Welfare Reform Bill

Liam Byrne Excerpts

Wednesday 9th March 2011 Commons Chamber

[Mr Duncan Smith]

I am going to press on, because I think that I have dealt with the right hon. Lady’s point. She may not agree with me, but I think that this is the right position for us to take.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

This is an extremely important point. Is the Secretary of State saying that someone who is deaf-blind will be recalled for regular checks under the regime that he is aspiring to put in place—yes or no?

[Mr Duncan Smith]

The detail of how that works will be looked at during the passage of the Bill. My point is that built into this should be the requirement that it is necessary to see people. There is the question of who and what conditions we can look at specifically, but it should be right that it is bound into the system that we are going to look at people. In some cases, it may be entirely self-evident that the individual’s condition has not changed and there is not much to be done; in other cases, an assessment may be required because their condition has changed quite fundamentally. I do not understand why the need to see somebody who may be in receipt of a benefit should be such an issue for people. It should not be worrying; it is part of a process. [Interruption.] Before right hon. and hon. Members object to that change, they need to ask themselves what they would say to those people whose conditions have changed for the worse and who are confused and never make it back to make a proper claim. This is a debate that we can and will have.

[Mr Byrne]

rose—

[Mr Duncan Smith]

I think, with respect to the right hon. Gentleman, that I have dealt with this point, and I am going to make some progress. [Interruption.] Oh, go on then.

[Mr Byrne]

I am genuinely trying to be helpful to the Secretary of State. He says that his Bill is incomplete and that he has not been able to furnish the House with full details on how the powers that he seeks from us will be put into practice. Will he consider exempting people with certain kinds of conditions from the need to go back to go through check after check?

[Mr Duncan Smith]

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

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

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

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

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

--- Later in debate ---

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I beg to move an amendment, to leave out from “That” to the end of the Question and add:

“this House, whilst affirming its belief in the principle of simplifying the benefits system and good work incentives, declines to give a Second Reading to the Welfare Reform Bill because the proposal of the Universal Credit as it stands creates uncertainty for thousands of people in the United Kingdom; because the Bill fails to clarify what level of childcare support will be available for parents following the abolition of the tax credit system; because the Bill penalises savers who will be barred from the Universal Credit; because the Bill disadvantages people suffering from cancer or mental illness due to the withdrawal of contributory Employment Support Allowance; because the Bill contains no safeguards to mothers in receipt of childcare support; because it proposes to withdraw the mobility component of Disability Living Allowance from people in residential care and fails to provide sufficient safeguards for future and necessary reform; because it provides no safeguards for those losing Housing Benefit or appropriate checks on the Secretary of State’s powers; because it fails to clarify how Council Tax Benefit will be incorporated in the Universal Credit system; because it fails to determine how recipients of free school meals and beneficiaries of Social Fund loans will be treated; and because the proposals act as a disincentive for the self-employed who wish to start up a business; and is strongly of the opinion that the publication of such a Bill should have been preceded by both fuller consultation and pre-legislative scrutiny of a draft Bill.”

I start with a word of thanks to the Secretary of State for meeting me and my right hon. Friend the Member for East Ham (Stephen Timms) a week or so ago to discuss the Bill. As I said to him then, we genuinely want to approach the vital question of welfare reform in a spirit of national consensus. We believe that if we can forge such a consensus it will be good for our country, it will reduce the deficit and, crucially, as he said before he sat down, it will be good for the fight against poverty in this country. We have been forced to table the amendment to oppose the Bill because it fails such fundamental tests that we believe the Government should go away and bring back a better Bill that will deliver genuine and lasting welfare reform.

We could begin to forge that national consensus by drawing the right lessons from the past 13 years. The Secretary of State presented his view, but elided one or two prominent features of the past 13 years, such as the fact that the number of people on out-of-work benefits before the depression came down by 1 million and the fact that the claimant count halved. We did not once, let alone twice, see unemployment go through the 3 million mark. We can draw important lessons for this debate from that period, the first of which is that if the Secretary of State wants welfare to work to work, we need more jobs. Labour consistently put that approach in place.

The Secretary of State said to his spring conference at the weekend—

[Mr Duncan Smith]

You were listening?

[Mr Byrne]

I not only listened carefully, but checked the transcript because I could not believe what the Secretary of State said:

“It’s not the absence of jobs that’s the problem.”

Given that five people are chasing every vacancy in this country and that 120 Members of this House have more than 10 people chasing every vacancy in their constituencies, the absence of jobs is very much a problem at the heart of his welfare reform programme.

[Mr Duncan Smith]

Does the right hon. Gentleman recall that I also said that notwithstanding the period of growth and the number of jobs created, more than half the jobs created by the Government did not go to British nationals sitting on unemployment benefit?

