Universal Credit: Delayed Roll-Out

Jim Shannon Excerpts

Tuesday 4th February 2020 Commons Chamber

[Will Quince]

I believe I answered this question a little earlier today. I am looking at the issue, and I will invite the hon. Gentleman, along with other colleagues who have an interest in this area, to the Department to raise it with officials. We are looking at solutions. It is not potentially an easy or quick fix, but if we can address this, of course we will.

[Jim Shannon (Strangford) (DUP)]

I see the delay as a wise step by government to reassess, and I congratulate the Minister on not enforcing a transfer to UC on people, who know it will see them in a five-week freeze. Will he use this delay to introduce a smoother, more workable transition period, to prevent people from getting into debt?

[Will Quince]

I thank the hon. Gentleman for that question. The important point here is that when we talk about the £500 million cost, we are talking about £500 million that will go into the pockets of claimants up and down the country, including some of the most vulnerable and disadvantaged people in our country, who previously would not have received that transitional protection under the legacy benefits system or in their transfer over under natural migration.

Child Poverty in Scotland

Jim Shannon Excerpts

Wednesday 30th October 2019 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) on bringing forward this debate. He always speaks passionately on behalf of his people, and on this occasion he did so on behalf of all children in poverty.

I am here to support my colleagues and friends. Although the debate is about child poverty in Scotland, the fact is that child poverty is not specific to Scotland. It is also rampant in other areas of the United Kingdom of Great Britain and Northern Ireland—particularly Northern Ireland—so I want to say a couple of words in support of colleagues who have already spoken and those who will speak after me. Much of what we say will be very similar.

I am a proud Ulster Scot. I love my heritage. I come from the Stewarts of the lowlands of Scotland, so my heritage goes way back to Scotland. I share a cultural identity with the hon. Gentleman and other friends and colleagues in the Chamber, and my values are very similar to theirs.

Unfortunately, the children in my constituency face the same difficulties as those in the hon. Gentleman’s constituency. Official estimates published by the Northern Ireland Department for Communities—the figures are a matter for the Northern Ireland Assembly—show that in 2017-18, 19% of children in Northern Ireland from birth up to the age of 16, including dependent children aged between 16 and 19, lived below the poverty line, in households with an income of less than 60% of the UK average. I suspect the figures are the same in the hon. Gentleman’s constituency and in those of the hon. Member for Motherwell and Wishaw (Marion Fellows) and the hon. Members who speak after me.

In 2017-18, the poverty threshold in Northern Ireland stood at £19,016 of annual income for a single person with two children, and £24,245 for a couple with two children. The Minister knows that I am very fond of him and what he does, and I believe he will answer our questions to the best of his ability, but I say to him that we need a UK strategy and additional funding to tackle child poverty. The situation in my constituency is the same as the situation that the hon. Members for Coatbridge, Chryston and Bellshill and for Motherwell and Wishaw described. Society, the Government and elected representatives are marked by the way they respond to those who are less well off. I do not believe for one second that we can ignore them; the Government must reach out and help.

During Northern Ireland questions today, an hon. Member—in fact, it was the hon. Member for Motherwell and Wishaw; I should have recognised her name earlier—asked the Secretary of State:

“What economic assessment he has made of the potential effect of the Government’s proposed withdrawal agreement on Northern Ireland.”

In a subsequent question, the hon. Member for Birmingham, Selly Oak (Steve McCabe) asked about

“legislative proposals to maintain welfare mitigation payments in Northern Ireland after March 2020.”

The right hon. Member for Birkenhead (Frank Field) and the hon. Member for Bermondsey and Old Southwark (Neil Coyle) tabled the same question.

My party—the Democratic Unionist party—and our Minister at that time were instrumental in achieving those welfare mitigation payments. At the end of March 2020, those provisions will end, and members of the public from all communities and of all political and religious persuasions across Northern Ireland will be disadvantaged because of Sinn Féin’s intransigence. We have an opportunity because my party put on the statute book legislation that enabled welfare mitigation payments to be made. Those payments came out of the block budget, by the way, but we agreed to that and acted accordingly. I did not get the chance to ask Northern Ireland Office Ministers directly earlier, but I ask this Minister: what can be done to mitigate the impact, which will be severe?

I will make a final comment about food banks, Sir David. Food banks are often talked about, and have probably been mentioned by everyone who is present here. The first Trussell Trust food bank in Northern Ireland was in my constituency. It came to Strangford because a number of church groups got together and recognised the need to reach out as faith groups, in order to help others who found themselves in difficulties making payments or paying bills, or when everything seemed to turn against them.

On the television this morning there was a discussion about debt organisations; I have not had a chance to watch it yet. It is not always a person who has benefit delays or benefit short payments who needs debt management; more often it is people who do not fit into the normal category. Minister, when it comes to addressing child poverty, what has been done to help those who need debt management? It is always better to try to address debt management early on, rather than let people get to the final moment, when letters are coming through their door, they are under pressure, their credit cards are over-egged and they find themselves in difficulties. People who are in employment, have a mortgage and who own a house may also need help.

There are people who come to my office who use the Thriving Life food bank in my area. I highlight the DWP and the changes that have been made to benefits, as referred to by the hon. Members for Motherwell and Wishaw and for Coatbridge, Chryston and Bellshill. There is a follow-on that is down to benefits being reduced or, when the issue of housing benefit is looked at, delayed. It is also down to employment issues, such as shorter hours and changes to minimum pay.

[Dr Whitford]

The hon. Gentleman raises the issue of food banks. There is hardly an area that does not now have a food bank. My local area is supported by churches that have a rota to collect goods. Recently, our food bank has often had to put out crisis calls because its shelves are simply empty; it cannot keep up with demand. As the health spokesperson for his party, does the hon. Gentleman recognise the impact on life expectancy and on long-term physical and mental health that comes from growing up in poverty?

[Jim Shannon]

I thank the hon. Lady; she is always good in this House when it comes to bringing forward issues that are pertinent to the debate. She again excels today in bringing forward this issue of food banks and the needs they address. The people who use them are under pressure emotionally and mentally, which transfers to physical issues. When that happens, the problems that the hon. Lady refers to become real for them.

I recognise, as I know the hon. Lady does, that those who have set up the food banks are genuine, interested people who bring the best of people together. They reach out to those who need help, as their faith tells them to do, which is a great motivation. I almost feel encouraged by the food banks and those who are motivated to make them happen, but calls go out to ensure that people bring in more stock, because demand is sometimes high.

We appreciate what the food banks, the volunteers and the churches do when they work together. When it comes to child poverty, whether it be in Scotland or Northern Ireland, we all want the same. We want children to have a good quality of life and we want their families to be able to look after them in the way it was designed in life that they should. For that to happen I believe, with great respect, that the Government must look genuinely at what they do.

The issue of debt management is important to child poverty; it is crucial. Nothing disturbs me as much as seeing children in difficulty; there are two or three such children who come to my office. The hon. Member for Motherwell and Wishaw mentioned Christmas. As Christmas comes, the child who lives three doors down will probably get almost anything he or she wants, but the child living in poverty will not get anything. There is a terrible injustice in society when we come to Christmas, a time of giving and good will, that those who are in poverty will not be able to have the same as everyone else.

Endometriosis Workplace Support

Jim Shannon Excerpts

Tuesday 29th October 2019 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the right hon. Member for Elmet and Rothwell (Alec Shelbrooke) on bringing this matter to the attention of the House. As the father of three sons, I must admit that the subject of periods and “women’s concerns”, as my mother used to call them, was not my forte. The hon. Member for Dewsbury (Paula Sherriff) will know what I am about to say, as I have told her before—and I commend her for all that she does and for the event that she held in Portcullis House. It was helpful for everyone to be aware of the issues.

