Compulsory Jobs Guarantee

Debate between Iain Duncan Smith and Sheila Gilmore

Wednesday 11th February 2015 Commons Chamber

[Mr Duncan Smith]

But because of what we are doing with local authorities, working through the local enterprise partnerships, and with all the local provision that we have been pushing down, if they want to create additional programmes, Jobcentre Plus will support them through that. We have to be slightly careful, when starting to calculate figures, about one group coming on the back of others, because we will not know how many of those went to work as a result of Jobcentre Plus and how many as a result of the programme. If local authorities, rightly, want to help, we are all in favour of supporting them with extra help.

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Mr Duncan Smith]

I will make a little progress before giving way again.

The issue still remains for the Opposition which I thought this debate was about. I thought they would have a fantastic motion that answered all these questions, but they do not. These are the biggest questions: which businesses have signed up to the jobs guarantee, and how many jobs have they guaranteed to provide? In the absence of any answers, I will quote the OECD’s view of these kinds of make-work schemes. For the past 20 years it has demonstrated that such schemes are expensive and counter-productive. Its jobs strategy states that having

“large deadweight losses, displacement and substitution effect… direct job creation in the public sector has been of little success in helping unemployed people get permanent jobs in a more open labour market”.

That is probably the final word on the structure of Labour’s jobs guarantee.

Let us look at how the Opposition propose to fund their jobs guarantee, which I had thought would be dealt with clearly today. The right hon. Member for East Ham said something about it, but they seem to have gone back to their original position. Her Majesty’s Treasury has estimated that for 2015-16 the jobs guarantee would cost £1.54 billion for the over-25s and a further £540 million for the under-25s, so over £2 billion in total for only one year. To pay for it, the Opposition have proposed two measures.

First, they would restrict pensions tax relief for earnings over £150,000. Let us deal with that first. They originally committed that funding for the purpose of increasing working and child tax credits, so they seem to have done a little dodge. I have no idea whether they still plan to use it for that, but I am sure we will find out. Apparently it will now pay for the jobs guarantee. Never mind the fact that it would take—this is a real estimate from those who know—until 2018-19 to implement, leaving three years with no funding to cover the annual cost of £1.5 billion. They cannot just wave a magic wand and say, “The money’s there”; they also have to position the money at the right time. The right hon. Gentleman was forced by the shadow Chancellor to say that there would be no borrowing. Well, that looks to me like a chunk of borrowing.

That is even if the proposal raises any money at all, because the CBI has called it “simply unworkable”, the National Association of Pension Funds has warned that it is a “disaster in the making”, and the Institute for Fiscal Studies has said that it

“would be expensive to administer… unfair and would inappropriately distort behaviour.”

The Opposition would create a problem in the pensions industry and damage people’s savings, and all to fund a programme that simply would not work.

The second source of funding is repeating the one-off bankers bonus tax. I have to tell the right hon. Gentleman that no matter how many ways he cuts this, Labour has spent this money 11 times over. That is the 11 that I can find; I am sure my hon. Friends will find a lot more. There were proposals on reversing the VAT increase, at £12.75 billion; reversing tax credit savings, at £5.8 billion; more housing, at £1.2 billion; reversing the child benefit savings, at £3.1 billion; more capital spending, at £5.8 billion; and more child care, at £800 million. It is almost like one of those game shows—“Come on down, there’s another box to be opened and we’ll spend that money as well.” These sources go on and on and on; it is quite fascinating. Yet it has been said time and again that this is a one-off tax. When in office, Labour’s last Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), said of the idea of repeating this tax that it is

“a one-off thing…because the very people you are after…will find all sorts of imaginative ways of avoiding it in the future.”

He had no time at all for the idea of a repetition of Labour’s bankers bonus tax. So there we have it: the cobbled-together nonsense of Labour’s jobs guarantee, destined to fail and wholly and utterly unfunded.

--- Later in debate ---

[Sheila Gilmore]

The Secretary of State always says of the work experience programme that about half of young people who take part in it go into work. His own Department’s evaluation—I do not know whether there has been a more recent one than 2012, but I have not seen it—suggested that following the work experience programme there was a difference between a participant group and a non-participant group, but it was only a small one. Does he not agree that nearly half of those who did not participate in work experience also went into work?

[Mr Duncan Smith]

It is always a pleasure to listen to the hon. Lady. She has tortuously wound her way around all these figures, but I come back to the simple point that the work experience programme, at a twentieth of the cost of the future jobs fund, ensures that over 50% of those who enter it will go into work. By the way, I did not invent the work experience programme—it was invented for me by somebody on the floor of the job centre because young people were saying, “Can’t we have more time for work experience than the last Government allowed us to have?” I do not know if she has seen the really interesting figure that the claimant count in her constituency is down by nearly 50%. That is a very good story. I know she will want to write that up as well, as an excellent statistic.

The record jobs figures under this Government stand as a testament to our success, with more people in work than ever before, up by 1.75 million, and more people in private sector jobs than ever before, up by nearly 2.2 million. Since 2010, two thirds of the rise in employment has gone to UK nationals—the Opposition never achieved this—thereby reversing the damaging trend of Labour’s last five years in office, when the majority of jobs went to foreign nationals. What is more, we now have more women in work than ever before, more lone parents in work than ever before, and more older workers than ever before—and employment for young people and disabled people is up on the year as well.

Let me now deal with the suggestion that these people are moving into part-time, low-quality work. That is not true. The Opposition constantly harp on about a figure that has no basis in fact, so let me give the facts. Full-time employment is up by over 1.3 million since 2010—over 80% of the rise in employment in the past year alone. Permanent employees are up by 1 million since 2010—nearly 80% of all people in work. Three quarters of those in employment since 2010 have come from managerial, professional or associate professional jobs. The Opposition constantly put about the nonsense that there are nothing but zero-hour, no-value, low-skilled jobs, but that is simply not true.

