DWP Policies and Low-income Households

Mike Weir Excerpts

Tuesday 17th January 2017 Commons Chamber

[The Parliamentary Under-Secretary of State for Welfare Delivery (Caroline Nokes)]

I wish to reiterate the thanks of the Minister for Employment, my hon. Friend the Member for East Hampshire (Damian Hinds), to those Members who secured today’s important and interesting debate. I also wish to thank all Members who have contributed. I am very conscious that I am somewhat short of time, so if I do not have the opportunity to respond to every point that Members have made in this debate, I will certainly seek to do so in writing.

For Scottish Members present, I am aware that there is another debate tomorrow in Westminster Hall in which we are discussing the DWP estate. I am sure that that will be an opportunity for us to discuss in more detail the proposals in Glasgow.

This Government are committed to building a country that works for everyone, which means taking action to help the most disadvantaged. We know—many Members have mentioned this today—that our approaches need to be joined up across Government to enable us effectively to support and transform the lives of the most vulnerable. That is why we have committed to bringing forward a social justice Green Paper this year, which will identify and address the root causes of poverty and build on the two new statutory indicators brought in through the Welfare Reform and Work Act 2016. That will drive real action on workless households and educational attainment—the two areas that can make the biggest difference to disadvantaged children and their families.

The Green Paper on social justice will demonstrate our commitment to the Prime Minister’s ambition of tackling poverty and disadvantage and delivering real social reform. As my right hon. Friend the Prime Minister said on the steps of Downing Street, she will fight against the injustices that we see in our society. In doing that, we will do everything we can to give people more control over their lives. That is why the Prime Minister has established a new Social Reform Cabinet Committee, bringing together the majority of Government Departments to deliver social reform. The Prime Minister has made it very clear that tackling poverty and disadvantage will be a priority for this Government.

The evidence is clear and we as a Government have been clear that work is the best route out of poverty. Working age adults in non-working families are almost four times more likely to be living on a low income than those who work, which is why the Government’s approach has been about recognising the value and importance of work, making work pay and supporting people into work while protecting the most vulnerable in society. Our reforms are working and transforming lives. The most recent labour market statistics show that we have a near record number of people in work: more than 2.7 million more than in 2010. In the past year we have seen nearly 250,000 more disabled people in work, more than 200,000 more women and more than 150,000 more BME people. That is a record of which we are rightly proud, but we know that there is more to do to realise our ambition of an economy that works for everyone.

I reiterate the comments of my hon. Friend the Minister for Employment: it is vital that universal credit roll-out is delivered safely and securely so that claimants receive the support they need. As he mentioned, reforms such as universal credit are revolutionising relationships between claimants and work coaches, ensuring that the support we offer is more personalised and better suited to the needs of claimants.

There is no doubt that universal credit has been a large and complex programme, which is why we have rolled it out slowly, starting small to begin with and enabling our own DWP staff to be involved in the roll-out through a test-and-learn programme so that we could ensure that as the programme expanded mistakes were ironed out. Our DWP staff are also absolutely crucial to the role of universal credit in encouraging people not just into work but into more work once they have found employment. That is an entirely different relationship.

I have spent the past six months as a Minister visiting Jobcentre Plus centres around the country and speaking with work coaches. Whether in Newcastle, which saw the initial roll-out of full service UC, or in coastal towns such as Eastbourne, I have seen at first hand the value of this approach in transforming lives and I am immensely proud of the commitment I have witnessed from work coaches up and down the country. Indeed, in Oldham I saw some of the most enthusiastic and inspired job coaches that I have seen anywhere in the country, who were absolutely enthusiastic about meeting the claimants and helping them through the journey into more work

The SNP’s call to suspend universal credit, which demonstrates a complete misunderstanding of its transformational benefits, arguably shows a lack of concern for the millions of working households that will benefit from a system that helps people into work, empowering them to transform their own lives rather than leaving them trapped in benefit dependency. As some Members might know, my hon. Friend the Minister for Employment is travelling to Scotland this week to meet MSPs and Ministers in the Scottish Government to discuss with them the issues of the jobcentres in Glasgow.

We have had a lot of discussion about the impact on disability employment, and I am very clear that when a jobcentre closes, that can provide opportunities to enable DWP staff to respond to the personal circumstance of claimants. Work coaches can personalise and tailor the support they provide and can visit claimants in their own home. Claimants do not have to travel to specific jobcentres but can nominate the ones they wish to use. We want a flexible and dynamic welfare state that embraces the new opportunities of technology and the expertise and joined-up services that our local partnership organisations have.

This Government are clear that the best way to help people to pay the rent and live independent lives is to help them into work. With my noble Friend Lord Freud, the former Minister for Welfare Reform, I met arm’s length management organisations to talk about UC and the issues that they raised with us about rent arrears. Our research shows that the majority of UC claimants are comfortable managing their budgets and after four months the proportion of UC claimants we surveyed who were in arrears at the start of their claim had fallen by a third.

To conclude, let me reiterate that the Government’s commitment to an economy and society that works for all is beyond doubt. I want to reassure hon. Members that the Government are committed to fighting against the injustices of society and ensuring that everyone has the right opportunities to fulfil their potential. Households in the lowest income bracket are now much more likely to be in employment than they were at the start of the previous Parliament. In the bottom half of the income distribution, the percentage of families who were in work increased from 60.3% in 2010-11 to 65.7% in 2014-15—

[Mike Weir (Angus) (SNP)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.

Benefit Claimants Sanctions (Required Assessment) Bill

Mike Weir Excerpts

2nd reading: House of Commons
Friday 2nd December 2016 Commons Chamber

[Patrick Grady]

rose—

[Mike Weir]

rose—

[Lucy Frazer]

I will make some progress.

Secondly, the hon. Lady questioned how people can provide evidence that a bus or a train was late. I can think of a number of ways of doing so, such as taking a photograph of the dashboard or asking a member of staff to provide evidence. Thirdly, she said that staff may be affected, but I have already covered that point.

In conclusion, the hon. Lady’s Bill is important because we need to assess what works and what does not work. I welcome the call for consistency, because it is absolutely vital that we have a system that works fairly throughout the country.

--- Later in debate ---

[Mike Weir (Angus) (SNP)]

I normally say that I am very pleased to take part in a debate, but, unfortunately, I am not very pleased to do so today because we are having to discuss a terrible subject. I congratulate my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) on the way she introduced this very important Bill. I cannot match her passion and, Madam Deputy Speaker, you will be glad to hear that I will not match her length, but I want to make a few points.

I listened very carefully to what the hon. and learned Member for South East Cambridgeshire (Lucy Frazer) said. Nobody on the SNP Benches disputes the fact that working is important—we all want everybody who is able to work to be in work, and that should be fundamental for everybody in every political party—but when she was talking about decision makers, she mentioned that we have a judicial system in which the judge does not know anything about the case. The fundamental difference is that such a person can go to court and present their case to the judge, but that is not possible in relation to decision makers in this process.

I want to comment on some of the remarks made by the hon. Member for Bournemouth West (Conor Burns). I have always found him to be a reasonable chap, but I was disappointed by what he said. He made a point—it is often made by Conservative Members—that taxpayers and benefit claimants are somehow different and neither the twain shall meet. He must realise that many benefits claimants were taxpayers and probably will be taxpayers again in the future. He quoted Beveridge, but these people have paid into the system for many years, and they often find themselves having to claim benefits because they have had an accident, they are ill or have a mental illness, or for many other reasons. It is totally wrong to look at the two as different: benefits claimants have been and will be taxpayers, and they are trying to get from the system what they are entitled to, but the hon. Gentleman does not seem to accept that.

