Universal Credit

Iain Duncan Smith Excerpts

Thursday 5th December 2013 Written Statements

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

Today I announce our plans for the next stage of implementing universal credit.

Universal credit is a major reform which will transform the welfare state in Britain for the better. Once fully implemented, universal credit will account for £70 billion of benefit spending each year, and bring a £38 billion economic benefit to society over 10 years.

Rightly for a programme of this scale, the Government’s priority has been, and continues to be, its safe and secure delivery. This has already been demonstrated in our approach to date, which started with the successful launch of the pathfinder six months earlier than planned in April 2013, and has continued with the controlled expansion of universal credit, starting in October 2013 and running through to spring 2014.

Furthermore, we are already pushing ahead with the cultural and business change required as part of universal credit: retraining 25,000 Jobcentre Plus advisers; delivering 11 in-work progression pilots; and rolling out the new claimant commitment, which is on track to be in place in all jobcentres by March 2014.

Over recent months the Department has worked with the Government Digital Service to assess the options for the next stage of universal credit delivery. That work has explored the use of the latest digital technologies and also assessed the utility of the work we have done to date, through the universal credit pathfinder, going forward.

Today I can announce the conclusions from this work:

As part of the wider transformation in the development of digital services, the Department will further develop the work started by the Government Digital Services to test and implement an enhanced online digital service, which will be capable of delivering the full scope of universal credit and make provision for all claimant types.

Meanwhile, we will expand our current pathfinder service and develop functionality so that from next summer we progressively start to take claims for universal credit from couples and, in the autumn, from families. Once safely tested in the 10 live universal credit areas, we will also expand the roll-out to cover more of the north-west of England. This will enable us to learn from the live running of universal credit at scale and for more claimant types, including the more vulnerable and complex.

These steps continue our progressive approach—test, learn, implement—as we deliver this flagship programme.

Our current planning assumption is that the universal credit service will be fully available in each part of Great Britain during 2016, having closed down new claims to the legacy benefits it replaced; with the majority of the remaining legacy case load moving to universal credit during 2016 and 2017. Final decisions on these elements of the programme will be informed by the development of the enhanced digital solution.

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 18th November 2013 Commons Chamber

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

Recent poll findings show that of those notified or aware that they would be affected by the cap, three in 10 took action to find work. To date, almost 36,000 have accepted help to move into work from Jobcentre Plus and around 18,000 potentially capped claimants have moved into work.

[Mr Syms]

Jobcentre Plus in Dorset worked extremely hard to identify those affected and to get them into employment. What assessment has my right hon. Friend made of the impact of that on the recent encouraging employment figures?

[Mr Duncan Smith]

I am grateful to my hon. Friend. I give credit to Jobcentre Plus for the action that it took, which sometimes goes unnoticed, when it knew that this policy was coming in. From April 2012, it wrote to potentially affected people with advance warning. It set up a helpline on the benefit cap and an online calculator so that they could work out some of the figures themselves. It then telephoned some of the most vulnerable, and visited them as well. It set up funding for intensive employment support and worked with local authorities to support claimants in budgeting, housing and child care, and big employment events. This is one of major reasons why about 61% of those who moved into work did so after they were notified.

[Mr Julian Brazier (Canterbury) (Con)]

I congratulate my right hon. Friend on this, and I assure him that in an area such as mine, which includes the ward with the highest level of child poverty in the south-east region, my constituents welcome the fact that we really are trying to encourage people who have been far too long on benefits to look for options to work. The news that he has just announced is what is needed.

[Mr Duncan Smith]

I agree with my hon. Friend. The reality is that of more than 19,000 householders capped in mid-September 2013, 60% were lone parents and 78% were capped by £100 or less a week. This is a system that is returning fairness to the whole programme. The Opposition opposed the cap, and it is worth remembering that even though the trade union leaders opposed it, 80% of Unite members support our policy on welfare reform, as I discovered from a poll the other day.

[Mr Steve Reed (Croydon North) (Lab)]

6. What progress he has made on delivering his target of 160,000 Youth Contract wage incentives by April 2015; and if he will make a statement.

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[Nick Smith (Blaenau Gwent) (Lab)]

16. When he expects all new claimants to be on universal credit across the UK.

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

Within the time scales set out, our priority is to deliver universal credit safely and securely, and we will set out our plans in more detail in a couple of weeks.

[Emily Thornberry]

Why did the Secretary of State tell the House last month that his plans for universal credit were on track?

[Mr Duncan Smith]

As I said in my earlier answer, I ordered a reset so that we do not have difficulties when we start to roll out the scheme. We have rolled out the pathfinder already. It is important to note that there have been at least six sites from October, and there will be many more around the country when we expand that. As I said, I will make clear to the House the plan and programme for the full roll-out, all the way through to complete delivery, in detail in the next couple of weeks.

[Nick Smith]

The Public Accounts Committee found that leadership of the universal credit programme was hapless. Will the Secretary of State tell us who is responsible for that blunder?

[Mr Duncan Smith]

I already take full responsibility for everything that goes on in my Department. I have to say that I take responsibility for making sure that universal credit as originally planned was stopped and reset. Before anybody was affected, we made absolutely sure that when we roll it out, as we have begun and will continue to do, it will deliver maximum benefits of more than £38 billion to the public.

I take no lessons from the Opposition, who spent years rolling out programmes regardless of how they affected people—a disaster on IT for tax credits and a disaster on the health service. A little bit of humble pie on their part might not be a bad thing.

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

The pathfinder mentioned by the Secretary of State was meant to include 10 separate Jobcentre Plus areas by October this year, but only one has come on line, in addition to those already in place, so there has been a further slowing down of the roll-out of universal credit. Indeed, the ones assessed have been the very simplest cases. When will the Department deliver on its original timetable, far less on any speeded-up timetable?

[Mr Duncan Smith]

As I said to the hon. Lady when I appeared in front of her Committee in July, we have been very clear that we would roll out universal credit on the plan and programme already set out. The pathfinders are on track. Those before Christmas and those after Christmas are on track—[Interruption.] Yes they are. It is not just the pathfinder centres; we already have a huge amount of change. We are putting 6,000 new computers into jobcentres to be ready for universal credit, and we are training 25,000 jobcentre staff to ensure that they are ready for its delivery. We are on track to make sure that universal credit—the bit that follows next—can use those pathfinders to deliver a universal credit programme that works, unlike so many of the programmes that the previous Government used.

[Chris Bryant (Rhondda) (Lab)]

Dear, dear, dear. [Interruption.] No, the report does not say that; I can tell you what it does say. It says that, precisely in the Government’s timetable, from October 2013

“All new claims for out-of-work support are treated as claims to Universal Credit.”

That has not happened, has it? The Secretary of State is not on time, he is not on budget, and it looks as if he is going to lose £140 million. The first step to recovery is owning up that you are sick. You are not on time, you are not on budget—are you?

[Mr Speaker]

I am always on time. Let us hear from the Secretary of State.

[Mr Duncan Smith]

Mr Speaker, you are not only on time, but you are always on budget.

That was a lot of sound and fury from the hon. Gentleman, signifying absolutely nothing. The reality is, as I have said quite categorically and publicly, the report could be written because of the actions I took over a year ago to ensure that universal credit will roll out and deliver exactly as we said it would. The hon. Gentleman served for I do not know how many years in a Government who allowed all these other programmes to fail, but not one person will be adversely affected by the change we have made. Universal credit will deliver maximum benefits to the British public, and the Opposition will remain out of government, because they have not a single clue.

[Mr Alan Reid (Argyll and Bute) (LD)]

12. What plans he has to introduce the payment of pensions and benefits and begin accepting applications for universal credit through the Post Office.

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[Fiona Bruce (Congleton) (Con)]

23. What recent steps his Department has taken to support care leavers.

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

I congratulate my hon. Friend’s work on the all-party group on financial education for young people. Last month, we launched the cross-departmental care leavers strategy, brokered through the Cabinet Committee on Social Justice, to ensure that for the first time pooled resources from education, employment, health, housing and justice will be tailored to the challenge facing a group of young people for too long left to struggle alone.

[Fiona Bruce]

Does the Secretary of State agree that equipping young people in general and care leavers in particular to manage their own finances well is a vital tool? What are the Government doing to address this matter, as recommended by the report of the all-party group on financial education for young people?

[Mr Duncan Smith]

Again, I congratulate my hon. Friend, because we will definitely be considering this next recommendation of hers. I have listened and read her suggestions, and we have actually managed to alter the new curriculum. The final version will now state that

“the functions and uses of money, the importance and practice of budgeting, and managing risk…income and expenditure, credit and debt, insurance, savings and pensions, financial products and services”

will be taught as part of the curriculum for the first time.

[Kevin Brennan (Cardiff West) (Lab)]

25. What steps he is taking to improve the quality of medical services reports on claimants of benefits.

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[Andrew Bridgen (North West Leicestershire) (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 latest labour market statistics. We have seen the largest annual drop in the claimant count for 15 years. Almost every area in Britain has seen the number of people claiming jobseeker’s allowance fall over the last year, contributing to a total fall in worklessness of more than 500,000 since 2010, while there are now more than 1 million more in work. All this is a testament, I believe, to this Government’s success in getting Britain working again.

[Andrew Bridgen]

Few would disagree that careers advice in schools needs improvement. Given that unemployment is now down to 2.6% in my constituency, does my right hon. Friend agree that Jobcentre Plus is well placed—it has the resources and the local knowledge —to deliver part of that improvement, preferably in conjunction with local employers?

[Mr Duncan Smith]

I congratulate my hon. Friend and his area on having an unemployment rate of 2.6%, which is testimony to the efforts this Government are making. Schools obviously have a legal duty to secure independent careers guidance for their pupils, and employers have to work with them, but it is also a fact that Jobcentre Plus has a careers guidance programme. We are now in talks with the schools to ensure that somehow we can connect would-be school leavers, long before they leave school, with companies and businesses, to tell them exactly what they need to have and what skills they will need to obtain.

[Rachel Reeves (Leeds West) (Lab)]

This weekend it was reported that Atos had pulled out of a DWP contract providing specialist disability advice. What was the Department’s response? An internal memo instructing staff deciding whether people are disabled enough to receive disability living allowance to “google it”. Is this not the biggest indication yet of the sheer contempt in which the Department for Work and Pensions holds disabled people?

[Mr Duncan Smith]

The hon. Lady is completely wrong. First of all, it was not an internal memo; it was guidance that goes out to the Department in the normal way. [Interruption.] The hon. Member for Rhondda (Chris Bryant) needs to keep quiet for a while and listen a bit more. This man has travelled so far in his political career that we never know what he is talking about. He has gone from being a Tory to being a Blairite and then a Brownite, and now he is a socialist on his website, so I wonder whether he needs to keep quiet and listen a little more.

The answer to the hon. Member for Leeds West (Rachel Reeves) is that Atos Healthcare has not withdrawn from the contract. Normal procedures to update guidance in the process of DLA reform are going through. Under DLA, only 6% had face-to-face assessments; the majority have face-to-face assessments now, under the personal independence payment. Therefore, decision makers have much more objective information than they ever had before, so there is no change to the quality of the service. This is a simple contract adjustment to reflect and meet the corresponding business needs. The hon. Lady should really not listen to jobbing journalists who come to her to tell her they have an issue.

[Rachel Reeves]

I am not sure whether the Secretary of State has even bothered to read the memo from his own Department. As the right hon. Gentleman knows, because of the failure of his Department to deliver the reform, the personal independence payment is going out only to a third of country. After the chaos of the universal credit, the work capability assessment, the PIP, the Work programme and the Youth Contract, DLA is now in chaos as well. Is there any part of the Department for Work and Pensions that is actually working?

[Mr Duncan Smith]

The thing that is wonderful about the hon. Lady is that she never listens; she just reads what is on her script that she prepared before, and it does not matter what question was answered. I have already told her—[Interruption.] The hon. Member for Rhondda should keep quiet; otherwise he will jump out of his underpants if he carries on like that—

[Mr Speaker]

Order. These occasions are becoming deeply disorderly. A question has been put, and the Secretary of State is answering it. The House must hear the answer with all due courtesy and orderliness.

[Mr Duncan Smith]

The first answer is that the hon. Member for Rhondda should keep quiet for longer. The real answer to the question on PIP is that the hon. Lady is completely wrong. As with every other programme, we are controlling the roll-out to ensure that it meets all our needs. There is nothing for the hon. Lady to concern herself about. This is working and it will work all the way through next year, exactly as planned. The truth is that the hon. Lady raises these questions because she does not want to come back to last week’s failed Opposition day debate, when her argument was so powerful that 47 Labour Members—including the shadow Chancellor, who I gather is a “nightmare”—decided to abstain.

[Mr Alan Reid (Argyll and Bute) (LD)]

T4. Will the Government use the Post Office to allow people without internet access to submit applications for universal credit and to give help with the application? Post offices are in the heart of communities, and for many of my constituents, this would avoid a long journey to the nearest jobcentre.

[Mr Duncan Smith]

May I say to my hon. Friend that that is exactly what we want to do? We want to make sure that those claiming universal credit can claim it in a number of different places—for example, we are setting up the facility to claim in libraries, in local government offices and also in jobcentres. We will work and are working with post offices to ensure that if people need to make claims from them, particularly in very rural constituencies such as my hon. Friend’s, that facility will be made available as well.

[Kerry McCarthy (Bristol East) (Lab)]

T2. Last month, the Secretary of State tried to tell me that lots of people were using food banks simply because they were available and it made sense to do so—adding insult to injury for the many thousands of people who are being forced to use food banks and have been referred to them by agencies because they are recognised as being in desperate need. Has the Secretary of State seen the research commissioned by Department for Environment, Food and Rural Affairs into the rise of emergency food aid? Why has this been shelved? Is it because it reveals that the Government are at fault for people not being able to feed themselves and their families?

[Mr Duncan Smith]

We have not shelved anything, and I have to tell the hon. Lady that she needs a few facts to be put on the table. First, during a time of growth under the Labour Government—[Interruption.] Labour Members really hate to be reminded that they were in government once and that the reason why they are no longer in government is that their incompetence was so phenomenal that even at a time of growth, people ended up claiming food parcels. If we look back, we see that under the last Government the number claiming rose by 10 times. More importantly, let me inform the House of an international comparison. In the UK at the moment, some 60,000 or so are food bank users. In Germany, which has a much higher level of welfare payment, 6 million people use food banks—one in 12, which is many more, and it is the same in Canada. The hon. Lady should not always read everything she reads, particularly when it is her lot that write it.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

T5. A recent report by the Office of Fair Trading identified no fewer than 18 different points at which charges can be levied on a pension. Does the Minister share my view that there should be radical simplification and disclosure on pension fees and charges—however and wherever they are levied?

[Graham Jones (Hyndburn) (Lab)]

T3. Eleven parishes in Oswaldtwistle have come together to open Hyndburn’s four food banks, which often serve people who are in employment. Is the Secretary of State not concerned about these levels of poverty, particularly in constituencies such as mine?

[Mr Duncan Smith]

I am. That is why we are doing all that we can to reduce the levels of poverty, and are succeeding. Child poverty, for example, has fallen by more than 300,000 under this Government. [Interruption.] I accept that the hon. Gentleman may well find that there are issues and problems in his constituency, and I am ready and willing to discuss them with him at any stage. The fact is, however, that child poverty rose under the last Government. They spent more than £170 billion on tax credits in an attempt to end the situation, and one of the hon. Gentleman’s own colleagues has said that they would no longer be able to afford them. They were more than 10 times more expensive than anything that they replaced.

