Amendment of the Law
Iain Duncan Smith Excerpts(9 years, 5 months ago)
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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.
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 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 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?
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—
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.
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(9 years, 5 months ago)
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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.
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.
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.
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.
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.
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?
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.
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.
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(9 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
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”?
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.
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.”
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.
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.
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.
Oral Answers to Questions
Iain Duncan Smith Excerpts(9 years, 7 months ago)
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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.”
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.
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.
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?
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?
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(9 years, 8 months ago)
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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(9 years, 8 months ago)
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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.
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.
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 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.
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.
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?
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?
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?
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(9 years, 8 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The 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(9 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
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?
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.
Social Justice: Transforming Lives--Progress Report
Iain Duncan Smith Excerpts(9 years, 9 months ago)
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The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
In 2012, we published “Social Justice: transforming lives”, a landmark document setting out a new vision for supporting the most disadvantaged families and individuals across the UK. The strategy outlined how family breakdown, low educational attainment, worklessness, problem debt, and addiction combine to cause the entrenched poverty affecting many of our communities, highlighting the complexity of the issues that many people face.
To meet this challenge, the strategy signalled that a new approach was needed— putting early intervention first, while tackling the root causes of poverty to give those experiencing disadvantage a meaningful second chance.
Today, I wish to inform the House that later today I am laying the Command Paper “Social Justice: transforming lives—progress report”, which shows what this Government have achieved in turning that vision into a reality, but also renews our commitment to this important agenda.
Over the last 12 months, we have continued the cultural change needed in order to achieve our aims, spanning not only families and individuals, but also public services and the way the Government fund them.
As today’s progress report sets out, delivering this aim has required a complete shift in how the Government tackle social problems: an unrelenting focus on preventing problems arising in the first place; giving people the support they need to make transformational changes to their own lives when problems arise; and spearheading new multi-agency, outcome focused approaches in order to address problems in the round.
The achievements set out in this report show how much can change in two years, and what this change means to individuals. We have made substantial progress against the commitments set out in the original “Social Justice: transforming lives” document, but we have not stopped there, and this report outlines what further action is required and how we should keep up the pressure on what we have created, which carries the profound theme of making meaningful life changes to the most vulnerable in our society.
By restating our commitment to transforming lives, and continuing to drive change in Government, at a local level and across the voluntary sector, in how we help families and individuals in need, we will make social justice a reality for everyone in the United Kingdom.
Let us continue to work together to build on this promising work. Our aim is not just about social justice in this Parliament; it is about social justice for years to come.
Oral Answers to Questions
Iain Duncan Smith Excerpts(9 years, 9 months ago)
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David T. C. Davies (Monmouth) (Con)
2. What assessment he has made of the effect of his welfare reforms on the economy.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Our reforms are having a very positive impact on the economy, as my hon. Friend has seen. The deficit is down by more than a third, and we are at a record level of employment. Recent statistics have shown that both the number and rate of workless households is at a record low, too—the lowest since 1996.
David T. C. Davies
May I commend my right hon. Friend on these reforms, which as he said have led to record falls in unemployment while also cutting the deficit? Does he agree with me that all of this is threatened by the policies suggested by Labour Members, who caused the financial chaos that we have had to deal with in the first place?
Mr Duncan Smith
My hon. Friend is absolutely right. It is worth highlighting one particularly revealing set of figures. For workless households, both the number and the rate are at record lows: 3.3 million and 15.9% are the lowest since ’96. Children in workless households number 1.5 million, at a rate of 12.7%—again, the lowest on record. Under Labour, some 2 million children lived in workless households. That is now collapsing, thanks to the work we are doing. Labour’s plans would only return us to the bad old days.
John Healey (Wentworth and Dearne) (Lab)
Why are jobcentre staff being told to say to people, “We are not here to help you to find work; we are simply here to check that you do it for yourself”?
