Universal Credit: North-West

Nigel Evans Excerpts

Wednesday 13th January 2016 Westminster Hall

[Yvonne Fovargue (Makerfield) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Nuttall. I congratulate my hon. Friend the Member for St Helens South and Whiston (Marie Rimmer) on the eloquent way in which she put the concerns of her constituents—indeed, all our constituents—about universal credit, particularly the changes to the working allowance, which will disadvantage working people. That bears saying once more. Such people are taxpayers. There are not two groups—people who pay tax and people who get benefits—because people move in and out. They pay tax and they deserve support, but they will lose money. Some 20,000 people working full time in my constituency will lose money by 2020. That is appalling.

However, as I represent a pathfinder authority, I want to move on to the difficulties caused by the universal credit roll-out and the lessons we can learn to make sure that it goes more smoothly in the rest of the country. Call me cynical, but I worked in the Citizens Advice Bureau from 1986 and I saw the change from supplementary benefit to income support. We now have universal credit. The aim was always to simplify, not to make things more complicated. The basic fact is that people’s lives are not simple. Lives are complicated and a system has to be devised that deals with the complications and issues that people have at different times of their lives. Certain problems with universal credit have been highlighted in the roll-out, such as the mismatch in budgeting periods and the six-week universal credit waiting period. I take issue with what the hon. Member for Weaver Vale (Graham Evans) said about everyone who is in work being paid monthly. In fact, only half of low-paid workers are paid monthly. Many are paid weekly or fortnightly, so they do not have a cushion to rely on when they first claim universal credit. Anyone who is paid weekly will have one week’s money to manage on for five or six weeks.

There is some difficulty in claiming advance payments, and people are loth to do so. We have seen a rise in debt of 42% over the past six months. People go to payday lenders and suchlike to cover that period of time. There are other delays, without the additional delays in receiving payments. According to the Citizens Advice report, three in 10 have experienced a delay of more than a week beyond the standard five weeks. One in 10 wait more than nine weeks and some wait four months, owing to administrative problems. I accept that things go wrong, but we can look at what happens when things go wrong and at how we can improve that for people.

Confusion about the council tax reduction needs to be looked at, but the major effect of delayed payments has been the increased use of food banks. My local food bank, the Brick, has reported that the majority of people visit because of sanctions and waiting for universal credit—that includes people who are in work. That is a key finding of the survey, which found that 80% have difficulty paying essential household bills such as rent and utilities during these periods. Wigan and Leigh Homes has said that rent arrears have gone up since universal credit came in. People do not realise that they are getting all their money, which is another issue. Many people have been pushed into debt simply because of universal credit.

My local citizens advice bureau reports a much greater level of debt among universal credit claimants compared with the claimants of the past legacy benefits. Some 63% of people say that they have difficulty buying food and feeding their families—a basic human need—which means that the rise in food banks is related in some way to universal credit. I do not think that that can be denied.

I remember claiming a benefit when my husband walked out on me and I had a young child. The whole situation was appalling. I went to the Benefits Agency and felt pretty bad at having to claim benefits. If I had had to go to a food bank as well to feed my family, how would that have incentivised me at that particular period in time to seek work? I was fortunate. I managed to find work within three months, but if I had had to rely on a food bank and wonder where the next meal was coming from for me and my daughter, I am not sure I would have been able to concentrate as much on finding work.

A claimant in my constituency went to my local CAB because they were sanctioned for hundreds of days—not a short period—because they were passed backwards and forwards between jobseeker’s allowance and employment and support allowance. Both teams said my constituent was not eligible for benefit. Ultimately, that person received £4,000 in backdated benefits, and universal credit was put back into regular payment. It is very nice that they got £4,000 in backdated benefits, but how on earth did they manage to feed their family during the time when they were owed £4,000 by the Government?

We need a way to resolve such problems. I would like a universal credit claimant champion, as recommended by Citizens Advice—someone who can look at difficult cases and take responsibility for them. Part of the problem is the fact that no one takes responsibility and people are passed back and to. I do not know about other hon. Members, but I have certainly seen an increase in the number of people coming to my surgeries about universal credit problems since we became a pathfinder. They have to go to their MP because we have a helpline, but advice agencies should have a dedicated helpline. I want to plead for extra funding for advice agencies. Since the changes to legal aid in 2010 when welfare benefits were no longer seen as a legally aidable necessity, less advice has been available from such agencies. Indeed, welfare benefits specialists are having to find other work. We are losing our expertise.

We should have a review before the full roll-out to make sure that when things go wrong, they are quickly resolved and we do not get into a situation in which people are paid huge sums of money backdated, but wonder how they live in the meantime.

The helpline has an 0345 number, which is charged at a fairly high rate on prepaid mobile phones. Constituents have told me that they have run out of credit using their mobile phones to ring an 0345 number, because they have been passed back and to. As I have said before, we need a local number. There should be a freephone number. There should be more phone lines available in offices. Freephone numbers should be available so that people can use the few phone boxes that are available to ring the universal credit number.

[Mr Nigel Evans (Ribble Valley) (Con)]

I fully accept what the hon. Lady says. It is absolutely right that we should have a system whereby people are not penalised for phoning to get information or assistance. Perhaps a system should be set up where the person is able to use a freephone number. If not, perhaps they could send an email and be called back free of charge. I do not believe people should be penalised.

[Yvonne Fovargue]

I agree, but, as for sending emails, the local authority did a survey to see how many people in Wigan use the internet regularly and found that 30% have never accessed or even looked at the internet. We need to think about those people. When we look at digital by default as a way of claiming, we need to provide more help for people to claim in other ways and not penalise them with a delay.

--- Later in debate ---

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is a pleasure to see a fellow north-west MP in the Chair for this important debate, Mr Nuttall. I congratulate my hon. Friend the Member for St Helens South and Whiston (Marie Rimmer) on securing the debate, and indeed on the impressive work she has done since being elected to Parliament. St Helens is a place with similar issues to my borough, Tameside, so it is excellent that she is raising them.

My hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) is also present. She, too, represents Tameside, which was a universal credit pathfinder area, so we were one of the first parts of the country to experience some of the problems related to it. No matter what political perspective a person has going into the debate on welfare rights and the welfare system, it is important to listen to relevant experience, where it exists, of how universal credit has functioned so far. I should say at the outset that I completely support the goal of simplifying our welfare system—I do not think anyone in this country would not want that.

Like many Members, I use the Child Poverty Action Group handbook to help constituents when they come to me with problems. The handbook is sometimes referred to as the bible of welfare rights; indeed, it is the same size and written in a similar font as the Bible. That indicates the complexity of the system, so of course people should be trying to simplify it. However, as my hon. Friend the Member for Makerfield (Yvonne Fovargue) said, we cannot get away from the reality that many people lead complex lives and have complex needs. The system must function in a way that gives them the support they need.

A number of the issues that come up at my constituency surgery that I wanted to raise have already been mentioned, but they are so important that I want to reiterate why they are key to making the system work properly. The first one is the first payment that people get. In my experience, there are immediate problems for people when they try to access universal credit because of how the system is designed. It is not a teething problem with the roll-out, but a structural flaw in how universal credit has been created. A lot of people are immediately put into a position where they struggle to afford food and heating. That simply does not seem to tally with the goal of supporting people into and out of the workplace. Instead of giving them a professional and efficient service when they need it, it often robs them of their dignity and puts them into crisis.

Like other Members present, at times of my life I have had to access support from the welfare system, particularly the tax credit system, which is almost always the case for those who have children at quite a young age. It did not lead me into a life of welfare dependency—it arguably led me to a worse life, as I ended up here in the House of Commons. Nevertheless, that is an important point, because so much of the Government’s rhetoric is based on the assumption that there are two sets of people in the country: an underclass of welfare recipients who must be punished and whipped back into the workplace, and everyone else who suffers from having to pay for the system. If that is the Government’s mindset going into the designing of a welfare benefit, the welfare system will simply never be designed in an appropriate fashion to meet the objectives of the people who have been described in this debate.

[Mr Nigel Evans]

I am glad that the hon. Gentleman has brought up the question of whether that is what the Government intend, because the answer is clearly no. The greatest dignity that we can give to anyone is the dignity of work and employment. That is the main thrust of what the Government want to see. Getting people off benefits and into full-time work will provide them with dignity and give their children a role model to follow.

[Jonathan Reynolds]

I do not doubt the hon. Gentleman’s motivation. Before the debate we exchanged some comments about that sense of there being a group of taxpayers paying for the welfare system and a group of people in receipt of welfare benefits. That is not the way to design a welfare system. We cannot do it in a way that divides the country so simply into those arbitrary classifications. Indeed, if we do that, it is impossible to design an effective system.

I mentioned the issues relating to the first universal credit payment. People have to wait a long time, because it is designed to be paid five to six weeks in arrears. As the hon. Member for Weaver Vale (Graham Evans) said in an intervention, the assumption is that they are in the workplace and receiving a monthly salary in arrears, so they will have that support before receiving universal credit. I say this completely genuinely: that is not how the economy of my constituency works. A great many people are still paid weekly or fortnightly. A lot of people have different levels of income week by week because of zero-hours contracts. That does not seem to have been considered in the level of detail required to design how and when people will receive the support that they need.

Delays occur in any bureaucratic system, but there is an even bigger structural flaw in universal credit that I have heard about several times in my constituency surgeries. If someone applies for universal credit on the wrong day—perhaps one or two days before they really “should” apply; in other words, when they have lost their job but before they have received their final pay cheque from their former employer—the system becomes disastrous for them. We must bear in mind that a lot of people, on finding out that they are going to be made redundant, would go to the jobcentre to look at the available support. If they apply for universal credit but receive a further pay cheque from their employer, they will wait not five to six weeks but 10 to 11. That is an enormous problem that must be looked at. If that happens—if someone has to know exactly when to apply for the support to which they are entitled—it will go far beyond the current level of complexity. That would have to be sorted out before any national roll-out.

I have raised those points because we have to find a way to get a supportive system that copes with people going into and out of the workplace—regular or temporary work—in a way that does not completely reset the system and cause all kinds of problems if they then go back into work. That is what I mean when I say that we should not split the country with an arbitrary classification of those in work and those out of work and receiving welfare benefits.

Whenever problems with universal credit are raised, the Government say that advance payments can sort out all the problems, whether with housing arrears, heating or food. That is the first question I ask people who come to see me with problems with universal credit, and a lot of them tell me that they have not been told about the advance payments system. I do not know what the experience of other hon. Members is, but advance payments do not seem to be programmed into the initial assessment. If a person does not know about the advance payment system, they have an even bigger problem, because they cannot claim an advance payment if they are a number of days past their initial assessment. If people accessing unemployment benefits for the first time face a confusing system that does not give them the funding they are entitled to, given that they have paid into the system, and that prevents them from getting back into the workplace, that is not an improvement on the current system. There has been a lot of party political advertising of the employment rate, the Government’s successes, childcare and all that, but we need to look at these genuine, serious problems.

Despite the objective of simplifying the system, the roll-out would have been disastrous in my area if it were not for our welfare rights advisers. To my mind, the staff of Tameside citizens advice bureau are absolute heroes. The reality is that that kind of support is being stripped from all communities. Law centres and citizens advice bureaux are closing. If the system is to work, we have got to give people impartial, fair advice. The hon. Member for Ribble Valley (Mr Evans) made a fair comment about how people can get in touch with welfare advisers. That is important, and it is sad to see welfare advisers going at a time when people need them.

