Romanians and Bulgarians (Benefits)

Iain Duncan Smith Excerpts

Tuesday 5th March 2013 Commons Chamber

[Mr Frank Field (Birkenhead) (Lab)]

(Urgent Question): To ask the Secretary of State for Work and Pensions if he will make a statement on what actions the Government are planning to restrict welfare to newcomers from Bulgaria and Romania from 1 January next year.

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

May I congratulate the right hon. Gentleman on getting his urgent question on the second time of trying? He is a model of persistence and I, of course, was over the moon about his persistence.

The right hon. Gentleman has raised an important question and I want to deal with some aspects of it. First, however, I will set the scene as to what we are trying to deal with. I understand that Labour Front Benchers now admit that they fundamentally got it wrong on immigration, but the scope to which they got it wrong is why we have this issue. Between 1997 and 2010, net migration to the UK was some 2.2 million people—larger than the city of Birmingham. Interestingly, from 2004 to 2010, 1.1 million European economic area nationals registered to work in the UK. After the prediction of what was likely to happen, the scope of the problem is far greater than anything the Labour party wanted to tell the public. Most of all, I congratulate my right hon. Friend the Home Secretary and her team in the coalition for having begun the process of reducing net migration to Britain for the first time in a long time.

For the benefit of the House and in line with the right hon. Gentleman’s request—I know he particularly wanted me to answer that bit first, so having dealt with it I will get on with the rest of my answer—let me explain the current arrangement. A lot of nonsense is talked about what we are and are not capable of. First, people must pass the habitual residence test, introduced by the previous Government, before being entitled to claim income-related benefits. The current system was put in place in 2004 and has basically two elements—a legal right to reside and an assessment of factual evidence of habitual residence. As we know, EU citizens have the right to live in another member state as long as they are a qualified person, which basically means a worker, self-employed person, jobseeker, self-sufficient person or student. Tax credits have, I am afraid, been open to abuse outside that system from day one because the rules allow anybody from within the European economic area to claim self-employed status and receive full entitlement immediately. The Government are trying to wrestle with that problem, and I will return to it.

We are currently facing—not for the first time—a legal challenge from the European Commission because our habitual residence test states that people must prove they live in the UK habitually before they get access to benefits. It seems strange to me that anyone should be surprised that a habitual residence test requires that a person should live in the UK habitually, but we sometimes live in that George Orwellian political language world, which the Commission seems to foster with great alacrity.

Secondly, on exportability, under the EU co-ordination rules, benefits under the main categories of social security are exportable—that is, payable elsewhere in the European economic area. So that we clear up the confusion, let me say that that includes, notably, child benefit, for example, and has for a while. We therefore pay child benefit to children who live in other EU states when their parents are working here. That causes a lot of concern, and quite legitimately so. When both parents work but in different countries, the EU rules apparently determine who has primary responsibility for paying, but any difference in entitlement is netted off. So, for example, if someone comes from Poland and works over here, the child support that we pay here is netted out against what they might have received had they been paid in Poland, and the net amount is therefore paid across. That is the existing rule. The UK system is obviously more generous, and that is why it pays people in a sense to be here, getting those benefits.

I recognise there are some real issues here. We are in the midst of looking at those issues with other countries as well, and I want to mention which ones are on the schedule. The Government are concerned that, although some protections are in place, they are not enough. That is particularly worrying given the issue, which the right hon. Gentleman raises, of 1 January 2014. So we are trying to look carefully at where the system is falling down at the moment, and I am exploring a series of options. Today, for example, I have called for another meeting of a series of European nations that share our concerns. Some people might have noticed today that Germany has woken up at last to the reality that it might face a large net migration. We are due to meet its representatives and others from around the EU to try to ensure that we deal with this. I do not believe that it is acceptable that we go on with it—I have told the European Commission that—and we will resist it.

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

What about answering the question?

[Mr Duncan Smith]

I am answering the question. To be frank, the real question for the hon. Gentleman is why he sat with a Government who, for over 10 years, made such a shambles and a mess of this.

The reality is that we are trying, for example, to figure out the rules that allow us to prevent individuals from staying in the UK for only a short time before claiming benefits—a rule that existed under the last Government. We are looking at the tests about accommodation and the length of time people spend here. We want to look at things such the leasing arrangements they have for their housing and over what length of time, and even at challenging the narrow and short-term definition of “habitual” used by the European Court of Justice. In other words, we are trying to lock people out from coming here solely for the purpose of claiming benefits.

I have to tell Opposition Members, who were making a noise just a second ago, that one of the big problems is that the last Government did not collect any data on how many migrants actually claimed benefits here. We have changed that. We are now totalling up who is here and who will claim benefits, and we will be on top of those figures.

In conclusion—I know the right hon. Member for Birkenhead (Mr Field) wants to ask some further questions—there are a number of things we need to do. We need to tighten up immediately the rules about habitual residency. We need to tighten up the rules about accommodation and the leasing length of time. We need to tighten up and start the process of arguing hugely with the Commission that it is quite wrong to net out things such as child benefit and pay the higher level to people whose families do not even come with them into the country to work. Finally, many nations in Europe are just as angry as we are about this, and we have been meeting them since last summer and reaching a common purpose to deal with the Commission and force it to recognise that any further changes it wants to make, including by taking us to court over the British residency rules, are not acceptable. We will tighten up. I refuse to accept the Commission’s rules. I will not give way on the habitual residency test, and we will tighten up on net migration.

[Mr Field]

May I thank the Secretary of State for his answers, but might I now try to pin him down on four issues? Does he accept that, if the word “crisis” is used, it is a crisis that successive Governments have engendered by moving welfare from the basis that people had to make contributions to receive benefits to one where they receive them if their income proves needs? Is not his universal credit just one more move in that direction? When will the House know what further restrictions will be placed on universal credit to prevent it from being claimed immediately by people who arrive in this country? Does he not accept that the current situation—basically, a means-tested welfare state—is inconsistent with our European Union treaty obligations and is against the Prime Minister’s wish that we should be open for trade but not an easy touch? Are the Government now going to rescind the directions issued by primary care commissioning groups as Parliament rose for the summer last year, which instructed doctors that they had to take people on to their books if they had been here for 24 hours, including people here illegally? When will the Government act on that?

Will the Government use the powers they do have to instruct authorities that in allocating social housing, they must pay due attention to the length of time people have been waiting and to their good behaviour; and that they have a duty to publish data—on which the Government will insist—on whether social housing is being allocated to non-British citizens?

Finally, given that there are already 150,000 Romanians and Bulgarians here legally, and that they are arriving here at a rate of 25,000 a month, does he not accept that the answer he has just given us will prove ineffective against the movement that might well come after 1 January 2014? Will he therefore tell the House when he expects to report on what measures the Government will take? Will he ask for a whole day’s debate, so that the House can improve them before we rise for this summer’s recess?

[Mr Duncan Smith]

I have known the right hon. Gentleman for a considerable time and have huge respect for him that goes beyond party affiliation. I will deal with those four points, but I want to deal with a point he made right at the end.

I absolutely agree with the right hon. Gentleman that this is something of a crisis. For the past two years, I have been fighting a rearguard action against what was left to me by the previous Government. [Interruption.] Opposition Members can moan, but let us put the facts as they are: I inherited a habitual residency test that simply is not fit for purpose. We are trying to tighten that up dramatically and I am being infracted by the European Union for doing so. Before Opposition Members start lecturing us, let us remember what they left. The right hon. Gentleman is, however, absolutely right—I am with him on this—to describe this as a crisis.

The right hon. Gentleman made an important point about the contributory issue on welfare. Tax credits took things faster in that direction, which is why self-employed people coming in to the country are immediately able to claim tax credits even if they are doing only a little bit of work—we talked about The Big Issue sellers and so on. That is one area we have to look at in relation to universal credit, but I take the opposite view from him. Universal credit gives us an opportunity to redefine the nature of that benefit by absorbing the tax credit issue, taking away the right of individuals coming in from overseas to claim on that basis, and redefining it as something much more in line with our obligations, while being able to lock out many migrants who would come and claim immediately. I am happy to discuss that with him further, but I believe we will be able to make that move, which I am looking at at the moment.

The right hon. Gentleman is right to say that GPs and the health service often overstate their responsibilities to migrants. I talked to the Secretary of State for Health about this issue about a week ago, and he is looking carefully at issuing clear instructions that they do not have to do this. It is my view and belief that that is the case, and it is about making it clear that they do not feel they will be challenged. It is a little like health and safety rules—people over-interpret the situation. In fact, things are never as tough as that, and we need to provide strong guidance.

The right hon. Gentleman is also right about being clear to local government. I am working with the Secretary of State for Communities and Local Government to ensure that we publish and are clear about the number of people from overseas who are taking social housing ahead of those who have waited a long time in the queue. This is part of what we are trying to change—I agree and I will do that.

I am very happy to meet the right hon. Gentleman and to work with any colleague, from either side of the House, to make common purpose to tighten up our arrangements so that we do not have a problem when 1 January 2014 arrives. However, a little humility is required from Opposition Front Benchers in recognising that they signed the accession treaty that left us with this problem. It was they who created the habitual residency test that left the door open, and I wish they would apologise and work with us, rather than complain the whole time.

[Nicholas Soames (Mid Sussex) (Con)]

Does my right hon. Friend agree that the economic benefit to Romanian and Bulgarian families of migrating to the UK is roughly double that to a Polish family, so the scale of his task is huge indeed? When he meets his European colleagues who share the same anxieties, will he see whether they have a different phrase and judgment for the habitual residence rules?

[Mr Duncan Smith]

I will, and I am at the moment. Since last year, we have been talking to colleagues in various countries, including Germany, about the need to deal with the Commission’s view. In a sense, the Commission is using free movement to enter the realm, I think, of social security, which has never been within its remit, and we have to challenge that. Up until now, Germany has been a little more ambivalent, but interestingly in the past two or three weeks it has suddenly begun to change its tune, and other countries, such as Spain, are coming into the group too. We have asked for urgent meetings immediately with that group—in the next two weeks—and I will raise this matter with it.

[Stephen Timms (East Ham) (Lab)]

I, too, welcome the urgent question from my right hon. Friend the Member for Birkenhead (Mr Field), but I am sorry that the Secretary of State answered it in such partisan terms.

The benefits system needs to be fair, and to be seen to be fair. Over many decades, people have come to the UK and made a huge contribution to our economy and our society. The Government now need to look at the benefits and services to be provided, given the prospect of future European migration. We need a sensible and serious debate about credible changes, but the Secretary of State seems only to be floating some rather vague ideas without any sense of whether they can be delivered.

The Secretary of State plans to introduce universal credit from October, but roll-out has already been drastically delayed and fundamental questions are now being asked about the deliverability of the IT. If, as he suggested a moment ago, the Government are to change the rules in the system ahead of implementation, they risk making the delivery of universal credit even more chaotic than it is already set to be. Will he explain how the changes he now envisages will fit in with what is supposed to be being introduced already?

Over the weekend, we were tantalised with hints from Ministers that they wanted the system to be more contributory, but the changes they have made so far, as my right hon. Friend pointed out, are making it less contributory. Has the Secretary of State had a change of heart in favour of a more contributory approach? One other suggestion floated is for the introduction of ID cards. Are these the same ID cards that Ministers announced were scrapped straight after the election? Furthermore, will he and his colleagues do a much better job of enforcing the minimum wage? There have been no prosecutions for minimum wage infringements over the past two years, which has been part of the problem. Will he now put that right?

[Mr Duncan Smith]

The changes are long overdue, and I would like to know why the right hon. Gentleman did not explain why the last Government did nothing about resolving the issue. He says that we should not be partisan, but he just has made a very partisan statement when an apology was all he needed to make. He needed only to say that he was sorry for the mess Labour left us in.

What we are talking about will have no practical effect on the implementation of universal credit, which, by the way, is proceeding exactly in accordance with plans. On the contributory principle—this is the point I wanted to make to the right hon. Member for Birkenhead—there is no magic wand. Let us bear it in mind that if it was a blanket contributory principle, we would end up paying a lot of benefits, such as winter fuel payments—an issue that, as the right hon. Member for East Ham (Stephen Timms) knows, was not resolved by his Government—to lots of people who had long since departed Britain. We are considering the matter, and universal credit will give us an ideal opportunity to embrace tax credits and, through this requirement, to start the process of change so that we can resist the pressure of paying tax credits—because they would no longer exist—to people who come to the UK for the first time and claim to be self-employed. That is the area I am looking at.

We need no lectures from the right hon. Gentleman about prosecutions for minimum wage infringements. The last Government’s record on this was so bad I wonder why the Opposition bother mentioning it at the Dispatch Box. We are trying to change it, and will change it, whereas the last Government gave way on every single issue in Europe from the moment they arrived.

[Mr John Redwood (Wokingham) (Con)]

Why can the Secretary of State not propose to the House that we legislate to say that no one can get benefits unless they can demonstrate a suitable contribution record or have spent at least 10 years in full-time education in the UK?

[Mr Duncan Smith]

As I said earlier, that is the direction of travel we are trying to head in. We are trying to change the rules, in order to make the test covering the period someone spends here and the commitment they make to the UK much tougher. We are wrestling with the habitual residence test, but it is weak in parts because it makes no requirements concerning the length of time someone commits to being in the country. That is an area we have to, and will, challenge. I want to change those rules so that the European Court recognises that someone needs to make a commitment to the country they are in before they can start drawing down.

[Chris Bryant (Rhondda) (Lab)]

I remind the Secretary of State that it was not just the Labour party that supported the accession of Bulgaria and Romania, but every single Member of the House at the time—there was not even a vote—so this is something for us all to engage with. I suggest that it is deeply irresponsible to keep briefing newspapers and providing lots of hints—nudge, nudge, wink, wink—but then not to come to the Chamber with concrete proposals. In the last two years, there has not been a single prosecution for breach of the national minimum wage, even though 13% of those working in care homes in this country are on less than the national minimum wage. Is it not time the Government sorted that out, so that fewer people choose to come here?

[Mr Duncan Smith]

I just do not agree with the hon. Gentleman. It’s great, isn’t it? In government, they wanted to take the credit for everything, but in opposition they do not want to take the blame when things then go wrong. They negotiated the treaty, so they bear the responsibility. I have to pick up the pieces, and we are going to do that. Under universal credit, we will hugely tighten up on self-employed people, shutting the door to many of those whom he allowed to come in and claim benefits in the first place.

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

The Secretary of State is right to seek to deal with what is clearly a wholly unsatisfactory and confusing situation, but does he agree that some people are seeking deliberately to misrepresent the current reality and so are fuelling fear, which can lead to prejudice and hatred? Does he agree that we need better information about the situation?

[Mr Duncan Smith]

I agree with my hon. Friend. I would simply make the point that we have to deal with the reality. Our system does not deal with the problem of people coming here solely to claim benefits. We are always keen for people who have something to add to come to the UK and add their talents and skills to help us build the economy—that has always been the principle—but we do not agree that people should find an open door and a way of coming in just to take money to which they never contributed. That is the key issue. I agree with his point, but responsibility rests with those who used to defend, but now spend their time attacking, the very position they created.

[Kate Hoey (Vauxhall) (Lab)]

Is not the simple truth that we cannot do anything much about any of these problems? The Secretary of State might come up with one or two little changes, but the only thing that will give us back control of our own borders is leaving the European Union.

