Disability Benefits and Social Care
Iain Duncan Smith Excerpts(13 years, 9 months ago)
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Mr Byrne
The cut is from the Department for Communities and Local Government’s own figures. If the hon. Gentleman looks at the study published by the Association of Directors of Adult Social Services, he will see the reality of what is hitting social care services up and down the country and the vulnerable people they support.
The great tragedy of this story is that there might be some kind of explanation if this were all part of a grand master-plan to get disabled people back to work.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I am a little intrigued. The right hon. Gentleman stood at the Dispatch Box at the beginning of his speech and said that we were not cutting housing benefit enough. Labour let it run out of control; it nearly doubled in 10 years. The outturn, however, is that we will be spending £3 billion less than Labour would have done under their proposals. Now, however, he is saying that we are cutting housing benefit too much. He needs to make his mind up. He cannot have it both ways. Are we cutting it too much or too little?
Mr Duncan Smith
The shadow Secretary of State should make his mind up about what he is really saying. Half his Front-Bench team have been going around saying that we are socially cleansing London because we are being too fierce on housing benefit tenants, and he goes around telling us that we are not cutting enough. It is pathetic.
Mr Byrne
I am grateful that the Secretary of State decided to temper his language, in contrast to the crass words that he used from a sedentary position.
The truth is that the housing benefit bill is spiralling out of control because this Government have strangled the recovery and put unemployment up to its highest level since 1996. There are now more than 1 million young people out of work, and long-term unemployment is up 10%. A third of the people on the dole have now been out of work for more than a year, because of the catastrophic failure of the Secretary of State’s back-to-work programme. That is why the dole bill and the housing benefit bill are going up. He should be ashamed of the record that he has presided over.
Draft Universal Credit Regulations
Iain Duncan Smith Excerpts(13 years, 9 months ago)
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The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The Welfare Reform Act 2012 sets out the overall framework for universal credit. The implementation of these arrangements will require the passage of detailed regulations.
The Department, as required by the Social Security Administration Act 1992, has submitted the following draft regulations to the independent Social Security Advisory Committee (SSAC) for formal scrutiny:
the universal credit, personal independence payment and working-age benefits (decisions and appeals) regulations 2012;
the universal credit, personal independence payment and working-age benefits (claims and payments) regulations 2012;
the jobseeker’s allowance regulations 2012; and
the employment and support allowance regulations 2012.
In addition SSAC will scrutinise the draft housing benefit (benefit cap) regulations 2012 and the draft universal credit regulations 2012. The universal credit regulations provide detail of the new single benefit, including entitlement, elements of the award, calculation of income and capital, and claimant responsibilities. I have asked the Committee to consider this set of regulations, which are not covered by the Social Security Administration Act 1992, for consultation over the summer in addition to those sent for formal scrutiny.
The Committee will decide today whether it intends to consult on these regulations and what form that consultation will take.
Draft universal credit regulations, along with other sets that are selected for consultation, will be published on both the SSAC and DWP website shortly along with details of any consultation process. I will place a copy of the draft regulations in the House Library. We intend to lay the final universal credit regulations before Parliament later in the year.
Oral Answers to Questions
Iain Duncan Smith Excerpts(13 years, 11 months ago)
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The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
We have committed to invest some £2.3 billion in child care support in universal credit—that is £2 billion spent on the current system and an extra £300 million we secured in order to extend support to parents working less than 16 hours. That should give them what is really important—support in work across the hours—and it means that some 80,000 more families will get child care under universal credit.
Elizabeth Truss
In the Netherlands there is a system of agencies that train and regulate childminders. That country has twice the number of childminders per head than we do in the UK and its child care is also more affordable. Will the Secretary of State look into what happens in the Netherlands, with a view to getting better value for the universal credit money and getting more people into work as childminders?
Mr Duncan Smith
I take this opportunity to congratulate my hon. Friend on the work that she has been doing on this. She is quite right that it is an important area and it is one that I have asked my Department and the Department for Education to consider together. Under the previous Government, the number of childminders fell quite dramatically. In 1996, there were about 100,000 and in 2011 that number had fallen below 60,000. That is a huge issue. When we took over, we found that the costs of child care in the UK are about the fourth highest in the world. My hon. Friend is absolutely right that there are big issues that we need to deal with and try to resolve so that we can get more people back to work with the support that they need.
Andrew Bridgen (North West Leicestershire) (Con)
7. What progress he has made on implementing the recommendations of the Löfstedt report on health and safety regulation.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
My Department’s reforms of the welfare system are to support people with difficulties entering the world of work. We have considered this matter extensively and are introducing support that is tailored to the needs of individuals to get them closer to employment and to tackle the entrenched worklessness at the heart of that. That includes £200 million of European social fund support for families with multiple problems. Local authorities play a critical role in the delivery of that support and we urge them to consider it to be as important as we do.
Stuart Andrew
I welcome the fact that about half the organisations involved in the delivery of this scheme are voluntary. Does my right hon. Friend agree that local charities are often best placed to provide the tailored and personalised support that such families need?
Mr Duncan Smith
It is true that voluntary sector organisations tend to deal with the whole person, rather than, like Government Departments and even sometimes local authorities, considering specific issues while forgetting that many of them knock on to each other. Such organisations have an important role to play. We should not ignore the fact that local authorities and Government Departments have to get their act together and make sure that when dealing with families with multiple problems, they talk to each other—always, there is a tendency for them not to do so. The good authorities hub up all the services around the family, which is at the centre, so Health, Work and Pensions, Education and all the Departments involved start to co-ordinate their activity, rather than spend all that money and get nowhere.
Paul Maynard
One of my wards, Claremont, is, according to the latest DCLG statistics, the fifth most deprived ward in the country, and I see daily the hurdles that families have to overcome to deal with some of the entrenched problems they face. I realise that no single agency can solve them, nor indeed can any single Government Department. Will the Secretary of State explain what he is doing with other Departments to ensure that all troubled families get a whole-of-Government approach, rather than a series of unconnected initiative-itises?
Mr Duncan Smith
My hon. Friend raises a good point. That is why the Prime Minister asked specifically that Louise Casey operate and head up a unit, reporting to my right hon. Friend the Secretary of State for Communities and Local Government, which is looking at the 120,000 worst affected, most difficult families. The idea, as I said earlier, is that, working with her, local authorities nominate the families. She wants them to hub up services to make sure that the pooled amount of money they get is spent on life-changing actions, not the tokenistic box-ticking that too often takes place.
Jake Berry
Does my right hon. Friend agree that the best way to escape the silo mentality in Government Departments and local authorities is to champion the voluntary sector in helping to support families in areas of multiple deprivation, such as those in my constituency? Home-Start is a fantastic charity that does such work in my area. Will he support it?
Mr Duncan Smith
Indeed I do. Home-Start is a remarkable charity and I am sure that right hon. and hon. Members on both sides of the House will give it their full support. It is worth bearing in mind that the families it deals with are very much in that category of worst and most troubled, with children growing up with parents who often have multiple issues themselves—sometimes serious drug addictions—and sometimes the money given to the families does not get down to where it benefits the children. It is worth reminding the House that 1.8 million children live in workless households, which gives them a difficult start in life.
Chris Skidmore
Some of the families and individuals facing multiple disadvantages are also family carers and young carers. What reassurance can the Secretary of State give the House that the Government will recognise those who have a caring role when introducing this fantastic support package?
Mr Duncan Smith
That is very much part of what we are trying to do and we will certainly recognise such roles. After all, we recognise fully that the effort given beyond the state multiplies many times the amount given by the state. Without that support—that voluntary and family work with people with difficulties—it would be almost impossible for the state to operate.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
Will the right hon. Gentleman join me in paying tribute to Lord Ashley, who was passionately committed to people with disabilities and pursued that work both in this House and in the other place? As a further tribute, will he ensure that, in his Department, the needs of people with hearing impairments are met as they should be able to expect?
Mr Duncan Smith
Indeed I will. The right hon. Gentleman reminds us that we should all pay tribute to a brilliant campaigner, if I dare say, and supporter of people with disabilities. All of us in this House and the other place know the effectiveness of his campaigns and stand in awe of someone who dedicated his life as he did to supporting vulnerable people.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
Yesterday, I was contacted by my constituent Edward Connolly. Edward and his wife have four children under 10, and Edward is recovering from prostate cancer. He works 16 hours a week and his employer cannot give him any more hours. He cannot access the Work programme, and he is losing £250 a month in tax credits. Can the Secretary of State tell me how he proposes to protect the Connolly family from the multiple disadvantages that have been introduced by this Government?
Mr Duncan Smith
If the hon. Gentleman wants to write to me directly about that, I am very happy to speak to the individual concerned and his family. Clearly, we want to do the best by them. That is the whole point of universal credit, which will benefit him enormously at 16 hours, and other hours too, whereas the present system, as the hon. Gentleman knows, targets only specific hours, rather than all the hours that people work. I am happy to deal with that case directly.
Mr Gerry Sutcliffe (Bradford South) (Lab)
May I add my condolences to the family of Lord Ashley, who was a tremendous worker in both Houses? The Minister is right: it is difficult to deal with families with multiple disadvantages. The difficulty is that that group is growing wider now because of people losing disability or other benefits. How will the Minister make sure that we maintain an up-to-date list of the families who have problems—a list that is going to grow?
Mr Duncan Smith
The hon. Gentleman is absolutely right. This is one of the big issues that we have to deal with. The reason why Louise Casey was asked to do this work was so that she, working with the local authorities, could start to map out where the most difficult families are in their areas. The key thing—I come back to this—is that it is ultimately local authorities that will and should know where these families are. There are some good examples. In Westminster the council has already hubbed up the issue and got organisations working with it; other local authorities are not so good. I am not here to name and blame, but I want local authorities to act with Louise Casey and the team to make sure we map those families, as the hon. Gentleman so rightly asks us to do.
