Oral Answers to Questions
Justin Tomlinson Excerpts(5 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lucy Powell (Manchester Central) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
Universal credit supports working parents with childcare costs, regardless of the number of hours they work. This provides an important financial incentive to those taking their first steps into paid employment. People can recover up to 85% of their eligible childcare costs on universal credit, compared to 70% on the legacy system.
Lucy Powell
As the Minister will know, one of the big challenges with universal credit is that families have to pay their childcare costs upfront. Save the Children and the Centre for Social Justice have recently warned that this is leaving families in £1,000 of debt when they start work. Under the review that the Department now seems to be conducting, can it look again at this, and can it also look at their other recommendation of making it not 85% but 100% of childcare costs, because this would really benefit those on low pay?
Justin Tomlinson
I know that the hon. Lady has worked tirelessly on this issue. The Government recognise its importance, which is why we have increased our financial support by nearly 50% since 2010. We are making improvements specifically in relation to payment in arrears, improving communication and ensuring that the Flexible Support Fund is better known and better used to help those who would otherwise face a financial barrier.
Andrew Bridgen (North West Leicestershire) (Con)
Can the Minister confirm that parents with disabled children will continue to receive additional support under universal credit?
Dr Rupa Huq (Ealing Central and Acton) (Lab)
Justin Tomlinson
I am very sorry to hear about that case. The hon. Lady’s constituent should have had access to an advance payment, and if she was down to her last £10, it should have been made on that day. If the hon. Lady will write to me with all the details, we will look at that specific case to see what went wrong.
Dr Philippa Whitford (Central Ayrshire) (SNP)
I welcome the Secretary of State’s announcement about examining the impact of universal credit on women, which, through women, often affects children. Will she look again at the single household payment, and consider separate payments to protect women from financial coercion, control and abuse?
Justin Tomlinson
This matter relates mostly to domestic abuse. I have been doing a huge amount of work with Women’s Aid, Refuge and ManKind to increase awareness that split payments are available in those circumstances, and to ensure that more work is done to identify, refer and support such claimants.
Royston Smith (Southampton, Itchen) (Con)
Mary Creagh (Wakefield) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
Universal credit spends £2 billion more than the system it replaces. It simplifies the old system and makes work pay. It is already transforming lives across the country.
Mary Creagh
Happy new year, Mr Speaker.
What an extraordinary answer. Some 10% of children in the UK live in severely food-insecure households. That is the highest number in the European Union. However and whenever the roll-out of universal credit starts, begins or enters into its full flood, will the Minister work with the Office for National Statistics to measure the extent of childhood food poverty before and after the introduction of universal credit?
Justin Tomlinson
I think we all recognise that we need better-quality statistics. Various groups are working on alternatives, and the Government will take those seriously. As has been mentioned, there are 300,000 fewer children in absolute poverty. On the specific issue of food insecurity, in the past five years alone it has almost halved to 5.4%, which is 2.5% lower than the EU average.
Several hon. Members rose—
Laura Pidcock (North West Durham) (Lab)
Happy new year, Mr Speaker.
I note the delays to the roll-out of universal credit announced over the weekend, but will the Minister please tell us what justification there can possibly be for people who have had to claim universal credit so far not receiving any protections? Will the Secretary of State agree to halt natural migration, compensate every single person who has lost out, and investigate the circumstances that have led people on to universal credit when there has been no change in their circumstance?
Justin Tomlinson
If the hon. Lady looked at the feedback we have had from stakeholders following this week’s announcement, she would see that they make it absolutely clear that they support universal credit over the legacy system. We know that 700,000 people—some of the most vulnerable people in our society—are missing out on £2.4 billion of support because the legacy system is too complicated. Universal credit gives personalised, tailored support and makes sure that people get the support that they need.
Several hon. Members rose—
Jo Swinson (East Dunbartonshire) (LD)
Thank you, Mr Speaker.
I hope that the delay to the full roll-out of universal credit is a sign that the Secretary of State for Work and Pensions is open to making the many changes to universal credit that are needed. I urge Minister to look in particular at the harsh repayment timescales for loans, which led my constituent to say:
“I should never have taken that 3 month job. It made me worse off”.
Surely that is the very opposite of what the Government are trying to achieve with universal credit.
Justin Tomlinson
I, too, welcome the hon. Lady back.
This issue is a real priority for the Secretary of State. We have already made changes: initially, the repayment period was six months, then 12 months, and it is now 16 months, and we have moved the maximum deduction rate down from 40% to 30%. We will continue to review the situation.
Kevin Brennan (Cardiff West) (Lab)
Mr Robert Goodwill (Scarborough and Whitby) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
The Government are committed to supporting care leavers. We have introduced a £1,000 bursary for those starting an apprenticeship and a £2,000 bursary for those going into higher education, extended paid internship opportunities across Government and launched the care leaver covenant. We are also working closely with Barnardo’s on an innovative work experience pilot.
Mr Goodwill
Care leavers are some of the most difficult people to get into employment. Social workers are helping with that transition through projects such as Staying Close and Staying Put, but what particular outreach support can the Department deliver to improve the statistics, which do not look good?
Justin Tomlinson
I know that my right hon. Friend worked tirelessly on this when he was a Minister in the Department for Education. We have 900 single points of contact who are supporting care leavers across the country. We are also working with a lot of businesses so that they can realise the huge potential that care leavers offer. I had two fantastic visits, to the Big House in London and PGL, which I saw at first hand were benefiting from giving care leavers work opportunities.
Giles Watling (Clacton) (Con)
Disability Support
Justin Tomlinson Excerpts(5 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Helen Goodman
It is extraordinary that the Government have been able to find the money to cut inheritance tax for the richest, but they cannot find money for people with disabilities and mental health problems.
As my hon. Friends have said, the stress and distress caused, particularly to people with mental health problems, are a serious problem. People are put into a situation of tension because they do not know when or whether they are going to be reassessed. I have constituents who are concerned for their family members’ wellbeing, because they get so anxious and cannot face the work capability assessments.
Let me now turn to the problem of ESA. The hon. Member for Ayr, Carrick and Cumnock talked about how we need to encourage and support people back into work. That is indeed true, but the fact is that, from the point of view of an employer, employing people with disabilities means higher employee liability insurance, it very often means adjustments at work and there is simply no incentive for people—[Interruption.] The Minister is saying, “Rubbish” from a sedentary position. Would he like to come to the Dispatch Box and tell me why that is rubbish?
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
Both as a Member of Parliament in my constituency office and as somebody who ran a business for 10 years, I employed disabled people and I benefited. It takes good employers to have a wide-ranging workforce. If you get it right it is a win-win for everybody. I do not recognise the situation the hon. Lady sets out.
Helen Goodman
I am glad the Minister did as he did, but we do also hear from people who cannot get jobs because of their disabilities and from employers who say it is too expensive to make the adjustments.
Jim Shannon
I think the Minister is nodding his head, and I think he accepts that, but we need to have people that can do that for them. We deal with them every day of the week in my office, and in every other hon. Member’s office. I am not different from anybody else—we are all the same.
The EHRC also recommends that the Government should:
“4. Make the UN Convention on the Rights of Persons with Disabilities…part of UK law”—
that is what the hon. Member for Eastbourne (Stephen Lloyd) referred to in his intervention—
“so individuals can effectively challenge rights violations in the domestic legal system, and develop a clear and coordinated plan for how the UK and devolved”
Administrations
“will systematically address the UN’s recommendations on disability rights.”
