Oral Answers to Questions

Sheila Gilmore Excerpts

Monday 24th February 2014 Commons Chamber

[Mike Penning]

I would hope that everyone across the House condemns any of the abuse and the threats against the employees of Atos as completely unacceptable, no matter what their view of Atos.

[Sheila Gilmore (Edinburgh East) (Lab)]

This Government have had nearly four years to sort this out, and pinning the blame on Atos will not get around that. Why, knowing the weaknesses of that organisation and all the flaws in how it was working, was it awarded a contract to implement the personal independence payment, which is causing huge delays?

[Mike Penning]

The contract for WCA is completely different from the contract for PIP, with a completely different set of assessments. Four years in, we are still trapped by a contract signed by the previous Administration —something that I intend to get out of, but without penalising the taxpayer.

Job Insecurity

Sheila Gilmore Excerpts

Wednesday 5th February 2014 Commons Chamber

[Vince Cable]

The hon. Lady is right, and it is one of the major casualties of the banking crisis that SME lending dried up. We are taking action on that through the business bank and in other ways. Restoring credit to the SMEs through the banking sector is a critical objective and it is a constraint on growth.

The shadow Minister’s conclusion was a good issue to embark on, and I just wish that he had spent more than two minutes and the last line of the motion on it. There is a real issue about how the recovery will be sustained. There are deep problems, including the lack of trained people and the rebuilding of supply chains. I would love to have a long debate with him about the industrial strategy, how we extend it, and what a Labour Government would do to reinforce it. I do not know whether the shadow Chancellor will come up with some more money, but I would be delighted to hear that it would have that kind of support. But the shadow Minister dismissed it as an afterthought in the last two minutes of a half hour speech, and I was, frankly, rather disappointed by that.

The shadow Minister chose to focus on jobs, and they are of course central. I want to address the issues of employment and employment conditions—

[Sheila Gilmore (Edinburgh East) (Lab)]

I thank the Secretary of State for giving way before he moves on to the next section of his speech, because I would like him to correct the possible misinterpretation of the IFS report that he has given. While matters might be beginning to turn round sooner than it thought last year, its general conclusion was that

“there is little reason to expect a strong recovery in living standards over the next few years…real earnings are not expected to return to their 2009-10 levels until 2018-19.”

[Vince Cable]

That is correct. I was merely referring to the point at which things start to turn around and improve. The IFS, like everyone else, underestimated the strength and speed of the recovery. Of course, its forecasts, like everyone else’s, may have to be revised upwards.

I have been responding to debates from my current position for the best part of four years, and I have seen the Opposition’s jobs argument go through four or five iterations. When we first started, the argument from the Opposition was that the attempt to deal with the fiscal crisis would result in mass unemployment. That now looks positively silly today, but if they go back to their speeches in 2010, that was their prediction. We now have the highest level of employment ever—30 million. We have 1.3 million more people in employment than in 2010. The jobless—unemployed—total has fallen not just in relative terms, but in absolute terms by 650,000 to 7.1 %. Of course, there are regional variations. I accept that there are particularly serious problems in the north-east, which is the only part of the UK that has double-digit unemployment.

It is worth contrasting the overall picture with some other countries that had a far less serious experience of the financial crisis than we did. Sweden has 8% unemployment. The unemployment rate in Canada, which everybody thinks is a wonderful economy—we recruited our central banker from there—is higher than in the UK. In the eurozone, even including Germany and Austria, it is 12%. Our unemployment position is significantly better than that of most other western countries.

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[Justin Tomlinson (North Swindon) (Con)]

It is a real pleasure to participate in this debate, which is covering some important areas. Like my hon. Friend the Member for Ipswich (Ben Gummer), I think that there are all too many missed opportunities in the Opposition motion on this important subject.

The reality is that we are 1.6 million private sector jobs up since the general election. Let us contrast that with the scandalous situation in which the number of workless households more than trebled under the previous Government. It became the norm for future generations just to accept that they would never have the opportunity to work. I have talked in previous debates about how the fact that the school I went to was at the bottom of the league tables and that I had seen generations of people robbed of an opportunity is what got me involved in politics and in supporting the Conservative party.

In my constituency, unemployment has fallen by 34% and youth unemployment by 30%. Let us remember that no Labour Government have ever left office with lower unemployment, which is their real legacy.

[Sheila Gilmore]

Will the hon. Gentleman give way?

[Justin Tomlinson]

I will not, because time is limited and other speakers would have their time cut.