Grahame M. Morris (Easington) (Lab)
The Secretary of State refers to Louise Casey, but my understanding is that Emma Harrison was paid £8.6 million in dividends last year from her company, A4e, which was appointed by the Prime Minister to head up that programme, but she has now resigned. Can the Secretary of State list her main achievements?
Mr Duncan Smith
Nice try, but the hon. Gentleman has got it wrong. Emma Harrison had nothing to do with the programme. Louise Casey has always been heading it up. I understand why he wants to elide the issues, but it is not true. Emma Harrison heads an organisation and was asked to give some advice, I understand, to 10 Downing street on other issues to do with families, but she has not controlled this issue at all. I hope the hon. Gentleman will try again some other time.
Katy Clark (North Ayrshire and Arran) (Lab)
11. How many blind people had their contributory employment and support allowance withdrawn in the last month for which figures are available.
Guy Opperman (Hexham) (Con)
14. What steps Jobcentre Plus is taking to use the flexible support fund to support claimants into work.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Referencing that last answer, we are all rather proud of the flexible support fund. It is a bold scheme that changes the direction of travel for jobcentres, which until 2011 worked in a static and rigid way. We are getting more flexibility, and the flexible support fund allows advisers to target money at individuals who may need support in getting to job interviews or buying the right kind of clothing, which is a big and bold change.
Guy Opperman
How has the flexible support fund actually provided funding to local partnerships to address those barriers to work, and will the Secretary of State write to me with specific evidence relating to the north-east?
Mr Duncan Smith
Indeed I will write to my hon. Friend. We have looked again at the flexible support fund and increased its flexibility and what advisers can do. Let me give some examples. General advisers in jobcentres can give up to £300—raised by over £100—to whatever specific area they think needs it. Senior operational managers can give up to £500, district managers can give up to £50,000, and work service directors can give up to £100,000, so the scope is there for them to do that flexibly. Many awards have been made, for example £985 for a class 1 HGV driver’s licence, so there is scope. I advise right hon. and hon. Members on both sides of the House to remind their young unemployed and other unemployed constituents that there is scope for them to be supported if they have difficulties.
Dr Julian Huppert (Cambridge) (LD)
15. What steps he is taking to ensure that pension funds adopt ethical and infrastructure investments.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
In recent weeks we have published new figures on the incapacity benefit reassessment programme, so I thought it would be helpful to the House if I just reminded Members of the figures. Throughout Great Britain as a whole, some 37% of people have been found fit for work, with another 34% expected to be able to work in the future, with the right support. These figures show that the programme is working.
Tom Greatrex
Does any Minister think it appropriate that, while undertaking a contract on behalf of the Secretary of State’s Department, Atos Healthcare, first, published misleading information on its website; secondly, refused to comply with the Advertising Standards Authority inquiry into that information; and, thirdly, failed to correct it until alerted to do so by the media last week—several weeks after the compliance notice was issued? Do they think that that is acceptable for an agency working on behalf of the Government?
Grahame M. Morris (Easington) (Lab)
T6. We have heard a lot of talk from the Government about creating an information revolution in Whitehall, but with the Secretary of State’s Department leading a charge by outsourcing many of its responsibilities, will the same measures of transparency apply to private sector companies such as A4e and Atos as currently apply to public sector bodies?
Mr Duncan Smith
First, with respect to the hon. Gentleman, I do not think that this Government, or this Department under its current management, need to take any lessons from one of the most secret Governments in history. If he would like to look on our website, he will see that we publish a huge amount of data on all the contracts that we let, down to a very low level. He can find out more information now, as a direct result of what we do. Obviously, private contracts are for private people.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Would the Minister like to clarify his earlier remarks about partially sighted people not being means-tested and judged on their savings but being awarded benefit on the basis of their need?
Mrs Helen Grant (Maidstone and The Weald) (Con)
What discussions has the Minister had with the Department for Communities and Local Government on council tenants starting a business in their homes?
Mr Duncan Smith
We discuss such matters at all times with the Department for Communities and Local Government. I promise my hon. Friend I will ensure that I raise that one.
May I take this opportunity to say to my opposite number, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), that I wish him the very best of luck if he heads off to be mayor? I have thought of a great slogan: “Byrne for Birmingham: not just 9 to 5, but also a ‘night mayor’.”
Social Justice (Transforming Lives)
Iain Duncan Smith Excerpts(14 years ago)
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The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
When the Government came into power, the Prime Minister set up the Social Justice Cabinet Committee to look across Government at issues relating to poverty, equality and social justice, and improve the way that we deliver services to those in our society that face the greatest and most complex disadvantages.
I am pleased to announce that today this work has taken a significant step forward with the launch of the Government’s social justice strategy. This strategy sets out an ambitious new vision for supporting the most disadvantaged individuals and families in the UK, as well as outlining where the Government are already making progress on this agenda. The strategy embeds two key principles into the heart of Government policy delivery.
First, a focus on prevention throughout a person’s life, targeting the root causes rather than the symptoms of social breakdown to stop people falling off track and into difficult circumstances. This starts with support for the most important building block in a child's life—the family—but also covers reform of the school and youth justice systems, the welfare system, and beyond to look at how we can prevent damaging behaviours like substance abuse and offending.
Secondly, the strategy sets out the Government’s vision for a ‘second chance society’. When problems do arise, people must be able to access the help and support they need to turn their lives around. This strategy cements the principle that this support must be focused on recovery, independence, and life change, not simply on maintaining people in the circumstances they are in.
This strategy also sets out a new approach to delivery, based on locally designed and delivered solutions. New, innovative approaches to service delivery are also integral to the strategy, including the use of social investment, smarter commissioning and intensive key worker led support.
This approach will not be delivered by Government alone. It is essential that we harness the expertise and dedication of local leaders, commissioners and delivery organisations at all levels, including the voluntary and community sectors.
This strategy sets out an ambitious approach, but one that aspires to deliver lasting change. This strategy aims to do more than simply increase family income, but address the root causes of poverty and deliver change that will transform lives.
Oral Answers to Questions
Iain Duncan Smith Excerpts(14 years ago)
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Julian Sturdy (York Outer) (Con)
17. What recent assessment he has made of the outcomes of his Department’s work experience schemes for unemployed people.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Work experience is a very positive scheme, and 51% of people are off benefits 13 weeks after starting a placement. I am delighted to tell the House that, notwithstanding the attempts to damage the programme, it remains strong, with another 200 employers, including Airbus and Centre Parcs, wanting to get involved to help young people to gain vital experience of work.
Stephen Metcalfe
Will my right hon. Friend expand on the answer he has just given and tell the House what other support he has received since the row about work experience broke out? This vitally important and publicly popular initiative helps young people to get the experience they need to get into work. Would he echo Sir Stuart Rose’s comments that companies involved in the scheme should show some “backbone” and not give in to politically motivated protests?
Mr Duncan Smith
Before I answer that question, may I pass our message of support to the Chair of the Select Committee on Work and Pensions, who has had a terrible accident? We wish her well and a speedy recovery to her normal place for Work and Pensions questions.
There has been a lot of support for the work experience programme. A small number of people, in some cases backed by the unions, have made trouble. I shall quote Sir Stuart Rose—this is interesting because his successful career started at the bottom. He said:
“We’re offering young people the opportunity to…understand what the workplace is…really…about and it appears that there is some plan to sabotage this which…is nonsense…it seems …straightforward. You can come in, you can get work experience and if you…don’t like it after the first week you can”
leave.
Julian Sturdy
Given the importance of schemes such as work experience to giving unemployed people the skills they need to compete in the labour market, especially in the north, will my right hon. Friend update the House on discussions he has had with companies that support the Government in trying to achieve that?
Mr Duncan Smith
My right hon. Friend the Minister of State who has responsibility for employment held a meeting with a number of employers who are part of the scheme, all of whom backed and supported it. They were concerned that the message goes out that the scheme benefits young people. One employer who is not a profit-maker—the chief executive of Barnardo’s—said:
“Scrapping the scheme would have taken a lifeline from thousands of young people.”
I should also quote a girl called Dawn, who was on the programme after having real trouble finding work. She said that work experience was daunting, but that:
“It’s work experience—the clue’s in the name. Nobody is going to give you a job unless you get experience first, and that means sometimes working for free”.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I urge the Secretary of State to sort out the teething problems with the programme—there have been such problems. Will he look at the Morrisons initiative, which is different and overcomes many of the criticisms that have been made of the programme? Will he also be assured that many Opposition Members want a scheme that gets young people into work and work experience rather than being on the dole?
Mr Duncan Smith
I accept the hon. Gentleman’s positive involvement. I simply say to him that the scheme as it stands is incredibly positive. More than 50% of those who enter the work experience scheme go into work, many with the employers who took them on for work experience. The reason we set up the scheme is what young people said, and they told us, “Our problem is that when we go to an interview, employers ask us, ‘What experience have you got?' We say, ‘We don’t have experience.' They say, ‘We can’t employ you.' But without employment we can't get work experience.” I genuinely believe from our discussions with employers that the scheme is a positive move, but I will certainly look at the scheme that the hon. Gentleman talks about.
Stephen Timms (East Ham) (Lab)
I echo the Secretary of State’s good wishes to the Chair of the Work and Pensions Committee.
Work experience is a very good thing. The Minister of State has emphasised that the scheme is voluntary—his U-turn last week underlined that—but jobcentre letters say the opposite. They say:
“If, without good reason, you fail to start, fail to go when expected or stop going…Jobseekers Allowance could cease to be payable”.
The Department for Work and Pensions website says the same. Until recently the website also said that the minimum wage applied unless work experience was compulsory. That point has mysteriously disappeared from the site. Will the Secretary of State get a grip, clear up this extraordinary muddle and end the confusion in his Department?
Mr Duncan Smith
I will do a little deal with the right hon. Gentleman: I will ensure that any little discrepancies are sorted out, providing that he and his party step forward and publicly welcome the whole idea of the work experience programme and condemn the many unions, such as Unite, GMB, Unison and others, that are backing this ludicrous Right to Work programme. Will the Opposition state that the unions should withdraw their backing? Last week, we held discussions with employers, and they asked that no sanctions be taken unless they say that something has happened to damage the business or cause a problem. We have agreed that in essence, and that is how it will stand.