[Michael Tomlinson]

I, too, heard the speech of my hon. Friend the Member for Bournemouth West (Conor Burns). I understood that he was making a broader point about taxpayers. Will the hon. Member for Angus (Mike Weir) answer this question, please: what is his view on the principle of sanctions? Should there be sanctions at all, yes or no?

[Mike Weir]

We are not discussing the principle of sanctions today. We are discussing a Bill that sensibly seeks to mitigate the current system. Whether there should be sanctions at all is another debate for another day, but it is not what we are debating today. Many Government Members have spoken about mitigations in the system. It is true that people can get hardship payments, but it can take many weeks. Not only that, but the hardship payments are a percentage of what people would get from benefits. Despite what many people seem to think, benefits are hardly over-generous in the first instance. People who get by on benefits find that they cannot get by on hardship payments.

Parts of my constituency are relatively prosperous. Many people work in the North sea oil industry, for example. In the downturn in that industry, people lost well-paid jobs. Many of them came to me absolutely flabbergasted at the amount of money they got by signing on because they had believed for so many years the rubbish pushed by some of our media that all people on benefits live the life of Riley, which is absolute nonsense.

The point has been made that there is nothing new in the sanctions system, which is correct—sanctions have been part of the system since at least 1996—but what is new is the number of sanctions and how they are imposed. The system is deeply flawed, and SNP Members have long called for a full independent review of it. Even the National Audit Office found in its recent report that a shocking 24% of jobseeker’s allowance claimants received a sanction between 2010 and 2015 and that the rate of sanctions varies dramatically. That is not right and the Government must listen to the concerns about the damage that the application of benefit sanctions has on individuals and their families.

The report also states starkly:

“sanctions are not rare. A quarter of Jobseeker’s Allowance claimants receive them at some point”,

which blows apart the Government’s assertion that only a small minority receive them. Worse still, there is absolutely no consistency in the figures. The report finds that some Work programme providers made more than twice as many sanctions referrals as other providers within the same geographical area, even though claimants are randomly allocated, so that case load characteristics are identical for each provider. That would not happen in a fair system.

There should be no more than a minor variation if the system is used uniformly. Clearly it is not, which the Bill would address by adding a clear code of conduct. The point is that, wherever someone is subject to the system up and down the United Kingdom, the same principles would be applied, and it would not be left to individual variance from place to place. The NAO believes that the DWP does not use sanctions consistently, noting that sanctions referral rates

“have risen and fallen over time in ways that cannot be explained by changes in claimant compliance.”

The Bill that my hon. Friend the Member for Paisley and Renfrewshire South has introduced would make a start on the process. Hon. Members accept that it does not do away with the sanctions regime. She is very intelligent and knows perfectly well that such a Bill would never get through the House in its current form. However, the Bill would go a long way to ensure that there is a coherent, unified process for all jobcentres and that advisers take a claimant’s personal circumstances into account before issuing sanctions. Advisers would be compelled to take into account whether a person is at risk of homelessness and whether they have caring responsibilities or a mental health condition that could be exacerbated if their benefits were sanctioned.

It is interesting to note that in March 2015 the Work and Pensions Committee published a report, “Benefit sanctions policy beyond the Oakley Review”, which recommended, among other things, that the Government take urgent steps to implement fully the outstanding recommendations of that report. To be scrupulously fair, the Government have taken some measures. They have trialled the yellow card system and we still wait to see what the outcome of that trial will be.

[Mhairi Black]

I thank my hon. Friend for giving way. I hope that the Minister will address that point at the end of the debate, because in a written answer to my question asking when the details of the yellow card system would be published, the answer was the end of November. We are now into December.

[Mike Weir]

When my hon. Friend has been here as long as I have, she will realise that a political month can go on for a very, very long time.

The point is that many of the people who are subject to sanctions are vulnerable or, frankly, leading chaotic lifestyles because of mental illness. In its comments on the Bill, SAMH, which has a scheme in my constituency, said:

“People with mental health problems are among the most vulnerable of benefit recipients, are disproportionately targeted to be sanctioned and are among the least likely to understand or be able to comply with the conditions attached to their benefit.”

SAMH also makes the point that

“Sanctioning this group…serves no purpose other than to make their illness worse and their personal circumstances even harder to cope with—making employment a less, not more, likely outcome.”

In response to a Scottish Government consultation last October, it added that

“The number of sanctions applied in Scotland doubled in the last year, and individuals with mental health problems are disproportionately affected.”

According to Mind, figures obtained by a freedom of information request in November 2015 showed that 19,259 people with mental health problems had their benefits stopped under sanction in 2014-15, compared with just 2,507 in 2011-12. That is a 668% rise in just three years, which cannot be just or right.

These people are already vulnerable. The reason that they are perhaps not fully compliant with the rules is not that they are wilful but that they are unable to do so. A sanction will make matters worse and will not make them more likely to get a job; in other words, it is a completely counterproductive process. In fact, it could be even worse than that, because these people are also the least likely to look into how they can then get a hardship payment or how they can appeal. We get people coming into my office after they have been sanctioned completely unaware of the system and how they go about appealing a sanction or how they go about getting a hardship payment, and that happens despite the work that we do and despite the excellent work that Angus Council’s welfare benefits team do to point people in the right direction.

There are people, particularly those with mental health problems, who simply fall through the cracks, and the danger of not having a unified system is that more and more people will fall through those cracks. Many other Members will have stories of people in similar circumstances. Crucially, however, the Government also did not accept the WPC’s recommendation that they should

“establish a broad independent review of benefit conditionality and sanctions, to investigate whether sanctions are being applied appropriately, fairly and proportionately, in accordance with the relevant Regulations and guidance”

that already exist.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Does my hon. Friend agree that it is not appropriate for somebody to be sanctioned in circumstances such as those of a constituent of mine, who did not turn up for a meeting because the letter about it was sent to the No. 5 in a different street to his?

[Mike Weir]

It is absolutely incredible that such a thing could happen, which just goes to show the difficulties in the system as it works at the moment.

Many Government Members have claimed that international evidence clearly shows that benefit regimes supported by conditionality reduce unemployment and that the regime in the UK is clear and effective in promoting positive behaviours to help claimants back into work. However, a recent study funded by the Economic and Social Research Council found that most claimants’ experience of welfare conditionality and sanctions was a wholly negative one, creating widespread anxiety and feelings of disempowerment. That is hardly a shock to those of us who have had to deal with the issue when they have turned to us for help.

More telling, however, is that a Government-backed employment project run by Oxford City Council and the DWP found in June that cutting benefit entitlements makes it less likely that unemployed people will find a job. It said:

“Conventional wisdom suggests that taking money off benefit claimants (eg by sanctions or cutting benefit rates) acts as a financial incentive to get a job. Our analysis says that the opposite is in fact true”.

[Peter Grant]

I have to disagree with my hon. Friend’s initial comment that he would not be able to match previous speakers’ passion, because I think he is doing that very well. In my constituency, when a major employer closed down, the DWP joined a taskforce to help the redundant workers back into work. The taskforce organised a half-day recruitment fair. Claimants who should have been signing on the day of the fair were told that they would be sanctioned if they met employers to get a job on the day they were supposed to sign on. Does he agree that changing legislation to prevent such things would improve the credibility and acceptability of any remaining sanctions?

[Mike Weir]

My hon. Friend makes an excellent point that again illustrates the complete illogicality of the system.

Research has linked sanctioning to food insecurity, demand for food banks and destitution. According to the Trussell Trust’s figures, benefit sanctions are a major contributor to its delivering more emergency food parcels in 2016 than at any other time in its history. The NAO has also thrown into doubt the cost-effectiveness of sanctioning. If we passed the Bill, we could start to reduce the number of needless, senseless and counterproductive sanctions by introducing into the system a clear code of conduct and a fairer means by which to look at the personal conditions of the person being considered for sanctions. The Bill builds on the good practice in some jobcentres, as my hon. Friend the Member for Paisley and Renfrewshire South fairly pointed out in her introduction. It would protect the most vulnerable from falling into poverty and prevent what are often already chaotic personal lives from getting even worse.

