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.

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[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.]

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[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?

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[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?

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[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?

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[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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?

--- Later in debate ---

[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.

--- Later in debate ---

[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?

--- Later in debate ---

[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?

--- Later in debate ---

[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?

--- Later in debate ---

[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.

Amendment of the Law

Iain Duncan Smith Excerpts

Monday 23rd March 2015 Commons Chamber

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

It is a pleasure to open the debate, possibly for the last time, and to welcome this final Budget—[Hon. Members: “Hear, hear.”] I knew that I would draw support from different parts of the House, and I am pleased to hear that I draw it from the Opposition Front Bench as well. Last week the Chancellor reiterated the Government’s commitment to our long-term economic plan—even the previous Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), slightly smiled at that one—restoring the public finances and supporting businesses while providing security and stability for Britain’s families.

At the start of this Parliament we inherited an economy that had suffered a greater collapse than almost any other country, with £112 billion wiped off our GDP and 750,000 people losing their jobs, contributing to a welfare bill that had risen by 60% in real terms under the previous Government. Over the past year, however, Britain has grown faster than any other major advanced economy, with the Office for Budget Responsibility’s future growth forecast revised up. Britain has had the best performing labour market in the G7, with employment forecasts revised up too, and unemployment revised down. We are on the path, therefore, from austerity to prosperity. The deficit has been cut in half. The fiscal mandate has been met in the target year. National debt is set to fall in the coming year. A surplus of £7 billion is forecast by the end of the next Parliament. Welfare spending is down in real terms for the first time in 16 years and is below its 2010 level as a share of GDP.

Underpinning this recovery is the remarkable performance of our labour market, with the highest employment rate that Britain has ever seen, at 73.3%. The rise in youth employment in the UK over the year is larger than the rest of Europe combined, and there are now more people in private sector jobs than ever before, more women in work than ever before, more lone parents in work than ever before, more older workers than ever before, more disabled entrepreneurs than ever before, and perhaps most importantly, the most households in social housing in work since records began. That is arguably the most important of all the figures.

[Wayne David (Caerphilly) (Lab)]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

In a moment.

Importantly, and contrary to the myths that the Opposition promulgate, of this rise in employment since 2010—I want to make this clear, as I suspect the hon. Gentleman may ask about this—80% is full-time work and 80% is permanent. Three fifths has come from managerial, professional and associate professional jobs, 70% of private sector jobs have been outside London, and two thirds of jobs have gone to UK nationals, reversing the damaging trend under the previous Government when more than half went to foreign nationals.

[Wayne David]

Will the Secretary of State kindly tell the House how many of those new jobs were on low pay?

[Mr Duncan Smith]

I think I have just told the House. It is always good to ask another question when I have just answered it. The jobs that we are providing are paid well. We have seen a rise of 2.1% in private sector pay against inflation of 0.3% now, and a rise in public sector pay of 0.7%—somewhat over and above inflation.

So we have seen unemployment fall to pre-recession levels. The number of out of work benefits has fallen to its lowest for a generation, and the number of workless households has fallen to the lowest on record.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Precisely on employment at record levels and the other boasts that the right hon. Gentleman has made, why then are national insurance and tax receipts way below budget and employment above budget? Does that not reflect the quality and level of the employment that is being offered—1.8 million zero-hours contracts, for example?

[Mr Duncan Smith]

I respect the hon. Gentleman and I am glad he asked me that, because it allows me to point out something that I was going to come to later. We have raised the thresholds on taxation. It is not surprising, therefore, that some of the insurance levels are low. I am proud of that. I am proud that my right hon. Friend the Chief Secretary is also proud of the fact that we are raising the point at which people pay tax for the first time. The real reason behind all these facts and any other issues that the hon. Gentleman raises in this regard is the fact that the previous Government saw the economy go over the edge of a cliff, and we have been picking it up ever since. If the question is why it is not perfect yet, the answer is that we still have some way to go, but we are making progress and going in the right direction.

Through this Government’s employment programme we are ensuring a jobs recovery for all. I want to point out some of the figures: 2 million apprenticeship starts since the beginning of this Government; over 1 million claimant commitments signed—as people go in to sign on to jobseeker’s allowance, setting out and reinforcing people’s obligations; work experience for 250,000 young people; 60,000 start-up businesses through the new enterprise allowance; and the Work programme helping more long-term unemployed people back into work than any other programme before.

[Mr Jim Cunningham (Coventry South) (Lab)]

rose—

[Mr Duncan Smith]

I will come back to the hon. Gentleman. I want to make a little progress, as I know that others want to speak.

The Work programme is continually improving. Nearly 1.1 million people have spent time off benefits, 680,000 have got a job, 400,000 have found lasting work, and job outcomes after 12 months are nearly twice as high as with the early cohorts, including the new employment and support allowance claimants. Compared with the previous back-to-work programmes—the flexible new deal, for example—the Work programme has helped more than twice as many people into work in the first two years as the flexible new deal, with nearly three times as many people in jobs for six months. This is not just getting people into work but ensuring that they stay there—that is the critical element.

I will give way to the hon. Member for Coventry South (Mr Cunningham) and then make some progress.

[Mr Cunningham]

The Secretary of State said that when the present Government took over, the economy was on a knife edge. I remember the previous Conservative Chancellor claiming credit when we were in power for the handling of the economy. More importantly, the Secretary of State has not mentioned the fact that recently the purchasing power of wages has dropped by 6%. Wages might have gone up by 2% in the private sector, but their overall purchasing power has dropped by 6%.

[Mr Duncan Smith]

I am a little bit lost. I am not sure whether the hon. Gentleman is saying that the previous Prime Minister was claiming credit when he was Chancellor in the previous—[Interruption.] If he is referring to my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), it is difficult for the previous Labour Government to claim credit when their Chief Secretary left a letter on the desk saying, “There’s no money left.” If the hon. Gentleman wants to claim credit for that, I will certainly allow him to intervene.

While the Budget proposed new measures to boost growth and support private sector job creation, in turn increasing employment, the Opposition’s only alternative, the jobs guarantee, it now turns out, is more like a no-jobs guarantee—a make-work scheme that the Institute of Directors has said is

“not the source of sustainable jobs”.

It is the kind of scheme that, for the past 20 years, the OECD has demonstrated is expensive and counter-productive in the long term. It says that large deadweight losses, displacement and substitution effects are of little success in helping unemployed people to get permanent jobs in the open labour market. We got rid of the Opposition’s last scheme, which did not work, and this one will fare no better. Labour’s flagship programme is just a rehash of the failed make-work schemes that seem to be its solution almost every time.

The hon. Member for Leeds West (Rachel Reeves) made this comment about Jobs Growth Wales:

“I went to see a scheme very similar to this in Wales last week and...that’s what we would aim to do across the UK”.

If that is what she thinks she is going to do, let us deal with what Jobs Growth Wales actually produces. It has been revealed to be an expensive exercise in cherry-picking the best-quality people who want to go back to work. Far from being a guarantee for all, which I understood was her policy, the hardest to help are not eligible for the programme, and only one in three applicants has got a place on it. A success rate of 80%, at a cost of £6,000 per place, is trumpeted, yet that compares with the 90% success rate of all—not some of—the eligible people in Wales who apply, who move off jobseeker’s allowance within nine months anyway. The reality is that this programme, on top of already successful programmes getting people into work, is less successful than the programme that it seeks to replace. Apparently, this is the programme that the Opposition want to copy and turn into a national programme in government, and it is all a rehash of the future jobs fund.

In the public sector, this Government have achieved the same success as the future jobs fund achieved through work experience in the private sector, but—here is the key—at a twentieth of the cost of what it cost Labour to provide jobs in the public sector. That is the problem with this make-work scheme.

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

While the right hon. Gentleman goes on mudslinging about party policies, he is skimming over the fact that what is wrong with our economy and the jobs being created is that over the past five years we have had a terrible deficiency of highly skilled workers. We are still churning out apprentices from short-term apprenticeships of a year, on average. That is not meeting the real need. When is he going to address that? If he does not do so, he will never solve the problem of low productivity.

[Mr Duncan Smith]

I agree with the hon. Gentleman that that was the situation we inherited. As I said earlier, under this Government there have been 2 million new apprenticeships aimed at getting people the necessary skills. There are also more people going to university and studying science. The reality is that it is not possible to turn around in a few years the problem mentioned by the hon. Gentleman, which followed 13 years of Labour government. We have set in train all of the right measures for the medium and long term to get more skilled people back into work. Before the hon. Gentleman sneers a little too much about people going back to work, I want to say that they are far better off in work and working towards full-time pay than sitting on benefits being depressed and worried.

[Mr Sheerman]

indicated assent.

[Mr Duncan Smith]

The hon. Gentleman agrees with me. The key point is that we want to get people into work, including skilled work, and for them to develop skills not only while they are in work, but as they come through apprenticeships and university.

I want to return to the make-work scheme, because I have a feeling in my bones that the Opposition are beginning to slide away from it. They have failed to answer a number of questions. We have asked them time and again how many private businesses have signed up to the jobs guarantee, but we have never had an answer. We have been told endlessly that there is a lot of interest, but we have never heard any examples.

I heard the shadow Chancellor on, I think, a Radio 4 programme and he seemed rather scared and unusually unable to be coherent. [Interruption.] All right, I will drop the “unusually”. He was unable to list the vast number of private sector companies taking part. When asked how many there were, he seemed to lose his nerve and said:

“But if not, you can do it through the voluntary sector. If not, you have to have a final backstop: a public work scheme.”

The shadow Chancellor has pretty much made it clear that the scheme is going to be about jobs created not in the private sector, but in the public sector. [Interruption.] Oh no, it will not: the right hon. Member for East Ham (Stephen Timms) knows that to be the case. In other words, the Opposition would repeat the mistakes of the past.



I hope that the hon. Member for Leeds West will answer another question we have asked the Opposition time and again: how long will the guarantee last? Back in 2011, we heard about a 12-month guarantee for young people unemployed for one year. By 2013, the proposal had morphed into a six-month guarantee—half the time previously advertised—for those unemployed for two years. Even that is not enough, for as Labour begins to see what a disaster the policy is and the shadow Chancellor begins to wind away from it—there is no interest in it from private sector firms and it has no traction with business—they seem to be beginning to realise that it is not worth all the money they are talking about spending.

I had a look at the Labour website when it launched its tuition fee policy. Interestingly, buried in the relevant document—I would like to say it was in the small print, although the print was pretty small anyway—I found that the scope of the flagship jobs guarantee had been halved again. This announcement was made without fanfare and without anyone taking to the airwaves to tell everybody what a wonderful scheme it was going to be. Labour now proposes “a six-month job”—remember it was for a year originally—

“for any more 18-24 year olds who find themselves claiming Jobseeker’s Allowance for a year”.

It also proposes “a three-month job”—it used to be for six months—

“for the over 25s out of work for two years”,

not one year. In other words, Labour is edging back, killing off its policy bit by bit, and I suspect that eventually it will let it go altogether.

Following a Budget in which the Chancellor once again pledged that no spending commitments would be unfunded, the final and most significant unanswered question—I hope the hon. Lady will answer it, because this is her last opportunity to do so—is: how will the jobs guarantee be paid for? That is a legitimate question, for the Budget punched a hole in Labour’s two proposals with two new measures: the first to levy funding from the banks and the second to restrict pensions tax relief.

Given that the shadow Work and Pensions Secretary has herself declared that

“we need to make sure that the sums add up”,

it is right that we do the maths, starting with the cost of the jobs guarantee, an estimation of which was done by Treasury officials in January. The cost of the jobs guarantee for 2015-16 is forecast to be £1.54 billion for over-25s and £540 million for under-25s. That is £2 billion in total in one year alone, which is far more than the Labour estimate. Taking the small print of the document we found, even if the figure in it is halved, as the Labour U-turn seems to make clear that it will be, it is more than three times the £300 million a year that Labour says it will cost, at close on £1 billion a year.

When the hon. Lady gets up to speak, I hope that she will explain how Labour will fund the jobs guarantee. If she is going to use the bankers’ bonus tax again, I must tell her that it has been spent 11 times over. Here are the things on which it has been spent: reversing the VAT increase—£12.75 billion; reversing the tax credit savings—£5.8 billion; more housing—£1.2 billion; reversing the child benefit savings—£3.1 billion; more capital spending—£5.8 billion; child care—£800 million; and there are more. The last Chancellor, the right hon. Member for Edinburgh South West, said that he did not think it would be feasible to repeat the one-off bankers’ bonus tax, but the reality is that Labour will repeat it to pay again and again for other things.

Another announcement in the Budget was the excellent decision to reduce the tax-free lifetime allowance. It had already been reduced from the £1.8 million inherited from Labour to £1.25 million, and it will now fall to £1 million. The latest change will save about £600 million a year. Importantly, it will affect only 4% of those approaching retirement. That is in stark contrast to Labour’s proposal to reduce the tax-free annual allowance, which would plunder the pension pots of moderately paid, long-serving public servants such as police officers, teachers, nurses and others. With the Government already taking effective steps to curb the size of the very largest pension pots—my right hon. Friend the Minister for Pensions has been involved in that—Labour’s proposed pension tax relief changes will be left null and void. Despite the fact that Labour has committed the money for the purpose of increasing working and child tax credits and, very recently, to pay for the £3.1 billion cost of lower tuition fees, it will apparently be used only to fund the jobs guarantee. As for Labour’s final funding proposal, restricting pension tax relief for those with incomes of more than £150,000, it would not come in for a further three years.

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

Will the Secretary of State give way?

[Mr Duncan Smith]

Not yet. I will finish this particular point before I move on to the rest of the stuff in the Budget.

In this key area, the Opposition have absolutely no idea what they will do. They do not have the money, they are losing interest in the very policy that they said was at the heart of their policies and the rest has just become smoke and mirrors. It is as simple as that. There we have it: the cobbled-together nonsense of Labour’s jobs guarantee is destined to fail as wholly unfunded. Yet we should not be surprised by that from a party which built an entire economy on debt, with policies paid for by more borrowing and higher taxes. Under Labour, Britain accumulated personal debt of a record high, reaching some £1.5 trillion, while the level of household saving fell to a 50-year low.

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

Will the Secretary of State give way?

[Barbara Keeley]

Will the Secretary of State give way?

[Mr Duncan Smith]

In a minute.

This Government are restoring stability in our economy, with no unfunded spending and no extra borrowing; instead, aspiration, responsibility and security will pave the way for a better future. The principle behind the Budget is to restore a Britain built on savings and investment, and that will be done with three new measures. There is a radical, more flexible individual savings account, with the complete freedom to withdraw money from a cash ISA and pay it back later in the year without losing any of the £15,000 tax-free entitlement. There is the brand-new Help to Buy ISA: we are working hand in hand with first-time buyers to help them to save for a home—£3,000 will be provided by the Government for every £12,000 saved—which is an excellent idea. There is a new personal savings allowance, with up to £1,000 interest-free. It will take 17 million taxpayers out of savings tax, not just cutting but abolishing that tax for 95% of people.

On pensions, the Government have already reversed the decade-long decline in pension saving, rolling out automatic enrolment to make saving the norm and introducing the new state pension, while reducing the means test and creating a solid foundation on which to save. We are returning to people who build up their pension pots the freedom to use that money as they see fit. In last year’s Budget, the Chancellor announced radical changes to abolish the prescriptive rules that dictated how and when people could use their pension savings. That means that from April, 320,000 people a year will be able to choose what to do with their pension savings on turning 55. In last week’s Budget, he went further still by allowing 5 million annuity holders to access their existing annuities. He has extended the freedom to give those people greater control over their finances, which is an excellent idea.

[Barbara Keeley]

One group of people who do not have much chance to accumulate pension pots is unpaid family carers, many of whom have to give up work in order to care. Will he say, at the end of this Parliament, whether he regrets forcing 60,000 unpaid family carers to pay the bedroom tax, meaning that not only can they not acquire pensions, but many of them are having to cut back on food and heating to pay it?

[Mr Duncan Smith]

The spare room subsidy policy that we introduced has been assisted by some £380 million that we have given to local government to ensure that anybody in the local community is supported and aided, as necessary. I do not regret that policy. I think it will bring fairness to social housing. Why does the hon. Lady not get up one time and answer this question: does she not feel ashamed about leaving so many people—7 million people—on long waiting lists for accommodation? Why does she not apologise for leaving so many people, when Labour left office, in overcrowded—

[Barbara Keeley]

rose—

[Mr Duncan Smith]

No, she has had her word. Why does she not apologise for leaving so many people in overcrowded accommodation? Labour Members do not apologise for that. The answer is that they have no policy on that. Social house building under the Labour Government fell to the lowest level since the 1920s. She should get up and apologise for that.

[Barbara Keeley]

I thank the Secretary of State for giving way, eventually. Perhaps he would like to look at the case of the couple in Sefton—the disabled person and her carer—who have fought their case through to the Supreme Court. The Prime Minister was unable to give an answer about that couple. It is not a question of such couples giving up their home or their spare room to anybody else. Carers find those rooms essential. That couple found their room essential. The Prime Minister could not answer. Will the Secretary of State answer?

[Mr Duncan Smith]

That is exactly the reason why we gave £380 million to local authorities to deal with individual cases. The courts have supported us in this. Again, the hon. Lady did not get up and apologise for the mess Labour left social housing in: overcrowded accommodation, people who could not find the right houses, people on huge waiting lists for accommodation and the lowest level of house building on record since the 1920s. That is the shame of the 13 years of the last Labour Government.

I spoke a moment ago about the pension freedoms that have been provided. The last pension freedom that has been provided by my right hon. Friend the Chancellor is to allow 5 million annuity holders to access their existing annuities. I pay tribute to my right hon. Friend the Minister for Pensions because that was originally his idea. It shows that the coalition is working at all levels.

