmingham, Hodge Hill who was involved in that knows too well the quality of the Department for Work and Pensions. Although the scheme is not without risks, the Department understands that and we have brought in a huge number of people and bodies from outside the Government to help implement it.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I will give way to two people, first to the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) because she was first, and then to my hon. Friend the Member for Gainsborough (Mr Leigh).

[Chi Onwurah]

The Secretary of State was speaking about his pride in the investment in IT systems that his Department has undertaken, but is he concerned that by making universal credit available primarily—and eventually solely—online, he will be dependent on investment by other Departments in the broadband infrastructure in this country? By abandoning Labour’s universal promise of broadband availability, many vulnerable people will not have access to broadband, and will not be able to benefit from universal credit.

[Mr Duncan Smith]

I was coming to that point, but I will deal with it now because the hon. Lady has a legitimate interest and all hon. Members will want to know about this issue. Two things are important. First, we must understand that the Government and the benefits system must move alongside what is happening in work. Those in receipt of benefits—often long-term benefits—are often outside and excluded from the workplace because of their lack of ability to work with and manage IT systems. We want to help them to enter the world of online work.

Secondly, the vast majority of people claiming benefits today already use computers and the internet—around 80% of those who claim jobseeker’s allowance use computers. Importantly, however, not all of them use their computer for claiming benefits, which they often do on the telephone. Over each month we intend to move more of those people to an online process of claiming—already more than 30% of people have started on that, and we intend to increase that figure first to 50% and eventually to 80%. We know, however, that to do that we may need to help people enormously, so jobcentres will be fitted out—we are doing trials—with computers and telephones that connect people directly to contact centres. My plan is for contact centres to get people on to their computers and work through the process with them. One reason people are worried and do not want to go online is that the present online system is not good. It is notchy and difficult—I have used it myself—and difficult to get through. We are developing and designing with claimants, jobcentre staff and local authority staff a front-end system that will be much simpler and easier. I will demonstrate it to colleagues on both sides of the House when we have time—I will do so next week, but on other occasions, too.

The whole idea is to move people to the new system, but we will of course retain the scope to deal with those who have difficulty.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I am dealing with those who have difficulty with the new system. I will give way twice more—first to the hon. Member for Banff and Buchan (Dr Whiteford) and then to my hon. Friend the Member for Gainsborough—and then get on.

[Dr Whiteford]

Will the Secretary of State address the question of implementation in the devolved Administrations? A wide range of policy areas is affected. UK Ministers have held informal discussions with the Scottish Parliament’s Welfare Reform Committee, but will he make a commitment that his new ministerial team will engage with the Committee, which has expressed concern in the past that such engagement has lacked substance?

[Mr Duncan Smith]

Absolutely—nothing makes me happier than getting out of London to visit the devolved Administrations, whether in Cardiff or Edinburgh. I shall spend a day in Edinburgh next week speaking to that Administration about this very subject, as I have done on a number of occasions. I am engaging in the same way in Wales, as are my colleagues. I can absolutely give the hon. Lady that guarantee.

[Mark Durkan (Foyle) (SDLP)]

Will the Secretary of State give way?

[Mr Duncan Smith]

If the hon. Gentleman will forgive me, I said I would give way to my hon. Friend the Member for Gainsborough.

[Mr Edward Leigh (Gainsborough) (Con)]

The problem with IT systems in the public sector, rather than the private sector, is the sheer scale of numbers—8 million households will use the new system—the complexity of the issues and the lifestyle of the recipients. I saw more failed Government IT systems in my time on the Public Accounts Committee than I have had hot breakfasts. I beg the Secretary of State to be cautious, to test and re-test, to pilot and re-pilot, and not to believe a word spoken to him by IT companies or his civil servants.

[Mr Duncan Smith]

My hon. Friend was an excellent Chairman of the Public Accounts Committee—he is highly respected among Members on both sides of the House—and I absolutely agree with him. That is how I see my role. One thing I have done is brought into the system a red team, whose job is to go through and doubt everything I am told, and to ask questions. Being a sceptic and not believing are part of the process of delivering. I absolutely understand that. We are involving others in the process—that is our purpose.

[Mark Durkan]

rose—

--- Later in debate ---

[Mr Duncan Smith]

I will give way once more, and then I am done.

[Charlie Elphicke]

Does my right hon. Friend share my concern that much of the Opposition case is based on the idea that people are basically thick—too thick to use the internet, too thick to budget monthly and too thick to pay the rent? A cornerstone of universal credit is that we trust people and believe in them. We want to encourage people to work and to manage their own affairs.

[Mr Duncan Smith]

I understand what my hon. Friend says. He refers to the fact that people need to be helped—that they are often more intelligent than we give them credit for, but that they lack local knowledge and instruction. A legitimate concern of Members on both sides of the House is to protect those who are the most vulnerable. I will always assume their best intents. It is our job to ensure that we meet those concerns—that is my purpose and I intend to meet it. He is right that we should assume that people are intelligent enough, but that we have to get them to the point at which they use the system.

