Oral Answers to Questions

Peter Dowd Excerpts

Tuesday 19th July 2016 Commons Chamber

[Mr Gauke]

My hon. Friend makes a very good point. Enterprise zones, which were reintroduced by the Government in the last Parliament, are important in creating a clustering effect and a culture of enterprise. They are making a big contribution to the northern powerhouse and playing a role in the increase in investment in the north of England.

[Peter Dowd (Bootle) (Lab)]

May I welcome the new Ministers to the Front Bench? Five northern powerhouse combined authority leaders have requested a meeting with the Prime Minister in Manchester to discuss the serious implications of Brexit for the northern economy, given its massive contribution to the country as a whole. In advance of the Brexit vote, will the Chief Secretary tell the House how many civil servants were working on regional plans, or any other plans for that matter, for such an eventuality?

[Mr Gauke]

First, I thank the hon. Gentleman and welcome him to his post. I am delighted to see that the shadow Front Bench is almost up to full complement.

We obviously face a number of challenges in terms of the new situation, but there are also a number of opportunities. As I have made clear repeatedly today, the Government are determined to ensure that, whatever the consequences of the Brexit vote, we will enable the northern cities to prosper and work together. That remains a Government priority.

The Economy and Work

Peter Dowd Excerpts

Thursday 26th May 2016 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

It is self-evident that investment, jobs and skills are the key to solving many of the problems facing the country. That is no less true in my constituency, so I shall touch on those topics.

There has been a slowdown in private sector investment owing to the impact of the recession and slow or stagnant recovery in the north. In my constituency, the only recent significant industrial investment is in a facility in Netherton at a manufacturing printers. The most strategic investment is in the new deep sea berth in the port of Liverpool at Seaforth. However, although there are plans to build a new road or a reconstructed road to the port, the plans for rail freight are abysmal, with just £10 million investment over the next three years. Perhaps there should be a halt to the road development until we get a better and more symbiotic relationship between rail and road investment there.

Bootle constituency has a chronic deficit of private investment as its employment base is in the public sector, at 23% in the borough of Sefton compared with 17% in the UK, and private sector job increases have not replaced public sector job loss. This is compounded by the underinvestment in public infrastructure on rail, ageing water and sewerage systems and undersupply of electricity to development sites. I hope the devolution deal will deliver on its promise to attract more investment into the area.

I want to give a thumbs-up to Mayor Joe Anderson, the chair of Liverpool city region combined authority, who has robustly made that case for the whole of Merseyside, as Ministers will testify. Gaining investment and jobs stimulated by the Liverpool2 development and improved road and rail access connecting it to the northern powerhouse will be critical.

On jobs, the stagnant recovery is reflected in job levels in Bootle, although the recession has not affected chronic unemployment. The issue of skills is a bone of contention nationally. We have managed to raise the level of skills, but there must be something wrong with an economy that can spend £20 million on a garden bridge across the Thames and £10 million on rail investment in one of the largest ports in the country. There is something wrong with that system and it must change. I hope this Queen’s Speech will change it, but I doubt it.

HMRC: Building our Future Plan

Peter Dowd Excerpts

Thursday 28th April 2016 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

I thank the hon. Member for Glasgow South West (Chris Stephens) for bringing this issue before us today.

For my constituency of Bootle these proposals are little short of disastrous—although I do not think they are proposals, as I fear that the Government have already made up their mind. At the same time, they have simply washed their hands of the matter, on the grounds that the reorganisation of HMRC has nothing to do with them. They want us to believe that HMRC is a sort of offshore haven, outside the Government’s control. I know that HMRC collects taxes on their behalf, but that is stretching the notion of a tax haven just a bit too far even for this Government.

Not only are the Government completely uninterested in what they cannot control, but they now seem to be in the business of being uninterested in what they can. They have put up a firewall between themselves and any decisions about the reorganisation, on the grounds that it is not a matter for them to interfere with. My hon. Friend the Member for Walsall South (Valerie Vaz) alluded to that. The Government believe that the HMRC board should be allowed to get on with things, unbridled by any political considerations that it might fall foul of. To put it another way, the Government have reached for the Treasury’s bargepole and are pushing this issue away from themselves.