It pays to save and, through our welfare changes, this Government have ensured that it pays to work. We have undertaken the most significant reforms in living memory, which span not only pensions but job-seeking benefits, disability benefits, child maintenance and more. They have been opposed at every turn by the Opposition. We are delivering a welfare state fit for the 21st century.

Universal credit is rolling out nationally. It is already in 150 areas and is set to be in every jobcentre by this time next year. The earliest claimants are spending more time looking for work, are moving into work quicker, are working more and are earning more than those on jobseeker’s allowance. It will bring economic benefits of up to £35 billion over 10 years, as the Public Accounts Committee agrees.

The benefit cap has ended the something-for-nothing culture. Capped households are 41% more likely to move into work and 12,500 have done so. Housing benefit is capped too. There has been the first real-terms fall in housing benefit spending in a decade and it is set to carry on falling in real terms up to 2020. Our reforms are restoring fairness and mean that we are making better use of Britain’s housing stock as we build more houses.

Over this Parliament, the increase in welfare spending has been the lowest since the creation of the welfare state at 0.5% a year compared with the 3.5% increase in Labour’s last Parliament in office. Total welfare spending is below what we inherited in 2010 as a proportion of GDP. In the coming year, out-of-work benefit spending will be back to pre-recession levels. Welfare reforms are set to have saved nearly £50 billion cumulatively, all while departmental baseline spending is down—I say this to the Chief Secretary to the Treasury—by some £2 billion a year. He can say “well done” if he likes. We are doing more, and we are doing more efficiently as a result.

As we come to the end of this Parliament, I am proud of the work we have done with my right hon. and hon. Friends in this House. I pay tribute to some of my previous Ministers, including my right hon. Friends the Members for Epsom and Ewell (Chris Grayling), for Basingstoke (Maria Miller) and for Hemel Hempstead (Mike Penning), and my hon. Friend the Member for Fareham (Mr Hoban), as well as to current Ministers, including the Minister for Employment, who has done brilliantly in her job, and the Minister for Disabled People, who is doing brilliantly in his. I pay particular tribute to an hon. Friend who is unsung and unfairly traduced by the Labour party: my good friend Lord Freud. He has worked tirelessly for two different Governments, determined only on one thing, which is to improve the quality of life for people in Britain. I am also proud of my working relationship and what has been achieved with the Minister for Pensions. We have worked well together and achieved good things, and we have also worked closely with the Chief Secretary to the Treasury on many subjects.

The last five years have often been hard and difficult, but always rewarding. We took a system that was bloated and unfair, and which under the previous Government seemed to penalise those who tried and rewarded those who did not. The last Government left us a system that measured only the amount put in and not the results obtained, and it trapped many in dependence. We took that system and changed it for the better, leaving a positive legacy: the deficit down, unemployment down, youth unemployment down, long-term unemployment down, employment up, private sector work up, working households up, growth up. That is a legacy of which any Government of any stripe should be proud. This Budget is key to that legacy, and I commend it to the House.

--- Later in debate ---

[Rachel Reeves]

My hon. Friend is right to talk about the experience of people in his Huddersfield constituency. People in Huddersfield, Yorkshire and around the country will, I think, be slightly shocked by the degree of complacency from the Secretary of State today and from the Chancellor last week, when for them and their families things are very often getting harder, not easier.

The Government have failed to control social security spending, as they promised they would, because they have failed to tackle the true causes of rising welfare spending, such as low pay and the lack of affordable housing, and because they have failed to deliver the flagship reforms the Secretary of State made such great claims for five years ago. What a tragic waste of time, talent and taxpayers’ money: wasting the precious time of sick and disabled people forced to wait for months on end for the support they so desperately need; wasting the talents of people who are not getting the help they need to get into work, or who are stuck in low-paid insecure jobs that my hon. Friends have spoken of that do not make the most of their potential; and wasting money on IT systems that do not work, assessment and appeals procedures that have descended into chaos, and soaring spending on in-work benefits because of this Government’s failure to build an economy that actually rewards hard work.

[Mr Duncan Smith]

The hon. Lady talks about what she calls soaring benefit costs. Does she accept that under her Government not only did in-work benefits rise by more than 50%, but housing benefit for those out of work rose by 70%? In other words, both in-work and out-of-work housing benefit claims rose dramatically under her Government.

[Rachel Reeves]

Under the last two Conservative Governments, unemployment reached 2.5 million. There was a global financial crisis during the period of the last Labour Government, and as a result, unemployment rose, but it has risen even further under this Government, from 1.5 million, when Labour left office, to 1.7 million in February 2012. The OBR’s Budget forecast last week showed a £600 million increase in the forecast for social security spending in just one year, and since 2010, the Government have spent £25 billion more on social security than they set out to spend.

Under the Government, the number of people paid less than the living wage has soared by 44%, while house building has fallen to its lowest levels since the 1920s. It is for those reasons that housing benefit spending—the second-largest area of DWP spending, after pensions—was more than £2 billion higher in 2014-15 than in 2009-10. It was due largely to the rocketing numbers of working people not paid enough to cover their rent. In this Parliament, the Secretary of State has spent £1.8 billion more than he planned on housing benefit for working people and, on current Government forecasts, the cost of working people’s rising reliance on housing benefit to pay their rent will reach £14 billion by the end of the decade, if left unchecked—£488 for every household in the country.

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 9th March 2015 Commons Chamber

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

8. What assessment he has made of the effect of the benefit cap on rates of employment.

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

The benefit cap is having a positive impact on people’s lives. I believe it is encouraging them to find work. The statistics show that. [Interruption.] Yes, they do. Those affected by the cap are 41% more likely to go into work than a similar uncapped group. It is under this Government that we are seeing long-term unemployment fall to its lowest level since 2009. The employment rate, at 73.2%, has never been higher.

[Adam Afriyie]

I had good cause this weekend to reflect on where I grew up. It breaks my heart to think that so many people spend such a long time on long-term welfare and state handouts. In Windsor, the number of people claiming benefits for more than a year has fallen by almost two-thirds, to just 70 people. That lifts my heart. Does the Secretary of State agree that we have a moral and social imperative to ensure that people are able to make their way from welfare to work and have a meaningful life?

[Mr Duncan Smith]

I agree with my hon. Friend. There is a fairness element: before we introduced the cap, about £9 million a year was being spent on fewer than 300 families. When asked, 73% of the public support the benefit cap and 77% agree it is fair for no household to get more than the average working household after tax. It seems like the only group that absolutely opposes the cap is the Labour party.

[David T. C. Davies]

Does my right hon. Friend agree that our changes to benefits regulations have ensured that record numbers of people are now in work, and that this coalition Government are delivering jobs, prosperity and growth and that the only alternative from Labour Members is more debt, deficit and dole queues?

[Mr Duncan Smith]

As ever, my hon. Friend puts it succinctly—but that does not stop me answering his question. He is right. There are three figures that are really important. The Minister for Employment, my right hon. Friend the Member for Wirral West (Esther McVey), talked about bringing down unemployment. Under this Government, the International Labour Organisation 12-month-plus employment rate for 16 to 24-year-olds—the hardest to help—is down 59,000 on the year and 16,000 on the election; the 24-month-plus rate is down 30,000 on the year and 2,000 on the quarter; and of those in social housing, never, since records began, have we had so many households in work. That is the real reason for the Government’s long-term economic plan.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Those on both sides of the House agree that it is important to encourage and support people into work, but under the new benefit cap announced by the Prime Minister, there is not a single three or four-bedroom property that somebody could rent when they need that safety net.

[Mr Duncan Smith]

I think the hon. Lady is talking about the Conservative manifesto proposal—I am not sure what other cap she could be talking about.

[Meg Hillier]

indicated assent.

[Mr Duncan Smith]

She is nodding, but that proposal only brings the benefit cap back in line with average earnings, which are £23,000.

Through the cap, the Government have delivered fairness to the system and an incentive to go back to work, and as a direct result, more people are going back to work than ever before. We are asking people to take responsibility for their lives, just as those who are working and are not within the cap take responsibility for their lives.

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

Would the right hon. Gentleman like to meet a constituent of mine whom I met last week? She has polio, she fell down the stairs and broke her leg, and now she has to have a knee replacement. She is on benefits and has two children. The rent on their property is £400, and the benefit cap is £500, which means they are living on £100 a week. Would he like to meet them?

[Mr Duncan Smith]

I am happy to speak to anybody the hon. Lady wants me to speak to about this matter. I believe that the benefits system in the UK helps those in the greatest difficulty—there is plenty of access to things such as hardship funds if that lady is having difficulty temporarily after breaking her leg—but if it is the hon. Lady’s belief that a Labour Government would increase spending on welfare, perhaps she could encourage those on her Front Bench to be honest about it and say so.

[Mr Frank Field (Birkenhead) (Lab)]

4. What the average monthly value has been of benefit sanctions imposed since May 2010.

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[David Rutley (Macclesfield) (Con)]

17. What comparative assessment he has made of unemployment rates in the UK and other European countries.

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

The UK currently has the 3rd lowest unemployment rate in the European Union, and it has fallen faster than that of any other G7 economy in the past year. Thanks to welfare reform and our long-term economic plan, businesses are creating jobs, and 1.85 million more people are in work than in 2010. For interest, that is more than the total population of Estonia.

[Bob Blackman]

The Opposition like to ally themselves to France, so I would like my right hon. Friend to inform the House where we stand in comparison with our neighbours in France.

[Mr Duncan Smith]

I do recall that the Opposition extolled the virtues of the French Government and what they were doing. It is worth bearing in mind therefore what would have happened if they had followed the French example—which I think they still plan to do. If the UK had the same employment rate as France, employment would be 3.5 million lower in this country. If the UK had the same unemployment rate as France, unemployment would be nearly 1.5 million higher. But there you go—the truth is that every time a Labour Government leave office, they leave unemployment higher than when they arrived.

[David Rutley]

I welcome the steps my right hon. Friend is taking to create jobs and reduce unemployment, which has fallen by 40% in Macclesfield over the last year. I have recently been on a delegation to Spain where we discussed the challenges they are facing of 25% unemployment and 50% youth unemployment, so does my right hon. Friend agree that it is absolutely vital for the UK to stick to its current course for the years ahead?

[Mr Duncan Smith]

Yes, I do. This Government—under the Conservative party—with our long-term economic plan, will stick to those plans, so we would continue to see unemployment fall. Spain has taken huge strides in trying to make changes, but they still have more to do, as they said to me, to deregulate the ways in which they work, but none the less they are at least making real efforts to do so, and they look to us for some examples. Our unemployment and employment rates are better, but I would like to think they are trying very hard to get there.

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

May I remind the Secretary of State that the UK Commission for Employment and Skills, which was set up by Ministers, has pointed out that 40% of unemployed people in Britain are under 25? There are 550 unemployed young people in my constituency. Is not the Secretary of State missing an opportunity to rebalance the regional economy, to address the skills shortages and to target resources at those areas that need it the most?

[Mr Duncan Smith]

Absolutely, but the point I would make to the hon. Gentleman is that I would love for somebody on his side to get up and say, “The economy under Labour crashed with a 6% fall in GDP.” Does he honestly think that had no effect on his constituents? [Interruption.] Since then, we have got unemployment down below 2010 levels and got employment levels up, and we are doing our best to reskill people through work experience and so forth—[Interruption.]—and for all the shouting on the Opposition Benches, they blame everybody else for the crash but they do not give us the credit for the changes and improvements.

[Kelvin Hopkins (Luton North) (Lab)]

Would the Secretary of State like to thank the former Labour Government—[Interruption.]

[Kelvin Hopkins]

I am most grateful to you, Mr Speaker, for that help. Would the Secretary of State like to thank the former Labour Government for keeping Britain out of the euro, which is the principal cause of the devastation of the southern European members of the eurozone?

[Mr Duncan Smith]

It is a very good thing that we are out of the euro—I am very happy about that. As far as credit is to be given, as the hon. Gentleman knows, I have been opposed to entry into the euro and my party was, under my leadership, absolutely opposed and continues to be so, and I am very pleased about that. May I finish by reminding the House of what even those in Europe say when they look at us? The OECD said of the UK that

“the performance of the labour market has been remarkable!”

That is the point: the rest of Europe says the UK has done better on employment and unemployment than anybody else, and that is down to the Government, thanks to their long-term economic plan. We have got it right; they have got it wrong.

[George Hollingbery (Meon Valley) (Con)]

9. What progress he has made on the “Not Just For Boys” campaign.

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[Nigel Mills (Amber Valley) (Con)]

10. What progress his Department has made on the roll-out of universal credit.

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

We have begun the national roll-out of universal credit. Those plans are on track, and universal credit is now available in nearly 150 jobcentre areas for single claimants and in nearly 100 areas for couples and families. Universal credit will be available in over 500 jobcentre areas—seven in 10—by the end of the year, and it will be rolled out to all our 714 jobcentres next year.

[Nigel Mills]

In contrast to some reports today, the staff in the jobcentres in my constituency are looking forward to the roll-out of universal credit because they know the advantages it will bring to local jobseekers. Has my right hon. Friend made a recent assessment of the benefits of universal credit following the roll-out so far?

[Mr Duncan Smith]

We have indeed. From what I have read of the reports my hon. Friend mentions, every single point made in them is wrong and misleading. We will be making our position clear on that. The analysis that he asks for has shown that the benefits of universal credit are statistically significant. Findings now show that, compared with similar claimants on jobseeker’s allowance, universal credit claimants spend more time looking for work, enter work more quickly and spend more time in work. They also end up earning more.

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

The roll-out so far has been to specific groups of people with particular characteristics. That is partly because, to put it uncharitably, the original IT system does not work. If I were being charitable, I would say that it worked but with greatly reduced functionality compared with what was originally planned. However, the Department is piloting a digital solution in Sutton, Surrey, and I wonder whether the Secretary of State could tell us how that is going. When are we likely to get the results of that pilot? Can he tell us when the digital solution is going to be rolled out, given that it was meant to be the great white hope for saving universal credit?

[Mr Duncan Smith]

The IT system is exactly the same system, and it works in all categories. The difference is that we have rightly decided, in accordance with the Public Accounts Committee’s request, to roll this out stage by stage—we have been told that this is the correct way to do it—rather than trying to rush it, as was done with the tax credit system, which crashed. The hon. Lady mentioned the digital solution. Digital development and the online service are merging together, because the live service has many elements that will be used by the digital service anyway. This is a merging of the two services, and we will be reporting on that as we go along. It is successfully rolling out at the moment and expanding at the same time. I would be very happy if the hon. Lady wanted to go and visit it.

[Steve Baker (Wycombe) (Con)]

22. I congratulate the Government on their agile approach to the roll-out of universal credit. Given that it is expected to come to Wycombe, along with every other constituency, in the course of the next year, will my right hon. Friend remind the House of the advantages that our constituents can expect from it?

[Mr Duncan Smith]

Apart from the technical changes, the reality is that at the moment when someone falls unemployed then takes a part-time job they have to sign off and go through the whole rigmarole of claiming tax credits with no one talking to them. Under universal credit, they do not sign off. They stay with their adviser, who helps them enormously in negotiating their way through all their job applications. There is therefore a human interface, which is much better and which will help people who are unemployed and who have difficulties. People can look forward to that.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

12. What proportion of people over the age of 50 who have been referred to the Work programme have found work as a result.

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[Julie Hilling (Bolton West) (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 welcome regulations laid in this House to prevent migrant jobseekers from the EU from accessing universal credit if they have never worked in the UK. This is a clear reversal of the open door policy of the past under the previous Government and we are now delivering a fair system for those who work hard in Britain. It is also in line with the fact that more British people find jobs that ended under the previous Government. A higher proportion of the jobs are taken by British people, which means that more people are in work. With welfare having fallen in real terms and a fairer pension system, this Government, as we come to a close, have a record of which to be proud.

[Julie Hilling]

An undercover reporter from “Dispatches” has found that staff in the Bolton universal credit call centre, where the system crashed nine times in 20 days, have been told not to inform claimants about same-day advance payment, the flexible support fund or the hardship fund, even though payments are taking at least five weeks to arrive. Does the Secretary of State agree that that is the correct way for staff to be told to behave and, if not, what is he going to do about it?

[Mr Duncan Smith]

I did read the reports about that and they are wrong. The people the programme talked to are not responsible for talking to claimants about hardship funds. The people who talk about hardship funds are in the jobcentres and I can tell the hon. Lady categorically—she is more than welcome to look at it—that the advice given to them is explicit. They are meant to engage with people immediately if they have any suspicion or if they are asked about this. We are putting up posters in jobcentres to make sure that those people are aware of that and we are also ensuring that all letters on any sanction contain the elements that are relevant. The programme is wrong on this issue.

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[Rachel Reeves (Leeds West) (Lab)]

Since our last oral questions, the time it will take fully to roll out universal credit on the basis of the latest figures has increased from 1,571 years to 1,605 years, an increase of 34 years in just 42 days. Let me ask about the effect of the policy. In its original impact assessment, the Department for Work and Pensions said that 2.8 million households would be worse off when the policy is fully rolled out. Will the Secretary of States give us his latest assessment of how many households will be entitled to less support under universal credit?

[Mr Duncan Smith]

The hon. Lady is nothing if not persistent with a useless question, so I will now attempt to answer. Universal credit will benefit the vast majority of households in this country. They will be better off, they will be in work more quickly, they will have longer terms in work and they will earn more. The latest work that has been done, which is independently assessed, shows that universal credit is a net benefit to society. It saves money for the Treasury and helps people. I would have thought that she would say that she backs it, but every time she gets to the Dispatch Box she spends her time trying to attack it. Does she not think that if she wants to be elected to government she needs to stand a little taller and be a little more responsible rather than just playing cheap politics?

