Universal Credit Roll-out

Debate between Iain Duncan Smith and Kate Green

Wednesday 18th October 2017 Commons Chamber

[Mr Duncan Smith]

No, because I am conscious that others want to speak, but I will come back to the hon. Gentleman in a minute.

I recall that my surgery was full of people who, under the tax credit changes, found they had no money at all. When Labour rolled out tax credits in a big bang, over 750,000 people ended up with no money at all. Since then, the thresholds have had to be raised dramatically to get money to those people.

[Kate Green]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

I will give way in one second.

The roll-out of universal credit has been deliberately designed—it is called “Test, learn and rectify”—so that, as it happens, we can identify where there are issues, rectify them and then carry on rolling it out. I want to give an example of why stopping the roll-out now will not work.

One area that we discovered early on is that landlords were simply unaware of who was on benefits. As a result of all that, arrears would be racked up, but they did not know they could get that stopped and have direct payments made. That will be changed in the next stage of the roll-out, because a portal between landlords and the service centre will allow them to establish that immediately. Unlike the local housing allowance, under which people ran up huge levels of debt, but reset slightly and carried on, universal credit allows them only a two-month period of debts before they go on to direct payments. That critical change will be one way of resolving the problem.

Child Poverty

Debate between Iain Duncan Smith and Kate Green

Thursday 25th June 2015 Commons Chamber

[Mr Duncan Smith]

We have got more people back into work and more people progressing through work, and more people are better off. They are better off in work than they are out of work—a fact that the hon. Lady seems to miss completely. The tax changes and the reductions in tax on take-home pay mean that people are actually better off. The answer to her question is simple: we will continue to support people who need that support through getting into work and beyond. That is the purpose of universal credit, she should stand assured.

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

Today’s households below average income survey report, on page 45, makes it quite clear that the percentage of children in relative income poverty has been flatlining since 2011-12, so it is not the policies of either this or the previous coalition Government that have reduced poverty; it is the legacy of the previous Labour Governments. Does the Secretary of State agree?

Oral Answers to Questions

Debate between Iain Duncan Smith and Kate Green

Monday 22nd June 2015 Commons Chamber

[Mr Duncan Smith]

Universal credit will be of enormous help to people with caring responsibilities, and others who are periodically required to be at home, because it will pay to be in work for every single hour. Moreover, under universal credit, as part of the in-work allowances, we have included an extra piece of support for those who care for others, on top of the carer’s allowance.

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

Disabled people do not want kindness; they want justice, and access to the benefits that can help them to live their lives. Will the Secretary of State give them a cast-iron guarantee that there will be no cuts in their benefits, no cuts in tax credits, and no cuts in the disability premiums that tax credits can bring? Disabled people need those assurances, given that, we understand, the Secretary of State has now agreed with the Chancellor that we are to expect welfare cuts amounting to £12 billion.

[Mr Duncan Smith]

Let me remind the hon. Lady what happened during the last Parliament, under a Conservative Government. Spending on disability living allowance was up by half in the decade before PIP came in, and just 6% of new claimants had face-to-face assessments. Under PIP, 20% of claimants receive both the higher rates, as opposed to 16% under DLA. Our reforms are about helping those in the greatest need. Let me remind the hon. Lady of something else as well, just in case she has forgotten. We did debate the overall figure of £12 billion, and Labour lost the election. I remember something that was said by the hon. Member for Leeds West (Rachel Reeves), who is not with us for the moment—I send her my best. She said:

“Labour will be tougher than the Tories when it comes to slashing the benefits bill.”

Is it not a bit of hypocrisy on the part of Labour Members to come here and make their claims, having said that they would be tougher than we are?

[Kate Green]

Labour will be tougher in cutting benefits when that is a response to the wrong drivers of those benefits. What we will not tolerate is cuts in benefits for people who are in work and who need those benefits to enable their work to pay. May I ask the Secretary of State about some of the work-related benefits for disabled people? Will he confirm that there will be no cuts and no downgrading of the payments to people on employment and support allowance in the work-related activity group, and will he tell us whether industrial injuries disablement benefit will be protected from cuts?

