Quality Workplace Pensions

Sheila Gilmore Excerpts

Thursday 27th March 2014 Commons Chamber

[Steve Webb]

I am grateful to my hon. Friend. As I have said, we estimate that around £200 million over the next 10 years will go from the pensions industry to savers, which we think will cover around 2 million pension savers, many of whom will work for smaller firms, because we know that the biggest firms have been able to negotiate good deals with providers. That is good news for people who work for Britain’s small firms, in particular, who might not otherwise have got good value for money in their pensions.

[Sheila Gilmore (Edinburgh East) (Lab)]

I am grateful to the Minister for coming to the House to make a statement, unlike some of his colleagues who have slipped out an important announcement in a written ministerial statement today rather than coming to the House. Will he give us a little more detail on the changes he proposes to make to governance and say when we can expect to see them introduced, because they will be very important in allowing people to be confident that some other form of charging is not emerging to replace it?

[Steve Webb]

I am grateful to the hon. Lady. The principal change, although not the only one, is the introduction of the requirement for independent governance committees. With trust-based governance there are member-nominated trustees and a fiduciary duty on trustees, but with contract-based pension schemes provided by insurance companies there is a question, as has often been argued, of who is acting on the members’ behalf. The IGCs will have to be in place by April 2015 and they will have various duties. The way in which they are set up is described more fully in the document—I know she will not yet have had a chance to read it. I think that she will welcome the changes, which mean that whatever sort of pension scheme someone is in, there is somebody there looking out for them.

Under-Occupancy Penalty (North-West)

Sheila Gilmore Excerpts

Tuesday 25th March 2014 Westminster Hall

[Yvonne Fovargue (Makerfield) (Lab)]

Thank you, Ms Dorries, for calling me to speak. It is a pleasure to serve under your chairmanship.

We are fast approaching the first anniversary of the bedroom tax, as I prefer to call it. Anniversaries are usually pleasant occasions, a time to celebrate and congratulate, but not this one. The legacy of the new tax is not benign; it is cruel and unfair. The tax has heaped hardship and misery on families already struggling with the rising cost of living and the increased personal indebtedness that have characterised the past few years. This is not the building-up of debt to pay for luxury items, as some would have it. Instead, increasing numbers of people are getting into arrears on basic household essentials such as food, rent and fuel.

Clearly, many of those people are turning to payday loans to get themselves through the week—borrowing to pay borrowing. The situation is all the more worrying because people are not only struggling to pay their everyday bills, which are increased by this cruel and unfair tax, but using high-cost credit to make ends meet. That results only in a downward spiral into further and further debt, with potentially catastrophic results. As Stepchange said in its response to the Work and Pensions Committee inquiry:

“Households struggling to meet rental payments are far more likely to have high-cost credit—33 percent of tenants with rent arrears have payday loans, a two-thirds increase on those without rent arrears…Because of the urgent and regular nature of rental payments, we are particularly concerned about people facing payment difficulties turning to payday loans. Analysis of our clients shows that those with rent arrears are far more likely to have at least one payday loan.”

The bedroom tax simply adds another layer to the problems that people face.

Many social housing landlords work to help their tenants to improve their income, but they are faced with an impossible situation. Many housing associations have invested millions of pounds to mitigate the effects of the bedroom tax, or spare room subsidy. Housing associations with tenants who have been affected spent on average £73,250, including on welfare and financial advice services, before April 2013 to help their residents to prepare and cope. Wigan and Leigh Housing, in my constituency, manages 22,500 properties on behalf of Wigan council. Recently, it had to deal with a tenant in arrears who also had more than 15 concurrent payday loans and no visible income other than benefits.

The fact is that the extra charge has tipped many households who were struggling but just coping into an unmanageable situation. Now many of those people are at risk of being evicted because they simply cannot find the extra money to pay their rent. Why has that happened? It has happened because people in social housing have been given a false choice, or rather no choice at all. They are told to move to a smaller property, or else pay the difference. Well, they cannot do so. There simply are not enough smaller homes to go around.

In Wigan in my constituency, we have a shortage of one and two-bedroom properties, so people who have had their housing benefit slashed have nowhere to go to. That is true of much of the north-west and indeed the north-east. It is not often that I agree with Lord Tebbit, but he said that spare rooms are “vital”. He said on the tax:

“I think we introduced that rather without thinking it through very well”.

Many social landlords in the north-west would agree with that .

In my constituency, 3,300 tenants are affected, with the reductions in housing benefit ranging from £517 a year to £1,273 a year. If those sums are to be found from somewhere, it is most likely they will be found by cutting down on essentials such as heating and food, because after all people must have a roof over their head. Often, the sums cannot be found, so arrears are rising.

Last month, a survey of the English housing associations carried out for the National Housing Federation by Ipsos MORI found that more than two thirds of their residents who have been hit by the bedroom tax are in rent arrears. That is the national average; the figure is higher in the north-west. In fact, the north-west has been the hardest hit part of the country, with 83,000 people seeing a cut in their housing benefit last year, according to the Department for Work and Pensions’ own figures. In fact, that could be a serious underestimate; the figure could be as high as 110,000 people.

The DWP’s figures also show that Manchester is the hardest hit city, with more than 11,300 households affected and an average shortfall of a whopping £724 per year. Other cities such as Liverpool are not far behind. More than 10,700 families in Liverpool are coping with a housing benefit reduction. Data collected from 15 social landlords operating in Merseyside, including the Halton Housing Trust, Liverpool Mutual Homes and Riverside, found that arrears rose from £21.2 million at the end of December 2012 to £22.9 million at the end of December 2013, a rise of £1.7 million.

I will now cite some findings from the excellent Real Life Reform report. Statistics are often used to prove and disprove policies, but it is worth remembering that this change and all the other welfare policy changes impact on people’s homes and their lives. These reports give social housing tenants the chance to be heard and I am grateful for this opportunity to share tenants’ views and experiences.

Perhaps it is worth noting a comment from the facilitator of the report. She is a communications officer, not a front-line housing officer, and she was profoundly moved by the stories. She says that the people who contribute to such reports do not match the stereotypes of social housing tenants on benefits. They do not drink or smoke. They all work. They run voluntary groups. They have children doing well at school or university, or children bringing up their own families. They are dignified and private people who want to make meaningful contributions to their families and communities. However, they are desperately worried about how they will pay their basic bills. They are concerned about how their families are being affected. They are choosing between eating or heating and, most tellingly of all, they have given up hope of being happy. In total, 76% of the people surveyed in the report said that they were rarely optimistic and 55% said that they were never optimistic.

What of discretionary housing payments, a limited emergency fund provided for the most vulnerable households? Yes, they have helped some households to manage their situation better. However, there is simply not enough money going round and the stress of continually applying for a fund that is discretionary cannot be underestimated. It is no wonder that 83% of participants in the Real Life Reform report felt that their health, particularly their mental health, was being negatively affected.

Wigan and Leigh Housing has used discretionary housing payments to help to reduce the number of people facing debt from the bedroom tax, but it has only managed a reduction from 73% to 63%. During the past year, applications for such payments have risen by 302% on average in the north-west, but the overall arrears keep rising and with them the threat of eviction.

Housing associations and councils are doing all they can to avoid evicting residents, but they cannot simply write off unpaid rent. Many of them have to spend huge sums in legal fees to recover unpaid rents. There are other costs, too. What is not fully appreciated is the increase in tenancies ending through a notice or people simply abandoning their properties and walking away. Each vacant property costs an average of £3,000 to repair prior to re-letting. In my area, many are being left empty because we simply cannot let the four-bedroom properties. People do not want to take four-bedroom properties, particularly those in the one block of maisonettes that we have.

[Sheila Gilmore (Edinburgh East) (Lab)]

In talking about her own region, my hon. Friend is surely illustrating exactly why this tax was poorly planned and poorly thought out. There was talk about 1 million spare bedrooms, but the mix of housing and the size of housing are distributed so differently across the country. In my area, we have a shortage of large houses as well as a shortage of small houses. We cannot have a one-size-fits-all policy in this way.

[Yvonne Fovargue]

I agree. People are not chess pieces. They have lives, families and communities and simply will not move from Wigan to London or London to Wigan; it is not as easy as that. For example, some people, including a constituent of mine, have family support networks, but she is being asked to move, although her mother lives down the road and looks after her daughter daily, sometimes overnight while she works. If she has to move away because she cannot afford the spare room subsidy, she will be penalised and may have to give up her job.

There are lots of other costs as well. Many people live in adapted properties with a spare room. My constituent, Clare, is paraplegic and blind. She has two carers, 24 hours a day, but under the rules was only allowed a bedroom for one of them. Her property had significant adaptations and, should she move to a smaller property, the cost to adapt it would run into tens of thousands. She is depending on discretionary payments to stay in her current property and has to reapply every 13 weeks, with the stress that that brings. This penalty affects the sick and disabled and it makes no moral or financial sense.

I just want to make a quick aside about fairness. It is often said that the policy brings parity with the private rented sector. However, the penalty was introduced retrospectively, when local housing allowance was introduced for new tenancies. People could then make a choice when choosing a home. This tax affects people who have lived among friends and family for years, have built their lives in a community and are forced to pay to stay there or look elsewhere—in my constituency, that is often in the more expensive private sector, due to the shortage of one and two-bedroom properties.

