Jobs and Business
Iain Duncan Smith Excerpts(11 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Umunna
My hon. Friend is absolutely right, and I was just about to come on to that. The Business Secretary, soon after making that statement in favour of our regulatory framework, said:
“Like the Conservative Opposition, we shall approach the issues constructively. There is no reason to hold back the Bill.”—[Official Report, 28 June 1999; Vol. 334, c. 58.]
My hon. Friend the Member for North Durham (Mr Jones) is absolutely right: neither the Conservative party nor the Liberal Democrats voted against that Bill in opposition, and yet we have had no expression of regret from them for supporting the regulatory framework that we put in place. It is about time that we heard some mea culpa from Government Members.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Just so that the record is absolutely straight, the hon. Gentleman might like to remind us who were in government when the economy went over the edge of a cliff. Would he now—[Interruption.] The shadow welfare Secretary should just calm down. I think the hon. Member for Streatham (Mr Umunna) is capable of dealing with this himself; he does not need the shadow welfare Secretary’s assistance. Let me ask the hon. Gentleman a simple question, which my right hon. Friend the Business Secretary posed to him at the beginning. On the basis of humility, will he now get to the Dispatch Box and say to the British people that the Labour party is deeply sorry for the shambolic mess in which it left the economy?
Mr Umunna
With the greatest respect to the welfare Secretary, let me say two things. First, I have said that we have expressed regret in terms of the way in which we regulated the banking sector. However, let me also remind him that in the last two quarters of our term in office, we saw growth of 1.1%. During his time—[Interruption.] He should let me finish my sentence. If he does that, I might answer his question—I presume he wants to hear it. Did we leave him with a double-dip recession? No. Did we leave him with 2.5 million people out of work? No; so I will take no lectures from this welfare Secretary about the management of the economy.
After that excitement, let me return to banking. Reform is obviously needed, in particular to ensure that the sector provides finance to the profitable and successful small businesses that want to expand and take on more employees, but cannot access the finance that they need. That is crucial, because so many of those businesses are the ones we look to to create jobs. We know that under this Government lending to businesses is falling month on month, including a fall of £4.8 billion in the three months to February, according to the latest Bank of England figures. We know too—my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) mentioned this—that the Government’s schemes, from Project Merlin to the national loan guarantee scheme and, now, funding for lending, have simply failed to get credit to those businesses.
Every other country in the G8 has a state-backed investment institution to tackle the problem and ensure that their small businesses can access the finance they need. That is why we have argued since early in this Parliament for the establishment of a proper British investment bank and a network of regional banks, based on the German Sparkasse model, to work alongside a British investment bank to transmit those schemes to small businesses. Those are two sensible ideas that would bring us into line with our international competitors. Indeed, I am pleased to hear that the Business Secretary agrees that it is a good thing to re-establish regional banking in this country.
We would have introduced a Bill in the Queen’s Speech to establish those bodies, yet the Government have failed to do so. Instead, what have we got? Last year, rather late in the game, the Business Secretary announced, to much fanfare at his party’s conference, that he was establishing his small business bank. The British Chambers of Commerce and the Federation of Small Businesses have said that he must get on with setting it up. Last year he came to the House and told us that his bank
“has already been established, and it will be up and running next year.”—[Official Report, 20 December 2012; Vol. 555, c. 988.]
So where is this bank? The IMF is currently in town inspecting the wreckage of the Government’s failed economic plan. I know how keen the Chancellor is to rely on its pronouncements, so I went on its website to discern how it defines what a bank does. The IMF says that the primary role of a bank is to
“take…deposits…from those with money, pool them, and lend them to those who need funds.”
I suspect that most Members would expect such a bank to be established on a stand-alone basis, with its own building like any other bank—I remember all the questions put to the Business Secretary about the location of the green investment bank, for example. However, what do we find buried in the back of one of his press releases, issued just before the Easter recess? We are told that his business bank
“is expected to become a fully operational new institution in the Autumn of 2014,”
but before then any references to his business bank
“refer to the team within BIS responsible for the development and operation of its policy and programmes before it becomes a fully operational new institution.”
Rushanara Ali
I was about to come on to that. Clearly the legislative programme in the Queen’s Speech is riveting, given the extraordinary presence on the Government Benches—just four Government Members, including Front Benchers. That says it all. The Government cannot even pull together more than a handful of Members to defend their legislative programme. [Interruption.] There are five of them now. The Secretary of State for Work and Pensions is here. Perhaps he can defend it singlehandedly on behalf of the two parties in government. It says it all that so few people are in the Chamber to speak up for the Government’s legislative programme—or, rather, the lack of it.
I want to focus on unemployment, which, yet again, the Government’s programme—or lack of it—fails to address. In constituencies such as mine, long-term and youth unemployment continue to soar. The lack of opportunities remains significant; the lack of sufficient numbers of apprenticeship programmes to meet the demand is a real problem and a real challenge. If young and other unemployed people were given the opportunity to get a foot on the employment ladder, we could reduce not only the level of deprivation in constituencies such as mine, but the burden on the taxpayer of welfare costs. The way to reduce the deficit is to ensure that we get people back into work and economic activity.
The Government’s Work programme has managed to find work for only 2% of participants in my constituency. It is a scandalous waste of public money that only 2% of people are in jobs through that programme. Will the Business Secretary and the Work and Pensions Secretary look again at why their programme has had such little impact? Why not consider improving the system for getting people into work so that we can give people, in particular young people, hope and a chance to make a contribution to our economy? That kind of wasted talent cannot be good for our society or communities, and is certainly not how to recover from the economic troubles that we continue to face.
One suggestion that my party has made, but which the Government have failed to take on board, is the compulsory jobs guarantee. We know that having training programmes with a genuine guarantee of a job works. We demonstrated that it worked when we were in power, through the future jobs fund and apprenticeship programmes. I believe that the Business Secretary and the Work and Pensions Secretary want to get people into work. What I do not understand is why, if a programme does not work properly and manages to get only 2% of people into jobs, the Government will not reform it. When the Secretary of State for Work and Pensions went on his journey in opposition to discover poverty in constituencies such as mine, I thought he might have learned a thing or two about how to get people out of poverty and into work, but he clearly has not. He is too busy focusing on punishing people, rather than giving them hope and the opportunity to get a job.
Mr Duncan Smith
The hon. Lady is wrong about the Work programme. In fact, I will show her later that the UK Statistics Authority has taken her party and others to task for their use of the statistics, which it says is incorrect. The reality, as she will see when we come forward in June, is that the programme is a success, and it is cheaper than anything that Labour produced.
Rushanara Ali
Perhaps the Secretary of State can also explain why he got a slap on the wrist today—and previously—for meddling with the statistics, because people—
Rushanara Ali
No, I will not give way until I have finished my sentence. I will give way when I am done; then I will listen to the Secretary of State’s response.
The Secretary of State is damaging public trust in statistics—there is that old phrase about “damned lies and statistics”. That will lead to further distrust, not just of politicians such as him, but of important institutions that are there to provide independent, credible statistics. He should not be meddling with his figures. The fact that only 2% of participants in my constituency managed to get jobs through his Work programme is an absolutely appalling indictment of his performance in his role and shows his failure to get people into work. I find it deeply disappointing, because I happen to have admired his work with the Centre for Social Justice, which he set up before he got into government. Although I was a sceptic about his conversion to understanding poverty and deprivation and wanting to reform and improve society, I was willing to give him the benefit of the doubt, but no longer, because he has returned to the approach that the Conservatives have always taken and failed to do anything to give people genuine opportunities. That is summed up by his Department’s failure to get people into work in constituencies such as mine. The facts speak for themselves. I am afraid that he does not have much to offer, other than trying to rewrite statistics.
Unless the Secretary of State has something else to add, I will move on.
Rushanara Ali
The Secretary of State has forgotten, but I am happy to give way.
Mr Duncan Smith
I hope that the hon. Lady will withdraw the idea that I am rewriting statistics. She will see from the letter written to me today by the UK Statistics Authority that no mention is made of that. I continue to believe, absolutely correctly, that the work of the cap will help and will lead to people getting jobs. That was the whole purpose, which is why we left those on tax credits off the cap. I believe that people are moving into work, and will continue to do so, as a result of the cap, and I will be able to demonstrate that.
Rushanara Ali
Perhaps the Secretary of State could start by demonstrating now and explaining why only 2% of participants have got jobs in my constituency. What is the reason for such a ridiculously small number, when there are so many people chasing apprenticeships and job opportunities? How can that be acceptable? Why is he so complacent? I thought he was interested in getting people off welfare and into work. It seems that he is interested only in attacking people, rather than helping them to get back into work. That is deeply disappointing. I had more hope that he would do something constructive to get people into work, given his track record in opposition and his efforts to get to know communities in our country and understand where the barriers were, but perhaps I should not have given him the benefit of the doubt.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
It is a great pleasure to conclude this debate on the Gracious Speech. I congratulate hon. Members on both sides of the House and will deal quickly with some of the points they made.
My hon. Friend the Member for Tamworth (Christopher Pincher) made a good speech in which he supported the changes in the Deregulation Bill. I agree with him that it will be excellent for small businesses. As my right hon. Friend the Secretary of State for Business, Innovation and Skills stressed in his opening remarks, our record on small business creation is very good.
I have known the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) for some time and am glad to see him back in his place. He was a very good Minister and talks a lot of common sense. His comments about the overseas aid budget were well made and are well taken. I know that there is some disappointment that we have not legislated on that, but the Government’s record of reaching the 0.7% obligation and sticking to it is second to none. It has been said at the United Nations that we have given a lead to the rest of the world. I am pleased that he supported that. I recognise his concerns about youth unemployment and will return to them in a second.
My hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) reminded us of the record deficit that Labour left us with and made the strong point that everything stems from that. Labour’s spending, borrowing and taxing left us with a bust economy. As a man who has set up and run his own small business—it is not so small now, but it is certainly a good business—he knows everything about small businesses.
I congratulate my hon. Friend the Member for Burnley (Gordon Birtwistle) on his comments about manufacturing industry. He has been very good at supporting manufacturing in Parliament and beyond. He made the very good point that the last Government ran manufacturing down. Under the tenure of my right hon. Friend the Secretary of State for Business, Innovation and Skills, we are doing our level best to rebalance the economy after manufacturing was destroyed by the Labour party.
The hon. Member for Preston (Mark Hendrick) said that international factors caused the 2008 slump and that he was pro our membership of the EU. I had assumed that everybody was pro that. It is all well and good for him to say that everything was somebody else’s problem before 2010 and that now everything is our problem, but that means that Labour, somehow, bears no responsibility for anything.
When I asked the shadow Secretary of State for Business, Innovation and Skills whether he would like to apologise for the economic shambles that Labour left, he did a delicate dance around the words, “I am sorry.” He can say that now if he wants to intervene. I know that sorry is a hard word, but perhaps he would like to lead for once for the Government and say—[Interruption.] They were in government. He should lead for them and say that he is sorry for the shambles and the mess that they left. I am ready to give way if he would like to say sorry for the mess that the Labour Government left.
Mr Umunna
I am happy to remind the Secretary of State that we bequeathed a situation in which unemployment was falling, growth was rising, and stability had set in. As I said earlier, we expressed regret for not better regulating the banking system, and I look forward to hearing his apology in that respect as well.
Mr Duncan Smith
I think it is shameful that an individual who represents a party that when in government ran up the biggest deficit and, as my right hon. Friend the Business Secretary said, created the biggest bust since the first world war, cannot genuinely say to the British people, “I am sorry. We got it wrong.” They did get it wrong and will bear the consequences of that all the way to, and including, the next election.
Mr Duncan Smith
I will finish a couple of quick points and then I will happily take more interventions.
The hon. Member for Washington and Sunderland West (Mrs Hodgson) made a point about unemployment in her area and the north-east in general. Employment and unemployment are big issues for us all, but I say to the hon. Lady, and to others, that since the election employment in every single area and region of the UK is up from where we found it. Employment is up—I will return to that point in a moment—and what the Government have done has helped that.
The hon. Member for Bristol East (Kerry McCarthy) complained about the absence of legislation on overseas aid, but I thought she might have been a little more generous about the fact that this Government are the first to make such a commitment— stay static, get to 0.7% of GDP, and implement it. It would be more helpful to say, “Yes, this is the right thing to do.” We can by all means debate whether we need to lock that commitment into legislation, but the reality is that we have locked it in because the Government have made it clear that we will not depart from it. We can debate the realities of the legislation, but we are spending more as a proportion of our gross domestic product than any other Government have previously done, and that has shown a lead to the rest of the world.
Let me turn to the Gracious Speech, which I feel has set the tone for a real change to society. I am proud that my Department will be initiating and taking through the Pensions Bill, which is the most important reform and change. It follows a series of reforms and changes that my hon. Friend the Minister of State, Department for Work and Pensions (Steve Webb) has taken through with me: automatic enrolment and ensuring that consultants will not be able to overcharge people for that; making the necessary changes; and, finally, the single tier pension, which I know is close to his heart. I take this opportunity publicly to congratulate my hon. Friend on the hard work he has put in. Without it, the Bill would not exist and it is a very good thing.
With the Immigration Bill we are picking up the pieces of Labour’s immigration strategy that saw net immigration of more than 2 million people between 1997 and 2010. New legislation will ensure we have the power to limit access to public services and housing, attracting people who will contribute, and deterring those who will not. As contributions from Government Members have made clear, we are already making progress towards that business-led recovery, and out of the mess left by the previous Government we are creating jobs and helping people get into work.
That brings me to a series of points about labour market stats. Let me run through a few of the realities, even though sometimes it does not help the Opposition. Since the last election, the number of people with a job is up by well over 750,000. There are 1.25 million more private sector jobs since the election, meaning that over the past year, six private sector jobs have been created for every job lost in the public sector. The number of people of working-age—
Mr Duncan Smith
I want to get through this point because I think it is important. The number of working-age people without a job is down—I stress that—by 350,000 since the 2010 election, driven by falling inactivity. Inactivity is now at its lowest level for two decades; the Labour party left us with a high rate of inactivity, and we have lowered it. There are now fewer people and fewer young people on jobseeker’s allowance than when Labour was in office. The number of claimants aged 18 has fallen for the 10th consecutive month. In April, we had the lowest number of new jobseeker’s claims for four years, alongside falling redundancies. Let me deal with Opposition Members’ suggestion that those people are moving not into real work, but into part-time work. That is not true. In fact, full-time employment is up more than 500,000 since 2010—it is up 64,000 on the last quarter alone.
My final point on that is that Opposition Members need to lift their heads up occasionally and look elsewhere. My right hon. Friend the Secretary of State for Business, Innovation and Skills compared our situation with that of France, which has 11% unemployment. That comparison bears out very well what the Government are doing. The UK’s overall employment rate is growing at almost double that of the US, and faster than the rate in any other G7 country. That is because the Government have taken the tough decisions to ensure that we have the flexibilities and that people can get back to work. The private sector is now creating jobs, whereas under the previous Government, it was shedding jobs.
Let me remind Labour Members that, for all their crocodile tears, long-term unemployment nearly doubled in two years under the previous Government—from 400,000 in 2008 to 800,000 in 2010. That was a failure on their part. They gerrymandered the figures on youth unemployment, but when we take the gerrymandering out, we find that youth unemployment is now lower than when the Labour Government left office.
The Work programme is a success. In fact, the Office for National Statistics wrote the other day to a number people correcting how they interpreted the figures. It made it very clear that what the right hon. Member for Birmingham, Hodge Hill and others have said about the statistics was completely wrong. The ONS has said that the reality is that the figure of 2% or 3% that he has been using, which is below the minimum performance level, is incorrect. It went on to say that the realistic and more relevant figure is that 8.6% of those referred to the Work programme are in sustained employment in the first six months. That was ahead of the previous position. By the way, I remind him that, unlike all his other programmes, people do not get paid unless they get people into sustained work. That is unlike what happened under the future jobs fund and the flexible new deal, when the Labour Government paid up ahead and wasted the money.