Universal Credit

Debate between Iain Duncan Smith and Sheila Gilmore

Tuesday 25th November 2014 Commons Chamber

[Mr Duncan Smith]

On migrants, we have already made it clear that universal credit is a different type of benefit, so people who come here and are out of work will not be able to claim it as a benefit. The issue of how migrant workers can claim in-work support will be negotiated. We are clear that, under universal credit, family benefits will not be paid to people who are not accompanied by their family, so we will secure such claims, thus cutting costs. On fraud, the automatic processes that check what people are earning and whether they are in work mean that we will cut down on all the fraud related to tax credits.

[Sheila Gilmore (Edinburgh East) (Lab)]

Given that the Department is such a fan of safe and secure roll-out, it is a pity that it did not take a similar view to the personal independence payment. A lot of people were treated like guinea pigs while it was being rolled out—that topic is being debated in Westminster Hall as we speak. The Secretary of State must be aware that 61% of the current claimants of universal credit are under 24 years old. They are the simplest of cases and, after such a long period, 17,000 is a very small number indeed. We have been hearing the “safe and secure” mantra for at least two years. When will the Secretary of State admit that his Department has very serious problems with implementation?

[Mr Duncan Smith]

I would have thought that the hon. Lady, who sits on the Work and Pensions Committee, would be attracted to the idea of trying to land the programme safely and securely. On the one hand she says that she agrees with it, but on the other hand she attacks it for not being fast enough. My view is that it should be expanded and delivered on a safe scale. Of course, the majority of cases will have been simpler ones because we have started with singles, but over the next few months we will see more complicated cases as we roll out to families. The north-west will be fully family when we start rolling out nationally. I am waiting for the hon. Lady to say one day, perhaps in a few years’ time, “You know, they did a jolly good job, because this has benefitted everybody, particularly those on low income.”

Universal Credit

Debate between Iain Duncan Smith and Sheila Gilmore

Wednesday 9th July 2014 Commons Chamber

[Mr Duncan Smith]

My hon. Friend is absolutely right. The problem for the hon. Member for Rhondda is that his Government left behind a shambles in welfare—people unemployed, long-term unemployment rising, and youth unemployment rising dramatically—and there has never been an apology about that, or about crashing the economy.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Secretary of State’s problem is that on numerous occasions over the past three or four years he has given the House and the Select Committee on Work and Pensions different versions of events. He told us that the project was on track and on budget, and he stated to the Select Committee in February that the business case would be approved by April. What is actually going on with universal credit? In what sense is what people are claiming any different from jobseeker’s allowance? Does he know what happens to people whose circumstances change, and is this really universal credit at all?

[Mr Duncan Smith]

I do know, actually. As we go along, we are developing universal credit correctly and stably, so that it rolls out properly. To repeat, we are rolling it out for singles in the whole of the north-west; couples development is now rolling out; and family developments are to come. Towards the end of this year, we will have rolled out universal credit to the north-west. I must say that that is the right way to do it: to make sure that what we produce is safe and delivers what we say it will, unlike tax credits and other problems that we got from the previous Government. I would like to know what the hon. Lady really thinks about the failure of her Government to deliver any programme correctly or safely.

DWP: Performance

Debate between Iain Duncan Smith and Sheila Gilmore

Monday 30th June 2014 Commons Chamber

[Mr Duncan Smith]

What an excellent intervention. It is a testing one, but I will try to live up to it.

Let me move on to universal credit. Across all 44 programmes of change in the Department, we are taking a careful and controlled approach to achieve a safe and secure delivery. For example, the benefit cap started with an early roll-out and is now fully implemented, seeing 42,000 households capped and 6,000 move into work. Universal credit is on track to roll out safely and securely, against the plan I set out last year. The hon. Member for Leeds West quoted a figure of £12.8 billion but, as ever, shows a poor grasp of the finances. We have always been clear that universal credit’s total budget is £2 billion, and we will not overspend.

Furthermore, we have taken decisive action so as not to repeat the way in which programmes were rolled out under the previous Government. The reset will avoid the “big bang” concept that they put forward at the last election. They did a number of things that led them to have to write off huge sums of money. For example, their benefit processing replacement programme was not even introduced; it was just scrapped after £140 million had been wasted on IT that could never be used. Lectures about money that has to be written off with nothing to show for it should be directed at them, not us.

We have introduced the pathfinder in order to test and learn. We are now rolling it out, as I announced the other day, to 90 jobcentres across the north-west, and that process will be completed in the autumn. Furthermore, I have announced that, from today, new universal credit claims for couples will be rolling out into the live status, and claims for families will follow that roll-out. That will complete universal credit’s roll-out in the north-west, as we set out last year.

On the digital solution, nothing offers clearer proof that the existing live service works. It is delivering universal credit and will continue to do so. As I have always said, the majority of the existing IT will continue to be used, even as we develop the final element, which is the digital service, using all that equipment. It is about an end-state solution—fully online, fully secure and responsive to all digital threats—enhancing what we have already built. Universal credit will roll out on time, and it will deliver what we have said it will deliver—at least £38 billion in net benefit to the Exchequer.

[Sheila Gilmore]

I wonder whether the Secretary of State can explain what an “end-state solution” actually is, or what it will mean, and why he did not properly test PIP, which had only a two-month pilot, meaning that every applicant is now a guinea pig?

[Mr Duncan Smith]

I think that I have been pretty clear about the end-state solution. It is universal credit completely delivering to everybody in the UK. That is the end-state solution—live, online and fully protected. Perhaps I need to spell it out to the hon. Lady again. On PIP, I will simply say that we did not rush it. We have kept control of the level and scale of the roll-out. As we have learnt what the difficulties are, we have made changes, working with the providers. I will demonstrate in a moment that we are driving those numbers down to reasonable levels, as expected.

Oral Answers to Questions

Debate between Iain Duncan Smith and Sheila Gilmore

Monday 23rd June 2014 Commons Chamber

[Mr Duncan Smith]

We regularly talk to all the employers. New employers are seen by advisers in the jobcentres in the local area. Fraudulent jobs are rare on the site; it is estimated that fewer than 0.1% of these vacancies have been fraudulent since go-live, and those have been removed. We constantly monitor the Universal Jobmatch system and we crack down on abuse. In addition, employment advisers are meeting all those employers they are not aware of or who have just come up on the system for the first time.