The number of apprentices has now doubled to 1.5 million, which is really worth while. Partly driving that improvement has been our support for businesses through new employee incentives, such as the extension of business rate relief, the cut in corporation tax, start-up business loans and the enterprise allowance—all measures that I have supported and that the Opposition have voted against.

The national minimum wage is incredibly important. I spoke about it in the Opposition day debate a few weeks ago. I am a big supporter of the national minimum wage. I support the fact that fines will be increased and that they will quite rightly be targeted on a per worker basis. I want more to be done and for us to be proactive in focusing not just on businesses, but actual decision makers within them, because members of staff are being exploited. In some cases, it is borderline slavery. That is rife in many parts of our economy—the restaurant trade, the night-time economy—and much more could be done. The figures show that people have got away with it all too often, not only recently but in the long term.

I know that the shadow Secretary of State did not want to discuss his personal situation, but when I ran a business, employed people and got them to contribute positively to society, I always made sure that I paid a fair wage. I incentivised my staff and they shared in the business as it did well, because they were more productive—a win-win situation.

The Government have done much to help keep money in the pockets of hard-working people. The income tax threshold has been raised, and 2.4 million of the lowest earners now pay no income tax at all, while 25 million people have had a tax cut. I have gently encouraged the Chancellor of the Exchequer to state any changes, positive or negative, on payslips so that people realise when and why they get more or less money. That would help to create further security.

The Government have reversed Labour’s trend of continuing to put up fuel duty. There were 12 disgraceful rises in just 13 years, but we cancelled the next six proposed increases. We even cut fuel duty, and since then we have continued to freeze it. That is important because fuel is the single most important tangible cost—the one thing which the public can say exactly how much it costs—so keeping its cost down will help to improve confidence. We have also cut the beer duty, which has been much welcomed, and the triple lock for pensions has meant the biggest ever cash rise for pensioners on fixed incomes.

Council tax has now been frozen in most councils, predominantly Conservative ones, for four years in a row. I pay tribute to my local authority, which in the next couple of weeks will set its fourth council tax freeze, in stark contrast to when Labour ran the council and put it up by a disgraceful 42% in just three years. Fear not: they were booted out of office on the back of that. It is right that the Government have encouraged and incentivised councils to freeze council tax.

Finally, in respect of youth unemployment, we need to encourage young people to consider becoming young entrepreneurs. I welcome the fact that 400,000 new businesses have been created since the general election. However, more young people need to understand that they do not just have to go to university or do an apprenticeship, because they might have the ability to set up their own business. Young people have the enthusiasm, energy and risk-taking ability to do so. I did a business degree at university. Of the 350 students on the course, I was the only one who went on to run my own business because entrepreneurial flair and risk-taking were taught out of us. Obviously, I was not paying enough attention. I therefore welcome organisations, such as Outset in Swindon, that provide mentoring for young people so that they can use their enthusiasm, having been inspired by TV programmes such as “Dragons’ Den” and “The Apprentice”, to become the next generation of wealth creators and provide further employment opportunities.

[Sheila Gilmore (Edinburgh East) (Lab)]

I am pleased to follow the hon. Member for North Swindon (Justin Tomlinson), because I want to counter some of the myths that have been perpetuated. It is constantly stated that Labour Governments always leave office with unemployment higher than when they came to office. That is not true. Between 1945 and 1951, unemployment fell under a Labour Government. For much of the 1950s and 1960s, the position was very stable. Let us contrast that with the 18 years of Conservative Government between 1979 and—[Interruption.] Government Members can brush it aside if they wish, but for 13 of those 18 years, unemployment was higher than 10%. When the Conservative Government left office in 1997, unemployment was brought down by the Labour Government and it fell in every year until the financial crash.

[Andrew Percy]

It’s somebody else’s fault.

[Sheila Gilmore]

It would be very strange to place the blame for a world financial crash on the Government of one country.

The other myth that has been perpetuated is that pensioners have this Government to thank for the largest cash rise in pensions ever because they introduced the triple lock. It did not happen because of the triple lock; it happened because inflation was so high in that year, which was largely due to the increase in VAT. If Members care to remember, it was said that that was never going to happen. The rate of inflation is the reason why the cash rise in pensions had to be so high. For pensioners, it was merely an inflationary cash rise. It had nothing whatever to do with the triple lock. If nothing had changed in the policy, the rise would have been exactly the same.