Mr Duncan Smith
The figure was there and we told the right hon. Gentleman, but he refused to listen—[Interruption.] Yes, it was. The ONS has pointed that out. The point I am making to him is that, when we produce the next figures, the Work programme will show that it is dramatically improving and getting more people back into work. [Interruption.] I will deal with that point, because the right hon. Gentleman believes he has an alternative. He spoke of introducing a new programme. His new programme is a real mess—it has changed on a number of points. When he first referred to it at, I believe, the last Labour party conference, he was offering those who had been unemployed for one year or more a guaranteed job for 12 months.
Mr Duncan Smith
Hang on a second. As I pointed out to the right hon. Gentleman at the time, that programme sounded rather familiar, so I looked up the programme the previous Government were considering—it was called “step up”. That programme, which was piloted in 20 areas and which bore an uncanny resemblance to his latest programme, gave paid employment to new deal failures who had been out of work for two years. It was never rolled out nationally because it was discredited, even within the Labour party, as not giving value for money. For those nearest to the labour market and those under 25, “step up” had a negative impact on work prospects and came in at a massive cost of £10,000.
After the programme he announced at the party conference was discredited, the right hon. Gentleman went away, fiddled with his plans and came back with a new plan. He will now mandate people to a job for six months, which is half the length of time he previously advertised. Even as recently as April, the Opposition seemed to be in a mess. There is complete confusion. The shadow Chancellor spoke of a guarantee of one year for young people and two years for adults.
Mr Duncan Smith
I will give way in one moment. The shadow Chancellor gets in a real mess, so I say simply to the right hon. Member for Birmingham, Hodge Hill that the Labour programme will cost huge sums of money. Like the future jobs fund, it will be good only for the public sector, and there will be a net cost to the Exchequer. He will compound all the failures they ever made. They left us with the biggest deficit. We are cutting the deficit by a third and borrowing is down by £38 billion. We have the fastest growing employment rate in the G7. This Queen’s Speech builds on our success, not on Labour’s failure.
Ordered, That the debate be now adjourned.—(Greg Hands.)
Debate to be resumed Monday 13 May.
Social Justice: Transforming Lives
Iain Duncan Smith Excerpts(11 years, 4 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
A year ago, we published “Social Justice: transforming lives”, a landmark document setting out a new vision for supporting the most disadvantaged families and individuals across the UK. The social justice strategy outlined how family breakdown, low educational attainment, worklessness, problem debt, and addiction combine to cause the entrenched poverty affecting many of our communities, highlighting the complexity of the issues that many people face.
To meet this challenge, the strategy signalled that a new approach was needed—putting early intervention first, while tackling the root causes of poverty to give those experiencing disadvantage a meaningful second chance.
Today, I wish to inform the House that I am laying the command paper “Social Justice: transforming lives—One year on”, which demonstrates the progress that we have made in turning that vision into a reality.
Over the last 12 months, we have started the cultural change needed in order to achieve our aims, spanning not only families and individuals, but also public services and the way the Government fund them.
As today’s report sets out, delivering this aim has required a complete shift in how the Government tackle social problems: an unrelenting focus on preventing problems arising in the first place; giving people the support they need to make transformational changes to their own lives when problems arise; and spearheading new multi-agency, outcome-focused approaches in order to address problems in the round.
The achievements set out in this report, and in supporting documents published on the Department for Work and Pensions’ website, show how much can change in a year, and what this change means to individuals. We have made substantial progress against over 100 commitments set out in “Social Justice: transforming lives”, each of which equates to meaningful life change for the most vulnerable in our society.
While the challenges we face remain significant, this is a strong and positive start—much to the credit of those championing social justice in Government, at a local level and across the voluntary sector. By restating our commitment to transforming lives, and continuing to drive change in how we help families and individuals in need, we will make social justice a reality for everyone in the United Kingdom.
Budget Resolutions and Economic Situation
Iain Duncan Smith Excerpts(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I welcome the Budget, which reiterates this Government’s commitment to restoring the damaged economy that we inherited. I remind hon. Members that the deficit—11.2% of GDP—was the largest since the second world war, higher than that of Germany, France and even the USA. The important point is that the deficit fuelled a high debt burden—which had been set to rise dramatically—of 65% of GDP and rising. In fact, if nothing had changed, it was forecast that borrowing would have risen by more than £200 billion during the course of the spending review. The deficit has cost more than £42 billion in interest payments each and every year since we entered office. [Interruption.] I am fascinated to hear that the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who is chuntering from a sedentary position, says that he is concerned about borrowing. The truth is that under Labour’s plans borrowing was set to rise by another £200 billion, and under its existing plans its solution for the problem of borrowing is to borrow more. Perhaps the right hon. Gentleman would like to explain how that would help the deficit.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
The Secretary of State is being characteristically generous in giving way so early in his speech. The previous Chancellor’s Budget would have halved the deficit over the course of four years, but this Budget confirms that borrowing is now set to grow by £254 billion more than first forecast. How can the Secretary of State judge that to be a success?
Mr Duncan Smith
Let us be clear about the plan left by the right hon. Member for Edinburgh South West (Mr Darling). Labour Members have been banging on about capital spending over the past 48 hours, but it is worth reminding everyone that while they now claim to want more capital spending, it was set to fall by 7% under the Darling plan. The honest truth is that, notwithstanding the euro crisis and the fact that the rest of Europe is mired in recession, as shown by the situation in Cyprus, the idea that there would have been a continuum and that all would have been well is complete and utter nonsense.
We are reducing the deficit and getting borrowing down, and it is set to fall further. Instead of banging on about capital spending, the right hon. Member for Birmingham, Hodge Hill should explain why Labour’s solution, which would send shudders through the world, is to borrow more. That would make our deficit position worse and raise interest rates dramatically, leaving ordinary people unable to afford their home loans.
Mr Byrne
The truth is that the Secretary of State is in this hole because the recovery that we left this Government has been knocked out. Growth has now stalled and, as a result, tax revenues are coming in at £5 billion lower than forecast. That is why we needed a Budget that would get back growth and jobs.
On capital spending, is the Secretary of State saying that he now agrees with the Deputy Prime Minister, who said earlier this year:
“If I’m going to be sort of self-critical, there was this reduction in capital spending when we came into the Coalition Government”?
Mr Duncan Smith
I do love these little exchanges with the right hon. Gentleman—I am sure we could become quite friendly—but the reality is that he is dancing around what was actually happening. I remind him that Labour’s capital spending programmes would have resulted in a real cut of 7% compared with our plans. It is all very well for Labour Members to talk about this now, but under the plan they left, capital spending was falling fast. We are spending more than their plan proposed, which would have resulted in a net 7% cut.
Borrowing today is lower than under Labour. It was £159 billion at its peak and it is now £120.9 billion, which is £38 billion lower, and forecasts approved by the Office for Budget Responsibility show that by the end of this Parliament it will be £63 billion lower and falling. [Interruption.] I say to the right hon. Gentleman that the public do not believe that Labour’s plan would have been any better. In fact, it would have been a lot worse and now Labour Members want to make it even more so, because they want to spend more, borrow more and see the deficit rise.
Mr Kevan Jones (North Durham) (Lab)
Does the Secretary of State not recognise that the difference between this Government’s plan and the one we left is that the economy and capital investment were growing? The Chancellor’s emergency budget in 2010 caused damage by ripping the heart out of the capital programme, and that led to a depression.
Mr Duncan Smith
I know it is difficult in the Chamber for anyone to listen to what anybody else is saying, but I want to return to my point. Under the plan that Labour left behind, capital spending would have been 7% lower compared with what it is today. It is absolutely no good—
Mr Duncan Smith
I am going to make some progress. The right hon. Gentleman will have plenty of time to contribute and I want to finish responding to the intervention from the hon. Member for North Durham (Mr Jones). Capital spending was set to fall. The plan that Labour left was to lower capital spending and there is no way around that. He cannot talk about capital spending rising because it was set to fall. We are bringing borrowing down. Labour has no plans at all for that and would raise borrowing.
Mr Brooks Newmark (Braintree) (Con)
Does my right hon. Friend agree that the bottom line is that today more men are in work than ever before, and more women are in work than ever before? That is the most important thing for our constituents.
Mr Duncan Smith
I was going to come on to that. I agree with my hon. Friend, and our employment levels put us in a better position than almost everybody else in Europe. We have more people in work and lower levels of unemployment. To be honest, people in Spain or France would give their eye teeth for the figures that we have today. Labour would push the cost of borrowing higher and higher, the deficit would spiral and the world community would not lend to us except at the highest rates possible. We would be rather like Spain or, in some senses, Italy.
Mr Duncan Smith
I will give way for the last time, and then I will make some progress.
Mr Byrne
The Secretary of State knows as well as I do that annual housing starts totalled just 98,000 in 2012. That is 11% down on the previous year, and half the number of homes that it is estimated are needed in this country. That is why Labour is saying clearly that we should spend the proceeds of the 4G licence sale, and half the money from a bank bonus, on building homes. This week’s figures show a 65,000 fall in the number of people working in the construction sector. This country needs investment in building homes, not a spare homes subsidy for the very rich.
Mr Duncan Smith
I thought the right hon. Gentleman would have avoided this issue because it is like walking into a large hole of his own making. Let me quote something from his right hon. Friend the ex-Prime Minister. This is how much he thought of house building:
“Housing is essentially a private sector activity...I don’t see the need for us to continue with such big renovation programmes”.
He cut spending, and I remind Labour Members that house building under his Government fell to the lowest levels since the 1920s—[Interruption.] No, absolutely not. Housing construction orders are up by 32%, and our plans will outstrip the house building figures of the previous Government.
Mr Duncan Smith
No. The reality is that under the previous Government, house building fell to the lowest level since the 1920s.
Mr Duncan Smith
No. The numbers of people living in overcrowded accommodation rose. The housing waiting list doubled. It was a shambles and a mess, and we are doing more to put it right. The plans in the Budget, which I will come on to, will improve the situation even more.
Let me make some progress. The Office for Budget Responsibility has confirmed that we are on course to meet the fiscal mandate one year early. The deficit has already been cut by a third to a forecast 7.4% this year, and it is predicted to fall every year in this Parliament. The likelihood of meeting the supplementary debt target has decreased. Public sector net debt is forecast to be 75.9% of GDP this year, and to peak at 85.6% in 2016-17. However, we have made a £31 billion saving in the debt interest payments predicted two years ago—almost as much as the whole defence budget.
Borrowing is down to £115 billion and forecast to be £87 billion by the end of this Parliament. Even excluding Royal Mail pensions and the asset purchase facility cash transfers, it is already £39 billion lower than the £159 billion peak for borrowing under Labour, and will be £63 billion lower—a reduction of 40%. I remind the House that Labour’s prescription is to borrow more, not less. The Institute for Fiscal Studies has estimated that in the absence of measures taken by the Government, total borrowing would have been £200 billion higher between 2010-11 and 2015-16.
It is important to note that since the beginning of this Parliament, issues in the eurozone have made matters very difficult, and in the current economic climate the challenge is harder than anyone could have predicted or hoped. As the OBR, OECD and others have explained, there are real risks to our stability and to others, in particular the financial storm in the eurozone, which shrank by 0.6% last quarter—the largest fall since the height of the crisis. With Europe accounting for 40% of our exports, it is no surprise that weak net trade has impacted on our GDP. In the words of the OBR, the
“unexpectedly poor performance of exports is more than sufficient on its own to explain the shortfall”.
Although the eurozone is expected to remain in recession throughout the year, the UK is forecast for a slight increase in growth. This Budget will, I believe, stimulate growth further still, so let us look at a few of its important measures. We are further reducing the main rate of corporation tax, which we had already lowered to 21%, to 20% from April 2015, down from the very high 28% inherited from Labour. It will now be the lowest rate in the G20. We are also—this is really important for my right hon. and hon. Friends, and for me it is the most important measure in the Budget—merging small company and main rates of tax at 20p. That had been asked for, but as I think Mr Frost said, it goes way past what was actually asked for. It is a real boost to small businesses.
We are increasing capital spending by a further £3 billion more than our existing plans from 2015-16, meaning that the Government will never cut capital to the levels planned by Labour which, I remind hon. Members, would have reduced spending by 7% more than our plans. We are taking measures to dramatically reinvigorate both house buying and the construction industry in this country by extending the excellent right-to-buy scheme, building 15,000 more affordable homes and increasing fivefold the funds available for building for rent. I remind colleagues that one of our biggest problems in getting housing benefit under control is due to the failure of the previous Government to allow enough houses to be built for rent, so that measure will be a huge help. We are introducing Help to Buy—a two-part scheme set over three years, committing £3.5 billion into shared equity loans for new builds, and offering new mortgage guarantees to support £130 billion of mortgages. That is really important.
I was watching the news programmes yesterday, and it was quite amusing to watch the shadow Chancellor run around. More and more he reminds me of the film “Toy Story”, and that rather angry Mr Potato Head who wanders around shouting, screaming and being very angry to absolutely no effect at all. Disaster, chaos, crisis, U-turns—I wonder what he does in his private life when anything goes wrong. He is certainly not much help to his wife I expect.
Sir Peter Bottomley (Worthing West) (Con)
Was that before or after the shadow Chancellor heard that people would not trust him with the economy?
Mr Duncan Smith
It is despite the fact that he knows nobody trusts him with the economy, which is why he looks more and more like an angry Mr Potato Head. It really is appalling and the idea that the alternative to the Chancellor is the shadow Chancellor is, frankly, enough to make one leave the country.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
The list of initiatives that my right hon. Friend has read out illustrates that this Government are part of the aspiration nation, wanting people to own their own homes. That is one of the greatest things to which people aspire, and it is fantastic that we are doing everything we can to help the construction industry and help people achieve that dream.
Mr Duncan Smith
I congratulate my hon. Friend on arriving at a really good statement: the aspiration nation. She is absolutely right, and the fact that she has come across it herself is testament to her brilliance on the Back Benches. This is about an aspiration nation, and the alternative—as somebody just remarked to me—is Mr Potato Head to infinity and beyond on borrowing. That is about the end of it.
The Budget also includes further measures, which I want to go through because some are really good.
Nick Smith (Blaenau Gwent) (Lab)
Did the Mr Potato Head comparison occur to the Secretary of State when he was looking in the shaving mirror this morning?
Mr Duncan Smith
Looking at the television was enough to give me the idea. I am glad the hon. Gentleman agrees that the shadow Chancellor more and more resembles angry Mr Potato Head.
By introducing an employment allowance, we will reduce the amount that 1.25 million businesses pay in national insurance contributions each year, and take 450,000 small employers out of national insurance altogether. That is a huge measure, and really important for small businesses, which, as we know, drive most of our employment.
Through tax reliefs both for social investment and for businesses that help employees to return to work after sickness, we are incentivising interventions that prevent long-term social problems. The sickness absence review on which the Government have led is really important. That tax help will drive change on one of the big problems we have had—we have talked with Dame Carol Black and Mr Frost about this—namely, that too many companies leave people who have difficulties to slide through their sickness and fall out eventually into incapacity benefit or, currently, employment and support allowance. We are trying to get companies to work with us on that review to ensure that they do much more to intervene earlier with help and support to try to resolve problems before people crash out of work and fall on to the benefits system. I hope that the sickness absence review will be fully supported on both sides of the House, and that that tax measure starts to get us ahead of the problem, which is where we always want to be. When somebody at work is finding it difficult, we want the companies involved earlier to ensure that something is done to change the situation.
That tax relief is important, as is the tax relief on social investment bonds. Sir Ronald Cohen has said that there is potentially a huge market for investment in social projects, and huge potential for bringing investors and some of the wealthier people in society back into contact with, and helping, areas of society that have damage and difficulty. Such investment can help to get kids off drugs or help with rehabilitating people from prisons. The measure will be a huge incentive, and I am pleased that we are consulting on it.
Nick de Bois (Enfield North) (Con)
My right hon. Friend might be aware that the Chancellor responded to representations from me and others and will consider further incentives for social investment tax relief to encourage smaller investors and crowd funding to help to drive local community finance initiatives.
Mr Duncan Smith
I congratulate my hon. Friend on being picked out in the Budget—it is not often that people are picked out in a Budget. He should shake hands with the hon. Member for Stoke-on-Trent Central (Tristram Hunt). He was angry before the Budget, but waved his Order Paper to applaud the Chancellor during his speech. I do not blame the hon. Gentleman, because he helped to change opinion—[Interruption.] I apologise. I do not want to talk about that too much because he has a career ahead of him—I hope.