I have been contacted in the last two days by some constituents. The hon. Member for High Peak referred to a quotation from some of her constituents. My constituents have asked me to highlight the fact that universal credit simply isn’t working. Those are real-life responses from real people with real problems. They have asked me to make contact with the Department, especially with Ministers, to ensure that their voices were heard in the midst of everything that has happened in this House today. We all know about it—I get a sore head just thinking about it. I assured my constituents that I would ensure that I voiced their concerns today, in the presence of the responding Minister. The concerns are as follows.
The Government say that no one falls through the cracks and ends up losing their benefit, because they will make sure that everyone claiming benefits under the old system is moved automatically on to universal credit and not forced to make a new claim. The Government say that no one is left without the money they need to survive, because they are continuing to pay people all of their old benefits until their new ones have kicked in. The Government say that everyone is protected from becoming worse off under the new system, especially vulnerable groups. I say that is a very honourable assumption to make. I do not for one second say that that is the purpose of what the Government have put forward, but currently the Department is failing people.
I know of many people who went to the jobcentre and went through the online process with a member of staff and then came into my office. The benefits office—what we would have called the bru office many years ago—is just around the corner from my office, so most people come to me when they have a problem, to talk to my staff members. Although they went through the online process with a member of staff, they then came to my office, in tears, as they simply could not understand what was happening to them. They could not understand that they had not got their benefits. They could not understand the paperwork system. I do not want to be too critical, but I have to say these things, as that is what has happened.
People are sick with worry, not understanding what is happening or what is required of them. They are very worried about their benefit, and when we think that many of those who are on universal credit are ill, and that the stress of this makes things worse, it is clear that we are failing. We are failing the most vulnerable, and much as I would love to help every person on universal credit, my staff are doing nothing else but that.
I observe, by the way, in the news that staff in one of the jobs and benefits offices were enjoying a celebratory cake for doing an excellent job and seeing the end of the roll-out in Northern Ireland. There was not much of a celebration in Newtownards about it, and that is a fact. Nor was there a celebration anywhere else. That is not saying that they should not have enjoyed the cake; I am just saying, celebrate when it is good but do not celebrate when it is not. Too many people are anxious and concerned. I would ask the Minister to assure me, and others in the House, that changes are on the way for the most vulnerable in the practicality of the roll-out, and changes in how it is affecting all of those I listed earlier.
I understand that we need all those who are able to work to do just that. That is very constructive and helpful, but let us be honest: are people on benefits and sickness benefits because they want to be? No, they are not. They want to work the same as the rest of them. It is perfectly plausible to put that forward. But I also understand that forcing those who are not able to work to worry and make themselves ill is cruel and unnatural. It must not happen. We need changes, yes. We also need assurances and action. I look to the Minister and the Department as to how and when that will happen.
Work and Pensions
Justin Tomlinson Excerpts(5 years, 5 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Justin Tomlinson
We suspect that the estimate of 5.5% fraud and error, which was set in 1996-97, does not reflect the reality today. The new measure, which will come in next year, can accurately set out where we should be, and where we should then target and prioritise our resources to prevent, identify and counter fraud and error even more effectively and efficiently.
[Official Report, 27 November 2018, Vol. 650, c. 71WH.]
Letter of correction from the Under-Secretary of State for Work and Pensions, the hon. Member for North Swindon (Justin Tomlinson).
An error has been identified in my response to the debate.
The correct response should have been:
Justin Tomlinson
We suspect that the estimate of 5.5% fraud and error, which was set in 1996-97, does not reflect the reality today. The new measure, which will come in 2020, can accurately set out where we should be, and where we should then target and prioritise our resources to prevent, identify and counter fraud and error even more effectively and efficiently.
Work and Pensions
Justin Tomlinson Excerpts(5 years, 5 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Alison McGovern (Wirral South) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
Lone parents are the primary beneficiaries of the Government’s decision to increase the help provided for childcare from 70% to 85%, which will help us to enhance the record levels of lone parent employment in this country.
Alison McGovern
The whole House will be aware that lone parent employment increased radically under the last Labour Government, but unfortunately lone parents now face being worse off because of universal credit. So can the new Secretary of State and her ministerial team guarantee that as part of their review they will make sure that no lone parent family in this country is worse off because of universal credit?
Justin Tomlinson
The lone parent employment rate is now at 67.6%, which is a record high and something this Government are very proud of. We will continue to try to push to see that figure go up further. We have made announcements on increasing the national living wage, which has seen a real-terms increase of 8% over the past three years, and changes to the income tax threshold worth £1,200, while the national living wage in itself, for somebody working full-time, is worth £2,000. That is making sure that lone parents who are working are getting the support to have more money available at the end of every month.
[Official Report, 19 November 2018, Vol. 649, c. 566.]
Letter of correction from the Under-Secretary of State for Work and Pensions, the hon. Member for North Swindon (Justin Tomlinson):
Errors have been identified in the responses I gave to the hon. Member for Wirral South (Alison McGovern).
The correct responses should have been:
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
Lone parents are the primary beneficiaries of the Government’s decision to increase the help provided for childcare from 70% to 85%, which will help us to enhance the near record levels of lone parent employment in this country.
Alison McGovern
The whole House will be aware that lone parent employment increased radically under the last Labour Government, but unfortunately lone parents now face being worse off because of universal credit. So can the new Secretary of State and her ministerial team guarantee that as part of their review they will make sure that no lone parent family in this country is worse off because of universal credit?
Justin Tomlinson
The lone parent employment rate is now at 67.1%, which is a near record high and something this Government are very proud of. We will continue to try to push to see that figure go up further. We have made announcements on increasing the national living wage, which has seen a real-terms increase of 8% over the past three years, and changes to the income tax threshold worth £1,200, while the national living wage in itself, for somebody working full-time, is worth £2,000. That is making sure that lone parents who are working are getting the support to have more money available at the end of every month.
Carer’s Allowance Overpayments
Justin Tomlinson Excerpts(5 years, 5 months ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
It is a pleasure to serve under your chairmanship, Mr Betts. I thank the hon. Member for High Peak (Ruth George) for opening the debate. She displays a huge amount of knowledge, passion and care in this area, and she has raised many points that the Government and I would agree with.
Carer’s allowance actually falls within the remit of my hon. Friend the Minister for Disabled People, Health and Work. There is an outstanding relationship with Carers UK, both at ministerial level and with officials. There are regular meetings with Carers UK, and many of the points raised in this debate have been raised previously and are being looked at and reviewed, so the debate is very timely.
As an individual, I share much of the passion that we have heard today. Not a lot gets me emotional, but I remember, in my early days as a constituency MP, meeting young carers, who are often forgotten in debates about carers. I am talking about children who have often lost the things that we all took for granted when growing up, as they have taken on caring responsibilities. It was a particularly moving meeting, and one that I have never forgotten, so I was happy to step in for this debate.
The Government recognise and appreciate the vital contribution made by informal carers, who provide invaluable support for relatives, partners, friends and neighbours who may be ill, frail or disabled. We also recognise the important role that many carers’ organisations play across the country in supporting carers, including those in the hon. Lady’s constituency, such as the Blythe House and Buxton carers’ support groups, which I am sure that she, as a diligent constituency MP, will have had much involvement with.