[Mr Duncan Smith]

The hon. Lady really needs to think carefully about what she says. Labour Members say that they will be tougher than us. Let me give the hon. Lady a simple pledge: we will protect the most vulnerable. There is only thing that is tough at the moment —tough on Labour Members: they lost the election. They had no idea of how they were going to end the deficit, and that is why they are sitting on the Opposition Benches.

Parliamentary Under-Secretary of State for Welfare Reform (Disabled People)

Debate between Iain Duncan Smith and Kate Green

Tuesday 28th October 2014 Commons Chamber

[Kate Green]

That is absolutely right. As I will show later, on several occasions when I have asked Ministers for information about what is happening, the answer has either been that they do not know or that they do not record the information at all.

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

I have known the hon. Lady for a long time, and I am concerned by a charge she is making. Will she explain to the House why, if this matter of the clumsy and offensive words for which Lord Freud has apologised were of concern to the Labour party to the extent it says, Labour waited weeks after it had the recording to bring it forward at Prime Minister’s questions? Surely if Labour Members were so concerned about this—instead of the faux concern they are now showing—they would have raised it immediately and demanded an apology and an explanation. Why did they not do so immediately rather than wait for weeks?

[Kate Green]

We were so taken aback and stunned by these remarks, and we considered them so offensive and serious, that we considered it right to bring them before the Prime Minister in the highest forum in this land, this Chamber, in the very first Prime Minister’s Question Time that we had the opportunity to do so.

Oral Answers to Questions

Debate between Iain Duncan Smith and Kate Green

Monday 31st March 2014 Commons Chamber

[Mr Duncan Smith]

I am certainly prepared to discuss the matter with my hon. Friend if he wants to come and see me about it. I keep that area of the social fund under review, as he knows. We localised about £200 million of the social fund to councils so that they could deal with the problems people face directly. We also kept the remaining money, so a total of about £1 billion goes out to all sorts of things, such as funeral payments, support for loans and support for people in hardship. This is a big push by the present Government to help people ahead of payday lenders.

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

Last week the BBC reported that just 6% of households affected by the bedroom tax had managed to move. Also last week, a report from Real Life Reform showed that nearly eight out of 10 tenants hit by the bedroom tax were in debt, with borrowing increasing by an average of £52 each week and families increasingly relying on loan sharks. Rather than preaching about careful budgeting, why do Ministers not just scrap this hated and unworkable tax, which is sending people spiralling into debt?

[Mr Duncan Smith]

It is interesting that the Opposition and the hon. Lady take the view that people moving is a bad thing. Let me just tell her—[Interruption.] It is interesting that they say that, but 30,000-plus people—I will repeat that: 30,000 people—who were in overcrowded accommodation have now had the opportunity for the first time to move into houses where they are not overcrowded. The hon. Lady and the Opposition left us with a quarter of a million people in that position—250,000—so in 10 months over 10% have had the opportunity to move and we are saving over £1 million a day. I call that a success.

Oral Answers to Questions

Debate between Iain Duncan Smith and Kate Green

Monday 28th January 2013 Commons Chamber

[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.

Welfare Benefits Up-rating Bill

Debate between Iain Duncan Smith and Kate Green

Tuesday 8th January 2013 Commons Chamber

[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.

Jobs and Social Security

Debate between Iain Duncan Smith and Kate Green

Wednesday 28th November 2012 Commons Chamber

[Mr Duncan Smith]

I just want to pick up on one point and then I will happily give way to the right hon. Gentleman.

The same scant regard for general facts is apparent throughout the motion. The Opposition claim that long-term unemployment is now soaring, yet long-term unemployment nearly doubled in the two years before Labour left office, going from 396,000 to 783,000 in 2010. By the way, just so that the record is absolutely straight, the right hon. Member for Birmingham, Hodge Hill says that Labour had got spending down, but welfare spending rose by 60% under the previous Government.

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

rose—

[Mr Duncan Smith]

I will give way in a moment, but I said that I was going to make these points.