Finally, in a welcome move, we are raising personal tax allowances to £10,000 by the end of the Parliament. That measure, which is a result of a good coalition agreement, means that working families pay £700 less in tax than when the Government took office, and that almost 3 million more of the lowest earners will pay no income tax at all.
James Duddridge (Rochford and Southend East) (Con)
The concept that 24 million people are helped by that measure is somewhat difficult to grapple with. It is much better interpreted by individual constituency. In my constituency, for example, 38,062 people will be £700 better off, and 359 people will be lifted out of income tax altogether.
Mr Duncan Smith
I agree with my hon. Friend and thank him for reminding me that we need to centre the measure down to constituency level, so that hon. Members know what it does. With my right hon. Friend the Chancellor, I will endeavour to ensure that every constituency is informed about how many people will be lifted out of tax and how many will benefit.
Mr Duncan Smith
Let me finish my point. That is one coalition measure of which I, as a Conservative, am incredibly proud. I am incredibly proud that we struck that agreement, and that, a year early, before the end of the Parliament, we will raise the threshold to £10,000. That will do more for poorer people who are struggling to make ends meet than almost anything the previous Government did. I should remind the House that they did exactly the opposite. They got rid of the 10p tax rate. They tried to pretend that that was somehow a tax cut, only to find that they spent billions of pounds—borrowed billions—to try to rectify it.
Mr Duncan Smith
During the passage of our last Bill, we were clear about who was winning and losing in those circumstances, and I am happy to engage with the hon. Gentleman on that. There are two important things to remember. The Opposition go on about this, but the reality is that in every year of this Government, the wealthiest in society—the top 1%—will pay nearly a quarter of all income tax, and the top 5% will pay nearly half of all tax. The richest will pay more in every single year of this Parliament than they would have paid under the previous Government’s plans. The 14,000 people in the UK who earn more than £1 million a year will pay £14.2 billion in tax this year. Conservatives did not say that they were pleased for people to be filthy rich; Labour did. The previous Government allowed wealthy people to boast that they paid less tax than their cleaners. We need take no lectures on upper rate tax from the Opposition.
Mr Byrne
Will the Secretary of State tell the House what representations he has made to the Chancellor on whether it is right that universal credit should be calculated on post-tax income? The Secretary of State will know that the effect of that is to claw back three quarters of the increase in the personal allowance from Britain’s poorest families.
Mr Duncan Smith
The reality—the right hon. Gentleman needs to get his head around this—is that those who engage with universal credit, all the way up the scale, will be better off than they would have been going back to work under all the measures in place at the moment.
Graham Jones
On the Secretary of State’s list of things that will be beneficial to constituents, does he agree that we probably do not need to include figures on the VAT measures, because everybody in every constituency will suffer from them?
Mr Duncan Smith
I seem to recall that, under the previous Government, the then Chancellor had to admit that his changes to VAT were a complete disaster and made no difference to anybody. Most companies ended up spending more money trying to make alterations. The reality is that the previous Government should have increased the personal tax allowance threshold to £10,000, but they never did. I would love to hear the Opposition welcome that measure rather than carp about it.
Nick de Bois
I suspect my right hon. Friend will wait in vain for that. Does he recall that the previous Government introduced stealth taxes by refusing to increase tax-free allowances even in line with inflation, so more people paid more?
Mr Duncan Smith
We know about the incredible stealth taxing under the previous Government. Their tax on pension funds meant that they were worse off by £100 billion, which sounded the death knell for defined benefit pensions. The previous Prime Minister, who, as I have said, got rid of the 10p starting rate, did more to punish people than we would ever expect from a Labour Government.
Jeremy Corbyn (Islington North) (Lab)
I would be grateful if the Secretary of State turned his attention to the benefit cap and its effect on poor people in high-cost areas such as the one I represent. Is he aware that 1,000 children in Islington schools are affected by the benefit cap? Some of their families will be affected by as much as £200 a week. That will lead to the social cleansing of the whole of central London because of the high cost of rents. Will he look again at the benefit cap and its effect on those in private sector housing, and do something rapidly to stop the enforced movement of poor people out of central London?
Mr Duncan Smith
I do not agree with the hon. Gentleman, although I understand fully what he says. I keep all benefit changes under review, but people have been told for more than a year that they are the families that will come under the benefit cap when it comes in on 1 April. A large number of those families are now heading back to work and taking jobs. That is what we are seeing—the figures will be released. It is remarkable how many people are moving to control their own situation. I remind the House and the hon. Gentleman that, despite all that is said, the benefit cap is set at the average earnings in Britain. Many people who are not on benefits have to cope with that.
Ms Karen Buck (Westminster North) (Lab)
Will the right hon. Gentleman give way?
Mr Speaker
Order. I gently remind the House that the Secretary of State is in order. He has been generous in taking interventions, but 30 hon. Members wish to speak in the debate. I know that both the Secretary of State and his shadow will factor that into their calculations.
Mr Duncan Smith
Rather than advice, I will take that to be an instruction, gently and eloquently given. I can crawl with the best of them—I hope better than my opposite number, but he will make his own attempt. I will make progress and try to be quicker.
I will talk briefly about the single-tier changes for which we are legislating. They are not just about improving the prospects of workers today, but about securing their position as they enter retirement. I am enormously pleased that the Chancellor confirmed that the single-tier pension will start in April 2016, which is in keeping with our original timetable. That means that after 60 years of modifications and tinkering, we will deliver a vital overhaul of the pensions system as soon as possible. I pay tribute to the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), who has been instrumental in driving that forward. If anyone is able to say at the end of this Parliament, “I made a difference,” it will be him. I will ensure that his name is remembered for that.
We are successfully rolling out auto-enrolment, which will help up to 9 million people get into a workplace pension scheme. That is important as it will make saving the norm. However, auto-enrolment will not work unless it pays to save. That is the key problem that the Minister and I have been discussing endlessly. What is the incentive to save? Too many people in Britain have been spending rather than saving.
The single-tier pension is all about solving that problem. We are replacing the complicated two-tier system of the basic state pension, additional state pension and the other outdated add-ons with a single flat-rate payment. That means that people will know what they are entitled to and will be able to project forward so that they know what they need to save. They will know that what they save will go above the line and that they will be able to use every pound; it will not be means-tested away so that they cannot use it. At £144 a week, the new state pension will be set above the level of the means test.
We are ending the unfairness whereby many people reach state pension age, having scrimped and saved all their life, only to find that others, who did not make any effort, get the same income through the pension credit. That is unfair. This change is about fairness and making saving pay. Michelle Mitchell, the charity director general of Age UK, said:
“The government’s proposals for a single tier state pension could help transform retirement for future pensioners, bringing clarity and stability to a system which is currently opaque and unfair.”
In 2020, three quarters of new pensioners will get a higher state pension following the introduction of single tier. That will benefit those who have historically had poorer state pension outcomes in particular. There will be better provision for the low-paid. Some 60% of low-income pensioners will see their income in retirement increase by 2040, compared with the current system.
Critically, there will be better provision for the self-employed, who, for the first time in about 40 years, will be treated the same as employees for the purposes of state pension retirement. There will be better provision for those with broken contributions, such as women and those with caring responsibilities. Some 700,000 women who reach state pension age in the 10 years after the single tier is introduced will receive £9 per week more on average. Implementing it in 2016 will benefit an additional 85,000 women who will now retire under single tier.
The single-tier pension is one of the big reforms, alongside universal credit, that will transform the landscape. It pays to work and it will now pay to save.
Mr Duncan Smith
With respect, I am under the eye of Mr Speaker. Although he is invariably generous, given his admonition, I will make a little more progress to ensure that I finish on time.
Universal credit makes it pay to work. Alongside universal credit sits universal jobmatch, an online job searching and matching service that is revolutionising the way in which people look for work. Two million people are already registered. It is already allowing us to segment those who are out of work so that we can deal with the people who are the most difficult to get into work earlier than we could before.
From April, we will begin to replace disability living allowance with the fairer and more objective personal independence payment. We are also improving employment opportunities for disabled people so that they can live independent lives.
Finally, we are getting to grips with the housing benefit system, which the last Government allowed to run out of control. Housing benefit doubled in 10 years. We are dealing with the problems that we inherited.
James Duddridge
As well as being welcome to individuals, will not the simplification of benefits bring massive savings in the administration of the Department by making it much simpler not only to deal with claims at the outset, but to stop people coming to us repeatedly who have problems not with the outcome, but with the system and the bureaucracy?
Mr Duncan Smith
Absolutely. Our dramatic changes will allow savings to be made for the right reasons, such as improving efficiency. The system will be simpler and easier, so people will understand it better. The lack of complication will help to save more.
In conclusion, the Labour Opposition vote against our reforms again and again. On welfare alone, they have voted against savings of £80 billion. That money needs to come from somewhere. They do not say where it would come from, apart from borrowing. Once again, that is backward logic: borrow more to cut borrowing; spend more to cut spending. Meanwhile, the Government are changing the culture of welfare and Government spending in the country. We are backing people who want to work hard and get on in life, and taking bold action to ensure that we succeed in the global race. It pays to work. It pays to save. The Chancellor’s Budget delivers sound public finances and a fairer deal for working families. It has all the right elements and I commend it to the House.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
As if we needed it, Wednesday’s Budget was the final, definitive, categorical proof that plan A has failed. Growth has halved; it will be lower this year and next year than was forecast. The deficit is not falling; it is static. The IFS said yesterday that the only way for the Chancellor to bring the deficit down this year and ensure that it is lower than last year would be to pay this year’s bills next year. Paul Johnson of the IFS concluded:
“The truth is that borrowing is the same this year as it was last year. And it will be the same next year as this year.”
Total debt is not down; it is going through the roof because the Government’s fiscal plans are in tatters. Borrowing is set to be £245 billion higher than was forecast. We were promised that the books would be balanced by 2015. That is a promise broken. According to Wednesday’s figures, the national debt will not be falling until 2017-18.
I am glad that the Secretary of State raised the idea of the global race. The House will have seen from the OBR’s figures on Wednesday that the fabled rebalancing that we were promised is simply not happening. Our exchange rate has fallen by 20% since 2007. Exports have grown by 1%. Once upon a time, in its early days, the OBR said that the export boost to GDP was set to be 1.2%. It now admits that net trade is dragging down our economy by 0.8%. What a contrast that is to 20 years ago, when sterling depreciated by 18% and exports grew by more than a third. Contrary to what the Secretary of State says, the OBR says that our market share is deteriorating not because the growth of our trading partners is slowing, but because our exporters have become less competitive. The Chancellor was right to say on Wednesday that we are in a global race. The problem is that we are set to lose it by setting sail for a low growth, low pay, low skill economy, and there was nothing in the Budget to change that course.
Mr Duncan Smith
The right hon. Gentleman is doing his usual trick of trying to rabbit around the figures and then arrive at an insoluble conclusion. He says that there are difficulties and complains about borrowing, but his prescription is to spend more and to borrow more. Will he please explain who agrees with him that we should spend more and borrow more when our problem is borrowing and our problem is a deficit?
Mr Byrne
The chief economist to the IMF has been clear that a different fiscal strategy is needed. Indeed, the Secretary of State for Business, Innovation and Skills hinted that what was needed at the moment was a whacking great boost in capital spending, and the Deputy Prime Minister has admitted that the Government cut capital spending far too fast. That is why we have set out clear, costed plans to increase capital spending and change course.
The Chancellor and the Prime Minister bear responsibility for that catastrophic failure and the failure of their fiscal plans, but, let us be honest, they have been aided and abetted by the Secretary of State for Work and Pensions, who has proved incapable of translating his fabled welfare revolution into practice. There could not have been a worse curtain-raiser to Budget day on Wednesday than the unemployment figures that we saw at 9.30 am. Halfway through this Parliament, unemployment is higher than it was at the general election—and it is not going down, it is going up. [Interruption.] I do not know where Government Members were on Wednesday. Unemployment rose on Wednesday. Youth unemployment went up by 50,000 on Wednesday. Unemployment among women went up, not down, on Wednesday. Government Members would do well to live in the real world for once.
Mr Byrne
I can confirm that, and I will also say to the House that families are now paying an extraordinary price. They are doing anything and everything to get work. On average, people have taken a £1,250 pay cut since the election, and that is why it is such a bad idea to cut tax credits and give a tax cut to millionaires in two weeks’ time.
Mr Duncan Smith
Let me make two things clear. Unemployment is at a lower rate than when we took over in 2010, and there are more people in work than ever before. It is no good the hon. Member for Westminster North (Ms Buck) harking back to 2008—Labour bust the economy in 2008-09, which led to this problem, and youth unemployment was rising. The right hon. Gentleman said that he is supported by the IMF. Let me quote Christine Lagarde, who said
“when I think back myself to May 2010, when the UK deficit was at 11% and I try to imagine what the situation would be like today if no such fiscal consolidation”—
the one we are carrying out—
“programme had been decided... I shiver.”
She shivers at the problems caused by the previous Government and what they would have done.
Mr Byrne
My hon. Friend is absolutely right to raise that point. Not only did we see youth unemployment rise on Wednesday, but the claimant count for long-term unemployment went up again. That is why I say to the Secretary of State that we needed action in the Budget to bring unemployment down.
The organisation of back-to-work schemes under this Secretary of State is now in a state of complete chaos. This is what he had to say about the Work programme in November 2010:
“The difference between this Government and the previous Government will be that the Work programme—the most comprehensive, integrated work programme in existence, certainly, since the war”.—[Official Report, 22 November 2010; Vol. 519, c. 18.]
What have we had instead? We have had a Work programme that has been literally worse than doing nothing: just 2.3% of people referred on to the programme have found sustained jobs. The Public Accounts Committee had this to say:
“Actual performance was even below the Department’s assessment of the non-intervention rate—the number of people that would have found sustained work had the Work Programme not been running.”
Will the Secretary of State now tell us what on earth is going wrong and what he got from the Chancellor to fix it?
Mr Duncan Smith
I will hold the right hon. Gentleman to those words when we publish the next figures, because the Work programme will be proven to be a remarkable success. As the Work programme becomes a success, it will actually save the taxpayer money, because none of the companies are paid unless they get people into work for six months. He knows full well that his Government’s programmes were expensive and failed: unemployment rose dramatically, and youth unemployment was rising from as early as 2004, when the economy was meant to be growing.
Mr Duncan Smith
I tell the right hon. Gentleman that when we publish the figures on the Work programme, he will be eating his words.
Mr Byrne
I will take that as a no.
The only measure in the Budget that might remotely help jobs is the employment allowance—a welcome idea that we support and for which we have argued before—but it will not kick in until halfway through 2014 and will not be fully up and running until 2015-16, when the GDP growth is forecast to be 2.4%, which is three times the growth forecast this year. We need action on jobs now, not in the first year of the next Parliament.
If we require any proof of the need for a big plan for jobs, we have only to look at the story by Mr Patrick Wintour in today’s Guardian. Here we learn some of the terrible ways in which front-line jobcentre staff are now being asked to reduce the unemployment figures—targets for sanctions and league tables for jobcentres. So tough is the pressure on staff that they are threatened with disciplinary action by their superiors if they fail to deliver for Ministers. They are even given a dictionary of which phrases to spot so that they can catch out jobseekers who have turned up to jobcentres for help. The leaked e-mails tell staff to look out for phrases such as, “I pick up the kids”, “I look after my neighbour’s children” and “I didn’t come in yesterday because my husband was ill”. It beggars belief that Ministers told the House on Monday that no such targets or league tables existed, yet we see from these e-mails that it is deep within the DWP’s culture.
Mr Byrne
I will give way to the Secretary of State in a moment, because I am going to invite him to apologise to the House.
How on earth could Ministers not have known? How on earth could the House have been given information earlier in the week that was the opposite of the truth? I know that the Secretary of State will apologise, because he is a decent man. On Tuesday, the Minister of State, Department for Work and Pensions, the hon. Member for Fareham (Mr Hoban), said:
“There are no league tables in place. We do not set targets for sanctions”.—[Official Report, 19 March 2013; Vol. 560, c. 828.]
The Under-Secretary of State for Work and Pensions, the hon. Member for Wirral West (Esther McVey), said:
“There are no targets whatsoever.”—[Official Report, 19 March 2013; Vol. 560, c. 872.]