We in the Opposition have been clear that we will scrap the bedroom tax because it is cruel and unfair. The chief executive of the National Housing Federation described the policy as

“an unfair, ill-planned disaster that is hurting our poorest families.”

I agree, but we will not scrap it just because of that. It does not work on any level. There is now a risk that the bedroom tax will cost more money than it saves. The National Housing Federation has said that the savings claimed by the Government are “highly questionable”, partly because those forced to move to the private rented sector will end up costing more in housing benefit. Nor does the policy deal with the problem of under-occupation. In fact, the Government’s costings on the yield raised from the under-occupation subsidy explicitly assume that people do not move into smaller properties. The DWP’s own impact assessment states:

“In many areas”—

as my hon. Friend the hon. Member for Edinburgh East (Sheila Gilmore) said—

“this mismatch could mean that there are insufficient properties to enable tenants to move to accommodation of an appropriate size even if tenants wished to move and landlords were able to facilitate this movement.”

In Wigan, it would take more than seven years, at current vacancy levels, to re-house even the 30% of people affected who might wish to downsize.

It is clear that this policy, and any savings predicated on it, depend on people choosing to pay to stay in their communities, near friends and families. It affects those with disabilities, those struggling to get by and it is having a negative impact on their mental health. It is putting additional costs and pressures on social housing providers and, perversely, it is likely to increase the housing benefit bill by forcing people into the more expensive private sector. One year on, it is time to think again and repeal this unfair and unworkable policy.

[Sheila Gilmore (Edinburgh East) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Dorries, and to have the opportunity to say a few words. Self-evidently, my constituency is not in the north-west of England. It is not in the north-west of Scotland, either, but in the east of Scotland, but it is important to see how the experience in one area of the country compares with another.

As I said in my intervention, part of the problem with making this policy work, even if it is thought to be a good idea, is that the housing situation in each local area is different. It is impossible simply to assume, as it has been assumed, that there are more than 1 million spare bedrooms, as has frequently been repeated, as if those were somehow easily accessible by people wherever they are.

We have to think about realities. It is galling and frustrating for me, as someone who was the chair of housing in a local authority and retains a strong interest in housing, to hear that there are empty large houses in some areas. If it were possible, I would dearly like to do that American thing of putting them on wheels and wheeling them up to Scotland.

It is not feasible for people simply to up sticks and go somewhere else. A few may be able to, and a few may welcome the opportunity to do so, but for many their attachment to their home area is not just an emotional one, although it can be that; there are practical issues for them to consider. Often, the areas where there is a surplus of certain kinds of housing are also likely to be those where there are poor job opportunities. My city, where unemployment is well below the Scottish average, is a net importer of people. People come to the city from other parts of Scotland, and from England, because the jobs are there. For a low-paid worker in Edinburgh in receipt of housing benefit, for example, to move to the north-west of England just because there are houses there, even if it would mean their being less overcrowded, is counterproductive for them and for our spending on social security, because if they could not get a job they would be drawing more in benefits than previously and their opportunity to move on from that situation would have decreased.

Even people who do not have a job issue in relation to moving have other ties. Despite commentators and sociologists sometimes suggesting that we have become a society without ties and that we live completely separate lives from one another, far away from our families, I am always struck by the degree to which that is not necessarily so. And help is often reciprocal; it is not just one way and not just about older people getting help from younger people. Obviously, grandparents will often give important help to members of their family. I met a constituent recently who said that, having retired, he and his wife have virtually full-time jobs, because each day of the week they look after a different group of grandchildren, although they do not look after any of them full time. That is not uncommon. People cannot always move huge distances, and even moving across a city can be difficult for those who pick children up after school, for example, to help their family. We have to be realistic about what people can do. I do not think that people are being awkward in any sense.

The other mismatch, throughout the country, is that houses of different sizes are often of different types. I know a number of older people—although pensioners are exempt from this measure—and even people approaching retirement who might want to move to a smaller house, but they are not going to move to a flat that is up four flights of stairs at that time in their life, because even if they are fit at the moment, they would say, “Why am I going to move to a tenement building where I would be climbing up and down stairs, when in a few years’ time I might not be able to do that?” Having looked in depth at the housing supply in my area—I am sure my hon. Friend the Member for Makerfield (Yvonne Fovargue) has done so, too—there is such a mismatch. Not a lot of housing becomes available, but what does will not necessarily suit the needs of the people we might be trying to move.

Realistically, this measure was invented as a savings measure, and a lot of the justifications are trying to make it sound better than it is. There is a case for helping people to move, for example, and I know people who would want to move. Older people particularly might want to move from a family house and might be pleased to see it going to a family, but they have certain needs that also have to be met. I have been pressing my local authority and housing associations to look in depth at an area and say, “Actually, maybe we should build houses for older people who could move into them and thereby release family houses, rather than building family houses.” People will not move out into just anything, and for good reason. They are looking to their future.

If this measure is about people moving, which I do not believe it is, it does not work, and it certainly does not work on an all-country level. It is about saving money, which is why it was in the Budget. The cost is not trivial for people. I have described other housing benefit changes as slow burn because they have had an effect over several years and it will take time for them to play through.

A constituent of mine is on jobseeker’s allowance of £71 a week. She was approaching retirement age, but unfortunately retirement age is receding from her, so she feels as if she is running to catch up. Of her £71 a week income, she now has to pay £12 a week towards her rent, which is on top of all her other bills. Scotland has not yet had the council tax changes, but she has to pay water rates, energy bills and bus fares to get to the jobcentre or training centre. She is trying to get another job after being made redundant in her late 50s, which is never easy, and £12 a week is a substantial sum of money; it is not something that people can easily make up. She does not fall into any of the priority groups that we are told discretionary housing payments will cover because she is not disabled and does not have a particularly adapted house, or anything else. All she happens to have is a rather small second bedroom in a house that she and her husband lived in for 18 years until he sadly died. They put a lot of effort into the house.

If we want to address the housing benefit bill in any area of the country, we need to build more homes and consider the cost of housing benefit in the private rented sector, which is far greater per person than in the social rented sector. We are attacking the wrong part of the problem, and it is therefore no surprise that housing benefit spending is predicted to continue rising in real terms throughout the entire five-year period, despite such changes. Not only do the costs outweigh the savings for individual housing associations and authorities; the policy does not make sense on a macro level because it will not achieve what it is supposed to achieve. We will still end up having a large spend on housing benefit, which the Government have much criticised, but if we want to change that, we have to look at where the real problem lies, and it does not lie in the social rented sector. I contend that the policy is ill conceived.

As my hon. Friend the Member for Makerfield said, there is a constant reiteration of “Well, Labour did it in the private rented sector.” I was a member of the Welfare Reform Bill Committee, and I do not remember Labour’s changes being mentioned at any point in Committee as a primary driver. Someone obviously thought, “We are not doing very well with our publicity on this one, and we are losing a bit of public support. Let’s find another argument.” The argument that was chosen is, “Labour did it in the private rented sector, which is why it is fair.”

People in the private rented sector did not suddenly find themselves presented with a Bill one April: “Here’s the Bill, which means that you now have to pay extra money, whether you can move or not.” Any changes introduced in 2008—there were rules prior to 2008 on the size of homes and the amount of housing benefit that people could claim, so it is not entirely true to say that the Welfare Reform Act 2012 was entirely a response to the changes in 2008—applied only when people moved into a new tenancy, which is very different from saying, “Regardless of whether you can move, you have to pay.” That is why we have called it a tax, and although many people get agitated and say that it is not, it certainly feels like a tax rather than a benefit.

Wherever we live, there are problems with the policy. Many of our constituents have problems with it, and if the Government are really serious about addressing housing benefit—I hope they are, because we certainly are—they should be seriously looking at the private rented sector. If they do that, the graph, instead of going up over the next four years, might start to go down.

--- Later in debate ---

[The Minister of State, Department for Work and Pensions (Esther McVey)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I think it is the first time, so I am delighted to be here. I congratulate the hon. Member for Makerfield (Yvonne Fovargue) on securing the debate.

Having listened to everything that has been said, there is one thing on which we can agree: this is about homes and people’s lives. This is about people and their local communities and what we can do best to support them. It is frequently forgotten, however, that it is also about the people who are not fortunate enough to be in a house of the size they need, whether because they are on a waiting list or because they live in an overcrowded home. At the same time, we must think about the people who are paying the bill. Taxpayers are funding the homes of people who may have extra bedrooms when they themselves may not.

We have thought about the matter in every which way and from everybody’s viewpoint and have asked ourselves how we best solve the situation. More than 300,000 people are in overcrowded homes and 1.7 million people are on waiting lists, yet there are 1 million spare rooms in people’s accommodation. We have to think about that. In Wigan, there are 3,500 families or more on the waiting list and 1,500 in overcrowded accommodation. I believe that the hon. Member for Makerfield said that 3,300 were affected by the removal of the spare room subsidy. Which group should be given more consideration? We cannot say that; they must all be considered when we decide what we shall do.

There is a conundrum, as we all agree, but how are we to deal with it? We cannot brush it under the carpet—it would have to be a huge carpet—and continue as if there is not an issue. We must deal with it, and we are confronting it. Of course, we know that there has been less house building, and we know the issues associated with that. God ain’t making no more land, and getting planning permission is very difficult. Yet Labour, during its reign, let more than 2 million people into a crowded island. We must cover all the angles and dimensions. We have said that we are putting £4.5 billion into the building of social housing. We are building another 177,000 by 2015. All those things are positive, although there is always more that can be done.