I want to touch on what all this means for a lot of people. We hear a lot about all the private sector jobs that have been created. However, nearly 500,000 of those private sector jobs are in the health and social care field, and most of those are funded by the public sector. They are private sector jobs only because they have been outsourced. For far too many of those employees, the working conditions have worsened. Earlier, a Government Member sought to intervene to say that Labour councils have outsourced contracts. I know of Labour councils that have outsourced contracts. My council has such contracts because it inherited them from the previous Liberal Democrat council.

Private firms are operating social care services on the basis of zero-hours contracts. People who work in the social care sector, much like the McDonald’s workers who have been discussed, wait at home to see how many hours they will get each week. Not only is that bad for the employee who never knows how much she will earn from one week to the next, but it is absolutely atrocious for the person for whom the care is being provided. It is no wonder that people do not know who their carer will be on any given day when the work is organised in that fashion.

The Government cannot escape responsibility for that situation. Why are councils finding themselves in that position? In Scotland it is largely because we have now had the council tax freeze, which has been mentioned, for six or seven years. It is not properly funded; local councils are strapped for cash, and as a result they are looking for experience in how to provide services. If a care service is outsourced, for example, it provides very poor employment circumstances for people.

Another problem that people encounter when on such contracts is how they organise child care. How can they do that if they never know when they will be able to work? One couple I spoke to at the weekend told me that they had to give up the possibility of both working, because they could not organise child care around their work contracts. That has knock-on consequences not just on their working conditions, but also on other aspects of their working life. These real issues are happening in all our constituencies, and we need to change that.

Welfare Reforms and Poverty

Sheila Gilmore Excerpts

Monday 13th January 2014 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

Like all other speakers, I am grateful to those who lobbied for this debate.

There is a need for some good research into what is going on—research that would very much form part of a commission. I want to give an example of research started by the previous Government that is not being conducted by this Government—in this case, research into the employment and support allowance and the work capability assessment. The last Government commissioned research into what happened to people who had been found fit for work. After three months, 22% were back in employment and 41% were on another benefit. There were still some missing people, but there was no explanation of where they were. After a year, only 23%—there was hardly any increase—were back in employment. However, 43% of those people were neither in employment nor on any other out-of-work benefits. Now 43% is an awful lot of individuals, but this research stopped so we do not know what has been going on since; we do not know whether the pattern has been consistent over the last few years. If it has been, there are a lot of unexplained outcomes in respect of people living in great poverty.

This issue is not just about people who have somehow been benefit dependent for all their lives. Professor Fothergill of Sheffield Hallam university recently gave evidence to the Work and Pensions Committee, and he pointed out that some of those most affected are couples in their 50s. Typically, people will be affected most by becoming ill at that stage in their lives, when illness really does begin to rack up and benefits for illness are most likely to be received. What happens if, say, a couple has one and a half incomes and has been comfortably off with the children grown up and a reasonable income coming in, but the main earner falls ill? There will be an immediate big loss of income because of the illness in itself. After a year, if that individual goes into the workplace activities group, which many do, they will lose even their employment and support allowance. At that stage, another £91 is lopped off their household income—and all this at a time when the costs are probably increasing because they are likely to be at home longer and have more heating bills to pay.

If this couple are council or housing association tenants, they might well have a spare room and will also be hit by the bedroom tax. The second means test applied by many councils for discretionary housing payments will probably mean that, because there is still an earner in the household—albeit probably a part-time earner—they will not qualify for discretionary housing payment. They will be deemed to have sufficient income over the absolute basic amount for them to have this extra payment. After working for 35, 40 or perhaps even more years, this couple will have experienced a huge tumble from being comfortable to being in really straitened circumstances. If they have made any savings over their working period towards their retirement, the chances are that when they reach pension age, they will have been entirely eroded, creating further problems for the future.

The irony in all this is that many of the measures introduced—I would hope that the research covered this issue—are not actually making any great savings. We have heard a lot about the bedroom tax not making much in savings, but it is not the only thing. Housing benefit payments are due to increase, which the Office for Budget Responsibility has factored into its assessment. Why? Half the expected increase—a substantial increase—is due to people in employment who will qualify for the benefit. Fewer people may be receiving jobseeker’s allowance at one end of the system, but further along the system, more will receive housing benefit. For one set of savings, there is a comparable set of costs. We have to look at that.

We are not making the savings we think we are, and I believe the same is true of the employment and support allowance. There is a big mystery here. The number of people in receipt of that benefit has gone down by far fewer than the number of people who have been found fit for work. What on earth is going on? I suspect that many people have simply come around through the system again. They were not well; they had to apply for benefit again. We are putting people through a lot of trauma and stress for very little saving.