[Mr Byrne]

The employment rate under the Labour Government reached a record high and there were 64 quarters of consistent economic growth. The idea that welfare to work can work when the number of jobs is not growing is frankly laughable. There is an important lesson that we must draw from the past to get welfare reform right.

[Mr Oliver Heald (North East Hertfordshire) (Con)]

rose—

[Mr Byrne]

I want to move on to a second lesson before I give way.

When we brought laws to this House to set new obligations for people to work, we ensured that set alongside them were new opportunities to work. We also brought determination and care to the business of legislation. In the Bill, there is determined carelessness.

[Mr Heald]

Is the right hon. Gentleman seriously saying that at a time when it is more difficult on the jobs front we should not make the effort to help people off welfare and into work? If people are capable of working, they should get help. That is what this Bill does. Should we sit on our hands and say that all is hopeless?

[Mr Byrne]

That was an extraordinary contribution. Of course we believe that extra help—for example, the future jobs fund, which the hon. Gentleman’s party closed down—should be given to get people back to work.

In looking at this Bill over the past few weeks, I could not but remember Lord Birkenhead’s description of Baldwin’s method of Government:

“He takes a leap in the dark, looks around, and takes another.”

That is the approach that this ramshackle Bill proposes for millions of people in our country—a leap in the dark. I hope that we can begin to sort out, as is appropriate on Second Reading, where the Government have got their principles right—some of their principles are right—and where they have got them wrong. The Secretary of State says he wants to set a new course. The problem is that we are not quite sure where it will lead.

[Mr Slaughter]

Did my right hon. Friend notice that almost every time the Secretary of State was asked a question on free school meals, housing benefit or disability living allowance, his answer was, “I’ll get back to you.” There are no answers to those points. I have here a few of the letters from my worried constituents, just on disability living allowance. Thousands or millions of people are worried that they will not be able to make ends meet, and the Secretary of State has no answers.

[Mr Byrne]

The purpose of this House, when it gives new powers to the Executive, is to have at least some idea of what they will do with them. I hope that a bit of enlightenment will come from this debate, but we have not heard much yet.

[Charlie Elphicke]

I take issue with the right hon. Gentleman’s statement that the Bill is a leap in the dark. We know that 5 million people of working age could work but do not. We know from December’s labour market report by the Office for National Statistics that 1.2 million of the people who took the jobs that were created came from overseas. We need to get our 5 million countrymen who are out of work back into work. Surely that is the priority.

[Mr Byrne]

Will the hon. Gentleman intervene again and tell me how many of his constituents are chasing each vacancy?

[Charlie Elphicke]

Of course there are quite a few people chasing each vacancy. As the right hon. Gentleman knows, the issue is not with this Government but with the mess left by the previous Government. This Government are trying to grow the economy and make Britain great again.

[Mr Byrne]

I am grateful for that observation. I say gently that, with five people chasing every job in the economy, if we are serious about getting people back into work—I think that the Government do want to do the right thing—we have to do more to create more jobs. We can pass laws and put in place extra help for unemployed people, but there must also be an economic policy that creates more jobs to absorb the very deep public sector job cuts that we know are coming down the line.

[Geraint Davies]

Does my right hon. Friend accept that the deficit was the price paid to avoid a depression caused by the bankers, and that the best way to get rid of it is to focus on economic growth, make bankers pay their fair share and make sensible savings over time, not to make the poorest pay the most while the richest are lavished with massive bonuses, which is what the Bill is about?

[Mr Byrne]

I will avoid getting into an extended debate about macro-economic policy, although I would happily discuss it all afternoon, but my hon. Friend is right. Under our approach, despite the fact that we faced the worst global crash since the 1930s, unemployment did not go beyond 3 million, as it did not once but twice under the Conservative Administration.

[Mr Evennett]

We are listening to the right hon. Gentleman with great interest, but is he not ashamed that although his party was in power for 13 years it failed to make work pay and that the UK now has one of the EU’s highest rates of children living in workless households? Is that not a disgrace?

[Mr Byrne]

I would do no more than encourage the hon. Gentleman to look at the analysis of his noble Friend Lord Freud, who examined our work to get people back to work and remarked on how fast the number of people on out-of-work benefits had fallen. He examined the number of children lifted out of poverty and said that our record was truly remarkable.

[Mr Stewart Jackson]

I fear that the right hon. Gentleman is going through the motions. He was a gifted and talented Chief Secretary to the Treasury, and I do not think he truly believes what he is saying. Will he at least concede that people who are no friends of the Conservative party, such as the Scottish TUC, have said that worklessness was exacerbated by the decision to import millions of low-skilled, low-wage workers from eastern Europe, which drove down wages and conditions and made it much more difficult for indigenous British workers to secure jobs and get off welfare dependency?

[Mr Byrne]

I do not think I should veer into a debate about immigration this afternoon, because you, Mr Deputy Speaker, would quickly call me to order. I would, however, make the point that, after consistent economic growth, employment went up, the number of people on out-of-work benefits came down and the number of people lifted out of poverty, including pensioners and children, was at a record high. The Government can learn something from that record.

