Work Capability Assessments

Nia Griffith Excerpts

Wednesday 1st February 2012 Westminster Hall

[Tom Greatrex]

My hon. Friend makes a very important point. It is no good having someone go to an assessment if the fact that they can sit in a chair or pick up a box and move it once from one part of a room to another means that they are considered able to carry out a task that they may be asked to do repeatedly or continuously in a potential job. That point has been made by a number of organisations that have contacted me about the work capability assessment in the past few days.

I will put to the Minister a few more questions, to which I hope he will respond. They arise from concerns that have been raised by individuals who have contacted me to pass on their experiences of the work capability assessment. Can the Minister confirm whether Atos approved health care professionals are bound by the Official Secrets Act? If they are not, can he confirm whether there are any legally binding conditions, aside from the normal patient confidentiality rules, that prevent Atos approved health care professionals from discussing their experience of the work capability assessment?

As the first Harrington review pointed out, audio recording of the work capability assessment could drive up the quality of assessments by improving assessor and claimant behaviour. Late last year, the Minister advised that he was considering the outcome of the trial in Newcastle of the audio recording of assessments. Will he update the House on when he expects to reach a conclusion on that and whether he will publish the outcome of the trial to ensure full transparency on the issue? He will be aware of the freedom of information request submitted to his Department. Given that many other organisations routinely record their conversations with members of the public to ensure that they are meeting the necessary standards—those organisations range from banks to train companies; I think that even the Independent Parliamentary Standards Authority does it—it should be considered. We need to move on from the trial as quickly as possible. Will the Minister update us on the outcome of the trial?

Individuals who undergo the work capability assessment complete a quality survey to rate the performance of Atos. The survey takes place after the assessment has been completed, but before the claimant is made aware of its findings, which is rather like asking someone for a product evaluation as they leave the shop, before they have had a chance to use the product.

[Nia Griffith (Llanelli) (Lab)]

Does my hon. Friend agree that it is unacceptable that people have to travel 20 miles from the sizeable town of Llanelli to Carmarthen, a local town, where they then find themselves in a lift that does not reach the correct floor, and has a step that leads to a floor without adequate fire escape facilities? Will he ask the Minister what inspections are made of the premises used by Atos with regard to their accessibility for the vulnerable people who have to use them?

[Tom Greatrex]

My hon. Friend makes an important and pertinent point that I hope the Minister will address. It is a real concern if some of the facilities used by people undertaking a work capability assessment are in such a state.

--- Later in debate ---

[Cathy Jamieson]

The hon. Lady makes an important point. I do not think that anyone would doubt that there is pressure on advice services. Organisations for individual conditions, such as Parkinson’s UK or the Multiple Sclerosis Society in my area, will talk about their concern that, although they can help so many people, there are others they cannot reach. I know from my case work that more people are coming to me to raise their concerns. They want to be put in touch with advocacy services to help them with appeals; my office cannot take on the job of representing people at every appeal, on account of the numbers involved.

[Nia Griffith]

Does my hon. Friend agree that, given the evidence we have heard today, and our own experiences, the DWP should seriously consider what to do about people with long medical histories of degenerative disease who are continually called in? It seems a complete waste of taxpayers’ money and it is a disgrace that we do that to those people. Will my hon. Friend suggest to the Minister that we might consider some way to exempt such people?

[Cathy Jamieson]

My hon. Friend makes a powerful case, and I am sure that the Minister is listening. On the point about people with long-term degenerative conditions, another constituent called at my office in great distress, when I happened to be there. The lady could hardly open the door to come in without assistance. She was extremely upset having just had a phone call to tell her she was deemed fit for work. She told me that she had had MS for 20 years. She has poor eyesight, mobility and memory. I was so concerned about her plight that I immediately contacted her GP, who assisted with taking up her case. He subsequently wrote:

“I have today issued Mrs E with a Med 3 for 13 weeks stating she is not fit for work (as she is patently NOT”—

he underlines that—

“fit for work). Like her I have not received any written communication stating that she is fit for work, as I would have expected. She should receive such written confirmation and the way to appeal clearly outlined in that letter. My role is twofold, firstly, to continue to issue a Med 3 (medical statement) and secondly to provide written information for her appeal Tribunal.”

He has done that. I do not think that we can overestimate the stress and worry that that incident has caused my constituent.

Remploy

Nia Griffith Excerpts

Thursday 15th December 2011 Westminster Hall

[Nia Griffith (Llanelli) (Lab)]

I congratulate my right hon. Friend the Member for Cynon Valley (Ann Clwyd) on forcefully making the case to the Backbench Business Committee to secure this debate. The debate has been extremely well attended, particularly by the Opposition, considering the many other distractions on a Thursday afternoon, including an important by-election.

I pay tribute to my hon. Friend the Member for Swansea West (Geraint Davies) for his fantastic work with the Fforestfach factory. He brushes over it lightly, but the work of going out to get all the public procurement, simply from a meeting back in March and in just three months over the summer, to change the situation of having virtually nothing in the order books to having those books absolutely full and going out to big purchasers, such as the national health service and the Driver and Vehicle Licensing Agency, to ensure that there is work for that factory, shows what can be done.

I endorse the comments made by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), who said that there is no divide between the factories and other schemes to help people get into work, and we need both mechanisms. In theory, nothing stops a worker in a Remploy factory from finding a job elsewhere, but the reality is defined by the shocking unemployment figures—an increase was announced yesterday, and further increases are predicted in the new year. Many Remploy factories are situated in unemployment hot spots. In the constituency of my hon. Friend the Member for Rhondda (Chris Bryant), who was present earlier, 20 people are chasing every single vacancy, and I know that many hon. Members have similar situations in their constituencies.

