Benefits Uprating

Jim Shannon Excerpts

Wednesday 8th December 2010 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

The hon. Member for Edinburgh East (Sheila Gilmore) asked about pensioners. What pensioners and this House need to know is the difference that is made in monetary terms when pensions are calculated using CPI rather than RPI.

[Steve Webb]

Under the triple lock, the increase will be determined by whichever is highest between earnings, prices and 2.5%. In the long run, the earnings figure is almost invariably higher than the prices figure, so regardless of which measure of prices is used, we will use the earnings figure. As I have said, CPI for additional pensions is about 1% a year lower. The average occupational pension in payment is about £70 a week, 1% of which is 70p a week. Under the triple lock, as I have just announced, the pension is going up by £4.50. That shows the great advantage of the triple lock.

Bill Presented

Armed Forces Bill

Presentation and First Reading (Standing Order No. 57)

Secretary Liam Fox, supported by the Prime Minister, the Deputy Prime Minister, Secretary William Hague, Secretary Kenneth Clarke, Secretary Theresa May, Secretary Vince Cable, Mr Secretary Mitchell, the Attorney-General and Mr Andrew Robathan, presented a Bill to continue the Armed Forces Act 2006; to amend that Act and other enactments relating to the armed forces and the Ministry of Defence Police; to amend the Visiting Forces Act 1952; to enable judge advocates to sit in civilian courts; to repeal the Naval Medical Compassionate Fund Act 1915; and for connected purposes.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 122) with explanatory notes (Bill 122-EN).

Housing Benefit

Jim Shannon Excerpts

Tuesday 9th November 2010 Commons Chamber

[Bridget Phillipson]

I respectfully suggest to the hon. Gentleman that had he been here earlier, he would have heard some of the arguments articulated by my right hon. Friend the shadow Secretary of State. I also respectfully suggest that I am not referring to the cap. That is not the issue that I am discussing in relation to Sunderland; I am discussing the changes in respect of the 10% and the 30th percentile. That is my concern, and that is why this debate has to be on issues broader than London. I understand the concerns of my hon. Friends with London constituencies about the impact there, but the impact it will have in Sunderland will be different.

On average, claimants of local housing allowance in the north-east will see a cut of about 10% a week, or £468 a year, in what they receive. That will have a massive effect in the region, and in Sunderland it will affect more than 4,500 households. Furthermore, those out of work on jobseeker’s allowance for more than one year will be hit particularly hard, with a cut of 10% in their housing benefit. Currently, 2,500 of my constituents are claiming jobseeker’s allowance in an area of ongoing deprivation, where jobs are increasingly hard to come by. That will simply drive people into further poverty and drive up homelessness at a time when, no matter how hard people try, it is often difficult to find a job.

Sunderland city council prevented homelessness for 157 households in 2009-10, helping people to find accommodation, often in the private sector. Overall, the changes made in the comprehensive spending review will make it even harder for Sunderland city council to prevent homelessness. In the long term, the use of temporary bed-and-breakfast accommodation will inevitably drive up housing costs for local councils and have massive social consequences.

Changes in the calculation of housing benefit—pegging it to the consumer prices index—will lead to a dramatic rise in rent arrears, contributing to increased use of temporary accommodation and increased homelessness. It is not yet clear to me whether those who fall into arrears because of the cuts will be deemed to have made themselves intentionally homeless, which would mean that councils would not have a duty to house them. I would be grateful for some clarity from the Government on that issue.

Before I was elected, I managed a refuge for women and children fleeing domestic violence, and the city council supported these homeless families and got them rehoused, often in the private sector. The women would often pay a small top-up to their housing benefit, often to be near supportive family who could help with child care so that they could undertake training or return to the workplace. Such women will be doubly hit, and at the point when they are trying to get their lives back on track.

It is clear that the Government have failed to come up with an acceptable plan for housing benefit. They fail to recognise the long-term solutions to the underlying causes, and they are certainly not progressive.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Lady agree that for a great many people the purpose of housing benefit is to get them out of low-income housing? The changes that the coalition Government are proposing will keep those people in poverty and low-income housing for the rest of their lives. That is my concern. Does the hon. Lady share it?