In my office five out of six staff members are female, and two of those girls suffer from endometriosis. I have overheard too many conversations to ignore the issue and leave it in a pile marked as women’s concerns. I married my wife some 32 years ago, and at the time she suffered from endometriosis as well. The doctor told her, “If you have some children, that will clear it up.” Well, we had three children, and it did not clear it up—that is a fact.

I did a little research, with the help of the House of Commons Library, and the briefing states:

“It is not known how many women are affected by endometriosis in the UK, there are no official figures collected on prevalence but a figure commonly cited is that it is estimated to affect 1 in 10 women. In 2015, the Royal College of Nursing reported that ‘the exact prevalence of endometriosis is unknown but estimates range from between two and 10 per cent of the general female population but up to 50 percent in infertile women.’ The NHS does collect data on hospital admissions where endometriosis was the primary condition—in 2018-19 there were 23,000 hospital admissions where the main cause was endometriosis in England.”

I will always bring in the perspective of Northern Ireland, where nearly all the 380 women who took part in BBC research said endometriosis had badly affected their mental health, career opportunities, sexual relationships and education. The latest figures show that in Northern Ireland the number of women waiting for a gynaecology out-patient appointment rose from 7,700 in 2012 to 17,000 in March. That is a massive increase of about 120%. In 2010, 221 patients were waiting for a laparoscopy, and by March this year the number had almost tripled to 606. That shows that the issue is becoming more prevalent. Of those waiting, nearly half have been doing so for more than six months. Those women are being failed by the NHS. Yet we expect them to continue to go to work with immense pain, feeling ill and sometimes unable to move. Worse, we live in a society where we have been trained not to talk about it. We talk about migraines openly in the workplace, but the debilitating disease of endometriosis is just as deserving of consideration and support in the workplace.

I firmly believe that we must begin a campaign to raise awareness of the problem for women, and of how gentle support can and must be put in place. That support can range from more frequent rest breaks to a change of activity during flare-ups in manual labour jobs, and even flexibility in sick day procedure. It is just a matter of understanding, being compassionate and sincere and trying to help—having empathy. I believe the change must start from here and work its way through all public sector jobs. I look to the Minister, as always, to understand how and when he intends to implement that support system.

--- Later in debate ---

[The Minister for Disabled People, Health and Work (Justin Tomlinson)]

Thank you, Mr Pritchard. It is a real pleasure to serve under your chairmanship once again for this important debate. I congratulate my right hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) on securing this debate, which provides an opportunity to discuss this hugely important and overlooked condition.

It is clear that there is overwhelming cross-party agreement, with little to disagree with in the sentiment expressed. I am incredibly impressed with the references to digital engagement and with how most hon. Members who spoke have been personally contacted or have personal experience of the impacts. It was clear to see genuine emotion from people watching the debate, and that is because this genuinely matters.

It has been highlighted that this issue cuts across many Departments. I represent the Department for Work and Pensions, but there is clearly a big role for the Department for Business, Energy and Industrial Strategy in how employers are acting, for the Department of Health and Social Care on awareness and how long it takes to get the correct diagnosis, and for the Department for Education in raising awareness at a younger age, although it does seem that there are positive steps. To ensure that nothing falls between the cracks, my Department recently moved the Office for Disability Issues to the Cabinet Office. We are still responsible, but it is based in the Cabinet Office so that on cross-cutting issues such as this it can be the eyes and ears, making sure that there is a joined-up approach.

I absolutely give a full commitment, on behalf of the DWP, that we will engage fully with the APPG review, to identify areas where we can improve awareness with our frontline staff, and improve how we handle benefits, support and everything that we can possibly do. We will also do everything we can to encourage the other three Departments, which I have no doubt will be just as willing to be proactive in this area. With the APPG’s helpful, constructive, proactive review, using the wealth of experience that is out there, hopefully together we can make a big difference.

[Jim Shannon]

We clearly welcome what the Minister just said, but as the shadow Minister said, surely there needs to be an understanding in the DWP of what endometriosis is and what its symptoms are, so that that is reflected when considering someone’s benefits. As elected representatives, we sometimes find that that is not the case. How will the Minister ensure that the Department and officials can make that change?

[Justin Tomlinson]

That is what I am articulating. We want to know that all our frontline staff and systems are taking that on. People are raising concerns that may not necessarily be directly linked to the DWP, although they may be. That is why I want to commit as much as I can to support the review, because if there are areas in which we can improve, we should and will improve in them. There is a genuine commitment.

Child Maintenance Service: Payment Recovery from Absent Parents

Jim Shannon Excerpts

Wednesday 2nd October 2019 Westminster Hall

[Peter Grant]

Absolutely. I do not think we will ever have a set of regulations that everyone agrees with. If a relationship between two people has completely broken down, the one who is paying will think they are paying too much, and the one who is receiving payment will think they are not getting enough. Surely, if the rules are based on someone’s income, however, it should be no easier for them to hide their income from their children than it is to hide it from the Inland Revenue.

I have assisted constituents affected by HMRC loan charge, as well as a constituent who was pursued to a ridiculous degree for a relatively small debt that they turned out not to owe to HMRC. Many resident parents in my constituency would like a fraction of that diligence to be used by the CMS when it chases down money that is owed not to the Government but to children who often desperately need it.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on securing this debate. Does he agree that more must be done to reconcile reported earnings with the lifestyle of the absent father or mother? I have seen parents in my constituency who give their child £10.50 a week, yet they drive a brand-new BMW, have the newest of gear and have that kind of lifestyle. An absent father must be allowed to live, but it should be difficult for them to disregard their financial obligations. We must make that more difficult.

[Peter Grant]

I agree with that entirely.

Local Housing Allowance and Homelessness

Jim Shannon Excerpts

Wednesday 24th July 2019 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this important debate. I thank the hon. Member for Ealing, Southall (Mr Sharma) for setting the scene so well, and all hon. Members for their substantial contributions. As always, I will give a Northern Ireland perspective on the matter and give an idea of what is happening there.

It is good to see the Minister in his place. He has not been in post long, but hopefully he will continue in it long after today. I know that he has a deep interest in this subject, and we look forward to hearing his response to the genuine questions that we have, because I know that he will do his best.

Despite targeted affordability funding, less than 10% of the local housing allowance rates now cover the rent of the cheapest 30% of private homes. That is a chasm of difference, which is very hard to equate, as other Members have said. Many people who cannot get on the social housing ladder and who have no family to take them in realistically have to resort to sleeping on the streets. It is not by choice; it is almost by design that they are unable to find accommodation.

I have had a number of such cases in my constituency. Entering the private housing system is not an option for many benefit claimants, given how high the cost of rental is in the private housing sector. People without a partner who are benefit claimants cannot realistically get a one-bedroom flat through social housing and cannot afford to get one through private rental under the current allowances, because the two figures just do not equate, as I have said.

The hon. Member for Westminster North (Ms Buck) mentioned a mother with two children who are visually handicapped, who has to use the money that should be purposely set aside for their disability to pay the rent, so that they have accommodation and the children can get to school. That is a supreme example of the problems that people have, and I am sure that the Minister will respond to it specifically if he can.