When houses with spare rooms were let, people were making to the tune of £500 million a year. Rent on that was being collected from taxpayers, who were paying that bill. It was unfortunate that those social landlords were getting £500 million a year extra for bedrooms that were not deemed to be occupied under the criteria brought in by Labour in 2008.

[Sheila Gilmore]

The Minister mentioned the building of affordable homes. A problem with the policy that the Government are currently implementing is the fact that they plan to charge 80% of market rent for them. There will be a substantial increase to the overall housing benefit bill. When the Work and Pensions Committee visited Luton in Bedfordshire, the housing association explained not only that it was obliged to set the rents at 80% of market rent to get a grant to build; it was also obliged as part of that arrangement to turn over some of its existing stock to such higher rents, as it became available. Government policies are likely to put up the housing benefit bill faster than the policy we are debating is likely to reduce it.

[Esther McVey]

I have heard various things—I will say that they are scare stories, because we have heard them before—about what would happen, and they have not happened. In fact—although at the moment this is just anecdotal—in the private sector house prices and rents are coming down, despite much of what the Opposition say; that is actually happening in Wales, which I visited last week.

What are the local authorities and housing associations doing? Some are redesignating homes with respect to their size. Knowsley is doing that. Salford is bringing empty houses into use and converting commercial property units into affordable homes. People are starting to build one-bedroom homes for the first time in a long time. Who would have believed it? Some people and areas are still building three-bedroom homes, despite knowing that they are not needed. One-bedroom homes are needed; they should constitute 60% of new builds. It is incredible that people who do not understand the stock still feel incentivised to build the wrong homes, because they will be paid for the bedrooms, whether they are used or not. That must all change.

We should all recognise the inequality in allowing social sector tenants full housing benefit for a spare bedroom while denying it to private sector tenants. The Opposition’s position seems to be that the policy is pernicious and evil when it affects social tenants, but acceptable when it affects private tenants; Labour introduced that policy in 2008. As has been pointed out many times before, there are two coherent positions: one is the Government’s, which asks anyone on benefits to contribute towards the cost of an extra bedroom; the other is to give anyone on benefits full housing benefit regardless of the size of the house that they need or whether or not they are under-occupying their property. The Opposition’s position is incoherent. It states that social tenants should not have to pay towards an extra bedroom, but private tenants should. We cannot have that.

--- Later in debate ---

[Sheila Gilmore]

The Minister is being very generous in giving way. She has raised issues about spare rooms—it is an emotive phrase. However, some organisations have argued that, if a room is not genuinely spare—for example, if a couple must sleep apart for health reasons, have medical equipment to store, or have a specially adapted house, so that it would be ludicrous to expect them to leave—they should simply be exempted. Those rooms are surely not really spare.

Also, even if the original intention of the policy was to bring parity with the private rented sector—I do not think it was, because it was never mentioned—an amendment was tabled in the other place, and probably also in this House, to the effect that the rule would be applied only if someone refused a reasonable offer of alternative housing. So it would not be retrospective. Is the Minister willing to consider either of those issues?

[Esther McVey]

We have put forward a full array of discretionary housing payments and exemptions, which I shall come to. However, I want to point out what Labour intended, when it was in power. Despite today’s claims about how it would have dealt with things, we know what is on the record:

“We hope to implement a flat rate housing benefit system in the social sector, similar to that anticipated in the private rented sector... We aim to extend our reforms to the social rented sector as soon as rent restructuring and increased choice have created an improved market.”—[Official Report, 19 January 2004; Vol. 416, c. 1075W.]

[Sheila Gilmore]

Will the Minister give way?

[Esther McVey]

I have given way a lot, and have answers to provide. Despite the bluster and fluster and cries of “We cannot do it,” that policy would have been implemented by the Opposition.

We have provided for the most vulnerable, including disabled children who cannot share because of their disability; foster children; overnight non-resident carers for claimants and their partners; and live-in carers. We have also ensured that tenants can retain a bedroom for an adult child who is in the armed forces and deployed on operations. We have established support, and in addition the courts have confirmed that we have satisfied our equality duties by making additional discretionary housing payment funding available. In total we have provided discretionary housing payment funding of £180 million in this financial year. The Government have given local authorities the money to help people in need. In fact, we have gone further, and within the year we have allocated an extra £20 million for which the 380 local authorities in Great Britain could bid.

What happened with that extra money? Not all the local authorities bid for the extra £20 million that we put in place because they did not feel the need to, and only £13 million was taken, meaning that £7 million was not. Yet again, there were screams of protest from the Opposition about what was needed, but the money had been put in place and yet not all of it was utilised. In my local area, for example, Wirral council still had £180,000 to spend on discretionary housing payments by the end of the month. That was made up of £30,000 left over and an extra £150,000 that had been granted.

We are getting all that information back from people and finding out what they need, so I take great exception to the accusation that this policy was developed on the back of a fag packet—I think that is what the hon. Member for Rhondda (Chris Bryant) said.

amendment of the law

Sheila Gilmore Excerpts

Tuesday 25th March 2014 Commons Chamber

[Mr Speaker]

For the avoidance of doubt, I should just say that I was happy to see the Secretary of State looking happy.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Secretary of State will be aware that, for very many people, the average level of savings is in the hundreds, not the thousands. Do the Government regret abolishing the savings gateway as one of the first measures they took on coming into government?

[Mr Duncan Smith]

When the hon. Lady got up to make an intervention, I wondered whether she would take the opportunity to say how much she welcomes the fact that unemployment has fallen by 20% in her constituency—a very good thing. I know she does not want to say that, but I say it for her.

I have to say to that no, we do not regret that. What we have undertaken since we came into power is going to hugely incentivise and improve pension savings and the savings marketplace. The extra vehicles announced in the Budget will rapidly improve that and I believe, all in all, that we will have a much better savings position than we inherited, so I think I have answered that question.

I need to make the point about employment and unemployment. Let me get this right: when we came into power, we inherited a situation where unemployment rose by nearly half a million. At its peak, some 5 million were on out-of-work benefits—1 million for a decade or more—and in one in five households, no one worked. The number of households where no member had ever worked doubled under Labour, from 184,000 in 1997 on an upward trend to 351,000 by 2010. I do not recall Labour Members mentioning those figures, and they avoided them when they were in power.

Correspondingly, since we came to power, unemployment is down 168,000 since the election. The claimant count has fallen by almost a quarter over the last year, which is the fastest annual fall since 1997. Workless households have fallen to the lowest rate since records began, down 450,000—two percentage points—since the end of 2010.

At the same time, we now have record employment: more people in work than ever before, more women in work than ever before and more people in work in the private sector than ever before—up over 1.7 million since the election. Ninety per cent. of the increase over the last year has come from British workers, unlike before, and more than three quarters of the increase since the election is from full-time work, up over 1 million compared with part-time work, which is up only 300,000.

Here is the point: we hear a lot from Labour Members about what they would do if they were in government, but youth unemployment increased under the previous Government by nearly half from 1997 to 2010—up almost 300,000. Now, on what the shadow Work and Pensions Secretary called

“the failure of this government to get young people into work”,

youth unemployment is down 81,000 on the year and is lower than what we inherited. The International Labour Organisation long-term youth unemployment is also down 37,000 on the year. The number of young people out of work and not in full-time education is down 63,000 and the long-term youth claimant count is down 23,900 on the year, having fallen for the last 15 consecutive months.

I remind the Opposition, who are chuntering away from a sedentary position, that under them long-term unemployment nearly doubled in two years, from 400,000 in 2008 to 800,000 in 2010. While they were seeing that rise, they gerrymandered the figures on the claimant count: 80,000 were put on to training allowances so that they came off the measurement of whether they were long term unemployed. Even though they were back out of work or back out of training, they went back as though they had just started their claims.

The trend slowed and is now falling. ILO long-term unemployment is down 38,000 this quarter and is down 59,000 on the year. The number on the claimant count for 12 months, ungerrymandered, is down 74,000 on the year—a fall of 17%. That is down, I believe, to so many of the reforms and changes that we have made, improving the labour market and improving the process of getting people back to work. The latest labour market statistics are remarkable and nothing demonstrates more clearly the Government’s success in getting Britain working.

--- Later in debate ---

[Mr Duncan Smith]

I pay tribute to my neighbour and hon. Friend for his phenomenal work on the jobs fairs, on all the creation he has done and on the work he has done with local unemployed people. He is absolutely right: the new enterprise allowance has been a phenomenal success. Thousands of people have started their own businesses under it. It is one of the big success stories of this Government. It is going to grow and we are going to ensure that many more people, particularly young people who are more and more keen to start their own businesses, get the kind of support they want.

[Sheila Gilmore]

Does the Secretary of State not have any concern that even now there are 2.3 million people unemployed, and as his own statement made clear, the total has gone done by only some 160,000 since the election? The figure was 2.4 million before the election and now it is 2.3 million. What has gone wrong with getting those people into jobs?

[Mr Duncan Smith]

Of course I want to see more people back in work, particularly young people, but the hon. Lady must remember that we inherited from the previous Government an economy that had hit the buffers, with young people cascading out of work in the two years running up to the election. Youth unemployment rose over their whole period in office, which suggests to me that their policies were hurting young people long before the recession. What we are doing is aimed at getting more people back into work. We have been successful in improving the situation, as the figures now are better than those we inherited—more people are in work, including more young people—but of course there is more to do, and it is this coalition Government who are doing it.