The Scottish Parliament is getting new powers to establish employment schemes to assist those at risk of becoming long-term unemployed and to support disabled people back into work, although benefit conditionality and sanctions remain a reserved matter. The Employability and Training Minister, Jamie Hepburn, has confirmed that the Work First Scotland programme, which will provide employment support for more than 3,300 disabled people from next year, will be voluntary and will not use the threat of sanctions. In a rare moment of agreement, I am pleased that the DWP has agreed that the programme can be voluntary and that no sanctions will be applied. I hope that this is a sign that the Government are now beginning to see the merit in looking at the matter afresh. From this small step, I urge the Minister to go further and to support the Bill, which would put the regime on a proper and consistent footing and in the process make a real difference to many people’s lives across the whole United Kingdom.

State Pension Age: Women

Mike Weir Excerpts

Wednesday 30th November 2016 Commons Chamber

[Richard Harrington]

I apologise to the hon. Gentleman—I could not hear the end of what he said because of the noise. I am not disputing that this was produced by proper economists—I accept that fact—but it is about what timescale they look at, in this case going to 2021, and how they brief. But okay, fair enough: even by the SNP’s calculations the figure is £7.9 billion, which should apparently come from millionaires or from Trident. Government is not like that; these are completely separate issues. This country has a proud record on state pensions. This Government, and the predecessor coalition before it, did not have the luxury, partly because of the economic mess Labour left us in, of kicking the can down the road and ignoring these very, very serious issues.

The benefits system is available to people, and if they are not having the access to it they should, we will help them. I give an undertaking to look at every way that the benefits system can be used to help people who are in difficulty. Contrary to what some hon. Members have said, my door is open to people so I can speak to them. I hope I have shown that. I took this job to help pensioners, not to not help pensioners. It has been irresponsible to imply—

[Mike Weir (Angus) (SNP)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.

Scotland Bill

Mike Weir Excerpts

Tuesday 30th June 2015 Commons Chamber

[Kate Green]

I agree. The intention stated in the Labour manifesto was to devolve labour market programmes to what we described as a combined authority footprint. That would enable recognition of the fact that local labour markets differ and recognition of the different industrial history and characteristics of people in particular parts of the country. Importantly, it would allow close alignment with the skills and industrial opportunities in particular communities. We want to see that opportunity for the devolution of labour market programmes to a sensible, localised level; I doubt whether it would be the whole of Scotland, because labour markets differ significantly within Scotland. There are considerable differences between the highlands and the central belt conurbations, for example.

[Mike Weir (Angus) (SNP)]

I am listening carefully to what the hon. Lady is saying, but does she not recognise the difficulties for an area such as my own, where unemployment is low but so are wages, and in which there are fairly prosperous parts as well as parts that are not prosperous? It is difficult to say that a local authority area is suitable for devolving responsibility down to.

[Kate Green]

I readily accept that a local authority area may be too small. What is important is to get the geography right, and the whole of Scotland might not be right. We want the opportunity to explore the right geography for devolution rather than assuming that centralising responsibility in Holyrood will necessarily be the best way of meeting the needs of labour markets across Scotland.

It is also important to recognise that devolving programmes only if they will last longer than a year misses the point for a lot of people who suffer poor employment outcomes. Our amendment 113 specifically addresses that point. Contrary to popular prejudice, it is extremely rare for people never to have worked. People who experience poor labour market outcomes have mostly been in and out of poor-quality, poorly paid work for many decades. That has often been true of many generations of their family. If we devolve the opportunity to develop labour market programmes to the Scottish Parliament at an earlier stage, we can break that cycle not of worklessness but of moving in and out of poor-quality work. Interventions could be developed that would enable people to sustain work and progress in it, which the Work programme has not succeeded in doing.

--- Later in debate ---

[Ian Murray]

He might not be that good. If he had won the lottery he would not be wearing that suit—I can be nasty to my own side, as well as to the SNP.

Clauses 26 to 30 are largely concerned with minor and technical changes to existing legislation. Amendment 113 would allow the provision of employment programmes where assistance is for less than one year. The reasoning behind that does not require much explanation, other than to point out that many people move jobs several times a year, especially in the current highly fluid labour market in which there is a dearth of long-term secure employment. Indeed, the labour market seems short-term and insecure with poorly paid work. Many people in part-time jobs are looking for full-time work, and many people are on zero-hours contracts.

The Smith agreement states that the Scottish Parliament

“will have all powers over support for unemployed people through the employment programmes currently contracted to DWP”.

However, clause 26 currently restricts the powers devolved to employment support programmes that last at least a year. Amendment 113 would remove that restriction to allow the development of programmes to support those who move in and out of work within one year.

Amendment 9 emphasises that employment support programmes in Scotland must be developed in close conjunction with local authorities. That will ensure that service delivery is tailored to the needs and circumstances of local communities and is responsive to the local jobs market. In that regard, we are happy to support amendments 120, 121 and 122, which provide for the creation of new employment programmes in Scotland, on the understanding that they are developed and run in close conjunction with local authorities.

[Mike Weir]

Will the hon. Gentleman expand on the position of local authorities? I made the point to the hon. Member for Stretford and Urmston (Kate Green) about the nature of many local authorities in Scotland, which would make it slightly more difficult to devolve the issue to local authority level than in certain other areas.

[Ian Murray]

I agree to a certain extent. In the area the hon. Gentleman represents, many of the local authorities are either incredibly small in population terms or incredibly large in geographical terms, and that would have its challenges. But many local authorities work together on many aspects of Scottish local government life. For example, Edinburgh works closely with Midlothian, a local authority that is smaller than my constituency. East Lothian, West Lothian and Fife also tend to work together on many issues. While we would like to see double devolution to local authorities, it does not necessarily mean to one individual authority. Many authorities would probably work together to try to make the best use of work programmes and job opportunities.

--- Later in debate ---

[Ian Murray]

I did not want to turn this into a political argument: I merely wanted to point out that work programmes are best delivered by local authorities. If the Welsh Government have made the decision that they are best delivered in a different way, it is up to them. The hon. Lady highlights, however, that devolution across the UK provides an array of ways to deliver services, and I hope that the Scottish Government take note of this debate and consider whether we should have double devolution. The principle of subsidiarity across the European Union and the UK, which my hon. Friend the Member for Nottingham North (Mr Allen) promoted in his new clause, should sit happily and firmly with the Scottish Government and their relationship with local government.

Local government and the Convention of Scottish Local Authorities have said clearly that local authorities across Scotland feel that they have been strangled, and we need to address that important point.

[Mike Weir]

I am not trying to be difficult, but it seems to me that the hon. Gentleman’s amendment would provide that the Scottish Parliament “must” devolve the power to local authorities. It would not always be appropriate for a local authority—or even a group of local authorities—to have that power. If he wants to pursue devolution of such powers, more flexibility would be needed, and the amendment is flawed in that regard.

[Ian Murray]

In all the time I have known him, the hon. Gentleman has never been difficult. We are debating a Bill that we feel does not go far enough in spirit or substance. We want the Scottish Parliament to have more power. The hon. Gentleman, the Scottish National party Chief Whip, wants to hold on to that power with both hands. He does not want to release any of it but wants to keep it in Edinburgh and Holyrood, so he can build an ivory tower for Scotland. He does not want to give it to local authorities.

[Mike Weir]

rose—

[Ian Murray]

I am delighted that I have been able to give the hon. Gentleman a little exercise by making him bounce up and down.