Mr Duncan Smith
I do not believe that that is correct. I have the highest respect for the people who man jobcentres all over the country, and who do a remarkable job in helping many of those who have fallen out of work to get back into it. Jobcentre staff now tell people that their own job is to help them to find and take work, but that they themselves have a responsibility to do whatever is necessary to find work and take it. Their job is a combination of helping people and ensuring that they perform their task of seeking work and taking it. I am sure that, actually, the right hon. Gentleman agrees that that is the right thing to do.
Mr Philip Hollobone (Kettering) (Con)
What assessment has my right hon. Friend undertaken of economies similar to ours that have ducked the challenge of welfare reform, and of how their economic performance compares with ours?
Mr Duncan Smith
We do not need to go very far to see the country that the Opposition held up as the paragon of virtue in the European Union. It is, of course, France. I should point out that the French pursued the policies that the present Opposition think are right for the British economy. Adult unemployment in France is at record, scorchingly high levels, and youth unemployment is far higher than it has ever been in this country, while it is falling here.
Douglas Carswell (Clacton) (UKIP)
As my right hon. Friend will know, the benefit cap is encouraging some people to move out of London, where rents are high, to areas such as Clacton and Thanet. Does he agree that local councils should be able to act to discourage benefit migration of that kind?
Mr Duncan Smith
There has been very little movement of more than about five miles from people’s existing homes as a result of the benefit cap. Most people have settled, and many—two thirds—have either gone back to work or found alternative employment. Let me say to the hon. Gentleman that there is something called the discretionary housing payment, and his local council, like any other, can make decisions about how it modifies the process. It is up to councils to do that, and we leave it with them.
Stephen Timms (East Ham) (Lab)
The flagship of welfare reform was supposed to be universal credit. The Secretary of State’s former adviser told Radio 4 last week that the Secretary of State had known that the project was going badly wrong since May 2012, but he continued to tell the House that it was “exactly on track”. The Chair of the Public Accounts Committee expects IT write-offs to exceed half a billion pounds after the election. What is the right hon. Gentleman’s estimate?
Mr Duncan Smith
Yet again, the right hon. Gentleman has got his facts completely wrong. The reality is that, as was announced only a few weeks ago, universal credit is not only doing well, but is to be rolled out nationally. The right hon. Gentleman may be smiling because he has the idea that Labour might somehow get into government, and might inherit a success. I can tell him that Labour will not get into government, but universal credit will get more people back to work. It is already the case that it will give the economy net benefits of more than £30 billion, and there will be direct benefits of some £9 billion a year as a direct result of the roll-out that we are planning successfully.
Stephen Timms
According to page 34 of the “21st Century Welfare” Green Paper,
“The IT changes that would be necessary to deliver”
universal credit
“would not constitute a major IT project.”
Is not the problem—as I pointed out to him at the time—that the Secretary of State failed to grasp the scale of the undertaking at the outset, and that hundreds of millions of pounds have been wasted as a result?
Mr Duncan Smith
Again, the right hon. Gentleman is wrong. No money has been wasted. The roll-out means that, with all the work that we are doing, the vast majority is reusable through the digital system. I should be happy to invite him into my office to discuss the issue; the door has always been open to him.
Let me also say this, however. I wish that the Opposition would stop trying to play silly games and would recognise that this benefit, which is now being rolled out successfully and whose national roll-out has been announced, will be a massive benefit for those who are seeking work and those who are in work. It is time that the Opposition sat down with jobseekers and those who run the jobcentres, and got their story straight. The hon. Member for Leeds West (Rachel Reeves) spent about half an hour in a jobcentre, and then disappeared without talking to anyone there.
Rushanara Ali (Bethnal Green and Bow) (Lab)
3. If his Department will make an assessment of the potential effect on child poverty of a two-year freeze in benefits.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Under this Government, the number of children in relative poverty has fallen by 300,000. The Government have no plans to make any further assessment of this kind. Such an assessment would only be provided in reference to Government policy.
Rushanara Ali
The End Child Poverty coalition recently found that almost half of all children in my constituency now live in poverty. Of the 2.6 million children living in poverty across the UK, two thirds rely on tax credits and in-work benefits. How does the Minister square that with the recent changes to benefits, which are going to make matters worse, and is he today redefining poverty?