Labour’s policies then went on to try to hide the true scale of the problem, by automatically moving people off jobseeker’s allowance into training allowances or short-term jobs, thus breaking their claim just before they reached the 12-month point. The Opposition claim today that long-term unemployment is up by more than 200,000 since the Work programme began, but in actual fact, comparing like for like, which means counting all those who were previously hidden on training allowances and other support, the total number on jobseeker’s allowance is about the same as it was at the start of the Work programme, so that point is complete nonsense.

--- Later in debate ---

[Mr Duncan Smith]

Guided by you, Mr Deputy Speaker, I shall simply tell the right hon. Member for Birmingham, Hodge Hill that he is wrong. I do not agree with his figures, and anyway, he served in government while the bill for welfare rose by 60% in real terms over the lifetime of that Government. Enough said: we took on a massive problem, and we have to deal with it.

[Kate Green]

rose—

[Mr Duncan Smith]

I shall make some progress, but I promise to give way to the hon. Lady.

Let us deal with the final point made by the right hon. Gentleman in the motion: that somehow all this could be solved if only we did not cut, change or reform anything and implemented a bank bonus tax to fund a real jobs guarantee. Such a one-off tax would be worth £3.5 million. However, we have introduced an annual bank levy, which raises much more money over the period. The Opposition did not introduce such a levy when they were in power.

Let us look at the bank bonus tax that they propose. I love the fact that that tax is wheeled out whenever they are in a corner. It has already been used to cover the spending of £13.5 billion that they committed to make when reversing the VAT increase. It has been used for more capital spending—£5.8 billion—and again to reverse tax credit savings of £5.5 billion. It was used to build 25,000 extra homes—£1.2 billion. It was used again to reverse child benefit savings of £1.7 billion, and more and more.

It is a joke to keep wheeling out that ridiculous programme as an excuse for what the Opposition should be doing, which, as my right hon. Friend the Member for Wokingham (Mr Redwood) said earlier, is telling us what they would do instead, where they would make the necessary savings and how they would reform welfare. That is the main issue.

[Kate Green]

The debate has moved on, but I wanted to say that the rise in social security spending under the Labour Administration was not all in relation to out-of-work benefits. A large proportion related to better payments for children and working tax credit, which subsidised low pay.

[Mr Duncan Smith]

I agree. The only way to look at these things is to consider the overall state of welfare spending. That is exactly how I look at it. As for the point about tax credit, much of it had nothing to do with going back to work, but it supported families for other reasons. The Opposition cannot separate what suits them from the other bits. We have a welfare budget, and they must own up to the fact that it rose by 60%.

Let me deal with what the Work programme really is. It supports 800,000 people—more than any previous programme—and data published yesterday show that it is successfully moving claimants off welfare rolls into jobs, so generating savings in the process. More than half those referred to the programme in June 2011 have since come off benefits, and about a third have spent the past three months off benefit, and a fifth have spent six months off benefit. Independent statistics published on Monday show that 207,000 people, as I have said, have been in work—a fifth of everyone on the programme. What is more, job entries are rising month on month. The figures that we published yesterday showed that in the past two months there was a 40% increase in attachments lasting six months.

We have rejected the old tendency that the right hon. Member for Birmingham, Hodge Hill keeps coming back to—chucking money at programmes in the hope that people will say we are doing something because we are spending money. With the FND, Labour paid out 40% of the fee up front just for signing up someone. Firms never had to do much at all. Under the flexible new deal, the average up-front attachment fee was more than £1,500. More than £500 million was paid out in total, without any assurance of success at all.

Oral Answers to Questions

Debate between Iain Duncan Smith and Kate Green

Monday 5th November 2012 Commons Chamber

[Mr Duncan Smith]

My noble friend Lord Freud has already discussed with all the financial institutions how to construct systems that support people who may have budgeting issues. The phrase “jam-jar accounts” is an unsophisticated term for such systems, but by and large they help people apportion the money necessary for their rent, food and so on, so that they can see that money flow in and then take it out. On housing benefit, a key area of the local housing allowance will be that we will not allow people to build up arrears of debt. We will intervene early to make sure that that does not happen, which should help landlords understand that we will support them.