Remploy workers find themselves competing with a whole range of people who have been made redundant from public sector jobs and private sector companies that rely on securing sales contracts, which have been drastically cut, with the public sector. Many in the private sector are not surviving the economic disasters that we are encountering at the moment. All those people are looking for jobs, and people from Remploy factories find themselves in a difficult position, particularly if a large number of them are made unemployed at the same time. I am not patronising Remploy workers, because the same would be true if any other factory in my constituency were to close. If a large number of people with similar skills enter the jobs market together, they will have many difficulties in finding employment.

The key is economic growth. We are currently looking for mechanisms to create more jobs in the private sector, but we have seen little in the way of strategy from this Government. We have not seen an upsurge in the private sector, which is not creating jobs in the way it was supposed to. There do not seem to be any Government strategies for doing so. Where we have Remploy factories, infrastructure, machinery, products and some markets, why are we throwing all that away? It is nonsense. Every individual factory needs to be looked at carefully, and strategies need to be developed for each factory to maximise its potential, so that its products can be marketed properly.

Marketing seems to be key. If the marketing strategy is put right, as seems to be the case in Wythenshawe, Aberdeen and Swansea West, the purchases will come in and the order books will fill up. If we can do that, we can make the factories as viable as possible, and we can help to create jobs. If we do not do that, the on-costs and health costs of people being unemployed will be enormous.

We would do a much better job if we made the factories as viable as possible, while keeping the Government support at a sensible pace. We cannot turn the factories around overnight, but we can make them more economically independent and viable over a period. We would always welcome a mix of workers with disabilities and workers who do not have disabilities. That would bring people together, and we would like to see that mix, which is already happening in many factories. We want viable places, and we want the products that are made to be sold.

That brings me on to public procurement. Assembly Members have a policy by which they purchase their furniture from Remploy factories. I have purchased furniture from Remploy factories for my office. We need much greater awareness. My hon. Friend the Member for Wrexham (Ian Lucas) asked why it has not happened before. Well, it used to happen, when there was a greater coming together of public purchasing. For example, local authorities once purchased everything for their schools together, before they began to have local management of schools and began to buy their own things in different ways. We need to return to the same sort of consortium purchasing, where we look at what is available or to make what is available more obvious. I have learned, even in this afternoon’s debate, of some products I did not know Remploy was involved in producing. There is a lack of awareness, because an awful lot of people just do not know what can be purchased.

[Dame Anne Begg]

When my Select Committee visited the Neath Port Talbot factory, we discovered that it had had full order books, because it had won a contract for Building Schools for the Future, which was, of course, cancelled by this Government. It was beginning to struggle a bit.

[Nia Griffith]

Absolutely. Remploy factories, just as many other private firms, have suffered considerably in the cuts to the construction programmes and Building Schools for the Future, which have kept much of the private sector going when the construction sector has been in absolutely dire times since 2008. That is an important point.

We need to look at public procurement policies thoroughly. We must encourage every single sector in public procurement to look at the whole range of products available from Remploy and conduct specific marketing on that. I am absolutely convinced that we can make the factories more viable by doing so.

Currently, we need continued support and an individual assessment of each factory to ensure that everything is being done to make each factory the best and most viable business possible. We also need a determined public procurement policy to save our Remploy factories.

Unemployment

Nia Griffith Excerpts

Wednesday 14th December 2011 Commons Chamber

[Oliver Heald]

I think that this Government are making a serious, determined and honest effort to help people in very difficult times. The hon. Lady talks as though there is no eurozone crisis and the world is not experiencing the problems it is experiencing, but those problems are out there. This is a difficult time politically and economically, yet this Government are trying to help people.

[Nia Griffith (Llanelli) (Lab)]

Does the hon. Gentleman accept that, in fact, the increase in unemployment in the eurozone has been much slower than the increase here?

[Oliver Heald]

The hon. Lady should talk to young people in Spain, where youth unemployment is very high—as much as 30%, I am told. The same is true in Italy. The fact is that youth unemployment is a European problem that must be tackled in the eurozone and right across the continent.

The Government are concentrating on a Work programme that, after 12 months, gives people individualised help to look at what skills and assistance they need to get them back into work, and that, for the first time, gives the disabled a chance of getting the help they need. That is a good thing. That programme and the youth contract, with its job subsidies and extra incentive payments, are not signs of an uncaring Government.

--- Later in debate ---

[Nia Griffith (Llanelli) (Lab)]

The latest unemployment figures are absolutely shocking: 133,000 in Wales alone; and, in some areas such as the Rhondda, 20 people are chasing every single job vacancy. As we look around our constituencies, we see people losing their jobs because of the Government’s savage cuts to public services, and because private firms that thrived on public procurement are seeing their order books empty. We see people losing jobs in the private sector because consumer confidence is low and demand is down, and we just need to look at our high streets and town centres to see shops closing, including those of big household names and local businesses.

If any programme to get people back into work, such as the Work programme, is going to be successful, and if people are going to have a chance of getting a job, the Government need to get their act together and get a growth strategy—now, before it is too late; now, before any more firms go bust; now, before any more shops on our high streets close; and now, before any more families suffer the scourge of unemployment.

But we see nothing from the Government that will stimulate consumer confidence or demand. On the contrary, we have seen this shameless coalition Government hike VAT up to 20%, despite the fact that just before the election, in April 2010, the Conservatives and the Lib Dems vigorously denied any intention of increasing it. Now, they are ignoring Labour’s calls to cut it.

The Federation of Small Businesses has described the Government’s abysmal attempts at a growth strategy as

“too timid and out of touch with the reality of the UK’s sluggish economy.”

Indeed, back in July the British Chambers of Commerce said that the Government’s deficit reduction plan was

“already dampening demand and adding significantly to the pressures facing businesses and individuals.”

It called on the Government to strengthen their efforts to stimulate growth. Did the Government listen then? No. Are they listening now? No.