[Rachel Reeves]

Instead of lecturing me, perhaps the Secretary of State would like to answer the question. The truth, revealed in a written answer by the Minister for Disabled People on 3 February, is that another 200,000 households are set to be worse off under universal credit, because to make up for all the waste and delays on universal credit, the Government are reducing the support that they provide to low-paid workers. Is not the truth that universal credit—the one policy that the Secretary of State had to build a better benefits system and make work pay—is being continually scaled down and pushed back because of his inability to deliver anything that remotely looks like being on time and on budget, and are not the hundreds of millions of pounds spent on universal credit so far just another example of his welfare waste?

[Mr Duncan Smith]

So there we have it: an Opposition who think that they will govern by innuendo and clap-trap. What we have heard from them is a lot of nonsense from start to finish. Listening to the hon. Lady, I wonder whether she is even the slightest bit prepared for government—although she will not be lucky enough to get into government. We heard another little speech from the shadow Chancellor today, in which he did not lay out one single policy on welfare, the economy or anything else at all. What we have from the Opposition—this is why they will not get into government—is constant nonsense, cheap politics and a total waste of time.

[Adam Afriyie (Windsor) (Con)]

T5. I think we must all welcome the Institute for Fiscal Studies report last week, which said that household median incomes are almost back to pre-recession levels. Does my right hon. Friend the Secretary of State agree that that demonstrates that sensible, competent economic policies in government make the difference to people on the street?

[Mr Duncan Smith]

That is absolutely true. While the Opposition moan on about bits and pieces, the reality is that this Government have got on with getting more people into work, getting more stable incomes, and increasing incomes. The cost of living, petrol prices and food prices are falling, and people’s incomes are rising. This Government’s long-term economic plan is delivering a change and an improvement to people’s lives.

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

T3. Last week Maximus told me that a disabled constituent of mine, who had been waiting more than a year for her ESA claim to be processed, could not be given a date on which that would happen, because many more people had had to wait longer. That does not exactly fill us with confidence, given that Maximus is taking over the Atos contract for assessing personal independence payment claims, or could the Minister give us some meaningful assurance that things can only get better?

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[Andrew Griffiths (Burton) (Con)]

T8. My constituents in Burton and Uttoxeter welcome people coming to this country who want to work hard, pay their taxes and contribute, but they are concerned about those who come to take advantage of our benefits system. Will the Secretary of State reassure my constituents that this Government take that seriously, and will he outline what we will do about it?

[Mr Duncan Smith]

My hon. Friend is right. When we came into office there was an open door policy—people could come in, be unemployed and claim benefits immediately. They could claim housing benefit. Since we have been in office, we have stopped people claiming housing benefit. They must be resident for three months before they can claim jobseeker’s allowance, and after three months, if they do not have a job or the prospect of a job, they will not be allowed to stay in this country. These changes introduced by this Government and the new ones on universal credit today mean that we are serious about this. Labour never was.

[Mr Jim Cunningham (Coventry South) (Lab)]

Has the Secretary of State seen the Citizens Advice report which shows that many ESA claimants are left with no money and are reliant on food banks after being told that they are too fit to claim ESA and not fit enough to claim JSA? Most have had to wait up to 10 weeks for a decision. Will the Minister look into this?

[Sir Tony Baldry (Banbury) (Con)]

T9. In the past five years, how many people have moved from benefits into work? Is there any comparable five-year period since 1945 when so many people have moved off benefits into the world of work?

[Mr Duncan Smith]

The record now for people moving from benefits into work is remarkable. Some 600,000 have moved back into work. Peak to peak, the figure is over 800,000, and we have many, many more people back in employment. There have never been as many people in work and that number is still growing, with some 700,000 vacancies in the jobcentres every week.

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[Mr Ronnie Campbell (Blyth Valley) (Lab)]

Youth unemployment in my constituency is still very high. Unlike some Tory Members, I cannot brag about a 50% reduction in youth unemployment. In fact, I cannot even go to 5%. Will the Minister do something about it?

[Mr Duncan Smith]

Of course we want to ensure that every young person has a chance to get a job, none less so than we on the Government side and the hon. Gentleman, but he must remember that the reason they are unemployed is that the economy crashed and fell by 6% of GDP, and we have to put that right. What we are seeing now is more young people across the country getting back into work. I believe that this does and will affect his constituents for the better, which is exactly what it is all about.

[Mr Speaker]

Last but not least, Mr Duncan Hames.

[Duncan Hames (Chippenham) (LD)]

Now that the roll-out of universal credit is beginning in Wiltshire, what effect will it have on the identification of children’s eligibility for free school meals, and what conversations has the Secretary of State had with Ministers in the Department for Education on how that will affect the allocation of the incredibly popular pupil premium?

[Mr Duncan Smith]

In the first instance, we have already agreed with the Department for Education on how that will work. It is set on a series of moments when it will apply the free school meals eligibility. I think that it will actually be better than the present system. With regard to the pupil premium, which is in the coalition agreement and, as the hon. Gentleman rightly says, works successfully, this should have no direct effect on that, other than to improve it.

Compulsory Jobs Guarantee

Iain Duncan Smith Excerpts

Wednesday 11th February 2015 Commons Chamber

[Stephen Timms]

We were left with a legacy of a very large number of people who have been out of work for a long time. It is welcome that at long last the economy is growing and jobs are being created; the long-delayed recovery is now, finally, in place. The question is: are those who have been left out of employment by the events of the past few years going to get the opportunities that these new jobs will create? Addressing that is exactly the purpose of this afternoon’s debate and of the proposal I am commending to the House.

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

If the right hon. Gentleman wants to be completely fair, will he take the chance now to apologise for the fact that under the last Government long-term unemployment doubled and youth long-term unemployment rose by a half? Should Labour not be saying, “We are really sorry, we got something very badly wrong”?

--- Later in debate ---

[Stephen Timms]

I can assure my hon. Friend that these will be jobs for at least 25 hours a week and paid at least at the level of the national minimum wage.

The persistent unemployment that we still see today could be contributing to a continued cost of living crisis tomorrow, weakening the productivity and the growth potential of our economy as well as undermining efforts to keep social spending under control and to bring down the deficit. We must take urgent and effective action now to tackle the problem.

What action have we seen from the Government? One of their very first acts on entering office was to abolish the future jobs fund, breaking, incidentally, the promise that the current Home Secretary made during the election campaign. Eventually, the DWP published an evaluation of the future jobs fund and, to the surprise of nobody on the Opposition Benches, it was glowing. It found a net benefit to society—net of all the Exchequer costs—of £7,750 for every single young person who took part. It reckoned that, within three years, half the cost of that intervention came back to the Exchequer because participants stopped claiming benefits and started paying tax and national insurance. It was an exceptionally cost-effective policy.

By late 2012, when the evaluation was published, it was too late. The future jobs fund had gone. In the time since its abolition, unemployment had risen to more than 2.5 million and youth unemployment had risen to more than 1 million.

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

As the right hon. Gentleman is referring to the research, may I just read out what it says? It says that

“even under the most optimistic combination of assumptions…the FJF programme is still estimated to result in a net cost to the Exchequer…there might never be an estimated net benefit to the Exchequer.”

That is what the analysis said.

[Stephen Timms]

If the right hon. Gentleman looks at the previous paragraph, he will see that the evaluation said that half the cost of an intervention came back to the Exchequer within a three-year period and that the wholly inadequate replacement for it was the Work programme, which sends more people straight back to the jobcentre after two years than it places in sustained work. It also performs shockingly badly not just in Edinburgh, as we were hearing earlier on, but for those in need of support, such as older workers and people with health problems for whom it has so far recorded failure rates of 87% and 93% respectively. The Work programme has been a failure and we must replace it with something that works better.

On youth unemployment, the Deputy Prime Minister saw what was going on and had an attack of conscience. He announced the Youth Contract, which the Government promised would lead to 160,000 work subsidies for young jobseekers. It started in April 2012 and it was an utter flop. It was not promoted. That was undoubtedly because DWP Ministers, with the possible exception of the Minister for Pensions, did not have their heart in it. Employers knew nothing about it. Those who did hear of it were confused by it and had nothing to do with it. The Government’s own advisers on poverty and social mobility said that it was not working, so last summer it was unceremoniously shut down early, after it had achieved fewer than 10% of the promised placements that were budgeted for. Ever since then, unemployment among young people has been going up.

The latest proposal from the Government is time-limiting support for young people without giving them the opportunity to train, after which they will simply be required to do community service. That is not an employment policy, but a policy for punishing the victims of the negligence and ineffectiveness of this Government.

--- Later in debate ---

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

I say to colleagues that I will give way, but I am conscious also that, owing to all the pressures earlier on, Back Benchers will want to get their speeches in.

It is always a pleasure to follow the right hon. Member for East Ham (Stephen Timms), who took a good shot at making a good fist of a bad job. By my calculation, it is over a year since the Opposition initiated a debate on jobs. I wonder why. So much for their being the party of work, which is what they used to say.

The Opposition have repeatedly avoided talking about the labour market, although my colleagues have been dying to intervene. When the Opposition have spoken about the labour market, there has been nothing but talking the economy down and negativity. They have made gloomy forecasts—I recall the Leader of the Opposition talking about

“the disappearance of...a million jobs”.

Then there was the misguided prophecy of

“a long ‘lost decade’...of...high unemployment”.

The Opposition have opposed welfare reform, and most importantly work experience, at every turn. The hon. Member for Ealing North (Stephen Pound) is right: work experience is what young people want, so why have the Opposition opposed our work experience programme, which has been unbelievably successful?

Meanwhile, it is this Government who have delivered 2.2 million more private sector workers, 2 million apprenticeships starts, work experience and training for over a quarter of a million young people, 60,000 businesses through the new enterprise allowance, and the Work programme, helping 600,000 people to get a job—a sustained job that follows. With the election approaching, the Opposition desperately want to sound as though they have anything positive to say about any kind of jobs programme, now that this Government have turned the situation around. Whereas this Government have a record of success, the more one examines the Opposition’s flagship jobs guarantee, the clearer it becomes that that is little more than a no-jobs guarantee, and certainly a guarantee of no jobs in the private sector.

Let me go through the jobs guarantee, as it is the subject of the debate today. We first heard about it in 2011, when it was said to be for young people who had been unemployed for a year. It offered a guaranteed job for 12 months. In 2013, that seemed to morph into a compulsory jobs guarantee for those who had been unemployed for two years, so the objective had already slipped a bit. It guaranteed a job for only six months—half the time previously advertised by the original statement. Yet there remained complete confusion in the Opposition ranks about how long this programme was meant to last. When pressed, the shadow Chancellor said:

“We would have a guarantee of one year for young people, two years for adults. Anybody who is out of work would be guaranteed a job.”

That is not quite what I heard from the Opposition today. How long will it last—one year, two years, six months? What exactly have they costed?

I can understand why the title of this debate was changed. One could almost hear what was going on behind closed doors between the shadow Chancellor and my opposite number, the hon. Member for Leeds West (Rachel Reeves), when they were hoping to announce all the details about how long the jobs guarantee would last. One could almost hear the shadow Chancellor saying, because it was in the speech from the right hon. Member for East Ham, “You’re not announcing anything that allows anybody to cost this properly, because that way they will tell us that this does not work.” Even the motion carefully leaves those questions unanswered. Why would not the Opposition put in their motion all the details of this apparently wonderful plan? The answer is that no such wonderful plan exists. They allude to certain other plans out there, but they do not tell us what they mean.

What we heard today sounded rather familiar, so I looked it up. Back when Labour was last in government, there was a programme called StepUp. It was piloted by the previous Government, of which the right hon. Gentleman was a member, in 20 areas between 2002 and 2004. I shall not go over the names of the programme, but it was supposed to give paid employment to those failed by the new deal and out of work for two years. StepUp was never rolled out nationally by the previous Government because the evaluation from 2006 exposed its failings: for those nearest the labour market and those under 25, StepUp actually had a negative impact on work prospects, at a massive cost of £10,000 per place.

The right hon. Gentleman referred to the programme in Wales. The hon. Member for Leeds West has been even more explicit that the Opposition’s jobs programme is a rehash of Jobs Growth Wales. She said:

“I went to see a scheme very similar to this in Wales last week and...that’s what we would aim to do across the UK”.

But that is not what was described from the Opposition Front Bench today. A closer look at what has been announced about Jobs Growth Wales reveals that in many senses it is an exercise in cherry-picking. The hardest to help are not eligible; no one on the Work programme, Work Choice or any similar programme is allowed to go for the new programme; and places are given to only one in three of those who have applied, so a place is far from being guaranteed for all. In any case, although Jobs Growth Wales has trumpeted a success rate of 80% of participants in work, an apprenticeship or learning after six months, already 90% of all—not some—young people in Wales move off jobseeker’s allowance within nine months. That has nothing to do with the programme and all to do with what is happening to them through the jobcentres and through the Work programme.

[Robert Halfon]

My right hon. Friend will be aware that general unemployment in Harlow has gone down by 50% since 2010, youth unemployment has gone down by 56% since 2010 and 83% of the jobs created are permanent positions, yet the Labour councillor Emma Toal said last week at a council budget meeting in Harlow that she feels sick to the stomach when I quote the fall in unemployment and the jobs created. Is that not shocking? Is that not a shame? Does that not show that we are the workers’ party and Labour is the party of dependency?

[Mr Duncan Smith]

Yes, it is appalling that the councillor is unhappy about the idea that more people are getting work in my hon. Friend’s constituency. The reason why she takes that attitude, I think, is that Labour wants only to be elected. The Opposition do not care about anyone else. They would rather tell bad news to get elected than have a success that they could trumpet. Perhaps that is the real point.

Ninety per cent. of all young people in Wales move off JSA within nine months, so at £6,000 a place, the alleged success that is being trumpeted is nothing like the value for money that the right hon. Member for East Ham mentioned earlier.

[Gordon Birtwistle (Burnley) (LD)]

In Burnley in 2009 we were classed as a basket case—a town that was going nowhere, or going down. That was at the time that the future jobs fund was happening. Last year we were cited as the most enterprising town in the UK. We have doubled the number of apprenticeships to 4,300 and the number of young people out of work has gone down by 47%. Surely that is the right way to go, not to force people into work that they do not want to do.

[Mr Duncan Smith]

May I say to my hon. Friend—I repeat, my hon. Friend—what an excellent job he has done in championing his constituency? He is right—it is about getting private sector businesses to create real jobs for young people and older workers to go into.

I want to deal in some detail with the jobs guarantee versus the future jobs fund. A Labour press release that I saw in 2014 extolled the Opposition’s pet project as

“building on the success of the Future Jobs Fund”.

The right hon. Member for East Ham carried on the Labour line. I hope that was noted back at headquarters. He is clearly to be trusted through the election, and I give him a lot of support for that.

As for the claimed success of the future jobs fund, the DWP analysis that I quoted earlier is important. It was commissioned under Labour and was subjected to extensive peer review by the National Institute of Economic and Social Research, which, as I said earlier, found that not only was the fund estimated to result in a net cost to the Exchequer but that, as I pointed out, the future jobs fund was not estimated to benefit the Exchequer at any stage, and the Exchequer would not be able to get back the money that it had spent on the programme.

By contrast, as the hon. Member for Ealing North said, young people want work experience. I remember that early on, when I first went into jobcentres, I was accosted by young people who said that the problem for them was that at job interviews they were asked whether they had job experience, and when they said they had none, they were told that they could not be given a job without work experience, but their response was that they could not get work experience without a job.

Under the previous Government, people were allowed only two weeks’ work experience before they were expected back at the jobcentre. What we did instead was to allow them up to two months’ work experience in a business, and an extra month if they were offered a job or an apprenticeship. So, by contrast, work experience under this Government—this is the interesting point—has achieved the same success rate at least as the future jobs fund achieved, but at a twentieth of the cost—£325 per place as opposed to £6,500 per place. Another difference is that the vast majority of positions under the work experience programme are in the private sector, whereas I can think of hardly any private sector companies that offered jobs under the future jobs fund. It is a success versus a costly failure.

[Stephen Timms]

As the right hon. Gentleman knows—he has the evaluation in front of him—there was a net benefit to society of £7,500, net of all Exchequer costs, for each person who took part. Is he surprised that youth unemployment has been going up over the past three months, at a time when overall unemployment is coming down, or was that what he expected?

[Mr Duncan Smith]

Youth unemployment is now lower than it was under the previous Government, and it has been falling consistently. I will wait for the figures for the next few quarters, and when they show that youth unemployment has continued to fall, I expect the right hon. Gentleman to write me a note saying, “Sorry about that; that’s another thing we got wrong.”

[Stephen Pound]

Will the Secretary of State give way?

[Mr Duncan Smith]

I will give way in a moment, but I just want to spend a little more time on the future jobs fund, because it is such a rich seam. I continue to ask the right hon. Member for East Ham to give us the list of private sector companies that are signed up to his new scheme, but he has not come up with it. The interesting point is that councils from Merthyr Tydfil to Norfolk and from Tyneside to Wakefield have all complained about how difficult it is to get businesses to deliver the future jobs fund. None of them could find anyone to deliver it. In Barnsley only 7% of the jobs found were in the private sector, and in Birmingham the figure was only 2%.

I was a little intrigued by that, because I know that the right hon. Gentleman is an intelligent man—I have huge respect for him and thought that he was a very competent Minister—and it was unlike him, given how accurate he normally is, to come to the Dispatch Box and, when pressed on how many private sector jobs would come from the scheme, answer, “It is most likely to be in the private sector.” That is it. That is the calculation that the Opposition have made for this incredible programme. He believes that it is “most likely” that those jobs will be in the private sector, yet not a single private sector employer is interested in it.

It is small wonder that the shadow Leader of the House also failed to name a single business that had signed up to the jobs guarantee. When pressed about the vast number of jobs there would be in the private sector, the shadow Chancellor, in a forerunner to his problem with “Bill Somebody”, said:

“But if not, you can do it through the voluntary sector. If not, you have to have a final backstop: a public work scheme.”