Universal credit is a big change, and if people do not have support to access it properly, their perception of it will be negative. We have to ensure that that is not the case. From my casework and experience, from what is happening in other parts of the country and from people’s testimonies, my overwhelming impression is that, despite the scale of the bureaucratic challenge of moving to universal credit, we are not tackling the big problems of our social security system. We are not providing sufficient support for people who have lost their job for the very first time—particularly during the global finance crisis—and who never thought they would be unemployed. When they find out what their national insurance contributions will buy, they are often frankly disgusted at the level of support available to them.

We are not tackling the sanctions, the conditionality and the job search criteria. Frankly, I think we are treating a lot of people like children and robbing them of their dignity. We are not giving them what they should reasonably expect when they access the welfare system. Most of all, the system is unable to cope with the flexible working patterns that are so common in our economy. Many people do not have jobs for life; often, they do not even have jobs that last for years. The system has to reflect that, but I do not think those things have been priced in. Despite the bureaucracy and our overall level of spending on the social security system, people in my constituency have been left genuinely destitute and reliant on charity and food banks to survive. That cannot be right. Given the resources we put into the system, there has to be a better way to do it.

I think we need an even more radical approach. We should look to other countries for best practice. Concepts such as basic income do not lead to a taper problem and do not disincentivise people from going back into the workplace; rather, people are supported in different stages of their lives and everybody gets something out of the system for what they pay into it. That is the direction in which we have got to be looking. We need something more radical than universal credit. Universal credit, if it worked properly, would be welcome, but at the moment there are huge teething and design problems. Even once those problems are sorted, it will not tackle the big problems of the welfare system. Let us sort those problems out, but let us not end the conversation about welfare reform here. Let us address the challenges and create a system that truly works for everybody.

--- Later in debate ---

[Nick Thomas-Symonds (Torfaen) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Nuttall. I warmly compliment my hon. Friend the Member for St Helens South and Whiston (Marie Rimmer) both on securing the debate and on the dignified, cogent and passionate way in which she put her case this morning.

The hon. Member for Weaver Vale (Graham Evans) spoke well about the staff to whom he had spoken at a Jobcentre Plus office in his constituency. My hon. Friend the Member for Makerfield (Yvonne Fovargue) made an excellent speech, drawing on her experience at Citizens Advice in the 1980s and speaking powerfully about the sad explosion in the number of food banks in this country since 2010.

I am grateful to my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) for his speech, in which he spoke well about the complexity of the modern economy. He made a powerful point about our need to draw on experience, and any well thought out, coherent and simple policy is to be welcomed. I may even give him a shorter book to read in due course. There were also interventions from my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) and the hon. Members for Congleton (Fiona Bruce), for Cheadle (Mary Robinson), for Bolton West (Chris Green), for Strangford (Jim Shannon) and for Ribble Valley (Mr Evans).

Much of today’s discussion has been about the language with which the debate is conducted, and I am extremely concerned about the language framework that the Government use. The Chancellor of the Exchequer said on the “Today” programme on Monday 8 October 2012:

“It is unfair that people listening to this programme going out to work see the neighbour next door with the blinds down because they are on benefits.”

Those are his actual words. He presumably thinks that that type of stuff is popular at the Tory conference. The real problem with that sort of language is how divisive it is. There is no sense that the person behind those blinds might be vulnerable or disabled. The Minister has an opportunity today to condemn such divisive language, and I sincerely hope that she feels able to do so.

Even if one accepts the abysmal logic, which I do not, the real problem is that the Chancellor is so lost in tactical mazes of his own construction that he is actually on the wrong side of his own dividing lines. He is attempting to separate people into the workers and the non-workers—that is precisely what he was trying to do in that quote. However, what we saw with the cuts to tax credits, which the Chancellor eventually caved in on, we are also seeing with the cuts to the universal credit work allowance from this April.

[Mr Nigel Evans]

What was appalling under the previous Labour Government was the high level of unemployment, which meant more people spending time with the blinds down. Under this Government, employment has reached record levels, unemployment has dropped, and far more people are earning more money than ever before. Is that not bringing dignity to the British people?

[Nick Thomas-Symonds]

I will come to people earning more than ever before in a moment. I make no apology for a Government who introduced the national minimum wage or for wage growth in the Labour years. This decade risks becoming the lost Tory decade, with wage growth lower than at any point since the 1920s.

The hon. Gentleman wants to talk about money in people’s pockets. I have already spoken about the effects of the cuts to the universal credit work allowance on single parents from this April, so shall I use some other specific examples? Take a couple, living and working together, one or both of whom has limited capacity to work as they are disabled. For them, the work allowance will be cut from £7,700 to £4,700, a loss in income of £3,000. That is for people who are actually in work. To take another example, single individuals will essentially lose everything, with a reduction of £1,332, at a net loss to income of £865.

When universal credit is damaging and attacking people in work, it is in danger of undermining the aims that it was set up to achieve. If Government Members do not want to take my word for that, let us take the word of the Social Mobility and Child Poverty Commission’s “State of the nation 2015” policy paper, published on a big date for dumping things just before Christmas, 17 December 2015. The paper is available on the Government website if any Members want to see it. The commission stated:

“The immediate priority must be taking action to ensure that the introduction of Universal Credit does not make families with children who ‘do the right thing’ (in terms of working as much as society expects them to) worse off than they would be under the current system. That means reversing the cuts to Universal Credit work allowances enacted through the Universal Credit (Work Allowance) Amendment Regulations 2015 before they are implemented in April 2016.”

That is what the commission says should be the priority from this April.

--- Later in debate ---

[Priti Patel]

We are clear that people being moved on to universal credit from tax credits will be supported and will not lose out. A fundamental principle of universal credit is that it removes barriers that may have existed and, importantly, it gives people the support they need when they come on to it. That is different from previous systems. It is different from tax credits, for example, which did not provide support for people when they wanted to increase their hours and earnings.

The previous system was fragmented and there was little incentive for people to take up even a few more hours of employment, but under universal credit people can benefit as soon as they start to work. It is a simpler system to understand. It comes back to the point that we have support in our jobcentres to help people to extend their hours of work or, when they are moved on to universal credit, to understand the system and support them.