[Mr Duncan Smith]

As the hon. Lady knows, given my track record, I bow to nobody in my scepticism about many of these treaties. Under the Prime Minister, we have made it clear that, should my party get elected into government next time round, a very serious renegotiation will take place, with the option of an in-out referendum. Personally, I think that is exactly the right position. This is one of the key areas over which we want to get back a lot of control, and only my right hon. Friend the Prime Minister has been bold enough to say we will do that, and test ourselves against that.

[Mr Edward Leigh (Gainsborough) (Con)]

I love the Secretary of State, but frankly his answer was so long and complicated that one would need a degree in social security to understand it—I did not understand it. As a recent by-election showed, the people are hurting and they want a clear answer from the Government. Why do the Government not do as my right hon. Friend the Member for Wokingham (Mr Redwood) and the right hon. Member for Birkenhead (Mr Field) suggested and either move to a contributory system or say, “We will not pay you benefits until you have stayed here for a number of years”? If the European Court sues us, bring it on, and that will make our case for renegotiation.

[Mr Duncan Smith]

I am always grateful for my hon. Friend’s support in these matters. I recall that he used to be in a Government busy voting for the Maastricht treaty when I was rebelling against it, so, with respect, I will do whatever I can and I do not bow before anybody in my determination to say no to the European Commission.

[Mark Hendrick (Preston) (Lab/Co-op)]

There has been a huge amount of exaggeration of the scale of the problem. Bulgaria and Romania are a fraction of the size of Poland. Most Romanians are more likely to go to Spain or Italy. Is this not more to do with Conservative voters migrating to UKIP?

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[Mr Duncan Smith]

I am actually a little surprised that the hon. Gentleman makes any reference to the Eastleigh by-election, when the Labour party’s position was an absolute disaster. This is not about that; the reality is simply that we need to ensure that the procedures are tightened up, mostly because of fairness to those who pay their taxes in Britain, who work hard and do not want to see social housing and all these other areas going to people who never made a commitment to this country. This is simply about fairness. We were left a bad position. I am trying to change it, while being infracted by the European Commission and saying no to it at the same time.

[James Duddridge (Rochford and Southend East) (Con)]

The Secretary of State repeatedly talks of the infraction process, which is surely just a fine. No one has ever paid any of these fines. Please, please, please: just say no, tell the Commission to sod off and do not pay the fine.

[Mr Duncan Smith]

If my hon. Friend does not mind, I will skip the language and keep to the sentiment.

[Mr Speaker]

Order. I can say only that I experienced a moment of deafness—partly because somebody else was wittering on at me—but I have the impression that perhaps something rather tasteless was said. I trust that the person concerned will wash his or her mouth out without delay.

[Ian Lucas (Wrexham) (Lab)]

Will the Secretary of State clarify whether the Government are considering removing rights to NHS treatment for British citizens, in an effort to restrict access to EU migrants? This has been reported over the past few days, as part of his party’s reaction to events last Thursday.

[Mr Duncan Smith]

My view is that that is not the case. It is a matter for the Secretary of State for Health. I recognise that the hon. Gentleman will have to raise it with him, but I am not aware of any such discussions or any such facts being placed in front of me. I would certainly not be keen for that to happen, but as the hon. Gentleman will be aware—as will the right hon. Member for Birkenhead, whose track record on this is arguably unimpeachable—we have a big problem and we have to face it, not because we are scaring people, but because we have to deal with it.

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

I welcome the Secretary of State’s toughening up. I certainly trust him to fight in a tough and effective way in Brussels, but does he understand that many of our constituents find it grotesquely offensive that Brussels officials are telling this Parliament who it can and cannot pay benefits to? In that spirit, will he confirm that this is an area of EU competence that this Government will ask to opt out of?

[Mr Duncan Smith]

I agree with my hon. Friend that it is invidious that areas that I have always believed were outwith the Commission’s normal competences are being sucked in by using other things—this is to do with the free movement. More could have been done and the issue should have been raised at a much higher level. It is quite good that other nations—mostly northern European nations, but also Spain—are now deeply concerned about the ratchet process. We are meeting them and there are the beginnings of a real resistance to it.

On what will happen in any negotiation, I am clearly not in a position to commit my right hon. Friend the Prime Minister on whatever may happen in future.

[Sammy Wilson (East Antrim) (DUP)]

I welcome the fact that the Government are now tackling the legacy they were left, as far as benefits for foreigners are concerned, but does the Minister not see the contradiction in the Government’s stance at present? We are talking tough at home while—according to Romanian Ministers—giving assurances that those who come from Romania will be given full access to benefits, on the same basis as UK citizens. Does he not see that as an incentive for Romanians to come here and dip into the financial honeypot that they see?

[Mr Duncan Smith]

That is exactly what I am trying to deal with, but not just for Romanians. This goes across the board for what anybody in the European economic area can do when they come here. The problem has been in existence for some time, as the right hon. Member for Birkenhead said. I now have to sweep up after the lord mayor’s show and deal with what has been left behind, after the last Government did nothing at all about the problem. I will do it; I am absolutely determined to.

[Mr John Baron (Basildon and Billericay) (Con)]

This is clearly not a problem of the Secretary of State’s making. Given that the average salary in this country is five to six times what it is in Romania and Bulgaria, will he do what he can to ensure cross-departmental co-operation, so that we do not face the situation we had in 2004, when Departments were simply out of the loop?

[Mr Duncan Smith]

Absolutely. In fact, we have already had a number of meetings with the Prime Minister and coalition colleagues about tightening up between Departments and understanding where one Department’s position knocks on to another. The first thing is to get rid of the silo mentality that existed and create a pan-Government position. The next thing is not to talk tough here and soft abroad, but to work with the Foreign Office to be as tough over there as we are back here. That is the process that is now being engaged.

[Jim Shannon (Strangford) (DUP)]

The Minister will be aware that large numbers of migrants are bypassing France, Italy and Germany to get to the United Kingdom, almost in haste. What discussions has he had with other EU countries to find the reason for bypassing other countries? Is it that the benefits system in the United Kingdom is much more generous than those anywhere else in Europe?

[Mr Duncan Smith]

We have had meetings about this issue with about 17 countries, all at the same time. I would list them all, but they include meetings with officials from Bulgaria, the Czech Republic, Estonia, Ireland, Germany, France and Poland. We have had meetings with all of them. There is no common position for them all, but a sub-set of those most likely to be affected—I understand that Germany and Spain are where most of the Romanians tend to be going at the moment—are very concerned about what may happen. We are discussing with them exactly how to respond. Reality is now striking many and I think the door is open for us to make a serious move on this issue.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I commend the Secretary of State and the Government for addressing this issue, which has never been addressed before. The principle is simple: UK citizens are entitled to the benefits that come with the contribution system we inherit, whereas EU citizens—those from Ireland perhaps are excepted, because of the common travel area—should not expect greater benefits here than UK citizens should expect in other EU countries. If we could get to that position, everybody would understand it and there would be greater justice and far fewer complaints.

[Mr Duncan Smith]

I agree with my right hon. Friend. The point he makes—it is one I have made before—is that there is not an easy solution to what the Commission wants, which is to try to drive free movement as the sole and most important element in this process. However, it fails to recognise that all the nation states have very different social security systems. Many of those nations are finally beginning to say, with us, that this cannot be driven through like a coach and horses, because we control our social security systems. We have different ways of contributing and we use tax differently, so the argument we are making—I believe we will win it—is that we must be left to make those decisions. Obviously when people want to come and work, we want them to do that; the issue is when they come not to work. I think we have a strong position on changing that.

[Jason McCartney (Colne Valley) (Con)]

I welcome the significant fall in net migration, which is down a third since the general election. It is important to note that 30% of total migration was from European economic area nationals. We have already talked about Romanians and Bulgarians coming here under self-employed status. Does my right hon. Friend agree that a key issue is those coming here under self-employed status having top-up benefits?

[Mr Duncan Smith]

It has been a problem for some time—this is the point I am trying to make—that the open door comes through on the tax credit system, whereas self-employed people have been able to make that claim. This is the Big Issue seller question that has been going around—I am very positive about The Big Issue, by the way; this is just about who we pay to do that. The reality is that universal credit opens up an opportunity for us to tighten up those measures, and we will tighten up hugely on access through universal credit for legitimately self-employed people who are unable to declare any kind of income that we might recognise as real.

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

There is always a danger, when we are discussing a problem such as this, that we give the impression that all immigrants are coming to this country for our benefits system. Will my right hon. Friend confirm that the vast majority of eastern European immigrants into the UK are coming here to work and to contribute to our society, and that they should be welcomed?

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[Mr Duncan Smith]

The reality is that most people who come here come here to work. They come here because they think the job prospects are greater; that is the real attraction. The truth is that, in the last 10 years, we simply did not know what was happening because the last Government refused to collect figures on those from other countries who were claiming benefit. We were therefore unable to answer that question. The first thing we did was to change that, and we now collect the data. We are now beginning to know what the facts are.

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

For the sake of taxpayers in my constituency, I sincerely hope that the Secretary of State succeeds in his negotiations to redefine the eligibility rules, but does he agree that if for some reason he inexplicably fails it will only encourage more people to vote to leave the European Union when we have the in/out referendum?

[Mr Duncan Smith]

My hon. Friend makes a very good point. The reality is that it is issues such as this that drive people away from the concept of the success of the European Union, if that is what they had believed. The more the Commission decides to interfere in areas such as this, the more damage it does to those who are pro-European. I personally have been quite sceptical about the process for a considerable period, but even I can recognise that this damages the concept of a European Union that works for all its members and that is about trade and co-operation and ensuring that the people who live in the European Union get benefits according to what they have contributed.

[Christopher Pincher (Tamworth) (Con)]

My constituents will be appalled to learn that the last Government failed to collect any data on the benefits being paid to migrants. Will my right hon. Friend give me a rough assessment of the cost to the Exchequer of the benefits being paid out, so that the British taxpayer can have some idea of the costs that were being imposed on them by the last Government?

[Mr Duncan Smith]

I am dying to do that. We want to know who has actually been claiming benefits, but we really do not know that from the figures. The last Government did not want to know. It was almost a deliberate policy not to have the figures available so that people would not know how many were coming in and claiming benefits. That will change. We are an open Government and we will publish the figures. We will be very clear and we will see the size of the problem that we have to resolve.

[Mr Philip Hollobone (Kettering) (Con)]

My constituents are absolutely furious that the UK’s borders are being flung open in this way. Do Her Majesty’s Government have any idea at all about how many Romanians and Bulgarians might be coming our way? Do they know and are not telling us, or have they not made an estimate? Have they contacted the Romanian and Bulgarian Governments to find out their estimates of the number of their citizens who will be coming to our shores?

[Mr Duncan Smith]

As I recall, the last Government put together a set of figures on Polish migration that were fundamentally wrong. The best way to deal with this is to make the systems much tighter and much better focused, so that we can deal with whatever numbers want to come here and ensure that they do not come here to claim benefits. I have said before and I say again that the last Government did not want to know how many of those people were claiming benefits. That is now changing.

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

The Secretary of State is to be congratulated on his robust approach in trying to build a coalition of European partners to deal with this matter. How confident is he that he will be able to reach agreement before the end of the year? If such agreement is not forthcoming, will he press ahead robustly with whatever unilateral measures he can?

[Mr Duncan Smith]

We need to reach an agreement within that time scale, so I really am going to push the accelerator pedal down. I have already called for an urgent meeting with those other countries that have agreed to meet us to discuss the issue. We also need to talk to the Commission. The Minister of State, my hon. Friend the Member for Fareham (Mr Hoban), is hugely responsible for this area, and I will do whatever I can in an arbitrary manner to make sure that nothing else takes place.

[Glyn Davies (Montgomeryshire) (Con)]

We need a society in which immigration takes place at a level and on the conditions that the people of Britain, with their typical generosity, find acceptable. Does my right hon. Friend agree, however, that unless we develop a firm grip on immigration and pay benefits only according to the rules set by this Parliament, we will not achieve a settled society in Britain?

[Mr Duncan Smith]

The whole point is that there is a contract between those who pay their taxes and those who need to receive benefits. That is implicit in everything we do in regard to welfare payments in the UK, and it should be implicit in the way the European Commission looks at individual nation states and understands their relationships with their own citizens. That is the issue that I want to take forward. The Commission needs to think carefully about driving hard just on free movement, without recognising that individual countries have very different systems. We need the leeway to implement those systems as necessary while still observing free movement for those who want to become employed.

Housing Benefit (Under-occupancy Penalty)

Iain Duncan Smith Excerpts

Wednesday 27th February 2013 Commons Chamber

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

I think that most Opposition Members will have been pretty disappointed by what the Minister has said. A range of important arguments have been advanced this afternoon, but they have received no answers whatsoever.

Let me begin by congratulating the Green party, Plaid Cymru and the Scottish National party on tabling the motion. We support it, and we will support it in the Division Lobby later today. Since the Welfare Reform Act 2012 first saw the light of day, we have warned of the flaws that have loomed large this afternoon. It was my right hon. Friend the Member for East Ham (Stephen Timms) who first warned that the people who will be hit by the Act have nowhere to hide and that they will just have to pay up, and it was my noble Friend Lord McKenzie who said in the other place that the discretionary housing fund would nowhere near cover the costs and consequences of this policy. I am afraid that everything we have heard this afternoon merely confirms what they have said. That is why through Divisions in the Chamber and in Committee here and in the other place we have tried to put in place safeguards which would have stopped the horror show that will begin in April.

As the weeks have gone by, my colleagues have clearly set out the faults and flaws in glorious 3D Technicolor. First, we learned that someone who is handed a 12-month sentence will be exempt from this policy. I have here a list of offences which attracted a sentence of less than 12 months in 2011. It includes some 43 people who were convicted of threat or conspiracy to murder, who will be exempt. There are also 273 people convicted of sexual offences; they, too, will be exempt. Yet mothers of members of the armed forces who are currently out there serving, like Alison Huggan—the case raised by my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop)—will be hit, and the Minister defended this policy this afternoon.

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

I know the right hon. Gentleman would never want to unwittingly mislead the House. He has said that if someone is convicted, they will be exempt. They are not exempt. Only those on remand will be exempt. Would the right hon. Gentleman like to correct the record?

[Mr Byrne]

Well, I am sure the House will draw great comfort from the fact that people on remand for threats to murder, sexual offences, burglary, robbery and public disorder will—

[Mr Duncan Smith]

rose—

[Mr Byrne]

I am very happy to take the Secretary of State’s correction, but—

[Mr Duncan Smith]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Secretary of State, you cannot be standing up at the same time as the Member who has the Floor. I am sure the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) is willing to give way. You should both have a little patience with each other. We do not want to end up bickering across the Dispatch Box, do we? Is Liam Byrne giving way?

[Mr Byrne]

I am very happy to give way, but let me tell the Secretary of State that the House will draw little comfort from the fact that people on remand for these offences will still be exempt from this policy.

[Mr Duncan Smith]

I just want to establish one thing: the right hon. Gentleman is now changing his party’s legal policy. It has been a very good principle in this country down through the ages that people are innocent until proven guilty, not guilty before they are proven innocent. The reality is that we stick within the existing strictures. The right hon. Gentleman has every right to oppose this measure, but he is now saying that as soon as someone is accused of a crime, they should immediately be treated as if they are guilty.

[Mr Byrne]

The Secretary of State cannot defend the fact that families of serving soldiers will be hit by this policy while those on remand and accused of the most serious offences we can imagine will not be hit by it. I do not think that the Secretary of State, of all people, will want to defend that. He should be speaking to his colleagues the Secretary of State for Defence and the Prime Minister, who I understand is the Chair of the Sub-Committee on the Armed Forces Covenant, and he should be bringing to this House safeguards for the families of armed personnel out on service, should he not? As he remains in his place, it is clear that he is not going to bring forward those safeguards for the families of people serving on the front line. The House will be disappointed to have observed that.