--- Later in debate ---

[The Minister of State, Department for Work and Pensions (Mike Penning)]

Apart from a short comfort break, I have sat through the whole debate, finding it very interesting. I found the tone and manner of most of it to be exemplary, and a credit to the House and the Backbench Business Committee. I will take exception with the Opposition Front-Bench team, because if they were so determined that they wanted this they could have had this debate and pushed for this inquiry during Opposition day debates last week or later in this week. They could even have signed the motion tabled by the right hon. Member for Oldham West and Royton (Mr Meacher), but they did not; there are three names on the Order Paper, but none from the Front Bench. They have suddenly decided—[Hon. Members: “It is a Back-Bench debate.] So why did we have the debate last week? What about the business next week? They have not done it.

Let us not get into the semantics of what went on but look at what happened during the debate. [Interruption.] For someone who sits there and complains about other people chuntering from a sedentary position, I must say that the hon. Member for Rhondda (Chris Bryant) is the leading expert in it. We heard contributions from: the right hon. Member for Oldham West and Royton; my hon. Friend the Member for Monmouth (David T. C. Davies); the hon. Member for Walsall North (Mr Winnick); my hon. Friend the Member for Stafford (Jeremy Lefroy); the hon. Member for Liverpool, Walton (Steve Rotheram); my hon. Friend the Member for Birmingham, Yardley (John Hemming); the hon. Member for Derby North (Chris Williamson); my hon. Friend the Member for Worthing West (Sir Peter Bottomley); and the hon. Members for North Ayrshire and Arran (Katy Clark), for Rochdale (Simon Danczuk), for Oldham East and Saddleworth (Debbie Abrahams), for West Ham (Lyn Brown), for Llanelli (Nia Griffith), for Hayes and Harlington (John McDonnell), for Edinburgh East (Sheila Gilmore) and for Edinburgh North and Leith (Mark Lazarowicz). As I say, it is a credit to the Backbench Business Committee that it listened to the Back Benchers and tabled this debate.

The contribution from the right hon. Member for Oldham West and Royton was wide ranging. I am pleased that he did not place all the blame on the coalition Government, not least because he was aware that the work capability assessments were introduced by the previous Administration, as was the Atos contract, which we discussed at Work and Pensions questions. So we inherited the assessments that are being complained about by hon. Members from across the House today, particularly those being carried out by Atos. We are working hard to improve the situation and deal with the mess we inherited. [Interruption.] I would like to know how it is possible that we are making it worse, as the contract we are working to is exactly the one we inherited. The hon. Member for Derby North, from a sedentary position, asks why. We were trapped in this because the previous Administration signed the contract. We need to make sure that the work capability assessment works as we go forward.

[Sheila Gilmore]

rose—

[Mike Penning]

I will not give way, because I do not have time.

My hon. Friend the Member for Monmouth raised the most important issue, and I am pleased that the shadow Secretary of State is here now. The shadow Minister engaged in a rewriting of history. My hon. Friend and several others alluded to the fact that the shadow Secretary of State said that Labour would be tougher than the Tories on welfare and on welfare reforms. There was no nuance about helping more people. Labour said it would be tougher than the Tories on welfare. We have saved £83 billion on welfare spending—that is the predicted saving. I would like to know where those cuts would take place if not through welfare reform. [Interruption.] The hon. Member for Gateshead (Ian Mearns) says from a sedentary position that the cuts would come through jobs, but more than 1 million people have been placed into jobs since this Government took office. That is most important.

Oral Answers to Questions

Sheila Gilmore Excerpts

Monday 13th January 2014 Commons Chamber

[Esther McVey]

My hon. Friend is another Conservative Member who is doing a great deal in his area. He has got together 2,000 people from his local community—job seekers and businesses—and has found everyone work. He is right: youth unemployment has fallen by 28% over the year, and long-term youth unemployment in his area has fallen by 26%. The new enterprise allowance scheme is expanding—2,000 young people have already set up businesses in that way—and we are investing more money by extending the scheme until December 2015.

[Sheila Gilmore (Edinburgh East) (Lab)]

The December report of the Office for Budget Responsibility increased its projection for increased spend on housing benefit by £1.8 billion between March and December and attributes half of that to people in employment who will have to claim housing benefit. Is not the truth that because of low hours and wages, savings in one respect are simply popping out as increased spending in another?

[Esther McVey]

That is not the case. We want to look at the numbers. If we look at the spend on housing benefit, we see that it doubled under Labour from £12 billion to £24 billion. What we have got to do is look in the round at those people who are in overcrowded housing and those on waiting lists as well as those who have got houses that are bigger than they necessarily need and yet the taxpayer is funding all of it. The figures are right: the cost doubled under Labour’s watch.