I am glad that we have secured an independent review of the sanctioning regime in the Jobseekers (Back to Work Schemes) Bill. It was clear that we were right to demand it, and it is now clear that the sanctioning regime is running out of control, so I hope that the Secretary of State will guarantee that the independent review will get to the bottom of every case in which sanctions have been used. If he does not, we will bring forward such amendments in the other place.
Mr Duncan Smith
First, I can absolutely commit to the fact that there are no targets for any sanctions whatsoever. To emphasise that, I should point out that the head of Jobcentre Plus has issued a reminder to everybody in the estate that there are no targets and that there will be no targets, and that anybody using those targets will be disciplined. It was the last Government, not this Government, who set up a target culture; we are breaking with that culture. I see the hon. Member for Walthamstow (Stella Creasy) in her place. The work they do in that jobcentre is remarkable at getting people back to work. They have accelerated and improved their performance. I would love to hear the shadow Secretary of State say to those working hard in jobcentres, “Well done for the work you do in getting record numbers back to work.”
Mr Byrne
My admiration for jobcentre staff working under this regime is unbounded. They are good people trapped in bad systems, with a Secretary of State who, I fear, is out of touch.
I have a copy of the e-mail that Mr Wintour reports today, and this is its concluding paragraph:
“Guys, we really need to up the game here”—
on the issuing of sanctions—
“The 5% target is one thing—the fact that we are seeing over 300 people a week and only submitting six of them for possible doubts is simply not quite credible.”
The e-mail says, “So the bottom line. I have until 15 February, along with other area managers, to show an improvement, and then it is a performance improvement plan for me.” He continues:
“Obviously if I am on a PIP…to improve my team’s Stricter Benefit Regime referral rate I will not have a choice but to consider implementing PIPs for those individuals who are clearly not delivering SBR within the team.”
That is why it is important that we have assurances that the independent review, set out in the Jobseekers (Back to Work Schemes) Bill, will get to the bottom of every sanction issued.
Mr Byrne
I will in a moment. I assure the Secretary of State that I will give him time to answer.
The e-mail in question starts by stating that Walthamstow is 95th in the league table out of only 109. This is incredibly serious, not least because in response to repeated questioning the Minister of State, the hon. Member for Fareham, and the Under-Secretary, the hon. Member for Wirral West, assured the House earlier in the week that this was not happening, yet it clearly is.
Mr Duncan Smith
There are no targets for sanctions. There will be no targets. Anybody caught imposing a target will be dealt with. That is absolutely clear. That message has already gone out. It went out before on innumerable occasions. The target culture was under the right hon. Gentleman’s Government. I am sorry that the hon. Member for Walthamstow (Stella Creasy) did not say one word about the good work being done by staff in her jobcentre. She owes it to them to remind everybody that they are doing a brilliant job in difficult times and have improved their performance dramatically.
Mr Byrne
I know that my hon. Friend the Member for Walthamstow (Stella Creasy) will speak later and will provide the Secretary of State with a full answer on that. I repeat, however, that if the Government do not make refinements to the Bill, we will move the necessary amendments. I am glad that the independent review has been legally sanctioned in the Bill. We will ensure that it is used to get to the bottom of what is going on, and I am sure he will co-operate.
Just as bad as the lack of action on the Work programme in the Budget were the new surprises about universal credit. The Secretary of State and others have given frequent assurances that the programme is on track, but that raises the question: what on earth is the track? Earlier in the week, we heard in the Financial Times that small businesses were so badly prepared by HMRC for the introduction of real-time information—the method by which payrolls will be updated to calculate universal credit—that the Government have had to U-turn again, only a few days before the change is being introduced. The RTI system for businesses employing fewer than 50 people—covering about 7 million—will be slipped back by six months. There are worries now, not just about the Work programme and the lack of action on bringing down unemployment, but on universal credit.
As I said earlier in the week, the ultimate test for the Secretary of State is this: when he went to Easterhouse all those years ago, he talked about the need for a jobs revolution in this country, but if we now look at the 1% most-unemployed estates in our country, we see that unemployment has not fallen over the first half of the Parliament but gone up. It has gone up in three quarters of estates, and long-term unemployment, which we are so worried about, has risen on two thirds of those estates. This welfare revolution is falling apart, and we needed a Budget for jobs this week to fix it.
The greatest tragedy is who will pay for this failure. We know that a host of cuts, not least the bedroom tax, that are arriving in a couple of weeks will hurt some of the most vulnerable people in our country. Yesterday in Great Yarmouth, together with Lara Norris, I met a woman called Sandra who had cerebral palsy. She has brought up five children, but for reasons of her disability she sleeps separately from her partner, who is her carer. She will be hit by this bedroom tax in a couple of weeks. She now has to take decisions about switching off the heating for half the week because she can no longer afford to heat her home. She has to go to bed and snuggle up in an electric blanket in order to stay warm. That is what is happening in our country, yet these cuts will start on the same day as Britain’s richest citizens are given a tax cut. It is wrong and we should have had action in the Budget to reverse it.
Mr Byrne
What we need to bring down the housing benefit bill is to build more homes. That is why we have said that the 4G licences and half the bank bonus tax should be spent on building homes. The Deputy Prime Minister—the hon. Lady’s right hon. Friend—admits that capital spending was cut too fast. I look forward to hearing her justify to her constituents who will hit by the bedroom tax why they should pay £14 a week extra while millionaires get a £2,000 a week tax cut.
Mr Duncan Smith
May I just remind the right hon. Gentleman—as far as I can see he lives in cloud cuckoo land most of time—that under the last Government housing benefit bills doubled and were set to rise to more than £25 billion this year? We are saving a minimum of £2 billion from that rise. Under Labour the bill would have gone up and we had the lowest house building programme since the 1920s. Really, he should stand up and apologise for the shambles and the mess they left housing in.
Mr Byrne
The Secretary of State’s level of delusion is now bettering his previous level. He knows that the policy costings—which he has clearly not read—published by his right hon. Friend the Chancellor show that the housing benefit bill is not going down over the next couple of years, but going up. The Secretary of State’s efforts have been so successful that he is bringing in a policy—the hated bedroom tax—that will cost more than it saves. We saw the proof on Wednesday—housing benefit up by more than £1 billion. That is a mark of his failure.
Cathy Jamieson
I will be happy to give way if the Secretary of State can answer that point about unfairness.
Mr Duncan Smith
Will the hon. Lady answer this question? If she is so against this, why is she in favour of people having spare rooms subsidised by the taxpayer? Why did her party’s Government refuse to allow the same thing in relation to private sector social tenancies?
Cathy Jamieson
Once again, the Secretary of State’s question shows just how out of touch this Government are. These are people’s homes, in which many of them have lived—[Interruption.] The Secretary of State can shout from the Front Bench, but he had his opportunity to speak earlier. It is important to reflect back to him the points made by hon. Members when he was not in his place, and that is what I am seeking to do. It is unfair that people who have lived in their homes for many years are now finding that there are no other homes for them to move to. Some people had been given homes under the homeless persons legislation, and some because the homes are suitably adapted for their needs. It is simply not fair to suggest that these people should not be able to continue to live in these homes.
Several hon. Members talked about unemployment and the need for more to be done. My hon. Friends the Members for Lewisham East, Walthamstow (Stella Creasy), for Nottingham South (Lilian Greenwood), for Luton North (Kelvin Hopkins) and for Blaenau Gwent (Nick Smith) highlighted the problems of many more people chasing vacancies in their areas than there are jobs available. The Government consistently say that there have been increasing numbers of people in employment. However, the harsh reality for many people in the constituencies represented by Labour Members who have spoken is that they are not seeing the benefit of that job creation and are finding that jobs are not available, that only part-time jobs are available, or that they are unable to work the number of hours they need to work.
On housing, various circumstances were relayed during the course of the debate. I note that we still have not had an answer from Ministers about the second home subsidy. Will the legislation be constructed in such a way that it will not be possible for people who already own homes to buy another home under this process? Yet again, no answer is forthcoming. Housing was discussed by my hon. Friends the Members for Hammersmith (Mr Slaughter), for Croydon North (Steve Reed), for Islington North (Jeremy Corbyn), for Westminster North (Ms Buck), for North Durham (Mr Jones), for Eltham (Clive Efford) and for Hyndburn (Graham Jones). I list them all because that shows the great strength of feeling about how this Government have got it wrong on housing and have not done enough to bring forward, at an early stage, plans not only to get houses built but to give the construction sector the boost that it needs.
My hon. Friends the Members for Cardiff South and Penarth (Stephen Doughty) and for Ilford South (Mike Gapes) referred to the Department for International Development’s welcome commitment to spend 0.7% of GDP, but made the important point that that money has to be spent on aid and should not be diverted anywhere else.
It was suggested that my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) should have a statue erected in his honour because of the amount of work that he has done in his area on energy and climate change issues. As a former sculptor, I would certainly be very keen to see a suitable monument erected somewhere in his constituency.
I want to return to the points raised by my right hon. Friend the Member for Birmingham, Hodge Hill. He made a number of very important points about how this Government have not taken any responsibility for what they are doing under their own watch. He noted how the numbers have been manipulated or massaged—we can use whatever word we like—and how they want to pay this year’s bills next year to ensure that their sums add up. At the same time, borrowing is the same as last year and will be the same next year, too. They also broke their promise to get the deficit down by 2015.
My right hon. Friend highlighted a number of issues with regard to the jobcentre targets, which was also picked up by my hon. Friend the Member for Walthamstow. Will the Exchequer Secretary address some of those issues when he winds up? As my right hon. Friend has pointed out, it has been said that staff were threatened if they did not get the figures down and that they were given a dictionary of certain phrases that they had to look out for whereby people were put on special measures or investigated further if they used those phrases in their job diaries or on their forms.
This is very serious and I have asked Ministers questions about it during previous debates. I received an assurance that there were no targets in the jobcentres, but we have heard evidence today that there seem to be not only targets, but league tables. I cannot imagine why jobcentre staff would say such things if pressure was not being put on them to work in that way. Ministers seem to be saying one thing in public while something else is going on in private behind the scenes. That suggests either that Ministers do not know what is going on, or that they do know but have not been able, for whatever reason, to get the information into the public domain. The Minister needs to answer those questions. For the same reason, it is important that we get the independent review on sanctions, which Ministers were clearly asked to consider in every case in which sanctions were used. We have heard about the many good people working in jobcentres. It has been suggested that they are good people trapped in bad systems, and it is the responsibility of Ministers to address that.
I want to end on a slightly more positive note. We welcome the employment allowance. We want to see the detail and ensure that it moves ahead as quickly as possible. It is something that we have advocated to give more help to small businesses.
Although we welcome some measures, I want to sound a cautionary note on the sickness and absence review in particular. Of course, we support the idea of people getting the help, assistance and medical treatment they need to deal with conditions and to enable them to get back to work if they have been off sick or have been injured. That access to treatment must not, however, be put at risk by further cuts to the NHS and it must not take a similar approach to the one we have already shown to be unfair whereby the Department for Work and Pensions, through organisations such as Atos, appears to be treating people in a way that disadvantages rather than assists them.
We have yet to see all the implications of the plan to introduce the single-tier pension. I have been contacted by many women who have already been hit by the change in retirement age and who are now very worried and confused about how the change to the state pension will affect them. They are now even more worried about the new proposals.
We have had a good debate, but the shadow Secretary of State raised a number of issues for which answers are still required and I hope that the Minister will provide them. I would particularly appreciate answers to the points about sanctions and jobcentres that were raised during the debate.
Contingencies Fund (Advance)
Iain Duncan Smith Excerpts(11 years, 5 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I hereby give notice of the Department for Work and Pensions’ intention to seek an advance from the Contingencies Fund. The Department for Work and Pensions requires an advance in the amount of £506 million to meet an urgent cash requirement pending parliamentary approval of the supplementary estimate 2012-13.
Parliamentary approval for additional resources of £506 million will be sought in a supplementary estimate for the Department of Work and Pensions. Pending that approval, urgent expenditure estimated at £506 million will be met by repayable cash advances from the Contingencies Fund.
Jobseekers (Back to Work Schemes) Bill
Iain Duncan Smith Excerpts(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Byrne
That is cold comfort to a constituency with the highest youth unemployment in Britain. Does the hon. Gentleman know what people at my local jobcentre say when I visit it? Can he guess? They say, “I wish this Government would bring back the future jobs fund because it was the best programme we ever ran.” What a shame his party cancelled it, and that is why we propose its restoration.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Will the right hon. Gentleman give way?
Mr Byrne
I will in a moment, if the Secretary of State will allow me.
When we look around the country, we now see Labour councils leading the charge to get young people back into work. In Sheffield, they are looking at how to intervene better in schools to help prevent young people from becoming unemployed. In Wakefield, they are bringing together colleges and businesses in a new way to get people back to work. In Leeds, there are new programmes to help get young people back into work. In Manchester, there is now a UCAS-style clearing house to get people back into apprenticeships. In Bradford, there are now industrial centres of excellence that bring the council, colleges and young people together. In Glasgow, the Labour council is guaranteeing a job for any young person out of work for too long. In Wales, they are making the same kind of commitment. In Birmingham, the Labour council—my own authority—has brought together a coalition of the willing to make progress on youth unemployment. In Liverpool, there is now an apprenticeship training agency, set up by the council and a local college. In Sandwell, Newham and Cardiff, Labour councils, local colleges and business communities have set up job brokerages. That is the kind of decisive action the Secretary of State can learn from. Perhaps he will give a commitment to go and look at what I have seen first hand and incorporate it into his policy.
Mr Duncan Smith
I am grateful to the right hon. Gentleman for giving way. Youth unemployment is lower than when the previous Government left office and there are more people in work than ever before. He is extolling the virtues of our localisation agenda, and I congratulate him on that.
I want to ask the right hon. Gentleman about a simple point. He has laid out for the hon. Member for Perth and North Perthshire (Pete Wishart) and others why his party will, by and large, not vote against the Bill. In doing so, he has said constantly how much he opposes emergency legislation and how terrible it is. Will he confirm that under Labour, there were 12 cases of emergency legislation being brought through this House in a hurry? Is he not crying crocodile tears on that point?
Mr Byrne
No. The Secretary of State should set out the detailed individual circumstances of every piece of legislation that he has referred to. He knows as well as I do what underpinned them. The point, as well he knows, is that he is making retrospective, fast-track legislation that touches on rights of appeal and property rights, all because of the mistake that he and his Ministers made in 2011 in bodging the regulations so badly that the Court of Appeal has struck them down.
To conclude, the assurances that we have heard from the Minister this afternoon are extremely important. The safeguards for appeal rights that have been set out are vital to ensure that people who are hit by sanctions have a wide-ranging set of good causes that can trigger an appeal.
Mr Byrne
In a moment.
First, ensuring that the appeal window of 13 months is preserved is crucial for people who are hit by sanctions. Secondly, as has been referred to by my hon. Friends, it is vital that there is an independent review of the sanctions regime. My right hon. Friend the Member for East Ham (Stephen Timms) will set out the questions that we believe need to be answered.
I have heard the Minister’s assurances this afternoon that there is no series of targets and that there are no league tables. We will hear further evidence on that point over the course of the debates in this House. I hope that the assurances that we have heard this afternoon withstand those tests.
Simon Hughes
We could have a complicated and long debate. Should people in this House, if they find themselves later in life to be unemployed and it is deemed appropriate that they are sent on mandatory work activity, be sent to work in a charity shop moving boxes and dusting shelves? One could argue that it would be good for us, and good for everybody—
Mr Duncan Smith
I am listening carefully to what my right hon. Friend has to say. As the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Fareham (Mr Hoban), has made clear and my hon. Friend the Under-Secretary of State will make clear, all of these things are kept constantly under review. We want to improve them and that is what jobcentre staff do. They are brilliant at that, by the way, and they get better and better. My point on mandatory work activity is that it is not just work experience. It is also about changing culture: finding out whether someone is working and not declaring it; and getting people used to the idea of getting out of bed in the morning and attending somewhere where they do what they have been asked to do, because they have so got out of the habit of doing that, that even attending an interview has become a problem for them. This is not just about training; it is about getting people culturally back in line so that they can then be dealt with by advisers.