Mr Duncan Smith
I am interested in the hon. Lady’s question because in the report Alan Milburn brought out as part of his commission he recommended that we should
“supplement the existing child poverty targets with new measures to give a more rounded picture of those in poverty”,
and I agree with that. That is what we have set out to do. We took a consultation, and we are now considering that consultation and we will be bringing forward recommendations.
May I just say to the hon. Lady, however, that many of the forecasts about child poverty proved to be wrong? Child poverty has actually fallen, and, interestingly, I notice that the figures for her area show that Tower Hamlets has seen the largest fall of any local authority in England, down 7.1%, and down 9.6% since 2010 for those on tax credits and below the poverty line.
Sir Tony Baldry (Banbury) (Con)
I am sure that when I voted for the welfare cap I was surrounded in the Division Lobby by large numbers of Labour Members of Parliament. Does my right hon. Friend agree that one can only have an effective welfare cap, and cap the welfare bill, if benefits do not rise faster than wages?
Mr Duncan Smith
My right hon. Friend is absolutely right and he is approaching this from the logical perspective, which is that we have a responsibility to make sure that the economy is in balance, that we get the deficit down and that we are able to afford what we want to do to support the most vulnerable. What the Opposition fail to recognise time and again is that the economy that they left in a totally wrecked position has got to be sorted out; we cannot just go spending what we do not earn.
Mr Peter Hain (Neath) (Lab)
Will the right hon. Gentleman accept that children are also being pushed into poverty because his Department is not pursuing errant non-resident fathers vigorously enough? As he knows, my constituent Lisa Jones, a hard-working single mother, has been totally frustrated by the lackadaisical attitude of the Child Support Agency in tracking down the father, despite knowing his mother’s address, when he owes £23,000 and she has been struggling on tax credits and housing benefits to bring up a teenage boy while the father takes exotic holidays and avoids court orders. Will the right hon. Gentleman stop his weasel-worded replies to me and sort this matter out now?
Mr Duncan Smith
I completely agree that in the right hon. Gentleman’s individual case, which I do know about and I recognise, that money should go to the parent with care. We fully agree with that and the CSA, part of the Child Maintenance and Enforcement Commission, is bearing down to try and get the details of this individual. As he knows, this case is a little complicated because the individual moves time and again before the agencies can get hold of him, but I have to say that I have already intervened by talking to them about this, and I promise the right hon. Gentleman this, and ask him to pass this on to his constituent: I personally will take direct interest in this because it is outrageous that this individual gets away with what he is doing. I have told the CMEC that it must bear down on these cases. The reforms we are bringing in will do just that, and I hope the right hon. Gentleman can reassure his constituent that we will sort this out.
Mr Speaker
There will be a further report to the House on the matter in due course. I am quite confident of that.
Pauline Latham (Mid Derbyshire) (Con)
Can my right hon. Friend confirm that, in spite of what Opposition Members say, relative child poverty has fallen by 300,000 under this Government since 2010?
Mr Duncan Smith
Yes, and it is something the Opposition do not really want to talk about. The forecast was that it would rise. In fact, it has come down. It is also important to recognise that nearly 400,000 fewer children now live in workless households and that the proportion of children on free school meals getting five good GCSEs is up from 31% under the last Government to 38% as of a year ago.
Mr David Nuttall (Bury North) (Con)
4. How many people are claiming jobseeker’s allowance in Bury North constituency.
Mr David Ruffley (Bury St Edmunds) (Con)
9. What recent discussions he has had with his EU counterparts on measures to reduce benefit tourism.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
My Ministers, officials, and I are in regular dialogue with the European Commission and other member states about the co-ordination and reform of social security. The most recent meeting was at the October Employment and Social Policy Council.
Mr Ruffley
The think-tank Open Europe today proposed that EU migrants’ eligibility for in-work benefits and out-of-work benefits be restricted for the first three years. Are my right hon. Friend’s EU counterparts in northern Europe sympathetic to such views?
