Universal Credit

Nigel Mills Excerpts

Wednesday 6th March 2013 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to follow the Chair of the Work and Pensions Committee and to speak about the report. This is the first report that I had the pleasure of working on when I joined the Committee. I feel slightly guilty in that I missed all the evidence sessions because I did not join the Committee until it started to write the report. I therefore missed the hard work and did the fun bit at the end.

I should probably start where the Chair of the Select Committee finished—the complex IT system. Those of us who have followed the news of new, large IT systems from the outside over many years would be brave or foolish to be entirely optimistic that a new, super IT system will work flawlessly from day one. Perhaps the Minister will assure us that that will be the case, that the IT has worked in the various tests and trials, and that it will work when we switch over to having live feeds of millions of entries from HMRC.

[Richard Drax (South Dorset) (Con)]

I, too, am concerned about putting all our eggs in one IT basket. Would it not be sensible to retain the staff in local authorities—in my constituency, they are about to be laid off—so that there is a back-up, at least until it is proved that the system works?

--- Later in debate ---

[Nigel Mills]

I see the sense in that, but it would involve a large cost.

Speaking as someone who still does the weekly payroll for a small charity with six employees, I am looking forward to the time when I have to input the data into the HMRC system weekly or monthly, rather than making the PAYE payment that is due once a quarter. I think that the system will work quite successfully for large employers that are used to operating PAYE systems, where they can hit a “submit” button every month and the data transfers over on the right date. However, for a lot of small employers, this will be a big change in their procedures from having to give the payroll data to the Revenue once a year. That will be a test.

Perhaps the Minister will update us on how confident he is that the systems will be able to interact and that the millions of entries will make their way to the right place at the right time, so that all the people who will be relying on it for their universal credit payments will receive the right amount on the right day, especially as the system rolls out and more people keep being added.

It is worth saying, as the Committee noted in its report, that there is broad agreement with the principle of a single payment that makes it easy for people to move in and out of work, with their income going up or down so that they get the right benefit at the right time. We all want that to work. Clearly, if it does not work, it will leave people in a whole new mess.

That is not to say that people are not in a mess now. We all have constituents who have struggled with the existing system of multiple claims. There are people whose tax credits have gone wrong, perhaps because their income has changed during the year and they have forgotten to notify HMRC or HMRC has lost the notification, who have ended up with a large bill at the end of the year that they were not expecting and did not have the money left for. We are not trying to reform an ideal system or even a good or acceptable system; we are trying to move from the existing pretty poor and complex system to a system that is easier to understand and easier to deal with. However, there are clearly issues with any new IT system.

The report was right to recognise that the new system, which we all broadly welcome, will work for the majority of claimants who are IT literate, understand the system and can update their circumstances and check what is going on. It also considered those for whom that is not the case and who will struggle with the new system—perhaps because they are not IT literate or, for whatever reason, have not got a bank account—and struggle to manage their own affairs. However, such people will probably already be struggling with the existing system in which they have to make multiple claims and try to manage the situation. We are not talking about people who are fine with the existing system but will suddenly have problems with the new one; they will already be experiencing some of those problems.

I will not do a wide sweep of all the issues mentioned by the Chair of the Work and Pensions Committee because that would be pointless repetition, but I will pick up some of the main themes. I support a system that, by default, is accessed electronically rather than on paper—that has to be the right way forward. At some point, the system must be accessed via IT by default and not choice, and now is probably the right time for such a transition. Statistics state that 78% of working-age people who claim benefits already use the internet, and about half of those use it every day. There is not a huge number of people with no IT access at all, although the 22% who are not regular users of the internet will need some support.

[Anne Marie Morris (Newton Abbot) (Con)]

I am also a Member of the Work and Pensions Committee. As my hon. Friend will recall, we discussed the development of specific apps that will make it even easier for those who are IT literate and can deal with a claim on their phone.

[Nigel Mills]

Yes, that is recommended in the report and I think the Government promised that by 2014 there will be a separate app for universal credit. Currently, 92% of jobs advertised require some level of IT skills, so encouraging people to become more confident and use computers to claim their benefits is a move in the right direction. I agree that we must give the right support to those who cannot do that or have not done it previously, and I hope the Minister will explain to the House how that will be done.

The Government’s response to the report mentions computer terminals in jobcentres. I am not sure whether I have yet seen that on the ground and how we will get enough computers in jobcentres for people who need to claim, or how people will deal with the regular monitoring of their benefits. Universal credit is not a once-only application in which a person can sit with someone who does the form for them and that is it. The entire system relies on updating that will require regular IT access, not just a one-off.