Simon Hughes
I absolutely understand and agree with that point. That is fine for all people of that type. In the case of my last example, the individual had been doing an internship and getting up, always being on time and being there all the time. If anybody had checked, they would have known that he had had a 100% successful record in the previous three months. There was no history of shirking, not getting up or lying in bed. Therefore, it would have been appropriate for an interview to find out about that work history, and assess and discuss what might have been appropriate.
Another constituent—a friend of mine living in Waterloo—had been out of work and claiming jobseeker’s allowance. He went to the jobcentre and was invited for an interview with Seetec, which he attended. It was about to send him to Tesco to stack shelves, but he persuaded it that there was an opportunity of mandatory work activity in a photography shop in the west end. He has photographic skills, and he persuaded Seetec, once it had spoken to the employer, that it would be a better place for him to go. I am not disputing the Secretary of State’s view that some people need to get into the culture of work, but the system fails those who are competent at work, have worked and are willing to do their bit, but get thrown into the wrong place, often to do highly inappropriate activities.
I hope that I have made it clear that I think there are underlying serious issues. I am grateful that the Secretary of State has tabled amendments and new clauses to ensure that this matter does not disappear, but comes back to us through regular reporting. My message to the House and the Government is that we need a better system, because a lot of people who are on low incomes or not working are not being well served by the system at the moment.
Jobseekers (Back to Work Schemes) Bill
Iain Duncan Smith Excerpts(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Frank Field (Birkenhead) (Lab)
I would like to congratulate the Government on their incompetence with the Bill. I would like to say that these are measures that a future Labour Government would support, but differently. We would have a human face to our approach, unlike this Administration.
First, let me deal with the point about incompetence. These are fairly simple regulations compared with what the Secretary of State is preparing for the nation with his universal credit. If the Department cannot get these regulations right, what hope for universal credit?
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I am listening to what the right hon. Gentleman has to say, but it sounds a little rich coming from him. From his time in government, he and others well know that sometimes the view of judges is very different from a lot of other legal advice. The reality is that by saying that this is incompetence he must be claiming that his own Government were deeply incompetent throughout their time in office.
Mr Field
Well, if that is true, this Government have learnt nothing from our experience, so it is doubly worrying. Universal credit, which the Government are going to deliver, is an immensely complicated reform and if they feel that— [Interruption.] The Secretary of State says not true. Should the day ever arrive when universal credit began to be delivered, we would all be in a position to judge. However, these are arguments for another day. Let us congratulate the Government on their incompetence and their need to come here and seek out support to rectify the errors made in the Department.
The second issue is important. We are dealing with an attitude of mind whereby there is a feeling that, even without ever making a contribution, a person has a right to benefits and to a pension from other taxpayers. That attitude is now deeply ingrained in our culture, and the Secretary of State’s welfare reforms and universal credit will encourage it. Under his scheme, more people will think they have a right to benefits than do now. Many of us, even those in areas with high unemployment, know that there are people, particularly young people, who feel that unless they will be offered jobs at three times their benefit level, it is not in their interest to work. That is why it is so important to change—[Interruption.] The Secretary of State is making faces, but I am trying to support him in the case that he is making.
We are trying to move from unconditional welfare to welfare that attaches conditions to drawing benefits. The last Government started those important reforms, and we continue to support them. The big divide has been between a welfare state based on contributions, in which people are eligible for benefit only if they have paid the requisite number of contributions, and one in which people think that they should get benefits because they are citizens. The Secretary of State may continue his conversation, but he knows full well that as he tries to limit the entry of Bulgarians and Romanians into our welfare system, the weakness of his hand is that they will be able to claim benefit here, because large numbers of other people do, and we will be discriminating unless we give them benefit on the same terms.
The lesson that I hope we will draw is that the Opposition will go into the election with a clear mandate to move from a means-tested welfare system, in which people think that they have a right to benefits, to one in which people gain entrance to welfare because they have paid contributions. The difference is in job offers and job guarantees. The most crucial welfare reform that the last Labour Government made was the future jobs fund, which was destroyed by this Government when they came into office. If we are to build up a medley of worthwhile alternatives for people who cannot find jobs, we the Opposition and the Government must play some part in creating those opportunities.
There is debate on both sides of the House about the best routes back to full employment, but no certainty about what they are. In the immediate future, therefore, we will have to rely on an even more severely tightened future jobs fund than the Labour Government did. We know from our constituencies that the real test of whether people want to work is to have jobs to offer them. Without those, we are in difficulties. That is not to say that we would not sanction without them. London, for example, has the second highest youth unemployment, but in 10 years of Labour government, 1 million immigrants came to London to work. There is clearly some problem in people’s thinking about what is suitable for them to do versus what is suitable for immigrants.
In my short contribution, first, I congratulate the Government on their incompetence and on having to rely on the House to rescue them from it. Secondly, like them, we are moving away from an unconditional welfare state to one that attaches conditions, but unlike them, we believe firmly that they need to engage actively in trying to build up something like the future jobs fund, so our constituents are offered real opportunities to work. I hope that those of us who have Labour authorities or even decent Tory or Liberal authorities, despite their current budget difficulties, will seek to implement that approach so that over the years, we will be able to offer more people proper, dignified alternatives to sitting on their backsides on the dole.
Housing Benefit Reform
Iain Duncan Smith Excerpts(11 years, 5 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I am pleased to announce that we intend to lay amending regulations to clarify the size criteria rules for two specific groups of housing benefit recipient, foster carers and armed forces personnel.
People who are approved foster carers will be allowed an additional room, whether or not a child has been placed with them or they are between placements, so long as they have fostered a child, or become an approved foster carer in the last 12 months.
Adult children who are in the armed forces but who continue to live with parents will be treated as continuing to live at home, even when deployed on operations. This means that the size criteria rules will not be applied to the room normally occupied by the member of the armed forces if they intend to return home. In addition housing benefit recipients will not be subject to a non-dependent deduction, that is, the amount that those who are working are expected to contribute to the household expenses, until an adult child returns home.
The intent of the policy was that by using discretionary housing payments, the estimated 5,000 foster carers and rather fewer armed forces personnel groups would be protected. We have agreed with local authority organisations improved arrangements through these regulations that puts these protections beyond doubt.
The changes will apply to tenants in both the social and private rented sectors.
I am also issuing guidance to local authorities emphasising that discretionary housing payments remain available for other priority groups including the needs of people whose homes have had significant disability adaptations and those with long-term medical conditions that create difficulties in sharing a bedroom.
Going forward I will continue to closely monitor and adjust the implementation of the policy, including an independent evaluation by Ipsos MORI, the Cambridge centre for housing and planning research and the Institute For Fiscal Studies to ensure that the needs of these groups are effectively addressed in the longer term.
This ensures this policy focuses on the key aim of bringing housing benefit expenditure under control. Under the previous Government, housing benefit almost doubled in 10 years to £20 billion, with households living in homes that are too big for them, while there are 2 million households in England on waiting lists, and 250,000 families living in overcrowded accommodation.
Oral Answers to Questions
Iain Duncan Smith Excerpts(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Adam Holloway (Gravesham) (Con)
4. What assessment he has made of the availability of one-bedroom homes for single-person households to downsize to following the housing benefit changes due to take effect in April 2013.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
There are about 400,000 working age households on housing benefit in under-occupied social housing in Great Britain who require just one bedroom according to the size criteria. There are more than 1.1 million one-bedroom properties in the social rented sector in England and 730,000 one-bedroom properties in the private rented sector. The availability of housing varies from area to area and is constantly changing. During 2011-12, there were about 112,000 new lettings of one-bedroom properties in England in the social rented sector alone.
Mr Holloway
Will there be an improvement in the position of disabled children in Gravesham under the spare room subsidy?
Mr Duncan Smith
My hon. Friend makes an important point. As the law stands, when a local authority agrees that a family needs an extra bedroom because their child’s disability means that they are unable to share, the family can be entitled to the spare room subsidy in respect of that extra bedroom. As with housing benefit claims, the determination of whether their disability requires them to have an extra bedroom is a matter for the local authority to decide with the help of DWP guidance and medical evidence. This week we will issue final guidance to local authorities on a number of areas, including this one, that will confirm the position that the judgment in Burnip, Trengove and Gorry applies to both the social rented sector and the private rented sector.
Bill Esterson (Sefton Central) (Lab)
One effect of the Secretary of State’s policy is that foster carers who have a spare bedroom and are waiting for a child to be placed must move to a smaller property without the space for them to foster. Is that what he intended?
Mr Duncan Smith
As the hon. Gentleman will know, we have made discretionary payments of £5 million available for foster carers to ensure that that does not happen. The effect for foster carers, as we move forward, will be that they will not have to change the number of rooms or their property as they will be able to remain there and to foster. That is what the policy will be.
Greg Mulholland (Leeds North West) (LD)
My right hon. Friend and the Prime Minister have acknowledged that some of the spare rooms are not spare by acknowledging the need for discretionary housing payments. May I urge my right hon. Friend to reconsider whether some of those categories could and should be covered by genuine full exemptions?
Mr Duncan Smith
As I have just explained, one of those categories—severely disabled children—is covered and the guidance coming out tomorrow will make it very clear that we will apply that judicial judgment across the board to children with severe disabilities who need that extra room as they are unable to share. I shall keep everything under review and I guarantee to my hon. Friend that we will ensure that the intent of the change is bound up in how it takes effect in so far as the spare rooms will be kept for those who need them. Honestly, however, when so many houses have spare rooms and when so many people are in queues to get housing, it would seem wrong to go on subsidising everybody to stay the same.
Dame Anne Begg (Aberdeen South) (Lab)
Is it fair to penalise someone who had wanted a one-bedroom property, had asked their local authority for a one-bedroom property, but instead was given a two or three-bedroom property because there simply were no one-bedroom properties available?
Mr Duncan Smith
The purpose of the policy is to readjust the disparity that exists and that lay there under the previous Government. Local housing allowance for social tenants in the private rented sector does not and did not allow people to have spare rooms. In the social sector there are a large number of houses that people occupy without occupying all the rooms, so the purpose is to get that smoothed out. A number of councils have people waiting for housing, people in overcrowding, while others are subsidised to have spare rooms in housing that they do not need.
Andrea Leadsom (South Northamptonshire) (Con)
Will my right hon. Friend confirm that there will be discretionary payments available to councils to meet particular needs? Does he agree that it is despicable for Opposition Members to be scaremongering unnecessarily and scaring people who are in a vulnerable position already?
Mr Duncan Smith
The Opposition know what they have been about over the past few weeks. They have deliberately set about trying to confuse people with their ridiculous title. They have tried to confuse people that they will all come under this change, when only those on housing benefit will be affected, and they also seemed to indicate to many others, such as pensioners, that they were not exempt. They are exempt.
Ian Austin (Dudley North) (Lab)
Is it not the case that there just are not enough homes for people hit by the bedroom tax? The Government promised, and the Secretary of State said a moment ago, that pensioners would not be affected, but those on universal credit will be. Soldiers’ families will not get full housing benefit, but someone who is sent to prison could keep every penny. The Government are hitting pensioners but safeguarding prisoners, so how can it be right that if someone has worked hard all their life and loses their job, or if someone is serving their country or is disabled or a pensioner, they could lose out?
Mr Duncan Smith
I do wish the hon. Gentleman would get his facts right. Convicted prisoners are not exempt, so he is wrong. With respect, he does not know the difference between someone on remand and someone convicted—[Interruption.]
Mr Speaker
Order. The hon. Member for Dudley North (Ian Austin) is noisier in heckling the Secretary of State than he was in heckling me at Essex university 30 years ago. He needs to calm down.
Mr Duncan Smith
With respect, Mr Speaker, the hon. Gentleman’s noise covers a complete lack of intelligence. That is what I would say. Let me bring something forward—[Interruption.] No, monkeys can jump around, but the noise they make is not necessarily relevant. Let me tell the hon. Gentleman about his own area. In Dudley, which I think he might know, the National Housing Federation estimates that there are 2,000 households under-occupying—in other words, with spare rooms. It also estimates that there are 1,500 families in overcrowded accommodation. In other words, if property is properly managed, we might get those who are overcrowded into decent-size accommodation. When will the Opposition moan about that?
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
5. What recent assessment he has made of the likely effects of the under-occupancy penalty on households that include a disabled person.
Ann Coffey (Stockport) (Lab)
8. What recent representations he has received on the sharing of data on missing children in the Troubled Families programme.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
My Department plays a vital role in the cross-Government programme to turn around the lives of our most troubled families, a matter on which the hon. Lady has a long track record. Although I have not received any representations on sharing data on missing children, as we do not deal with them particularly, we are committed to building a clearer picture across Government of how many children are missing from care and where they go. We will begin piloting new arrangements shortly.
Ann Coffey
I thank the Secretary of State for that answer. As he will be aware, children going missing is a key indicator of being at risk of child sexual exploitation, and he will also know that information on children going missing from troubled families is under-reported. Will he ensure, together with his colleagues in other Departments, that data on missing and absent children is collected and shared properly, so that children from troubled families at risk of coming to harm can be identified, helped as early as possible, and not end up in the care system?
Mr Duncan Smith
Yes. I congratulate the hon. Lady on focusing on this across all the Departments, as I am aware that she has asked this question to a number of Departments. She is absolutely right. We do need to co-ordinate much better between Departments. As she knows, this is an historical issue for different Governments. The Department for Education chairs the data working group, which includes the Home Office, the Serious Organised Crime Agency, and the Children’s Society. I understand that my right hon. Friend the Secretary of State for Communities and Local Government is also involved. That should help to improve the collection and publication of data. The pilot will begin shortly to see that we sort this out. She is right that we must do more to improve data as part of the missing children strategy and make sure that we get it right.
Mr Peter Bone (Wellingborough) (Con)
9. If he will bring forward proposals to restrict eligibility for housing benefit for people aged under 25.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
In June last year the Prime Minister commenced a debate on the cost to the taxpayer of meeting the £2 billion bill for automatic entitlement to housing benefit for people aged under 25. Although that is not current Government policy, I have had a number of representations on the issue—not from the Opposition, but from others.
Mr Bone
If the Prime Minister and the Secretary of State are in favour, I cannot understand why that is not Government policy. With so many under-25s who are hard-working having to stay at home with their parents, why are the Government spending £1.8 billion a year housing under-25s who are on benefits? I cannot see how that is fair.
Mr Duncan Smith
My hon. Friend is right that the bill for under-25s in receipt of housing benefit is in the order of £2 billion a year. Some 370,000 under-25s claim housing benefit, and 42% of them are without children. However, the reality is that when we looked at that in the round prior to the spending review, it was agreed that it was not a priority area for the coalition. No doubt he will continue to campaign for it to be a priority area, and I am very happy to discuss the matter with him.
Mr David Lammy (Tottenham) (Lab)
The Secretary of State has decided to move forward with his benefit cap in four pilot areas in London. How much has he decided to compensate Haringey council for making it a guinea pig in that way?
Mr Duncan Smith
I do not believe that there is any need to compensate anybody. We have already told all those councils that they are not guinea pigs; they are actually getting very close support and advice. I think that it will be a tremendous success story. What they are doing is learning, along with us, about any issues that might arise, and we have already said very clearly that we will support them through any extra costs and expenses. The right hon. Gentleman’s party has to recognise that the reality is that the cap is right. The public support it because they are tired of seeing people getting more on benefits than those who are in work, so setting the cap is right. He needs to ask why his party keeps voting against it.
Dr Julian Huppert (Cambridge) (LD)
I and my Liberal Democrat colleagues are delighted that that proposal did not become Government policy and will happily keep making representations on it. Although it would be wonderful if all under-25s had a loving and stable family to live with, does the Secretary of State accept that that is simply not the case? Will he meet the YMCA to understand the realities facing many under-25s and continue to provide them with the support they need to have somewhere to live?
Mr Duncan Smith
Yes, I would be very happy to meet my hon. Friend and any group of people, such as the YMCA, he wishes to bring to me. I simply say this: we have a significant problem, because we inherited a welfare budget approaching £200 billion that had risen out of control under the previous Government. He is fully aware that we have to reform it both to get people back to work and to ensure that we get the cost under control. Those are all areas we have looked at, but in those discussions we decided that, in the round, it was not a priority.