[Peter Grant]

Does the hon. Gentleman agree it is extremely ironic that at the same time as the Government want to maintain an arm’s-length relationship between the client and HMRC, the relationship between HMRC and big businesses—including big, tax-dodging advisory businesses—is at a very short arm’s length?

[Peter Dowd]

The hon. Gentleman’s point is spot on, and in future we must try forensically to consider those connections.

I previously used the word “pusillanimous” to describe the Government’s past actions, and given the circumstances I thought that was a reasonable way of describing their approach to this issue. This issue affects the lives of thousands of dedicated civil servants up and down the country, but the Government’s claim that it has nothing to do with them rings hollow. On one hand the Government feel that the operation and reorganisation of HMRC is its business, and that they should not interfere as a matter of principle—in other words, senior civil servants and the board can just get on and do what they want, and the Government will remain silent. That is disingenuous at the very least. In short, the Government are ducking their responsibilities again.

On the other hand, like a medieval baron, the Government want to interfere in all sorts of matters that take their fancy. Only yesterday they decided that their attempts to interfere in the running of trade unions was a mistake, which led to a retreat to save the Prime Minister’s bacon and get trade union support in the referendum. The Government also feel able to interfere in the organisation of schools, how they are run, and who will or will not run them at a very local level—almost school by school. However, on a major issue to do with tax raising revenue in this country, they are silent because that is for someone else to deal with. That is not acceptable. The “nothing to do with us” old chestnut will not wash.

These proposals directly affect my constituency. HMRC has been sited in Bootle since the 1960s. There are a number of offices, with other Departments in situ employing more than 3,000 staff. That number is falling day by day. In 2005, HMRC employed 105,000 members of staff, but that number continues to fall. The so-called Building Our Future programme—a misnomer if ever there was one—seeks to close almost 160 HMRC offices and relocate them. A more accurate description would be “Demolishing our Future”.

Apparently, HMRC has criteria by which it chooses which offices are to close, but no account is taken of the impact of those closures on local communities like mine, which have thousands of jobs dependent on the service, the wider impact on the community’s social cohesion, or the effect on the many local businesses that serve those offices. I had a meeting with senior HMRC staff, for which I thank them. However, the criteria that they indicated had been used to inform the closure decisions did not on the whole stand up to much scrutiny for the offices in my constituency.

Let me give some examples. The HMRC staff talked about transport links needing to be available and robust. The Bootle office is three miles from Liverpool city centre where the new office is to be sited—I am not sure whether that site is even available yet. Bootle has excellent bus links across the city region. Indeed, there is a main bus interchange literally 200 yards from one of the main offices, and just a few hundred yards from another one. Both main sites are similarly close to five stations on the Northern and Ormskirk lines. Those stations have excellent cross-city region links, and are no more than 10 to 15 minutes ride from Lime Street station in the city centre, where apparently the office is to go. We are close to the city centre, yet the Government are saying that transport links are essential and therefore the office must be in the city centre.

No discussions have been held with the passenger transport authority in Merseyside, or with the Cheshire or Welsh transport authorities. I mention the Cheshire and Welsh authorities simply because if a substantial part of the decision is based on transport links—among other things that I do not have time to touch on now—the fact that we have not even discussed those links with the area’s transport authorities throws into doubt the robustness of the plan. Consultants were paid a huge amount for this plan, and we should get our money back from them because they pinched it from the taxpayer.

[Several hon. Members rose—]

Budget Resolutions and Economic Situation

Peter Dowd Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

May I put on record my condolences to the people of Brussels and Belgium? My home town has been twinned with the town of Mons for more than 50 years, and the current Mayor of Mons—Elio Di Rupo—is the former Prime Minister of Belgium. I would therefore like to make sure my views are recorded.

Anything I say about the Chancellor in relation to the Budget will be as nothing compared with the thrashing he received over the weekend from his colleagues and particularly from the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) or, conversely, with the assault that the right hon. Member for Chingford and Woodford Green received in retaliation. It was the nasty party in full flow, arguing among themselves for all to see. If Conservative Members do that to themselves, hon. Members can imagine how easy it is for them to do the same to disabled people.