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

Ministers assured us that the flexibilities introduced for lone parents on jobseeker’s allowance under Labour would continue, yet the number of lone parents who have been sanctioned has risen dramatically. In a written answer on 24 October the Minister said that the reasons for sanctions were exactly the same as those for other jobseekers. Can the Secretary of State explain exactly how those flexibilities are being properly applied and what training is being delivered to personal advisers in Jobcentre Plus?

Universal Credit and Welfare Reform

Debate between Iain Duncan Smith and Kate Green

Tuesday 11th September 2012 Commons Chamber

[Mr Duncan Smith]

First, I will answer the second question. That is exactly what we intend and we believe that we are on track to do just that. The right hon. Gentleman and the House should realise that this is not, as has been the case with previous IT programmes, a “waterfall” approach whereby everything explodes and is launched on one date, which I think the previous Government used to realise was probably not a good idea. This will be a progression over four years, so that, as we bring in different groups, such as jobseeker’s allowance recipients, and first address the flow, then the stock, and then look at tax credits and how they fit in, we can make sure that we get this absolutely right at every stage. We know that there are important things to consider so that people do not suffer as a result of universal credit. We want to get this right, even as we do it.

We agreed on the £2.5 billion figure. That is our position. As we look at all these things, including the disregards, we see that we can realise better ways of doing them. It is a work in progress. That is how we are able to achieve these things, just as when we looked at them originally.

The right hon. Member for East Ham (Stephen Timms) has peppered us with freedom of information requests, which is exactly what an Opposition Member should do. However, it does him and the shadow Secretary of State ill to lecture us about releasing business cases. When they developed employment and support allowance, a system about as large and complicated as this one—I think that the right hon. Member for East Ham was a Minister in the Department at the time—at no stage, despite the request, did they ever release their business plan to us.

[Kate Green]

I wonder whether the Secretary of State will clarify something that he said in response to my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne). He said that the change would be implemented in stages, with first the flow, then the stock and then tax credits. Surely the tax credits for the first claimants to receive universal credit will have to be brought in on the first day of universal credit.

[Mr Duncan Smith]

No; it has always been part of the process that jobseeker’s allowance will be the first to move across. I am happy to discuss that further. Universal credit will run in parallel with the other systems until we shut them down and move them across. That is the way it will work. That has always been clear. I think that the Chair of the Work and Pensions Committee knows that, because I have been open with her about it from the word go.

Oral Answers to Questions

Debate between Iain Duncan Smith and Kate Green

Monday 10th September 2012 Commons Chamber

[Mr Duncan Smith]

Again, I agree with my hon. Friend. We already have an issue that should be dealt with beyond that, with people who declare themselves as self-employed on arrival here—some coming in as sellers on the street, and so on. There is a way in which they can claim benefits. We do not want to open that up to everybody; we would rather deal with that but not lose the habitual residence test, which is my plan.

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

Will the Secretary of State none the less acknowledge that, in fact, migrant workers are more likely to be in work and disproportionately less likely to be claiming benefits than non-migrants? Does he not think it important that we conduct the debate with the facts accurately and reliably portrayed?

[Mr Duncan Smith]

I agree that we want to ensure that the door is open to those who want to come and work here and benefit the UK. That is part of the agreements in the European Union. However, we have concerns, and we are not alone: 17 countries and others are beginning to ask why this is necessary. Freedom of movement exists; what the habitual residence test does is protect our understanding of that, not damage it. Indeed, we have no intention of damaging it, but we certainly want to protect British taxpayers from any kind of change.

Oral Answers to Questions

Debate between Iain Duncan Smith and Kate Green

Monday 25th June 2012 Commons Chamber

[Mr Duncan Smith]

I respect the hon. Gentleman and I am grateful for those comments; I wish that everybody else on his side of the House approached this issue with the same attitude. Work experience has resulted in about half those going on to it getting off the benefits roll. They want to do it—this is really important—and what they are getting from it is experience they cannot otherwise get. Employers say to people time and again, “We can’t employ you because you don’t have experience,” yet they could not get that experience. Surely this has got to be a good thing for them and a good thing for all of us.