The Government are already supporting carers in a number of ways, including through the benefit system. About 850,000 people currently receive carer’s allowance. Since 2010, the rate of carer’s allowance has increased from £53.90 to £64.60 a week, with a further increase to £66.15 planned for April 2019, meaning an additional £635 a year for carers since 2010. By 2023-24, the Government forecast a spend of around £3.4 billion a year on carer’s allowance, which is a real-terms increase of more than one fifth since 2016-17.
Carer’s allowance offers a measure of recognition of the vital contribution that carers make to our society, although we fully appreciate that many make substantial sacrifices to care for their loved ones. That is why in June 2018, the Government published “Carers action plan 2018 to 2020: supporting carers today”, which sets out a two-year programme of targeted work to support unpaid carers. The plan puts a focus on practical actions to support carers and gives visibility to the work already under way or planned within Government.
However, I recognise that there are concerns about carer’s allowance, particularly around earnings and the possibility that a number of claimants may have been overpaid. Again, I pay tribute again to the hon. Lady, who raised some of those issues, which have been raised in the media, through the work of the Work and Pensions Committee and through her own recent, diligent parliamentary questions. It is in everyone’s interest that we deal with fraud and error effectively, preferably by stopping it happening in the first place.
We have been discussing updating our measurement of carer’s allowance fraud and error with the National Audit Office over the last year or so. We now plan to start the measurement during 2019, with the intention of publishing revised estimates during 2020. This is vital, because the last time we did this was in 1996-97. A huge amount has changed since then—not only the technology, but the way people work and their circumstances, as the hon. Lady mentioned. We suspect that the estimate of 5.5% fraud and error, which was set in 1996-97, does not reflect the reality today. The new measure, which will come in next year, can accurately set out where we should be, and where we should then target and prioritise our resources to prevent, identify and counter fraud and error even more effectively and efficiently.[Official Report, 6 December 2018, Vol. 650, c. 12MC.]
However, we are not complacent about fraud and error and already have a number of measures in place to deal with it. We are also reinforcing to carers their responsibility to inform us of changes to their earnings and other circumstances. Our priority has been to try to clear new carer’s allowance claims as quickly as possible, including during a period when the number of carer’s allowance claims has increased significantly. In part, that increase is due to the great work of stakeholders to raise the profile of carer’s allowance. We have also done our part by introducing the new online claim system, which is easier to use and—perhaps surprisingly for a Government online system—has a 90% satisfaction rate, so there are certainly some lessons for us to learn there.
Our performance here has been consistently improving, partly as a result of recruiting new staff—an additional 150 in the last 12 months alone. Many of them are based in the Preston, Blackpool and Swansea offices. I know that the Minister for Disabled People, Health and Work visited the Preston office in the summer, in her role as the Minister responsible for carer’s allowance. She was very impressed with the enthusiasm and hard work of the staff.
Ruth George
The Minister says that performance is improving. In what way is it improving? Does he mean that they are now going back over these historical overpayments and requesting them back from carers? Most carers and most people in this House would not see putting right the wrongs of previous years by finally investing in compliance to be a performance improvement, at least not for the carers that it affects.
Justin Tomlinson
I am coming on to what those staff will be doing and the improvements that we are bringing forward. As well as focusing on new claims, we are working hard to reduce backlogs elsewhere in the system, remind carers of their responsibilities and make better use of available technology.
The Department for Work and Pensions takes every care to explain a claimant’s responsibilities when they apply for carer’s allowance. This includes the need to report changes on time. Our annual notifications help remind claimants how important that is. We also provide information on the website gov.uk, while customers who need additional advice can contact the Carer’s Allowance Unit for further information, and we encourage stakeholder groups to help to share that information.
I absolutely understand the points the hon. Lady made about whether the guidance is perfect. When the Work and Pensions Committee raised questions with the Minister, we recognised that there were improvements to be made in this area. We have already made significant changes to the website. I also accept the points made about the letter, which the hon. Lady went through. I will encourage the Minister for Disabled People, Health and Work to meet with her personally to discuss the specific points about the quality of that guidance and information. We absolutely have to get that right, and it was a fair point to raise.
The consequences of not keeping the DWP up to date, including the need to repay overpayments, are clearly stated during the initial claim process and in our annual uprating letters. Therefore, every claimant has an obligation to tell us when their circumstances change. As with all benefits, the DWP has a responsibility to recover an overpayment where a claimant has failed to disclose a change that would affect their entitlement. Where there is an overpayment, the DWP will always look to recover the debt through a sustainable repayment plan. Where a claimant is having difficulty repaying a benefit overpayment, they can request a reconsideration of the amount that is being taken. It is also important to note that once a claimant has told us of a change of circumstances, they would not be responsible for overpayments from that date. However, we must recognise that we need to work with claimants to help them avoid overpayment and to ensure that we pay the correct amount.
In recent years, the DWP has introduced new technology to make it easier to identify and prevent overpayments, with cases checked against earnings information held by Her Majesty’s Revenue and Customs. The new verify earnings and pensions—VEP—system, allows us better to check earnings declared by carers to the DWP against tax records, and it allows staff to quickly take any action to clear up any discrepancies. Where we do have arrears from previous exercises, our priority is to ensure that the benefit is being paid at the correct rate in order to provide regular financial support. Once we have done this, we can determine any overpayment that might have accrued. Even when there has been a delay in dealing with a change in circumstances, as a carer’s allowance claimant can earn £120 net of allowable expenses a week, many of these claimants will have been paid correctly anyway. We will be increasing the carer’s allowance earnings limit again from £120 to £123 a week from April 2019. The Office for Budget Responsibility forecasts that average earnings will increase by around 5.1% between 2017 and 2019, whereas we will have increased the carer’s allowance earnings limit by 6%.
The Government acknowledge the vital role played by carers and the valuable work that carers’ organisations carry out on behalf of carers. We recognise that the UK’s 6 million carers play an indispensable role in looking after friends or family members who need support, which is why it is so important that carers should continue to have access to a dedicated benefit that recognises their particular contribution to society. Our staff work hard to support carers and pay people the right entitlement. I know that the Minister for Disabled People, Health and Work is very passionate about this, and it is a real priority for her. Equally, there are improvements in place that mean that we are tackling arrears and have a much smoother process for taking account of any earnings changes going forward. I thank the hon. Lady for giving me the chance to talk about carer’s allowance.
Question put and agreed to.
Benefit and Pension Uprating
Justin Tomlinson Excerpts(5 years, 5 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
I am pleased to announce the proposed social security benefit and pension rates for 2019-20.I have attached the table of rates to this statement and I will place a copy of the proposed benefit and pension rates 2019-20 in the Library of the House. The annual uprating of benefits will take place for state pensions and most other benefits in the first full week of the tax year. In 2019, this will be the week beginning 8 April. A corresponding provision will be made in Northern Ireland and the Scottish Government will lay its own statutory instruments to make these increases to carer’s allowance in Scotland.
The annual uprating process takes into account a variety of measures:
The basic and new state pension will be increased by the Government’s “triple lock” commitment, meaning that they will be uprated in line with the highest of prices (CPI), earnings or 2.5%. Consequently, they will be uprated by 2.6% (the May-July average weekly earnings figure).
The legislative requirement for the pension credit standard minimum guarantee is that it is increased at least in line with earnings. This year the pension credit standard minimum guarantee will increase by £4.25 a week for a single person (and £6.45 for a couple). The pension credit savings credit maximum amount will be increased in line with prices.