Before our very eyes, the acrid smoke from the smoke-and-mirrors Budget is starting to choke the Chancellor, and the mirrors have cracked. As for compassionate Conservatives, they would not know a good samaritan if he crossed the road to help them—by their standards, they would expect to be mugged. Expecting the country, at this point in the whole unfolding charade, to believe that a mass damascene conversion has taken place among Conservative Members is stretching credulity to its limits.

The Chancellor is fond of talking about cocktails: the problems faced by the economy are the result of a cocktail of external pressures—oil prices, the squeeze in China, the instability in the middle east—that have little to do with him. In my view, what we have seen is more cock-up than cocktail. According to the Chancellor, that has nothing to do with the fact that, as John Humphrys pointed out on the “Today” programme, he has missed virtually every target he has set himself.

Labour Members would be impressed by the conversions we have seen if we did not smell a rat. At the end of the day, however, we all remember the right hon. Member for Chingford and Woodford Green punching the air at the autumn statement and trying to claim that the Chancellor was Mr Christmas. Evidently the Chancellor had laid his hands on another £27 billion, and of course Conservative Members were all cheering and chinking glasses. Well, the chinking of glasses is often followed by a hangover, and the hangover is on its way. The Government are going to have to deal with the hangover, because they cannot and must not—and we will not tolerate it—make people in the most vulnerable positions the fall guys for the arrogance, the incompetence and the brass neck of this Chancellor.

Local Government: Ethical Procurement

Peter Dowd Excerpts

Tuesday 15th March 2016 Westminster Hall

[Richard Burgon (Leeds East) (Lab)]

I congratulate my hon. Friend the Member for Birmingham, Northfield (Richard Burden) on obtaining the debate, and I thank Martin Linton, the former Member of Parliament for Battersea, for the background work he has done. I declare an interest because I visited Jerusalem and the west bank recently with a Labour delegation funded by the excellent organisation Medical Aid for Palestinians, with which I am proud to be associated. As a Front Bencher, I do not want to speak for long, but I have a particular wish to speak because of my visit to Jerusalem and the west bank.

Like many Opposition Members, I was very concerned about the nature of the announcement that has been made. I was concerned that the Cabinet Office Minister announced the proposals not in the Commons—which was in recess—but at a press conference in Israel, with the Prime Minister of Israel, Benjamin Netanyahu. That announcement coincided with our delegation to illegally occupied Palestine.

People’s attention has already been brought to the statement by the Secretary of State for Communities and Local Government:

“Divisive policies undermine good community relations, and harm the economic security of families by pushing up council tax. We need to challenge and prevent the politics of division.”

I wish to say something about divided communities, after our recent delegation to the illegally occupied territories of Palestine. The experience that we had in the west bank clarified why some councils might want to take some action on illegal settlements. The policies pursued by the Government of Israel in allowing illegal settlements to flourish are a physical and political barrier to peace and a two-state solution.

I want to draw my brief remarks to a conclusion by asking the Minister whether he has been to the west bank and seen the Israeli settlements. Does he agree with UK Government policy that settlements are illegal under international law? Does he see any contradiction in the local authority devolution agenda when they are freeing up policy on business rates while freezing powers on pension investment and procurement decisions? Government regulations threaten councils with “severe penalties” if they fail to reflect foreign policy, but why is it so wrong to impose a ban or boycott with respect to settlements that the Government deem to be illegal?

[Peter Dowd (Bootle) (Lab)]

Does my hon. Friend agree that the point about sanctions and boycotts made by the hon. Member for Hendon (Dr Offord) was quite ridiculous? On that basis, why do we boycott Iran, Syria, Russia, individuals, Afghanistan, Ukraine and Zimbabwe? It seems to be an illogical position to take that we should not have sanctions or boycotts.

[Richard Burgon]

I agree with my hon. Friend that we should make democratic choice the key part of this debate but, after hearing some contributions from Government Members, I think that they are not in favour of democratic choice in relation to this matter.

These proposals are a step too far. Britain has a clear position on settlements: they are illegal under international law, constitute an obstacle to peace and threaten to make a two-state solution impossible. This is about democracy, and the proposals are an affront to democracy, choice and local power, and the comments of the hon. Member for Hendon (Dr Offord) are an absolute disgrace.