[Several hon. Members]

rose—

[Mr Duncan Smith]

Let me make a bit of progress, because others might want to speak.

We have discussed finances. The Government have always made it clear that the £2.5 billion is additional and that that was how it would work. We have always agreed on that. The nature and design of universal credit means that this is an iterative process. The reality is that we learn as we do the developing. One thing that “agile” allows us to do is to rectify previous assumptions that things have improved because of changes. I can confirm to my hon. Friend the Member for Gainsborough that, as we proceed with the IT project, “agile” will allow us to ensure that we do not wait to the end moment to test it; we are testing stuff pretty much the whole time.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

Will the Secretary of State give way?

[Mr Duncan Smith]

May I make a little progress? I think I have been reasonably generous in giving way. I promise that I will try to get the hon. Gentleman in later.

On our engagement, it is clear from what I have just said that the independent OBR has open access. We have been in regular discussions. The right hon. Member for Birmingham, Hodge Hill described it yesterday as a think-tank, but it is not a think-tank. It accredits and decides whether the Government’s calculations and projections are correct. No one has a perfect view of the future, but at least it is independent of all political positions and positioning. It is working with us at the moment. I can assure hon. Members that the process is robust and will continue until the Government announce the final rates for universal credit and the OBR includes them in its forecasts. That is what we are working to.

Elsewhere, we are continually engaging with a host of organisations. The Work and Pensions Committee’s inquiry concluded, quite legitimately, that organisations have concerns. Of course, they will be concerned and will want answers, and we are working and talking with them. We are also dealing with local government, and have shared our draft regulations with the Social Security Advisory Committee and are carefully considering its advice. We are in regular contact with local authorities. We recently visited many local authorities and are informing them about policy work and regulations.

We are consulting on the future—this was raised in one or two questions—of the passported benefits and the interaction with universal credit. That is taking place right now, and we are discussing the matter with the regular and other Departments. They have to decide what they want to do, and we must decide how and whether to incorporate that into universal credit. That process is under way. Rather than constantly saying, “We can’t do these things, it’s impossible, so we won’t try”, it is worth trying to get the system right. One problem for many people is that they have to go to so many places for so many different things, they get confused and often do not get it right, and each time they feel a bit more worn down. If we can smooth out that process and make it easier and more accessible, in due course we will improve the lot of those in the greatest difficulty.

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

Does the Secretary of State now regret responsibility for administering council tax benefit being given to local authorities? That seems to fly in the face of the whole concept of universal credit and creates the very difficulties he claims he is trying to solve.

[Mr Duncan Smith]

I am a huge admirer of the Chairman of the Select Committee, but her inducements for me to express any personal opinion must be resisted. My general view is that localisation is a good thing, and I am sure that local authorities will robustly deliver a system that works brilliantly. Collectively, we are absolutely in favour of it.

[Mr McCann]

The Secretary of State explained that the process is more or less on track. If so, will he explain the difference of opinion that led the Prime Minister to believe that he should be removed from his post?

[Mr Duncan Smith]

I am not one for discussing what goes on privately. I have been kicking around this game long enough to know that sometimes people like other people to move or be promoted, but some of us are not interested in careers. We reached a settlement and we are very happy—it was a happy discussion. We are a Government of friends, we get on enormously well and we do not need to worry about what everybody else says about us.

[Jake Berry (Rossendale and Darwen) (Con)]

I would like to take my right hon. Friend back to the online delivery of the universal credit. Although figures vary, he will be aware that the vast majority of people living in social housing have no access to the internet. BT does a social housing telephone tariff. Will he explore the possibility of a social housing broadband tariff to enable those who want to claim their benefits online to do so?

--- Later in debate ---

[Mr Duncan Smith]

Absolutely right. That is exactly what we are trying to do, and I will ensure that it is one of the areas we look at. That is the whole process we are engaged in. If we can get more people in social housing online, the net benefit will be phenomenal. We are all desperate for more broadband, but the people who will benefit the most—for shopping and so on—will be older people and others in difficulty on lower incomes. They will benefit massively, if we can begin to get them online. This is a crusade as much as anything else.

[Dame Joan Ruddock]

I am extremely grateful to the Secretary of State for giving way. He said earlier that he would not publish the business case, despite the request. I wonder, however, whether he can tell us something that we assume might be in the business case. How many more hours working in the economy does he expect to see as a consequence of introducing universal benefit next year?

