Housing Benefit and Supported Housing

Jim Cunningham Excerpts

Wednesday 27th January 2016 Commons Chamber

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

I have listened and I am afraid that the hon. Member for North Dorset (Simon Hoare) exemplifies the brand “Same Old Tories”.

Let me make it clear from the start that I am a big fan of welfare reform. I believe that as we move to the second half of this decade, we need an active welfare system. However, the difficulty I have with measures such as the bedroom tax, the local housing allowance and caps on housing benefit is that I am not convinced that they are genuine welfare reforms. They ignore the supply problems in housing, rapacious landlords and the lack of specialist supportive accommodation. We treat all tenants as if their circumstances are the same. In fact, we simply passport cuts from the Department for Work and Pensions to the Department for Communities and Local Government without any regard to the consequences.

[Mr Jim Cunningham (Coventry South) (Lab)]

This particular measure smacks of what in the 1960s we used to call “Rachmanism”. A lot of families will find themselves destitute on this route because they will not be able to pay those rents. It is a private landlord’s charter to make money.

[Steve McCabe]

Almost everyone now realises that we cannot have action on housing benefit without having action on rents. That is self-evident.

We are having this debate because those who are the targets of this change are not the workshy and the feckless. Too many of them are vulnerable people—the very people that many of us, including many Conservative Members, came into politics wanting to help, such as elderly people no longer fit to wholly look after themselves, veterans, youngsters leaving care and those fleeing domestic violence. The National Housing Federation claims the Chancellor’s changes could cost some people up to £60 a week, enough to force them to leave their accommodation and in some cases add to the growing number of casualties sleeping on our streets as a homelessness crisis sweeps our country like a plague.

The NHF also speculates that the changes may lead to the closure of thousands of homes. The kind of places we are talking about are retirement homes, active elderly establishments designed to improve the quality of life, supported accommodation and temporary accommodation. Is that really the kind of reform that Conservative Members want? There is already a 16,000 shortfall in meeting demand for supportive accommodation, and estimates say that is likely to double by the end of this Parliament.

Oral Answers to Questions

Jim Cunningham Excerpts

Monday 7th December 2015 Commons Chamber

[Mr Jim Cunningham (Coventry South) (Lab)]

9. What the cost to the public purse of implementation of universal credit has been to date; and how many people have been enrolled on universal credit.

[Nigel Mills (Amber Valley) (Con)]

18. What progress he has made in rolling out universal credit; and if he will make a statement.

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[Mr Duncan Smith]

Even on the figures we have published in the past 24 hours, it is a reality that people on universal credit are much more likely to get into work, work longer and earn more money—that is the key bit. Rolling out universal credit has a massive effect on the likelihood of people entering into decent work. I also remind my hon. Friend—the hon. Member for Pontypridd (Owen Smith) obviously did not want to listen to this fact—that under universal credit the childcare package is for every hour they work all the way up until the moment they leave the benefits system.

[Mr Cunningham]

What does the Secretary of State have to say about the value-for-money aspects of universal credit, given that only 2% of people have participated and it has cost £3.25 billion to introduce?

[Mr Duncan Smith]

The cost of universal credit implementation has fallen: it was originally forecast to cost £2.4 billion but is now due to cost £1.7 billion. To give Labour Members a concept of what value for money looks like—[Interruption.] The hon. Gentleman has no idea about value for money because he has been on the Labour Benches for too long.

[Mr Cunningham]

Me?

[Mr Duncan Smith]

With respect, I meant the Labour Member sitting just below him. The number of people getting back into work directly as a result of universal credit has had a net benefit to the Exchequer of £3 billion-plus. I call that a real benefit in real terms.

Employee Pay (DWP)

Jim Cunningham Excerpts

Wednesday 18th November 2015 Commons Chamber

[Chris Stephens]

I do not know the reasons for that, but I think that it should have been possible. As my right hon. Friend will know, in Scotland those earning less than £21,000 a year have received a £250 pay rise over the last couple of years.

Between 2012 and 2015, all DWP staff received a 1% increase, and the Chancellor has announced his intention to limit civil service pay increases to 1% for the next four years.

[Mr Jim Cunningham (Coventry South) (Lab)]

I am sure the hon. Gentleman agrees that, if inflation is taken into account, that 1% increase effectively amounts to a 6% or 7% wage cut, and women in particular are bearing the burden.

[Chris Stephens]

The hon. Gentleman is correct, and I will come on to the fact that it is estimated that what has taken place in the DWP is effectively a cut of £2,245.

There is also the issue of no pay progression within the Department. Since 2009 there has been no mechanism for DWP staff to move from the bottom towards the top of the pay range for their grade. This has meant staff have become frozen at the bottom of the pay range with no means of ever progressing further. Around 70% of DWP staff are in this position.

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[Chris Stephens]

I agree with that, because if there is a pay range and scale, there should be natural progression through experience and training.

With pay increases limited to 1% year on year, simply not enough money is available to create meaningful pay progression and give all staff some annual pay increase. The Treasury has consistently prescribed that any pay progression must be funded from the 1% increase and no additional funds have been made available. My first question to the Department is this: will the DWP change its attitude towards pay progression and allow employees to move up the pay grades and scales?

Let me turn to the increase in pensions and national insurance contributions. DWP staff are members of one of the civil service pension schemes and since 2010 members’ contributions to the pension schemes have been steadily increasing, averaging 3.2% by 2015. These increases have, effectively, eroded the value of the recent 1% pay rise. This has meant that DWP staff take-home pay now has hardly increased at all since 2012. DWP staff also expect to see an increase of around 1.4% in their national insurance contributions in 2016, when the new state pension comes into effect.

