Oral Answers to Questions

Debate between Nigel Mills and Iain Duncan Smith

Monday 9th March 2015 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

10. What progress his Department has made on the roll-out of universal credit.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

We have begun the national roll-out of universal credit. Those plans are on track, and universal credit is now available in nearly 150 jobcentre areas for single claimants and in nearly 100 areas for couples and families. Universal credit will be available in over 500 jobcentre areas—seven in 10—by the end of the year, and it will be rolled out to all our 714 jobcentres next year.

[Nigel Mills]

In contrast to some reports today, the staff in the jobcentres in my constituency are looking forward to the roll-out of universal credit because they know the advantages it will bring to local jobseekers. Has my right hon. Friend made a recent assessment of the benefits of universal credit following the roll-out so far?

[Mr Duncan Smith]

We have indeed. From what I have read of the reports my hon. Friend mentions, every single point made in them is wrong and misleading. We will be making our position clear on that. The analysis that he asks for has shown that the benefits of universal credit are statistically significant. Findings now show that, compared with similar claimants on jobseeker’s allowance, universal credit claimants spend more time looking for work, enter work more quickly and spend more time in work. They also end up earning more.

Universal Credit

Debate between Nigel Mills and Iain Duncan Smith

Tuesday 25th November 2014 Commons Chamber

[Mr Duncan Smith]

As the hon. Lady knows, we started with single people, but whenever somebody’s circumstances changed—they may have become a couple or had a family—they stayed in the system and have been dealt with. It is not correct, in any way, to say that these are the simplest cases. The roll-out to families introduces further complications, but we are doing this in way that makes sure that we get it right. By the end of this year, the north-west will have universal credit, so if someone falls unemployed and then goes into work, they will do so on universal credit. That is the key point. All the complications will be dealt with within the existing system.

[Nigel Mills (Amber Valley) (Con)]

I welcome the progress announced in the Secretary of State’s statement. Will he confirm that the Treasury has now signed off the whole business case and laid to rest the fear that it was not going to do so?

[Mr Duncan Smith]

That is exactly what was being asked before the summer break, and the answer is that the Treasury has done that. The MPA has also signed off the roll-out process in saying that it de-risks the nature of the roll-out and approves it exactly as it stands at the moment.

Universal Credit

Debate between Nigel Mills and Iain Duncan Smith

Wednesday 9th July 2014 Commons Chamber

[Mr Duncan Smith]

I respect the right hon. Lady enormously for the job she does, but I say to her clearly that it was on the recommendations of her Committee and the NAO that we instigated—by the way, I think this is the way ahead for all future programmes—a programme in which, at every stage and in every separate part of development, we would have approvals from the Treasury and with the Cabinet Office, which is what is going on at the moment. My point is that the answer that Mr Kerslake, the head of the civil service, gave was correct in the sense, as I have said today, that the overall strategic business case for the full lifetime of the programme is in discussion right now for that completion. However, all the elements that are relevant—the strategic business plan for this Parliament, which includes all the roll-out, all the investments, of which the right hon. Lady will be aware, and the roll-out through to the north-west—have been approved. There will be no further need for approvals this Parliament, so the reality is quite clear: universal credit is on track and is rolling against the plan we set out last year. All those approvals are agreed, and we hope that the final element, which would logically come at the end of the process, will be agreed shortly with the Chief Secretary.

[Nigel Mills (Amber Valley) (Con)]

The Secretary of State has me convinced about the benefits of universal credit, but will he consider publishing the business case so that the House and the public outside can see the full benefits?

Oral Answers to Questions

Debate between Nigel Mills and Iain Duncan Smith

Monday 13th January 2014 Commons Chamber

[Nigel Mills (Amber Valley) (Con)]

18. What plans he has for the habitual residence test.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Migrants must now meet a much tougher habitual residence test than before, showing the efforts they have made to find work before coming to the UK and that their English language skills are not a barrier to getting a job. They must also have been resident in the UK for three months before being able to access out-of-work benefits. We have plans to make it even stronger, by introducing a minimum earnings threshold, with tougher questions on whether work is genuine, and job seekers from the European economic area will not receive housing benefit.

[Nigel Mills]

I am grateful to the Secretary of State for that detailed answer. I urge him to go a bit further and listen to the representations he has received to extend the qualifying period for the habitual residence test, and make people have to be here for a year before they can get those benefits.

[Mr Duncan Smith]

As has been made clear beyond this Chamber, we are looking at that matter at the moment, and we have been discussing it with a number of other European nations, the vast majority of which are clear and with us on the idea that freedom of movement should not result in an opportunity for people to take benefits from wherever they want and to pick and choose their benefit areas. We are looking at how we can come to an agreement on those time scales and limits.

Universal Credit

Debate between Nigel Mills and Iain Duncan Smith

Tuesday 10th December 2013 Commons Chamber

[Mr Duncan Smith]

I have more credibility than the Labour party, which wasted money galore. My answer is that I will deliver this and we are already delivering welfare reforms—[Interruption.] The right hon. Member for East Ham (Stephen Timms) needs to remember that he was in a Government who watched welfare spending rise by 60% under their watch.