Given the issues, why should we expect people to try and get suitable accommodation? I know the difficulties in my area. My staff and I were working with a young man who was literally sleeping in a garage. He was 40, so not entitled to homeless points, despite our efforts on his behalf. We all tried to get him into accommodation in the area, but he could not get a one-bedroom flat in his price range. His elderly mother—very often, family members step in—ended up paying the difference, but when she passes away, hopefully not for a long, long time, I do not know where this troubled young man will be. He will certainly not be in a private rental.

Nobody should have to sleep on the streets in this day and age, as I think all of us—the Minister, the shadow Minister, the hon. Member for Stockton North (Alex Cunningham), and all right hon. and hon. Members here today—realise. I believe that we must try to bring more people into employment, so that they do not have to rely on benefits to provide them with a stable home. I will make some comments and ask some questions about that shortly, because this issue is not just the Minister’s responsibility; other Departments have a role to play as well.

The local housing allowance should be a safety net for people, so that they can find a job to provide them with a bit more stability. Yes, some people may undoubtedly seek to take advantage of the benefits system as an excuse not to find a job, but I have to say that, from my evidential basis, I do not see that. I am not saying that it does not happen, but I do not see it in my constituency.

There is a genuine lack of housing at these prices, and private rental landlords are sometimes loth to take universal credit or housing benefit tenants, and especially not at a discounted rate. There is a very difficult balance to strike between a rental that is correct and a housing benefit or universal credit system that helps people to stay in the accommodation they are in.

[Matt Western (Warwick and Leamington) (Lab)]

The hon. Gentleman is making an extremely powerful and important speech. He seems to be making the case for much-needed and industrial-scale social rented housing, which would provide people with basic security of tenure for their home, so that they can then get a job and enter the workplace with that assuredness. I think he is also saying that there is such a big gap between housing costs and local housing allowance provision, particularly for one-bedroom accommodation.

[Jim Shannon]

I have been a great believer in social housing. I have supported it all my life, and I regularly have people coming to me trying to access it. It is incredibly important for those who cannot afford to buy their own home—even more so today. Alongside that, when it comes to social housing, we must provide a benefit system, and the LHA enables people to stay in their accommodation, so the hon. Gentleman is absolutely right. I totally agree with what he said.

I have sympathy for those experiencing difficulties and recognise that people may be experiencing difficult times that prevent them from finding a job. I believe that help should be available to them, but there is another aspect of this issue, and that is getting the right qualifications to find a stable job—a reality that some people fail to face up to in school. In 2017, 16.6% of Northern Ireland residents aged between 16 and 64 had no qualifications. I believe that these problems are intrinsically linked, which is the point I made earlier. It is not just the Minister’s Department; the Department for Education, the Department of Health, the Department for Work and Pensions and others all have a role to play. To tackle homelessness, we must tackle the problem of people having no qualifications, as low-skilled jobs are becoming harder and harder to come by nowadays.

Unfortunately, homelessness and deaths are linked, and I will give hon. Members some statistics—I cannot say that they are exactly linked together, but the stats may just tell us something. In Northern Ireland from October 2017 to the end of August 2018, an average of 13 homeless people per month had their housing applications closed due to death. Of the deceased, 63% were aged 60 or younger and the youngest was only 18. The majority, 93, were male. Their cause of death is unknown; I make that comment clearly. This is a problem, and I believe that these people should be helped. These figures are distressing, and it is horrendous that people cannot get a helping hand to lift them out of the difficult situation they are in.

A new strategy is required if we seek to solve the homelessness problem across the UK. Getting more people into work and getting people with the right qualifications would be steps in the right direction.

To conclude, support should be available to those in need, and certainly used as a springboard to get them into employment and keep this fine nation going forward, but in the short term we need affordable housing—the hon. Member for Warwick and Leamington (Matt Western) referred to social housing. That housing simply is not there at present. We need funding to build affordable housing, and for rent control as well. We simply should not have people on the streets in this nation, and we need to do all we can to ensure fit-for-purpose allowances in areas with a lack of one or two-bedroom accommodation, as compared with those on the housing stress list.

Child Maintenance Service

Jim Shannon Excerpts

Tuesday 23rd July 2019 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Member for Linlithgow and East Falkirk (Martyn Day) for setting the scene so well, with lots of detail. The thrust of the issue is this: no matter what constituency we hail from, I can guarantee that questions have been raised over the effectiveness of the Child Maintenance Service. Each of us who has spoken so far, and the others who will speak after, will reinforce that.

On the news I have read numerous reports of single parents being left with thousands of pounds of debt because of the loopholes that the scheme is cluttered with. In my own office, not a month goes by without several Child Maintenance Service cases, and each one is unbelievably annoying and frustrating for my staff and me. They are even more frustrating for those trying to get the money that they are owed. There are issues with non-resident parents finding a loophole through being self-employed.

The biggest issue is with the self-employed. My hon. Friend the Member for East Londonderry (Mr Campbell) referred to how their circumstances change. I will give a couple of examples, without mentioning any names. When we understand the resources that somebody had three months ago and what they suddenly have today or maybe a year later, we wonder what happened. Did they lose it all on the horses? Where did it go? I am talking about people who own properties and cars and so on. There are many such cases because of the complicated financial arrangements required, which raises the issue of the effectiveness of the Child Maintenance Service alone. We know that the Minister is really interested in his subject matter and is committed to what he does. I appreciate that, but there needs to be change, especially for the self-employed.

My constituents tell me that another problem is that when they phone up the Child Maintenance Service, they get a different person every time and have to tell their story again. There must be a methodology. I understand that there is a high turnover of staff in the Child Maintenance Service, probably because of the complications of the job. Some people stay, but not enough. I suspect that that is because of their knowledge of the subject. Despite the legal requirement for the ex-partner to help cover the expenses of the single parent, the majority of whom—not all—are women, it has been reported that that is not the case. According to a National Audit Office report in 2017, the DWP acknowledged that 75% of alleged arrears were impossible to collect. Are they impossible to collect? Perhaps some might be. It is possible that people could be out of work or could be ill, but I suggest they are trying to avoid making their child maintenance payments.

Some figures show that the DWP does not track compliance for the monthly payment scheme for seven in 10 cases. With respect, I say to the Minister that tracking compliance seems elementary for the DWP and should be done without any nudging or requests from anyone in this debate today. Clearly, the Child Maintenance Service has far to go before we can extol the work being done. I am also mindful of the civil servants working in one of the most highly pressured situations. They do their best, but are tied by what it is becoming clear to me is ineffective legislation and regulation. Some of the staff members tell me that we need better legislation, better regulation and resources as well. If that is the case, let us see whether we can do that.

Figures from UK law firm Slater and Gordon have identified that 11% of mothers have been forced to depend on food banks to provide food for their children. This is factual. It is a fact in my constituency and is a fact for the mothers as well. We have food banks in my constituency of Strangford. I have seen the mothers come in. A self-employed person who has a fairly high standard of living has left the mother with the children, and with the mortgage as well, because they have walked off and left it. They probably had a joint credit card and the male partner has run up the debt. I must be careful with my language and remember we are in Westminster Hall in the House of Commons. They have cleared off—I was thinking of another word, but I cannot use it—and left the credit card debt for the mother to find. It makes me, and I suspect others, very angry. The aim of the scheme was to ensure that that did not happen, and it is very sad that some parents—I stress the word “some”—will not play their part in feeding their family after they have left the home.