Benefits linked to the additional costs of disability, and for carers, are increased by the annual rise in prices (2.4%). A number of other elements—including non-dependant deductions—will also be uprated in line with prices.
The majority of working-age benefits have been frozen at their 2015-16 levels for four years under the Welfare Reform and Work Act 2016.
In line with the announcement in the autumn Budget, universal credit work allowances will be increased by £1,000 from April 2019. This increase will take effect after the rates are increased by prices.
The list of proposed benefit and pension rates also includes a change to the carer’s allowance earnings rule, which will be increased for 2019-20 from £120 to £123 a week.
The attachment can be viewed online at http://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2018-11-23/HCWS1104/.
[HCWS1104]
Oral Answers to Questions
Justin Tomlinson Excerpts(5 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
The Welfare Reform and Work Act 2016 froze the majority of working-age benefits for four tax years from 2016-17. Those provisions will lapse in 2020, and the pre-existing statutory arrangements will come back into force.
Mr Carmichael
According to the Resolution Foundation, the value of working-age benefits has fallen by 6.4% since 2014. What does the Minister think it tells us about the Government of which he is a part that the Chancellor’s priority in the Budget was to give a tax cut to higher rate taxpayers like him and me, rather than addressing that?
Justin Tomlinson
The reality is that the poorest fifth in society are £400 a year better off in real terms, and the richest fifth in society are £800 worse off.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
The report from the UN special rapporteur on poverty in the UK was scathing. Professor Alston referred to a
“punitive, mean-spirited, and often callous approach”
and the “misery” that it caused, in relation to the cuts and changes to the social security system, including universal credit and the freeze on benefits. Does the Minister agree with him that in the UK, poverty “is a political choice”?
Justin Tomlinson
We disagreed with the findings, but we did take the opportunity to share our record of delivering record employment, a simplified benefits system that helps some of the most vulnerable people in society and 1 million fewer people in absolute poverty, as well as our proactive work with stakeholders, which is delivering real life opportunities for all in society.
Chris Philp (Croydon South) (Con)
John Howell (Henley) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
This Government are committed to supporting care leavers. We have introduced a £1,000 bursary to those starting an apprenticeship, extended paid internship opportunities across Government, launched a care leaver covenant and are upskilling our Jobcentre Plus staff.
John Howell
What work is the Minister doing with Barnardo’s, and what impact is the See Potential programme having?
Justin Tomlinson
I would like to take this opportunity to pay tribute to my right hon. Friend the Member for Tatton (Ms McVey), who made it a personal priority of hers to introduce Barnardo’s not only to help train and improve the guidance for all of our frontline staff, but to offer a comprehensive work experience programme and opportunities for care leavers. This is a vital part of our See Potential work, as we unlock their undoubted potential.
Melanie Onn (Great Grimsby) (Lab)
What more can be done for constituents such as mine living in YMCA properties who are still going to college, yet cannot afford the bus fare or to feed themselves? That is exactly what has happened to a constituent of mine.
Justin Tomlinson
We are looking very carefully at all of the ways that we can make sure care leavers have the same opportunities that others take for granted. For example, through second chance learning, care leavers aged 18 to 22 are still able to access full benefits while having a second opportunity to learn. There is the £1,000 bursary for those who choose an apprenticeship, and the £2,000 bursary for those who choose higher education.
Layla Moran (Oxford West and Abingdon) (LD)
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
We welcomed the recent report by the Social Security Advisory Committee and have accepted nearly all its recommendations. We are determined that all claimants are supported through this process, particularly the most vulnerable, and we will be working collaboratively with our stakeholders to ensure that those in need of additional support receive the assistance they require.
Helen Hayes
None of the changes to universal credit managed migration that were announced in the Budget will help people whose debilitating mental illness means that they are too anxious and unwell to open their post and are deeply fearful of any new assessment process. I welcome the new Secretary of State to her post, but what will she do to ensure that no one is left without income during the managed migration process, and will she commit to halt the roll-out until such a guarantee can be given?
Justin Tomlinson
I know that the new Secretary of State is very passionate about focusing on this particular area. There will be four to six months of comprehensive preparation for those looking to migrate. There will be personalised communication and information on the support available, and our highly trained and experienced staff will identify vulnerable claimants, such as those with mental health conditions, so that we can instead offer home visits or telephone calls, or even delay or stop the migration process if that is appropriate for the individual claimant.
Stuart C. McDonald
Does the Minister agree that the system of implicit consent is absolutely essential for claimants with high support needs under the legacy system, and that it must be rolled out and extended to universal credit urgently and before managed migration begins?
Justin Tomlinson
There is real merit in that point. From talking to stakeholders, particularly social housing companies and local authorities, I think that when we can find a way to connect up stakeholders, including the most vulnerable claimants in particular, it increases the chance of making the process as smooth as possible.
Mike Amesbury (Weaver Vale) (Lab)
I welcome the new Secretary of State to her post.
On 13 November, Mind wrote to me to outline its fears about how the approach of the then Secretary of State for Work and Pensions to the managed migration of universal credit created a real risk that many people with mental health problems could be left without an income altogether in the move to universal credit. Will the new Secretary of State take the opportunity to make a clear statement of independence from her predecessor, take note of the grave concerns of Mind, Macmillan and others, and withdraw these regulations immediately?
Justin Tomlinson
No, because these migrations will bring in very important additional supports, as each and every Member needs to bear in mind when the vote comes forward. We work closely with stakeholders, and I remind Opposition Members that under legacy benefits, more than 700,000 people, who include some of the most vulnerable claimants—the people who contact us as constituency MPs—are, on average, missing out on £285 a month because those legacy benefits are complex and not personalised. It is absolutely right that we do this, but in a controlled and sensible manner.
Diana Johnson (Kingston upon Hull North) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
Many claimants come on to universal credit with pre-existing rent arrears, but we have introduced new measures to make additional payments of two weeks’ housing benefit to support claimants as they transition to universal credit, and to extend trusted partner status to social landlords to further support our claimants.
Diana Johnson
Universal credit rolls out in Hull just before Christmas, and the council is already preparing for expected increases in rent arrears. I am sure that the Minister will have watched Sean McAllister’s film “A Northern Soul” on BBC 2 last night. It featured Steve Arnott, a low-paid worker, and his work on the Beats Bus inspiring children on the council estates of Hull. The film showed in-work poverty, food poverty and child poverty. Can the Minister guarantee that the families in that film and in Hull will be better off when universal credit is introduced in December?
Justin Tomlinson
The key to universal credit is that, for the first time, a claimant will get personalised, tailored support that can help them navigate all the forms of support available. Under legacy benefits, more than 700,000 people, among whom are some of the most vulnerable people, miss out on an average of £285 a month. Those on universal credit will typically spend 50% longer looking for work. This is key to unlocking the potential of all claimants to improve their life chances.
Alison Thewliss (Glasgow Central) (SNP)
Thenue housing association in my constituency tells me that errors in universal credit, such as the system retaining the wrong landlord details despite the claimant having asked for that to be corrected, have meant that some tenants have ended up two months in arrears through no fault of their own. What will the Minister do to fix the system before people end up in debt as a result?
Justin Tomlinson
I am very sorry to hear of that. If there are specific cases, please do not hesitate to highlight them. Through the roll-out of the landlord portal, which has been warmly welcomed by social housing companies and local authorities, there is an opportunity for claimants and housing bodies to work together to manage this migration process smoothly.
