Universal Credit: Local Authorities

Iain Duncan Smith Excerpts

Thursday 10th December 2015 Written Statements

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

The full universal credit service will be rolled out nationally for all types of claimants from May 2016, completing in June 2018. At this point we will start to move the people receiving legacy benefits to universal credit. This carefully managed process will finish by early 2021.

This means the need for local authorities to administer housing benefit for working age people will progressively reduce. Local authorities need to plan for the future and have sought clarity about implications for their staff currently administering housing benefit.

Today I can confirm that my Department does not propose to make any staff transfer arrangements for local authority staff who currently work on housing benefit for people of working age.

There has been extensive consideration of this issue and engagement with the local authority associations. As universal credit is a new benefit, delivered in a new and fundamentally different way, my Department has concluded that there will be no “relevant transfer” within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (as amended). Any such transfer would anyway be exempt as a transfer of administrative functions between public administrative authorities. My Department has also considered the requirements of the Cabinet Office statement of practice (COSOP). My Department has concluded that COSOP does not apply where, as here, there is no “relevant transfer” for the purposes of TUPE; and that the new and fundamentally different delivery model for universal credit makes staff transfers inappropriate.

The phased nature of this process means that the impact on local authorities can be managed in a way which minimises the need for any redundancies. Where this does not prove possible, after the exercise of all reasonable efforts to redeploy people, the Department has given local authorities a commitment that we will meet their costs of any residual redundancies.

[HCWS377]

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 7th December 2015 Commons Chamber

[Dr Phillip Lee (Bracknell) (Con)]

1. What progress he has made on reducing the number of people in workless households.

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

With your permission, Mr Speaker, given the weekend’s events in my borough, may I take the opportunity, on behalf of myself and colleagues in all parts of the House, to wish a speedy recovery to those who were injured by the tragic events at the tube station in Leytonstone?

When we took office, almost one in five households had no one in work and around 1.4 million people had been on benefits for most of the previous decade. Since 2010 the number of workless households has fallen by over 680,000 to its lowest level since records began.

[Dr Lee]

My constituency covers the major part of Bracknell Forest. In 2014 it had the second highest percentage of working households in the country. Does my right hon. Friend agree that continuing to encourage households into work is one of the most effective ways of improving the life chances of everyone in that family?

[Mr Duncan Smith]

My hon. Friend is right that growing up in a working family is crucial for the life chances of children. When this Government took office, there were more than 2.5 million children growing up in workless households. That has fallen by nearly half a million since 2010. By targeting worklessness, the five new life chance measures that we have introduced will make an enormous difference to children’s lives. I understand that there are now almost no workless households in the south-east.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I ask the Secretary of State to be a little careful—none of us should get complacent about worklessness. Has he seen the research in the United States on the Uberisation of work, when people cease to have good employers with pensions, rights and contracts, and are increasingly pushed into self-employment, where they have no rights?

[Mr Duncan Smith]

By the way, I welcome the hon. Gentleman back. It is good to see him back in his place; I understand he has had some difficulties with health treatments.

The hon. Gentleman would be right, if that were the trend and the direction in which we were going. It is interesting that there is a difference between us and the United States. The vast majority of the jobs that have been created here are white-collar and full-time. That is important. Although we think that people being self-employed is excellent for those who choose to do it, we are seeing a huge trend in supported jobs with full pay and full-time work.

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

The selling point of the Government’s universal credit scheme was that it was supposed to increase work incentives. However, the reduction in work allowances in universal credit due to take effect in April next year will leave around 35,000 working households with no transitional protection and thousands of pounds worse off. Does the Secretary of State accept that these changes will actively disincentivise people to go into work, particularly lone parents?

[Mr Duncan Smith]

I do not. Universal credit is acting as a huge incentive to go back to work. Even the statistics published over the weekend show that universal credit means that people are 8% more likely to go into work than was the case with jobseeker’s allowance. I remind the hon. Lady that jobseeker’s allowance has been seen by many in the western world as one of the most successful back-to-work benefits. Universal credit performs even better than jobseeker’s allowance by some considerable degree.

[Dr Whiteford]

With respect, the Secretary of State did not answer the question about the 35,000 households and about transitional relief coming into effect for April 2016, so I ask him again: what about those people who stand to be thousands of pounds worse off in April?

[Mr Duncan Smith]

As I said before, first, people are getting back to work. Secondly, those who are on universal credit at present will be fully supported through the flexible support fund, which will provide all the resources necessary to ensure that their situation remains exactly the same as it is today.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

I wonder whether the Minister has seen the figures that I have. May I take him from rhetoric back to reality? The figures show that although there has been a rise in employment in the past three months, the number of hours that we have worked as a country has fallen. It is a good thing that unemployment has gone down, but surely we need to address under-employment, particularly when there are 3 million people who say they are under-employed. I saw that over the weekend his Minister for Employment was flogging temporary part-time jobs for people to dress up as Santa Claus, but perhaps it would be better if his Department spent a bit more time trying to ensure full-time permanent well paid work for people.

[Mr Duncan Smith]

It is a bit rich for the hon. Lady to get up and start attacking the Government’s record of getting more people back to work, more people in full-time work and more people in managerial positions. When we took over from the Labour Government, there was a complete collapse of the economy, with people lucky to get a job and even lucky to get part-time work. Two thirds of the rise in employment since 2010 has been in managerial, professional jobs, and permanent jobs are up over 476,000. That is not rhetoric; those are realities.

[Mr Graham Allen (Nottingham North) (Lab)]

2. What steps his Department is taking to reduce the number of young people who are long-term unemployed; and if he will make a statement.

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[Mr Stephen Hepburn (Jarrow) (Lab)]

6. What estimate he has made of the proportion of working families likely to be affected by the Government’s reforms to benefits.

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

We are fundamentally reforming the welfare system to ensure that the benefits of work are always clear for all. As part of that, we are supporting working families who are on benefits to progress in work, increase their earnings and move away from welfare dependency.

[Mr Hepburn]

The Government’s humiliating U-turn on tax credits is to be welcomed, but the Chancellor has confirmed that another £12 billion of welfare cuts will take place. Is it not a fact that those cuts will affect the poorest, the most vulnerable and those who are struggling to survive in society, like families?

[Mr Duncan Smith]

With respect to the hon. Gentleman, it was made clear at the Budget by the Chancellor that the total package of changes includes changes to the welfare budget of £12 billion, but that other Departments are also involved in the process of getting rid of the deficit. I thought that the Labour party had said it was in favour of getting rid of the deficit, so the question is what it plans to do. I remind him that a huge amount of the savings are being made because more people are going back to work and fewer people are therefore claiming benefits.

[Mr Peter Bone (Wellingborough) (Con)]

Following on from what the Secretary of State has just said, if the British people vote to come out of the EU, we will not be giving £350 million a week or more than £1 billion every three weeks to the EU. Would he welcome some of that money for his Department?

[Mr Duncan Smith]

My hon. Friend must not dare tempt me in that direction. What is really important is that we run our economy here in the UK for the benefit of citizens of the UK. We have made our position clear: we want to ensure that those who have not been here for a certain period of time and have not contributed are not able to draw upon our benefits system.

[Mr Speaker]

On the whole, because the hon. Member for Wellingborough (Mr Bone) is dextrous, he was just about within order, but I counsel colleagues that they should take great care, as a general principle, not to shoehorn their personal preoccupations into questions to which they do not obviously relate.

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[Andrew Gwynne (Denton and Reddish) (Lab)]

The Government’s forced U-turn on tax credits is very welcome to the families in my constituency who were set to be affected by the cut, but many people are being moved on to the universal credit system and will be similarly impacted. Young people will not qualify for the Government’s so-called national living wage. How do the Government reconcile that with the aim of making work pay?

[Mr Duncan Smith]

The key thing is that, as the Institute for Fiscal Studies has said, there is nothing new in the spending review when compared with the Budget. It said that

“the long term generosity of the welfare system will be cut just as much as was ever intended”.

In other words, the £12 billion of savings is pretty much exactly as was announced in the Budget. I say to the hon. Gentleman that universal credit has a huge effect. We published figures this week to show that universal credit means that more people go into work faster, stay in work longer and are likely to earn more money. That is a huge change and it will affect young people dramatically, as much as it will anybody else.

[Victoria Atkins (Louth and Horncastle) (Con)]

The reforms to benefits, whereby work should always pay more than welfare, are welcome in Louth and Horncastle. As we roll out universal credit across my constituency, will the Secretary of State join me in my constituency to see the changes for himself, including the 40 new jobs just created in Louth at the supermarket Aldi?

[Mr Duncan Smith]

I know how hard my hon. Friend campaigns to get employment up in her constituency. I am more than happy to come and support her to show that more people are getting jobs as a result of our welfare changes. Unlike the previous Government who spent money and changed very few lives, we are spending less money but changing more lives for the better.

[Owen Smith (Pontypridd) (Lab)]

The Secretary of State said yesterday that “nobody will lose a penny” under his changes to universal credit, which was a surprise to me. On Friday, the Office for Budget Responsibility published a report showing that the Government intend to cut £100 million from the universal credit work allowance next year, £1.2 billion the year after that, and then £2.2 billion, £2.9 billion and £3.2 billion by 2020. By my count, that is a trillion pennies. Will the Secretary of State clarify his remarks and tell us precisely which workers are going to lose them?

[Mr Duncan Smith]

I just wish the hon. Gentleman would actually go and visit a universal credit site to see the huge difference it is making. In answer to his question, as the IFS said

“no family will take an immediate…hit”

from being moved on to universal credit. [Interruption.] Hold on a second. I remember that it was the Labour party that got rid of the 10p tax starting rate and did not cash protect anybody at all. We are transitionally protecting those who are moving on to universal credit. Maybe the hon. Gentleman is against that. If so, would he like to say why?

[Owen Smith]

Again, the Secretary of State says this Budget made no changes. He is right, because the changes had already been passed in the summer Budget and in the statutory instrument. The truth is that the Chancellor bailed himself out of the hole he dug on tax credits by raiding the universal credit system, creating a deeply unfair two-tier system. A working mother on universal credit will next year be £3,000 worse off than her equivalent on tax credits. In all, 2.6 million families will be £1,600 on average worse off. It is the new IDS postcode lottery: it is arbitrary, it is unfair, and if you are a low-wage working mother, it could be you.

[Mr Duncan Smith]

The hon. Gentleman’s party, which opposed universal credit from the outset, can hardly say that it is the slightest bit interested in how it works. The reality is that all those calculations for lone parents do not take into consideration—[Interruption.] No, they don’t. The childcare package that comes with universal credit is dramatic. Unlike tax credit—[Interruption.] Perhaps he would like to just keep quiet and listen for once to somebody who knows what they are talking about. I say to him very simply that the childcare package for universal credit gives parents with children childcare support every single hour while they are in work. Under tax credit, they got next to nothing.

[Helen Whately (Faversham and Mid Kent) (Con)]

8. What progress he has made in rolling out universal credit; and if he will make a statement.

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[Nigel Mills (Amber Valley) (Con)]

18. What progress he has made in rolling out universal credit; and if he will make a statement.

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

Universal credit is rolling out as planned: on track and on time. I can announce today that it will be in every jobcentre by April next year. Estimates of the total cost of implementation have fallen from £2.4 billion to £1.7 billion, with £0.6 billion having been spent to date. Over a quarter of a million people have now made claims to universal credit.

[Helen Whately]

I recently visited my local jobcentre in Sittingbourne. Job coaches told me how well universal credit is working, giving claimants more flexibility to work and coaches more time to support them. Does the Secretary of State agree that universal credit is helping people into work and making work pay? Will he press on with the roll-out so more people can benefit?

[Mr Duncan Smith]

Even on the figures we have published in the past 24 hours, it is a reality that people on universal credit are much more likely to get into work, work longer and earn more money—that is the key bit. Rolling out universal credit has a massive effect on the likelihood of people entering into decent work. I also remind my hon. Friend—the hon. Member for Pontypridd (Owen Smith) obviously did not want to listen to this fact—that under universal credit the childcare package is for every hour they work all the way up until the moment they leave the benefits system.

[Mr Cunningham]

What does the Secretary of State have to say about the value-for-money aspects of universal credit, given that only 2% of people have participated and it has cost £3.25 billion to introduce?

[Mr Duncan Smith]

The cost of universal credit implementation has fallen: it was originally forecast to cost £2.4 billion but is now due to cost £1.7 billion. To give Labour Members a concept of what value for money looks like—[Interruption.] The hon. Gentleman has no idea about value for money because he has been on the Labour Benches for too long.

[Mr Cunningham]

Me?

[Mr Duncan Smith]

With respect, I meant the Labour Member sitting just below him. The number of people getting back into work directly as a result of universal credit has had a net benefit to the Exchequer of £3 billion-plus. I call that a real benefit in real terms.

[Nigel Mills]

I welcome the fact that universal credit reached my constituency about five weeks ago, but for the benefit of constituents concerned about what will happen when they move from tax credits to universal credit, will the Secretary of State confirm when that move will now take place?

[Mr Duncan Smith]

It does not suit the Opposition to know it, but all those who transfer from tax credits, through the legacy system, into universal credit will be transitionally protected. That is critical. They do not want to know that, because, as I said, they are the party who failed to transitionally protect anybody when they abolished the 10p tax rate.

[Neil Gray (Airdrie and Shotts) (SNP)]

We welcome the apparent tax credits U-turn, but it appears that the cuts to the work allowance, which will still go ahead under universal credit, will hit families just as hard. Will the Secretary of State assure us that the tax credits U-turn will also apply to the corresponding elements of universal credit, or will he confirm our suspicions that this so-called U-turn is merely a delaying tactic?

[Mr Duncan Smith]

The universal credit position is exactly as set out at the time of the summer Budget, which means, as we understand it and calculate it, and as figures released in the last 24 hours show categorically, there will be a huge improvement in the numbers of people going back to work, working full time and earning more money. I absolutely believe that, in the next few years, the hon. Gentleman will be one of the first to say, “Thank God we introduced universal credit.”

[Owen Thompson (Midlothian) (SNP)]

11. What assessment he has made of the potential effect of paying universal credit to households rather than individuals or women experiencing financial abuse.

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[Jo Stevens (Cardiff Central) (Lab)]

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 be able to update the House today on the next stage of universal credit roll-out. Universal credit is available now in three quarters of all jobcentres, and by April next year will be available nationally. Building on that, the digital service is already in a number of jobcentres, and I can announce that it is being extended to a further five jobcentres as early as next year—to Hounslow, Musselburgh, Purley, Thornton Heath and Great Yarmouth prior to May 2016, when the digital service will be rolled out nationally.

[Jo Stevens]

I invite the Secretary of State to confirm that current claimants of universal credit will face losses next April as a result of cuts to the work allowance. Can he explain to the House why there is no transitional protection for universal credit, as there is for tax credit recipients?

[Mr Duncan Smith]

I thought I had made this clear, but I will make it clear again. For those already on universal credit, advisers will support them through the additional resources and the flexible support fund to ensure that their status remains the same. Those moving from tax credit to universal credit are transitionally protected, as has already been stated.

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[Graham Evans (Weaver Vale) (Con)]

T7. Since 2010, unemployment in Weaver Vale has decreased by 54%. Will my right hon. Friend join me in paying tribute to the hard-working staff of Jobcentre Plus who have helped to make that happen? Is it not an example of this Government’s long-term economic plan delivering for hard-working taxpayers in Weaver Vale?

[Mr Duncan Smith]

As my hon. Friend knows, I visited him the other day in his constituency, where he is doing an exemplary job, as is the jobcentre. Employment is improving and unemployment is falling, and that is happening nationally as well as with him. I would be very happy to visit him again.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

T4. Hounslow Community FoodBox in my constituency is a food bank service that is, sadly, growing. A recent worrying trend has been the police bringing people into the FoodBox who have been caught shoplifting because they have no way of affording food. They have fallen through the net. Will the Secretary of State review past decisions to withdraw DWP emergency funds in the case of people who would otherwise be left destitute?

[Mr Duncan Smith]

We have actually gone in exactly the opposite direction. We are making sure that in all jobcentres, and in all correspondence, individuals are notified that if they have difficulty they will have full access to crisis loans and advance payments. There is no reason for anybody in the benefits system to find that they have no money. They need to go and speak to the jobcentre advisers or ring them on the telephone and they will find themselves supported.

[Michael Tomlinson (Mid Dorset and North Poole) (Con)]

As a vice-chair of the all-party parliamentary group on youth employment, I welcome the unemployment figures in my constituency, but will the Minister tell me what more can be done to help the hardest-to-reach young people into work?

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[Mr Duncan Smith]

The hon. Gentleman is right to raise that. All support will be given by Jobcentre Plus. If it has not already done so, I will ensure that it puts a specialist team in to make sure that all those people are seen as a priority, that all their skills are assessed and that they are got into jobs as quickly as possible. If, however, he would like to come and see me about this or if he can think of anything else we can do, I can assure him we will do everything we can to help his constituents at this time.

[Michelle Donelan (Chippenham) (Con)]

Will the Minister please inform the House of the specific plans for constituencies such as mine which have very high rates of employment but suffer proportionally high rates of long-term unemployment?

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[Alison McGovern (Wirral South) (Lab)]

I was surprised to hear the Secretary of State say earlier that my party never supported universal credit. If that were the case, why would we have spent the past five years harassing him about how slowly he was going with it? However, that does not stop me worrying about the fortunes of the 30,000 lone-parent families in work in Merseyside. Is the Secretary of State for real: can he confirm that not a single one of those families will be a penny worse off?

[Mr Duncan Smith]

Universal credit actually improves the lot of lone parents dramatically, because the first person into work gets a huge amount more than they would have done under tax credits. Here is the key: I have already said that those who are on universal credit at the moment will be supported by their advisers through the flexible support fund, to ensure that their status does not change.

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

I congratulate my right hon. Friend on protecting the winter fuel payment, but although hundreds of thousands of letters are dropping through people’s letterboxes, figures also show that those who are retired are disproportionately less likely to switch their energy supplier. Will he commit to work with colleagues in the Department of Energy and Climate Change to look at how energy switching details can be included with the winter fuel payment?

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[Heidi Allen (South Cambridgeshire) (Con)]

I have a brief question on universal credit, as we continue to roll it out. Is there an opportunity to extend the dedicated telephone line that housing associations enjoy direct to universal credit to citizens advice bureaux, which do an incredible amount of work but are struggling to make contact with the people who can help them?

[Mr Duncan Smith]

Under universal support, which is delivered locally, we are talking hugely to local authorities and all the local organisations in the area, and my hon. Friend will find that this will be swept up as part of that process; it is a dramatic improvement on where tax credits are right now, because it brings in all those other benefits as well.

[Stephen Timms (East Ham) (Lab)]

The latest projections show that universal credit is running about four years behind the timetable that the Secretary of State originally set out. He has told us today that the new digital IT solution is to be rolled out from next April. How will he merge that with the prior IT system, which is already in use in quite a lot of jobcentres?

[Mr Duncan Smith]

The universal programme is on track and has been approved by the Major Projects Authority, which has said that it is delisted. I say to the right hon. Gentleman, who has been here long enough to remember, that I will take no lessons from a Labour Government who gave us a tax credit debacle—they rolled it out and more than three quarters of a million people failed to receive any benefit on the day it was launched. He should come to see this system; the live service and the digital service are merged because a lot of the digital service will use elements of the live service. They are therefore merging in the run-up to May and will then be rolled out together at the same time.

[Alison Thewliss (Glasgow Central) (SNP)]

The Minister said earlier that there is no place for domestic violence in our country, and I firmly agree with him. When will he confirm how his Department intends to make women prove that they have had their third child by rape?

[Mr Duncan Smith]

I missed the question, Mr Speaker. There was a lot of noise, so I did not hear it.

[Mr Speaker]

The hon. Lady was asking about the treatment of someone who has a third child through rape.

[Mr Duncan Smith]

My apologies to the hon. Lady. May I say to her that we will come back with our exact reasons and rationale for how we will decide that? The reality remains, however—and this is, I believe, popular among the public—that those who make choices and take responsibility for them want everyone else to do the same as well.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

On a point of order, Mr Speaker.

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 2nd November 2015 Commons Chamber

[Mr Peter Bone (Wellingborough) (Con)]

8. What assessment he has made of the potential effect on his Department of restricting benefits for EU nationals.

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

Since the start of last year we have been taking action through a range of measures to restrict access to benefits for EU migrants looking for work in the UK, because the last Labour Government left us an open door. That will ensure that advantage is not taken of our welfare system, and that the system is also fair to those who pay into it. It is estimated that changes made by my Department and Her Majesty’s Revenue and Customs will save more than half a billion pounds over the next few years.

[Mr Bone]

Does the excellent Secretary of State agree that it would be easier and more efficient for us to treat all EU citizens in the same way, and allow into the country only the ones whom we want here? Would not the end of free movement make his life much easier?

[Mr Duncan Smith]

My hon. Friend started so well. However, I will avoid his blandishment to take myself even further than I might have.

I remind my hon. Friend—who is doing much to promote himself to a job in the Government—that no one who is unemployed and not a British citizen will be able to receive universal credit at all, which is a huge step towards the arrangement that he is after.

[Philip Davies (Shipley) (Con)]

I commend the Secretary of State for all the efforts that he is making to restrict benefits for European citizens within the framework of the law, but does he agree that the only way in which the country will ever gain complete control over benefits policy for EU citizens is by leaving the European Union?

[Mr Dennis Skinner (Bolsover) (Lab)]

That’s what he used to say.

[Mr Duncan Smith]

The Prime Minister has given the country a referendum on that matter, which is a huge step forward for the hon. Member for Bolsover (Mr Skinner) and everyone else—they will all have a vote. My hon. Friend the Member for Shipley (Philip Davies) will, at that moment, be able to make that powerful argument. I am sure, with his rhetoric, he may yet carry the day.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

9. What recent assessment he has made of trends in the level of in-work poverty; and if he will make a statement.

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

Work is, as my hon. Friends have said, the best route out of poverty, and that is why we are focused on getting people into employment. We have made significant progress and have the highest employment rate on record with over 2 million more people in work since 2010. The number of people in in-work poverty is 200,000 lower than at its peak under Labour in 2008-09.

[Alan Brown]

As always, the Secretary of State refers back to statistics relating to the previous Labour Government, but the way to solve in-work poverty is not to cut tax credits. Is he aware of analysis by the Institute for Fiscal Studies suggesting that for the 8.4 million working households currently eligible for benefits or tax credits, the new proposed increase in the minimum wage will, on average, offset the cuts by only 26%? That will lead to an increase in in-work poverty. What will he do about that?

[Mr Duncan Smith]

Let me pick the hon. Gentleman up on a couple of points. First, since the Government came to power, the number of people living in working families and not in poverty is up by about 1.7 million, compared with 2009-10. The number of people in in-work poverty peaked in 2008-09 and the latest figures are 200,000 lower than that peak. On the IFS, it is worth reminding him that in a recent interview on tax credits its director said that the Chancellor had taken the decisions to protect some of the poorest people on tax credits. That is where we are. The Chancellor is clearly looking at the last vote and he will come forward with further measures.

[Owen Smith (Pontypridd) (Lab)]

In trying to deal with in-work poverty, the Living Wage Foundation today unveiled its new, very carefully calculated rates of £9.40 for London and £8.25 outside the capital. They are designed to reflect the realistic costs of living and average wages. Will the Secretary of State tell us why, therefore, he and his Government continue to describe their new rate, the minimum rate for the over-25s of £7.20, as a national living wage?

[Mr Duncan Smith]

I made the decision for my Department to pay the London living wage to all the cleaners and everybody else who works on contract. My right hon. Friend the Chancellor came forward with a very generous position in the Budget to raise the national wage to £9 by 2020. That is a huge increase. Perhaps the hon. Gentleman would like to tell me why, throughout the 13 years of the previous Labour Government, they never engaged with raising it to the national living wage either.

[Owen Smith]

The Labour Government introduced the minimum wage in the teeth of opposition from the Conservative party. I welcome the fact that the Secretary of State pays, in his Department, the London living wage, but continuing to describe the national living wage as just that undermines both the campaign and the concept of a real living wage that people can genuinely afford to live on. The under-25s, as we have heard, will not benefit from this. Is the reason for that, as the Minister for the Cabinet Office and Paymaster General, the right hon. Member for West Suffolk (Matthew Hancock) has told us, that young people are viewed by this Government as unproductive and therefore worth less money?

[Mr Duncan Smith]

For a moment, I forgot myself. I have been rather churlish. I did not welcome the hon. Gentleman to his post. I welcome him now to his post without reservation. [Interruption.] Well, that is not what he said on Second Reading of the welfare Bill, when he abstained, having decided since that he is really opposed to it. But never mind, the road to Damascus has a new route—I think it is called a career.

Moving on, it is this Government who increased the minimum wage to £6.70 and the living wage to £9 by 2020. Universal credit improves work incentives and supports childcare, with up to 85% of childcare costs covered. The lowest paid and the poorest will be best protected by what we are proposing, and not by leaving the minimum wage where it was under the previous Labour Government.

[Heather Wheeler (South Derbyshire) (Con)]

19. What estimate he has made of the number of households to which the benefit cap no longer applies.

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

The benefit cap is having a long-term and positive effect on those who are trying to find work, and on people’s lives generally. More than 60,000 households have been capped since April 2013, and as of May 2015, more than 40,000 households were no longer subject to the benefit cap. Of those, 16,300 households have moved into work.

[Andrew Bridgen]

I have good news from North West Leicestershire, where two thirds of the households to which a benefit cap applied are no longer subject to that cap. Does that show that the Government are successfully targeting taxpayers’ money in a way that encourages benefit recipients to seek work and reorder their finances, in exactly the same way as those in work do?