That is what they have. He let the cat out of the bag. The reality is that high streets and businesses have now made their views clear about Labour’s “destructive anti-business mood”. The Institute of Directors has stated that

“wage subsidies for employers are not the source of sustainable jobs”.

That is what this ridiculous programme would mean.

[Stephen Pound]

I was initially reluctant to interrupt the right hon. Gentleman while the compliments were flowing from the Treasury Bench, but normal service has now been resumed. The major difference between the scheme that he is promulgating and that which we are proposing—I reiterate this for the avoidance of any doubt—is that while the Government are proposing work experience, we are talking about real jobs. The advantage of work experience cannot be denied, but the aim of our proposal is proper, permanent jobs. If they turn out not to be permanent jobs that people start with it, so be it, but the difference is between permanence and work experience.

[Mr Duncan Smith]

The hon. Gentleman, for whom I have a huge amount of time, is right about work experience, and he must not let anyone on his side push him off that, but what he has just said is slightly wrong. He said that we are promulgating work experience and the Opposition are talking about a jobs guarantee, but we are not promulgating it; a quarter of a million young people have already gone on our work experience programme, and over 50% of them have gone into work. He is quite right that not all of them went into the businesses they did the work experience with, but many of them have gone into other jobs almost immediately. What is really exciting is that although many businesses said, “We’ll do the work experience, but we can’t guarantee a job,” a significant number of them, once they had seen the young person for a few weeks, came back and said, “I tell you what: we’re going to create a job around this individual, because we think they’re going to help our company.” That is what work experience has done. I simply say to Opposition Members that they should embrace that, not oppose it, because their Front Benchers have opposed work experience, and that is a big problem.

[Pamela Nash (Airdrie and Shotts) (Lab)]

In my experience the Opposition do support work experience, and there are many examples of that. Does the Secretary of State realise that there are already local examples of programmes similar to that which we are today proposing nationally? For example, my local authority, North Lanarkshire council, is about to announce that 5,000 people have got into work as a result of a similar project. Permanent private sector jobs have been created as a result of a six-month wage subsidy.

[Mr Duncan Smith]

But because of what we are doing with local authorities, working through the local enterprise partnerships, and with all the local provision that we have been pushing down, if they want to create additional programmes, Jobcentre Plus will support them through that. We have to be slightly careful, when starting to calculate figures, about one group coming on the back of others, because we will not know how many of those went to work as a result of Jobcentre Plus and how many as a result of the programme. If local authorities, rightly, want to help, we are all in favour of supporting them with extra help.

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Mr Duncan Smith]

I will make a little progress before giving way again.

The issue still remains for the Opposition which I thought this debate was about. I thought they would have a fantastic motion that answered all these questions, but they do not. These are the biggest questions: which businesses have signed up to the jobs guarantee, and how many jobs have they guaranteed to provide? In the absence of any answers, I will quote the OECD’s view of these kinds of make-work schemes. For the past 20 years it has demonstrated that such schemes are expensive and counter-productive. Its jobs strategy states that having

“large deadweight losses, displacement and substitution effect… direct job creation in the public sector has been of little success in helping unemployed people get permanent jobs in a more open labour market”.

That is probably the final word on the structure of Labour’s jobs guarantee.

Let us look at how the Opposition propose to fund their jobs guarantee, which I had thought would be dealt with clearly today. The right hon. Member for East Ham said something about it, but they seem to have gone back to their original position. Her Majesty’s Treasury has estimated that for 2015-16 the jobs guarantee would cost £1.54 billion for the over-25s and a further £540 million for the under-25s, so over £2 billion in total for only one year. To pay for it, the Opposition have proposed two measures.

First, they would restrict pensions tax relief for earnings over £150,000. Let us deal with that first. They originally committed that funding for the purpose of increasing working and child tax credits, so they seem to have done a little dodge. I have no idea whether they still plan to use it for that, but I am sure we will find out. Apparently it will now pay for the jobs guarantee. Never mind the fact that it would take—this is a real estimate from those who know—until 2018-19 to implement, leaving three years with no funding to cover the annual cost of £1.5 billion. They cannot just wave a magic wand and say, “The money’s there”; they also have to position the money at the right time. The right hon. Gentleman was forced by the shadow Chancellor to say that there would be no borrowing. Well, that looks to me like a chunk of borrowing.

That is even if the proposal raises any money at all, because the CBI has called it “simply unworkable”, the National Association of Pension Funds has warned that it is a “disaster in the making”, and the Institute for Fiscal Studies has said that it

“would be expensive to administer… unfair and would inappropriately distort behaviour.”

The Opposition would create a problem in the pensions industry and damage people’s savings, and all to fund a programme that simply would not work.

The second source of funding is repeating the one-off bankers bonus tax. I have to tell the right hon. Gentleman that no matter how many ways he cuts this, Labour has spent this money 11 times over. That is the 11 that I can find; I am sure my hon. Friends will find a lot more. There were proposals on reversing the VAT increase, at £12.75 billion; reversing tax credit savings, at £5.8 billion; more housing, at £1.2 billion; reversing the child benefit savings, at £3.1 billion; more capital spending, at £5.8 billion; and more child care, at £800 million. It is almost like one of those game shows—“Come on down, there’s another box to be opened and we’ll spend that money as well.” These sources go on and on and on; it is quite fascinating. Yet it has been said time and again that this is a one-off tax. When in office, Labour’s last Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), said of the idea of repeating this tax that it is

“a one-off thing…because the very people you are after…will find all sorts of imaginative ways of avoiding it in the future.”

He had no time at all for the idea of a repetition of Labour’s bankers bonus tax. So there we have it: the cobbled-together nonsense of Labour’s jobs guarantee, destined to fail and wholly and utterly unfunded.

[Jim Sheridan]

On additional funding for the unemployed—I say this as someone who was unemployed for three years, so I know it is not a nice place to be—would this Government consider channelling any retrospective payments from people who have been found guilty of avoiding tax into fighting youth unemployment?

[Mr Duncan Smith]

Let me say to the hon. Gentleman that in my time before politics I was made redundant, and I know what it is like not to know where the next pay cheque is coming from. I agree with him: it is a terrible place to be, and no one, if we can avoid it, should be there. That is why we have said that, through the long-term economic plan, we have to make sure that the economy is stable and on a good, long trajectory, and that we get our debts and our deficits down. As regards chasing people who are avoiding tax, this Government, as my right hon. Friend the Prime Minister said today at the Dispatch Box, have done more to close tax loopholes than any other Government previously.

[Jim Sheridan]

Will you do this today?

[Mr Duncan Smith]

Hypothecated funding is a matter for the Chancellor, as the hon. Gentleman knows, but I will certainly pass his views on. Many of us in this House loathe the idea of some people being able to hide their money away. We think that hard-working taxpayers deserve a fair deal, and the unemployed do too. I am seeing the Chancellor later today, and I promise the hon. Gentleman that I will pass his comments on to him.

As regards Labour’s proposed programme, with the best will in the world, I say to the right hon. Member for East Ham that he could have done better on the back of a fag packet, having had weeks, months and years to figure it out. I suspect Labour Members had to come up with something for this debate and are therefore doing this now. This slot was probably destined for a debate on the health service, but because they have made such a Horlicks of that, they have decided to throw in this business instead.

Let me deal with the success of the employment programme and talk about what we in this Government have done. Universal Jobmatch has transformed how almost 7 million people look for work, with over 4 million average daily searches. Work experience is one of this Government’s great successes for young people, with half of participants off benefits at a twentieth of the cost of the future jobs fund. The Work programme is helping more people than any programme before. Over 1 million have spent time off benefit, and almost 640,000 have got a job, 368,000 of whom have found lasting work, with a third of them staying in a job for 18 months or longer. It is now the most successful back-to-work programme of all those that have been put forward. Performance is exceeding all our original expectations and is better than under any previous Labour programme.

Let us look at how much better the Work programme is than some of the programmes Labour had. More than twice as many people moved into work in the first two years under the Work programme as under the flexible new deal. Nearly three times as many people have been in a six-month job as under the flexible new deal. For recent and new employment and support allowance claimants, Work programme job outcomes are exceeding expectations and rising all the time, compared with Labour’s Pathways to Work programme—never rolled out fully—which had no statistically significant impact on employment outcomes and was assessed by the National Audit Office as poor value for money. The truth is that we are now doing more for people who have difficulties getting into work than the previous Government ever did.

Does the hon. Member for Edinburgh East (Sheila Gilmore) still want to intervene, as she has been trying to catch my eye? No, she is on her computer. I hope she was writing up a glowing review of my speech; I look forward to reading it on Twitter in due course. I give way to her.

[Sheila Gilmore]

The Secretary of State always says of the work experience programme that about half of young people who take part in it go into work. His own Department’s evaluation—I do not know whether there has been a more recent one than 2012, but I have not seen it—suggested that following the work experience programme there was a difference between a participant group and a non-participant group, but it was only a small one. Does he not agree that nearly half of those who did not participate in work experience also went into work?

[Mr Duncan Smith]

It is always a pleasure to listen to the hon. Lady. She has tortuously wound her way around all these figures, but I come back to the simple point that the work experience programme, at a twentieth of the cost of the future jobs fund, ensures that over 50% of those who enter it will go into work. By the way, I did not invent the work experience programme—it was invented for me by somebody on the floor of the job centre because young people were saying, “Can’t we have more time for work experience than the last Government allowed us to have?” I do not know if she has seen the really interesting figure that the claimant count in her constituency is down by nearly 50%. That is a very good story. I know she will want to write that up as well, as an excellent statistic.

The record jobs figures under this Government stand as a testament to our success, with more people in work than ever before, up by 1.75 million, and more people in private sector jobs than ever before, up by nearly 2.2 million. Since 2010, two thirds of the rise in employment has gone to UK nationals—the Opposition never achieved this—thereby reversing the damaging trend of Labour’s last five years in office, when the majority of jobs went to foreign nationals. What is more, we now have more women in work than ever before, more lone parents in work than ever before, and more older workers than ever before—and employment for young people and disabled people is up on the year as well.

Let me now deal with the suggestion that these people are moving into part-time, low-quality work. That is not true. The Opposition constantly harp on about a figure that has no basis in fact, so let me give the facts. Full-time employment is up by over 1.3 million since 2010—over 80% of the rise in employment in the past year alone. Permanent employees are up by 1 million since 2010—nearly 80% of all people in work. Three quarters of those in employment since 2010 have come from managerial, professional or associate professional jobs. The Opposition constantly put about the nonsense that there are nothing but zero-hour, no-value, low-skilled jobs, but that is simply not true.

[Adam Afriyie (Windsor) (Con)]

It seems to me that with the DWP reforms we have brought through and with the changes to the tax system and regulation, we have created the greatest job creation engine this country has ever seen. Does my right hon. Friend agree that this motion is completely redundant, just as the Labour party’s measures in the previous Government created so many redundancies?

[Mr Duncan Smith]

I do agree. I also remind my hon. Friend that my hon. Friend the Member for Nuneaton (Mr Jones) said that under the previous Government youth unemployment did not, as the right hon. Member for East Ham claimed, rise only because of the great global recession that somehow crept up on the previous Government, but was rising steadily from 2004 all the way through.

[Mr Marcus Jones]

Opposition Members often say that all the jobs being created are zero-hours contracts, as in the election literature they put through people’s doors. Can my right hon. Friend say what the prevalence is of zero-hours contracts in the workplace?

[Mr Duncan Smith]

I can tell my hon. Friend exactly—it is 2% of people and 4% of total contracts. Moreover, this Government are moving to get rid of the exclusivity that we think is an abuse in zero-hours contracts—something that Labour never did anything about when in office. The truth about zero-hours contracts, limited as they are, is that they give some people, such as many of those with caring responsibilities, the flexibility of picking work when they need it. We are closing down on the abuses, and they are reducing. By the way, the previous Government never did anything about that. I am reminded—I should have remembered—that the previous Government said they were perfectly at ease and happy with people getting filthy rich, so the point is that we should not expect too much from Labour Members.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

I hope that my right hon. Friend is making progress with the Leader of the Opposition in convincing Doncaster council not to use so many zero-hours contracts, because it is profligate in doing so.

[Mr Duncan Smith]

With the Labour party, it is always a case of “Look at what I say, not what I do”, because we invariably find that Labour party members out in the country are doing something fundamentally different. Let me finish my speech, because I am conscious of the time, Mr Deputy Speaker.

The Labour Government presided over a great recession—the great Labour recession—which cost the British economy £112 billion, and cost 750,000 people their jobs. We should never forget that their recklessness with the economy cost ordinary families up and down the country very dear in terms of lost jobs, lost money and lost hope. On their watch, youth unemployment increased by nearly half, long-term unemployment almost doubled in just two years, 5 million people were on out-of-work benefits and no one worked at all in one in five households. When we entered government, one in five households had nobody in work: that was the previous Government’s record.

I believe that this Government have got Britain back to work, with unemployment down, youth unemployment down, long-term unemployment down and the lowest rate of workless households on record. We have a proven track record on delivery: departmental baseline spending is down £2 billion; reforms are set to save £50 billion overall next year; and there has been a real-terms fall in welfare spending for the first time in 16 years. Over this Parliament, welfare spending has grown at the slowest rate since the creation of the welfare state.

Above all, our real success is not about figures—in hundreds of thousands, millions or even billions—but about the fact that each and every job created means a life transformed. Each job gives a young person a real sense of self-worth, gives an adult new hope, and gives a parent a sense of security for themselves and their children. That is what the Government stand for, and what we have delivered—hope and security for families up and down the country.

[Several hon. Members]

rose—

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 26th January 2015 Commons Chamber

[Stephen Mosley (City of Chester) (Con)]

3. What recent assessment he has made of the effectiveness of the innovation fund for young people.

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

I set up the £30 million innovation fund four years ago to test cutting-edge projects for helping disadvantaged young people: some of those most at risk of becoming NEET—not in education, employment or training—or falling in with gangs. Using social impact bonds, these projects are now proving they can deliver a return on the investment; 16,600 positive educational and employment outcomes have been achieved, each one an improvement in a young person’s prospects.

[Stephen Mosley]

One key factor of the innovation fund is the use of social investment. How effective does my right hon. Friend think social investment has been? What future does he foresee for social investment in future projects from his Department?

[Mr Duncan Smith]

The interesting thing about this development, which I hope has support on both sides of the House, is that these social investment bonds have advanced dramatically in the past four years, making the UK now a world leader in this, with lots of different Governments coming to ask how to implement it. With the tax relief that we have granted to social investment bonds, the future funding in many of these projects will involve more and more decisions being able to be taken by local government; it will be able to set individual projects up and fund them, without recourse to government, but with a return. So we will be paying for things that happen rather than things that might happen—that is the key.

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

But ending the wage incentive part of the Youth Contract eight months early was a tacit admission of its failure. Only 10,000 young people completed the contract, whereas 160,000 were budgeted for. Can the Secretary of State tell us what went wrong?

[Mr Duncan Smith]

What went wrong was the Youth Contract, full stop. The money used for the Youth Contract actually went to invest in people who had greatest disadvantage, and when we set up our other programmes, including the Work programme, we outperformed anything the Youth Contract had. Furthermore, work experience was not available to young people under the previous Government for any great length of time, whereas we have had more than 50% of people on those work experience programmes go back to work. More young people are in work now than when we came into office; they were left by the disaster of the previous Government.

[Stephen Timms (East Ham) (Lab)]

Young people remain at a distinct disadvantage in the labour market. The statistics published last week show that for the third month in a row overall unemployment came down but youth unemployment rose. Does the Secretary of State have any new proposals to tackle this problem of currently rising youth unemployment?

[Mr Duncan Smith]

I do not know whether the right hon. Gentleman has actually looked at the figures correctly. He will find that under this Government youth unemployment has fallen; there are now more young people in work; and youth unemployment is at a lower level than the previous Government left us in 2010, after they crashed the economy. I might also remind him that they used to put young people on short-term programmes. As soon as they did that, they took them off the register and started them as though they had begun looking for work then, rather than being six months in. The previous Government gerrymandered the figures and they still failed.

[Stephen Timms]

At the time of the general election the rate of youth unemployment was two and a half times the overall level of unemployment. Since then, the relative position of young people has steadily worsened, to the point where last week the youth unemployment rate was 2.9 times the overall rate of unemployment. Judging by his answer, the Secretary of State may not have noticed that youth unemployment is currently going up. Is it not now high time for a compulsory job guarantee, so that young people have the chance of a job at the start of what should be their working lives, instead of spending years on unemployment benefit?

[Mr Duncan Smith]

The reality is quite different from that set out by the right hon. Gentleman. Youth unemployment is down 171,000 on the year—nearly a fifth; 7.1% of all young people are unemployed and not in full-time education; and the number of young people on jobseeker’s allowance has fallen every month for that past three years. The truth about this is quite the opposite to that he suggests. The previous Government left us with young people unable to get work experience and unable to get jobs, and a real stagnation problem, with young people not being able to get the skills necessary. Youth unemployment is now falling. Youth employment is rising—[Interruption.] No; since the last Parliament youth unemployment has fallen. Youth employment is rising. Once in a while it would be nice if the right hon. Gentleman got up and said, “You know what, the last Government got it wrong. Thank you for getting it right.”

--- Later in debate ---

[Sir David Amess (Southend West) (Con)]

16. What recent steps he has taken to stop welfare tourism.

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

Citizens of the European economic area who choose to come here without a job to start will not be able to access universal credit. We have introduced several restrictions to benefits to ensure that our welfare system focuses support on those who are contributing to the economy. These include strengthening the habitual residency test, banning access to housing benefit for new EEA jobseekers, and introducing a three-month residency requirement for income-based jobseeker’s allowance.