We are also introducing our other programmes, including the Work programme and universal credit, with the pathfinders moving into the north-west and eventually rolling out by 2016. We know that 90% of claims for jobseeker’s allowance and other benefits are already being made online, which is a huge change—only about 10% or 12% were made online before—that is improving speed and accuracy. Some 78% of claimants are confident about their ability to budget with monthly payments, as a result of the programmes we have run. Two thirds think that the universal credit process offers a much better work incentive than jobseeker’s allowance. Even in its early stages, universal credit is having a significant impact on people’s work prospects: claimants are likely to spend twice as long looking for work; two thirds agree that it is easier to understand their obligations; and 86%—rising to 90%—are confident of gaining a job within three months, which is a much higher rate than for jobseeker’s allowance.

These are dynamic changes that we are making, improving the path back to work, the incentives and the choices that people make. We are improving their work prospects and helping them into meaningful, long-term jobs. However, I gather from the Chief Secretary that the Treasury received a submission from the Opposition in the run-up to the Budget for an alternative to our programmes, which they call a jobs guarantee. I thought that we should look at that, just to examine whether it was worth embracing. I think it only fair that we tell the House whether or not it would work. Having looked at the proposal in a completely ambivalent manner, I have to say that it is confusing. The first submission said that it was a six-month programme for young people. The second submission said that it was a year-long programme. The third submission said that it was a two-year programme for the long-term unemployed. I gather that there is now some suggestion that it might be a six-month programme for everybody.

Apparently the jobs guarantee is now a flagship policy for the Opposition, but I understood that it would be funded for only one year. Now we hear that the same funding they announced for one year is meant to last all the way through a full Parliament. We asked the Treasury to do some formal costings for that, which I hope have been made available to the Opposition. They said that their scheme would cost only £1.9 billion in its first year and £0.9 billion thereafter, but the Treasury’s formal costings—[Interruption.] I know that Opposition Members do not want to listen, because the last thing they want to hear is how they would pay for it The Treasury, which is full of decent people doing a hard day’s work, has shown that there is a massive gap of £2.6 billion per year between what the Opposition say their jobs guarantee will cost and what we calculate it will cost.

Not only have the Opposition underestimated the costs by £0.6 billion in the programme’s first year, and £1.7 billion in future years, but they have no robust means of funding it. They say that they will fund it with a bankers’ bonus tax that will raise £2.3 billion, which is questionable, but I understand that they have spent that 10 times over. Let me list a few of the things they have committed to spend it on: reversing the VAT increase, which would cost £13.5 billion; more capital spending, which would cost £5.8 billion; reversing child benefit savings, which would cost £3.1 billion; reversing tax credit savings, which would cost £5.8 billion; and more housing, which would cost £1.2 billion. They have made £30 billion of spending commitments, apparently to be paid for by a tax that would save them £2.3 billion.

Inherited Social Housing Tenancies

Sheila Gilmore Excerpts

Monday 24th March 2014 Commons Chamber

[Esther McVey]

My hon. Friend is right; no, I cannot. It is only when we meet people who are living in overcrowded accommodation, or who are on a waiting list with their children, and we look at the conditions they are living in, that we realise what a lamentable mess we had been left with and how we have to clear it up. How can we justify 1 million spare rooms when other people are sometimes crammed together in a room? So my hon. Friend is correct in what she says.

[Sheila Gilmore (Edinburgh East) (Lab)]

As the Minister has been able to expand on a possible policy area, I would point out that nobody in the private rented sector was ever expected to find £14 or £28 out of their pocket, each week, retrospectively. The Office for Budget Responsibility has said that housing benefit spend will continue to rise. Has the additional spending from this loophole been factored into that, or is that going to be another increase that is not in this Government’s forecast?

[Esther McVey]

The money is obviously in the forecast; I mentioned that we put £20 million in place for local authorities but they did not need it—they needed only £13 million—and so that will come into play. As I also said, we all need to get the housing issues for people across the country right, and we are dealing with them in a way that is fair and proportionate.

Pensions Strategy

Sheila Gilmore Excerpts

Thursday 20th March 2014 Commons Chamber

[Steve Webb]

I am grateful to my right hon. Friend for making the crucial point about the link between this new freedom and the level of the state pension. If we are able to keep the triple lock going, what will happen with a means-tested earnings-linked pension credit is that there will be more and more clear blue water between the means test and the triple-locked pension, which will greatly reduce the risk of anyone falling back into means testing in retirement. I would certainly like to see that continue beyond this Parliament.

On guidance on care, we will liaise with our colleagues at the Department of Health to make sure we are taking best advantage of this conversation.

[Sheila Gilmore (Edinburgh East) (Lab)]

Given the track record of the DWP and the Government on universal credit, the employment and support allowance, the personal independence payment and universal jobmatch, I think people might be a little sceptical about a proposal that appears to have been drawn up on the back of an envelope. The Red Book expects the savings ratio to fall from 7.2% to 3.2% by 2018. How will these proposals help savers?

[Steve Webb]

We heard earlier that these are Labour policies, but now we hear that they were drawn up on the back of a fag packet. Perhaps both statements are true—I do not know. Just to be clear about what the Labour party has been demanding: it has been demanding not a guidance guarantee, but annuity brokers. It wanted everyone to buy an annuity. This is about freeing people up. That is why it will be good news for saving. Let me give the hon. Lady a brief example. Under auto-enrolment, the people most likely to opt out are the oldest—people in their 50s and beyond—partly because they do not want to tie up their money late in life. This will give them a guaranteed return, in cash, within a few years, and we think it will lead to more pension saving and that it will be a boost to savers.

Pensions Bill

Sheila Gilmore Excerpts

Monday 17th March 2014 Commons Chamber

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I beg to move, That this House disagrees with Lords amendment 1.

We are on the home straight of the Pensions Bill. It has been all the way through this House and their lordships’ House, and we have come back to it today to deal with amendments that, with one exception, make it a better Bill. I am grateful to my noble Friends Lord Freud and Lord Bates who, from the ministerial Benches, took the Bill through another place. I am also grateful to all my colleagues who have contributed to the Bill, and to peers on both sides of the House of Lords who have made insightful contributions and improved the Bill in a number of ways.

We have made a number of amendments in response to concerns raised by noble Lords, so I emphasise that our decision to ask this House to disagree with their amendment 1 is exceptional. Indeed, that is the only amendment with which we are asking the House to disagree, so I hope that we will be seen to have taken a constructive approach and that we have sought to improve the Bill on a cross-party basis wherever possible. For reasons that I will explain, however, we ask the House to disagree with this amendment.

As the House will know, access to the national insurance system through employment is dependent on earning above the lower earnings limit, which is currently £109 a week or, expressed annually, £5,668. People earning above the lower earnings limit but below the primary threshold of £149 a week receive a credit and do not pay national insurance but effectively build up national insurance rights. The issue raised by Baroness Hollis in another place related to the position of people who have more than one job, none of which, by itself, results in their paying national insurance but whose wages, if added together, would be above the lower earnings limit. It was suggested that there was apparent unfairness, because someone with a single job that pays £120 a week would get a year of national insurance, whereas someone with two jobs, each paying £60 a week, would not.

We are grateful to Baroness Hollis for raising the issue. We will set out the extent to which we think the issue is significant, the extent to which we think there is evidence for it and how the Government plan to address it. We ask the House to disagree with the amendment, but we accept the principle that we need a pensions and national insurance system that is fit for the modern age. Crediting and various other issues have evolved and need to evolve to reflect the fact that we are dealing with a changing labour market. I want to share with the House some examples of how that has happened and will continue to happen. One particular example is the introduction of universal credit.

At present, there is a set of low-earning individuals who do not get credits. When universal credit is fully in place and they come within its scope, they will receive credits. Potentially, some will be the very same people we are talking about in relation to the amendment. The House may not be aware that the introduction of universal credit will bring an estimated 800,000 additional low-earning households into the scope of crediting. That demonstrates that the Government are not complacent about the changing labour market, or the position of low earners and their access to the national insurance system. This is a concrete and substantive way through which people will gain access in future.

I understand the concern of Baroness Hollis that people might miss out on a qualifying year for national insurance. Why does that matter? If they were repeatedly to miss out on qualifying years, they might fail to build up a full single-tier pension. That requires 35 qualifying years, bearing in mind that these are years of contributions or credits. However, the mere fact that I have used the phrase “35 qualifying years” demonstrates the first reason why the problem might not be as significant as one might, at first sight, imagine. An 18-year-old might, for the sake of argument, have a 50-year working life, or possibly slightly more. Of that 50 years, only 35 years need to be qualifying years for a full single-tier pension. That person could, therefore, spend 15 years doing multiple small jobs—which is exactly what the noble Baroness is concerned about—and it would not make a jot of difference to their single-tier pension entitlement.

We do not know how many people spend how many years in this situation, and that brings me to one of my central points: we do not have the evidence base to know the scale of any potential problem, let alone to rush to solutions, which is what the amendment does. We have cross-sectional data. On the basis of surveys, we know how many people report having multiple jobs in any given year. We know what the wages are and we can have a stab at aggregating them. What we do not know very reliably is how that changes over time: whether the people who in any given year have multiple small jobs are the same people the next year and the next year. If it is just a transient phase that happens for a few years of someone’s working life and does not happen again, it may be entirely irrelevant to their state pension position.