[Kate Green]

The hon. Gentleman may not know the answer, but does he have any idea how long it will take to make a claim on average, particularly with regard to the point made by the hon. Member for Newton Abbot (Anne Marie Morris) about filling in the form on the phone? If it will take more than half a minute or so, it is unlikely that people will be able to cope with that on the phone, and they may struggle to do it online at all.

[Nigel Mills]

It would be very optimistic to assume that the application form will take half a minute. I have not seen the form, but I have not seen any Government form that takes half a minute for a long time—[Interruption.] Does the Minister wish to answer the question?

[The Minister of State, Department for Work and Pensions (Mr Mark Hoban)]

I think we must be careful and not underestimate where people are at the moment. The vast majority of claims for jobseeker’s allowance are made over the telephone and an increasing proportion are made online. We are not entering uncharted territory and I am surprised that Opposition Members seem keen to keep us in a luddite past. We need to tackle the digital divide, and this is a very good way of doing it.

[Nigel Mills]

I am grateful to the Minister although I am not sure we got an idea of how long the application form will take to fill in. Perhaps we will get that later.

[Hywel Williams]

Speaking as a non-luddite, I want everyone to be able to partake of the system. I am not a member of the Work and Pensions Committee but perhaps I can ask the hon. Gentleman—or even tempt the Minister—to say whether any attention was given to applications in Welsh in Wales, where Welsh is to be treated on the basis of equality with English? Perhaps the Minister will leap to his feet and reassure me on that.

[Nigel Mills]

Despite what some people think, Amber Valley is not in Wales so I am afraid that the use of the Welsh language is not an issue I have to worry myself or my constituents with. I will leave that point for the Minister.

The next area of concern is the single monthly payment per household, and making that replicate what most people in work receive as a salary is a sensible step. We are not talking about people who only receive benefits; people in work will receive universal credit on top of that, and we are trying to encourage them to work more hours and get more money, at which point their benefit will drop. In an ideal world, a single monthly payment that matches timing with salary must be a step forward. We are trying to help people get back into work and not face extra barriers created by the benefit system. Clearly there are issues, however, and some people will not be able to cope with one single monthly payment. We must consider how we will help them through that, deal with the exemption system, and find out that they are not coping before they get into so much debt that they cannot get out of it. It will be interesting to see the progress on new bank accounts, especially the jam jar system, although we have not yet heard how many providers are willing to offer such a system.

[Jane Ellison]

I am glad that my hon. Friend mentioned jam jar accounts because they are important. We have spoken previously about this issue, but it is one on which we are all urging the Minister to give the banks a really good kick. As I said in a previous speech, such accounts are one demonstrable way that the banks could make amends for what the public perceive to be a pretty poor show over the past few years.

[Nigel Mills]

I am grateful to my hon. Friend. We need to know soon how many providers are interested in that system and what the Government’s proposals are. People will be rolling into universal credit soon, and we must understand what their bank accounts will look like to ensure the system works. I have heard lobbying groups present interesting ideas about the real advantages of the jam jar system. People can choose to have their rent payment moved into a separate account so that it goes out on the right day and they cannot accidentally spend it on something else. Applications that use payment cards or jam jar bank accounts can produce useful solutions. Perhaps we can introduce a system under which people have the chance to choose their preferences. People must choose to set money aside for certain bills, rather than be forced in some draconian state-controlled manner and told how to spend their money, but an update on the issue would be useful.

I also want to consider the impact of this system on people who are self-employed. It is clearly right that they state each month what profit they have made so that any benefit they are due can be worked out. It is equally right that we encourage them to work hard and make a minimum level of profit and not somehow get round the system that applies to people looking for paid employment. I am a little concerned that we will end up with two different reporting and accounting systems. For universal credit people will have to report their monthly profit or income based on some kind of calculation, yet for tax purposes they will have to use a completely different calculation. That could leave them with two different sets of books and calculations which could be hugely complicated and they may end up with some true-up at the end. Hopefully, people can get some assurance that what is expected for universal credit is the same as HMRC expects at the end of the year. It could be nice and simple—people could hit a “total” button on the universal credit system and it will say what their annual profits have been.

[Anne Marie Morris]

Despite that complexity, presumably my hon. Friend would welcome the change to allow businesses that have become insolvent not to be written off, so that effectively over a five-year period they can come back without all the penalties that exist in the current system.