Foster parents will also be hurt. Again, we heard nothing from the Minister today about how foster parent families are going to be helped. [Interruption.] I listened very carefully to what the Minister said, and he said nothing today that countermands what he sent out in a recent circular, which says:

“a household that has an extra room for a current or potential foster child will be treated as under-occupying.”

Families in that position will be hit, therefore. [Interruption.] We then hear that under universal credit a couple where someone is a pensioner and someone is not will also be hit. [Interruption.]

Over all this, of course, looms the truth that two-thirds of the people hit by this bedroom tax will be disabled. [Interruption.] The Minister has been pleading from a sedentary position that the discretionary housing payment will somehow help. He will, no doubt, have seen the National Housing Federation research that found that 200,000 people who will be hit by this bedroom tax are on disability living allowance. The NHF estimates that if we spent all the DHP money helping those people, it would help 73,000 people, so there would be 127,000 people in receipt of DLA who would get absolutely no help whatever. Of course, that would leave nothing for foster parents either. I am afraid that the Minister cannot simply plead that the DHP is of some help to foster parents, those who are disabled and people whose houses have been adapted. The truth is very different, and he has been found out this afternoon.

[Mr Byrne]

Of course there is. The Minister, unlike his party colleague the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), did not resile from his support for a whopping great tax cut for millionaires at the same time as Hayley Duncan and her children are being hit by this bedroom tax.

This is a policy that is unique in its cruelty. It sets out to tackle the problem of under-occupancy, and the Minister made much of the 1 million spare bedrooms he wants somehow to bring on to the housing market. As he knows, however, the policy will only save the money chalked up in the Treasury scorecard if it fails. That is the reality. About £490 million is earmarked to be saved by this policy over the course of this year, but it will be saved only if 660,000 households are hit for £14 a week for 52 weeks a year. That is how those savings will be delivered. This is not about bringing spare bedrooms on to the market; it is about hurting vulnerable people and asking them to pay extra.

What is particularly troubling to many Opposition Members is the Minister’s refusal to acknowledge that in many parts of the country there will simply not be the smaller houses for people to move into. Again the NHF has been very clear about that. In large parts of the country there is simply not the housing stock for people hit by this tax to move into. The Government have removed any shelter where vulnerable people can take cover before opening fire. This is a policy of unique cruelty, therefore. The Government are not seeking to solve under-occupancy. Instead, they are simply seeking to make the poorest and most vulnerable even poorer. As the Secretary of State once cared about poverty, perhaps he would like to justify that fact?

[Mr Duncan Smith]

Will the right hon. Gentleman explain the following two important points? Under the Labour Government’s local housing allowance changes, the situation for children of the same sex in respect of the size criteria was exactly the same as we are now introducing in the social sector. Why is it good for one but not for the other? Secondly, he is crowing about the number of social houses in existence, but why did the last Labour Government leave the building programme at the lowest level since the 1920s?

[Mr Byrne]

Like me, the Secretary of State will have followed the recent remarks of the Deputy Prime Minister—

[Mr Duncan Smith]

Answer the question.

[Mr Byrne]

I am answering the question. The Deputy Prime Minister said:

“If I’m going to be sort of self-critical, there was this reduction in capital spending when we came into the coalition government…But I think we’ve all realised that you actually need, in order to foster a recovery, to try and mobilise as much public and private capital into infrastructure as possible.”

But what has happened in the past couple of years? What has happened even in the past year? For the last year for which records are available, the number of housing starts in this country has fallen by 11%. That is the reality of what this Government have delivered.

This policy is not simply a cruel punishment; it is a cruel and unusual punishment, because it is not normal—it is not usual in a modern, advanced and civilised country—to reward the rich in quite the way this Government are proposing while punishing the poor. It beggars belief that next month—the month in which those on £1 million a year will get a £2,000-a-week tax cut—those with a spare bedroom will face a £14-a-week rent rise. In what world is that fair or normal and usual? It is only in a Tory world, defended by a Liberal Democrat.

--- Later in debate ---

[Mr Byrne]

My hon. Friend is absolutely right. The Secretary of State may truly believe that this policy will save his Department £490 million a year, but his Minister of State was rather less than forthcoming earlier on swearing that that would be the figure. The Secretary of State may genuinely believe that this policy will save £2 billion over the forecast period. If he does genuinely believe that it will save the money set out by the Treasury in Budgets gone by, he is deluding himself, because the evidence is staring him in the face: this policy will cost more than it saves.

[Mr Duncan Smith]

I stand by our assessments. Will the right hon. Gentleman apologise for what was done in Labour’s 13 years? The current Government have increased the level of social house building by 18% on what we inherited; it had collapsed under Labour. Will he apologise and explain to the nationalists that one reason why we are in this predicament is that house building collapsed under his Government?

[Mr Byrne]

House building did not collapse. In the final years of our Government we brought forward serious new investment for housing, and it is the Labour party that is proposing serious investment in social housing and new housing today. That position seems to be shared by the Deputy Prime Minister, but his Government are presiding over an 11% collapse in the number of houses being built.

--- Later in debate ---

[Kris Hopkins]

Today’s debate gives us the opportunity to make that point. The Minister’s speech was excellent and clarified many of the issues, but it is appropriate that we should use all means to put the information into the public domain.

During my time as housing chair, I visited many homes in the district. The majority were in very poor condition and had been for many years. Some were built before the war. Some were sold for as little as £1; people could not live in them as they were in such a poor condition.

[Mr Duncan Smith]

My hon. Friend is right to raise the important matter of communications, as was my hon. Friend the Member for Gainsborough (Mr Leigh). We have been talking to councils for quite some time and we are urging them to talk to their social housing residents. They are doing that, but they are not helped when others go out and say things about the provisions that are completely untrue. There have been many scare stories about pensioners and we made it clear from the word go that pensioners were not involved, but some of the Opposition parties spent their time saying that pensioners would be affected. There is a barrier, but we are doing our level best to get the information across.

[Kris Hopkins]

I thank my right hon. Friend for that point. The truth is that as a Conservative, I care about the disabled. I want to champion the work and efforts of carers and we should not allow the Opposition to brand us as that nasty party. Many of our councillors are working really hard for the vulnerable people in our society, and I know that Government Members care about those people.

Pensions and Social Security

Iain Duncan Smith Excerpts

Wednesday 13th February 2013 Commons Chamber

[Gregg McClymont]

The Minister is determined to tease out from the Opposition what will be in our next manifesto. Our position is clear, and he is obviously trying to deflect attention from this real-terms cut in the pension.

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

Come on, Greg, you can do it. Just tell us!

[Gregg McClymont]

The Secretary of State must be less exuberant from a sedentary position.

I shall move rapidly on to the strivers tax. It is clear that strivers have been hit by a tax to pay the cost of the Government’s economic failure, while at the same time millionaires have received a £107,000 tax cut.

Universal Credit

Iain Duncan Smith Excerpts

Tuesday 5th February 2013 Written Statements

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

I am pleased to announce that later today the Government will publish the Command Paper: “Government’s response to the House of Commons Work and Pensions Select Committee’s third report of Session 2012-13—Universal Credit implementation: meeting the needs of vulnerable claimants”.

On 22 November 2012 the Work and Pension Select Committee published its third report of Session 2012-13, following its enquiry into the implementation of universal credit and plans for meeting the needs of vulnerable claimants.

The Government welcome the ongoing interest of the Work and Pensions Select Committee in this fundamental reform of welfare provision and delivery. Although the report was not received until after the principal universal credit regulations were near to being finalised, we have carefully monitored the progress of the inquiry and considered the evidence presented to the Committee alongside the policy development and service design for universal credit and will continue to do so.

By removing the barriers and disincentives to work that exist within the current system, universal credit will make sure work pays—especially for those on the lowest incomes, helping people to live independent lives. This will reduce worklessness, and encourage people to take personal responsibility. Work can transform individual lives and society for the better and should be encouraged. It is therefore important that we allow claimants to make the same sorts of decisions as those in work and support people to move towards greater independence.

The Government however recognise the Committee’s concerns about the impact changes to the existing welfare system may have on claimants with complex needs. From the very start of the development of the policy, we have been absolutely clear that we must and will protect the interests of those who are in vulnerable circumstances or will face challenges in dealing with the new system.

The Government’s response to the Select Committee’s report details how we will provide support for vulnerable claimants, including helping with access to the online system and offering alternative channels for those who need it; ensuring personal budgeting support is in place to enable claimants to take financial responsibility and having alternative payment arrangements for those who need them. We have also confirmed our commitment to continuing work with Government Departments and devolved Administrations on how they operate passported benefits both in the short and longer term.

A copy of the Government’s response will also be available later today on the Department for Work and Pensions website at:

www.dwp.gov.uk/publications/policy-publications/.

Welfare Spending

Iain Duncan Smith Excerpts

Friday 1st February 2013 Ministerial Corrections

[Mel Stride]

I congratulate my right hon. Friend on the progress that he has made in controlling welfare expenditure, particularly given that under the previous Government, the costs rose by no less than 60%. However, there is always more to do. Will he outline what we are doing to clamp down on welfare fraud?

[Mr Duncan Smith]

My hon. Friend is right about the situation that we were left. We are already bearing down on the problem. The figures show that we are making inroads into welfare fraud. Universal credit will have a much better record in this area, because we will be able to use real-time information to check up on who is in work and what they are earning on a monthly basis, rather than having to wait until the end of somebody’s time on tax credits at the end of a year and reconcile the figures over a long period. Under the current tax credits system, £5 billion has been written off as a result of fraud and error, and it looks like another £5 billion will also be written off.

[Official Report, 28 January 2013, Vol. 557, c. 658.]

Letter of correction from Iain Duncan Smith:

An error has been identified in the oral answer given to the hon. Member for Central Devon (Mel Stride).

The correct answer should have been:

[Mr Duncan Smith]

My hon. Friend is right about the situation that we were left. We are already bearing down on the problem. The figures show that we are making inroads into welfare fraud. Universal credit will have a much better record in this area, because we will be able to use real-time information to check up on who is in work and what they are earning on a monthly basis, rather than having to wait until the end of somebody’s time on tax credits at the end of a year and reconcile the figures over a long period. Under the current tax credits system, £4 billion has been written off as a result of fraud and error, and it looks like another £4 billion will also be written off.

Universal Credit

Iain Duncan Smith Excerpts

Thursday 31st January 2013 Ministerial Corrections

[Mr Duncan Smith]

It will—I can give the hon. Gentleman that reassurance. We are discussing this at every level with the local authorities concerned. The process will start at a jobcentre in each of the areas I have mentioned on 29 April, and that will start bringing in childless couples to claim universal credit, rather than jobseeker’s allowance. Over that period, once people are captured into the universal credit system, they will not go back on to jobseeker’s allowance, so a lot of tax-credit people who fall unemployed will move on to universal credit. We are in deep discussions with the regions.

[Official Report, 28 January 2013, Vol. 557, c. 656.]

Letter of correction from Iain Duncan Smith:

An error has been identified in the answer given to the hon. Member for Stalybridge and Hyde (Jonathan Reynolds).

The correct answer should have been:

[Mr Duncan Smith]

It will—I can give the hon. Gentleman that reassurance. We are discussing this at every level with the local authorities concerned. The process will start at a jobcentre in each of the areas I have mentioned on 29 April, and that will start bringing in childless single people to claim universal credit, rather than jobseeker’s allowance. Over that period, once people are captured into the universal credit system, they will not go back on to jobseeker’s allowance, so a lot of tax-credit people who fall unemployed will move on to universal credit. We are in deep discussions with the regions.

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 28th January 2013 Commons Chamber

[Jackie Doyle-Price (Thurrock) (Con)]

3. Whether he plans to phase the introduction of the benefit cap.

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

The benefit cap will be implemented from 15 April 2013 in Bromley, Croydon, Enfield and Haringey local authority areas. This will be a phased roll-out, with the remaining local authorities implementing the cap by the summer. This is in keeping with the way that the culture has changed in DWP. All the programmes that we are implementing are being rolled out on a staged basis. That includes changes to the Child Maintenance and Enforcement Commission, universal credit, personal independence payment and universal job match.

[Jackie Doyle-Price]

Can my right hon. Friend give me some reassurance that vulnerable people will not be affected by the cap? Can he also assure me that every effort is being made to support people back into work?

[Mr Duncan Smith]

Clearly, the cap and the principles behind the cap are supported by Government Members—that is, that people who are on benefits should not be earning more than those, for example, on average earnings. Those who are exempted are those who are entitled to working tax credit—because this is about getting people back to work, not stopping them doing that—war widows, widowers, those in receipt of disability living allowance/personal independence payment, attendance allowance, industrial injuries benefits, those on war disablement pension and compensation scheme and the support component of employment support allowance. There is also a 39-week grace period for those who fall unemployed so that they can get back to work without having to change their arrangements.

[Sheila Gilmore (Edinburgh East) (Lab)]

Despite what the Secretary of State has just said, it is clear that he sees the need now to delay an implementation that was previously seen as so important. What about those households where there is an adult receiving DLA and where there are parents who act as the carers? They are two separate units for benefit purposes. Will the Secretary of State undertake to ensure that those households are not penalised?

[Mr Duncan Smith]

First, I must say to the hon. Lady that she is talking complete nonsense. I would much rather implement a programme learning the lessons as we implement it, than follow the practice of the previous Government, who had a period of collapsing programmes because they rushed them. This is the right way to do it and it is a shift in culture. On the second part of her question, under the Government that she supported—and it is still the case today—when someone becomes an adult, they effectively form their own household. We have discussed and are discussing those matters continuously, but households are formed when someone becomes an adult, and the previous Government never saw any reason to change that in all the years that they were in power.

[Gavin Barwell (Croydon Central) (Con)]

As the Secretary of State confirmed, Croydon will be one of the first places where this policy is rolled out. May I thank Lord Freud, who is the Minister responsible for welfare reform, and the housing Minister for meeting me to discuss this? Will my right hon. Friend confirm that his Department will work closely with my local authority to ensure that this important policy is implemented smoothly?

[Mr Duncan Smith]

I say to my hon. Friend and to all hon. Members and hon. Friends whose areas are affected by the roll-out that we are in deep discussions with all those councils. Jobcentre Plus will be working hugely with each of them, advising, helping and supporting them—in many senses, giving them more support than is necessarily likely to be the case when the national roll-out follows the pilot programmes.

[Fiona Mactaggart (Slough) (Lab)]

But as the roll-out happens, some of the areas that will be most affected are not the pilot areas—the first areas—but places such as my constituency, where people are already being moved out of London housing into Slough because there is relatively cheap housing there. Will the Secretary of State undertake that during the period when, as he said, he is taking time to introduce this, he will make revisions and talk to those authorities that are not the pilot authorities and are affected, as mine will be?

[Mr Duncan Smith]

I am glad to see that the hon. Lady realises the point of this whole process—to learn the lessons and to understand how best to implement the pilot programmes properly. Of course we will be talking to all local authorities, particularly those that are directly affected, and all other local authorities will listen to what they say. Despite the massive protestations of collapse and doom and gloom that we heard when we announced these proposals—we should remember that all local authorities have known about them for over a year—we now see statistics showing that there has not been the mass migration that was predicted. As for access to housing, housing benefit caseloads in London have risen by 5%, not fallen.