[Sheila Gilmore (Edinburgh East) (Lab)]

This matter came to my attention through a constituent who was in exactly this position, and the Minister will be aware that I raised it in Committee. The amendment is an enabling amendment rather than a prescriptive amendment, and even if there are only a few people who will be in that position, is it not worth making provision for them? Not everybody will necessarily enter the labour force at 18, particularly with greater further education and so on, so reaching 35 years might be quite difficult for some people. If there is a small number, as the Minister keeps telling us, I do not understand the objection to the amendment.

[Steve Webb]

I am grateful to the hon. Lady who, as she says, has shown an interest in this issue. There will be an issue of proportionality in any change. We estimate that perhaps 50,000 people might at any given point be doing multiple small jobs that together take them over the floor, but do not on their own. If, for most of those people, this happened for a few years and did not happen again, and it was relevant to the state pension for only a handful of people, should we legislate for that handful? It could happen and it probably does happen to some people, but to make well-informed policy the Government ought at least to assess the scale of the problem.

In particular, we should not rush into specific solutions. The amendment advocates a specific model, but I believe that we must begin by identifying not just the number but the types of people who are doing multiple part-time jobs of this kind. For instance, are they people with children? Is that why they are doing such jobs? If they have children under 12, they will receive credits under the general system.

We must match our data on multiple small jobs with data from other sources. We must look at longitudinal as well as cross-sectional data in order to gain a sense of the scale of the problem and the types of people affected, rather than legislating for a single solution. We believe that the amendment is technically flawed for a number of reasons, but we certainly think that rushing to amend the Bill in order to give ourselves power to do something that we might or might not want to do because it is one possible solution to a problem whose scale we do not know would be premature.

[Steve Webb]

My hon. Friend is right. It is important to attribute value to the time that people—both men and women—spend at home bringing up young children, and I can reassure her that years spent doing that will count in full as qualifying years towards a single-tier pension. For the first time, more or less, since the introduction of the system—at least, since earnings-related pensions were introduced— those years will count just as much as years spent running a FTSE 100 company. A year is a year, and a qualifying year is a qualifying year.

The provision will apply to anyone who is looking after a child under 12 and entitled to child benefit—well, it is slightly more complicated, but that is the basic idea—and to anyone who is caring for an elderly relative and receiving carers allowance, or, in certain cases, caring for more than 20 hours a week. There is, rightly, a network of credits which bring people into the system. Those will remain, and, in many respects, will become more valuable in the single-tier context.

[Sheila Gilmore]

The Minister advanced exactly the same arguments on Second Reading and in Committee. He said on those occasions that he did not have enough information. Given that we last considered the Bill several months ago, may I ask what steps he has taken to obtain the information that he feels is needed?

--- Later in debate ---

For example, I understand that the average person with a zero-hours contract could typically work 15 to 20 hours a week or so. The zero is just what is guaranteed, but the typical outcome is very often a week of work that pays someone enough to have to pay national insurance. Again, related to that is the fact that qualifying years for national insurance are based on the situation over a whole year, so even if someone is on a weekly zero-hours contract and does not work every week—they work zero hours some weeks—they could still build up a full qualifying year, because in the weeks they work they might pay significant amounts of national insurance. Therefore, again, simply saying there are lots of zero-hours contracts does not prove that it is an issue. The fact that someone is on a zero-hours contract does not mean they have multiple jobs. The fact that people are on zero-hours contracts and sometimes work zero hours does not of itself stop people getting qualifying years. I imagine the debate may move in the direction of saying, “Oh, there’s all these zero-hours contracts. It’s a scandal and therefore we need this amendment,” and there are about 17 logical flaws in that reasoning.

[Sheila Gilmore]

Does the Minister feel that there is a technical problem in including such people, however small a group he thinks they form, because he seems to accept that people might end up not making up the 35 years towards a pension?

[Steve Webb]

We have always been clear that there will be people who will not make the 35 years, particularly those who come into the country later in life, for example, but the link between multiple mini-jobs and not making the 35 years, which we are talking about here, is unclear at best. We simply do not know whether it is a transient phase for people or whether they are in a recurring pattern. Again, I counsel the House against rushing to policy conclusions in amendments that are not accurately drafted rather than saying, “Let’s get the evidence base together.”

As well as undertaking to update our own figures, we are happy to commit to a literature review of what is known about this end of the labour market, making sure we have access to all the available data. We are also content to convene what we have grandly called an analytical stakeholder forum—that is three words of jargon in one go, so it must be impressive. The point of that is to pick the brains of those who study this end of the labour market, and we will be very pleased to benefit from the insights of the noble Baroness Hollis, with whom I have already had an informal conversation about this matter. I should stress that she would like us to retain Lords amendment 1 to avoid misrepresenting her views. We are very keen to gain her insights and those of economists and others who study this end of the labour market to try to establish what more we might be able to find out through existing data and whether any further work needs to be done.

It seems to us that we need to take a step-by-step approach, rather than rushing to policy conclusions as the amendment would. If we found that there were lots of people in this situation and that something must be done, even the something that must be done might not be the thing proposed in this amendment, and it seems a bit odd to pick one option, which as far as we can see is a sort of opt-in crediting option, when there might be others. For example, one might think that lowering the lower earnings limit might be a better solution. That would reduce the number of people in this position because their combined wages would be more likely to be above that floor. It would not necessarily require an opt-in process, and it would be simpler. That might therefore be a better solution; there might be others. We might relax the rules on voluntary national insurance contributions and the deadlines for payment. One can think of a whole raft of solutions, but if we are not clear about the scale of the problem, the groups affected and the permanence or otherwise of the situation, putting just one such provision in primary legislation—giving ourselves a power we might not use through what is, at that, an ambiguous amendment—does not seem to us to be the way forward.

Let me try to draw these threads together, because we have a lot to get through. We are concerned that the amendment itself is unclear, and I have run through a number of reasons why, such as the reference to the lower earnings “level”, not “limit”, and the reference to “income”, not “earnings”. National insurance liability is based on earnings, so the wording would have to be thus changed. The lower earnings limit figure is currently a weekly figure, whereas the amendment refers to an annual figure. Of course, all these things could normally be tidied up, but we do not have the opportunity to do so because if the House accepts the amendment, that is it: it is the end of the parliamentary process, the Bill becomes law and a deeply flawed amendment is on the statute book.

It is unclear exactly how the amendment is meant to work. As was said earlier, would people have to opt in and get credited, or would there be a duty on Her Majesty’s Revenue and Customs to combine these incomes and then levy national insurance, which might be to the detriment of some? There are a great many issues to be examined, but it is not our view that we should not look at them. We should, and as I said at the outset I absolutely accept the principle that we should have a system of pension rights and national insurance that reflects the current labour market, rather than the one in existence after the second world war. We are making a number of changes in that regard, but as I have said, the amendment as it stands is flawed in a number of respects and ambiguous in others. It rushes to a single solution to a problem whose scale and nature we simply are not year clear about, so we believe that—

[Sheila Gilmore]

Will the Minister give way?

[Steve Webb]

A poetic conclusion was nearly reached; but before I conclude I give way to the hon. Lady.

[Sheila Gilmore]

I understand that the Minister is anxious not to rush to a conclusion, but can he tell us what time scale he has in mind?

[Steve Webb]

We envisage updating our own estimates by the summer and would be very happy to do that, and bringing together experts and trawling through the related literature in the latter part of this year. We do not want to kick this into the long grass. If we concluded that further data-gathering was needed, and it was qualitative rather than quantitative, that would take some time, but well-informed evidence-based policy making sometimes does take time, frustrating though it may be, and that is the approach the Government wish to take.

I urge the House to disagree with the Lords in their amendment 1.

--- Later in debate ---

[Gregg McClymont]

The Opposition’s view is clear: the issue of job insecurity, of short-hours working and of zero-hours contracts is a significant problem for the pensions market and, specifically, for the state pension. In that context, it seems wise to us to allow the Minister to crack on with solving this problem. I have confidence that he will ensure that this amendment, if agreed to by the House, provides the basis for matching up the state pension with people on these insecure and flexible employment contracts. On that basis, we disagree with the Minister’s disagreement, and we intend to support the Lords amendment.

[Sheila Gilmore]

Having been with this Bill from the outset, I remain disappointed, given the answers that the Minister gave to my interventions, that we have not made any substantial progress on resolving this issue. It will be predominantly women, although not necessarily entirely so, who will be disadvantaged. In other aspects of the Pensions Bill, the Minister has said how important it is that people will now build up their own entitlements for their own individual pensions. Being able to get a derived pension from a spouse, a deceased spouse or an ex-spouse will disappear from the system. We discussed that issue at considerable length during the passage of the Bill. Indeed the Minister has majored on this whole issue of people having their own individual entitlement.

Oral Answers to Questions

Sheila Gilmore Excerpts

Thursday 13th March 2014 Commons Chamber

[Mrs Grant]

I remain keen to set up a tourism council at the earliest possible opportunity. A large amount of work has been done and I have asked my officials to work with colleagues in the Department for Business, Innovation and Skills to consider how best to achieve that.

[Sheila Gilmore (Edinburgh East) (Lab)]

T7. Many of my constituents are concerned about the advertising of gambling through broadcast media, particularly at times when children and young people see it—that is, the kind of advertising that makes it seem easy to win big money very quickly. What steps is the Minister taking to tackle that problem?