Of course, that has to be put alongside the right legislation to encourage people back to work, which is where I fear the Bill will fall short, for a very simple reason. It fails the basic tests of whether it fosters ambition and whether it reinforces and consolidates our obligations to each other. Fostering ambition and nurturing compassion are the basic tests of welfare reform, and I am afraid the Bill fails both.

[John McDonnell (Hayes and Harlington) (Lab)]

I oppose the Bill, and given any opportunity I will vote against it.

As my hon. Friend the Member for Hammersmith (Mr Slaughter) said, the Government’s response to every representation that has been made by external organisations or today in the House has been, “These matters will be dealt with in regulations”. Attached to the Bill is a quantity of regulations that we have not seen before with a Bill of such stature. May I suggest that my right hon. Friend link up with the Secretary of State to discuss the procedure to be followed after Committee and before Report, so that the bulk of the regulations are published in time for us and others to consider them before our final debates on the Bill?

[Mr Byrne]

That is an extremely sensible proposal, and perhaps the Minister of State, the right hon. Member for Epsom and Ewell (Chris Grayling), will reflect on it in his winding-up speech. It is important for the other place to be involved in discussions, too, to ensure that the Bill leaves this House in better shape.

[Mr David Lammy (Tottenham) (Lab)]

May I align myself with what my hon. Friend the Member for Hayes and Harlington (John McDonnell) just said?

Will my right hon. Friend put on record the fact that words that we used to use in the Chamber—equality and non-discrimination—must exist for people in the work force with disabilities and from ethnic minorities at a time when there are few vacancies? I think in particular of Haringey Phoenix Group, which represents blind people, whose representatives came to see me in my constituency.

[Mr Byrne]

That is a challenge that I know well, representing the constituency that I do. I will say a little more later about the challenges and the reforms that are needed on disability living allowance.

There are some principles in the Bill that we support. The principle of universal credit builds on the changes that we made to ensure that work pays, and we welcome some of the proposed reforms to the claimant commitment. We certainly welcome tougher and tougher measures on fraud, but the basic truth, which many hon. Members have rehearsed this afternoon, is that the Bill is not a pamphlet. It is not about theory; it is about practice. It is therefore important that we consider whether it will foster ambition and strengthen compassion in a number of important areas. I start with child care, with which the Secretary of State started.

For millions of families in this country, and especially for women, the truth is that extra help with child care is needed if they are to get back to work. Many families in our country receiving a combination of housing benefit, council tax benefit and child tax credit have up to 97% of their child care costs supported. The Secretary of State said today that he wants that budget to be frozen, which at least shows some progress, but he also confirmed that the number of people who will have a claim on that budget will grow. That of course means that some people will get less help with their child care than before. What we have not learned this afternoon is what that will really mean for people.

My hon. Friend the Member for Stockton North (Alex Cunningham) asked the Secretary of State a very straight question on 9 February: had he decided which child care option he would propose? “Not exactly, no,” said the Secretary of State.

“Can you give us a clue?”,

my hon. Friend persisted, gamely.

“I will give you a clue when we are a bit closer to the finalised detail”,

said the Secretary of State. Now, the right hon. Gentleman is asking for powers to end child tax credit. I am not sure how much more finality one could want, but there are still no answers other than the comment that the Government are still consulting. We hear rumours that for some people the cover for their child care costs will be reduced to 70%—a gigantic new bill for many families that could prevent people from getting back to work. Helen Dent, chief executive of Family Action, has said:

“The possible reduction in help with childcare costs could mean that many parents might end up being worse off under universal credit”.

I say today, on behalf of the 486,000 families who get child care help from the Government, that they need to know more.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

I absolutely agree with my right hon. Friend, but is there not a further black hole in the Government’s proposals, which is the failure to acknowledge regional variations? The cost of child care in London, for example, is massively higher than it might be in another metropolitan area of the country. The Bill reflects that lack of definition and flexibility and a complete ignoring of regional variations.

[Mr Byrne]

My hon. Friend is right, and I am afraid it gets worse. The Secretary of State has made much of his effort to reduce the disincentive to work, which we genuinely welcome, but, like me, he will have noticed that earnings are now growing at about half the rate of prices. He will also doubtless have noticed that once people begin to earn £43,400, they will lose their child benefit, which is worth several thousand pounds a year. That all puts pressure on second earners to go out to work, so the question must therefore be what marginal deduction rates will confront those second earners. The answer is not easy to find, but it is buried away in paragraph 69 of the impact assessment. Having read it, I am not surprised that the Government did not put it up in spotlights, because it states that twice as many earners will see their marginal deduction rates go up than will see them go down. Who is most likely to be hit? It will be couples with children, whose median deduction rates will go up.