[Mike Weir]

The hon. Gentleman and I have crossed swords on many Bills. He is misrepresenting what I said—not deliberately, I am sure. As I read it, if the amendment is agreed to, that would mean an obligation to devolve to each individual local authority. That is not what he is saying now about a conglomeration of local authorities. The amendment is flawed; the idea behind it is not so flawed, but the way it is written is.

[Ian Murray]

We are in trouble: I cannot even persuade the people who agree with the broad principle, and I am trying to persuade the Government to accept the amendment. It may be badly drafted, but the hon. Gentleman knows how this place works. We table our amendments in Committee to press the Government to do something about a particular piece of legislation, and the Government ultimately reject them. Of the 87 amendments that I tabled to the Enterprise and Regulatory Reform Bill, 87 were rejected, although I was delighted that four or five came back as the Government’s own ideas on Report. That is essentially what will happen. The Secretary of State said he would go away and reflect, and I am sure he will do just that—go away and reflect on the amendments he may be able to claim as his own, and those he will ultimately reject on Report.

I have a lot of time for the hon. Member for Angus (Mike Weir). I put on the record that we agreed on most things when we crossed swords in other Committees, particularly with regard to the privatisation of Royal Mail and the Postal Services Bill. We do not always disagree.

The broad principle of double devolution—transferring powers from Holyrood to local communities—is one we should all support to ensure that we have powerhouse local authorities in Scotland and to place power closer to the people we seek to represent. It is a fairly obvious thing to say, but local authorities know their local jobs markets better than anyone else. The landscape of a jobs market in one local authority, or one conglomerate of local authorities, will be very different from others.

We should be looking to tailor employment support programmes not just to individual needs and individual community needs, but to areas where there will be a greater need for a certain skill set than in other areas. For example, my city is at the forefront of financial services and academia. Rural constituencies will be completely different. Local authorities would be able to tailor those programmes. Crucially, something we tend not to talk about in this House is not just transferring power but transferring the resources that go with it. Local authorities in Scotland are being completely starved of the resources they require to do the job we want them to do.

The hon. Member for Livingston (Hannah Bardell) made a great speech. She said many things we would absolutely agree with. One glaring omission, however, was anything on retraining, education, further education and reskilling. Further education is not just the mechanism for young people to go back into education, or to be retrained or reskilled; it is the place where many people get a second chance. They are able to go back to something they perhaps failed at many years ago, or to retrain after having a family. Scotland is suffering from having 144,000 fewer college places than we did in 2007. That is hampering those second chances.

If the devolution of the Work programme does end up at the Scottish Parliament, I hope it ultimately ends up with local authorities.

[Mike Weir]

indicated dissent.

[Ian Murray]

The hon. Gentleman is shaking his head, so it must be true. We would then be able to resolve the issue of the college places that have been lost.

Amendment 114 would provide for the devolution of the Access to Work scheme to the Scottish Parliament. Access to Work provides practical advice and support to disabled people, and their employers, to help them to overcome work-related obstacles resulting from disability. It is an incredibly powerful and important programme. A close friend of mine, Mark Cooper, who has cerebral palsy, has been on it for some time. He took a job that covered maternity leave in Glasgow, 45 miles away, and was able to work with the employer and the programme to travel to Glasgow and secure an adapted workplace.

Post Office Card Account

Mike Weir Excerpts

Tuesday 16th December 2014 Commons Chamber

[Steve Webb]

I am grateful to my hon. Friend for his work on the crucial issue of financial inclusion. I stress that we see the Post Office card account as being particularly suitable for vulnerable people such as elderly pensioners. Over the next few years, people of working age will move from these types of accounts to more transactional accounts. The credit union movement is clearly an important part of this financial inclusion agenda. The crucial thing is to ensure that whether it is through a POCA, a basic account or any other sort of account, people can, if they wish, go to the local post office for their money, and they cannot do that if it has been shut.

[Mr Mike Weir (Angus) (SNP)]

It might be the Christmas spirit, but I find myself in the unusual position of actually welcoming a statement from the Minister. The Post Office card account is welcome, but I have to say that the Minister is wrong in what he says about Post Office modernisation. Many of the post offices in my constituency are suffering changes, with stand-alone post offices being closed in favour of local post offices. There is real concern about the lack of positions for POCAs in local post offices, where queues can build up—many quite large communities have only one local post office to serve the whole community—and banks are beginning to close some of their branches. In those circumstances, how can he be certain that the POCA will be a stepping stone to mainstream banking?

[Steve Webb]

I will take what I can get: I am grateful to the hon. Gentleman for his enthusiastic response. The 3,760 POCA holders in his constituency, as of last year, will welcome this announcement. On the issue of post office locals, each proprietor has to think what works in their premises, but I am advised by a normally reliable source—the Minister with responsibility for postal services—that queuing times are falling in the local model.

amendment of the law

Mike Weir Excerpts

Tuesday 25th March 2014 Commons Chamber

[Mr Mike Weir (Angus) (SNP)]

The changes to pensions and annuities have caused a great deal of interest in my constituency, but many constituents are unsure what it means for them. This is dangerous, because the changes are being introduced quite quickly and many people will have to decide whether to defer taking their pensions until the changes come into play.

At one of my surgeries on Friday a constituent who had already bought an annuity asked me whether he could now take a lump sum instead. I fear that the answer to that is no as he had already entered into an annuity contract, but it shows that there may be some ill feeling about the sudden change among those who have only recently bought annuities.

It is also not clear to many constituents that the changes apply only to defined contribution schemes. Many are unsure what type of scheme they are in. Another constituent asked me how the changes affected his company scheme, but it seemed to me that that scheme was a hybrid, with elements of both defined contribution and defined benefit. Again, my understanding of the changes is that they would not apply to such schemes, at least at the moment. Have the Government given any thought to whether hybrid schemes will be affected? Will the possibility of taking a lump sum from such a scheme be limited, and if so, what impact is that likely to have on the scheme as a whole?

While I appreciate that anyone who is considering what to do would be well advised to seek professional advice, these are serious issues that require a clear answer to allow constituents in such schemes to determine what is in their best interests. They may have to do so fairly quickly. The changes could mean a huge change in how people save for their future, but I suspect that it will also mean a huge change in how such savings are viewed, both by the general public and, crucially, by future Governments.

[Dame Anne Begg]

The hon. Gentleman has rightly challenged the Government about the uncertainties caused by the changes proposed in the Budget. Can he enlighten the Scottish people as to the attitude of a Scottish National party Government on the proposals if, heaven forfend, there is a vote for independence?

[Mr Weir]

I may as well ask the hon. Lady what a future Labour Government would do, given that Labour has flip-flopped on the proposals since they were announced last week. When we achieve our independence, we will inherit these proposals, and a future Chancellor will improve them.

There is evidence from other countries that when such changes are made, a substantial number of people take their savings as a lump sum, rather than buying an annuity. There are very good reasons why people might choose to do so, and I accept the argument that we should allow them more choice over how they use their own savings. On Thursday, during the statement by the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), I raised the question of whether these new pensions vehicles will be truly different from other forms of savings. That is important, because we have traditionally given greater tax incentives to allow savings for retirement that are not available for other savings products. If, however, someone entering a pension scheme can in future take the whole sum as a lump sum rather than as an annuity, what exactly makes that pension scheme any different from other long-term savings schemes? Will a future Government look at that and decide to end any tax reliefs, which could have a significant impact on future savings? In his response the Minister said:

“One of the differences between workplace pensions and other forms of saving is the employer contribution. Whereas someone of working age can save through any savings vehicle they like, it is only through workplace pensions that they get not only tax relief but the employer contribution.”—[Official Report, 20 March 2014; Vol. 577, c. 956.]