Some 40% of DWP staff are on tax credits. The DWP has told the PCS that 40% of DWP staff have to rely on tax credits to supplement their low rates of pay. This is clear evidence of how low pay rates are in the DWP. If the measures to reduce tax credits that were announced in the July Budget were ever to be implemented, there would be a significant impact on DWP staff.

The Government have made many public statements saying that employers should pay a living wage and not make their employees rely on tax credits to supplement low pay. It is ironic, therefore, that so many DWP employees are made to rely on tax credits because the Government will not pay their own staff a decent salary. Furthermore, the Government have justified tax credit cuts by declaring that when their employees lose their tax credits, employers will naturally pay higher wages. However, if the Government rely on tax credits to subsidise the low pay of their own workforce and they are unwilling to compensate these workers who stand to lose from changes to tax credits and the 1% pay cap, it is hard to see how other employers can be expected to practise anything different.

DWP pay is an equality issue. Some 69% of staff are female, predominantly employed in the lower grades.

[Mr Jim Cunningham]

There is a contradiction. On the one hand, Government policy is equal pay for women, but on the other hand they reduce women’s wages at the DWP and other Departments.

[Chris Stephens]

I entirely agree, and I am sure the hon. Gentleman will agree with me that we are seeing an increase in the pay gap between male and female workers.

Low pay in the DWP therefore has a detrimental effect on women. As the highest paid grades in the DWP have a majority of male staff, this has created a significant gender pay gap in the DWP. My next question is this, therefore: what equality impact assessment has been carried out to ensure the DWP complies with the Equal Pay Act 1970 and is not at risk of equal pay claims?

There have been increased workloads and efficiency, but no reward. Time and again, Ministers and those running the Department thank DWP staff for their hard work in keeping the Department afloat and delivering welfare reform. Recognition is always welcome, but DWP staff feel that the thanks need to be translated from mere words into a form of recognition visible in their pay packets.

Furthermore, the DWP workforce has been cut by 30% since 2010, so the pressure on those remaining has increased. In March 2015, the Secretary of State told DWP staff that productivity had increased significantly. He cited record levels of employment, faster processing, fewer calls chasing progress, and an annual operating cost £2.5 billion lower than in 2009-10, yet none of those improvements in productivity has been reflected in increases in DWP pay.

The DWP is one of the lowest paid Departments in the civil service. Prior to civil service pay being delegated to individual Departments, all civil service grades were paid the same, irrespective of which Department they worked in. However, as a consequence of pay delegation, pay levels now vary greatly from one Department to another, and DWP pay is particularly low. There are now well over 100 pay bargaining units across the civil service, and the DWP, as the largest Department, does not do well compared with other civil service Departments.

This will be brought into sharp focus with the roll-out of universal credit, when 2,000 HMRC colleagues, earning considerably more than DWP staff, will transfer into the DWP and will be earning a lot more for doing the same work. For example, 40% of staff in the administrative officer grade in the DWP earn less than the HMRC administrative officer grade minimum. Anyone who joins HMRC on its administrative officer minimum will come in more than halfway up the DWP administrative officer pay scale at £18,415.

People who work in the private sector are better off. This Government seek to justify public sector pay restraint by spreading the myth that life in the public sector is altogether cosier than in the private sector, but the truth is that pay for those in the DWP is now so low that some people in the private sector employed on civil service contracts are leaving them behind. For example, in Steria, the company that won the contract for HR shared services, where some DWP workers saw their work privatised, members have just been awarded a 2.3% pay increase. In Maximus, another DWP contractor, members have recently accepted an offer that will give the majority of them increases of over 15%, with the lowest paid receiving an increase of nearly £5,000.

Increases for private sector workers on DWP contracts are therefore considerably in excess of the 1% awarded to DWP staff. Of course, those pay increases in private sector contracts are funded by the taxpayer every bit as much as DWP pay is funded by the taxpayer. We commend the pay increases for those staff, but we fail to see the logic of the 1% pay cap being so rigidly imposed on public sector workers when that is not the case for private sector workers delivering Government contracts.

We fear that there is discriminatory performance-related pay in the DWP. The Department also pays some staff a non-consolidated payment each year. This is worth 1.9% of the annual pay bill—around £44 million. The payments are distributed based on performance appraisal markings and grade. Staff who have received a “must improve” box marking—around 8% of DWP staff—receive no non-consolidated payment. Other non-consolidated payments vary from £450 for an administrative assistant to £1,750 for a grade 6 employee. These non-consolidated payments have been shown to be discriminatory in many ways. You are more likely to receive the higher award if you are full time, white and under 60, and more likely to receive no non-consolidated payment if you are over 60, BME or part time.

Terms and conditions are also diminishing. At the same time as pay increases in the DWP have been subject to central Government pay restraint and caps, DWP staff have seen a gradual erosion of other terms and conditions. This has taken the form of increased pension contributions and changes to pension entitlements, repeated attacks on the civil service compensation scheme, restricted access to flexitime, a draconian approach to attendance management, and cuts in staffing.

The sense of anger among DWP staff is high. When the 1% pay award was imposed on DWP staff in July, more than 5,700 protest letters were sent to the Secretary of State and the permanent secretary. The PCS receives constant feedback from its members on the impact of pay restraint. My next question therefore is: what assessment has been carried out to ensure that DWP staff reach the so-called living wage target? Or will steps be taken to ensure that this is delivered earlier? Some DWP staff reported regularly borrowing from credit cards to make up the shortfall in their wages and being unable to afford to tax their cars.

My last question is: do Ministers believe that the enormous improvements in productivity that DWP staff have achieved on their watch should be rewarded with an additional pay increase above the 1% cap?