Stephen Timms (East Ham) (Lab)
The Minister knows that the five-week delay under universal credit forces people into debt right at the start of their claim, which too often leads to rent arrears and other hardships. I welcome the new Secretary of State to her post. Will the Minister encourage her to take a fresh look at this indefensible five-week delay in particular?
Justin Tomlinson
As we have pointed out, those transitioning from legacy benefits will get the additional two weeks of housing benefit and, with the new measures announced, two weeks of either their employment and support allowance, their jobseeker’s allowance or their income support, as well as access to advance payments from day one. The key thing is that this system mirrors the world of work. For the vast majority of people, their aim is to get into work, and in work they would expect to be paid in arrears. They would have to deal with that at the same time as going back into work, whereas now the personalised work coach can provide support by giving them access to advance benefits and pointing them to the support offered by Citizens Advice and our wider universal credit support network. It is about providing that support as people prepare themselves for the world of work.
Toby Perkins (Chesterfield) (Lab)
Alison McGovern (Wirral South) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
Lone parents are the primary beneficiaries of the Government’s decision to increase the help provided for childcare from 70% to 85%, which will help us to enhance the record levels of lone parent employment in this country.
Alison McGovern
The whole House will be aware that lone parent employment increased radically under the last Labour Government, but unfortunately lone parents now face being worse off because of universal credit. So can the new Secretary of State and her ministerial team guarantee that as part of their review they will make sure that no lone parent family in this country is worse off because of universal credit?
Justin Tomlinson
The lone parent employment rate is now at 67.6%, which is a record high and something this Government are very proud of. We will continue to try to push to see that figure go up further. We have made announcements on increasing the national living wage, which has seen a real-terms increase of 8% over the past three years, and changes to the income tax threshold worth £1,200, while the national living wage in itself, for somebody working full-time, is worth £2,000. That is making sure that lone parents who are working are getting the support to have more money available at the end of every month.[Official Report, 28 November 2018, Vol. 650, c. 2MC.]
Vicky Ford (Chelmsford) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
My hon. Friend is being very active in this area, and it is a key priority for us that access to support is available from day one. We have 137 work coaches in prisons to help prepare for UC claims, and we now have three pilots—in Norwich, Wayland and Belmarsh prisons—to make sure we can test the difference that completing UC claims will make. This is a real priority.
Neil Gray (Airdrie and Shotts) (SNP)
We have always known that austerity is a political choice, but now, thanks to Philip Alston, we know that poverty is also this Government’s political choice as we consider his findings into areas like the near-£5 billion benefit freeze cut next year, the 1950s women who have been impoverished by pension changes, and targeting children with austerity via the two-child limit. What different choices can we expect from this new Secretary of State?
Draft Child Support (Miscellaneous Amendments) Regulations 2018
Justin Tomlinson Excerpts(5 years, 5 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
I beg to move,
That the Committee has considered the draft Child Support (Miscellaneous Amendments) Regulations 2018.
The draft regulations were laid before both Houses on 12 July 2018. The regulations will enable the Department to make amendments to child maintenance legislation to deliver the new child maintenance compliance and arrears strategy.
A comprehensively reformed child maintenance scheme was launched in 2012. The main aim of the scheme is to encourage and support parents to take responsibility for paying for their children’s upbringing. We want parents to work together following separation and, where possible, to make a family-based arrangement for maintenance, avoiding state intervention altogether. Where parents do not meet their responsibilities, the statutory scheme is there to enforce payments.
I am pleased to say that, following careful staged implementation, the new service is working well and avoiding the problems that beset the previous statutory child maintenance schemes. As we have implemented the reformed scheme, we have listened to the issues that hon. Members and external stakeholders have raised. The draft regulations address a number of those issues by closing known loopholes, updating the way in which child maintenance is calculated and introducing a new sanction to target the small minority of parents who persistently evade their responsibilities.
For many years, the old system under the Child Support Agency did not provide the right support to parents and was expensive to run. The majority of cases with ongoing maintenance have been closed in the CSA schemes. I want to provide clarity to thousands of families who have a case in the CSA with arrears. In many of those cases, the children are now adults and the outstanding debts are small. In some cases, when asked, parents have moved on with their lives and are not interested in pursuing the debt. The draft regulations will enable us finally to address all arrears that built up under the CSA, meaning that we can close the cases and end years of uncertainty for the families involved.
A small number of non-resident parents are able to lower their child maintenance liabilities, or avoid them altogether, by drawing an undeclared income from assets. Whether that is via loans against the value of bullion or the acquisition of virtual currency, the cultivation of a cash-poor but asset-rich lifestyle is a rare but growing method of evading child maintenance responsibilities. The draft regulations introduce new powers to address that problem.
Where a partner believes that the ex-partner possesses the relevant assets, the Child Maintenance Service will investigate, escalating to the financial investigation unit if appropriate. If possession of a relevant asset is confirmed, and the value exceeds £31,250, a notional income will be calculated at 8% of the asset’s total value. That would be added to the total income used to calculate liability. We expect the use of the power to be appropriate only in a very small number of cases. We recognise, too, that such assets can be acquired for legitimate reasons. That is why we have protected assets in certain circumstances, including where the asset is used for business purposes or is the primary home of the parent or a child.
Some parents intentionally manage their financial affairs around joint or unlimited-partnership accounts, as those are inaccessible to our existing powers. The draft regulations seek to extend our ability to use regular and lump-sum deduction orders in relation to joint and unlimited-partnership bank accounts, and to use lump-sum deduction orders in relation to sole-trader accounts. Through that new power, we may be able to collect an additional £350,000 a year for children. I want to make it clear that we want to strike a balance between recovering money for parents who are refusing to pay child maintenance and protecting the rights of other joint account holders. To achieve that, a number of safeguards have been put in place to prevent the other joint account holder’s funds being deducted.
Deductions will only be made from joint or unlimited-partnership accounts where there are insufficient funds held in the parent’s solely held accounts. Before action is taken, the previous six months of account statements will be checked to establish ownership of funds. In a small number of cases where, despite investigation, it is not possible to establish how much of the funds in the account belong to the parent—for example, because no evidence is furnished as to ownership—a pro rata approach will be adopted. This will assume that the parent’s share of the funds is equal to that of the other account holders.
All account holders will be notified before a deduction order is made in respect of a joint account and will be given the opportunity to make representations in relation to the funds targeted. The standard representation period will be 14 days for regular deduction orders, and 28 days for lump sum deduction orders. All account holders will have appeal rights. Further safeguards are in place to ensure businesses have enough cash flow to continue to trade. For example, a deduction would not be taken if it would reduce the account balance below £2,000. We have provided a requirement for the Department to review these provisions every five years.
I plan to commence an existing power to enable the Child Maintenance Service to disqualify a paying parent with child maintenance arrears from holding a UK passport. The regulations make further provisions in respect of this power. The measure will only be used where a parent has consistently failed to meet their financial responsibility for their children and all our other enforcement powers have failed to regain compliance. It will operate in a similar way to existing sanctions of commitment to prison and disqualifications from holding or obtaining a driving licence. Given the serious nature of the power, it will be for the court to decide whether to disqualify a parent from holding or obtaining a UK passport. The court has the power to suspend the disqualification order on such conditions as the court thinks appropriate. Although the power will be used only in a small volume of cases, I expect it will be an effective deterrent to secure payments and maintenance as early in the case as possible.