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

I, too, support good quality work experience that genuinely enhances employability, but as the Secretary of State seeks to roll out this initiative, what steps are his Department taking to ensure that high quality is maintained and that such work experience does not become a way for employers to churn cheap labour at the bottom?

[Mr Duncan Smith]

Of course, the hon. Lady is absolutely right, and the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), is absolutely focusing on this issue with Jobcentre Plus. If we hear of any programmes that are not in that category, we will not allow young people to go on them. However, the key thing to bear in mind here is that this gives young people a real chance to get something they can sell to an employer. We should all back that, and I wish that more people were like the hon. Members who have just spoken.

Living Standards

Debate between Iain Duncan Smith and Kate Green

Wednesday 30th November 2011 Commons Chamber

[Mr Duncan Smith]

I will indeed. The point I was making was that, as the universal credit comes forward in the next two years, it will do huge amounts to ensure that the incentives to return to work are improved. Secondly—and this relates to complaints from Opposition Members about the tax credit—it will reset the baseline so that those incentives will be increased and improved. Had we remained in the same position as the previous Government with their tax credits, there would be no way back for us now.

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

I am well aware that the Secretary of State has great hopes for the universal credit to incentivise people into paid employment, but does he accept that the cumulative effect of last year’s Budget and spending review, this year’s Budget and yesterday’s statement is that the incentives to work for low-paid employees have been worsened as a result of the reduction in support for child care costs through the tax credit, the cut in child benefit, the freezing of the lone parent and couples element of tax credits and the fact that it is all set against a rise in living costs that families cannot afford to meet?

[Mr Duncan Smith]

Seen over the whole period of this Parliament, and taking into account things such as lifting the tax allowances, the commitment of the coalition to lift them further before the end of the Parliament, and a whole variety of the points that I have already laid out, I do not agree with the hon. Lady. When Opposition Members look back, they will realise that the introduction of the universal credit will result in positive work incentives and we will get people back to work, as we are already doing.

I have already mentioned some of the things that have been introduced in the past year and a half, and yesterday the Chancellor also announced reforms to support working families which no Opposition Member has taken into consideration. We have deferred the fuel duty increase planned for January and cancelled the inflation increase planned for August 2012. The tax on petrol will be a full 10p lower than it would have been without our action in the Budget this autumn, and that means that families will save £144 on filling up the average family car by the end of next year. Fuel and the cost of driving are a very big driver of poverty and we are doing something about it. We are also regulating the rise in fares on national rail, the London tube and London buses, and we have already offered councils the resources for another year’s freeze in council tax, which I hope they all take up. Our plans to raise personal tax allowances will pull over 1 million people out of tax altogether, which is a big incentive for people to go back to work. When the Opposition complain about changes to working tax credits, they should remember their punitive decision to abolish the 10p starting rate of tax. They did not care what happened to the poorest in society.

Oral Answers to Questions

Debate between Iain Duncan Smith and Kate Green

Monday 13th June 2011 Commons Chamber

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

9. What his policy is on the couple penalty in the benefit system.

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

The Government are committed to reducing disincentives in the benefit system. The universal credit provides an enhanced earnings disregard for couples which, along with the taper, will help low-income couples to keep more of their earnings in work. Obviously, over time, it is our intention to work further to reduce the penalty.

[Kate Green]

A widow and a widower each with two children who form a new couple relationship and decide to live together could be £9,000 worse off as a result of the proposed benefits cap. Given reports over the weekend of confusion among Ministers on the fate of the benefits cap, will the Secretary of State assure us that such a couple would not face a couple penalty?

[Mr Duncan Smith]

Clearly, we do not, as the hon. Lady makes out, want to make anybody face any further induced couple penalties. Our plan is to ensure—over a period of time, but particularly in this Parliament—that we work to erode the couple penalty. However, it is worth reminding her specifically what happened under the previous Government, because the baseline that we have accepted is important. The OECD pointed out that a couple needed about 75% of the income of two single people, but the previous Government left them only 60% of those earnings. In other words, the previous Government took far more from couples than most other countries did. That is why we are in difficulty. She should reflect on that when she asks such questions.