[Nigel Mills]

Yes, we want to encourage people to have another go if they wish—that makes perfect sense.

In conclusion, this system has been generally welcomed and we hope it is a real step forward. We are concerned, however, that for some more vulnerable people in society some of the changes will prove too much. We must ensure that we do not leave a whole load of people behind in a difficult situation, and that when the system goes live, the Government have plans in place to ensure that a worse situation does not develop.

State Pension Reform

Nigel Mills Excerpts

Monday 14th January 2013 Commons Chamber

[Steve Webb]

I have written to the devolved Assemblies and the Scottish Parliament about our announcement today. On the hon. Lady’s question about costings, let me say that for the next couple of decades or so we will be spending pretty much the same as now—it is within the same cost envelope—but we will be getting the bill down for younger workers by the middle of the century. It will not be down relative to today—the share of national income going on pensions will be substantially bigger than today—but it will not be rising quite as fast. We are ensuring that workers in their 20s will be automatically enrolled so that they have a savings culture as well as state pension.

[Nigel Mills (Amber Valley) (Con)]

I warmly welcome this announcement, and I think we will get to the right place. How long does the Minister expect that the current complex system will have to remain in place? Will we have to keep paying people pension credits for 40 years or more, or will there be a taper so that everybody will eventually receive the new pension?

[Steve Webb]

I am afraid that the taper is sometimes called the grim reaper. The process is that everybody who has already reached pension age by 2017 will have their rights under the current rules. I have every anticipation that those rights will be honoured for as long as people are in a position to draw them.

Personal Independence Payments

Nigel Mills Excerpts

Thursday 13th December 2012 Commons Chamber

[Esther McVey]

I welcome the right hon. Lady’s words and her acknowledgment of the listening and consultation that we have done and the changes that we have made. I cannot give the assurances that she would like on PIP, as those were not the case for people of working age under DLA. What we can say is that everybody will be viewed as an individual when it comes to assessing their needs and that more people will get the higher awards—nearly 25% of those on PIP will be on the highest awards. As for carers, one thing we all agree on is that they do an incredible job. We will support them as best we can. I can also announce today that the links for carers that were in place under DLA will also be in place under PIP.

The Opposition never conducted a cumulative impact assessment when they were in government, and for good reason. I understand that it would be impossible to measure the impact of such large reforms and changes, particularly as they will not be in place until 2017 and the case load is dynamic. Even the Institute for Fiscal Studies says that it would be nearly impossible to do that. As I have said, I am delighted that we have listened to the disability groups, taken on board what they have said and made the changes they asked for.

[Nigel Mills (Amber Valley) (Con)]

Does the Minister welcome, as I do, the fairer way that fluctuating conditions, mental health conditions and cognitive impairments are assessed under PIP, in contrast to DLA, which tended to focus solely on physical impairment?

[Esther McVey]

I thank my hon. Friend, who quite rightly states that PIP is intended to look at fluctuating conditions, take all the impacts into assessment and deliver for those people.

Benefits Uprating (2013-14)

Nigel Mills Excerpts

Thursday 6th December 2012 Commons Chamber

[Steve Webb]

I hesitate to trade Shakespearian quotes with the hon. Lady, but to be clear, benefits are not being frozen, they are being increased. She is right on child poverty. The Government have not just stumbled across working poverty, because it was widespread under the previous Government, but it will be substantially improved by universal credit, which will make work pay in a way that it did not under the previous Government.

[Nigel Mills (Amber Valley) (Con)]

Will the Minister confirm that average pay has increased by only 10% and out-of-work benefits have increased by 20% in the past five years, and therefore that holding down the rate of increase will help to make the situation fairer for those who go out to work to pay for those benefits?

[Steve Webb]

My hon. Friend is right that we have substantially increased out-of-work benefits. He will recall the 5.2% increase last year in line with inflation. We judged that that was the right thing to do when inflation was running very high. This year, my right hon. Friend the Chancellor has had regard to inflation and the wider economic situation, which have informed his judgments.

[Mr Dennis Skinner (Bolsover) (Lab)]

BBC television this morning went to a clothing factory in Derbyshire.

[Nigel Mills]

In Alfreton.

[Mr Skinner]

Yes, in Alfreton. The BBC interviewed people—strivers—who work for a living at the factory about the effect of the Budget. Surprisingly, all three of those interviewed understood that the cut would affect them and not just people out of work. What answer has the Minister got for those people about how the Budget was presented? The Government tried to pull the wool over their eyes, but they were smart enough to spot that they would be the casualties.