[Mrs Grant]

The Secretary of State recently made it quite clear in a statement and a speech that we have asked the appropriate regulators to look into gambling advertising in the context of the rules, regulations and guidelines.

Welfare Reform (Sick and Disabled People)

Sheila Gilmore Excerpts

Thursday 27th February 2014 Commons Chamber

[John McDonnell]

Interestingly, all the statistics prove that people who are represented win their appeal in vast numbers, while those who are not represented are suffering. To be frank, it is no wonder that 84% of GPs have reported that patients have presented with mental health problems, such as stress, anxiety and depression as a result of undergoing or the fear of undergoing the work capability assessment.

For all those reasons, the BMA has called for an end to the WCA “with immediate effect”, believing that it should be replaced with

“a rigorous and safe system that does not cause avoidable harm”.

Such systems are used in other countries, so why can we not use one of them here? That is why the motion calls for the WCA to be scrapped.

People assessed as capable of work and put on employment and support allowance within the work-related group now lose their contributory ESA after 12 months. Some 700,000 disabled people are losing a total of £4.4 billion as a result of the 12-month cut-off. There has been a massive escalation in the use of sanctions against people who are on ESA or jobseeker’s allowance; some 900,000 people were sanctioned last year.

[Sheila Gilmore (Edinburgh East) (Lab)]

Is it not ironic, at the very least, that the people who are most affected by the one-year cut off are those who, for instance, have a working partner or small savings—the very hard-working people whom the Government say they want to protect?

[John McDonnell]

People thought that they were contributing to a scheme that they would see the benefits from. They now find that they have contributed, but that they will no longer get the benefits. That is unjust.

One in five of the people on JSA who were sanctioned is disabled. Sanctions mean the loss of benefits altogether for weeks or even months. That is compounded, as my hon. Friend the Member for Makerfield (Yvonne Fovargue) said, by the increasing difficulty in securing advice or advocacy to appeal or challenge sanctions.

--- Later in debate ---

[Mr Reid]

The hon. Lady’s question is based on the wrong premise. I actually voted against the bedroom tax. As I said in my introduction, I did not support every detail of the Government’s proposals.

It is interesting to note all the opposition from Labour Members to everything the Government are doing. I look forward to hearing what the Opposition spokesperson says about this later, because I understand that Labour do not propose to spend any more on welfare payments than the Government are doing. It will therefore be interesting to hear what the official Labour line is, as opposed to all the complaints that we are hearing from its Back Benchers.

As well as tackling the economic mess that Labour left behind, Liberal Democrats in government have blocked the excesses that a Conservative-only Government would have implemented. For example, we prevented the Conservatives from freezing disability benefits. Instead, they are going up by 2.7% this year. Assessment of applications for disability benefits is an integral part of welfare reform, and this Government have improved on the system left behind by Labour. Thanks to Liberal Democrat amendments to Labour’s Welfare Reform Act 2007, the Government are required to conduct five annual independent reviews of the work capability assessment. In government, we are now acting on those reviews to improve the system. Professor Harrington completed the first three reviews, and found that our efforts to improve the WCA were making a difference.

[Sheila Gilmore]

For the purposes of putting the record straight, the requirement for independent assessments of employment and support allowance was in the original legislation, pre-2010.

[Mr Reid]

I did not catch the year that the hon. Lady mentioned. The WCA was introduced by the Labour Government, and this Government have improved on it.

Following Professor Harrington’s reviews, the Government gave Department for Work and Pensions decision makers more flexibility to request additional evidence, such as a letter from an applicant’s consultant. The fourth independent review was completed in December 2013 by Dr Litchfield. He found that the DWP had made good progress on implementing recommendations from the previous reviews, which have made notable improvements. However, despite all the improvements to the system, and having a system that looks fine in theory, we all know from our constituency work that, in practice, Atos has failed miserably to carry out the assessment contract. Appeals have been upheld for 40% of the original decisions. That shows that there is something wrong with the initial assessments and that more improvements to the assessment system must be made.

We are all aware from our constituency case load of people waiting for many months for their assessment to be carried out. That applies to assessments for personal independence payments as well as for work capability assessments. The limit for PIP assessments is supposed to be 30 working days, but Atos is clearly failing miserably to meet that target. I was contacted recently by the Bute Advice Centre in my constituency. It pointed out that it, and the client, have three weeks from the initial phone call in which to complete and return the application form. The centre and the client have met the deadline on every occasion, but then the long wait begins. One client who has been waiting since 2 July 2013 has heard nothing from Atos. Two other clients on Bute have been waiting since early October. The advice centre tells me that phone calls to the Department for Work and Pensions get a helpful response, but the DWP puts the blame on Atos, and from Atos there is complete silence. That is utterly unacceptable.

Another constituent has e-mailed me to say that her current employment and support allowance claim started last May and she submitted her medical questionnaire in July. After many months of waiting, she was eventually told by Atos that her work capability assessment would be conducted two days after her contribution-based ESA ends if she is placed in the work-related activity group. Such delays make complete nonsense of the system.

It is true that any benefit awarded will be backdated but, as my constituent points out, a claimant may have been eligible for the support group at the time of their application. If their health improves over the year, they may be placed in the work-related activity group backdated to the time of their application, yet if the assessment had been conducted quickly, they may have been placed in the support group. If the person has savings, their ESA will stop after a year, and that may well be before it has even started to be paid. That just makes nonsense of the system.

The long delays are very unfair to claimants, putting them under increased financial pressure and stress. Their suitability for work could be wrongly assessed as the assessment is completed such a long time after the application was made.

As I have said, the system looks fine in theory, and the Government have made improvements, but Atos has clearly completely failed. As we all know, it has announced that it wants to throw in the towel. The Government must get the mess created by Atos’s abject failure sorted out as a matter of urgency, appoint a company that can do the job properly and get the backlog cleared as quickly as possible. People applying for disability benefits deserve their application to be assessed speedily and accurately.

--- Later in debate ---

[Caroline Lucas]

I am grateful to the hon. Lady for the clarification, but, to be honest, it does not make much difference. In my view, benefits should be payable on the basis of need, not on the basis of an arbitrary cap. It is on precisely that point that the official Opposition and I part company. It will be deeply disappointing if the official Opposition abstain on this motion. There is a lot of sound and fury from Labour Members, but that must be followed through in a vote. I cannot understand why the official Opposition would not vote for this motion.

[Sheila Gilmore]

Does the hon. Lady agree that there are some forms of welfare spending that we should bring down? In my view, one of those is the excessive amount that is paid to private landlords through housing benefit. I am certainly in favour of reducing that form of welfare spending. Is she not?

[Caroline Lucas]

I am very much in favour of that if the hon. Lady wants to put it under the heading of welfare spending, but I am not sure that most people would. We can argue about the precise language, but the official Opposition will demonstrate later this afternoon that they are sitting on their hands. That is a great shame.

Let me make some progress, because the purpose of my speech is not primarily to attack the official Opposition, but to attack the Government. This afternoon, the Government have witnessed hon. Members giving case after case from their own experiences of the impact of the welfare reforms that the Government have introduced. I will talk about what the figures mean for Brighton and Hove, and tell the House about the local advice agencies in Brighton and Hove that came together to produce a powerful report on their experiences of working with ill people and people with disabilities. Those agencies include the local citizens advice bureau, Advice Brighton and Hove, Age UK and the Federation of Disabled People.

To illustrate the reality behind the figures, I will talk about two local case studies from Macmillan that were included in the report. It mentions Mr C, a 56-year-old single man who, following cancer of the spine, lost his mobility and became confined to a wheelchair. Mr C was forced to stop work owing to ill health and constant pain. Macmillan made contact to start the PIP application process last September. To my knowledge, it is still not resolved. At the same time, an application was made for ESA. That application followed a similar path to the PIP application. Mr C is still being paid the assessment phase rate of just £71.70 a week, with no information from Atos as to when it will assess him further. Four months on, we are still counting and he is still waiting.

Macmillan also relayed the story of Mr J, a 32-year-old who is suffering from advanced bowel cancer and who came to the charity for help. It took more than 10 weeks for him to be assessed. His wife was acting as his full-time carer because he was so ill. She was also looking after their baby and young child. The report states:

“Throughout this process both Mr and Mrs J were very anxious and suffering serious financial hardship. Mr J at this time was seriously ill, vomiting day and night plus major issues re fatigue due to chemotherapy etc. Both also felt throughout the period that they were not believed and had been labelled scroungers and benefit cheats by the DWP.”

The work by Advice Brighton and Hove makes it clear that people who are applying for PIP—some of the most vulnerable people—are being left without adequate finances. That is having a massive impact on their physical and emotional well-being. The cases in the report are dreadful, but they are no longer surprising. I have multiple examples of sick and disabled constituents who have been awarded no points, but have then been assessed for benefits under the Government’s regime.

The DLA regime is being tightened, even for disabled children such as my five-year-old constituent who has cystic fibrosis and needs constant 24-hour care to prevent her from falling and being a danger to herself and others. Her DLA has been cut from the higher to the lower rate. Just before Christmas, her parents asked for that to be reconsidered, but it still has not happened. As well as the loss of essential financial support, the family have lost their eligibility for things such as the blue badge.

Another of my constituents has, at last, got a date for a medical assessment in March, after submitting her application in August last year. In the meantime, funding for her electric wheelchair has been stopped. She managed to get funding for three months through the council’s discretionary fund, so she has not lost it yet, but she is extremely worried about what will happen if her claim is not processed in time.