[Rosie Cooper]

The Secretary of State originally predicted that 1 million people would be on universal credit by April last year. The latest figure is 26,000. I understand that last October he predicted a figure of 100,000 by May—does he still believe that?

[Mr Duncan Smith]

The universal credit programme is working well. It is now completing its roll-out to all the areas in the north-west, to all singles, couples and families. In the next month, it will start rolling out across the country, and that will bring universal credit to more jobcentres. By the time that process is completed, one in three jobcentres will be running universal credit. The key thing is to make sure that we get this vital reform, which helps people to get back into work faster, that we land it correctly and safely, and that we learn the lessons of the past when things like tax credits, brought in under the previous Government, were absolute disasters wasting billions of pounds in lost money and fraud.

[Sir David Amess]

Does my right hon. Friend agree that it is quite wrong for people who are working in this country on a temporary basis to be able to claim benefits for their dependants in their country of origin, when one considers the cost of those benefits in relation to the differences in the cost of living?

[Mr Duncan Smith]

Yes; changing that situation is something that the coalition has set out to achieve. I remind my hon. Friend that when we came to power, the last Government had pretty much left an open door for access to benefits. People were able to claim jobseeker’s allowance pretty much on arrival. There was a habitual residence test, but it was very weak. We strengthened it and stopped people claiming for more than three months. People will not be able to claim housing benefit and they must have a right of residence. If they do claim, they must show that they have a minimum earnings likelihood. Anything below that will not count as a job. We are tightening up the system after the mess that we were left by the last Government.

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

Does the Secretary of State really feel that it is sufficient for people to have to work in this country for only three months before they can claim out-of-work benefits?

[Mr Duncan Smith]

I will take that as a peculiar compliment. We inherited a system in which people did not have to work for any time to claim jobseeker’s allowance. Within the existing rules, we will not pay for the first three months. If people are unemployed, they will be paid for three months. After that, they will be asked to leave. That is a much tighter position than the one we inherited. I, of course, would like to take it further. As the Prime Minister set out clearly in a recent speech, he believes that there should be years of contributions before someone is eligible to claim benefits, be they tax credits or jobseeker’s allowance. When the Conservative party gets back into power, we will implement that.

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

I, too, welcome the Prime Minister’s announcement in November that a future Conservative Government will have the toughest regime in Europe on limiting migrants’ access to our benefits system. Will the Secretary of State outline for the House the steps the Government have already taken to ensure that migrants come here to work and contribute, and what he has done to deter people from benefit tourism?

[Mr Duncan Smith]

Exactly what I have mentioned. The mess that we were left by the last Government left little or no restrictions on anybody coming in, so the UK became a draw for people who wanted to claim benefits and be out of work, because it was a better option. We are tightening that up. We have stopped a number of things, such as housing benefit, and have shortened the time on jobseeker’s allowance. Tax credits are moving into line with that as well. As I said, when we are re-elected at the next election as a Conservative Government, we will tighten it up even more.

[Mr David Jones (Clwyd West) (Con)]

11. What assessment he has made of the reasons for differences in the unemployment rate in the UK and in other European countries.

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

The UK has the fifth lowest unemployment rate in the European Union, and unemployment has fallen by more than in any other G7 economy in the past year. Thanks to welfare reform and our long-term economic plan, businesses are creating jobs and 1.75 million more people are in work than in 2010.

[Mr Jones]

Does my right hon. Friend agree that the most recent EUROSTAT figures, which show that employment in the UK is rising at twice the rate of any other European nation, underline the importance of maintaining a benefits system in which people are always better off in work than not in work?

[Mr Duncan Smith]

Yes, I agree with my right hon. Friend. The reality of what he raises is exemplified by the fact that the Opposition still cleave to the idea that they would copy the French way of doing things in respect of the economy. It is worth reminding them that in France—this is the system that they think is really good—the employment rate is down at 64%, the unemployment rate is 10.3% and the youth unemployment rate is up at 25.4%, which are all massively worse than here in the UK.

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

But it remains the case that youth unemployment here is much higher than in countries such as Germany, Austria and Norway. Does the Secretary of State agree that we will not tackle that until we tackle the scandal of the quality of technical and vocational education in our schools and colleges?

[Mr Duncan Smith]

I agree with the hon. Gentleman about the need to ensure that much greater emphasis is placed on vocational education in schools, including to get people ready for apprenticeships. The Government have done a huge amount towards that. There are 1 million new apprenticeships. The report that came out when we first arrived said that there had to be a greater emphasis on that. None the less, our youth unemployment rate is remarkable when compared with the average in Europe and, apart from Germany and Holland, is significantly lower than anywhere else.

[Alistair Burt (North East Bedfordshire) (Con)]

In May 2010, the claimant count in my constituency was 1,702. This month, it is 684. In a European context, will my right hon. Friend help me? Is that fall in unemployment in my constituency due to the increased vibrancy of a diversified rural economy such as mine, or the absence of a plan long terme économique elsewhere?

[Mr Duncan Smith]

My right hon. Friend puts his finger on it. The reality is that the Government have implemented a long-term economic plan. In that long-term economic plan, welfare reform plays a critical part in ensuring that people are ready and available for work. Our labour market is far more deregulated than that of many other countries in Europe. It is noticeable that today, in the light of the elections in Greece, everyone is talking about austerity, but the big problem in Greece, as in other countries, is that the labour market is so rigid that very few companies want to invest, because there is no flexibility whatever. That is why they come to the UK—this Government have a plan that works to help them to get profitability.

[Mr Philip Hollobone (Kettering) (Con)]

Unemployment in the Kettering constituency has halved since May 2010. What does my right hon. Friend think would have happened to the rate of unemployment in Kettering had Her Majesty’s Government followed the economic policies of France, which apparently are a blueprint for Her Majesty’s Opposition?

[Mr Duncan Smith]

That is the point. Opposition Members do not like it very much, but let us follow that theme for a minute. The Leader of the Opposition extolled the virtues of the alternative to the long-term economic plan—the French plan, which was no economic plan as far as I understand it. We have now seen French unemployment go through the roof, employment rates fall and economic activity stagnate. London is now something like the sixth or seventh-largest French city because so many French people are coming to the UK because—we welcome them—they like to look for jobs.

[Yvonne Fovargue (Makerfield) (Lab)]

12. What recent estimate he has made of the number of people whose housing benefit has been reduced as a result of the social sector size criteria.

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

17. What recent estimate he has made of the number of people whose housing benefit has been reduced as a result of the social sector size criteria.

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

The latest published figures for August 2014 showed that the number of people affected by the removal of the spare room subsidy has fallen by 75,000. This follows a general downward trend, bringing the number of those affected down from 547,000 in May 2013 to 472,000.

[Yvonne Fovargue]

In the Wigan borough, 3,386 people have had their housing benefit reduced due to the bedroom tax. Wigan & Leigh Housing estimates that it will take over seven years to re-house those who wish to downsize. Many of those affected have contacted me because, despite working, they are struggling to pay bills and feed their family. What is the Secretary of State’s estimate of the average income of those subject to the bedroom tax?

[Mr Duncan Smith]

In previous speeches and today, the hon. Lady has talked about the fact that there are just not enough properties in her constituency to enable people to downsize. In fact, I understand that there are 2,700 people subject to the under-occupancy spare room subsidy, but something like 15,000 one and two-bedroom houses in the social sector properties in Wigan. There are many houses—many more than she might have laid out.

My point to the hon. Lady and the Opposition is that, in their opposition, they need to explain how they will afford it. The policy is saving some £500 million a year. It has already saved £830 million to date. They have no plans for substituting that, which means that their economic record is in tatters. After all, Labour, when in power, was the party that introduced that very policy for those in social sector private rented tenancies.

[Jack Dromey]

Once in every generation, there is a tax so bad that the next generation looks back and asks, “Why did they do it?” Such was the poll tax, now the bedroom tax. Will the Secretary of State tell us how many victims of domestic violence liable to the bedroom tax have had their sanctuary rooms deemed as spare rooms?

[Mr Duncan Smith]

The hon. Gentleman knows that that is just another attempt to start scaremongering about the whole idea—[Interruption.] Yes, it is. What has been disgraceful about the Opposition is that they have spent their time scaremongering up and down the country about this issue. He knows very well that local authorities and the police work together, they have discretionary housing payments to deal with that matter at a local level and they can resolve it. More than £380 million has been granted to local authorities for discretionary payments.

I have looked at what the hon. Gentleman said previously about the number of houses available. He said that some 5,000 people are suffering due to the under-occupancy rules because they had nowhere to move, but I remind him that there are 63,500 one and two-bedroom properties in Birmingham. He yet again mis-states the reality, which is that this has to work. I remind him again that it was his Government who introduced this for the private-rented social sector.

[Helen Goodman (Bishop Auckland) (Lab)]

The Secretary of State is too complacent. The fact is that when a family pays the bedroom tax, the whole family suffers. The actual number of people affected is much higher than the numbers he quoted, at 750,000. Making families move is unkind, especially when it disrupts children’s education. There are not enough smaller properties, as colleagues have said, and people cannot move. So why did not the Government vote with Labour before Christmas to abolish the bedroom tax?

[Mr Duncan Smith]

The hon. Lady, like many on the Opposition Benches, is living in cloud cuckoo land. They invent a whole series of issues about this. First, we get these lines about the fact that evictions are up. In fact, evictions are a very small proportion and are down. They say that rent arrears are up, but they are stable and have not risen. They say that homelessness is up, but it is actually down. The reality is that every time the Opposition talk about this subject, they invent these issues. But never once in the whole of the time they were in government—or even now—did they bother to talk about the fact that their policies meant that house building fell to the lowest level since the 1920s and that many people live in overcrowded accommodation, thanks to Labour’s failure, its crashing of the economy and its shocking mismanagement of housing.

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

13. What recent steps he has taken to support young people seeking employment or training.

--- Later in debate ---

[Kerry McCarthy (Bristol East) (Lab)]

15. What plans he has to respond to the recent recommendations of the all-party parliamentary group on hunger and food poverty.

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

The report is a serious contribution to an important debate, which recognises that the reasons behind the demand for emergency food assistance are complex and overlapping. I have already responded and will continue to review the recommendations and engage with the inquiry as it takes its proposals forward. That is an undertaking I gave at the last Question Time. My Department has already agreed to do more to raise awareness of short-term benefit advances, including advertising in jobcentres so that everyone can see it.

[Kerry McCarthy]

The report showed that about a quarter of a million people last year used food banks because of benefit sanctions. I have a constituent who showed me evidence that he applied for hundreds of jobs, but, because he applied for one by handing in a CV in person rather than through the website, he was sanctioned for three months without money. Does the Secretary of State agree that that is completely outrageous?

[Mr Duncan Smith]

I am afraid I simply do not recognise the kind of case the hon. Lady raises. She knows that if she wants to raise a case directly with me or with the Minister for Employment, my right hon. Friend the Member for Wirral West (Esther McVey), she should do so, but there is no such rule in jobcentres or in respect of sanctions. [Interruption.] Yes, I am very happy to see the hon. Lady, but let me bring her to the wider issue, which is simply this: the report made it very clear that there are multiple issues. What the Opposition have tried to do non-stop, as they have with the spare room subsidy and other matters, is try to scare everybody up and down the country into believing that there is a magic wand. Let me remind her that under her Government the number of food banks doubled. The reality is that long before the coalition came to power, they were already delivering a failed economy and forcing people out of work and into difficulty beyond whatever we may have done.

[Sir Tony Baldry (Banbury) (Con)]

One of the reasons for using food banks—a reason given by those who use them—is delays in benefit payments. Am I right in thinking, however, that the average time for sorting out benefit payment disputes has been reduced to under two weeks?

[Mr Duncan Smith]

My right hon. Friend is correct. The reality is that delays in benefit payments have fallen under this Government. There are now fewer delays. The Opposition say that we need to speed up the payment of benefits. I remind them that under Labour benefits were not paid until two weeks after the claim, so unless they are now saying that benefits should be paid earlier than that, I really have no idea what the Opposition’s policy is on this. We pay benefits as quickly as possible. There is no determination to delay payment. Jobcentres and benefit offices do their level best to ensure that people get money when they need it, and hardship funds are available if anybody has any difficulty.

[Mr Speaker]

We shall squeeze in one more. I call Sheila Gilmore.

--- Later in debate ---

[Kerry McCarthy (Bristol East) (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 welcome the new cross-Government report on drug addiction which shows that, for the most complex cases, residential treatment delivers a rate of positive outcomes nearly three times better than community treatment. Instead of not prioritising full recovery, as used to be the case, we are now getting people off drugs, into work and on the path to a better future, rather than leaving them languishing on methadone.

[Kerry McCarthy]

In answer to my earlier question, the right hon. Gentleman talked about the number of food banks under the last Labour Government. In the last year of that Government, there were 41,000 food bank users, but the number is now nearly 1 million a year—a figure that just before Christmas he referred to as “tiny”. What do we have to do to get him to accept that food bank use and the scandal of food poverty in this country are his responsibility and that he needs to do more about them?

[Mr Duncan Smith]

As we have always said, these are complex issues. We welcome the fact that voluntary sector organisations provide for and support people in their community, through food banks and often with clothing and various other things. Having had the allowance passed down to them, many local authorities now use it to engage with food banks and send people there and to other organisations providing food and so on. Instead of simply saying that everything is the fault purely of the Government, the hon. Lady should take stock of one thing: it was her Government who crashed the economy and made people worse off. [Interruption.] I know the Opposition do not like to hear it, but they should do the maths: destroying the economy leaves people worse off. By getting more people back into work, the Government are helping them get beyond the need for food banks and other support.

[Sir David Amess (Southend West) (Con)]

T3. Will the Minister ask officials to look compassionately on benefits arrangements for people with mental health difficulties? So often, when these people are called for assessment, it is not obvious that they really do have problems.

[Rachel Reeves (Leeds West) (Lab)]

In 2011, the Secretary of State said that, by April 2014, 1 million people would be receiving universal credit. With delays and write-offs, that date has been and gone, so will he answer the question that my hon. Friend the Member for West Lancashire (Rosie Cooper) asked, but which was not answered, and give a guarantee to the House that he will meet his latest target of just 100,000 people receiving universal credit by May 2015?

[Mr Duncan Smith]

I say to the hon. Lady that we intend to, and I repeat the answer I gave earlier. I know she wants to dance around on these things, but she has to say whether she genuinely supports universal credit or whether she plans to get rid of it, as that seems to be becoming Labour party policy.

[Rachel Reeves]

We have been consistent: we support universal credit, but not throwing good money after bad, and we will go ahead with it only if the National Audit Office signs it off and says it will save more money than it costs, which is far from clear at the moment.

Last week’s figures show that the glacial pace continues, with still only 26,940 people receiving universal credit. At this rate of progress, it will take 1,571 years before it is fully rolled out. The Secretary of State protests that it would be riskier to go faster, but he has only himself to blame for the undeliverable targets he set and the unrealistic claims he made for this flagship policy. Is not the truth that, having failed to deliver the one policy that could have helped make work pay over this Parliament, all he is left with is a toxic legacy of rising child benefit and reliance on food banks and a ballooning benefits bill for people in work—a record of Tory welfare waste that, if I were him, I would rather run from than run on?

[Mr Duncan Smith]

I bet that looked good on a piece of paper when she wrote it. Honestly, here we go again Let me just remind the hon. Lady what her party left behind. It left a welfare budget that had “ballooned”—her word—by 60%. On tax credits alone, in the six years before the election, her Government spent £175 billion. They ballooned their welfare spending; unemployment rose; the economy crashed; people found themselves out of work—and her Government were to blame for all that. We have reformed welfare, and let me remind the hon. Lady that, at the end of this Parliament, we will have saved £50 billion from the bills Labour left us; housing benefit has come down; the number of jobseeker’s allowance claimants has fallen; and before she writes a script again, she might like to test it for accuracy. They—the Labour party—have failed.

[Jeremy Lefroy (Stafford) (Con)]

T5. What measures have been taken to ensure that sanctions are not imposed inappropriately on jobseeker’s allowance claimants—if they unavoidably miss appointments, for instance?

--- Later in debate ---

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

T4. The Secretary of State has said that local authorities are choosing to give funds to local food banks. I can assure him that Mayor Joe Anderson in Liverpool does not relish having to spend £138,000 to tackle food poverty locally in Liverpool. Will the Secretary of State sit down with representatives from the Trussell Trust to help him understand how more than 1 million people are being forced to go hungry by the actions of his Department?

[Mr Duncan Smith]

The truth is that many local authorities are using some of the devolved social fund, which is a very good idea, and engaging with food banks to enable people to access them in the early part of their claim. That is happening up and down the country, and I think that is quite reasonable; it is what local authorities do to help people as best they can. Perhaps the hon. Lady is opposed to that because she thinks everything should be run centrally from the Government here. Well, they made a mess of it last time.

[Paul Uppal (Wolverhampton South West) (Con)]

As my right hon. Friend will know, a crucial aspect of tackling youth unemployment is ensuring that people have the right skill set. Will she commend the work of City of Wolverhampton college, which is in my constituency and which—following a very difficult starting point—has turned around the lives of many young people by working with local businesses and creating opportunity and employment, and creating opportunities for the local university as well?

--- Later in debate ---

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

T10. The Secretary of State will be aware that 1,250 young people in my constituency are long-term unemployed. As well as helping those people directly, will he link much more closely with the Department for Education so that we can pre-empt those problems through good careers guidance, helping the pre-NEETs and ensuring that young people are job-ready at the age of 16, 17 and 18?

[Mr Duncan Smith]

May I first commend the hon. Gentleman for the work he has done? It has been a shining example both in his own area and nationally on early intervention and in setting up the Early Intervention Foundation. He has worked closely with Government and his own side. Yes, the answer is that of course we want to look at linking closely with the Department for Education, and I am very happy to discuss it with him further, but I also want to congratulate him on the hard work he does.