As soon as the CSA came into existence in 1993, debt began to build up quickly. Operational improvements from 2008 onwards halted the lack of growth, but reducing the historic balance has been extremely challenging. Successive Governments have not sought to hide from it, and since 1996 have published information on the client funds accounts on the amount of debt believed to be uncollectable. The latest Child Support Agency client funds accounts for 2015-16 make it clear that £3.1 billion of CSA debt is deemed uncollectable.
Over the years, a number of strategies have been tried to collect the debt, including using external debt collection agencies and offering parents the option of making a part-payment, but none has been successful in getting money to children. The regulations include changes that help to deliver certainty to parents by attempting a final collection of their debt, where they want it and where such action is likely to be cost-effective for the taxpayer.
For a case to be in scope for the regulations, the debt must have accumulated on either the 1993 or 2003 CSA cases; it must be an arrears-only case, where no maintenance is due for a child currently; and it will not have received a payment within the past three months. Where a case started on or before 1 November 2008 and has over £1,000 arrears, was over £500 if the case started after 1 November 2008, or the arrears were accrued under the CSA but have transferred to the Child Maintenance Service system and are more than £500, we will write to the parent the money is owed to and ask if they would like us to make a last attempt to collect the debt. Parents will be given 60 days to tell us that they want us to attempt to collect their debt. If representations are not received within the 60-day period, the debt may be written off.
The regulations will enable the CSA debt to be written off without seeking representations where it falls below the prescribed thresholds. That is because it would not be cost-effective to attempt to collect the debt below these levels. There are different thresholds according to the age of the debt, as the older the debt, the harder it is to collect. Where such debt is written off, both parents will be notified. Where the debt is below the value of £65, the regulations will enable the debt to be written off without notice to either parent. That is in line with the current threshold used in my Department for debts owed to the Government.
Finally, if a case of debt subject to sequestration—Scottish insolvency—these regulations will enable it to be written off when the sequestration expires. This will apply to all child maintenance schemes if the debts become legally uncollectable due to the way in which sequestration operates.
In conclusion, the launch of the Child Maintenance Service has gone well, but we now need to build on that success. We propose to do that by first widening our enforcement powers, closing down known loopholes and sending a clear signal that we will pursue those who fail to meet their obligations to their children. Secondly, we will not back away from the hard choices. We will commit to tackling the arrears that represent the legacy of the CSA and will do so in the way that best balances the interests of parents and the public purse. I commend the regulations to the Committee.
Justin Tomlinson
I pay tribute to the MPs across all parties who have engaged with me on this subject; since I became a Minister it has been probably the most popular topic. Colleagues have even sat through some of the presentations with me as we have developed the regulations. Their experience, either through individual casework or with people with a lot of knowledge in this area, have helped to shape these regulations. All the contributions recognised that the absolute priority must be the children. There is much that we agree on. It is disappointing that the Opposition do not support the regulations because they send a crystal-clear message to the tiny minority of parents who choose to avoid their responsibilities.
I will try to cover the points raised. The historical debt is about £3.1 billion. It would cost us somewhere in the region of £1.5 billion to pursue all that debt, some of which is many decades old. Estimates are that we would get back between £0.1 billion and £0.6 billion, because of the nature of that historical debt. The absolute key is that we learn the lessons. That is why the CMS was brought in, and it is making a difference. In the first five years of the CMS, about £113 million was owed; in the first five years of the CSA, £1.5 billion was owed. That is a considerable difference. In March 2015, arrears were about 17%; they were 13.3% in 2016, 12.5% in 2017 and 12.1% in March 2018. I do not want to tempt fate, but the last available statistics from June 2018 show it was down to 11.8%.
There is still much more to do, but these regulations are part of the ongoing journey. This will not be the last time that we introduce regulations that are shaped not just by cross-party MPs but by the stakeholder organisations, including Gingerbread, which the shadow Minister rightly credited for the work it does in this area. I have met Gingerbread; we listened the experience it offered. The issue of three months of no payments refers only to the CSA historical debt, not the ongoing CMS or, in effect, live case, when that would not apply.
On enforcement and, in particular, why we do not take lifestyle into account, that would be a blunt tool. This may also cover the point made by my hon. Friend the Member for Gloucester, because in some cases people might have a flash car but on investigation it is found to be fuelled by debt or is not their car. Rightly, therefore, we have brought in the financial investigation unit, so that we can investigate if receiving parents notify their caseworker if they feel that there is evidence of lifestyle inconsistency. The highly trained specialist team from the unit will now be able to look at that and, if they find grounds for changes, they will take enforcement action.
On the specific point about passports, I must stress that use of that power is a last resort, once we have exhausted all other enforcement powers. Maximum enforcement lasts for two years, and it must be granted by the court—not by us—so there are numerous safety checks in place. We used to rely on the removal of driving licences. Not unreasonably, however, the paying parent often argued, “If you take my driving licence away, I won’t be able to earn and you won’t get another penny from me.” We think that this might be a better way. We hope that it is a sufficient deterrent and is used only in a very small number of cases.
On assets outside the UK, yes, absolutely, they may be considered. On notional income, that would be applied at 8%, not on the primary home, because we work on the assumption that the child and the paying parent live there, but if they have another home and, for whatever reason, the paying parent decides not to charge rent on it. The example given was of an asset from parents given as a goodwill gesture. We would then attribute what we believe to be fair, which is the notional income of 8% derived from that asset. That would be added to the paying parent’s total income for the year, which is used for the calculation of the child maintenance.
The point about targets has been raised with me before, and I understand why—as Governments, we set targets for pretty much everything we do. To be crystal clear, we publish all data, so that all organisations may look at the data and draw their own conclusions. We do not want to set an artificial target, however, because we do not want to create perverse incentives—if we say, “X per cent. has to be enforced”, we might seek to go after easy targets, rather than some of the tricky cases, in particular those of the most vulnerable people for whom it would make a real difference. The key that drives us is to get those arrears down, to act as quickly as possible and to ensure that the child, through the receiving parent, gets the full amount of money to which that child is entitled.
On charges, too, we have had representations, and we undertook a review. What is key, however, is that in an ideal world we would never be needed—all parents would be able to find an amicable way to resolve their differences and to ensure that a fair amount is paid, because that benefits the children. We would all agree on that. The modest charges—bear in mind that my Twitter feed sometimes tells me that the fees are a hugely profitable exercise—cover about 2% or 3% of our total costs. They are a nudge exercise to encourage people to find an amicable way to agree. That can happen—time heals—and we want that in place.
One of the changes that we have made is to go the other way. For example, given those points made about whether Direct Pay always works, we now proactively contact those on Direct Pay through text messages to say, “If you are having problems, contact us, and we can look to change that to collect and pay.” We are ensuring that people, the less confident in particular, are not left without receiving the money that they should be. We can act far quicker than in the past.
On domestic abuse, I am very proud that I have ensured that Women’s Aid is helping to develop training for all our staff, so that they can identify those who might be victims of domestic abuse, which comes in all forms. The administration fee would be waived, and we may take people’s word for it—this is not something that has to be proved strenuously. Through the training, where appropriate, we will then signpost and even—if this is felt to be the right thing to do—contact the police, to alert them to what is happening.
On sole traders, we have trained staff who may use their discretion. I absolutely understand the point about cash flow not necessarily being profit, so they will look into a business not being made unsustainable, which would remove the ability to pay income in future.