I hope that the House will forgive me for taking up a little more time, but I want to give the example of a constituent who suffers from severe mental ill health. After months of delays, which caused her extreme anxiety, and with support workers very concerned about her suicidal state, an application for benefits that was submitted in August last year has only recently been resolved. She has rightly been placed in the support group, which means that the DWP recognises that she is definitely unable to work. Despite that, she was put through months of unnecessary anxiety.

Many people feel that the system is extremely counter-productive, in the sense that it makes people who are already ill much more ill. We hear example after example of that. I hope that the Government will not ignore them. If advice agencies are getting together to assess these problems, it must be about time that the Government looked at the impact of their own policies.

The conclusion of the report by my local advice agencies is that people are going through what they call “awful experiences” while waiting for their claims to be processed. Advisers are spending disproportionate amounts of time making calls to the DWP and the privatised PIP providers. That is frustrating and is a drain on resources. Claims that need to be followed up are taking more than double the amount of time that is usually allocated to such work. The advice sector in Brighton and Hove has made it very clear that the situation is untenable. It is looking to the Government to sort it out. In the meantime, it is asking for local contacts within the DWP and Atos so that organisations do not have to keep wasting huge amounts of time contacting DWP and Atos nationally. I hope that the Minister will respond to that specific request. It is quite a small one, but it would make a huge amount of difference to the time that is spent following up claims.

Finally, other hon. Members have given the shocking figures on the number of people who are dying while appealing against a decision that they are fit to work. Not every death will be related to fitness for work or to the stress of an unfair or wrong assessment. If a link could be proven, there would be a case for corporate manslaughter. However, Ministers cannot ignore the strong likelihood that significant numbers of people are being assessed as fit for work by the Government when, in reality, they are very close to death. That has to change.

[Sheila Gilmore (Edinburgh East) (Lab)]

Like other Members, I have supported the call for a cumulative impact assessment and voted for it in this House. I do not know why it is so difficult for the Government to work out the impact of their policies. The people who are affected know what the impact is.

Jean and Jim are in their 50s, which is a typical age for illness to strike and is the age that has the highest uptake of many benefits. They are losing ESA because Jim’s contributory benefits are running out. Jean has part-time employment. That is another reduction of £91 a week in their household income after they have already lost his earnings. They have also been affected by the bedroom tax, because they are in a two-bedroom house. They have put a lot of money into that house over the years. When they first applied for discretionary housing payment, they were turned down because, with Jean’s earnings and Jim’s DLA, they had too much income to be eligible, despite his clear disability. I am glad to say that that has changed, due to extra money being made available.

That is what is meant by an impact assessment. That is the kind of interlocking effect that we are asking and reasonably expecting the Government to look at. Governments should look at what is happening to people. A piece of research was commissioned by the previous Government and published in 2011, but it has never been followed up by this Government. One very worrying statistic from that research is that 43% of the people who had been found fit for work were neither in employment nor on any out-of-work benefit after a year. The percentage of that cohort who were in work after a year, 23%, was hardly higher than it had been after three months, at 22%. That is a whole lot of missing people, and those are the sorts of facts and research that a Government should commission. It is disappointing that the Government chose not to follow through on those sorts of studies.

I will pre-empt what I know the Minister will say, which is, “Labour introduced the WCA, you introduced Atos, and therefore it is all your fault”, but that is not good enough for a number of reasons. In my maiden speech I mentioned ESA and WCA, and said that whoever formed the Government, I would be raising that issue. There have been points over the past nearly four years when the Government could have changed tack. They did not have to extend Atos’s contract or proceed with the migration of people from incapacity benefit to ESA as fast as they did, without looking again at what the first few years had told us.

The Government have been adamant until now that they had to carry out frequent reassessments of people, and they would not stop even when cases were clear cut. “Oh no, we have to do these reassessments”, we were told, but now they are suddenly in a panic because the assessors cannot cope, and it is, “Actually we don’t need to do these reassessments after all, but we won’t bother telling people that they might not be called up in the next few months. We won’t even bother telling MPs.” The Minister was here on Monday for Work and Pensions questions, and he never breathed a word about it.

The personal independence payment, however, is entirely this Government’s baby, and the problems go back to the beginning. This change was driven by finances, not by any research or understanding that a change needed to happen, and it had to be geared to financial savings. There was an urgent—and shortened—consultation on the changes, which many people complained about at the time. Despite the demographic changes, the straw man of too many people receiving DLA was erected, and there were assertions that DLA was granted constantly without medical evidence and that hardly anyone was ever reassessed. That ignored the big changes that had taken place in the previous 10 years, and the fact that increasingly, new awards were time limited.

If we start with poor evidence, and with arguments and assertions rather than fact, we end up with a flawed proposal. In 2013 we saw the start of the personal independence payment, and the delays and assessments have been growing exponentially. It is not just Atos, because Capita is having exactly the same problems. The flaw is in the system that has been set up.

People in the Government and elsewhere have said a number of things about why that is happening, and in December the Minister said to the Work and Pensions Committee that every single assessment for PIP was being audited internally. That suggests either a lack of training or a lack of confidence in their own staff. We are now told that each individual assessment is taking twice as long as expected, and that far more face-to-face assessments are having to take place. Might that be because the forms are not very good and the information is not coming in? Those are all things that a proper pilot would have tested. Instead of that, however, many thousands of new applicants—not just a few hundred—are being treated like guinea pigs in a system that the Government did not scope out or test properly; they did not look to see whether the people they had asked to do the assessments had the capacity to deliver them.

Housing Benefit

Sheila Gilmore Excerpts

Wednesday 26th February 2014 Commons Chamber

[Mr Lilley]

I will give way not at the moment.

The problem that we face is a huge shortage of housing. We have 1.85 million people on council waiting lists, up 800,000 since 1997. That should be no surprise, given that the previous Government allowed the population to increase by 3 million during that period, with virtually no addition to the housing stock.

The symptom of such a shortage is overcrowding—a word which did not pass the lips of the Opposition spokesman in her speech. During my period as a Member of Parliament, many people have come to my surgery to seek help about a change in social housing. Overwhelmingly, they have been people living in overcrowded accommodation who want a bigger property and seek to move out of a one or two-bedroom property. I have therefore been surprised by the general approach of Opposition Members and by some of the media in saying that no one wants to move out of small properties into big ones and that there are therefore no small properties to be moved into by those affected by the removal of the spare room subsidy.

By chance, I bumped into an old friend who is now the chairman of an organisation called HomeSwapper. Some 80% of local authorities belong to it, and hundreds of thousands of tenants have registered on it that they want to swap.

[Sheila Gilmore (Edinburgh East) (Lab)]

With all due respect to the right hon. Gentleman, the problem with his presentation is that the Government expect to make a fairly substantial saving of some £500,000—they will not actually make it—from people not being able to move. What is the real aim of the policy: is it about people moving, or about trying to extract money from them?

[Mr Lilley]

The policy is about making better use of a housing stock that is in very short supply.

My friend pointed out that hundreds of thousands of people are registered: last year, about 40,000 swaps were arranged; this year, the number arranged on the site has increased by 23%. I went to my local authority to find out its figures. Some 500 or more people registered as council tenants in St Albans are seeking to move, of whom 260 are seeking larger properties, while only 62 are seeking to downsize. I therefore ask Opposition Members to go to their local authorities and find out the actual figures.

--- Later in debate ---

[John Hemming]

Because none of those things is a fact. Lots of people are living in overcrowded situations. I see them at my Saturday advice bureau, and two people wrote to me today. Those people are looking for accommodation.

The Opposition have said that they want to cap the structural welfare budget, but if they are going to spend more money on providing free rooms for people who do not need them, where will they get the money from? Will they cut disability benefits? Today, the Opposition propose to give a special exemption to people who have been on housing benefit since 1996. If they proposed a special exemption, with valid rules, for people with disabilities who needed a spare room and to transfer that money out of the DHP, that would be worth looking at. They are picking the wrong analysis for this.

I have always managed to succeed for my constituents who needed DHP because they have disabilities and need a spare room. I have never had a problem getting DHP. As of last week, having got extra money from the Government, Birmingham’s DHP budget still contained just over £600,000. Birmingham is managing to spend that money, look after people and protect those with disabilities, and not to exhaust the budget.

[Sheila Gilmore]

Did the hon. Gentleman—he may have done—support an amendment tabled in the House of Lords and in this place that would have meant at the very least that no one should have their housing benefit cut unless they had refused a reasonable offer of a house?

[John Hemming]

With the charges for a spare room, it has taken some time to identify those people who are willing to transfer. Discretionary housing payments have been made available to people. I have seen payments for DHP go through. People come and talk to me about their personal problems, and I work to get them resolved. I do not think I voted for that amendment, but I have not checked the records so I do not know. It is important to remember that the quantum of DHP is critical. The Government have recently announced DHP for the next two financial years, and that is how we protect people with disabilities who need a spare room for one reason or another. However, it is not possible to achieve that and give this exemption or that exemption.

--- Later in debate ---

[Heather Wheeler]

That says it all. I know that this is meant to be a 90-minute debate, but I wonder whether the Opposition want to give up now because we are having the most ludicrous conversation. I feel so sorry for the voters and residents who are looked after by people who scream and shout and say that they look after the most vulnerable people in society, but physically do nothing about it.