[Mr Duncan Smith]

If the right hon. Lady will forgive me, I am not going to give her specific details now, although I am happy to talk to her at greater length later on. The point I would simply make is that universal credit is designed to get more people who are below work, as it were, to cross the line into work. When people ask, “What is universal credit really about?”, they always talk about the taper. That is really important: simplifying the taper allows people to move up the hours. In truth, however, universal credit’s key component is the disregards—the bit we call the participation tax rate. In other words, right now, unless someone goes straight to 16 hours as a lone parent, for example, the participation tax rate—the moment when they join work—is so high that there are households that need two earners in work just to have enough money to survive. The idea of universal credit is to break that down and improve their lot. I cannot give the right hon. Lady the detail, but I believe that more people will move up the hours, with more people moving into higher hours and longer-term work.

[Mark Durkan]

I thank the Secretary of State for giving way. He has said that he is taking a hands-on approach to the developing IT system. Will he assure us that the IT system, which will also cover Northern Ireland, will be formatted to allow both the continued weekly or fortnightly payment of benefits, if that is the policy of the Northern Ireland Assembly, and the direct payment of housing benefit to social landlords, which is the policy of the Assembly? Will the IT system also be able to cope with the problems of cross-border workers?

[Mr Duncan Smith]

I was going to deal with a lot of that in my speech, so the hon. Gentleman is helping me to speed up. Let me deal with monthly payments. I genuinely believe that we need to get people on to monthly payments, for a very good reason. Right now, about 75% of the work force are on monthly payments. We looked at this issue—as I am sure others have—when I was at the Centre for Social Justice. One of the biggest stumbling blocks we found is that when people are out of work, everything is paid directly to them every fortnight, but when they go back to work they really struggle—particularly those who have been out of work for a little time—to cope with the first few months in work. We are looking to get as many people as we possibly can on to a monthly payment, so that when they go into work they have already completed that process and it is not a big break for them.

Of course we will want to identify—working with councils and local groups, and so on—those in real difficulty. Now, here’s the thing. Until now, nobody has really bothered much about them, unless someone—maybe an MP—makes a specific effort to try to get something resolved for them. What we are doing will make us look at why those people cannot cope and then start to surround them with support. It might be about their ability to budget; it might be that the family has serious drug problems, in which case we will need to get to that. So, we start looking at the reason, then we can resolve that and move them into the process. We will allow for the ability to settle at two weeks where we think it vitally necessary, but the mainstream will go to monthly payments. However, I am happy to talk to the hon. Gentleman further about that and help him out.

[Mr Marcus Jones (Nuneaton) (Con)]

I thank my right hon. Friend for giving way and I wholeheartedly support the outcome he is seeking in implementing the policy. One of the greatest impediments to getting back into work, particularly for low earners, is child care. Will he outline what more the Government can do to support people with child care costs?

[Mr Duncan Smith]

The whole idea behind the universal credit is that it allows us not to cherry-pick child care. That is, we will support child care up the various hours, because at the moment the system is set so that people get it only at certain points. Universal credit allows us to do that, and we are putting another £300 million behind that. That is a major positive. Universal credit is also a major positive for lone parents seeking work, because of the increased ability of the first earner back into work to receive that money. That should benefit them enormously.

Let me try to address one other point that was made and then conclude. The Opposition have expressed some concerns about the universal credit and HMRC’s real-time information project, but the scheme will deliver a net reduction of £300 million in administrative burdens on employers. That is important, because the project will help enormously with the way we flow information, together with HMRC—and I stress “together”. The right hon. Member for Birmingham, Hodge Hill has made the point about that, both today and to me in the past, but I say to him simply: I am not letting this one go, as with some other Departments. We are locked into this. In fact, we have now placed one of the DWP people in the team working on real time information, which will report at the same time as the others. We believe that we are making good progress on getting RTI moving in the right direction.

The right hon. Gentleman asked what was to be done with the 20,000 housing benefit staff. We are dealing with this matter sensitively. We recognise that staff across the country will have concerns about the impact of the new benefit, which is why we are consulting local government right now. Although housing benefit will be absorbed into universal credit, we must not forget that that will not happen overnight. I am sure that any impact on job roles will be counterbalanced by, for example, changes to localised council tax benefit, which will require a number of staff. The administration of the social fund is also being moved down to local authorities, and there will be other work, too. This is a matter for us to discuss with the councils, but it can be dealt with sensitively. I do not think that we should get too concerned about it, but we need to deal with it. I think that there is scope for all of them.

I was asked earlier about the business case. We are constantly reshaping and remodelling it, and I do not think that we need to publish it. As I said to the right hon. Members for Birmingham, Hodge Hill and for East Ham, I am happy to discuss any issues surrounding it at any time. They are always invited in; it is always good to have a drink with them and discuss these matters.