Mr Duncan Smith
Although I have not read the report, Open Europe has stated what we are already discussing with Ministers of many of the other countries concerned. They are all pretty much in agreement that the present system does not give them enough leeway, and there is a general sense that they want people to contribute more before they receive benefits. That is very much the tenor of the discussion, so what the think-tank writes is pretty much what I think is going to happen in Europe.
Fiona Mactaggart (Slough) (Lab)
I thank the Minister for his decision to ensure that my constituents who fled Sierra Leone because of Ebola were able to claim benefits and were not affected by the habitual residence test. Will he therefore reinstate the old rule whereby people who were advised by British embassies and high commissions to come back to Britain will have the habitual residence rule waived?
Mr Duncan Smith
The moment I heard the hon. Lady’s question to my right hon. Friend the Secretary of State for Health, I immediately said to the Department, “Let me have the news on this”, and I changed the policy on that specifically for Ebola. I am keeping the matter under review to look at whether it is necessary to make a wider exemption, depending on what the embassies say, and I will come back to her about that in due course. I was horrified to see what had happened to her constituents.
Julie Hilling (Bolton West) (Lab)
10. What recent estimate he has made of the number of people subject to the under-occupancy penalty who have moved into a smaller home since the introduction of that penalty.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The latest published figures showed that, as a result of various actions, 65,000 people were no longer affected by the removal of the spare room subsidy. As at December 2013, around 22,000 had downsized or moved a year ago. New figures to be published in due course show that if that trend continues, up to 50,000 will have moved or downsized by now, with the total no longer affected even higher.
Julie Hilling
The justification for the cruel and heartless bedroom tax is that it would force people to move into smaller homes. As only about 5% of people hit by the tax have been able to move, not least because in areas such as mine there are no smaller properties to move to, does the Secretary of State accept that this policy has manifestly failed?
Mr Duncan Smith
Actually, I do not, and by the way I think the hon. Lady’s figures are not correct. I gave her higher figures even for last December. The rationale for the policy was fairness. The previous Government left us with the situation where some on housing benefit in the private sector were not allowed to occupy houses that had extra rooms, so balancing that is fair. Getting housing benefit spending under control after it nearly doubled in cash terms under the previous Government, and helping those living in overcrowded accommodation while we build more houses, giving them a chance to move into houses where they can fit their families—that is decent and fair.
Mrs Anne McGuire (Stirling) (Lab)
Given that, according to recent surveys by social landlords, more than half the people impacted by the bedroom tax are now in arrears, what advice would the Secretary of State give those social landlords, particularly housing associations, about the unsustainable financial position they now find themselves in?
Mr Duncan Smith
Of course, we always keep in close contact with social landlords to ensure that they do what they are meant to do and do not overcharge. The Homes and Communities Agency’s latest figures show that arrears have fallen in the same period from last year and rent collection among housing associations is stable at around 98%, so I think that it is safe to assume that the under-occupancy penalty has had little effect on housing association arrears.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
The bedroom tax surely has a claim to be the most wrong-headed and iniquitous policy introduced by any Government in recent memory. The Government’s justification for this cruel tax was that putting it on social housing tenants would incentivise families and individuals to move into smaller homes, but the policy has one fatal flaw: the absence of homes for those families and individuals to move into. Surely the Secretary of State must today concede that the policy has been an abject failure and scrap the tax immediately.
Mr Duncan Smith
Apart from the rhetoric, the reality is that the hon. Gentleman is wrong. It was his Government who started the process in the first place. I remind him that when they introduced the local housing allowance, they refused to allow anybody who accepted that benefit to live in a house that had extra bedrooms, because that would be unfair on those who were in that accommodation. We have restored that fairness. That is the right thing to do, and it saves £500 million a year.