[Sheila Gilmore (Edinburgh East) (Lab)]

The problem is that that is just not happening, and perhaps the Secretary of State should accept that. For example, I saw a job advertised in my constituency today for a care assistant in a care home that has just closed down. Jobs are being wrongly categorised. Among sales assistants, we find jobs for account executives, for which qualifications are needed. What exactly is happening with Universal Jobmatch?

[Mr Duncan Smith]

The problem is not what the hon. Lady describes. It is with Labour Members, who cannot bear the idea that, when they were in government, they had an archaic system that worked only from 8am to 6pm. Our system works for 24 hours. It works while people’s computers are shut down. It nominates jobs, and advisers can offer advice online. This is a major success story. The problem is that Labour does not get it. We are getting more people into work, higher levels of employment and falling levels of unemployment. In fact, we have some of the lowest levels in the European Union.

amendment of the law

Debate between Iain Duncan Smith and Sheila Gilmore

Tuesday 25th March 2014 Commons Chamber

[Mr Speaker]

For the avoidance of doubt, I should just say that I was happy to see the Secretary of State looking happy.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Secretary of State will be aware that, for very many people, the average level of savings is in the hundreds, not the thousands. Do the Government regret abolishing the savings gateway as one of the first measures they took on coming into government?

[Mr Duncan Smith]

When the hon. Lady got up to make an intervention, I wondered whether she would take the opportunity to say how much she welcomes the fact that unemployment has fallen by 20% in her constituency—a very good thing. I know she does not want to say that, but I say it for her.

I have to say to that no, we do not regret that. What we have undertaken since we came into power is going to hugely incentivise and improve pension savings and the savings marketplace. The extra vehicles announced in the Budget will rapidly improve that and I believe, all in all, that we will have a much better savings position than we inherited, so I think I have answered that question.

I need to make the point about employment and unemployment. Let me get this right: when we came into power, we inherited a situation where unemployment rose by nearly half a million. At its peak, some 5 million were on out-of-work benefits—1 million for a decade or more—and in one in five households, no one worked. The number of households where no member had ever worked doubled under Labour, from 184,000 in 1997 on an upward trend to 351,000 by 2010. I do not recall Labour Members mentioning those figures, and they avoided them when they were in power.

Correspondingly, since we came to power, unemployment is down 168,000 since the election. The claimant count has fallen by almost a quarter over the last year, which is the fastest annual fall since 1997. Workless households have fallen to the lowest rate since records began, down 450,000—two percentage points—since the end of 2010.

At the same time, we now have record employment: more people in work than ever before, more women in work than ever before and more people in work in the private sector than ever before—up over 1.7 million since the election. Ninety per cent. of the increase over the last year has come from British workers, unlike before, and more than three quarters of the increase since the election is from full-time work, up over 1 million compared with part-time work, which is up only 300,000.

Here is the point: we hear a lot from Labour Members about what they would do if they were in government, but youth unemployment increased under the previous Government by nearly half from 1997 to 2010—up almost 300,000. Now, on what the shadow Work and Pensions Secretary called

“the failure of this government to get young people into work”,

youth unemployment is down 81,000 on the year and is lower than what we inherited. The International Labour Organisation long-term youth unemployment is also down 37,000 on the year. The number of young people out of work and not in full-time education is down 63,000 and the long-term youth claimant count is down 23,900 on the year, having fallen for the last 15 consecutive months.

I remind the Opposition, who are chuntering away from a sedentary position, that under them long-term unemployment nearly doubled in two years, from 400,000 in 2008 to 800,000 in 2010. While they were seeing that rise, they gerrymandered the figures on the claimant count: 80,000 were put on to training allowances so that they came off the measurement of whether they were long term unemployed. Even though they were back out of work or back out of training, they went back as though they had just started their claims.

The trend slowed and is now falling. ILO long-term unemployment is down 38,000 this quarter and is down 59,000 on the year. The number on the claimant count for 12 months, ungerrymandered, is down 74,000 on the year—a fall of 17%. That is down, I believe, to so many of the reforms and changes that we have made, improving the labour market and improving the process of getting people back to work. The latest labour market statistics are remarkable and nothing demonstrates more clearly the Government’s success in getting Britain working.

--- Later in debate ---

[Mr Duncan Smith]

I pay tribute to my neighbour and hon. Friend for his phenomenal work on the jobs fairs, on all the creation he has done and on the work he has done with local unemployed people. He is absolutely right: the new enterprise allowance has been a phenomenal success. Thousands of people have started their own businesses under it. It is one of the big success stories of this Government. It is going to grow and we are going to ensure that many more people, particularly young people who are more and more keen to start their own businesses, get the kind of support they want.

[Sheila Gilmore]

Does the Secretary of State not have any concern that even now there are 2.3 million people unemployed, and as his own statement made clear, the total has gone done by only some 160,000 since the election? The figure was 2.4 million before the election and now it is 2.3 million. What has gone wrong with getting those people into jobs?

[Mr Duncan Smith]

Of course I want to see more people back in work, particularly young people, but the hon. Lady must remember that we inherited from the previous Government an economy that had hit the buffers, with young people cascading out of work in the two years running up to the election. Youth unemployment rose over their whole period in office, which suggests to me that their policies were hurting young people long before the recession. What we are doing is aimed at getting more people back into work. We have been successful in improving the situation, as the figures now are better than those we inherited—more people are in work, including more young people—but of course there is more to do, and it is this coalition Government who are doing it.

We are also introducing our other programmes, including the Work programme and universal credit, with the pathfinders moving into the north-west and eventually rolling out by 2016. We know that 90% of claims for jobseeker’s allowance and other benefits are already being made online, which is a huge change—only about 10% or 12% were made online before—that is improving speed and accuracy. Some 78% of claimants are confident about their ability to budget with monthly payments, as a result of the programmes we have run. Two thirds think that the universal credit process offers a much better work incentive than jobseeker’s allowance. Even in its early stages, universal credit is having a significant impact on people’s work prospects: claimants are likely to spend twice as long looking for work; two thirds agree that it is easier to understand their obligations; and 86%—rising to 90%—are confident of gaining a job within three months, which is a much higher rate than for jobseeker’s allowance.