[Sir John Randall (Uxbridge and South Ruislip) (Con)]

T6. We have heard about the excessive amounts being charged on pensions and annuities. Does my hon. Friend the pensions Minister agree that it is important for us to re-establish a real savings culture, and will he tell us what else he can do?

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

Since January, the coalition has no longer been producing the statistics showing the number of people chasing every job vacancy in each constituency. Will the Secretary of State bring those statistics back, so that we can have information about what is happening in our own constituencies?

[Mr Duncan Smith]

I shall consider the hon. Lady’s request, and get back to her.

[Tessa Munt (Wells) (LD)]

Does the Secretary of State agree that a non-resident parent who has no declared income, but chooses not to claim benefits and is living on a loan, should be required by the Child Support Agency to contribute the flat rate of £5 rather than being party to a “nil” arrangement and not having to pay anything? Should not such people contribute to the considerable costs of raising their child or children?

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[Philip Davies (Shipley) (Con)]

I congratulate the Secretary of State on introducing a benefit cap. The feedback that I receive from my constituents suggests that they thoroughly support the principle of the cap, but feel that its level is too high. Will the Secretary of State encourage them by announcing that he will consider lowering the level, perhaps to a figure beginning with 1?

[Mr Duncan Smith]

I shall take my hon. Friend’s plaudits and congratulations in the spirit in which they were meant. The benefit cap is intended to be fair to those who pay tax to support people who are out of work by ensuring that people cannot earn more through being out of work than they can through being in work. Of course we keep the whole issue under review, but the cap is working very well at its present level.

How interesting it is that not one Opposition Member wants to talk about issues such as getting people back to work and being fair to the taxpayer. The only policy that the Opposition have come up with so far is reversal of the spare room subsidy. That is a pathetic indictment of the lack of welfare policies in the “welfare party”.

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

I welcome today’s figures showing a reduction in unemployment, but what are the implications for the targets relating to inappropriate sanctions on jobseeker’s allowance claimants? This is a real issue, and it needs to be addressed. It is distorting the JSA figures.

[Craig Whittaker (Calder Valley) (Con)]

With regard to discretionary housing payment, under a recent freedom of information request it has been established that Calderdale’s budget is almost £384,000 and under the same FOI we learned that in the first six months of the spare room subsidy Labour-run Calderdale has struggled to spend around £24,000. Does my right hon. Friend agree that this massive differential between budget and actual spend could indicate that the spare room subsidy in Calderdale is not an issue, or does he think Labour-run Calderdale is not doing enough to help the most vulnerable?

[Mr Duncan Smith]

We will, of course, be releasing figures on this later, but what I say to councils up and down the country is, “That is what the money is there for—to help alleviate issues and problems, at their discretion.” I remind my hon. Friend that last year, after having complained that they did not have enough money, they returned £10 million to the Exchequer, so my urging to them is, “Either do what you’re meant to do or stop complaining.”

[Bill Esterson (Sefton Central) (Lab)]

What advice does the Secretary of State have for the 4,963 people in Sefton chasing the 10 available one-bedroom properties? Where does he expect them to go, especially given that many of them are disabled and are unable to pay the bedroom tax?

[Mr Duncan Smith]

As my hon. Friends made clear in the debate last week, there is actually an awful lot of available property in HomeSwap, with over 300,000 available in the last week alone. I simply say to the hon. Gentleman, and, through him to the councils, local authorities and housing associations, that the purpose of this programme is to get them to manage their housing better, and not to be building bigger houses when they need one-bedroom properties, and to start managing better for the people who need their property.

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 14th October 2013 Commons Chamber

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

2. What recent discussions he has had with representatives of the UN on the under-occupancy penalty.

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

Strangely, I was not asked to discuss the removal of the spare room subsidy, or any other matter, with the UN representative.

[Alec Shelbrooke]

Does my right hon. Friend share my concern that the UN housing expert made no reference to the 250,000 households living in overcrowded accommodation or the efforts that the Government are making to bring fairness and respect to the welfare system after the mess that lot left it in?

[Mr Duncan Smith]

Mrs Rolnik from the UN appeared over here, seemingly at the invitation of those opposed to all our policies, the Labour, or welfare, party included. I was interested in the notes that came back from the UN after she left. Some of the officials said,

“who is that strange woman; why is she talking about bedrooms and why on earth do we have a UN Housing Rapporteur.”

My thoughts entirely.

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

The statement from the United Nations not only reveals that Mrs Rolnik visited the Department for Communities and Local Government, the Department for Work and Pensions, the Department for Environment, Food and Rural Affairs, the Ministry of Justice, the Homes and Community Agency and Manchester city council, but gives a statement of housing need in this country to which most serious commentators would wholly subscribe. Will the Secretary of State now stop his delusional approach to a scheme that cannot work because there is an inadequate supply of smaller accommodation for people to move into?

[Mr Duncan Smith]

It was the right hon. Gentleman’s Government who left office with the lowest level of house building since the 1920s—[Interruption.] It is higher now than it was under them—nearly 1.8 million on waiting lists in England and 250,000 tenants in overcrowded accommodation. The Opposition never talk about that. Never do we hear them say they were sorry for the overcrowded mess they left behind them. Instead of little gimmicks with people from Brazil, they would be better off apologising for the mess they left us in in the first place.

[Mr Julian Brazier (Canterbury) (Con)]

I commend my right hon. Friend’s robust approach. Does he agree that it cannot be part of any responsible welfare system to support people in accommodation of a size that they do not need when so many families have no proper accommodation at all?

[Mr Duncan Smith]

I agree with my hon. Friend. It is also worth reminding the Opposition that they introduced a policy for social tenants in the private sector that does not allow housing benefit recipients to have spare rooms. So they are being hypocritical in saying that they are against one and in favour of the other.

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

How can the Secretary of State continue to defend the bedroom tax when there are not enough smaller properties for people to move into, even if it were the right thing to do?

[Mr Duncan Smith]

I keep reminding the Opposition—and this may be the real reason why they got in such a mess over the economy—that a subsidy is not a tax. They need to understand that a tax is something that the Government take away from people, but this is money that the taxpayers have given to people to subsidise them to have spare rooms. We simply cannot go on like that. I remind the hon. Lady that the Government she was a member of nearly doubled the housing benefit bill in the 10 years they were in power, and that is why we have to take action.

[Robert Halfon (Harlow) (Con)]

Is my hon. Friend aware that there are 4,000 people in Harlow on the council house waiting list, many of whom are not on benefits? Does he agree that the single room supplement will free up housing so that some of those people can get the housing that they rightly deserve?

[Mr Duncan Smith]

I agree with my hon. Friend. The coalition is concerned about people who have to live in overcrowded accommodation. Never do we hear one single comment from the welfare party about people living desperately in the overcrowded accommodation that they left them in.

[Chris Bryant (Rhondda) (Lab)]

The Secretary of State is so out of touch he is even out of touch with his own Minister, Lloyd Freud—[Hon. Members: “Lloyd?”] Lord Freud. It was a Freudian slip.

Last week, Lord Freud admitted that there are not enough one-bedroom properties in this country. How would the Secretary of State describe a Government who tell the poorest in the land that they have to move into a one-bedroom property or pay a substantial penalty when they know that there are not enough one-bedroom properties? Is that perniciously cruel or utterly incompetent?

[Mr Duncan Smith]

I am not closely associated with Lloyd George, but I am always ready to read what he has to say. I welcome the hon. Gentleman to his post, but he is completely wrong. My noble Friend Lord Freud chastised housing associations and others for continuing to build houses that are not required when there is a demand for single bedroom accommodation.

[Chris Bryant]

He didn’t.

[Mr Duncan Smith]

He did. I know he said it, because I read it.

[Lorraine Fullbrook (South Ribble) (Con)]

3. What assessment he has made of the effect of the expansion of the new enterprise allowance on young entrepreneurs.

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

The new enterprise allowance offers support for people of all ages who want to start a business—to date, more than 1,700 young people have done so. We now have an additional 60,000 mentoring places available, so many more will be helped in the future. This is a very successful programme.

[Lorraine Fullbrook]

My constituent Paul Williams recently received help from the new enterprise allowance to start up his business, Choc Amor. He has twice moved to larger premises, has recently opened a new tea room and now employs nine people. Does my right hon. Friend agree that Paul Williams is a great example of why we should extend the scheme further, so that other hard-working people with drive and determination can get on in life, start a business and support our recovering economy?

[Mr Duncan Smith]

My hon. Friend is absolutely right. The example she gives is one of many that prove the programme is working. The scheme was due to end in September 2013, but now, as a result of its success, referrals will extend to 2014. More than 54,000 have taken up the mentoring offer and there is an extra £35 million for an additional 60,000 mentoring places. I hope my hon. Friend, and all hon. Members, will ensure that many more people know about the scheme and have the same opportunity as her constituent.

[Stephen Mosley]

Last month, I organised a small business fair in Chester. We had the support of the local provider, Blue Orchid, which seems to be doing an excellent job of helping people to start businesses in Cheshire. There are a large number of providers across the country. What assessment has my right hon. Friend made of their effectiveness?

[Mr Duncan Smith]

For the most part they provide a good service to all constituents and have been successful in all parts of the country. They operate within Jobcentre Plus districts and are monitored locally. If there are concerns, they are raised with the Jobcentre Plus. Their monthly management information flow gives us a very good overview of the scheme. In the north-west, my hon. Friend’s region, 8,000 have started working with a mentor and 4,420 have started claiming the weekly allowance—a big success.

[Bill Esterson (Sefton Central) (Lab)]

Most businesses do not survive beyond the first year, and failing generally leaves their owners significantly out of pocket. Would it not be better to concentrate on boosting the economy to create jobs for young people, rather than recommending self-employment which, sadly, may make matters worse for the vast majority?

[Mr Duncan Smith]

I am sorry to hear the hon. Gentleman cavil about this programme. The reality is that the two are not mutually exclusive. For those who have a good idea and want to start a business, the scheme provides an opportunity that otherwise would not be there. I remind him that approximately 1,800 18 to 24-year-olds, 18,000 25 to 49-year-olds, 6,000 aged 50-plus, who may well have had difficulty getting a job later on, and 4,800 with disabilities who would have been written off under the old scheme, have now started a business.

[Kerry McCarthy (Bristol East) (Lab)]

Will the Secretary of State look at the problems people are having in making the transition from jobseeker’s allowance to the new enterprise allowance regime, particularly with regard to housing benefit? A constituent, who is keen to set up his own business, came to see me the other day, but immediately found that his housing benefit had been stopped. He is of course still entitled to it in the early stages of claiming NEA.

[Mr Duncan Smith]

I am grateful to the hon. Lady for raising the issue and I will definitely have it looked into immediately. It is meant to flow easily. If there is a misunderstanding, or people do not know what it is, we must take that on and ensure that they do.

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

25. As Essex has a long and rich tradition of enterprise and entrepreneurial endeavour, I thank the Government for introducing the scheme to support the next generation of business leaders in Basildon and Thurrock. Will the Secretary of State tell the House how many businesses have been started with the support of the allowance in Essex, preferably in south Essex?

[Mr Duncan Smith]

I will get back to my hon. Friend about the more specific details, if he wants. About 26,000 new businesses have started already and the target is to get 40,000 going by December 2013. There are about 2,000 start-ups every single month under this scheme. Out of the first 3,000 people on it, 85% are still off benefit a year later. That is a successful scheme.

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

Is the Secretary of State aware that many Labour Members support this measure, but we are careful about ensuring that the quality of mentoring is good, that the evaluation of the likelihood of success be built on initiatives such as the new scheme of Hertfordshire university and that the scheme leads to long-term sustainable businesses?

[Mr Duncan Smith]

As the hon. Gentleman knows, I have great deal of respect for him, and he is right that much depends on the quality of the mentoring; we are doing our level best to make sure that it is as good it could possibly be. If he has any suggestions about how to improve it further, the door is open and I am always happy to see him and discuss them with him. I would revisit any project he would like to nominate if he wanted us to look at any difficulties and I would consider looking at any improvements that might be worth making.

[Jeremy Lefroy (Stafford) (Con)]

22. I welcome the extension of this excellent scheme to 2014. What discussions has my right hon. Friend had with the Chancellor about extending it further, should it continue to be successful?

[Mr Duncan Smith]

The Chancellor and I of course discuss these matters quite regularly, and the reality is that he is very interested in this scheme. The truth is that a successful economy relies on new business start-ups. This plays exactly into the right arena. In comparison with competitors all over the world, new business start-ups and new businesses are providing the way for us to be successful. I am sure that the Chancellor will readily take my hon. Friend’s suggestions.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

5. What assessment he has made of the performance of Atos Healthcare in delivering occupational health assessments.

--- Later in debate ---

[Margot James (Stourbridge) (Con)]

6. What assessment he has made of the effectiveness of the benefit cap in encouraging people back to work.

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

It is my strong belief that there is a connection between what is happening with the benefit cap and getting people into work. The findings of polls we conducted show that of those notified or aware that they would be affected by the cap, three in 10 then took action to find work. To date, Jobcentre Plus has helped some 16,500 potentially capped claimants back into work.

[Margot James]

Some of the few families in my constituency affected by the benefit cap have particular issues in accessing employment. Does my right hon. Friend feel that the Work programme has the specialist knowledge required to deal with some of the difficulties that this group sometimes encounter in accessing employment?

[Mr Duncan Smith]

It does, which is the whole point of the Work programme—to get more individuals to involve themselves and to help such people find the right courses, the right application and then the right skilling. The Work programme is able to do that in a more intense way than Jobcentre Plus is, so it should provide enormous help. The reality is that the benefit cap is enormously popular, which may account for why the welfare party opposite has come and gone on this issue from the beginning. First, Labour Members say they are opposed to it; then they say they are for it: we have no idea what they will do about it.

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

A new report by the New Policy Institute and Trust for London shows that 57% of working-age adults and children living in poverty in London are in households that work. That work is almost inevitably low paid and increasingly part time. Will the Secretary of State drop this mantra of making work pay and begin perhaps to discuss with his colleagues the possibility of encouraging a living wage?

[Mr Duncan Smith]

I am always very willing to discuss issues relating to the living wage with the hon. Lady or with anyone else. However, I hope that when the hon. Lady talks to her constituents she is honest enough to tell them that the reason they find themselves in so much difficulty is that the last Government made such a mess of the economy, and caused so many people to collapse into low incomes and very poor jobs. It was the Labour party that caused that. We are changing it, and restoring the previous position.

[Mr David Ruffley (Bury St Edmunds) (Con)]

The European Commission said this morning that more than 600,000 EU migrants live in this country without working. Does my right hon. Friend agree that we could cap the benefits paid to those individuals by introducing a more stringent residence requirement, and by insisting that they have a longer social security contribution record?

[Mr Duncan Smith]

I have not read the report in any detail, but I do know that the 600,000 figure does not necessarily refer to people of working age who could be working. There is a big question mark over the number of people to whom it relates. I do not want to find myself in the middle of a debate between some of the media and the European Union, so let me simply say that our own assessment—our habitual residency test—currently prevents people who could be working and not on benefits from claiming those benefits. It is the Commission that is trying to get us to change that, and I am utterly refusing to do so.