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

4. How many people currently claiming a state pension will benefit from the new higher rate state pension under his proposals for a single tier scheme.

--- Later in debate ---

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

Early roll-out of universal credit begins with a pathfinder in April 2013 in the Greater Manchester and Cheshire region, including the jobcentre in Ashton-under-Lyne. I am aware that a number of the hon. Gentleman’s constituents will be involved as a result, as will other Members’ constituents, and my Department will write to all of them to invite them to discuss the roll-out.

[Jonathan Reynolds]

The Secretary of State is right to say that my local authority of Tameside is one of the pathfinder areas. Conversations that I have had with officers from that authority and the wider public infrastructure show that there is a lot of concern about the lack of detail and support from the Department of Work and Pensions with regard to the implementation. Given that this is just a few months away and is a cause of serious concern, will the Secretary of State reassure me and people in my local area that the Government are on top of this and that implementation will take place as planned?

[Mr Duncan Smith]

It will—I can give the hon. Gentleman that reassurance. We are discussing this at every level with the local authorities concerned. The process will start at a jobcentre in each of the areas I have mentioned on 29 April, and that will start bringing in childless couples to claim universal credit, rather than jobseeker’s allowance. Over that period, once people are captured into the universal credit system, they will not go back on to jobseeker’s allowance, so a lot of tax-credit people who fall unemployed will move on to universal credit. We are in deep discussions with the regions.[Official Report, 31 January 2013, Vol. 557, c. 6MC.]

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

The previous Government’s record in commissioning and managing large IT projects was a catalogue of failure. Have my right hon. Friend and his colleagues been able to learn anything from that in how they have designed universal credit?

[Mr Duncan Smith]

All such programmes under Governments of any hue have always carried risk, because they are about change. The DWP benefits systems, including tax credits, are very complicated and often contradictory. Of course what we are doing involves risk, but we are trying to manage that risk. The best way to do so is to ensure that we introduce it stage by stage, so that we can recognise where we need to learn lessons, correct what is difficult or going wrong and ensure that we roll out the system properly.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

On Friday, I visited a housing association in my constituency that is greatly concerned about the introduction of universal credit, as well as the bedroom tax and the benefits cap. What assessment has the Secretary of State made of the impact on the finances of housing associations from the possible increases in rent arrears as a result of his Government’s policies?

[Mr Duncan Smith]

I do not believe that there will be an impact. [Interruption.] The Opposition should look to their own record and the housing benefit mess that they left us. They left a rising bill that had doubled in nearly 10 years, so it would be better to have a little less from them. We are trying to ensure that those who are paying this money are not allowed to slip into debt for any great length of time. That matter is being discussed with housing associations and we are making good progress on it. I believe that this approach will help people who are trying to get back into work enormously, rather than their being treated as though they are children who have to have all their bills paid for them.

[Ian Swales (Redcar) (LD)]

A constituent of mine who did a few extra hours at Tesco before Christmas faces losing her income support and carer’s allowance for a whole month and will be much worse off. Does the Secretary of State agree that that shows the injustice of the system left by the previous Government, and that universal credit is desperately needed?

[Mr Duncan Smith]

That is exactly the point. My hon. Friend hits the nail on the head. The mess of all the chaotic benefits left by the last Government, many of which contradicted each other, meant that people were not incentivised to go to work for anything more than 16 hours in some cases. Many people who could have got themselves out of poverty by working did not do so because they were penalised by the system. That is the shame of what the last Government left behind.

[Kate Green (Stretford and Urmston) (Lab)]

Will the Secretary of State say what resources are being allocated to in-work conditionality for part-time workers under universal credit, given that the Department has acknowledged that there is no evidence nationally or internationally of what works to sustain people in employment and enable them to progress?

[Mr Duncan Smith]

The Department is looking closely at how we can assist people to take more work while on universal credit. We do not have the final results of that, but I am happy to sit down with the hon. Lady at any time and discuss her concerns. She is right about one thing: rather than parking people on a specific number of hours, universal credit will allow people to work more hours and get more money, rather than losing it, thereby getting themselves and their children, if they have any, out of poverty.

[Mel Stride (Central Devon) (Con)]

8. What steps he is taking to control welfare spending.

--- Later in debate ---

[Ben Gummer (Ipswich) (Con)]

20. What steps he is taking to control welfare spending.

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

The Government have undertaken major reforms to limit Britain’s welfare spending, which over successive years ran out of control. Under the last Government, welfare bills had increased by 60% by 2010, costing every household in Britain an extra £3,000 a year. Last week, the Welfare Benefits Up-rating Bill was passed by this House. It will save £1.9 billion, restoring fairness for taxpayers in the process.

[Mel Stride]

I congratulate my right hon. Friend on the progress that he has made in controlling welfare expenditure, particularly given that under the previous Government, the costs rose by no less than 60%. However, there is always more to do. Will he outline what we are doing to clamp down on welfare fraud?

[Mr Duncan Smith]

My hon. Friend is right about the situation that we were left. We are already bearing down on the problem. The figures show that we are making inroads into welfare fraud. Universal credit will have a much better record in this area, because we will be able to use real-time information to check up on who is in work and what they are earning on a monthly basis, rather than having to wait until the end of somebody’s time on tax credits at the end of a year and reconcile the figures over a long period. Under the current tax credits system, £5 billion has been written off as a result of fraud and error, and it looks like another £5 billion will also be written off.[Official Report, 1 February 2013, Vol. 557, c. 8MC.]

[Mr Wilson]

As the Secretary of State has said, the previous Government increased welfare spending by 60%. There was not, however, a 60% increase in people getting jobs, or a 60% reduction in child poverty. Does the Secretary of State agree that we should not measure the success of our welfare system by how much we are spending on it?

[Mr Duncan Smith]

I agree with my hon. Friend: we should measure our welfare system by how soon it provides support to those who need it and how it supports those who can be moved into a more productive form of life. The previous system trapped people into dependency on welfare with rising bills and, ultimately, a very poor record on child poverty.

[Alun Cairns]

I strongly welcome the welfare reforms that the Government are introducing, and I pay tribute to the Secretary of State for the control he is bringing to expenditure. Does he agree, however, that the provision of some of the benefits, and the terms under which they will be received, may need to be reviewed? If the parent of a young child with a complicated medical condition needs to stay in hospital for longer than 84 days, they may fall foul of the carer’s allowance. Will the Secretary of State agree to look at that?

[Mr Duncan Smith]

I understand fully what my hon. Friend is saying and, of course, the parent who is caring for a child in hospital has 84 days in which that child may be in hospital. I also recognise what he is saying about broken-up periods in hospital should someone have a condition that takes them back to hospital again. I would be happy to sit down with him, and anybody else, to look at the issue and discuss whether there are ways to rectify it.

[Ben Gummer]

I congratulate my right hon. Friend on the reforms he is bringing in. Social mobility and poverty were manifestly not improved by 60% during the previous Government’s regime, although the bill went up by 60%. However, people such as my constituent, Mr Martin Wilsher, who is visually impaired, still have concerns about some of the reforms being introduced. What reassurances can my right hon. Friend provide to Mr Wilsher?

[Mr Duncan Smith]

First, as my hon. Friend knows, this is about the disability living allowance and the personal independence payment, and the reality is that DLA will not be included in the changes. More than that, it is important to note that through discussions over the introduction of PIP, a good and warm welcome has finally come from the Royal National Institute of Blind People. After recent discussions it said that the PIP criteria include a number of

“significant improvements for blind and partially sighted people.”

The changes we are making to PIP, after guidance from that organisation and others, will help people such as my hon. Friend’s constituent.

[Jessica Morden (Newport East) (Lab)]

Last week in Westminster Hall Ministers made great play of the savings that the Government might expect from the bedroom tax. In Wales there is a chronic shortage of smaller houses, so why will the Secretary of State not admit that those who are hit by this cruel policy in Wales will have to go into the insecure private sector where rents will be higher and local housing allowance rates will cost more?

[Mr Duncan Smith]

What the hon. Lady and her party presided over when they were in power was a complete mess in housing—[Interruption.] It is all very well for Opposition Members to shout like a bunch of discombobulated monkeys bouncing up and down on the Benches; the reality is that their housing benefit record left many thousands of families unable to find housing because they were in a queue, while others occupied housing that had far too many rooms. We have to put that right, and that is what we are doing. The Labour party never did that when it was in government.

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

Although I am not a vindictive person—at least, I hope I am not—I would like to see the Secretary of State and his colleagues, plus the Prime Minister and the Chancellor of the Exchequer, try to live, just for six months, on the income of those who have been adversely affected as a result of the cuts carried out by the Government over the past two years. Try and live on that sort of income; see what it is like not having any recourse to private income.

[Mr Duncan Smith]

I have known the hon. Gentleman for a long time, and the reality is that none of these decisions is taken lightly by this Government—indeed, any Government. I remind him, however, about all those people who, because of the mess in which the previous Government left the finances, have found themselves out of work or with incomes falling. When he talks about vulnerable people, it is this Government who have increased the pension and made it better for some of the most vulnerable people in society.

[Helen Goodman (Bishop Auckland) (Lab)]

Under the current rules, citizens from some eastern European countries are entitled to housing benefit and working tax credit, but not to income-related jobseeker’s allowance. Will the Secretary of State set out for the House what the position of these people will be once universal credit, which will wrap all the benefits up together, has been introduced?

[Mr Duncan Smith]

It is our intention to try to ensure that under universal credit the loose access to benefits that has been enjoyed by far too many people coming into this country who have no right to them will actually be limited. I will be able to brief the House much better on that as and when we complete the rules on it.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

Obviously the Secretary of State has made mention of the benefits uprating being capped at a 1% increase. Has he had any discussions with the Chancellor of the Exchequer about what that will do to growth or about the impact that it will have on the economy over the next three years?

[Mr Duncan Smith]

I have lots of discussions with the Chancellor on a regular basis, all very amicable. Of course we have to discuss this in a wider context, but the hon. Gentleman and his party look at this in a very narrow context. They say, “Well, you withdraw this money from people on benefits and that immediately has an effect on the high street.” If that were all that we were doing, I would agree with him, but it is not. There is a major programme for investment in industry and a huge capital spending programme, not least as will be announced in a statement later today. These will have an even bigger effect, in a positive way, on spending in the high street.

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

9. What estimate he has made of trends in the number of people in Easington constituency claiming jobseeker’s allowance in 2013.

--- Later in debate ---

[Catherine McKinnell (Newcastle upon Tyne North) (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 millionth jobseeker signed up to the universal jobmatch service, launched before Christmas, which is revolutionising how claimants look for work—with online job searching and matching through DWP on a scale never seen before. The system works 24/7 to find jobs that fit with people’s skills, location and working patterns, which means that their CV works for them even while they sleep. The service harnesses new technology to improve their prospects, and was launched on time and on budget.

[Catherine McKinnell]

It would appear that about 430,000 women born between 6 April 1952 and 6 July 1953 will not qualify for the new pension, while men of the same age will. What does the Minister have to say to the 1,700 women in Newcastle potentially affected by this unfair situation?

--- Later in debate ---

[Mr Philip Hollobone (Kettering) (Con)]

The winter fuel allowance is a non-contributory benefit, yet every year we spend tens of millions of pounds on winter fuel allowance for pensioners who live abroad in far pleasanter climates than our own. Is there nothing that the Government can do within the terms of the EU directive to ensure that such payments cease and that pensioners in this country benefit from that money?

[Mr Duncan Smith]

This is a matter that we are looking into. As my hon. Friend knows very well, it is caught under European law; however, the recent judgment that came out said that we had to make these payments. There might be other ways we may be able to limit that exposure, and I will be able to let my hon. Friend know later in the day.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

T5. Teacher Dawn Lewis in my constituency is one of 600 women who will lose out because of the perverse pension rule that my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) drew attention to earlier. Is the Minister at all worried that this looks like yet another coalition attack on working women?

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

On the Government’s benefit changes for housing, foster carers have expressed their concern to me that they might be inhibited from doing their good work by the extra penalty for having a spare room. Can the Secretary of State or a Minister give me some reassurance that the amount of fostering that we currently have—and need—can continue without financial disadvantage?

[Mr Duncan Smith]

We are of course working closely with the Minister responsible at the Department for Education—the Under-Secretary of State, the hon. Member for Crewe and Nantwich (Mr Timpson)—whose record on this is unimpeachable, as my right hon. Friend knows. He also should recognise that we have laid aside £5 million specifically to help with foster carers in the situation he described. However, we are in discussions with local authorities, county councils and the Department for Education about how best the money can be used to ensure that it specifically helps foster carers in this area, so that they suffer no hardship whatever, but can continue, and we can encourage more people to become foster carers.

--- Later in debate ---

[Teresa Pearce (Erith and Thamesmead) (Lab)]

T9. Given the inability of Her Majesty’s Revenue and Customs to write to all parents affected by the recent child benefit changes, I have serious concerns about the real-time information that will need to be delivered if universal credit is going to work and succeed. In September, the Minister for Welfare Reform, Lord Freud, said that 99.8% of the data sent by employers had been matched, yet a parliamentary answer from the Exchequer Secretary on 17 December revealed data from the same month showing that only 71% had been matched. Which Minister has got it right?

[Mr Duncan Smith]

The hon. Lady is confusing two answers. The answer that she received from the Treasury—from Her Majesty’s Revenue and Customs—was to do with checking against the references of the accredited companies. That was a process that was looking for 80%, and it was achieving just over 75%. What my hon. Friend the Minister was saying was that the number of companies being brought on to the pilot was exactly in line with the number that is there. I can promise the hon. Lady that, if she really wants me to, I will give her a written answer to that question as well.

[Mr John Redwood (Wokingham) (Con)]

Is the Secretary of State looking favourably on the idea that workers coming here from Europe to earn a living should have to establish a contribution record over a reasonable period of time before becoming eligible to receive benefits?

[Mr Duncan Smith]

The Minister of State, Department for Work and Pensions, my hon. Friend the Member for Fareham (Mr Hoban) and others are engaged on this matter with our European partners. We do not think it right that somebody who has made no contribution to this country should be able to walk in here on day one and take benefits, as is being proposed. I promise my right hon. Friend the Member for Wokingham (Mr Redwood) that I will not allow that to happen.

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

T10. The Minister has failed to justify to the 430,000 women in the rest of the country, or to the 500 women in my constituency, born between 5 April 1952 and 6 July 1953 why they will receive a state pension of up to £1,900 a year less than a man born on the same day as they were.

--- Later in debate ---

[Mr Duncan Smith]

We do not expect anybody to lose their homes as a result, but I must tell the hon. Gentleman that his Government sat for a large number of years without building any houses, watching housing benefit rise and people sitting on waiting lists to get houses, so crocodile tears from them now they are in opposition are a waste of time. We will sort the problem out, and I hope they will not be in government for a long time to come.

[Mark Pritchard (The Wrekin) (Con)]

Most EU migration has been of real benefit to Britain, but may I ask the Secretary of State what plans he is putting in place to stop Bulgarian and Romanian migrants claiming welfare benefits from 1 January 2014, thus driving up the welfare bill for UK taxpayers?

[Mr Duncan Smith]

We inherited a situation in which there were rules guarding against that happening to those who come in. To put the record straight, habitual residence tests and other rules require that those who come into this country are involved in some form of work. My hon. Friend also knows that European legislation is before us at the moment that tries to allow those coming in to claim benefits on day one. We are utterly opposed to that: we are fighting it, and it is not my intention to see it happen in any way.