These are dynamic changes that we are making, improving the path back to work, the incentives and the choices that people make. We are improving their work prospects and helping them into meaningful, long-term jobs. However, I gather from the Chief Secretary that the Treasury received a submission from the Opposition in the run-up to the Budget for an alternative to our programmes, which they call a jobs guarantee. I thought that we should look at that, just to examine whether it was worth embracing. I think it only fair that we tell the House whether or not it would work. Having looked at the proposal in a completely ambivalent manner, I have to say that it is confusing. The first submission said that it was a six-month programme for young people. The second submission said that it was a year-long programme. The third submission said that it was a two-year programme for the long-term unemployed. I gather that there is now some suggestion that it might be a six-month programme for everybody.

Apparently the jobs guarantee is now a flagship policy for the Opposition, but I understood that it would be funded for only one year. Now we hear that the same funding they announced for one year is meant to last all the way through a full Parliament. We asked the Treasury to do some formal costings for that, which I hope have been made available to the Opposition. They said that their scheme would cost only £1.9 billion in its first year and £0.9 billion thereafter, but the Treasury’s formal costings—[Interruption.] I know that Opposition Members do not want to listen, because the last thing they want to hear is how they would pay for it The Treasury, which is full of decent people doing a hard day’s work, has shown that there is a massive gap of £2.6 billion per year between what the Opposition say their jobs guarantee will cost and what we calculate it will cost.

Not only have the Opposition underestimated the costs by £0.6 billion in the programme’s first year, and £1.7 billion in future years, but they have no robust means of funding it. They say that they will fund it with a bankers’ bonus tax that will raise £2.3 billion, which is questionable, but I understand that they have spent that 10 times over. Let me list a few of the things they have committed to spend it on: reversing the VAT increase, which would cost £13.5 billion; more capital spending, which would cost £5.8 billion; reversing child benefit savings, which would cost £3.1 billion; reversing tax credit savings, which would cost £5.8 billion; and more housing, which would cost £1.2 billion. They have made £30 billion of spending commitments, apparently to be paid for by a tax that would save them £2.3 billion.

Universal Credit

Debate between Iain Duncan Smith and Sheila Gilmore

Thursday 5th September 2013 Commons Chamber

[Mr Duncan Smith]

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

[Sheila Gilmore (Edinburgh East) (Lab)]

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

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

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

[Mr Duncan Smith]

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

Oral Answers to Questions

Debate between Iain Duncan Smith and Sheila Gilmore

Monday 11th March 2013 Commons Chamber

[Mr Duncan Smith]

I am grateful to my hon. Friend. I have no issue whatever with the Church of England and the bishops saying whatever they believe. It is right and proper that they should argue with us and put pressure on us on a variety of issues. However, I do not agree that the way to get children out of poverty is to keep transferring more and more money to keeping people out of work. The reality is that we are having to reform a system that became completely out of control under the last Government and get in place a system that gets people back to work, because being in work is how people get their children out of poverty.

[Sheila Gilmore (Edinburgh East) (Lab)]

T2. Mandatory reconsideration after employment and support allowance is refused and when somebody wants to appeal can lead to people being without either ESA or jobseeker’s allowance. Will the Minister ensure that a short time limit is set on reconsiderations so that people are not left without any income?

Oral Answers to Questions

Debate between Iain Duncan Smith and Sheila Gilmore

Monday 28th January 2013 Commons Chamber

[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.

Welfare Benefits Up-rating Bill

Debate between Iain Duncan Smith and Sheila Gilmore

Tuesday 8th January 2013 Commons Chamber

[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.

Oral Answers to Questions

Debate between Iain Duncan Smith and Sheila Gilmore

Monday 25th June 2012 Commons Chamber

[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.

[Sheila Gilmore (Edinburgh East) (Lab)]

The questioners on the Government Benches asked about recent assessment of work experience, but the Secretary of State responded by talking about figures that he has been punting for several months now. Has he carried out any further assessment since the pilot project that produced those figures, which is nearly a year old now, given that the only other published assessment, of mandatory work experience, suggested that it did not work?

[Mr Duncan Smith]

We published these figures two months ago, but if the hon. Lady really wants to press me, I hear anecdotally from those in the Work programme that it is even better.

Jobs and Growth

Debate between Iain Duncan Smith and Sheila Gilmore

Thursday 17th May 2012 Commons Chamber

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

I welcome the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) back from a potential sojourn in Birmingham as mayor—his announcement that he wanted to stand was so powerful that Birmingham, on the spot, rejected the whole idea of having a mayor. I have got to know him well over the past couple of years and he has been heavily involved in designing the policy framework for the Opposition. He talked about part-time work and, as a result of his leader’s decision, he will experience it himself. I am sorry about that, because I am sure that he would have done a very good job had he been allowed to continue—I certainly suspect that he would have done better than some of his colleagues.

Today is about the Queen’s Speech, and I want to welcome a number of Bills: the Crime and Courts Bill, the children and families Bill, the draft care and support Bill to modernise the care system, and, importantly, a pensions Bill to provide once and for all a decent single-tier state pension to reward those who save. Let me say a few words about that matter and in tribute to the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb). He and I have worked very hard together and I hope that when we publish the White Paper both the House and the country will see that we are proposing a genuine and serious reform that should improve the quality of retirement for everybody in the future. We will reform the state pension system, creating a fair, simple and sustainable foundation for private saving. The main benefits of the Bill will be that it will enable individuals to take responsibility for meeting their retirement aspirations in the context of increasing longevity and create an affordable and sustainable pension system for future generations.

Let me respond to a few of the comments made by hon. Members on both sides of the House. The right hon. Member for South Shields (David Miliband), who I see in his place, made an elegant speech, as ever, in which he referred to a number of different issues. In particular, he mentioned youth unemployment, and I want to ensure that we establish the baseline on that point. The trouble was that the previous Government gerrymandered the figures on youth unemployment. When somebody had been unemployed for six months, they put them on one of their programmes—the future jobs fund or whatever—and took them off the unemployment register. They were not put back on to the register until they fell out of that programme—[Interruption.] Members might want to hear this. If we add together the figures, we see that the total number of claimants aged 18 to 24 on jobseeker’s allowance or other forms of temporary support is lower this month than it was in May 2010. Under the previous Government, during a period of growth, youth unemployment rose every year from 2006.