That is different from what existed before. Under universal credit, no one will have to worry about the Government asking for money back because the real-time information system connects the employer and Her Majesty’s Revenue and Customs on the number of hours worked. That is dramatically different from the situation when tax credits was introduced and millions of low-income families faced uncertainty about owing money back to HMRC at the end of the year. I am sure all Members have dealt with many examples of casework in that area.

I want to come on to the points raised, because I am conscious of time. There is evidence that universal credit is getting people into work and helping them stay in work. We have reviewed universal credit and, as a result of the support that people are given, we see that they spend 50% more time looking for work. We now see more universal credit claimants moving into employment compared with JSA claimants thanks to the focused support they get through their single point of contact, their work coach and other means.

[Mr Nigel Evans]

Is not the point—surely this helped win us the general election—the message that no one should be better off out of work than in work? With the national living wage and higher thresholds, we have ensured that far more people who are in work will keep more of their money.

[Priti Patel]

My hon. Friend is absolutely right about people keeping more of the money that they earn rather than going through the process of having more taken away and then recycled through benefits such as tax credits. It is also worth reflecting on the point made by my hon. Friend the Member for Weaver Vale. He mentioned Northwich jobcentre, which has done a great deal of work to support people on universal credit. The award that the Secretary of State gave to staff members there shows how they are supporting people and transforming lives, which is fundamental to the welfare reforms that we are bringing in.

Many comments were made about universal credit in terms of the process, the roll-out and delays. I do not agree with some of the assessments and analysis given, and those with reference to the OBR in particular. We are rolling out universal credit as planned. Importantly, we no longer believe in the “big bang” model used in previous systems such as tax credits, which when introduced brought a great deal of chaos to jobcentres and the welfare system. We have adopted a test-and-learn approach to ensure safe and secure delivery and, importantly, to ensure that we can learn from individuals as they go through the process.

We have an enhanced digital service, which makes it clear immediately that a claim has not been progressed and that further information is needed. Jobcentre Plus and work coaches speak well of the system. I have seen it in action, with the immediate way in which data are exchanged and claims are processed. We have faster electronic payments to allow the Department to make payments via BACS on the same day to minimise further delays, because of course people need to be supported.

I do not agree with the comments made about the report from Citizens Advice, because we know that the research for that was based on anecdotal evidence from a small group of current UC claimants—the sample was less than 1%. Even Citizens Advice said that that was not representative of all claimants on universal credit.

We have universal support working alongside universal credit, which offers wraparound support for those who need it. That comes back to the points raised about no two individuals being the same. Situations are different for claimers and no one can count for the life circumstances of individuals, so universal support provides that wraparound support.

Budget Resolutions and Economic Situation

Nigel Evans Excerpts

Thursday 9th July 2015 Commons Chamber

[Chris Leslie]

My right hon. Friend is right that we should be thoughtful about the Government’s proposals. It is sometimes difficult to see through the political fog of the games that the Chancellor is trying to play and the tactics he is trying to use. Oh, the look of innocence on his face! My right hon. Friend is right that it is important to take on questions of welfare reform and work through them methodically. We will not oppose everything just for the sake of it. My right hon. and learned Friend the acting Leader of the Opposition was right to say yesterday that while that might be the temptation, we will look at the proposals and be reasonable about those we can support.

We welcome the steps taken in the Budget to reduce pension tax relief for the highest earners, and of course the rise in the personal allowance threshold, as we support steps to cut taxes and try to get a better settlement for those in work.

[Mr Nigel Evans (Ribble Valley) (Con)]

Does the shadow Chancellor agree that the Government are absolutely right to work towards a situation in which nobody is better off out of work than in work? If so, why did Labour do nothing about it when it was in power?

[Chris Leslie]

The hon. Gentleman was doing so well until the little barb at the end of his intervention. Of course we want a situation—there is more political consensus on this than people perhaps realise—in which people in work are better off than they otherwise would be. The problem, which I will come on to later, is the Chancellor’s approach with this particular set of Budget measures. He is pulling the rug from beneath people’s feet while higher wages are not yet available. When we look at the package as a whole, we see that people will be worse off during that period. He cannot just shovel that beneath the rug.

Oral Answers to Questions

Nigel Evans Excerpts

Monday 3rd November 2014 Commons Chamber

[Esther McVey]

The hon. Gentleman shakes his head, but rather than living on planet fantasy I ask him to look at the facts.

[Mr Nigel Evans (Ribble Valley) (Con)]

Youth unemployment in the Ribble Valley is relatively low. One of our great facilities, the jobcentre in Clitheroe, is currently under review and the suggestion is that it should close. Does the Minister accept that young people in rural areas have to travel large distances to get to a jobcentre? As these jobcentres are important, they should not be told to get on a bus to Blackburn.

[Esther McVey]

My hon. Friend is right that jobcentres are important. The question is how we best support jobcentres and claimants. Can young people in rural areas make their claim on the phone or online, and can we align various other organisations so that they can come together and help support people in a fully rounded way? Obviously, what we are doing is right, because, as he says, in his area employment is up and unemployment is down.

Budget Resolutions and Economic Situation

Nigel Evans Excerpts

Friday 22nd March 2013 Commons Chamber

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. There is a seven-minute limit.

--- Later in debate ---

[Graham Jones (Hyndburn) (Lab)]

I want to concentrate my comments on local government and, in particular, housing, although I appreciate that Monday is the allocated day for that.

This Government’s housing stimulus fails to recognise that the economy in the regions is not just stalling but in recession, and that rebalancing the economy is about boosting the construction industry in places like east Lancashire. This Budget fails to achieve that. It does nothing to tackle the shocking state of much of the housing stock in constituencies such as mine. It is worth putting it on the record again that there are wards in my constituency with over 70% non-decent homes in the private sector. Cutting VAT on property refurbishments would have been a much better move in these areas, because it would have boosted the construction industry where there is already an over-supply of housing.