Jobs and Social Security

Nigel Mills Excerpts

Wednesday 28th November 2012 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to follow the hon. Member for Huddersfield (Mr Sheerman). I think that I agree with most of what he said. I certainly agree that on this issue we need cross-party consensus and not political point-scoring. It is a pity that his Front Benchers did not take note of that in drafting their motion and chose to play politics instead of dealing with the substance.

Whatever our concerns about the performance of the Work programme to date, it beggars belief to suggest that people would have been better off left to their own devices, with none of the support that it has been providing, and that more of them would have found work in the difficult economic climate we have seen over the past 18 months. That is a grave insult to the providers and their employees who have been working hard trying to help people who have been unemployed for a long time. We have to give the programme somewhat more time than its first year before we draw any real conclusions about its success. We can see from the data published by the trade association that its performance is improving, and that is consistent with what I have seen on the ground in my constituency.

[Sheila Gilmore (Edinburgh East) (Lab)]

The problem I have with quoting the additional figures that have emerged from the trade association is that for the past year and a half we have been lectured on the fact that we could not have any interim information about how the Work programme is going because the data had to be properly evaluated and reliable. Yet because the published data do not suit the Government, we are suddenly having all these unverified data thrown at us to tell us that things are not really how we think they are. Why was all this kept secret?

[Nigel Mills]

I am not sure that I am the best person to answer that question. However, when we have a programme that is running for seven years, with people being put on to it for two years, we cannot draw many conclusions from the data in the first few months of its operation. A decent period will have to elapse before we get some reliable data that will have some meaning and can be used to look at trends. I see why we have official data to the end of July this year, but data since then would have more relevance if we also had data from the first three months of the programme.

No Member of this House seriously disputes the need to provide those with most barriers in their way with the additional support that they need to get back to work. Many such people have been out of work for a long time and will need help with serious issues in order to build up confidence and have any chance of getting back to work. To be fair, the scheme of the previous Government towards the end of their time in office was not radically different from that introduced by the current Government. This Government have accelerated the change, introduced a more consistent programme over the whole country and brought the strands of different schemes into one programme, but the direction of travel is not entirely different. In fact, many providers involved with the previous scheme are also involved in the current one. It is not sensible to say that the Work programme is doing the wrong thing and is a terrible idea, and that its support is completely wrong. Where does that leave us? Surely it is not the Opposition’s policy to have no support at all for the long-term unemployed.

[Mr Byrne]

The hon. Gentleman is generous in giving way. Our point is that there is not enough fuel in the tank. I am sure he is as worried as I am that on current performance, the Work programme may not hit its second-year target to get 27.5% of those on the programme into a long-term job. The Opposition motion says that we should start putting more fuel in the tank by providing extra resources for young people.

[Nigel Mills]

One problem of the Work programme is that the year we are looking at contained the second part of the double-dip recession. We all accept that it is hard for anyone to find work in a recession, let alone those who have been out of work for a long time and have the most barriers to overcome. We hope that as the economy gathers strength in the coming year, that will give the Work programme even more chance of success in meeting its second-year targets.

[Margot James]

My hon. Friend draws attention to some of the similarities between the Work programme and what went before. Does he agree that one key difference is the remuneration paid to Work programme providers? They get a £300 attachment fee when someone is referred to them, but do not receive further remuneration until a candidate has been in work for six months. That provides a huge incentive—along with the fact that some applicants will have their benefits docked if they do not co-operate—and makes the Work programme a greater success than what preceded it.

[Nigel Mills]

I am grateful to my hon. Friend. The motion suggests that people would have been better off without the Work programme and with no extra support, but the support it provides is valuable and not entirely different from that provided in previous programmes. Payment by results, which I will come to, provides a far greater incentive to providers to get people back into work and, most importantly, not just to start a job but to find a sustainable position where they can remain for a long time. That is a key part of the programme.

The Work programme also fixed the problem of providers going for low-hanging fruit and getting back into work those who could do so most easily, while not placing quite the right focus on those who were more challenging. Remuneration for the Work programme means there are far more incentives to focus on the harder parts of the cohort.

Like my hon. Friend the Member for Stourbridge (Margot James), I have visited providers in my constituency—A4e and Ingeus—and I have seen their work and how they go about it. Importantly, somebody does not come through the door on the first day and start applying for jobs on the second; there is a long period of working out a person’s needs, what support they have, the training they need, and building their confidence, before they start applying for jobs. One does not expect providers to get people into work in the early months of their referral, which is why there is a problem with the statistics. We are looking at numbers of people who have been in work for six months of a programme that has existed for 13 months during a double-dip recession. The providers might not have even tried to get some of those people into work at the start of the programme—it is not a fair measure. Providers in my constituency are doing great work and the support they provide is valuable. I commend them on that, rather than saying that their work is worthless or worse than nothing.