Mr Jim Cunningham (Coventry South) (Lab)
2. What steps he plans to take to reduce child poverty by 2015.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Across Government, we are investing in a range of programmes to tackle the drivers of child poverty. Universal credit alone will lift 350,000 children out of poverty. The previous Labour Government spent £150 billion on tax credits from 2004-2010, much of which was targeted at families with children, but despite that, as the Institute for Fiscal Studies noted recently, we are still a long way off hitting the targets. There is still much to be done.
Mr Cunningham
Is the Secretary of State aware that, according to the IFS, the Government will not reach their statutory target by 2015? Equally importantly, is he aware that of the 35,000 children in Coventry and Warwickshire whose families are on the poverty line and will experience a reduction of £1,400 a year, many are disabled? Will he reconsider his position on that?
Mr Duncan Smith
Interestingly, the IFS assumed that no changes to future policy would be made and did not account for fundamentals, such as behaviour change, or for education policies such as the early intervention work and some of the education reforms. The IFS did not consider several other policies—for example, the work with disadvantaged two-year-olds, the £180 million bursary fund, the early intervention grant and the fairness premium—which is fair enough, but we believe that they would affect its figures. We are desperately keen to eradicate child poverty, as we originally stated, and we stand by that. We did not enter power not to do that. The hon. Gentleman needs to acknowledge, however, that we also inherited a terrible deficit and huge debt problem. Those things tend to collide, but we are doing our level best—this is what universal credit does—to rectify the situation for the poorest in society.
Mr Julian Brazier (Canterbury) (Con)
Does my right hon. Friend agree that in a country where one child in five is growing up in a household without work, the best way to tackle child poverty in the long run is to break the cycle of dependency now running, in some cases, into three generations? Many of the measures he has mentioned, including work experience schemes, literacy programmes, subsidy programmes and so on, are designed to do that.
Mr Duncan Smith
I agree with my hon. Friend. We also inherited a system with far too much in-work poverty. Our aim is to move as many people as possible through universal credit and into work, and to ensure that, through universal credit, they are better off. That is the key point. I have also made the point, however, that the idea of “poverty plus a pound”, by which we just rotate money between people to move them slightly above a particular level before they collapse back, is a mistake and led to poverty rising on the previous Government’s watch.
Mrs Anne McGuire (Stirling) (Lab)
A recent report by the Children’s Society indicates that there will be a sharp increase in the number of disabled children living in poverty when universal credit is introduced, as a result of the £1,400 a year reduction. All the statistics show that poverty disproportionately impacts on families with disabled children. Does the Secretary of State think that the current levels of support are too generous? If not, why do the Government continue with this very harsh proposal?
Mr Duncan Smith
It is my belief that universal credit will hugely help people in those situations, and the transitional protection for them will also protect those who move on to a slightly different level. My main point to the hon. Lady, who I know takes this very seriously—
Mr Duncan Smith
I beg her pardon. I say to the right hon. Lady—quite rightly so and well deserved—that we are in the business of trying to secure life change through all these groups so that they can take control of their lives. My hon. Friend the Minister with responsibility for disabled people is working to ensure that it is far easier than ever before for people to get into work and take control of their lives, and that is what most of the lobby wants us to do.
Andrew Griffiths (Burton) (Con)
3. What steps his Department is taking to support students who suspend their studies due to illness.
Teresa Pearce (Erith and Thamesmead) (Lab)
8. What estimate he has made of the cost to a typical small business of introducing real-time reporting of PAYE information.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Real-time reporting of PAYE information aims to reduce administrative burdens for all employers, and builds on processes that are already in place. The current burden of PAYE falls disproportionately on small employers. We are building on existing processes, and the annual saving to all businesses is estimated at £300 million per year from 2014-15. The smallest employers—those employing nine people or fewer—will be given free software upgrades by Her Majesty’s Revenue and Customs.
Teresa Pearce
I thank the Secretary of State for that answer. A recent HMRC consultation showed that 75% of people thought that the Government’s time scale for implementing real-time PAYE information was unachievable. All employers will have to move to the new system by October 2013 if universal credit is to succeed, yet some small businesses are still unaware of the time scale, and many are not computerised. What additional assistance will the Government provide to help such businesses to ensure that they meet the timetable?
Mr Duncan Smith
HMRC, which is now responsible for this measure, meets me and others in the Department regularly. We have embedded some DWP employees in the HMRC programme; they are locked together. They are, as I understand it, on time, and they are having constant discussions with large and small employers about the issues and the problems, and assessing what needs to be done to make this happen and to make all the changes. We must remember that all those firms collect those data anyway; the only question is how they report it back within the monthly cycle. We are on top of that but, obviously, we want to keep our eye on the matter.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
Small businesses and business more widely rightly demand that the burden Government place on them is as light as possible, but the current restrictions on saving for a pension with the National Employment Savings Trust mean that businesses must deal with multiple pension providers. Last month, the Pensions Minister told me that he was reflecting on whether to remove the restrictions on NEST. Will the Secretary of State confirm that reflection will now turn into action?
Mr Duncan Smith
I was just discussing the matter with my hon. Friend the Pensions Minister. As the hon. Gentleman knows, we are looking at this right now. Even though we feel sympathetic to what he says, we are still reflecting on the matter.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
We are making good progress towards the delivery of universal credit in 2013, and I have fortnightly progress meetings with officials and weekly reports from my office. I also chair the universal credit senior sponsorship group, which brings together all Government Departments and agencies that are relevant to the delivery of universal credit. Design work is well under way and is being continually tested with staff and claimants, and the development of the necessary IT systems will continue in parallel.
Mr Burley
Many of my constituents complain to me that the current benefits system is far too complicated. There are more than 50 different benefits that people can claim, although no one appears to know the exact number, which leads to huge confusion among those who are genuinely in need. Can the Secretary of State confirm that universal credit will reduce that complexity, improve the user experience and, most important, make clear to all claimants that it will always pay to work?
Mr Duncan Smith
I can confirm that. Universal credit will put together all the benefits that are relevant to people going back to work. Benefits that are not relevant to the Work programme will not be included, but the rest will. That will hugely slim down the complexities, and will ensure that people understand that in every hour for which they work, they are better off in work than out of work. The migration will take place in three phases over four years, and each phase will bring in a new group of claimants of those different benefits until we have finally completed the process and there is a single universal credit.
Ann Coffey (Stockport) (Lab)
As the Secretary of State says, when the universal credit is introduced in October 2013, a couple with two children and working 16 hours a week will be better off in work than on benefits, so why is he introducing changes to the working tax credit this April that will make the same family £728 a year worse off than an equivalent family with no one working? That does not seem to make much sense in policy terms.
Mr Duncan Smith
The tax credit system, which the hon. Lady’s party left us, is administered and run by the Treasury. She said that I was bringing this measure in, but the Treasury has made that policy decision. [Interruption.] Before Opposition Members get over-excited, I should add that I of course fully support everything my colleagues at the Treasury do. I remind the hon. Lady that when universal credit is reintroduced, people who fall into the bracket in question will be £95 better off than they would be on benefits. I also remind Opposition Members that we inherited a massive debt that the last Labour Government racked up, and we have to reduce it. This measure is one of the mechanisms by which to do that.
Mr William Bain (Glasgow North East) (Lab)
13. What steps he is taking to tackle female unemployment.
Mr Rob Wilson (Reading 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)
The Welfare Reform Bill is expected to receive Royal Assent later this week and will mark an important moment, cementing a new contract with the country that states that we will protect the most vulnerable and provide a system that is fair to the taxpayer by making sure through universal credit that work will pay. I believe that those changes are long overdue and I am grateful to all in this House who have helped to get them on the statute book.
Mr Wilson
The shadow Chancellor claims today that families are better off on benefits, where so many were trapped during 13 years of complex Labour reforms. Will my right hon. Friend reassure the House that he will change all that with the universal benefit and make it his mission to ensure that no family is better off on benefits?
Mr Duncan Smith
I can confirm to my hon. Friend that the whole purpose of the Welfare Reform Bill, including the universal credit, which is at the heart of it, is that people will be better off in work than on benefits. I am always astounded by the fact that although many Opposition Members quite legitimately say that they support the universal credit, during its passage through this House and the other place they have never actually voted for it.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I want to bring the House’s attention back to the question asked by my hon. Friend the Member for Stockport (Ann Coffey). She has exposed an important truth: a couple on the minimum wage were £3,000 better off in work under Labour but after the changes that will be made in April they will be £700 better off on benefits. Will the Secretary of State tell us how many people he expects to give up work because they will no longer be better off in a job?
Mr Duncan Smith
I do not expect anyone to give up work, because the jobcentres and the jobcentre staff will work with people to ensure that, as far as possible, they work up the hours and take advantage of the benefits that come with working more hours. I say to the right hon. Gentleman, as ever, and to the Opposition that they behave as though when they left office they left a perfect situation, but they left a massive deficit and debts piling up. He was the one who said at the time that there was no money left, so perhaps he would like to tell us where he was going to get the money from to pay off some of the deficit.
Mr Byrne
Let me give the Secretary of State a simple lesson in economics: the more people who are in work, the more tax comes into the Treasury; the more people who are on the dole, the more we pay out in welfare payments. That is why welfare payments are going through the roof. The Work programme is in chaos, the Minister for the Armed Forces is saying that there is a crisis in the funding model, and now we find out that people will be better off on benefits than in work. Will the Secretary of State promise us that in the Budget he will fix the situation whereby it no longer pays to go out and get a job?
Mr Duncan Smith
The only group that is in chaos is the Opposition. First, they have completely failed to admit and recognise that they left this economy in a desperate state. Secondly, they said that they supported key measures in the Welfare Reform Bill but have never voted for them. They also voted against some of their own measures, which we carried through in our Bill. The reality is that the right hon. Gentleman’s economics do not add up: going on a spending spree, spending £150 billion on benefits and achieving nothing is a failure.