Spending Review and Autumn Statement

Peter Dowd Excerpts

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

My hon. Friend, who I believe is the son of police officers, made a persuasive argument to me about what we could do to our police when we discussed that matter. He has done his parents and his constituents in Corby proud. The support for energy intensive industries has been provided by the Department for Business, Innovation and Skills out of its departmental budget this year. In the years ahead, it will be provided as an exemption from the green tariffs.

[Peter Dowd (Bootle) (Lab)]

In addition to the threat to thousands of Revenue and Customs jobs in my constituency, proposals have been announced by Webhelp and Shop Direct, which has the Very and Littlewoods brands, to transfer 400 call centre jobs to South Africa. What in the statement will encourage such companies to remain or, as the Chancellor puts it, stay here in Britain, especially in the light of the cuts to departmental budgets?

[Mr Osborne]

The way in which we can support the hon. Gentleman’s constituents and ensure that businesses invest here is by being a competitive place to do business. He is right to draw attention to the fact that companies can choose to locate anywhere in the world. How do we address that? We make Britain the place to invest and we make Liverpool the place to invest, so that we attract those businesses here. Investment is coming into this country. Indeed, Britain has attracted more investment than the rest of Europe. As I set out today in the autumn statement, overall investment in our economy is going up by more than investment in any other G7 economy this year, and it will go up more here next year and the year after than in any other G7 economy. That will produce the jobs that he wants for his constituents.

HMRC Office Closures

Peter Dowd Excerpts

Tuesday 24th November 2015 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

On 12 November, HMRC made its “Building our Future: location strategy” announcement. As far as I am concerned, that is the precursor to the end of 50 years of my constituency’s links with the civil service as a major public employer. More than 2,500 hard-working, committed, loyal and productive staff at four sites will be affected by the announcement, of whom almost 700 are my constituents. Many of them are my friends, and many of them work in specialist and complex areas of investigation and administration. Regrettably, I found out about the detail—I use the word “detail” very loosely—in a very short letter from the chief executive. It was sent at 2.14 pm on 12 November, which was when Parliament was in recess. It said:

“I am writing to let you know that HMRC has today announced the next step in our ten-year modernisation programme to create a tax authority fit for the future, committing to high quality jobs and the creation of 13 new regional centres serving every region and nation in the UK.”

Members should consider how it feels to tell that to the hundreds of people who will lose their jobs, and to the thousands who will be moved out of my town centre. It seems that every Tom, Dick and Harry knew about the change before I did, and that is disrespectful not to me, but to the thousands of people in my constituency who are affected.

On reading the letter, it almost felt as if I should be grateful to HMRC for continuing to employ people anywhere to collect tax, and as if the service was expanding rather than contracting. I do not know how it managed to do that, but it did.

As I understand it, almost 170 offices will be closing, and they will be replaced by 13 regional centres and four specialist sites over the next five years, although some existing sites will remain open for longer. By 2021, HMRC will be operating out of just 35 locations. For staff in Bootle, the news is particularly shocking.

Litherland House is expected to close in 2018-19, followed by the Triad tax office and St John’s House in 2019-20. Comben House will also close. Those closures will have a significant and, in many cases, devastating impact on large numbers of people, staff and families. The implication in the letter is that staff should be grateful for having a job, even if it has a major effect on their lives, which is an absolute disgrace.

Many staff will face additional costs, with car parking charges and so on, and a detrimental effect on their family lives. They will have to travel to a regional centre, the location of which they have not yet been told. HMRC has announced that it will move to these regional centres, but it will not say where those centres will be. It will be devastating news wherever it is if it is not in the centre of my town. Many questions must be asked, but before I ask some of them, let me just quote Accountancy Live, which is a web-based professional site. It says:

Tax advisers and professional bodies are sceptical about whether HMRC’s plans to close 137 offices…cut real estate costs and save £100m, will deliver improvements in customer service levels, amid concerns that the changes could stretch the tax department to breaking point.”

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

Does the hon. Gentleman agree that the cuts will put HMRC under even more pressure at a time when more resources are needed to militate against the ongoing problems that both HMRC and Concentrix are causing? Numerous constituents have contacted me, suffering from the inadequacies of both departments, and I am sure that those problems will only be exacerbated by the cuts.

[Peter Dowd]

The hon. Lady is absolutely right. It is a fantasy to suggest that, by closing all these offices, we will be able to collect more tax and to tackle fraud.