[Alex Cunningham (Stockton North) (Lab)]

The unemployment rate in my constituency is nearly 9%. One mother whose benefits have been capped has little opportunity of getting a job, especially as she has several small children to look after. She is putting feeding and clothing them and paying bills ahead of paying her rent, so her landlord, Miguel Contreres, is receiving just £30 a week. Can the Secretary of State provide a fair alternative to the landlord’s throwing that mother and her children out on to the street?

[Mr Duncan Smith]

Can we please return to reality? [Interruption.] I love the fact that my new shadow, the hon. Member for Leeds West (Rachel Reeves)—whom I welcome to her position—was out over the weekend saying “We are going to get really tough on benefits”, and at the first opportunity Labour Members are carping about the cap and the spare room subsidy. The truth is that the cap applies to people with average earnings. May I ask the hon. Gentleman what he might like to say to those who are trying and working hard, and who wonder why people on benefits are earning more than they are?

[Sir Bob Russell (Colchester) (LD)]

8. How many individual cases were raised with the Child Support Agency by hon. Members in 2012.

--- Later in debate ---

[Fiona O'Donnell (East Lothian) (Lab)]

16. What plans he has to improve the performance of his Department’s programmes referred to by the Chancellor of the Exchequer in his spending review statement on 26 June 2013.

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

I am cutting the running costs of my Department from what I inherited from the last Government of £9 billion in 2009-10 to less than £6 billion by the end of this Parliament. What is more, by 2016-17 spending on out-of-work benefits will be back at 2008-09 levels. Working with the Treasury, we are always looking to drive down costs further still, and we will make further announcements.

[Fiona O'Donnell]

I thank the Secretary of State for that answer. The Chancellor of the Exchequer called in his spending review statement for a hard-hearted assessment of underperforming programmes in the DWP. Does the Secretary of State accept this review, and what steps is he taking to tackle underperformance in his Department?

[Mr Duncan Smith]

The No. 1 thing we could do was to get rid of Labour—a great move to get more performance and not underperformance, and judging by the performance of its Front-Bench team, that is one of the areas where we ought to start straight away—but I must say to the hon. Lady that we are driving costs down and making savings in every programme. I would love to know this: out of the £80 billion plus we will save as a result of our welfare changes, which the Chancellor welcomes, which ones does she welcome?

[Mr Frank Field (Birkenhead) (Lab)]

How many permanent secretaries does the Secretary of State think he will get through before universal credit is rolled out nationally?

[Mr Duncan Smith]

Universal credit will roll out very well and it will be on time and within budget. We should consider the reality of the record of the right hon. Gentleman’s Government on Departments and the mess they got into. They left us with IT blunders of over £26 billion. With respect to him, as he was not always involved, but the others were, I therefore think they should apologise first.

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

17. What discussions he has had with Motability on the changes from disability living allowance to personal independence payment.

--- Later in debate ---

[Paul Blomfield (Sheffield Central) (Lab)]

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

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

Today I welcomed the national roll-out of the claimant commitment across around 100 jobcentres a month from now, mirroring a contract of employment. These contracts are about a cultural shift making it easier for claimants to understand what they must do in return for benefits and that they are in work now to find work. During the pathfinder both claimants and staff have found this helps enormously in focusing people on their requirements and the consequences if they do not meet them. This now marks the next stage of delivery.

[Paul Blomfield]

One of my constituents who is still without a job after his involvement in the Work programme came to one of the public consultation meetings I organised during the recess because he was angered by his experience of the programme. Bright and articulate with a postgraduate degree from Oxford, he had been sent on an eight-week employability course that included the completion of questions by ticking boxes with smiley faces or sad faces. Does the Secretary of State understand why he and others on the course angrily felt it was a waste of time, and does his experience explain why the Work programme has failed the overwhelming majority of people who have been sent on it?

[Mr Duncan Smith]

I just do not agree with that because the reality is that the Work programme figures show that it is performing incredibly well and it will just get better: some 72% of the first tranche or cohort are off benefits; 380,000 people who before were written off by the last Government are now in work; 168,000 are now in sustained employment; and we now know that 90% of those who are in sustained employment go on to another year at least of employment, which is better than any of the last Government’s programmes—cheaper, more effective and better for those trying to get into work.

[Andrew Stephenson (Pendle) (Con)]

T6. As this month marks the first anniversary of automatic enrolment, will the Minister update the House on progress so far?

--- Later in debate ---

[Rachel Reeves (Leeds West) (Lab)]

Labour Members support the principle of universal credit, but we have repeatedly raised concerns about the Secretary of State’s ability to deliver it. Since 2011 he has consistently promised that 1 million people will be claiming universal credit by April 2014. Will he now tell the House how many people he expects actually to be claiming universal credit by then, and whether he will proceed with the previously announced plans to close down new claims for tax credits by that date?

[Mr Duncan Smith]

May I start by welcoming the hon. Lady to her position? As I told the Committee and have said consistently, universal credit will be rolled out within the time scales we set, and we are planning very clearly to enrol as many people in it as possible. This will be a success. As she says she is in favour of universal credit, perhaps she can explain why Labour Members voted against it at the start and continue to do so.

[Rachel Reeves]

Despite what the Secretary of State says, the truth is that by April next year it will be possible to claim universal credit at just 10 jobcentres out of a total of 772. Meanwhile, the National Audit Office says that £34 million has already had to be written off, £303 million is now at risk, and Ministers have failed to set out how the policy will work. It is a catalogue of errors. Will the Secretary of State tell us how much money spent on the project will be money down the drain? Instead of blaming everybody but himself, would it not be better for him to turn down the volume on off-the-record briefings against his own permanent secretary and start taking responsibility for his own failed policy?

[Mr Duncan Smith]

Just in case the hon. Lady does not realise it, I should point out that this is not a failed policy: it will roll out successfully on time and within budget. Where does the word “failure” apply to that? She is part of a party whose time in office saw more than £28 billion wasted on IT programmes, with complete chaos most of the time it was there. This will roll out on time and within budget. At any time when we announce the new reset, she can, if she would like, come and talk to us about it. Perhaps for once, instead of voting against stuff and then saying she supports it, she might tell us how many of the benefit cuts Labour Members voted against they are now in favour of.

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

T10. Is my right hon. Friend aware that the number of jobseeker’s allowance claimants in Southend West has fallen by 12% in the past year? Will he join me in congratulating everyone on this very encouraging trend?

[Julie Hilling (Bolton West) (Lab)]

T2. With well over 1 million unemployment benefit claimants being sanctioned since 2010, rumours abounding that targets are in place for sanctioning, and all of us facing many desperate people in our surgeries, will the Secretary of State tell us when we will see the results of his investigation into sanctioning?

[Mr Duncan Smith]

It is obvious and clear that Labour Members do not support sanctioning. The reality is that they spend their whole time saying that they are in favour of benefit changes and at every single turn they oppose them. People who deserve sanctions deserve sanctions, and we impose them on those who do not play a part in the system.

[Dr Julian Huppert (Cambridge) (LD)]

People with autism and mental health problems have particular problems with the work capability assessment, and the courts recently found that the test put people with mental health problems at a substantial disadvantage. Will the Minister or the Secretary of State rethink the work capability assessment for those people and pause the process, for which Rethink Mental Illness called?

[Andy Sawford (Corby) (Lab/Co-op)]

T3. Will the Secretary of State confirm whether benefits officers been have told not to sanction people when the only job offered is on a zero-hours contract? Do Ministers recognise that the new claimant commitments mean that people will not actually be able to sign zero-hours contracts without risking losing their in-work benefits?

[Mr Duncan Smith]

The claimant commitment is about people’s obligations under the existing terms. They will have to seek work, attend interviews and try to get a job, and once they are offered a job they must take it. Those are the sanctions coming up under universal credit. People will lose benefits for three months for a first offence, six months for a second offence and three years for a third offence. Right now, zero-hours contracts are legal. If Labour wants to change the law, we want to hear that from the hon. Gentleman.

[Henry Smith (Crawley) (Con)]

Will the Secretary of State update the House on the innovation fund and how it is helping separated families?

--- Later in debate ---

[Kerry McCarthy (Bristol East) (Lab)]

T5. The Government continue to disregard warnings from the likes of Oxfam and Church Action on Poverty that many of the 500,000 people being forced to use food banks are doing so because of delayed, reduced or withdrawn benefits. The Department seems not to be interested in collecting any statistics behind the reasons for that referral. Will the Secretary of State look into this to see what impact his benefit changes are having on people who simply cannot afford to feed themselves?

[Mr Duncan Smith]

We do spend our time looking carefully to see whether the effects of our policies are negative on some families and how we can best support them. We have localised to local authorities the support for things such as crisis loans. Local authorities are now much better at focusing on what people really need. Our general view is that there are people in some difficulty, but lots of people are taking some of this food because it is available and it makes sense to do so. We are working with local authorities to ensure that those in real need get support.

[Mike Freer (Finchley and Golders Green) (Con)]

What estimate has been made of the annual number of surviving civil partners who qualify for widow and widower pensions?

--- Later in debate ---

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

The roll-out of universal credit will be complete by 2017, yet the contract for the Post Office card account will be up for renewal in 18 months. What assurance can the Secretary of State give that people will still be able to access their benefits through their post offices?

[Mr Duncan Smith]

I have looked at this matter carefully. The Post Office contract is due to expire in 2015, but there is the option to extend it and we will keep the matter under review. The Post Office is piloting a new current account and we hope that many people will transfer on to that. I assure the hon. Gentleman that we will ensure that those who are in the circumstances that he describes will always be properly supported.

[Ian Austin (Dudley North) (Lab)]

Every single week, constituents tell me that Atos claims that it has not received the forms that they have completed. Last week, a young disabled constituent told me that that had happened on several occasions, leaving him penniless for weeks at a time. Why can the Secretary of State not sort this shambles out?

[Graham Evans (Weaver Vale) (Con)]

Will the Secretary of State confirm that since the benefit cap was introduced, his Department has helped more than 16,000 people who would have been affected by it into work? Does that not show that those who voted against the benefit cap cannot be trusted on welfare reform?

[Mr Duncan Smith]

My hon. Friend is right that the benefit cap is popular and effective. Although the new shadow Secretary of State said that Labour would be tougher on welfare, we have all noticed throughout questions that the only thing we have heard from Labour is opposition to every single spending reduction and welfare reform. That party is not fit for government.

[Mr Speaker]

The hon. Member for Brighton, Pavilion (Caroline Lucas) has been looking doleful for much of questions. I shall do my best to rescue her from her misery.

Universal Credit

Iain Duncan Smith Excerpts

Thursday 5th September 2013 Commons Chamber

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

(Urgent Question): Will the Secretary of State confirm that the facts in the National Audit Office report about universal credit, set out this morning, are true?

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

I start by reminding the House of the importance of universal credit. Universal credit is a major and challenging reform to transform—

[Mr Speaker]

Order. Just before the Secretary of State develops his remarks—the exchanges will run on—I say very gently to the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) that the proper form in these matters is to stick to the urgent question in the terms submitted. It is not appropriate for a Member to refine, adjust or spin the terminology of the question. We really must stick to the terms. I am not impugning the integrity of the right hon. Gentleman—[Interruption.] No, no; I am not doing anything of the kind. What I am saying is that I think he has behaved in a mildly cheeky manner, and I hope he will not do that again.

[Mr Duncan Smith]

We would never accuse the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) of being less than cheeky—or, for that matter, of ever attempting to spin anything—but I stand by your judgment, Mr Speaker: a cheeky spinner he is.

Universal credit, I remind everybody, is an important and challenging programme to provide major benefits for claimants and the country as a whole, with a clear financial set of incentives that will get an estimated 300,000 additional people into work and make 3 million claimants better off. However, all major programmes involve difficult issues and difficult decisions, week in, week out. In 2011, I added to the programme and the original schedule—as the right hon. Gentleman knows, because we saw each other and I told him about this—the need for a pathfinder, which I said would start rolling out in April.

I added that provision because I was concerned that we needed to ensure that we tested the IT throughout. By the way, I have done that for every programme—from disability living allowance to the personal independence payment, and everything else. We need to make sure that we are right, and I was concerned that the existing programme was not quite right.

In the summer of 2012—or rather, before that, in early 2012—I instigated an independent review because I was concerned that the leadership of the programme was not focusing in the way that it needed to on delivering the programme as it had been originally set out. The internal report showed me quite categorically that my concerns were right: the leadership was struggling, a culture of good news was prevailing and intervention was required. That was very much backed up by the National Audit Office.

As a result, I changed the leadership team in October 2012 and brought in the brilliant Philip Langsdale, who had successfully delivered Heathrow terminal 2. He was one of the great IT brains in the UK. He made it very clear that the programme was deliverable, and that it needed to be reset so that it could be delivered on time and on budget. When he sadly died, I went to my right hon. Friend the Minister for the Cabinet Office and Paymaster General and asked for David Pitchford—in the short term, while we looked for a replacement—who headed the Major Projects Authority in January. My right hon. Friend agreed to that, and the Cabinet Office helped us to put together the reset programme that had been started by Philip Langsdale.

I accepted the findings of the report absolutely in review, and have made certain that in the last few months we have been working to deliver the programme. It has been handed over to Howard Shiplee, who has now taken over. He wrote recently in The Daily Telegraph that he believed the programme was deliverable on time and on budget. The important thing about Howard Shiplee is that he is the man who delivered the Olympic park under budget and early. His clear indication is that he believes that we might do similar things here. He has made that very clear.

I should also like to remind the House that universal credit is not just succeeding but progressing. It is progressing because we have already started to roll out the pathfinders. I was in front of the Select Committee in July, when I explained that those pathfinders were already teaching us some important lessons. We are expanding those into six new jobcentres and dealing with them. Also, from October, around 100 jobcentres a month will begin using the claimant commitment with new jobseekers. That commitment will act as a contract between the jobseeker and the state. We are already seeing that this is driving people into work. Universal credit is not just about IT. It is massively about cultural change to get people back to work and to ensure that those who do go to work, particularly the poorest, benefit the most.

The NAO concludes on the programme:

“It is entirely feasible that it goes on to achieve considerable benefits to society”.

Every recommendation that the NAO has made in the report has already been made. The key lesson that I take is simply this. The previous Government crashed one IT programme after another, and no Minister ever intervened to change them early so that they delivered on time. We are not doing that. I have taken action on this particular programme. This programme will deliver on time and will deliver within budget.

[Mr Byrne]

Our bible, “Erskine May”, states clearly on page 201 that Ministers must give accurate and truthful information to the House,

“correcting any inadvertent error at the earliest opportunity”.

On 5 March this year, the Secretary of State told my right hon. Friend the Member for East Ham (Stephen Timms) that

“the implementation of universal credit…is proceeding exactly in accordance with plans.”—[Official Report, 5 March 2013; Vol. 559, c. 827.]

We now learn from the National Audit Office that the month before that statement was made, the Department began a 13-week reset programme. Four weeks earlier, the Department reduced case-load forecasts for next April by 80%. Five months before, the Department had largely stopped developing systems for national roll-out. It is inconceivable that the Secretary of State did not know about that, because the reset programme was organised by the man he personally brought into the Department. Furthermore, in a letter to me last month, the Secretary of State told me:

“I closely monitor the progress of this ground-breaking programme”.

The NAO must agree its facts with the Department. Paragraph 13 of the NAO’s report states:

“The Department is now reconsidering the timing of full rollout”,

and that plans have changed three times in four months. This morning, the National Audit Office told me that the NAO and the permanent secretary have agreed that statement, yet it flatly contradicts what the Secretary of State has said to this House. To hit his deadline at the end of 2017, he must now move more than 200,000 people a month on to the new system—the population of a city the size of Derby.