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[Justin Tomlinson]

I thank the hon. Gentleman for his intervention. My next bit will specifically address the under-25s. Our pledge is that the national living wage will go over £9 by 2020. From my recollection at the general election, the Scottish National party pledged to pay about £8.60 or £8.80, and Labour pledged £8. I think that we can all support our decision to get the figure to over £9 by 2020.

Crucially, on the point about the under-25s, DWP will meet its statutory requirement and pay the national living wage to all employees regardless of age. That will include those under the age of 25. All Members will welcome that.

DWP will raise the pay of around 600—0.7% of our staff—who will fall just below this level from April 2016. The Department is ensuring that our contracted staff will also be paid at the new national living wage from April 2016 onwards, as we are conscious that we have large supply chains and people with whom we have direct work. For the remainder of the Parliament, all increases in employees’ salaries will be in line with the guidance from Her Majesty’s Treasury.

[Mr Jim Cunningham]

Can the hon. Gentleman tell me how many agency people the Department employs, how many consultants it does business with and how much that costs?

[Justin Tomlinson]

I thank the hon. Gentleman; I will be providing a written update in answer to that very good question.

I was asked about pensions. As changes are made to pensions, we have made sure that the lowest paid see the smallest increase and that those paid more contribute more progressively, but it remains a good pension scheme, with a defined end. As for promotion through the pay scales, for those who can get promoted through the bands—there is typically a 10% difference between them—that remains in place.

Young Jobseekers

Jim Cunningham Excerpts

Tuesday 27th October 2015 Westminster Hall

[Chloe Smith]

I welcome my hon. Friend’s positive example. South Derbyshire certainly has a very assiduous MP to go with those figures. It is indeed the case that youth unemployment is coming down. We should celebrate and look at the examples of what has worked locally. That is one of the themes I want to establish in this debate.

[Mr Jim Cunningham (Coventry South) (Lab)]

I congratulate the hon. Lady on securing this debate. Will she comment on the quality of jobs young people get, and their training and salary levels?

[Chloe Smith]

I do not think that the hon. Gentleman will hold me too far to account if I leave it to the Minister to cover some of those points that are, after all, national. I suspect that the hon. Gentleman is arguing that they ought to be a matter for Government. The great majority of the private sector jobs created over the past few years have been full-time. Myths abound as to the extent of zero-hours contracts. We gave that argument a good going-over in the general election campaign—I am sure that the hon. Gentleman did as much as I did. There are myths around about the quality of jobs that young people can look forward to as they leave education and look for opportunities. It is deeply disrespectful to young people to set up a negative argument that they can look forward only to a zero- hours contract. It is deeply negative and we ought to avoid it.

Amendment of the Law

Jim Cunningham Excerpts

Monday 23rd March 2015 Commons Chamber

[Mr Duncan Smith]

I respect the hon. Gentleman and I am glad he asked me that, because it allows me to point out something that I was going to come to later. We have raised the thresholds on taxation. It is not surprising, therefore, that some of the insurance levels are low. I am proud of that. I am proud that my right hon. Friend the Chief Secretary is also proud of the fact that we are raising the point at which people pay tax for the first time. The real reason behind all these facts and any other issues that the hon. Gentleman raises in this regard is the fact that the previous Government saw the economy go over the edge of a cliff, and we have been picking it up ever since. If the question is why it is not perfect yet, the answer is that we still have some way to go, but we are making progress and going in the right direction.

Through this Government’s employment programme we are ensuring a jobs recovery for all. I want to point out some of the figures: 2 million apprenticeship starts since the beginning of this Government; over 1 million claimant commitments signed—as people go in to sign on to jobseeker’s allowance, setting out and reinforcing people’s obligations; work experience for 250,000 young people; 60,000 start-up businesses through the new enterprise allowance; and the Work programme helping more long-term unemployed people back into work than any other programme before.

[Mr Jim Cunningham (Coventry South) (Lab)]

rose—

[Mr Duncan Smith]

I will come back to the hon. Gentleman. I want to make a little progress, as I know that others want to speak.

The Work programme is continually improving. Nearly 1.1 million people have spent time off benefits, 680,000 have got a job, 400,000 have found lasting work, and job outcomes after 12 months are nearly twice as high as with the early cohorts, including the new employment and support allowance claimants. Compared with the previous back-to-work programmes—the flexible new deal, for example—the Work programme has helped more than twice as many people into work in the first two years as the flexible new deal, with nearly three times as many people in jobs for six months. This is not just getting people into work but ensuring that they stay there—that is the critical element.

I will give way to the hon. Member for Coventry South (Mr Cunningham) and then make some progress.

[Mr Cunningham]

The Secretary of State said that when the present Government took over, the economy was on a knife edge. I remember the previous Conservative Chancellor claiming credit when we were in power for the handling of the economy. More importantly, the Secretary of State has not mentioned the fact that recently the purchasing power of wages has dropped by 6%. Wages might have gone up by 2% in the private sector, but their overall purchasing power has dropped by 6%.

[Mr Duncan Smith]

I am a little bit lost. I am not sure whether the hon. Gentleman is saying that the previous Prime Minister was claiming credit when he was Chancellor in the previous—[Interruption.] If he is referring to my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), it is difficult for the previous Labour Government to claim credit when their Chief Secretary left a letter on the desk saying, “There’s no money left.” If the hon. Gentleman wants to claim credit for that, I will certainly allow him to intervene.

While the Budget proposed new measures to boost growth and support private sector job creation, in turn increasing employment, the Opposition’s only alternative, the jobs guarantee, it now turns out, is more like a no-jobs guarantee—a make-work scheme that the Institute of Directors has said is

“not the source of sustainable jobs”.