Let me put a few questions to the Minister. When will the locations of the new regional centres be announced? Has an equality impact assessment been carried out on all the areas affected, particularly the four sites in my constituency? When did HMRC establish which sites were to close, and why was the decision not subject to consultation with Members of Parliament, trade unions, the Treasury Committee, and the Public Accounts Committee? Will the impact of additional costs be factored into the departmental deals, as there has been a pay freeze for God knows how long? What level of community or local business consultation has taken place ahead of the announcements? As far as I am concerned, absolutely none has taken place. Have the following losses to HMRC been taken into account? What about redundancies, income tax, local business tax, increase in jobseeker’s allowance, income support claims, national insurance contributions? The list goes on.

In my constituency specifically, what will happen to the 136 benefits and credits staff currently based at the Triad? When Litherland House closes, how will the other Bootle offices accommodate the staff? What will be the cost of the temporary building adjustments needed until 2020? What will be the cost of altering the software in order to move profiles around sites during the transition period? The questions go on, but we have had not one answer. I demand answers to those questions.

--- Later in debate ---

[Damian Hinds]

I will not for the moment. I want to see how things go and to try to cover as many as possible of the points that have been raised during the debate.

The consolidation has been ongoing since the formation of HMRC in 2005, when it had more than 570 offices. Most recently, in 2014, it announced the closure of 135 older-style walk-in centres, to which vulnerable customers had to make the effort to travel. HMRC replaced them with a dedicated “needs extra support” service, whereby officials go to meet the customers in their own home or at a convenient location. I have met and spoken to HMRC staff who have made the change from the old service model to the new one, and have heard about how much more effective it is in supporting those who need most help.

[Peter Dowd]

rose—

[Damian Hinds]

If the hon. Gentleman will forgive me, I will not give way.

Keeping HMRC’s valued employees fully engaged has been a central part of the transformation programme. The proposals were initially announced internally 18 months ago. Since then, HMRC has held about 2,000 events across the country, talking to and consulting colleagues on the changes.

[Damian Hinds]

I assure my hon. Friend that that is not the way in which the process to identify the locations has been conducted. My hon. Friend the Financial Secretary mentioned earlier the combination of site and location-specific criteria. Critically, the process has also involved mapping out where HMRC staff live, in order to calculate reasonable travel distances and the locations to which those individuals can reasonably travel. In the case of HMRC staff employed in Leeds and Bradford, 130 live a more reasonable distance from Leeds than they do from Bradford.

[Peter Dowd]

What does the Exchequer Secretary have to say to my constituents who have been connected to the civil service for half a century? What does he have to say to the town that will be devastated when those 2,500 jobs move out?

[Damian Hinds]

There are a great number of job opportunities in Liverpool, near the hon. Gentleman’s constituency. This will be a different type of operation, with more disciplines co-located in the same building, so there will be more opportunities for collaborative and efficient working and for career progression and development. Everyone working for HMRC will have the opportunity to discuss their personal circumstances with their manager ahead of any office closures or moves, including any issues that need to be taken into account when making decisions.

Housing and Planning Bill (First sitting)

Peter Dowd Excerpts

Tuesday 10th November 2015 Public Bill Committees

[Peter Dowd (Bootle) (Lab)]

I also declare that I am a member of my local authority.

[The Chair]

A large number of interests. I wish I had some.

Welfare Reform and Work Bill

Peter Dowd Excerpts

Tuesday 27th October 2015 Commons Chamber

[Debbie Abrahams]

The hon. Gentleman makes my point for me: that is why we need the independent review. There was enough evidence to leave real concerns about this matter. The Select Committee thought that the Minister had agreed to a review, but as paragraph 100 of the report states, unfortunately he reneged on that promise. In addition to these serious ethical issues, there were, and still are, concerns about a number of people affected, particularly in the case of ESA claimants, and about the meteoric rise in the use of sanctions.

[Peter Dowd (Bootle) (Lab)]

Does my hon. Friend recall that in the summer the Department for Work and Pensions was forced to admit to having invented quotes from fake benefit claimants, which meant that its sanctions leaflets had to be withdrawn pretty quickly?