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[Jim Shannon (Strangford) (DUP)]

I want to make some constructive comments, and I hope that the Minister will take on board some of the issues I raise. I will ask some questions from a Northern Ireland perspective, because the housing benefit changes will affect us as well—we cannot divorce ourselves or walk away from them.

I should set the scene, because Northern Ireland has some very particular circumstances: the Department for Social Development has responsibility for social security benefits, and the Department for Employment and Learning has responsibility for training and employment programmes, in contrast with the rest of the United Kingdom and the Department for Work and Pensions. DEL has significant differences with its steps to work programme, as against the job guarantee fund here. There are issues to be clarified, therefore, and I want to ensure that the changes in benefits will not impact adversely on the people of Northern Ireland.

Northern Ireland has had the local housing allowance since 2008, but it has not been formally assessed. I had hoped that it would be, because it would have given us an idea of how successful it has been. I am concerned, however, that the proposed changes to the allowance lack a firm evidential base. Will the Minister comment on that? I think that the proposals will adversely affect recipients in Northern Ireland.

I am gravely concerned about the Budget plans to reduce the initial award of the benefit by 10% in April 2013 to those claimants who have been receiving jobseeker’s allowance for longer than 12 months. I make that comment because the unemployment rate in Northern Ireland between April and June was 6.6%. Worse still, the working-age employment rate remained well below the UK average, and was the lowest of all the 12 UK regions. The changes put forward tonight will adversely affect the people of Northern Ireland because of our position in relation to benefits.

I have concerns about the introduction of a measure that utilises sanctions that are neither helpful nor beneficial. The proposal appears to be based on the assumption that a reduction in housing benefit will motivate working-age claimants to find work, but it is clear that even if every working-age claimant was so motivated, there would still be significant numbers of long-term unemployed people in Northern Ireland beyond 2013. Perhaps the Minister will comment on that. We have to find a balance. How do we distinguish between those who are genuinely seeking employment and those who perhaps are not?

I mentioned earlier that the focus of housing benefit has to be on providing low-income families with access to good-quality housing. The housing benefit cap rates may have a knock-on effect on the social housing sector, as private rented accommodation becomes harder to access for those on low incomes and the demand for social housing increases. A great many people are in a Catch-22 situation: they do not have enough money to rent a house privately, yet there is not enough social housing for them.

[Sammy Wilson (East Antrim) (DUP)]

My hon. Friend makes an important point, but does he accept that in the absence of cap rates—or, sometimes, where the rates are fairly generous—private sector rents become inflated? Landlords simply look at what the rate is, and if it goes up they put their rents up. It is almost like a perpetual cycle: the rates go up, so rents go up, and then the rates are pushed up again, and the only people who gain are the landlords.

[Jim Shannon]

I thank my hon. Friend for his information, which is helpful in focusing attention on what we are trying to aim for.

Members have mentioned fuel poverty. One of the spin-offs of losing housing benefit will be fuel poverty. In my former position, I sat as a Member of the Northern Ireland Assembly. One of the inquiries that we undertook was on child poverty. Fuel poverty and housing benefit both came up in that inquiry into child poverty, but all those things were part of the jigsaw of how people survive. Take away one part of it and we have a problem. I have some concern about that.

One Member mentioned the discretionary housing payment, and I would certainly be keen to find out from the Minister what he intends to do if the pool of funding that is set aside runs out. He said that it was impossible to separate housing benefit from housing and social development policy in general, and there are some examples of that in Northern Ireland where housing has been designed to bring mixed communities together, such as in Loughbrickland in County Down and Ballynafeigh in south Belfast, which are also examples of how we have moved forward. I would like to express some concern over the removal of housing benefit from people where it will drive them towards poorer areas. For some people who are already in poorer areas, they will not move beyond them, and I have concerns about that.

I am conscious of the time, but another concern of mine relates to applications by carers for disabled people—I do not think that the issue has been mentioned fully yet, although some Members may have partially touched on it. A carer for a disabled person might want to apply, but the only person who can do so is the claimant’s spouse or partner. Would it not be more beneficial to ensure that the rest of the family members, who are perhaps those who are more affected, may also apply? I look forward to hearing the Minister’s response to that. I also believe that some consideration needs to be given to single parents who have shared custody of children. I am not sure whether that issue has been addressed, so I would ask the Minister to look at that, too. Where custody is established, benefit entitlements should be granted to the parent to support the family unit. I do not believe that the proposals do that. Again, I ask the Minister to consider that point.