Oral Answers to Questions

Debate between Iain Duncan Smith and Kate Green

Monday 28th March 2011 Commons Chamber

[Mr Duncan Smith]

That is absolutely what we plan to do. We will bring forward our proposals shortly. The idea is that the available money will continue to be used for child care support. We recognise how important child care is in helping parents, particularly lone parents, to fit in their obligations to work and to look after their children.

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

Witnesses to the Welfare Reform Public Bill Committee stated last week that incentives for second earners to move into paid employment would be reduced in many cases under universal credit. Will the Secretary of State tell us what assessment has been made of the impact of the universal credit proposals on second earners and on women’s economic independence?

[Mr Duncan Smith]

Yes. The majority of existing and potential second earners will not, on the basis of the figures I have looked at, be affected by the reforms, because the household already has earnings that take them beyond the reach of the benefit system. Approximately—I stress this is an approximate figure—300,000 second earners may see a deterioration in the incentive to increase their hours, and it is possible that some second earners will choose—or may choose as a result of their home commitments—to reduce or rebalance their working hours or leave. However, universal credit will provide much better incentives for the first earner, giving a greater choice to the household about how it wishes to spread its income.

Welfare Reform Bill

Debate between Iain Duncan Smith and Kate Green

Wednesday 9th March 2011 Commons Chamber

[Mr Duncan Smith]

I shall make a little more progress.

May I confirm that we shall move from the universal credit making inroads into the couple penalty to a subject on which I am sure many right hon. and hon. Members will want to speak—child care costs in universal credit? I can confirm that support for child care costs will be provided by an additional element paid as part of the universal credit award. We will invest at least the same amount of money in child care as in the current system, and we will aim to provide some support for those making their first moves into work, so that the support available is not restricted to those working more than 16 hours.

This is an important point. Although there is a debate about it, we must remember that working tax credit gives that child care support to those in the relevant band. Universal credit will allow claimants to adjust their hours of work to suit their child care responsibilities. It will allow people to set their hours of work more in line with their caring responsibilities. It will cover all the hours that people are planning to work. We will be much more flexible, and we intend to work closely with relevant groups to take further advice about the rates that we will set. By the time the Bill reaches its Committee stage, we will be able to be more specific.

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

Can the right hon. Gentleman confirm that as a result of that further consideration, there will be no circumstances in which, as a result of child care costs, a parent could be faced with a marginal deduction rate of more than 100%, as some models prepared for us by Family Action have suggested?

[Mr Duncan Smith]

That is not our intention, and it is why we were are proceeding carefully and consulting about our proposals. The purpose is to maintain incentives to go to work. Universal credit is designed to encourage lone parents to go to work, but it recognises their need to meet their child care responsibilities. We can debate the various elements, but the principle is that the measure should be more than helpful to them. We will move on to the finer detail as we get to Committee stage.

As we increase support to make work pay, it is right to ensure that claimants do everything they reasonably can to find or prepare for work. As the House knows, we will tailor conditionality to individual circumstances, and require all claimants to accept what I call a claimant commitment. From the outset they will be asked to sign up to the idea that we will provide them with the necessary support and access to universal credit, but we will also expect them to recognise that the sanctions regime is applicable. It is easy to understand. If they do not comply with that as they go further through the process, they are likely to encounter that sanctions regime at key moments.

The toughest sanctions will apply to those who are expected to be seeking work but fail to meet important conditions. They should understand that if they keep on crossing a series of lines, they will invoke the sanctions regime. The problem at present is that the regime is often confusing. I have visited jobcentres a number of times—and I see on the Opposition Benches one of the Members who used to be a Minister in the Department. As he knows, if one talks to jobcentre staff, they will say that the problem is that when claimants reach the point where they are about to hit sanctions, it comes as a big surprise to many of them that sanctions will be imposed and that the situation is real and serious.