We have not seen the long-term strategies or the certainty that firms need in order to invest. Let us take the feed-in tariff fiasco. In my constituency alone, we are losing many jobs, because a new policy has been introduced in only six weeks, just like that, meaning that nobody has the confidence to put up the £10,000 to install solar panels on their roof. What other scheme do the Government have in mind whereby people put up £10,000 up-front to help to secure jobs in their local economy? I do not think they have one other idea.

In Wales we can show Members a better way—the one mentioned in the motion before us is being put into practice by the Welsh Government. The Labour Government in Wales are creating 4,000 jobs a year for young people in the private sector through the Jobs Growth Wales programme; helping to create jobs in the construction sector by continuing to build schools and houses; and helping businesses by making £55 million available in grants and loans to them. The problem, however, is that the Welsh Government are having to do this against the background of UK Treasury policies, which are making it very difficult for any business to flourish. We have a Chancellor who is determined to suck money out of our local economies, making it extremely difficult for local businesses to keep going.

We all know that people on the lowest and most modest incomes spend their money most rapidly in the local community, because they have to for their day-to-day needs, so let us look at a few examples of how the Government are squeezing hard-pressed families and sucking money out of our local economies. First, there is the VAT hike, which I have mentioned.

Secondly, there is the winter fuel allowance. Most pensioners, certainly in Wales and in many unemployment hot-spots across the UK, are not millionaires but need that £100, so they are transferring money that they would have spent in the local economy and putting it by to pay for their fuel. That money is leaving the local economy, with the economy in Wales alone losing some £31 million.

Thirdly, we have real cuts dressed up as freezes, such as those on public sector pay and on child benefit, and they are translating into money that people do not have to spend in the local economy. Fourthly, the 3% hike in pension contributions is taking £2.8 billion out of the economy; and fifthly, tax credits are being taken away from people who work less than 24 hours a week. But people just cannot, unfortunately, get those hours, and they are from some of the very poorest households. They are trying to work and to keep the family together, yet they are going to have even less money to spend and less money to stimulate the economy, so there are going to be even more job losses. The Government must do something now to put that right and get growth going.

Benefits Uprating

Nia Griffith Excerpts

Tuesday 6th December 2011 Commons Chamber

[Steve Webb]

I am grateful to the hon. Gentleman for welcoming our decisions on the DLA mobility component. Clearly, the decision on CPI was taken in a fiscal context. However, it came after RPI was negative and CPI was positive, so the immediate context was a year in which state earnings-related pension schemes and public sector pensions had all been frozen. I certainly could not believe that there had not been any inflation, and I am yet to meet a pensioner who could.

[Nia Griffith (Llanelli) (Lab)]

As we all understand, with rocketing fuel and food prices these rises are not as generous as they look. Has the Department assessed the impact of the £100 cut in the winter fuel allowance, combined with the fact that those on low incomes spend a lot of money on food and fuel? People will actually be worse off, particularly those with an income that puts them just above the bracket for claiming the cold weather payment.

[Steve Webb]

It was entirely right that we went ahead with Labour’s planned cut to the winter fuel payment. We reversed the cold weather payment cut to prioritise the most vulnerable when it is most cold. I make no apology for that. It was important to put the full 5.2% through for people with no wage because of the pressures on household fuel bills and other costs. That is why it was vital that we stood by the most vulnerable even though money was tight.

Living Standards

Nia Griffith Excerpts

Wednesday 30th November 2011 Commons Chamber

[Guto Bebb]

The VAT rise is a fair point. That is possibly 2p, but we have seen duty frozen—11p, in effect, off the price, and frozen for 19 months. When the previous Administration were in power, we saw fuel duty increase by 20p and I did not see any Labour Members express any concern for those living in a rural area such as mine, where people have to travel 20 miles to get to the supermarket. This Government listen. They listen to the concerns of the elderly and of people in rural communities.

[Nia Griffith (Llanelli) (Lab)]

Will the hon. Gentleman give way?

[Guto Bebb]

I have already taken two interventions.

More importantly, this Government know that the way out of the situation that we inherited is to champion self-reliance and enterprise, and to say to people in Wales, “Back in the 1980s we were creating more businesses than any other part of the United Kingdom. We had more new VAT-registered businesses than any other part of the United Kingdom.” I have confidence in the people of Wales. Unfortunately, the past 13 years have been wasted, but with this coalition Government, we will see change and we will see growth.

[Ms Margaret Ritchie (South Down) (SDLP)]

I support the motion before the House and I want to bring to the debate the perspective of a rural constituency in Northern Ireland.

There is irrefutable evidence that families, young people, the elderly, low to middle income earners and those in receipt of benefits have all found themselves squeezed, have less money to provide for essentials for daily living, and justifiably feel that they have been unfairly treated by the coalition Government. They also feel that the Government have removed the sense of fairness and equity from their vocabulary.

Proposed punitive regulations and legislation surrounding welfare reform will make the situation worse, making it more difficult for people to access benefits. At the same time they will be unable to obtain jobs. Although the concept is laudable, the jobs are not there because of the economic recession. The spectre of emigration therefore looms again, this time to Australia and New Zealand, and many small rural communities have found that young people who should be making a contribution to the economy through self-help, through the private sector or through the public sector, have simply gone away.

Added to this, the increases in fuel prices are leading to deepening fuel poverty, and the rising cost of motor insurance, particularly in Northern Ireland where it is more acute, prevent many young people from making themselves available to work where a requirement to drive is a pre-requisite on the job application. Levels of youth unemployment have risen, so child poverty has deepened. Levels of deprivation and disadvantage have deepened. We must not let the Government condemn us. We believe in self-help and in collaboration, and we have done that. We have developed our assets to their full potential but still that has not been enough because of the Government policies, which have been an onslaught on our rural economy, particularly in areas such as Northern Ireland where deprivation is at its most acute.