The Public Accounts Committee will no doubt consider next week the changed timetable, the IT shambles and the write-offs, the lack of counter-fraud measures, the shambolic financial control and the ineffective oversight. What I want to say to the Secretary of State, however, is this: he has let this House form a picture of universal credit, which the nation’s auditors say is wrong. The most charitable explanation is that he has lost control of the programme and lost control of the Department. He must now correct the record. He must now apologise to the House and convene cross-party talks to get this project back on track. The quiet man must not become the cover-up man.

[Mr Duncan Smith]

I must say that that was suitably pathetic, coming from the right hon. Gentleman. He knows very well—he has been in to see me on a number of occasions; I would like to say what he said, but it was unmemorable in every single case—that the reality is that this programme, as I said at the beginning, will be delivered in time and in budget. There is no major change to that. What I have done, and I did early on, is something that the right hon. Gentleman never did and Labour has never done. When I got concerned about the delivery schedule, I made changes and intervened, bringing in the right people to do that. I stand by that, and I will not take lessons from the right hon. Gentleman and his party. Let me just remind them of what happened when they were in office.

The benefit processing replacement programme was scrapped at a cost of £140 million, and no one apologised. The Child Support Agency wasted £500 million before the programme was scrapped—no Minister intervened; no Minister changed it. The Labour Government wasted £3 billion on benefit overpayments. The tax credit system was delivered at one go on one day and it collapsed, costing billions, with £30 billion lost in fraud. The programme that delivered the health service IT changes cost £13 billion when it was cancelled with no apologies.

The lesson that I have learned and that we Government Members learn, in conjunction with my right hon. Friend the Minister for the Cabinet Office and Paymaster General, is that we check these programmes while they are progressing and if changes need to be made, we make them. In making those changes, I stand by the fact that the purpose is to deliver this programme—on time and on budget, which is something that the Opposition never did in the whole of their time in government.

[Sir Tony Baldry (Banbury) (Con)]

Does my right hon. Friend not feel that every time Labour Members snipe at him they simply show that they are not serious about welfare reform? Does the National Audit Office report not show that universal credit can substantially benefit society and, indeed, can benefit society by some £38 billion by 2022-23?

[Mr Duncan Smith]

The reality is that this NAO report is very clear about the benefits and very clear that if we get the resets right—it gave us a list of them—and every one of those items has been done, it will save £38 billion. More than that, it will help improve the lives of the least well-off as they are delivered back into work. We should remember that I inherited from the previous Labour Government a chaotic system costing billions—and we are putting it right.

[Mr Alistair Darling (Edinburgh South West) (Lab)]

Like many Secretaries of State for Work and Pensions, I looked at something like universal credit some 12 years ago, and I was advised then that it was technically very difficult, if not impossible, to implement it at anything like an acceptable cost and that whatever the cost I was quoted, it was likely that it would end up costing an awful lot more. I have listened to the right hon. Gentleman this morning claiming that this project is on track and on budget, which I find extraordinary when the NAO says that it is anything but that. I have also listened to him blaming all those around him for letting him down, so will he tell us what advice he received when he gave this the go-ahead in 2010?

[Mr Duncan Smith]

I can tell the right hon. Gentleman, whom I usually respect—and he may recall that we were facing each other across the Dispatch Box at the time when he was looking into the matter—that the advice I received then made it absolutely clear that universal credit could be delivered and a timetable could be set in the Department. I take full responsibility for the delivery of universal credit, and I will not shirk that responsibility. I intend to deliver it on budget and on time.

The NAO is an historical report. It relates to the period during which I was making the changes. Those changes have now been made, and all the outside advisers and experts believe that universal credit is deliverable. The right hon. Gentleman’s party has said that it supports universal credit, and I was happy to receive that support, but Opposition Members have continually voted against it and carped about it. I think that it would be far better for him to ensure that they stay the course.

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

Will not 3.1 million people, including many in Brighton and many on the lowest incomes, be better off and receive a higher entitlement under universal credit?

[Mr Duncan Smith]

That is absolutely true. That is why this programme is worth seeing through, and why having the nerve and decisiveness to see it through is so important. Of course there were difficulties—I do not shy away from that—but the changes that have been made by my Department, the Cabinet Office and external parties will deliver the system on time in order to benefit the very people to whom my hon. Friend has referred, while the Opposition carp and forget their own history.

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

I am very disappointed by the bullish way in which the Secretary of State has behaved this morning. I believe that it was the same attitude that dismissed the voices of members of my Select Committee and those of many others who suggested that the implementation of universal credit was not going as well as was being claimed. From now on, will the Secretary of State set realistic time scales for the roll-out of universal credit, will he be honest, open and transparent about the challenges posed by the introduction of such a large and complex system, and will he stop over-promising what cannot be delivered?

[Mr Duncan Smith]

When I appeared before the hon. Lady’s Committee in July, I was very clear about the changes that were being made, and also about the fact that we would return to the Committee with the full roll-out timetable in the autumn once we had delivered it. That is what we were asked to do, and I will do it.

I am not being over-bullish about this. The fact is that it takes determination to drive a reform through. I have that determination, and the Department is determined to make this happen, with support and help. It is in all our interests for that to be done. We believe all those who have been charged to deliver it and who say that it can and will be delivered on time and on budget. I see no reason why that should not happen, and indeed the National Audit Office said that it was wholly feasible for it to happen.

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

The previous benefits system was confusing and unfair. Given that the Government are committed to resolving that problem, will my right hon. Friend tell us when a million people will be covered by the new universal credit system? That is what we should be aiming for, as a first step.

[Mr Duncan Smith]

All I can say is “at the earliest”, but we want to shift as many people as possible. I would rather think in terms of how quickly we can move people from tax credit and jobseeker’s allowance to universal credit, and I hope that that will happen well before the election. I expect big volumes to be running through, but we need to take our time in order to ensure that when we roll out the IT, it works properly.

I have made the changes that I have made in order to ensure that the system is delivered safely. I could have just let it run. I could have accepted the word of some people that it would be all right on the night. However, I did not. I took the job of making sure that we knew whether it was all right, and I have made the changes that are necessary for the delivery of the programme.

[Helen Goodman (Bishop Auckland) (Lab)]

What is the Secretary of State’s estimate of the number of people who will be on universal credit by the time of the next general election?

[Mr Duncan Smith]

I will not give that estimate now, because I intend to make a clear statement in the autumn about how and when we will roll this out. All I can tell the hon. Lady is that there will be significant volumes, and that I intend to close down jobseeker’s allowance and tax credit well before the election.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

Is my right hon. Friend aware that the Public Administration Committee will produce an important report tomorrow about civil service reform? It comes as no surprise that the Comptroller and Auditor General has said that his programme lacked “an appropriate management approach”, adding:

“Instead, the programme suffered from weak management, ineffective control and poor governance.”

These are problems that afflict all Departments, and have done so for many years under the last Government as well as this one. Will my right hon. Friend support the civil service reform so determinedly championed by my right hon. Friend the Member for Horsham (Mr Maude), to ensure that we secure the change in Whitehall that we need?

[Mr Duncan Smith]

First, let me say that I am a complete supporter of my right hon. Friend the Minister for the Cabinet Office and Paymaster General on the civil service reform plan, and I have been from day one. The truth is that if the Opposition were in thinking mode they would have agreed with that as well. The reality is that today’s NAO report shows there were problems in the running of this programme. I intervened when I discovered that and changed it, but I never expected to have to do that. When I arrived, I expected the professionalism to be able to do this properly. So my view is that I have intervened in the right way. All the other programmes of IT change are working and are well run—and they are well run by the Department. This one was not. We have made the changes necessary.

[Barry Gardiner (Brent North) (Lab)]

The Secretary of State does, however, still need to explain why he came to this House in March and said the programme was proceeding according to plan when, in fact, he knew at that point that a month previously he had had to rip up those plans and reset the whole programme. Why did he do that? Why did he not give a more candid account to Parliament in March?

[Mr Duncan Smith]

The plan is, and has always been, to deliver this programme within the four-year schedule to 2017. At the time I came to the House, I believed that to be the case, and I am standing here today telling the House—whether Opposition Members like it or not—that that is exactly what the plan is today. We will deliver this in time and in budget, and I have to say the changes were made deliberately to ensure that.

[Philip Davies (Shipley) (Con)]

May I invite my right hon. Friend to welcome the shadow Secretary of State’s conversion to caring about the use of taxpayers’ money, and in doing so would he like to remind the House of how many of the Government’s welfare cuts and changes the right hon. Gentleman has opposed? May I also urge my right hon. Friend to adopt the cross-party talks the shadow Secretary of State urges, because whatever advice he gives, my right hon. Friend will know to proceed in exactly the opposite direction?

[Mr Duncan Smith]

I am always willing to see the shadow Secretary of State; he has been in three or four times, and I will be very happy to see him again if he wishes. Honestly, however, my hon. Friend is right: the Opposition have opposed every single welfare change. We will be saving £80 billion as a result of our welfare reforms, and we have already, last week, seen the lowest number of households without work since the last Government were in power. We have seen fewer people economically inactive, and we have seen a fall of over 300,000 in the number of those out of work or economically inactive.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

I had a conversation with the late Philip Langsdale before he took up his post, and I must say I had the most profound respect for the man. He took over the post because of previous project management failures. May I remind the Secretary of State that it was he who signed off the contract that led to those project management failures? Rather than simply blaming civil servants—although I agree with the Chair of the Public Administration Committee about the need for change—why does the Secretary of State not accept the blame himself?

[Mr Duncan Smith]

I am not blaming civil servants—[Interruption.] No: I made decisions that led to the removal of some of those who were charged with the responsibility of delivering this. Today’s NAO report is very clear that the culture of secrecy and of good news did not help run those departments. That does not run all the way through every programme. We are delivering DLA PIP and that programme has been modified and changed because they have brought forward all the concerns. It is the same with the CMEC CSA changes and the cap changes. All of those IT programmes have been dealt with in my office in conjunction with them in the proper way. This one was not. I am simply saying that Philip Langsdale—the hon. Gentleman is right that he was a brilliant man—said to me at the beginning that this one did not tell the truth.

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

Does my right hon. Friend agree that all this debate about the minutiae of a complex transformation and simplification of what, by any measure, is a very complicated benefits system, risks losing sight of the bigger picture, which is that universal credit will mean that work always pays, and that whatever the costs of developing the system, they will be a small fraction of the billions of pounds that will be saved in the long run?

[Mr Duncan Smith]

My hon. Friend is right about that. I remind the House that under the previous Government, in the six years preceding the election, tax credits cost £180 billion-plus because of the shambles and the mess they were in. They lost huge sums through tax fraud and evasion, and we are putting that right. Our welfare reforms, including universal credit—all opposed by the Opposition—will change it, and they are already having an effect. Not one of our reforms has been supported by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who has carped and voted against every single one.

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

One of the most damning criticisms in the National Audit Office report relates to the lack of a proper fraud detection system as part of universal credit. When Lord Freud, the Minister with responsibility for welfare reform, came before the Select Committee on Communities and Local Government earlier this year, he said that a new fraud detection system would be put in place. Why did the Secretary of State allow this programme to run for so long without an adequate fraud detection system being part of it?

--- Later in debate ---

[Mr Duncan Smith]

That is exactly one of the reasons why we intervened back in 2012—the system they were trying to integrate was not going to work correctly. That was already evident by the end of 2011 and early 2012. The problems were such that when I introduced the independent inquiry, it told me categorically that this was not going to work, so we have changed it and reset it. In conjunction with the Cabinet Office, we have seen that there is a better way to do this, and we believe that the integrated fraud programme will deliver results in the new roll-out.

[Nigel Mills (Amber Valley) (Con)]

When the Select Committee visited the north-west we saw universal credit working, albeit in a limited manner, and being well received by the staff working with it. It was having a positive impact on the claimants they were working with. Surely, however, it is right not to roll out this programme so fast and risk millions of people not getting the benefit that they are expecting to get. So may I urge the Secretary of State to say to the House that he will not rush this and that he will get it right before it is rolled out to more people?

[Mr Duncan Smith]

I agree, and I must say what the problem has been throughout all this. When I introduced the pathfinder, which said that there would a delay in the way we rolled this out, Labour criticised us for delaying the roll-out. Then, later on, it criticised us for not doing it properly. The reality is that we are doing this properly. We will not do it against artificial timetables, but it will be done in the overall four-year timetable and it will be effective.

[Mark Durkan (Foyle) (SDLP)]

The Secretary of State has told us today that he had serious concerns in the summer of 2012. He also told us that he then changed the leadership in October 2012. Does he recall what he said to this House in September 2012? He said:

“For what it is worth, I take absolute, direct and close interest in every single part of the IT development. I hold meetings every week and a full meeting every two weeks, and every weekend a full summary of the IT developments and everything to do with policy work is in my box and I am reading it. I take full responsibility and I believe that we are taking the right approach.”—[Official Report, 11 September 2012; Vol. 550, c. 154.]

Culture of secrecy and good news, or what?

[Mr Duncan Smith]

I do not resile from any of what I said; that is exactly the way in which we have tried to manage it. But of course, someone is only as good as the information given to them. I must say to the hon. Gentleman that by September 2012 I had already started the reset process and brought in Philip Langsdale. He was coming into the office and we were going to make those changes. The reality is that this will be delivered on time and on budget. That was my view then and it is my view today. The key thing is that those charged with the responsibility of doing that have the skill to do it.

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

Is my right hon. Friend aware that his transformative scheme has enormous public support, as it will revolutionise dependency by reducing it in this country? Does he note, as I do, that in office the socialist Opposition swallowed any number of camels and are now straining at a gnat?

--- Later in debate ---

[Mr Duncan Smith]

My hon. Friend is absolutely right. As I said earlier, the Labour party has opposed every single reform since we came into government. Those reforms are set to save some £80 billion, and universal credit is part of that. At no stage have the Opposition told us what they would do instead. When they said that they would support universal credit, they voted against it. This is a party in opposition that is so opportunistic that it catches itself in the morning disagreeing with itself in the evening.

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

Since the Secretary of State took personal responsibility for this failure, we have seen a delay in the time scale for the universal roll-out of universal credit, a reduction in the number of pathfinder programmes, which has gone way down, and claimants being reduced to the simplest to pass through the system. When he gives us the time and the budget, as he undoubtedly will again, could they at least be accurate? I say to him that when it comes to spinning it takes one to know one—but his spinning will not create humour in the country. It could be catastrophic for benefits claimants.

[Mr Duncan Smith]

The hon. Lady, not for the first time, is completely wrong. The pathfinder was exactly as we set it down. It was always going to deal with single people at the beginning and we have rolled it out as we said we would. I stand by the fact that this pathfinder is the right thing to do. I introduced it back in 2011 and it will help us enormously to develop the IT. That is the way we are doing it and that is the way we will do it.

[Mike Freer (Finchley and Golders Green) (Con)]

Having visited the pathfinders with the Select Committee on Work and Pensions, I can reassure my right hon. Friend that both the claimants and the front-line staff were enthusiastic about universal credit and how it is working. Is my right hon. Friend also aware that the Select Committee commented that the Government are making significant progress in making work pay?