That is what we do know, but what is worse is what we do not know. We do not know what will happen to those entitled to free school meals; what will happen to free prescriptions; which working families will be exempt from the benefits cap; or how unearned income such as widow’s benefit or child maintenance will be treated. We do not know about sick pay or maternity pay, and we have no idea how on earth council tax benefit will work. As the House knows, the council tax benefit system is going local, but the rules on universal credit are to remain national. The Secretary of State for Communities and Local Government, who likes to be straightforward with the House, boldly asserted on 17 February that he was in charge of drawing up the new rules on council tax benefit, but surely the final word must come from the Work and Pensions Secretary. Once again, there is total confusion. The questions for families are stacking up, and there are no answers to any of them. That is the story for families.

[Grahame M. Morris (Easington) (Lab)]

Would my right hon. Friend care to comment on reports in today’s papers that representatives of 30 cancer charities have written to the Secretary of State expressing concern about people who are recovering from cancer? Specifically, they are likely to lose their employment and support allowance after a year, but 75% of them or not in a position to return to work after a year.

[Mr Byrne]

That is deeply concerning, and I will dwell on it in a moment.

[George Hollingbery (Meon Valley) (Con)]

The right hon. Gentleman makes a persuasive case on the detail—clearly a lot of it remains to be found, but this is a confusing and complex matter. Will he admit that the current system is unsustainably complicated? There are 8,600 pages of guidance on benefits administration at the DWP and 2,000 pages for local government, and there are 30 different benefits to administer. Change is required. If we have a framework and consult widely, we will have a better system.

[Mr Byrne]

The Opposition want welfare reform that sticks. When so many details are unclear, the danger is that the Bill will unravel progressively as it comes into effect.

We have discussed whether the Bill passes the test of fostering ambition for families and have shown that a great number of questions remain unanswered. Let us now consider savers. All hon. Members want to nurture the ambition to save. The amount that people must save for a deposit for a house is heaven knows how much, but now that tuition fees have been trebled, more families have to save harder to get their young people into college. One might have thought, therefore, that the Government would provide more incentives to foster the ambition to save, but the noble Lord Freud told the House of Lords that

“the £16,000 savings threshold would extend to all households eligible for universal credit.”—[Official Report, House of Lords, 15 December 2010; Vol. 723, c. WA204.]

There we have it. The Government are so keen to foster the ambition to save that once someone has £16,000 in the bank—the price of two and a half years at university—their tax and in-work benefits are taken away.

[Mr Duncan Smith]

Will the right hon. Gentleman give way?

[Mr Byrne]

I will give way in a moment, but first I want to tell the House what James Browne of the Institute for Fiscal Studies said:

“This is a much harsher treatment of capital than we have in the tax credit system.”

Will the Secretary of State tell us how that measure rewards savers?

[Mr Duncan Smith]

May I remind the right hon. Gentleman that his system became completely absurd, because it allowed people with huge savings and income to claim benefits? The previous Government’s system supported not the bottom two or three deciles but people further up the income scale. That is one reason so few people from the bottom income deciles got back into work, and why poverty was so high.

--- Later in debate ---

[Mr Byrne]

Does the Secretary of State accept that, on current figures, taking away the in-work benefits of people who have £16,000 in the bank would mean 400,000 families with children losing benefits? Surely that is not a good way of fostering the ambition to save.

[Mr Duncan Smith]

The right hon. Gentleman’s figures are incorrect. When universal credit comes in, the figure is more than likely to be no higher than about 100,000—[Interruption.] Wait a minute. I know where the right hon. Gentleman gets his figures from. Those 100,000, of course, will be transitionally protected, so they will not lose.

[Mr Byrne]

The Secretary of State can say that only because he is taking tax credits from so many families over the next two or three years. He has not given a guarantee for future savers. What will happen to their incentive to save under his new system?

[Mr Duncan Smith]

Will the right hon. Gentleman give way, because he needs to answer my question?

[Mr Byrne]

The Secretary of State needs to answer my question. The Minister of State told my right hon. Friend the Member for East Ham that getting rid of the savings cap would cost only £70 million. Will the Secretary of State therefore look again? He must recognise, as I do, that he is currently not fostering the ambition to save for hundreds of thousands of people.

[Mr Duncan Smith]

I completely disagree with the right hon. Gentleman on that, but I want to challenge him to give an answer to taxpayers, who ask whether the welfare system is about supporting people who are most in need, or whether it is about casting money wider and wider to people who can support themselves in particular periods. How much more money does he really want to spend?

[Mr Byrne]

I am afraid that the Secretary of State has still not provided an answer to my question—he still cannot tell us how he will encourage people to save. Tuition fees have trebled, and people in my constituency are asking, “How on earth do we encourage our young people to go to college, and how on earth can we afford to get our young people into university?”—[Interruption.] I know the Secretary of State does not have those challenges to face, but thousands of people in our constituencies need to save to get their kids to university. The regime that he is proposing will strip in-work benefits from them, kicking the ladder away from aspiration in our country.