Food Banks

Sheila Gilmore Excerpts

Wednesday 18th December 2013 Commons Chamber

[Esther McVey]

The Trussell Trust started under Labour—it hid that away—and the removal of the spare room subsidy in the private sector started under the Labour Government in 2008. Rewriting history does not work. The British public want to know the truth: those on the Labour Benches ruined the economy and we are getting it back on track.

[Sheila Gilmore (Edinburgh East) (Lab)]

I am very grateful to the Minister. On the one hand, she has spent a long time telling us that there are now many more people in work, although the rate of employment has still not returned to pre-recession levels. But if —[Interruption.]

[Madam Deputy Speaker]

Order. The hon. Lady must be brief, but she must be heard.

[Sheila Gilmore]

If everything is going so well, why since 2010 has there been such a substantial increase in the number of people using food banks? The only explanation can be the Government’s changes to welfare policy.

[Esther McVey]

Tomorrow, when Hansard comes out, we can read the full explanation, because hon. Members probably do not want me to go through it again. Actually, it was because of the crash, the overspend, the personal debt and the public debt left to us by those on the Opposition Benches.

Another issue that has been raised is zero-hours contracts. They happened under Labour: the numbers in 2013 are the same as the numbers in 2000. In fact, the number of zero-hours contracts went up by 75% from 2005 to 2009, something that those on the Opposition Benches did absolutely zero about. It is the Leader of the Opposition’s Doncaster council that presides over the biggest number, within his council. Again, there is a lot of fluster and a lot of bluster. The Opposition did nothing in government and they are doing nothing to control their Labour councils, yet we are now picking up the pieces.

--- Later in debate ---

[Roger Williams]

I am sure that is the case. I am trying to respond to my hon. Friend the Member for Bournemouth East (Mr Ellwood). I believe that the current benefits system is not fit for purpose and that this Government are making progress to make it better, but there is still a huge amount of work to be done. The conditionality of so many benefits leads to difficulties. In my constituency, Jobcentre Plus seems to be using different criteria in different towns to impose sanctions on people. Obviously, when sanctions are imposed, people are left in great difficulty.

[Sheila Gilmore]

As a member of one of the governing parties, what is the hon. Gentleman saying to Ministers about that sanctioning disaster?

[Roger Williams]

I have already written to a Minister and I am going to meet them to find out why the sanctions in different jobcentres have different criteria; why they have different systems for writing to and contacting people in order to encourage them to attend meetings; and why, if people do not attend those meetings, they get sanctioned.

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[Mr Hurd]

There was no acknowledgement of the past and no real acknowledgement of some of the complexities underlying this situation. The Labour Front-Bench team came here simply to make political capital and I think lost the respect of the House. It would have been nice to hear some acknowledgement from the Opposition Front Benchers or Back Benchers of the improvement in the economy and the fact that we now have more than 30 million people in work—a record number—and of the performance of this Government in a few years to get this economy back on track.

[Sheila Gilmore]

I thank the Minister for giving way. I think he was somewhat churlish in not acknowledging that many Opposition Members are also extremely grateful to those who work in food banks. When I went to my local church-run food bank, I found that the people there were not political; the one thing they wanted to tell me was how shocked they were that so many of the people coming to them were suffering from sanctions—and sanctions not as a last resort but as a first resort.

Oral Answers to Questions

Sheila Gilmore Excerpts

Monday 18th November 2013 Commons Chamber

[Mike Penning]

My hon. Friend has been campaigning hard on behalf of his constituents and we have been working closely with the Ministry of Justice, which is why I can announce that there were six sessions per month in June 2012 and there are now 18 sessions per month, a 300% increase, and we intend to do better.

[Sheila Gilmore (Edinburgh East) (Lab)]

People in Kettering and claimants elsewhere might be able to get a quicker resolution of their cases if the testing of the new descriptors for mental health and fluctuating conditions were brought to an end. It is more than two years since Professor Harrington suggested action. When will we see the results?

[Mike Penning]

I am sure that in the hon. Lady’s constituency as well as in Kettering, we are working very hard to bring down the time it takes, particularly in the tribunals. We have been working closely on the area of mental health, and we will continue to work to make sure that everybody gets a fair deal from the process.