[Sheila Gilmore]

The Secretary of State appears to be unaware of a briefing that his own Department gave to the Select Committee on Work and Pensions yesterday, which exposed the lack of rigidity in the figures. Apparently, the correct figure shows that in March 2010 the number of people who were taken off benefit on a training allowance was 18,000. It has come down to 4,000, but will he accept that that does not explain the rise in youth unemployment?

[Mr Duncan Smith]

Labour gerrymandered the figures, and that was a long suicide note about what they tried to do to change those figures. The hon. Lady can try as much as she likes but the truth is that the previous Government set in place every single mechanism to ensure that they did not count young unemployed people.

Living Standards

Debate between Iain Duncan Smith and Sheila Gilmore

Wednesday 30th November 2011 Commons Chamber

[Mr Duncan Smith]

I hope they will attach no credibility if they were our forecasts. We set up the OBR—an independent body that Opposition Members accepted—and its forecasts are about as good as we shall get, so we should give it credibility for at least trying to get the forecasts right. That is a damn sight better than the past 12 years of gerrymandered Treasury figures, not one of which had any credibility.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Secretary of State quotes from the OBR, so he might like to add that it stated that we came out of recession quicker and that growth had increased by the first part of 2010. The OBR made its predictions before the autumn statement. Last year, it made its predictions before the statement. Its predictions were wrong, because the Government’s policies were wrong. Its dire predictions this year were made before this new set of policies.

[Mr Duncan Smith]

I am grateful for the intervention, as it allows me to remind the hon. Lady that in looking back at the period in the run-up to and start of the recession the OBR said the depth of boom and bust was greater than was anticipated—by more than 1%. The baseline from which we started, therefore, was much lower, which means, as is seen by the Treasury, that the amount we would have had to borrow would have been more than £100 billion if we had not taken our decisions early on. Labour Members’ posturing about their own position is fundamentally incorrect, and they must recognise that.

The OBR said that the eurozone crisis is

“likely to have contributed to weaker UK growth and business and consumer confidence.”

I know that Labour Members do not like to hear that that is an issue, but it is seen by everybody, not least of which the OBR.

Oral Answers to Questions

Debate between Iain Duncan Smith and Sheila Gilmore

Monday 24th October 2011 Commons Chamber

[Mr Duncan Smith]

The hon. Lady should not be so surprised given that I responded to the question she asked. The IFS projection deals with the tax and the benefits systems, but there are wider issues; we are addressing the pupil premium and other areas, which we think will also have an effect. The IFS projections are based on the premise that absolutely nothing changes, and I remind the hon. Lady that the last report showed that the previous Government were going to miss their 2010 targets before they left office.

[Sheila Gilmore (Edinburgh 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)]

From today, and following the written ministerial statement laid in the House on Friday, employment and support allowance claimants who are eligible to volunteer for the Work programme will be referred to Work programme information sessions. Claimants in the support group will be able to opt in to the sessions. That will form part of the work-related activity component for those in the work-related activity group—WRAG. This is an important step in giving claimants a taste of the support available through the Work programme.

[Sheila Gilmore]

Does the Secretary of State agree with last week’s comments by the Minister for Housing and Local Government that under-occupiers should not be bullied out of their homes, and will he now withdraw his proposals for social tenants which would result in exactly that?

[Mr Duncan Smith]

The position of the Housing Minister is correct, and I make it a principle to support him.

Pensions Bill [Lords]

Debate between Iain Duncan Smith and Sheila Gilmore

Monday 20th June 2011 Commons Chamber

[Mr Duncan Smith]

With respect, it never was under the previous Government, and we are not going to change that policy. We have had plenty of discussions on this, and I remind the hon. Gentleman that, although the previous Government uprated it, the Red Book for that time shows that absolutely no money was allowed thereafter, so it was going to settle back. Let us be absolutely clear about that.

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Mr Duncan Smith]

Let me make a little more progress and then I will give way.

We have protected other key areas of support for pensioners, including free eye tests, free prescription charges and free TV licences for those aged over 75. Having quickly put incomes on a firmer footing, we have moved to secure older people’s right to work by taking decisive action to phase out the default retirement age, thereby sending a message that age discrimination has no place in modern British society and that older workers have a huge contribution to make.

Those were absolutely the right steps to take as a backdrop to the Bill, but they are just the beginning as we set about reforming our broken retirement system. At its heart, the Bill is about dealing with the challenge that faces the next generation, who will have to pay for their parents’ retirement while footing the bill for a crippling national debt, even before they start thinking about their own pension arrangements. I remind the House that 7 million people currently are not saving enough to have the income they want or expect in retirement. We need to look at the steps we can take to secure their future.

Welfare Reform Bill

Debate between Iain Duncan Smith and Sheila Gilmore

Wednesday 15th June 2011 Commons Chamber

[Mr Duncan Smith]

I have always said that the door is open to everybody to discuss the effects and how some of them can be ameliorated—or not, depending on what the issues are. The answer is therefore yes—as a London MP, I should join that delegation too—although I still believe that we have the right policy, because it is about balancing fairness for those hard-working people who pay their taxes who often feel that those beyond work are not working themselves.

[Sheila Gilmore]

Will the Secretary of State give way?

[Steve Baker (Wycombe) (Con)]

Will the Secretary of State give way?

--- Later in debate ---

[Sheila Gilmore]

The Secretary of State wishes to present the Bill as being about people who are workless or feckless, but hard-working taxpayers who suddenly fall ill and are unable to claim the personal independence payment for six months could well be excluded from benefits because they have been savers. Is that fair?