We have introduced the measures to continue to build on the success of the reformed child maintenance scheme. Their introduction will send a clear message to parents who go to great lengths to avoid financial responsibilities to their children. Now that the reforms are embedded, it is right to take action to address the historical arrears, allowing us to draw a final line under the problems of previous child support systems and to focus on controlling arrears under the Child Maintenance Service so that they never reach the levels seen in the CSA schemes. The draft regulations will give us the opportunity to offer parents a final chance at collection, where cost-effective to do so and we can be reasonably certain that action would be successful. I commend this statutory instrument to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Child Support (Miscellaneous Amendments) Regulations 2018.
Poverty in Liverpool
Justin Tomlinson Excerpts(5 years, 6 months ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Dan Carden (Liverpool, Walton) (Lab)
It is a pleasure to serve under your chairmanship, Mr Streeter. I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on her excellent speech; she set out everything that the city faces, from cuts to local authorities, the hostile environment on benefits and the personal experiences that we come across in our surgeries every week, as well as the evidence in report after report. The Government seem determined to turn a blind eye to those reports and doubt their veracity, and I find it shocking when the Minister shakes his head, when we see such experiences every day.
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
I was not shaking my head.
Dan Carden
You were during my hon. Friend’s speech. The experiences I am talking about are things we see every day in Liverpool.
I was elected for the first time last year, to represent a Liverpool constituency, and it is an incredible privilege. When I am asked what the biggest issue facing my constituency is, I say poverty—and it is, because that is the critical issue affecting people, in their long-term health, educational outcomes, job opportunities, living standards and mental health. Most of all, it affects their sense of self-worth. That is the most hurtful part of seeing the decline in our communities. As my hon. Friends have done, it is right to put on the record how proud Scousers are, and how strong our communities are. That is shown by the work that our community centres and food banks do day in, day out. Liverpool is an astonishing city that is doing well in many respects.
This debate set me thinking about what poverty is, and what we are talking about today. If we look back in history, we see different types of poverty. I have seen individuals fall into poverty—people can lose a job, be moved on, and then perhaps another job appears, and during that time, trade unions and charities may help out. Families also fall into poverty. My family was affected by unemployment. My dad was unemployed for seven years, and sometimes it felt as if we did not have much money when we were growing up. Nevertheless, we had a family unit, we had a community and we had support. We still had good schools and public services, the local authority did its bit, and there were youth facilities. Today we are talking about whole communities being pushed into poverty while the safety net is withdrawn from the bottom.
Poverty is man-made. It does not exist in a vacuum; it is the result of decisions made by the powerful. No one person is responsible for their own poverty. Austerity is and has been a political choice, not an economic necessity. Since 2010 this Government have handed out an eye-watering £110 billion in tax giveaways for the biggest corporations and the super-rich, paid for by devastating cuts to wages, living standards and essential public services for the rest. They have starved our schools of funding—something they deny—taken police off our streets, including 1,000 from Merseyside Police, and left our NHS and social care in crisis.
Not only have the cuts themselves been political, but so too has their distribution. New research from the University of Cambridge shows that post-industrial cities in the north of England have been hit by the deepest cuts to local government spending and that, on average, Labour councils have been hit four times harder than Tory councils. Few places have been hit harder than Liverpool, with the staggering 64% cut to local authority funding that we have heard about. Conservative Members tell us not to fear because the Prime Minister announced at the Tory party conference that austerity is over. Leaving aside the fact that we have heard such empty rhetoric three times before, I assure the Minister that the reality on the streets of Walton and across Liverpool tells a different story as austerity rolls on, piling misery on our communities.
We have already heard many of the statistics, so I will not repeat them all. Average wages in Liverpool are £11,000 below the national average, and 40% of children in my constituency are growing up in poverty. Liverpool is now classed as having the second-highest levels of destitution of any city in the UK. On top of that, this Government now heap universal credit—a policy so fundamentally flawed that it has become an exemplar of institutional incompetence. [Interruption.] I think I heard the Minister tut, but this is being played out on our streets, and we see the evidence in report after report. Perhaps he will respond to some of the points raised today, including the Trussell Trust’s report, which states that demand for food banks has soared by 52% in areas of universal credit roll-out, compared with 13% in other areas.
Housing associations, letting agents and private landlords have told me that tenants are falling into rent arrears in areas such as Bootle and elsewhere where the roll-out has gone ahead, and that evictions will increase. The calamitous roll-out in my constituency comes right before Christmas, and my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) was right to call for it to be delayed, at least until after the Christmas month, when we know it will cause increased hardship. The figures are stark, but they do not do justice to the human misery that I already deal with in my casework under the existing benefits system.
Under this Conservative Government, we are being hurtled backwards to bygone days, reminiscent of when it was a crime to be poor. The Government’s welfare reforms have seen hundreds of millions of pounds sucked out of Liverpool’s local economy. The benefit freeze—in reality it is not a “freeze” but a real-terms cut for millions of low-income families—has meant a loss of £45 million for households in Liverpool. We have heard about the cumulative effect of such cuts.
Given the pressures, some people have to give up employment to care for elderly relatives. A scaffolder came to my constituency office and explained that he has had to give up good, well-paid employment because the care is not there for his elderly mother. We have heard how the local authority already has to act as a sticking plaster, which shows that the current benefits system is failing. I want to congratulate the Mayor and the local authority on their work.
Next week the Chancellor will reveal the Government’s Budget, and we will no doubt have a debate about economic growth and the fudging of figures to mask deep systemic problems in our economy. Not only have we seen the worst decade for wages in centuries, but the UK is the only advanced economy in which wages have continued to fall, even when the economy is growing. That is because of a decades-long trend of the share of gains from growth going increasingly towards profit, not wages. More and more economists tell us the blindingly obvious: having money from economic growth flow to working people and the poor rather than to the rich would stimulate better rates of economic growth and lower unemployment. As income inequality increases, the potential for economic growth is constrained. Since the 1970s, while productivity and the economy kept growing, the average worker’s pay package did not. The Financial Times has stated that since 2007,
“the UK was the only big advanced economy in which wages contracted while the economy expanded. In most other countries, including France and Germany, both the economy and wages have grown…The UK sits on its own as a rich economy that experienced a strong economic performance while the real wages of its workers dropped.”
What does economic growth matter to my constituents if it does not even reach them?
We have heard reports that the Chancellor is considering bringing back regional pay in the Budget in order to deny pay rises to our constituents on a national pay scale. Can the Minister tell us anything about that, and can I urge him to feed back that it would be an absolute disaster for the regions of the country if the Chancellor were to go anywhere near the idea?
The Government’s cuts have not tackled the deficit; they have shifted it on to local authorities and public services, plunging them into crisis, while starving our economy of the patient, long-term investment it needs to thrive. The problems are so stark that the solutions must be radical. The people of Liverpool do not need piecemeal change; they need something much bigger. That is why the next Labour Government will not be satisfied with tinkering around the edges of a rigged economy; they will transform our economy so that it works in the interests of the ordinary people I represent.
The Parliamentary Under-Secretary of State for Work and Pensions (Justin Tomlinson)
It is a real pleasure to serve under your chairmanship again, Mr Streeter. I pay tribute to the hon. Member for Liverpool, Wavertree (Luciana Berger) and all hon. Members who contributed to the debate. I clearly do not agree with all the points they made—I am sure they will not agree with everything I am about to say—but it is crystal clear that every one of them is driven by a passion to protect the most vulnerable people in society. We all want the same result; we just disagree about how to get from A to B. I am conscious that hon. Members mentioned lots of different issues. I am merely a junior Minister in the Department for Work and Pensions, so in the limited time I have got, I will try to cover the points about employment, income and poverty, universal credit migration and food banks. If time permits, I will also cover some of the other points that fall at least roughly within my area.