Housing Benefit

Sheila Gilmore Excerpts

Tuesday 12th November 2013 Commons Chamber

[Steve Webb]

I will give way in a moment, but I want to make a little progress. Let me take the first line of the Labour motion and change one word so that it reads,

“this House regrets the pernicious effect on vulnerable and in many cases disabled people of deductions being made from housing benefit paid to working age tenants in the private rented housing sector deemed to have an excess number of bedrooms in their homes”.

The Opposition position seems to be that this is pernicious and evil when it affects social tenants, yet not merely acceptable but policy when it affects private tenants. There are two coherent positions: one is the Government position that asks anyone on benefits to contribute towards the cost of an extra bedroom, and the other is to state that anyone on benefits will receive housing benefit, regardless of the size of house they need; that would cost a lot of money but it would be coherent. The Labour party’s position is incoherent. It states that social tenants should not have to pay towards an extra bedroom, but that private tenants should. We have heard cases of people who need extra bedrooms, for example for dialysis machines. Social tenants need an extra room for that machine, but private tenants should have to pay for it. Surely some mistake.

[Sheila Gilmore (Edinburgh East) (Lab)]

One of the strangest things in this argument about the private rented sector is that during the passage of the Welfare Reform Bill I never once heard the Government mention it—it is one of those later justifications. The problem is that people in the private rented sector were not suddenly told one day, “Your house is too big; you have to start paying for the extra rooms regardless of whether you can move.” That is a huge difference and the two things are not comparable. If we want to talk about equalising, perhaps we should equalise rents.

[Steve Webb]

I am interested that the hon. Lady mentions rents, because if we compare private and social tenants, she is saying that social tenants, who already benefit from subsidised rent, should not have to pay for an extra bedroom, whereas private tenants paying a market rent should pay for it. That does not seem fair to me.

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[Dr Coffey]

I do not know the details of the hon. Gentleman’s case, but I am sure that he is taking it up with his local council. Rather than responding to individual cases, however, I would prefer to stick to the principle of why we believe this to be fair and right. I will come to my reasons in a moment.

On social housing, as the Minister said, it would be wrong to expect thousands of homes to sit empty waiting for people to move in. I took up such a case in my own constituency recently. The local council said that it was not getting as much new homes bonus as it had expected, and I wondered whether that was because Suffolk, thought to be prosperous, was missing out. We looked into it and discovered that 120 of the homes sitting empty belonged to the local housing association. I found that extraordinary. So we brought the association in to find out what was being done to maximise the use of those houses—whether they were one, two or three-bedroom homes. Not only will Flagship have to pay more money council tax, if those homes are not used, because we have allowed councils to charge 100% for empty homes after a certain time, but maximising their use would help the council to keep more of its new homes bonus.

Of course, the market can operate in social housing, as has been eloquently explained, via house swapping. I understand that 392 house swaps have been arranged in north Kensington, compared to only nine in Doncaster. It is incumbent on Members to work with their councils to understand what they are doing to facilitate house swapping. From what I learned this morning, my own area is not doing enough, and I will pursue that matter in the future.

[Sheila Gilmore]

The problem is that the hon. Lady and her Front-Bench team do not seem to know what the policy is for. We hear that it might be about making savings, but if everyone slots into the right-sized house—according to the Government’s criteria, which I do not necessarily accept—there will be no saving. Is it about making savings or making better use of properties? If it is about making better use of properties, there are lots of better ways to do it.

[Dr Coffey]

The beauty of Government Members is that we think we can achieve both. We believe we can save the taxpayer money and put it towards the affordable homes programme. Our estimate—I appreciate that it is only an estimate and that we will have to wait and see—is that it will save £500 million a year. Meanwhile, we have set aside £4.5 billion for the affordable homes programme to build houses in this Parliament and are already arranging the programme for the next Parliament.

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[Mrs Main]

No, I will not give way. The hon. Lady can make her own remarks.

It appears that in trying to garner support for the incoherent policy that tried to level the playing field with the private rented sector—I thought that was a good idea as a Labour party policy—Labour started the process that should have been continued by ensuring that people paid for the accommodation that they were using. I have not heard from Opposition Members—perhaps they can illuminate the House and the public on this point during their speeches—what, if they choose to get rid of the inequality of a bedroom tax, which obviously does not exist, but let us go with the fantasy for a moment, they will do when they are in power. Will they allow the anomaly, or will they pledge, at goodness knows what expense, to reverse the proposals that they introduced in 2008?

[Sheila Gilmore]

rose—

[Mrs Main]

No, I will not give way to the hon. Lady.

The Opposition should also address overcrowding. As yet, they have not done what Mr Tom Copley says that they should do and apologise for the fact that they never addressed the dire need to build more social housing to allow—

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[Mike Freer]

No, I am sorry. I have given way once and I am running out of time.