[Mr Duncan Smith]

If the hon. Lady had looked at what the cap covers, she would know that those on tax credit will be exempt, as will those on DLA, widows and others who are in difficulties. The cap is about those who we believe should be able to go to work but are not doing so. Of course, this would just be all stick if it were not for the fact that the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) had recently introduced the biggest back-to-work programme this country has ever seen, to support those in greatest difficulty. Universal credit is about helping to improve people’s incomes when we get them back into work with a bigger incentive. We are striking a fair balance by doing all that while also placing some expectations on those who are waiting to go to work.

That is also the point of the next bit, which is about conditionality and sanctions. The Bill places a level of responsibility back into the system by strengthening our conditionality and sanctions regime and requiring all claimants to accept a claimant commitment setting out their individual responsibilities—a sort of contract that will enable them to understand that they have certain obligations and that there are certain things that we are obligated to do for them. That is fair. Many claimants I have spoken to out there are completely confused about what they should or should not be doing.

When those responsibilities are not met, we will have the power to apply a robust set of sanctions, which will be made clear to the claimant at the beginning. Opposition Front Bench who were in the previous Government will know from going round jobcentres that claimants often still profess, even at the last moment, to having no knowledge of the fact that they will face sanctions if they do not comply. So we are going to let them know early exactly what the sanctions will be. As with universal credit, they will then have a clearer understanding of what they are meant to be doing.

The next area, which we have dealt with in some detail, involves the personal independence payment. We are bringing more responsibility to the system, but I believe that we are also improving support for those who are able to work and for those who are not. Disability support is an issue. The Bill makes critical changes to the system, and the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller) made a sterling effort to explain them in Committee and on Report.

The changes to the current system of disability support will ensure that disability living allowance is no longer awarded on the basis of subjective and inconsistent decisions. I hope that all hon. Members will recognise that this is a bold attempt to bring this area of benefit up to date and to ensure that those who are not getting what they should will do so, and that those, however many there are, who are getting too much or not the right amount will get that adjusted as well. The truth is that this will be based on their ability to live their lives. I agree with my hon. Friend the Minister about the checks involved. The DLA will be replaced in total by a personal independence payment, which will be based, for the first time, on regular and objective assessments of need.

This brings me to perhaps the biggest thing in the Bill: universal credit. This lies at the heart of all our reforms. It involves the principle that it should no longer be possible for people to be better off on benefits than in work, or for people to fear moving into work. I say “fear” because people are often concerned because they simply cannot tell whether they will be better off or worse off in work. No longer are we going to try to pick the number of hours that somebody should be working; rather, we will say to them, “You must make that choice, in line with work, relevant to your caring responsibilities and all the other issues that affect you.” This is a bold reform to help people to improve their chances and give them the assistance they need. That goes alongside the Work programme, as I said earlier, which will support all those people who are trying desperately to make the best of their difficult conditions and get back to work.

Welfare Reform Bill

Debate between Iain Duncan Smith and Sheila Gilmore

Wednesday 9th March 2011 Commons Chamber

[Mr Duncan Smith]

I read The Guardian; he reads the Telegraph. What can I say? Times really are changing.

I have read the report, and I think that a number of elements in it are simply not altogether correct. I say that rather carefully because the point about the cancer aspect is that, as the hon. Gentleman knows, we inherited from the previous Government a process of reform and change to the employment and support allowance, which included the work capability assessment. We supported that, with the previous Government, because it was the right thing to do—to look at the 1.5 million people on incapacity benefit and check them over. We did not inherit any real allowance for cancer sufferers. It is important to make this clear. The Employment Minister, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), immediately accepted the internal reviews, but went further. He asked Professor Harrington to conduct a review of what we did regarding cancer patients and others, and the hon. Gentleman, being a generous individual, will know that we then incorporated a big change, so that a person in cancer treatment—chemotherapy—who is between treatments will go straight on to the support element. Thus the contributory aspect will not affect them, because while they are on the support element they will continue to be supported when they are out of work.

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Mr Duncan Smith]

One second. Would the hon. Lady forgive me? I have been asked to answer a question and I shall try to answer it. We have already made some very substantial change to support people in cancer treatment. The concerns of Macmillan and others relate to oral chemotherapy. I understand that. We have already asked Professor Harrington, in his second review, to undertake to give some advice on that. We have a slight problem with that from the start, because it is a fairly new form of treatment and a limited number of people are on it. So far, much of the medical evidence suggests that it does not affect people in the way that intravenous chemotherapy does; it is not as debilitating. We remain open to that evidence.

Although there is no provision for oral chemotherapy right now, my right hon. Friend the Employment Minister has made it clear that Professor Harrington will review the subject and take evidence, and we have asked the cancer groups to offer up their thoughts and advice, in addition to the medical fraternity. We will take account of what Professor Harrington says. As the hon. Member for Birmingham, Selly Oak (Steve McCabe) knows, last time we adopted all the recommendations in the professor’s report in their totality. So we are not in the business of trying to harm or affect cancer patients; quite the contrary. We made some very serious changes to what we inherited from the previous Government—I would like to think that they would have done the same—and we will continue to do so. I hope that answers the hon. Gentleman’s question. If he will let me get on with the rest of the Bill, I will.

--- Later in debate ---

[Mr Duncan Smith]

I shall try to make progress, if hon. Members do not mind, because I have given way quite a lot on that subject.

Before the introduction of the universal credit we will introduce many of the changes to conditionality and sanctions that I discussed. Claimants, I hope, on that principle will accept the claimant commitment, as they will be subject to tougher regimes that are fair and reasonable. Turning to other benefit changes, we are making changes to the income support regime for lone parents before the introduction of universal credit. Lone parents who can work will be expected to claim jobseeker’s allowance when their youngest child reaches the age of five. We want as many people as possible to get help to engage with the labour market, and we know that about 80% of all lone parents are working or would like to work.

There will continue to be safeguards to allow parents to fit their job-search requirements with their caring responsibilities and child care availability. There are other relevant changes, too, and I accept that there have been concerns about them. I would be interested to learn the Opposition’s position on that. We are making changes to contributory employment and support allowance, time-limiting receipt to one year for those in the work-related activity group. There will be no change for those in the support group, as we have made clear, and people claiming income-related employment and support allowance will be unaffected.