Diana Johnson (Kingston upon Hull North) (Lab)
11. What forecast he has made of the likely level of child poverty in (a) 2015 and (b) 2020.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The number of people in in-work poverty fell by 300,000, according to the latest figures. The rate is flat in general terms since the election, despite there being more people in work than ever before, and there are almost a million more people in working families and above the poverty line.
Kerry McCarthy
Tomorrow is equal pay day, which marks the day on which women effectively start working for free because they earn on average only 80p for every £1 a man earns. Does the Secretary of State agree that addressing the gender pay gap, which has got worse under his Government, is key to tackling in-work poverty, and what does he intend to do about it?
Mr Duncan Smith
First, let us start from where we are: more women are now in work than ever before, which is a huge start. I also accept—[Interruption.] The rate is even better: it is a record rate. Of course, it is absolutely vital and right to ensure that women who go to work get paid a decent salary. My right hon. Friend the Minister for Employment has been leading the charge for the Department, doing a lot of campaigning. Universal credit, as it rolls out nationally, delivers for working women a far better deal, with higher wages, than they would get under the present system.
Ann McKechin (Glasgow North) (Lab)
Given that 20% of workers are struggling on the minimum wage alone, when was the last time the Secretary of State spoke to employers about adopting a living wage for their workers?
Mr Duncan Smith
I have talked to employers endlessly about making sure that they pay a decent wage—first, making sure that people pay the minimum wage, which the last Government were rather slack about but we have done a lot on. My own Department pays our employees in London the London living wage, and we negotiated with the contractor to make sure everybody gets it, including all the cleaners.
Mr Speaker
I am sure that the House is aware—but if not, I can inform Members—that the House of Commons is itself an accredited living wage employer.
Mr Dominic Raab (Esher and Walton) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Today, I welcome the tougher action my Department has taken to recoup debt and safeguard taxpayers’ money. Now, where overpayments result from benefit fraud, the Department will always recover the maximum amount in legislation, ending concessions that previously meant that people paid back less, and making exceptions only where children will be affected.
Mr Raab
Will the Secretary of State confirm that, on the latest official data, child poverty, elderly poverty, fuel poverty, inequality—using the Gini coefficient—the numbers of people not in education, employment or training, and the gender pay gap are all, every single one, lower under this Government than when Labour was in office?
Mr Duncan Smith
This Government have dealt with huge problems that were left to us. First, we had a collapsed economy. We are now putting that right, and we are also getting more people back to work. The best way to get people out of poverty is to get their families into work. Under this Government, there is now the lowest number of households in poverty.
Rachel Reeves (Leeds West) (Lab)
As others have remarked, this week is living wage week, when we celebrate the success of employers and campaigners in moving towards getting more workers paid a wage that they can afford to live on. Under this Government, the number of people paid less than a living wage has risen from 3.6 million to 4.9 million—more than one in five people. Does the Secretary of State agree that this Government’s failure to tackle low pay means that more people in work are living in poverty, which is a key reason why the Government are spending £400 million more on housing benefit for people in work than when they came into office?
Mr Duncan Smith
It is good to see the hon. Lady; I know that she did not turn up and vote for her party’s own motion last week, and did not even sign it, but now we have her here. I answer her question by simply saying this: the reality is that we have seen the minimum wage rise faster under this Government than under the previous Government, with an increase of nearly 10% since the election. My right hon. Friend the Business Secretary is doing everything he can to pursue companies that do not pay the minimum wage, and we are prosecuting them.
Rachel Reeves
First, I would like the Secretary of State to withdraw what he said about my not being here last week. He does not know the reasons why I was not here, and I expect him to withdraw those comments.
The truth is that the in-work benefits bill is rising in real terms because of this Government’s failure to build a recovery that benefits everyone, not just a few at the top. We have seen a historic squeeze on wages for the majority and the minimum wage falling behind the increase in inflation, with an increase of just 70p in five years. The reality is that taxpayers are footing the bill for the spread of low pay and insecurity under this Government. Is it not time that the Secretary of State adopted Labour’s plans to raise the minimum wage, to get more workers paid a living wage, to ban exploitative zero-hours contracts, and to build an economy that works for all working people?