That is true to some extent, but it does not really address the question, as defined contribution pension schemes are not necessarily workplace schemes, so they do not all have an employer contribution. For example, many self-employed people may use such schemes. They get tax relief, but will that continue should the pension element of the scheme effectively be removed? Is it therefore the Government's intention to make a distinction between those schemes that have an employer contribution and those that do not? Do the Government intend to have a process for determining which schemes are pension savings and which are just ordinary savings? Again, some clarity on these points is much needed.

I also asked the Minister how someone, say in their late 50s, who comes to claim means-tested benefits would have their defined contribution scheme treated. I did not really get an answer to that point, so I shall put it again to the Exchequer Secretary. I put the question to the House of Commons Library, and it responded:

“Income from a defined contribution pension is treated as income for the purposes of means-tested benefits”.

So far, so good, and that is no surprise, but what is the position if someone has a defined contribution scheme and has the ability either to withdraw their money or take it as income? Up to now, that has not been an issue, as most people cannot get access to their funds until they reach retirement age, but the changes, as I understand them, will mean that anyone over 55 will have access to their fund.

A clue to what might happen is to be found in the rules for pension credit, where a person can be treated as having pension income for which they have not yet applied. The leaflet from the Pension Service “A detailed guide to Pension Credit for advisers and others”, which was issued last September, states:

“Notional income is income your customer does not actually get but is treated as getting. We may treat them as having notional income when they have: not claimed state pension but are entitled to it; not taken income available to them under a personal pension plan or a retirement annuity contract; deferred payments from an occupational pension; given up their rights to an income (from a trust fund for example) because they wanted to get Pension Credit”.

At present, such rules do not apply to means-tested benefits for people of working age. In this case, the present rules specify that income from a personal pension should not be treated as income available on application. Will that remain the case once it is possible for anyone who has reached 55 to take their funds from their pension plan?

It may well be that some Government Members will be of the view that any potential income should be treated as income for the purpose of assessing state benefits, but the implications of that are that someone who has done what we all wish people to do and has saved towards their retirement but is then made redundant at a late stage in their working life, could have their whole retirement fund wiped out because of a period of unemployment. Again, clarity is needed on that point. Similar concerns arise over those who are in care and meeting care costs, which is a point raised by the hon. Member for New Forest East (Dr Lewis) on Thursday and also by Age UK and the Joseph Rowntree Foundation.

Of course, the situation in Scotland is slightly different from that in England, but Jane Vass of Age UK is quoted in The Guardian as saying:

“The pension pot is protected from means testing. So when it is in a pension it can’t be touched but there is a risk when it comes out of that wrapper.”

It is possible that many of those who have been saving for retirement find that they have to use the fund to meet care costs, or perhaps a substantial part of their pot will go on meeting the costs of an insurance policy to meet future care costs.

Those are real issues concerning the whole set of changes to annuities, pensions and pension pots. People who are thinking of what to do with pension schemes that are coming to an end—do they take an annuity or do they defer until the new changes come in?—need that information now. Although the Government have said that advice will be available, it is not yet available, and it will probably be some time before it is. Clarity is needed now; otherwise, many people could make the wrong decision. It may be that they should take an annuity, or maybe they want to take the lump sum. They need proper advice now before the changes come into effect, possibly in 2015.

Pensions Strategy

Mike Weir Excerpts

Thursday 20th March 2014 Commons Chamber

[Steve Webb]

My hon. Friend is right. The key word she used was “opportunities.” If people want to take more of their pension wealth earlier in retirement—perhaps when they are more fit and able—they should be free to do so. As she says, however, they need to make informed choices, which is why the guidance guarantee is so important.

[Mr Mike Weir (Angus) (SNP)]

Although I am generally supportive of the changes to the private pension—they are sensible, especially for those with smaller pots—I wonder what the difference is between one of these new pensions and other savings vehicles. Will there be any impact on the assessment of someone in their late 50s who unfortunately finds themselves seeking means-tested benefits? Will they be looked at differently compared with the current pension plans, given that they will now be able to draw down money at any time and it will no longer be necessary for them to purchase an annuity at the end of the scheme?

[Steve Webb]

The hon. Gentleman is right to say that we are going to have to think about pensions and retirement saving in a new way. One of the differences between workplace pensions and other forms of saving is the employer contribution. Whereas someone of working age can save through any savings vehicle they like, it is only through workplace pensions that they get not only tax relief but the employer contribution. They will, therefore, remain particularly attractive products, including for people on low wages.

Housing Benefit (Under-occupancy Penalty)

Mike Weir Excerpts

Wednesday 27th February 2013 Commons Chamber

[Dr Whiteford]

I agree with the right hon. Gentleman, who makes a very important point. I have no doubt that, in some cases, the under-occupancy penalty will jeopardise the arrangement that unpaid family carers have made to allow them to continue to care for a loved one in their own home.

[Mr Mike Weir (Angus) (SNP)]

Is my hon. Friend also aware that the homes of people who have had them adapted to meet specific needs may now be deemed too large, so they may be forced to move out and a social landlord might have to pay to adapt another house for them? Is that not a daft way to proceed?

[Dr Whiteford]

It is utterly daft. I have seen cases in my own constituency where relatively minor changes to local authority support services have destabilised the balancing act performed by families who provide care while juggling work and family commitments. I have met far too many family carers who are already at the end of their endurance, compromising their own health and well-being to continue to care. When carers cannot cope any more or their own health breaks down, the human cost is immense and the financial cost of primary health care spending and the need for expensive care packages are incalculable. The bedroom tax undermines the ability of families to continue to care.

--- Later in debate ---

[Dr Whiteford]

I will not give way.

We should also look carefully at the loopholes in the bedroom tax regulations. Apparently, the meaning of “bedroom” is not clearly defined in the legislation. I heard yesterday that one large housing association in England—the Knowsley Housing Trust—has reclassified 600 properties to protect tenants. That obviously comes at a cost to the housing association, but it is nevertheless a brave and socially responsible move. I am sure that social landlords are also seriously considering bricking up windows or taking down walls.

Other housing associations in England—the hon. Member for Aberdeen South (Dame Anne Begg) referred to this—have called for two-bedroom properties to be exempted from the rules. They argue that it makes no sense for them to build inflexible one-bedroom homes, because they want to encourage long-term tenants who are integrated in the community, not transient short-term tenancies.

Another potential mitigation measure that might help in urban areas is for housing associations to co-ordinate most effectively their waiting and transfer lists, as we have seen on Merseyside. Obviously, that will not work so well in more rural and dispersed areas, but it might help in cities. There is a range of options, and it is important that we look closely at all of them.

To return to a question posed earlier, social landlords need to be consistent in how they deal with arrears. I am not sure we can draw a distinction between someone who falls into arrears because of the bedroom tax and someone who is not under-occupying but falls into arrears because their employment and support allowance has been cut, because their tax credits have been reduced, because they lose their job or because they have fallen sick. The danger is that if some people have their arrears written off and others do not, that will quickly cause resentment between tenants, all of whom are likely to be living on tight budgets and in danger of experiencing significant increases in rent across the board if housing associations budgets come under strain.

[Mr Weir]

My hon. Friend makes a good point. The proposal in the petition to amend section 16 could help current tenants to avoid eviction, which is a good thing, but it will not extinguish debt, which can be chased by other means, such as arrestment of wages or money from bank accounts. We know that from the experience of the poll tax. How many years after the poll tax died were people being pursued for arrears?

[Dr Whiteford]

My hon. Friend’s legal expertise helps him to make a compelling point. Social landlords are aware that more people will be at risk of arrears and that they are being proactive in trying to prevent that from happening, but they are clear that their ability to provide affordable homes depends on their ability to collect rents from tenants. The real problem is that the under-occupancy penalty is unfair and unworkable. Instead of trying to mitigate its worst effects, we should concentrate on changing the underlying problems and abandoning the bedroom tax. In Scotland, we clearly have an opportunity to do that by bringing decision-making powers back to the Scottish Parliament.