Benefit Cap Review

Iain Duncan Smith Excerpts

Monday 15th December 2014 Written Statements

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

Today I am publishing the Command Paper Cm 8985 “The benefit cap: a review of the first year”.

This review is published in line with the statement made by the then Minister for Employment on 1 February 2012. The document draws on a suite of evaluation commissioned by my Department, with key findings peer reviewed by the Institute for Fiscal Studies, or on its behalf by independent researchers.

The review also draws on the benefit cap official statistics and evidence previously published by my Department.

The extensive new evaluation material is attached to this statement and will also be published today on the gov.uk website.

The review brings together and summarises the messages across all of the evaluation publications. Key findings include:

There is consistent evidence of positive employment-focused behavioural change for claimants affected by the cap, including lone parents and carers. It is clear that the priority of claimants affected by the benefit cap is to find work and they are succeeding in doing so.

Many claimants were encouraged to find work as a result of the cap. Capped households were 41% more likely to go into work after a year than a similar uncapped group of households (those with benefit income just below the cap level). Among lone parents and families in London there was an even greater likelihood of capped cases moving into work than similar uncapped cases.

The benefit cap is a popular policy, 73% of the public support it in principle and 77% of the public agree that it is fair for households with no-one working to receive no more in benefit than the average amount working households receive after tax.

Very few capped households have moved house and where they have done so, the vast majority have moved locally. The benefit cap has led to little, if any homelessness and local authorities have coped well with its introduction.

I enclose below a brief description of each evaluation report:

Benefit cap: Analysis of outcomes for capped claimants

Analysis of administrative data carried out by departmental analysts and peer reviewed by the Institute for Fiscal Studies. This document examines the historical estimates of those in scope for the cap and effects of the benefit cap by comparison of outcomes of capped claimants and comparable groups. Evidence is presented on movement into work (proxied by Working Tax Credit exemption), moving house and movement out of scope for the cap.

Post-implementation effects of the benefit cap



An Ipsos MORI longitudinal telephone survey of capped households identified from the October 2013 Single Housing Benefit Extract (SHBE). The first wave of the survey was carried out with 1,200 claimants in February 2014, and the second in August-September 2014 with 468 of the same claimants. This work examines the behavioural change over time on employment, finances and housing.

In-depth interviews with people affected by the benefit cap

A Cambridge Centre for Housing and Planning Research (CCHPR) report based on interviews with 50 households affected by the benefit cap These households were identified from the same source as the Ipsos MORI surveyed claimants. This work explores coping strategies of households and changes in behaviour around work and well-being, mobility and household structure, income and well-being, and beliefs and expectations. It provides contextual information around themes explored in the survey.

Supporting households affected by the benefit cap: Impact on local authorities, local services and social landlords

This report by CCHPR draws on work in 10 case study local authorities (LAs); a survey of social landlords; and consultation with major lenders to the Housing Association sector. A variety of LA staff were interviewed in May-August 2013 and again in September 2014 in case study areas; 26 landlords were interviewed in 2013 and again after one year in these areas alongside 47 local agencies (including CAB and voluntary organisations); and variety of lenders were interviewed and provided written responses to the consultation in October 2013 and 2014. It provides information on how local services have been affected and how they are working with capped claimants.

Attachments can be viewed online at:

http://www.parliament.uk/business/publications/written-questions-answers-statements.

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 8th December 2014 Commons Chamber

[Simon Kirby (Brighton, Kemptown) (Con)]

4. What steps he has taken to increase support for heads of households in the workplace.

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

In October we introduced the family test, putting the family at the heart of policy making across Whitehall. From April 2015, for the first time ever, shared parental leave will enable both parents to retain a strong link with the labour market, allowing fathers to play a greater role in raising their children and helping mothers to return to work at a time that is right for them.

[Simon Kirby]

I thank my right hon. Friend for that answer. How many troubled families have been helped in Brighton, Kemptown?

[Mr Duncan Smith]

The troubled families programme has turned around the lives of over 69,000 families in England, and 120,000 had been helped by August 2014. In Brighton and Hove, the programme has worked with 675 families, changing their lives, and 417 families were turned around by August 2014, giving them a new start in life.

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

Did the Secretary of State hear the wonderful Professor Elizabeth Dowler on the “Today” programme this morning, when she very articulately said that what poorer people—those on low wages, working hard—want is a decent job paying enough to put food on the table and to pay the bills that have been going up inexorably?

[Mr Duncan Smith]

I heard that interesting debate between Professor Dowler and the head of the Oxford food bank, who talked about the wider ramifications of issues concerning access to food and food distribution, which is a matter for supermarkets. Of course, we want people to earn more. The key thing after the recession was to get people into work. We have got 2 million people back into work as a starting point, and we know that for every year in work a person’s salary rises on average by about 4%. Is there more to do? Yes, of course there is. We are looking carefully at that report and we will respond appropriately. I promise the hon. Gentleman that I take the report very seriously.

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

5. What the average time taken is for a decision on an award of personal independence payment.

--- Later in debate ---

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

6. What comparative assessment he has made of unemployment rates in the UK and other European countries.

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

The UK’s unemployment rate of 6% is now the fifth lowest in the European Union. In France, Italy, Spain and across the euro area all unemployment rates remain in double figures. In the past year alone, the UK has seen a larger fall in its overall unemployment rate and its youth unemployment rate than Germany, France, Italy and all the major G7 countries.

[Stephen Metcalfe]

Youth unemployment in my constituency of South Basildon and East Thurrock is down by 42%. Does my right hon. Friend agree that this jobs revolution would not have happened if we had pursued the policies across the channel, which were supported by the Leader of the Opposition?

[Mr Duncan Smith]

It is well worth reminding ourselves that when the present French President was elected, the Leader of the Opposition extolled his virtues and his plan for France. Right now, France’s unemployment rate is more than 75% higher than the UK’s and it has been rising faster, and its youth unemployment rate is 50% higher than the UK’s. If that is the prospect for the UK, I am sure I know what the result will be at the next election.

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

The fall in youth unemployment is very welcome, but it remains the case that our youth unemployment levels are much higher than many European countries, such as Germany, Austria and the Netherlands. Why will the Government not sign the European Union’s youth jobs guarantee?

[Mr Duncan Smith]

I do not know whether the hon. Gentleman was listening to what I said earlier. The reality for us is that our youth unemployment is falling faster than anywhere else. Only a few countries in Europe actually have lower youth unemployment. I am determined to drive it down to the levels that other countries have. Our rate of youth unemployment is a success, and I honestly do not think that bogus schemes—they cost a lot of money, but do not get anybody into work—will do anything but instil a certain amount of apathy among young people.

[Kwasi Kwarteng (Spelthorne) (Con)]

Does my right hon. Friend believe that the Government’s success on youth unemployment shows that our long-term economic plan is working?

[Mr Duncan Smith]

It is true. Here is the long-term economic plan—a record employment level of 30.8 million, up 1.75 million since 2010; over three quarters of the rise in employment since 2010 in full-time work, and two thirds of the rise in employment in managerial, professional jobs; and the number of British people in work up by over 1 million in the past four years, two thirds of the total rise in employment.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is the Secretary of State aware that in Bolsover and the village of Shirebrook, Mike Ashley has a different rule? Most of his employees at SportsDirect are on zero-hours contracts. It is time those contracts were abolished. That is what we will do if we get into power in May. Is he aware that the way in which employment agencies bring people over to work at SportsDirect resulted in one employee having a baby in the SportsDirect toilet on new year’s day? That proves that all the talk about the wonderful employment figures is totally wrong, because she should have been on maternity benefits and probably should not have been working on new year’s day. That is what is inflating the bogus employment figures. It is time he sorted it out.

[Mr Duncan Smith]

The reality is different from what the hon. Gentleman describes. The personal circumstances of individuals may be appalling and that needs to be dealt with, but people on zero-hours contracts represent 2% of the work force. We are moving to get rid of the one excess that makes them a problem, which is when people are blocked from taking any other work. That will not be allowed, but it was allowed under his party’s Government. The last point I would make about zero-hours contracts is that nearly 70% of those who have them prefer them, because they give them flexibility. That comes from independent polling. Zero-hours contracts were never attacked by his party’s Government and I do not think that it is his party’s policy to get rid of them. We think that they add something to the economy.

[David Rutley (Macclesfield) (Con)]

7. What steps his Department is taking to help unemployed people find work and start their own business.

--- Later in debate ---

[Mr John Leech (Manchester, Withington) (LD)]

10. What estimate he made of the potential savings to the public purse that would arise from implementation of the under-occupancy penalty; and what estimate he has made of the amount saved to date by that implementation.

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

Before our reforms, the taxpayer had been paying for 820,000 spare rooms. To date, the policy has saved about £830 million from the housing benefit bill, and the estimated savings remain the same: approximately £500 million a year in 2013-14 and 2014-15. Those figures have been ratified by the Office for Budget Responsibility.

[Mr Leech]

How many people have been forced to move from social housing into more expensive private rented accommodation, where the housing benefit bill has actually risen, and how much has it cost the Department?

[Mr Duncan Smith]

Each local authority is dealing with this matter differently. We have given a huge amount of support, through the discretionary housing payments, so some will move, some will not, and some have had their rents dealt with and have stayed in place. We have trebled the support to £345 million, and more than 392,000 DHP awards were made last year. As I said, each authority is doing it differently. For example, Sheffield city council is using DHPs to pay removal costs and provide decorating, while Southwark and Islington councils are paying additional incentives through mutual exchanging with overcrowded households. They are all doing different things, but they are basically getting it right. We were warned that arrears would rise, but actually housing association arrears are lower than they were last year.

[Stephen Timms (East Ham) (Lab)]

Research published last month by the Trussell Trust, Church Action on Poverty, the Church of England and another organisation—Oxfam—showed that more than half the rocketing demand at food banks was caused by problems in the benefits system, not least by the hated bedroom tax, but also by escalating payment delays, contrary to what the Minister for Disabled People, said a moment ago. Will the Tory welfare waste party now follow the U-turn its coalition partners took and realise that the bedroom tax has to go?

[Mr Duncan Smith]

The right hon. Gentleman went a long way round to get to his usual comment, but most of his facts are incorrect. Let us get the facts right on benefit processing. Each year, we provide £94 billion in working age benefits, and benefits have been paid in arrears for the last 25 years, so there is not an unusual delay. People are often confused about whether or not there is a delay. On benefit processing times, 93% are processed absolutely on time, which is up seven percentage points since Labour left office. The vast majority of the delays are pre-decisions awaiting additional evidence. Of course there is more we can do. I am looking at a report today, and I am going to be positive about ensuring that we can do other things. I can thus announce today that we are looking to new measures committing the Department to raising much more awareness, as was asked for, of the short-term benefit advances. We are doing that through websites, on posters and by providing information in jobcentres. We are testing that and hoping to roll it out at the beginning of the new year. We are also issuing fresh guidance to advisers to make sure that they constantly advise those at risk of the availability, should they need them, of interim payments.

[Steve Rotheram (Liverpool, Walton) (Lab)]

11. What steps he has taken to accelerate the processing of personal independence payment applications.

--- Later in debate ---

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

12. What estimate he has made of his Department’s expenditure on in-work housing benefit for migrant workers from the European economic area who have arrived in the UK within the last (a) six, (b) 12 and (c) 24 months.

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

The Government inherited a system that did not record the nationality of benefit recipients—we are changing that—and as a result local authorities currently hold limited data on housing benefit. However, based on the latest figures we have been able to glean, we estimate that some 420,000 EU families have been claiming child benefit at a cost of £650 million; and 317,000 EU citizens are claiming tax credits at a cost of £2.2 billion.

[Mr Betts]

Many of my constituents express a real sense of grievance when people come to this country and claim benefits to which they have not contributed. It is now the policy of the Government—and, indeed, of the Opposition—that before people can claim unemployment-related benefits, they should have to work in this country for a longer period. Should a similar principle apply to the claiming of housing benefit?

[Mr Duncan Smith]

In a sense, I agree with the hon. Gentleman. We have already introduced restrictions, right now, on access to benefits, tightening up the time scales so that people cannot get them for the first three months until they prove they are, in fact, resident here, and then only for three months after that. We have also stopped such people claiming housing benefit, but the hon. Gentleman will know that my right hon. Friend the Prime Minister has announced that we will want to go much further and ensure that people cannot claim benefits for four years until they can prove to have been resident here.

--- Later in debate ---

[Rehman Chishti (Gillingham and Rainham) (Con)]

T2. If he will make a statement on his departmental responsibilities.

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

Even with the employment record at a high this week, I welcome the autumn statement announcement of more help to enter work across the generations, for young or old. We are introducing intensive support for those not in education, employment or training claiming universal credit to prevent a wage scar developing any further, and we are piloting work placements for older workers, helping with the transition to a new job in later life.

[Rehman Chishti]

I thank the Secretary of State for that answer. I welcome the announcement that the compensation scheme for diffuse mesothelioma has paid out over £15 million in its first seven months. What plans do the Government have to ensure that all victims, such as those in the Medway towns linked to the Chatham dockyards, are made aware of their rights to this compensation?

[Mr Duncan Smith]

I thank my hon. Friend who, with some of his colleagues, has put in a huge amount of effort to bring this to the Government’s attention. The new scheme is already making payments, with compensation averaging £125,000 for this desperate and terrible disease. We know that there are many more victims and families to be encouraged to come forward, and the Government are promoting that through the regional press and work in administrations to publish it further. Should the need arise—and should it be possible—we will keep this under review with a view to possibly raising that as well.

[Rachel Reeves (Leeds West) (Lab)]

I welcome the Secretary of State’s comments that he takes today’s report on food banks seriously, especially after previously refusing to meet the Trussell Trust. However, does he recognise the reality depicted by the Archbishop of Canterbury who said that

“hunger stalks large parts of our country”,

often because of problems with the benefits system? Even being in work and earning money no longer appears to offer complete protection against extreme food poverty.

[Mr Duncan Smith]

I do take this report seriously. We have met the Trussell Trust—I have never refused to meet it—and I have met many others from a number of food banks. The reality is that of course there are things that need doing. It is a wide-ranging report that deals with food distribution as well, as I said to the hon. Member for Huddersfield (Mr Sheerman), and with supermarkets and the amount of food that is disposed of and how we can distribute that. There was a very good debate on Radio 4 about that, but of course, as I said to her colleague the right hon. Member for East Ham (Stephen Timms), one of the areas that they and our own internal report highlighted was what we do to raise awareness. Today I have announced that we shall be doing much more to raise awareness of interim payments for people who need them, particularly those who are in difficulty.

[Rachel Reeves]

I thank the Secretary of State for that answer, but frankly it is not enough. The findings of this morning’s all-party report are clear: the rise in food poverty is the consequence of the failing safety net and the worsening cost of living crisis. Just a few weeks before Christmas, it is shocking that more and more families are worrying about where their next meal is going to come from. Food banks have become the shameful symbol of this Tory-led Government, and yet another example of Tory welfare waste. Is it not about time that the Government started to put this right by raising the minimum wage, ending the abuse of zero-hours contracts, getting a grip on benefit delays, scrapping targets for sanctions and cancelling the cruel and unfair bedroom tax? If they do not do these things, is it not about time we had a Labour Government who will?

[Mr Duncan Smith]

The same old rubbish from the Opposition! May I just remind the hon. Lady that this Government have done a huge amount for the poorest? The tax allowance is up to £10,000 by April, saving £825 per year. Under this Government, the national minimum wage has gone up by 3%, more than earnings and more than inflation. There are free school meals for primary school pupils—1.5 million children will be getting them. The cost of living is coming down, too. Food prices are falling, and motor fuel prices are down. The hon. Lady wanted to make this a political issue, but I remind her of what the Archbishop of Canterbury said today: it would be wrong to play political games with such an important issue. Perhaps she should listen more and speak less.

[Sir George Young (North West Hampshire) (Con)]

T4. Does my right hon. Friend agree that as unemployment continues to fall, we have a golden opportunity to offer work to those with a learning or physical disability? Will he confirm that programmes such as Work Choice and Access to Work and the work of his Department’s disability employment advisers will continue to have top priority, so that we can make yet further progress?

--- Later in debate ---

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

T7. Last month, there was a debate in this Chamber on promoting the living wage. May I congratulate the Department for Work and Pensions on being the first Department in Whitehall to pay its staff and contractors the London living wage? Does the Secretary of State agree that we should encourage all Government Departments to follow suit?

[Mr Duncan Smith]

I thank my hon. Friend for his question. We had discussions about this quite early on with the cleaners and with those who are keen on the living wage, and I took the decision with the contractor to ensure that the London living wage was paid here in London. I speak to my colleagues every day and discuss this with them.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

T5. The South Ayrshire food bank is threatened with closure if it cannot find funding for premises for food storage and distribution by Christmas. Given today’s report on food banks, and given that the people involved are having to do this incredibly important work for the poorest in our society thanks to this Government’s nasty welfare policies, what practical support can the Government provide to those charities to support their important work?

[Mr Duncan Smith]

The Government give huge support to charities up and down the country. I do not know the specific case that the hon. Lady has mentioned, but if she wants to drop me a note about it, I would be happy to look into it and see whether there is anything more we can do to help. I have to say, though, that the Opposition go on and on about what we are doing with welfare and how it has somehow driven everybody into this situation, but in Germany 1.5 million people a week go to food banks. It has nothing to do with our welfare reforms, and Germany is a wealthier country. Food banks have grown around the world, but the latest figures from the OECD show that, in the category of the “difficulty to afford food”, the UK is almost alone in having gone down from the position that we inherited from the last Government. This Government are doing more to help poor people to get by and to get jobs, rather than leaving them parked on unemployment benefit like the last Government did.