[Nigel Mills (Amber Valley) (Con)]

Although writing off anything is disappointing, will the Secretary of State confirm whether he has analysed what a comparable write-off would be for schemes in the public and private sector elsewhere?

Universal Credit

Debate between Nigel Mills and Iain Duncan Smith

Thursday 5th September 2013 Commons Chamber

[Mr Duncan Smith]

That is exactly one of the reasons why we intervened back in 2012—the system they were trying to integrate was not going to work correctly. That was already evident by the end of 2011 and early 2012. The problems were such that when I introduced the independent inquiry, it told me categorically that this was not going to work, so we have changed it and reset it. In conjunction with the Cabinet Office, we have seen that there is a better way to do this, and we believe that the integrated fraud programme will deliver results in the new roll-out.

[Nigel Mills (Amber Valley) (Con)]

When the Select Committee visited the north-west we saw universal credit working, albeit in a limited manner, and being well received by the staff working with it. It was having a positive impact on the claimants they were working with. Surely, however, it is right not to roll out this programme so fast and risk millions of people not getting the benefit that they are expecting to get. So may I urge the Secretary of State to say to the House that he will not rush this and that he will get it right before it is rolled out to more people?

[Mr Duncan Smith]

I agree, and I must say what the problem has been throughout all this. When I introduced the pathfinder, which said that there would a delay in the way we rolled this out, Labour criticised us for delaying the roll-out. Then, later on, it criticised us for not doing it properly. The reality is that we are doing this properly. We will not do it against artificial timetables, but it will be done in the overall four-year timetable and it will be effective.

Pensions Bill

Debate between Nigel Mills and Iain Duncan Smith

Monday 17th June 2013 Commons Chamber

[Mr Duncan Smith]

We plan to head that off. We will have much more stringent quality standards, which will ensure that the process is properly managed. We will keep that constantly under review, to ensure that there is no opportunity for people to abuse the process. It is worth noting that we have already talked about areas where we want to ban and cap. For example, we announced our intention to ban consultancy charges in auto-enrolment schemes and we are considering how to do that. The Office of Fair Trading report is due in the summer, I think, and the Government will be consulting after that. We plan to publish our consultation, including on proposals to introduce a charge cap. Defined ambition pensions should also give us greater risk sharing and certainty. I hope that that answers the hon. Lady, and there will be more to come from my hon. Friend the Minister of State.

[Nigel Mills (Amber Valley) (Con)]

Small pots cannot currently be transferred to the National Employment Savings Trust. Will the Secretary of State update the House on the Government’s plans to change that? I cannot see any such plans in the Bill, so might they appear at a later stage?

[Mr Duncan Smith]

This is obviously Second Reading, but we will have further discussions on that subject. We know that it needs addressing and my hon. Friend the Minister of State is already aware of that. Although we will not cover it on Second Reading, we will, I suspect, tackle it during the passage of the Bill. If my hon. Friend the Member for Amber Valley (Nigel Mills) wants to be on the Committee, now is the time to volunteer. Volunteering in this place is always dangerous, but, none the less, I urge him to do that.

Even with auto-enrolment, it is critical that people understand what they get from the state and are able to save with some confidence. I recognise that that is the biggest area, and it is what the single-tier pension is all about. Auto-enrolment on its own without single tier would be difficult, but single tier underpins auto-enrolment, making it all the more important. The single tier will be all about setting a basic level of pension above the means test.

Let me give an illustrative example: 2012-13 prices would mean a single tier of £144 a week, a basic state pension of £107 and pension credit of £142. Under single tier, every individual would therefore qualify for a pension in their own right. The full rate payable for 35 years of national insurance contribution—the right hon. Member for Birkenhead has made the point about contributing to one’s future wealth—reflects that we are combining both the basic pension, based on contributions for more than 30 years, and the state second pension, based on 49 or 50 years of contributions. We are merging the two together. Yet even as we abolish the whole complicated system of the additional state pension on the one hand and contracting out on the other, we will still recognise people’s existing contributions. This is an important matter which has been raised with us a number of times. For example, someone who reaches state pension age in 2016 under single tier who is due £160 under the current system in whatever form will still get that pension of £160, so it is locked in.

Workers who were contracted out at implementation will start to pay full national insurance contributions, as 70% of those who are in work already do. In return, we believe they can build towards a pension at full single rate. Rather than today’s much lower basic state pension, they will get a reward for that effort to save, as I said earlier, referencing the already existing auto-enrolment. As a result, the vast majority, some 90% in the first two decades, will receive enough extra over their retirement through a single-tier pension to more than offset the higher contributions. Let us take a 40-year-old in 2016 contributing an extra £6,000 of national insurance before reaching state pension age in 2043. Over their retirement they would receive £24,000 more in state pension—a net gain of £18,000. That is the point that I was trying to illustrate earlier.

We must honour the past and deal with its complexity. That is the key. Going forward, whether previously contracted out or not, people will become entitled to the single-tier pension in the same way. This is an important feature.