[Debbie Abrahams]

My hon. Friend makes a valid point. That is one of the reasons why we need an independent review to investigate such matters.

--- Later in debate ---

[Helen Whately]

Public sector workers are getting a 1% pay rise. Over the past few years, private sector pay has, in the main, been frozen while public sector pay has continued to go up.

I will move on to the Opposition amendments on the benefits cap. The Government intend to reduce the cap to £20,000, or £23,000 in London. We should be clear that that is the net figure, so it would amount to a salary of about £25,000 before tax. We have heard some rather mixed messages from Labour Members. Their leader has said that he wants to cap benefits overall but not for individuals. I am sure that it will become clear today exactly where they stand on the amendments tabled by SNP Members, who I understand do not want any reductions in the benefits cap. Benefits should be a safety net. We need a benefits system that is sustainable and therefore affordable and fair. It cannot allow people to do better on benefits than in work. That creates the wrong incentives. It is also deeply unpopular and therefore unsustainable in its own right. Surely Opposition Members have had conversations with people who are just above the threshold that would allow them to receive most benefits. They must understand their legitimate anger when they see their taxes funding a lifestyle they cannot afford.

[Peter Dowd]

Is the hon. Lady aware that 70% of the money that the Treasury will save as a result of cuts to tax credits will come from working mums?

[Helen Whately]

It was pointed out in Committee that people who receive benefits also pay tax. I do not think we should try to parcel people up in different tribes or groups. This is about getting the right thing for the country, trying to help everybody make the most of their opportunities and making work pay.

I have certainly had difficult conversations on the doorsteps in my constituency, because the majority of employees in Faversham and Mid Kent are paid less than £20,000 per annum. At its current level the benefits cap has been working. More than 16,000 capped households have moved into work, and households subject to the cap are 41% more likely to get into work. We know that work is the best way out of poverty and I believe that everyone in this House wants to see people move out of poverty. We should make the benefits cap work harder. That is what this is about.

--- Later in debate ---

[Victoria Atkins]

I am grateful, Mr Speaker. This is a very quick point.

The concept of job quality is beguiling, but how on earth do we define it? I am conscious that I may be about to upset the hon. Member for Bishop Auckland (Helen Goodman). I am going to describe a real-life job. Someone in their early 20s worked six days a week, or seven on occasion, without a break and far beyond nine-to-five, earning so little that she did not pay income tax in her first year, with no pension, no sickness pay and no holiday pay. Some Members might think that the quality of that job was very poor, but the opinion of the person who had it was that it was a great stepping stone into a very fulfilling career. I can say that because it was my first job. The hon. Member for Bishop Auckland laughs. I do not for a moment recommend it as a first job; we must all find our own courses in life. Nevertheless, how on earth do we define the quality of a job? I fear that this new clause would be a lawyers’ paradise—and I know whereof I speak.

[Peter Dowd]

It is often my lot to be well down the batting order, although I prefer bowling.

Until last night, when they were fortunately brought down to earth by the other House, the Government were pushing on with their tax credit proposals. They are still pushing on with them, despite the fact that the Chancellor is, he tells us, in listening mode, and the fact that there is no palpable or sustainable action to move to a higher-wage economy. They are tinkering at the edges. This proposal affects working mums; as I said earlier, 70% of the burden is falling on them. It affects low-income families. It damages work incentives, despite what the hon. Member for Louth and Horncastle (Victoria Atkins) said. It affects the working poor. It will have a dire effect on those with chronic illnesses, particularly with mental health problems.

The question we have to ask is whether this proposal will make work pay and help people back into work. Many say no. Some have suggested alternatives for where the extra funding can be found. I am not saying whether I agree or disagree with them, but it gives the lie to the claim that there are no alternatives. Despite issues of phased implementation, inheritance tax, relocation of planned spending on the personal allowance, marriage allowance changes, help with childcare costs, working tax credit and universal credit, there is still no guarantee of higher wages.

The provisions on ESA and the WRAG were introduced specifically to assist with support for disabled people who were assessed as not being fit for work according to the Government’s own assessment regime. Some people, such as those with chronic mental health problems, find it difficult to work. The Work programme has supported only 9% of participants on ESA with mental and behavioural disorders into sustained employment. We have parity of esteem, but not for those on welfare. Support for those people has to be tailored to their needs. There can be a slow journey back to health. People need advisers with particular skills and they are not getting them, so how do they possibly get back into work?