Against that background, we had the Government’s autumn statement yesterday. Although parts of it may be welcome, there are areas that require clarification. They centre on the cap on public sector pay, the rise in state pension age that goes with it, and the need for spending commitments to be fully subject to the Barnett consequentials. There is no doubt that in the face of the mounting economic recession, the 1% cap on public sector pay, following on from the current freeze, is derisory and unacceptable. It will prove highly controversial in a place like Northern Ireland, particularly in the light of today’s strikes.

[Nia Griffith]

Does the hon. Lady agree that not only will the cutting back on public sector jobs affect young people’s opportunities, but the 3% tax—the £2.8 billion that the Government hope to raise from the increase in pension contributions—will suck money out of the economy across the UK and drive families into poverty?

[Ms Ritchie]

I do agree. In fact, we were the only party in the Northern Ireland Executive that voted against the hike in pensions, which we found totally unacceptable because it will impact on the most vulnerable in our society.

We would also like to know what the Barnett consequentials for the devolved Administrations will be in relation to the announcements in the autumn statement of the £16 billion youth contract and the £400 million for house construction projects.

I and my party colleagues support this motion because it clearly highlights the deepening problem of poverty right across Northern Ireland and because we support our colleagues in the Labour party in Britain.

Pensions Bill [Lords]

Nia Griffith Excerpts

Tuesday 18th October 2011 Commons Chamber

[Lilian Greenwood]

The Minister may feel that he has heard my speech before, as we discussed his Government’s plans to accelerate the rise in state pension age at some length in Committee. However, as he did not fully address the points I made then, I make no apology for making them again.

My constituent, Lorraine Smedley, e-mailed me on Friday asking if anything can be done even at this late stage. The answer must be yes. The Minister can still change his mind; he can accept our amendment that would ensure that no one would wait more than an extra 12 months to receive their pension. Also, if he chooses not to listen, Members on the Government Benches can still decide to join the Opposition in the Lobby tonight. I hope they will do so, although the contributions we have heard so far suggest that they will not.

Members who were not fortunate enough to serve on the Bill Committee will not know about my constituent Lorraine, so let me explain why she is so angry about the Government’s plans. Lorraine worked for the national health service for many years, but, having put aside some savings, she decided to take a part-time job as she moved towards her expected retirement date. She had worked out that she could supplement her part-time wage until her retirement. She told me:

“I thought I was close enough to my retirement age to know where I stood.”

Even with the Government’s welcome concession, Lorraine is still being asked to work for an extra 15 months, and she says she does not know what to do. Working those extra 15 months before she receives her state pension is not a prospect she relishes. Her job as a community care assistant is demanding, both physically and emotionally, and she is not sure that she will be able to continue; and with the cuts in public service spending and public sector jobs, she may not have a job anyway. The prospect of claiming benefits is anathema to Lorraine. She was determined to pay her own way her whole life, and having left school at 16 and paid into the state pension pot all those years she feels that she should not have to rely on benefits now.

Lorraine’s case highlights the two reasons why the Government’s proposals are unfair. First, they do not give women adequate notice of the change. The Minister has sprung these changes on women in their late 50s without giving them a realistic time scale in which to make preparations for the loss of pension payments that they have earned and expected over many years. In 1995, the then Government legislated for the equalisation of state pension ages. Women who were expecting to retire at 60 learned that they would have to wait until they were 65 to do so. They may not have liked it but they had many, many years to adjust. Yet that same group—those same women—who knew that they would have to work or wait for an extra five years for their pension, are now being asked to accept a further rise of more than a year with just five or seven years’ notice of the change.

The second reason why the Government have got it wrong is that the changes lead to one group being asked to bear an unfair share of the burden. According to the Department’s impact assessment, the proposals in the Bill affect about 5 million people—2.3 million men and 2.6 million women. About 4.5 million people will have their state pension age increased by a year or less, and their position is unaffected by the Minister’s last-minute amendment. An estimated 500,000 people, all of them women born between 6 October 1953 and 5 October 1954, will still have their pension age increased by more than a year. Some 300,000 women will experience an increase of exactly 18 months. No man will have to wait more than 12 months extra to receive his pension. How is that fair?

I accept that there has been a significant upward revision in the life expectancy of those reaching 65 over the next decade and that those benefiting from increased longevity should share in the costs. As we live longer, we need to pay more towards our income in retirement and/or work longer. The women like Lorraine who have written to me do not disagree—they understand that they may need to work longer—but they think that they should pay a fair share. The Minister did not explain in Committee so I hope he will explain now how it is fair that those 500,000 women have to pay a bigger share than anyone else, particularly given that we also know that they, as a group, are not well-equipped to bear a greater share of that burden.

As my hon. Friends have set out, these women are less financially secure than men and are much more likely to be reliant on the state pension. If they do have savings for their pension, those are likely to be much less than those of men. These women are likely to have taken time out of the labour market to care for children, thus affecting their contributions record and their salary level. They are likely to have worked part-time and to have been excluded from an occupational pension scheme until the 1990s. The Department’s own figures confirm this: the median pension savings of a 56-year-old woman are, as has been said, just £9,100, whereas the equivalent figure for men is £52,800, which is almost 600% higher.

Although, like Lorraine, I welcome the Minister’s amendment, it just does not go far enough. Women should not bear an unfair burden, which is why I support the Labour amendments. They would mean that 1.2 million fewer people would have to work longer and would ensure that nobody would be asked to work more than 12 months extra to receive their pension.

[Nia Griffith (Llanelli) (Lab)]

To be perfectly honest, it is disgraceful that the Government are not giving these women enough time to plan their retirement properly and it is clear that the changes that the Government are now proposing do not remedy the situation that they got themselves into with their initial proposals. It is wrong that women who have worked hard—doing all sorts of things, not necessarily paid work—for many years are now being denied their well-deserved pension for an extra 18 months with so little notice.