Welfare Benefits Up-rating Bill

Iain Duncan Smith Excerpts

Monday 21st January 2013 Commons Chamber

[Kwasi Kwarteng]

I could not have put it better myself. My hon. Friend has made an important point about employment, which touches on a wider point about the division between Government and Opposition. The Labour attempt to create a socialist state by means of Government spending led to absolute disaster, as it always does. We will not be able to create jobs simply by expanding the public sector ad infinitum; logic tells us that that is not going to work.

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

I am pleased to note that my hon. Friend ascribes efficiency and a real plan to the Labour Government, but that great plan of theirs to create a socialist state ended in the payment of tax credits to people earning more than £70,000 a year. Who were they helping in that regard?

[Kwasi Kwarteng]

This is anecdotal evidence, but I was reliably informed that a couple of Liberal Democrat Members of Parliament were claiming tax credits on the basis that they were entitled to them. That is the sort of barmy universe that was constructed under the last Administration, and it is something that we have had to redress. When we consider matters such as those that we are considering today, we must always bear in mind that, given a budget deficit of £170 billion—more than 12% of GDP—it is very difficult to curb public spending sufficiently to enable the country to pay its way on a sustainable basis.

--- Later in debate ---

[Mr Duncan Smith]

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

The Bill moves into its Third Reading with—I believe—its fundamental principles intact. I thought that my hon. Friend the Minister of State’s closing speech before the votes answered, in detail, many of the questions that remained after the debate on the amendments, but now, on Third Reading, I think it important to make further progress.

The arguments that we advanced when we presented the Bill were first and foremost about affordability. Our main argument concerned the need to reduce the historic deficit left by Labour. As I have said to my colleagues throughout the coalition, at no stage have we made our decisions lightly. This is not something that, at the start, we would have wanted to do, and I want to come back to that point in a moment. We were left a legacy of disaster and spending that was out of control, and our priority must be to get that back under control. If we do not do that, the poorest in society will fare the worst—that is the main point to make.

Let me give an illustration of the point I was making. Under the previous Government public spending ran to excess, while the cost of working age welfare increased by some 60% in real terms, as has been said on a number of occasions. Money was poured into what became an over-inflated system; as my hon. Friend the Minister of State, has said, for every £3 taken in tax £4 was actually borrowed, with the result that we had a growing deficit. It was one of the worst deficits in Europe, if not the worst in the western world. We spent £170 billion on tax credits alone between 2003 and 2010. For all the talk about this being absolutely about people in work, 70% of that money went on child tax credits, chasing a target that Labour never hit, and that was payable regardless of whether parents were in work or not.

[Mrs Anne Main (St Albans) (Con)]

Will my right hon. Friend give way?

[Mr Duncan Smith]

No, I am going to make a little progress now, although I will give way later. I recognise that some who did not get a chance to speak earlier may wish to say a few words, and I want to give them a little time to do so.

The previous Government appeared to have no care or concern for the fact that more than £10 billion was wasted and lost eventually through fraud, error and overpayments, nor that the rest of the money altogether failed to meet its aim. There was already a problem with fraud and error on tax credits, but, worse still, the previous Government did not even record overpayments, so we have no idea to what degree that system was damaged. However, we do know—

[Mr Byrne]

rose—

[Mr Duncan Smith]

I said that I would make a little progress and then give way. I wish to make one point, which is that £4 billion has had to be written off as a direct result of this inability to get the money back, with a further £4 billion likely to be written off directly as a result of Labour’s massive failure to control that budget.

The second part of our approach is important and it relates to the issue of fairness, which my hon. Friend the Minister of State addressed. We do not do these things lightly, but we do want to make sure that those paying the tax bill for those receiving it in welfare recognise that their taxes are well spent; we want to ensure that those in work paying their taxes do not see the rises for those on welfare outstripping their own. We have already discussed the increases, so this is fundamentally an issue of fairness.

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

rose—

[Mr Byrne]

rose—

[Mr Duncan Smith]

I said I would give way, so I will give way to the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) now.

[Mr Byrne]

Over the past month or two, as the Secretary of State has warmed up the debate for tonight’s Bill, he has launched attack after attack on tax credits. Will he just accept the principle that tax credits are important in helping to make sure that people are better off in work and, indeed, that that is why he is not abolishing tax credits but incorporating them into the new system of universal credit? Will he just set that point straight for the House?

[Mr Duncan Smith]

I have said all along that I do not doubt that at the beginning the intention was to try to improve the lot of those working on low incomes; I have never attacked that as a principle. The point I am making tonight is that there seemed to be a loss of control. In 2005, the then Government stuck a 58% increase into tax credits just before an election—almost 70% of all the money in tax credits goes on child tax credits—and they were, in a way, bribing an electorate in the hope that these people would vote for them because they felt that there would be some reason why they would not get the money afterwards.

I wish to make one important point to the right hon. Gentleman on tax credits, because he has asked me about them. The reality was that the previous Government ended up, through tax credits and child tax credits, attempting to chase a target that, as the economy improved, ran away from them. This became spending for an arbitrary target, and the taxpayer was chasing a target that the previous Government never achieved.

[Mr Byrne]

rose—

[Mr Duncan Smith]

I will not give way. Progress on tackling child poverty stalled, and the previous Government missed their 2010 target by some 600,000 children.

[Debbie Abrahams]

rose—

[Mr Duncan Smith]

No, I will not give way yet. From 2004 until the last election the previous Government spent £171 billion trying to hit their target, and that was where the problem came from. They wrecked what might have been a good process because they turned it into a target-chasing process, which never succeeded finally.

[Debbie Abrahams]

Some 200,000 children will be pushed into poverty as a result of this uprating measure, according to the assessments, so how can the Government claim to have any commitment to reducing child poverty?

[Mr Duncan Smith]

Let me put the figures in the round within the period of spending review. My hon. Friend the Minister of State made a very good point, with which I agree and which I have made in the past—we do not trumpet our progress because we think the process of setting a target around 60% of the median income line was a recipe for nightmare problems and excess spending. We do not claim that that is the right way to measure the problem. The hon. Lady will have noticed that in answer to a parliamentary question last week, we said that we will go into full public consultation about a better way to measure real child poverty that the coalition Government will set and measure ourselves against—[Interruption.] Income will be part of it, but not the dominant part that her Government made it. If she and her party were honest—when I made this point on Second Reading, I noticed one of her Front Benchers nodding his head—they would admit that when they worked out the arbitrary target in 1997-98, they thought that they would not be in power that long and that they could achieve the targets along the way. What they ended up in doing was create a nightmare for themselves.

Some £170 billion were spent on tax credits but targets to halve child poverty by 2010 were missed by 600,000. Easier successes were found and then later the rate fell from 26% to 23%. It dropped further between 2002 and 2005 but that coincided with a 75% increase in spending on tax credits from £13.2 billion to £22.9 billion. Throughout that period, the amount of severe child poverty was absolutely static.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

The Secretary of State knows that the Liberal Democrats are not comfortable about this sort of Bill, but my hon. Friend the Minister of State argued that, in difficult circumstances, we must take difficult measures. Will the Secretary of State reaffirm the Government’s commitment to taking children out of poverty, to the basic principles of the welfare state and to go on seeking to ensure that all those who cannot work through no fault of their own—carers, unemployed people and pensioners—will continue to be supported? Will he reaffirm that we intend there to be a fairer society at the end of this Government than there was at the beginning?

[Mr Duncan Smith]

That is my genuine intention. My right hon. Friend will know that his hon. Friend the Minister of State and I have worked to ensure that what we do to get the deficit down through universal credit and the other reforms—even those for pensions—will improve the lot of the poorest in society. If we take the figures on that relative income point across the period covered by the spending review, we can see that some 350,000 children net will be lifted out of poverty, even if we take into account the effect of this Bill. I can tell my right hon. Friend that that is absolutely our purpose and one that I believe we can stand by.

[Alun Cairns (Vale of Glamorgan) (Con)]

Will my right hon. Friend give way?

[Mr Duncan Smith]

I want to make a little progress before I give way again.

We need to remind ourselves that although the Opposition spent the debate in Committee going on and on at my hon. Friends about taxes on the wealthy coming down, we are raising more in tax from the wealthiest than they ever planned to throughout the whole of their spending programme. Hon. Members should remember that Labour was the party that said early on that it was

“intensely relaxed about people getting filthy rich”.

We will take no lessons from the party that did not raise the upper rate to 50% until the last month or two before it lost the election.

[Hugh Bayley (York Central) (Lab)]

Will the Secretary of State give way?

[Mr Duncan Smith]

I shall give way in a second, but I want to make a little more progress.

Let me deal with the point about deficit reduction, which is really important. The Opposition did not answer a key question during our debates in Committee. They have voted against every single measure to reform and reduce the overall spending on welfare so that we can get the deficit under control. Let me quote somebody whom they might remember. The quote is this:

“from 2005 onwards Labour was insufficiently vigorous in limiting or eliminating the potential structural deficit.”

That was their former Prime Minister, Tony Blair. I agree with him. In 2005 the previous Government raised spending dramatically as a device for electoral success, as we said earlier. Time and again Labour has voted against our reforms.

[Mr Byrne]

rose—

--- Later in debate ---

[Mr Duncan Smith]

Before I give way, let me give some examples. The Opposition opposed the Welfare Reform Bill, and that would have cost £2.1 billion in extra spending. They rejected the benefit cap—a further £500,000. Reversing tax credit savings would cost £5.5 billion. Reversing the child benefit savings would cost £1.7 billion. Voting against this Bill would cost another £1.9 billion. That money would need to come from somewhere.

If I give way to the right hon. Gentleman now, I would like to hear him tell us how exactly he would reduce the overall spending. Please, nothing on the bankers bonus tax, which has been spent at least 10 times already. If he tells us that he would get long-term unemployed people back to work, he should remember that under his Government the long-term unemployed figures doubled.

[Mr Byrne]

I am grateful to the Secretary of State for giving way. We have said that contributory employment and support allowance should be limited to two years. We have said that there should be an independent gateway for disability living allowance. We have said that we should switch the way we uprate benefits from RPI to CPI. We have said that there should be a benefit cap which, yes, is different in London from the rest of the country, but a benefit cap none the less. We have said that disregards in tax credits should be reduced. Crucially, we have said that there should be a two-year limit on jobseeker’s allowance. That is a far bigger list than the current Chancellor of the Exchequer ever set out when he was in opposition. We think welfare spending should come down. We think getting people back into work is the way to do it. That is why we think the Secretary of State should have brought forward plans to sort out the Work programme, which is failing, and to fix universal credit, which is in disarray.

[Mr Duncan Smith]

I wonder why I bothered to give way to the right hon. Gentleman. Every one of those statements was a spending commitment. They were not reductions. Every one of them would still leave a Labour Government with a vast bill to pay. I remind the Opposition that what they have opposed remains the reality. They are stacking up spending commitments without one single observation about how they would make the savings necessary to cut the deficit that they left us—one of the worst deficits, as I said before. Their proposed raid on pensions, which they wanted to talk about, would not cover it. They have already spent several times over all their little gimmicks. Voting against the Bill is another spending commitment.

[Hugh Bayley]

rose—

[Mr Duncan Smith]

I will give way to the hon. Gentleman, but first I want to deal with some of the claims that the right hon. Member for Birmingham, Hodge Hill made in the course of the debates on the Bill. The first claim that he made was that spending on out-of-work benefits was falling before 2010. That is not true. The figures published show that between 1997-98 and 2010-11 spending on out-of-work benefits rose by £2.6 billion. There we have it. Even the Opposition’s attempt to whitewash what was a very small idea is not true. Overall benefits and tax credit spending increased by £75 billion, from £122 billion to £197 billion, which is 60% in real terms.

The Opposition’s decision to vote against the Bill has financial implications equivalent to 48,000 nurses’ salaries or more than 500,000 primary school places. That is the kind of mess that they have got themselves into because they have taken the easy course in opposition, which is to oppose everything and to come up with no serious proposals.

[Hugh Bayley]

In York there is a particularly large gap between private sector rents and the levels of housing benefit because the broad rental market area for York includes a number of towns 20 miles away, such as Malton, Norton and Easingwold, where rents are about 40% lower. A new clause was tabled that suggested that the Department should analyse those gaps on an annual basis, but there was not time to discuss it. How would the Secretary of State respond to that proposal? Would he support such a proposal if it were made in another place?

[Mr Duncan Smith]

We are always analysing what we are doing with local housing allowance and housing benefit generally, so that is an ongoing process for us. We are also testing our proposals for universal credit when it comes to housing.

I know that I need to conclude, but I want to say something, as the hon. Gentleman touches on the subject. When we brought in the housing benefit changes, we heard all sorts of threats that those would lead to total disaster. One of the myths propagated by the Opposition was that 82,000 people across London would lose their homes. The reality is, so far, that the figure is up by just under 600. The myth was that 134,000 people would have to move or become homeless. The reality is that across the country, the numbers of those in temporary accommodation is up by only about 900.

In conclusion, the changes that we are putting forward are down to the first point that I made, the second point being that we need to carry them out in the fairest possible way. As my hon. Friend the Minister said earlier, we do not take this course of action lightly, but we know that if we were to go on borrowing at the rate that the last Government would have, we would punish the poorest.

I say to the Opposition that it is not good enough simply to take the easy course. When in government, they left us with the worst deficit and high borrowing that would have completely devastated those who pay their mortgages. They need to come to the Dispatch Box and tell us now how they would be fair to those who have to pay the highest tax bills.

Welfare Benefits Up-rating Bill

Iain Duncan Smith Excerpts

Tuesday 8th January 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.

The Bill, which stands in my name and that of my right hon. and hon. Friends, is about the renewal of what I believe is a principled welfare state based on affordability, integrity and fairness. For the convenience of the House, let me explain that I intend briefly to run through the features of the Bill, and I will then open up the debate to take interventions and deal with the amendment.

This Government inherited from the previous Government an unsustainable and costly system, and a welfare state that I believe delivered poor social outcomes, trapping people in dependency, as well as a poor deal for Britain’s taxpayers. My opposite number, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), needs no reminder of that as it was he who, when we arrived in government, told us that there was no money left. That was the result of a recession that was later discovered by the Office for Budget Responsibility to be deeper and sharper than anyone thought. The original estimate—

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

rose—

[Mr Duncan Smith]

I will give way in a moment. I am in the business of having the right hon. Gentleman justify his own position so I will be happy to give him a chance, but let me finish this point. The previous Government originally claimed that the shrinkage in the economy was 5.8%. In fact, as the OBR later pointed out, at 6.3% the shrinkage was deeper than we had ever seen before—the biggest shrinkage in the economy since world war two.

[Mr Byrne]

I am grateful to the Secretary of State for giving way so early in the debate. Will he confirm to the House that on his watch the welfare bill has risen nearly £14 billion higher than anticipated?

[Mr Duncan Smith]

I am glad that the right hon. Gentleman raises that point because a huge part of that is spending on pensions. He will know that we are spending more on pensions and provide a better deal for pensioners than his Government ever did. Until this Bill, the Government continued to raise welfare payments in line with inflation; this is the first time that we propose not to do so. That will take effect through the uprating order that should be laid before Parliament later this month. The Bill provides that discretionary working age benefits and tax credits will be uprated by 1% for a further two years in the tax years 2014-15 and 2015-16, if prices have risen by at least 1%. The schedule to the Bill sets out the benefit payments and tax credits in question, which are listed in full in the explanatory memorandum. By providing for those changes in legislation, we can provide certainty for taxpayers, the markets and claimants.