The Government’s record on housing so far is a confetti of failed announcements. I think it was said of the previous Housing Minister that if a house had been built for every announcement he made or press statement he released, we would not have a housing crisis. As a result of all these Government announcements, house building has fallen, rents are rising, home ownership is becoming a harder, not an easier, goal for young families to achieve, and homelessness has risen. The new homes bonus announced by the Government in 2010 was supposed to unleash growth and build at least 400,000 additional homes, but it has failed to deliver. Housing starts fell by 11% last year to below 100,000—less than half the number required to meet housing need, which stands at about 230,000.

Next up was the Prime Minister, who claimed that the latest scheme, NewBuy, would assist 100,000 people to buy their own home. To date, however, this Government scheme has helped just 1,500 people to realise their dreams—1.5% of the target. Then we had the Government’s £10 billion guarantee scheme, which has yet to deliver a single penny of support for house building. The Government’s record on house building so far is abysmal.

On Wednesday, we got the latest wheeze—the announcement of the Help to Buy scheme, which is in fact the NewBuy scheme dressed up because that has not been particularly successful. The new scheme has already been met with caution. The Chartered Institute of Housing is concerned about any success simply fuelling another housing bubble: a supply side failure and an over-leveraged mortgage market. The Financial Times described the rebranded scheme, Help to Buy, as the right to default under a headline “Housing plan parallels US home loans system”, and commented that the Chancellor

“has not learnt the lessons of the credit crunch”.

This scheme will encourage people to overstretch their finances and max out their mortgages to take advantage of the offer. In short, read Fanny Mae and Freddie Mac, whose lending precipitated the 2007 financial crash. We have the irony of a Government who have forced banks to tighten their lending criteria now enabling a relaxation of mortgage lending terms, with taxpayers on the hook.

The criticisms come not only from Labour Members and from the industry: I note that in this morning’s press it has come from the Chancellor’s own Benches, with the hon. Member for Spelthorne (Kwasi Kwarteng) stating:

“Having a system where you are giving mortgages without increasing supply will lead to price inflation. We”—

the Government—

“could have announced something bolder that increased supply”.

Alas, that is not the case. Worse, in the equity loan element of the scheme, the Government have only a second charge against the property. I am deeply concerned about that, because it will leave the taxpayer with all the risk and the mortgage lenders with all the profits. Fathom Consulting says that the plans amount to “sub-prime lending” and:

“Suffice to say that had we been asked to design a policy that would guarantee maximum damage to the UK’s long-term growth prospects and its fragile credit rating, this would be it.”

The overwhelming barrier to the housing market is the spending review’s 60% cut to the budget for affordable housing, which is affecting the state of the economy. The Chancellor has failed to deliver a real plan for growth; all he can offer is more of the same.

Criticism of the Help to Buy scheme has continued in this morning’s press. Nick Pearce of the Institute for Public Policy Research has said that the Government

“continues a strategy based on propping up—indeed inflating—prices rather than getting additional homes built. This suggests that the lessons from the housing bubble that contributed to the financial crisis have not been learnt and that orthodox thinking on housing policy remains entrenched in Whitehall.”

David Orr of the National Housing Federation added:

“the danger is that if we don’t tackle the fact we’re still not building enough homes, we’ll just create another housing bubble that will continue to push house prices up and out of reach of the majority.

Our housing market has long been weakened by the lack of new houses being built, which are forcing up rental and house prices—leaving millions of people struggling to get on the property ladder or pay their rent.”

Duncan Stott of Priced Out said:

“The only thing that will genuinely help first-time buyers is for house prices to fall back to an affordable level. Pumping government debt into the housing market will just push house prices further out of reach.”

He also said:

“Help to Buy is bad enough on its own, but to also open it up to second homebuyers would really rub salt in the wounds of Generation Rent.”

The criticism does not end there. CentreForum says that

“it is difficult to see how today’s demand side measures under the ‘Help to Buy’ scheme will help. These measures could actually increase the cost of housing and may also mean that any significant fall in house prices results in big losses for the taxpayer.”

It has called for more supply-side answers, but the Chancellor’s Budget has failed to come up with any such solutions. CentreForum also states:

“Far better would have been a rejuvenated effort to introduce community land auctions…or a scheme to give housing associations the ability to issue government backed bonds for the construction of new homes”.

Shelter has also called for limits on council borrowing to be lifted in order for more social and council housing to be built.

In a constituency where house building is flat for many reasons—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order.

--- Later in debate ---

[Ms Karen Buck (Westminster North) (Lab)]

We have heard a great deal in the Budget debate—not unreasonably—about public debt, but less about the private sector crisis that generated the public sector debt crisis. We have also heard about the impact of private debt and deleveraging, including from the hon. Member for North East Somerset (Jacob Rees-Mogg). In that context, it might be worth mentioning that private debt and deleveraging are connected with the substantial decline in the number of people who can afford their own homes because of house price inflation in the past decade. That feeds into the core of my argument on the extent to which housing and housing costs have led us to a crisis in the welfare state.

We have heard less in the debate about flatling growth, the crisis in unemployment and under-employment, and the crisis in real wages and living standards. It is worth noting that real wages fell by 0.7% last year, and that average earnings will have fallen by 2.4% over the course of this Parliament. That fall in purchasing power is contributing to the continued stalling of growth.

Unfortunately, housing costs are at the heart of the living standards crisis, particularly in respect of first-time buyers, younger people, and those in what we call generation rent. Home owners have benefited for a decade or so from low interest rates. The tragedy is that many people are not aware of the fact that low interest rates are sustaining lower mortgages. A third of home owners have interest-only mortgages, and are extremely vulnerable to a future rise in interest rates.

Shelter has demonstrated consistently the crisis in home affordability. Some 7.8 million people struggle to pay their rents and mortgages, and 2.8 million people rely on unauthorised overdrafts and payday loans on a regular basis to cover the cost of their mortgage or rent. With underemployment and the continuing flatlining of real wages, that situation will only get worse.