Stephen Timms (East Ham) (Lab)
On Friday morning I met a 19-year-old autistic young women whose family home, which is rented from the council, with housing benefit, has been adapted at public expense, but now they are very worried because they are deemed to have one bedroom too many. Surely the bedroom tax should not apply when a council house has been specifically adapted for the occupants at public expense.
Mr Duncan Smith
The right hon. Gentleman knows very well that that is the point of discretionary housing payments—[Interruption.] Opposition Members can groan, but we have put more money into discretionary payments to sort these things out than they ever did when they brought these in. The reality is that there is money for them to do just that. I remind him that the National Housing Federation has estimated that in his area of Newham some 3,000 people are under-occupying and some 5,000 are overcrowded. Perhaps he would like to take his own side to task for never doing a thing for those struggling in overcrowded accommodation.
Mr Stephen Hepburn (Jarrow) (Lab)
10. What steps he is taking to tackle long-term unemployment.
Mark Pawsey (Rugby) (Con)
15. What arrangements his Department is making for benefit payments to people who are unable to receive them through a bank or building society account.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
People who are unable to receive benefit payments through a bank or building society account are paid under the new simple payment. The service is easily accessible and is available free of charge and over the counter at more than 10,000 PayPoint outlets across the UK. The phased roll-out of simple payment began in October 2012 and we are closely monitoring the service to ensure that people can access their payments.
Mark Pawsey
I recently met a constituent of mine who wishes to receive his pension payment in cash but has had some difficulty in doing so since the transition from cheques to simple payment. What support is available for people such as my constituent?
Mr Duncan Smith
The contract is working very well across the board at the moment. About 99% of all claimants are getting their money as required at the right time, and 95% are within 1 mile of outlets, or within 5 miles in rural areas. It is, therefore, better than the previous system and it is also cheaper. The last cheque system cost £30 million and was defrauded to the cost of about £5 million; this costs about £7 million.
Immediate responsibility for the individual mentioned by my hon. Friend lies with PayPoint and the bank. They have a responsibility to ensure that cash is available at every location. We take them to task over that and they will have to make restitution.
Glyn Davies (Montgomeryshire) (Con)
17. What plans he has to support disabled entrepreneurs.
Michael Fabricant (Lichfield) (Con)
18. What plans he has to tackle the potential for digital exclusion under his plans for universal credit; and if he will make a statement.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
It is important to recognise that 80% of existing benefit claimants already use the internet. For the minority who do not, we are helping them move online by, for example, working with digital champions, testing the new universal credit system with more than 6,200 real claimants to date, and developing a local support framework to ensure bespoke services. Even before universal credit is introduced, we are seeing the effect of this change.
Michael Fabricant
My right hon. Friend gives a good indication of the progress being made, but he will know that a number of people who are applying for universal credit and, indeed, other benefits will not have access to a computer, technical skills or even broadband. What sort of support is he giving them?
Mr Duncan Smith
We have put—and will continue to do so—large numbers of internet access devices in jobcentres, so people will automatically get help and support when they go in. We are talking and working with local authorities to ensure that people will be able to gain immediate access through libraries and all other local authority outlets. We are also working with individuals to make sure that those who have computers at home fully understand how to use the system. The truth is that this will be helpful. The Opposition seem to occasionally miss the fact that 92% of advertised vacancies require basic IT skills and that if people do not have the ability to go on a computer, they cannot apply for the job.
Mr Clive Betts (Sheffield South 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)
I welcome the recent introduction of mandation to universal jobmatch, which means that Jobcentre Plus advisers can mandate jobseekers to use the new service to help them find work and require them to demonstrate their progress. More than 2 million jobseekers are now registered, which is twice the number when I last updated the House. That shows just how quickly the system is revolutionising how jobseekers look for work.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
May I start by thanking the Secretary of State for briefing me and my right hon. Friend the Member for East Ham (Stephen Timms) on his plans for urgent legislation, about which his Department has commented in The Daily Telegraph this morning? Both he and I believe that sanctions are vital to give back-to-work programmes their bite. However, when he signed off the 2011 regulations that created sanctions for the Work programme, why did he not check that they were legally bullet proof?
Mr Duncan Smith
The right hon. Gentleman knows that the advice that we received made it very clear that the regulations would survive a challenge, and that was the view that we took. As he knows, the High Court upheld our position. It was the Court of Appeal that decided, on quite a technical line, to change that position. The position on human rights was upheld, as was the main point of our direction of travel.
Mr Byrne
I do not think that it is a technical challenge when three Court of Appeal judges unanimously quash the 2011 regulations because they are not in line with the law. That mistake puts in jeopardy about £100 million of sanctions that have been issued. I did not think that the Work programme could get any worse, but it has. We will support wise and sensible legislation that will fix the problem, but will the Secretary of State take personal responsibility and apologise for this mess, which may cost twice as much as the west coast main line fiasco?
Mr Duncan Smith
The right hon. Gentleman knows very well that when Ministers make regulations, they take the fullest advice possible. That advice came to us; it was checked and it said that the regulations were fine. The High Court upheld them. It was the Appeal Court that decided that an element of that was not correct.
I do not wish to make this a political issue, and I take full responsibility for everything that goes on in my Department. I accept that we wish we were not in this position, but if the right hon. Gentleman supports the idea that people who have been mandated to do work, should take jobs and do work experience once they have volunteered without messing around otherwise they lose their benefit, I hope that we can look forward to his supporting the legislation that will ensure that we do not have to pay out money against a judgment that we never anticipated.
Mr Edward Leigh (Gainsborough) (Con)
T4. Is the Secretary of State aware that Conservative Members support his courage and his battles in trying to reduce the crippling burden of the social security budget? In particular, may I commend his quiet courtesy this weekend in reminding the Archbishop of Canterbury that trapping people in dependency is not necessarily a Christian response? What the Secretary of State is doing is a good and positive way of making work pay.
Mr Duncan Smith
I am grateful to my hon. Friend. I have no issue whatever with the Church of England and the bishops saying whatever they believe. It is right and proper that they should argue with us and put pressure on us on a variety of issues. However, I do not agree that the way to get children out of poverty is to keep transferring more and more money to keeping people out of work. The reality is that we are having to reform a system that became completely out of control under the last Government and get in place a system that gets people back to work, because being in work is how people get their children out of poverty.
Sheila Gilmore (Edinburgh East) (Lab)
T2. Mandatory reconsideration after employment and support allowance is refused and when somebody wants to appeal can lead to people being without either ESA or jobseeker’s allowance. Will the Minister ensure that a short time limit is set on reconsiderations so that people are not left without any income?
Ann McKechin (Glasgow North) (Lab)
T5. Local housing associations in my area are deeply concerned about their ability to provide services as a result of this year’s welfare changes. What assessment will the Secretary of State make of their credit ratings, both this year and next? Does he expect them to go down the way?
Mr Duncan Smith
The best thing for me to do is to ensure that I write to the hon. Lady properly and place the reply in the Library of the House.
Glyn Davies (Montgomeryshire) (Con)
T7. Last week we discussed in the House the treatment of women across the world. To deliver equality and fairness of treatment in the United Kingdom, we must ensure equal access to work and remuneration. Does my hon. Friend agree that it is important to make a continuing assessment of the number of women in work?
Mr Jim Cunningham (Coventry South) (Lab)
T9. Why is the Secretary of State disregarding research by the National Housing Federation which shows that the discretionary fund to provide help with the bedroom tax is £100 million short of what is required?
Mr Duncan Smith
We are not. We listen to councils and everybody else who talks to us about these things, and ensure that we adjust accordingly. In reality, more than £280 million is going in discretionary payments direct to councils over two years to resolve these issues. That is more than ever before and I believe it is enough. We are asking councils to make sensible judgments that benefit the maximum number of people—tenants and those on housing benefit—in their areas.
Mr Shailesh Vara (North West Cambridgeshire) (Con)
T8. What assessment has the Minister made of the support available to disabled people through the Access to Work programme?
Hywel Williams (Arfon) (PC)
This afternoon I received a message in my inbox that was sent to all MPs and marked “importance: high”. It said that one-bedroom apartments, located in the most convenient and sought-after positions in the heart of St James’s, and including a spacious reception, double bedroom and fitted kitchen, were advertised at £390 per week although the landlord would take an offer to fall-in with the parliamentary allowance. Would the Secretary of State advise one of my Caernarfon constituents, currently luxuriating in a two-bedroom flat, to apply?
Mr Duncan Smith
No, I would not, and I hope that nobody else in the Chamber would be able to apply either—otherwise we may find out exactly what they are worth. The changes we are making with the spare room subsidy are to get rid of the subsidy that ordinary taxpayers are paying for people to under-occupy houses while many others live in overcrowded accommodation.
Mr Stewart Jackson (Peterborough) (Con)
There is significant concern across the country about the likelihood of welfare dependency as a result of immigration from Romania and Bulgaria from January 2014. Will the Minister look urgently at the habitual residence test within the context of the free movement directive and ensure that such issues are addressed in good time?
Philip Davies (Shipley) (Con)
Although the Labour party thinks that the benefit cap is too low, the majority of my constituents think it is far too high. May I urge the Secretary of State to ignore the left-wing bishops, who probably do not even speak for the majority of people who go to church each week, let alone the vast majority of the British people?
Mr Duncan Smith
I listen to everybody who gives me advice although I do not necessarily follow it. The Government are doing the right thing in bringing in a benefit cap, and for the first time ever people on low and average earnings will realise that at last those on benefits will not be paid more through their taxes than they themselves earn.
Andy Sawford (Corby) (Lab/Co-op)
I met the mother of Hayden, a three-year old boy in my constituency, who has just received a letter stating that she must now pay the bedroom tax. Hayden has sleep difficulties and often has disturbed nights. Should he be forced to share a room with his four-year-old sister who will now also be disturbed, or will it all be okay because there is a tiny amount of discretionary funding?
Mr Duncan Smith
I do wonder that the Labour party, which sat in government for 13 years, never once raised the issue of people living in overcrowded accommodation, and never once seemed to care that huge numbers of people were on the waiting list. Nevertheless, Labour Members bleat about those who are under-occupying and are being subsidised by poorer people who cannot find accommodation.
David Mowat (Warrington South) (Con)
The Pensions Minister will have seen the recent press coverage about the high margins generated by annuity providers. That comes as no surprise given the complete market failure that has occurred in large parts of the private pension industry. Will he consider imposing a uniform product structure—as has been done in energy—and will he enforce legally the open market option?
Mr William Bain (Glasgow North East) (Lab)
A constituent I met on Saturday is a divorced lone parent who works hard for a low income, and his children stay with him on three evenings a week. Why does the Secretary of State believe that such a hard-working individual should lose £12 a week under his hateful bedroom tax?
Mr Duncan Smith
Again, another hon. Member who does not know the difference between a subsidy and a tax. The reality is that those who do not occupy all the rooms in social housing are being subsidised by many of those who live in overcrowded accommodation. Let me remind the hon. Gentleman—Opposition Members do not like to be reminded—that under local housing allowance for the private social rented sector, which was introduced by the previous Labour Government, people were not allowed to occupy houses that had spare bedrooms.
Dr Julian Huppert (Cambridge) (LD)
The Government’s under-occupancy policy relies on people being able to move into appropriately-sized housing, but in specific parts of the country that is very hard to achieve. Does the Secretary of State agree that no benefit reduction should take place until people have at least been offered somewhere appropriately sized and located? Will he make sure that there is enough discretionary housing budget for councils to ensure that that is the case?
Mr Duncan Smith
I agree, particularly with the last part of the question. We have set aside £280 million over two years for councils to be able to negotiate and work out with their tenants the best and most amenable way to go. My hon. Friend’s question is constructive, in sharp contrast to the Opposition. All they can do is moan about a policy, but in 13 years they did nothing about overcrowding, with the lowest level of house building since the 1920s.
Helen Goodman (Bishop Auckland) (Lab)
When the bedroom tax is introduced in my constituency, some people, who will be unable to move because properties are not available, will be left with £18 a week to live on. During the recess, I tried that to see what it would be like. I have had a lot of messages from members of the public asking me one question: will the Secretary of State try for a week to live on £18?
Mr Duncan Smith
When we made changes to local housing allowance, the hon. Lady and others prophesised that hundreds of thousands of people would be made homeless—they went up and down the country scaring everybody. The figures now show that our homeless figures are lower than the peak under the previous Labour Government.
Romanians and Bulgarians (Benefits)
Iain Duncan Smith Excerpts(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Frank Field (Birkenhead) (Lab)
(Urgent Question): To ask the Secretary of State for Work and Pensions if he will make a statement on what actions the Government are planning to restrict welfare to newcomers from Bulgaria and Romania from 1 January next year.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
May I congratulate the right hon. Gentleman on getting his urgent question on the second time of trying? He is a model of persistence and I, of course, was over the moon about his persistence.
The right hon. Gentleman has raised an important question and I want to deal with some aspects of it. First, however, I will set the scene as to what we are trying to deal with. I understand that Labour Front Benchers now admit that they fundamentally got it wrong on immigration, but the scope to which they got it wrong is why we have this issue. Between 1997 and 2010, net migration to the UK was some 2.2 million people—larger than the city of Birmingham. Interestingly, from 2004 to 2010, 1.1 million European economic area nationals registered to work in the UK. After the prediction of what was likely to happen, the scope of the problem is far greater than anything the Labour party wanted to tell the public. Most of all, I congratulate my right hon. Friend the Home Secretary and her team in the coalition for having begun the process of reducing net migration to Britain for the first time in a long time.
For the benefit of the House and in line with the right hon. Gentleman’s request—I know he particularly wanted me to answer that bit first, so having dealt with it I will get on with the rest of my answer—let me explain the current arrangement. A lot of nonsense is talked about what we are and are not capable of. First, people must pass the habitual residence test, introduced by the previous Government, before being entitled to claim income-related benefits. The current system was put in place in 2004 and has basically two elements—a legal right to reside and an assessment of factual evidence of habitual residence. As we know, EU citizens have the right to live in another member state as long as they are a qualified person, which basically means a worker, self-employed person, jobseeker, self-sufficient person or student. Tax credits have, I am afraid, been open to abuse outside that system from day one because the rules allow anybody from within the European economic area to claim self-employed status and receive full entitlement immediately. The Government are trying to wrestle with that problem, and I will return to it.
We are currently facing—not for the first time—a legal challenge from the European Commission because our habitual residence test states that people must prove they live in the UK habitually before they get access to benefits. It seems strange to me that anyone should be surprised that a habitual residence test requires that a person should live in the UK habitually, but we sometimes live in that George Orwellian political language world, which the Commission seems to foster with great alacrity.
Secondly, on exportability, under the EU co-ordination rules, benefits under the main categories of social security are exportable—that is, payable elsewhere in the European economic area. So that we clear up the confusion, let me say that that includes, notably, child benefit, for example, and has for a while. We therefore pay child benefit to children who live in other EU states when their parents are working here. That causes a lot of concern, and quite legitimately so. When both parents work but in different countries, the EU rules apparently determine who has primary responsibility for paying, but any difference in entitlement is netted off. So, for example, if someone comes from Poland and works over here, the child support that we pay here is netted out against what they might have received had they been paid in Poland, and the net amount is therefore paid across. That is the existing rule. The UK system is obviously more generous, and that is why it pays people in a sense to be here, getting those benefits.
I recognise there are some real issues here. We are in the midst of looking at those issues with other countries as well, and I want to mention which ones are on the schedule. The Government are concerned that, although some protections are in place, they are not enough. That is particularly worrying given the issue, which the right hon. Gentleman raises, of 1 January 2014. So we are trying to look carefully at where the system is falling down at the moment, and I am exploring a series of options. Today, for example, I have called for another meeting of a series of European nations that share our concerns. Some people might have noticed today that Germany has woken up at last to the reality that it might face a large net migration. We are due to meet its representatives and others from around the EU to try to ensure that we deal with this. I do not believe that it is acceptable that we go on with it—I have told the European Commission that—and we will resist it.
Mr Duncan Smith
I am answering the question. To be frank, the real question for the hon. Gentleman is why he sat with a Government who, for over 10 years, made such a shambles and a mess of this.