[Mr Duncan Smith]

Yes. The benefit cap is introducing fairness, and the claimant count in my hon. Friend’s constituency is down by 54% since 2010, and the youth claimant count by 64%. We want even more people to benefit from the financial and wider rewards of employment, and that is why we are reforming welfare and getting on with the job.

[Heather Wheeler]

Since the introduction of the benefit cap, some three quarters of households affected by it in South Derbyshire have taken steps so that they are no longer affected, and that is testimony to those who work tirelessly to help families improve their lot. Will my right hon. Friend join me in welcoming that, and assure me that efforts will continue to help people turn their lives around, and away from dependency and into work?

[Mr Duncan Smith]

I absolutely agree, and as I have said, the benefit cap is working. We are changing the levels at which that cap is set to improve it and to make it work further around the country. In my hon. Friend’s area, the east midlands, the number of workless households has fallen by 68,000 under this Government—households that are now benefiting from that return to work.

[Jeremy Lefroy (Stafford) (Con)]

12. What steps he has taken to ensure that his Department's policies promote family stability.

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

Family stability is at the heart of this Government because it creates better outcomes for children and society. We have taken a number of steps to promote family stability, including the family test, investing more than £8 million in relationship support, introducing the marriage tax allowance, and increasing childcare support to promote work as the best foundation for family stability.

[Jeremy Lefroy]

I welcome the Secretary of State’s answer. The cost of relationship and family breakdown has been estimated at some £47 billion a year. I welcome the support for relationship advice, but I ask the Secretary of State to do more on that and to help turn around the lives of troubled families.

[Mr Duncan Smith]

I pay tribute to my hon. Friend. He has made support for families an important issue, and I have talked to him on a number of occasions. I believe that the troubled families programme is critical in supporting families with multiple and often highly complex problems to turn their lives around. Between 2013 and 2015, the DWP created 150 troubled families employment advisers to support people, and 116,000 families have been turned around with nearly 12,000 adults moved into continuous employment. I hope that helps my hon. Friend to understand that the Government are serious about this issue.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Poverty is a destructive element for family stability. Has the Secretary of State read the Joseph Rowntree Foundation report, “Monitoring poverty and social exclusion in Wales 2015”? It points out that working families and young people in Wales are at greater risk of poverty now than they were a decade ago, that 45% of all part-time jobs are classified as low paid, and that for those who work part time or are self-employed, the number of families living in poverty has increased by 100,000 in the past decade. It states that changes in the Welfare Bill will be damaging for families in Wales. Does the Secretary of State acknowledge that?

[Mr Duncan Smith]

I acknowledge that the Joseph Rowntree Foundation has written its report, and it has said many things in the past about what we have been doing. As I said earlier, the number of families that have risen out of poverty directly as a result of our changes has been dramatic. As the hon. Lady well knows, Wales had a difficult time in the recession, but unemployment is now falling dramatically and employment is rising. I believe that the best way to get people out of poverty is to get them into work, and eventually into full-time work. That is happening right now.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

16. What discussions he has had with the Chancellor of the Exchequer on the effect on family carers in receipt of carer’s allowance of reforms to benefits and other financial support.

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[Mark Pawsey (Rugby) (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 the Legatum Institute is publishing is global prosperity index. I raise it because it ranks countries on a number of measures, including the economy and levels of opportunity, with the UK rising nine places in the economic index, which is the latest evidence showing the positive impact of our reforms. As today’s report shows, thanks to our welfare reforms and economic reforms more people than ever have the opportunity to benefit from the dignity and sense of purpose that comes from having a job.

[Mark Pawsey]

I have been contacted by a number of constituents who have been in receipt of a Motability vehicle and have appealed against a PIP assessment. They tell me that it can take months for their appeal to be heard, during which their entitlement to the vehicle, to which expensive adaptations have sometimes been made, is withdrawn. What steps can the Minister take to ensure that those rightly in receipt of a Motability vehicle retain it?

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Given the considerable disquiet in the country about cuts to tax credits, not to mention the alarm on the Secretary of State’s side of the House, where 20 of his own MPs have said that the Government are in danger of cutting a lifeline to working families, does he now regret describing tax credits as a “bribe”?

[Mr Duncan Smith]

The hon. Lady should remember exactly how the money was spent. If she looks back, she will find that in the run-up to the 2005 general election, the then Chancellor raised the spending on tax credits, strangely, by 71%. After that the rate stayed pretty flat, but before the 2010 election it was suddenly raised again by nearly 23%. I simply say to the hon. Lady that if she does the maths, she might wonder why Labour lost the 2010 election.

[Neil Carmichael (Stroud) (Con)]

T4. Will the introduction of universal credit, and all the associated data that that entails, enable the Government and the Department to help young people on low incomes to find new opportunities to progress into higher-paid jobs?

[Mr Duncan Smith]

Yes. What happens now when someone on jobseeker’s allowance gets a job is that they disappear and nobody sees them. Under universal credit they will stay with their adviser, who will help them with any subsidiary training, help them to find extra hours if they want them, and help them to sort out any problems at work. That is a remarkable change, and it will give us the opportunity really to help people to progress in work.

[Paul Blomfield (Sheffield Central) (Lab)]

T2. According to the Office for National Statistics, nearly one in four jobs in my city of Sheffield pays less than the real living wage. On the day that the living wage is being increased to £8.25 an hour, will the Secretary of State congratulate the Living Wage Foundation on its work and outline what he will do to ensure that more people are paid the real living wage, which is now over £1 an hour more than the Government’s bogus national living wage?

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[Jack Dromey (Birmingham, Erdington) (Lab)]

T3. With one in four workers in Erdington earning less than the living wage, 82% of children are being brought up in families that are dependent on tax credits. Does the Secretary of State not accept that this is the worst possible time to cut tax credits, and that those families will not be compensated by his phoney living wage? Will he join me in welcoming the initiative taken today by the Labour-led Birmingham City Council to declare that no Brummie in the city should earn less than the real living wage?

[Mr Duncan Smith]

Despite all the other arguments, the Labour Government had 13 years in power and they let the national minimum wage fall further behind than ever before. It is this Government who have increased the minimum wage and who are now proposing a real living wage of £9 at the end of this Parliament.

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[Andy Slaughter (Hammersmith) (Lab)]

T8. Over the previous Parliament, the number of working families in London claiming housing benefit increased by 84%. Over the past three years, London councils have been able to replace only one in seven of the council homes they have sold. Does the Minister see any connection between those two figures?

[Mr Duncan Smith]

What the hon. Gentleman failed to remind us all is that under the last Government the number of people claiming housing benefit, both out of work and in work, rose dramatically, whereas under this Government the number of those claiming housing benefit out of work has fallen dramatically.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

T7. I welcome the reforms to welfare, which have helped 609 people in my constituency back into work since 2010. Moving from benefits into work can cause cashflow difficulties, so I additionally welcome the initiative to put Jobcentre Plus advisers into food banks to make sure those delays do not occur. What progress are we making on speeding up benefit claims to make sure those situations do not occur?

[Mr Duncan Smith]

We want to ensure that anybody who goes to a location such as a food bank has the ability to check whether there is a problem—if there is, let us deal with it there. We have also advertised hugely across all the jobcentres, telling everybody they can get benefit advances, hardship loans and so on. We are now beginning to find that when they go to the food banks, they are also being helped to get back into work, which is an added bonus.

[Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)]

T9. On the administration of the benefit sanctions regime, yesterday’s Sunday Herald reported new figures showing that in nearly 300,000 cases benefit claimants had been penalised with sanctions without being officially notified—that includes an estimated 28,000 cases in Scotland alone. Will the Minister apologise to all those who have faced destitution without proper notice? Will he finally commission an independent review of this badly intentioned and poorly administered system?

[Mr Duncan Smith]

I do not recognise those figures, but I will say to the hon. Lady that back in 2001 the last Labour Government decided to move—

[Ms Ahmed-Sheikh]

I am not interested in the last Labour Government.

[Mr Duncan Smith]

Well, she asked the question and if she does not want the answer, that is fine by me. What I am saying to her is that the last Labour Government moved to a clerical system. We have reviewed that approach over the past year and decided that, under the changes we want, going back to an automatic system is much better. The recent statistics released last week show that the rate of appeal was slightly higher among those who did not receive the initial letter appeal than among those who did; we therefore do not think there is a difference. We will be writing to people to remind them that they still have rights to appeal if they wish to do so.

[Richard Fuller (Bedford) (Con)]

A substantial benefit of the issues relating to tax credits is that more companies are encouraged to pay the national living wage—£9 an hour—now. What conversations has my right hon. Friend had with the Chancellor about incentives that we could provide to companies to pay £9 an hour?

[Mr Duncan Smith]

Yes, the No. 1 reality is that companies that believe the economy is well run will invest in their workforce and give them a better salary. The problem was that the last Labour Government set up a system that encouraged companies to pay low wages and leave them static. The change now is this: universal credit is making them move on; higher salaries; a better wage packet. Many companies are already paying the higher level—they have come and said they will.

[Greg Mulholland (Leeds North West) (LD)]

I was pleased to meet the Under-Secretary of State for Disabled People to discuss children with Batten disease who were having to re-apply for disability living allowance, but we were disappointed to be told that we would not get a formal response. Will the Minister ensure that the Batten Disease Family Association gets a formal response about how the Department will take the recommendations forward?

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

Given the Government’s ambition to have all benefit claims online by the end of this Parliament, will the Minister update the House on what discussions he has had with internet service providers to ensure that those on low incomes can get online?

[Mr Duncan Smith]

The ambition is to get as many claims online as we can, but there will be some people who cannot get online. Under universal credit, we are keen to ensure that people can, if necessary, continue to make paper submissions, and that they will be treated inside jobcentres, but we will get as many online as we can. We have been talking constantly to the providers about how best to do this, and also about matters of security.

[Mr David Winnick (Walsall North) (Lab)]

For clarification, is the Secretary of State pleased that, as a result of sustained parliamentary and public pressure, the Chancellor has been forced to reconsider the proposals on tax credits? Is that a matter that meets with his approval?

[Mr Duncan Smith]

Everything the Chancellor proposes meets with my approval, as I am a member of the Government.

Benefit Sanctions Policy: Response to Work and Pensions Committee Report

Iain Duncan Smith Excerpts

Thursday 22nd October 2015 Written Statements

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

I have today provided the Government’s response to the Work and Pensions Select Committee report on benefit sanctions.

I am very grateful for the Committee’s work which has set out many helpful recommendations.

We have been building a labour market system in which each claimant, closely assisted by a work coach, agrees the steps they need to take to secure a job, receives support to help them do so, and understands the requirements placed on them in return for their benefits. Last week’s labour market statistics showed the UK’s employment rate had reached 73.6%, the highest since records began; evidence that the system is working.

Accepted by Labour, coalition and Conservative Governments, sanctions are a necessary part of that system and we keep them under regular review, making improvements where necessary. In response to the Select Committee I am announcing that we will be introducing a number of changes.

Prompted by the yellow card approach recommended by the Work and Pensions Select Committee, we will trial from early next year a system of warning before a sanction is imposed. At present people are notified of a sanction and it is imposed immediately afterwards. In some cases, claimants go on to challenge the decision and the sanction may be overturned. We will trial arrangements whereby claimants are given a warning of our intention to sanction and a 14-day period to provide evidence of good reason before the decision to sanction is made. During this time, claimants will have another opportunity to provide further evidence to explain their non-compliance. We will then review this information before deciding whether a sanction remains appropriate. We expect that this will strike the right balance between enforcing the claimant commitment and fairness.

We will reintroduce automated JSA sanctions notifications. In 2001 under the last Labour Government, the process for issuing notifications was changed, replacing automated letters with arrangements whereby staff had to manually trigger a notification. Recent analysis assessed historic compliance with these arrangements when notifying of decisions of JSA sanctions as above 93%. The Department has introduced new checks to move compliance towards 100%, and will revert to the arrangements before 2001 of issuing letters automatically. The Department will write to claimants it has identified who may not have had a decision letter to explain the position. Further information for anyone who may have been affected will be available on gov.uk.

We will consider extending the definition of “at risk” groups we use for hardship purposes to include those with mental health conditions and those who are homeless. This will mean that they can seek access to hardship from day one of a sanction being applied. We have recently accelerated the process for considering hardship claims so they are now paid within three days. Subject to further work on feasibility we will accept the Committee’s recommendation to have a decision maker set up an appointment to discuss hardship where a claimant is either vulnerable or has dependent children, a step which would help decisions to be made even more quickly.

The Government see sanctions as playing an important part in the labour market system, encouraging people to comply with conditions which will help them move into work. We want the sanctions system to be clear, fair and effective in promoting positive behaviours and we will continue to keep it under review so that it meets those aims.

[HCWS259]

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 7th September 2015 Commons Chamber

[David Morris (Morecambe and Lunesdale) (Con)]

13. What progress the Government have made on reducing the rate of unemployment.

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

Under this Government, unemployment has fallen by more than 650,000 and the unemployment rate has been cut from 8% to 5.6% of the labour force.

[Chris Skidmore]

Last month’s figures showed that the number of people in Kingswood claiming jobseeker’s allowance had fallen by 23% since July 2014. Does my right hon. Friend agree that that shows that the Government’s welfare reforms are helping people back into work, and that the Conservatives are now the true workers’ party thanks to our long-term economic plan?

[Mr Duncan Smith]

My hon. Friend is, of course, right. People should remember what we inherited, which was a collapsing economy and huge levels of unemployment. Under this Government, some 1,000 more people are in work each day and employment is up by more than 350,000 to more than 31 million. Really importantly, 14.5 million women are in work, which is a record high that the last Labour Government never, ever achieved.

[Mrs Sheryll Murray]

May I thank the Secretary of State for all his work in reducing unemployment in my constituency? South East Cornwall is a beautiful area, attracting many tourists, especially during the summer. What action have the Government taken to assist those coming out of seasonal work, to help stop them becoming unemployed again?

[Mr Duncan Smith]

My hon. Friend does a huge amount of work in her constituency to help people in those kinds of jobs and represents them very well here. Jobcentres in her area are tasked with and focused on helping people who do periodic work, which is the nature of a lot of the employment there, and they are trained to do that. As universal credit arrives next year, my hon. Friend will find that a huge number of her constituents will benefit, because instead of losing their way by having to come off jobseeker’s allowance and on to tax credits, they will stay on universal credit and with the jobcentre. That will help those who have work that is not always permanent.

[David Morris]

Does my right hon. Friend welcome the fact that the number of people in Morecambe and Lunesdale claiming jobseeker’s allowance for 12 months or more fell by more than 30% over the past 12 months? Is not it a key part of any long-term economic plan to help the long-term unemployed back into the dignity of work?

[Mr Duncan Smith]

My hon. Friend has been assiduous in his work with the jobcentre and those who have been unemployed. Across the country, long-term unemployment is down by more than a fifth, falling to about 165,000 over the past year, and the number of people unemployed for more than 24 months is falling. The latest figures are down by a fifth, which is a remarkable position, given what we took over from the last Government.

[Catherine West (Hornsey and Wood Green) (Lab)]

22. What assessment is being made by the Department for Work and Pensions of the impact of cuts to the teaching of English as a second language on over 50-year-olds who are seeking employment?

[Mr Duncan Smith]

As the hon. Lady should know, we offer support and help to those who attend jobcentres. If they do not speak English correctly, we send them on and support them through language courses. That process helps them obtain jobs and improve their circumstances.

[Lady Hermon (North Down) (Ind)]

Is the Secretary of State confident that the rate of unemployment in Northern Ireland would be reduced if, perchance, the Northern Ireland Executive were not to agree welfare reform and the powers were taken back by Westminster?

[Mr Duncan Smith]

Obviously, this is a matter for my right hon. Friends the Prime Minister and the Secretary of State for Northern Ireland, but what I will say is that we have been in constant discussions and negotiations with politicians in Northern Ireland about implementing welfare reform. Even though there was agreement, they have now decided not to agree. I simply say to all involved that they now need to start thinking about how they can address the issue; otherwise, they will not benefit the people they serve who will lose out because they will lose money.

[Hannah Bardell (Livingston) (SNP)]

My constituent, Mr Colin Fraser, has degenerative Parkinson’s disease. He came to see me at my constituency surgery just over a week ago in a very shaken and devastated state after having had the mobility component of his personal independent payment reviewed. According to the Department’s own guidelines—[Interruption.] This is an important issue. The guidelines state that cases involving claimants with severe neurological conditions such as motor neurone disease, dementia and Parkinson’s should be “paper based” and not subject to interview. My constituent was subjected to very intimidating behaviour and I would like the Secretary of State to look very carefully at his case and, in a wider context, how people are dealt with in such situations.

[Mr Speaker]

With relation to employment.

[Mr Duncan Smith]

We do conduct reviews and I would be very happy to review that particular case, if the hon. Lady wants to take it up with me. The Under-Secretary of State, my hon. Friend the Member for North Swindon (Justin Tomlinson), has already met Parkinson’s UK to discuss how we can improve and modify the system so that it helps people much better. We are always looking for ways to improve it, and I and my hon. Friend would be very happy to speak to the hon. Lady about this particular case.

[Richard Graham (Gloucester) (Con)]

I know that the Secretary of State and his team are absolutely committed to helping 1 million people with disabilities back into work. Last week, I met representatives of an access-to-work contractor, Pluss, which is very active in Gloucester. It told me some remarkable stories of people being helped into jobs. Does my right hon. Friend agree that specialist providers have a real role to play in helping his Department to achieve this important goal?

[Mr Duncan Smith]

Yes. That is one of the objectives of this Government. We have made huge strides in getting more people with disabilities back into work—I think the figure is now over 220,000, which I believe is the highest figure since records began, in proportionate terms—but the most important point is that we are looking to get that up to the level of normal, non-disabled people who are back in work. Those with disabilities have every right and every reason to expect exactly the same support into work that everybody else gets.

[Stephen Timms (East Ham) (Lab)]

Unemployment went up last month. The Government’s commission on employment and skills pointed out earlier this year that although we currently have German levels of adult unemployment, we have eurozone levels of youth unemployment, which went up in July and in August. Does the Secretary of State accept that much more needs to be done to give young people the chance of a decent start?

[Mr Duncan Smith]

Of course we are focused on youth unemployment, but it has actually been falling from what we inherited. It has fallen by more than 200,000 since we took over, and the claimant count has fallen every month in the past three and a half years. The right hon. Gentleman talked about the figures going up, and in a sense I am not surprised, because they cover the period leading up to the last election. Given what the Opposition were saying, and looking at the polls that some businesses carried out, it is no surprise to me that they might have held back. If he looks at the vacancies, he will see that there are 735,000 vacancies in the jobcentres every week, which is more than he managed.

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

4. What discussions he has had with the Chancellor of the Exchequer on ensuring that people accessing new pensions freedoms receive appropriate advice.

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[Jo Stevens (Cardiff Central) (Lab)]

16. What representations he has received on changing the Government’s child poverty targets.

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

This Government are committed to working to eliminate child poverty and improve the life chances of children. Our approach is to focus on the root causes of poverty and not just on the symptoms, which will deliver the best improvement in children’s life chances. Our consultation on child poverty measurement in 2013 received more than 250 responses, capturing views across the spectrum from local authorities, charities, academics and members of the public.

[Clive Efford]

I am grateful to the Secretary of State for that answer, but children growing up in households where the parents are on the national minimum wage will see their household income cut next year by up to a maximum of £1,426. He punched the air when the announcement was made in the House in the Budget in July. Was he being incompetent or just callous when he did that? What is he going to do to deal with this cut in household incomes?

[Mr Duncan Smith]

I am surprised that the hon. Gentleman did not notice that at the time of the Budget my right hon. Friend the Chancellor announced one of the biggest rises in the living wage. I make no apology for punching the air, because that was a huge announcement. This is the whole point: as we get people back to work, they should be earning more in work—rather than being paid for by taxpayers, they should be paid for by their businesses.

[Jo Stevens]

Can the Secretary of State explain why the Government are scrapping all child poverty targets?

[Mr Duncan Smith]

We are not scrapping all the child poverty targets; what we have said is that we are going to look at all the life chances measures. We want to know what they are doing and how well they are performing. Alongside that, we are still publishing income measures; HBAI statistics—households below average income—will still be published. The hon. Lady is therefore wrong in what she says. What we are doing is focusing on what we can actually do to help families get out of poverty, rather than rotating them around a 60% median income line, as the last Labour Government did. That did not make any sense and cost a huge amount of money.

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

Does the Secretary of State agree that an important indicator of a child’s prospects in this country is whether they live in a workless household, and that it is right for the Government to take account of that when assessing child poverty?

[Mr Duncan Smith]

Absolutely; that is exactly right. This is about the measures we take that keep people out of poverty in a sustained way. I have talked already about the rise in the national living wage, but we are also doubling free childcare to 30 hours a week; raising educational standards; and expanding successfully the troubled families programme to a further 400,000 families. In addition, the early years pupil premium is hugely important in helping the most troubled families.

[Mr Philip Hollobone (Kettering) (Con)]

What has happened to the number of workless households since my right hon. Friend became Secretary of State for Work and Pensions?

[Mr Duncan Smith]

We inherited a situation where nearly one in five households in Britain had nobody in work at all. It is far more likely for someone who is out of work to be in poverty and for their children to be in poverty. We have pretty nearly halved that level and have the lowest number of workless households since records began.

[Stephen Timms (East Ham) (Lab)]

Until a few weeks ago, the Secretary of State told us that he was committed to the targets in the Child Poverty Act 2010, but now he has brought forward legislation that not only scraps those targets, but, as my hon. Friend the Member for Cardiff Central (Jo Stevens) pointed out, will leave Ministers with no child poverty targets at all. He has just denied that from the Dispatch Box, but the fact is that the Welfare Reform and Work Bill removes all the child poverty targets. Why are the Government, in reality, despite his fine words, throwing in the towel on child poverty?

[Mr Duncan Smith]

We are not; we are committed to eradicating child poverty and we will have to report every year on our achievement in line with the figures that I gave the right hon. Gentleman earlier. I simply say to him that his Government failed to meet their targets—they spent £75 billion on tax credits in their last six years and still failed—and it is under this Government, in the past five years, that child poverty has actually fallen by some 300,000, rather than under them.

[Stephen Timms]

The truth is that child poverty is now going to rise even faster than already predicted because of the huge cuts in tax credits next April, to which my hon. Friend the Member for Eltham (Clive Efford) referred. With most children in poverty now living in working households, not workless households, should the Secretary of State’s children’s life chances reports not include data on children in low-income working households, as well as on those in workless households?

[Mr Duncan Smith]

I believe that our reports will cover a much wider range of issues that affect child poverty. I have always felt that issues to do with family stability, drug and alcohol addiction and education are critical to a child achieving a decent outcome. If the right hon. Gentleman has anything further to add, I am always willing to take his submissions, and the Select Committee has also said that it will do the same. My point is that an arbitrary target simply for an income line, which is what his Government did, leads to a huge distortion in the benefits system, and the right hon. Member for Birkenhead (Frank Field) has said exactly the same.

[Graham Evans (Weaver Vale) (Con)]

7. What steps he is taking to increase public awareness and understanding of the new state pension.

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[Matt Warman (Boston and Skegness) (Con)]

18. What assessment he has made of the effectiveness of the roll-out of universal credit.

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

Universal credit is now available in more than half of jobcentres across Great Britain and will be available in all jobcentres early next year. The national roll-out is on track and our “test and learn” approach is now working very well. Nearly 175,000 people have made a claim for universal credit so far. The number is growing exponentially as we roll out the scheme across the country. Our evidence shows that universal credit claimants find work quicker, stay in work longer and earn more than the jobseeker’s allowance claimants.

[Kate Hollern]

I am surprised by that response. The targets that the Minister set last October have been dramatically missed. Will he now accept that universal credit is a failed and expensive policy?

[Mr Duncan Smith]

It would be helpful if the hon. Lady listened to the answer that she was given rather than go with a Labour Whip’s handout. The Front-Bench team obviously worked very hard to ensure that she got her question in. Universal credit is going to be a remarkable success; it is rolling out to more than half of jobcentres and people will benefit enormously.

[Matt Warman]

In contrast to the views expressed by the hon. Member for Blackburn (Kate Hollern), in my constituency of Boston and Skegness I am told that the roll-out of universal credit is progressing well in its limited form, thanks in part to all the agencies involved. Will the Secretary of State assure me that we will continue to provide the important computer support needed for this online programme so that we can ensure that it goes as far and as fast as possible?

[Mr Duncan Smith]

I can give my hon. Friend that assurance. In all the areas in which we have rolled out universal credit—in more than half of jobcentres—it is dramatically improving people’s lives. Unlike when the previous Government rolled out tax credit and hundreds of thousands of people lost their money, this scheme is ensuring that people who deserve the money and are ready for it are paid it.

[Stephen Timms (East Ham) (Lab)]

The number of people receiving universal credit remains derisorily small. Four years ago, the Secretary of State told us that the transition to universal credit would be complete by 2017. We told him he would not manage it. We were right; he was wrong. He still has not given us a revised date for the completion of universal credit roll-out. Has he given up entirely on ever having one?

[Mr Duncan Smith]

I am on the verge of giving up speaking to the right hon. Gentleman, because he misuses all the facts. As I have told him again and again and again, he is more than welcome to visit the sites where it has been rolled out. He has had an open invitation to come to see the digital site and I recommend that he does so. Universal credit is already working; no one has lost any money; it will be online; and it will go out fully and start next year. This is a successful programme and if the right hon. Gentleman wants to compare notes about tax credit roll-outs, I would be more than happy to do that.

[Helen Whately (Faversham and Mid Kent) (Con)]

I recently visited my local jobcentre in Maidstone. I found that the job coaches there were pretty much unanimous in their support of universal credit—

[Helen Whately]

Will my right hon. Friend advise on what formal assessment there has been of the success and impact of universal credit so far?