[Mr Duncan Smith]

My hon. Friend is exactly right. All our reforms—reducing the workless numbers and ensuring that the economically inactive are going back to work, saving money for the Exchequer and for taxpayers—are in play. Every one has been opposed by the Opposition and we have had no answer about what they would do instead. As my right hon. Friend the Minister for the Cabinet Office and Paymaster General has said, they dance around on all the issues and the truth is that they have no policy. The welfare party is bankrupt.

[Derek Twigg (Halton) (Lab)]

Under the section of the report containing the key findings, paragraph 18 states:

“Throughout the programme, the Department has lacked a detailed view of how Universal Credit is meant to work.”

Will the Secretary of State explain how that happened? Does it not show that he lost control of the project from the very beginning?

[Mr Duncan Smith]

The original plan to have an “Agile” process meant that by 2011 the plan would be formulated and could be delivered against. In 2011, I was concerned about the failure to deliver—that was meant to be part of the process—and that is why I instituted the changes in 2012. We will have that plan ready. It will be announced to Parliament, it will be stuck to and it will deliver in time and on budget, so the NAO is right and I fully agree with it.

[Sir Peter Bottomley (Worthing West) (Con)]

We understand that the aim is to give support to the right people at the right time in the right way and to help make their lives better. Will my right hon. Friend remind us of the additional benefits of the reduction in administrative costs and in fraud and error?

[Mr Duncan Smith]

The costs overall and the savings are enormous. The total benefits to individuals and in fraud and error will total up to perhaps £38 billion. The point is that those savings are real savings. Yes, there is a problem about some wasted money in this programme that is quite unacceptable, but set against the big savings the key point is that it is a big and important programme.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The use of real-time information is critical to rolling out universal credit across the country and ensuring that it works properly, so will the Secretary of State confirm that the RTI project is on time and on budget at HMRC?

[Mr Duncan Smith]

The good thing about the pathfinder is that it has allowed us to test the RTI system. The hon. Lady will find, if she wants to visit any of the sites, that we are getting a phenomenally good feed from the RTI about the payroll. In some areas, they have already discovered that some people claiming jobseeker’s allowance are earning a salary at the same time. They have been able to deal with that, hugely due to the fact that the RTI system is working. I recall that many Opposition Members said that the RTI software would not work, but they were wrong.

[Justin Tomlinson (North Swindon) (Con)]

Why was this urgent question called when the Public Accounts Committee, of which I am a member, is investigating this clearly outdated, historic report next Wednesday?

[Margot James (Stourbridge) (Con)]

I was delighted to hear my right hon. Friend say that he thought that the cultural change afforded by the introduction of universal credit was even more important than the financial savings that it will offer. In my part of the world in the black country, we have a higher than average rate of workless households. Will he talk to his officials about ensuring that some of the pathfinder pilots that he has in mind take place in the black country?

[Mr Duncan Smith]

I thank my hon. Friend for her support and I will ensure that she gets the earliest possible roll-out.

[Jeremy Corbyn (Islington North) (Lab)]

As the Secretary of State considers the operation of universal credit, will he look at the effect on people living in areas with high private sector rental costs who find that a wholly disproportionate amount of their benefit goes on such rents, rather than keeping body and soul together? We need not only to look at that, but to control private sector rents.

[Mr Duncan Smith]

I believe that universal credit will help in that regard because the idea is that, as people go back to work, they will be better off for every hour they work than they were on benefits, which should make them more able to afford to live. The vast majority of benefits under universal credit will go to the bottom 20% of earners, so it should be a net benefit to the poorest in society.

[Nick de Bois (Enfield North) (Con)]

May I urge my right hon. Friend to reject the shadow Secretary of State’s offer of cross-party talks, not only because of Labour’s failure on IT, benefit fraud and the tax credits system, but because Labour Members fundamentally do not believe in the welfare reform that this country desperately needs?

[Mr Duncan Smith]

I will not reject the offer of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) because I am an optimist. On the road to Damascus, there is always a chance that such an individual may change his view and realise that what we are doing is the right thing. I will do my level best to persuade him that everything that he has done so far is wrong and that there is a better way—marked “coalition”.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Secretary of State’s problem is that we have been here before. We were told on every occasion that everything was fine and that “Agile” programming—whatever that is—would solve all the IT problems, but now we find that “Agile” was all wrong. The problem for the Secretary of State is that he still wants to deliver this by 2017, despite the fact that he is already way behind his original timetable for delivery by then. If he accepts that there are all these problems and statements such as it is

“unlikely that Universal Credit will be…simple or cheap to administer”,

would it not be better to delay the final implementation date?

[Mr Duncan Smith]

The hon. Lady is right and I agree that we have been here before: the national health IT collapse costing £13 billion; the Child Support Agency failure and £120 million crash programme; and a £7.1 billion IT project that failed. The difference is that, unlike those programmes under the Labour Government, I acted to ensure that changes were made early to deliver the programme on time and on budget.

[Several hon. Members]

rose—

Disabled People

Iain Duncan Smith Excerpts

Wednesday 10th July 2013 Commons Chamber

[Mr Byrne]

It ill behoves the Minister to play word games this afternoon on a policy that is affecting hundreds of people and their carers in his own constituency. What is he saying to carers in his constituency who are having to cut back on food, electricity and heating?

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

Will the right hon. Gentleman give way?

[Mr Byrne]

In a moment. What is the Minister going to say to councils up and down the country surveyed by Channel 4 for tonight’s broadcast showing that one third of councils are having to deny help to disabled people because the provision of the discretionary housing payment fund is, frankly, insufficient? What is he going to say to those councils and what is he going to say to those disabled people in his own constituency?

[Mr Byrne]

We believe this policy should be dropped and it should be dropped now. Why? Because this is an iniquitous, unjust policy that is going to cost more than it saves.

[Mr Duncan Smith]

rose—

[Mr Byrne]

I will give way to the Secretary of State in a moment, but first I want him to respond to this scenario. His own figures show that 660,000 people will be hit by this hated tax. He said when he came to the House that this would save £490 million. Let us assume that 50% of the people who move go into the private rented sector. That is going to cost his Department an extra £25 a week each. Let us assume the rest get another form of social housing. Every single move costs a registered social landlord £850. Then there is the cost of arrears, which RSLs say will double. Then there is £160 million-worth of discretionary housing payment on top. The truth is that if 40% of people move, this could well cost our country £580 million, which is £100 million more than the Secretary of State promised to save. What is his analysis of that? Does he now admit this will cost more than it saves?

[Mr Duncan Smith]

The right hon. Gentleman’s leader said categorically, in terms, that Labour would not reverse the spare room subsidy. [Interruption.] Yes, he has, in an interview. Now, however, the Leader of the Opposition’s spokesman is standing at the Dispatch Box saying Labour will reverse this. That is a commitment to spend £1 billion over two years, rolling out further down the road. That is a spending commitment.

[Mr Byrne]

The Secretary of State has just refused to deny that this iniquitous policy is going to cost £100 million more than it saves. If he wants to refute that, why is he refusing to give our noble Friends in the other place the detailed model his Department used in order to assess this and come to the conclusion it was going to save £490 million? If he wants to have an argument about whether this does indeed cost more than it saves, he should provide that detailed analysis and those figures.

--- Later in debate ---

[Mr Byrne]

I am grateful to you, Mr Speaker.

We have to deal with the issue of the bedroom tax and then the issue of the cash benefits—

[Mr Duncan Smith]

Will right hon. Gentleman give way?

[Mr Byrne]

I am not going to give way to the Secretary of State—

[Mr Duncan Smith]

He has now just said—

[Mr Speaker]

Order. We must proceed, on both sides, according to established rules of debate, which include taking interventions or choosing not to do so. A Member cannot intervene, however strongly he or she feels, if the person who has the Floor declines to give way.

[Mr Byrne]

If the Secretary of State is so passionate about speaking, he should be answering for the Minister this afternoon instead of intervening from a sedentary position.

[Mr Duncan Smith]

rose—

Universal Credit

Iain Duncan Smith Excerpts

Wednesday 10th July 2013 Written Statements

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

Today we set out the next stage of the roll-out for universal credit following the successful launch of the pathfinder in Greater Manchester, on time earlier this year.

Starting from October, the national roll-out will be comprised of three strands.

First, across all jobcentres we will roll out components to drive the cultural shift under universal credit. Notably 20,000 Jobcentre Plus advisers will be retrained to deliver the claimant commitment and enhanced job search support nationally. Ten in-work conditionality pilots will test how best to encourage claimants to progress in work.

Secondly, we will roll out improved access to digital services across Jobcentre Plus. A total of 6,000 new computers will be installed across the country, embedding digital technology and ensuring that jobseekers become used to online transactions.

Thirdly, expanding on our early approach, universal credit will roll out to the regions, with six hub jobcentres—Hammersmith, Rugby, Inverness, Harrogate, Bath, Shotton—taking new claims to the benefit. This plan continues the safe approach to delivering this extensive reform, meaning universal credit will be rolling out in areas of England, Wales and Scotland.

The pathfinder exercise has shown that the IT system works. In parallel, the DWP is working with the new Government Digital Service to explore the possibility of enhancing the IT, using recent advances in technology to ensure the system is as secure, flexible and responsive as possible. This approach builds on the rapid development and roll-out of services such as GOV.UK and universal jobmatch, which was developed in one year and since launching in December 2012 is now achieving over 5 million average daily job searches.

The Government have made clear that the priority is to deliver universal credit safely and securely over a four-year period to 2017. We remain committed to that objective, to these time scales, and to the budget agreed for delivering this important reform.

The Government will set out more details of their development plan in the autumn.

Remploy

Iain Duncan Smith Excerpts

Thursday 4th July 2013 Commons Chamber

[Mrs McGuire]

Thank you, Mr Deputy Speaker. I am sorry; I might have touched a nerve.

I also wonder, given the way in which the House works, whether the Minister had given Members advance warning of her briefing at 4.30 this afternoon.

I shall turn now to the substance of the review. The Minister often cites the Sayce review, as did her predecessor, as protection for her decisions. I would remind the House, however, that the Sayce review did not recommend the speedy closure of the Remploy factories in the way that the Government have progressed it. Indeed, it recommended a phased development of the process. Once again, however, the review has been brought into play. The Government’s aim has always been to get rid of the Remploy liability in this financial year, and no matter what else was said, this was always going to be the cut-off point. That has been confirmed this morning. Of course I welcome the fact that viable bids have been received for some of the factories and that 17 of the 27 CCTV businesses are in the commercial process. I also welcome the Minister’s comment that it appears that eight of the other 10 will continue in one form or another.

The textile division based in Scotland has a long and proud tradition of making security and chemical protection wear for the Ministry of Defence, and the disappearance of the skills built up over many years will be a great loss. The textile division recently lost a major MOD contract that it was eminently capable of carrying out, given the quality and timeliness of its work. Given that the factories are under pressure of closure, will the Minister tell us whether she or any of her officials had any engagement with MOD procurement officials to encourage them to use Remploy as a supplier, given that it had carried out the work successfully over many years? It has never been properly recognised that much of the kit worn by our service personnel in Afghanistan and Iraq was made in Remploy factories. Did the Minister use her good offices to encourage the MOD to award that contract to Remploy, if necessary using article 19?

Will the Minister also explain what she meant when she said that there was an asset bid from a social enterprise company for the textile section? What opportunities does she believe that that bid will open up? Many of us on the Opposition Benches see the words “asset bid” and worry that they might really mean asset stripping. We need to know exactly what is involved.

I also want to ask the Minister to define the word “success”, which she used in the closing paragraph of her statement. She mentioned that about 1,100 former Remploy workers were choosing to work with personal caseworkers to find other jobs. In other words, they are not currently in employment. Another 400 are in work and another 300 are in training, so by my calculation, significantly less than 50% of the former Remploy workers who have already been made redundant are currently in employment. I am wondering what the Minister’s benchmark for success is.

Given that the Work programme is performing three times worse than doing nothing for disabled people—

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

Rubbish.

[Mrs McGuire]

The Secretary of State keeps saying “rubbish”, but he needs to listen—[Interruption.] I did not realise that the Minister had brought along—[Interruption.]

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 1st July 2013 Commons Chamber

[Mark Garnier (Wyre Forest) (Con)]

1. What assessment he has made of the effectiveness of his Department's innovation fund projects in helping disadvantaged young people.

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

The innovation fund is a £30 million investment testing cutting-edge projects to improve the employment prospects of our most disadvantaged 14 to 24-year-olds. So far the fund is working well: 6,000 young people are being helped, and recent statistics show 1,800 positive outcomes—each an improvement such as better school attendance, improved skills, qualifications or a move into work—which are being measured for future expansion.

[Mark Garnier]

I know my right hon. Friend recognises the importance of financial education and financial literacy in schools. Can he repeat his support for financial education to start in primary schools and will he reassure the House that he recognises the need for his Department to work closely with the Department for Education to deliver this important measure?

[Mr Duncan Smith]

I can confirm that a strong passion of mine—and certainly one of the DWP’s—is to get financial education literacy into the national curriculum. I hope that view would be shared on both sides of the House. Clearly, people coming out of the education system need at some point to understand what interest rates are, for example—otherwise they will get ripped off by unscrupulous lenders. The national curriculum is published in its final form for first teaching in the autumn of September 2014. The Department for Education and ourselves are consulting on including financial education in it, and I believe that we are likely to get that, so I can say an honest “yes” to my hon. Friend.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

The Daily Record recently alleged that Youth Contract wage incentives are being handed out to people already in work—just to give the illusion that the funds are being used. What investigation has the right hon. Gentleman made of that report?

[Mr Duncan Smith]

This is not directly related to the innovation fund, which is about testing programmes so that extra skills, quality and money can eventually be put in. However, I am aware of what the hon. Lady says, as is the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Fareham (Mr Hoban) who is looking into it and will ensure that action is taken. If the allegation is true, we will act; if not, it will simply be a scurrilous report.

[Mark Pawsey (Rugby) (Con)]

2. What assessment he has made of the use of electronic correspondence by the Child Support Agency.

--- Later in debate ---

[Damian Hinds (East Hampshire) (Con)]

4. What contribution his Department has made to strengthening the social investment market.

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

Social investment involves taking a new approach to the tackling of our most entrenched social problems, thus enabling investors to have a positive impact on society and make a return that guarantees more long-term investment. After initiating the scheme, the Government, along with Sir Ronnie Cohen and others, launched Big Society Capital, which is the world’s first institution of its kind, and established the Early Intervention Foundation. My Department has set up 10 social impact bonds, taking the total in the country to 13. We are improving the concept, and we are now a world leader in the field.

[Damian Hinds]

Will my right hon. Friend seek to maximise the involvement of retail investors in the social investment market? Does he agree that the new social investment tax relief has great potential to unlock new funding to finance valuable local projects and help to turn lives around?

[Mr Duncan Smith]

I will certainly try to encourage precisely those people to invest. The aim is eventually to establish a proven project which delivers a social return, thus encouraging both trusts and private sector investors, as well as local authorities, to supply guaranteed funds to organisations that would otherwise have no funding. We think that the potential market is enormous. The Americans, among others, have said that they are grateful for our leadership in this regard, and the G8 was very keen on hearing from us.

[Guy Opperman (Hexham) (Con)]

Does the Secretary of State agree that social investment could be channelled through local regional banks and expanded credit unions, which are surely the best-placed organisations and the closest to their local communities?

[Mr Duncan Smith]

All those are options. We have put in extra investment in credit unions—some £35 million—to try to increase their scope and to bring them together again. My hon. Friend is right. Local is what this is all about. It is about giving projects in the local area, with local authorities, a chance to obtain reasonable, long-term investment to deliver life-changing results. It is interesting that, at the G8 conference—this is the most important thing—many of the countries said that this is the way for them to go, too. This country has led on this area, thanks to the coalition.