Other husbands who have left their wives have made payments voluntarily, so some people do the right thing, but then we come to cases such as the one I had in the office a month ago. The guy had multiple properties and a six-figure sum in the bank, and all of a sudden, within less than nine months or thereabouts, it was all away. Where has it gone? Why are the wife and the children not being looked after when clearly there were resources there? Again, circumstances change. He moves house and it seems to be a game of cat and mouse to try to get him, but it goes on and on.

Department for Work and Pensions figures show that CMS arrears rose in the three months between December and March by £7.4 million. Clearly, the DWP is not getting the money that it should. If the figures rise, it tells me that more cases are coming in, but it also tells me that the DWP is not being effective. The problem is not getting better or being fixed, which is why I support this matter being discussed in this House today and the call for action to be taken. At the end of the day—the Members who spoke before mentioned this; this is the real issue for me—it is the children who miss out, caught in the middle of this mess. It is grossly unfair. They deserve better, and it is up to us as Members of Parliament, and I gently say to the Minister it is up to the DWP, to ensure that they are given better. Those poor children should not have their parents turning to food banks to feed them when there is a parent in work, who should be doing the right thing by them. The system needs to be either reformed or completely reworked.

I have given examples, and there are others, with people who drive around in flashy cars. I know how the system works, and it is possible; but I will say this: it takes diesel or petrol to fill the car up. If someone is living in a fancy house, whether rented or not, and is going out to dinner at least twice a week, that is an over-indulgent lifestyle if there is an ex-wife down the road with children who is not getting the money. Those are the things in the stories I am told, and sometimes I see such things from people I know, never mind anyone else. I am pleased that the majority of people make their commitment and pay their money. There is another example fresh in my mind, concerning a guy who had a very successful business. He and his wife had parted company; it was not her fault, by the way. He decided one day to close the business, and had no resources. Yet he left her with a debt and the children to feed. People sometimes engineer circumstances to ensure that they do not have to make any payment.

The figures I referred to are outrageous. It is pretty clear from them that the CMS is not as effective as it could be. That is no fault of the staff. According to what they tell me, there is a need for better legislation, regulation and resources. The hon. Member for Linlithgow and East Falkirk mentioned someone being told to hire a detective to do a private investigation and to come back with the details. I know that it takes time to get together the detail and information, especially if someone is deliberately trying to avoid paying for their children. I know how difficult it becomes, but I stress that it is the children who miss out.

If not for the sake of the single parents out there, act for the sake of the children. The least that they deserve is a system that ensures their parents get the money they are entitled to, to feed and water them, and look after them. The cases of missed payments and the lack of action from the CMS need to disappear. We need a better system and a better way of handling things, before the next batch of children reach their teens and look back to see that their mothers have slogged and sacrificed and never got a penny of help. It is not only figures in a bank account that we are discussing; it is the quality of lives of children in the UK. Change is needed to get things right and make people accountable for their children, as they should be. As to those who deliberately try to avoid paying, we must catch them and make them accountable.

Unemployment and Autism

Jim Shannon Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I thank the National Autistic Society and the local group Autism Take 5 for their help in preparing for this debate.

Of those who have been fortunate enough to have received a diagnosis, there are 540,000 people with autism spectrum conditions. Some 433,000 are aged 18-plus, and 107,000 children are currently diagnosed with ASCs UK-wide. Research by the Centre for the Economics of Mental Health sheds light on the impact on the UK economy through lost productivity. This Government emphasise the need for people to move into paid employment and for higher rates of economic activity, but the autistic population is standing out as they are experiencing social and employment exclusion more than any other group. The cost of this is £27.5 billion spent annually supporting people with ASCs, and a 36% loss in employment in that group.

The World Health Organisation reports a substantial increase in people being diagnosed with autism spectrum conditions. Therefore, we must consider the large number of teenagers now approaching working age. This is significant because people with ASCs experience symptoms that are considered barriers to employment.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Lady for bringing this subject to the House for consideration. Every one of us in this House and those outside are concerned about it. Does the hon. Lady agree that support and understanding are the key to employment of people with autism, and that the option of free training—something different, and something proactive and positive for people with autism and their employers—should be available to private employers who wish to learn how to get the best from their staff, and ensure that their working environment is safe and secure for all workers?

[Marion Fellows]

I feel privileged that the hon. Gentleman has intervened in my Adjournment debate, and I could not agree with him more. I will come to his point later in my speech.

Following a survey commissioned by the National Autistic Society, the London School of Economics advises that only 16% of adults with ASCs are in full-time employment, despite 77% of them wanting to work. These figures have remained static since 2007 and are considerably lower than the employment figure for people belonging to other disability categories, which currently sits at 47%. Therefore, those with autism spectrum conditions are disproportionally unemployed.

We know that employment contributes to our identity and quality of life. Equally, we are only too aware that unemployment has significant individual and societal costs. As a result of these barriers, most people with ASCs who are fortunate enough to gain employment will experience mal-employment, and will most likely be placed in jobs that are a poor job fit for their skillset. This is commonly because the job does not align with individual interests, talents, specific skills or intelligence levels. It is common sense that the better the job fit, the more likely people are to succeed. By not addressing this, individuals with ASCs will experience high levels of job turnover, resulting in disjointed employment histories that limit their potential for continuous employment; we know that when applying for jobs, our work history can either facilitate or block our access to being invited for an interview.

Every adult—with or without a disability—has the right to enjoy employment, and should be able to choose their career without restriction, to work in positive conditions and to be protected against unemployment.

--- Later in debate ---

[Justin Tomlinson]

I am conscious of time, so I will have to look into the details. It is right that we absolutely have to do more to enlighten businesses of all sizes about the opportunities. Small changes and good practice can benefit not just individuals with autism, but the organisations that take them on.

This is my second time as Minister for Disabled People and I am very proud that, in the final few weeks last time, I was able to push through the opening up of disability apprenticeships, removing the need to get a grade C in GCSE maths and English for people who would qualify under the disability apprenticeship. That is an important way that we, as a Government, are trying to remove barriers, but we must look at providing additional support within the workplace to go beyond the interview, so that people have an opportunity to demonstrate their skills.

Through our Disability Confident campaign, which now has more than 12,000 businesses of all sizes signed up, we are looking to share best practice. I think we can go further than that, not just by recruiting more organisations to the Disability Confident campaign, but by looking at organisations such as the Health and Safety Executive. To a certain extent, that will help support the point made by the hon. Member for Airdrie and Shotts (Neil Gray). It is very proactive in engaging with businesses on safety, so it is a given that the workplaces will have a safe environment. We are world-leading on this—other countries look to our expertise—but we need to do the same on health. That includes empowering small and medium-sized businesses in particular that do not have personnel or HR departments, so that they can have the skills and the confidence to make small, reasonable adjustments. That would be a win-win for all.

I had the pleasure on Friday, as part of Employability Day, of meeting employers and individuals who had overcome those barriers. That was transformational for those individuals who were enjoying the opportunity to contribute, and to the employers who had struggled to fill gaps and were now benefiting as an organisation.

[Jim Shannon]

I was just sitting here thinking about the best way of doing this. The hon. Member for Motherwell and Wishaw (Marion Fellows) has made some suggestions. When it comes to organising training for the potential employer and the young person with autism, would the Minister consider using the influence of parents and families to enable the training process to be easier for the person who has autism as well as for the potential employer?

[Justin Tomlinson]

I agree. In all parts of accessing services and applying for jobs, having supportive individuals is a reasonable adjustment that a good employer, a good organisation and a good Government should take into account and should encourage.