Housing associations have historically been seen by lenders as relatively stable, and have been able to borrow money at competitive rates. Mary Taylor, chief executive of the SFHA, has pointed out to Ministers that

“already it is proving harder for landlords to borrow from banks, whether to build or to fund major repair and retrofit programmes. And where they can borrow it is invariably at a higher cost than before, even though interest rates generally remain low and stable. According to Housing Associations, lenders are pointing to the lack of security of rental income arising from Welfare Reform as a key factor in these rising costs. Lenders have to assess risk—and they recognise the very real risks, even if the Government is stubbornly refusing to do so. I believe the Council of Mortgage Lenders raised these issues with the Government over a year ago, but we are still to see action.”

--- Later in debate ---

[Steve Webb]

No, I want to make some progress.

For social sector tenants alone, the bill totalled £14 billion. That is why we have had to look at this area of spending. The system for tenants renting in the private sector has already been tightened in a number of respects, and there is a fundamental fairness issue involved here. Is it right to squeeze private sector tenants’ housing benefit while making no change in the social sector, where rents are already subsidised and where people already have an advantage? That is what we are trying to address.

At the moment, there is a spare bedroom subsidy. We subsidise a million spare bedrooms in the social rented sector through housing benefit. We have a situation in which two households next to each other can be treated inequitably. We heard the hon. Member for Banff and Buchan talk about fairness. We have to be fair to the different sorts of tenancies. Those living in the social sector already benefit from a subsidised rent. Should they also benefit from a subsidised spare room? When we have a million spare bedrooms, and over a quarter of a million households living in overcrowded accommodation, we must do better. We have to regard the spare bedrooms in the social housing stock as a precious resource that we can make better use of.

[Mr Weir]

What would the Minister say to people who wish to downsize from a larger home to a smaller one, but who find that such accommodation simply does not exist in their areas? In mainly rural areas such as mine, such accommodation does not exist. People could be offered another home many miles away from where they have grown up, from where they work or from where their friends are. This is a ridiculous policy.

[Steve Webb]

I want to stress that there will a range of responses to the under-occupation charge. Some people will move. About one in six of the households we are talking about are in work, and there are options for people who are in work. People could take work. It is often said that there are no jobs, but there are more people working in this country now than in the whole of human history. The number of people in work in this country is now approaching 30 million, so, for some, working or working more hours will be an option. It will not be the answer for everybody, but it will be the answer for some.

[Mr Weir]

rose—

[Steve Webb]

Let me just address the hon. Gentleman’s point before he replies to my reply. I have not finished replying to his first point yet.

There has to be better use of the social housing stock. I pay tribute to the housing associations in the Liverpool area, 20 of which have come together with local authorities to pool their housing stock. I take the hon. Gentleman’s point that a small housing association might have limited stock and limited scope for moving people around, but by pooling their stock, those organisations are able to make better use of it so that more options will be available. I entirely accept his point that the answer to this question will be different in a city from in a remote rural area, and that is why we are more than happy to look at whether the allocation of discretionary housing payments to help people in rural areas is the right answer. As it happens, the allocation of DHPs is slightly over-represented in rural areas, compared with city areas, because of the way in which it has been done. We recognise that there is an issue there.

[Mr Weir]

I thank the Minister for that answer, but he said that there would be a range of responses to the policy, including paying the difference. However, people on housing benefit are, by their very nature, on low wages. They are already under intense pressure from rising energy and fuel prices and from freezes on benefits if they are receiving any. It will be difficult for those people to make up the difference in that way. Their choices will be very limited, and many will be forced to move by financial necessity when the change comes in.

[Steve Webb]

We have already seen the impact of our restrictions in the private rented sector, and we know that people make certain choices. It would be wrong of any of us to belittle those choices, given the financial situation, and I do not do so, but we have seen people on relatively modest incomes in the private rented sector saying that paying £2 a day for a spare room is worth more to them than spending that money on something else. Some people in that sector are making that choice, and that is part of where the saving comes from. Some people in the social housing sector will do the same thing.

Benefits Uprating (2013-14)

Mike Weir Excerpts

Thursday 6th December 2012 Commons Chamber

[Steve Webb]

The focus of the uprating Bill will be on those benefits over which the Secretary of State has discretionary powers, particularly working-age benefits, JSA and ESA. We will also look at tax credits and child benefit. It is our policy to ensure that carer’s allowance is protected against inflation.

[Mr Mike Weir (Angus) (SNP)]

Does the Minister accept that many of those on working-age benefits spend much of their money on food and, in particular, energy, for which the rate of inflation is much higher than CPI? A 1% increase is not the difference between CPI and 1% for these people but is in fact a much greater cut in their living standards.

[Steve Webb]

This issue is raised every year, and every year it is argued that the rate of inflation for people on benefits is always above the prevailing rate of inflation, but in the long term there is no reason to think that that would be the case. We have made provision for the most vulnerable groups to be protected—those receiving disability benefits and pensioners—but unless the hon. Gentleman can suggest serious ways of saving money elsewhere in the Budget, for which the Scottish National party has not been famous, I am not sure that his opposition to our plans is credible.

Winter Fuel Allowances

Mike Weir Excerpts

Tuesday 27th November 2012 Westminster Hall

[Mr Mike Weir (Angus) (SNP)]

I am pleased to introduce this debate under your chairmanship, Mr Amess.

When I introduced a private Member’s Bill on this topic, it received the support of hon. Members of all parties, which demonstrates the depth of concern about the off-gas-grid energy market. The issue has also been constantly raised by Members during energy debates. Unfortunately, Government Whips objected to my Bill, and it is now suffering a lingering death in the twilight zone of the Order Paper.

I do not intend to use this debate to address the general problem of fuel poverty, the details of which should be well known to Members of all parties. I note, however, that 15% of all households in the UK are not on the gas grid, and that some 32% of such households are in fuel poverty, as opposed to 15% of those on the grid. Unfortunately, it seems that little has been done to address the immense problems that have been raised over the years. The present Government, to their credit, got the Office of Fair Trading to undertake a review of the market, but to almost universal disbelief, frankly, that decided that the market was working fairly. Despite that, much of the OFT’s work on the market is of great interest.

I have raised the issue of winter fuel payments for off-gas-grid pensioners on numerous occasions, as I am sure the Minister knows. Ministers in this Government and the previous Government have indicated that the idea has merit but, of course, nothing has happened. Back in March 2010, the Select Committee on Energy and Climate Change, of which I was a member, raised the issue in its report on fuel poverty.

My Bill would not extend winter fuel payments to additional groups, nor would it tread on the contentious issue of means-testing winter fuel payments, which concerns some Members. My Bill does not attempt to address the many issues that surround off-grid energy. It is tightly drafted to give some relief to a particularly vulnerable sector: those pensioners who are off the gas grid. There are many such pensioners in my constituency, and they face a number of particular problems.

First and foremost, there is the cost of home fuel oil. As with all forms of energy, the price of home fuel oil has rocketed in recent years, but there is clear evidence that the price rises in the early autumn and stays high over the winter. Even valueoils.com, which sells the oil, states:

“Winter months are typically more expensive than the summer given the rise in demand across Europe, the summer months of June and July will usually provide the lowest rates.”

The graph on its website shows a dramatic price increase in all areas of the United Kingdom over the winter months, and it is important to note that that is as much an issue in rural areas of Wales, England and Northern Ireland as it is in the highlands and islands of Scotland.