It is the kind of scheme that, for the past 20 years, the OECD has demonstrated is expensive and counter-productive in the long term. It says that large deadweight losses, displacement and substitution effects are of little success in helping unemployed people to get permanent jobs in the open labour market. We got rid of the Opposition’s last scheme, which did not work, and this one will fare no better. Labour’s flagship programme is just a rehash of the failed make-work schemes that seem to be its solution almost every time.

The hon. Member for Leeds West (Rachel Reeves) made this comment about Jobs Growth Wales:

“I went to see a scheme very similar to this in Wales last week and...that’s what we would aim to do across the UK”.

If that is what she thinks she is going to do, let us deal with what Jobs Growth Wales actually produces. It has been revealed to be an expensive exercise in cherry-picking the best-quality people who want to go back to work. Far from being a guarantee for all, which I understood was her policy, the hardest to help are not eligible for the programme, and only one in three applicants has got a place on it. A success rate of 80%, at a cost of £6,000 per place, is trumpeted, yet that compares with the 90% success rate of all—not some of—the eligible people in Wales who apply, who move off jobseeker’s allowance within nine months anyway. The reality is that this programme, on top of already successful programmes getting people into work, is less successful than the programme that it seeks to replace. Apparently, this is the programme that the Opposition want to copy and turn into a national programme in government, and it is all a rehash of the future jobs fund.

In the public sector, this Government have achieved the same success as the future jobs fund achieved through work experience in the private sector, but—here is the key—at a twentieth of the cost of what it cost Labour to provide jobs in the public sector. That is the problem with this make-work scheme.

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[Rachel Reeves]

We introduced a cap on charges for stakeholder pensions and the automatic enrolment brought in policies for which Labour had already legislated. We are proud of automatic enrolment, but we disagree with the changes that this Government introduced, which mean fewer people are benefiting from automatic enrolment —1.5 million fewer, two thirds of them women. That is a real lost opportunity to ensure that those people who should be saving are actually saving.

What this Secretary of State and the Government he speaks for simply do not understand is that their failure to make work pay and to deliver a recovery that raises living standards for all is the root cause of their failure to control social security spending and balance the books as they promised. They have spent £25 billion more than they planned and their receipts from income tax and national insurance have, as has been pointed out, fallen short of forecasts by a staggering £97 billion over the life of this Parliament.

It is because of that failure that, in order to deliver his objective of a large surplus in the next Parliament, the Chancellor has now committed to even deeper spending cuts over the next three years than we have seen over the past five years. The Office for Budget Responsibility confirms that these plans will mean

“a much sharper squeeze on real spending in 2016-17 and 2017-18 than anything seen over the past five years”,

and

“a sharp acceleration in the pace of implied real cuts to day-to-day spending on public services”.

My right hon. Friend the Member for Morley and Outwood (Ed Balls)and my hon. Friend the Member for Nottingham East (Chris Leslie) have highlighted the threat this poses to police, defence and social care. Is it not the truth that the Chancellor’s extreme fiscal plan can be delivered only by putting our NHS at risk or imposing yet another Tory rise in VAT? Although it is hard to see how this Government can make the extra £12 billion-worth of cuts to social security spending when they have failed to deliver any savings in social security so far, these cuts could not be delivered without inflicting unimaginable hardship on low-paid workers, children in poverty, disabled people or carers.

So for this Government, this empty Budget will be a fitting epitaph. What of this Secretary of State who wanted to take his place in history as the compassionate Conservative who reformed welfare? His time is up and his record is clear: major reforms undelivered or descending into costly chaos; food banks in every town and child poverty back on the rise; more and more spending on in-work benefits as more and more working people find their wages do not cover the rent. No wonder the OBR says that the Government are guilty of “optimism bias”.

[Mr Jim Cunningham]

One important factor in looking at low pay, child poverty and similar issues is that many people’s employment rights are eroded. We need only to look at City Link in Coventry to see that more than 1,000 people could not even get any redundancy pay because of the erosion of employment laws under this Government. That only adds to the poverty.

[Rachel Reeves]

I thank my hon. Friend for that intervention. Of course, this Government have made it harder for people to access justice, too, through the cuts they have made there.

We have had five years of Tory welfare waste—and it is high time we put it behind us. The Secretary of State wanted universal credit to be his legacy, but it is being paid to less than 4% of those who were supposed to be receiving it a year ago. Instead, this Secretary of State will be remembered for the hundreds of thousands of disabled people hit by the bedroom tax; for the 1 million people forced to resort to a food bank to feed their families last year; for the 3 million low-paid working families who have been hit by this Government’s cuts to tax credits. We cannot afford another five years of this Tory Government.

This could have been a Budget to make work pay, with a plan to raise the national minimum wage to £8 an hour and measures to promote and incentivise the living wage. This could have been a Budget for mums and dads who want to work and earn more, with 25 hours a week of free child care for all working parents of three and four-year-olds and guaranteed wrap-around care for those with children at primary school. This could have been a Budget that gave relief to working families on low incomes, by scrapping the ill-conceived and unfair married couples tax allowance and using the money to introduce a 10p starting rate of income tax instead. This could have been a Budget to create more of the productive, well-paid jobs we need by backing entrepreneurs, small businesses and the growth industries of the future, with a cut to business rates, a proper British investment bank, and new powers devolved to every city and county region across the country.

This could have been a Budget to secure our NHS for the future, with a tax on properties worth more than £2 million to pay for the thousands more doctors, nurses, midwives and home care workers that our health service desperately needs. This could have been a Budget that began to right the wrongs of the past five years, by tackling the tax loopholes and reversing the tax giveaways that have benefited a few and by cancelling the cruel and unfair bedroom tax that is hitting disabled people so hard. All that is not just the Budget that this could have been; it is the Labour Budget that we can have and the Labour Budget that we will have if we elect a Labour Government in just 45 days’ time.

