Pensions Bill

Iain Duncan Smith Excerpts

Monday 17th June 2013 Commons Chamber

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

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

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

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

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

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

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

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

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

[Mr Duncan Smith]

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

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

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

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

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

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

[Mr Duncan Smith]

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

[Mr Donohoe]

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

[Mr Duncan Smith]

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

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

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

[Mr Duncan Smith]

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

[Nigel Mills (Amber Valley) (Con)]

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

[Mr Duncan Smith]

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

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

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

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

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

[Mr Byrne]

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

[Mr Duncan Smith]

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

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

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

[Mr Duncan Smith]

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

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

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

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

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

[Mr Duncan Smith]

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

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

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

[Mr Duncan Smith]

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

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

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

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

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

[Jeremy Lefroy (Stafford) (Con)]

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

[Mr Duncan Smith]

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

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

--- Later in debate ---

[Mr Byrne]

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

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

[Mr Duncan Smith]

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

[Mr Byrne]

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

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

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

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

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

--- Later in debate ---

[Mr Byrne]

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

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

[Mr Duncan Smith]

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

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 20th May 2013 Commons Chamber

[Pauline Latham (Mid Derbyshire) (Con)]

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

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

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

[Pauline Latham]

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

[Mr Duncan Smith]

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

[David Wright (Telford) (Lab)]

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

[Mr Duncan Smith]

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

[Graham Evans (Weaver Vale) (Con)]

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

[Mr Duncan Smith]

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

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

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

[Mr Duncan Smith]

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

[Andrea Leadsom (South Northamptonshire) (Con)]

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

--- Later in debate ---

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

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

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

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

[Mr Betts]

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

[Mr Duncan Smith]

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

[David Mowat (Warrington South) (Con)]

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

[Mr Duncan Smith]

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

[Stephen Timms (East Ham) (Lab)]

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

[Mr Duncan Smith]

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

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

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

[Stephen Timms]

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

[Mr Duncan Smith]

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

[Rosie Cooper (West Lancashire) (Lab)]

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

--- Later in debate ---

[Barry Gardiner (Brent North) (Lab)]

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

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

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

[Barry Gardiner]

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

[Mr Duncan Smith]

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

[Sir Bob Russell (Colchester) (LD)]

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

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

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

[Sir Bob Russell]

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

[Mr Duncan Smith]

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

[Fiona Mactaggart (Slough) (Lab)]

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

--- Later in debate ---

[Mr William Bain (Glasgow North East) (Lab)]

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

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

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

[Mr Bain]

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

--- Later in debate ---

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

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

[Mr Duncan Smith]

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

[Mr Byrne]

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

[Mr Duncan Smith]

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

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

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

--- Later in debate ---

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

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

[Mr Duncan Smith]

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

[Alex Cunningham (Stockton North) (Lab)]

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

--- Later in debate ---

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

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

[Mr Duncan Smith]

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

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

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

[Mr Duncan Smith]

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

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

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

[Mr Duncan Smith]

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

[Duncan Hames (Chippenham) (LD)]

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

[Julie Hilling (Bolton West) (Lab)]

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

[Mr Duncan Smith]

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

Jobs and Business

Iain Duncan Smith Excerpts

Friday 10th May 2013 Commons Chamber

[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.”

--- Later in debate ---

[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—

[Mr Duncan Smith]

Will the hon. Lady give way?

[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.

--- Later in debate ---

[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.

[Several hon. Members]

rose—

[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 Byrne]

rose—

[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 Byrne]

A payment-by-results system does not cost much money if there are no results. If the Secretary of State is so proud of the 8% figure, why did his Department not use it when it published the results?

[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 Byrne]

Will the Secretary of State give way?

[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 Byrne]

Will the Secretary of State give way on that point?

[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

Wednesday 24th April 2013 Written Statements

[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

Friday 22nd March 2013 Commons Chamber

[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.

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[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 Byrne]

rose—

[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.

[Several hon. Members]

rose—

[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.

[Graham Jones (Hyndburn) (Lab)]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

No. The reality is that under the previous Government, house building fell to the lowest level since the 1920s.

[Mr Byrne]

rose—

[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?

--- Later in debate ---

[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.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

rose—

[Mr Kevan Jones]

rose—

[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 Jones]

The right hon. Gentleman has pledged to produce figures by constituency of how much each will benefit from the £10,000 income tax cap. Will he produce the constituency figures on those who have lost in terms of tax credits, bedroom tax and VAT?

[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 Duncan Smith]

I will make a little progress and give way in a minute.

[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.

[James Duddridge]

Will my right hon. Friend give way?

[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.

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[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]

The words of the chief economist Olivier Blanchard are clear: the Government are on the wrong fiscal path, and we know that the Business Secretary agrees with us.

--- Later in debate ---

[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 Byrne]

I thank the Secretary of State for that bold assertion to the House. Would he like to intervene again and tell me that the targets for employment and support allowance will be hit by Work programme contractors when the data are published in May?

[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 Duncan Smith]

rose—

[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 congratulate my hon. Friend on bringing that to the House’s attention. This is an incredibly serious matter.

[Mr Duncan Smith]

Will the right hon. Gentleman give way?

[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.

--- Later in debate ---

[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]

rose—

[Mr Byrne]

I give way to the Secretary of State for the last time.

[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.

--- Later in debate ---

[Mr Duncan Smith]

rose—

[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

Friday 22nd March 2013 Written Statements

[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

Tuesday 19th March 2013 Commons Chamber

[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 Duncan Smith]

Will the right hon. Gentleman give way?

[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.

--- Later in debate ---

[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

Tuesday 19th March 2013 Commons Chamber

[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

Tuesday 12th March 2013 Written Statements

[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

Monday 11th March 2013 Commons Chamber

[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.

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[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.

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[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.

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[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 Speaker]

I call Mr Ruffley. Not here.

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[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.

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[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?

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[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?

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[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?

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[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.

[Several hon. Members]

rose—