When I secured this debate, Mike Foster, the former Member for Worcester, contacted me to point out that the Oil Firing Technical Association

“suggest a typical rural household could have saved £170 if heating oil was bought in June 2010 compared to January 2011 nearly doubling the value of the Winter Fuel Allowance.”

Even the House of Commons Library note that was produced for my Bill’s Second Reading states:

“The average costs of heating and providing hot water for a typical three bedroom house with LPG have been estimated at around £2,300 per year (based on April 2012 prices with a conventional boiler), heating oil is thought to cost around £1,700 and gas around £1,200.”

It is also worth noting that over the past four years the cost of heating an average home with propane or home fuel oil has increased by £850 and £750 respectively, while the cost for gas has increased by £400. Not only are off-grid homes more expensive, therefore, but the costs are rising much more sharply. In short, heating a home with liquefied petroleum gas costs almost twice as much as heating a home with access to the mains gas grid. Importantly, the main use of LPG and home fuel oil is for heating, so although those homes generally—as most homes do—have electricity and benefit from the discounts offered by energy companies, they still face greater costs, particularly for heating and cooking.

The traditional Government response has been to call for an extension of the mains gas grid as one way to address the problem. Indeed, the Scottish Government recently announced a new scheme to do that but, realistically, such schemes are going to help only those households with a mains gas supply relatively nearby. Even then, the cost of connecting to the gas grid can be substantial and well out of the range of many people who would like to be connected. I have dealt with cases in my constituency just outside towns when although there is a gas main relatively close by, residents have been quoted many hundreds of pounds for connection to it. Furthermore, many rural and island areas will never be able to connect to the gas grid. The grid simply does not exist in many remote areas, let alone in island areas, so in such areas the cost of connection would be enormous.

[Andrew Percy (Brigg and Goole) (Con)]

I have an example from my constituency. The marshland villages to the south of Goole are not on the grid. I have raised that with the network, and it has no intention of putting them on the grid. Such communities face the double problem of being more reliant on their cars and often living in the worst insulated houses.

[Mr Weir]

The hon. Gentleman makes a good point, and I was going to address some of those problems. In many rural areas, the situation is exacerbated by the fact that much of the housing is old and of a construction that makes it difficult to install energy-saving measures such as cavity wall insulation. Many houses in rural Scotland are of a solid wall construction, and there is a limit to what can be done to save energy. Once the roof insulation has been put in, the only real option is to install some sort of solid wall insulation, which is difficult in many of those houses.

Such households will receive the same winter fuel allowance as pensioners on the gas grid, but there is a crucial difference in how the energy is delivered. Those who are on the gas grid will receive their winter fuel bill around the time that the winter fuel allowance is generally paid, so the system works well for those people. Indeed, in the explanatory notes to the regulations that last amended the benefit, the previous Government specifically stated:

“They are paid in a lump sum each winter to ensure that money is available when fuel bills arrive.”

No one could dispute that that is a good thing, but that is not how it works for those who are off the gas grid. Such people face the difficulty of having to pay for their LPG or home fuel oil up front at the beginning of the winter, well before they have the benefit of the winter fuel allowance. Many find it difficult to do so and may not completely fill up the tank, leaving them having to do so in the depths of winter, which brings its own problems, and not only due to the cost.

The OFT’s report found that there are many competing suppliers in the market, but by definition many of those suppliers are small. Although some of the larger players offer greater payment flexibility, smaller ones are unable to do so. The Minister may be interested to know that some of the bigger players have expressed an interest in doing something, but they sometimes have difficulty finding vulnerable customers because of the regulations. Although electricity companies, for the purpose of the discount, can access such information, I understand that other energy companies cannot because of the way the regulation was drafted under the Energy Act 2010.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for bringing such an important issue to the House.

The same thing happens in Northern Ireland. Gas is available in Newtownards but not on the peninsula, while gas is available in Comber but not a few miles away in Ballygowan. For those reasons, accessibility is being held back for a great many people. Is it not time for the Government to consider issuing licences generally so that gas can be accessible for everyone?

[Mr Weir]

That is an excellent idea. I note that the leader of the hon. Gentleman’s party, among others, supported my private Member’s Bill, because this is a huge problem in Northern Ireland, although Northern Ireland has different regulations because social security is a devolved matter.

The price of fuel is rising—often quite substantially—as winter approaches. Even those suppliers that offer a fixed winter price will be doing so at a price higher than in the summer. As the Minister will appreciate, there can also be a problem getting a delivery. Hon. Members will recall the dreadful weather of two winters ago, when many of my constituents faced huge difficulties getting their tanks filled. Some were left with no fuel in the run-up to Christmas. The situation is exacerbated by how the oil companies work, because some modern tanks have a gauge, and the companies will deliver only when it falls to a certain level. If somebody cannot get their tank filled when they want to because the oil company has decided that it is not an urgent case, and bad weather then comes quickly, it can cause huge problems.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

The hon. Gentleman’s constituency and mine share problems involving off-grid gas. Does he believe that if there were a more focused approach on paying winter fuel allowances to those in greater need, some of our constituents might be better served?

--- Later in debate ---

[Mr Weir]

I said at the outset that I would not get into that argument, because I do not think that that is the way to proceed. Personally, I do not agree with the hon. Gentleman, because I think that the bureaucratic problems created might be great. I am trying to focus purely on those who would, under any system, receive their payment earlier because they are off the gas grid, and I shall go on to explain why.

The situation of two winters ago was perhaps exceptional, but it shows the additional problems faced by off-gas-grid consumers. My Bill proposed a suggestion for tackling those problems. Currently, winter fuel allowances are paid through a system involving regulations that specify a date by which pensioners must apply. It is worth noting, however, that once they are in the system, they do not have to reapply every year. Clause 1 of my Bill would have varied the regulations to bring forward the qualifying date from late September to late July for those off the gas grid. Clause 2 would have brought forward the payment date for those off the gas grid to no later than 30 September to allow them to buy a complete tank of gas before the winter.

When my Bill was presented, the House of Commons Library produced a note that considered how the problem might be tackled, including my suggestions. The Library identified two possible objections. I am not sure whether they are the same objections that the Minister will offer today, but I will comment on them briefly.

The first objection was that ordinary claimants might feel aggrieved at being denied early access. The whole point of the Bill, however, was to tackle the problem of having to pay for energy up front. Ordinary claimants, as the note describes them, would have access to the allowances, as stated in regulations, when their quarterly bills become due. I reiterate that the explanatory note to the relevant regulations state that the payment is meant to be made available when the bill arrives. For those who pay up front, the most appropriate way to achieve parity would be to make the payment as close as possible to the time of the outlay, which was precisely what my Bill attempted to do.

The second objection was that moving the application date forward could cause some people to lose out on the payment. I recognise that that could be a problem, but it is hardly insurmountable. It would be a problem only for the first year of each claim because, as I said, once applicants are on the system, they need not reapply each year, as they receive the allowance automatically. It would be possible, for example, to allow off-grid consumers who miss the earlier date to apply at the later date, but then to be transferred to the earlier date in year 2 to prevent difficulties. If the Government have other problems with an earlier date, will the Minister explain them? If it is just that they do not want to move the date at all, we could keep the September date, and simply allow payment to off-gas grid consumers at an earlier date from year 2.

There is nothing revolutionary about my proposals, which would simply make a minor change to begin to address off-gas-grid consumers’ problems by targeting a particularly vulnerable group. It seems to me that none of the difficulties are insurmountable with political will, but the whole issue of off-grid consumers seems to have been kicked into the long grass as being too difficult. The Bill would not solve all the problems, but it would make a start.