As for the sanctions regime, a Church group in Scotland identified that 100,000 young people were affected by sanctions, that they were being debilitated by them and that the sanctions undermined their humanity. Yes, sanctions have existed since 1913, but they have to be humane and those under discussion are not.

[The Minister for Employment (Priti Patel)]

We have had a long and interesting debate on a range of amendments. I thank every colleague who has contributed to it, particularly my hon. Friends the Members for Faversham and Mid Kent (Helen Whately), for Beverley and Holderness (Graham Stuart), for Weaver Vale (Graham Evans), for Stafford (Jeremy Lefroy), for Bury St Edmunds (Jo Churchill), for Chippenham (Michelle Donelan) and for Louth and Horncastle (Victoria Atkins).

Given that time is short, I will speak very briefly to some of the amendments. On amendments 35 to 48, we introduced the benefits cap in order to increase work incentives, to promote fairness between those in work and those on benefits, and to not only help to address the deficit but to support people back to work. The benefits cap has been a key part of our reforms to the structure of the welfare system and to attitudes towards getting back into work.

It is clear from the evidence that the cap is working. Since the cap was introduced in 2013, more than 6,000 previously capped households have moved into work and more than 41% of capped households are likely to go into work. That trend did not exist before the cap, and those with higher weekly benefit payments used to be less likely to move into work. We have had some great results and we intend to build on them and to align the cap with the circumstances of many hard-working people throughout the country. We firmly believe that the new, tiered benefit cap will continue to build on those successes and that it will do more to improve work incentives throughout the country while promoting greater fairness when it comes to work and employment.

There was an extensive debate on amendments 56, 20, 57 and 31 on universal credit and the employment support allowance. The removal of the work-related activity and limited capability for work component will apply only to new claims. There will be no cash losers among claimants already receiving the rate, and clauses 13 and 14 do not affect the support group component.

In 2008, when the then Labour Government introduced ESA as a “radical reform package”, the work-related activity component was originally intended to act as an incentive to help people into work and to return quickly to work. However, the original estimates were incorrect and only 1% of people in the work-related activity group left the benefit each month. It is clear, therefore, that the existing policy is not working and that it is failing claimants.

As discussed in Committee and this afternoon, we believe that it is the duty of Government to support those who want to work to do so, particularly those with disabilities and health conditions who want to work, including the majority of ESA claimants. We know that 61% of those in the WRAG want to work. We will do everything we can to support them in that ambition, and it is right that we do so.

Universal credit supports people with small or fluctuating amounts of work. That is why it is particularly helpful that we look at the ESA component and universal credit together. It is that alignment that will help to bring people closer to work while tailoring the support they need to move into work. As part of the package of savings in the summer Budget, the Government were able to allocate new spending to ESA that would not otherwise have been available. That support is now funding up to £100 million per year to help claimants with limited work capability but who have potential, because they want to move into work, to get closer to the labour market. We will provide all the support necessary to make sure that they can get back into work.

Comments have been made about work coaches and jobcentres. May I reassure the House that all work coaches are trained to help claimants and that that is not based on the benefit they are on, but, importantly, on the actual support they require? That is particularly true for universal credit. The training for staff working with ESA claimants focuses on raising awareness of their individual circumstances and recognises that disability and health conditions affect individuals in different ways. Such factors change over time but, importantly, we will support claimants in their journey to get back into work.

We have had a debate about sanctions. Of course sanctions exist for a reason. Importantly, however, they also exist to support people into work. I recognise that many Members from both sides of the House have specific cases to which they have referred. I again extend my offer to look into such cases. The Government keep the operation of sanctions under constant review. We have clearly made a number of improvements to sanctions, including in relation to the Oakley review. Last week, we gave a very clear response to the Work and Pensions Committee report. Our response outlined the work that the Department has already undertaken to review the sanctions system and the changes we intend to make. The response was welcomed by the right hon. Member for Birkenhead (Frank Field), the Chair of the Select Committee.