In turn, that has contributed to a dramatic rise in the number of people who are caught in generation rent—they cannot save for a deposit and cannot get a mortgage because of the high house prices we have seen for generations. Two million more people now rent in the private sector than 10 years ago—26% of all Londoners now rent privately. That driver into the private rented sector has led to an escalation in rents, particularly in London. London rents now average £2,200 a month. Naturally enough, people are unable to afford such bills. That explains why the housing benefit bill has risen. It is due not to Government policy, but to the increased case load in the private rented sector, together with unemployment and flatlining wages. The Government, despite their rhetoric, will spend £12 billion more in real terms on housing benefit in this comprehensive spending review period than the last Government spent under the previous comprehensive spending review. That was the figure before the Office for Budget Responsibility upgraded that expenditure this week.

If I were the Secretary of State for Work and Pensions, I would be furious that the Department for Communities and Local Government had driven up the bills of my Department through its housing policy, with the failure to build and the halving of the affordable housing investment programme, and its rents policy. However, if I were the Secretary of State for Communities and Local Government, I would be equally furious at the extent to which the Department for Work and Pensions policy of capping housing benefit had increased the pressure on my budget, particularly through homelessness. Today, we have heard about a further rise of 10% in homelessness, with an increase of 22% in London. That is not only a human tragedy; it costs money.

Will the Budget proposals address the crisis in housing and housing affordability? No, they will not. David Orr, the chief executive of the National Housing Federation, has said that if the investment had gone into affordable housing supply instead of the mortgage guarantee schemes, it would have delivered 175,000 new homes and a £30 billion boost to the economy. We know that the money is available because the Chancellor has secured £13 billion to underpin the mortgage schemes. Those schemes are effectively the rebranding of existing schemes that have not worked over the last two or three years. As other Members have said, the schemes risk inflating a housing bubble.

A consistent theme is emerging not only from the Opposition but from commentators on the right. Even the Daily Mail has said today, “Could the great state mortgage scheme be hijacked by the rich?” The answer is probably yes. It will be a boost to older buyers and second home owners, rather than the young. Mervyn King, of the Bank of England, has warned that the mortgage guarantee is not the answer to the housing crisis. It will stoke up house prices and continue to freeze younger homebuyers out of the housing market, which will keep them locked in generation rent. That will in turn lead to an increased housing benefit bill, which Ministers will scurry to try to cap.

The housing crisis is being exacerbated, not relieved, by Government measures. That has a fundamental impact on private debt, the banking crisis, in-work and out-of-work poverty, work incentives and welfare. The Government inherited an imperfect position on housing supply, but they are making it considerably worse. Beveridge and Keynes, those giants of post-war economics, knew that affordable housing was the key to—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I call Stella Creasy.

Atos Healthcare

Nigel Evans Excerpts

Thursday 21st March 2013 Commons Chamber

[Esther McVey]

I will not give way on that point. We have implemented those recommendations. [Interruption.] We took on a very poorly designed assessment from the Labour Government and we have done significant work to get it right.

Furthermore, although the Spartacus report on the work capability assessment—the so-called people’s review—reflects what are clearly strongly held views, it is a collection of anecdotal accounts. It fails to recognise the improvements made to the WCA since 2010—[Interruption.]

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Mr McDonnell, I know you are frustrated but you must not behave in this manner. Please allow the Minister to finish her remarks.

[John McDonnell]

On a point of order, Mr Deputy Speaker. I apologise to you for intervening in that way, but you can understand the frustration. I have never heard that sort of feeble excuse for a Minister not willing to meet people with disabilities. I think it is outrageous. I apologise for the interruption.

[Mr Deputy Speaker]

I think the House accepts your apology and hopes that the Minister will be allowed to finish her remarks in silence.

[Esther McVey]

I think that we all suffer frustration; I do because I inherited something that was clearly unworkable and that we have had to spend more than two years trying to get right. We will continue trying to get it right. That is what we are doing and I ask the hon. Member for Hayes and Harlington to concentrate on that.

Finally, we have also invited the right hon. Member for Oldham West and Royton to have a constructive talk with Atos to look at what we could do. I believe that he declined an invitation to discuss the changes that would improve the position. He dismissed the Atos invitation as something that would not achieve anything and he condemned the work capability assessment and Atos. I believe that we all have something to learn from this and that we must all work together constructively.

Universal Credit

Nigel Evans Excerpts

Wednesday 6th March 2013 Commons Chamber

[Mr Hoban]

The definition in the regulations will be the one that is in the existing regulations, and it has worked well so far. We are talking to women’s refuges and others to try to understand what has changed, and why the existing definition no longer gives the desired results. That is a matter that we want to continue to discuss.

We need to be careful when we talk about the direct payment of rent, because the vast majority of people have no problem paying their rent or their mortgage. My hon. Friend the Member for South Dorset (Richard Drax) has raised this matter. In one of the pilots, 92% of people paid their rent on time. Among the other 8%, some were underpayments and some were mis-payments, but not all were wilful non-payments. We have an obligation to try to move that 8% so that they can pay their rent on time and meet their obligations. Also, this change will encourage social landlords to think about the broader needs of their tenants—how they can find the necessary skills to get work, and get the necessary financial and budgeting support to manage their money more effectively—rather than just thinking about collecting the rent.

We need to ensure that the new system does not remove personal responsibility from everyone, while recognising that we will need to do something for those who are facing the greatest problems. We are working on that, and the pathfinders will help us to gain that knowledge. We want to make sure that the risks are managed and that landlords can request that the housing element is paid to them when the rent arrears trigger has been reached. These arrangements will be in place for some high-risk claimants from the outset until there is improved financial capability. In effect, we will start the shift to direct payments for claimants with the easier cases and then progress to the more difficult cases. The approach that runs through the roll-out of universal credit is to pilot things and understand the lessons to be learned to ensure we avoid mistakes in the future.