[Pauline Latham (Mid Derbyshire) (Con)]

T8. Belper in my constituency won the Great British high street of year award recently. Like many of my colleagues, I spent Saturday visiting small businesses in my constituency to celebrate small business Saturday. Will my right hon. Friend outline the help that the Government are giving to small businesses to encourage them to employ more staff?

--- Later in debate ---

[Jenny Willott (Cardiff Central) (LD)]

T9. We have heard today about the use of food banks, and the right hon. Member for East Ham (Stephen Timms) mentioned a recent report from the Church of England, the Child Poverty Action Group, Oxfam and the Trussell Trust that highlighted the problems that arise when those who have been sanctioned lose all their benefits, including housing benefit. I understand that the Department for Work and Pensions is working on a fix to prevent housing benefit from being stopped when a claimant is sanctioned, but while that is being worked on, will the Minister consider sanctioning all but, say, 10p of jobseeker’s allowance or employment and support allowance now so that other benefits are not automatically cancelled and claimants do not need to use a food bank and end up in rent arrears while they are being sanctioned?

[Mr Duncan Smith]

I take all these reports seriously, and this one particularly. It is of huge interest. We want to do everything we can to make sure that people do not stumble into a process of sanctions. I am certainly willing to consider what the hon. Lady says, but the big thing that the Oakley review told us is that communications were critical, so advising claimants all the way along that they are about to be caught in this trap is vital to making sure that they do not get caught.

[Nia Griffith (Llanelli) (Lab)]

Absolutely. The Secretary of State has at last begun to recognise the problem, but I would like him to go a lot further on the issue of food banks and the fact that it is benefit sanctions, changes and delays that cause the majority of food bank users to have to go there. Will he do more and have a thorough review of all his Department’s responsibilities to make sure that nobody has to go to a food bank for those reasons?

[Mr Duncan Smith]

Of course I take the matter seriously, but it is rather ridiculous to assume that every single person who goes to a food bank does so because of what the Department for Work and Pensions does. The report today and other reports are clear. They show that these are often people with dysfunctional lives—people who have been caught in drug addiction and family breakdown, people who have a serious illness and are not claiming benefits and get into difficulty. All these ultimately have to be dealt with by the Department, but we have had a number of reviews, which have told us that there are some things we need to improve and we are working on that. The one thing that we have improved dramatically is late payments. There are fewer late payments than there were under the previous Government.

[Nigel Adams (Selby and Ainsty) (Con)]

I think this was referred to earlier. What has happened to the number of people in in-work poverty since my right hon. Friend has been Secretary of State?

--- Later in debate ---

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

My daughter is on a zero-hours contract as a care assistant, which suits both her and her employer as it allows her to choose when to work and when to study. Does my right hon. Friend agree that as long as there is no exclusivity clause, such flexibility in employment is helpful?

[Mr Duncan Smith]

Yes. My hon. Friend is right. Some 2% of people in work are on zero-hours contracts and the vast majority of them choose to do it because it suits them. Many of them have caring responsibilities and cannot commit to a full period of work, and some of those are in very professional jobs. It has been a success.

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

Is the Secretary of State really telling us that the Government have no responsibility at all for the acute financial hardship affecting so many people in our country? If so, no one believes him except Tory MPs. No wonder the Archbishop of Canterbury is so shocked by what he sees in Britain today.

[Mr Duncan Smith]

The Archbishop of Canterbury also said today that they should not play political games with a serious report. I agree. Of course, a Government take responsibility where that responsibility falls, but we do more than that. I am determined to do whatever it takes to make sure that far fewer people are in any kind of need and have to go to food banks. That is the vital issue. It is all very well, after four years in opposition, to lecture us sanctimoniously, as the hon. Gentleman does, when it was the Government whom he supported who crashed the economy and did not even take any responsibility for the disaster they brought to all the families who lost their jobs.

Welfare

Iain Duncan Smith Excerpts

Wednesday 3rd December 2014 Written Statements

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

The Government have made significant progress in putting the welfare state on a sustainable footing—undertaking major reforms to benefits and pensions, in order to restore fairness and restore public finances at the same time.

As part of this decisive action, at Budget 2014, the Government took the unprecedented step of introducing a cap on welfare. Today, the independent Office for Budget Responsibility (OBR) has confirmed that the Government are on track to meet the welfare cap commitment.

What is more, the OBR now forecasts welfare spending outside the cap to be £2.3 billion a year lower on average over the next four years, compared to Budget 2014—contributing to a reduction in the overall welfare spending forecast in each and every year of the cap forecast.

This is a marked improvement in exercising discipline over welfare spending. Spending in scope of the welfare cap accounts for £1 in every £6 spent by the Government. Yet in spite of this, it had never previously been subject to firm controls and was allowed to increase by £48 billion under the last Government, up from £70 billion to £118 billion. This was within an overall welfare bill that increased by 60% in real terms, rising even before the recession.

This Government’s welfare reforms are set to save nearly £50 billion over this Parliament. But for these vital changes, welfare spending was set to be that much higher still.

Instead, by actively managing welfare spending, we have halted the damaging trend of welfare spending escalating out of control. Overall welfare spending has been falling as a proportion of GDP since 2012, and last year fell in real terms for the first time in 16 years —even while spending on pensioners rose. This year, working age welfare spending is forecast to be £3 billion lower in real terms than in 2009-10. Testament to the success of the Government’s long-term economic plan, there have been significant falls in spending on unemployment, down over £2 billion since the recession; and on out-of-work benefits, back to pre-recession levels by 2015-16.

Today, the OBR’s first assessment of the welfare cap shows that the Government are forecast to meet the welfare cap commitment, in each of the four years of the forecast period from 2015-16 to 2018-19. The Government are living within the rules of the cap and there has been no breach.

The detail of that assessment is set out in full in the OBR’s “Economic and Fiscal Outlook December 2014”. This explains that the use of the margin in 2015-16 and 2016-17 is due to forecast reasons, not policy changes— the margin exists to allow for such fluctuations in the forecast. As the OBR has set out in the economic and fiscal outlook, its forecast for the volume of work capability assessments for employment and support allowance has been adjusted downward, and the forecast of the number of people who are likely to receive PIP has been adjusted upward. These, alongside other changes to the incapacity and disability benefit forecasts, have increased the forecast and result in use of the margin in 2015-16 and 2016-17, then falling below the margin in 2017-18 and 2018-19. However, overall, compared to its forecasts at Budget 2014, the OBR has revised welfare spending down by £1.3 billion a year on average up to 2018-19.

Importantly, these reforms are set to save money and deliver efficiencies in the long term. That much is shown by excess spending continually falling over the four-year period, bringing spending below the level of the welfare cap in 2017-18 and 2018-19.

Above all, this reflects the full effect of the Government’s action to bring spending back under control, arresting the growth that was once left to escalate. In future years, the aim must be to continue to exercise discipline and rigour in managing welfare spending—as this Government have committed to do.

Universal Credit

Iain Duncan Smith Excerpts

Tuesday 25th November 2014 Commons Chamber

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

I rise to make a statement about the new announcements on the roll-out of the next part of universal credit. Universal credit is a major reform, transforming the welfare state in Britain for the better and bringing £35 billion in economic benefits to the UK. Rightly, for a programme of this scale, the Government’s priority continues to be its safe and secure delivery. That is why, after the successful launch of the pathfinder in April 2013, a controlled expansion of universal credit has been taking place since last year, and in the north-west since June—first to singles, then couples, extending to families from today, across Birkenhead, Warrington, Bromborough, Upton, Wallasey and Hoylake.

In addition, universal credit is live in 81 jobcentres. National roll-out will follow from next year, bringing universal credit to one in three jobcentres by spring 2015. This careful, controlled expansion is the right approach, testing and learning as we go, avoiding some of the big bang failures that have dogged programmes in the past.

Already, universal credit is delivering major benefits. The early results show that the majority of recipients agree that it is easier to understand, easier to claim and provides a better financial incentive to work. I know that many colleagues have visited those centres and will testify to that. People are spending almost twice as much time looking for work as they were before and, above all, universal credit is on track to help them move out of unemployment more quickly, with those in the new system reporting that they are working more over a six-month period than those on jobseeker’s allowance.

Ensuring that work always pays, universal credit will generate up to an additional 300,000 people in work once fully rolled out. Some 3 million households are set to gain by £177 on average and 500,000 working families will receive more help with child care, with 100,000 of those in part-time work or mini jobs benefiting for the first time from entry into work. With the rate of child care support increased from 70% to 85% of costs, parents can receive up to £646 for one child, and £1,108 for two or more children. It is important to point out that that is the element of the roll-out in this particular area and that it covers all the hours that they will be in work—unlike the present system, which puts them only in certain batches of hours.

The number of people reaping those benefits is set to grow exponentially as the universal credit roll-out ramps up. The latest published statistics—up to November—show that nearly 40,000 have made a claim for universal credit, over 20,000 have completed that process and gone on to receive universal credit, and 17,850 are on universal credit currently. Illustrating the scale of the increase, nearly 6,000 claims were made in the month between October and November—over five times as many as there were in June, before we started the north-west expansion.

At the same time, we are bringing forward changes to legacy benefits. That is a ripple effect of the massive cultural shift that universal credit delivers. Around 1 million jobseeker’s allowance claimants have now signed a claimant commitment, which is part of universal credit, making unequivocal once and for all the deal between those looking for work and the taxpayers who support them. That is the massive cultural change that universal credit entails.

Our plans to deliver universal credit are on track, taking the same approach that has delivered success so far, rolling out once we are confident in our capacity and capability. The plans have been assured by the Major Projects Authority, the independent body advising the Government, just as the universal credit business case has now been signed off by the Treasury. The current business case assumes that the last claims to legacy benefits will be accepted during 2017. Following that, the stock of remaining cases will progressively decline, with the rest migrated to universal credit. Should there be no change in the labour market outlook or the pace at which claims are migrated, the current business case assumes that the bulk of this will be complete by 2019.

Our careful approach is set to deliver universal credit under budget, with implementation costs down from £2.4 billion to £1.8 billion, according to the latest figures. The value of the programme to date is unmistakably clear, I hope. Specifically, the investment in IT has a value that hugely outweighs the cost. There are over £130 million-worth of universal credit assets on the balance sheet, as agreed by the National Audit Office. That IT is being used day in, day out, and it will continue to be used even as we start to test an enhanced digital solution from this week. Our decisions will continue to be informed by that digital development.

The important point is that this is about de-risking the roll-out, which the MPA agrees is happening now as a result of this programme. I believe that that represents value for money. It is delivering the maximum benefit from this vital process of welfare reform, renewing work incentives, restoring fairness and rebuilding a welfare system fit for the 21st century.

[Rachel Reeves (Leeds West) (Lab)]

I thank the Secretary of State for his statement. However, the announcement in this morning’s press release confirms that universal credit is rolling out at a glacial pace. It is just another example of Tory welfare waste. We all know that simplifying and integrating our benefits system has the potential to help people into work and to progress in work. That is why the Opposition have always supported the principle of universal credit and want it to succeed, despite the Secretary of State’s best attempts to make a complete and utter shambles of it.

The Secretary of State has already informed the House that universal credit would be rolled out to families with children this year, but today’s statement tells us nothing more about how many families will be claiming it, in which areas of the country, and whether that will include families with someone in work or families with a disabled member. We were told that at the beginning of next year universal credit would be rolled out to all jobcentres across the country. That has now turned into one in three jobcentres by next spring, but we still do not know which jobcentres, in which parts of the country, whether those jobcentres themselves have been informed and, more importantly, whether local partners, including councils and voluntary sector organisations, which have such a critical role to play in making the roll-out work, have been informed.

However, there was one new revelation buried at the bottom of this morning’s press release: an admission from the Secretary of State that the delivery of this policy will now not be completed until the end of the decade, if then, with only “the bulk” of claimants on legacy benefits transferred by 2019. Let us remind ourselves what the Secretary of State said he would deliver four years ago so that we can see how far plans have gone astray. The White Paper presented to the House in 2010 set out a timetable for

“completing the transfer to Universal Credit by October 2017”.

Since then, the Secretary of State’s timetable has repeatedly slipped, despite repeated assertions that the project was

“on time and on budget”.

In November 2011 the Secretary of State said that he would have 1 million people on universal credit by April 2014. The truth turned out to be just 1% of that figure. The Government told us that they would have 1.7 million people on universal credit by May 2015, but his latest target is for just 100,000 to be on the system by then. As recently as this month, he was insisting that the transfer of all claimants to universal credit would be completed in 2018.

On 5 November, less than three weeks ago, he said in evidence to the Work and Pensions Committee, in response to a question from my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce), that

“we do envisage Universal Credit being complete by the end of 2018.”

Yet buried at the bottom of today’s press release we find the admission that only

“the bulk of this exercise will be complete by 2019”.

I hope that the Secretary of State can answer the following questions and give us some clarification and assurance. First, what on earth does he mean by “the bulk”? Is it a new statistical term that we can appeal to the UK Statistics Authority for clarity on? More importantly, given the concerns and the amount of public money at stake, can he not be more precise about how many people he expects to be left on legacy benefits after 2019? Which claimants will those be, and when can we expect them to be transferred on to universal credit?

Secondly, what are the implications of this further delay in the completion of the roll-out and transfer for the project’s administrative costs and the expected savings and benefits being claimed? Can the Secretary of State confirm that the estimate of £35 billion for the project’s benefits remains correct, and has the full business case now been signed off by HM Treasury?

Thirdly, why did the Secretary of State claim on the BBC’s “Today” programme this morning that “almost 40,000” people are “actually claiming” universal credit when the latest figures show that the current caseload is 17,850? Fourthly, can the Secretary of State tell us how many families he expects to be receiving universal credit by the end of 2014 and by May next year? Will only families with both parents out of work be able to claim? Will families including a disabled member be able to claim by May 2015?

Fifthly, will the Secretary of State place in the House of Commons Library a full list of the “one in three” jobcentres that he expects to be handling universal credit claims by the spring? Sixthly, will the extension of universal credit to families with children, and to jobcentres, be on the new digital platform being developed by the Department, or will it still be running on the old system that we know is inadequate for handling large-scale caseloads? Finally, would the Secretary of State care to repeat his claim that this programme is

“on time and on budget”?

I hope that the Secretary of State will be able to answer those simple and fundamental questions about a programme that was held up as the Government’s flagship welfare reform and has already eaten through more than half a billion pounds of public money. If he cannot give straight answers to straight questions, Members of this House and voters will be forced to conclude that, as with the delays we have seen with disability benefits, the failure of the Work programme and the Youth Contract to help key groups into work, and the failure to tackle the low pay, insecurity and housing shortages that are driving up benefit bills, this is just adding to the legacy of Tory welfare waste—wasted money, wasted time, wasted talents and a wasted opportunity to get our economy and our social security system working for all the people of our country.

[Mr Duncan Smith]

I must say that I think that the hon. Lady thought that up about a week ago, before she even got near what I have just said in the statement, but never mind—she likes to rehash the old ones, and we will deal with them. She made the point at the end of her statement that somehow the Work programme is not working. The Work programme is outperforming all of the figures that it was meant to. It is also outperforming what we were left by the previous Labour Government: record unemployment and more people who had lost work as a result of their crashed economy. We have more people in work than ever before and more young people now returning to work. Those are the standing plans.

Let me deal with some of the other issues the hon. Lady raised. She talked about what we are doing on universal services. We have already undertaken a huge amount of consultative processes with local authorities and all other partners in the areas. We have a programme called universal services, to be delivered locally, and we are working closely with the Local Government Association in trialling all sorts of elements of that, including the exchange of information on housing, which is an area that previously was not working. The LGA is represented on the programme of governance, the partnership forum and the universal credit transition working group. As universal credit is expanded nationally, delivery partnership agreements will be established locally so that local authorities, jobcentres, landlords and employers can adjust their requirements to prepare for the UC roll-out. That is taking place at the moment and it is helping to inform hugely the process of helping to improve the nature of the roll-out.

As I said in my statement—I repeat this because the hon. Lady seemed not to have picked it up—40,000 people had claimed, over 20,000 had completed the claim process, and 17,500 were currently on universal credit. [Interruption.] No, that is exactly what they have done. Forty thousand had claimed, 20,000 had made the claim and received—[Interruption.] I do not want to go through this nonsense with her. Let me remind her that many of those who started a claim went to work and therefore never completed the process. In case she thinks it is not worth people claiming the benefit because they are not staying on it, our position is that the purpose is to get them off the benefit and into work.

I will be happy to give the hon. Lady a list of the one in three jobcentres that will be covered by the spring. As I said, by the end of this year one in eight jobcentres will be covered. Families will be included. Depending on the type of claimants and their particular issues, they will be dealt with in jobcentres as the benefit is rolled out to them. The timing and delivery remain exactly as they were.

As we have announced today, we will also be rolling out the first part of the digital trial process, and that will inform us hugely on how we will be able to roll out and expand the system. The hon. Lady said that I had only just announced the timing of the roll-out, but in fact I had said it previously. She might want to ask the right hon. Member for East Ham (Stephen Timms), who is sitting next to her, about that. All the dates were in the answer to a parliamentary question from him about a week and a half ago; I cannot remember the exact date. Nothing has been hidden at all—we have been very clear about it.

The long-term strategic outline business case covers the lifetime of the programme from 2023 to 2024 and provides even more granular detail on costs and benefits and delivery planning until, it is expected, 2025. The MPA has approved our roll-out plans and given them a very strong sign-off.

The hon. Lady asked about the information that will be shared automatically. Claimants are asked to give consent to our universal credit teams sharing information about their claims with local authorities to help to highlight extra support that may be needed.

The hon. Lady says that she is in favour of universal credit in principle, but she has voted against it and attacked every single thing to do with it, just as Labour Members say they are in favour of welfare reform in principle but attack and vote against every single part of what we are doing. I have to say that the way she is going, she will get a lot of practice at being in opposition.