[Naomi Long (Belfast East) (Alliance)]

5. How many people who worked in Northern Ireland and paid national insurance contributions while aged 14 or 15 between 1947 and 1957, which did not count towards their qualifying years for a full basic state pension, fall two years or less short of the years needed to qualify for such a pension.

--- Later in debate ---

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

12. What his plans are for reducing absolute child poverty.

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

The hon. Gentleman asks a really important question about absolute poverty. The threshold has been rebased this year under a new baseline. That changes the way it is reported. Those changes result from a reclassification and do not represent a real change in children’s circumstances. However, low-income and material deprivation is static or marginally improved.

The hon. Gentleman asks about what we are doing. There are a number of programmes through bringing in universal credit to help the poorest to some of the Work programme and the troubled families programme—I will go through more detail with him if he wants—as well as the pupil premium, and early intervention and education. There is a raft of work to try to change the lives of those likely to be on low incomes.

[Mr Sheerman]

I know the Secretary of State to be thoughtful man, and quite a caring man as well, but is he not concerned that Maggie Atkinson, the Children’s Commissioner, only as recently as last week said that the recent reforms of welfare benefit had put another 600,000 children into real poverty?

[Mr Duncan Smith]

I like to think that on both sides of the House the objective is to reduce child poverty. That is our stated objective; I think it was the stated objective of the Labour Government.

[Mrs Anne McGuire (Stirling) (Lab)]

It has gone up.

[Mr Duncan Smith]

I hear from a Labour Front Bencher, “It has gone up.” Actually, relative poverty has fallen by 300,000 since the start of this Parliament. Before Labour Front Benchers intervene again, I should say that while the hon. Gentleman’s question is thoughtful, their interjection is not. The reality is that throughout the past 10 years they talked about relative poverty as the measure, not absolute poverty, so they ought to be slightly careful. It has fallen under this Government.

The real point is that we are in a difficult time; there is no question about it. Just the other day, we saw that the Office for National Statistics has revised its figure on the scale of the collapse in 2009 down to 7%, which is a dramatic fall. We will drive all those programmes that I mentioned to the hon. Gentleman, and the change—we hope—to the measurement is about getting real help to real people.

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

Is it not the case that in the past, enormous sums were spent on moving people just over the relative poverty threshold without addressing any of the causes of poverty? Will my right hon. Friend reassure the House that he will change that?

[Mr Duncan Smith]

Yes. The important point to make is that from 2004 to 2010, the last Government spent £171 billion on tax credits alone, but relative poverty rose in that period, and absolute poverty was absolutely static, falling only at the end, when inflation crashed below zero because the economy crashed with it.

[Ian Austin (Dudley North) (Lab)]

This multi-millionaire Secretary of State, with his stately home lifestyle, has never gone hungry in his life, but for some children in poverty, the free school dinner is the only square meal in the day. Ministers still refuse to set out their plans for the future of the free school dinner under universal credit, and there are rumours of a new cut-off for families earning more than £135 a week. Will he end the uncertainty for 168,000 families and tell us when he will set out his plans?

[Mr Duncan Smith]

We have always said that we stand by the existence of free school meals, and I stand by that now. As we bring in universal credit, we will make it very clear how this will work—and work well. I do not need any lectures from the hon. Gentleman. He may accuse us, but it was not us who crashed the economy and forced lots—thousands—of people into poverty. That was a direct result of his Government’s incompetence. This Government are doing more to get people back to work, more to get them out of poverty, and more to help them through family breakdown than his Government ever did, so I do not need lectures from an empty barrel like him.

[Pauline Latham (Mid Derbyshire) (Con)]

13. What recent estimate he has made of the number of women in work.

--- Later in debate ---

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

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

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

Today I welcomed the announcement in the spending review that we will reinvest more than £350 million a year in extra support to help people move into work. Through up-front work search, more intensive work preparation, weekly signing on and mandatory English language courses, we are ensuring that those who need the most help get it, giving them the best possible chance of finding work.

--- Later in debate ---

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

Will the Secretary of State tell the House whether he thinks the bedroom tax is proving a runaway success?

[Mr Duncan Smith]

It is proving a success, because what it is doing—[Laughter.] No. What it is doing is finally shining a light on the previous Government’s failure to sort out the mess in social housing, with the housing benefit bill doubling in 10 years and set to rise by another £5 billion. I never hear from the right hon. Gentleman, or anyone else on the Labour Benches, about their failure, because they left so many people—a quarter of a million—in overcrowded accommodation and a waiting list that had grown to 1.5 million. When he gets up, perhaps he would like to tell us: is he going to reverse this policy or not?

[Mr Byrne]

If the Secretary of State thinks that the bedroom tax has been a success, he is living on a different planet. Back in 2011 the pensions Minister told the House that the bedroom tax would solve overcrowding, but this morning we heard on the BBC that there are houses lying empty from Teesside to Merseyside. They are not overcrowded; they are empty. Councils up and down the country are saying that arrears are up by 300%, and military families are saying that they have been lied to and cheated. When is the Secretary of State going to realise that this policy costs more than it saves and that this Government should be taxing mansions, not bedrooms?

[Mr Duncan Smith]

Let me tell the right hon. Gentleman something about empty homes. The previous Government left a huge amount of empty homes when they left office. There are now around 710,000 empty homes, which is 73,000 below the peak in 2008, which was under them. There are now 259,000 long-term empty homes, which is down 20,000 since they left office. The reality is this: the Labour party left a shambles, and never once did the people living in overcrowded accommodation hear anything from the Labour party about them. They are having to suffer while we subsidise to nearly £1 billion people living in houses with spare rooms. Perhaps he can say whether he, if he ever got into office again, would reverse that. Why does he not stop moaning about it?

[Jesse Norman (Hereford and South Herefordshire) (Con)]

T4. I would like to thank the Under- Secretary of State for Work and Pensions, my hon. Friend the Member for Wirral West (Esther McVey), for her productive meeting last week with representatives from the Royal National College for the Blind in Hereford. Does she share my view that the best way to achieve efficiencies in the residential training programme is to encourage disability employment advisers to make more referrals to that very successful scheme?

[Keith Vaz (Leicester East) (Lab)]

T5. Last year the parents of 47,009 children living abroad received child benefit totalling £55 million. What steps is the Secretary of State taking to fulfil the promise he made on 30 May to fight every step of the way to resolve that issue?

[Mr Duncan Smith]

As the right hon. Gentleman knows, that is an existing problem. The European Union insists that family benefits are paid at the highest level, depending on which country the recipient is in. Someone coming to the UK to work from, say, Poland would still get their family benefit paid to them, but if it is lower than family benefits over here, the top-up amount will go back to their families. I believe that is iniquitous, and I am not alone. I have had a series of discussions with others from Holland, Denmark and Germany, and there is a genuine consensus—it is growing dramatically—that it is wrong and that we need to change it, so we are engaging with the Commission on a plan to change it.

[Caroline Dinenage (Gosport) (Con)]

T6. A high percentage of employment and support allowance claims have been won on appeal because the claimant produced evidence that had not previously been made available. What can the Department do to encourage all relevant documents to be provided from the outset to save unnecessary costs and emotional stress?

--- Later in debate ---

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

T9. The number of people accessing emergency food aid from Liverpool’s central food bank in my constituency has jumped by 70% over the past year. The chief cause of this is delays in them receiving their social security support. What assessment has the Secretary of State made of how many more people will be forced to turn to food banks and payday lenders by his Government’s proposal to extend the wait for jobseeker’s allowance?

[Mr Duncan Smith]

The story that the cause is an increase in waits is not true; in fact, waits have fallen and have improved by 4% since 2009-10. The Trussell Trust’s director of UK food banks has set out the real reason behind most of this:

“The growth in volunteers and awareness about the fact you can get this help if you need it helps explain the growth this year.”

[Mark Garnier (Wyre Forest) (Con)]

T10. Can the Minister share with the House what steps she has taken to deliver a cross-government disability strategy?

--- Later in debate ---

[Mike Crockart (Edinburgh West) (LD)]

What assistance can my right hon. Friend offer my constituent who, anxious not to be a burden on anyone, took a zero-hours contract? Although he generally works for significantly fewer than 16 hours, on the odd occasion that he does work for more than 16 hours his department suggests that he makes a new claim when cancelling the old one. How can that be right?

[Mr Duncan Smith]

I recognise that this is an issue. Some 200,000 people are employed on zero-hours contracts, which is just less than 1% of all workers. The current benefit system deals with claimants on zero-hours contracts, but universal credit will mean that they will not have to re-sign on. Personally, I think there should be far fewer zero-hours contracts. We are trying to work with employers and the Department for Business, Innovation and Skills to persuade those who have a genuine long-term job to get off zero-hours contracts and get a proper contract of work.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

The pensions Minister’s answer a couple of minutes ago on discretionary housing payments was quite frankly absurd, because he knows full well that the bedroom tax was not in operation in the last financial year.

To return to the question of impact, local authorities throughout the country, including my own, now find that arrears are going up because people cannot afford the bedroom tax that is being imposed on them. What does the Minister expect local authorities to do about this, because it is affecting their overall budgets as well?

[Mr David Ruffley (Bury St Edmunds) (Con)]

Benefit tourism can be deterred if greater conditionality is introduced into the UK benefit system. Will the Secretary of State tell us whether or not our European partners will allow us to do that?

[Mr Duncan Smith]

I believe they will. I think that a large number of countries in the European Union are concerned that, while they want people to travel for work—as do we—through free movement, they do not want people to pick and choose which benefit system they want to be a part of when they are out of work. We have had recent conversations with Germans and others, and we are all moving together towards an eventual proposal to get the European Commission to work with us to change this.

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

Distributional analysis of the Government’s spending review shows that 20% of people on the lowest incomes—namely pensioners, the disabled, the unemployed and those in low-paid work who depend most on DWP support—are paying a disproportionate price as a result of the austerity cuts. Are Ministers not ashamed that they are asking the poorest to pay the highest price?

[Mr Duncan Smith]

It is this Government who have protected pensioners more than any other Government: we introduced the triple lock and their incomes have risen faster and further than for a long time, particularly compared with when that lot in the Labour party were in office. The reality is that we are protecting pensioners far better than any recent Government.

[Philip Davies (Shipley) (Con)]

Paul Stewart was paralysed from the waist down and told that he would never walk again after a snowboarding accident. Through sheer willpower and determination he has defied the odds and next month he will undertake his IronSpine Challenge of a 2.4 mile swim, a 112 mile cycle, a 26.2 mile walk and a cliff-face climb to raise money for spinal research. Does the Minister agree that Paul is a tremendous inspiration to others who suffer such life-changing disabilities?

--- Later in debate ---

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

When the benefit cap, which will develop strong work incentives, is rolled out to Plymouth, will my right hon. Friend be able to tell me how many people will be encouraged to get a job, rather than depend on benefits?

[Mr Duncan Smith]

Yes.

[Mr Speaker]

We are grateful for that.

Pensions Bill

Iain Duncan Smith Excerpts

Monday 17th June 2013 Commons Chamber

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

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

We have discussed these matters in the House before, and I sense that there is general consensus that now is the time and this is the right area to address. As this is a coalition, I want to pay particular tribute on the key area, the single tier, to my hon. Friend—[Interruption.] I do not know why I looked to my left. I should be looking to my right—things are definitely moving now—which is where the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), is sitting. His persistence and work and application have been remarkable, and they have delivered a real reform. Huge credit is due to him, and to the coalition, because we have been able to work together and produce this measure as a coalition. I am enormously pleased that it enjoys some consensus in general terms across the House.

The Bill is about putting in place a welfare and pension system that both reflects the reality of our society now and puts us on a fair and, I hope, sustainable basis for the future. That principle underpins vital changes proposed in the Bill: long overdue reforms to modernise bereavement benefits; bringing forward the increase in the state pension age to 67; and putting in place a mechanism for a regular review of the state pension age, recognising the fact of our ageing population.

Between now and 2035 the number of people in the UK over state pension age is currently set to increase from 12.4 million to 15.6 million, a rise of 26%. With ever more pensioners, sustainable pension provision is ever more pressing, and will always be a priority for this Government—and, I would hope, for all Governments. To that end, the Bill provides for the most important reform for a generation: the introduction of the single-tier pension. This new pension system reflects the fact that working patterns and family life have changed over years, that people need to take personal responsibility for planning and saving for their retirement, and that people are living longer and drawing their state pension for longer than their ancestors would ever have done or, ironically, ever expected to do.

The Bill is a significant change for the future, but it builds on the foundations that we have already laid to ensure that pensioners get a decent income in retirement. We announced the triple lock at the beginning of this coalition—not just linking the state pension to earnings but giving a guarantee, in difficult times, that pensioner income would be predictable and would rise at a faster rate than it had risen before. The average person reaching state pension age in 2013 can expect to receive some £12,000 more in basic state pension over their retirement than under previous policies of uprating by prices. The basic state pension is now a higher share of average earnings than in any year since 1992.

Through our commitment to universal pensioner benefits in this Parliament, we have maintained support for older people. There were 12.6 million winter fuel payments to more than 9 million households in 2011-12. We have continued free eye tests, free prescriptions, free concessionary bus travel and free television licences for the over-75s, and that is worth hundreds of pounds to individuals each year. Yet, we are still left with an incredibly complex and confusing system—it is confusing for most people who would have to look at it.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I am grateful to the Secretary of State for giving way so early in his speech, which we are following with great interest. Will he clarify—he may not want to at this stage—whether he plans to table any amendments to schedule 12(14), which says that the flat-rate pension will be uprated by earnings?

[Mr Duncan Smith]

No, that is not our plan, but our commitment is public and stated, and goes throughout the whole of this Parliament. This Bill brings that in, so any further changes would have be made later. I simply say that our commitment to the introduction of this Bill remains exactly as it stands.

The two tiers—the basic state pension and the additional state pension—together with other outdated add-ons, make for this complication, as does the mess and mass of means-testing known as the pension credit. With 11 million people now not saving enough for their retirement, we can and must do more to simplify the state pension system. The right hon. Member for Birkenhead (Mr Field), who is in his place, has gone on about this matter for long enough and there has been consensus across the Floor of the House. Getting more people to save, and to save more when they save, is critical.

The first step, which the previous Government had initiated, was auto-enrolment. We picked that up and are now successfully rolling it out to help up to 9 million people into a workplace pension scheme and to make savings the norm. That big change has, again, been smoothed through and taken through at rate, but we have taken care and consideration, because at this difficult time some companies would encounter difficulties. We have been careful to ensure that the roll-out allows time for people to plan. Significantly, more than 400 of the country’s largest employers have now met their auto-enrolment duties, and more than half a million eligible jobholders were newly enrolled by the end of April 2013. Once this is in a steady state we expect up to £11 billion more in pensions saving every year. That is a very big and significant reform. People from many other countries around the world have been to talk to my hon. Friend the Minister of State and have seen me about doing it themselves. We are not breaking absolutely new ground, but for us and for many others it is a real departure: getting people to save and save from the moment they move into work.