Mr David Evennett (Bexleyheath and Crayford) (Con)
T2. Will my right hon. Friend advise us what steps he is taking to ensure that benefit fraud is reduced?
Mr Duncan Smith
We have a whole series of measures. We recently introduced a new fraud and error strategy, which is already having some success. Future fraud will be reduced now, and agreed by the Office for Budget Responsibility in a sense, but we will reduce future fraud right now by £237 million. The plan and target is for us to reduce it by about £1.4 billion by March 2015. These are major measures over and above what we were left by the Opposition, who seemed quite content to watch fraud and error spiral out of control.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
T3. As you know, Mr Speaker, the Wedgwood museum in Stoke-on-Trent is one of the greatest museums in the world and is facing the liquidation of its collection due to faulty pension legislation. The problem lies with the 2008 occupational pension schemes regulation and the last man standing principle, which leaves a solvent employer liable for the whole of the deficit in a multi-employer scheme. That was never meant to apply to charitable collections. Will the Minister review that legislation before we sacrifice more of our national heritage to the lawyers?
Brandon Lewis (Great Yarmouth) (Con)
Does my right hon. Friend agree that rather than let the Socialist Workers party and their protest groups continue to confuse a good programme such as work experience with others, we should congratulate not only the companies that are doing so much for young people, but the young people who are taking up the scheme and have the motivation to build their CVs?
Mr Duncan Smith
As ever, my hon. Friend has hit the nail on the head. Work experience is a great programme, which is helping lots of young people to get into work at a reasonable cost to the Exchequer. Those two things need to be borne in mind. It is no good the Opposition sitting quiet, watching while trade unions back these anarchists and try to stop decent people getting into work.
Hugh Bayley (York Central) (Lab)
People diagnosed with mesothelioma—141 former railway carriage builders in York have now died—can often claim compensation from their employer. The earlier they get compensation, the less they and their dependants need in benefits, so will the Secretary of State talk to the Secretary of State for Justice about fast-tracking these cases through the courts, as is currently done in the royal courts of justice in London, and making that a nationwide approach?
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Does my right hon. Friend agree that it is a great shame that the Labour party seems unable to get behind the work experience programme and condemn the protests out of hand, and will he tell the House why he thinks that might be the case?
Mr Duncan Smith
I have been wondering about that. Some right hon. and hon. Members—and some more so than others—have been conspicuous by their absence in this debate, and I sometimes wonder whether their trade union paymasters have something to do with their staying quiet throughout this whole debate.
Mr Wayne David (Caerphilly) (Lab)
The Welsh Assembly’s Labour Government have an initiative to help unemployed young people called Jobs Growth Wales. Do the central Government support it?
Welfare Reform Bill
Iain Duncan Smith Excerpts(14 years, 1 month ago)
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Mr Byrne
I rise to speak in favour of the amendment in my name and those of my right hon. and hon. Friends. I shall state at the outset that we wish to seek a Division on that amendment, and I am disappointed that the Government have tried to invoke financial privilege to defend against a vote on our amendment in the House of Lords, where they know very well that they will once again be defeated. I am, however, grateful that the Minister has incorporated half of our amendment, by ensuring that there will be a grace period of nine months, but I want to set out the dangerous flaws that have now been exposed in the “one cap fits all” approach and also set out what I think would be a better approach.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Will the right hon. Gentleman give way?
Mr Duncan Smith
The right hon. Gentleman says that he is upset that we are invoking financial privilege. Will he tell us why, throughout all the debates in the Lords and here, his party has not tabled an amendment to regionalise the cap at any stage, but instead chose to knock out child benefit?
Mr Byrne
Of course. The Labour party advanced the position in our amendment not, as the Minister said in a slip of the tongue, 10 years ago but well over one year ago. It was advanced by my predecessor and the Leader of the Opposition. During the passage of the Bill, we have talked extensively about the risks—[Interruption.] The Secretary of State might like to listen to the answer. We have given the Government ample opportunity to put in place safeguards against the dangers of their having to spend a lot of money patching up what is being done this afternoon. In the absence of those safeguards, I want to propose to him a better approach.
Mr Byrne
In a moment. I will give way to him as often as he wants.
We have set out a clear alternative approach. The Government have today burned one third of the savings that they proposed for this measure because they got the policy wrong. Today, by conceding a nine-month grace period, they have incorporated part of our amendment, but now I want to show the Secretary of State a better way of instituting a principle on which I think we both agree.
Mr Duncan Smith
Throughout this debate, we have seen a game played out by the Opposition: on the one hand they are in favour but then they vote against everything. I cannot understand why, if the right hon. Gentleman takes this principled position and if Labour has believed in it for a while, he has not previously advanced this amendment, which he apparently believes so passionately now needs advancing? Why not in the Lords? Why not here before? There is no answer except that he is trying to indicate one thing and run away with the other.
Mr Byrne
I spent much of this morning perusing the helpful Conservative party briefing on the Bill—I am sure that Government Members have a copy—page 2 of which contains a useful summary explaining how I, the shadow Business Secretary, the shadow work Minister and the Leader of the Opposition have set out clearly their support, in principle, for the Bill. However, we want to give the Government the chance to institute important safeguards—for example, not allowing the cap to kick in if someone has not been offered the chance to work and instituting new safeguards for homelessness, on which they have had to spend a lot of money today. The Government have not listened to any of that, and now they have had to come back to the House accepting half of Labour’s amendment and spending a huge amount of money, thus burning many of their savings.
Richard Graham
The hon. Lady is welcome to visit Gloucester. We have lots of things to show her that she will enjoy. If her point was that there are specific problems in London, I agree with her, but I shall come to that later if I may.
The second group of people in my constituency whom I want to address is those on the lowest wages of all. The Government have been clear that one of their major goals—many of us campaigned for this long before the general election—is to reduce, and if possible to eliminate, income tax for the lowest earners in our constituencies. They have done a great deal towards that goal—I believe that 1.1 million have been taken out of income tax altogether. What message do we send to those who are not earning very much and whom we would like to take out of income tax altogether if we do not cap the benefits that those not in work can clock up?
We should send the lowest earners the message that this Government are on their side. We want to take them out of income tax when we can, and at the same time, we want to put a cap on those families who, for whatever reasons, are unemployed. That is a very important message to send, for example, to the young worker at Asda in Barton and Tredworth, who finds that the presents she buys her children at Christmas are not nearly as good as those bought for the children of the family next door, who are living more comfortably on benefits. This is a worker-friendly policy and Bill.
The third group in my constituency whom I should like to address is those who are the most worried and the most vulnerable, including the disabled—I have had several mails from disabled people—war widows and those on PIP or attendance allowances. As the Minister has made absolutely clear, the Bill provides protection for the most vulnerable in our constituencies.
I absolutely recognise that people could well be affected by some elements of the Bill, and the vast majority of them probably live in London. It is not for me to speak on their behalf or on that issue, but the Minister has addressed the problem with three measures: first, the 10-month grace period; secondly, a special nine-month grace period for those who lose their job; and thirdly, a package of discretionary funding. That seems to me to be a significant proposal for hon. Members whose constituencies are likely to be affected.
The right hon. Member for Birkenhead (Mr Field) made a good point when he warned of the consequences of the Bill in a year or two. Many Government Members, including me, are new to the House and indeed to the world of politics, whereas he has years of experience. I do not have his experience of debating measures that sound great on the day but do not deliver quite what they intended, but in 2010 the Select Committee on Work and Pensions, of which I was a member, looked very carefully at changes to housing benefit. There were warnings from well-known charities such as Shelter and speeches from Opposition Members such as the hon. Member for Westminster North (Ms Buck) that thousands, if not hundreds of thousands, of people would be thrown out of their accommodation and have to sleep rough on the streets. A year later, none of that has come to pass, although I may have missed something.
Mr Duncan Smith
Does my hon. Friend agree that one of the biggest problems in these debates about welfare is that contributions from the other side, with the exception of the right hon. Member for Birkenhead (Mr Field), are characterised by massive scaremongering about every single change? That has been reprehensible.
Richard Graham
My right hon. Friend makes an important point. I have heard from many charities, whose work I deeply respect in many ways and who are active in my constituency, and the strength of their words on some of these issues does amount to scaremongering. I hope that, as on housing benefit, they are proved entirely wrong.
I hugely congratulate the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) on the ingenuity of his argument. I have no doubt that were he to go more deeply into the private sector, as I believe he is starting to do, he would be a fantastic salesman of unsellable products. Today, we have heard from him an extraordinary, last-minute and uncosted proposal that leaves us none the wiser about what the Opposition really believe. I sympathise with the right hon. Gentleman. He said that if we left matters to politicians, they would make a pig’s ear of it. He is right: he did. From the man who was in charge of the spending of taxpayers’ money and realised that he had spent it all, that was a hugely motivational factor for many Government Members, who realised that politicians had made a pig’s ear of it and perhaps it was time for people from outside politics to come in and try to do something to help.
Mr Deputy Speaker (Mr Nigel Evans)
Further to that point of order, I call Mr Iain Duncan Smith.
Mr Duncan Smith
Far be it from me to suggest an answer, but the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) might like to reflect on the fact that his party did not vote on the programme motion.
Mr Deputy Speaker
My response to the original point of order is that I am operating under the programme motion that this House voted for; I can do nothing other than that.
Clause 10
Responsibility for children and young persons
Oral Answers to Questions
Iain Duncan Smith Excerpts(14 years, 2 months ago)
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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.
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?
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.
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.
Living Standards
Iain Duncan Smith Excerpts(14 years, 4 months ago)
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Mr Byrne
I know that the hon. Gentleman takes these matters seriously, and that he will feel bad about the fact that 10,000 families in his constituency are seeing cuts to their tax credits to pay for the failure of his Front Bench to get people back to work. He is such an assiduous attender of these debates that he will know as well as I do that the OBR’s analysis of our last Budget showed that we were set to borrow £37 billion less than the Chancellor set out to the House yesterday. He should explain that to the 10,000 families in his constituency who are seeing a cut in tax credits.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The right hon. Gentleman is being generous, as ever, in giving way. I remind him, however, that there is obviously a split between him and the shadow Chief Secretary to the Treasury, because on yesterday’s BBC programme “The Daily Politics”, she was asked this specifically:
“If you had been writing the autumn statement, borrowing would have been higher? Yes or no.”