A number of exceptions to the Bill are not included, and a number of benefits remain outside the scope of the Bill. We are maintaining our commitment to the triple lock so that the basic state pension will rise by 2.5%. In April 2013, pensioners will see an increase of £2.70 on last year—far more than the derisory 75p that Labour gave them in 2000—and I stress again that we introduced the triple lock to guarantee that. Crucially, we are also protecting disabled people and carers. Benefits to cover the added costs faced by these groups will continue to be linked to price inflation.

[Several hon. Members]

rose—

[Mr Duncan Smith]

I will give way in a moment. That includes carer’s allowance, disability living allowance, and new personal independence payments, as well as premiums paid to disabled people receiving working age benefits such as the disability additions in tax credits, and the support group component of employment and support allowance.

[Several hon. Members]

rose—

[Mr Duncan Smith]

The hon. Member for Edinburgh East (Sheila Gilmore) was first.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Secretary of State has stated that benefits have been raised in line with inflation, but he did not say that tax credits— 2,000 people who are affected by the Bill are in work and receiving benefits such as tax credits—have not been increased for the past two years. In fact, they have been frozen.

[Mr Duncan Smith]

It is interesting that the hon. Lady raises that point, because under the Labour Government, tax credits absolutely boomed. In 2005, there were increases of 58%. Overall, there were 340% increases in tax credits, 70% of which goes to child tax credits. The hon. Lady says that tax credits should continue to rise, but she can make that argument in due course.

[Helen Goodman (Bishop Auckland) (Lab)]

Will the Secretary of State admit that the social security budget is going up on his watch because unemployment is rising faster than his colleague expected?

[Mr Duncan Smith]

Never let a good fact get in the way of a good argument. Unemployment is falling, youth unemployment is falling, more women are in work than ever on her watch, and long-term unemployment is flattening out. The reality, therefore, is that we have better employment figures—there are 1 million new private sector jobs, which outweighs the public sector jobs we have had to get rid of. The reality is that the rate of unemployment, at 7.8%, is better than the EU average and better, almost for the first time, than the United States of America.

[Mr Byrne]

It is significant that the Secretary of State has just admitted for the first time that welfare spending on his watch is rising £14 billion higher than projected. Will he go a step further and confirm his understanding of the OBR figures that show that the claimant count is forecast to rise by a third of a million more than anticipated over the next few years? Will he admit that, yes or no?

[Mr Duncan Smith]

I should remind the right hon. Gentleman that the claimant count was forecast to rise but has fallen throughout all those forecasts. I know it is inconvenient for the Opposition, who would rather unemployment rose than fell, but unemployment is falling. Many countries in Europe would give their eye teeth for the employment figures in this country.

[Derek Twigg (Halton) (Lab)]

On disabled people, paragraph 24 of the Secretary of State’s impact assessment, which has just been published, states:

“Nevertheless, despite this protection…those households where someone describes themselves as disabled, (under the DDA definition) some of whom will not be eligible for a disability benefit, are more likely to be affected than those where there is not a person”

in that category.

[Mr Duncan Smith]

There are two good reasons for that. First, families in which there is some disability are often more likely to include people who have claims on other benefits. Some of those will be affected by the change.

[Derek Twigg]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

No. That is exactly the reasoning behind what the impact assessment says. The second reason is that, as part of employment and support allowance, the support group is protected. However, people who are described in the terms of the Bill as qualified under the Disability Discrimination Act 1995 and are not in the support group will find that they will be affected by the 1% increase. Therefore, by and large, the benefits for those who are disabled and qualified as disabled, and for those in receipt either of support payments in ESA, disability living allowance or the premiums in many other benefits, are being uprated in line with inflation—[Interruption.] May I finish? The only benefit that is not being uprated in line with inflation is ESA for those not in the work-related activity group. Some of those with disability will be affected because many in their households will be on other benefits. That is the reason.

[Derek Twigg]

rose—

[Mr Duncan Smith]

I think I have dealt with that particular point and will move on—[Hon. Members: “No!”] All right, I will give way to the hon. Gentleman again.

[Derek Twigg]

I thank the Secretary of State for giving way, but I am not clear about what he has just said. Will he confirm his impact assessment, which states that

“despite this protection …those households where someone describes themselves as disabled, (under the DDA definition) some of whom will not be eligible for a disability benefit”—

this is the crucial point—

“are more likely to be affected than those where there is not a person who describes themselves as disabled”?

Does he agree?

[Mr Duncan Smith]

I have just told the hon. Gentleman that the reality is that someone in those households is more likely to be on benefits, but particularly ESA. Let me remind him and the Labour party that they introduced the changes to the work capability assessment and ESA. The Government inherited, modified and improved those measures, but they are part of the reason why that is in the impact assessment.

[Derek Twigg]

Will the Secretary of State give way?

[Mr Duncan Smith]

No. I have dealt with the hon. Gentleman’s point. The truth is that the Labour party is not only against the Bill but against what the Labour Government introduced just before the last election and the work capability assessment. Labour Members have opposed £80 billion of changes and reductions in every single vote and every single motion. I have dealt with his point. They must decide what they are in favour of when it comes to reducing the deficit; otherwise, they will be a laughing stock.

[Charlie Elphicke (Dover) (Con)]

Is not the bottom line that it is very difficult to justify 20% increases in benefits when earnings for hard-pressed families have gone up by only about 10%?

[Mr Duncan Smith]

It is worth pointing out to my hon. Friend that, when the Opposition originally heard about the Bill, the shadow Chancellor and my opposite number—the shadow Secretary of State—entertained the idea that what was wrong with the Bill was that it affected too many people who were in some kind of work through working tax credit. The speculation was that, somehow, they would be prepared to support, or not oppose, measures on those not receiving working tax credit. I notice that there is no mention of that position in the amendment, because they have been clobbered by their left and by the trade unions, their paymasters. Instead, there is a rag-bag amendment expressing opposition to a variety of things, which bears no relation to their previous position. There they go again, denying where they are.

The real question for the shadow Secretary of State and the shadow Chancellor, before they intervene again, is this: having opposed every single reduction to the deficit, what exactly would they do to cut it? They have not a single answer.

[Andrew George (St Ives) (LD)]

We have just heard that one justification for capping benefits at 1% is that, allegedly, benefits have risen significantly more than wages. In that case, would it not be wise for the Government to introduce a measure so that benefits do not increase by more than average wage inflation?

[Mr Duncan Smith]

As I have said, the Bill is about trying to bring that fairness back into the welfare payments process. As my hon. Friend the Member for Dover (Charlie Elphicke) has said, the reality is that in the period since the recession, payments for those in work have risen by about 10% and payments for those on benefits have risen by about 20%. We are trying to get a fair settlement back over the next few years. Eventually, benefits will go back on to inflation.

[Andrew George]

We do not know—the Secretary of State is probably more clairvoyant than I am—what food price inflation will be in, for example, 2016. We are being asked to predict what the circumstances will be in the context of the rather arbitrary figure of 1%. I simply urge my right hon. Friend to keep an open mind, and to have a means by which we will uprate that is fair to both benefit recipients and those in work.

[Mr Duncan Smith]

I accept the point about fairness—that was my point—but the reality is that the Bill is also about getting the overall welfare bill down and in kilter. As I have said on the radio and again today, the key is that we must reduce the deficit—that is at the heart of the measure. The Liberal Democrats joined us in the coalition. I should remind the hon. Gentleman that the No. 1 priority we face is reducing the deficit that Labour left us—the biggest deficit on record of any Government since the second world war. That is the reality, but Labour Members are in denial, so I will move on.

The reality is that affordability—

[Several hon. Members]

rose—

[Mr Duncan Smith]

I will give way in a minute—I want to make progress and I have been quite reasonable in giving way.

First and foremost, under Labour public spending spiralled out of control—[Interruption.] Yes, it did. That left behind the UK’s largest ever peacetime deficit, and interest payments running at £120 million a day—[Interruption.] It is interesting that as soon as I speak about what Labour Members left behind, they go into denial. They try and shout me down because they do not like the sound of it. The reality is—

[Several hon. Members]

rose—

[Mr Duncan Smith]

I will give way in a minute. The reality is that the shadow Chancellor and the former Chief Secretary deny that they left a problem. It was a nightmare, and they should apologise and tell us what they would do to put it right.

[Mr Byrne]

I am grateful to the Secretary of State for giving way again: he is being typically generous. No doubt he, like me, will have looked at the DWP benefit expenditure tables, which show that spending on out-of-work benefits between 1996-97 and 2009-10 did not rise, but fell by £7.5 billion. That is why Lord Freud said that Labour’s record in getting people back to work was “remarkable” and noted that Labour had tackled the long-term dependency on unemployment benefits that it had inherited from the Tories in 1997.

[Mr Duncan Smith]

I notice that the right hon. Gentleman is very careful to avoid telling the House how much Labour spent on tax credits as well. The important point that Labour Members need to realise is that of the total bill for tax credits, 70% had no involvement with work at all. Child tax credits had no work agreement on them whatever. The reality is that Labour spent 340% more on tax credits, 58% before the 2005 election and 29% before the last election, in the hope of buying votes to get it out of difficulty. The result was that the debt we had to pay off was costing us £30,000 every single minute. That is what we had to pay as a result of that expenditure—

[Mr Byrne]

Will the Secretary of State give way?

[Mr Duncan Smith]

I am not giving way to the right hon. Gentleman again. I keep reminding him that he is the man who, when he left office, admitted that there was no more money left. He should apologise for that. Labour has opposed the £80 billion of savings that we have proposed. When he gets up again, he needs to tell the House what Labour would do to reduce the deficit and where it would find the savings. If he answers that question, I will give way to him.

[Mr Byrne]

My right hon. Friend the shadow Chancellor has set out far more about the difficult decisions that we would make than the Chancellor ever made. We have said that uprating of benefits should be slower; that there should be a two-year cap on contributory ESA; that there should be a reduction in disregards in tax credits; that there should be a benefit cap in different parts of the country; and that no one in this country should be allowed to live a life on welfare and languish for more than two years on JSA. The best way to bring the welfare bill down is to get people into work, not give them a failed Work programme.

[Mr Duncan Smith]

I remind the right hon. Gentleman again that we are getting people into work. Unemployment is lower than it was when we took office, youth unemployment is lower and we are getting more people into work. He said that he was in favour of the cap. That is very interesting, because he voted against the cap. He says that he is in favour of a number of issues, but he voted against the Welfare Reform Act 2012. He is against universal credit and the housing benefit changes. He has not agreed to any of the changes that we have made.

The overall bill for welfare rose by 60% between 1997 and 2010—

[Robert Halfon (Harlow) (Con)]

Is not the philosophical underpinning of this debate our wish to create a hand-back society, not a hand-out society? Is not cutting taxes on lower earners the best way to help those on low earnings, rather than recycling their hard-earned money through the benefits system?

[Mr Duncan Smith]

That is exactly the point. Labour Members think that helping people is about trapping more and more people in benefits. It is interesting that under the tax credits system, nine out of 10 families with children were eligible for tax credits, in some cases those with more than £70,000 in earnings. What a ridiculous nonsense they created.

Labour’s system was riddled with fraud and error. HMRC had to write off £4 billion in fraud and error payments and will probably have to write off another £4 billion, so £8 billion has been lost. This Bill is about finding savings of £1.9 billion, but as a result of tax credits Labour lost probably nearly £8 billion. That is the record of the last Government. They should apologise for the mess they left us in.

[Ian Paisley (North Antrim) (DUP)]

I appreciate the Secretary of State’s generosity in giving way.

I welcome the Secretary of State’s confirmation that pensions will not be detrimentally affected by the Bill. Can he confirm that in actual cash terms there will be an increase in benefits?

[Mr Duncan Smith]

That is correct. That is exactly what this Bill sets out. That will also be the case this year.

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

I wish to take the Secretary of State back to the point made by my hon. Friend the Member for Halton (Derek Twigg) about disabled people. We have now gone from the Secretary of State saying that there is a blanket protection for disabled people to him acknowledging in the impact assessment that some disabled people will be affected by these changes. Given that recognition in the impact assessment, can he tell the House how many disabled people his Department estimates will be affected by these changes?

[Mr Duncan Smith]

I stand by what we said originally, and I say it again: in this Bill we have protected people on disability living allowance, as well as people in the support group on ESA. All the disabled premiums in JSA and so on are also protected. I do not know where Labour Members think they are going with all these points, because the reality is that they are basically opposed to absolutely everything. They would spend more money, they would tax more and they would borrow more, and the people who would suffer would be the British people who would have to pick up the bill. That is the reality.

I was making an important point about fraud and error. In essence, more than £10 billion was lost, and we do not even know how much was overspent, because Labour would not collect the figures. Writing off those debts wastes taxpayers’ money. To put this in perspective, the Bill sets out what we are doing at the moment to raise £1.9 billion, but that money could have been raised without difficulty had Labour’s system been better and more efficient.

It is also worth pointing out that, for many of the people Labour Members talk about, universal credit will improve their income dramatically. I have some very good examples of that. Under universal credit, a typical one-earner couple who have two children and rent their home will be £61 better off—including the changes today. A one-earner family with an income of £20,000 and two children will see a net gain of at least £34 a week. That will be a big boost for them and was not taken into consideration in the IFS figures.

The reality is that there is an issue about fairness, which we touched on just now. We should bear in mind that 70% of all households will not be affected by this legislation. Many of our constituents are taxpayers picking up the bill for all these costs, including the deficit and borrowing that the last Government left us. Over the last five years, following the recession, the gap has grown between what people in employment have been earning and what those on welfare have been getting. Those in work have seen their incomes rise half as quickly as those on out-of-work benefits—10% compared with 20%. That is not fair to taxpayers. Returning fairness to the system is critical, and it is one area that Labour refuses to acknowledge. Under the previous Government, taxes rose, borrowing rose and the deficit rose—and they left those bills for the next generation to pay. It is our job to get that under control. These are not decisions taken lightly or easily, but we have to take them and they are in denial.

The shadow Chancellor likes to sound off from a sedentary position. He likes to give it out but does not like to take it. I remember only a few weeks ago that he went around the studios complaining that we were too mean to him. If he does not like it, then he should stop making sedentary interventions.

[Mr John Redwood (Wokingham) (Con)]

Will the Secretary of State confirm that inflation can be particularly tough on people on low incomes who face small increases? Will he reassure people in the country that the Government and the future Governor of the Bank of England will be dedicated to getting inflation down, so that the value of benefits is not eroded more?

[Mr Duncan Smith]

Exactly. Mortgage rates are a critical component of what a household spends each year. Under Opposition plans, if interest rates had to rise because of their messy borrowing and spending, every 1% would cost another £1,000 on a typical mortgage. What have also done as a coalition, which we should be proud of and on which our coalition partners were very keen, is raise the tax threshold. That is taking more than 2 million people out of tax—people who were paying tax under the previous Government. That is serious help and an improvement of £165 a week for the average family.

[Kate Green (Stretford and Urmston) (Lab)]

I want to ask the Secretary of State about the people who are moving into low-paid work. Of the increase in employment in the past year, only 20% has been for full-time work, and so 80% has been for people who are by definition in part-time, and therefore probably low-paid, work. How will they benefit when he is capping the in-work benefits increase by just 1%?