Measures in the Bill will ensure that automatic enrolment works as intended. We need to address some technical issues, clarify the existing powers and provide for the automatic transfer of small pension pots. The last of those is vital, because a quarter of people already lose track of at least one pension, and it is estimated that some 50 million dormant pots will exist by 2050 if we do nothing about this issue. It is confusing, and I say with the greatest respect to my hon. Friend the Minister of State that although plenty of people understand pensions, dine out on them, sleep on them and can work them very cleverly—the word “anorak” does not come into my lexicon at all—most people find this a complex and difficult area. People can be left with small pots as they move, and that is now the way of work; people move in and out of different companies, leaving behind these pots. It is vital to deal with that, and my hon. Friend has made a huge move to do just that.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

Perhaps I am an anorak, as the chairman of the pension fund for Members, but one of the issues is the question of contracting out. As I understand it, the Bill does not allow contracting out. Am I right to say that people like us and many others in the public sector will face an increase in national insurance contributions?

[Mr Duncan Smith]

I fully respect the hon. Gentleman’s knowledge of pensions, and that is the case. We have not shied away from that: there will be an increase in national insurance contributions for a number of people. Some 70% of employees will not pay any national insurance charges, although some 30% do, and overall most of our 10% will get a better pension that will be higher in total than that which they would have had according to their contributions. All, bar a smaller number, will be better off. It is never an easy pill to swallow, but the overall reform benefits the vast majority of people. I accept that there will be that charge, but the vast majority will benefit and even those with higher national insurance charges will benefit, too.

[Mr Donohoe]

In that case, it will mean a pay cut to a considerable number of people in the public sector.

[Mr Duncan Smith]

My point was that although, of course, the charge will add to the amount they pay, overall they will get a better state pension over the lifetime of that pension. It is a trade-off, in a sense: they get more, but they have to pay a bit more. Whichever way we cut it, it would be complex and difficult to avoid that. During the passage of the Bill, we will be happy to hear more from the hon. Gentleman and to hear any ideas he has, but our principal position at the moment is to reduce it to the smallest level that we can.

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

Another concern that has been raised about the potential problems with transferring small pots is that they could be moved from a well-managed, good-quality scheme into a lower-quality scheme. What assurances and protections will the Government put in place to ensure that that does not happen to people?

[Mr Duncan Smith]

We plan to head that off. We will have much more stringent quality standards, which will ensure that the process is properly managed. We will keep that constantly under review, to ensure that there is no opportunity for people to abuse the process. It is worth noting that we have already talked about areas where we want to ban and cap. For example, we announced our intention to ban consultancy charges in auto-enrolment schemes and we are considering how to do that. The Office of Fair Trading report is due in the summer, I think, and the Government will be consulting after that. We plan to publish our consultation, including on proposals to introduce a charge cap. Defined ambition pensions should also give us greater risk sharing and certainty. I hope that that answers the hon. Lady, and there will be more to come from my hon. Friend the Minister of State.

[Nigel Mills (Amber Valley) (Con)]

Small pots cannot currently be transferred to the National Employment Savings Trust. Will the Secretary of State update the House on the Government’s plans to change that? I cannot see any such plans in the Bill, so might they appear at a later stage?

[Mr Duncan Smith]

This is obviously Second Reading, but we will have further discussions on that subject. We know that it needs addressing and my hon. Friend the Minister of State is already aware of that. Although we will not cover it on Second Reading, we will, I suspect, tackle it during the passage of the Bill. If my hon. Friend the Member for Amber Valley (Nigel Mills) wants to be on the Committee, now is the time to volunteer. Volunteering in this place is always dangerous, but, none the less, I urge him to do that.

Even with auto-enrolment, it is critical that people understand what they get from the state and are able to save with some confidence. I recognise that that is the biggest area, and it is what the single-tier pension is all about. Auto-enrolment on its own without single tier would be difficult, but single tier underpins auto-enrolment, making it all the more important. The single tier will be all about setting a basic level of pension above the means test.

Let me give an illustrative example: 2012-13 prices would mean a single tier of £144 a week, a basic state pension of £107 and pension credit of £142. Under single tier, every individual would therefore qualify for a pension in their own right. The full rate payable for 35 years of national insurance contribution—the right hon. Member for Birkenhead has made the point about contributing to one’s future wealth—reflects that we are combining both the basic pension, based on contributions for more than 30 years, and the state second pension, based on 49 or 50 years of contributions. We are merging the two together. Yet even as we abolish the whole complicated system of the additional state pension on the one hand and contracting out on the other, we will still recognise people’s existing contributions. This is an important matter which has been raised with us a number of times. For example, someone who reaches state pension age in 2016 under single tier who is due £160 under the current system in whatever form will still get that pension of £160, so it is locked in.

Workers who were contracted out at implementation will start to pay full national insurance contributions, as 70% of those who are in work already do. In return, we believe they can build towards a pension at full single rate. Rather than today’s much lower basic state pension, they will get a reward for that effort to save, as I said earlier, referencing the already existing auto-enrolment. As a result, the vast majority, some 90% in the first two decades, will receive enough extra over their retirement through a single-tier pension to more than offset the higher contributions. Let us take a 40-year-old in 2016 contributing an extra £6,000 of national insurance before reaching state pension age in 2043. Over their retirement they would receive £24,000 more in state pension—a net gain of £18,000. That is the point that I was trying to illustrate earlier.

We must honour the past and deal with its complexity. That is the key. Going forward, whether previously contracted out or not, people will become entitled to the single-tier pension in the same way. This is an important feature.

[Mr Byrne]

I wanted to catch the right hon. Gentleman’s eye before he left that point. With reference to honouring the past, can he confirm to the House that going forward under the transitional arrangements, those rights that have been built up in STP will be uprated by the consumer prices index?

[Mr Duncan Smith]

Yes, I can confirm that to the right hon. Gentleman. Unless there is some reason why he disagrees with that and wants to come back at me, I will make progress.

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

I thank the Secretary of State for giving way before he moves on. We are talking about winners and losers. Is it not the case that the average payment that a pensioner will receive per week under the single-tier pension is less than the current average payment?

[Mr Duncan Smith]

No. I am not sure how the hon. Lady arrived at that conclusion. It is not the case. The vast majority will get more in decades to come. We are happy to discuss that further if she has some information that she wants to share with us.

In 2020 three quarters of new pensioners will get the higher state pension, following the introduction of the single tier, particularly benefiting those who have historically had poorer state pension outcomes. There will be better provision for the low-paid, including 60% of the lowest income pensioners who will have higher incomes in retirement by 2040, compared with rolling forward the current system. There will be better provision also for the self-employed—this is a big plus—who for the first time in about 40 years will be treated the same as employees for the purpose of state pension entitlement. That is a genuine gain.

There will be better provision for those with broken contribution records, especially women and those with caring responsibilities. I hope that this will be seen in all parts of the House as part of a rolling process to try to include them in the process and reward them for doing a hugely responsible job in society. More than 700,000 women who reach state pension age in the first decade after single tier is introduced will receive on average £9 a week more. That is quite a significant change. By bringing forward implementation to 2016 rather than 2017, an additional 85,000 women will retire under the single tier. That was a debate that took place previously and I hope the measure will be welcomed in all parts of the House. However, this better provision will be sustainable only if we get to grips with the unprecedented demographic shifts reflecting and affecting our population.

[Sir Peter Bottomley (Worthing West) (Con)]

When my right hon. Friend gets on to that topic, the House will listen with interest. He has talked, rightly, about the anomaly of the self-employed, and the measure will be greatly welcomed, as will the attention to some of the women affected, but may I draw his attention to clause 20 which, if it is not passed, would unfreeze the pensions for people in the old dominions? Were I to be asked to serve on the Committee, I would do so with pleasure, with the intention of getting the Government to stop this historic immoral anomaly, to start negotiating bilateral treaties and to give people the prospect that they will not have to live on pensions of £6 a week when others are on £106 or £160 a week.

[Mr Duncan Smith]

I hear my hon. Friend, and I would simply say to him that that would cost a sum knocking on the door of between £650 million and £700 million a year. Other Governments have considered it. I would be happy to discuss the matter with him, however, and to reflect on it. I am sure that those sitting further down the Bench will have heard his desire to serve on the Committee, although whether my hon. Friend the Minister of State would want that is another matter altogether.

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

If the Secretary of State is not prepared to go as far as the hon. Member for Worthing West (Sir Peter Bottomley) requests, will he perhaps look again at the Select Committee’s recommendation that the anomaly could be changed for those who reach pension age after April 2016? I appreciate that it would be expensive to change the system for those who are historically already in payment, but that might not be the case if the change related only to new pensions.

[Mr Duncan Smith]

Whenever the hon. Lady speaks, I always want to help her, particularly as I am due to appear in front of her Committee shortly. I really want to be as nice as possible to her, but I am not sure how much hope I can give her. My hon. Friend the Minister of State and I are certainly always happy to look at these proposals, but I come back to the point that it is difficult to do anything about them at the moment, because these things cost significant amounts of money. I recognise the concerns that are being raised, but these are expensive items and, right now, I do not think that we could possibly schedule in such changes. I am happy to discuss the matter further with the hon. Lady, however, as is my hon. Friend.

The regular review of the state pension age will ensure that the issue is considered in every Parliament, which will avoid the necessity for future Governments to have to take emergency action, as we did earlier. Men and women retiring at 67 in 2028 can expect to receive a pension for roughly just as long as those retiring at 65 today. The review will work on the same principle—namely, that people should spend a given proportion of their lives drawing a state pension. By regularly considering the state pension age in the light of changing life expectancy, we can ensure that our pension system remains on firm foundations. That will ensure a continuing and fair social settlement between young and old.

Another long overdue element of reform in the Bill relates to bereavement benefits. As we bring our pension system into the 21st century, we must do the same with our bereavement benefits. They form an important part of our state safety net, but they have remained unchanged for too long. They now reflect a time gone by, in which the life of a widow was quite different from what it is today. The conclusion, after long discussion, is that we have an outmoded system of complicated payments and contributions that, at worst, can harm people’s long-term job prospects by distancing them from the labour market.

While protecting existing recipients, the Bill makes provision to simplify the system through a lump sum payment followed by 12 monthly instalments. The new system will help spouses and civil partners to deal with additional costs in the critical time immediately after a bereavement when that help is most needed, as well as giving them the space and time to settle and resolve most of the other issues that require financial support. Those with dependent children will receive a £5,000 lump sum and £400 a month for 12 months. Those without children will receive a £2,500 lump sum and £150 a month for 12 months. This is not a saving measure. I can absolutely guarantee that the money being applied to this will go back into it, although it will be more narrowly focused over a particular time scale.

I believe that the Bill has the general support of both sides of the House, by and large. It is a genuinely good example of coalition politics coming together to find a solution for people who are unable to change their circumstances following retirement and who want simplicity and the certainty of a commitment by whichever Government are in power that their income will remain at a level that allows them to sustain their position in life.

[Jeremy Lefroy (Stafford) (Con)]

I congratulate the Government on the Bill. Does my right hon. Friend agree that it is extremely important that pensions education is provided at a much earlier age? I cannot remember when I first started to learn about pensions, but I must have been about 40. Are the Government looking at introducing that much earlier in financial education in schools?

[Mr Duncan Smith]

I am interested that my hon. Friend raises that point, because I have been in discussions with my right hon. Friend the Secretary of State for Education on including financial literacy in the national curriculum—it is not completely settled at this point, but we are getting close to a settlement. We on the Government Front Bench today believe fundamentally that financial literacy should be part of the national curriculum. That way, people will be less in thrall to doorstep lenders and those who can bamboozle them with what interest rates and payments are, and when it comes to pensions they will better understand their needs and what they will actually get. That is vital, and I am sure that the coalition Government will bring forward a solution that allows it to go into the national curriculum.

In conclusion, I am really proud of the Bill, and I am particularly proud to be serving with the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate, who has brought it forward with his team. I am also proud of the work of the Department’s pensions section. I know that Opposition Front Benchers know just how good that section is and how hard it works. I want to thank them, from the Government side, for all their hard work and for overcoming—how shall I put it—the differences of opinion as we have headed towards this point, and in such a way that we are now all unified in one paean of praise for the wonderful single-tier pension that we are about to launch. I thank my hon. Friend for his support. The Bill represents a huge change, but one that has been a long time coming. I believe that it will bring our pensions system into the 21st century, allow security in old age and mean for the first time a firm foundation for the work force of today. I commend the Bill to the House.

--- Later in debate ---

[Mr Byrne]

I will leave it to the hon. Gentleman to provide his own definition of the word “huge.” He will have read chapter 4 of “The single-tier pension: a simple foundation for saving”, published by the Department for Work and Pensions, which clearly says that under the current system, the number of people reaching state pension age after 2016 who will be eligible for means-tested benefits for pensioners will fall to 16%, and that the figure will fall to 11% by 2060. Under the single tier, eligibility for means-tested benefits will fall by 7.5%. The hon. Gentleman will also have read, as I have, Age UK’s evidence, which states, strikingly, that the great bulk of that change results from the elimination of savings credit, rather than from any increase in generosity. If we put savings credit to one side, we will see that the change in the percentage of pensioners eligible for means-tested benefit is just 1% or 2%. If he chooses to define that as huge, that is his right.

I want to flag concerns in three further areas and I hope this will provide us with material for debate and amendments—some probing and some to be voted on —in Committee.

[Mr Duncan Smith]

I had not meant to intervene, but the right hon. Gentleman has spent the first part of his speech extolling the virtues of what Labour did, and there has been a little bit of to and fro about that. Does he relate to what Ros Altmann said about the ending of the dividend tax credit and does Labour now accept that it made a major error? Ros Altmann was an adviser to the previous Prime Minister, Mr Blair, and she said that Labour “destroyed our pensions system”. Does the right hon. Gentleman regret that attack on the defined benefit system?

[Mr Byrne]

We were ambitious and wanted to focus our resources on tackling pensioner poverty. I am reluctant to take too many lessons from the Secretary of State. The 1986 cap introduced by Lord Lawson led to a huge drop in contributions to occupational schemes. In fact, the pensions Minister himself said:

“Pensioners have long memories. They remember the Conservatives’ record on pensions…That record is one of not believing in the state pension, of eroding the basic state pension…of attacking SERPS—the state earnings-related pension scheme—and of slashing entitlements.”—[Official Report, 6 November 2000; Vol. 356, c. 34.]

I am afraid, therefore, that I am reluctant to take lessons from the Secretary of State on the inheritance that he has been bequeathed. As I have said, the foundation was strong and that is why we are urging him to be a touch more radical. I think that, in his heart, the Secretary of State will share many of my concerns. I know that he has been trapped in difficult negotiations with the Chancellor and I have no doubt that he would otherwise have gone further than he has in the Bill.

My first question is about universalism. Every generation has to strike the right balance between universalism and targeted benefits. That was true of the post-war Government and it is true of this Government. The Opposition believe that there needs to be a different balance between universal and targeted benefits for older people in the future. We find ourselves in agreement on that not just with the pensions Minister in this morning’s Financial Times, but with the Deputy Prime Minister and possibly even the Secretary of State, although he will keep his own counsel.

Our biggest problem with the Bill is that if the flat-rate pension is so virtuous, its virtue should be enjoyed as widely as possible. It should be a universal pension, but it is not. In particular, we are very concerned about the 700,000 women who will reach the age of 65 in 2016 when the flat-rate pension starts but who, because they will have hit the state pension age of 63, will not enjoy the flat-rate pension, even though a man who was born on the same day will. There are many of those women in our constituencies. I know that this matter will be of concern to the Minister and the Secretary of State.

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[Mr Byrne]

I will move on, but I will give way in a moment.