The reality is that we are trying, for example, to figure out the rules that allow us to prevent individuals from staying in the UK for only a short time before claiming benefits—a rule that existed under the last Government. We are looking at the tests about accommodation and the length of time people spend here. We want to look at things such the leasing arrangements they have for their housing and over what length of time, and even at challenging the narrow and short-term definition of “habitual” used by the European Court of Justice. In other words, we are trying to lock people out from coming here solely for the purpose of claiming benefits.
I have to tell Opposition Members, who were making a noise just a second ago, that one of the big problems is that the last Government did not collect any data on how many migrants actually claimed benefits here. We have changed that. We are now totalling up who is here and who will claim benefits, and we will be on top of those figures.
In conclusion—I know the right hon. Member for Birkenhead (Mr Field) wants to ask some further questions—there are a number of things we need to do. We need to tighten up immediately the rules about habitual residency. We need to tighten up the rules about accommodation and the leasing length of time. We need to tighten up and start the process of arguing hugely with the Commission that it is quite wrong to net out things such as child benefit and pay the higher level to people whose families do not even come with them into the country to work. Finally, many nations in Europe are just as angry as we are about this, and we have been meeting them since last summer and reaching a common purpose to deal with the Commission and force it to recognise that any further changes it wants to make, including by taking us to court over the British residency rules, are not acceptable. We will tighten up. I refuse to accept the Commission’s rules. I will not give way on the habitual residency test, and we will tighten up on net migration.
Mr Field
May I thank the Secretary of State for his answers, but might I now try to pin him down on four issues? Does he accept that, if the word “crisis” is used, it is a crisis that successive Governments have engendered by moving welfare from the basis that people had to make contributions to receive benefits to one where they receive them if their income proves needs? Is not his universal credit just one more move in that direction? When will the House know what further restrictions will be placed on universal credit to prevent it from being claimed immediately by people who arrive in this country? Does he not accept that the current situation—basically, a means-tested welfare state—is inconsistent with our European Union treaty obligations and is against the Prime Minister’s wish that we should be open for trade but not an easy touch? Are the Government now going to rescind the directions issued by primary care commissioning groups as Parliament rose for the summer last year, which instructed doctors that they had to take people on to their books if they had been here for 24 hours, including people here illegally? When will the Government act on that?
Will the Government use the powers they do have to instruct authorities that in allocating social housing, they must pay due attention to the length of time people have been waiting and to their good behaviour; and that they have a duty to publish data—on which the Government will insist—on whether social housing is being allocated to non-British citizens?
Finally, given that there are already 150,000 Romanians and Bulgarians here legally, and that they are arriving here at a rate of 25,000 a month, does he not accept that the answer he has just given us will prove ineffective against the movement that might well come after 1 January 2014? Will he therefore tell the House when he expects to report on what measures the Government will take? Will he ask for a whole day’s debate, so that the House can improve them before we rise for this summer’s recess?
Mr Duncan Smith
I have known the right hon. Gentleman for a considerable time and have huge respect for him that goes beyond party affiliation. I will deal with those four points, but I want to deal with a point he made right at the end.
I absolutely agree with the right hon. Gentleman that this is something of a crisis. For the past two years, I have been fighting a rearguard action against what was left to me by the previous Government. [Interruption.] Opposition Members can moan, but let us put the facts as they are: I inherited a habitual residency test that simply is not fit for purpose. We are trying to tighten that up dramatically and I am being infracted by the European Union for doing so. Before Opposition Members start lecturing us, let us remember what they left. The right hon. Gentleman is, however, absolutely right—I am with him on this—to describe this as a crisis.
The right hon. Gentleman made an important point about the contributory issue on welfare. Tax credits took things faster in that direction, which is why self-employed people coming in to the country are immediately able to claim tax credits even if they are doing only a little bit of work—we talked about The Big Issue sellers and so on. That is one area we have to look at in relation to universal credit, but I take the opposite view from him. Universal credit gives us an opportunity to redefine the nature of that benefit by absorbing the tax credit issue, taking away the right of individuals coming in from overseas to claim on that basis, and redefining it as something much more in line with our obligations, while being able to lock out many migrants who would come and claim immediately. I am happy to discuss that with him further, but I believe we will be able to make that move, which I am looking at at the moment.
The right hon. Gentleman is right to say that GPs and the health service often overstate their responsibilities to migrants. I talked to the Secretary of State for Health about this issue about a week ago, and he is looking carefully at issuing clear instructions that they do not have to do this. It is my view and belief that that is the case, and it is about making it clear that they do not feel they will be challenged. It is a little like health and safety rules—people over-interpret the situation. In fact, things are never as tough as that, and we need to provide strong guidance.
The right hon. Gentleman is also right about being clear to local government. I am working with the Secretary of State for Communities and Local Government to ensure that we publish and are clear about the number of people from overseas who are taking social housing ahead of those who have waited a long time in the queue. This is part of what we are trying to change—I agree and I will do that.
I am very happy to meet the right hon. Gentleman and to work with any colleague, from either side of the House, to make common purpose to tighten up our arrangements so that we do not have a problem when 1 January 2014 arrives. However, a little humility is required from Opposition Front Benchers in recognising that they signed the accession treaty that left us with this problem. It was they who created the habitual residency test that left the door open, and I wish they would apologise and work with us, rather than complain the whole time.
Nicholas Soames (Mid Sussex) (Con)
Does my right hon. Friend agree that the economic benefit to Romanian and Bulgarian families of migrating to the UK is roughly double that to a Polish family, so the scale of his task is huge indeed? When he meets his European colleagues who share the same anxieties, will he see whether they have a different phrase and judgment for the habitual residence rules?
Mr Duncan Smith
I will, and I am at the moment. Since last year, we have been talking to colleagues in various countries, including Germany, about the need to deal with the Commission’s view. In a sense, the Commission is using free movement to enter the realm, I think, of social security, which has never been within its remit, and we have to challenge that. Up until now, Germany has been a little more ambivalent, but interestingly in the past two or three weeks it has suddenly begun to change its tune, and other countries, such as Spain, are coming into the group too. We have asked for urgent meetings immediately with that group—in the next two weeks—and I will raise this matter with it.
Stephen Timms (East Ham) (Lab)
I, too, welcome the urgent question from my right hon. Friend the Member for Birkenhead (Mr Field), but I am sorry that the Secretary of State answered it in such partisan terms.
The benefits system needs to be fair, and to be seen to be fair. Over many decades, people have come to the UK and made a huge contribution to our economy and our society. The Government now need to look at the benefits and services to be provided, given the prospect of future European migration. We need a sensible and serious debate about credible changes, but the Secretary of State seems only to be floating some rather vague ideas without any sense of whether they can be delivered.
The Secretary of State plans to introduce universal credit from October, but roll-out has already been drastically delayed and fundamental questions are now being asked about the deliverability of the IT. If, as he suggested a moment ago, the Government are to change the rules in the system ahead of implementation, they risk making the delivery of universal credit even more chaotic than it is already set to be. Will he explain how the changes he now envisages will fit in with what is supposed to be being introduced already?
Over the weekend, we were tantalised with hints from Ministers that they wanted the system to be more contributory, but the changes they have made so far, as my right hon. Friend pointed out, are making it less contributory. Has the Secretary of State had a change of heart in favour of a more contributory approach? One other suggestion floated is for the introduction of ID cards. Are these the same ID cards that Ministers announced were scrapped straight after the election? Furthermore, will he and his colleagues do a much better job of enforcing the minimum wage? There have been no prosecutions for minimum wage infringements over the past two years, which has been part of the problem. Will he now put that right?
Mr Duncan Smith
The changes are long overdue, and I would like to know why the right hon. Gentleman did not explain why the last Government did nothing about resolving the issue. He says that we should not be partisan, but he just has made a very partisan statement when an apology was all he needed to make. He needed only to say that he was sorry for the mess Labour left us in.
What we are talking about will have no practical effect on the implementation of universal credit, which, by the way, is proceeding exactly in accordance with plans. On the contributory principle—this is the point I wanted to make to the right hon. Member for Birkenhead—there is no magic wand. Let us bear it in mind that if it was a blanket contributory principle, we would end up paying a lot of benefits, such as winter fuel payments—an issue that, as the right hon. Member for East Ham (Stephen Timms) knows, was not resolved by his Government—to lots of people who had long since departed Britain. We are considering the matter, and universal credit will give us an ideal opportunity to embrace tax credits and, through this requirement, to start the process of change so that we can resist the pressure of paying tax credits—because they would no longer exist—to people who come to the UK for the first time and claim to be self-employed. That is the area I am looking at.
We need no lectures from the right hon. Gentleman about prosecutions for minimum wage infringements. The last Government’s record on this was so bad I wonder why the Opposition bother mentioning it at the Dispatch Box. We are trying to change it, and will change it, whereas the last Government gave way on every single issue in Europe from the moment they arrived.
Mr John Redwood (Wokingham) (Con)
Why can the Secretary of State not propose to the House that we legislate to say that no one can get benefits unless they can demonstrate a suitable contribution record or have spent at least 10 years in full-time education in the UK?
Mr Duncan Smith
As I said earlier, that is the direction of travel we are trying to head in. We are trying to change the rules, in order to make the test covering the period someone spends here and the commitment they make to the UK much tougher. We are wrestling with the habitual residence test, but it is weak in parts because it makes no requirements concerning the length of time someone commits to being in the country. That is an area we have to, and will, challenge. I want to change those rules so that the European Court recognises that someone needs to make a commitment to the country they are in before they can start drawing down.
Chris Bryant (Rhondda) (Lab)
I remind the Secretary of State that it was not just the Labour party that supported the accession of Bulgaria and Romania, but every single Member of the House at the time—there was not even a vote—so this is something for us all to engage with. I suggest that it is deeply irresponsible to keep briefing newspapers and providing lots of hints—nudge, nudge, wink, wink—but then not to come to the Chamber with concrete proposals. In the last two years, there has not been a single prosecution for breach of the national minimum wage, even though 13% of those working in care homes in this country are on less than the national minimum wage. Is it not time the Government sorted that out, so that fewer people choose to come here?
Mr Duncan Smith
I just do not agree with the hon. Gentleman. It’s great, isn’t it? In government, they wanted to take the credit for everything, but in opposition they do not want to take the blame when things then go wrong. They negotiated the treaty, so they bear the responsibility. I have to pick up the pieces, and we are going to do that. Under universal credit, we will hugely tighten up on self-employed people, shutting the door to many of those whom he allowed to come in and claim benefits in the first place.
Greg Mulholland (Leeds North West) (LD)
The Secretary of State is right to seek to deal with what is clearly a wholly unsatisfactory and confusing situation, but does he agree that some people are seeking deliberately to misrepresent the current reality and so are fuelling fear, which can lead to prejudice and hatred? Does he agree that we need better information about the situation?
Mr Duncan Smith
I agree with my hon. Friend. I would simply make the point that we have to deal with the reality. Our system does not deal with the problem of people coming here solely to claim benefits. We are always keen for people who have something to add to come to the UK and add their talents and skills to help us build the economy—that has always been the principle—but we do not agree that people should find an open door and a way of coming in just to take money to which they never contributed. That is the key issue. I agree with his point, but responsibility rests with those who used to defend, but now spend their time attacking, the very position they created.
Kate Hoey (Vauxhall) (Lab)
Is not the simple truth that we cannot do anything much about any of these problems? The Secretary of State might come up with one or two little changes, but the only thing that will give us back control of our own borders is leaving the European Union.
Mr Duncan Smith
As the hon. Lady knows, given my track record, I bow to nobody in my scepticism about many of these treaties. Under the Prime Minister, we have made it clear that, should my party get elected into government next time round, a very serious renegotiation will take place, with the option of an in-out referendum. Personally, I think that is exactly the right position. This is one of the key areas over which we want to get back a lot of control, and only my right hon. Friend the Prime Minister has been bold enough to say we will do that, and test ourselves against that.
Mr Edward Leigh (Gainsborough) (Con)
I love the Secretary of State, but frankly his answer was so long and complicated that one would need a degree in social security to understand it—I did not understand it. As a recent by-election showed, the people are hurting and they want a clear answer from the Government. Why do the Government not do as my right hon. Friend the Member for Wokingham (Mr Redwood) and the right hon. Member for Birkenhead (Mr Field) suggested and either move to a contributory system or say, “We will not pay you benefits until you have stayed here for a number of years”? If the European Court sues us, bring it on, and that will make our case for renegotiation.
Mr Duncan Smith
I am always grateful for my hon. Friend’s support in these matters. I recall that he used to be in a Government busy voting for the Maastricht treaty when I was rebelling against it, so, with respect, I will do whatever I can and I do not bow before anybody in my determination to say no to the European Commission.
Mark Hendrick (Preston) (Lab/Co-op)
There has been a huge amount of exaggeration of the scale of the problem. Bulgaria and Romania are a fraction of the size of Poland. Most Romanians are more likely to go to Spain or Italy. Is this not more to do with Conservative voters migrating to UKIP?
Mr Duncan Smith
I am actually a little surprised that the hon. Gentleman makes any reference to the Eastleigh by-election, when the Labour party’s position was an absolute disaster. This is not about that; the reality is simply that we need to ensure that the procedures are tightened up, mostly because of fairness to those who pay their taxes in Britain, who work hard and do not want to see social housing and all these other areas going to people who never made a commitment to this country. This is simply about fairness. We were left a bad position. I am trying to change it, while being infracted by the European Commission and saying no to it at the same time.
James Duddridge (Rochford and Southend East) (Con)
The Secretary of State repeatedly talks of the infraction process, which is surely just a fine. No one has ever paid any of these fines. Please, please, please: just say no, tell the Commission to sod off and do not pay the fine.
Mr Duncan Smith
If my hon. Friend does not mind, I will skip the language and keep to the sentiment.
Mr Speaker
Order. I can say only that I experienced a moment of deafness—partly because somebody else was wittering on at me—but I have the impression that perhaps something rather tasteless was said. I trust that the person concerned will wash his or her mouth out without delay.
Ian Lucas (Wrexham) (Lab)
Will the Secretary of State clarify whether the Government are considering removing rights to NHS treatment for British citizens, in an effort to restrict access to EU migrants? This has been reported over the past few days, as part of his party’s reaction to events last Thursday.
Mr Duncan Smith
My view is that that is not the case. It is a matter for the Secretary of State for Health. I recognise that the hon. Gentleman will have to raise it with him, but I am not aware of any such discussions or any such facts being placed in front of me. I would certainly not be keen for that to happen, but as the hon. Gentleman will be aware—as will the right hon. Member for Birkenhead, whose track record on this is arguably unimpeachable—we have a big problem and we have to face it, not because we are scaring people, but because we have to deal with it.
Mr David Ruffley (Bury St Edmunds) (Con)
I welcome the Secretary of State’s toughening up. I certainly trust him to fight in a tough and effective way in Brussels, but does he understand that many of our constituents find it grotesquely offensive that Brussels officials are telling this Parliament who it can and cannot pay benefits to? In that spirit, will he confirm that this is an area of EU competence that this Government will ask to opt out of?
Mr Duncan Smith
I agree with my hon. Friend that it is invidious that areas that I have always believed were outwith the Commission’s normal competences are being sucked in by using other things—this is to do with the free movement. More could have been done and the issue should have been raised at a much higher level. It is quite good that other nations—mostly northern European nations, but also Spain—are now deeply concerned about the ratchet process. We are meeting them and there are the beginnings of a real resistance to it.
On what will happen in any negotiation, I am clearly not in a position to commit my right hon. Friend the Prime Minister on whatever may happen in future.
Sammy Wilson (East Antrim) (DUP)
I welcome the fact that the Government are now tackling the legacy they were left, as far as benefits for foreigners are concerned, but does the Minister not see the contradiction in the Government’s stance at present? We are talking tough at home while—according to Romanian Ministers—giving assurances that those who come from Romania will be given full access to benefits, on the same basis as UK citizens. Does he not see that as an incentive for Romanians to come here and dip into the financial honeypot that they see?
Mr Duncan Smith
That is exactly what I am trying to deal with, but not just for Romanians. This goes across the board for what anybody in the European economic area can do when they come here. The problem has been in existence for some time, as the right hon. Member for Birkenhead said. I now have to sweep up after the lord mayor’s show and deal with what has been left behind, after the last Government did nothing at all about the problem. I will do it; I am absolutely determined to.