[Angie Bray (Ealing Central and Acton) (Con)]

Surely the right hon. Gentleman must recognise that tuition fees are not payable until such time as people come out of university and earn a salary of £21,000 or more. His argument is a red herring.

[Mr Byrne]

I do not know what the hon. Lady’s constituents are saying to her, but many in my constituency live in fear of debt—they want not to burden their children with debt, but for them to get a first-class education, so that they can contribute to the future of our country.

The wider point that is emerging is that we do not know enough about how the Bill affects families and savers, but there is also a question over how it will affect the self-employed. Over the last few weeks, we have heard a great deal of pitch-rolling from the Chancellor and the Prime Minister, who are now worried about the damage that their last Budget did to our economy. All of us hope that the Chancellor can upgrade his growth forecast at the forthcoming Budget after doing so well over the last year, and the Prime Minister is now promising that his next Budget will be the most pro-growth Budget in the universe. He told his spring conference:

“At its beating heart this is still a party of start-ups, go-getters, risk-takers…We’re the party of practical men and women, people with a passion and a mission to build a business and see it grow...We are the party of enterprise.”

No doubt, then, the Bill is part of that plan—no doubt the Bill will make it simpler, easier and more encouraging for people in this country to start a business and to make that entrepreneurial leap. Well, my hon. Friend the Member for Stretford and Urmston (Kate Green) asked the Secretary of State about the self-employed on 9 February. To be fair to him, I think he recognises the problem. Surveying the position of the self-employed, he told her that

“we are conscious that that area is the slight blip in the system.”

This is what the blips in the system at the Federation of Small Businesses told me yesterday. Mike Cherry, the FSB national policy chairman, said:

“We are concerned that the Government has assumed that entrepreneurs with a new business will be paying themselves…and will therefore lose all benefits under the Universal Credit system…A measure such as this simply creates yet another barrier towards self-employment which is particularly unhelpful at a time when we are relying on the small business sector to grow the economy”.

So much for the party of enterprise.

[Mr Duncan Smith]

rose—

[Rehman Chishti (Gillingham and Rainham) (Con)]

rose—

[Mr Byrne]

I will give way to the hon. Gentleman.

[Rehman Chishti]

Considering that the right hon. Gentleman agrees that it is absolutely right and proper to support families, does he concede that the Labour party got that wrong because couples were paid to live apart?

[Mr Byrne]

I do not know whether the hon. Gentleman was in the Chamber when my hon. Friend the Member for Swansea West (Geraint Davies) spoke of the disincentives for families to stay together under the new regime, but if he wants to pretend that the Bill ends the couple penalty in the welfare system once and for all, perfectly and immaculately, I look forward to him setting out his argument.

[Mr Duncan Smith]

rose—

[Mr Byrne]

I think the Secretary of State wanted to say a word about the encouragement that he will provide for small businesses.

[Mr Duncan Smith]

The right hon. Gentleman raises the issue of the self-employed. I made this point to him privately and I will now make it publicly: they will fall within the universal credit. The point that I was referring to was how complicated and counter-intuitive the current systems have become, as he knows very well. We are seeking the best way to ensure that the right reporting structures are in place for those people, who will be inside the universal credit.

[Mr Byrne]

Perhaps the Secretary of State can tell the House this afternoon when those proposals will be ready for us to look at. [Interruption.] “In time for Committee,” he says from a sedentary position. We all look forward to seeing that.

It is now clear that for the self-employed, savers and families, this Bill at the very best poses more questions than it answers. The other question that the House has to ask the Secretary of State this afternoon is not about how we foster ambition, but about how we nurture compassion. How do we strengthen and reinforce our obligations to each other? That is something that we will hear a lot more about, when we talk about the reform of disability living allowance. What we know about the detailed reforms is not good. I welcome what the Secretary of State has said about the mobility component of DLA. I think that he has confirmed that he is withdrawing the proposal to cut £135 million from the mobility component of DLA. If that is true, it is welcome, because we are talking about a measure that the chief executive of Scope pronounced as “callous” and an

“assault on the most vulnerable”.

The rationale presented by the Minister of State has this morning been taken apart by 39 charities. I am afraid that I have to agree with the words of those campaigners who have said that

“many of these people”

—those in residential care—

“will be prevented from enjoying the freedom of movement that is taken for granted by people who are not disabled.”

Those are, of course, the words of the motion at the Liberal Democrats’ spring conference this weekend. I hope that together we may be able to prevail and get this measure dead and buried.

[Mr Tom Clarke]

On the crucial issue of the mobility component for people in residential accommodation, when my right hon. Friend put his question to the Secretary of State, I understood the Minister of State to be indicating dissent. Will my right hon. Friend give the Minister another opportunity to clarify this important issue?