Nobody is denying the demands of longevity and the fact that we have to think ahead. However, we have to plan ahead properly and in a structured way. That is why in 2008 Labour legislated that the state pension age would become 66 by 2024 to 2026. That time scale was set out to give people 16 to 18 years in which to plan. As hon. Members will recall, the Turner report recommended a minimum of 15 years’ notice for any changes in the pension age and that is a very important point to note. Obviously the Government have brought that forward significantly, leaving many women with very little time in which to plan for a delayed retirement. Some 500,000 women will have a delay of up to 18 months before they get their pensions and about 330,000 women will have a delay of a full 18 months. The Government are determined to introduce this change, despite the fact that before the election we were given promises by both the Conservatives and the Liberal Democrats that there would be no change before 2020.

The particular women that we are talking about are the most vulnerable. Those who depend most on the state pension are those who have the lowest incomes, those who have perhaps had the least opportunity to make contributions and those who have worked in the least well-paid jobs. As has been clearly expressed by my hon. Friends, women are far more reliant than men on the state pension because their pension pot is usually very small. Very often they have been limited in the opportunities they have had in this regard. They may have taken years out for child care, limited themselves in order to be able to pick up their children after school or limited themselves by geographical location. Often this group of people are enabling their own sons and daughters to work and have a decent income for their families by providing very valuable child care for the grandchildren. We often refer to these women as the “sandwich generation” because at the same time as they are looking after those grandchildren they are often coping with their own elderly parents.

Of course, these women are often more vulnerable to the cuts. An enormous number of cuts are being made in all sorts of jobs, in not only the public sector, but the private sector. The Government’s growth strategy is clearly failing, and often it is not just the lack of public procurements, but the lowering of income levels in the whole of a region or town which is making it harder and harder even for private businesses to flourish. Women are often doing more casual work or are working part-time, and as they are the ones who have often come latest to the jobs they are often the ones facing redundancy. It is often extremely difficult for older women to find new posts, particularly in areas with geographical limitations or not very good bus services, and if they need to be back to collect the grandchildren from school.

A number of these women are widows. My right hon. Friend the Member for Croydon North (Malcolm Wicks) has clearly explained the demographics and set out the number of men in certain groups who die young. Some 19% of men in certain social categories die before the age of 65, many of whom leave widows and they, like other groups, are not best placed to face the difficulties of trying to keep house and home together in difficult financial circumstances. If they do not receive their pension until a certain age, they will be losing not only the state pension, but pension credit and the various concessions and entitlements that are limited to people of state pension age.

If there were a genuine growth strategy, the argument about freeing up jobs would not be valid, because as more jobs are generated people who stay in work longer have more money to spend and so it is easier to create more jobs that younger people can take up. When there is no economic growth and the spiral is downwards, there is more bed-blocking—or job-blocking—whereby older people staying in work makes it more difficult for youngsters to get started.

So although Labour Members welcome the fact that the Government have made something of a concession, we are very disappointed that it is only a half-measure. In fact, it is nothing but window dressing. It is the sort of Christmas present that is wrapping with absolutely nothing inside—an empty cardboard box with some paper round it. The correspondence that I have received indicates to me that my constituents are not fooled by it and are worried that they will still be facing much of the same difficulty as they were with the original proposals.

I shall support the amendments tabled by those on my Front Bench to ensure that we try to give the maximum number of women the maximum amount of benefit that we can, rather than the Government amendments, which are, quite frankly, laughable. They are a disgrace because they do not address the main thrust of the problem and they leave a lot of women with a large gap and very little time in which to work out how to deal with it.

Post Office Card Account

Nia Griffith Excerpts

Tuesday 24th May 2011 Westminster Hall

[Nia Griffith (Llanelli) (Lab)]

I congratulate the hon. Member for Truro and Falmouth (Sarah Newton) on making an excellent opening speech. She outlined the history of the Post Office card account very clearly, but she also showed that she is way ahead of many other hon. Members in thinking about 2015 and the fact that in order to secure the future of post offices any incoming sub-postmaster will immediately ask, “What will be my income in five or 10 years from now?” They see no hope of any inter-business agreement coming through, as a result of the privatisation of the Royal Mail; very disappointingly, such an agreement has not been enshrined in legislation. Consequently, they will ask, “Well, what of the promise that the post office will be the shop front for Government business? What is going to come of that promise?” So it is very timely that the hon. Lady has secured this debate today.

Labour first introduced POCA as a measure to boost financial inclusion. It was designed to give people who had perhaps always dealt in cash an opportunity to collect their pensions or benefits from their local post office. Indeed, by 2008 4.5 million people had a POCA, of whom 30% had no other bank account. Obviously, therefore, the future of POCA is vital for that particular sector of the population.

Those of us who were here in the last Parliament will remember the box-loads of cards that came in begging us to lobby to keep POCA and to have it extended beyond the finishing date of its first phase, which was 2010. Obviously that renewal of POCA was made by the last Government. They put in place the present arrangements, which will run until 2015. Now we need to look towards 2015 and consider what will happen next.

As has been pointed out, the Royal Mail Group used to earn about £195 million annually from POCA. That figure has now dropped to about £135 million annually, but the income from POCA is still a very significant source of income for post offices. Furthermore, it is not necessarily very evenly spread and therefore some post offices will be disproportionately hit if a lot of Government business is withdrawn from the network.

POCA is important for consumers because it was part of the last Government’s financial inclusion plan. It exists so that customers can obtain their benefits or pensions if they cannot use or do not wish to use any other kind of banking account. It allowed account holders or a nominated helper to withdraw cash free of charge at any post office branch using a plastic card that could not be used for other purposes. It also meant that the problem of people getting into debt, and all the difficulties associated with some types of account, were avoided. The important thing now is to say, “Where do we go next?”