[Alison Seabeck]

In Plymouth, we have more than 80% broadband coverage, but we do not have that level of broadband connection. A lot of my constituents are very poor and do not have internet access. They use their mobile phones to access the internet, but they cannot use them for downloading documents. There is therefore likely to be a surge of people going into jobcentres and elsewhere seeking support. My constituency also has quite a high level of illiteracy. Does the Secretary of State intend to bolster the number of staff in jobcentres to deal with that potential early surge, perhaps using some of the staff in housing benefit departments who could lose their jobs?

[Mr Duncan Smith]

The hon. Lady obviously would not expect me to make a commitment on that now. I can tell her what we are doing, however. I have visited a large number of jobcentres and talked to the managers and staff about what will happen when we move over to the new process. A number of jobcentres are already trialling ways of speeding up the online process of moving people to the new system. We are going to install computers and have staff ready to advise people. When they come in to make their claim, they will be shown to a computer, with a telephone or an adviser, and helped through the process. So, if they cannot do it at home, they should at least be able to do it at a jobcentre, with guidance and help.

I am also talking to my colleagues at the Department for Culture, Media and Sport, because we really need to get broadband to all areas, and we need to do it pretty fast. I accept that that is a matter for the Government. We are not just telling people that they have to do this, and then forgetting about them. We are going to ensure that those who have no internet access have another way to complete the process. We are also looking at different ways of using mobile telephones for making certain types of claim. There is a whole process taking place, and nothing is being left to chance. If the hon. Lady has any ideas, we would be pleased to hear them. I am sure that they will be brilliant.

[Ian Paisley (North Antrim) (DUP)]

rose—

[Mr Duncan Smith]

I was not going to give way again, because the Deputy Speaker is looking at me with the kind of look that says, “This boring bloke needs to shut up and sit down as soon as possible so that others can speak”, but if the hon. Member for North Antrim (Ian Paisley) is very quick, I will give way to him.

[Ian Paisley]

I thank the Secretary of State for his generosity, and I hope that I will not be too boring. What contingency plans is he working on to deal with a catastrophic failure of the new IT system? For eight weeks over the summer, the Ulster bank in Northern Ireland was effectively closed as a result of such a system failure. If it can happen to a bank, it will happen to the new system.

[Mr Duncan Smith]

As I have said, we are working through all of that. Of course we have to prepare for contingencies and for certain events, and we are looking at that right now. It is part of the process of developing the system.

No one has asked me about the security of the system, but I might as well be open about it. That is of course an area that we are working on. We are learning the lessons from what happened when the banks started operating online, and we are now engaged with various organisations, including GCHQ, and talking about those matters. A long, detailed, iterative process of work is taking place to try to cover every eventuality, and I promise the hon. Gentleman and the House that we shall leave no stone unturned.

I recognise why the Opposition wanted this debate, and I know that people have read bits and snippets from the newspapers. People should not always believe everything they read in the newspapers, however. Personally, I do not read them often these days for that very simple reason! None the less, I say to the Opposition and to every Member that if we get universal credit right—I believe that we will, and we are working to achieve it—it will benefit all our constituents. It is a major plus and a key reform—one that will genuinely define us as a Parliament that cared enough to take on the risks and achieve this. Not to do so risks too much for people as they head into the modern world unable to cope, unready and believing that they and their families will never see the process of work, which will scar them for the rest of their lives.

--- Later in debate ---

[Dame Anne Begg]

If the group about whom I have been talking cannot access the system, there is very little chance that they will be able to return to work. That is why the support is needed.

[Mr Duncan Smith]

I had not intended to intervene, but I think that I ought to take up the point that the hon. Lady has raised. Our plans already take account of a number of people who will not be online. We want 50% of those receiving the benefit to be online when we launch the system in October 2013, and we want the proportion to rise to 80% by 2017. We have always had parallel arrangements for those who will not be online, and we will explain those key arrangements to the hon. Lady.

[Dame Anne Begg]

I thank the Secretary of State, and may I also make a plea for it to be easily accessible, high quality and free, which is very important, too?

The poorest in our society are already disadvantaged in the digital age. They have already fallen behind the rest of us. Universal credit and its reliance on digital claims could exacerbate that still further. Instead of giving people living in poverty the help and support, and the access to work, that raises them out of poverty, universal credit could plunge them further into poverty and disadvantage. That would be a disaster.

We will not know the full impact of universal credit until we know the level at which it is set. Despite what the Secretary of State has said today, only then will we know the real marginal reduction rates and who will be better and worse off—who will be up, and who will be down—and whether people genuinely will be better off in work. Only when we get the real figures for real families, rather than the scenario planning that has gone on thus far, will we be able to see whether universal credit will work and they will have more money. Until then, a lot of what we are discussing is just an academic exercise. We need to get those figures, and I hope they will come soon.

There is, however, a great deal to play for. I said on Second Reading of the Welfare Reform Bill that a single working-age benefit is the holy grail of welfare reform. It is now up to the Government to make sure it does not turn out to be a very expensive cracked clay pot.