[Mr Duncan Smith]

As I have already said, universal credit is now available in more than half the jobcentres. The full development starts rolling out next year. People will benefit enormously not just from the technicalities but from the fact that an adviser will now stay with a claimant all the way through the claim. I know that my hon. Friend was not looking for a job, but perhaps the hon. Member for Bermondsey and Old Southwark (Neil Coyle) will need to be looking for one in a few years’ time.

[Louise Haigh (Sheffield, Heeley) (Lab)]

9. What recent assessment he has made of the effect of work capability assessments on disabled people.

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

15. What estimate he has made of the number of people who have been in full-time employment in the last 12 months.

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

Full-time employment has risen by more than 350,000 over the last year, accounting for 99% of the rise in total employment. The number of people in full-time work is at a record high, and is up over 1.5 million since 2010.

[Stephen Metcalfe]

I am sure the whole House welcomes this Government’s success in creating more full-time jobs. I hope it will also welcome the fact that wages are now rising by 2.8%, on average, which shows that not only are more people in work, but they are being rewarded better than ever.

[Mr Duncan Smith]

My hon. Friend is right: nearly 2 million more people take home a pay packet that is increasing, up 2.8% on the year, and for the last nine consecutive months, the increase in pay has outstripped inflation. Even better, my right hon. Friend the Chancellor has announced a huge rise in take-home pay through the national living wage, and we should all welcome that.

[Will Quince (Colchester) (Con)]

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

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

This month, we are rolling out our Fit for Work programme to all employers across England and Wales, and to GPs. Employers will now be able to refer thousands of workers facing long-term sickness to specialist support, providing occupational health advice and helping them to avoid long absence. The Fit for Work service is the first line of defence when anyone falls sick, and alongside GPs it will help employers to avoid people falling on to sickness benefits and losing their link with the world of work.

[Will Quince]

Will my right hon. Friend join me in paying tribute to the work of social enterprises, such as GO4 Enterprises in Colchester, which do brilliant work in helping young people, ex-offenders and those with mental health difficulties to get back into lasting work?

[Mr Duncan Smith]

Absolutely. I recognise the huge and vital contribution made by firms such as GO4 Enterprises, delivering huge change in Essex. My Department is instrumental in growing social investment via the £30 million innovation fund I set up, and we will continue to chase and improve those targets.

[Wes Streeting (Ilford North) (Lab)]

T4. How can the Secretary of State claim, as he did this afternoon, that no one has lost out from the roll-out of universal credit, when the taxpayer has lost out to the tune of £140 million because of the botched roll-out of the IT systems?

[Mr Duncan Smith]

Actually, that has not happened. Taxpayers have not lost money. What we have done is to go on rolling out a system, and unlike what happened when tax credits were rolled out under the last Labour Government and hundreds of thousands of people lost money, nobody is losing money as universal credit rolls out.

[Mike Wood (Dudley South) (Con)]

T2. Despite being diagnosed with neuromyelitis optica mid-way through her degree course, my constituent Amy Green successfully completed her course and now hopes to set up her own business. What support is available for people with disabilities who want to start their own business?

[Margaret Greenwood (Wirral West) (Lab)]

T6. When is the Minister’s Department going to publish a full analysis of the impact of the Welfare Reform and Work Bill on the proportion of children living in child poverty as defined by the Child Poverty Act 2010?

[Mr Duncan Smith]

We publish statistics the whole time on child poverty. We will also be publishing statistics on the effects of different aspects of what we do. There has never been across-the-board comprehensive publication of data by Government on all those things, but I am happy to engage with the hon. Lady if she wants to take the matter further.

[David T. C. Davies (Monmouth) (Con)]

T3. My constituent, Mrs C, recently bereaved, failed to apply for the bereavement allowance in time because she was not aware that it existed. She now has severe financial problems. Will the Minister and his officials be willing to meet me to discuss this case and any way that we could help her?

[Mr Duncan Smith]

I am very happy to see my hon. Friend myself. If what he is suggesting has happened, it should not have done, and let us put it right.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

T7. Will the Secretary of State support Oxfam’s calls for the Welfare Reform and Work Bill to include a requirement for his Government to publish a poverty strategy that would properly address the issue of low pay and tax credit cuts? Please note: the answer is not the Chancellor’s entirely bogus living wage.

[Mr Duncan Smith]

We are focused constantly on trying to get incomes up, and we are looking to do that through the raising of the national living wage announced by my right hon. Friend the Chancellor. For this Government, the No. 1 thing we need to do to make sure that people get out of poverty is to get them back to work. There are some of the best employment figures in Scotland thanks to this Government.

[Mr David Nuttall (Bury North) (Con)]

T5. Given that the Chancellor has said that the welfare costs of new Syrian refugees will be paid for out of the international aid budget, does the Secretary of State agree that there is a good case to be made for that budget also to be used to pay for the costs of existing asylum seekers already in the United Kingdom?

[Mr Duncan Smith]

I thank my hon. Friend for that really helpful question. My right hon. Friend the Chancellor has made it clear that in this particular circumstance, the needs of these particular migrants, in many cases in desperate trouble, will be met by the money in the aid budget. We have no plans to change that. My hon. Friend cannot tempt me to say more, but following is a statement in which he might like to catch the Speaker’s eye.

[Mr Speaker]

Of course, there is no obligation on colleagues to ask helpful questions.

--- Later in debate ---

[Greg Mulholland (Leeds North West) (LD)]

Physical exercise and sport have been shown to have a very positive effect not only on physical wellbeing, but on mental wellbeing. What is the Department doing to encourage employers to encourage employees to take part in such activities, perhaps with flexible working hours to allow them to do so during the working day?

[Mr Duncan Smith]

The hon. Gentleman raises a really important point, which is about getting ahead of the curve by making sure that people do not fall sick. I have announced today the Fit for Work programme, part of which is very much about trying to encourage employers to look at the health of their employees well ahead of that happening. If he wants to write to me about this, I will be very happy to discuss it with him, and we may be able to do more.

[Mims Davies (Eastleigh) (Con)]

I welcome all that the Government have done to increase youth employment, including the remarkable achievement of Eastleigh College, working alongside local employers and stakeholders. Will the Minister investigate having a separate disability living allowance application for those with mental disabilities, such as severe autism, as highlighted by my constituent Cheryl Derrick on behalf of her son?

--- Later in debate ---

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

This Government oblige jobseekers to search online without giving them the skills or resources to do so. Despite my many questions, the Minister has refused to tell me how many claimants have been sanctioned because they cannot get online. Will the Minister tell me or promise to find out?

[Mr Duncan Smith]

Nobody should be sanctioned because they cannot get online. If the hon. Lady has any examples of that, we would be very happy to take them up. There are online opportunities in libraries and jobcentres, and everything else. If she wants to write to us about it, I would be very happy to deal with it.

[Craig Williams (Cardiff North) (Con)]

With Wales nearly certain to qualify for the European championship, what efforts are being made to improve disabled spectators’ facilities in football stadiums?

[Danny Kinahan (South Antrim) (UUP)]

As it seems that there may finally be movement towards addressing welfare in Northern Ireland, has the Minister considered how best to address one of the core legacy issues from the troubles—that of mental health?

[Mr Duncan Smith]

The hon. Gentleman is right that a huge amount of work is being done and there is still even more that can be done, but the No. 1 priority for Northern Ireland right now is for people to sit down, behave rationally and sort this out so that we can get the money to Northern Ireland and support the sort of people he talks about, rather than posturing and playing games.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

The Government’s own data show that people in the work-related activity group are twice as likely to die than those in the general population. How can the Secretary of State justify £30-a-week cuts for people in that category?

[Mr Duncan Smith]

The hon. Lady put out a series of blogs on the mortality stats last week that were fundamentally wrong. Her use of figures is therefore quite often incorrect. I simply say to her—[Interruption.] She has had an offer to meet the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for North Swindon (Justin Tomlinson), time and again, but she just wants to sit in the bitter corner screaming abuse.

[Christian Matheson (City of Chester) (Lab)]

In the period during which the Secretary of State has held his job, what is the most unacceptable reason he has come across for a benefit claimant being sanctioned?

[Mr Duncan Smith]

There are rules, regulations and guidance on who should be sanctioned. The sanctions regime, which was in place under the Labour Government, is there to ensure that when taxpayers pay their money to support unemployed people, those people look for work, take that work and stay in work. I think that is only fair.

Welfare Reform and Work Bill

Iain Duncan Smith Excerpts

Monday 20th July 2015 Commons Chamber

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

I beg to move, That the Bill be now read a Second time.

I am conscious of the fact that many Members wish to speak today and that we have compressed time as a result of the statements. I will take interventions, but I recognise that we need to make some progress so that everybody has a chance to speak. In moving the motion, I wish to make it very clear that Conservative Members are united in support of the Government’s aim to move from a high tax, high welfare and low wage society to a low tax, lower welfare and higher wage society. This Bill lays the ground for that commitment and helps us to continue the job of reversing the Labour’s Government’s failure that led us into the difficulties we inherited.

Let me remind the House quickly, before we get into the details, of what we inherited when we came into office in 2010: nearly one in five households had no one working—this is what Labour left us; the number of households where no one had ever worked had nearly doubled; 1.4 million people had been on benefits for most of the previous decade; and close to half of all households in the social rented sector had no one at all in work. Since then, even through the coalition, we have proceeded to get to 2 million more jobs being created; there are now 2 million more apprenticeships; the number of workless households has reached a record low—it is down more than 670,000 since 2010; and the workless household rate in the social rented sector is now the lowest on record. The recent Budget debate, in which we had a pretty full discussion of many of the characteristics of this Bill, made it clear that we want to go further, delivering 3 million more apprenticeships and moving towards full employment. These are measures that this Government will drive forward and that this Bill requires us to report on each year.

We will also continue to bear down on the deficit and debt, achieving a surplus by the end of the Parliament. We are spending £3 billion on debt interest payments alone every month—the figure is £33 billion a year, which is £1,236 per household. Every pound we spend on paying off the debt is a pound we are paying to others such as overseas investment funds, rather than on the necessary public services such as schools and hospitals or on being able to reduce taxation further. Eliminating the deficit and paying off our debts is the moral and most effective things for a responsible Government to do for people on low incomes, who rely more than anybody on those services.

It is worth pointing out that we also need to drive productivity improvements. The Budget contains some important measures to make that a reality, and our long-term productivity plan sets out how it will boost productivity over the next 10 years. As my right hon. Friend the Business Secretary made vividly clear in launching that plan, if we could, for example, match US levels of productivity, we would increase GDP by 31%—that is £23,000 a year for every household. A key driver to getting us there is the national living wage. That historic reform will give more than 2.7 million people currently on the minimum wage a pay rise of more than £5,000 a year. With the increase in the personal allowance to £12,500 by the end of the Parliament, the national living wage will make work pay and improve people’s living standards. It will also help productivity. The Governor of the Bank of England confirmed last week that the living wage will help increase the productivity of workers and of the country—

[Jeremy Corbyn (Islington North) (Lab)]

rose—

[Mr Duncan Smith]

I want to quote what the Governor has said and then I will give way to the hon. Gentleman. The Governor said:

“There should be some improvement in productivity as a consequence of adjustment in the national living wage”.

[Jeremy Corbyn]

I thank the Secretary of State for giving way so early on in his speech. Obviously, all of us are supportive of a productive, growing economy—that benefits everybody. But when he drew up proposals for this Bill, did he look at the levels of child poverty in Britain? Did he look at the levels of homelessness, destitution and rough sleeping in Britain? How does he think this Bill is going to improve that situation? Alternatively, will it make the holes in the welfare state safety net rather bigger, with more people falling through it as a result?

[Mr Duncan Smith]

I am grateful to the hon. Gentleman for his intervention. I wish him well in his campaign. [Laughter.] I was being genuine and not politically expedient. I must say that being Leader of the Opposition is not all that it is cracked up to be. I have some personal experience of that. He should be careful what he wishes for. None of us wishes him ill.

On the hon. Gentleman’s legitimate question, I say yes to the first part. The measures in the Bill relating to life chances will do more to help us target the kind of work that we should be doing to turn lives around in families and households to ensure that people are able to get into work and to sustain themselves in work. As for the third part of his question, it is also correct that this Bill, with all the other welfare reforms and the things that we are bringing in, will ultimately improve the life chances of people and the numbers in work. We know that the best way out of poverty is through full-time work.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I will give way to my hon. Friend the Member for North West Leicestershire (Andrew Bridgen), but then I will make some progress. I will give way again a bit later.

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

Does my right hon. Friend agree that, by putting welfare spending on a sustainable footing, these measures are the best way to secure the future of the poor and the vulnerable in our society?

--- Later in debate ---

[Mr Duncan Smith]

I do agree with my hon. Friend, which is why I want to get to the Bill. This backdrop of rising employment, falling deficit, increased productivity and higher wages brings me to the Bill before the House today. This is a Bill for working Britain, and it is underpinned by three key principles: first, work is the best route out of poverty, and being in work should always pay more than being on benefits; secondly, spending on welfare should be sustainable and fair to the taxpayer while protecting the most vulnerable; and, thirdly, people on benefit should face the same choices as those in work and those not on benefits. I wish to talk about each of those principles in turn.

My focus in government—and the focus of the Government —has been to ensure that it pays more to work than to be on benefits. This Bill builds on that principle. First, it extends the important principles of the benefit cap. The £26,000 cap we introduced in 2013 has been a huge success—

[Carolyn Harris (Swansea East) (Lab)]

rose—

[Mr Duncan Smith]

One moment, please. The cap has been a huge success in getting people back to work and reintroducing fairness to the welfare system. Capped households are more than 40% more likely to go into work after a year than similar uncapped households. It is right to keep the level of the cap under review to ensure that it continues to be fair and that it provides the right incentives for people to move into work.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

rose—

[Mr Duncan Smith]

No, I will give way to the hon. Member for Swansea East (Carolyn Harris) in a second, but I wish to make a bit of progress.

We know that around four in 10 households outside London earn less than £20,000, and the same proportion of households in London earn less than £23,000. To ensure that the cap better reflects the circumstances of hard-working families, the Bill lowers the current cap to £20,000 for households outside Greater London, and the Greater London cap will be set at £23,000. The exemptions will continue to apply to the most vulnerable, which includes people on disability living allowance and personal independence payment, those in an employment and support allowance support group and those moving into work who are entitled to working tax credits.

[Carolyn Harris]

What assessment has been made of the effect of his welfare reforms on children?

[Mr Duncan Smith]

I am sorry, but I did not quite hear the hon. Lady. Will she repeat what she said?

[Carolyn Harris]

The right hon. Gentleman must listen carefully. What assessment has he made of the effect of his welfare reforms on the children of this country?

[Mr Duncan Smith]

The impact assessments are in the Library and the Vote Office. Full assessments have been made.

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

I am grateful to the Secretary of State for giving way. Earlier, he said he would protect the vulnerable. May I remind him that there are 1.4 million people in this country with a learning disability? Has he considered an exemption for the specialist disability housing providers, such as Mencap, from the 1% reduction, so that people with a learning disability have more opportunities to live in the community, especially after Winterbourne and all those terrible scandals?

[Mr Duncan Smith]

I am happy to meet the hon. Gentleman to discuss that and to look at the issue he raises. I know that we have looked at it, but I am happy to look at it again with him.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I will make some progress, and then I will give way, but many Members wish to speak and make their own points.



We are committed to helping people who have health difficulties and who are capable of taking steps into work to do so, which is why we are putting greater support into jobcentres. For new claims, the Bill will end the disparity between what people receive on the work-related activity component of ESA and on jobseeker’s allowance. We know that the majority of people receiving work-related activity ESA payments want to work, but the current system discourages claimants from making the transition into work. People on ESA receive £30 a week more than those with a health condition on JSA, but they receive far less support in finding work: people on JSA can expect about 11 hours of work coach time per year, whereas those on ESA typically receive only about two hours per year. The Bill will help people to achieve their ambitions. Current claimants will not be affected, and new funding will be provided for additional support to help claimants to move into work.

[Emily Thornberry]

I was interested to hear the Secretary of State talk about the benefits cap and fairness. Is he aware that his right hon. Friend the Member for Epsom and Ewell (Chris Grayling) also talked about fairness and the benefits cap, saying that it was only fair that people’s benefits were capped at the level of the average that someone would expect to earn by working? At that point, the cap was £26,000; now, it seems that average earnings are £23,000 and £20,000. What is the reason for the difference?

[Mr Duncan Smith]

I just explained, I think, that there are differences between gross and net figures. Now, we are looking at lowering the cap from the original £26,000, as the hon. Lady will know if she uses her intelligence—

[Emily Thornberry]

Will the Secretary of State give way?

[Stephen Timms (East Ham) (Lab)]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

I am not going to give way to the hon. Lady again, because I thought it was pretty simple maths. However, I will give way to the right hon. Gentleman.

[Stephen Timms]

Given what the right hon. Gentleman was just saying about ESA, what is his response to Parkinson's UK and Macmillan Cancer Support? They point out that, in the case of Parkinson’s, there are some 8,000 people in the work-related activity group with Parkinson’s and other progressive diseases who are not going to get better but who, under his proposals, will lose £30 a week. How can he defend that?

--- Later in debate ---

[Mr Duncan Smith]

As originally designed by the Labour Government, the work-related activity group was to be a transitional stage on the way to work. It included people who had conditions that were perceived to be likely to improve, thus enabling them to move into work, and people who could, even while they were in the work-related activity group, do some work, and that had to be assessed. If a person’s condition is such that they are unable to do any work at all, under the existing rules of the work capability assessment, they should be assessed and moved into the support group. That is exactly the point.

The objective of the work-related activity group—its design was, I think, rather faulty, but we have what we have—is to encourage people to go into work. As the right hon. Gentleman knows, there are no sanctions to make them take work. There are sanctions if they are unwilling to make an effort, but if they cannot take the work they are not sanctioned.

[Stephen Timms]

The Secretary of State will readily acknowledge that people with Parkinson’s or multiple sclerosis who are in the work-related activity group are not going to get better. Surely he should not be taking £30 a week away from them.

[Mr Duncan Smith]

As I said—the right hon. Gentleman should remember this—the purpose of the work-related activity group is that the people in that group are deemed to be capable of some work, or at least to be capable of doing some work very soon. That is the point of the group. My point is that when someone becomes too ill to do any work, at that point they are assessed and they should go into the support group. I am happy to discuss the matter further with him elsewhere, but those are the rules as they stand.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I want to make some progress. I will give way again later, but I am conscious of the fact that over 35 Members are waiting to speak—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Forty.

[Mr Duncan Smith]

Forty Members, so it is in colleagues’ interest to let me make some progress.

I also want to support parents claiming universal credit to get into and stay in work after having a child. We found just last week that the number of children living in households claiming out-of-work benefits is at a record low, down by 450,000 since 2010. That is very good progress, but we want to build on it. The Government are introducing a far-reaching childcare offer: with universal credit, people will get up to 85% of their childcare costs paid from April 2016—up from 70% under the previous system. All three and four-year-olds already receive 15 hours of free childcare a week, as do 40% of the most disadvantaged two-year-olds. On top of that, there will be an additional 15 hours of free childcare available for working parents of three or four-year-olds. Overall, we anticipate that this provision will be worth about £5,000 per child per year. In line with that, we believe it is fair to ask parents claiming universal credit to look for work when their youngest child turns three, and to prepare for work when the youngest child turns two, and the Bill makes provision for that as well.

[Ian Paisley (North Antrim) (DUP)]

I want to bring the Secretary of State back to the cap. Lowering the cap is one thing, and it is something that we could probably agree on, but having different levels of the cap across the United Kingdom breaks parity and sets an unwanted precedent for other benefits, and we strongly disagree with that. Will he reconsider and have the cap at the same level across the whole United Kingdom?

[Mr Duncan Smith]

The problem with the cap when we set it previously was that it disproportionately affected London without having a great effect on the rest of the country. This process means that of the 92,000 extra people who are likely to be affected, 16,000 will be in London and 77,000 will be outside London, which I think resets the balance. By the way, many people tell me that the cap is set far too high.

[Ian Paisley]

rose—

[Mr Duncan Smith]

I have already given way to the hon. Gentleman, so I will make some progress. He is more than welcome to try to intervene later, but I want to move on to the next aspect of the Bill. I stand by the fact that the cap will now be more likely to be equal. It will not be absolutely equal because there are variable incomes, as he knows.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Will the Secretary of State give way?

[Mr Duncan Smith]

I will give way to the hon. Lady, because I have not yet done so.

[Caroline Lucas]

On the level of the cap, the cost of living for my constituents is very similar to that in London, yet they will have to make do with a much lower cap. Moreover, the Bill will allow the Secretary of State to reduce the cap over time without having to come back to Parliament to seek any kind of agreement. Why is he essentially playing politics with poverty?

[Mr Duncan Smith]

The hon. Lady’s question is rather mixed; I thought that she was asking me to impose an even stricter cap on her constituency, with a lower level. The reality is that none of this is absolutely perfect, but we believe that it will reset the balance, which is better than just leaving a single figure at a lower level and making London suffer more than the rest.

As the Chancellor set out in the Budget, the benefits system has to be put on a more sustainable footing, but in a way that protects the most vulnerable. That brings me to the second principle of the Bill, which is sustainability. In 1980 working-age welfare accounted for 8% of all public spending, but by 2010 it had risen to nearly 13%, which is over £200 billion, or almost £8,000 for every household. Nine in 10 families with children were eligible for tax credits when we came into government. It is clear from what we heard last week that many Opposition Members have still not learnt anything from some of the mistakes made during Labour’s 13 years in government. They have not weaned themselves off the addiction to paying for more and more debt with somebody else’s money. They are still not credible when it comes to managing the public finances.

As a result of our reforms, five in 10 families with children will be eligible for tax credits, bringing greater balance to the welfare budget. However, it is also clear in the Bill that we have been careful to ensure that the changes are fair. We are protecting the most vulnerable in society, including the elderly and disabled. Where possible, we are introducing changes only for new claimants so that those who have planned on the basis of what is currently available are not affected.

[Mr David Burrowes (Enfield, Southgate) (Con)]

On that point about protecting the vulnerable, particularly the disabled, our manifesto commitment to halve the disability employment gap is very welcome. Will the Bill’s reporting obligations on full employment include the Government publishing data each year showing to what extent they are meeting that target?

[Mr Duncan Smith]

All the data that we have committed to publishing will be open and available to everybody, so everybody will be able to see exactly how much progress we have made. Through the life chances measures, people will be able to figure out whether we are making progress, and therefore what we should be doing about it. I am glad that my hon. Friend welcomes some of the changes, particularly the living wage, which I know he has campaigned on for some time.

We are making provision to tackle social rents, which have increased by 20% since 2010. The Bill will reduce rents in social housing in England by 1% a year for four years from April 2016, protecting taxpayers from the rising cost of subsidising rents through housing benefit, and protecting tenants from rising housing costs. This will reduce average rents for households in the social housing sector by around 12% by 2020, compared with current forecasts. It will also mean that those people not on housing benefit and not subject to “pay to stay” will be better off by around £12 a week by 2019-20.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I have given way quite a lot and I am conscious that 40 Members wish to make speeches. [Interruption.] I do not think that I can be accused of having not given way, because I clearly have.

Finally, we are reforming the way support for mortgage interest payments will be paid in future. Instead of a benefit, it will be made in the form of a loan. I think that will be welcomed by most Members on both sides of the House, although it is difficult to tell with the Opposition.

Let me turn to the third principle of the Bill. We are ensuring that people on benefits face the same choices as those in work and those not on benefits. Families in work have to make careful choices about what lifestyle the money they earn can support and what their income can provide for. In that context, it is right that people who receive child tax credit should make the same financial choices about having children as those who are supporting themselves through work. Therefore, from April 2017 the Bill will limit the child element of child tax credit to the first two children. The two-child limit will also apply on universal credit in relation to a third child or subsequent new children in the household and to completely new claims. Again, we are ensuring that this charge is fair. It will not affect existing claimants at the point of change. That is the key point.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Secretary of State knows that the number of those earning over £25,000 now is 800,000 fewer than it was in 2010. The real crisis in Britain today is not the number of people not in work, but in-work poverty. Given that child and family tax credits basically subsidise and incentivise work, will he look at this again and accept that the real crisis is not the number of people without jobs, which is what he has been talking about, but the fact that people in work do not earn enough to put food on the table, and they are getting more and more poor?

[Mr Duncan Smith]

I do not agree. If the hon. Gentleman looks at our record over the past five years, he will see that we have increased the number of jobs and that wages are now rising much faster than inflation. The last set of jobs statistics showed that every single one of those jobs was full time. All this nonsense about them being low-earning, part-time jobs is just complete and utter fabricated idiocy.

[Emily Thornberry]

On a point of order, Mr Deputy Speaker. The impact assessment for the Bill has only just arrived in the Vote Office; it was not here for the beginning of the debate. Surely we ought to be given the statistics in order to have an informed debate, rather than having to rely on what comes out of the Secretary of State’s mouth.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

We will investigate the matter. I would have thought that the hon. Lady would give me a little more warning of her point of order, but there we are.

[Mr Duncan Smith]

We released them earlier and they have been available since before the debate began, so I will simply move on.

I would like to turn to how we tackle the root causes of poverty. I believe that the past approach focused on dealing with the symptoms of poverty while completely failing to target the root causes. The Bill will provide a statutory basis for much-needed reform to improve children’s life chances. I have long argued that there are five key pathways to poverty that affect children’s life chances: worklessness, educational attainment, drug and alcohol addiction, family breakdown and problem debt. The Bill will remove the existing measures and targets in the Child Poverty Act 2010 and introduce a new duty to report on worklessness and educational attainment. Alongside the statutory measures, we will develop indicators to measure progress against either of those root causes of poverty.