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[Mr Campbell]

I apologise, Mr Deputy Speaker.

What have we got? We have the pension provisions. Okay, that is those people’s money and I suppose they are entitled to it, but I can tell Members what happened a few years ago when the miners were given the chance to pull their pensions out of the national mineworkers’ pension fund. I was chairman of the local branch at the time, not an MP, and I remember the spivs coming in big style. We had nothing to do with them, but they had meetings in social clubs and pubs and brought all the lads in. The Major Government said at the time that people could take their pension then as long as they got a better deal, the lads thought that they were getting a better deal and, of course, the spivs and speculators all came in. The lads all gave up their pension, saying that they were going to get a better deal, but within a year to 18 months they had to come back into the pension scheme.

That was a scandal waiting to happen, because there was no advice at all. The miners were finished—it was after the miners’ strike—and we told them to keep their pension where it was, but of course the spivs were telling them how wonderful their options were.

[Mr Jim Cunningham]

I remember exactly what my hon. Friend is talking about. Under the Thatcher Government, people were encouraged to come out of the state earnings-related pension scheme and to go into private pension schemes. I remember Rolls-Royce spending a lot of money encouraging people to do that, and look at how that ended up.

[Mr Campbell]

It nearly ended up in a scandal. The Government opened up the mineworkers’ pension scheme again so that people could bring their money out of the schemes they had been conned into joining. A lot of miners lost a lot of money, so the warning is there. As has been mentioned in many speeches today, the Government must be very careful that they do not fool the people.

I want to mention the national health service, because 65% of new contracts in the NHS have gone to private companies. I do not know what will happen if the Tories are elected at the next election, but I can tell Members one thing: in five years 65% of contracts in the NHS have become private and that is a disaster waiting to happen. I think that the Tories are waiting for 100% private contracts in the national health service, so that it is totally privatised. The Labour party is prepared to put in at least 5,000 more doctors and 20,000 more nurses, and I hope that that is a reality and that we can afford to pay for it.

I have to mention the banks, as they cost the taxpayers of this country a lot of money over five years. It is time that we started taking a lot more money off the banks than we are taking now. They owe the taxpayers of this country big time and we should increase the levy and say that they should pay the money back. We should not have bailed them out in the first place.

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[Mr Jim Cunningham (Coventry South) (Lab)]

The Government parties are trying to brainwash us into thinking they have an economic plan, when in actual fact it is an economic puzzle, given some of the measures announced.

The Government have to be challenged over their allegation that the Labour Government created the economic situation in 2010. I think the Conservatives have forgotten that in opposition they said they would match our Budget pound for pound—in fact, they said we were not spending enough. That does not suggest any economic foresight on the part of the Chancellor when he was shadow Chancellor. Moreover, the previous Governor of the Bank of England, who was an adviser to the then Chancellor and Prime Minister, said it was not the Labour Government’s fault. It actually started in America with Fannie Mae and Lehman Brothers—the bankers—and the housing crash. In other words, the Government have become apologists for the bankers, rather than holding them to account for what they did to this country and the international community in 2008.

We should also remind the Government that we kept interest rates down to help young people, in particular, deal with negative equity. We introduced the quantitative easing that the Government are still carrying out today and persuaded George Bush—funnily enough, a Conservative American President—to pump more than $200 billion into the American economy, and when Obama came in a month later, he saved the motor car industry, which helped this country. If we had not bailed out the banks, some Ministers would be losing not just their houses but their pensions. We bailed out the banks partly because we knew that otherwise the ordinary person—the pensioner, the saver, the young person saving for a mortgage—would have gone under, but it also helped to rejuvenate industry.

As far as we know, the Chancellor needs to make another £30 billion of cuts, but we do not know if that means more cuts to the police. We know there will be benefits cuts, but we do not know where they will come from, and defence cuts, but we do not know whether there will be further cuts to the NHS. I am not scaremongering. Unless the Government tell us exactly where the cuts will be, it will be open to speculation. They have emasculated local government financially—is local government facing further cuts? Is that part of the plan? In Coventry, at least 1,000 jobs will go over the next three years, and the city council has to find £75 million in cuts, which will affect basic services. Today I attended a school where children were trying to save their local library. The council has granted a reprieve, but there is another area where the council might find itself in difficulty—care in the community. There has been bed blocking at the university hospital in Coventry because we do not have enough social workers to discharge people back into their own homes. Labour will certainly put that right.

People in the public sector have not been appreciated and have had their wage increases held at 1% for the last three or four years. The Government can say what they like about wages rising by about 2%, but purchasing power has dropped by 6%. They say we are back to 2010 wage levels—well, that is one heck of a cut over the past four or five years. We have also had cuts to the legal aid budget, meaning that people cannot get social justice. We have 1.6 million people on low-wage zero-hours contracts, yet the Government have the effrontery to hand back £6 billion in tax cuts to their friends. The Chancellor proposes to cut £12 billion by reducing welfare spending and £13 billion by reducing departmental spending. Where is this coming from? Only £2 billion of cuts have been announced, so where might these cuts come from? I have already indicated some areas where they might fall.

The NHS is due to have increased funding in line with Simon Stevens’s proposals, which the Government are supposed to be in favour of. Similarly, the education budget is supposed to be protected, as is overseas development assistance. As I just mentioned, the Government have promised £6 billion in personal tax cuts, without bothering to inform us how they will be costed. We should also consider the NATO commitment to spend 2% of GDP on defence, which the Prime Minister recently advocated. If they do not achieve this, will we see more cuts and job losses in the defence industry? The Government have also promised to ring fence universal benefits and the state pension triple lock. So it comes down to this: where do they plan to make the cuts and why will they not open up and tell us?