By letting claimants know much earlier and by introducing a regime that is easy to understand, with a simple tripwire process, they will know from the word go. That should disincentivise people from taking the wrong turns. Benefits will be taken away for three months after a first failure, six months after a second, and three years after a third. That will apply to those at the top level—in other words, those who are fully able to search actively for work and to take it. There are, however, other categories. The same conditions would not apply to lone parents, for example.

Oral Answers to Questions

Debate between Iain Duncan Smith and Kate Green

Monday 14th February 2011 Commons Chamber

[Mr Duncan Smith]

My hon. Friend is right to say that this is one of the most invidious unintended effects of a benefits system, and this country found itself in a worse situation on the couple penalty that most others did because of the interplay and complexity of that benefits system. The universal credit will not immediately end all that, but it will make the situation much better for couples. When couples want to stay together, the Government should never be the thing that forces them apart. The right hon. Member for Birkenhead (Mr Field) has made that clear and I back him up on it completely.

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

Block contracts with care homes often leave individual care plans unclear on what mobility costs are to be met by the home. What guarantees can Ministers give that no disabled person in residential accommodation will find their ability to leave their own home reduced as a result of the removal of the mobility component of disability living allowance?

Welfare Reform

Debate between Iain Duncan Smith and Kate Green

Thursday 11th November 2010 Commons Chamber

[Mr Duncan Smith]

My right hon. Friend is absolutely right. One of the great fears that people have, particularly in respect of housing benefit, is that it can take a month or so before they get their benefit back as they come out of work. Because that will be included at the point at which they make the application and because that is tapered into the benefit, there will be a seamless change or transfer. As they come out of work, they will do so with their gross amount exactly as it should be—the thing that will change is the level at which they taper. In other words, the amount will be what they are necessarily paid in benefits. They will not suddenly have to make a reapplication—there will be a seamless process—which should get rid of exactly the fear that my right hon. Friend talks about.

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

Like my hon. Friend the Member for Aberdeen South (Miss Begg), I congratulate the Government on their intentions to make work pay and simplify the system. I very much wish that project well.

The Secretary of State will be well aware of Labour Members’ concerns that spending announcements to date have hit women twice as hard as men. Will the universal credit be assessed on a household basis? If so, what assessment has he made of the impact of moving money from purse to wallet within that model and of the impact on women?

[Mr Duncan Smith]

The system will assess at household level, but of course, the beauty of that is that we will understand better what household needs are. Two things that will hugely benefit women will flow from that. First, in knowing what that household should have, we will have a much higher take-up rate. Therefore, the in-work poverty that has been terrible until now will hugely be resolved. The second aspect that is really good for women is that, as the hon. Lady knows, many women who have caring responsibilities do short-hours work. The proposal will hugely benefit them because they will retain more of their income as they go into work. They will be beneficiaries, which I hope helps her.

Welfare Reform

Debate between Iain Duncan Smith and Kate Green

Monday 11th October 2010 Commons Chamber

[Mr Duncan Smith]

He may be after my hon. Friend’s vote, in which case we will have to do some quiet talking. It is a ludicrous position to take. We now have a Labour party in opposition which prefers to defend the very wealthiest, and a coalition that wants to defend the worst off.

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

Universal child benefit is the most effective benefit for reaching the poorest children, more effective than means-tested benefits which are designed for them. Can the Secretary of State enlarge on the implications of his comments last week that child benefit will, in due course, be subsumed into his new universal credit? Should I therefore assume that there is no prospect, regrettably, of a universal payment being reinstated when the economy recovers?

[Mr Duncan Smith]

The hon. Lady is right that child benefit has been and will continue to be a very effective mechanism to get money to the poorest families. We are not eradicating the universal benefit in the case of child benefit. We are capping it off at the higher rate. The rest—[Interruption.] Well, 85% of the public will get their child benefit. The hon. Lady asked specifically about the universal credit. I did not say that it would subsume child benefit. I said that as we reform the benefit system, and as the PAYE system is reformed, we should be able to look at these things long after the spending review and look for ways of getting rid of anomalies. Right now, in the spending review, there are no plans to make any such changes. We will do exactly as I said. Child benefit will be removed from families where there is at least one earner above the threshold.