[Mr Byrne]

I am grateful for my right hon. Friend’s suggestion. The Secretary of State has £135 million scored against the saving. I now invite him to intervene and say whether that saving is off the table, or whether the measure is going forward.

[Mr Duncan Smith]

The right hon. Gentleman knows very well, because we had this conversation privately. As I assured him, and as I assure him now, what we have done is roll the proposal into the personal independence plan. We are reviewing what is necessary. I said to him then, as I have said to the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke), that what we are looking for is the amount necessary for people who are in residential care. That is the commitment that I have given. That is the exact fact, that is how it remains, and all other things will fit around that.

[Mr Byrne]

The argument that the Secretary of State has rehearsed this afternoon is that the Bill will give him the flexibility either to withdraw or to reform the proposal, but what he has not set out for the House is whether he will reduce the savings target of £135 million that has been scored by the Chancellor against the measure.

[Mr Duncan Smith]

I have just given an answer.

[Mr Byrne]

I therefore look forward to the Government reflecting on this debate and perhaps giving slightly more clarity when the Minister winds up.

More alarming for many people is the lack of any safeguards on what the Government have in mind for the future of DLA, especially as we know that the Chancellor is determined to take £1 billion off the bill and then ask what kind of reform will be necessary to deliver his sums. Not for him the subtleties of asking what kind of reform might make sense. This is what the Multiple Sclerosis Society had to say about the measure: “We share serious concerns”—[Interruption.] It is incredible that when such organisations present their arguments, those on the Government Front Bench would rather talk among themselves than listen to what they have to say. This is what the Multiple Sclerosis Society said:

“We share serious concerns with a large number of other disability organisations that the Bill in its current form could lead to those most in need losing out on the support they rely on”.

The Secretary of State’s own equality assessment says that 13% of disabled households could be entitled to less help under the new system. He has simply not provided assurances on that point. When my hon. Friend the Member for Stretford and Urmston asked him about that, he said:

“I am sorry to be cagey about this. It is simply because this will become very clear when we publish the Bill.”

Well, here is the Bill, but where are the answers to the question?

[Mr Duncan Smith]

I am interested in what the right hon. Gentleman is saying. He is going on about the review and the issues around disability living allowance, but I notice that the Opposition make no mention of that in their amendment. I notice also that both he and his leader have said that they support the reforms to disability living allowance, so perhaps he would like to make it clear: is he in support of them or not?

[Mr Byrne]

Everybody is in support of reforming disability living allowance, but we have not said that £1 billion should come off the bill and that we should then work out what kind of reform would deliver those numbers. The Secretary of State must realise that this is why millions of people up and down the country are so alarmed about the reform proposals being put in place. Now he—or, indeed, his Minister—has a chance to say that he will listen to campaign groups that are worried about the proposals, that he will listen to amendments and that he will try to put in place safeguards to ensure that DLA reform is done in the right way. Yes, we should reform DLA, but we should not abolish it.

[Charlie Elphicke]

Would not one key reform be to ensure that those claiming the allowance are seen, to check that they are still in need of it? Some 140,000 people have not been seen by the Department for Work and Pensions in the last 20 years, going back to 1992. Surely that is unacceptable.

[Mr Byrne]

There is a strong case for reform of DLA. The lobby groups agree with that, as do we, but we do not agree with the way the Government have approached the issue. First, we had an announcement by the Chancellor of the Exchequer that DLA would be cut £1 billion, then we got a consultation, which has only just finished, and while all that was happening a Bill was published with no detail or safeguards dealing with how that reform would be conducted. The Secretary of State must realise that that is a serious concern for millions of people up and down this country.

That alarm is simply magnified by the proposals to set a one-year limit for those who can receive contributory employment and support allowance. I, too, think that there is a case for time limits—there is a good case for considering two years, for example—but this morning 30 cancer charities have written to the Secretary of State urging him to think again on that measure. His own Department’s statistics, they say, show that 75% of cancer patients still need ESA after a year. Their message is blunt:

“this proposal, rather than creating an incentive to work, will lead to many cancer patients losing their ESA simply because they have not recovered quickly enough.”

If this indifference is not addressed in Committee, the Secretary of State will have single-handedly dismantled any notion that compassionate conservatism is truly a reality. This simply cannot be right, and it needs to be looked at again.

[Mark Durkan (Foyle) (SDLP)]

I support the crucial points that my right hon. Friend is making, but has he noted that the impact assessment on the proposed changes to DLA makes no mention of the impact on carers? There clearly will be a consequential impact on carers, depending on what benefits the people for whom they care receive and which rates of the daily living component or the mobility component will entitle carers to claim carers allowances. There is no mention of that whatever. Is my right hon. Friend aware of whether the Government have even made an estimate of the number of carers affected, and if so, why it has not been published?