Mr John Baron (Basildon and Billericay) (Con)
This is clearly not a problem of the Secretary of State’s making. Given that the average salary in this country is five to six times what it is in Romania and Bulgaria, will he do what he can to ensure cross-departmental co-operation, so that we do not face the situation we had in 2004, when Departments were simply out of the loop?
Mr Duncan Smith
Absolutely. In fact, we have already had a number of meetings with the Prime Minister and coalition colleagues about tightening up between Departments and understanding where one Department’s position knocks on to another. The first thing is to get rid of the silo mentality that existed and create a pan-Government position. The next thing is not to talk tough here and soft abroad, but to work with the Foreign Office to be as tough over there as we are back here. That is the process that is now being engaged.
Jim Shannon (Strangford) (DUP)
The Minister will be aware that large numbers of migrants are bypassing France, Italy and Germany to get to the United Kingdom, almost in haste. What discussions has he had with other EU countries to find the reason for bypassing other countries? Is it that the benefits system in the United Kingdom is much more generous than those anywhere else in Europe?
Mr Duncan Smith
We have had meetings about this issue with about 17 countries, all at the same time. I would list them all, but they include meetings with officials from Bulgaria, the Czech Republic, Estonia, Ireland, Germany, France and Poland. We have had meetings with all of them. There is no common position for them all, but a sub-set of those most likely to be affected—I understand that Germany and Spain are where most of the Romanians tend to be going at the moment—are very concerned about what may happen. We are discussing with them exactly how to respond. Reality is now striking many and I think the door is open for us to make a serious move on this issue.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I commend the Secretary of State and the Government for addressing this issue, which has never been addressed before. The principle is simple: UK citizens are entitled to the benefits that come with the contribution system we inherit, whereas EU citizens—those from Ireland perhaps are excepted, because of the common travel area—should not expect greater benefits here than UK citizens should expect in other EU countries. If we could get to that position, everybody would understand it and there would be greater justice and far fewer complaints.
Mr Duncan Smith
I agree with my right hon. Friend. The point he makes—it is one I have made before—is that there is not an easy solution to what the Commission wants, which is to try to drive free movement as the sole and most important element in this process. However, it fails to recognise that all the nation states have very different social security systems. Many of those nations are finally beginning to say, with us, that this cannot be driven through like a coach and horses, because we control our social security systems. We have different ways of contributing and we use tax differently, so the argument we are making—I believe we will win it—is that we must be left to make those decisions. Obviously when people want to come and work, we want them to do that; the issue is when they come not to work. I think we have a strong position on changing that.
Jason McCartney (Colne Valley) (Con)
I welcome the significant fall in net migration, which is down a third since the general election. It is important to note that 30% of total migration was from European economic area nationals. We have already talked about Romanians and Bulgarians coming here under self-employed status. Does my right hon. Friend agree that a key issue is those coming here under self-employed status having top-up benefits?
Mr Duncan Smith
It has been a problem for some time—this is the point I am trying to make—that the open door comes through on the tax credit system, whereas self-employed people have been able to make that claim. This is the Big Issue seller question that has been going around—I am very positive about The Big Issue, by the way; this is just about who we pay to do that. The reality is that universal credit opens up an opportunity for us to tighten up those measures, and we will tighten up hugely on access through universal credit for legitimately self-employed people who are unable to declare any kind of income that we might recognise as real.
Stephen Mosley (City of Chester) (Con)
There is always a danger, when we are discussing a problem such as this, that we give the impression that all immigrants are coming to this country for our benefits system. Will my right hon. Friend confirm that the vast majority of eastern European immigrants into the UK are coming here to work and to contribute to our society, and that they should be welcomed?
Mr Duncan Smith
The reality is that most people who come here come here to work. They come here because they think the job prospects are greater; that is the real attraction. The truth is that, in the last 10 years, we simply did not know what was happening because the last Government refused to collect figures on those from other countries who were claiming benefit. We were therefore unable to answer that question. The first thing we did was to change that, and we now collect the data. We are now beginning to know what the facts are.
Mr David Nuttall (Bury North) (Con)
For the sake of taxpayers in my constituency, I sincerely hope that the Secretary of State succeeds in his negotiations to redefine the eligibility rules, but does he agree that if for some reason he inexplicably fails it will only encourage more people to vote to leave the European Union when we have the in/out referendum?
Mr Duncan Smith
My hon. Friend makes a very good point. The reality is that it is issues such as this that drive people away from the concept of the success of the European Union, if that is what they had believed. The more the Commission decides to interfere in areas such as this, the more damage it does to those who are pro-European. I personally have been quite sceptical about the process for a considerable period, but even I can recognise that this damages the concept of a European Union that works for all its members and that is about trade and co-operation and ensuring that the people who live in the European Union get benefits according to what they have contributed.
Christopher Pincher (Tamworth) (Con)
My constituents will be appalled to learn that the last Government failed to collect any data on the benefits being paid to migrants. Will my right hon. Friend give me a rough assessment of the cost to the Exchequer of the benefits being paid out, so that the British taxpayer can have some idea of the costs that were being imposed on them by the last Government?
Mr Duncan Smith
I am dying to do that. We want to know who has actually been claiming benefits, but we really do not know that from the figures. The last Government did not want to know. It was almost a deliberate policy not to have the figures available so that people would not know how many were coming in and claiming benefits. That will change. We are an open Government and we will publish the figures. We will be very clear and we will see the size of the problem that we have to resolve.
Mr Philip Hollobone (Kettering) (Con)
My constituents are absolutely furious that the UK’s borders are being flung open in this way. Do Her Majesty’s Government have any idea at all about how many Romanians and Bulgarians might be coming our way? Do they know and are not telling us, or have they not made an estimate? Have they contacted the Romanian and Bulgarian Governments to find out their estimates of the number of their citizens who will be coming to our shores?
Mr Duncan Smith
As I recall, the last Government put together a set of figures on Polish migration that were fundamentally wrong. The best way to deal with this is to make the systems much tighter and much better focused, so that we can deal with whatever numbers want to come here and ensure that they do not come here to claim benefits. I have said before and I say again that the last Government did not want to know how many of those people were claiming benefits. That is now changing.
Nick de Bois (Enfield North) (Con)
The Secretary of State is to be congratulated on his robust approach in trying to build a coalition of European partners to deal with this matter. How confident is he that he will be able to reach agreement before the end of the year? If such agreement is not forthcoming, will he press ahead robustly with whatever unilateral measures he can?
Mr Duncan Smith
We need to reach an agreement within that time scale, so I really am going to push the accelerator pedal down. I have already called for an urgent meeting with those other countries that have agreed to meet us to discuss the issue. We also need to talk to the Commission. The Minister of State, my hon. Friend the Member for Fareham (Mr Hoban), is hugely responsible for this area, and I will do whatever I can in an arbitrary manner to make sure that nothing else takes place.
Glyn Davies (Montgomeryshire) (Con)
We need a society in which immigration takes place at a level and on the conditions that the people of Britain, with their typical generosity, find acceptable. Does my right hon. Friend agree, however, that unless we develop a firm grip on immigration and pay benefits only according to the rules set by this Parliament, we will not achieve a settled society in Britain?
Mr Duncan Smith
The whole point is that there is a contract between those who pay their taxes and those who need to receive benefits. That is implicit in everything we do in regard to welfare payments in the UK, and it should be implicit in the way the European Commission looks at individual nation states and understands their relationships with their own citizens. That is the issue that I want to take forward. The Commission needs to think carefully about driving hard just on free movement, without recognising that individual countries have very different systems. We need the leeway to implement those systems as necessary while still observing free movement for those who want to become employed.
Housing Benefit (Under-occupancy Penalty)
Iain Duncan Smith Excerpts(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I think that most Opposition Members will have been pretty disappointed by what the Minister has said. A range of important arguments have been advanced this afternoon, but they have received no answers whatsoever.
Let me begin by congratulating the Green party, Plaid Cymru and the Scottish National party on tabling the motion. We support it, and we will support it in the Division Lobby later today. Since the Welfare Reform Act 2012 first saw the light of day, we have warned of the flaws that have loomed large this afternoon. It was my right hon. Friend the Member for East Ham (Stephen Timms) who first warned that the people who will be hit by the Act have nowhere to hide and that they will just have to pay up, and it was my noble Friend Lord McKenzie who said in the other place that the discretionary housing fund would nowhere near cover the costs and consequences of this policy. I am afraid that everything we have heard this afternoon merely confirms what they have said. That is why through Divisions in the Chamber and in Committee here and in the other place we have tried to put in place safeguards which would have stopped the horror show that will begin in April.
As the weeks have gone by, my colleagues have clearly set out the faults and flaws in glorious 3D Technicolor. First, we learned that someone who is handed a 12-month sentence will be exempt from this policy. I have here a list of offences which attracted a sentence of less than 12 months in 2011. It includes some 43 people who were convicted of threat or conspiracy to murder, who will be exempt. There are also 273 people convicted of sexual offences; they, too, will be exempt. Yet mothers of members of the armed forces who are currently out there serving, like Alison Huggan—the case raised by my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop)—will be hit, and the Minister defended this policy this afternoon.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I know the right hon. Gentleman would never want to unwittingly mislead the House. He has said that if someone is convicted, they will be exempt. They are not exempt. Only those on remand will be exempt. Would the right hon. Gentleman like to correct the record?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Secretary of State, you cannot be standing up at the same time as the Member who has the Floor. I am sure the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) is willing to give way. You should both have a little patience with each other. We do not want to end up bickering across the Dispatch Box, do we? Is Liam Byrne giving way?
Mr Duncan Smith
I just want to establish one thing: the right hon. Gentleman is now changing his party’s legal policy. It has been a very good principle in this country down through the ages that people are innocent until proven guilty, not guilty before they are proven innocent. The reality is that we stick within the existing strictures. The right hon. Gentleman has every right to oppose this measure, but he is now saying that as soon as someone is accused of a crime, they should immediately be treated as if they are guilty.
Mr Byrne
The Secretary of State cannot defend the fact that families of serving soldiers will be hit by this policy while those on remand and accused of the most serious offences we can imagine will not be hit by it. I do not think that the Secretary of State, of all people, will want to defend that. He should be speaking to his colleagues the Secretary of State for Defence and the Prime Minister, who I understand is the Chair of the Sub-Committee on the Armed Forces Covenant, and he should be bringing to this House safeguards for the families of armed personnel out on service, should he not? As he remains in his place, it is clear that he is not going to bring forward those safeguards for the families of people serving on the front line. The House will be disappointed to have observed that.
Foster parents will also be hurt. Again, we heard nothing from the Minister today about how foster parent families are going to be helped. [Interruption.] I listened very carefully to what the Minister said, and he said nothing today that countermands what he sent out in a recent circular, which says:
“a household that has an extra room for a current or potential foster child will be treated as under-occupying.”
Families in that position will be hit, therefore. [Interruption.] We then hear that under universal credit a couple where someone is a pensioner and someone is not will also be hit. [Interruption.]
Over all this, of course, looms the truth that two-thirds of the people hit by this bedroom tax will be disabled. [Interruption.] The Minister has been pleading from a sedentary position that the discretionary housing payment will somehow help. He will, no doubt, have seen the National Housing Federation research that found that 200,000 people who will be hit by this bedroom tax are on disability living allowance. The NHF estimates that if we spent all the DHP money helping those people, it would help 73,000 people, so there would be 127,000 people in receipt of DLA who would get absolutely no help whatever. Of course, that would leave nothing for foster parents either. I am afraid that the Minister cannot simply plead that the DHP is of some help to foster parents, those who are disabled and people whose houses have been adapted. The truth is very different, and he has been found out this afternoon.
Mr Byrne
Of course there is. The Minister, unlike his party colleague the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), did not resile from his support for a whopping great tax cut for millionaires at the same time as Hayley Duncan and her children are being hit by this bedroom tax.
This is a policy that is unique in its cruelty. It sets out to tackle the problem of under-occupancy, and the Minister made much of the 1 million spare bedrooms he wants somehow to bring on to the housing market. As he knows, however, the policy will only save the money chalked up in the Treasury scorecard if it fails. That is the reality. About £490 million is earmarked to be saved by this policy over the course of this year, but it will be saved only if 660,000 households are hit for £14 a week for 52 weeks a year. That is how those savings will be delivered. This is not about bringing spare bedrooms on to the market; it is about hurting vulnerable people and asking them to pay extra.
What is particularly troubling to many Opposition Members is the Minister’s refusal to acknowledge that in many parts of the country there will simply not be the smaller houses for people to move into. Again the NHF has been very clear about that. In large parts of the country there is simply not the housing stock for people hit by this tax to move into. The Government have removed any shelter where vulnerable people can take cover before opening fire. This is a policy of unique cruelty, therefore. The Government are not seeking to solve under-occupancy. Instead, they are simply seeking to make the poorest and most vulnerable even poorer. As the Secretary of State once cared about poverty, perhaps he would like to justify that fact?
Mr Duncan Smith
Will the right hon. Gentleman explain the following two important points? Under the Labour Government’s local housing allowance changes, the situation for children of the same sex in respect of the size criteria was exactly the same as we are now introducing in the social sector. Why is it good for one but not for the other? Secondly, he is crowing about the number of social houses in existence, but why did the last Labour Government leave the building programme at the lowest level since the 1920s?
Mr Byrne
I am answering the question. The Deputy Prime Minister said:
“If I’m going to be sort of self-critical, there was this reduction in capital spending when we came into the coalition government…But I think we’ve all realised that you actually need, in order to foster a recovery, to try and mobilise as much public and private capital into infrastructure as possible.”
But what has happened in the past couple of years? What has happened even in the past year? For the last year for which records are available, the number of housing starts in this country has fallen by 11%. That is the reality of what this Government have delivered.
This policy is not simply a cruel punishment; it is a cruel and unusual punishment, because it is not normal—it is not usual in a modern, advanced and civilised country—to reward the rich in quite the way this Government are proposing while punishing the poor. It beggars belief that next month—the month in which those on £1 million a year will get a £2,000-a-week tax cut—those with a spare bedroom will face a £14-a-week rent rise. In what world is that fair or normal and usual? It is only in a Tory world, defended by a Liberal Democrat.
Mr Byrne
My hon. Friend is absolutely right. The Secretary of State may truly believe that this policy will save his Department £490 million a year, but his Minister of State was rather less than forthcoming earlier on swearing that that would be the figure. The Secretary of State may genuinely believe that this policy will save £2 billion over the forecast period. If he does genuinely believe that it will save the money set out by the Treasury in Budgets gone by, he is deluding himself, because the evidence is staring him in the face: this policy will cost more than it saves.
Mr Duncan Smith
I stand by our assessments. Will the right hon. Gentleman apologise for what was done in Labour’s 13 years? The current Government have increased the level of social house building by 18% on what we inherited; it had collapsed under Labour. Will he apologise and explain to the nationalists that one reason why we are in this predicament is that house building collapsed under his Government?
Mr Byrne
House building did not collapse. In the final years of our Government we brought forward serious new investment for housing, and it is the Labour party that is proposing serious investment in social housing and new housing today. That position seems to be shared by the Deputy Prime Minister, but his Government are presiding over an 11% collapse in the number of houses being built.
Kris Hopkins
Today’s debate gives us the opportunity to make that point. The Minister’s speech was excellent and clarified many of the issues, but it is appropriate that we should use all means to put the information into the public domain.
During my time as housing chair, I visited many homes in the district. The majority were in very poor condition and had been for many years. Some were built before the war. Some were sold for as little as £1; people could not live in them as they were in such a poor condition.
Mr Duncan Smith
My hon. Friend is right to raise the important matter of communications, as was my hon. Friend the Member for Gainsborough (Mr Leigh). We have been talking to councils for quite some time and we are urging them to talk to their social housing residents. They are doing that, but they are not helped when others go out and say things about the provisions that are completely untrue. There have been many scare stories about pensioners and we made it clear from the word go that pensioners were not involved, but some of the Opposition parties spent their time saying that pensioners would be affected. There is a barrier, but we are doing our level best to get the information across.
Kris Hopkins
I thank my right hon. Friend for that point. The truth is that as a Conservative, I care about the disabled. I want to champion the work and efforts of carers and we should not allow the Opposition to brand us as that nasty party. Many of our councillors are working really hard for the vulnerable people in our society, and I know that Government Members care about those people.