Under that policy, we got no social housing at all on smaller developments because builders built to the threshold. That was Labour’s legacy in London. Of course there are difficulties, as the population makes the transition to the new arrangements, but, as I mentioned, I cannot be alone in the Chamber in having to deal with constituents in accommodation that is too small for them, where children and parents are sharing bedrooms, where children of different sexes approaching puberty have to share bedrooms, or where living rooms are doubling up as bedrooms.

What about the families consigned to emergency accommodation? We do not hear much about that from the Opposition today. That is a problem forgotten by Labour and being dealt with by the Government. It is argued that it is cheaper to subsidise spare rooms than to move people or adapt homes, yet the overall costs of converting larger properties to smaller accommodation would be repaid by the savings on emergency accommodation alone.

[Sheila Gilmore]

Will the hon. Gentleman give way?

[Mike Freer]

No. I have given way once already and we are running out of time.

[Sheila Gilmore]

rose—

[Mike Freer]

You can bob up and down as much as you like. I have given way once.

The capital cost of adaptions for disabled people moving into smaller accommodation is also likely to be offset by the savings in rehousing those who are in temporary accommodation. In my authority, the average cost of adaption for a disabled property is £7,000, yet my council spends on average on emergency accommodation £14,000 for one placement. So one placement would pay for two houses to be adapted. Again, the fiscally incoherent Labour party argues that the cost of downsizing is offset by the housing benefit, but what about the larger families already in the private sector who may then be rehoused in those properties that become vacant? Little is said of that saving.

This is a completely one-sided debate. What about the private rented sector? People in such accommodation do not get spare rooms. What about the people in my office? They work, yet they do not even get a flat of their own. They have to share. You are quiet on the private sector. Let us make it fair. This was your policy. You were quite happy to tax the private sector spare rooms, but now you say no.

--- Later in debate ---

[Bob Blackman]

During the second world war and the 1950s, there was clearly a need, which was why the Conservative Government in the 1950s built record numbers of council properties—to enable people to live in decent accommodation. I agree about that. Clearly, however, social housing should be based on need, not expectation for life, and as people start new careers and move on, they should vacate social housing for the benefit of others in greater need.

[Sheila Gilmore]

rose—

[Bob Blackman]

I am not giving way again.

The Labour party clearly does not recognise this fundamental change that needs to take place.

[Sheila Gilmore]

rose—

[Bob Blackman]

The hon. Lady can keep popping up and down, but I am not giving way.

The Labour party would hand out £500 million of taxpayers’ money while presiding, as it did, over record low levels of housing development. It failed to provide the housing needed during its term of office, and this Government are now trying to turn that around after many years of neglect. The last Government allowed social rents to increase, knowing that housing benefit would pick up the costs for the vast majority of tenants: about 80% of tenants were receiving the maximum housing benefit. That is fine while people are fully occupying those properties—they will be in need, because they will have been assessed as being in need—but once they are under-occupying those properties, it becomes right and proper for Governments and councils to say, “It is time for you to move on and for a family who need that property to move in.”

Earlier, someone challenged the position in the private sector. On average, home owners occupy their property for seven years before choosing to move on, but of course some people fall on hard times and have to sell their property in a rush or lose everything when they lose their job or become disabled. We have to have sympathy and ensure supply for those people across the board. In the private rented sector, on the other hand, we need longer tenancies, because currently they are often for six months or less. Clearly, however, we need some equalisation between the private and social rented sectors.

There are other courses of action that councils can consider. My own local authority has brought in incentives for people who under-occupy to move out. It will give them cash incentives to enable them to buy their own property or move to a smaller property when their families have moved on. That is the right sort of approach. There should be a carrot and stick approach. If someone chooses to under-occupy, they will get less benefit. If they choose to occupy a property that they no longer need, they should not expect the public sector—the taxpayer—to fund them.

[Sheila Gilmore]

I thank the hon. Gentleman for giving way. It is hard to know where to start in responding to what he is saying. If this were a matter of choice, it would be a very different issue. Why is it appropriate to apply a financial stick to people who do not, by definition, have the financial capacity to move on because they are on benefits? In those circumstances, there is no choice to be made. An amendment was tabled to the Welfare Reform Bill which would have resulted in this measure applying to people who had been made a reasonable offer but refused it. Does the hon. Gentleman regret the fact that the Government did not accept that amendment?