Mr Duncan Smith
I remind the hon. Lady that it was under her Government that the minimum wage stalled. Under this Government, it has risen by nearly 10% to £6.50 from October 2014. As for those who are supposed to be worse off, it is calculated using real earnings. Labour Members use a very simplistic calculation, and it does not give the full picture. The reality is that this Government categorically have done more for low-paid people than the previous Government did in their whole time in office.
Kerry McCarthy (Bristol East) (Lab)
T4. A couple of weeks ago, a very disturbing press report said that teachers are having to resort to spending their reserves, or even the pupil premium money, on providing food, clothes, transport, beds, and even ovens for children living in poverty because they take the view that if children are not fed and have nowhere to sleep, they will never be able to achieve educationally. Is it not an absolute disgrace that schools are having to resort to that because the safety net is not there to meet the fundamental needs of these children?
Mr Duncan Smith
I have not seen that report, but I am happy to look at it. However, I believe that the work being done in schools under this Government to support people who come from low-income families is phenomenal. Introducing that support for those children means that more children are now staying in school. As I said earlier, they are getting better results directly as a result of that support provided for them in school.
Caroline Dinenage (Gosport) (Con)
T7. Casework in my constituency has shown that, although the Department for Work and Pensions does well in identifying and prioritising claims made by terminally ill patients, when those claims are passed to Atos there is a lack of monitoring. What steps is the Department taking to ensure that those claims are dealt with in a timely manner at every point in the system?
Graeme Morrice (Livingston) (Lab)
T5. One of the greatest failings of this Government is the high level of in-work poverty and the significant cost of in-work benefits. Therefore—this is a similar question to that asked by my hon. Friend the Member for Glasgow North (Ann McKechin), who stole my thunder a tad—is it not time for the Secretary of State to be a real advocate of the living wage, to help address this problem?
Mr Duncan Smith
Under this Government, take-home pay rose last year by more than inflation for all but the richest 10%. Average annual pay growth is 3.7% for those who have stayed in work between 2012 and 2013, and disposable income last year was higher than in any year under the previous Government.
Mr Philip Hollobone (Kettering) (Con)
T8. Which Minister is responsible for worklessness? Will they get to their feet and accept the grateful thanks of the nation that the number of workless households is the lowest since records began, and will they explain to the House how it has been achieved?
Mr Duncan Smith
This is a tough one, but I will endeavour to do my best. On behalf of my team and my Government, I accept that we are doing the right thing, and more people are going to work than ever before.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
T6. Will the Secretary of State confirm the rumours that the job fairs occurring up and down the country get a lot of assistance from his Department and that that assistance goes to Conservative MPs and even Conservative candidates, but that Labour and Opposition Members are not offered the same support when they run anything similar?
Mr Duncan Smith
That allegation is without foundation. The jobcentres in the hon. Gentleman’s constituency and all the others will give every bit of support to every Labour Member and any other Member, nationalist or otherwise, to get their job fairs going. I recommend that Labour Members do more to create job fairs in their own constituencies, to help people get back to work.
Nick de Bois (Enfield North) (Con)
T9. Ministers will be aware that another first for this side of the House is the launch of the Enfield over-50s jobs forum, helping to break down the barriers of getting older people back into work. Will Ministers meet me and support the vast number of local and national companies that have got behind it and fully support it?
Barbara Keeley (Worsley and Eccles South) (Lab)
In earlier questions on the bedroom tax, it was not mentioned that this unfair charge hits 60,000 unpaid family carers, many of whom are not able to move from adapted homes. They cannot move into work, they cannot take extra hours and they need those additional rooms, which are essential for getting enough sleep to enable them to carry on caring. Is it not about time that we accepted that they should be exempt from the bedroom tax?
Mr Duncan Smith
We have already had court cases that leave this very clearly with the Department. Our view is that those who need to be exempted are exempted, and we have left discretionary payments of some £380 million with local authorities to make those local discretionary decisions themselves. The hon. Lady’s local authority can do just that.