[Mr Duncan Smith]

I will make two points to the hon. Lady. First, the vast majority of people who take part-time work choose to take part-time work. In all the studies we have—I am happy to let her have them; they are in the public domain—only 17% or 18% say that they did not want a part-time job, and wanted a full-time job, so she should not decry those who take part-time work. My second point is that that is why we are bringing in universal credit. Universal credit is about in-work and will be a huge support to those in part-time work, starting this year. The trouble with the tax credit system, which the Opposition are defending despite the fraud, the over-payments and the massive error, is that it lodged people into little silos where they could not move up, out of those hours. If a job moved from 16 hours to 17 or 18 hours, people did not do it because they could not afford to do it. Large numbers of lone parents, as she knows only too well, would rotate out of that and crash back out of work, because the job moved on and they could not stay with it.

The reality is that we are reforming the welfare system to make it better and easier for people who are in part-time work to have improved incomes. That is a part of this overall welfare programme that will deliver an efficient and even-handed system. It is right that the 1% applies across the board, including the tax credit system. As I said earlier about the overall numbers of people affected, of those working households, 20% of all households are affected by the Bill. If tax credits and child benefits were excluded, as the Opposition have prescribed, we would see a requirement to find a further £1.5 billion—yet another amount of money which they cannot say how it would be found. When in denial, like those on the other side of the House, one just votes against everything. A constructive Opposition would give us a proposal on how they would save that money.

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

The Secretary of State has used the word “denial” twice. In previous Budgets and autumn statements, the Government talked about and acknowledged measured child poverty. However, in the most recent autumn statement and in the Bill, there is no mention of child poverty. Will he admit that under these plans child poverty in our country will go up and that that will come at a cost to us all?

[Mr Duncan Smith]

I will say two things about child poverty. First, we want to ensure that the figures published concern the years that this measure covers, and the year in which I will be introducing secondary legislation. The figures will be published next week in time for the debate—the Committee stage will be on the Floor of the House and everybody who is here today can take part.

Secondly, child poverty was calculated based on the median income line, and the previous Government lost control of it. Tax credits rocketed because they were chasing a moving line. As upper incomes rose, so did average earnings, and that is why they had to spend so much money. I remind the hon. Lady that they missed their targets in 2010 by 600,000 children in poverty. Since we have come in, the figures published this June show that child poverty fell by 300,000. I am not going to stand here today and try to claim credit for that fall. The figure fell because we saw the biggest fall in earnings for many years. Does that mean that because earnings fell child poverty has been solved? No, it does not. That is why we are consulting on a better way to measure child poverty.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The Secretary of State brandishes the figure of a 20% increase in benefits in the past five years. In cash terms, jobseeker’s allowance has gone up from just £59.15 in 2007 to £71 in 2012. In other words, in each of those past years JSA has gone up by just £2.50. Is it not the truth that this is a mean and miserable piece of legislation from a mean and miserable Government?

[Mr Duncan Smith]

I hear the hon. Lady’s point; I have to say that I do not agree with her. Benefits have risen, but if she would like to talk to those who are in employment on lower incomes in her constituency she would find that many have seen absolutely no rise in their incomes at all, and some even less than that.

[Jake Berry (Rossendale and Darwen) (Con)]

On that point, I was approached by a member of Manchester constabulary in my advice surgery recently. He said, “How can you justify putting out-of-work benefits up by 5.2% last year, when I have had a pay freeze and I risk my life every day?” Is that not the nub of the argument? People who are in work have to be treated fairly.

[Mr Duncan Smith]

I agree with my hon. Friend. I want to make some progress because he is absolutely right. The reality that Labour will not face up to is that the programme it has put forward is hugely costly.

I want to deal with the programme that Labour put forward in the past week, which I think is in the amendment before the House. I looked at it and it seemed very familiar. I remembered something, looking back over the past 10 years. I went back and had a look at the programme that the shadow Chancellor and his then boss, the then Labour Prime Minister the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) came up with. [Interruption.] I seem to recall that they came up with a programme called StepUp. The right hon. Member for Morley and Outwood (Ed Balls) was an adviser at the time. [Interruption.] Well, he was certainly very close to him. Is he now denying—[Interruption.] Well, there we have it finally: he no longer wants to have the former Prime Minister as his friend. More than that, from his sedentary position, he will probably deny that, late in the hour while the then Prime Minister was troubled and in difficulty, he did not come by taxi or by car to consult him and help him out. A denial of a friend is pretty cheap, and I think we will remember that.

The reality is that the StepUp programme, on which the Opposition have clearly based this new programme, was piloted in 20 areas between 2002 and 2004. It was never rolled out nationally, and I want to quote from the evaluation report. The StepUp programme was all about giving paid employment to people who had been out of work for some two years. The report stated:

“StepUp produces a very modest improvement in job entries…but this is below the level of statistical significance.”

In fact, each of those jobs would have ended up costing £10,000—a massive cost for a very small regard. When they did it—[Interruption.] Wait a minute. When they did it—[Interruption.] They do not want to hear about it. They made a bogus announcement and now they do not want to hear how useless it is. The work prospects of under-25s in the pilot got worse as a result of this programme.

Here is what happened. The Opposition were in a hurry during the Christmas recess, worried about being attacked for having no proposals, so the shadow Chancellor said, “Oh, I remember something we did under the man who used to be my friend, but is no longer my friend. I remember we had this programme.” So they decided to put that out and propose raiding pensions savings yet again to pay for a bogus programme. If anyone thinks for one moment that it would help anybody at all, let me tell them that it is more than a joke—it is pathetic. And it is pathetic that they have done it to try to get themselves off the hook.

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

Has my right hon. Friend pondered this question? The Government are trying to ensure that the social security net works for people who need social security. When does he think that Labour decided that they were not interested in social security, only in bribing the electorate?

[Mr Duncan Smith]

It is in its DNA, so I am not sure when it started, to be honest. The tax credit system was out of control, as I said earlier on, because Labour was chasing a figure it could never reach, and as a result its spending was enormous.

In conclusion—

[Mr Byrne]

rose—

[Mr Duncan Smith]

No, I want to conclude. The right hon. Gentleman will have plenty of time to speak.

[Mr Byrne]

rose—

[Mr Duncan Smith]

Okay, I will give way in a second.

I want to remind the Opposition of what they have done. They have opposed £83 billion-worth of savings this Parliament. That is equivalent to adding another £5,000 of debt for every working family in the country. We hear much about taxing the rich, yet, in this Parliament, the richest will pay more in tax than in any single year of the previous Government—more tax on capital gains, more stamp duty—they will be less able to avoid and evade tax and they will pay more when they take out their pension policies.

We hear much about the bankers’ bonus tax, but Labour would have spent that money 10 times over. This is its great bankers’ bonus tax of £2.3 billion. Let us think about it very carefully. It would have overspent that to the sum of £25 billion—through reversing the VAT increase, more capital spending, reversing tax credit savings and reversing the child benefit savings. We are talking huge sums of money.

[Mr Byrne]

The Secretary of State has the temerity to criticise proposals we launched on Friday, when he is presiding over a Work programme that is literally worse than doing nothing. He stands before the House justifying the position of his Government, which is that it is possible to spend a life on welfare, but we say that is wrong. The way to bring welfare spending down is to get people into jobs, and when there are no jobs we invest in creating them.

[Mr Duncan Smith]

Our record on getting people into jobs is better than theirs. The difference is that Labour spent taxpayers’ money like drunks on a Friday night, with no care or concern for how effective it was. The work experience programme achieves what the future jobs fund did, but at a fraction of the cost. The Work programme is getting more people into work than the flexible new deal programme.

[Chris Bryant (Rhondda) (Lab)]

rose—

--- Later in debate ---

[Mr Duncan Smith]

No, I will not give way to the hon. Gentleman. I think he has a few apologies to make before I give way.

This was Labour’s legacy in government: 5 million on out-of-work benefits, one in five households with nobody working and 2 million children living in workless families—a higher proportion than in any other EU country. In opposition, they have learned nothing. Today’s amendment shows—if Members can be bothered to get to the end of it without falling asleep—that Labour would spend more, tax more and borrow more and let the next generation pick up the bill. The Bill is about picking up the pieces, sorting out the deficit and being a responsible Government.

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

I beg to move,

That this House declines to give a Second Reading to the Welfare Benefits Uprating Bill because it fails to address the reasons why the cost of benefits is exceeding the Government’s plans; notes that the Resolution Foundation has calculated that 68 per cent of households affected by these measures are in work and that figures from the Institute for Fiscal Studies show that all the measures announced in the Autumn Statement, including those in the Bill, will mean a single-earner family with children on average will be £534 worse off by 2015; further notes that the Bill does not include anything to remedy the deficiencies in the Government’s work programme or the slipped timetable for universal credit; believes that a comprehensive plan to reduce the benefits bill must include measures to create economic growth and help the 129,400 adults over the age of 25 out of work for 24 months or more, but that the Bill does not do so; further believes that the Bill should introduce a compulsory jobs guarantee, which would give long-term unemployed adults a job they would have to take up or lose benefits, funded by limiting tax relief on pension contributions for people earning over £150,000 to 20 per cent; and further believes that the proposals in the Bill are unfair when the additional rate of income tax is being reduced, which will result in those earning over a million pounds per year receiving an average tax cut of over £100,000 a year.

It is good to see the Secretary of State fronting the Bill today and to see the Economic Secretary to the Treasury in his place. Where, however, is the Chancellor? It is a disgrace that he is not here in person. Where is he?

[Mr Duncan Smith]

The Chancellor told me earlier he was in Berlin making a speech—a long-term commitment —but he will be back in plenty of time for the winding-up speeches, and he is looking forward to hearing Labour make as much of a mess of it at the end as at the beginning.

[Mr Byrne]

I think it is surprising that the Chancellor is talking to people in Germany, rather than to MPs in the House about the disastrous consequences of his policies.

We know that the Chancellor and the Secretary of State do not see eye to eye on much, but they are jointly and severally liable for the mess and the haemorrhaging of the welfare budget that the Bill seeks to staunch. The Chancellor’s disappearance is a hallmark of the contempt that has been shown for the House today. The impact assessment for the Bill was published at noon. It makes radically different assumptions from the policy costings set out by the Chancellor last year. And now the Government propose to ram the Bill through the House in just one day of debate. They are terrified of scrutiny and exposure. It is turning into a hit and run on working families, and frankly we should not stand for it.

The Chancellor should have shown up, because the Bill is about clearing up the consequences of his failure. His reputation as a maker of recessions is now pretty well established. Every time he has come to the House, he has been forced to downgrade growth yet again, and since he took office he has battered the life out of the recovery that Labour left him in 2010. He is the first Chancellor for 35 years to preside over a double-dip recession. History will not judge him well.

But the Chancellor has a partner in crime: the Secretary of State, the man who has become the Comical Ali of the Government, the only man in the DWP who thinks that everything is fine and hunky-dory—a man who would put Dr Pangloss to shame. Every time he comes to the House, he comes with words of reassurance: everything on his watch is going according to plan. He blithely assures us that the Work programme is fine. We are told that universal credit is completely and utterly on track—not a hiccup to be heard—and that the benefit cap will definitely start in May. The only problem is that he is living in a fantasy land of his own, because everything is not okay, everything is not on time and everything is certainly not on budget. We were promised a Work programme bigger than any yet known to man. So big it could be seen from space. This is a programme that is so effective it is literally worse than doing nothing. It works so well that just three out of 100 people who passed through it passed into sustained jobs. It is a disaster.

Then, of course, we have universal credit—a policy that is now proceeding so smoothly that, it is fair to say, it has earned widespread support and praise from right the way across Government. Members of the Cabinet—perhaps even those sharing a building with the Economic Secretary—are now so impressed that they are telling anyone who will listen at the Daily Mail and elsewhere that it is a “disaster waiting to happen” and that the IT is “nowhere near ready.” The Secretary of State has so much grip on this project that the Prime Minister himself invited him to pack his bags and clear on out of the Department—a vote of confidence that I know rang around Caxton house, because senior officials are now leaving the Department as fast as they can.

Now, of course, we have the news that the benefit cap—which Lord Freud told the other place would absolutely, definitely, without question be introduced nationwide in April—will be introduced in just four London boroughs. This is a record of chaos, delay and impending disaster, and today the Government are inviting millions of working families in this country to pay to clean it up.

--- Later in debate ---

[Mr Byrne]

I would contrast that money with the £3 billion a year that the Chancellor is giving away to Britain’s richest citizens, in a tax cut that will kick in next year, at a time when the Government are cutting tax credits and when Britain’s working families are under pressure. How can the hon. Gentleman possibly justify that, either here or to his constituents?

[Mr Duncan Smith]

I would be grateful if the right hon. Gentleman will now acknowledge that all the OBR’s latest figures show that, under this Government, the wealthiest are paying more in tax than in any single year under his Government.

[Mr Byrne]

Like me, the Secretary of State will no doubt have seen table 2.1 of the Budget, published in March 2012, which clearly shows that in 2014-15, the cost of the tax giveaway will be £3.4 billion. How can he possibly justify that at a time when he is hitting Britain’s working families? Will he justify it now?

--- Later in debate ---

[Mr Duncan Smith]

I asked the right hon. Gentleman a simple question—[Interruption.] Actually, the shadow Chancellor should leave the right hon. Gentleman alone for a second; I think he has a brain in his head. Don’t listen to him; his advice to the last Prime Minister was hopeless. I want to ask the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) a simple question. Here are the figures: the wealthiest in Britain are paying more in tax under this Government than in any single year under the last Government. Does he agree with that?

[Mr Byrne]

We put the top rate of tax up. It is this Government who are cutting it, at a cost of £3.4 billion a year. How can the Secretary of State possibly justify the choices made by his right hon. Friend the Chancellor, a man who has supported him hilt and sword? How can the Secretary of State justify giving away £3.4 billion to Britain’s richest citizens in a tax giveaway when he is hurting Britain’s working families? Justify it now!

[Mr Duncan Smith]

Does the right hon. Gentleman agree or disagree that the OBR figures show that, under this Government, we are raising more in tax from wealthy people than in any single year under the last Government? Will he now admit that?

[Mr Byrne]

I am saying that we should be raising more from Britain’s richest citizens, not giving them a £3.4 billion tax cut to heat their swimming pools while Britain’s working families are being punished. Let us be clear about the effects of the Bill.

Oral Answers to Questions

Iain Duncan Smith Excerpts

Monday 10th December 2012 Commons Chamber

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

8. What his plans are for the future of housing benefit for people under 25 years old.

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

In June, the Prime Minister instigated a debate about the merits and risks of taxpayers continuing to meet the £2 billion bill that automatic entitlement to housing benefit for people aged under 25 brings. More work is required, and that discussion and debate is still going on.

[Mrs Glindon]

Last year, 10,000 young people became homeless because, through no fault of their own, they could no longer live with their parents. Will the Secretary of State give the House a categorical assurance that there will be no further plans in this Parliament to take away young people’s housing benefit?

[Mr Duncan Smith]

I repeat what I said in my first answer: there is a discussion and debate. The policy debates are likely to go ahead, but I have no plans as yet to implement any policy—there are further discussions to be had.

[Meg Hillier]

When the Secretary of State is having those further discussions, perhaps he will take account of experience in my constituency, where around a third of residents are under 24. Nationally, an estimated 400,000 households are headed by someone under 25 who claims housing benefit, half of whom have dependent children. When he is having those discussions, will he consider the impact on children of his policy proposal?

[Mr Duncan Smith]

That would go without saying—all impacts on various groups will be taken into consideration. The main point I would make is that, no matter what else, if we were to implement such a policy, we would have to take into consideration categories of people who might find it incredibly difficult, such as those described by the hon. Lady. There would not necessarily be carte blanche—there would be nuances and changes. However, as I have said, discussions are ongoing, and as she can see, no policy exists at the moment.