Other Members have touched on the issue of large families. It would not apply so much in the area that I represent, but I believe that it none the less applies right across the United Kingdom. Has particular consideration been given to ethnic families in other parts of the United Kingdom, where larger, multi-generational households are perhaps more common? I ask the Minister to consider that as well. There should be more innovative and positive incentives, which are far more preferable in making housing benefit entitlement reflect family size in the social rented sector from 2013. The Government position is bereft of detail, and I ask the Minister to consider my points.

Work Capability Assessments

Jim Shannon Excerpts

Wednesday 27th October 2010 Westminster Hall

[Natascha Engel]

I might have used that example, but I thank my constituency neighbour for his contribution. It is a serious matter, and errors are a fundamental problem. The system must be right if we are to move huge numbers from incapacity benefit.

[Jim Shannon (Strangford) (DUP)]

rose—

[Natascha Engel]

I shall give way briefly, but I must make some headway.

[Jim Shannon]

I thank the hon. Lady for giving way. Does she agree that it is not a tick-box exercise, although it seems like one at the present time, with people being asked whether they can stretch, bend or kneel? There are two parts to the assessment. One of them concerns emotional matters, such as depression and mental health; the other is physical. Perhaps the best way to do that would be to make contact with the person’s GP or physician, who would have better knowledge of the claimant. It would certainly help.

[Natascha Engel]

Yes, I agree.

Jobs and the Unemployed

Jim Shannon Excerpts

Wednesday 7th July 2010 Commons Chamber

[Gordon Banks]

My hon. Friend is right, and it is not just about the environmental or green side; it is also about quality of life. The quality of a property has a knock-on effect on children’s ability to grow up and learn, so there will be a negative effect all round. I am not sure that he, as a former Minister with responsibility for construction, will enjoy what I am about to say, but I think there is a strong argument for reducing VAT to stimulate the economy, just as the last Government did, but in a more targeted way. Reducing VAT to 5% on the labour element of home maintenance repair and improvement work could, as argued by Experian, create an extra 55,000 jobs this year alone. What the Government are doing will cost jobs. The views we have heard today about job growth are not shared by the Federation of Master Builders, which argues that 7,500 jobs will be lost in small and medium-sized enterprises in the construction sector this year alone as a result of the VAT increase. When the multiplier effect is taken into account, the effect on small and medium-sized construction companies in this year alone could be the loss of between 23,000 and 25,000 jobs.

There is another cause for concern. If firms go bust, close down and lay off workers, they will be in no position to train apprentices for the future.

[Jim Shannon (Strangford) (DUP)]

The hon. Gentleman mentions the construction industry, which I think is relevant to all hon. Members in the Chamber; it is certainly relevant to the area I represent. Does he agree that the Government should try in particular to help those aged 50 and over who have worked in the construction industry all their lives? They cannot get jobs anywhere else and find it hard to retrain.

[Gordon Banks]

I do agree, but I would much rather see them retained in the construction sector. There is a strong argument that the construction sector can drive economic growth in this country, and I would like the Government to take that forward.

As I said earlier when I intervened on my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), if we do not deliver skills learning for apprentices today, we will have a skills shortage in future and that will have an economic impact. That should not be tolerated, but we have to understand that struggling businesses do not take on apprentices; they survive day to day and fight day to day. The last thing they are thinking about is having an apprentice, because they are thinking about getting through the day without the bank phoning them.

When the construction industry loses jobs, there is a lack of focus on the resulting suffering because it does not affect 2,000 or 3,000 people all under one roof. They are in different places around the United Kingdom, and when jobs are lost, it is 20 jobs here and 40, 50 or 100 there. That makes it very difficult for the construction sector to show the impact of policies and to get through to the Government and people in general the impact of decisions. It is very easy to see what is happening when a car plant or a big manufacturing location is threatened with closure, but it is very difficult to take on board everything that is happening in the construction sector because it is so disparate and is spread throughout the UK.