Oral Answers to Questions

Jim Cunningham Excerpts

Monday 9th March 2015 Commons Chamber

[Mr Duncan Smith]

My hon. Friend is right. When we came into office there was an open door policy—people could come in, be unemployed and claim benefits immediately. They could claim housing benefit. Since we have been in office, we have stopped people claiming housing benefit. They must be resident for three months before they can claim jobseeker’s allowance, and after three months, if they do not have a job or the prospect of a job, they will not be allowed to stay in this country. These changes introduced by this Government and the new ones on universal credit today mean that we are serious about this. Labour never was.

[Mr Jim Cunningham (Coventry South) (Lab)]

Has the Secretary of State seen the Citizens Advice report which shows that many ESA claimants are left with no money and are reliant on food banks after being told that they are too fit to claim ESA and not fit enough to claim JSA? Most have had to wait up to 10 weeks for a decision. Will the Minister look into this?

[Mr Harper]

If the hon. Gentleman is referring to mandatory reconsideration when somebody is found fit for work, he will know that the average length of time taken to decide one of those is 13 days, not 13 weeks. He will also know that if someone is found fit for work, they are able to claim jobseeker’s allowance and they will receive support from the jobcentre to help them get back into work.

Mental Health and Unemployment

Jim Cunningham Excerpts

Tuesday 24th February 2015 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

May I say what a privilege it is to follow the right hon. Member for Sutton and Cheam (Paul Burstow)? This debate is important and it sends a message that, again, this Chamber is discussing mental health. I have said, and I will say it time and again, that the more we talk about mental health, the better. Talking about mental health on the Floor of this main Chamber sends a clear message that this House—Members from all parts of it—is taking mental health seriously.

Clearly, work is central to most people’s lives. Mountains of research suggest that the right type of work is good and positive for somebody’s mental health. In this debate, I want to focus on three main areas. The first is mental illness and the benefit system—we cannot talk about unemployment without mentioning the benefit system. The second is how we manage long-term mental health problems in the community. Realistically, there are individuals who will not be able to work or hold down full-time jobs, so we need mechanisms by which we can support them in the community. The third area, which is related to unemployment, is how mental health is dealt with in the modern workplace in the UK.

Many people may ask: why is mental health in the workplace important? Well, to coin a phrase from Bill Clinton, “It’s the economy, stupid.” Bad mental health is bad for the UK economy. The UK report on mental health in the workplace, commissioned in February 2014, estimated that it cost the UK economy some £70 billion a year—4.5% of GDP. In the current economic climate, a reduction in that figure, which was drawn up using Department for Work and Pensions data and OECD and Eurostat labour market figures, would be welcomed by the Chancellor of the Exchequer. There is also another important issue here, which is that it is good for the individual. In a decent modern society, we should ensure that people’s mental health is not harmed by the work that they do. We must remember that it is not just the individual who is harmed, but the families as well.

The right hon. Member for Sutton and Cheam talked about the number of individuals who are on employment and support allowance, some 46% of whom have mental health problems. We have heard the rhetoric over the past few years about trying to be tough on welfare claimants and about getting people off benefits. No doubt we will hear more of that in the run-up to the general election. But I am not sure that such rhetoric helps the people with mental health problems who are claiming benefits.

The evidence is clear that the work capability test has been a complete disaster for people who have mental health conditions. It has also been a complete financial disaster for the Government. It does not work for the people it is supposed to support and it does not help the taxpayer.

[Mr Jim Cunningham (Coventry South) (Lab)]

My hon. Friend mentions the situation in the workplace with regard to mental health. I was very interested in what the right hon. Member for Sutton and Cheam (Paul Burstow) said about the Health and Safety Executive enlarging its role in this area. What does my hon. Friend think about that? Does he think that it could play a role?

[Mr Jones]

I do, yes. There seems to be this feeling that business should be afraid of the Health and Safety Executive. I know from my previous life that it is good not just at dealing with stress but at driving up standards and productivity in the workplace. It ensures that the working environment is safe, so, yes, there is an opportunity there.

Like other Members, I have seen in my constituency the merry-go-round system of the work capability test. It goes a bit like this: a person is assessed by Atos, by people who have no mental health training whatever; he or she fails a fit-for-work test and is then put in a work-related group; he or she then appeals that decision and has their benefits reinstated. Then, ludicrously, within a matter of months, that person gets recalled to Atos, and they are on that merry-go-round again. That is not only bad for the individual but a complete waste of taxpayers’ money, as there is the cost not just of the assessments but of the appeals. The appeals system has been overloaded with people and has had to employ more staff, and that is not an efficient way of dealing with these individuals.

Charities in the north-east, such as Mental Health North East, have explained this expensive merry-go- round and have done very good reports on the numbers. Hundreds of people in the north-east of England are on the merry-go-round system, which has a tragic effect not only on the individuals but on their families. In some cases, it puts back people’s mental health rather than improving it. We should not shy away from the fact that there have been some cases nationally in which, because of the Atos system, people have taken their own lives. No Government should be proud of that.

People are under pressure, not just from the work capability test but from the economic downturn. Statistics came out last month that showed that the number of suicides now, at just over 6,000, is higher than it was two and three years ago. Surprisingly enough, the north-east of England is the region with the highest number of people—young men, mainly—committing suicide. I find it very uncomfortable that in 2015 we have a system that puts these pressures on individuals and that the major killer for men aged 20 to 34 is suicide. We need to address that, not just because it is the right thing to do but because of the economic case. That is 6,000 people who are not making a contribution to the economy of this country. We should also remember that 6,000 families will be hugely affected by the loss of a loved one. Each one is a personal tragedy and each one, like a ripple, has an effect on an entire community. It is important that we address the issue because we cannot have avoidable deaths going unchecked. Whatever happens after May, dealing with suicide and mental illness must be taken forward on a cross-party basis.