I note the comments that have been made by the right hon. Member for Birmingham, Hodge Hill, who accepted, in his speech to the Institute for Public Policy Research, that time-limiting ESA is the right thing to do, but disagreed about the period—in this case, a year, whereas he was talking about two years. However, that is not clear in the amendment to the motion, so I wonder whether he could clarify the position. The amendment opposes the limit altogether, rather than the number of years. I would happy to accept an intervention from the right hon. Gentleman if he wished to clarify the position. [Interruption.] He will cover it in his speech—very good. I hope that we will understand that, as principles and practicalities need to come together.

I would point out to the right hon. Gentleman and to everyone else that the one-year limit is twice as long as that currently in place for jobseeker’s allowance. There has been discussion of people undergoing cancer treatment and others. That is best dealt with under the ESA regime and reviews, so that we can decide which groups are relevant, and which not, as we have done with some cancer patients undergoing chemotherapy. They have been taken out of that provision because they are in the support group. Professor Harrington’s review is the best way of doing that. We have established the principle of receipt for a year, and the rest is about the details of the conditions that best apply, and that can be dealt with in the Harrington review.

That best reflects the different nature of ESA and the different needs of those who claim it. However, we simply cannot pay those benefits indefinitely. I wonder whether that would have been the previous Government’s position if they had undertaken further reviews. For limited contributions under ESA, it would have been feasible for someone to receive ESA for their rest of their life. That was one of the big issues that we had to tackle.

[Sheila Gilmore]

rose—

[Mr Duncan Smith]

I will give way to the hon. Lady, because she has been persistent.

[Sheila Gilmore]

I thank the Secretary of State for giving way. ESA is not given indefinitely, because there are constant assessments and reassessments. I have constituents who have been reassessed twice in the past two years and who are due for another assessment. It is not true that someone who receives contributory ESA will receive it for ever without assessment. The assessment process should cover that, without an arbitrary cut-off date.

[Mr Duncan Smith]

I remind the hon. Lady that in the support group, the contributory element does not apply. It applies to people with finances that take them above the line. The income-based measure continues—that is not the issue. The issue is whether we think that people who have contributed for a certain time have the right to contribution-based benefit, regardless of their income, for a period of time. That is the debate. The income-based measure is exactly the same—it is not going to change, so that meets the hon. Lady’s concerns.

[Sheila Gilmore]

rose—

[Mr Duncan Smith]

I think that I have dealt with that.

There are other changes, including the consumer prices index uprating, in the Bill. We must get to grips with the housing benefit system, which ran out of control under the previous Government. I have a deep suspicion that they knew that before they called the election, and I sense that there were big differences about whether they would do something about this. Over the past 10 years, overall spending on housing benefit has almost doubled from £11 billion to £21 billion, which is a huge increase. I accept some of the arguments about the reasons for that—the fact, for example, that house building fell to a record low, and more and more people had to be moved into the social rented sector—but the reality under the local housing allowance regime was that we lost control of spending. We have therefore introduced a number of changes to the local housing allowance, including a move to annual uprating in line with CPI. Restricting uprating should enable us to keep downward pressure on rents. Only if an increase in local market rents exceeds the annual rate of CPI will the restriction apply. That will also be an important step towards the integration of housing support with the universal credit.

We accept that those changes will not be easy for some people, which is why we want to provide a great deal of transitional protection. Essentially, we have put up a total of about £190 million to smooth the transition to those measures for those who are most likely to be deeply affected. That includes £130 million in discretionary housing payments, £50 million to assist people with housing advice and removal costs and £10 million for homelessness prevention, particularly in London. That, coupled with the other changes that we have already made through regulations, where we are looking at making direct payments to those who are able to lower their rents and at delaying the point at which the measure comes in by some nine months, was a product of listening to people’s main concerns and trying to ensure that what we bring in is doable and manageable by councils.

--- Later in debate ---

[Mr Duncan Smith]

I say to the right hon. Gentleman, despite his best intentions, that the mess that the previous Government got into over incapacity benefit—[Interruption.] It is all very well for Labour Members to sit in opposition and pretend that nothing went wrong under the previous Government. We are picking up an incapacity benefit system in which they left people parked, never seen by anybody for years and years. All we are putting into the Bill is the requirement that people be seen to check on their condition. That has to be in their interests, and it is not in any way a problem that it should happen. Of course, if the right hon. Gentleman wants to try to make amendments as the Bill goes through Committee, we will always be happy to debate those and listen to him. My point is simply this: it is right to see people, and wrong to leave them parked for ever on set benefits. Seeing them is more humane than inhumane, and that balance is the way that we should go.

As we introduce our new welfare system, we will have to take steps to clamp down on benefit fraud, as Opposition Members know. The system that we have is inefficient and too often ineffective. Despite significant overlaps between benefit and tax credit frauds, fraudsters are subject to different treatment in their cases as they are handled by different groups—DWP, Her Majesty’s Revenue and Customs or even a local authority. The mess and overlap is enormous. The Bill introduces powers enabling a new single fraud investigation service to investigate and prosecute all cases of benefit and tax credit fraud. I hope that the House supports that process. We will ensure that anyone found committing lower-level fraud will face a tough minimum fine as an alternative to prosecution. For all other fraudsters, we will seek prosecution whenever we can. We need to ensure that fraudsters get the message that repeated criminal behaviour will not be tolerated, so those found to have committed fraud may face losing their benefit for certain periods; I have already dealt with the detail of the timings.

I simply say to the House, because this was raised in the Select Committee, that I am absolutely clear that not every problem with overpayment or difficulties with those payments was down to fraud. I fully accept that with the complexity of the system, officials made mistakes and that we were often too ready to badge people as fraudsters when in fact they were not necessarily fraudsters but caught up in a system that left them confused and perhaps not making the right or necessary level of statements to the authorities. This process is about separating those people out. A recent trial of a changed reconsideration process at Jobcentre Plus led to a fall of some 15% in the number of appeals being heard. The general view is that process will be sustainable and will work.