Before I discuss my constituency, I make one last plea for the construction sector. It is vital for training, revenue and business growth, and it is vital for improving public services, which I want to improve. It is also vital for improving the quality of life of UK citizens. I strongly urge the Government to recognise that and to invest in it accordingly.

My constituency is quite large and varied, with a rural aspect to much of it. We have industry, of which we are very proud. Some of it is excellent. There are businesses such as Highland Spring, Vector Aerospace, Owens-Illinois and Diageo, and I want to focus on two of those, their interdependence and the impact of the VAT increase. Diageo has long had an interest and a presence in Clackmannanshire. The county is very proud of that business, as it is of Owens-Illinois—or the Glassworks as it is called locally. The interdependence is that one of the companies produces the packaging for the product that the other produces.

My concern is that the VAT increase will impact negatively on product sales, which will impact negatively on the requirement for packaging. If that occurs, the safety valve will be jobs. It is not rocket science—it is simple and straightforward. In my opinion, and as we heard yesterday, the recent reduction in the budget deficit is a result of increased tax take arising from businesses getting back on their feet, from people being in work and from a return to growth. The VAT increase puts all that at risk. It is regressive, hits the poorest hardest and will result in job losses. It will not deliver the revenue necessary for the Treasury, and it could have a negative effect that might deliver a downward spiral. The VAT increase coupled with the axing of the future jobs fund makes the outlook anything but secure.

We have discussed today why the future jobs fund has been cut, and I am afraid that I and my Opposition colleagues do not understand why it has been cut. We also do not understand why the Prime Minister, who thinks it is a good idea, has decided to cut it. It is interesting to see some Liberal Democrats in the House this afternoon, because they think that the future jobs fund is a good thing, too, but have played their part in cutting it. In fact, the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), said:

“We have no plans to change or reduce existing government commitments to the Future Jobs Fund. We believe that more help is needed for young people, not less”.

In Scotland, some 11,000 young people will be discarded as a result of the Prime Minister and the Lib Dems going back on their word. Much more can be said about the Government’s support for jobs—or lack of it—but I will end by saying this. The VAT increase will cost jobs, axing the future jobs fund will cost jobs, and failing to recognise the importance of the construction and housing sectors will cost jobs. They will all cost revenue, ruin lives and put the recovery at risk. None of them are a chance worth taking.

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[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I am delighted to follow the interesting speech of the hon. Member for South West Norfolk (Elizabeth Truss) on the need for an economic benefit analysis of every decision that is taken by Government. That is one of the factors that led to the devastation of many of the regions, because some things cannot be measured in pure economic benefit alone. There is also the social value of projects. That is why I want to address the House today on the disproportionate and unfair impact of Government spending cuts on the north-east of England—and, I am sure, on many other regions, but I speak for my own today.

In Newcastle upon Tyne North, we have many public sector workers, but we also have several major private employers, including Sage, Nestlé and Sanofi Aventis. Projects in recent years, such as Newcastle airport industrial estate, Newcastle Great Park developments and the development of many retail outlets, have diversified the local jobs market in Newcastle. None the less, many of my constituents are long-serving and dedicated public servants who stand to be directly and swiftly hit by the Lib-Con austerity drive.

In Newcastle upon Tyne North, the current situation has come as no surprise, because during the election campaign the now Prime Minister publicly identified the north-east as a region where spending was unsustainable and where public sector employment was simply too high. The first wave of public cuts were announced on 24 May, and now we have the ideologically motivated cuts laid down in the Budget.

[Jim Shannon]

It was not only Newcastle that was mentioned; it was also Northern Ireland. The Prime Minister was quick off the mark there. However, the level of public sector economic activity in Northern Ireland is almost 27%—5.2% above the UK average—and the dependence on public sector jobs is perhaps greater there than in other parts of the UK. I say to Government Members that it is important that the private sector is increased before anything happens to the public sector. I want everyone to be aware that the impact will be great, as the hon. Lady has said.

[Catherine McKinnell]

I thank the hon. Gentleman for his intervention. He is absolutely correct that those two regions were identified by the Prime Minister as specific targets for cuts. Recent announcements have made it clear that the future is particularly distressing for regions such as mine and that of the hon. Gentleman.