[Mr Byrne]

I am not aware of those estimates, and I hope that we will have a long and important debate about carers this afternoon and in Committee.

[Several hon. Members]

rose—

[Mr Byrne]

I will give way in a moment.

My final point is about the small question of whether the Bill will actually save any money in and of itself. The Bill would save money if it got people back to work, but it will not create a single job. By the time we get to Royal Assent, there will still be five people chasing every job in this country, and for 120 of us, there will still be 10 people chasing every job in our constituencies. The only way that this Government are going to save money through welfare reform is by cutting the benefits of working families. Indeed, once we take out the shift to a lower form of uprating, we see that half the benefit cuts hit working families, starting with 10 raids on the family budget, taking out £1.5 billion from this April. Two thirds of that bill would not be necessary if unemployment were not as high—in fact, if it where down it would have been under Labour. Nowhere is that muddle about whether the Bill saves money more confusing than when it comes to the housing measures.

[Several hon. Members]

rose—

[Mr Byrne]

I will give way in a moment, but I want to make this point first.

Clause 68 puts into the Secretary of State’s hands unprecedented powers to do whatever he wants with people’s rents. Normally, we would object to that kind of sweeping power because we would not know what a Minister was going to do with it. This time, however, we object because we know exactly what the Secretary of State is going to do. He has proposed a housing benefit cap, which he says will save money, but the Mayor of London has now said that the measure will cost more money because homelessness costs will rocket.

The Secretary of State says that his measures will bring rents down, but the Secretary of State for Communities and Local Government is putting rents up in the social housing sector to 80% of market value. The House of Commons Library says that that could cost up to £200 million. One half of the Conservative party does not know what the other half is doing, and taxpayers are picking up the tab. In fact, it was left to the Pensions Minister to tell the House on 3 February that, on his estimate, the housing bill would go up by £1 billion over the course of this Parliament. So how is this Bill going to save money on housing benefit?

[Alison Seabeck]

Before I ask my question, I need to draw the House’s attention to the entry in the Register of Members’ Financial Interests for my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), with whom I have an indirect interest: he is my partner. Now I can get on with my question.

My right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) has mentioned the increase in costs resulting from the impact of rents going up to 80% of market value. The Localism Bill contains measures designed to put homeless people straight into the private rented sector. That will put further pressure on that sector, which is already being squeezed, and push rents up. There is no evidence that rents will come down. Does he agree that the Government’s left hand does not know what the right hand is doing?

[Mr Byrne]

That is the evidence from the Mayor of London and the Secretary of State for Communities and Local Government.

[Sajid Javid (Bromsgrove) (Con)]

At the last election, the Labour party manifesto contained a pledge to reform housing benefit to ensure that the people claiming it would not live in the kind of homes that ordinary working families could not afford. We believe in that policy. Is the right hon. Gentleman now renouncing it?

[Mr Byrne]

Not at all. The point that we are making is about the way in which this reform has been adopted and steamrollered through, and about the lack of consultation between the Department for Communities and Local Government and the Department for Work and Pensions. This has been so mismanaged that many people—the Mayor of London, Shelter, the Secretary of State for Communities and Local Government—are now saying that the cost of housing benefit could go up. Surely that is not the DWP’s intention. We need a bit more detail about a policy that might actually deliver the necessary savings on housing benefit.

[Angie Bray]

I was recently talking to some constituents in Acton, and I discovered that these proposals for changes to housing benefit are among the most popular proposals that the Government have introduced. My constituents like the idea that it pays to work, and that those on benefit will not be able to afford better houses than those in low-paid work can afford. They also wonder why it has taken so long for any Government to introduce a measure that is simply fair, regardless of the money it might save. They wonder why the Labour Government never did anything about this when they had the chance to do so.

[Mr Byrne]

I am sure that the hon. Lady will have set out, with equal eloquence, the view of the Mayor of London that the measures might actually cost more taxpayers’ money than they will save.

[Jim Shannon]

Will the right hon. Gentleman give way?

[Mr Byrne]

I will take a couple more interventions in a moment.

I want to put on record my thanks to the scores of charities and campaign groups that have helped to brief us and offered to work with us to draw up amendments to improve the Bill in Committee. I am even more grateful to them for their commitment to mobilise their millions of members to help the Government understand why the Bill needs urgent reform. If the Government persist with the illusion that the Bill is immaculate, perfect and beyond improvement, and if they decline to hear the voices of those millions of members of charities and campaign groups that have worked with us, we will have no alternative but to vote against it on Third Reading.

In today’s debate, we will hear a lot of statistics; we will also hear about this record and that proposal. I just hope that the House will remember that behind every statistic is a person—one of our constituents. They are people like my constituent, Colin Hulme, who wrote to me at the end of last week. Mr Hulme suffers from Chiari malformation, a condition that affects about one in 1,000 people. It hit him in 2007, and he had to give up his job as an IT consultant and move home. He is a very brave man. He told me that his disability living allowance means that

“at least I can pay my household bills, my kids will have food on the table and clothes for school. More importantly, it means my wife can provide the care that I need.”