I am sure that I have already spoken for far longer than I should have done, but I think our debate has been important. I end by echoing the words of my hon. Friends who have contributed. We are talking about a change in culture. It is not just a benefit replacement exercise; it is about helping people back into work—making sure that they know that it is better to work than not to work, that it is better to work longer to earn more than to work fewer hours and earn less. We need to tackle some of the barriers to getting people into work, not just in respect of the complexities of the benefit system, but by enabling people to manage their money and to take responsibility for their finances and for their future.

Universal credit is a huge step forward in encouraging self-reliance, but we recognise that a number of people—not the vast majority of people—will need more support. The measures we have set out today and the way in which we have developed them, even from when we submitted our response to the Select Committee’s report, demonstrates this Government’s serious commitment to get universal credit right. It is by getting it right that we will have the best chance of getting people out of poverty.

[Mr Deputy Speaker (Mr Nigel Evans)]

Dame Anne Begg seeks the leave of the House to make a short response to the debate. With the leave of the House, I call her to speak.

Housing Benefit (Under-occupancy Penalty)

Nigel Evans Excerpts

Wednesday 27th February 2013 Commons Chamber

[Jane Ellison]

I give way to my hon. Friend.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Just before I allow the intervention, I must remind the hon. Lady that she said that a lot of people want to speak, and they do. After the next speaker, I will be introducing a time limit that will be less than the time she has taken so far, so I ask her to show some self-restraint so that we can make progress. Heather Wheeler, you were about to intervene.

[Heather Wheeler]

Very kind, Mr Deputy Speaker.

I find this really interesting. I do wonder about some of our Labour colleagues. We have mentioned the possibility of someone taking in a lodger and bringing in £4,200 a year tax free. Does the Labour party not want this cash flowing in our communities? Is there a problem with people taking control of their lives? Does it have an issue with that? Are we only allowed top-down rules? What is wrong with taking in a lodger? It might be like going back to the ’50s, but actually we had real communities then, and I think it is an excellent idea.

[Jane Ellison]

I thank my hon. Friend for her intervention. I hope that she makes her own contribution and develops that theme later.

I will wind up now. My principal point is that these debates are not well served by exaggeration and shroud-waving, but I am afraid that that is what we have seen. Undoubtedly, there are difficult cases. We all have them—I have some in my inbox, as have other colleagues on both sides of the House—and we must work with Ministers to look at them. We have had a commitment from the Minister to a rolling review of the policy, but let us also look at some of the potential winners and ensure that we bring to the attention of those in overcrowded accommodation and those who have no chance of qualifying for subsidised public housing the opportunity that might be offered to them by some of these changes.

I shall sit down now, Mr Deputy Speaker, so that others can contribute.

[Mr Deputy Speaker]

I am extremely grateful for your assistance. I call Caroline Lucas.

--- Later in debate ---

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Members should resume their seats. Caroline Lucas spoke for just about 10 minutes—predicting the 10-minute limit. Well done.

Welfare Benefits Up-rating Bill

Nigel Evans Excerpts

Monday 21st January 2013 Commons Chamber

[The First Deputy Chairman of Ways and Means (Mr Nigel Evans)]

Before I call the first group of amendments I must tell the Committee that the amendments to the schedule have been marshalled in error before the new clauses. The Committee will deal with the new clauses before it considers the schedule. I invite Members who wish to speak to clause 1 as a whole to do so in this debate, as I do not anticipate that there will be a separate debate on clause 1 stand part.

Clause 1

Up-rating of certain social security benefits for tax years 2014-15 and 2015-16

[Stephen Timms (East Ham) (Lab)]

I beg to move amendment 12, page 1, line 4, leave out ‘by 1%’.

[The First Deputy Chairman]

With this it will be convenient to discuss the following:

Amendment 7, page 1, line 4, leave out ‘1%’ and insert

‘the Retail Prices Index measure of inflation.’.

Amendment 10, page 1, line 4, leave out ‘1%’ and insert

‘the percentage by which the general level of earnings is greater at the end of the period under review in that tax year under section 150(1) of the Social Security Administration Act 1992 than it was at the beginning of that period’.

Amendment 20, page 1, line 22, leave out subsection (5).

Clause stand part.

[Stephen Timms]

In this Bill the Government are punishing people who are already hard up for the failure of their economic policy. We were promised that the policy would lead to steady growth and falling unemployment, but it has failed. We have had a double-dip recession, and some predict that this week we will learn we are in a triple dip. Unemployment is now officially forecast to go up next year, so spending on unemployment benefits will go up, and borrowing will go up too.

The Chancellor’s policy has failed and the Government have decided to respond by forcing down the incomes of those whose incomes are already the lowest of all. Roughly speaking, the saving over the two years to which the Bill refers will be about the same as the increase in welfare spending resulting from the rise in unemployment forecast just between the Budget last year and the autumn statement.

The Government want to cut the incomes of the least well-off in real terms, not just for the coming year but, through this Bill, for the year after and the year after that. At the same time, in April they will give a tax cut to everybody earning more than £150,000 per year. That combination of policies will force up poverty in every part of the country, and it is a disgrace that Ministers are forcing this Committee stage into a single day.

This Bill is a bitter blow to large numbers of families—in work and out of work—who are on low incomes at the moment and struggling to make ends meet. Three new food banks open every week; last year a quarter of a million people received help from a food bank because they could not afford enough to eat, and this Bill will make matters significantly worse. It means that for three years, low-income families will get below-inflation increases. The number of people visiting a food bank will be higher this year and, because of this Bill, it will be higher still next year and higher again the year after that.

As Citizens Advice points out:

“The cumulative impact of capping the uprating of most benefits to no more than 1%”,

for the next three years, will lead to an exponential increase in net losses each year. Child Poverty Action Group stated that

“the poorer you are, the greater your loss.”