Her answer was yes.
Mr Byrne
We do happen to believe that further action is needed to get people back to work, because we are now seeing the costs of the right hon. Gentleman’s Government over the past year and a half. We have now seen the Chancellor set out £158 billion of extra borrowing because he has drained the recovery of growth and put the benefits bill up over the course of this Parliament by £24 billion. That is the only part of his budget that is growing.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I am tempted to ask, “Is that it?”, but perhaps I will not.
Yesterday, the Office for Budget Responsibility published its forecasts for the UK economy over the coming years, which painted a very difficult picture: Britain is expected to grow this year by 0.9% and next year by 0.7%; growth is forecast at 2.1% in 2013, 2.7% in 2014, 3% in 2015 and 3% again in 2016. The OBR showed that in 2009-10 borrowing was £156 billion a year. Last year, that fell to £137 billion. This year, the OBR expects it to fall again to £127 billion.
The OBR did not just publish forecasts. It did us a favour, because it looked back and reopened the books on the era of the previous Government, and an important factor emerged. It told us that an even bigger component of the growth that preceded the financial crisis was part of an unsustainable boom, and that the bust was deeper and had an even greater impact on our economy than previously thought, meaning that the effects will last even longer. It said:
“The peak-to-trough fall in output over the recession is now estimated to have been greater than previously thought at 7.1% rather than 6.4%”
That is a huge change to the figures. It found that from near the end of 2010 we were taking a serious hit from rising global food and energy prices.
I want to add a further quotation from the OBR as these matters form the baselines of our debate today:
“Most of the weakness can be explained by an external inflation shock”.
Its third point is that the eurozone crisis is
“likely to have contributed to weaker UK growth and business and consumer confidence.”
Mr Duncan Smith
I hope they will attach no credibility if they were our forecasts. We set up the OBR—an independent body that Opposition Members accepted—and its forecasts are about as good as we shall get, so we should give it credibility for at least trying to get the forecasts right. That is a damn sight better than the past 12 years of gerrymandered Treasury figures, not one of which had any credibility.
Sheila Gilmore (Edinburgh East) (Lab)
The Secretary of State quotes from the OBR, so he might like to add that it stated that we came out of recession quicker and that growth had increased by the first part of 2010. The OBR made its predictions before the autumn statement. Last year, it made its predictions before the statement. Its predictions were wrong, because the Government’s policies were wrong. Its dire predictions this year were made before this new set of policies.
Mr Duncan Smith
I am grateful for the intervention, as it allows me to remind the hon. Lady that in looking back at the period in the run-up to and start of the recession the OBR said the depth of boom and bust was greater than was anticipated—by more than 1%. The baseline from which we started, therefore, was much lower, which means, as is seen by the Treasury, that the amount we would have had to borrow would have been more than £100 billion if we had not taken our decisions early on. Labour Members’ posturing about their own position is fundamentally incorrect, and they must recognise that.
The OBR said that the eurozone crisis is
“likely to have contributed to weaker UK growth and business and consumer confidence.”
I know that Labour Members do not like to hear that that is an issue, but it is seen by everybody, not least of which the OBR.
Stella Creasy (Walthamstow) (Lab/Co-op)
We all welcomed the establishment of the OBR because of the independence it gives. The full quotation from the OBR states that
“an external inflation shock constraining real household consumption”
is the reason for the revision in growth forecasts. How does the Secretary of State think that bearing down further on family incomes will help our economy to grow again?
Mr Duncan Smith
The reality, as the OBR and the Institute for Fiscal Studies make very clear, is that you cannot borrow your way out of a debt crisis. I know that Opposition Members are indulging in voodoo economics—a fake religion—but almost every economist abroad and at home says that you cannot borrow your way out of a debt crisis.
Charlie Elphicke
I was just looking at Labour’s five points for growth, which would cost a lot, would require us to borrow from the markets, and would drive up mortgage rates for hard-pressed home owners. Would that not be irresponsible and reckless?
Mr Duncan Smith
The answer, very simply, is that, yes, it would be.
Yesterday, there was much jeering about the issue of Europe. The Opposition say one thing one day, move on and then say another. I remind the shadow Chancellor, who is not here today, of something he said in July:
“We need to face up to today’s problems. When you see Italian and Spanish bond spreads you can see the situation is incredibly dangerous”—
and that came from a man who yesterday said that we cannot blame anything on the European crisis. That is absurd, and the Opposition must get their act together over the reasons we are where we are.
Mr Duncan Smith
I want to make a little progress, but then I will give way.
Whatever we say, in government or in opposition, I fancy that were the previous Chancellor in office he would be saying many of the things that my right hon. Friend the Chancellor said yesterday, because once in government people become strangely rational, and that leads to difficult choices. We can play party games, but I want to run through some of the choices we have had to make. We had to choose whether to invest more in supporting young people, and we chose to invest in the youth contract—about £1 billion over the next three years. That was an absolute priority for us, so we had to tighten two or three other areas to enable us to provide that support. These are tough choices. If we had a pot of money to raid, yes, we might have raided it, but there is none, as the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) reminded us on leaving office.
Unemployment is therefore a huge challenge for us—it is why we set up the Work programme. None the less, the OBR estimates that private sector employment will rise by 1.7 million by 2016, largely offsetting the forecast reduction in public sector employment.
Frank Dobson (Holborn and St Pancras) (Lab)
Will the right hon. Gentleman give way?
Mr Duncan Smith
I will give way in a moment. I promised I would give way to the hon. Member for Sefton Central (Bill Esterson), too.
The growth plan proposes £6.3 billion of additional infrastructure, £1 billion for new regulated industries and moves, with the Association of British Insurers, to target a further £20 billion of extra investment.
Bill Esterson
I wonder whether the right hon. Gentleman believes in fairness. I expect he will say he does. If so, why do the Government’s policies target low income families much more than those at the top?
Mr Duncan Smith
I do not agree with the hon. Gentleman. I am talking about choices. I remember a great deal of debate, even in the Select Committee, about whether the working-age unemployed would see their benefits reduced. Everybody said it would happen; newspapers predicted it. In fact, my right hon. Friend the Chancellor has stuck to increasing them by CPI at 5.2%—just one good example of making a choice about who would be affected most direly by any change or any reduction. That was a bold choice and one on which we should congratulate him.
Mr Byrne
I am grateful to the Secretary of State and I am following his argument closely. Further to the intervention from my hon. Friend, the right hon. Gentleman will no doubt have seen the analysis from the Institute for Fiscal Studies this morning. If it is true that the Government are not hitting the poorest families harder, why has the IFS said that for 2012-13 the poorest three deciles in this country are being hit three times harder than the overall average?
Mr Duncan Smith
According to the findings of the IFS and of the Treasury, the top decile pays a huge amount more in relative terms than anybody else. [Interruption]. Hon. Members should listen. Taking account of uprating, about 80% of households with children will see their tax credit awards rise at least in line with earnings next year. Members can pluck little bits out, but when they average it across, they will see that there have been some choices.
I am quite prepared to recognise that the pressure on the bottom deciles will always be tougher and harder because of where they spend their money. That is not the issue. The issue is, within the bounds of what we could afford, what were we trying to protect? The decisions we took and the changes we made, which I will come to in a moment, mean that we have protected the most vulnerable as well as we could and better than the Opposition would have done, had they been in power.
Mr Byrne
I am grateful to the Secretary of State. He is being most generous. The IFS was pretty clear this morning. It said that the richest decile would see an impact of just over 0.5%. The poorest decile would see an impact of minus 1.6%. So it is clear that the poorer families in this country are being hit much, much harder than the richer ones.
Mr Duncan Smith
I am sorry, those are not the figures that I have. The figures on the chart that I am looking at show that the richest decile has a greater proportion of its income taken, even in relative terms. Yes, I accept that, relatively, those in the bottom three deciles do quite badly in many senses, but the right hon. Gentleman should look at the Treasury figures, which show that the wealthiest decile do worse than anybody else, in absolute and in relative terms.
Mr Duncan Smith
I am going to move on.
The commitments made by the Chancellor in the previous Budget have to be taken into consideration, along with the ones that I have mentioned. The new offer on child care comes on top of our expansion of free nursery education for all three and four-year-olds. We are already set on a path of far-reaching reform in our welfare system, getting work incentives back in order and delivering a system that people finally understand. We will do this through the universal credit, which will in two years rebalance any of the out-of-work incentives that got out of balance, so that work pays.
The Opposition had 13 years to make the kind of changes that we are making. We have already got them under way. They will take about 350,000 children and more than 500,000 adults out of poverty. Some £7.2 billion has been invested in the fairness premium, including the pupil premium, to support the poorest in the early years and at every stage in their education. We have invested in 4,200 new health visitors.
Almost none of those changes is taken into consideration in the rather narrow way of measuring who is in poverty and who is not in poverty, particularly child poverty. This is an important point. I spoke earlier about the money and the effort that we are putting in for the poorest. The wide range of steps that we have taken is, on balance, positive. None of those has been taken into account because it is not possible at this stage to calculate the effect, but I want to do that and we ought to do so.
Huw Irranca-Davies (Ogmore) (Lab)
The right hon. Gentleman’s heart is in the right place, but his head is in the clouds. We can argue over definitions and data, but let me read to him the response of the chief executive of Citizens Advice, who says:
“The Chancellor has broken the promise he made in last year’s Budget to protect families on the lowest incomes from the impact of last year’s harsh cuts by increasing child tax credits above inflation, leaving them now with no protection at all… Make no mistake, this—
yesterday’s announcements—
“means children in the poorest homes are at risk of going cold and hungry to pay for the new schemes the Chancellor has announced today”.