In the final moments, I wish to pay tribute to the hon. Member for Motherwell and Wishaw. It is fantastic to see so many Members supporting an Adjournment debate. I think that is a recognition of the quality of the speech that was delivered on a really important topic. I think there is much agreement across the House and I would be very happy to meet further to discuss what more we can do. The Government are determined to make a real difference in this area. I am absolutely thrilled to see that there is cross-party support for that. Together, we will do everything we can to unlock every individual’s talent, so that everybody can benefit from the growing economy.

Question put and agreed to.

Local Housing Allowance: Nottingham

Jim Shannon Excerpts

Monday 17th June 2019 Commons Chamber

[Lilian Greenwood (Nottingham South) (Lab)]

It is just over nine years since I became the Member of Parliament for Nottingham South and in that time, I have secured a number of debates on housing and homelessness. I wish I could say that my contributions had led to an improvement in the situation for some of my constituency’s most vulnerable citizens, but I am afraid that things have got worse, rather than better. I suggest that every one of us here will have witnessed a sharp rise in the most visible form of homelessness: rough sleeping.

Back in 2010, the official count for rough sleepers in Nottingham was three. I first raised the issue in Parliament in December 2011, because it had risen sixfold in a year. Andrew Redfern, the chief executive of local homelessness charity, Framework, was warning that cuts to services and welfare changes were undermining years of success in tackling homelessness. Earlier this year, the number of rough sleepers in Nottingham reached a record high of 55. In eight years it was no better; it was much, much worse.

In March 2013, I secured an Adjournment debate on the under-occupancy penalty. Despite the best efforts of the coalition Government, the official title never stuck, and we all know it as the bedroom tax. That measure left 6,000 of our city’s poorest households with “nowhere to go” as the Nottingham Post put it.

In March 2015, I led a Westminster Hall debate on affordable housing, and in 2018 I used another Adjournment debate to highlight an Opportunity Nottingham report into persistent rough sleeping. The thing I find most shocking, looking back on those debates, is that on each occasion I was drawing attention to the problems faced by people in the city I represent, not as a result of lack of effort or even just bad luck, but as a direct result of Government policy. What is most shameful is that on each occasion Ministers were warned that their policies would cause hardship, poverty and debt but pursued them anyway.

Last week, the Minister assured us that he wanted everyone to have security in their home and a roof over their head. I hope that he is serious, because if he is, he will not want to continue with policies that he knows will make the lives of people in my city and this country harder and poorer.

[Jim Shannon (Strangford) (DUP)]

The hon. Lady and I came into the House at the same time, in 2010, and these are issues that we are both very interested in. Does she agree that it is nigh impossible for people to find a private rented property within the LHA even in what are often known as council estates and that this must be urgently reviewed in areas where the number of houses does not tally with housing need? This causes landlords to push for more to cover their overheads, to the detriment of our vulnerable constituents on housing benefit living on the breadline and having to make up the difference.

[Lilian Greenwood]

The hon. Gentleman pre-empts much of my speech, but he is entirely right.

Today’s debate was prompted by research undertaken by Hannah Clemson, policy and communications officer at Advice Nottingham, into the availability and affordability of private rented accommodation in Nottingham city, specifically property within the local housing allowance rate. Advice Nottingham is a consortium of six advice agencies based in Nottingham and providing free, confidential and impartial advice on a range of issues, including benefit, debt, employment and housing. They do an incredible job supporting people who are often in desperate circumstances, and I am glad to have the opportunity to put on the record my thanks to them for the work they do.

The availability of affordable homes to rent is clearly an issue of importance to many of my constituents in Nottingham, but it is not only an issue in our city. This debate is particularly timely, given last Thursday’s urgent question on the Supreme Court ruling in the case of Samuels v. Birmingham City Council led by my hon. Friend the Member for Battersea (Marsha De Cordova). That case highlighted the impact of the growing gap between actual rents and the amount of rent covered by local housing allowance, following the Government’s decision to freeze LHA rates from April 2016.

Analysis by Shelter has revealed that there is now a shortfall between LHA rents at the 30th percentile in 97% of broad market rental areas in England. As the hon. Member for Strangford (Jim Shannon) said, people cannot find affordable rents, and that is true almost everywhere in this country. Nottingham is one such area, where the freeze on local housing allowance is leaving people homeless and in poverty. Many of my constituents simply cannot afford a home in the private rented sector, yet that is the only choice they have. The Government’s outdated LHA rates from 2016 show rents in Nottingham to be as low as £42.54 per week. In reality, Advice Nottingham has found the cheapest property is now at least £63 per week.

Advice Nottingham knew that LHA was not meeting local needs from the work it did with its clients. It knew that rents were too high and that local people were struggling to find affordable accommodation, but it decided to do its own research to find out exactly how many properties were available in the city within the LHA rates. It undertook this research last November within a one-week period. Using Rightmove, Zoopla and Gumtree, it searched the city to find properties. It found only 12 properties at or below the rate for shared accommodation, and many of those were specifically marketed as student properties—I will explain the significance of that later in my speech. It found just five one-bedroom flats in the city at or below the LHA rate. Family homes proved even harder to find: there were only two two-bedroom properties at or below LHA rate; three three-bedroom properties; and one four-bedroom house, in the whole of the city, at a rent covered by LHA.

More recent work by Nottingham City Council confirms Advice Nottingham’s findings. The LHA rate is intended to reflect the bottom 30th percentile of local rents, but it found that it actually covered less than 7% of one-bedroom flats, less than 3% of two-bedroom properties and less than 5% of three-bedroom homes. With a shortage of council or housing association properties available, many families are forced to rent properties that they cannot really afford, forgoing other essential household expenditure, including food, heating and clothing, simply to put a roof over their heads.

--- Later in debate ---

[Lilian Greenwood]

My hon. Friend makes a very important point, and I will seek to explain precisely the problem our constituents are facing. The problem is that the gap they are seeking to fill between the LHA they receive and the rent they need to pay is not trivial but significant. According to Shelter, the gap between 30th percentile rents and the LHA rate in Nottingham is £15.17 a month for a room in a shared house; £55.01 for a one-bedroom flat; £54.57 for a two-bedroom property; £56.61 for a three-bedroom property; and £121.93 per month for a four-bedroom house. These are not trivial amounts. Trying to cover the shortfall is leaving people in a very vulnerable and insecure position and, as my hon. Friend has said, in poverty.

[Jim Shannon]

I am sure the hon. Lady, like others, will know from her constituency experience that whenever people’s income is reduced because of rental accommodation or benefit changes, more often than not they are pushed towards food banks. In my constituency, the Thriving Life food bank has been extremely busy due to benefit changes, rental accommodation not being available and being unable to pay the money. As a result, they are falling back on food banks—which we are very glad to have, by the way—with dismaying regularity.

[Lilian Greenwood]

The hon. Gentleman makes a really important point, and I cannot imagine how many people would get by without food banks, but some people will not go to a food bank—perhaps because they are too proud—and so will be going hungry, sitting in a cold house because they have not turned the heating on or sending their children to school in clothing that is too small or simply not appropriate. I have heard of children going to school in their pyjamas because they do not have proper clothing. It is shameful.

Martyn Neal, a senior adviser at the Meadows Advice Group, spoke to Advice Nottingham’s researcher about his experiences trying to support clients with local housing allowance. He described meeting two clients, one already homeless and one threatened with homelessness. The housing plans given by Housing Aid were almost identical and contained instructions to the client to look for affordable accommodation in the private sector. The LHA was quoted as a guide to affordability, but absolutely no other guidance was given about how the client should go about this or what difficulties, if any, they would likely encounter. No other support was offered, at least for the next few weeks.