A flat-rate pension is a good idea and its virtue should be widely enjoyed. It should be a universal system. During the passage of the Bill, the Opposition will look at how we can maximise its inclusivity and universal scope.

[Mr Duncan Smith]

I am grateful to the right hon. Gentleman for giving way—he is being generous, as ever. I want to confirm that we are not seeking to make the state pension age unstable—quite the contrary. We have talked about setting down a period in which people should expect to be in retirement. The Opposition also know that, after every review, we will require legislation to make changes. There are therefore plenty of locks. If we did not address the matter it would rationally put us out of step with everybody else. Ireland, Australia, Spain, USA and Germany are doing similar things. All Governments need to take such steps.

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 20th May 2013 Commons Chamber

[Pauline Latham (Mid Derbyshire) (Con)]

7. What recent estimate he has made of the number of people in full-time employment.

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

There are more than 21 million people in full-time work, and the number has risen by over 600,000 since the general election.

[Pauline Latham]

I thank the Secretary of State for that answer. Can he confirm that the number of people claiming the main out-of-work benefits since the 2010 election has fallen?

[Mr Duncan Smith]

Yes; this is an intriguing figure. As we have succeeded in enabling people who, when the last Government left office, were inactive but of working age to find employment, the total number of people without jobs has fallen by 380,000 since 2010. That fall has been driven by a fall in the rate of inactivity that was left by the last Government. As a result, the number of people receiving incapacity benefit and a number of other benefits—including lone parents—is at its lowest for some two decades.

[David Wright (Telford) (Lab)]

Unemployment, including youth unemployment, is stubbornly high in Telford. Does the Secretary of State still talk to the Chancellor of the Exchequer or indeed the Prime Minister, because there was nothing in the Budget about youth unemployment, and there was nothing about it in the Queen’s Speech? Is he talking to them at all?

[Mr Duncan Smith]

I talk to them regularly, and they talk to me. What I tell them constantly is that the figure for youth unemployment is lower than the figure that we inherited. We have also introduced the Youth Contract, which provides us with extra money so that we can give many people below the age of 24 a real chance to benefit from work experience programmes and apprenticeships. Many more people will go into apprenticeships under this Government than ever went into them under the last Government.

[Graham Evans (Weaver Vale) (Con)]

Last week I held my second jobs fair, at which 30 local employers met 300 jobseekers in my constituency to talk about more than 300 vacancies. Can my right hon. Friend confirm that there is currently a record number of vacancies in the United Kingdom?

[Mr Duncan Smith]

That is correct. On average, about half a million vacant jobs are advertised, and that may not represent all the work that is available. Our universal jobmatch scheme ensures that claimants look for and apply for jobs, because they must be mandated on to the system. The number of private sector jobs has increased by 1.25 million since the election, and every six jobs created over the last six years correspond with one job loss in the public sector.

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

The House hears what the Secretary of State has to say about youth unemployment, but there is a youth unemployment crisis among young black men in particular. What action will he take to lower the present 50% level?

[Mr Duncan Smith]

I agree that there is a particular problem in that regard. I am talking to all the voluntary sector groups as well as to providers, including all our staff at the DWP, and also to Opposition Members. We need to make more progress, because youth unemployment is not good regardless of the numbers involved, and we cannot do enough to drive it down. I can give the hon. Gentleman a guarantee that we will make more efforts to deal with this particular problem.

[Andrea Leadsom (South Northamptonshire) (Con)]

8. What steps he plans to take to restrict access to benefits for new migrants from other EU member states.

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

10. What assessment he has made of the preparedness of the universal credit IT delivery system.

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

The IT system to support the pathfinder roll-out from April 2013 is up and running. As Members would expect, we continue to monitor, test and learn. That system is a crucial aspect of our pathfinder approach—although not all of it, by any means—which will guarantee the careful and deliberate wider roll-out of universal credit.

[Mr Betts]

I thank the Secretary of State for that answer, but will he confirm that three of the pathfinders are not going ahead precisely because the computer system is not ready? Will he also confirm that in the one pathfinder that is going ahead, the staff have one computer screen on which to record information, and the rest of the claimant information has be written down by pen on a notepad? That is the situation, is it not? How can the Secretary of State possibly come to this House and justify that as being satisfactory, after years of preparation?

[Mr Duncan Smith]

The hon. Gentleman is fundamentally wrong. All the pathfinders are going ahead. The IT system is but a part of that, and goes ahead in one of the pathfinders. The other three are already testing all the other aspects of universal credit and in July will, essentially, themselves roll out the remainder of the pathfinder, and more than 7,000 people will be engaged in it. All that nonsense the hon. Gentleman has just said is completely untrue.

[David Mowat (Warrington South) (Con)]

22. The pilot commenced on time and substantially on budget at one of the pathfinder locations, implying that much of the application must be working. Does that not contrast well with the failed big-bang approach taken by the last Government in similar implementations?

[Mr Duncan Smith]

I repeat to my hon. Friend what I said to the hon. Member for Sheffield South East (Mr Betts): the reality is that it is far better for us to do this carefully, and to check each time that the systems work and that those who are meant to be using them know what they are doing, so we learn the lessons from the whole system. The last Government went for a big-bang approach in one project after another, and most of them literally did just that: they blew up.

[Stephen Timms (East Ham) (Lab)]

The Secretary of State will recall that I wrote to him in November 2010 to warn that the IT system could not possibly be delivered in the time scale he was claiming—unfortunately, that has proved to be the case. In November 2011, he announced that 1 million people would be receiving universal credit by April 2014. What is his latest estimate of the number of people who will be receiving universal credit by April 2014?

[Mr Duncan Smith]

Let me remind the right hon. Gentleman of a quote from the Institute for Fiscal Studies about the way we are rolling the system out. It said:

“The level of problems caused to tax credit claimants and employers as the new tax credit systems went live in April 2003 demonstrated that there were undetected gaps in the design of the testing regime for the systems.”

This system is a success. We have four years to roll it out, we are rolling it out now, we will continue the roll-out nationwide and we will have a system that works—and one that works because we have tested it properly.

[Stephen Timms]

In November 2011, 1 million people were going to be claiming by next April: now, the Secretary of State has not the faintest idea how many there will be—so much for this project being on schedule. There were supposed to be four pathfinders, but now there is only one, under which the only people who can get universal credit are those in the most straightforward circumstances. How long will it now realistically be before he has an IT system that can cope with, for example, applicants with children?

[Mr Duncan Smith]

Interestingly enough, I had the right hon. Gentleman and the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) in to see me last year and I told them exactly how we were rolling the system out—[Interruption.] No, no. I told them that the pathfinder would continue first of all with single claimants. As for the idea that somehow things have changed—he knew about that then and the situation is exactly the same now.

[Rosie Cooper (West Lancashire) (Lab)]

11. What steps he is taking to publicise the potential effects of planned regulation changes on claimants currently in receipt of (a) the disability living allowance higher rate and (b) Motability cars.

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[Barry Gardiner (Brent North) (Lab)]

13. What redress is available to tenants whose landlords seek to evict them on the grounds that they are housing benefit recipients subject to the benefits cap.

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

Landlords must support their tenants in maintaining their tenancy. All those affected by the cap have already been contacted, most of them more than a year ago, so tenants uncertain about their situation should have asked for a review by now, to check that they are receiving all the benefits to which they are entitled. The local authority may consider paying discretionary housing payments, which we have already given them, in negotiations with the landlord, to find a way to avoid eviction.

[Barry Gardiner]

The Secretary of State is precisely avoiding the point. He knows very well that landlords are using as an excuse for getting rid of tenants, and as a reason to evict them, the fact that they are on the benefits cap. He said that the benefits cap would be a way of bringing rents down, but it is not; it is a way of evicting tenants who are living on benefits. That is appalling, and he needs to do something about it.

[Mr Duncan Smith]

On the implementation of the cap, people have had over a year to work on this, and I know that local authorities are working with them; we keep in constant contact with them. We will have given local authorities more than £380 million in discretionary moneys. It is very clear that if the issue is only the cap, there is no requirement for people to be evicted. This is a reality, and authorities must work with them. The hon. Gentleman needs to talk to his party, because it wants to make the cap worse by regionalising it.

[Sir Bob Russell (Colchester) (LD)]

15. What steps he is taking to support credit unions.

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

I congratulate my hon. Friend, as I always make a point of doing, on his persistence in supporting credit unions. I know that he is a member of his local one, which has about 300 members. I hope that he will welcome the award of a contract for £38 million to the Association of British Credit Unions Limited, which will help 1 million people, and will act as an alternative to loan sharks and payday loans.

[Sir Bob Russell]

I thank my right hon. Friend for that helpful answer. I know that he would like to praise the volunteers at Colchester credit union for all they do. Will he discuss with his ministerial colleagues in the Department for Communities and Local Government and the Department for Education the importance of encouraging all of us, particularly children, to undertake regular saving?

[Mr Duncan Smith]

My hon. Friend is right and his campaigns have helped us shape some of our thinking on that. It is worth noting that for the first time financial education will be on the national curriculum, which is extremely important. Through universal credit we are making available a series of financial planning devices and special bank accounts, so we hope this will drive people in the right direction. The crackdown on payday lenders who abuse their position has already started and is yielding real results.

[Fiona Mactaggart (Slough) (Lab)]

16. What assessment he has made of whether people who claim disability-related benefits are also more likely to receive housing benefit; and if he will make a statement.

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[Mr William Bain (Glasgow North 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 step that we are taking to support those suffering from mesothelioma and their families, which is a vast improvement on previous taxpayer-funded schemes. The Mesothelioma Bill will correct the failings of the insurance industry to keep proper records, speeding up tracing and setting up the scheme whereby insurers will make payments to some 300 people a year who cannot trace their past employers’ insurers. The Bill is a laudable and long-overdue step towards redress for sufferers of this terrible disease and I welcome its Second Reading in the other place.

[Mr Bain]

Seven weeks in, the true devastating consequences of the bedroom tax are becoming clear: claims for discretionary housing payments up 338% in a month, and in Glasgow rising to 5,500, the highest in the entire country. Is it not the case that the Secretary of State has not provided local councils with the resources they need to deal with a crisis of his making?

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[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

Can the Secretary of State give the House his personal forecast for when this year’s allocation for the discretionary housing payment fund will run out?

[Mr Duncan Smith]

No, because the reality is that we have also said that there is three years’ worth of payments—that is the point of the word “discretionary”, by the way. Local authorities can use the money for precisely the kinds of reasons they want, and their observance is to spend it. We keep it under review, as we have said we will do persistently. I cannot understand the point of the right hon. Gentleman’s question.

[Mr Byrne]

Let me tell the Secretary of State the point of the question: across the country discretionary housing payment fund money is about to run out. In my home city of Birmingham applications are up five times on last year. That policy means that in places such as the north-east three-bedroom houses are now standing empty because people cannot afford to move in. There are now 53,000 households in our country being put up in temporary accommodation, which is costing the taxpayer billions of pounds. When will he admit the truth: the hated bedroom tax now costs more than it saved? It is time to scrap it, and scrap it for good?

[Mr Duncan Smith]

Discretionary housing payments are given to councils, as the right hon. Gentleman knows. They set the scheme up. They can top the money up as they wish—[Interruption.] One moment they want discretionary moneys, and the next they do not. That falls into the pattern for the Opposition. When they were in government they lost control of the housing benefit bill, which doubled, and it was due to rise by another £5 billion. Every time they come to the Dispatch Box and oppose what we are doing, it means another spending commitment. They have gone from old Labour to new Labour and now to welfare Labour.

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

T6. What progress has my hon. Friend made on transforming the lives of the most disadvantaged individuals and families in our society?

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

T7. Ministers will be aware of the long-overdue changes to shared parenting in the current Children and Families Bill. Will they liaise with their hon. Friends in the Department for Education to ensure that non-resident fathers are not deterred from engaging in their children’s lives as much as possible because of welfare changes that might make it difficult for them to secure appropriate accommodation when their children come to stay?

[Mr Duncan Smith]

First, may I welcome the fantastic work my hon. Friend did when he was in that job? He is absolutely right, and I will ensure that we liaise with colleagues and make that argument strongly, but it is one that I think they already bear in mind strongly.

[Alex Cunningham (Stockton North) (Lab)]

T3. I keep hearing of homeless people having particularly difficult and negative experiences of the Work programme. Crisis has told me of a woman who lives in a hostel and has serious mental health problems, some of which relate to being homeless, yet she was referred to a sub-contractor specialising not in mental health, but in learning difficulties, who was obviously no use to her whatsoever. What will the Secretary of State do to sort out the people who are supposed to be offering services and support that are appropriate to people’s needs and end the failure of his Work programme?

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

Many of my constituents rely on the sub-prime lending sector to manage from day to day and to build their credit record. What conversations has the Secretary of State’s Department had with the Financial Conduct Authority in its efforts to improve that sector and to make sure that my constituents get a good service rather than, in some cases, being driven into the hands of illegal moneylenders?

[Mr Duncan Smith]

That is a very good question. My noble Friend Lord Freud is conducting those discussions, which are in line with all his discussions with the banking and finance sector in advance of universal credit coming in. The hon. Lady makes a very valuable point, and she is absolutely right. I will ensure that we press people very hard on this.

[Stephen Barclay (North East Cambridgeshire) (Con)]

My right hon. Friend will be aware that the Department suffered £1.2 billion of fraud losses last year and recovered just under £50 million. Will he look again at the scope for greater data sharing with the private sector, which is often targeted by the same fraudsters, to see whether risk-averse legal advice within the Department is hampering these recoveries?

[Mr Duncan Smith]

Yes. When we came into office, the fraud and error in tax credit loan bills stood at some £11.6 billion—money lost by the previous Government. Since then, we have published a new fraud legislative strategy, refreshed in February last year, and we are convicting and punishing more people. There were almost 10,000 convictions for benefit fraud in 2011-12, up more than 40% on 2009-10.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

The Secretary of State blithely told us earlier that if the budget given to local councils for discretionary housing payments runs out, they should just top it up. Where exactly does he think they should get the money from to top up their budgets, and, if he is not prepared to accept the failures of the bedroom tax, why does he not at least agree to top up the budgets himself in order to make up for the deficiencies of his own policy?

[Mr Duncan Smith]

I have said all along that we will keep this under review and talk to local authorities. The Opposition have not once apologised—they did not do so when in government, either—for the fact that, under them, house building fell to its lowest level since the 1920s and that there was more overcrowding. There are 1.5 million spare rooms and 250,000 people live in overcrowded accommodation. There were record levels under the previous Government. Why do they not say sorry for the mess they left housing in?

[Duncan Hames (Chippenham) (LD)]

I know that Ministers want to be on the side of those who work hard to get on, including a constituent of mine—about whom I have written to the employment Minister—who worked hard for many years before undergoing chemotherapy for blood cancer. Two years ago he spent a month between jobs, during which time he chose not to claim benefits, but he has been told by the benefits office that, as a result of this gap in his contribution history, he is not eligible for contributory employment support allowance. Will the Minister meet me so that we can examine this case and try to make sure that rigid bureaucracy does not prevent us from helping people in such situations?

[Julie Hilling (Bolton West) (Lab)]

A recent judgment said that homeless people using night shelters are not eligible for any housing benefit payments. Given that night shelters will not be able to continue without an income from their service users, what action is being taken to address this problem?

[Mr Duncan Smith]

We are looking at this issue with my noble friend Lord Freud and my right hon. Friends. I will definitely write to the hon. Lady about the outcome.