As for the Government’s response to the Atos merry-go-round, the right hon. Member for Sutton and Cheam (Paul Burstow) is right that after four years they have finally worked out that it is not an effective way of dealing with people with mental illness on benefits and have put in place pilot schemes that go broadly in the right direction. However, like the right hon. Gentleman, I want to ask the Minister what the time scale is for rolling them out across the country. I am also of the opinion that we need to take people who have mental health issues out of the system. I do not argue for one minute that they should not be assessed at all, but putting them through the Atos system is not the way to do it. If we can ensure that they get the individual help and care that they need, that will not only help them return to work or gain access to work but save the taxpayer a great deal of money.

Compulsory Jobs Guarantee

Jim Cunningham Excerpts

Wednesday 11th February 2015 Commons Chamber

[Kate Green]

Very few households choose to be workless. Indeed, very few—[Interruption.] I understand that the hon. Gentleman was not saying that. It is an issue not just of role models, but of opportunities. It is welcome that more people are in paid employment, but today’s debate is about that vulnerable minority who are scarred by long-term unemployment.

[Mr Jim Cunningham (Coventry South) (Lab)]

One thing we should remember is that the Labour Government helped one-parent families through Sure Start, whose schemes allowed trapped housewives on council estates to get back into work if they wanted it.

[Kate Green]

I am extremely proud of the fact that, under Labour, lone parent employment rose from 44% in 1997 to nearly 60% by the time we left office.

An interesting debate opened up this afternoon about the proper role of Government in relation to long-term unemployment. One argument was expressed very well in a thoughtful speech by the hon. Member for Enfield North (Nick de Bois), who suggested that the role of Government was only to create the conditions for business to thrive and to make employment available. That is the real philosophical divide between Opposition and Government Members. We believe that it is the role of Government proactively to intervene as a backstop to tackle entrenched long-term unemployment. We believe that programmes that have attempted to do that—for example, the future jobs fund and Jobs Growth Wales—prove that such programmes, in those terms, are effective.

Those programmes were much criticised today by the Secretary of State, but they have been cost-effective and have created real jobs with real pay for those who participated. That, fundamentally, is what young people want.

Our compulsory jobs guarantee will be a quality offer for long-term unemployed people. It will be paid at least at the national minimum wage. It will guarantee work for at least six months. We expect, drawing on our experience of other programmes, that many of those jobs will turn into permanent jobs. It will consist also of support, to ensure that training and the opportunity to develop one’s career are embedded as part of the programme. Contrast those conditions with work experience which, of course, is important, but which fulfils a different function. I do not think it is appropriate to expect anyone, even our young people, to work for three months without proper pay, because at that point they must be doing a proper job.

My hon. Friend the Member for Ealing North (Stephen Pound), who is not in his place, made an important point about our compulsory jobs guarantee—the fact that it is founded on the concept of mutual obligation. For those who are out of work, we will make sure that after a period of one year for the under-25s or two years for the over-25s it will be our role to take the responsibility to guarantee them employment, and in return that individual will be expected to take up the opportunity that is offered.

The hon. Member for Banff and Buchan (Dr Whiteford), who made a very useful speech in many respects, seemed to think that the sort of conditionality that we propose in our compulsory jobs guarantee programme was not appropriate. I am entirely with her in the appropriate and careful use of sanctions—which I do not think we are seeing under the present Government—but I do not see what the problem is with having conditions for support which our compulsory jobs guarantee will offer, and it is right that they should be contained in the programme.

There was an important and interesting debate about engaging the private sector in our programme. As my right hon. Friend the Member for East Ham pointed out in opening the debate, we have seen successful engagement of the private sector, particularly of the small and medium-sized enterprise sector, in Jobs Growth Wales. One criticism that many Government Members levelled at the future jobs fund was that it had not engaged with private sector employers. I readily accept that the programme was brought in as an emergency in response to a significant employment and financial crisis, and at that time the most straightforward way to do so was through the medium of the voluntary and the public sectors. But there is no reason at all why that could not have evolved to encompass private sector employers, and indeed those private sector employers who did participate, such as Jaguar, as my right hon. Friend mentioned, found it a very positive programme, as did those who went through it.

We heard some useful contributions from, for example, my hon. Friend the Member for Scunthorpe (Nic Dakin) and the hon. Member for Stroud (Neil Carmichael), about the importance of accompanying jobs programmes with investment in education, skills and vocational training. As the hon. Member for Stroud said, it is right that certain industry sectors struggle to recruit suitably qualified and appropriately skilled workers. That is why I so deplore some of the reforms that we have seen to the education system under this Government, which so erode the value of vocational education and training. Although Government Members like to tell us often about the growth in apprenticeships under this Government, young people aged 16 to 19 have not seen a growth in opportunities to take up apprenticeships. What is more, those apprenticeships too often take young people to only a level 2 qualification, and we know that many employers consider a level 2 qualification insufficient for someone to make a meaningful start in the kind of jobs that the hon. Gentleman rightly talks of.

Finally, let me address the concerns that were raised by a number of Government Members about whether our programme is fully funded and costed. May I take the opportunity to assure them that it is? It will be funded by the bankers’ bonus tax—[Interruption.] Not again, as the Minister says. This will be the only purpose to which an incoming Labour Government will put the funds raised by this one-off repeat of the bonus tax. When the Minister for Disabled People is sitting on the Opposition Benches after 7 May, I invite him to hold us to that commitment, because this is one that I confidently give on behalf of my party.