All speakers acknowledged that we have seen record employment, with 1,000 new jobs created every day, unemployment at record lows, and 964,000 fewer workless households. That is important because research statistics show that workless households are four times more likely to be in poverty. I will come to the specific points made during the debate about that.
Many of the speakers mentioned that there had been an increase in zero-hours contracts, for example. That is not the case: the number of zero-hours contracts actually fell by over 100,000 in the last year alone, and they represent only 2.4% of total employment, which is around the same level as under the last Labour Government.
Justin Tomlinson
Briefly, although I will not take too many interventions because I am conscious of time.
Maria Eagle
Can the Minister explain why 32% of those using the South Liverpool food bank said that the main reason they were doing so was low income?
Justin Tomlinson
As I said, I will come to food banks—a little patience, please.
We all recognise that getting people into work is important, but ultimately the question is whether it leads to real cash in their pockets. Research has shown that there are one million fewer people in absolute poverty—a record low—and 300,000 fewer children living in absolute poverty, but there is still more to do. While food insecurity has almost halved in the last five years alone—we are at 5.4%; the European average is 7.9%—there is still more to do.
Luciana Berger
I have been reflecting on all the positive spin that the Minister is trying to put on various figures, but why then we are receiving a visit from the UN special rapporteur on extreme poverty and human rights in the next few weeks? Why is that person coming to this country to see the awful situation that we face?
Justin Tomlinson
We get reviewed as a signatory country and supporter of the UN’s work, and I will be speaking personally to the person coming.
Of the four current measures of poverty—relative, absolute, and before and after housing costs—three are lower than in 2010 and the other is the same. Those in poverty, who are the focus of this debate, are on average £400 better off in real terms than they were in 2010, while those in full-time work on the national living wage have seen a 7% real-terms increase in their income in the last two years alone. We have done that through a combination of increasing the national living wage—there are arguments about what the level should be, but I do not need to remind colleagues that the rate that we first set was higher than the one in the manifesto that Labour Members stood on in 2015—our income tax threshold, which has completely removed the lowest 3.6 million earners from paying income tax, which is worth £1,000 a year, and our extension of free childcare and other areas of support.
Let me turn to universal credit, which is very topical. One thing that surprised me was that nobody mentioned conversations with work coaches. I know that many Opposition Members have been to visit jobcentres—I have done my research and looked at their Twitter feeds. As a constituency MP—I have only recently been recalled as a Minister—I know that the work coaches on the frontline are very enthusiastic about the principle of universal credit. That does not mean that everything is right, but they are enthusiastic about it. For the first time, they can offer personalised and tailored support.
Maria Eagle
The Minister knows very well that there have been coaches in jobcentres for many years helping people on an individual basis. He seems to be arguing that there is no problem—that food bank use is going down and that poverty is going down. I can tell him that that is not the experience in my constituency.
Justin Tomlinson
That is not what I am saying at all. I said I would come to food banks. The hon. Lady has not been to a jobcentre to talk to work coaches and see what they have to say. [Interruption.] I know that other hon. Members have.
The key is that the legacy benefits are not some panacea, where everything is great. As constituency MPs, we all know from our casework that legacy benefits are complex, involving three different agencies—HMRC, local government, and the DWP jobcentre—and frankly, one would need to be a nuclear physicist to deal with all three.
Over 700,000 families on legacy benefits were, on average, missing out on £285 of support that they were entitled to, worth a total of £2.4 billion. [Interruption.] The hon. Member for Garston and Halewood (Maria Eagle) is heckling from the sides again, but these are some of the most vulnerable people, and my role as the Minister is to represent them. I have seen in my casework, as a genuine local resident in my constituency, as the MP and, formerly, a councillor, that some people were overwhelmed by the legacy system. Under universal credit, they will have for the first time a named work coach who will stick with them throughout the process to ensure that they are not missing out. That does not mean that universal credit has been perfect—we have had many debates and there have already been many changes. In some cases, under tax credits and legacy benefits we had tax rates of 90%. I know that would please the Leader of the Opposition, but that is not what the decent public want. There were 16, 24 and 30-hour cliff edges, which created a barrier to people progressing in work. The legacy benefits were seeing £2.4 billion-worth of support missed. We cannot knowingly stand by and say, “We’ve got to stop universal credit,” because these are vulnerable people missing out on money.
We are conscious that we have had to make changes to the migration. We have always said that the roll-out of universal credit will be slow and steady—it is a “test and learn”. In last year’s autumn statement, we rightly announced that we would remove the seven-day waiting list, a welcome change that was called for by a cross-party campaign.
A lot of the cases brought up involve people who have not had access to money. We realised that people did not know that the system was not designed to provide advance benefits, so it is now a given that the work coach will push that information in the initial interview.
Anybody currently receiving housing benefit will now get two weeks of housing benefit in addition—no strings attached—which can then be used. We recognised that we should not presume in all cases that they should take full responsibility for paying their housing benefit, so we now offer, particularly where people’s housing benefit payments are sent directly to their landlords.
We have launched the Landlord Portal, which is very much welcomed by local government and housing associations, and we have protected the severe disability premium. In conjunction with the £3 billion-worth of transitional support in place, over one million disabled families will be on average £110 a month better off.
Justin Tomlinson
No, I am sorry; I am running out of time. Severely disabled claimants will benefit from higher rates, ranging from £158 to £326. That is why hon. Members should think carefully about the unintended consequences of seeking political capital by calling for a stop to universal credit. Yes, lobby for improvements, but to stop it would be to deprive some of the most vulnerable people of support.
I am very short of time but I want to touch on food banks. I have met the Trussell Trust and have visited food banks as a constituency MP, a Minister and a councillor, and I have friends who work in food banks. I welcome the work of the football clubs in Liverpool in food collection; I went to see my local football club, Swindon Supermarine FC, which was doing a food bank collection last night. People use food banks for varying reasons, but if they are missing out on formal support, we must do something about that. I made a commitment to the Trussell Trust, with which I want to work closely—I am not precious. It is important that we help those vulnerable people, which could mean having a point of contact in every jobcentre so that if the volunteers spot someone who has been to the food bank first, they can then come to us. My commitment is to do all that we can for vulnerable people.
Work and Pensions
Justin Tomlinson Excerpts(5 years, 6 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Michael Tomlinson
Justin Tomlinson
This is a real priority for our Secretary of State and it will involve building on our work to enable care leavers to make advanced UC claims, access to the youth application support programme, early access to the work and health programme and extensions to second chance learning, and we will work with employers to create more opportunities to build on this partnership with Barnardo’s.
[Official Report, 15 October 2018, Vol. 647, c. 405.]
Letter of correction from the Under-Secretary of State for Work and Pensions, the hon. Member for North Swindon (Justin Tomlinson):
An error has been identified in the response I gave to my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) during topical questions.
The correct response should have been:
Justin Tomlinson
This is a real priority for our Secretary of State and it will involve building on our work to enable care leavers to make advanced UC claims, access to the youth application support programme, early access to the work and health programme and exemptions for second chance learning, and we will work with employers to create more opportunities to build on this partnership with Barnardo’s.