Our new approach will drive real action, which will make the biggest difference to the most disadvantaged children now and in future. The key point is that this will enable us to measure what Government policy actually does, rather than just how much money we put into it. It is worth reminding the House that we will continue to publish the HBAI—households below average income—statistics so that those who wish to look at them can still do so.

[Angela Crawley (Lanark and Hamilton East) (SNP)]

Child Poverty Action Group figures indicate that 21% of the children in my constituency grow up in poverty. As a result of the benefit freeze, a couple with two children earning £400 per week will be £34.20 worse off each week. Does the Secretary of State agree that the Bill punishes families on low pay?

[Mr Duncan Smith]

No. The hon. Lady should realise that the main way out of poverty is to get into work and then to progress through work. The vast majority of people progress through work. [Interruption.] The records in Scotland are remarkably good. Employment in Scotland—[Interruption.]

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The Secretary of State has given way quite a lot. We cannot have three people at once shouting, “Will the Secretary of State give way?” The Secretary of State will give way when he feels it is correct to do so, but we cannot have three people hanging loose.

[Mr Duncan Smith]

Let me give the hon. Member for Lanark and Hamilton East (Angela Crawley) some figures for Scotland, which are worth looking at. Employment in Scotland is up 40,000 on the year and 179,000 since 2010. The employment rate is 74.3%, up 4.5% since 2010. Private sector employment is up 58,000 on the year and 244,000 since 2010. Just 5.2% of workers in Scotland are on temporary contracts and over 80% of those who work part time do so because they say it suits them. Although there is still much more to do, our reforms to lower corporation tax, get people back to work and create more jobs are exactly the route for her constituents to improve their life chances.

[Helen Jones (Warrington North) (Lab)]

Will the Secretary of State give way?

[Mr Duncan Smith]

I do not want to intrude on internal fear and loathing among Opposition Members. They will have time for their private argument among themselves about what they should do. I am trying to give a little more time for them to do that, to be fair to the Opposition.

This Bill is an important legislative step in moving Britain from a high welfare, high tax, low pay society to a lower welfare, lower tax and higher pay society. It will ensure that the right support and incentives are in place so that people are always better off in work rather than trapped on welfare. Yes, there are difficult decisions, but it would be wrong to turn a blind eye, as the Opposition did for so many years, and not face up to these difficulties. The Bill puts work first and puts welfare spending on a more sustainable footing for the future, while protecting the vulnerable and those most in need. I commend the Bill to the House.

--- Later in debate ---

[Stephen Timms]

I look forward to coming to that part of my speech. The Bill, as I understand it, says that the limit does not apply in the case of tax credits for children born before 6 April 2017. The limit does apply in the case of universal credit for children born before 6 April. That seems to me a pretty clear unfairness and we will oppose that unfairness, and we will table amendments to deal with that and other unfairnesses in the Bill.

[Mr Duncan Smith]

For the sake of clarity for Opposition Members if not for Government Members, will the right hon. Gentleman tell us, as this is missing from his reasoned amendment, whether he supports in principle that reduction of payments for two children for families on child tax credits?

[Stephen Timms]

As I told the House, we will table amendments to deal with unfairness in those measures and in others in the Bill, and we will vote on those in Committee in the autumn.

[Mr Duncan Smith]

I want to be very clear about this. Is it now the official Opposition’s position that they support the limiting of payments of child tax credit for two children from the date specified in the Bill?

[Stephen Timms]

We support removing unfairness from the Bill that the Secretary of State published. For that reason we will tonight table a raft of amendments to that part of the Bill and others where we think there is unfairness.

[Mr Duncan Smith]

rose—

[Stephen Timms]

I will give way one more time.

[Mr Duncan Smith]

The right hon. Gentleman is very generous in giving way. I want to establish clarity for those on the Government Benches as well as those on the Opposition Benches. Putting aside the fact that in Committee he may want to table amendments to make changes, do the official Opposition support the principle that those with more than two children should not receive further child tax credits? Is that the principled position they support? That is missing from the right hon. Gentleman’s reasoned amendment.

[Stephen Timms]

The Secretary of State does not need to wait until the Committee because we will table a raft of amendments tonight: if our reasoned amendment fails and the Bill receives a Second Reading, we will table our amendments. He will see in that list of amendments a series of amendments to deal with the unfairness in that part of the Bill. Those amendments will give him the answer that he seeks. They will appear on the Order Paper tomorrow so that the House can consider them over the weeks ahead.

--- Later in debate ---

[Madam Deputy Speaker (Mrs Eleanor Laing)]

I am grateful to the hon. Lady for her point of order. If a mistake has been made by the Vote Office, I am quite sure that Mr Speaker will be annoyed on behalf of the House.

[Mr Duncan Smith]

rose—

[Madam Deputy Speaker]

I can see that the Secretary of State has something to say, and I am delighted to call him further to that point of order.

[Mr Duncan Smith]

Further to that point of order, Madam Deputy Speaker. I rise only to say that we sent the impact assessments to the House authorities before 5 o’clock. I gather that there was some technical hitch in the House before they were able to get them to the Vote Office, but that was not a problem of our making. [Interruption.]

[Madam Deputy Speaker]

Order. The Secretary of State has explained what he and his Department have done. If there has been a mistake in getting the papers between the Secretary of State’s office and the Chamber, that will be investigated. It should not have happened, but there is no point in Members shouting about it from a sedentary position. The Secretary of State has apologised for his part in any mistake, if such a mistake has been made. [Interruption.] No, I will not have any more shouting about this. It is a technical problem, and it is not strictly a matter for the Chair, except in so far as saying that Members ought to be provided with all the information necessary to enable them fully to take part in a debate. If that has not happened, there will be an investigation, but one way or another, there is no point in any further shouting about it.

--- Later in debate ---

[Nigel Mills]

We need to give carers every possible support. They perform an important and difficult role. Having done a bit of caring in my time, I know how hard and stressful it can be. We can look at that, but I cannot stand here tonight and say I would vote for it.

The reduction in the benefits cap is a hugely popular policy. Everybody I spoke to in my constituency said that the benefits cap was a great idea, but £26,000 a year was far too high. It was higher than the average wage in my constituency, so people did not think that it would affect a lot of people. In fact, the number of people who were affected by it in my seat was extremely small.

It is right to bring the cap down and to have different levels in London and the rest of the country. There are different levels of housing benefit around the country and that is one of the biggest costs that trigger the benefits cap, so it is right to have a different level in London. Twenty thousand pounds is the right level for the cap. It is a bit less than the average wage in my constituency. That will show people clearly that anyone who goes out to work will be better off than those who live solely on benefits.

I support the hard decision to have a benefit freeze for four years. When we have to find savings, perhaps one of the least bad ways of doing it is to freeze what people are already getting, rather than taking more people out of the system completely.

The point that the acting shadow Secretary of State raised about the withdrawal rates for tax credits and universal credit showed how fiendishly complicated the tax credits system is. It is difficult to work out exactly who will be hit at what level and by what amount by the new withdrawal rates and the new starting position. That reinforces the case for universal credit. Everyone will be able to see from every pay packet they get that when they work more hours in a month, they are better off than in months when they work fewer hours. We need that system to be in place, rather than the incredibly complex, slow and clunky tax credits system, which applies a year behind or a year ahead. Nobody quite understands how what they get in tax credits bears any relation to the work that they have done in the year.

[Mr Duncan Smith]

Even with the changes to universal credit, the taper remains exactly where it was, so every hour in work will mean better pay. That principle still stands.

[Nigel Mills]

I was not doubting that for a second. With the tax credit changes, we need to be sure that the people who are still claiming tax credits understand that they will be better off doing more hours and earning more than they would have been otherwise. That is why universal credit needs to be rolled out. Everyone will be able to see that they are better off month by month, rather than having to work out if they might have been better off a year ago if they had worked a bit less in a complex way through online calculators. That cannot be a sensible system.

On the child tax credit limit, it has to be right that people who spend a life on welfare have to take the same decisions as people who are going out to work. It is therefore right to draw the line at two children for where the welfare system stops helping. There will still be a lot of help through child benefit and the Prime Minister confirmed that we would not seek to limit that. I think that we have got the line in the right place. It should be clear to people that from 2017, if they have more than two children, there will not be more tax credits.

Budget Resolutions and Economic Situation

Iain Duncan Smith Excerpts

Thursday 9th July 2015 Commons Chamber

[Chris Leslie]

I will not give way because Conservative Members are not being reasonable and letting me make progress with my speech.

The impact of the work penalty in the tax credits system should have been set out at the election. A lone parent with two children working 16 hours a week on the minimum wage would gain just over £400 from the move to the new national living wage, as the Chancellor calls it, but would lose twice that—£860—from the change to tax credits next year. A couple on the minimum wage who work full time and have two children will gain £1,500 from the change to the minimum wage but lose over £2,200 next year from the changes to tax credits. As the Government were hitting the low-paid, the Secretary of State for Work and Pensions was punching the air. Working families did not vote for that, and they will not be fooled by the Chancellor’s hollow words.

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

rose—

[Chris Leslie]

Is the Secretary of State going to punch the air? [Interruption.] There we go.

[Mr Duncan Smith]

May I just take the hon. Gentleman up on the case that he set out? I want to get the figures right. A lone parent with two children who works 16 hours on the minimum wage will, when we add in everything including childcare, actually be better off on the net figures after the Budget.

[Chris Leslie]

I will give way to the right hon. Gentleman again if he will confirm that the childcare promise, which was supposed to happen this summer, has been shelved until at least 2017. Is that correct? I will give way to him. This is a debate, so I will give way to him. He wanted to talk about the case studies. He thinks it is—[Interruption.]

[Chris Leslie]

The Secretary of State has shot himself in the foot. He should read the small print of the Chancellor’s announcement. Without much fanfare, he left that childcare—

[Mr Duncan Smith]

rose—

[Chris Leslie]

I have not finished. [Interruption.]

[Chris Leslie]

It is quite entertaining to see the Secretary of State struggle in this way.

[Mr Duncan Smith]

rose—

[Chris Leslie]

Wait for it. Can the Secretary of State confirm—

--- Later in debate ---

[Chris Leslie]

I relish giving way to the Secretary of State, but he has to answer this question. We have given him a bit of time to think of an answer. He needs to explain the shelving of the childcare support. Will the support come in this summer—yes or no?

[Mr Duncan Smith]

I remind the hon. Gentleman that the figures I gave were for 2016-17 and they included the childcare.

[Hon. Members]

Ah!

--- Later in debate ---

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

I welcome—[Interruption.] I must be more statesman-like.

I welcome yesterday’s Budget statement from my right hon. Friend the Chancellor. He is in serious danger of coming to be seen as one of the great Chancellors of this country.

Yesterday my right hon. Friend set out a Budget of great significance. At its heart it is a Budget for working people. First, he set out the steps that we have taken to bring the economy back from its knees, where it was left by the Labour Government. It is only through a strong economy that we can deliver the growth and jobs that working people need. In the previous Parliament we created 2 million jobs, and the budget deficit is now less than half the 10% rate that we inherited. As we look forward, the Office for Budget Responsibility has forecast growth of 2.4% for 2015. That means that for the second year in a row, Britain is expected to have the strongest economic growth of any major advanced economy in the world. The economy will be in surplus by 2019-20, and it will be the largest surplus in structural terms in at least 40 years. Because of the steps taken by the Government, Britain is again standing tall in the world.

Secondly, the Budget sets out the actions we are taking on tax evasion, avoidance and planning, and the imbalances that were left to us in the tax system. This makes a vital contribution to bringing our public finances back into line, meaning that we can continue to provide the essential public services that working people in this country rely on.

Thirdly, the Budget sets out the steps we are taking to boost productivity and skills and to back business. We will have an innovative new apprenticeship scheme, which I hugely welcome, and we will introduce a levy on large employers to fund a big increase in apprenticeship starts and quality. The hon. Member for Nottingham East (Chris Leslie) spoke about productivity. This is one of the ways we will get productivity improvements. In England, firms will be able to get back more than they put in if they train a sufficient number of apprentices—a real incentive to get on and reskill. It is about ensuring that people in this country have the skills they need to get jobs, increase their hours and secure higher pay.

Fourthly, the Budget sets out the work that this Government are doing to support business. It is only when businesses are thriving that the people of our country can thrive too. One of the great things about the last election, apart from the fact that we won, is that it brought into the House so many of my new colleagues who have run businesses, started businesses and know what it is like to cut that pay cheque week in, week out. That is hugely different from the Opposition. We have been relentless in our commitment to cut corporation tax. In the previous Parliament it fell to 20%, the joint lowest rate in the G20. In this Parliament it will fall to 18%, sending out what my right hon. Friend the Chancellor said was a clear message that Britain is open for business.

Fifthly, the Budget sets out the measures that we are taking to reduce tax, to help people save, to help them own their own homes, and to support them in one of the most basic human aspirations—to pass something on to their children—through the changes we are making to inheritance tax.

[Kevin Hollinrake]

Does the Secretary of State agree that there are two sides to the welfare coin—the people who receive the benefit and the people who pay for the benefit? The burden of £30 billion a year in tax credits was too big a burden to carry.

[Mr Duncan Smith]

Indeed. I shall shortly come to how these imbalances created disparities for people in work and trapped on low income.

We are sticking to two of our most important manifesto promises on personal tax. We are starting the journey to raise the tax-free personal allowance to £12,500 from next year. Once £12,500 is reached, as my right hon. Friend the Chancellor said, we will legislate so that the personal allowance always rises in line with the minimum wage—a great move to protect working people. We are keeping our commitment to raise the threshold at which people pay the higher 40p rate of tax to £50,000, starting with an increase to £43,000 from next year.

I consider one measure from yesterday’s Budget to be more significant than all the others—indeed, it is perhaps the most significant measure in all the Budgets that I have listened to during my many years in this House. The Government believe that if people work hard, they should be rewarded. In our growing economy, people should be able to expect a decent wage if they move into work and increase their hours. That is why, starting from April 2016, the Government have announced that we will move to a national living wage—set initially at £7.20, but rising to £9 by 2020. We will ask the Low Pay Commission to recommend future increases to the national living wage that achieve the Government’s objective of reaching 60% of median earnings by 2020. I believe that that is groundbreaking, and I hope that all Members of the House, instead of cavilling about it, will come to support it.

[Mr Clive Betts (Sheffield South East) (Lab)]

One of the lowest-paid sectors is the care sector, and it is right that it should get a pay increase. The Local Government Association has calculated that to pay the current living wage to all care workers who are directly employed by local authorities, and those employed by private firms that provide services to local authorities, would cost £0.75 billion. By 2020 that will rise to about £1.5 billion, or more. Will that be regarded as a new burden on local authorities for which the Treasury stands the cost, or will it be a further £1.5 billion cut to local authority services?

[Mr Duncan Smith]

We have the spending review to address such issues. In my Department here in London I took on contractors about paying the London living wage, and I faced exactly the same debates and arguments about how it was not feasible and how they would face high costs. I insisted that they went away and looked at their productivity. My Department in London instituted the London living wage. Not one job was lost and productivity has improved. I would consider the matter carefully before we take those official statements as the reality.

[James Cleverly]

Is there an economic imperative and also—perhaps more importantly—a moral imperative that, in the relationship between employer and employee, the employer ensures that the employee receives a salary on which they can live? It is not right that the Government make up the shortfall between employer and employee.

[Mr Duncan Smith]

I agree that the principle behind the tax credit system has instituted a non-progression period for people locked in low incomes, and I will return to that in a moment.

[Chris White (Warwick and Leamington) (Con)]

As someone who has long campaigned for an increased uptake of the living wage—not least by leading a debate on that in the House last November—I congratulate the Secretary of State on creating the national living wage. Will he tell me how many people’s incomes will increase as a result of that policy?

[Mr Duncan Smith]

The answer is that the incomes of 2.5 million people will increase, but it is not me who introduced that policy—I give all the credit to my right hon. Friend the Chancellor. Let me also say to the right hon. Member for Nottingham East—

[Chris Leslie]

I am not “right honourable”.

[Mr Duncan Smith]

I apologise. That is a matter for his leader but—what can I say? Labour has no leader at the moment.

The hon. Member for Nottingham East was talking about the minimum wage and the living wage, and I want to pick up on something he said a fortnight ago:

“Do not the Government need a serious strategy to address low pay and boost productivity? They should be providing incentives for a living wage and new opportunities for high-quality skills, as a more positive route out of poverty.”

Absolutely. He went on to speak about the Chancellor’s Budget before it had been delivered and said:

“Unless he is planning a rise of 25% in the minimum wage, that will not happen.”—[Official Report, 25 June 2015; Vol. 597, c. 1038.]

Well, my right hon. Friend the Chancellor listened to that and initiated a rise of 38% to the minimum wage. The hon. Gentleman must be overjoyed, and will want to tell the House what a great man the Chancellor is and what a great Government we are.

[Chris Leslie]

Let me be clear: we are glad to see an increase in the minimum wage, but the problem emerges with the one-step-forward, two-steps-backward strategy. We cannot consider this question in the round by just brushing away the work penalty that has been introduced into the tax credit system. The Secretary of State must admit that people who depend on tax credits will lose out in the immediate period from April. Is that the case?

[Mr Duncan Smith]

No, there is a clear question that needs to be answered. The hon. Gentleman has been asked it but he has not answered, and it would be helpful for us if he would: will he vote against the changes, and do the Opposition plan to reverse the changes on tax credits?

[Chris Leslie]

I cannot be much clearer in my opposition to the work penalty to the tax credit system. I do not think that it is right at this time to hurt those who are in work and in low pay. Of course we oppose the work penalty, but we support increases in the minimum wage. After all, it was our creation and something that Labour campaigned on in the election. We are delighted that Conservative Members now feel that they can adopt that policy when they campaigned so vociferously against it.

[Mr Duncan Smith]

I notice that the hon. Gentleman said “at this time” when talking about tax credits. We can take note of that. It suggests to me—indeed, I am sure of it—that after the next couple of years Labour will have abandoned its opposition to the measure.

The measures that I set out in the Budget are vital to delivering the commitments that this Government have always made. We are committed to ensuring that a renewed economy goes hand in hand with a renewed social settlement, yet consider what we inherited in 2010: nearly one in five households with no—[Interruption.] Labour Members really do not like listening to this, but they have to hear it—[Interruption.] I will give way in a minute. Perhaps the hon. Member for Bishop Auckland (Helen Goodman) will sit down. Let me remind her what Labour left behind when it left government: nearly one in five households had nobody working; 1.4 million people had been on benefits for most of the previous decade; the number of households where no one had ever worked had doubled; and close on half of all households in the social rented sector had no one in work. Surely that is a shameful record.

[Helen Goodman (Bishop Auckland) (Lab)]

I am grateful to the Secretary of State for giving way. He always tells the House that his politics is based on his faith. Will he explain why cutting tax credits for large families is a fair thing to do when that will be concentrated—I know he does not want to look at statistics—on families where children are living in poverty: Roman Catholic families and Catholics from other minorities? Does he understand that every child matters?

[Mr Duncan Smith]

I do understand that, and I am coming on to speak about tax credits. For some time I have believed that the way tax credits operated distorted the system, so that there were far too many families not in work, living in bigger and bigger houses and getting larger while being subsidised by the state, while many others—the vast majority of families in Britain—made decisions about how many children they could have and the houses they could live in. Getting that balance back is about getting fairness back into the system. It is not fair to have somebody living in a house that they cannot afford to pay for if they go back to work, as it means that they do not enter the work zone and their children grow up with no sense of work as a way out of poverty.

[Alan Mak]

This Budget creates clear dividing lines between this Government who help people into work, and the Labour party that created a high welfare dependency culture. Will my right hon. Friend remind the House of how many people under the previous Government were paying income tax to the state and receiving welfare credits from it? How many people are no longer in that situation?

[Mr Duncan Smith]

The answer to my hon. Friend’s question, which I wanted to come to, is that that is the perverse nature of tax credits. About 40% of those on tax credits had tax taken off them, which was recycled through the system with some of it being given back to them. That seems to be a rather bizarre and absurd system.

The tax credit system was the brainchild of the previous Prime Minister, Gordon Brown. The original tax credit system, introduced by the Labour Government, cost £1.1 billion in its first year; the tax credit system now costs some £30 billion a year, most of which is spent on child tax credits. This money was pumped into the system in a clear attempt to chase what was then a moving poverty line. In fact, under the previous Government, £258 billion of hard-earned taxpayers’ money was recycled to be spent cumulatively on tax credits—a huge sum.

We saw massive spikes in tax credit spending in the run-up to election years. In the two years before the 2005 election, spending increased by £10 billion—a 70% increase. In the two years before the 2010 election, it increased by some £6 billion, or 25%. It is worth looking again at the in-between years, when it suddenly flattened but rose before an election. There were disproportionate increases in the child element, in an attempt to keep up with that moving median line. The child element was increased by more than earnings in 2004-05 and from 2008-09 to 2010-11, so that by 2010-11 the child element had increased by 25% more than if it had been uprated in line with average earnings since 2003-04.

One of the worst aspects of the system was the way people had to predict their income for a year. If their actual earnings turned out to be different, they were left with large overpayments or underpayments. This caused misery for families and left a gaping hole in the public finances. Although Labour Members have never owned up to it, we lost billions through that process. To try to deal with the situation, a large disregard was introduced. People then did not have to tell the Government if their income changed by up to £25,000 in the course of a year. To have the disregard at that level was completely irresponsible. It was an attempt to use taxpayers’ money to plug holes in a failing system.

[Mr Peter Bone (Wellingborough) (Con)]

Was that not one of the cruellest aspects of Gordon Brown’s system? In my constituency surgery, I saw desperately poor people who were being asked to repay money they could not afford. It was extraordinarily cruel.

[Mr Duncan Smith]

I agree with my hon. Friend.

[Catherine West]

That is ancient history.

[Mr Duncan Smith]

It is not ancient history; it was the legacy of a Labour Government who were obsessed with a moving target.

[Catherine West]

I am very pleased that the Secretary of State has given way. It is ancient history for those of us who are here now. This is the right hon. Gentleman’s sixth year in government and the system is becoming more and more unfair. Will the Department for Work and Pensions carry out an equalities impact statement on the changes in the Budget? [Interruption.] I will repeat that, because the right hon. Gentleman is having trouble hearing. Will the Department for Work and Pensions carry out an equalities impact assessment in relation to changes in the Budget, both on employment and support allowance and on the changes to families, to ensure that ethnic minority families are not discriminated against and that the lives of people with disabilities are not being worsened by this evil policy?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Interventions cannot be used to make speeches. We must have short interventions. There are 29 Members who wish to speak. Let us have short interventions, so that Members can get into the debate.

[Mr Duncan Smith]

There are impact assessments in the Red Book. There will be relevant impact assessments before Second Reading, as there always are.

The key point on tax credits is what they got for all of that: unsustainable spending that went up jerkily, but by huge amounts; and a subsidy for employers, which enabled the payment of lower wages and completely distorted systems, and presented a bizarre set of incentives for moving in and out of work. It is now well documented that for many people it made sense to work only 16 hours —no more, no less—and we saw spikes in the employment data at 16 hours. There were huge spikes of people clustered around 16 hours, because it did not pay to work anything else.

[Mims Davies (Eastleigh) (Con)]

Families set up their lives around the 16-hour week limitation and businesses had to react to that, which affected our productivity. Does my right hon. Friend agree that the Budget will deal with this and make people’s lives better?

[Mr Duncan Smith]

I do. As my hon. Friend makes clear, if people can afford to work only 16 hours, businesses will not invest in them and their training because it will not be worth their while. That means their chances of progressing are nil. Many rotated and crashed out of work directly, because they had no sense that they could go on any further. She is absolutely right.

We believe that two-fifths of those who received tax credits ended up paying for the tax credits they received. It was a bizarre system.

This Government are different. We are building on the firm foundations of a welfare system by balancing the books and fixing the economy, while continuing to provide a strong safety net to support the most vulnerable. Our record in the previous Parliament spoke for itself, so I am going to say it again. Despite all the doomsday predictions from the Opposition—

[Helen Goodman]

Will the Secretary of State give way?

[Mr Duncan Smith]

No. I gave way to the hon. Lady. She did not succeed then; she is not going to get another chance. I am terribly sorry.

[Helen Goodman]

rose—

[Mr Duncan Smith]

No, no. Honestly, I am not that kind.

Despite the doomsday predictions that the hon. Lady and many of her colleagues made, this is the actual result: 2 million more people in work; 2 million more apprentices; the proportion of workless households at an all-time low; and, perhaps most importantly, the proportion of workless households in the social rented sector at a record all-time low. That is a real record of success on which we will build. That is what we are going to do with the Budget.

[Geraint Davies]

Research from Oxford university predicts that the number of people going to food banks, as a result of the Budget’s changes to welfare, will increase by 1 million to 2 million. Does the right hon. Gentleman agree with that assessment? If not, how much does he think it is going to increase by?

[Mr Duncan Smith]

I must say that that would have to be pretty quick work. If they have done that much work in a matter of hours, I want to employ them in my Department. No, I do not agree with that, and here is why. I fully support food banks. What people do to help with food banks is a very good idea. However, the figures on usage put out by food banks have all been proven to be incorrect. In Germany, 1.5 million people a week use food banks and its benefit system is meant to be more generous than ours. In Canada, more than 800,000 a month use food banks. This country has a very low number compared with other countries. Those figures speak for themselves.

As we build on this, we must meet our commitments to protect the elderly and the most vulnerable, protecting those benefits that provide for additional costs arising from disability or caring, and protecting pensioner benefits. My right hon. Friend the Chancellor and I make no apology for that, with good reason. When we took office, pensioners were some of the most vulnerable people suffering from a very, very low income. We have begun to put that right, and we intend to be proud of it.