No one would pretend that yesterday’s results were anything other than disappointing and concerning. We all wish that progress was quicker, and the whole House wants to get people back into work to improve the quality of their lives and for the sake of the taxpayer. However, the Work programme is a seven-year programme that gives individuals a two-year programme, and it is unfair to judge it on the basis of its first-year performance. We should look in a year’s time when the first cohort has spent two years in the programme. Let us look at the outcomes after the full two years, and see how many people are in work at that point.

[Ben Gummer (Ipswich) (Con)]

My hon. Friend is entirely right that the figures are disappointing. I am sure that he, like me, has had successful cases in his surgery. Two people who came to my surgery went through training schemes under the previous Administration—one of them had been unemployed for eight years—but found a job through the Work programme, so it is having an effect in individual cases. It is certainly making an impact in my constituency, as I am sure it is doing in his.

[Nigel Mills]

My hon. Friend reinforces the point that it is utterly unreasonable to say that the scheme is worse than doing nothing.

Providers who cover my constituency have told me that they had only a short time to prepare before they started work. They said they had not worked in the east midlands before, so had not only to find staff, but to build links and form relationships with employers to convince them to take people in more challenging situations. Expecting brilliant results at the start of the programme does not work.

The latest data show that 29% of first referrals from June 2011 have now had a job start, and that 37% of under-25s have had a job start. Those are not terrible results; they are encouraging. In Amber Valley, the results are better than average: 4.2% of those referred have met the target of spending six months in a job. I accept that that is less than the 5.5% target, but it is well ahead of the national average. Amber Valley is generally performing well. Total jobseeker’s allowance claimants are down 21% since the election, and JSA claimants under 25 are down 24%. Claimants per vacancy are down from 6.2 to 1.5. That is not a disastrous situation, but a sign that things are going in the right direction. I sincerely hope it continues—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I know a new Member will speak shortly, but could we just have a little quiet so we can hear Mr Mills?

[Nigel Mills]

Opposition Members clearly do not want to hear the truth of my argument.

The Select Committee on Work and Pensions report from last year, which was produced before I was a member of the Committee, gave the scheme a broad welcome, but one concern was the impact on smaller providers that are subcontractors to the main providers. I wholeheartedly endorse payment by results, but it can make things quite hard for organisations that are not large businesses with strong balance sheets, which can fund the gap. Given the delays in the system, some of the smaller providers have found their cash flow squeezed and are struggling to survive. All hon. Members value their innovative ideas and the extra local knowledge they can add to the scheme, so will the Government, after seeing the results, find a way of reviewing how small providers are funded and ensure they can survive the transition period and continue to provide their valuable work?

Overall, there are some concerns with how the Work programme has started. We would prefer the numbers to be a lot better, but there are encouraging signs. The programme can be a success and performance is going in the right direction. I hope that, in a year’s time, we are talking about the great successes of getting the most challenged people—those who have been out of work for a long time—back into jobs, which will improve their lives and the situation for the taxpayer.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Before I call the new hon. Member for Manchester Central (Lucy Powell), I remind Members that there will be no interventions because it is a maiden speech.

Benefits Uprating

Nigel Mills Excerpts

Tuesday 6th December 2011 Commons Chamber

[Steve Webb]

The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller) brought forward proposals only this week to make child maintenance more effective, because, as the hon. Lady rightly says, getting child maintenance paid is crucial. We believe that far too little is paid and the cost of collecting it is disproportionate to what we receive, so we need an efficient child maintenance system, and that is what we propose to bring forward.

[Nigel Mills (Amber Valley) (Con)]

Does the Minister agree that rather than trapping more low-paid families in the complicated web of means-tested benefits, which has done so much damage already, taking them out of tax altogether is by far the better approach?

[Steve Webb]

My hon. Friend is quite right that we have already taken, I think, just over 1 million families or individuals out of tax. We have a long-term goal of a £10,000 tax-free allowance, which would take out millions more, but what is often not understood is that couples in which both members go out to work to make ends meet get twice as much benefit. Each benefits from the personal tax allowance increase, so it helps precisely those most hard-pressed families in which both parents work all hours to keep their family going.