Why do the poorest in society have to pay for the schemes that were announced yesterday? The right hon. Gentleman’s heart is in the right place, but he has not thought this through.
Mr Duncan Smith
It is not just the poorest who are paying. Everyone will have to bear a proportion, because everybody is going to pay for this. Yesterday the Opposition claimed that the shocks that caused inflation are not relevant, yet today they stand there and tell us that it is all down to inflation. They need to make up their minds which case they want to mount first.
Mr Redwood
Will my right hon. Friend confirm that it is his strong intention always to make sure that it is worth while working, and will he bring us up to date on the progress and timetable on that?
Mr Duncan Smith
I will indeed. The point I was making was that, as the universal credit comes forward in the next two years, it will do huge amounts to ensure that the incentives to return to work are improved. Secondly—and this relates to complaints from Opposition Members about the tax credit—it will reset the baseline so that those incentives will be increased and improved. Had we remained in the same position as the previous Government with their tax credits, there would be no way back for us now.
Kate Green (Stretford and Urmston) (Lab)
I am well aware that the Secretary of State has great hopes for the universal credit to incentivise people into paid employment, but does he accept that the cumulative effect of last year’s Budget and spending review, this year’s Budget and yesterday’s statement is that the incentives to work for low-paid employees have been worsened as a result of the reduction in support for child care costs through the tax credit, the cut in child benefit, the freezing of the lone parent and couples element of tax credits and the fact that it is all set against a rise in living costs that families cannot afford to meet?
Mr Duncan Smith
Seen over the whole period of this Parliament, and taking into account things such as lifting the tax allowances, the commitment of the coalition to lift them further before the end of the Parliament, and a whole variety of the points that I have already laid out, I do not agree with the hon. Lady. When Opposition Members look back, they will realise that the introduction of the universal credit will result in positive work incentives and we will get people back to work, as we are already doing.
I have already mentioned some of the things that have been introduced in the past year and a half, and yesterday the Chancellor also announced reforms to support working families which no Opposition Member has taken into consideration. We have deferred the fuel duty increase planned for January and cancelled the inflation increase planned for August 2012. The tax on petrol will be a full 10p lower than it would have been without our action in the Budget this autumn, and that means that families will save £144 on filling up the average family car by the end of next year. Fuel and the cost of driving are a very big driver of poverty and we are doing something about it. We are also regulating the rise in fares on national rail, the London tube and London buses, and we have already offered councils the resources for another year’s freeze in council tax, which I hope they all take up. Our plans to raise personal tax allowances will pull over 1 million people out of tax altogether, which is a big incentive for people to go back to work. When the Opposition complain about changes to working tax credits, they should remember their punitive decision to abolish the 10p starting rate of tax. They did not care what happened to the poorest in society.
Neil Carmichael (Stroud) (Con)
My right hon. Friend has mentioned the 900,000 people who are being lifted out of income tax altogether. Is that not a significant step in the right direction?
Mr Duncan Smith
I agree with my hon. Friend. The reality is that we are raising people out of tax, while what the Labour Government did by getting rid of the 10p starting rate was to drop more people into higher rates of tax. It was really dismissive, very regressive and attacked the poorest.
John Howell (Henley) (Con)
Is my right hon. Friend as surprised as I am that there has been little or no mention from the Opposition of the benefit to living standards that comes from keeping interest rates low?
Mr Duncan Smith
I was going to come on to that. Had interest rates gone up and had we been paying more for our borrowing, we would all—including those paying mortgages—be poorer.
This debate about living standards is important. Of course, those standards are very tight, and I make no bones about the challenge that we face, but let us not forget where we came from. Let me take the House back to 2007, when personal debt had rocketed to about £1.3 trillion and we had the highest structural deficit in the whole of the G7. That was before the recession began. That is a completely unsustainable picture, and it required very painful readjustment. As my colleagues know, the problem was that we entered the recession ill prepared for the consequences. When Labour Members ratcheted up spending by a massive degree, they simply postponed the inevitable. After all, the IFS forecast for the period 2008-2011 was that living standards would fall by 1.6%. This was a case of a fall in living standards postponed, with pain pushed on to future generations. People do not have to take my word for it—the IFS said:
“Much of the impact of the…recession on UK living standards was not felt until after the economy had stopped contracting, but that…pain was most definitely delayed rather than avoided”.
Claire Perry
Does my right hon. Friend agree that adopting the Opposition’s proposals would just delay that pain further for future generations, and that this debate would be irresponsible in the extreme if we did not think about the living standards of our children and grandchildren?
Mr Duncan Smith
My hon. Friend, not for the first time, hits the nail firmly on the head. The reality is—
Mr Duncan Smith
I will give way in a minute. [Interruption.] Relax—I will give way. The point is that there is a choice: we can either let this thing slide, with higher interest rates and all that goes with that, and let our children pick up the debt and the deficit, or we can deal with this ourselves and give our kids at least a fair chance.
Of course living standards are under a squeeze—we know that—but that is something we utterly regret. Nobody wants to stand here and say that that is the purpose of what we do—it is not—but it is part of what we are having to do, and we need to get living standards up again as fast as we can. The forecasts from the Office for Budget Responsibility show that that will be the case. If Labour Members were being realistic, they would accept that no matter who was in power, standing here, they would have to deal with exactly the same problem.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The Secretary of State and the hon. Member for Devizes (Claire Perry) talk about the children of the future, but I would like to bring their attention back to the children of today. Is the Secretary of State aware of recent Government figures that show that the number of children in need this past year has risen by 3,600, with squeezed living standards putting vulnerable families further at risk and pushing more cost on to the state?
Mr Duncan Smith
The children of today are also, more than likely, the children of the future, so we do not want to split hairs about this. Children are children, and as they become adults we do not want them to have to pick up the debt and the deficit that we leave behind. It is all about taking difficult decisions, being honest about what those decisions are, and recognising that if we do not take them now, we will have them forced on us by other people.
Mr Rob Wilson (Reading East) (Con)
May I remind my right hon. Friend of the record of the previous Government, which included imposing a 100% rise in council tax on my constituents, upping the pension rate by a pathetic 75p for our old-age pensioners, and ratcheting up fuel prices? How did that help children and families across our country?
Mr Duncan Smith
I wish that we saw a little more realism from Labour Members in accepting that they were, in many senses, partly the architects of the difficulty that we are in.
Glenda Jackson (Hampstead and Kilburn) (Lab)
I find it absolutely incomprehensible that the Secretary of State is able to discard the real pain that is now being suffered by children because of his Government’s bizarre choices based on the argument that they are going to become adults and will then have to pay further down the line. Is he really equating the possibility of a child losing its home, its school, its friends, its family, its support system, and watching its parents having to give up work because they cannot afford child care, with what is going to happen further down the road? That is bizarre.
Mr Duncan Smith
Of course, the hon. Lady would be right if that were what I was saying. What I am saying is quite simple: it is that our responsibility right now is to get the economy back in balance so that children do not have to pick up the debts. Let us remember that the deficit that we are dealing with is the pump that fuels the debt, and that debt is the legacy that we will leave them.
Mr Duncan Smith
Wait a minute—I am trying to answer the hon. Lady. She may not like the answer, but I want to finish it. The reality therefore is, yes, of course, but I think that we have done as much as we can to protect those who are in difficulty.
In answer to the hon. Lady, I should like to list a few things that we have done. Bearing in mind the changes we have made to taxation, more than half of those who will be lifted out of income tax will be women. We are investing an additional £300 million in child care support on top of the £2 billion already being spent. There will be 5,000 mentors to support women entrepreneurs and we are creating the women’s business council to advise Government. There will be up to £2 million to support women to set up and expand businesses in rural areas. We are improving child tax credits this April with a £180 real-terms permanent increase in the child element. Next April, there is an increase of 5.2% and a further £135. We are doubling the number of two-year-old kids who receive 15 hours of free education a week. There is also the £2.5 billion pupil premium. I could go on and on. We are doing huge amounts to try to protect the poorest in society.
Mr Duncan Smith
It is all rail fares, but I do not want to split hairs with the hon. Gentleman about whether he thinks it will help his constituency. I think it will.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
The Secretary of State talks about protecting women but he will know that House of Commons Library figures show that women are paying two thirds of the contribution in tax and benefit changes. He also said that the personal allowance increase benefits women more than men. Does he admit that the truth is that the Library figures show that while 13,500 women benefited from the personal allowance increase even though it was compensated for by other cuts, 16,800 men benefited, so in fact women are a minority, even from the personal allowance increase that he parades as a change to help women?
Mr Duncan Smith
I can look at the Library’s figures and decide whether they or our figures are correct. We will have a look at them. My view is that the figures that we have show that more women than men benefit from that change. We can debate that if the right hon. Lady likes, but at least she is admitting that, one way or the other, a significant number of women benefit dramatically. That is a good starting point.
I want to move to an important subject. Given that this is an Opposition day debate, I had rather hoped––
Sarah Newton (Truro and Falmouth) (Con)
Before we move from the topic of hard-working women such as those in my constituency, especially those on the lowest incomes, who depend on informal care from grandparents, perhaps my right hon. Friend could share with the House the many things we have done to support grandparents on low incomes.
Mr Duncan Smith
I am grateful to my hon. Friend who, as ever, talks sense, and I agree with her.
This is an Opposition day debate and I had hoped to hear something about what they would do to fix things. My right hon. Friend the Member for Wokingham (Mr Redwood) asked a very specific question but never received an answer from the right hon. Member for Birmingham, Hodge Hill. We have today had to endure the usual waffle and confusion. On the one hand, the Opposition criticised us yesterday for borrowing too much, but on the other they seem to think that more borrowing is the only way to fix the deficit. The director of the IFS was pretty clear yesterday on the Opposition’s position on borrowing more to spend. He said:
“You would have to believe some pretty surprising things about the way the economy works to think that if you reduce tax by a pound then borrowing would go down rather than up.”
Does the right hon. Gentleman agree with the director?