It is right that we provide extra support for those who face the biggest challenges in changing their income levels. Spending on the main disability benefits—disability living allowance, personal independence payment and attendance allowance—will be higher in every single year to 2020 compared with 2010. Our commitment to protecting the most vulnerable is why we have protections in place on policies such as the benefit cap, so that people are exempt if someone in a household is claiming DLA, PIP or working tax credits. Wherever possible, we are introducing measures on a flow basis to give people the time and knowledge to prepare for the changes.

We are also ensuring that people on benefits face the same choices as those in work and not on benefits. Our measures will mean people making decisions and choices about their lives, which is why we are introducing the two-children element on a flow basis, and why we are lowering the benefits cap to £23,000 in London and £20,000 elsewhere, emphasising that it is not fair for someone on benefits to receive more than many people in work. I think that that principle is well accepted and popular around the country. In London, about four in 10 households earn less than £23,000, and outside London the same proportion earn less than £20,000.

[Helen Goodman]

I am grateful to the Secretary of State for giving way; he is being very generous today.

Will the Secretary of State not admit that although he is protecting disability benefits, he is not protecting disabled people, because disabled people also get tax credits and housing benefit?

[Mr Duncan Smith]

I just do not agree with that, I am afraid. We have set out to protect disability living allowance and PIPs so that those in the greatest need are protected and their benefits continue to rise. As I said, we will help those in work and capable of work through the living wage and childcare support. We will get people back to work and doing more hours. I do not agree, therefore, with what the hon. Lady says; we have gone out of our way to protect those in the greatest need.

[Tom Pursglove]

In my constituency, people would say that the £20,000 benefits cap is not only morally right but much more in line with circumstances in our area. I tried to intervene on the shadow Chancellor to find out if he agreed with that. Has the Secretary of State had any such indication?

[Mr Duncan Smith]

We have presented today a package for working people that will incentivise those who can work to go back to work and work the hours they need to improve themselves and their families. My hon. Friend is absolutely correct. This is exactly the drive the Government are making.

[Rishi Sunak]

Will the Secretary of State confirm that when he first entered office, we were spending more on working-age welfare than on education? If so, is that not evidence that our welfare system is unsustainable and needs sensible and fair reform?

--- Later in debate ---

[Mr Duncan Smith]

My hon. Friend is absolutely right. The other point that has not come up but which my right hon. Friend the Chancellor has made clear is that the amount of money we pay to people outside Britain to pay off our debts is money that we cannot spend on education and health. Getting the deficit down and paying off our debts has to be the best thing we can do for people on low incomes, who need those services.

[Catherine West]

rose—

[Mr Duncan Smith]

No, I have given way twice to the hon. Lady; I am going to make some progress.

We remain relentlessly focused on supporting people to move into work. Universal credit is now rolled out to half of all jobcentres in Britain, and by the new year will be rolled out to all of them and will then be expanding. It will provide people in work with even better help and support, meaning that those on low pay will do better as a result of universal credit, which was a big reform that was opposed by the other side but which we will deliver and make work.

[Amanda Milling (Cannock Chase) (Con)]

Unemployment in Cannock Chase fell dramatically in the last Parliament. Does my right hon. Friend agree that the measures in yesterday’s Budget will see unemployment in Cannock Chase, Staffordshire and the west midlands fall even more dramatically?

[Mr Duncan Smith]

As I said earlier, and as my hon. Friend says, in all these areas, we inherited a country riven by deep unemployment, debt and a massive deficit and unable to pay its way. In many senses, it was in a worse state than Greece. Look at the difference five years later. I believe that the next five years will see a renaissance in Britain, as we become an economic powerhouse, both in the north and the south, and more people get back to work earning a decent wage—in fact, a living wage.

In conclusion—

[Geraint Davies]

Hooray!

[Mr Deputy Speaker]

Order. I might be able to help. Both Front-Bench speakers have taken over an hour already. If other Members want to speak, we need to get to the end.

[Mr Duncan Smith]

If hon. Members want, we can go back over the figures one more time. I am enjoying myself, even if the shadow Chancellor is not.

[Graham Evans]

rose—

[Antoinette Sandbach (Eddisbury) (Con)]

rose—

[Mr Duncan Smith]

The Opposition do not like being reminded of the fact that the last Labour Government left the economy in a terrible mess, and it is this Chancellor who, over the last five years, has set out to put it right, and we are proud of that.

[Mr Deputy Speaker]

Order. The two Cheshire Members need to take their seats. They cannot remain standing. It is a long way home and they ought to rest themselves.

[Mr Duncan Smith]

I will give way to my hon. Friend the Member for Weaver Vale (Graham Evans). I know he wants me to keep going.

[Graham Evans]

Opposition Members never miss an opportunity to miss an opportunity to apologise for wrecking the country’s economy. The shadow Chancellor criticised my right hon. Friend the Chancellor and said there was no mention of science and technology. My right hon. Friend has a very proud record of investment in the north of England, as part of the northern powerhouse—

[Mr Deputy Speaker]

Order. Mr Evans, you will be making your speech very shortly. The danger is you will have nothing to say because you will have already made it.

[Mr Duncan Smith]

I thought it was altogether too brief. My hon. Friend was just getting into his stride. I feel we need another intervention. I agree with him—how could I not? The Opposition never miss an opportunity to miss an opportunity. They should have said years ago, “We’re sorry; we won’t do it again. We need to spend some more time thinking about what we did wrong.” We intend to give them that time.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I have to say to my hon. Friends that I really have to make some progress, because lots of Members want to speak. They will have a chance to speak later.

With universal credit, people will get up to 85% of their childcare costs paid, which is up from 70% under the previous system. In addition, there will be 15 hours of free childcare if someone has a two-year-old, or a three or four-year-old, and if they are working, while the 30 hours of free childcare a week will be worth £5,000 a year. By the way, the 30 hours of free childcare will start exactly when I said it would—it will be cutting in in the 2016-17 period.

[Chris Leslie]

indicated dissent.

[Mr Duncan Smith]

It is not delayed.

[Chris Leslie]

rose—

[Mr Duncan Smith]

No, it is not. I am telling the hon. Gentleman it is not, so he can sit down.

[Chris Leslie]

On a point of order, Mr Deputy Speaker. It is important that the record is correct. I think the Secretary of State said that the childcare provisions were coming in in 2016 and that this was not a delay to the planned date of 2015. Am I right, Mr Deputy Speaker?

[Mr Duncan Smith]

rose—

[Mr Deputy Speaker]

Order. First, it is a point of order, so the Secretary of State should sit down until I have heard it. Secondly, I think we can recognise it was a point of clarification, so we can carry on.

[Mr Duncan Smith]

In that case, to clarify, the 30 hours of free childcare for working parents with three and four-year-olds has not been delayed; it will start to be introduced in September 2016. Thank you very much; now let’s move on.

If someone needs support to improve their skills or talk to their employer about increasing their hours, universal credit comes in again. For the first time, it will stick with them and help them to increase their hours, which is why it will complete the process of supporting people back into work. Even with the changes we are making, the welfare system will remain generous.

[Geraint Davies]

rose—

[Mr Duncan Smith]

No, no; the hon. Gentleman had his chance.

About five in 10 families with children will still be eligible for tax credits as a result of these reforms. These figures show that we are taking a balanced approach to welfare—an approach that expects people to stand on their own two feet whenever possible but which provides them with the support to do that, by reducing their taxes, providing childcare, skills and back-to-work support, introducing universal credit to make work pay and asking employers to play their part by increasing wages at a time when our economy is growing.

In conclusion, ours is an approach that continues to provide a generous safety net and support for those who need it and expects people to face the same choices as those in work and not on benefits. At its heart, it is about moving from a low-wage, high-tax, high-welfare country, to a high-wage, lower-tax, lower-welfare country. It is a positive vision for Britain under a one nation Conservative Government delivered by a great Chancellor and a great Prime Minister.

--- Later in debate ---

[Dr Whiteford]

The point I am trying to make is how important it is for us to have children. If our birth rate stays as low as it is, we will be storing up long-term economic problems for ourselves. Scotland has the lowest birth rate in the UK and one of the lowest anywhere in Europe. That is precisely because people know that they have to combine their incomes even to get a starter flat. They do not have room for a baby, they do not know how they would pay for a baby if one parent had to work part time, they do not know how they would be able to continue to pay a mortgage—still less a mortgage on a bigger house—and they do not know how they would pay the rent. People have to make serious choices, but the bigger social picture is that we must absolutely encourage people to have a family and encourage family life.

[Mr Duncan Smith]

I will make sure that the hon. Lady’s questions are answered in the winding-up speeches, but there are all sorts of provisos involved. If two families are joined, the original child element is kept. Following up the point made by my hon. Friend the Member for Lewes (Maria Caulfield), the six deciles in the middle can end up paying for others to have more children than they can afford themselves. This is a point about fairness: they are the ones paying, but they do not feel that they can afford to have more children themselves.

[Dr Whiteford]

The key point is that a falling birth rate is not good for anybody in whatever decile. Even those of us who do not have children are going to be dependent on the next generation being large enough to support us in our dotage when we need people to come in and look after us. The economics do not stack up. In the context of worryingly low birth-rate projections, we desperately need to encourage and make it easier for people in all deciles to decide whether having children is a possibility for them.

I have to say that I was appalled at the reference on page 88 of the Red Book to

“protections for women who have a third child as the result of rape, or other exceptional circumstances.”

I know this point was picked up yesterday, but I think the implications need to be addressed more thoroughly. It is perhaps important to acknowledge that rapes do not necessarily result in pregnancy. After all, rape is a crime that affects pre-pubescent children and post-menopausal women, as well as people of child-bearing age. How does the DWP intend to establish that a child has been born as a consequence of rape? Will there seriously be a box to tick on the form? Will a criminal conviction against a perpetrator be required?

We know that rape is one of the most unreported and poorly prosecuted serious crimes in the UK, with most surveys suggesting that 85% of women who are raped do not report it—for a variety of reasons, not least because most victims know their assailants and know that securing a conviction is a very long shot under our criminal justice system. Many simply do not want to put themselves through another traumatic ordeal.

I put it to Ministers that the women most likely to become pregnant as a result of rape are those in long-term abusive relationships who are being repeatedly assaulted. They are among those least likely to report rape, and those in the most extreme danger if they do. So I ask again, what will this “protection” mean in practice? How will the DWP arbitrate? Will women be believed? What steps will be taken to preserve their dignity and privacy? I would like to hear some answers to those questions.

Child Poverty

Iain Duncan Smith Excerpts

Wednesday 1st July 2015 Commons Chamber

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

Over a decade ago, I demonstrated that the relative income measure of poverty was flawed, and that it was driving Government policy on an unsustainable path. In 2007, the Centre for Social Justice report “Breakthrough Britain” made this point:

“Many poverty analysts are concerned that setting this simplistic poverty threshold has warped government priorities.”

I shared that concern, and in 2011 I reiterated that message in a speech to the London School of Economics, calling for a rethink about the way we improve the life chances of the poorest in society.

How we measure things matters because it influences what Governments focus on and what we target. As the right hon. Member for Birkenhead (Frank Field) himself said,

“this income measure…drives…policy in a single direction which is in danger of becoming counterproductive.”

Even the current chair of the Social Mobility and Child Poverty Commission, Alan Milburn, made a point in its latest report, before the election, that there is a real challenge to all parties to deal with the issue of this measurement.

The problem with a statutory framework set around the relative income measure has become all too apparent to all people and to everyone who wants to be honest about this. At 60% of median income, if someone sits below the line they are said to be poor; if they sit above it, they are not. Asking Government to raise everyone above that set percentage often led to unintended consequences, although for good reasons. Most of all, it led to poorly targeted spending, pumping money into the welfare system and focusing more often on inputs than on what those outcomes meant.

For example, as I have said before, we saw massive spikes in tax credit spending in the run up to election years. In the two years before the 2005 election, tax credit spending increased by nearly £10 billion, and in the two years before the 2010 election, it increased by nearly £6 billion. From 2002 to 2010, spending on tax credits more than doubled and cumulatively rose to £258 billion by the 2010 election.

Spending on welfare overall increased by 60% in real terms under the Labour Government, driven by the legitimate and reasonable need to chase what became, after the early successes, a moving line. Despite all this spending, by 2010, under the Labour Government, the number of households where no member ever worked nearly doubled, in-work poverty rose, and the Government missed their 2010 child poverty target by 600,000 children. I allege nothing from this. The motives were good, but the figures did not work.

We reached the position where a growing economy, ironically, drives increases in the measure of child poverty, whereas if the economy crashes, as happened under the Labour Government, child poverty apparently falls. Even today, if we were to increase elements of the state pension, we would run the risk of increasing the median income and thus increasing the number of households that would then fall into poverty.

We consulted widely over a number of years during the last years of the previous Government. The challenge was and remains to get a better way of identifying what we measure and how we tackle the root causes of the problem. This is because the current Act does not do enough to focus Government action on improving a child’s future life chances, to acknowledge the key role education plays, or to recognise that work is clearly a very important way, if not the real way, out of poverty.

Let me deal with the issue of work. I believe work is the best route out of poverty. It provides purpose, responsibility and role models for our children. Yet after more than a decade of welfare spending increases, by 2010 one in five households had nobody in work. During the previous Parliament we began to turn this around. There are now 2 million more people in work than in 2010. The number of children living in workless households is at a record low, and workless households are down to record levels as well. In this Parliament, I want to continue to press to improve that so that more parents get into work, stay in work and, importantly, progress when in work.

On education, the other aim that I just referred to, our ambition must be for disadvantaged pupils to be successful at school. We are committed to raising the bar among poor pupils as part of raising standards for everyone. This is because we know how important educational attainment is for improving their life chances. The Wolf report commissioned by the last Government showed that English and maths skills are vital for labour market entry, and continue to have a significant impact on career progression and pay. This is clearly shown by the staggering fact that 63% of men and 75% of women with low literacy skills have never received a promotion, remaining locked on the income on which they entered work. We are committed to ensuring that more poor pupils achieve excellent grades at GCSE, attend the very best universities, and do an apprenticeship or gain skilled employment, so that every child, regardless of background, is given an education which allows them to realise their full potential.

To that end, today I am announcing that we will bring forward legislation to remove the existing measures and targets in the Child Poverty Act 2010, as well as the other duties and provisions. However, the legislation will introduce a statutory duty to report on measures of worklessness and educational attainment. The worklessness measures will identify the proportion of children living in workless households, and the proportion of children in long-term workless households. The educational attainment measures will focus on GCSE attainment for all pupils and particularly for disadvantaged pupils.

The worklessness and education measures will reflect the agreed responsibilities in the devolution agreements. As with all our reforms, we will work with the devolved Administrations as we progress. They must make decisions about what they want to do. Alongside these reports we will continue to publish the HBAI—households below average income—statistics annually.

Alongside the statutory measures, we will develop a range of other indicators—I think this is very important—to measure the progress against the root causes of poverty. We know that in households with unstable relationships, where debt and addiction destabilise families, parents lack employment skills, and children are not ready to start school, these children do not have the same chances in life as others. It is self-evident. They cannot break out of that cycle of disadvantage. We are currently developing these measures, including family breakdown, problem debt, and drug and alcohol dependency. We will report each year on these life chances measurements as well.

We will reform the Social Mobility and Child Poverty Commission to become the Social Mobility Commission. The commission will ensure independent scrutiny and advocate for improved social mobility. This approach will ensure that tackling the root causes of child poverty and improving future life chances become central parts of our business as a one nation Government. As the Prime Minister said:

“We need to move from a low wage, high tax, high welfare society to a higher wage, lower tax, lower welfare society.”

Governments will no longer focus on just moving families above a poverty line. Instead, we want to focus on making a meaningful change to children’s lives by extending opportunity for all, so that both they and their children can escape from the cycle of poverty and improve their life chances. This process will, I hope, mark a shift from solely measuring inputs of expenditure to measuring the outcomes of children-focused policy. I commend this statement to the House.

[Stephen Timms (East Ham) (Lab)]

I thank the Secretary of State for early sight of his statement. What he read out today is the obituary notice for compassionate conservatism. It is the death knell for any idea that his party might one day be a party for working people.

It is only a week since we received the news that progress on child poverty has stalled, with most poor children now living in working households. The Conservatives’ manifesto said that they would

“work to eliminate child poverty”.

Instead, their solution is to change the definition—incidentally, at their second attempt; they tried this before and gave up—to remove altogether child poverty from the remit of the Social Mobility and Child Poverty Commission, and next week to announce cuts that will make the problems much worse.

The Child Poverty Act, which the Secretary of State, if I understood his statement correctly, now wants to repeal, received all-party support before 2010, and it put one of the most important duties on Government: to ensure that, in the 21st century, children do not grow up suffering deprivation or lacking the necessities that most of us take for granted. It has not just one, but four measures of poverty: absolute, relative, persistent, and material deprivation. The relative measure is the internationally accepted definition used by every OECD country.

Do the Government accept the importance of relative poverty? Will the Secretary of State clarify that? He told us in his statement that a decade or so ago he was arguing against the use of relative poverty. As he knows, at the same time the current Prime Minister was arguing for acceptance of relative poverty. In what he said today the Secretary of State echoed the words of the Prime Minister last week when he said:

“Just take the historic approach to tackling child poverty. Today, because of the way it is measured, we are in the absurd situation where if we increase the state pension, child poverty actually goes up.”

Of course, the Prime Minister was right. If the Government increase the income of better-off people, they make others relatively poorer. The Prime Minister last week described that as absurd, but that was not what he said when he was trying to re-brand the Conservative party in 2006. In his Scarman lecture he said that the Conservative party

“will measure and will act on relative poverty…poverty is relative and those who pretend otherwise are wrong.”

He went on to say:

“We need to think of poverty in relative terms—the fact that some people lack those things which others in society take for granted.”

That was the Prime Minister speaking in 2006.

So what is the Government’s current view? Is it that focusing on relative poverty is absurd, as the Prime Minister said with conviction last week, or is it the diametrically opposite view that he set out with apparently equal conviction on behalf of his party before? Where do they now stand? The Prime Minister promised that a Government he led would “act on relative poverty”. Why is that promise being broken?

Why cannot the Secretary of State level with the House? He hopes nobody will notice this announcement or its significance because it coincides with the airports statement. Am I right in understanding that he proposes that in his legislation there will be no targets at all, or will he include some targets in it and, if so, will he tell us what they are? I remind the Secretary of State that he and his colleagues all voted for the Child Poverty Act in 2010.

When in government, Labour lifted more than 1 million children out of relative poverty and more than 2 million out of absolute poverty. A key success was raising lone parent employment from less than 45% in 1997 to more than 60% today, mainly thanks to tax credits. That was not about lifting a few people from just below a line to just above it; it was about a very substantial change in the way the economy works. Will the Secretary of State tell us whether next week the Government will announce big cuts to tax credits? That is not about making work pay; it is about making working families pay.

What we need is not a change in the definition of poverty, but a plan to deal with poverty and boost productivity. Ministers should be tackling low pay, but instead they are attacking the low-paid. The Children’s Commissioners for England, Wales, Scotland and Northern Ireland have today come together to warn that the Government’s policies will push more young people into poverty. What happened to the long-term plan? Why have children been left out? Why is the party that promised in its pre-election manifesto to work to eliminate child poverty now planning to increase it?

[Mr Duncan Smith]

Let me deal with the points that the right hon. Gentleman has made. First, I thought that his comments were a little ridiculous. The idea that this is somehow an obituary for compassionate conservatism does him ill. He knows very well that the purpose of what we are doing is to get rid of child poverty, and that remains our central purpose. As I said earlier—and we are not alone in this—the problem is that if we lock two sets of measures that actually drive spending to rotate people over that line, what we get is a process of churning, but not the real and deeper change in people’s lives. That is the big reason why we want to do this.

The truth is that the previous Labour Government, on their own measure, failed to achieve their target—they failed to halve child poverty by 2010. Worse, in-work poverty actually rose. We could go through the list, but I would have thought that there was a better way of building some consensus than saying that Labour, if in power, could somehow embark on a massive spending spree and everything would be all right. Even Alan Milburn said that was unrealistic, and it remains unrealistic. We have to deal with the world as it is now, and we have to change the life chances of those children.

It is worth remembering that under this Government 74% of poor workless families who found work escaped poverty, and there was a higher poverty exit rate of 75% for children living in families who went from part-time to full-time employment. That has happened under this Government.

The right hon. Gentleman talked about international measures and suggested that we are somehow breaking away from everyone else. The reality is that no other country embarked on a plan to get rid of child poverty using that child poverty measure, and the reason is that other countries realised that it would lead to peculiar patterns of expenditure, with very little result for those who most need help.

The right hon. Gentleman asked whether relative poverty is important. Yes it is, which is why we continue to publish statistics on houses below average income, and we will continue to do so, so everybody will still be able to comment on that. Our focus will be on turning around the lives of the poorest through education and ensuring that they get back to work through skilling, which my right hon. Friend the Education Secretary has been working on.

The right hon. Gentleman talked about the poverty figures published by the IFS last week. He knows very well that before last week most of his colleagues were running around saying, “It’s going to be terrible. The IFS is predicting that child poverty will rise dramatically.” Actually, none of that happened. [Interruption.] Even on those measures, child poverty fell by over 300,000 under this Government.

The right hon. Gentleman referred to a well-respected body such as the IFS, which has all the means at its disposal, and we have enormous respect for its ability to predict things, but its predictions on child poverty have been wrong every single year that we have been in government. In its most recent prediction it was wrong again. Its original prediction was that child poverty would rise to 2.8 million, but that was out by over half a million.

I am not attacking the IFS—far from it—but simply saying that if a Government set a policy on something they find incredibly difficult to forecast or predict, they will end up chasing the error, as the previous Labour Government did. Well over £200 billion was spent on tax credits, but the key point is to turn lives around. That is why we will present this Bill, and why we will change this so that we can reach the poorest children.

[David T. C. Davies (Monmouth) (Con)]

Higher education standards, more apprenticeships and real jobs are what will drive down poverty, not borrowing large sums of money and spending it on benefits. Does my right hon. Friend agree?

[Mr Duncan Smith]

I agree. The whole point is that we want to eradicate child poverty. This is not a departure from that proposal. However, we want to ensure that we do that by changing the long-term life chances of those who live in the poorest families. I do not want to have to stand here year after year and pretend that rotating people over the line of median income somehow means that we have succeeded. I said three or four years ago that child poverty had fallen under us according to that measure, but I said that I made no claim to have done that. The previous Government crashed the economy, which is why child poverty fell.

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

Over 210,000 children in Scotland are living in poverty, which is more than one in five, and two thirds of them have working parents. The report published earlier today by the UK’s Children’s Commissioners makes it clear that this Government are failing to protect the most disadvantaged children from their austerity cuts. Why will the Secretary of State not back calls for powers over employment and social security to be devolved to the Scottish Parliament so that we can take more effective action there to tackle poverty?

[Mr Duncan Smith]

The devolved Administration in Scotland are getting powers over employment, because the Work programme and personal independence payments are being devolved, so they will have the powers to do that. In fact, the significant new powers in the Scotland Bill will give something like £2.5 billion-worth of new welfare powers to the devolved Administration, and they will be responsible for raising more than 50% of what they spend. On the basis of what I said earlier, I am happy to engage with the devolved Administrations on what measure they want to use, because they will have the capacity to decide either to continue with that measure or to change it in line with ours.

[Several hon. Members]

rose—

[John Howell (Henley) (Con)]

Prior to 2010, when I was the party’s child poverty champion, we discussed these changes, so I welcome the Secretary of State’s statement. Does he accept that they represent a comprehensive approach to dealing with child poverty that is actually going to help?

[Mr Duncan Smith]

I am glad that my hon. Friend believes that, because so do I. The purpose of what I have set out today, after a great deal of consideration over the past few years and a full consultation on the matter, is to arrive at a situation in which we are able to help those children and families in the greatest difficulty and try to move them out of poverty so that they sustain their lives out and beyond poverty.

[Frank Field (Birkenhead) (Lab)]

I welcome the Secretary of State’s statement. I re-emphasise his point that whatever definition we have will drive policy and resources, but might I make two pleas? First, when he fixes the life chances definition, he should not be too modest about his own contribution. Under the Labour Government, he and my hon. Friend the Member for Nottingham North (Mr Allen) published a report showing that the life chances for most children, particularly poor children, can be over by the age of five. We need to concentrate on that and not to be concerned immediately with technical education, however important that may be. Secondly, this Government and the previous Labour Government have been largely successful, through their welfare-to-work scheme, in moving people from benefits to work. The welfare-to-work mark 2 agenda should be about how we move many of those who are trapped on low pay up the pay scale so that they earn decent wages, with the dignity that comes from that, while also drawing less in tax credits.

[Mr Duncan Smith]

I welcome the right hon. Gentleman’s comments. He knows very well that, as I have already said to him, I am very happy to engage with him and his Committee on these matters. As he says, at the beginning of the previous Parliament, we called on him and the hon. Member for Nottingham North (Mr Allen) to do some work for us, and I have remained absolutely wedded to the proposals that they brought forward. In fact, the Social Justice Cabinet Committee that I now chair is tasked with ensuring that those early intervention measures are driven through all Departments. My right hon. Friend the Education Secretary is already acting on much of that with the early educational markers and by driving attainment much earlier on in areas such as maths and literacy, which will be part of our measure. The right hon. Gentleman will, I hope, note that I talked about publishing, alongside that, life-chances measures for areas such as debt, drug and alcohol abuse, and family breakdown. Those measures will help to guide us on when we intervene to make the changes necessary.

[Mr Steve Baker (Wycombe) (Con)]

In constituencies such as Wycombe, for far too long the combination of relative measures plus coarse aggregates has hidden real poverty in certain wards. Will my right hon. Friend focus on practical outcomes for families and individuals so that we can get out of the position where we complacently ignore those in need and real suffering?