As I said, I have raised the issue on numerous occasions with Ministers in this and the previous Government. My Bill was born out of frustration that nothing had happened, but Ministers did not seem willing even to debate the issue. Although the Bill in front of mine was talked out, my Bill was not allowed to go to Committee so that the issue could at least be debated—it was objected to by the Whips and now presumably will make no progress. I secured this debate in the hope that the Minister will give us some answers about what the Government object to in trying to tackle the serious difficulties faced by this particularly vulnerable group.

--- Later in debate ---

[Steve Webb]

I will not, if the hon. Gentleman will forgive me, as I want to respond to the points made by the hon. Member for Angus.

The hon. Member for Angus wants to ensure that the Government get payments to people. We want to ensure that we do so when we need to. Even with our systems, we do not manage to get the money to everybody before Christmas, although we get it to the vast majority—more than 95%, I think. One way to address his concern would be to bring forward the eligibility date for everybody; for instance, we could bring it forward from September to July. That would achieve his goal of getting the money to the folk who are off the grid when they need it.

The problem is that the vast bulk of people would then get their lump sum in autumn, rather than when the winter fuel bill arrives, which would be to their detriment. Surprising research by the Institute for Fiscal Studies found that because the money is labelled, branded and seen as a winter fuel payment, even though it is just cash and people can spend it on what they like, they are far more likely to use it for fuel bills than other cash coming in. We would be reluctant to move the bulk of payments away from the time when people’s principal bills arrive.

In that case, the hon. Gentleman’s proposition is that we identify a separate category of people who are off the mains gas grid. He said in his remarks that people would have to claim only once. I will return in a moment to the point about the claims process, but we would have to ensure that the data were accurate every year. To give a simple example, when I bought the house that I live in, which is not in the middle of nowhere by any means, it had no mains gas, so for one year we were off-grid. Had I been a pensioner when I bought it, I would have been entitled to early payment. The next year, we were connected to the gas grid. Somebody would have had to know that I was no longer entitled to the early payment. Either I would have had to report it to the Department for Work and Pensions, or the Department would have had to send people into back gardens; I do not know.

We would need a mechanism. Although the bulk of properties would be the same from one year to the next, there would be in-flow. New properties are built off the grid, and properties off the grid would come on to the grid. It is not as straightforward as the hon. Gentleman suggests. It would not be a one-off process in which once someone was in, they would qualify for ever.

[Mr Weir]

I understand what the Minister is saying, but I have two points. First, surely the churn would be relatively low. Secondly, with other payments, it is not unusual for claimants to have to notify the Department of changes in circumstance. Why would it be such a problem in this case?

[Steve Webb]

When the Department’s books are audited, we cannot say, “We think it’s broadly all right in most cases.” We have to make efforts to ensure that we are paying money only to people who are entitled. Although the stock would, as the hon. Gentleman rightly says, be largely the same from year to year, with some in-flow and out-flow at the margins, we have to ensure that the records are accurate every year. We need a mechanism in place to ensure that that is so.

To get this scheme up and running, we would have to identify which of the 12 million households were eligible for it and we would have to invent a claims process—I assume that the hon. Gentleman would suggest that people should be able to make a claim to us—and advertise that. We would then have manually to separate the potentially hundreds of thousands of cases, if not more, and process them differently. We estimate that the running costs to the Department would be several million pounds. It is not a trivial task. Is this the best way to help vulnerable households of the sort that both the hon. Gentleman and I want to help and support?

The hon. Gentleman raised an interesting issue about data on vulnerable households, which we deal with at the moment through the warm home discount. We have a deal with the big energy suppliers, through electricity bills, which helps people who are off the gas grid. We tie up their data, as customers, with ours on pension credit, age, and so on, and send a flag to the electricity companies to say, “This is a vulnerable household. Will you make a deduction at source from the electricity bill?” The figure at the moment is £130 this winter.

[Mr Weir]

I did not particularly mention that issue. Those who get the warm home discount will get it whether they are getting winter fuel allowance on-grid or off-grid. At least one large energy supplier told me that it would be interested in something similar, but because the Energy Act 2010 only allows data sharing with electricity companies, they cannot get hold of that information. Will the Minister at least consider whether it is possible to extend that regulation to gas and off-grid suppliers, some of which are fairly major now?

[Steve Webb]

Yes, I will. Our data sharing with pension credit customers is covered by the Pensions Act 2008, so in principle we can share our data, although we would need separate regulations for a different scheme. I am happy to explore that. If the hon. Gentleman provides me with details of the suppliers who expressed an interest, we could perhaps have a conversation with them. We might be able to do something constructive.

I take the hon. Gentleman’s point that some of the properties that we are talking about are hard to insulate, but I have always thought that far and away the best way to help people who are in fuel poverty is to tackle energy efficiency and wastage. I would far rather pay somebody £200—the winter fuel payment figure—to get their home better insulated, than pay them £200 simply to help them pay a sky-high bill for a house that is poorly insulated. Although some properties in the 1 million, or however many we are talking about, are of the sort that the hon. Gentleman described, many are not. These are important issues. My hon. Friend the Member for Brigg and Goole (Andrew Percy) mentioned his English constituency experience. Many properties are off-grid because of where they are, but they are not necessarily solid-wall insulated, or whatever.

We need to do a lot more. We have set up the energy company obligation, which is specifically designed to ensure that help goes to low-income and vulnerable households to enable them to heat their homes more affordably in the long term and to improve the energy efficiency of their homes. We are now setting up the green deal. The capital costs of home insulation are often quite large, but because of the cost of off-grid fuels, such as liquefied petroleum gas, oil, and so on, people could get substantial saving on bills. Under the green deal, essentially, people take a loan up front for large capital expenditure, but they then have a flow of savings. The golden rule of the green deal is that people are not lent more at the start than will be covered in repayments by savings on the energy bills. That is similar to the hon. Gentleman’s argument about there being a capital cost up front, as people would get their insulation done up front. That scheme might be particularly relevant to the sorts of households that we are talking about, because if their unit cost of energy is high, the savings they get from insulation will be high and the loan will be paid back within a reasonable time.

As the hon. Gentleman says, many people will use budgeting schemes with the larger oil suppliers. A colleague told me recently that they were off the gas grid and bought oil, but paid a flat amount every month. If people are in a position to budget through the year, there is no need for the Government to start moving winter fuel payments of £200 or £300 around a couple of months early. I take the hon. Gentleman’s point that some smaller suppliers might not offer such a scheme.

[Mr Weir]

I understand what the Minister is saying, but although somebody like myself, for example, would pay for my gas or electricity by direct debit and get a lower rate, not everybody is able to do that. Many off-grid pensioners simply cannot afford to do that. That is the basis of this problem and if we are going to tackle it—the same thing applies with green deal—we need to consider whether a pensioner can afford to take out a long-term loan to insulate their house. Probably, they cannot. There are difficulties in that regard.

[Steve Webb]

Perhaps I failed to explain the green deal properly. People can afford to do that, because the green deal only goes ahead if the savings on their energy bills due to insulation more than cover the repayment and debt-servicing costs of the loan. It is not a question of whether they can afford it, because it does not cost them anything. They get the capital up front and they have lower assessed energy bills, because the green deal does not apply unless they pass that test. So even including the repayment on the loan, they would be no worse off overall and they are living in a warmer home.

[Mr Weir]

But are they not effectively creating a larger debt based on their home? Many pensioners will be reluctant to do that.

[Steve Webb]

The requirement to repay is attached to the home, not the individual.

[Mr Weir]

It is effectively another mortgage.

[Steve Webb]

No. Because the home is better insulated than the one next door, the fuel bills are lower. The net effect is the same, except that when the loan is finally repaid people are living in a home with cheaper fuel bills. If I could choose between two properties in a street, one which had been green dealed and one that had not, I would go for the former, because the loan will come to an end and then I will have lower fuel bills than the house next door.