His view is that the Bill is about

“cutting costs and shifting responsibilities rather than improving the lives of sick and disabled people.”

It is a worry for him, and I think that the whole House will acknowledge that that worry is shared by millions of people up and down the country today.

My real point to the Secretary of State in this debate about principles is this: in the debate ahead, let us together put aside the politics of fear and division, and let us have the politics of hope—people’s hope for a job, the hope that they can get the help that they need, and the hope that they can get on and move up in work. That is what welfare reform should be about. That is the instinct expressed in our amendment, and I hope that the House will back it this afternoon.

[Several hon. Members]

rose—

--- Later in debate ---

[Mr Oliver Heald (North East Hertfordshire) (Con)]

I welcome this opportunity to support the Bill, which will bring about probably the biggest change in the welfare state for 60 years. I disagree with the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) on certain points. The Bill is about helping people into work and establishing big principles for the future, and it really is not good enough to make a speech saying, “We want to help people into work,” but then to deny the means to do that. He is saying that the Bill should not go ahead. He is saying that the details—which should be debated, I agree with him on that—are sufficient to allow him to deny this major Bill a Second Reading. Well, he is wrong about that. He has issues that he rightly wants to discuss in Committee, and he has the support of numerous groups throughout the country that want those points of detail to be considered. Yes, he is right about that, but, my goodness, he is wrong to say that the Bill, which does such important things, should not go ahead.

Let us consider the idea of the universal credit. We will finally be able to say that a person will always be better off in work. That is a big principle; that is important. I venture to suggest that the right hon. Gentleman agrees with that in his heart of hearts, yet he is saying that we should not introduce those measures. I notice that he is not prepared to listen to this—

[Mr Byrne]

I am listening.

[Mr Heald]

At the moment, it takes 45 minutes in a jobcentre to work out whether someone will be better off in work or not. The Bill will change that at a stroke. People will know that they will always be better off in work. That is an important principle.

My second point involves helping people to get into work, giving them support through the “black box” approach. This is something that Labour agrees with; the right hon. Gentleman actually trialled it when he was in government, and it worked. It is recognised internationally—

[Mr Byrne]

It is not in the Bill.

[Mr Heald]

Yes, it is in the Bill. The sanctions are about making the Work programme work. It will not work without sanctions and without the measures in the Bill. To deny the Work programme to people all over the country who should have help into work would be a big mistake. The right hon. Gentleman should support the principle behind the Bill.

My third point is that it is essential to make proper training available so that people can avail themselves of those training opportunities and then get the jobs that are available in this country. There are 500,000 jobs advertised in the jobcentres every month, but many of them are jobs for which people do not have the necessary skills. To introduce a system, through the “black box”, that will enable people to acquire those skills and get into those jobs is something good, and it is something that the right hon. Gentleman should support.

As for whether jobs are available, when the right hon. Gentleman’s party were in government many jobs were created, as he said, but the problem is that many of them went to people who were not from this country and had not been languishing on benefits for years. Members of the Select Committee visited Burnley earlier this week and we met people who were being helped to move from benefits into work. We found that many of them did not like the work capability assessments, so I hope that it will be possible for the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) to make the Harrington changes before that scheme is rolled out nationally. I see him nodding. Some people there had not worked for 10 years, and said that they were pleased to have the opportunity to be trained and to look for a job.

Burnley is not an area where there are as many jobs as there are in Hertfordshire, which I represent, but even in areas where there are not many jobs, it is wrong to say to someone who could work, “No, we’re not going to do anything about it; we’re not going to train you; we’re not going to give you those chances; we’re not going to provide the Work programme.” By denying this Bill a Second Reading, the right hon. Member for Birmingham, Hodge Hill would be depriving people of all those things.

Let us take some of the other issues that the right hon. Gentleman raised, such as child care. The Secretary of State has said from the Dispatch Box that there will be child care; the black box works only if child care is available. Support for single parents to get into work is necessary, but it is to be provided. If the right hon. Gentleman wants to talk about the details in Committee, we would all fully understand that. I believe that it is a mistake for him to try to deny this Bill a Second Reading.

Time is whizzing by, but I would like to make two further points. Child support is an important issue in the Bill, and it has been troubling for a long time. If single parents are to get into work, it is important for them to be able to rely on child support payments coming in. America has a system whereby, once the figure is set, it is automatically deducted from the salary of the parent who has to pay it. In this country we have always denied that possibility, and said that we should not do that. However, if we are to say to many lone parents, “Look, we really want you to go to work”—and we shall be saying that to a lot more lone parents—we must find ways of ensuring that the essential payments from the other parent come through.