Both Martyn’s clients were or had been living in the Meadows area of Nottingham and understandably preferred to remain local to be near schools for their children. Martyn says:

“Under the LHA, both clients were entitled to a three-bedroom home. I logged onto Rightmove and using a 3-mile radius as a start, which would fit in with school transport rules, I began my search. There was not a single property available for rent less than £50.00 a month above the local housing allowance.

I extended the radius to 5 miles, which revealed one property, in Bulwell”

—which is in the constituency of my hon. Friend the Member for Nottingham North (Alex Norris)—

“this met the local housing allowance.”

The Minister may or may not know Nottingham well. Bulwell and the Meadows are at opposite ends of the city, a tram ride or two bus rides away from each other. The journey is time-consuming and costly, especially for a large family.

Sally Denton, from Nottingham Law Centre, has described the problems that she has witnessed. She said:

“In the current rental market where there is a shortage of social housing there is an increased demand on the private sector. This means that landlords can charge more due to the demand.”

She said that tenants

“cannot do anything to challenge the level of rent and cannot move to cheaper accommodation as it does not exist.”

She added:

“We see clients regularly who are struggling to pay for unaffordable rents. If an unexpected expense occurs, or there is a change in income (like the 5-week wait under Universal Credit), people can very easily fall into rent arrears and risk losing their homes.”

Nottingham Law Centre is not alone in identifying this problem. Terry Alafat, the chief executive of the Chartered Institute of Housing, has said:

“Our research makes it clear just how far housing benefit for private renters has failed to keep pace with even the cheapest private rents.

We fear this policy is putting thousands of private renters on low incomes at risk of poverty and homelessness.”

How can the Minister preside over a system that forces people to put themselves at risk of debt and eviction? I am sure that when he responds to the debate he will talk about the Government’s targeted affordability funding, but while that is of course welcome, it is nowhere near enough to address the problem. In Nottingham, the targeted affordability funding means that the LHA rate for three and four-bedroom houses has increased by 3% in the last year. The monthly shortfall for an LHA claimant renting a three-bedroom house at the 30th percentile is now £56.61 rather than £60.22, and for a four-bedroom house it is £121.59 rather than £126.14. Yes, that is an improvement, but does the Minister really think that it is sufficient?

While the freezing of LHA rates is creating this issue, a much bigger problem is the lack of affordable housing. Since 1980 Nottingham has lost 22,010 social homes through Right to Buy, and although Nottingham City Council, Nottingham City Homes and other local housing associations have built new homes, there are nowhere near enough to make up for those that have been lost. Indeed, the problem has accelerated since discounts were increased in 2012. In the last year there were 664 applications to Nottingham City Council for Right to Buy, whereas 134 homes were bought in 2012-13. There is a huge gap between the demand for and the supply of social housing. Nottingham City Homes made 1,431 new lets in the last year, but the housing register stood at 8,393.

Of course, some of those on the housing register are in permanent accommodation, but I know from my constituency casework that too many are inadequately housed, such as young families living with their parents in overcrowded conditions or in properties that are unsuitable for their needs—perhaps forced to live in high-rise housing. According to a survey carried out by Inside Housing in 2017, nearly 40% of council homes sold under Right to Buy have been resold and are being let in the private rented sector, at higher rents and, even with LHA restrictions, at a higher cost to the taxpayer. What discussions has the Minister had with his colleagues in the Ministry of Housing, Communities and Local Government about this ludicrous situation?

I am proud to represent a vibrant and extremely popular university city, but the rise in the city’s student population has also contributed to the lack of affordable family housing. Landlords have sought to capitalise on the student market by converting family homes into highly profitable shared accommodation. That increase in the number of houses in multiple occupation does not even help the under-35s whose LHA rate is restricted to the shared room rate. Many private rented properties in Nottingham are student-only lets. As students make up the majority of tenants, if someone entitled to LHA lived in a student let, the whole cost of the council tax would probably fall on the non-student tenant. Even when there appears to be an abundance of private rented accommodation, much of it is closed off to my constituents who receive LHA.

Unfortunately, however, that is not the only reason property is closed off. Shelter has revealed that many landlords discriminate against people on universal credit, and the position is no different for other LHA claimants. With the cost of renting so high and the rates so low, private landlords are reluctant to let to LHA claimants; 43% bar them completely, while a further 18% prefer not to let to them. What plans do the Government have to ensure that landlords cannot discriminate in that way?

The struggles that my constituents are facing are being replicated across the country. Last week the Supreme Court ruled in favour of Mrs Samuels, a single mum with four children, who was found to be “intentionally homeless” by Birmingham City Council because she did not use the subsistence benefits, intended for essential living costs, to pay the shortfall between her LHA and her rent. Shelter estimates that the majority of LHA households—65%—in private rented accommodation also face a monthly shortfall. Its survey of private renters detailed some of the impossible trade-offs that families receiving LHA are having to make. For example, one in three renters has cut back on food for either themselves or their partner, and 37% have been forced to borrow money to pay their rent in the last year.

This cannot go on, but last week the Minister seemed unwilling to address the issue. Can he tell me what assessment he has made of the hardship suffered by households as a result of the freezing of LHA rates? Does he accept that the freeze has increased homelessness in Nottingham and across the country? Is he really saying that families should be forced to live below the breadline and use subsistence benefits to pay their rent? The Supreme Court ruling in favour of Mrs Samuels set a precedent, and his Department needs to respond urgently.

There is a very clear solution: 92% of local authorities responding to the Local Government Association’s LHA survey thought that lifting the freeze on LHA rates, and better aligning them with rents, would help to reduce homelessness in their areas. The Residential Landlords Association has said:

“The LHA has a ‘double whammy’ effect that is driving homelessness. This double whammy means that; first, tenants in receipt of Housing Benefit are more likely other tenants to have their tenancy ended by their landlord; and, secondly, these households are finding it increasingly difficult to find suitable, affordable accommodation in the private rented sector.”

The Chartered Institute of Housing has said:

“We are calling on the government to conduct an immediate review and to look at ending the freeze on Local Housing Allowance.”

Shelter, the Child Poverty Action Group, and many other housing and homelessness charities are saying the same thing. It is time to act and lift LHA rates, so that housing benefit covers the true cost of renting in the private sector.

The Government have pledged to halve rough sleeping in this Parliament, and to end it by 2027. I’m afraid that that shows a real lack of urgency, but how can I take the commitment seriously when Ministers have repeatedly ignored warnings over the past nine years, and have pursued the very policies that have caused homelessness to rise? They have cut Supporting People funds, changed the basis on which LHA rates are set from the median to the 30th percentile of market rents, restricted people aged 26 to 35 to the shared room rate, introduced the bedroom tax, subjected families to the benefit cap, and restricted and then frozen LHA rates.

I do not hold the Minister responsible for things that happened before he was even a Member of Parliament, but I will hold him accountable for his actions now. Before he became a Minister, he chaired the all-party group on ending homelessness. Now that he is in a position to make a real difference, will he do so?

Matt Downie, director of policy and external affairs at Crisis, said recently:

“Homelessness is not inevitable—there is clear evidence that it can be ended with the right policies in place. The government must urgently reform housing benefits for private renters, so they not only match the true cost of renting but also keep pace with future rent changes.”