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

Does my right hon. Friend share my concern that less than 16% of the 204,300 young people under 25 with children who claimed housing benefit are in a couple?

[Mr Duncan Smith]

That is obviously a matter for concern, but also for wider change. We want to ensure that couples stay together, and our plans and changes with universal credit will help with that enormously. It is worth reminding ourselves of the situation left by the previous Government. Labour Members go on about our policy, but in the past decade the housing benefit bill doubled from £11 billion to £21 billion. We are reducing the overall rise, but housing benefit under this Government will still rise by around £2 billion, as opposed to the huge sum the previous Government would have instigated.

[Hywel Williams (Arfon) (PC)]

What would the Secretary of State say to the GISDA organisation in my constituency, which works with homeless and vulnerable people in marginal and rural areas uniquely through the medium of Welsh? It depends on housing benefit to move those young people into housing, employment and training.

[Mr Duncan Smith]

Up until now, many people have been trapped on benefits, as they will continue to be without change. The point has been made in this discussion and debate that many who are not on housing benefit but on low incomes find that they must make difficult decisions on where to live—on whether to stay at home or share. My point is simply that we are looking at how we bring those who fall under the benefit bill into line with others, thus giving them a greater opportunity to take work and profit by doing well from an early age. That is all the debate is about. It should surely be welcomed as a right debate to hold.

[Ian Austin (Dudley North) (Lab)]

It is interesting that, despite the Liberal Democrat campaign, the Secretary of State is not ruling the proposal out. Young people have been coming to London to get on in life since Dick Whittington. What does the Secretary of State say to the youngster who took the advice of his predecessor, Lord Tebbit, and got on his bike, moved to London, worked hard and paid taxes, but was made redundant? Should he lose his home and have to move hundreds of miles to live with his parents, where there might not be any jobs? All hon. Members want housing benefit to come down, but how would that promote aspiration?

[Mr Duncan Smith]

This Government are doing more to help unemployed young people back to work than was ever done by the previous one. I remind him that his Government left us with rising youth unemployment. They took all those who were unemployed for over 10 months and put them on a course. When those who were unemployed came off the course, they went back to zero, and therefore were never registered. We have a better record than they had.

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

2. What steps he is taking to prevent fraudulent universal credit claims.

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

We are investing £400 million in the next four years to reduce fraud and error as part of a joint operation with Her Majesty’s Revenue and Customs and the Cabinet Office. We are already making progress, and universal credit will enable even greater strides to be made. At the autumn statement, the inclusion of universal credit in the baseline—a critical moment—means we now anticipate savings from fraud, error and overpayments to be roughly £2.2 billion per year.

[Stephen Mosley]

I welcome my right hon. Friend’s response. Any money defrauded from the taxpayer is money taken from those who are most in need. Does he agree that universal credit is one way in which the Government are cracking down on those who are abusing the system?

[Mr Duncan Smith]

That is absolutely true. We were left with a series of benefits that too often were riddled with fraud and error. Not all of this is about fraud. Many people are receiving overpayments or underpayments when they should be receiving the correct amount. Too often with tax credits, people are chased at the end of the year, without their realising that they had received the wrong money in the first place. Universal credit will be kinder in the sense that it will be adjusted each month. It will help us save huge sums—some studies state £2.2 billion per year.

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

The Government’s decision to go digital by default—in other words, people will be able to receive universal credit only if they apply online—surely creates a greater chance of fraudulent activity. We all remember what happened with the online form for child tax credits. What guarantees do the Government have that universal credit will not be susceptible to online fraud and that the necessary checks will not take such a long time that they will delay payment? All of a family’s income will come through universal credit.

[Mr Duncan Smith]

We have taken account of that. I have had the opportunity to discuss this with the hon. Lady, and I am sure I will again. The reality is that digital by default does not mean that that is the end of it for people who are not online. On the contrary, we allow for those who are not online. We will help and support them as they make their claim, and it will be taken through the system. They will receive their money on time. For those in doubt, we will make payments anyway. We fully recognise the reality of the need for money and for it be sorted out afterwards—that has been taken into account.

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

3. What steps he is taking to increase take-up of workplace pensions.

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

11. What evaluation of the implementation of universal credit he plans to undertake.

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

Today we are publishing a high-level framework for evaluating universal credit. A full programme of evaluation is being developed. This will include studies of implementation, covering themes such as claimant, staff and stakeholder experience. This, along with other analysis, will form part of a continuous programme of evaluation on the roll-out of universal credit.

[Nick de Bois]

Will my right hon. Friend reassure me that he will resist the last Government’s temptation always to launch things with a big-bang announcement, often followed by failure? In this case, will he carefully learn the lessons of the pilots he is launching in April?

[Mr Duncan Smith]

The process we are engaged in—by the way, I have fully briefed the Opposition Front-Bench team, so there are no secrets here—involves a pathfinder starting in April, and by the beginning of October we will start the national roll-out. The whole idea is to roll it out progressively throughout the UK, making sure that we learn the lessons as we roll it out. Whatever changes need to be made can be made at that point. It seems to me that that is the reasonable and right way to do these things, but I remind my hon. Friend that we are not only below budget, but on time—and it will be completed on time.

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

No doubt the Secretary of State will confirm that, following the introduction of universal credit, when people’s incomes change they will have to go to the local council to sort out their council tax benefit changes, and to the DWP to sort out their housing benefit changes. Two visits, or two contacts, will be required as a result of one change of income. What progress is the Department making in discussing with councils the need to provide a joined-up service so that, in future, people will need make only one contact when their incomes change?

[Mr Duncan Smith]

The hon. Gentleman is right to raise that issue. We are currently engaging in discussions with local authorities with the aim of ensuring that people receive a proper and comprehensive service, and I assure the hon. Gentleman that that is exactly what they will receive as and when the time comes to roll out universal credit. The point of universal credit is that all the other benefits, including housing benefit, will be combined in a single payment, which will simplify matters enormously for claimants and recipients; and councils will, through council tax benefit, have the opportunity to provide the best possible service for their tenants.

[Sarah Newton (Truro and Falmouth) (Con)]

12. What assessment he has made of Professor Harrington's third review of the work capability assessment.

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[Damian Hinds (East Hampshire) (Con)]

17. What assessment he has made of the potential utility of jamjar budgeting accounts in (a) smoothing the transition to universal credit and (b) increasing financial inclusion.

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

Budgeting accounts will be a useful help for some claimants both in supporting transition to universal credit and in terms of broader financial inclusion, in particular for those claimants who have not managed their money monthly before—that is an important category—or who have not been responsible for their own housing costs.

[Damian Hinds]

I am grateful for that answer. The demonstration projects have shown the value of jamjar accounts, and commercially they could have much wider application. In the tendering process, will my right hon. Friend pay particular attention to the unique possibilities of credit unions, given their local base and links with housing associations?

[Mr Duncan Smith]

I will indeed. We are doing our level best; we are giving credit unions extra money and backing them enormously to get going. I think that they will develop hugely, and I hope that they will eventually replace the payday lenders—it is really important that we all agree about that. On the jamjar accounts and the way we are making these payments, everyone warned us that there would be problems if we paid housing benefit direct. We have trialled that in one of the demonstration projects and, importantly, only 3% of those who receive their housing benefit payments direct are having to revert to indirect payments because they have been unable to cope. That is a major advance from the existing local housing allowance.

[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 announcement made in the autumn statement last week that housing support for those living in supported exempt accommodation will be disregarded from the benefit cap. We have listened to the concerns of organisations including Refuge, Women’s Aid, the National Housing Federation and others. That announcement addresses their concerns, meaning that individuals in very vulnerable circumstances, including those fleeing domestic violence, will be protected.

[Mr Betts]

The Secretary of State will be aware of the direct payments pilot schemes, which are taking place before universal credit, before the bedroom tax and before the changes to council tax benefit. Is he aware that the pilots are showing an increase in rent arrears due to an increase in partial payments? If that remains the case at the end of the pilots, is he prepared to change policy to make it easier for rent payments to be made direct to the landlord?

[Mr Duncan Smith]

I disagree with the hon. Gentleman. The figure I gave in my response to the last of the questions showed that, in actual fact, the pilots are beginning to show categorically that if there is proper management by local authorities, the number of people defaulting is very low. That we can deal with. [Interruption.] Instead of playing games, paying this direct and treating housing benefit tenants as children, does he not think that part of the reason why they crash out of work early is that they cannot cope with the extra responsibility? By getting them ready for that responsibility before they go to work we are doing them a favour, and that figure shows we are supporting them.

[Tracey Crouch (Chatham and Aylesford) (Con)]

T2. Later this week, my constituent Danny Shingles will go into hospital to have a debilitating polycystic kidney removed. I am sure that the Secretary of State is aware that cysts on kidneys burst, poisoning the body and creating great discomfort. While preparing for his operation Mr Shingles is also having to appeal a decision to stop his disability living allowance and employment and support allowance, despite the fact that after his operation he will be entitled to have them again. This is causing my constituent much unnecessary stress, so will the Secretary of State review the guidance given to assessors to ensure that all factors, including the scheduling of operations, are taken into account when making decisions about whether someone is entitled to benefits?

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

Will the Secretary of State set out for the House the projected rise in the dole bill as a result of the Budget?

[Mr Duncan Smith]

I do not believe that there will be a dole rise. The reality is that, under this Government, in the last year we have seen more people back into work; more private sector jobs than were ever created by the previous Government; and more women in work. Unemployment levels have fallen and youth unemployment levels have fallen. Perhaps the right hon. Gentleman would like to apologise for the total mess his Government left us.

[Mr Byrne]

The Secretary of State clearly does not know, so let me help him. The Office for Budget Responsibility says that the dole bill will rise by £6 billion as a result of his failure to get Britain back to work. To pay that price, he is proposing an uprating Bill which, I am afraid to say, sounds all wrong to me. It is wrong to take £4 billion from tax credits, it is wrong to take £300 million from maternity pay, and it is wrong that this strivers tax is going to hit 4,500 working families in his constituency. He should be fixing welfare reform, not flogging working families. Perhaps he would like to tell the House this afternoon just what share of the savings from this uprating Bill is going to come from working families.

[Mr Duncan Smith]

I must tell the right hon. Gentleman that our unemployment figures are better than those originally forecast by the OBR. I remind him—as if he needed reminding—that he left this Government with a 6% fall in GDP, an economy that was on the rack, and debt that was higher than that of any other country in northern Europe and rising every year, with £120 million a day being spent on the interest. Let me remind him of one other thing: he has voted against every single change and every cut we have made to deal with that debt. The Opposition are irresponsible and not fit for government.

[Richard Graham (Gloucester) (Con)]

T3. I welcome the introduction of universal credit next year. However, will the Secretary of State outline how my constituents without bank accounts will in practice be able to access universal credit? Does he agree with the suggestion made by Westgate ward Councillor Paul Toleman that Post Office accounts could be a useful alternative mechanism?

[Mr Duncan Smith]

It is correct that Post Office accounts would be a useful measure in ensuring that we can give people the right kind of choice and the right kind of places for their accounts. Under universal credit, people will be given an opportunity to begin to live their lives in the same way as they would live them if they were back in work. That is a critical and huge change that will allow them to get back into work rather than not have to make the changes that could change their whole outlook.

[Jonathan Ashworth (Leicester South) (Lab)]

T5. The Secretary of State failed to answer the substance of the question put to him by my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) a few moments ago. Of those affected by the 1% uprating, 81% are women and 60% are in work. Is not the reality that this Government are clobbering the strivers?

[Mr Duncan Smith]

I remind the hon. Gentleman that in the autumn statement we yet again raised the threshold, which allow an extra £5 a week for families. Families on low incomes are better off and the average family is £125 better off as a result of the autumn statement.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

T4. Further to earlier questions on this matter, PATCH—Pembrokeshire Action to Combat Hardship—a charity that deals with poverty issues in west Wales, is concerned about the housing component of universal credit. Will the Secretary of State confirm how he intends to define “vulnerable tenants”?

[Mr Duncan Smith]

Vulnerable tenants will be defined as they always have been, as people who for various specific reasons are unable to cope. All those people will be considered carefully and all the mechanisms that we are putting in place—this is the point that makes universal credit different—mean that by ensuring that we identify those who have difficulties, we can get to them and sort out their problems rather than just dealing with the symptoms, such as their being unable to make their payments. We need to deal with why they are in debt, what is happening to their families and whether, say, the family is drug addicted and start to put those problems right before they crash out of work later on.

[Dan Jarvis (Barnsley Central) (Lab)]

T7. The DWP recently published an evaluation that confirmed a net benefit of £7,750 per participant from the future jobs fund, a scheme that originated in my constituency. That can be set alongside Barnsley college’s successful sector-based work academy, which is already demonstrating its effectiveness in getting long-term unemployed adults into work. Does the Minister understand why, when it comes to reducing long-term unemployment, my constituents have more faith in those schemes, which originated in Barnsley, than they do in the Work programme, which came from his Department?

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[Huw Irranca-Davies (Ogmore) (Lab)]

In my constituency, organisations such as Yellow provide accommodation solutions for young people under 25 so that they can get into work. In his deliberations on the future of housing benefit for the under-25s, how will the Secretary of State identify those youngsters who have suffered traumatic family break-ups, dysfunctional families, and sexual and physical abuse and separate them from the others? It is a genuine practical question.

[Mr Duncan Smith]

I can assure the hon. Gentleman that we would make every effort to ensure that those most vulnerable people would not necessarily be included in a change like this. As I said earlier, this is not a policy at the moment; it is a consultation, and we are happy to listen to anybody about the groups they think ought not to be included in such a policy. I have an open door in that regard, and he is more than welcome to come and see me.

[Andrea Leadsom (South Northamptonshire) (Con)]

T9. Does my right hon. Friend agree that the best outcomes for children are where at least one parent is working? Does he also agree that all Government measures should try to support the best outcomes for children and families?

[Mr Duncan Smith]

I do agree with my hon. Friend. Universal credit should help that enormously through its disregard process, which I call the work allowance. The allowance of a couple with a child will be more than £6,000 when they go back into work; under the present system it is only £520, and under the Work programme it is a little more. The difference is enormous and will provide a real boost and a real income to families and support them at home.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

The Secretary of State will be aware of the ever-increasing number of workplace pensions that are wound up in mergers and takeovers, as happened at Whitbread where former employees have lost their pensions. Will he review the legislation in order properly to protect people’s pensions on mergers and takeovers?

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

Yesterday on the Directgov website, DWP job ID 438253 advertised for female presenters for Loaded TV working at home on internet babe chat. The advert has now been removed from the website, but does the Secretary of State think that DWP should be accepting and promoting jobs for internet babe chat? What does it say about this Government’s values on work?

[Mr Duncan Smith]

I remind the hon. Lady that it was this Government who changed the rules: under her Government, it would have been wholly acceptable, I suspect. The new system is in its national pathfinder and will, I hope, be rolled out before Christmas. We already have checks in place: more than 6,000 jobs, 60 attempted employer accounts and 27 bogus employers have been blocked so far, and we act swiftly if complaints are raised. I remind her that, on average, more than 5 million daily job searchers are working on this system. It will be a massive improvement and will benefit jobseekers, so the hon. Lady should not carp about the odd difficulty that arises. We get rid of the bogus jobs.

[Stephen Lloyd (Eastbourne) (LD)]

I congratulate the Government on extending Access to Work to disabled people on work experience and on removing the need for small companies who employ fewer than 49 people to pay for Access to Work. Will the Minister look seriously at extending Access to Work to disabled people on the Work programme because of the additional cost of their disabilities?