Mr Duncan Smith
With respect, that is not a policy; that is just a lot of waffle. In reality, what the right hon. Gentleman has to tell us—[Interruption]—and I will give way to him again or to the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper)—is whether he agrees with the shadow Chief Secretary to the Treasury, who yesterday said that if the Opposition had made the autumn statement, they would be borrowing more.
Mr Byrne
We think that we could get more people into jobs if we had a temporary cut in VAT to get shoppers back on to the high street; if we cut national insurance for small firms to hire extra workers; if we brought forward infrastructure projects, none of which we saw yesterday; if we cut VAT on home improvements; and if we had a tax on bankers’ bonuses to get 100,000 young people into jobs.
Mr Duncan Smith
Borrowing, borrowing, borrowing. More borrowing—isn’t it wonderful? Interestingly, the Opposition were supposed to say that they would stick to the original Darling plan, but the measures just laid out involve borrowing way above that, because, as my right hon. Friend the Member for Wokingham has said, if we look at what the Opposition have opposed, out of all that that we have had to do, we find that the bill now stands at some £91 billion extra a year, or £326 billion for the next five years in which they might have been in government.
These are all the spending cuts that the Opposition have opposed; the VAT position—opposed; welfare savings—opposed; in-year spending cuts—opposed; local government reform—opposed; capital spending on education—opposed; two-year public sector pay freeze— opposed; cuts to capital investment allowances—opposed; increasing public sector employee contributions—opposed; Ministry of Justice reform—opposed; police reform— opposed; DEFRA reform—opposed; cuts to the HMRC budget—opposed. That is not a policy; that is a joke.
Mr Byrne
The truth is that the plan laid out by my right hon. Friend the Member for Edinburgh South West (Mr Darling) would have halved the deficit over four years and, according to the OBR, resulted by the end of this Parliament in borrowing £8 billion less than that which the Chancellor set out yesterday. It would have involved borrowing £37 billion less than the Chancellor over the forecast period. The truth is that he has put borrowing through the roof, because he has put welfare through the roof, because he has put unemployment through the roof.
Mr Duncan Smith
The reality is that the OBR yesterday told us categorically that the position in which the Labour Government left us was significantly worse than anybody expected. It also said that unless we had taken the decisions that we took last year, we would be borrowing more than £100 billion in each year of this Parliament. On top of that, the Labour party’s measures would have resulted in even worse, but at least we had a little honesty from the shadow Chief Secretary to the Treasury, who said that borrowing would rise because she would borrow more. Given the economic situation, the Treasury estimates that such measures would cost far more—on the back of the OBR figures.
We now know what the Government at the time were doing, and what the Opposition today are about. They are determined to put hard-won interest rates, which we have held down, at risk. Last April, under Labour, our interest rates were higher than Italy’s; 18 months later, we are the only major western country to have seen its credit rating improve. Italy’s interest rates are now about three times ours, despite it having a lower deficit—actually, almost half the deficit that the previous Government left us. So, while the rest of Europe is under intense pressure, the UK remains a safe haven and the Labour Opposition are completely confused.
Yesterday the shadow Chancellor insisted that low interest rates were the sign of an economy in trouble. That is the same man who, back in 2004, described long-term interest rates as
“the simplest measure of monetary and fiscal policy credibility”.
Mr Duncan Smith
Let me lay out the facts to make things simple for the Opposition before I give way. A 1% rise in our market interest rates would add £10 billion to mortgage bills; the average family with a mortgage would have to pay £1,000 more every year; the cost of business loans would increase by £7 billion; taxpayers would be forced to find an extra £21 billion in debt interest payments—and the ex-Chief Secretary to the Treasury has the front, the absolute front, to talk about squeezing living standards. If the Opposition had their way, living standards would collapse.
Hugh Bayley
Does the Secretary of State not recall that at the time of the general election Britain’s national debt was significantly lower than that of Italy, France, Japan and the United States? The reason Italy faces its economic problems is that its national debt is much higher than that which this Government inherited from the Labour Government.
Mr Duncan Smith
It is well worth reflecting on the fact that the previous Government’s debt cannot be detached from their deficit. In case the hon. Gentleman does not understand it, I will explain that what they did was ratchet up spending before the recession began. We had the largest structural deficit of any G7 country before the recession began.
Mr Duncan Smith
No, I will not give way. The previous Government then went on a spending spree, ratcheting up the deficit, which now pumps the debt. It is no good playing silly games—
Mr Duncan Smith
No, the hon. Gentleman can sit down. It is no good. He is not going to play games over the difference between the deficit and the debt. The reality is that Labour cannot weasel out of it. It left us with a tragedy that we are having to put right, which is why we will oppose the motion.
Oral Answers to Questions
Iain Duncan Smith Excerpts(14 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Stephen Mosley (City of Chester) (Con)
15. What steps he is taking to tackle benefit fraud in areas where its prevalence is high.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I remind my hon. Friends of our inheritance from the previous Government: fraud and error in the benefit system were at £3.1 billion and progress had plateaued since 2005. The joint strategy with Her Majesty’s Revenue and Customs started in 2010 and included mobile regional taskforces to look at different areas. We are targeting claimants in high fraud areas with visits, phone calls and letters. One pilot has been completed in Birmingham and we have two more in Cardiff and Croydon. We will carry out evaluation once all three are completed. So far, since October, from case cleansing alone we have saved more than £100 million.
Nadhim Zahawi
I thank my right hon. Friend. Will he share with the House how many benefit fraudsters were actually prosecuted last year?
Mr Duncan Smith
We prosecuted almost 10,000 benefit fraudsters in 2010-11, up from 8,200 the year before. Of those, 86% were successfully convicted—[Interruption.] I would have thought that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) would like to keep quiet, because he has made one mistake already and is bound to put his foot in it again. We will push for the strongest possible sentences. In all cases, benefit fraudsters are required to pay back the money they have stolen.
Stephen Mosley
Benefit fraud is not just stealing from the taxpayer; it also leads to less money being available to those who are most in need. One measure that should deter benefit cheats is the one, two and three strikes rules. How successful does my right hon. Friend think that those rules will be in reducing benefit fraud?
Mr Duncan Smith
When the Welfare Reform Bill has passed through the other place, that process will begin and I think it will be very successful. Another important thing that we will do is bring together all the disparate benefit groups chasing fraud so that we have a much more cohesive strategy. Under the previous Government data were collected so shoddily that it is difficult to get to the absolute truth about the figures, so finally and importantly, we intend to change that.
Kevin Brennan (Cardiff West) (Lab)
The right hon. Gentleman is absolutely right to tackle benefit fraud, and he mentioned the scheme in Cardiff. Is he being equally assiduous in tackling a lack of benefit take-up among people who should be entitled to benefits?
Mr Duncan Smith
That is exactly what universal credit will help to change. The most important point is that its automatic nature will mean far fewer cases of people not receiving in the first place what they are entitled to. One good example is child care: many women, in particular, who are responsible for looking after children do not get the child care that they need, and under the universal credit that should change.
Yvonne Fovargue (Makerfield) (Lab)
Universal credit is supposed to be much simpler than the current system. Why, according to the Government’s own impact assessment, will 380,000 people receive penalties for mistakes on their application and when will negligence be defined?
Mr Duncan Smith
The point about universal credit is that it gets rid of quite a lot of the complexity in the system. That complexity has led to so many mistakes by individuals claiming and by the officials who are meant to be settling those claims. The hon. Lady, and her party, should welcome the arrival of universal credit at the earliest opportunity.
Laura Sandys (South Thanet) (Con)
2. What support is available through Jobcentre Plus for people who wish to start their own business.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
11. If he will amend his proposed welfare reforms to minimise the risk of children entering poverty.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The overhaul of the benefits system through the Welfare Reform Bill will hugely improve the incentives to work. Universal credit will bring in an improvement for children, in that 350,000 children will be lifted out of relative poverty. As the hon. Lady may be aware, we have also made available an extra £300 million for the poorest people who are caring for children.
Debbie Abrahams
The Children’s Society’s analysis of the impact of the welfare reforms says that they will push more children into severe poverty and homelessness. Currently, one in four children in my constituency is in severe poverty. Eighteen bishops have called for the Secretary of State to reconsider his position on the reforms—will he listen to them?
Mr Duncan Smith
I think the hon. Lady is referring to the cap, but I do not agree with her. The cap, which I understand Labour Front Benchers support, is rational and reasonable in that nobody who is out of work should be earning more than average earnings—that is, about £26,000 net. She may deal with constituents who have to travel perhaps an hour into work in the morning and an hour back, who work very hard and who look at those who are out of work and on benefits and find it difficult to accept that they are unable to earn as much.
Damian Hinds (East Hampshire) (Con)
With child poverty targets repeatedly missed pre-2010, what role does the Government’s support for child care and the extension of early years provision play in helping families and keeping children out of poverty?
Mr Duncan Smith
My hon. Friend has hit the issue right on the head. If we focus narrowly on income, we get a perverse result. Through our early years work, through the support provided by the pupil premium in schools, and through the work that we are doing with universal credit, we have been hugely improving future outcomes for parents and their children who currently languish in poverty.
Huw Irranca-Davies (Ogmore) (Lab)
As the Secretary of State will know, the Institute for Fiscal Studies predicts that by 2015 there will be 400,000 more children in poverty. Does he agree with us about this, and if so, what is he going to do about it—or does he just accept that it is a necessary evil of the Government’s current policies?
Mr Duncan Smith
With respect, we are already doing a lot about it. Of course, people can predict as far ahead as they like, without making big assumptions that nothing ever changes, and they will get the kind of results that they want. The reality for us is that all the work that I described to my hon. Friend the Member for East Hampshire (Damian Hinds) is vital in changing outcomes for parents and children. Unlike Labour when in government, we do not think that children should be considered separately from their families; we lift families out of poverty and children out of poverty too.
Jessica Lee (Erewash) (Con)
A genuine challenge for us is to move into work those young unemployed people who have not had the role model of a parent getting up and going out to work in the morning. Can my right hon. Friend assure us that we are tackling this cycle of dependency to assist children and young people for the future?