[Mr Duncan Smith]

I agree. Apart from the two key areas that we are going to study very hard and put forward proposals on—the educational attainment and worklessness measures—we will have a duty to report on the pathways to poverty that I spoke about. Those will be the guiders that allow us to drive forward the change that is necessary, often in the very early years, in families suffering deprivation.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Is not this statement merely a justification for next week’s cuts to tax credits for the working poor? Is it not also about avoiding the fact that the Government have absolutely no hope in hell of achieving their Child Poverty Act targets? The fact is that low income is the cause of child poverty, so what is the Secretary of State going to do to address that, because this Government have absolutely failed to make work pay?

[Mr Duncan Smith]

I agree that low earnings are part of the problem, but that is exactly what we are trying to address in raising the thresholds and planning to raise them again to over £12,600. We have taken millions of people out of paying tax. We also targeted this by raising the minimum wage, which will rise again to £6.70. I have made it very clear that I personally want the minimum wage to rise even further. This Government are determined, through the mechanisms and interventions that I am talking about, to raise incomes and change life chances at the very earliest stage.

[Dr Sarah Wollaston (Totnes) (Con)]

I welcome the Secretary of State’s determination to break the cycle of disadvantage and to focus instead on outcomes. As he knows, health inequality also traps children in disadvantage. He has touched on alcohol and drug addiction, but will he also look at the burdens of mental health inequalities, and obesity and tooth decay, because those too are having a massive impact on children’s life chances? I hope that he will work across Government Departments to make sure that they are tackled as well.

[Mr Duncan Smith]

I am happy to work with my hon. Friend on this. I agree with her about poor health outcomes, which often involve mental health issues. Some of those are swept up within the work that we are already doing. We will bring forward further proposals on how we can improve outcomes for people with mental health conditions by getting them to treatment much quicker. I am happy to discuss those matters, in line with the areas that I spoke about earlier.

[Caroline Lucas (Brighton, Pavilion) (Green)]

In a recent answer to me, the Secretary of State admitted that the proportion of the social security budget spent on 18 to 21-year-olds on jobseeker’s allowance in receipt of housing benefit is just 0.1%. When he enacts his nasty and punitive policy to remove that entitlement, what will happen to those people and their 2,400 dependent children? Does he simply not care that they are going to be thrown into greater poverty and homelessness?

[Mr Duncan Smith]

No. All those young people will always be supported by this Government. We are talking about getting the balance right between those who need support and can be supported by their families and those who have genuine and serious long-term difficulties. Part of the process I have announced today is to identify those families earlier. Universal credit helps enormously in identifying the families with debt problems, housing problems, and drug and alcohol problems. Getting to them and dealing with those problems is far better than the tokenism that the hon. Lady seems to be involved in.

[Michael Tomlinson (Mid Dorset and North Poole) (Con)]

I welcome my right hon. Friend’s statement, which will continue to build on the Government’s work to address the root causes of poverty in Mid Dorset and North Poole and elsewhere. Does he agree that this Government’s work to support families and prevent family breakdown is critical in tackling child poverty and increasing children’s life chances?

[Mr Duncan Smith]

I do believe that. One of the big failures of Governments is that too often they have been ambivalent about the whole concept of stable family structures and have simply chased the errors. Since we came to power, family life has stabilised, according to the latest reports. More than that, we are putting millions of pounds into help and support for those in danger of family break-up, and that never happened before.

[Mr David Winnick (Walsall North) (Lab)]

Tory party members were the strongest opponents of a national minimum wage, and no doubt the right hon. Gentleman himself voted against it. Apart from those on the Tory Benches, most people will understand very clearly that the whole purpose of his statement and policy is to try to conceal the amount of poverty, child poverty and deprivation that exist in so many constituencies like mine. He should be thoroughly ashamed of himself.

[Mr Duncan Smith]

Those are the usual rather bitter and acrimonious remarks from the hon. Gentleman. I say to him, not for the first time, that I utterly disagree. More than that, I point out that all the figures that we would usually publish will continue to be published; there is no hiding anything in this report. If he is not going to be bothered to read them, I will direct him to exactly where he will find them. If we change life chances from the beginning rather than being obsessed about targets, as he is, we might change real lives rather than playing games.

[James Cartlidge (South Suffolk) (Con)]

In my experience as a small business owner, I was absolutely shocked to find that members of staff would decline pay rises that we offered them because they would lose so much in tax credits in this absurd system. May I assure my right hon. Friend that he will have strong support from my constituents in South Suffolk if he undertakes radical reform of tax credits, because they are a benefit trap and they hold back social mobility?

[Mr Duncan Smith]

We are already engaged in that. Universal credit is rolling out, replacing the current system. That will make it much easier for people to find work and then to work different hours, whereas at the moment, under tax credits, they are often penalised for making a decision to change their hours because they lose far too much of their earnings. That reform is under way, and it will change lives.

[Hannah Bardell (Livingston) (SNP)]

The UK Government’s £12 billion of proposed welfare cuts will risk putting up to 100,000 more children into poverty in Scotland by 2020. Yesterday the Secretary of State and his colleagues walked through the Lobby to turn down the opportunity for Scotland to have greater power over welfare and employment. He said in his statement that “work is the best route out of poverty.” Is it not time that Scotland had the power to tackle poverty, because his Government and his party clearly cannot?

--- Later in debate ---

[Mr Duncan Smith]

It will not surprise the hon. Lady to hear that I do not agree with almost every single word she said. I remind her that it is no good going on and on about the powers that one wants when one is not prepared to recognise or exercise the massive powers given under the Smith commission—£2.5 billion-worth of new welfare powers, the ability to raise more than 50% of what is spent, and powers over employment programmes. I am not quite sure what she actually wants, but I do know this much: under this Government, employment in Scotland has been better than it has been after previous recessions at any other time.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

I welcome the Secretary of State’s thoughtful statement. Does he agree that, despite having figures for persistent poverty in the structure of the existing poverty targets, they have not hitherto succeeded in driving public policy change in Whitehall or in improving the life chances of those in persistent poverty in Blackpool and Cleveleys?

[Mr Duncan Smith]

That is exactly the point I have been making. One of the big areas that has been missing is educational attainment. By locking in educational attainment, we are at last going to be able to look at a balance of measures that ask whether people are actually seeing their life chances progress. The group of people I most constantly worry about are the families who never got near the 60% line, whose life chances were flat. I want them to be able to follow a trajectory that goes above that line and for them to be able to get ahead under their own steam as they take control of their lives.

[Sue Hayman (Workington) (Lab)]

In west Cumbria, as in many other parts of the UK, the areas of greatest deprivation have not shifted for decades, so I was pleased to hear the Secretary of State say that we are now moving to a high-wage economy. We have heard a lot from hon. Members about wages and tackling in-work poverty. Surely the Secretary of State must agree that until we ensure that all businesses pay a decent living wage, we are never going to tackle in-work poverty and break that cycle.

[Mr Duncan Smith]

The hon. Lady should recognise that wages are rising faster and more strongly than at any time since 2007, so we have started that process. We have also raised the minimum wage—it is due to go up to £6.70—but if the hon. Lady wants to press me, I absolutely agree with her. I want businesses—and I have said this before—to recognise that they need to pay the people who work for them a decent wage and not rely on the Government to subsidise that wage so that they can have bigger profits. I am going to campaign for that and I hope we will drive it.

[Mr David Nuttall (Bury North) (Con)]

Unemployment in my constituency of Bury North has fallen by about half since 2010. Does the Secretary of State agree that the best way to alleviate child poverty is to have a growing economy, giving more parents the opportunity to work and enabling higher wages for those already in work?

[Mr Duncan Smith]

I agree with my hon. Friend. The Opposition are concerned and angry that the measure is being changed, but it is worth relating the interesting fact that, even with all the money under the measure, the number of working-age people in in-work poverty rose by 20% between 1998-99 and 2010. It beggars belief that some want a policy that is clearly not working to continue simply because it has become totemic to them. They are not looking at its actual effect.

[Jeremy Corbyn (Islington North) (Lab)]

If I heard the Secretary of State correctly, he said that a quarter of those who move from unemployment into work remain in poverty. Is not there a problem, therefore, of short-term working, zero-hours contracts and low wages? Is not there also a problem, particularly in London and the south-east, of excessively high rents, which are driving so many people into poverty? Any interested observer of the Secretary of State’s statement would say that it was a study in obfuscation to avoid examination of what he is really doing, which is damaging the life chances of millions of young people in this country. Child poverty is a terrible thing and he should address it rather than run away from the facts.

[Mr Duncan Smith]

The hon. Gentleman and I should be at one, because we are addressing the facts. That is what today’s announcement was about. The hon. Gentleman mentions the number of those who are in work but who have not risen out of poverty. The figures I read out earlier show that, of those who fail to get proper maths or English qualifications at school and make it into work—they are in the minority—some 75% of the women will never progress because of their failure to get qualifications. Does not the hon. Gentleman think that I am answering his charge through educational attainment—driving change for those children and getting them into work so that they can progress?

[Jeremy Quin (Horsham) (Con)]

As a former director of a credit union, I am deeply concerned about the level of indebtedness that is endured by and has blighted the lives of many low-income families. Would the Secretary of State care to expand further on the Government’s plans to address this very difficult problem?

[Mr Duncan Smith]

My hon. Friend should know that in the last Parliament we put a significant amount of money into credit unions. It is our plan—we are determined about this—to get credit unions to expand and to work with them so that they become the key element for people on low incomes and others to be able to get decent support, including financial support. I recommend that all hon. Members set an example by making sure that they are members of credit unions.

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

I note that the Secretary of State will remove any Government ambition to eradicate child poverty. On behalf of the hundreds and thousands of children who go to school having not eaten breakfast or who after the summer holidays turn up thinner because they have not eaten properly—many of whom actually come from working households—may I ask the Secretary of State what he will do to make sure that no child in our country is going hungry?

[Mr Duncan Smith]

We have provided universal free school meals and childcare measures allowing mothers to go to work. I say to the hon. Lady that under her party’s Government, in-work poverty actually rose, so she needs to look at her figures before lecturing us.

--- Later in debate ---

[Heidi Allen]

Thank you, Mr Speaker. I was here towards the end of the transport statement.

I want to draw on my own experiences as a business owner. It is important that, however we choose to describe the measures, we tackle child poverty head-on. During the early days of one particular employee’s employment, it felt like I had to drag him to work. He was a young man aged 21 with three small children and it was clear that nobody, including his peers and parents, had brought him up in the world. When I gave him employment and put his money up, he was still culturally unable to find the mental drive to go to work. We have to tackle child poverty by getting to people when they are young, through education, giving them hope and making sure they have food in their bellies—whatever it takes—and we have to achieve that together. I have seen it at the other end—you can drag a horse to water—so I welcome what the Secretary of State is trying to do.

[Mr Duncan Smith]

I welcome my hon. Friend to her place and her experience of running a business and trying to get people from difficult backgrounds into work. My right hon. Friend the Education Secretary is already engaged in driving schools to help inculcate and teach character resilience and key characteristics such as understanding what it is to go to work and to get up in the morning. Under this Government, average weekly earnings have been rising faster than for a considerable time.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

The Secretary of State has told us that he will remove the current child poverty targets and replace them with a number of measures. I am uncertain, however, about whether there will be any other targets. If not, how will we be able to measure his success? Clearly, success is needed because, as he knows, 37% of London children live in poverty and unless he is successful they will continue to be poor.

[Mr Duncan Smith]

We are going to be very open and publish all the elements I mentioned earlier, including those relating to educational attainment, workless households, the new life chances measures and the figures for households below average income, so the hon. Lady and anybody else will be able to see them. We are not hiding from anything. We want those HBAI figures to fall and for the educational attainment and working household figures to improve. That will all be evident and if we are not achieving that, the hon. Lady can be the first on her feet to say so.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

The Secretary of State referred to universal credit in response to an earlier question. It is acknowledged that universal credit will be a vital support to families and children. What is being done to ensure that people in rural areas without high-speed broadband connections will not be disadvantaged in this process?

[Mr Duncan Smith]

That is a very good question, and the hon. Lady is right to say that universal credit will help enormously. The Government have a massive programme to roll out superfast broadband to every area of the country. I will take the hon. Lady’s question to the Department for Culture, Media and Sport so that it can tell her how soon it will arrive in her area. Even if people are unable to do it online, we have made full provision for them to do it, if necessary, by paper exchange, as they would at the moment.

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

The Secretary of State has announced that he will report on measures of worklessness and educational attainment. Will he take care to make sure that those figures are broken down by race and ethnicity, because there are complex factors at work? It is not necessarily the case that all groups of black children do worse than all groups of white children. Although we might disagree on the remedies, without sound data we cannot plan to help all of our children.

[Mr Duncan Smith]

I give the hon. Lady that absolute assurance.

[Neil Gray (Airdrie and Shotts) (SNP)]

Regardless of the fiddle the Secretary of State is carrying out on the measure of poverty, does he not accept that if his Government press ahead with cuts to tax credits without raising the minimum wage to at least the living wage, he will plunge many more of my constituents and their children into poverty?

[Mr Duncan Smith]

The purpose is to get people into work and to help to drive up their hours so that they end up in full-time work and beyond the benefit system. I believe the reforms we have carried out and those we will bring forward will aid that. He should be reminded that his devolved Administration has the capacity and power to decide what measures they want to employ.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

One of the proudest and best achievements of the previous Labour Government was the roll-out of 3,600 Sure Start children’s centres. If, as the Secretary of State says, this is all about outcomes, not inputs, why has his Government slashed the budgets of local authorities, which pay for Sure Start, to such an extent that more than 800 have closed and many more are now hollow shells of their former selves? To use his very words, they are now unable to make

“meaningful change to children’s lives”.

[Mr Duncan Smith]

We gave local authorities responsibility and the money. We did not ring-fence the money, but we told them that their priority should be to make sure that that early years work takes place. My view across the board is that, as all the studies I have seen show, the quality of that work is as good if not better than it was before. I was and remain a great supporter of such support, and I and my right hon. Friend the Secretary of State for Education will ensure that it continues.

[Barry Gardiner (Brent North) (Lab)]

London is the sixth richest city in the world and it produces a fifth of the GDP of the United Kingdom; yet four out of 10 of its children are in poverty. Does the Secretary of State accept that businesses recognise those facts by paying a London weighting? Is it time that he considered a London weighting both in relation to the minimum wage and the benefits cap in London?

[Mr Duncan Smith]

As a London MP, I am only too well aware of the peculiar difficulties faced by London. Even after all the years of very high expenditure through tax credits, we still have the situation that the hon. Gentleman mentions. Certain particular facts about London make that a reality. I would simply say that my purpose in all this is to look at all measures to have a better way of making certain that the support goes to such individuals. I am very happy to discuss with him the matter he raises to see whether we can make any progress.

[Mike Wood (Dudley South) (Con)]

rose—

--- Later in debate ---

[Mike Wood]

Despite the progress that has been made during the past five years, too many children of disabled parents remain in poverty. Will my right hon. Friend assure us that the Government will continue to work to help more disabled people into work—and well-paid work—so that such children can look forward to better outcomes?

[Mr Duncan Smith]

I welcome my hon. Friend to his place. The Government rightly spend significant sums of money on support for disabled people throughout the UK. In fact, I think the amount we spend on disabled people, as a proportion of GDP, is more than is spent by America, Germany and France together. I am proud of that. It is the right thing to do, and we should continue to do it. However, many people who have disabilities are desperate for work. We have now increased the proportion who are in work to record levels, but that is not good enough. I want to get it up to the same level as for the rest of society.

[Diana Johnson (Kingston upon Hull North) (Lab)]

Will the Secretary of State please explain how redefining child poverty and removing targets will in practice give help today to a child living in poverty in a family who are in work?

[Mr Duncan Smith]

We continue to support families who are in work through the various mechanisms we have. As universal credit rolls out, it will add to those mechanisms, and there are additions for families with children. Including the measures I am announcing today, we will address that by ensuring that the children in such families have improved life chances through improved educational achievement. We have already done a huge amount through free school meals, support through childcare—there are massive amounts of new childcare—and the involvement of parents in further work. We are doing more to help those families than was ever done before.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Would the Secretary of State care to comment on a recent policy proposal from the Resolution Foundation, which has pointed out that if one really wants to target help to working families on low and middle incomes, the best way to do it is to increase or boost the working allowance as opposed to giving them tax cuts?

[Mr Duncan Smith]

I have never seen such things as either/or. A well-balanced Government will decide how they can help certain specific groups with support where necessary. We have done that in a variety of areas, including through the tax credits we inherited from the previous Labour Government and now through universal credit. I am a great believer in this: if, as we have done, we give people incentives by raising the threshold and taking millions of low-paid people out of tax, that has got to be good because now that they do not pay tax, they can hold on to more of their money.

[Huw Irranca-Davies (Ogmore) (Lab)]

The Secretary of State will no doubt want to join me in welcoming the Welsh Labour Government’s moves to tackle the deep roots of poverty, whether relative or absolute poverty, including schemes such as the Flying Start programme. He will also welcome the news that Labour-controlled Rhondda Cynon Taf Council intends to move all its workers on to the living wage. Does he agree with the concern that cuts to in-work benefits that happen too soon and are not commensurate or simultaneous with rises in the minimum wage or a move towards the living wage will inevitably impact on absolute poverty in working households?

[Mr Duncan Smith]

I am not altogether acquainted with the programmes that the hon. Gentleman mentions, but I have talked at length to the devolved Administration in Wales. We have endlessly discussed how we can interact. I would like us to interact more; they are sometimes a bit resistant to doing so. My purpose is to help people to get back to work and out of poverty. Wales is seeing a bit of a renaissance in terms of people going back to work, which is good news. As far as I am concerned, we want to help people through work, and I want employers to pay their people a decent wage. I have ensured that the Department for Work and Pensions in London pays the London living wage to all, including the cleaners.

[Nia Griffith (Llanelli) (Lab)]

Higher educational attainment and improved job prospects are important goals, but they are long-term ones. In the meantime, child tax credits are absolutely vital. Indeed, they are a more precise way of targeting help to children in low-income families than normal rises in the tax threshold. The majority of such families are of course in work. What assurances will the Secretary of State give us that there is no plan to reduce child tax credits for these hard-working families?

[Mr Duncan Smith]

We have brought forward these particular measures because they allow us to identify families better. We now have to do the work to identify families who are stuck on low trajectories and are unlikely to break free of such a position on the measure by which we have always measured poverty in the past. I would simply say that that is the best way to give workless families more opportunities now. In the longer term, educational attainment will help to ensure that their children do not repeat what has happened in the past. I believe that the reforms we are making and those we will bring forward will help children more and will help parents to get back into work faster.

[Wes Streeting (Ilford North) (Lab)]

The Secretary of State has not actually addressed the questions asked about tax credits by my constituency neighbour. If I may say so, his statement skirted around the issue of children living in households where the parents work but are still in poverty. How can it possibly be fair, in next week’s Budget or at some point in the future, to cut the tax credits for those families? All he has said today about these measures and everything else will not help the parents of those households to pay the bills when he cuts their tax credits overnight.

[Mr Duncan Smith]

I wonder whether the hon. Gentleman ever reflects on the fact that people can best get out of poverty by progressing through work. In discussions with Labour Members, I tend to find that they are still wedded to the idea that only through constant and high Government spending can anyone move beyond the status of being in poverty. That is the difference between us: Conservative Members believe that helping, encouraging and getting people back to work and reducing the tax burden on them is likely to get them out of poverty; Labour Members think that only Government spending succeeds.

Child Poverty

Iain Duncan Smith Excerpts

Thursday 25th June 2015 Commons Chamber

[Chris Leslie (Nottingham East) (Lab/Co-op)]

(Urgent Question): To ask the Secretary of State for Work and Pensions if he will answer a question about the state of child poverty.

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

The latest low-income statistics, based on the “Households Below Average Income” report, are published today, covering April 2013 to March 2014. They show that the percentage of individuals and children in relative low income is at its lowest since the 1980s. The latest figures also show that the proportion of people in both relative and absolute low income remained flat on the year for children, working-age adults and disabled people. For pensioners, there is a statistical change, but the proportion in relative and absolute low income has increased slightly.

The figures that I have quoted are measured against the retail prices index. As the House will know, the RPI has become a discredited measurement anyway, as the consumer prices index is used everywhere else in the world. Therefore, I have also taken the liberty of putting into the publication what the UK Statistics Authority has also produced: the effects when measured against CPI, which is much more widely used. Those figures are even more positive than the others we have seen today. Today’s figures demonstrate that if we deal with the root causes of poverty—as I believe this Government are doing—then even under a measure of poverty that I have consistently over the last few years described as flawed, we can still have an impact.

Let me remind the House of some of the important things that my Government have done to help families on low income through tackling root causes. In education, we have introduced the pupil premium and tackled failing schools with the free schools programme. There is our commitment to supporting families through the groundbreaking troubled families programme, which is turning really difficult families around in difficult communities. There is our investment in early-years support and childcare and our unprecedented back-to-work programmes that have helped support hundreds of thousands of people, once written off, back into work. We have also raised the tax threshold, which means that those on the lowest incomes often do not pay any tax, or if they do, they pay a lower rate of tax and keep more of their own income. Finally, there is our fundamental belief that the most powerful way to change lives is by creating a welfare system that makes work pay, writes no one off and supports people into work.

That is what we have been doing and what the left has failed to understand—particularly the Labour party. If you deal with the root causes of poverty, of which work is a critical component, many of the symptoms start to sort themselves out. Today’s figures show, I believe, how important it is to both balance the books and continue reforming welfare.

[Chris Leslie]

This morning’s statistics show a depressing slowdown in the progress that we should be making as a country towards the abolition of child poverty in the UK. Will the Secretary of State confirm that the numbers of children in absolute poverty have risen over his time in office? Will he confirm that last year, 19% of children were in absolute poverty, and that this year, 19% of children are still in absolute poverty? Will he also confirm that this year, 17% of children were in relative poverty, and that there are still 17% of children in relative poverty today?

Has the Secretary of State dropped the ambition to end child poverty by 2020? This is not a time for complacency. The Social Mobility and Child Poverty Commission has warned that there is now “no realistic hope” of that target being met. The Prime Minister says that he will be

“judged on how we tackle poverty”,

so what is the Government’s plan to catch up on the lost ground? Will the Secretary of State pause and reflect on the fact that nearly one in five children in this country is still growing up without some of the basics? We are talking about the lives of children up and down this country—about whether their parents can put money in the meter to keep their home warm in winter, and about whether they have something or very little for their tea.

The Child Poverty Act 2010, which Ministers opposite supported, placed one of the most important duties on the Government: to ensure that in the 21st century, children do not grow up suffering deprivation or lacking the necessities that most of us take for granted. Yet progress has now slowed to a snail’s pace. Would it not be shocking if the Government departed from the consensus that children should be free from such disadvantage by the end of this decade? I therefore ask the Secretary of State to give a straight answer to the House today: does he remain committed to the Child Poverty Act or not?

Do not the Government need a serious strategy to address low pay and boost productivity? They should be providing incentives for a living wage and new opportunities for high-quality skills, as a more positive route out of poverty. But what does this Secretary of State do when faced with an end to the progress in reducing child poverty? He threatens to cut £5 billion from the tax credits of children, which would mean 3.7 million working families losing, on average, £1,400 a year. That will not address child poverty; it will add to it.

Does the Secretary of State realise that it is parents who are already working who would be hit by such a decision? How does it help to make work pay to pull the rug from underneath them in that way? Why is he trying to kid people into thinking that such a hit to incomes can be easily replaced? Unless he is planning a rise of 25% in the minimum wage, that will not happen.

Labour lifted more than 1 million children out of relative poverty and more than 2 million children out of absolute poverty. On the Secretary of State’s watch, progress has stalled. Is it true that, instead of developing policies to tackle low pay, the Government, faced with statistics that show such poor progress, will try to erase the figure altogether, redefine the measure and pretend that the problem has gone away? Is he really going to propose that statistical redefinition? The Conservative party manifesto promised that they would

“work to eliminate child poverty and introduce better measures to drive real change”.

Nobody realised that meant that they would just change the measure. Instead of shifting the goalposts when things get uncomfortable, Ministers should take responsibility and tackle low pay, not attack the low-paid.

--- Later in debate ---

[Mr Duncan Smith]

The Opposition, and particularly the hon. Gentleman, have scored a massive own goal today. They tabled the urgent question before the statistics came out, so certain were they and their friends on the left that the statistics would show a massive rise. They were wrong. They cannot accept that our welfare reforms, which they never made in their time, are working.

I remind the hon. Gentleman that I am committed to the purpose of getting people out of poverty and ending the process of families being in poverty. Most of what I have done over the past 10 years has been dedicated to doing that. The trouble with the Labour party is that it is wedded to this income measure. Its whole policy was skewed as a direct result of that.

Our reforms have tackled the root causes of poverty. Employment is up by over 2 million since 2010. I remember the hon. Gentleman saying that employment would fall as a direct result of our changes. The level and rate of children in workless households is at a record low. The proportion of households in social housing that are in work is the highest it has ever been since records began. The rate and level of children in workless households is also at a record low. That is tackling the root causes of poverty.

The truth is that the Opposition have egg all over their face today. I find the hon. Gentleman’s comments close to rank hypocrisy, because they comprehensively failed to meet their own targets, despite dumping huge sums of money into the welfare system. They did nothing to transform people’s lives. They missed their own target to halve child poverty by 2010. Under the Labour Government, in-work poverty rose by 20%, even though they ploughed money into the welfare system, increasing welfare spending by 60%. Let me remind the Opposition how they did that. Tax credit spending rocketed in the years before each election. In 2003-04 it rose by 60%, and in 2004-05 it rose by 7.2%. Then, strangely, between elections it went flat and even fell slightly. Then just before the 2010 election, it rose by 14.4% and then 8.5%.