We also think it is right to impose further restrictions on pensions tax relief for the very highest earners. I can see no objection to those with the broadest shoulders bearing more of the burden of funding so that some of our young people have the chance of employment, and that is what we will do.

Many people lost out after the global economic crash and in the three years after the general election, when the economy hardly grew under this Government. Even now, as Ministers point to improving levels of employment, long-term and youth unemployment remain a scourge on our economy. Labour’s compulsory jobs guarantee is the key policy to change that, and the sooner we have a Labour Government ready to introduce it, the better.

Housing Benefit (Abolition of Social Sector Size Criteria)

Jim Cunningham Excerpts

Wednesday 17th December 2014 Commons Chamber

[Andrew George (St Ives) (LD)]

It is a pleasure to follow the hon. Member for Makerfield (Yvonne Fovargue). She is well respected as a knowledgeable expert on these issues. She said that the under-occupancy penalty is cruel and described the mindset of those who would introduce such a policy. Presumably, that is the same mindset that introduced this policy into the private rented sector and reinforced it. My record on this issue can be seen on a number of occasions, including on the Affordable Homes Bill, which received a 75-vote majority in this House on 5 September. My opposition to the under-occupancy penalty has been consistent throughout, including during the previous Labour Government.

It is not the fault of those who are in housing need that successive Governments have failed to build enough homes of the right size, and they should not be made to pay the penalty for that. It would be nonsense to move disabled people from homes that have been converted, often expensively at taxpayers’ expense, only to have to do it all over again in another property. It is rare in my constituency, and I know in many others, to find a suitable alternative home within 20 or 30 miles. It is wrong that people who have a settled life in a local community should have to uproot themselves from their social and family, and other supportive, connections to meet the requirement of this unacceptable policy.

The fundamental moral point is that the poor are just as entitled to a stable family home as the better off. There are many circumstances where apparent under- occupancy is for a good reason: the visiting carer; the young nest returner coming back to a family home—something that middle-class people expect to offer to their younger people—after perhaps not getting on in life as they anticipated; and those who provide shared care. We should be encouraging housing associations and other social housing providers to build larger homes. When I worked in this sector, I always sought to ensure that social housing providers had some flexibility. Having larger homes provided flexibility in the management of their estate. This policy drives them in the opposite direction. I fear there is also a sinister agenda to create an environment in which poor families will ultimately turn on their poor neighbours and blame them if they are living in overcrowded accommodation, rather than looking further afield to find the real culprit.

[Mr Jim Cunningham (Coventry South) (Lab)]

What happened to the hon. Gentleman’s private Member’s Bill? How was it stopped? He mentioned poorer families. What is the actual cost? Is it costing £15 or £25 a week for those families who have to move?

[Andrew George]

It is already on record as 14% and 25%, depending on the number of rooms. I am concerned about the trading of statistics in the debate so far. I have to say that they are far away, and wildly so, from many of the statistics I have scrutinised when looking at the impact of the policy. They need to be traded in a calmer environment.

Oral Answers to Questions

Jim Cunningham Excerpts

Monday 8th December 2014 Commons Chamber

[Esther McVey]

I will indeed meet the hon. Gentleman to talk about that case. However, that is why the Secretary of State is leading the way in bringing in universal credit so that we do not have all those discrepancies in the system, with points and differentials and things that are preventing people who want to return to work from doing so. The Government should be supporting them, and that is what we are doing.

[Mr Jim Cunningham (Coventry South) (Lab)]

2. If he will make it his policy to pay employment and support allowance during the period of mandatory reconsideration.

[The Minister for Disabled People (Mr Mark Harper)]

I am afraid that I am going to disappoint the hon. Gentleman. We are not going to change our policy in that way. When someone is found fit for work, they should claim jobseeker’s allowance and work with Jobcentre Plus to get back into the work force.

[Mr Cunningham]

I think that the Work and Pensions Committee has also termed the policy illogical, but does the Minister not realise that, by virtue of the fact that he is not prepared to change it, he is driving more and more people into hardship and that they, in turn, are having to use food banks? The Government must hold some sort of record on food banks, because under this Government their use is the only thing that is increasing.

[Mr Harper]

That was not the sort of question I normally expect from the hon. Gentleman. If someone is found fit for work, they should immediately apply for jobseeker’s allowance, which is paid at the same rate as the assessment rate of employment and support allowance, so there is no change in their income. They should then engage with their Jobcentre Plus contact so that they can be moved into work. That is the right way for someone to behave when they have been found fit for work, and there is no reason at all why their income should fall.

--- Later in debate ---

[The Minister for Employment (Esther McVey)]

Many of us were on the high street celebrating small business Saturday and helping our local businesses, but of course this Government are doing even more to help them to take on more people. Whether through implementing a £2,000 cut in their national insurance bills, extending the business rate relief or putting £10 billion of financing into the British business bank, we have done a great deal to help our small businesses, which are the backbone of this country.

[Mr Jim Cunningham (Coventry South) (Lab)]

T6. Her Majesty’s Revenue and Customs is sending letters to taxpayers detailing how their tax revenues are being allocated. This is being done in the name of transparency, but will the Minister tell his colleagues in the Treasury that teachers’ pensions are not welfare?

[The Minister for Pensions (Steve Webb)]

As the hon. Gentleman appreciates, the letters are sent by HMRC on behalf of the Treasury, and he is welcome to address his concern to our colleagues there. However, we clearly appreciate that there is a distinction between social security benefits and pensions paid to public servants in retirement.