Mr Duncan Smith
I refer my hon. Friend to the answer given earlier by my right hon. Friend the Minister of State. The Work programme is a huge change for people who have been out of work for a long time. If we couple that with work experience and the opportunities for apprenticeships, we can see that this is a big step forward. Together with the introduction of universal credit, which will ensure that someone is always better off in work than out of work, the whole benefit and welfare system should be changed positively to support those sorts of people.
Mark Pawsey (Rugby) (Con)
17. What steps his Department is taking to ensure the new system of universal credit accommodates changes in personal circumstances.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The design of universal credit will largely be about improving people’s personal circumstances. It will take account of such changes. That is the point of using the real-time information system. Essentially, such information will flow automatically, thus stopping what happens at present. All too often, there is too much of a delay in changing people’s circumstances, which can damage their outcomes, as was the case for one of my hon. Friend’s constituents. That should be brought to an end. At last, we will have a system that reflects people’s needs.
Mark Pawsey
The constituent to whom the Secretary of State refers, whose domestic circumstances changed, immediately notified Her Majesty’s Revenue and Customs, but she tells me that it took seven weeks to reassess her claim for working tax credit and child tax credit. During that period, payments were suspended and my constituent was placed in some hardship. Can the Secretary of State reassure the House that under the new system of universal benefit, such delays will not occur?
Mr Duncan Smith
May I say on behalf of the Government that such a delay is unacceptable? My hon. Friend knows that I have already written to him about that. The current system, much improved though it is, still leads to great difficulty because of the complexity of the benefit system that we have inherited. Universal credit will change that and at last give constituents such as his a chance to take a job, change their circumstances and get the money they should have got in the first place.
Amber Rudd (Hastings and Rye) (Con)
Women’s working lives often have much variation in them, as they sometimes take a few years off to have children. What assessment has my right hon. Friend made of the benefits of universal credit in taking account of such changes, specifically for women?
Mr Duncan Smith
Universal credit is now widely perceived as being very beneficial to women, particularly to lone parents who struggle a lot. They are in and out of work, and often their hours change. That will be reflected almost immediately in universal credit. I know that many who come out of work temporarily lose some of their housing benefit because it takes so long to reorganise it, and thus are worse off. That should all be brought to an end by universal credit, and it will also improve the support for child care.
John Robertson (Glasgow North West) (Lab)
18. How much his Department paid in winter fuel allowance in (a) Glasgow North West constituency and (b) Scotland in 2010; and how much it will pay in 2011.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I am pleased to announce today the publication of the Löfstedt report on health and safety legislation. We have accepted its findings, including the recommendation to move about 1 million self-employed people out of health and safety regulation altogether where their work activity poses no potential risk or harm to others. I believe that the report is good for everybody and will help us put some much-needed common sense back into health and safety.
Stephen Metcalfe
At a recent meeting of the Basildon and Thurrock branch of Epilepsy Action, concerns were expressed that the work capability assessment does not fully take account of the debilitating effect that a condition such as epilepsy can have on a person’s ability to work. Can my right hon. Friend assure the House that those conducting the work capability assessment do understand the complexities and intermittent nature of neurological conditions such as epilepsy, and that those are taken into account when making the assessment?
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
With the OECD forecasting that unemployment is set to spiral to more than 9% in the next year or two, it is clear that the squeeze on working families will only get tighter and tighter. Can the Secretary of State remind the House how much extra it is budgeted will come off tax credits over the next year?
Mr Duncan Smith
I have to say to the right hon. Gentleman that he needs to wait until the autumn statement to have all those figures set in place—if such a thing does exist.
Mr Byrne
I am happy to write to the Secretary of State with his own figures. Budgets laid out by the Chancellor project that more than £3 billion will come off tax credits and child benefit for working people, starting from next April. That squeeze is already serious, and that is why it is unacceptable to propose a further squeeze on tax credits in order to pay for the Secretary of State’s failure to get young people back to work.
On Friday, the Deputy Prime Minister was asked where the money for the new youth contract would come from. He said:
“Well the money clearly comes from the Government”.
He is full of insight. Will the Secretary of State confirm that he has been rolled over by the Deputy Prime Minister and that tax credits will be squeezed to pay for his failure to get young people back to work?
Mr Duncan Smith
Just in case the right hon. Gentleman has missed the point, I remind him that decisions about tax credits are a matter for the Chancellor. I am surprised that he does not know that, because he was once in the Treasury himself. That reminds me that he is the individual who left a letter saying that there was no money left. Where does he think we were going to get the money from to get our successful programmes under way? The answer is that we have made a great start through the work experience programme, the Work programme and the changes to universal credit. We as a Government are doing more to get people back to work than anything his Government did when they were in power.
Chris Kelly (Dudley South) (Con)
T2. What assessment has the Minister made of the potential effect on UK defined benefit pension schemes of the European Union proposal to review the institutions for occupational retirement directive and align it with the solvency II directive? Is not that just a further EU assault on the hard-pressed UK occupational pension sector, and the last thing we need? Will the Minister stand firm against that?
Karl Turner (Kingston upon Hull East) (Lab)
T4. Has the Minister revised his previous estimate that, by 2012, 25,000 single parents will be in work when their income support ends when their youngest child is five years old? Does he not accept that unemployment in my area, Hull, is at a record high, thanks to his Government’s policies?
Mr Duncan Smith
I am always astonished by the Opposition’s defeatist idea that trying to get single parents back into work to support their children is somehow a bad thing. The reality is that the hon. Gentleman’s Government left this country bust, and without any money to do any of the things that he wants to do. They keep spending the same money again and again in their proposals. It is time that they grew up and got on with the real opposition that we expect.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
T3. The Secretary of State will be aware that it is still possible to study David Beckham, Harry Potter and surfing as part of degree courses in the UK. Following the Government announcement about the youth contract, can he assure me that he is in touch with the Department for Education to ensure that young people are equipped to deal with jobs in the real world?
Richard Graham (Gloucester) (Con)
T6. Does my right hon. Friend agree that many people of both sexes, in Gloucester and elsewhere, who are currently without a pension will benefit considerably from the on-time and on-budget auto-enrolment that will arrive next summer? Does he also agree that many more people, especially women, would benefit from the current proposal under consideration for a single-tier state pension?
Mr Duncan Smith
I absolutely agree. Auto-enrolment is not a negative; it is a positive. The fact that the Government are to plough ahead with it, that there will be no exemptions and that all companies will be brought under its scheme is critically important. I support the proposals of the pensions Minister, my hon. Friend the Member for Thornbury and Yate (Steve Webb). Furthermore, the reason that we were left in such a parlous position, with too many people owing money, was that not enough people in Britain had saved; now is the time to start changing that.
Mr William Bain (Glasgow North East) (Lab)
T7. Last week, the Office for National Statistics revealed that the real value of average median wages has declined by 3.5% this year, with an even bigger fall for the lowest paid. Does the Secretary of State recognise the impact that the child tax credit has in improving the living standards of the low paid, and would it simply not be an attack on the poor to refuse to uprate the child tax credit in line with inflation next April?
Mr Duncan Smith
I need to remind the hon. Gentleman that whatever our opinions on this, it is a matter for the Chancellor and not the Department for Work and Pensions.
Mark Pawsey (Rugby) (Con)
T8. Over the past 12 months, unemployment in my constituency has fallen by 13%. According to the headline on the front page of the Rugby Advertiser, that is the largest fall in the country. In contrast to the picture painted by the Opposition, there are some good news stories. Does the Minister agree that in dealing with unemployment, this Government are taking the right steps?
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
A constituent of mine, Abigail McGhee, was engaged to, and living with, the father of her two young children when he sadly died. Her application for widowed parent’s allowance was declined on that basis. Will the Minister reconsider the application of this benefit for people who find themselves in that sad position?
Mr Duncan Smith
Yes, I will, and if the hon. Gentleman would like to send me the details of that case, I will pay particular attention to it.
Andrew Bridgen (North West Leicestershire) (Con)
May I thank my right hon. Friend for his Department’s swift adoption of the Löfstedt review’s recommendations today? Does he agree that when introduced they will have the capacity not only to reduce the burden of red tape on organisations, but to improve their understanding of health and safety and therefore its effectiveness?
Ms Karen Buck (Westminster North) (Lab)
Since last May, an extra 155,000 working households have been forced on to local housing allowance—an increase of 42% on the previous year. Is that because rents have risen or because wages have fallen?
Mr Duncan Smith
As the hon. Lady knows, when we entered office we inherited a housing benefits system in a mess and local housing allowance was already spiralling —it has approximately doubled in the last 10 years—so she should look at what happened before as much as at what happens now.
Mr Peter Bone (Wellingborough) (Con)
Does the Secretary of State agree that new policy announcements from his Department should be made to Parliament first?
Mr Speaker
I am glad that I asked for the question to be put again—and I am glad I heard the answer. Very satisfying.
Universal Credit
Iain Duncan Smith Excerpts(14 years, 4 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The Department for Work and Pensions has obtained approval for an advance from the contingencies fund of £46 million to allow for the continued development of IT for universal credit before Royal Assent. This is a second advance; an earlier advance of £18 million was approved for the same purpose in April.
Parliamentary approval for resource and capital of £80 million for this new service has been sought in the main estimate 2011-12 for the Department of Work and Pensions. Pending approval of the Welfare Reform Bill, urgent expenditure estimated at £46 million will be met by repayable cash advances from the Contingencies Fund.
The universal credit programme has successfully completed the second stage of IT delivery on time. This is a major achievement given the demanding timetable and relatively new “agile” way of working. The second advance will allow the programme to continue to work to its current design and development timetable and enable continuity of third-party supplier engagement. This will support an earlier move to the new simplified benefit than could be achieved without it and achieve better value for money by enabling a more rapid take-up of online claims with lower operational delivery costs.
The amount covered by the advance is part of the proposed £2 billion investment in universal credit agreed at the time of the spending review. The advance will be repaid at the earliest opportunity following Royal Assent.