Andrew Stephenson (Pendle) (Con)
T10. Will my right hon. Friend join me in welcoming this Government’s approach to the national minimum wage and its rise to £6.50 last month, which is the biggest cash increase since 2008 and 3% above inflation?
Mr Duncan Smith
That is exactly what has happened. The minimum wage has risen faster under this Government than under the previous Government, and we are driving for greater acceptance among businesses.
Steve McCabe (Birmingham, Selly Oak) (Lab)
How many people does the Minister of State, Department for Work and Pensions, the hon. Member for Forest of Dean (Mr Harper), aspire to help on an annual basis through the Access to Work programme?
Sir Edward Leigh (Gainsborough) (Con)
It is all very well for Germany to lecture us on the importance of the free movement of workers in Europe, but that is what it is supposed to be about—workers. Because Germany has a contributory system, one cannot arrive there and claim benefits. Will the Secretary of State take action, sort this matter out, take on the European Commission and say that people have to contribute taxes for three years before they can claim benefits here?
Mr Duncan Smith
We have already taken action. We have closed many of the loopholes and tightened things up. Come Monday next week, nobody will be able to claim out-of-work benefit for more than three months, and after that people will have to leave the country. They will not get housing benefit, they have to be able to speak English and they have to show that they are resident here. And that is only the beginning.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
A research group from Oxford university has analysed the data from the Government’s new sanctions regime. It has identified that 4.5 million people on jobseeker’s allowance have been sanctioned, including young people. One in four of those who were sanctioned left JSA. More than half of those who left did so for reasons other than employment. In the light of that, will the Secretary of State apologise for his claim that his policies are getting people into work, when they clearly are not?
Mr Duncan Smith
As far as I am concerned, jobcentres apply sanctions only as a last resort. With the new actions that we have taken to get mandatory reconsideration, the number of appeals has dropped. The truth is that when the hon. Lady’s party was in government, it accepted the need for sanctions when people did not do what they were expected to do. Only in opposition does it claim that it is opposed to sanctions. It would not implement that policy if it was in government.
Jeremy Lefroy (Stafford) (Con)
I welcome the fall in the number of JSA claimants in my constituency from more than 1,500 to below 700 since 2010. However, one area in which we face significant recruitment problems is nursing. That is a problem not just in Staffordshire but across the country. Will the Secretary of State talk to the Secretary of State for Health to see whether we can increase the number of training places at universities across the country?
Mark Durkan (Foyle) (SDLP)
Will the Secretary of State update us on the work that is being done to prepare for the application of the welfare cap? Will he say whether that work has been informed by devolution considerations?
Mr Duncan Smith
As the hon. Gentleman knows, we are in the middle of discussing devolution proposals that emanated in Scotland but that cover all other elements of the United Kingdom. The key point that I make to him again and again is that Northern Ireland has not implemented the welfare legislation. As a result of that, it is difficult for us to deal with Northern Ireland directly on these matters, but I am certainly willing to engage.
Mr Speaker
As I indicated earlier, I will take the point of order because it relates to these matters.
Rachel Reeves
On a point of order, Mr Speaker. The Secretary of State criticised me for not turning up to vote on an Opposition day motion last week. He knows nothing of why I was not able to attend last week. I kindly ask him to withdraw his criticism and apologise for the aspersion that I could not be bothered to turn up to vote in the House of Commons.
Mr Duncan Smith
I simply made the point that it was good to see the hon. Lady here because she did not turn up to vote in the last debate. I understand that she retweeted that she was in Rochester at the time. She was not put down as a signatory to the motion. Those are the points that I made.
Rachel Reeves
Thank you, Mr Speaker. I was not in Rochester last week. I will give the Secretary of State one last opportunity to withdraw the aspersion and apologise. He knows nothing of the reason why I was not here last week, so I ask him to withdraw the aspersion and apologise.
Mr Duncan Smith
I stand by my assertion that the hon. Lady did not vote and that her name was not on the Order Paper.