The reality is that we set out in our manifesto that we need to look at new measures of child poverty. Looking at life chances is the right way to do it, to get to the root causes of why people get into poverty. The current measures led the last Labour Government to a benefit system that gave families an extra pound here or there just to push them above the poverty line but did nothing to transform their lives.

Let me give an example of a family who are officially in poverty under those measures, with parents who have huge drug problems. When they go over the line, according to the measurement, they are not in poverty, but because the parents are likely to spend all their money on drugs, the children do not get fed. The reality is that the measurement is not of that family’s life chances but only of the income transfer.

At the beginning of the last Parliament, I started a debate about whether the current measures were a sensible way of directing Government efforts towards changing people’s lives. We undertook a consultation in 2012 and 2013 that received a wide range of responses, with a broad consensus that the current measures did not recognise the range of actions needed to improve children’s life chances. As a result, the Government have a clear manifesto commitment on child poverty—we will work to eliminate it and introduce better measures to drive real change in children’s lives by getting to the root causes.

I believe that we have a proud record of tackling the problem. We have raised the minimum wage faster and further than the last Government did and focused on supporting families, improving educational attainment, supporting people into work and allowing people to keep more of what they earn. Today’s figures are a vindication of our approach, and as the right hon. Member for Birkenhead (Frank Field), whom I see in his place, said this morning:

“Most of the electorate…find the definition of poverty…as defined by academics and politicians to be utterly bewildering.”

I have always believed passionately in a welfare system focused on changing lives. Today shows that not only has Labour lost the election, it has lost the argument. No wonder it is referred to as the welfare party. [Interruption.]

[Mr Speaker]

Order. There has been a very considerable cacophony in the Chamber. I can advise the House that at least three dozen colleagues are seeking to catch my eye on this important matter. I want to try to accommodate the level of interest, but we have business questions to follow and then a statement by the Secretary of State for Transport, before we embark on a significantly subscribed debate following the Anderson report, so there is a premium on brevity from both Back and Front Benchers. I hope that we will be given a tutorial in that by Sir Oliver Heald.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

I start by congratulating my right hon. Friend the Secretary of State on the best figures in his and my time in the House.

Does my right hon. Friend agree that it is sad to see Labour concentrating on statistics and benefits when the central insight that the Government have had, which is working, is that this is all about work, education and tackling barriers to employment?

[Mr Duncan Smith]

My hon. and learned Friend is absolutely right. We are determined to bring about life change to improve people’s lives in the poorest communities. I made the point that more households in social housing are in work than ever before, and that is life change. They are taking control of their lives.

[Frank Field (Birkenhead) (Lab)]

May I congratulate the Secretary of State on the public relations success of winding up the media with the idea that these would be the worst figures ever published? Might that ingenuity now be applied to developing indices on life chances? What taxpayers are interested in is whether we can prevent poor children from becoming poor adults. Might he ask the Select Committee on Work and Pensions to undertake that inquiry and report to the House and then to his Social Justice Committee, so that the Government might act on it before the year is out?

[Mr Duncan Smith]

May I just correct the right hon. Gentleman on one small fact? I have not spent my time winding up the media. With respect, I think he needs to look at those on his Front Bench, and some of their friends, who have spent the whole time winding up the media.

I welcome the right hon. Gentleman to his new post. He knows very well that the door is open, and I am happy to sit down and discuss that proposition, and, more importantly, what I believe should be in the measures.

[Helen Whately (Faversham and Mid Kent) (Con)]

Making sure that work pays is vital to lifting families out of poverty. Does my right hon. Friend agree that the effective roll-out of universal credit is critical to achieving the goal of reducing poverty?

[Mr Duncan Smith]

I welcome my hon. Friend to her place. Yes, universal credit will reduce poverty, because it makes every hour of work pay. That means that going into work is no longer a tough decision: it becomes an easier decision and progressing into full-time work becomes much easier.

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

It is a sad day for all of us when we come to this Chamber and hear that the Conservative Government wish to redefine child poverty. It takes me back to what we faced under the Thatcher Government at the end of the ’70s and the beginning of the ’80s, when they fiddled and changed the unemployment statistics. History is repeating itself. The Child Poverty Action Group in Scotland has said that on the basis of the £12 billion of cuts that are to come between now and 2020, an additional 100,000 children in Scotland will be pushed into poverty. It is an utter, shameful disgrace that that is happening today in a civilised society and wealthy country.

I see from the figures released for Scotland that 210,000 children in Scotland are living in relative poverty after housing costs—22% of children in the country of Scotland. After housing costs, 140,000 children are living in combined low income and material deprivation—an increase of more than 20,000 in the past year. That is the reality of what the previous Government’s economic agenda has done to Scotland, and we know there is more to come if the right hon. Gentleman and his Government get their way. [Interruption.] Because of the impact of the Government’s policy in Scotland—[Interruption.]

--- Later in debate ---

[Mr Speaker]

Order. When I am on my feet, the hon. Gentleman resumes his seat—that is the situation. I am trying to be helpful to the hon. Gentleman, but I fear that subtlety did not quite work. When I see a process of constant page turning, that is a source of anxiety to the Chair. I simply say to the hon. Gentleman that the thrust of the matter has to be a series of questions. Once we get beyond that to a series of comments or rhetorical questions, I feel that the hon. Gentleman, in the interests of the House and in the interests of himself, can appropriately resume his seat. We are very grateful to him.

[Mr Duncan Smith]

I had been looking at those sheets of paper and assumed there was a bit more to come! I welcome the hon. Member for Ross, Skye and Lochaber (Ian Blackford) to his post. I agree that there is always more to be done. We want to eradicate poverty and child poverty. I think the figures show that we have made good progress, but I am not complacent.

The Scottish nationalists have campaigned, obviously, for independence, but they have many of the levers in their hands, and if the hon. Gentleman complains about poverty and child poverty in Scotland, my question would be: to what degree have the Scottish Government acted to make some of the changes that he wants? He made a couple of points, but my point would be that employment in Scotland is at a record high, which has not been the case in the past after a recession. The work that we have done to get people back into work, including those in workless households and in social housing, has been a huge success. It is worth reminding the hon. Gentleman that across the board in the UK, some 800,000 fewer people are in relative low income before housing costs, and 300,000 fewer children are in relative low-income households.

The hon. Gentleman spoke about reforming the benefit system so that it has a connection with the tax system; I can tell him that universal credit is exactly what he is hoping for. So far, we have had a bit of resistance from his Government. I hope he will now go back and say, “Let’s go for this full time.”

[Fiona Bruce (Congleton) (Con)]

Does the Secretary of State agree that working to support families to prevent family breakdown is critical to improving children’s life chances, especially as family breakdown hits the poorest hardest? Does he also agree that Labour singularly failed to address that when they were in government?

--- Later in debate ---

[Mr Duncan Smith]

My hon. Friend is a doughty campaigner for families and for assisting families to stay to together. Many of our reforms are helping families to stay together. Our reforms to the Child Maintenance and Enforcement Commission—the Child Support Agency, as it was often known in the past—hugely offers families the chance to sort their problems out before they go through the system. We are now seeing record numbers of those making their own balanced arrangements. We have put extra money—millions of pounds—into counselling for families on the verge of break-up, and we believe that that is helping them. The troubled families programme is aimed at stabilising families.

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

Poverty in inner London after housing costs is the highest in the country, at a scandalous 33%. Does the Secretary of State share my disappointment that, while we all believe that work should pay and is the best route out of poverty for many, the numbers on low pay in London have risen for the fourth year in a row and a third of a million more Londoners are now on low pay than in 2010? Can he reassure me that the way to tackle low pay is not to cut tax credits?

[Mr Duncan Smith]

What the figures show is that, as I know as a London MP, parts of London have particular and deep-rooted problems. We want to address those particular problems. First of all, it is true that people are better off in work than they would be out of work, because without work they would have no chance of raising their income. As I made clear on Monday, we also want companies to start paying people a proper wage. I have campaigned endlessly to raise the minimum wage. We have raised it, and the Government are committed to raising it further. I have said to companies, “It is time now that you pay more money to your employees, to rate them as they should be for the work that they have done.”

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

Does my right hon. Friend agree that the target-based culture of the left actually encourages dependency and makes people stay in poverty because that is the right incentive for them, and that his policies are offering a new opportunity, which is transforming people’s lives? He deserves the full support of the House and the country.

[Mr Duncan Smith]

I thank my hon. Friend, who makes a critical point. If we set up a target process that deals with only one aspect of a symptom, we will not get to the root causes. We have set out to get to those families who are the furthest away from employment, and move them into independence through employment. The figures I have given on the number of people in social housing now back in work and those on the lowest incomes now back in work are dramatic. They are better than any other records previously established.

[Helen Goodman (Bishop Auckland) (Lab)]

The Secretary of State has been in his post for five years. In that time, the number of households living in absolute poverty has gone up by 2 million and the number of children doing so has gone up by half a million. Is not ditching the relative poverty measure and moving to focus on absolute poverty a complete own goal?

--- Later in debate ---

[Mr Duncan Smith]

Let me remind the hon. Lady of the statistics. There are 800,000 fewer people on relative low income, 300,000 fewer children on relative low income, 100,000 fewer pensioners on relative low income, 670,000 fewer workless households, and 390,000 fewer children living in workless households. Those are the real statistics. Let me make this point to the hon. Lady: it is far better for us to look at the real life chances of families that were left behind by Labour. Those families were trapped in poverty because they could not change their lives, but we are changing them.

[Oliver Dowden (Hertsmere) (Con)]

Does my right hon. Friend agree that the single best way out of poverty is to have a job, and is he pleased that the number of children in workless households is at a record low under this Government?

[Mr Duncan Smith]

I welcome my hon. Friend to the House, and I agree with what he has said. Let me tell him about a couple of record lows. The number of workless households has fallen by more than 670,000 since 2010 and there are 50,000 fewer households in which no one has ever worked. Those are people who were left behind by the Labour Government.

[Kirsty Blackman (Aberdeen North) (SNP)]

Does the Secretary of State agree that, given the limited powers of the Scottish Government, Scottish children cannot be protected from the extreme breadth and extent of the attacks made on the welfare system by successive Conservative Governments?

[Mr Duncan Smith]

I welcome the hon. Lady to the House, but she cannot have it both ways. The Scottish Government demanded and were given extra powers relating to, for instance, taxation. They cannot turn around and say, “It is not our fault that we cannot change anything in Scotland.” If SNP Members want those powers, they cannot come to the House of Commons and complain because they cannot change anything in Scotland.

[Craig Whittaker (Calder Valley) (Con)]

Poverty levels are at their lowest since the mid-1980s. That is good news, and it shows that work actually does pay, but does my right hon. Friend agree that the current poverty measure is out of date, and that we need a measure that highlights the root causes of poverty?

[Mr Duncan Smith]

As the House will know, we began a debate about that back in 2011, and engaged in a full consultation not long before the last election. I have thought for some time that we need a better way of measuring what happens to families who are trapped at the lowest income levels and do not seem to be able to change their lives. The current measures are inadequate and give no indication of how that problem can be resolved. Life change is the key, and we need to be able to measure the way in which we can bring it about.

[Mr David Hanson (Delyn) (Lab)]

Unemployment in Wales has clearly fallen, but a third of the children in Wales—200,000 children—are living in absolute poverty. What plans has the Secretary of State to tackle zero-hours contracts, insecurity at work and low pay, and does he think that cuts in child tax credit will improve the present situation dramatically?

--- Later in debate ---

[Mr Duncan Smith]

As the right hon. Gentleman knows, Wales has historically experienced deep-rooted problems. Some of its communities have often found themselves literally, physically, distanced from developments in other parts of Wales. However, we are working hard to ensure, through transport links, that people can travel to work more quickly, and can travel further to find jobs. As the right hon. Gentleman said, employment in Wales has improved, which it was not doing previously. We are working hard, but I should be happy to talk to him about any specific details, because I am determined to help Wales to improve even more than it has already.

[Craig Tracey (North Warwickshire) (Con)]

Does my right hon. Friend agree that ensuring that all children are given a high-quality education and an opportunity to acquire vital skills is critical to enabling those who are growing up in low-income households to escape from welfare dependency and find well-paid jobs?

[Mr Duncan Smith]

Indeed I do. My hon. Friend—whom I welcome to the House—is exactly right. We must work harder to ensure that the circumstances of families with deep-rooted and deep-seated problems are turned around, and that they can obtain work and become independent, rather than depending on what the Government do.

[Caroline Lucas (Brighton, Pavilion) (Green)]

When the Secretary of State received the confidential Government assessment marked “sensitive”, which warned him that reducing the benefit cap could plunge up to 40,000 more children into poverty, did he stop to think about the consequences, or is he sticking to his insulting idea that people want to be on benefits, despite the reality that most people want to work but the decently paid work they need simply is not there?

[Mr Duncan Smith]

I have never believed that people want to be on benefits; I actually believe the vast majority of people on benefits want to do something about that and change their lives. Everything I do is about trying to do that: every policy we have is aimed at getting the economy right and helping people get back into work.

[Tim Loughton (East Worthing and Shoreham) (Con)]

The Secretary of State is right to stress that child poverty is a problem not just of income, but many families on low income need support—to make them work-ready, or those with mental health problems—and there are still many tens of thousands of children in this country with attachment problems. Although he rightly mentions the success of the troubled families programme, does he agree that we also need a pre-troubled families programme to tackle inherited problems at source, often involving attachment disorder?

[Mr Duncan Smith]

I recognise and pay tribute to the huge work that my hon. Friend has done, and continues to do, to try to transform the lives of the most troubled families. The troubled families programme was a success but we are now extending it, and within that extension there is scope to do exactly what he wants to do.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does the Secretary of State agree that all of us who want every child in our country to have a full and happy life do get worried about not just the issues in this morning’s debate, but the fact that responsibility for children is spread over so many Departments? There is no longer enough focus on children in a holistic sense. Will he lead the Government in doing something quite quickly about that?

[Mr Duncan Smith]

The hon. Gentleman is right—I often find myself in agreement with him. I am now tasked with chairing the Social Justice Cabinet Committee, the purpose of which is to bring together all work on families and children and to ensure that we have a concerted, single approach to it. But he is absolutely right that that is half the problem in government.

[Huw Merriman (Bexhill and Battle) (Con)]

Does the Secretary of State agree that today’s statistics, showing that the percentage of children in relative low income is at its lowest level since the 1980s, are proof that this Government’s policy is working not just in that area, but in terms of social justice as a whole?

[Mr Duncan Smith]

I believe that is the case, but there is hugely more to do. I do not for a moment stand here today and say, “It is all brilliantly successful”—quite the contrary. This is a very difficult area, but we are dealing with and trying to turn around some of the most troubled and difficult families. My hon. Friend is right, but we have more to do, and that is my purpose and why I am here.

[Mr David Winnick (Walsall North) (Lab)]

If the situation has, according to the Secretary of State, improved substantially, why are there so many food banks—a far larger number than previously? Is it not quite clear that some Tory Members have no idea at all about the amount of poverty that exists—in many cases in their own constituencies?

[Mr Duncan Smith]

I do not agree with the hon. Gentleman. Most of my colleagues are hugely involved in food banks and help them. I welcome food banks: I welcome decent people in society trying to help others who may, for various reasons, have fallen into difficulty. I do not accept that the single cause of that is welfare reform—quite the contrary. Food bank usage has been rising over a period. It was never part of the British system, but in Germany, where we can argue that their welfare payments are higher, 1.5 million people a week use food banks—much more than people do here.

[Nigel Mills (Amber Valley) (Con)]

I welcome the Secretary of State’s commitment to tackling the root causes of poverty, but one big issue for low-income families is their level of debt. What more can the Government do to help families in that situation?

[Mr Duncan Smith]

Problem debt is a huge issue. With universal credit, through “Universal Support—delivered locally”, we are working with local authorities so that if people have a debt problem, we will continue to pay their rent but insist that, working with the council, they are put on debt programmes to help them manage their money and become independent. If they are in debt, they will not sustain themselves through work. That is the key thing to change; my hon. Friend is right.

[Conor McGinn (St Helens North) (Lab)]

Child poverty in St Helens is higher than the national average. Does the right hon. Gentleman think that taking in-work benefits away from working families would increase or decrease the level of child poverty in my constituency?

[Mr Duncan Smith]

Our purpose is to support people as they go into work and progress into full-time work—that is what universal credit is all about. I believe that what the hon. Gentleman will see as we complete its roll-out is that more families will benefit, to the degree of taking control of their lives and having that independence of a pay packet.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

Does the Secretary of State share my desire to focus on those children in persistent poverty—those in that situation for three years out of four—many of whom are, sadly, in my constituency and face multiple disadvantages within their family? Does he agree that they were a specific group wholly ignored by the previous Labour Government’s anti-poverty strategy?

[Mr Duncan Smith]

My hon. Friend has campaigned hard on this and he is right; one problem with setting a narrow measure such as this and then being governed by it is that it is all about rotating people at the top of the relative poverty scale and not actually dealing with the deepest and deep-set problems. Dealing with those is what our purpose must be as we go forward to look at new measures.

[Tom Brake (Carshalton and Wallington) (LD)]

Blue-collar Conservatism did not last long. Instead of hitting hard-working families with billions of pounds-worth of cuts, driving up child poverty, why does the Secretary of State not instead shift the burden of deficit reduction to the very wealthy and implement sound Liberal Democrat policies, such as extending free school meals and childcare?

[Mr Duncan Smith]

I welcome the right hon. Gentleman to his position. I simply remind him that for five years he was part of what we were doing, so I hope that he would welcome today’s figures. I am sure that he has a new set of policies and I am happy to look at what he has come up with.

[Mr Peter Bone (Wellingborough) (Con)]

Before the Secretary of State was in his post, I encountered a benefit culture in my constituency surgeries; people in families where nobody had ever worked were coming to my surgeries. Gradually, over time, that has shifted, with more and more people getting jobs. Is that not the root success story: if we can get people into work, we break the benefit culture?

[Mr Duncan Smith]

That is exactly the point. It is work that takes people out of poverty. We must support those who are furthest away and have the greatest difficulty, but we want the rest of them to move into work. We want the barriers, the debt problems and all those issues to be removed and we want to get them into work. We want to improve their kids’ education and improve their life chances. My hon. Friend is spot on.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

A failure to increase child benefit and child tax credit in line with the cost of living means that more than one in five families struggle to provide the basics for their children. Given that unacceptable situation, does the Secretary of State support the End Child Poverty campaign calling on the Government to give children’s benefits the same triple lock protection as the state pension?

[Mr Duncan Smith]

I welcome the hon. Gentleman to his post. May I say that the latest figures from Scotland show a fall of 40,000 in the number in relative poverty between 2012-13 and 2013-14? Our position is to help the worst-off, to support pensioners through the triple lock and to get all of them into a sustained life of good income.

[John Glen (Salisbury) (Con)]

This week, I attended the launch of Scope’s Extra Costs Commission, which is looking at the barriers faced by disabled people in entering the workplace. May I urge my right hon. Friend to do all he can to continue the Government’s strategy to ensure that more disabled people are able to enter the workplace?

[Mr Duncan Smith]

My hon. Friend makes a powerful point. It is worth reminding hon. Members that, through our Disability Confident programme and the support we are putting in to get more people with disabilities back into work, there are now more people with disabilities in work than ever before. That is still not good enough—the line is still too far below the line for others in work. We want to halve that gap by the end of this Parliament.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

The Secretary of State can use any definition he likes, but the root cause of child poverty in my area is the fact that a quarter of all the full-time jobs pay less than the living wage. What is this Government’s strategy on low pay and in-work poverty?

[Mr Duncan Smith]

One of the greatest causes of difficulties for those families was the economy crashing and people losing their jobs. It is my Government who have raised the minimum wage faster and higher. Is it high enough? No, but we are committed to raising it again in October, and we want to drive it further up. I have made it clear that employers should be paying that living wage, as the Prime Minister has said. The hon. Gentleman will have to watch this space.

[Dr Tania Mathias (Twickenham) (Con)]

Does my right hon. Friend agree that we want to eradicate poverty and I even have it in my constituency of Twickenham? [Interruption.] I have seen poverty in different parts of the world, but I have not seen there the isolation of families who are relatively poor in my area. May I applaud the continuing plans for free childcare for two-year-olds? That is where I have seen part of the eradication of poverty—families coming together and being part of the community in Twickenham.

[Mr Duncan Smith]

May I welcome my hon. Friend to her post? Opposition Members were making noise while she was speaking, but they should recognise that her back story is remarkable: the work she has done to help communities and families. I welcome her to the House. She is absolutely right. Getting those families who have educational difficulties and who are isolated from the community back into the community, and supported and helped back into work is absolutely key. She is right on the money.

[Diana Johnson (Kingston upon Hull North) (Lab)]

With 48% of children in Orchard Park and Greenwood ward in my constituency living in poverty, does the Secretary of State think that removing the in-work benefits will increase or reduce that number?

[Mr Duncan Smith]

The best thing we can do for those families is provide the support programmes that I have talked about. Those programmes are about helping those families get a better education, be more stable and get into work. Being in work and progressing in work is the greatest solution to poverty in the hon. Lady’s area, as it is in mine.

[Bob Blackman (Harrow East) (Con)]

Clearly, one triumph of the coalition Government was the troubled families initiative, which concentrated resources on those most in need. Will my right hon. Friend describe the impact there has been on the child poverty aspects of those families who have been assisted?

[Mr Duncan Smith]

The impact has been enormous. We dealt with 120,000 families. Against all the target measures, including being in work and educational attainment, more than 105,000 of them had their lives turned around by February 2015. We will extend that programme to incorporate more troubled families.

[Bill Esterson (Sefton Central) (Lab)]

For the avoidance of doubt, I should like to ask the Secretary of State a question about people who are already in work. Will he tell me whether cutting tax credits for people in work will help or harm the poorest children?

[Mr Duncan Smith]

Quite simply, the view is that we need to support people in work to ensure that they have the support that is necessary and that they progress in work. I make a simple point that I have made already in this House, which is that it is also the responsibility of companies to pay people a decent wage, and not to rely solely on Government to top up those incomes. We will continue to back those families, and universal credit will make that even more relevant with a greater level of support.

[Tom Pursglove (Corby) (Con)]

What is the impact of the Government’s policy of taking low-income families out of tax altogether and how many families directly benefit from that approach?

[Mr Duncan Smith]

We have taken millions of people out of tax altogether, which has dramatically improved their incomes. Something like 25 million people have seen their tax bill reduce directly. For those who have a limited amount of income, this is a huge change and a huge support. That is not ever recognised by the Opposition, who basically raised taxes rather than lowered them.

[Kelvin Hopkins (Luton North) (Lab)]

The Secretary of State will have no doubt read “The Spirit Level”, which shows that social ills correlate strongly with income inequality—crime, mental illness, infant mortality and much more besides. At the worst end, there is the USA, and at the best end, the Scandinavian countries. These social ills cost billions to the public purse. We continually languish close to the USA end, rather than the Scandinavian end. Does that not make a powerful case for dramatically reducing income inequality and thus reducing child poverty?

[Mr Duncan Smith]

I agree with the hon. Gentleman. The purpose is to get income inequality down, and it actually fell over the last Parliament. The way to do that is to improve the numbers going into work, to get them to go further and into full-time work. Universal credit helps that enormously.

[Rebecca Pow (Taunton Deane) (Con)]

I invite the Secretary of State to come to Taunton and to Halcon, where he will see how the Government’s long-term strategy to address the root causes of poverty is working. Halcon is among the 4% most deprived parts of the country and has four generations of unemployed families. The One team’s project with police, education and everybody working together is working, so may I urge him to come and have a look?

[Mr Duncan Smith]

I welcome my hon. Friend to this place. I absolutely will—it would not take much to get me out to Taunton. As my right hon. Friend the Chief Whip is sitting next to me, I hope that he will be tolerant when my hon. Friend asks me and I ask for a slip.

[Several hon. Members]

rose—

[Wes Streeting (Ilford North) (Lab)]

The Secretary of State will find support on the Labour Benches if he champions a higher minimum wage and asks employers to pay the living wage. Is it not the case, however, that getting every employer to pay the living wage will take considerable time, whereas his Government are looking to cut tax credits for people who are in work and on poverty pay overnight?

[Mr Duncan Smith]

It is interesting that the hon. Gentleman says that, because I genuinely believe that we should expect British employers to pay a decent wage to the people they employ, and I am engaged in that process. I do not think that he is right, as I think it will take a much shorter time to get employers to face up to their responsibilities, but as he has offered his support I am very happy to talk about it.

[Andrew Stephenson (Pendle) (Con)]

I thank the Secretary of State for taking time to visit Nelson job centre with me. In Pendle, we have some fantastic local organisations, such as branches of Christians Against Poverty, the local citizens advice bureau, Colne Open Door and many others, running job clubs. What is his Department doing to work with such organisations and charities to help families out of poverty?

--- Later in debate ---

[Mr Duncan Smith]

Job centres have been given the freedom of the flexible support fund, so they have money to help to support some of these organisations. We now do a lot of work with debt counselling, and we use both local and national debt counsellors.

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

London has some of the highest levels of child poverty in the country. Given that the Secretary of State’s welfare cuts will be particularly harsh for working Londoners because of our high housing costs, why is he not at least calling for the implementation of the London living wage?

[Mr Duncan Smith]

I have done. I insisted that all the contractors in my Department pay a London living wage and the Department for Work and Pensions pays a London living wage. We showed that we did not lose any jobs, that efficiency improved, and that people were happier and did a better job. I agree with the hon. Lady. I am determined that others should learn from that and recognise that we need to pay people a decent wage for the job that they do.

[Chris Skidmore (Kingswood) (Con)]

In Kingswood, unemployment is down from 1,320 in May 2010 to 609 today, a fall of 54%. Does my right hon. Friend welcome this and agree with me that the most important action that can be taken to reduce child poverty is to reduce long-term unemployment, ultimately ending long-term welfare dependency?