Will the Minister end the freeze on local housing allowance, and if so, when? Will he provide additional targeted affordability funding to help those who are struggling to pay their rent right now? Will he ensure that LHA rates are restored to at least the 30th percentile of local rents? Given that this is a housing crisis, will he call on his colleagues at the Ministry for Housing, Communities and Local Government to act now to provide more social housing and controls on rent rises? Now that he is in a position to help to end one of the causes of homelessness, will he do the right thing?

--- Later in debate ---

[Will Quince]

I thank the hon. Lady for her question. That is exactly why we have introduced the targeted affordability funding and we have made available discretionary housing payments, but it is also why more broadly, as I explained in the urgent question last week, I am looking at this in some detail, as I did before being a Minister as part of the all-party group for ending homelessness.

As I said, the three-bedroom and four-bedroom LHA rates in Nottingham have both been increased by 3%. The remaining rates in Nottingham did not fall within the criteria of those rates that had diverged the most from local rents and therefore were not eligible for targeted affordability funding this year, and so remain frozen. As I have said, the Government have committed to end the freeze to LHA rates in March 2020 alongside the freeze on other working-age benefits.

Before I go on, I am aware that the hon. Lady mentioned a few other points which I would like to cover: homelessness, housing supply and “no DSS”. I did a huge amount of work, alongside the hon. Member for Bermondsey and Old Southwark (Neil Coyle), on the causes of homelessness and rough sleeping as co-chair of the all-party group for ending homelessness. Those causes are understood to be both complex and multifaceted. In order to fully evaluate these factors, we have commissioned a feasibility study and a rapid evidence review of the causes of homelessness in partnership with the Ministry of Housing, Communities and Local Government. This report has now been finalised and we are working on the next steps.

As I said earlier, we want everyone to have security in their homes and a roof over their head, and that is why we have committed over £1.2 billion to tackle homelessness and rough sleeping. We published a strategy to end rough sleeping by 2027 and halve it by 2022, and that is backed by £100 million of initial funding. And we have changed the law so that councils can place families in private rented accommodation so they get a suitable place sooner. Last year, statutory homelessness acceptances fell, and we are going to build on this; and the Homelessness Reduction Act 2017 will mean that more people get the help they need sooner.

The hon. Lady rightly touched on landlords not letting to those in receipt of benefits, also known under the old term of “no DSS”. This is a hugely important issue, and in February, the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for South Derbyshire (Mrs Wheeler), announced a Government campaign to end “no DSS” practices. We recently had a No. 10 roundtable on this very issue with a number of key stakeholders, and we are working with those stakeholders to find a satisfactory resolution.

Everyone deserves a safe and secure home, regardless of whether they are in receipt of benefits. Blanket bans do not take account of the individual and their circumstances, which is why we strongly discourage them. We would encourage landlords and agents to consider all potential and existing tenants in receipt of housing benefit and universal credit on an individual basis. We have already seen some positive changes from property sites that have committed to remove “no DSS” wording adverts from across their platforms, and lenders have changed their policies to remove mortgage restrictions that would prevent landlords from renting to tenants in receipt of housing support. Metro Bank is one of the latest to remove such restrictions, and I hope others will follow, but work is ongoing and we will continue to bring the sector together to tackle these practices.

[Jim Shannon]

It would annoy us greatly to find that rental landlords were discriminating against people because they were in receipt of benefits or were DSS applicants. Does the Minister agree that if there is discrimination, which clearly many of us in this House think there would be, under discrimination laws it would be illegal to do that? Also, what action would the Minister, in co-operation with colleagues of course, take to make sure that did not happen?

[Will Quince]

The hon. Gentleman makes a good point. Although that might be discrimination in terms of the terminology we would use, it might not fall under the legal definition of it. As a result, we believe that the best way of tackling this issue is to work with key stakeholders such as landlords and mortgage lenders, as well as with those who provide insurance, because we know that there is a particular issue in that regard. We had a successful roundtable at No. 10 recently, where I genuinely believe we had a good cross-section of all the key players from across the board. We are starting to see progress in this area, and I am sure that by taking this collaborative approach, with the Government working with business, key stakeholders and the charitable and voluntary sector, we will truly get a grip on this issue and tackle it. We do not want to see anyone who is in receipt of benefits being discriminated against in this way.

Hoover Pension Fund Deficit

Jim Shannon Excerpts

Tuesday 11th June 2019 Westminster Hall

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

I beg to move,

That this House has considered the Hoover pension fund deficit.

It is a pleasure to serve under your chairmanship, Mr Robertson. We are here to discuss the Hoover pension fund deficit, which was once a surplus of more than £100 million. Hundreds of former longstanding Hoover employees from my constituency and the surrounding area have faced appalling cuts to their well earned retirement money, and they deserve justice.

Like other prosperous UK pension schemes in the 1980s, the 1987 Hoover pension scheme, with 7,500 members, had a large surplus, which totalled £123 million in 1986. Changes to the pension scheme, withdrawals from the fund by Hoover to cover its financial difficulties, payments to the Government required by a short-sighted surplus tax implemented by the then Tory Government, and financial difficulties posed by the global financial downturn have resulted in the surplus shifting to become an overwhelming deficit. At the last valuation, in March 2016, it stood at approximately £500 million on a buy-out basis, and approximately £300 million with the Pension Protection Fund.

Hoover had long been in talks with the Pensions Regulator and the PPF to offload the deficit pension scheme, which it could no longer support without risking the company’s insolvency and the loss of the remaining employees’ jobs. The pension scheme is now transferred over to the PPF, after a regulated apportionment arrangement was agreed with Hoover, along with a 33% share in the business for the scheme, and a £60 million lump sum payment.

When the pension scheme entered the PPF, all Hoover employees in it who were still working and/or under the scheme’s retirement age, stopped gaining benefits. The annual value of those employees’ pensions, when they retire, was capped at the level for the scheme’s retirement age, which is 65. Retired employees now receive 90% of either the actual annual value of their pension, or 90% of the pension level for their age, whichever is lower. Those who have already retired from Hoover and are older than the retirement age have not had a cap on their pensions, but only the part of their pension funds earned after 1997 will be index-linked with inflation, which means that people who worked all or most of their careers with Hoover before that date are losing income because of inflation.

[Jim Shannon (Strangford) (DUP)]

As always, the hon. Gentleman is bringing an important issue to Westminster Hall. Does he agree that the fact that those still under retirement age could receive an immediate 10% cut in their pension pot, and that 7,500 members will be affected—5,319 pensioners and 2,184 who have deferred pensions—shows a need for the Government, and the Minister in particular, to step in and help not only those members but their families, who rely on the pension they paid into all their working lives?

[Gerald Jones]

I agree 100%. The hon. Gentleman outlines the fact that people yet to reach pension age will experience a 10% reduction, which will cause huge difficulty.

Unfortunately, the case of Hoover pensions is not an isolated one, and we have become used to hearing in recent months and years of cruel injustices suffered by former employees of British Coal, British Steel and BHS. The evidence also suggests that we are likely to see many more such cases in the future. Before I go into more detail, and pose questions for the Minister, I shall provide some background on the history of Hoover in Merthyr Tydfil and explain the financial background that has led to the unacceptable injustices that its former employees now face.

Hoover has been an important employer in Merthyr Tydfil and Rhymney for 71 years, since the Pentrebach factory was established in 1948 to make the well-known Hoover washing machine. Only about 300 people were employed at the factory when it opened, but over the following 20 years, because of product demand, the figure rose by the thousands. By the time of Hoover’s 25th anniversary in Merthyr in 1973, more than 5,000 people were employed at the site, all contributing to the company’s pension scheme. Counting the company’s Glasgow plant, Hoover’s British workforce once peaked at 16,500 people. At its peak, the Hoover factory was the largest employer in Merthyr Tydfil County Borough, providing much-needed employment opportunities for generations of local people formerly employed in the iron and coal industries for which Merthyr Tydfil is famous.