In its 2010 manifesto, the Labour party made a clear commitment to a people’s bank with a full range of competitive, affordable products, and the hon. Member for Argyll and Bute (Mr Reid) mentioned that there was a commitment in the coalition agreement not only to an enhanced Post Office card account but to a people’s bank. The Minister himself stood on that manifesto for a people’s bank, so what is happening about it? Why have we not yet seen any steps towards creating any sort of additional banking services in the Post Office? I hope that the Minister today is able to tell us something about the plans, because at the moment it looks very much as if that coalition promise has been broken. There is no plan for any form of people’s bank at the Post Office, and we do not yet know what sort of enhanced services the Post Office card account will have—perhaps the Minister will enlighten us.

[Richard Graham]

The hon. Lady glosses over a bit of the history of the Post Office card account. My memory is pretty clear that in 2007 the account was put out to tender and that by the beginning of 2008 it was clear that the tender would not be given to the Post Office. The previous Government changed direction only in November of that year, after an enormous campaign that showed the unpopularity of the suggestion.

The hon. Lady is right that in March—I think—of last year, the Government started to recommend that the Post Office card account be extended to cover other financial services, and that her own party’s manifesto included more of the same, but that does raise the question of why, after 13 years in government, her party took so long to arrive at some proposals for extending the account. It would be fair to say—I hope that she agrees—that this Government have made substantially increased commitments. The question, however, which she rightly raised, is how we will take forward those commitments to using post offices as the front office for more Government work.

[Nia Griffith]

It was indeed decisive action by the Labour Government in late 2008 that ensured that the contract went to the Post Office. My question here, however, would be, “What has happened to the green giro?”

I refer the hon. Gentleman back to the letter, with which I am sure the Minister is familiar, that George Thomson wrote to the Secretary of State for Work and Pensions in September. It contained a list of ways in which he thought further Government business could be put the way of the Post Office, including, among other ideas, assisted applications for all benefits, assisted benefit withdrawals, signing on, payment in cash and various housing benefit validations. He obviously wanted to discuss in detail with Ministers in the Department for Work and Pensions his ideas about the Post Office becoming a front office for DWP business—the DWP is probably the Department that would most use the Post Office. Instead, however, what do we find? We see the green giro awarded elsewhere, and that is a very significant blow for the Post Office.

[Mr Reid]

Yes, it is a blow to the Post Office, but the hon. Lady must recognise the part that her Government played. It was that Government who put out the contract and wrote the specification, and if it had specified a widespread rural network, the Post Office would have won the contract.

[Nia Griffith]

What we want to know now is what the Government will do about securing more Government business for the post office network. It is absolutely clear that unless there is more business, the worrying situation of hundreds of post offices being temporarily closed—for months, or two or three years—will continue. Post offices are closing because it is extremely difficult to identify people who want to take on a sub-post office. They want to see guaranteed income, but instead they see much less security in what they will get from Royal Mail in the future, both because of the drop in the volume of postal items and because there is no guarantee in the Bill currently going through Parliament of any definite business from Royal Mail for the post office network after privatisation.

[Richard Graham]

The hon. Lady is, of course, absolutely right that the risk at the moment is different from what it was. The risk under the previous Government—the reality, in fact, not the risk—was the Government-led closure of some 8,000 post offices across the country. The risk today is that the network of 11,500 post offices that remain after the Labour closures programme could be weakened—she is quite right about that—if sub-postmasters either retired and no one took over or if they decided that the business was so unprofitable that they had to give it up, again with no one prepared to take over. I must point out, however, that that risk is a very different one.

In Kingsholm in my constituency of Gloucester, a profitable post office was closed. The sub-postmaster was one month short of having served 25 years and wanted to continue in the job, but my predecessor as MP and his Government closed the post office. Under this Government, a post office closed in Quedgeley when the sub-postmaster decided to give it up, but after a while a new sub-postmaster was found and a new post office opened, with the support of Post Office Ltd and the Government. The hon. Lady is right that there is a risk, but it is not the same, and it is much smaller.

[Nia Griffith]

The hon. Gentleman conveniently forgets that although about 8,000 post offices probably met the previous Labour Government’s access criteria we kept 11,500 open, and put in a £150 million subsidy each year to do so. He was very lucky that a new sub-postmaster was found for Quedgeley, but in my constituency, and those of many Members, post offices have remained closed for much longer, and the real difficulty will be in enticing people to take on the businesses if they cannot see a viable future in them. I am so grateful to the hon. Member for Truro and Falmouth for securing the debate today, because the Post Office card account will be a key part of that viability.

[Alex Cunningham (Stockton North) (Lab)]

I was absolutely delighted this week to receive a letter from the Post Office saying that it is reopening a post office in Port Clarence, a community in my constituency. That has been made possible by the local authority, voluntary organisations and the local community working together. Is there not that wider responsibility on a whole community, even though the Government also need to be in there to ensure that things happen?

[Nia Griffith]

Indeed. It is very much a partnership, and where that can happen, all to the better, but a key part of that partnership is the Government business, which is what we are talking about today.

I hope that the Minister is able to shed some light on what the Government mean by Government front office. What is the additional business that they hope to give to the post offices? What is the enhancement of the Post Office card account that they can offer at this stage, and what is the future for the account after 2015? Without that security and that business coming into the post offices, it is very difficult to see how we will encourage new entrants to take on post offices, particularly in areas where there is little opportunity to do much else in the post office, because they are very small, for example. Sometimes there is little else in the village that would offer people the opportunity to get enough money just to pay the milkman or the fish van that comes round. I have constituents who cannot get the cash they need for very small, simple, everyday transactions without a local post office. It is absolutely vital, therefore, for the future of the Post Office that we get that Government business, and I hope that we will hear how the DWP will contribute to that and, in particular, what its views are and its plans for the future of the Post Office card account.

--- Later in debate ---

[Steve Webb]

Before the hon. Gentleman seeks to intervene, I should say that, when I said the United Kingdom, I thought that I was including Northern Ireland.