Our response to the Committee includes the announcement that we will trial a sanctions warning system, which will give claimants a further opportunity to work with jobcentre work coaches to provide evidence before a sanction is applied. We will consider extending the definition of at-risk groups for hardship purposes, including those with health conditions—particularly those with mental health conditions—and those who are homeless, which means that they can seek access to hardship payments from day one of the sanction.

We want the sanctions system to be clear, fair and effective in promoting positive behaviours. Importantly, however, it should also support individual claimants, which is why we will continue to keep the system under review. I will make it very clear: there are no targets for sanctions, a point made on the Floor of the House this afternoon. I say to the hon. Member for Bishop Auckland (Helen Goodman) that she was wrong in her remarks not just about sanctions but about employment levels in this country and clearly about the economy.

On new clause 3, I thank my hon. Friend the Member for Beverley and Holderness, the hon. Member for Bermondsey and Old Southwark (Neil Coyle)—he was consistent in making points in Committee—and my hon. Friends the Members for Bury St Edmunds, for Gloucester (Richard Graham) and for Weaver Vale for their contributions. The PIP assessment is designed to treat all health conditions and impairments fairly. I assure all hon. Members that we consider the needs of those who are terminally ill in developing the assessment, and that we absolutely remain committed to providing support to disabled people and those with illnesses in all their circumstances. We know that such claimants, especially those who are terminally ill, have particular challenges.

I listened to all the contributions in Committee. As the hon. Member for Bermondsey and Old Southwark knows, I am meeting him tomorrow, with the hon. Member for Sheffield Central (Paul Blomfield), to discuss this matter further. I look forward to working with him on the points he has made, as well as on those expressed by my colleagues. The hon. Member for Bermondsey and Old Southwark was right to refer to the fact that rules have been introduced to ensure that the PIP system handles terminally ill claimants efficiently and sensitively, reducing the need for face-to-face assessments—we discussed that at length in Committee—and the degree of intrusion on claimants and their families, while, importantly, focusing on delivering vital support to claimants as quickly as possible.

It is very clear, as we discussed in Committee, that the Government are focused on rolling out PIP in a very safe and steady manner, ensuring that the claimant experience is protected and that the PIP system is as straightforward as possible for the user, particularly those who are terminally ill. PIP has been and will continue to be subject to independent reviews—we have committed to that in legislation—which, as ever, will help us to make continued improvements to what is a dynamic benefit. We are fully committed to ensuring that there is a positive evidence base for all changes that we make and that users understand their impact so that we can deliver the best possible service for claimants.

We will continue to work with all hon. Members, as I have said in Committee and this afternoon, as PIP is rolled out. I will continue to work with colleagues and to take on board their points. I thank them for their valuable contributions. The hon. Member for Bermondsey and Old Southwark has expressed some concerns, but I will take away his points for our meeting. I look forward to taking forward such considerations.

In summary, the Bill brings forward important changes that are designed to create the right incentives within the welfare system, and I urge hon. Members to withdraw their amendments.

Tax Credits

Peter Dowd Excerpts

Tuesday 20th October 2015 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

The 2015 Conservative manifesto promised to improve the lives of the millions

“who work hard, raise their families, care for those who need help, who do the right thing”.

The tax credit changes will do exactly the opposite and instead penalise them heavily. There is no hiding from that. This is not the right thing. Why do the Government not accuse all people on tax credits of being feckless? That is what they really think. They do not bother even to make an artificial distinction between the deserving and undeserving poor. They do not care. If people are poor, deserving or otherwise, they do not care.

From what I can see, that is what those on the Government Benches think. They want urgent action to tackle the burden of tax credit expenditure, but take a mañana approach to tackling the issue of low pay. Some Conservative Members have expressed concern, but that is as far as it goes. Hand wringing, tutting, head shaking—conscience salved. But Conservative Members will be reminded time and again of their support for these proposals. It might get a bit tedious, but so be it.

The Chancellor says the changes are fair, so let me give a few facts. Facts can be stubborn. First, during this Parliament cumulative income loss will be between £6,000 and £9,500. Secondly, 3.2 million hard-working families will be hit. Thirdly, the changes will mean less pay, with some low income families keeping just 3p of every extra pound. Fourthly, child poverty will increase. Fifthly, the cuts are not compensated by other changes and have not been impact assessed. This is dreadful and the Government should think again.