That proved to be the high point for the factory: in the 1990s, amid financial difficulties, Hoover was sold to the Italian manufacturer Candy, which over the next few years would decline to invest further in the company or its operations. Job cuts continued over the next 10 years and in 2009, 61 years after the factory opened, production stopped altogether. Since 2009, only 100 staff have remained employed at the Pentrebach factory, in the company’s warehousing, distribution and sales operations. However, in May 2019 Hoover took the decision to move 45 jobs from Pentrebach to its headquarters in Warrington, in a move to centralise its operations, leaving only 60 posts, primarily in distribution, at the Merthyr Tydfil site.

I want to give some background on how the company’s pension scheme arrived at the state it is in today. According to the Pensions Commission set up by the Labour Government in 2004, from 1974 until 2000 the average annual real return on UK equities was as high as 13%, with investments in pension schemes during that time allowing them to flourish and pension contribution rates to increase. However, by the early 1980s the Thatcher Government had become concerned that UK companies were using large contributions to their pension schemes to lower their liability for corporation tax during years of high profits. During that time of prosperous UK pension schemes, what the Conservative Government saw as surplus funds to be taxed in a period of high equity returns were, rather, risk barriers against years of low financial profit and the rising longevity of workforces, as well as a reserve for future workers’ pensions.

The Finance Act 1986, passed by the Tory Government, required companies’ pension funds to declare any surplus of 5% or more, and either remove it within five years or lose part of their tax-exempt status. Many companies made much lower pension contributions in the years after the 1986 Act came into law, but market returns during that time remained so positive that many companies still had large surpluses left in their pension funds. Various UK companies took pension contribution holidays or looked to make improvements to their pension schemes to eliminate the surplus. It was no different in the case of Hoover, which in 1986 looked to wind up the existing pension scheme and replace it with a new scheme with improved benefits for members.

At that time Hoover had 5,500 employees in the UK, half of whom were based in Merthyr Tydfil, and the company’s UK pension scheme had a surplus of approximately £123 million, as I have mentioned. It proposed to take £87 million from the surplus, of which £42 million would go towards improved pensions and £27 million to the company’s general fund, with £18 million to be taken by the Conservative Government under the Finance Act 1986. In 1993, Hoover moved £16.8 million from the surplus to its general fund. It denied that it was being used to cover the £20 million in losses that it suffered from its infamous “free flight” sales promotion—when it promised two free airline tickets to customers who purchased more than £100 worth of products—but said it was for the general financial stability of the company. Hoover accordingly paid £11.2 million in tax to the Government, again under the terms of the Finance Act 1986.

During the 1980s and 1990s, therefore, Hoover paid the Conservative Government a total of £29.2 million. As I have explained, the terms of the Finance Act 1986 were established based on the average annual return on UK equities being 13%, as it was between 1974 and 2000. The Pensions Commission reported a considerably lower long-term average of just over 5%. The Government were incredibly over-optimistic if they assumed that 13% returns could continue into the long term. That is another classic example of the short-sightedness of a Government who placed the employer first, ignoring the employee, thinking only of short-term gain and completely neglecting the long-term potential impact of a policy on hard-working people.

I want to highlight the case of one of my constituents who has had to bear the brunt of this mess: Mr Phillip Little. Mr Little worked at Hoover in Merthyr Tydfil for 35 years, working at several departments and in various jobs across the company over a long and dedicated career. When he took his pension at age 55, he faced an immediate loss of 47%, resulting from payment holidays and Government and company withdrawals from the scheme in previous years, following the Italian company Candy’s takeover of Hoover in the 1990s and its refusal to invest or contribute further to the company’s pension scheme. Now, with the Hoover pension scheme being transferred to the Pension Protection Fund, Mr Little has had to suffer a further 10% reduction in the value of his pension due to the rules and caps, meaning he has taken a hit of 57% in total, losing over half the total value of his pension.

I think we would all agree that nobody should have to make do with less than half the pension they rightfully earned from their decades of hard work. Having been looking forward to retirement after 35 years with the company, Mr Little is devastated, and feels as though, in his words, he has been “mugged” three times over by company withdrawals from the pension scheme, payments to the Government and latterly the scheme’s transfer to the PPF.

Mr Little is one of many hundreds of former long-standing Hoover employees in the Welsh valleys who have been told that the retirement money that they worked for decades to build up has had to take yet another cut and that there is nothing they can do about it. They have had to sit and watch as the company and Government take money from what was once a surplus fund and is now in hundreds of millions of pounds of debt, and their well-earned retirement has been taken away from them.

I ask the Minister how his Government can justify this legacy of the short-sighted and irresponsible actions of the 1980s Thatcher Government, which imposed the 1986 Act on hundreds of UK companies’ pension funds such as Hoover’s, thinking only of short-term gain. Will the Government now do what is right by the many hundreds of people, such as Phillip Little, who have seen their pensions hit over and over, and repay them with the money they took from the fund under that Finance Act, so that these hard-working people can have the retirement that they deserve and that they worked for decades to build?

In Labour’s 2017 manifesto, we committed to carrying out an immediate review of current pension surplus tax and sharing arrangements, since many of the people at companies across the UK affected by this, such as Hoover, British Coal and British Steel, do not have another private fund to fall back on. The Government must now follow suit. Will the Minister commit to at least reviewing these arrangements, and to giving justice to the many former Hoover employees in my constituency who have been robbed of the pensions they worked to build and on which, having left the workplace, they now depend?

Universal Credit and Debt

Jim Shannon Excerpts

Wednesday 5th June 2019 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Member for High Peak (Ruth George) for bringing this debate. As I often do, I will give a quick example. A troubled young man from my constituency, from a good family, is unable to deal with his social situation and finds himself sleeping rough. As he is a new claimant, he has to move on to universal credit. He goes to the housing executive, which tells him that he is not a priority, and to self-refer to a hostel. He depends on his family.

I want to put on record that the staff at the Ards benefits office—Frances, the manager, Lee and Donna—are tremendous and exceptional. If every person had such people to respond to them, it would be very helpful. They do their best to help, but they can only do what the system allows them to do.

Due to problems in the past, my constituent is already paying £10 a week out of his jobseeker’s allowance, and £40 a month comes off his housing benefit, which leaves him with £30 to live on. Internet is essential for those making online claims. What if somebody cannot use the library or another place with wi-fi? He waits five weeks for a claim that is not even back paid. What if he did not have a loving family, doing what no one would expect them to do for a 40-year-old man? Is this system working? I say to the Minister: it is not—far from it.

I meet people with severe and immediate financial hardship every day. Nearly a quarter—24%—of all universal credit claimants have a deduction of above 20% of their standard allowance. Research by StepChange found that even a deduction of 5% would push nearly half of StepChange clients on benefits into a negative budget. When a 40% deduction is applied—these are serious figures—70% will be pushed into a negative budget.

I ask the Minister: can we give staff such as Frances, Lee and Donna in the social security office in Newtownards the opportunity to read a situation, and allow them the discretion to allow past bad debt to be repaid at a nominal rate? We should understand that the private sector does not understand the bedroom tax, and rent does not come down to what the Government say it should be. It just does not work.