There are a lot of common threads. Any community-minded constituency MP will echo much of what has been said this morning. My own constituency is a mixture of market towns and villages, most of which, notwithstanding the series of cuts over the past year, either have sub-post offices or, in some instances, have reopened them as community ventures—community shops, co-operatives and so on. I think that we all share that commitment to the post office network.

My hon. Friend the Member for Gloucester (Richard Graham) is absolutely right to say that, although money is tight, the Government should prioritise spending on the post office network. I encourage him to think about which Government Department identified £1.34 billion for the post office network, and about the other spending issues that that Department faced that raised some political issues. He will recall that there were other calls on the Department’s money, yet it prioritised the post office network, because we are about not just words, but deeds in relation to that. To be clear, in return for that £1.34 billion, Post Office Ltd must maintain a network of at least 11,500 branches and continue to adhere to the strict access criteria that mean that 99% of the population live within three miles of a post office.

[Nia Griffith]

Does the Minister agree that, under the previous Labour Government, it was £150 million per year and that that went up to £180 million per year in the last year in which we were responsible for setting the subsidy? That is half of what the present Government are giving to the post office network, and it was sufficient to keep open those 11,500 post offices. Why on earth has such a large amount of money been given to the Post Office when it would be far better to create the streams of business that make post offices viable and sustainable for good, so that they do not need that type of subsidy? I find it very difficult to understand why doubling the subsidy is the best way forward when making things viable would really be the best way forward.

[Steve Webb]

I could not have written that question better myself. Why is it necessary to double the subsidy to keep the post office network going on a viable basis? Because so little was done over the past 13 years to make the post office network sustainable. That is precisely why we have had to put temporary subsidy in while we get the Post Office back on its feet.

I shall quote from the Department for Business, Innovation and Skills document, “Securing the Post Office Network in the Digital Age.” On the very point that the hon. Lady raises, it states:

“Senior management at Post Office Ltd… estimate that without action and modernisation”—

how much of that happened?—

“keeping the network operating at its current size would result in the annual subsidy required from taxpayers rising from £150 million this year to £400 million by 2016—and would carry on climbing.”

That is the legacy. That is what would have happened had we done nothing. I sense, Mr Hollobone, that you are not a great PowerPoint fan, but it is at such moments I wish we could have a screen and slides because I would simply refer hon. Members to chart 3 of that document.

I will point that document in the direction of Opposition Members because it shows that the long-term gradual decline in the post office network is partly because of demographic trends—sub-postmasters retiring and not being replaced—and partly because, during the 13 years of a Labour Government, the number of post offices has fallen off a cliff. During the two closure programmes between 2003 and 2009, 5,000 branches were closed. People have stood in this place and in this Chamber for the past 13 years pleading loyalty to the post office network, yet those were the people who carried out two massive closure programmes.

[Nia Griffith]

Does the Minister not agree that the fundamental reason for the Post Office’s loss of business is the complete revolution in how we correspond with each other? Personal letters were of immense importance 20 years ago, but the growth of the internet and so on is clearly the main factor in the reduction in the amount of mail business going through post offices. That is the be-all and end-all and the real reason for the existence of many post offices, in addition to what Government business they can do.

[Steve Webb]

The reasons for the decline of the post office network are many and varied. When I go to my local village post office, I am told that eBay is keeping it going. The fact that people buy postage for parcels and so on brings a whole range of different customers into the post office network. One of the biggest trends, which was accelerated by the previous Government through direct payments, was people being paid via their bank accounts, rather than by traditional giros at post offices. That was one of the single biggest changes that accelerated the demise of the post office network. Opposition Members ought to take just a tiny bit of responsibility for the trends that we have seen.

On the Post Office card account specifically, the perspective of POCA users has been missing from the debate. The Post Office has recently published some startling research that it undertook on what POCA holders wanted from the account. The Post Office talked to 930 people and asked the following about the POCA:

“is there anything you would change about it, for instance any additional services you would like it to provide?”

Some 80% of respondents said “nothing.” I will return to that significant point. Some 80% of respondents did not want any changes to the account and they valued POCA for its particular characteristics, which we should think carefully about changing. The next most popular answer to that question had a 4% response rate. I shall read down the list of things people would change about POCA, which have a response rate of between 4% to 2%:

“deposit/cash cheques into it; more cashpoints; use any ATM; comments relating to PO service in general; more flexible like a debit card; interest on account balance; online account access.”

Hon. Members will have noticed that direct debit is not on that list. Some of these issues are counter-intuitive. I will not say that I like nothing better than to go online to use my bank account—which, I should just add, I access at the post office—but the folk who use POCA value it for what it is. As a number of hon. Members have said, we need to ensure that the people who have POCAs can benefit from things such as direct debit. However, that may not imply sticking things on to POCA.

Why might it be a good thing to provide access to those services but not to do so through changing the POCA? It is striking that many hon. Members have said that 30% of people with a POCA do not have another bank account. However, I tend to think of it the other way around. Some 70% of people with a POCA have a bank account or some other sort of account. So why do they have two? If they have a bank account with direct debits and all the rest of it, why do they bother having a POCA? Because people like to budget in different ways and they like a simple account that cannot go overdrawn.

Some of the evidence on charges is startling and worth repeating. I have been known occasionally to go overdrawn without planning to and I am shocked when I see the charges. The evidence of what happens shows that most people do not simply face one charge in a year. Once things have gone wrong, the charge is debited. People are then more overdrawn, they perhaps do not notice it and so another charge goes on. Just to give a feel of the situation, in 2008, out of 12.6 million active bank accounts, about a quarter incurred at least one penalty charge and the average charge was £205. Of that 2008 sample, a quarter of people had one charge, 15% had two charges and 39% had at least six charges.

Hon. Members can start to see why such an overdraft facility—there might also be a situation where someone had a POCA that could not go overdrawn but a direct debit bounced and somebody somewhere had to pay a charge for that—is not necessarily what people are asking for. People do not want to pay more because they are on a low income, so we need to find ways of giving them access to the best prices. However, grafting the ability to use direct debit on to an account that people like because of its simplicity may not necessarily be the best answer.