[Sheila Gilmore]

rose—

[Mr Betts]

rose—

--- Later in debate ---

[Sheila Gilmore (Edinburgh East) (Lab)]

There is a fundamental incoherence at the heart of this whole policy. We have heard impassioned pleas from some members on the Government Benches about how much they care for people in overcrowded housing and that this is a policy to help with that situation, but at the same time it is clear from the Government’s own financial projections that they expected to make savings from people not being able to move and having to pay the extra. That is the fundamental inconsistency. The savings are going to be outweighed not just by discretionary housing payments but by the cost of administering them, of giving people additional advice and support and of employing more staff to do so. All that is being shouldered by local authorities and housing associations, and it has to be taken into account when looking at overall public spending.

DHPs do not make up for the fact that many people are suffering. These are real people. A constituent of mine was a cancer sufferer; he is in recovery. He has three children whom he wants to have with him at weekends. One is autistic—where is he supposed to put that child in a one-bedroom property? Is he not allowed to have a life? He did not qualify for DHPs first time around because his DLA was taken into account, so it is not a straightforward case of saying “People will be all right, even those who are disabled.” Why should people be made to make repeated applications instead of being exempted? The Prime Minister at times seems to think that those people are already exempted, but he is clearly wrong.

I am sorry to tell the hon. Member for South Derbyshire (Heather Wheeler) that many of us are deeply concerned about housing in our areas. New houses have been built in my city, but this week only 23 one-bedroom properties are available, of which five are sheltered accommodation. They are not suitable for people in this position. The houses just are not there at the moment, so why should people pay a tax, which is what it is, until that is sorted out?

[Mr Lilley]

Will the hon. Lady clarify—

Pensions and Benefits Uprating

Sheila Gilmore Excerpts

Tuesday 25th February 2014 Commons Chamber

[Gregg McClymont]

I am afraid to say to the hon. Gentleman that, although I understand where he is coming from, it is not the case that everyone will receive the single-tier pension; people must have made contributions for 35 years. He should speak to his colleague, the Minister, who everyone recognises is an expert on the state pension. There will be poor pensioners who will not receive the new pension, and they will depend on pension credit.

I asked the hon. Member for Argyll and Bute (Mr Reid) to reflect on the reality of the difference that pension credit made, particularly in a period after 1997 when there was genuine absolute pensioner poverty.

[Sheila Gilmore (Edinburgh East) (Lab)]

Is it not the case that if it had not been for the framework that was set up by the last Labour Government—particularly the introduction of pension credit, which is clearly already accounted for in budgets—it would have been far more difficult to move to the form of pension that the Minister has proposed?

[Gregg McClymont]

My hon. Friend makes an important point. The level at which the Minister appears set to place the new flat-rate state pension is just above pension credit. It is that framework, which was set for the poorest pensioners to ensure they would no longer live in poverty, that is so important. My argument is not that the hon. Member for Argyll and Bute is entirely wrong; it is that he must take account of the difference that pension credit made to the poorest pensioners in his constituency, my constituency and around the country.

That brings me to the question that I wanted to ask the Minister, which is about pension credit. Of course it is welcome that the basic state pension is rising by £2.95, and he was very clear that pension credit will also rise by £2.95, but of course as a percentage rise, the rise for pension credit is less. The danger is that those on pension credit will fall behind relative to those on the basic state pension.

The term that the Minister used was over-indexation. A little alarm goes off in my head when Ministers resort to using such terms. A more straightforward way to put things is to say that pension credit, which the poorest pensioners rely on, is not being uprated by the same percentage as the basic state pension. There may be an excellent reason for that, but I would like to hear it.

There is also a more fundamental point about the new pension system that the Minister and the Government are introducing, which relates to the point that my hon. Friend the Member for Edinburgh East (Sheila Gilmore) made. It is that, as the Pensions Bill proceeds, the new flat-rate state pension—as I understand it—is being set just above pension credit. If pension credit loses its value relative to the basic state pension in the run-up to the introduction of the new system, there is a danger that the flat-rate state pension will be pegged at a lower rate than would otherwise be the case. We must be clear not only about the implications for the poorest pensioners of a lag in the uprating of pension credit, but about the implications for the flat-rate state pension system for which the hon. Member for Argyll and Bute is such an enthusiast. We must ask these legitimate questions. If we are to have a reasonable debate, we need to recognise the progress that was made over the past decade—certainly until 2010—and consider how that will interact with the flat-rate state pension system that the Minister is so keen on creating.

--- Later in debate ---

[Steve Webb]

With the leave of the House, I shall be grateful for the chance to respond to the three speeches that we have heard. I cannot help reflecting on the fact that we cannot manage to talk for even an hour about spending £3.3 billion, but I take it from that that the House thinks that we are doing a good job.

Before I respond to the detailed points that have been raised, I want to be clear about what we mean by above inflation, real terms and all the rest of it. The April increase in the basic state pension will be in line with inflation at 2.7%. Of course, we now know that CPI is below 2%, so despite the population experiencing inflation at that rate, we are putting up the pension by 2.7%—

[Sheila Gilmore]

Will the Minister give way?

[Steve Webb]

In a second.

That explains the reference at the end of my speech to an above-inflation increase although, as we have discussed, there will be years in which the trend goes in the opposite direction.

[Sheila Gilmore]

The Minister anticipates the point I was about to make. The situation to which he refers could apply in any year. People suffered greatly in previous years because the uprating was set at a low point for inflation, yet they experienced real rising prices, so the increase is hardly a great virtue on the part of the Government.

[Steve Webb]

It is interesting to look at what has happened to benefit rates over the long run. In the seven years since the 2008 crash, the rate of jobseeker’s allowance has increased by more than the growth in earnings. While people with jobs—people would obviously far rather have jobs than not—have seen their wages grow over that period, the rate of JSA, which I still quaintly think of as unemployment benefit, has risen by more than that growth.

The hon. Member for North Ayrshire and Arran (Katy Clark) talked about pitiful increases and slashing benefits, but I can tell her that the Labour Government spent £181 billion on tax credits, benefits and pensions in their final year in office, yet in the first year of the next Parliament, we envisage spending not £181 billion, but £211 billion. Spending £30 billion more than six years previously is an odd definition of “slashing”, so we need to keep a bit of perspective in the debate. I respect the hon. Lady’s sincerity and clearly she wishes that the increases were greater but, as she well knows, her Front-Bench colleagues will not vote against the orders, and that is not because of a technicality, but because they would not allocate money for larger increases. I know that she disagrees with her Front Benchers. If she ruled the world, she would put in place greater increases—she would tax people more and spend more—but that is not her party’s position.

--- Later in debate ---

[Steve Webb]

I did not hear the hon. Gentleman say where the extra cash would come from—the bankers’ bonus tax, perhaps? Is he saying that it should be 2.7% or not? As a debating point he is saying that it should, but he has no idea where the money would come from. [Interruption.] He says from a sedentary position that he wants me to be straight about this. Being straight with the electorate means that if he stands up in Parliament and says that the increase should be bigger, which he has every right to do, he must say where the money would come from. That is the nature of choice in government.

The right hon. Member for East Ham (Stephen Timms) asked about tax credit. Tax credit rates will be set out in affirmative statutory instruments in the usual way and debated in the usual way, so there is no difference there. He talked about the triple lock, which we are very proud of. In fact, we understand that the Opposition are going to copy it. On one level he was mocking and deriding it, but when the Prime Minister said that he would continue it in the next Parliament if re-elected, the leader of the Labour party said that

“nobody should be in any doubt about our commitment to the triple lock”.

The right hon. Gentleman ought to have a word with his leader, who thinks that the triple lock is really a rather good thing.

I want to respond to the right hon. Gentleman’s attempted demolition job on the triple lock that is now his policy. He implied that had Labour been in office, pensions would have gone up by more. There are two possible ways that could have happened. One is if Labour had continued the RPI link. We all know that the statisticians do not think that RPI is a particularly good measure of inflation, and I refer to what the hon. Member for North Ayrshire and Arran said earlier. I entirely accept that RPI is generally, although not always, bigger than CPI, but we are not trying simply to pick a bigger or smaller number. In having these annual debates, we are trying to compensate for average inflation. If society thinks that benefit rates are too low, we can do something about benefit rates. What we do not do is just pick an inflation measure because it is bigger or smaller.

We chose CPI because it is a robust and internationally standard definition. The statisticians have dropped RPI as a national statistic because they do not think that it is a good measure of inflation. When the Secretary of State looked at the increase in the general price level this year, CPI was the only number he could realistically have used because RPI is no longer regarded as an official statistic and the other new measures have not even been properly implemented yet. It is entirely open to the hon. Member for North Ayrshire and Arran to persuade her Front Benchers that we should tax people more and increase benefits, but that should be done by making a decision, not by using a measure of inflation that even the statisticians no longer think works.

[Sheila Gilmore]

I suspect that the Minister will therefore be disappointed to learn that landlords appear to think that RPI is an appropriate measure for calculating their tenants’ rent increases.

[Steve Webb]

Clearly a whole raft of decisions are made about increases. The right hon. Member for East Ham mentioned rail fares, for example, and the train operators’ revenues and some of their costs are determined by RPI. The task that the Department for Work and Pensions has once a year is to look at what has happened to the general price level, and I have not heard a single argument in this debate that CPI is not the best single measure to use for that purpose.