[Mr Duncan Smith]

I agree with my hon. Friend. Long-term unemployment is falling and we are getting to the root causes of the problem. That will continue and is the key to helping people out of poverty.

[Kerry McCarthy (Bristol East) (Lab)]

With the approaching long school summer holidays, this is a particularly difficult time for children living in food poverty, as they do not have access to free school meals or breakfast clubs. What is the Department going to do to tackle that issue?

[Mr Duncan Smith]

That is not directly in my Department, but I am very happy to talk about any specific issues and problems if the hon. Lady wants to come and see me. Through my Social Justice Cabinet Committee, we can drive to ensure that the support is available for those who need it.

[Peter Grant (Glenrothes) (SNP)]

I thank the Secretary of State for his answer to my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands), in which he perhaps unintentionally highlighted some of the successes of the Scottish Government in using their limited powers to mitigate the worst impacts of his Government’s cuts. Does the Secretary of State not agree that the Government could immediately stop making child poverty worse by announcing an immediate end to any benefit sanction against families with young children?

[Mr Duncan Smith]

Actually, it is improving. The last bit of the hon. Gentleman’s question was slightly lost, but I think I heard that he was raising sanctions.

[Peter Grant]

On families with children.

[Mr Duncan Smith]

Right. If we do sanction someone, the processes before that happens are exhaustive—[Interruption.] Oh yes they are. People continue to be supported through all the child support mechanisms, including child benefit, and the household support that is available as well.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

In my constituency, 31% of the children—more than 6,000 children —are born into poverty, and the parents of 36% of them earn less than the living wage. I have already had people who are working arrive at my surgeries in tears, terrified about what will happen when the Government chop tax credits. What would the Secretary of State like me to tell my constituents?

[Mr Duncan Smith]

I should tell them that they should wait, as should the hon. Lady, to see what we bring forward. They may be surprised.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Has the Secretary of State considered calls for the establishment of a child poverty prevention board or council, as happens elsewhere, so that we can focus all our energies on the things that really make a difference and avoid getting trapped in a sterile debate about how we measure, rather than how we reduce, poverty?

[Mr Duncan Smith]

That is an interesting question. I agree that it is important to get beyond this sterile debate. I want to bring to the House what I consider to be the right measures, and then I will be happy to discuss options. The right hon. Member for Birkenhead (Frank Field) has come up with an idea, and I am happy to discuss that as well.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I have to say I found the Secretary of State’s tone absolutely breathtaking. Given that two thirds of children living in poverty are from working families, will he answer the question—this is the sixth time of asking—what assessment have his Government undertaken of the proposed cuts in tax credits and how they will affect child poverty levels?

[Mr Duncan Smith]

We have got more people back into work and more people progressing through work, and more people are better off. They are better off in work than they are out of work—a fact that the hon. Lady seems to miss completely. The tax changes and the reductions in tax on take-home pay mean that people are actually better off. The answer to her question is simple: we will continue to support people who need that support through getting into work and beyond. That is the purpose of universal credit, she should stand assured.

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

Today’s households below average income survey report, on page 45, makes it quite clear that the percentage of children in relative income poverty has been flatlining since 2011-12, so it is not the policies of either this or the previous coalition Government that have reduced poverty; it is the legacy of the previous Labour Governments. Does the Secretary of State agree?

--- Later in debate ---

[Mr Duncan Smith]

Okay, that is an interesting argument. I simply say that, if the hon. Lady wants to claim that, she can also claim the disaster of the crashed economy that the Labour party delivered, putting millions of people out of work.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Following his damascene conversion on the road to a Glasgow housing estate, the Secretary of State pledged that there would be no going back on Labour’s target to end child poverty. With nearly 9,000 children in poverty in Erdington, the great majority in working households, what does he have to say to the working mums I met in the Erdington food bank, who despair at what now looms for them in the next stages? To use the grotesque words of the Chancellor, these are strivers, not shirkers, but his Government are about to make them and their children poorer.

[Mr Duncan Smith]

I hope the hon. Gentleman also tells them that his Government failed to halve child poverty against their target. Before we get another lecture about child poverty from that lot over there, I simply say to them that their economic mess—crashing the economy and putting millions out of work—did more damage to his constituents than anything else. We are here to help them and get them back into work.

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 22nd June 2015 Commons Chamber

[Mrs Madeleine Moon (Bridgend) (Lab)]

8. What his policy is on maintaining the level of (a) employment and support allowance, (b) personal independence payment and (c) attendance allowance for disabled claimants.

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

I thank the hon. Lady for her question and for her campaigning in this area. I would like to take this opportunity to offer her my condolences, not having spoken to her before.

I am currently reviewing all policy on welfare. The outcome will be announced when the work is complete, but as the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for North Swindon (Justin Tomlinson), said, it is our intention to protect the most vulnerable, including the disabled. I believe our reforms demonstrate our strong record of supporting disabled people. We introduced the personal independence payment to ensure more support is going to those who need it. More than 700,000 of those who were, once upon a time, stuck on incapacity benefits under Labour are now preparing or looking for work. Spending on disability benefits increased in real terms, and, as my hon. Friend has said, disability employment increased by 238,000 in the previous Parliament.

[Mrs Moon]

I thank the Secretary of State for his condolences.

My advice surgery has received people who are terminally ill, people with life-ending degenerative conditions, people who have been found fit to work despite both conditions, and those on attendance allowance have been told to use their attendance allowance to pay for their second bedroom, so that they are not affected by the bedroom tax. There is huge fear out there in the disabled community. May we have an assurance that those with disabilities will not be further affected by more cuts in welfare benefits?

[Mr Duncan Smith]

Our purpose is to protect the most vulnerable. It has been from the beginning, and it will continue to be. There is, therefore, no reason for people to be fearful, and I hope that Opposition Members will not whip up such fearfulness, although I am by no means accusing the hon. Lady of that.

We must review welfare spending, but we want to do so in a way that actually changes lives. We felt that much of the huge increase in welfare spending under the Labour Government—an increase of some 60%—went to the wrong people who were not doing the right thing. That is the key point. Our purpose is to reform welfare in order to get people back to work, and to ensure that those who cannot manage and have disabilities are treated with the utmost kindness and given the utmost support.

[Mims Davies (Eastleigh) (Con)]

There are many unpaid carers in my constituency. Does my right hon. Friend agree that flexible working patterns can be an important part of support for them? What encouragement can the Government give employers and employees who need to embrace such flexibility?

[Mr Duncan Smith]

Universal credit will be of enormous help to people with caring responsibilities, and others who are periodically required to be at home, because it will pay to be in work for every single hour. Moreover, under universal credit, as part of the in-work allowances, we have included an extra piece of support for those who care for others, on top of the carer’s allowance.

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

Disabled people do not want kindness; they want justice, and access to the benefits that can help them to live their lives. Will the Secretary of State give them a cast-iron guarantee that there will be no cuts in their benefits, no cuts in tax credits, and no cuts in the disability premiums that tax credits can bring? Disabled people need those assurances, given that, we understand, the Secretary of State has now agreed with the Chancellor that we are to expect welfare cuts amounting to £12 billion.

[Mr Duncan Smith]

Let me remind the hon. Lady what happened during the last Parliament, under a Conservative Government. Spending on disability living allowance was up by half in the decade before PIP came in, and just 6% of new claimants had face-to-face assessments. Under PIP, 20% of claimants receive both the higher rates, as opposed to 16% under DLA. Our reforms are about helping those in the greatest need. Let me remind the hon. Lady of something else as well, just in case she has forgotten. We did debate the overall figure of £12 billion, and Labour lost the election. I remember something that was said by the hon. Member for Leeds West (Rachel Reeves), who is not with us for the moment—I send her my best. She said:

“Labour will be tougher than the Tories when it comes to slashing the benefits bill.”

Is it not a bit of hypocrisy on the part of Labour Members to come here and make their claims, having said that they would be tougher than we are?

[Kate Green]

Labour will be tougher in cutting benefits when that is a response to the wrong drivers of those benefits. What we will not tolerate is cuts in benefits for people who are in work and who need those benefits to enable their work to pay. May I ask the Secretary of State about some of the work-related benefits for disabled people? Will he confirm that there will be no cuts and no downgrading of the payments to people on employment and support allowance in the work-related activity group, and will he tell us whether industrial injuries disablement benefit will be protected from cuts?

[Mr Duncan Smith]

The hon. Lady really needs to think carefully about what she says. Labour Members say that they will be tougher than us. Let me give the hon. Lady a simple pledge: we will protect the most vulnerable. There is only thing that is tough at the moment —tough on Labour Members: they lost the election. They had no idea of how they were going to end the deficit, and that is why they are sitting on the Opposition Benches.

[Anne McLaughlin (Glasgow North East) (SNP)]

9. What arrangements are in place to prevent child maintenance payments from increasing when a parent is prevented from spending time with their child by the recipient of the payments.

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[Nick Thomas-Symonds (Torfaen) (Lab)]

10. What his policy is on maintaining the level of financial support provided to carers.

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

This Government recognise and appreciate the vital contribution made by carers. We have ensured that carers are central to the Government’s reforms to care and support, and there are stronger rights for carers in the Care Act 2014, which came into force in April 2015. Since 2010, the rate of carer’s allowance has increased from £53.90 to £62.10, and this April we increased the earnings threshold for carers by 8% to £110 a week. The Government are committed to continuing to provide financial support for carers throughout the benefits system.

[Nick Thomas-Symonds]

Young carers in our society perform a vital role, often balancing their responsibility of caring with work or study, yet young carers in full-time education are not entitled to carer’s allowance. What will the Secretary of State do to remedy that injustice?

[Mr Duncan Smith]

I remind the hon. Gentleman that this was very much the situation when his party was in government—before he starts lecturing us too much on what we have done. We have done more to improve the status of carers, and we support carers enormously. As I said, in universal credit we are adding an extra benefit for them by allowing the work allowances for carers to support them as well. I am certainly happy to look at the particular situation he asked about, and I will write to him.

[Ben Howlett (Bath) (Con)]

As the Secretary of State will know, the Bath Carers Centre in my constituency does a superb job of supporting carers and their families. What assurances can I give people there as to the Government’s plans on supporting carers in the coming years?

[Mr Duncan Smith]

As I have said, we did a huge amount to support carers in the last Parliament, and we intend to continue to protect and support them throughout this Parliament. Carers do a huge amount to support people, including in the national health service, and including people with disabilities. This has been our promise and our pledge. We will continue to support carers.

[Stephen Timms (East Ham) (Lab)]

The Secretary of State referred to the shadow Secretary of State; I am pleased to tell the House that she gave birth to a baby boy last Wednesday and that mother and baby are doing well. The Secretary of State referred to disabled people and the effect on them of the £12 billion benefit cuts. It now appears that the anxiety and uncertainty facing carers will be extended, because we will not get the full list of cuts on 8 July; we will have to await a further statement in the autumn. When the final list of £12 billion is announced, will carers be protected from those cuts?

[Mr Duncan Smith]

First, will the right hon. Gentleman pass on our thanks—I mean congratulations—to the hon. Lady on her great news? I have already made it clear that we have done a great deal to support carers, and it is my intention to keep on supporting them. It is worth pointing out that our changes improved the lot of carers over the course of the previous Parliament, and will continue to do so.

[Stephen Timms]

The absence of any reassurance there will give rise to a great deal of concern among carers. May I ask the Secretary of State about working families on lower and average incomes? Will they be better off or worse off once his £12 billion of cuts have been announced?

[Mr Duncan Smith]

We are looking at welfare, and at how to reform it. When we are ready, I will come forward with an announcement. Let me take the right hon. Gentleman back to the issue of tax credits. We have had many Labour Members going on about tax credits. I looked up how tax credits were increased under a Labour Government. Interestingly, it appears that just before every election, the Labour Government dramatically increased tax credits—in 2004 by 60%; in 2005, just before the election, by 7.2%; and in 2010, just before the election, by 14.4% and by 8.5%. The truth is that his Government have always used benefits as a way of trying to buy votes. We believe that benefits are about supporting people to do the right thing, to get back to work, and to live a more prosperous life.

[Mr Clive Betts (Sheffield South East) (Lab)]

11. What consultation his Department has undertaken with social landlords on the potential effects of the introduction of universal credit and the benefit cap on direct rent payments to landlords.

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

I instituted a phased roll-out of universal credit, so we would have time to consider any issues that arose and to deal with them. Jobcentre Plus and local authorities are working together with “Universal Support—delivered locally”. We will continue to develop this important partnership to ensure the most vulnerable get the support they need to lead independent lives. We have done a huge number of reviews. We regularly engage with more than 50 landlords across all sectors, which includes meeting social landlords in key areas where universal credit is live.

[Mr Betts]

This issue was raised by Tony Stacey, the chief executive of South Yorkshire Housing Association. Currently, if a household is in rent arrears and gets housing benefit, the benefit can be paid directly to the social landlord. When universal credit is introduced, if the family also gets a welfare cap, it is the housing cost element that is squeezed by the cap. No longer will the universal credit be paid directly to the social landlord to cover the rent. Can the Secretary of State not see that that could lead to a rise in evictions? Is he aware of the problem, and what will he do about it?

[Mr Duncan Smith]

Let me be absolutely clear about the importance of universal credit. In the past, housing providers would get the money paid directly to them while the individuals in difficulties sorted themselves out. Under universal credit, they can apply for an extra payment, and that will be done direct. The key point about this is that the housing provider works with the individual family to help them turn around their circumstances, rather than just leaving them as they are and not doing anything about them. All that is being tested under universal credit. People on universal credit will be better off directly as a result of the changes that we are making.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

Section 96 of the Welfare Reform Act 2012 stipulates that the level at which the total benefit cap is set will be determined by reference to estimated average earnings. How do the Government justify breaking the link between the cap and average earnings by reducing the rate to £23,000?

[Mr Duncan Smith]

The hon. Gentleman should address his question to his Front-Bench team, as they apparently support our move.

[James Cartlidge (South Suffolk) (Con)]

21. With respect to the benefits cap, does the Secretary of State agree that the big picture is about getting people off benefits and into work? The people of South Suffolk feel that the fact that anyone can ever earn more out of work than in work is one of the great social injustices of our day.

[Mr Duncan Smith]

As I have said, the problem that we inherited was a tax credit system that rewarded people for doing the wrong things, and parked people who wanted to do better on benefits that allowed them not to do any more hours of work. Universal credit changes that: every hour of work pays. Labour has opposed that root and branch, but then it has opposed every other welfare reform that we have introduced, and all the extra jobs that have come about directly as a result.

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

Will the Secretary of State take the opportunity to congratulate with me people working in Jobcentre Plus in Rossendale and Darwen who have been involved in the roll-out of universal credit? Having spoken to them and to some of their clients, I can say that universal credit seems to be universally popular.

[Mr Duncan Smith]

I thank my hon. Friend for that difficult question. I will, absolutely. Jobcentre Plus staff do fantastic work, do a huge amount to get people back into work, and work with people with difficult conditions, and they welcome universal credit. I will pass on his congratulations to them, and I thank him for asking me to.

[Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)]

13. If he will make an assessment of the effects of the benefits sanctions and conditionality regime on use of food banks.

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[John Healey (Wentworth and Dearne) (Lab)]

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

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

Today, I would like to remind the House of the progress this Government have made on a groundbreaking programme called social impact bonds. In the last Parliament, we set up the innovation fund, working with young people at risk of falling out of the education system, or even joining gangs. This is a radical departure from the funding systems of the past, in which arbitrary spending was based on inputs. Now, with the impact bonds, money can be put into programmes that are about outcomes. We will bring in the next phase of this work shortly through the Social Justice Cabinet Committee, which I chair.

[John Healey]

In his speech today, the Prime Minister talked about the causes of welfare spending. He had next to nothing to say about low pay, yet the financial modelling I conducted on Labour’s plans for raising the national minimum wage shows that we could save three quarters of a billion pounds on housing benefit and tax credit costs. Surely getting to grips with the root causes is a better way to control rising welfare costs than attacking the incomes of the poorest?

[Mr Duncan Smith]

I agree with the right hon. Gentleman that we want companies to take a fuller share of paying people a reasonable and decent salary. That is an absolute fact. In the last Parliament, this Government raised the minimum wage twice. It is at £6.50 now, in October it will go up to £6.70, and the Prime Minister has made it clear that he wants it to rise even further. We want companies to pay better salaries, which means less tax credits from us.

[Jason McCartney (Colne Valley) (Con)]

T2. What support is the Department giving young people in my constituency who are seeking apprenticeships and employment?

[Stephen Timms (East Ham) (Lab)]

We welcome the Government’s belated decision to consult on a charge cap for savers withdrawing their money from pensions. Will the cap apply only to exit fees, or will it also cover recurring charges on investment and income drawdown products? Which? says that that sort of cap could save £10,000 out of a typical £36,000 pension pot, and before her appointment, in March, the new Minister for Pensions said that that sort of cap was needed to protect savers. Will the wider cap be the subject of the Government’s consultation?

[Mr Duncan Smith]

The right hon. Gentleman is right in the first part of his question. In the second part, as he knows, the Chancellor announced the consultation, which will go out in July. We have concerns about some companies that may be overcharging, and that will form part of the consultation.

[Kevin Foster (Torbay) (Con)]

T3. I was pleased to meet with Disability Support Torbay on Friday to discuss the advocacy, support and advice it gives to many local people. Does my right hon. Friend agree that it is crucial to work with employers to make sure that they are aware of work the Government are doing, such as the Access to Work programme, to help them to employ and retain people with disabilities?

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[Marie Rimmer (St Helens South and Whiston) (Lab)]

T5. Following the shameful failure of the Front-Bench team once again to answer a question today, may I ask again why the Government are refusing to publish—even though the Information Commissioner has instructed them to do so—the up-to-date statistics relating to the number of people who have died, having been found fit for work at their face-to-face assessment?

[Mr Duncan Smith]

I find it absurd that Opposition Members deliberately try to misrepresent what happens under such schemes. I remind the hon. Lady that it was her Government who introduced the employment support allowance and the work capability assessment, and at no stage did they say that that led to people committing suicide. People in that situation are often in a very delicate and difficult position, and I find it disgraceful that she is going round making such allegations.

[Mrs Maria Miller (Basingstoke) (Con)]

T9. The latest employment statistics show that under this Government record numbers of women are in work, yet there are 2 million more women who would like to be in employment but are not. What discussions has the Minister had with colleagues to ensure that the barriers that those women face are being removed?

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

T7. My hon. Friend the Member for St Helens South and Whiston (Marie Rimmer) is right. Given that on 5 June the High Court found the Department’s actions—this time on PIP delays—unlawful, does the Secretary of State think that he and his Department are above the law? Why does he refuse to publish the details of the number of people who have died within six weeks of their claims for incapacity benefit and employment and support allowance, including those who have been found fit for work?

[Mr Duncan Smith]

As I said to the hon. Member for St Helens South and Whiston (Marie Rimmer), I find it unbelievable that she, the hon. Lady and others have spent all their time trying to make allegations about people going about their work. [Interruption.] She knows very well that the Department does not collate numbers on people in that circumstance. It deals with individual cases where things have gone right or gone wrong and reviews them. It is a crying shame that Labour Members want to go out every day scaring and frightening people. It is no wonder they lost the election.

[Mr David Burrowes (Enfield, Southgate) (Con)]

May I welcome the introduction of the family test and the Secretary of State’s lead on that? What is he doing to ensure that it does what the Prime Minister says it should do, which is change the way Government do business?

[Mr Duncan Smith]

This test will be reviewed through the Social Justice Cabinet Committee, which I chair. We intend, and the Prime Minister intends, that it will have teeth. We want to see an improvement in family life and greater support for those who have to juggle care for their children, care for elderly relatives, and work. Through that process we hope to improve their lives.

[Daniel Zeichner (Cambridge) (Lab)]

T8. In my constituency rents are almost double the English average and the housing benefit bill rose by 50% during the previous Parliament. Does the Secretary of State think that subsidising private landlords to such a degree is a good use of public money?

[Mr Duncan Smith]

As the hon. Gentleman knows, we deal with housing benefit claims as they come. They support people in both private rented accommodation and social rented accommodation. I remind him that the Government whom he supported introduced the current private rented benefit test. More importantly, under that Government more people out of work and more people in work were claiming housing benefit. Under this Government fewer of those out of work are claiming housing benefit.

[Heidi Allen (South Cambridgeshire) (Con)]

As the employment figures tell us, the work plan is working. Before I came to this place, I ran my own business, and when I saw the same CVs coming back six months or a year later, I would choose to email or call those people and try to give them some coaching. It is a great opportunity for businesses to mentor individuals who are not being touched by the work plan.

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[Fiona Bruce (Congleton) (Con)]

Does the Secretary of State agree that family breakdown is a driver of child poverty as well as many other issues such as addiction, obesity and self-harm, at a cost of almost £50 billion a year, and that therefore investment in strengthening couple relationships, as well as parent-child relationships, makes economic sense as well as being a matter of social justice?

[Mr Duncan Smith]

I agree with my hon. Friend. The previous Labour Government did absolutely nothing in this area. We have put huge sums of money into family breakdown support through counselling. We intend to continue that support and make it even stronger.

[Angela Rayner (Ashton-under-Lyne) (Lab)]

My constituency is a pilot area for universal credit. Despite what the Secretary of State has said previously, social landlords are among the many local organisations who are concerned that the proposed seven-day waiting period will lead to some of the most vulnerable of my constituents getting into rent arrears. The Social Security Advisory Committee agreed and recommended that the Government reconsider this proposal, but it was overruled by the Secretary of State. Will he agree to meet the concerned parties, including social landlords, charities and citizens advice bureaux, to hear from them directly? What steps will he take to protect social landlords and their tenants from the effects of this change?

[Mr Duncan Smith]

We are already talking to many social landlords, who have agreed with us that the improvements we have made are dramatic and helpful, but I am very happy to meet anybody the hon. Lady wants to bring to me.

[John Glen (Salisbury) (Con)]

Will the Minister explain the Government’s commitment to training in jobcentres? One concern is that there is inconsistency in decisions made. What commitment will be given during the next five years to the training budget for jobcentre staff?

[Mr Duncan Smith]

I am not altogether certain that I quite understand what my hon. Friend is referring to. If he is referring to the Flexible Support Fund, that is allocated deliberately so that jobcentres can make local decisions about the kind of training that they need to give. If he has a particular problem, I am more than happy for him to write to me or come and see me.

[Jonathan Ashworth (Leicester South) (Lab)]

My constituent, Mr Geoffrey Thomas, found that the DWP was deducting £8.43 from his ESA because it falsely claimed that he had taken out £400-worth of social loans. Does the Secretary of State agree that this is a disgraceful way to have treated my constituent? Will he make urgent inquiries to make sure that this is not happening to any other people across the country?

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[David Mowat (Warrington South) (Con)]

Earlier, the Minister pointed out that we have brought in a 0.75% cap on private pensions that are subject to auto-enrolment. That is excellent news. However, there is also abusive behaviour more widely in the industry. Do we expect that cap to be extended to non-auto-enrolled pensions?

[Mr Duncan Smith]

At the moment, the cap sits with automatic enrolment, but I am happy to hear the case for extending it. As I said earlier, we will consult on this issue in July and I am happy for my hon. Friend to make some kind of report or submission.

[Bill Esterson (Sefton Central) (Lab)]

Since 2010 there has been a big fall in the number of apprenticeships in technical sectors, including IT and construction. Does the Secretary of State accept that if his Department is serious about addressing the need for high-paid jobs in this country, he has to do a lot more about young people’s skills?

[Mr Duncan Smith]

I absolutely agree, and am glad that the hon. Gentleman has raised the issue of apprenticeships. Under the previous Government there were 2 million more apprenticeships, and this Government have made a commitment to 3 million. As the Minister for Employment, my right hon. Friend the Member for Witham (Priti Patel), said earlier, we have also introduced a degree-level apprenticeship. The hon. Gentleman is absolutely on the money: we want to do more about apprenticeships, and if he spots something that will be helpful to us I am happy to see him about that.

[Helen Whately (Faversham and Mid Kent) (Con)]

People with mental health problems can find it incredibly difficult to get a job and stay in employment. What are the Government doing to help?

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[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

The Minister has just extolled the virtues of his Department’s support for people with mental health problems, but in reality we know that too many people with mental health issues are coming through the Work programme and not getting work. Is it not time that, for the benefit of those people and of the taxpayer, some of his Department’s money was devolved to local areas so those people can get better support and get into proper jobs?

[Mr Duncan Smith]

Like Mr Speaker, I welcome the hon. Lady to her post. This is absolutely an area where we want to take things further and do more work. Mental health conditions are one of the big issues stopping people getting into work. We want to do more on that, and have more treatment and more support through jobcentres. I am happy to discuss that.

[Richard Graham (Gloucester) (Con)]

I welcome some of the statistics given earlier by the Minister for Disabled People. Does he agree that Disability Confident events could be rolled out across the whole country, and will he consider holding an event at which MPs from across the House could hear from him and DWP staff about how those events are held and the advantages they have, so that we can all help this great cause?

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[Peter Grant (Glenrothes) (SNP)]

The Secretary of State may be aware of a report on the front page of today’s Herald about a recently retired employee who took advantage of the Government’s changes to pension regulations and as a direct result was scammed out of his entire pension provision of £360,000. What steps are his Department taking to make sure that the changes it has introduced do not simply allow gangs of criminals to declare open season on our pensioners?

[Mr Duncan Smith]

I am glad the hon. Gentleman raised that specific case, and I would like to hear more from him about it, as I have not read that report myself. We are doing a huge amount under the consultation and we want to look more at scams and how to stop them. I will very much be making those representations to the industry and will, if necessary, bring in relevant legislation.