We are also changing child maintenance. Much of the current system is designed to drive people into acrimonious disputes during family breakdown. We should all agree that we want to take the heat out of such situations, as far as we can. That is why we are reforming the system and introducing a gateway to the statutory scheme so that parents consider making their own arrangements. We will offer parents a calculation-only service to make it easier for them to make their own arrangements. Of course, if they choose to take matters further, they can.

We are introducing measures to allow non-resident parents to pay through Maintenance Direct when the case is within a statutory scheme. That will provide further flexibility for parents. We need to keep the burden of the cost of collection under control. In 2009-10, the cost of collecting every pound was more than 40p. However, should the non-resident parent fail to pay in full or on time, we will move the case swiftly into the collection service and take enforcement action where necessary.

[Sheila Gilmore]

Why was it necessary to introduce provisions in the Bill before the consultation process has concluded? The consultation process on this matter is due to conclude on 3 April. Because the conditions have been published in the Bill, rather than being legislated on later, many people feel that the Government’s mind is set in stone.

[Mr Duncan Smith]

The measures in the Bill set the framework for the details. We will obviously work through the details in time for the Committee stage. It is reasonable to do that. The Bill does not set out the detailed prescriptions, as is right. I do not agree that the process is wrong.

In conclusion, the Bill is not just about balancing budgets, although that is part of the process. It is also about transforming lives and moving people—hopefully—from the entrapment and tyranny of doubt and dependency, to some kind of opportunity, enterprise and change to their lives that they can make themselves, through assistance and support. Surely it is our duty together to ensure that no one is written off, discarded or left behind. I believe that that is what the Bill will achieve. Notwithstanding criticisms and individual issues, I hope that the House will recognise that the purpose of the Bill is positive, and that it will transform the lives that we seek to transform.

Welfare Reform

Debate between Iain Duncan Smith and Sheila Gilmore

Thursday 11th November 2010 Commons Chamber

[Mr Duncan Smith]

My hon. Friend is right about travel costs. The key point is that if someone going to work retains significantly more money, their travel-to-work costs become much more affordable. Therefore they are able, as other people in work do, to make decisions about travelling to a job over a slightly longer distance. That will be wholly beneficial to those who are out of work.

[Sheila Gilmore (Edinburgh East) (Lab)]

In his statement, the Secretary of State used the fact that 37% of ESA claimants did not proceed to full assessment to insinuate that people were withdrawing their claims because they were trying to cheat the system. Current ESA claimants are people who have newly fallen sick, and they are not long-term claimants. Most of them recover from their illnesses during the assessment period and get back into work, so I ask the Secretary of State to withdraw that assertion.

[Mr Duncan Smith]

I made no such assertion. What I was demonstrating was that if you put a check in place and ask people to demonstrate their situation, those who are bent on a different purpose will naturally fall out. I used the last Government’s work capability assessment programme to illustrate how that affects new entrants. I was by no means casting aspersions on anybody who is going through the programme, because they deserve what they get.

Welfare Reform

Debate between Iain Duncan Smith and Sheila Gilmore

Monday 11th October 2010 Commons Chamber

[Mr Duncan Smith]

My hon. Friend raises a very important point. I can guarantee to him that we have already been doing that, but we will continue to do so. That is why the independent panel, which includes somebody from Mind, will review it. Mr Farmer has been tasked with reviewing that generally, as well. We will constantly keep this under review and ensure that that is the case. We do not want to use this to punish people; it is about helping people, not punishing them.

[Sheila Gilmore (Edinburgh East) (Lab)]

Given the large number of my constituents and many others who had problems with the work capability test under the previous system, can the Secretary of State assure us that he has already reviewed the test prior to rolling out the new pilots, rather than leaving it as it is and piloting yet again? What full report is there on the outcomes of the system thus far? In Scotland, the Scottish Association of Citizens Advice Bureaux published a report that was highly critical of the system that was in place. Although a lot of us agree with it in principle, we know that when it comes to individual people the situation is very different.

[Mr Duncan Smith]

I guarantee that we have already reviewed the matter. Indeed, we inherited a review process, which the previous Government initiated. We will bind in the results of that—we are doing that at the moment. Having said that, we have subsequently set up the panel and asked somebody to investigate to ensure that we are covering all the necessary matters. The two pilots will help us understand better the way that the system works. I am not sure what else we can do at this stage. As I said to the right hon. Member for Paisley and Renfrewshire South (Mr Alexander), we intend to use what we are discussing as a process—it is not an end point, but a process that allows us to get the best out of how we deal with those who have been on incapacity benefit and need our support and help to get back to work. I give that guarantee.

Capital Gains Tax (Rates)

Debate between Iain Duncan Smith and Sheila Gilmore

Monday 28th June 2010 Commons Chamber

[Mr Duncan Smith]

Perhaps not in the hon. Gentleman’s view, but he has never been reasonable in my view, so good luck to him.

The Budget tackled the ballooning cost of housing benefit. In real terms, the cost of working-age housing benefit has increased from £10.6 billion to £15.4 billion in 2010-11. If the system was left unreformed, it is projected that the housing benefit bill would reach £21 billion in 2014-15. It is out of control and what is more, housing benefit is often unfair for working families. Today, a tenant in a five-bedroom house in an expensive area such as Westminster could feasibly get more than £100,000 a year. Although that example applies to a small number of people, some 750,000 get more than £10,000 a year. Those cases are still in the minority, but they happen far too often. It is unacceptable and unaffordable that people on benefits are living in homes that our hard-working families cannot afford, so we have capped local housing allowance levels at the rate for four-bedroom properties.

[Sheila Gilmore (Edinburgh East) (Lab)]

Is the right hon. Gentleman aware that the biggest reason behind the increase in housing benefit is the lack of affordable rented housing in this country? Most of my constituents would rather live in an affordable rented house than a private rented home.

[Mr Duncan Smith]

Oh dear me; there is no stopping Labour Members sometimes. I must say to the hon. Lady: whose fault is that? The Labour Government slashed the building programme, so Labour Members have only themselves to blame. Everyone warned them about the problem for years. As far as we possibly can, we need to ensure that the houses that people occupy are of the size that they need. We should not have elderly people trapped in houses that are far too large for them and that they cannot look after. Only the most expensive areas will be affected by the cap.