[Mr Mark Hoban (Fareham) (Con)]

I commend my right hon. Friend for the methodical way in which he is going about the implementation of universal credit. My constituents suffered from over-payments, under-payments and mis-payments under tax credits because Labour in government botched the implementation of the system by doing it as one big bang. We cannot afford the same thing to happen in this case. That is why he is absolutely right to introduce in the way that he is to make sure that it works before it is rolled out further. We should be commending him for that and for not repeating Labour’s mistakes.

[Mr Duncan Smith]

I thank my hon. Friend; he is exactly right. We have worked on this together. As he knows very well, taking the early decisions to ensure that the programme rolls out safely and securely is far more important than, as the hon. Member for Leeds West (Rachel Reeves) seems to suggest, rattling ahead regardless of the consequences. That is exactly what happened with tax credits, where, on day one, 400,000-plus people did not receive any benefits. The disaster of tax credits has stayed with us ever since.

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

Will the Secretary of State confirm that the reason the volumes are so low is that only the simplest cases in the simplest groups are covered? Although it has been rolled out to families, they will still be only the simplest and easiest-to-deal-with families. Given that 250,000 jobseeker’s allowance claims are usually made every month, I wonder how he thinks we are going to get from today’s position of having had 20,000 claims in over a year to having 250,000 in a month. It seems quite a task to get the volumes up to that level and to be able to roll it out across the whole country.

[Mr Duncan Smith]

As the hon. Lady knows, we started with single people, but whenever somebody’s circumstances changed—they may have become a couple or had a family—they stayed in the system and have been dealt with. It is not correct, in any way, to say that these are the simplest cases. The roll-out to families introduces further complications, but we are doing this in way that makes sure that we get it right. By the end of this year, the north-west will have universal credit, so if someone falls unemployed and then goes into work, they will do so on universal credit. That is the key point. All the complications will be dealt with within the existing system.

[Nigel Mills (Amber Valley) (Con)]

I welcome the progress announced in the Secretary of State’s statement. Will he confirm that the Treasury has now signed off the whole business case and laid to rest the fear that it was not going to do so?

[Mr Duncan Smith]

That is exactly what was being asked before the summer break, and the answer is that the Treasury has done that. The MPA has also signed off the roll-out process in saying that it de-risks the nature of the roll-out and approves it exactly as it stands at the moment.

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

Somewhat unusually, but fortunately, the House was not subjected this afternoon to a self-serving sermon in the guise of a statement. Does the Secretary of State have as a principle the idea that promises, like pie crusts, are made to be broken? Every promise he has made at that Dispatch Box about the cost of implementing and rolling out universal credit has been broken, so is today’s semi-statement merely more porky pies in the sky?

[Mr Duncan Smith]

I will not follow the mixed metaphors about pies and pie crusts in the sky; I usually like them on a plate myself. The hon. Lady has a choice to make. I would much rather make it clear that we want to deliver this thing safely and securely. After all, we have listened to the MPA and we had the National Audit Office in to look at it last year. We took all the advice, and we are rolling it out in the way that it should be rolled out. I have to say—this is not arrogance—that I believe that future Government programmes will be best rolled out using the test-and-learn process that is securing these roll-outs. That is the right way. Let us get this safely and securely rolled out, not smashed to pieces like tax credits on day one.

[Maria Miller (Basingstoke) (Con)]

I thank the Secretary of State for coming to the House to update us and explain exactly what the situation is with universal credit. Four million people spent most of the last decade trapped on out-of-work benefits. Universal credit is already giving people the opportunity to get back into work more effectively. Why on earth would a Labour Government want to halt these vital reforms for three months when a full roll-out has been approved by the Major Projects Authority? Surely we should be hearing from Labour Members how they would help us to support this being brought forward even more rapidly.

[Mr Duncan Smith]

Of course it is legitimate, as it always is, for the Opposition to question this. All I am saying is that we have taken the decisions to ensure the security and safety of the roll-out. We will not take any decision unless it is clear that it is the right thing to do, and we want to deliver this safely and securely. The experience of those who are on universal credit is getting better. We now find that word of mouth from those groups is so good that people are going into jobcentres wanting to claim universal credit rather than be on jobseeker’s allowance.

[Margaret Hodge (Barking) (Lab)]

Having listened very carefully to the Secretary of State’s statement, I wonder whether he is playing a rather worrying political trick by making a statement on the day before the NAO brings out its publication on progress on universal credit. He well knows that there are huge risks with the value for money of the project and substantial potential for waste of taxpayers’ money. For example, if there are further delays in the implementation of the digital programme, taxpayers will have to continue to pay for the expensive, mainly manually operated live service. Why does he not, just for once, give us an open and straightforward account of the state of play?

[Mr Duncan Smith]

I am sorry that the right hon. Lady takes that view. She may not know the genesis of the statement, so perhaps I can explain it to her. Labour Front Benchers asked for an urgent question today, and I gather that it was negotiated between the various authorities that there would be a statement, not a UQ, because there were to be some very important statements today. The Speaker made that decision, which is quite correct. The reason I am here today is that I was originally asked to be here by the Opposition.

In answer to the right hon. Lady’s question, I fully respect the NAO and we listen carefully to what it has to say. She knows that she will have its team before her when she undertakes the inquiry process. I cannot second-guess what is in tomorrow’s report, but my general belief and hope is that it will welcome this as being the right direction, the right process and the right prioritisation of safe delivery that makes sure that we do not waste money. In cost terms, as I said, we will be spending less, at £1.8 billion, than we were originally set to spend.

[Dr Julian Lewis (New Forest East) (Con)]

Many people are concerned about both welfare tourism and benefit fraud. Will my right hon. Friend explain how they might be diminished as a result of the new system?

--- Later in debate ---

[Mr Duncan Smith]

On migrants, we have already made it clear that universal credit is a different type of benefit, so people who come here and are out of work will not be able to claim it as a benefit. The issue of how migrant workers can claim in-work support will be negotiated. We are clear that, under universal credit, family benefits will not be paid to people who are not accompanied by their family, so we will secure such claims, thus cutting costs. On fraud, the automatic processes that check what people are earning and whether they are in work mean that we will cut down on all the fraud related to tax credits.

[Sheila Gilmore (Edinburgh East) (Lab)]

Given that the Department is such a fan of safe and secure roll-out, it is a pity that it did not take a similar view to the personal independence payment. A lot of people were treated like guinea pigs while it was being rolled out—that topic is being debated in Westminster Hall as we speak. The Secretary of State must be aware that 61% of the current claimants of universal credit are under 24 years old. They are the simplest of cases and, after such a long period, 17,000 is a very small number indeed. We have been hearing the “safe and secure” mantra for at least two years. When will the Secretary of State admit that his Department has very serious problems with implementation?

[Mr Duncan Smith]

I would have thought that the hon. Lady, who sits on the Work and Pensions Committee, would be attracted to the idea of trying to land the programme safely and securely. On the one hand she says that she agrees with it, but on the other hand she attacks it for not being fast enough. My view is that it should be expanded and delivered on a safe scale. Of course, the majority of cases will have been simpler ones because we have started with singles, but over the next few months we will see more complicated cases as we roll out to families. The north-west will be fully family when we start rolling out nationally. I am waiting for the hon. Lady to say one day, perhaps in a few years’ time, “You know, they did a jolly good job, because this has benefitted everybody, particularly those on low income.”

[George Hollingbery (Meon Valley) (Con)]

Given the huge importance of universal credit and the scale of the programme, has my right hon. Friend had any confirmation from the Labour party as to whether it actually supports universal credit, as opposed to vaguely supporting it in principle?

[Mr Duncan Smith]

The answer is that I have not, but my hon. Friend probably reached that conclusion after the earlier statement made by the hon. Member for Leeds West, which was really miserable. That is Labour’s position: its Members hate the idea that we are doing this securely and safely. They say that they support it in principle, but attack everything to do with it and never miss a chance to tell everybody how terrible it is when, in actual fact, if they visited and talked to claimants rather than just dash out of the office, they would find that those who are on universal credit think it is the best thing that has happened and it is helping them enormously.

[Yvonne Fovargue (Makerfield) (Lab)]

The Secretary of State has said that 40,000 people have made a claim and 17,850 are in payment, which is less than 1% of the total number affected. In my area, which is a pilot area, local charities that operate food banks say that delays in processing are a significant reason for single people applying for their help. How will the Secretary of State ensure an improvement in processing time if he cannot even deal with 1% at the moment?

[Mr Duncan Smith]

Actually, the number of delays in processing has fallen since this Government came to office. There are now fewer cases of delayed payments. The universal credit process will ensure that even that is improved on, as the automatic payments work quite quickly. All of the centres already provide advice on debt management and any particular personal problems people may have. There are debt advisers available and we are also ready to provide advanced payments if people have such problems. That is all part of the services delivered locally through universal credit. If the hon. Lady wants to raise a particular problem, I would be very happy to deal with it, as would the jobcentre. Jobcentres are able to pay money early to people, and if the hon. Lady has a problem case they will certainly be able to help her.

[Chloe Smith (Norwich North) (Con)]

It was only on Saturday that a constituent of mine—a mother of four, including a disabled child—described to me her current restriction on taking a little paid work. She told me that universal credit would solve that. May I urge my right hon. Friend to proceed as quickly and as safely as possible; to let me and the House know how many households in the country and my constituency will benefit; and to do a good job for my constituents?

[Mr Duncan Smith]

I accept those blandishments from my hon. Friend. There are two very important issues to remember. Universal credit is not just about the IT system; more importantly, it is about the relationship between the claimant and the adviser. When someone claims a benefit under jobseeker’s allowance, after they take a job—a part-time job or whatever—they have to sign off, which means that they do not have any contact with the jobcentre until they fall out of that job and go back again. Under universal credit, they will not sign off. They will be able to afford to take a job with fewer hours, build up their hours, go back to see their adviser and take another job. In other words, the adviser will stay with them until they come off the benefits system. It is that dynamic that is changing the lives of so many claimants and I intend to extend that to all of them,

[Nia Griffith (Llanelli) (Lab)]

We all want to see work paying properly. The Secretary of State will be aware that the Joseph Rowntree Foundation has said that the taper is far too steep and that some families will lose significantly by going into work. In other words, they will get only a couple of pounds more working a full week than they would get if they were entirely on benefits. What is the Secretary of State doing to address that problem with universal credit so that that does not happen and that work will always pay?

[Mr Duncan Smith]

That is a really important question and I thank the hon. Lady for being positive. Two things should be understood about universal credit. First, in-work allowances, which are rather like tax allowances, allow different groups of people—such as those with disabilities and single parents—to earn a certain amount of money before the taper comes in. That gives them a real step up, which is why the bottom 40% with regard to income will benefit to a greater degree than anybody else.

Secondly, I am fully prepared to accept that there is a debate about the taper, but when any future Government budgets they will be able to say, “We want to lower the taper because we want people to be able to up their hours quicker.” Alternatively, if there is full employment, they may say that the taper is not so relevant. That is a debate for Governments. We have instituted a very simple process whereby Back Benchers and others can say whether they want a higher or a lower taper. We have set it at what we think we can afford, and that still makes it better for those claimants going into work. There will always be a debate, so the hon. Lady will be able to argue whether the taper should be raised or lowered.

[David Mowat (Warrington South) (Con)]

The Secretary of State must have been relieved to hear the Opposition reiterate their support for universal credit, even though they are concerned that it is being rolled out too slowly. Has he had a chance to review their four-point plan, which I presume is designed to address the issue? The first point is to stop the roll-out and lay-off about 1,000 people while Labour reviews the programme, and the second and third points are uncosted, significant scope increases, introduced at a late stage in the programme, which will almost certainly mean much higher costs.

[Mr Duncan Smith]

I think my hon. Friend has a point. The Opposition think that the programme is rolling out too slowly, so they want to roll it out even slower or stop it and not roll it out at all. They are caught in a classic Opposition trap—we have all been there; I spent some time in opposition—which is that they know that what the Government are doing is right, but they do not want to say so because that would make it look like they had nothing to say. Therefore, they are talking about little bits and pieces and nit picking, instead of saying that it is a good programme. When I was in opposition, if something was really good I used to say, “Let’s get behind it and support it, and we can deal with the detail later.”

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Is the Secretary of State’s failure on universal credit the reason that fraud and error are likely to increase by £700 million in his Department?

[Mr Duncan Smith]

Actually, we are working very hard to bring down fraud and error. Of course, universal credit will bring down fraud and error. That is one of the driving reasons that it is important to implement universal credit, which is why we are delivering it safely and securely. We all want fraud and error to come down. Of course, we always hear about the mix-up between error and fraud. There is a tendency to think that everyone is defrauding the system, but that is not the case; sometimes, official errors get into the system. Universal credit gets rid of that by simplifying the process, which should make it better. The hon. Gentleman is right to say that we have more to do on fraud and error. We need to keep bearing down on it, which is what any Government would want to do, and universal credit will help enormously.

[John Glen (Salisbury) (Con)]

The working-age welfare budget increased by 40% in real terms between 1996 and 2009, while long-term unemployment doubled. In 2009, a quarter of the unemployed had been on in-work benefits for nine of the previous 10 years. That was the legacy of the previous Government. What does the Secretary of State think the legacy of his Government’s careful roll-out of the very well organised and researched universal credit will be once his period in office ends a long time in the future?

[Mr Duncan Smith]

That is exactly the point. On the first part of my hon. Friend’s question, the Opposition are in a kind of amnesia: they seem to forget that they crashed the economy in the biggest disaster it has ever had, with a fall of some 7% in GDP, and that many people lost their jobs. We have managed to get more people back to work and now have more people in work than ever before, with unemployment falling dramatically, youth unemployment falling and even more people with disabilities now going back to work. As it is rolled out, universal credit will deliver even more to those people—a better income, better support and a much simpler process that they can understand, rather than the chaotic system of tax credits that we have at the moment.

[Mr Marcus Jones (Nuneaton) (Con)]

Universal credit is a life-changing and positive policy. May I urge my right hon. Friend to take his time and make sure that we get this right? The impact of getting it wrong, as with tax credits, would be a complete disaster for many of the families whom I represent, and I hope he will not want to go down the path trodden by the Labour party.

[Mr Duncan Smith]

My hon. Friend is right. I set out to change the roll-out plan because I felt that we would just replicate all the problems of previous roll-outs, in which people tried to rush against an artificial deadline and ended up with a big crisis because they had not thought things through properly. The process of testing, learning and implementing is the way that I believe future programmes should be rolled out. It may not be delivered in the fastest way, which is what people want, but it is about securing people’s lives and, to my mind, that is more important than meeting artificial deadlines.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

I congratulate my right hon. Friend on his statement. My constituency has been included in the roll-out of universal credit so far, and I visited the jobcentre to see the progress that has been made. I met a team there, as well as employers and, most importantly, jobseekers, and the feedback was universally positive. They said, “Universal credit is simply making work pay.” That is why I welcome the roll-out, but may I specifically ask how universal credit will support child care?

[Mr Duncan Smith]

I have been to many such jobcentres. I was in Hammersmith last week, when I talked to a number of people who have claimed the benefit. They were very clear about the difference that being able to stay with an adviser in the jobcentre has made to their lives. All of them said that it had allowed them to develop, get on and get a better job as a result.

On the second part of my hon. Friend’s question, we have announced the child care package today. Basically, people will get child care support at 85% of the costs. The reality is that that will be for every hour that they are in work. Unlike with tax credits at the moment, whether they are doing five or 10 hours or 20 or 25 hours, they will get help with child care. That will be a huge help for those with caring responsibilities, particularly lone parents who have to get back to work as well as look after their household.

[Mr Peter Bone (Wellingborough) (Con)]

It is rare to have a Secretary of State who is so passionate about a subject, has so much ability and has so much determination to see something through; in fact, he stood up to the Prime Minister to keep himself in his Department. He has two very able Ministers to support him, the Minister for Employment and the Minister for Pensions—I hope that that does not embarrass the Liberal Democrat on the Front Bench—and there are two worthwhile Opposition shadows, the hon. Member for Leeds West (Rachel Reeves) and the right hon. Member for East Ham (Stephen Timms).

It must be a matter of congratulation for the Secretary of State that universal credit is working. The Opposition want it in as quickly as possible so that they can congratulate him, but I think that he is right to keep rolling it out. Is that not the way to handle future Government programmes?

[Mr Duncan Smith]

My hon. Friend will forgive me if I do not repeat to the Prime Minister the first part of his question. Certainly, the Prime Minister and I are in complete agreement on all these measures, and I am of course implementing only what he wishes to see. I want that point on the record, if possible. Yes, the key thing is that we are trying to deliver universal credit safely and securely. I am pleased that my hon. Friend, from his position, is so supportive.

[Mr Philip Hollobone (Kettering) (Con)]

Her Majesty’s Treasury and the Major Projects Authority must have been attracted by the potential for universal credit to cut administrative costs and reduce benefit fraud or they would not have signed off the programme. Surely one major feature of universal credit is that it makes work pay by giving people extra incentives to keep more of their income as they move into the world of work. What evidence can the Secretary of State point to of jobseekers who are already recipients of universal credit changing their job-search behaviour?

[Mr Duncan Smith]

Interestingly, my hon. Friend is right. The whole point is that there is a static effect, which we know will save money even without any dynamic effect. In other words, offsetting the savings we make from changing tax credits and so on against expenditure puts us in a net positive position.

We are already beginning to run trials on the dynamic effect. So far, people are going into work quicker, and they tend to stay in work longer. They are doing many more job searches than before, because it is easier to do them. That proves my point that most unemployed people want work desperately. They want to be helped to get work, and if we make the system easier, simpler and more accessible, they will do a lot themselves. What is essentially happening is that they have cottoned on to the usability of universal credit, and it is gratifying to see the way in which they are getting back to work quicker.