I absolutely stand by our coalition agreement commitment. The coalition programme for Government includes a pledge to give POCA holders the chance to benefit from direct debit discounts, but that should not necessarily be done by grafting direct debit on to POCA. We have listened to what the account holders are saying to us and our impression is, yes, people want the best prices they can have, but not necessarily by taking a product they value and turning it into something else.

That brings me on to the point my hon. Friend the Member for Truro and Falmouth made about the fully transactional account. One of the problems with the fully transactional POCA is that it would be so different from the product that was originally tendered, we would have to retender. The postcards will probably go to the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), but I have a feeling we might be going through it all over again. The comment rightly made by the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) was that there is uncertainty about the future. There always is. If we said that we need a full transactional POCA, so we are going to retender for it, I suspect that there would be riots on the streets of Kilmarnock.

We do not want more disruption and uncertainty. What we want—and as a Government what we are trying to do—is to work in partnership with the Post Office far more. Rather than those involved with running post offices being people to whom we do something, they should be in here as people we do something with. That is a profoundly different approach. The hon. Member for Leeds West (Rachel Reeves) talked about joined-up government and different Departments not damaging the Post Office. The Department that springs to mind is the Department for Transport. I renew my car tax each year at my village post office because, having talked to the sub-postmistress, I know it is one of the biggest transaction charges it gets. The Department for Transport would rather I did not do so. It sends me letters that say, “Do it online—you don’t have to go to your post office.” One year, it had a prize draw—or a raffle or lottery—in which I could win a free car.

The fact that Departments are not working in a co-ordinated way on the Post Office is not new. I work closely with the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton, and the Financial Secretary to the Treasury. The three of us have discussed financial inclusion issues, particularly credit unions. The post office network and credit unions could work together. There are exciting possibilities on that. One of the challenges is that, although credit unions are often very good and strong in a localised way, there are some very small credit unions and, in large parts of the country, if we asked someone on the high street where their nearest credit union is, they would not know what we were talking about. The potential for linking post offices and credit unions and access is very exciting, but it is also very expensive. That is the trade-off and the challenge.

We do not want credit union accounts with hefty charges because that would defeat the object of the exercise. We are wrestling with how to bring those two things together, but there are real opportunities for the post office network to build closer links with credit unions. In recent years, credit unions have made great progress in bringing affordable, financial services to people who would not otherwise be able to access them. I want credit unions, in partnership with the Post Office, to provide more services more efficiently to more people. That is what we want to see.

I was asked about the Post Office as the front office for Government. A number of Government Departments are looking at ways to do that, and I want to share briefly with the Chamber some measures that the DWP is taking. The hon. Member for Llanelli (Nia Griffith) mentioned George Thomson at the National Federation of Sub-Postmasters, who wrote to the Secretary of State. I am delighted to say that, in response to that letter, the Secretary of State had a face-to-face meeting with George Thomson. Several points that she read out, and which were on his list, are now being piloted in Government.

For example, a pilot for document verification started last week. The Pension Service, for which I am responsible, is piloting a check-and-send style service. That is for applicants who claim state pension or pension credit, and who are required to submit additional documents in support of their claims, such as birth or marriage certificates. Many people do not like sending their marriage or birth certificate in the post, so why not go into a post office and let post office staff check the documents, as they do when people renew their car tax? Post office staff could say, “Yes, that is fine; I have seen it. I am authorised to say that.” That would be quicker, and would give the Post Office revenue and footfall—everybody would be happy. That is not a—I do not think the word “piddling” is parliamentary—little pilot. Some 106 post office branches in the north-east of England are involved—a big pilot. It started last week and will run for three months in the Seaham pension centre catchment area. It will include a mix of Crown branches in urban, urban deprived and rural locations.

That is one concrete example; let me give the Chamber another. Later this year, we will be looking at a national insurance number pilot, which will investigate whether applications from what we call low-risk groups—EU citizens in states that are already members of the EU, not including the accession countries—could be directed to the Post Office for the evidence-gathering interview to get a national insurance number. Although the Post Office currently carries out document checking for the Driver and Vehicle Licensing Agency and the Identity and Passport Service, the DWP requires something qualitatively different. We are working closely with the Post Office to see if we can have an efficient but secure service, and hope to go live with the project later this year.

We want business in post offices, but we do not want dirty great queues. In other words, if I am queuing up to buy a stamp, I do not want someone in front of me trying to verify a national insurance number. We have to try to think of what post offices are good and efficient at, and harness that without disrupting the core business of the post office. That is why we are conducting these pilots.

The hon. Member for Llanelli mentioned signing on. In rural areas, getting to a jobcentre can be quite a trek, so why not sign on at the post office? At the moment, I was surprised to learn that customers in rural areas, intriguingly, sign on by post. The pilot will test whether there are benefits in requiring customers to attend and sign on in a local post office instead. We will evaluate that approach across a wide geographical spread and range of labour markets. We have identified test locations in Essex and in the highlands and islands—a range of areas.

Youth Unemployment

Nia Griffith Excerpts

Wednesday 16th February 2011 Commons Chamber

[Nia Griffith (Llanelli) (Lab)]

Does my hon. Friend agree that, right in the middle of a recession, the whole point was for the public sector to provide some of those jobs—in construction, for example—to keep people’s skills up, ready for when the private sector picked up?

[Michael Dugher]

My hon. Friend is exactly right.

Those 2,000 private sector jobs in my constituency are coming from ASOS, the online fashion company—I do not see too many takers in the Chamber for its clothes, but we live in hope—but those jobs did not happen by accident. The reason 2,000 jobs are coming to my constituency is that when Labour was in government, we built the facilities that will house those jobs. We built the road that attracted the company in the first place. The public sector plays a big part in supporting private sector jobs.