Atos Work Capability Assessments

Nigel Evans Excerpts

Thursday 17th January 2013 Commons Chamber

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. If everybody could resume their seats, I just want to inform the House that there are 28 Members who wish to participate in this relatively short debate. My responsibility is to protect Back Benchers’ time and get as many Back Benchers in as I possibly can. While we are starting at six minutes, you should start to think in terms of a four-minute contribution if you possibly can, so that as many Members as possible can get in.

--- Later in debate ---

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The time limit on Back-Bench speeches is now five minutes.

Welfare Benefits Up-rating Bill

Nigel Evans Excerpts

Tuesday 8th January 2013 Commons Chamber

Second Reading

[Mr Deputy Speaker (Mr Nigel Evans)]

Before I call the Secretary of State to move the Second Reading debate, I inform the House that the amendment has been selected.

--- Later in debate ---

[Mr Burley]

I have been here since the beginning of the debate, waiting patiently to speak.

I move on to my constituency. The House of Commons Library shows that average wages in Cannock Chase rose by 6% between 2007 and 2012. During that same period, benefits went up by 20%. Where is the fairness in benefits going up by 20% when pay has gone up by only 6%? Do not take my word for it. This is what a local police officer e-mailed me last year when we uprated benefits by 5%:

“Why has the Conservative Government given a recent rise in benefits money…to the unemployed when Nurses, Police Officers, Fire and rescue workers and all other public sector workers have not received a pay rise for over two years?”

It is a fair question, and I do not know the answer. What I do know is that if the rate of inflation is not sufficient to warrant an increase in public sector pay beyond 1% in April this year, it cannot be so high as to require an increase in benefits beyond that either.

This is what another constituent who recently contacted me said:

“I have a friend who has a partner, neither she or he work and have not worked for as long as I can remember. They are both fit and healthy and perfectly able to work they just do not want to. They openly admit there is no point in finding work as they would not have enough money to live on. She stated to me that in order to get close in wages to what they receive in benefits that they would both have to get a job.”

This is the perverse reality of where we are now—that it pays people not to work and they are better off at home on benefits even though they could work and in many cases want to. Tellingly, the constituent went on to say:

“Some time ago she”—

her friend—

“let it slip out that she claimed £500 a week in benefits, I was…astounded and furious and pointed out that it was twice my wages. I am…aware that some people are unable to work and in genuine need…but surely people on benefits who are MORE than capable of working should not be living a life of…luxury and be financially better off than those who…earn a living? These people are playing the system…whilst…genuine hard working people struggle to have a life.”

Those are the real words of a real constituent in an area where the average salary is £22,500, and Labour Members ignore those words at their peril. [Interruption.]

[Mr Deputy Speaker (Mr Nigel Evans)]

Order.

[Mr Burley]

The Opposition have argued that this uprating of 1% will impact on working people and not just those on benefits. Given that the previous Government made 90% of workers eligible as welfare recipients, that is inevitable. Unfortunately, Labour Members make the mistake of taking these measures in isolation. If we take the Government’s measures as a whole, including tax allowances, energy tariff changes and cutting petrol duty, low-income working households will be better off. It is time to end the ridiculous money merry-go-round. Let us take people out of tax and off benefits. Labour used to be the party of the working man; it is now the party of the workless and welfare. I look forward to fighting them on the doorsteps as they take that message to the electorate. [Interruption.]

[Several hon. Members]

rose—

[Mr Deputy Speaker]

Order. Before I call the next speaker, let me say that shouting back and forth really does not help the debate, and I am finding it difficult to listen to what the speaker is saying, so please let us have less of it. I call Steve McCabe.

--- Later in debate ---

[Julian Sturdy]

As you rightly said in your speech—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. There are too many uses of the word “you” for my liking. It is not about me.

[Julian Sturdy]

I apologise, Mr Deputy Speaker.

The safety net in the welfare state system is important, but I support the 1% uprating. The point was made earlier that if we are really to focus on the problem, we have to consider inflation as well. If we can keep inflation down through Government measures, as we are at the moment, that is an important part of the system.

An effective and fair welfare system should support those who tragically suffer from difficult medical conditions and those who find themselves in abject poverty. However, benefits that are simply rolled out and increased without question and without any regard for the wider economic situation threaten to give our whole welfare system a bad name. Thus our benefits must always be questioned, our welfare system always honed and the key question of fairness always addressed. The votes in the House later today must be made with fairness in mind—fairness to those who receive benefits and those whose taxes pay for them.

We cannot adequately or logically debate this issue without considering the fiscal implications of increasing benefits and the fairness of those implications. The key fact used by the Secretary of State—that over the past five years some benefits have increased by 20% while workers have experienced an average pay increase of 10% to 12%—is enough to set alarm bells ringing. If we are to ensure that our welfare system is a source of pride and not resentment, we cannot justify such increases when wider taxpayers are suffering in a tough economic climate.

--- Later in debate ---

[Mr Jones]

I thank my hon. Friend for his comment. He is absolutely right that we are in a difficult position that we can no longer sustain.

That brings me on to another point. This afternoon, I have observed a certain mood among the Opposition. Far from being pragmatic, they have been completely ideological. What puzzles me is that before the last general election Labour pledged to cut spending roughly in line with the coalition’s current rate of deficit reduction, but since then they have opposed virtually all the cuts, including £80 billion of savings proposed to welfare. The question for the Opposition, therefore, is: if all those changes are unacceptable, what do you propose to do? Do you want to cut the NHS? Do you want to make more cuts to policing? Do you want to cut local government? Do you want to cut education?

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I do not want to do any of those things. Will the hon. Gentleman please use the third person?

[Mr Jones]

I apologise, Mr Deputy Speaker. I was referring to Opposition Members, whose other options might be to put 13p on a litre of fuel, increase council tax, impose other tax rises or—as has always been the case—give the country more debt.

--- Later in debate ---

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Will everyone resume their seats? We can see that no Government Members wish to contribute, so if everyone shows the time discipline of remaining within three minutes, all those who wish to speak will be able to contribute to the debate. Let us have some team play.