--- Later in debate ---

[Kwasi Kwarteng]

If that were indeed true, why is there a discrepancy between privately rented accommodation and social housing in this context? I hope that the Opposition will enlighten me on this. The last Labour Government might have wrecked the economy, but they at least had some sense of responsibility—unlike the current Opposition. Why did that Labour Government believe that there was a perfectly good reason to equalise the treatment of the private and social sectors?

[Sheila Gilmore]

Will the hon. Gentleman give way?

[Kwasi Kwarteng]

I will not; I have only a short time in which to speak.

Labour Members talk about fairness, but is it fair that someone on a low income who is in privately rented accommodation should pay taxes in order to subsidise someone else’s spare room? Is it fair to raise taxation from low-paid workers to subsidise other people’s accommodation?

--- Later in debate ---

[Esther McVey]

I would like to raise the example of Susannah from south Yorkshire. She had had four children and did not necessarily want to move. In the end, she looked around for six months and moved. She said, “Actually, I wished I’d had that support earlier, because now I am in an area I prefer. I have downsized. I have a smaller house, which means that my cost of living is less. I am paying less on cleaning and less on heating, and I can live within my means.” I have a list of people like that. I ask Opposition Members to work with their local authorities and their constituents to help them downsize so they can live within their means. I know that living within one’s means is not something Opposition Members understand, but that is what we all have to do as a country.

[Sheila Gilmore]

At what point, when the costs of this policy outweigh the savings, will the Government admit that they have simply got it wrong?

[Esther McVey]

We are planning to save money and move people into the right houses, something the Labour Government failed to do. They left people in the wrong houses and never supported them, and lived beyond their means.

Pensions Bill

Sheila Gilmore Excerpts

Tuesday 29th October 2013 Commons Chamber

I draw the Minister’s attention to new clause 12 in particular. It is specific to the pensions field and is about finding the evidence that will help feed into precisely the cross-Government approach he advocates. I ask him again to accept the new clause, which would at least give us some comfort and reassurance that he is serious about delivering on his warm words this morning. The new clause is not just about fiduciary duty; it is about gathering data on the impact of climate change and natural resource constraints for the sustainability of private pensions and for a better understanding of the systemic risks posed by high levels of exposure to fossil fuels and other carbon-intensive assets. To my mind, that is a prerequisite for any future integration across Government of this kind of concern. I see it as an issue not of moving ahead of the rest of the Government, but of gathering information that will be very useful to Government. I ask the Minister again to consider accepting new clause 12.

[Sheila Gilmore]

I want to speak on Opposition new clause 11 on annuities. The scandal of annuities was widespread and is well known. It has caused many people to suffer a much-reduced income in retirement.

The Minister, with all due respect, engaged in diversionary tactics when dealing with the Opposition proposal. He talked about other things that people might do when they are reaching retirement age and planning for their retirement. He spoke about other draw-down opportunities that might be better for them and said that people should get as much advice as possible. He failed to deal with the specific proposal.

It is not good enough simply to say that it would be good for people to have many different opportunities and a lot of advice. It is important to ensure that when people are deciding whether to annuitise, which they will ultimately have to do, they know all the options. It is not necessary for everyone to annuitise as soon as they reach retirement age; that decision can be postponed. The question is who should advise people about this matter and how we can ensure that people know all the options. The variety in the kinds of annuity that are offered and the deals that people can get is considerable.

Annuities are an important element in creating a retirement income that is adequate for people to live on. I urge the Minister to change his view and to accept that the arrangements that the Opposition are proposing do not fly in the face of his desire to explain other options to people and to give people those options. Many of the people who fare the worst do not have such substantial pension pots that they have a wide range of options and they cannot necessarily afford to postpone annuitisation, because they do not have much other income.

As ever, it is the role of Parliament and of Government to protect those who are in the weakest position. We must always have those people in mind. Those who have lots of options probably receive good advice anyway or could afford to pay for good advice. For many people, the whole matter of pensions is entirely baffling. Those people tend to go with the easiest or most obvious option.

The 20 to 30 years over which people—even those on relatively low incomes—have increasingly been expected to source their own pension provision and to take up pension options, such as the many money purchase or defined-contribution schemes that have been offered, have resulted in many people having very poor pension outcomes. One reason for that has been the charges and costs, which greatly reduce the pension pot that people end up with.

As the Minister has said, transparency is not enough. Transparency goes a long way, but action needs to be taken beyond that. I acknowledge that it is a step forward that on Report, although not before, we have a provision on capping charges. It would be better to be more specific about that and not to wait too long for a consultation process that could have been started a considerable time ago.

I know that other hon. Members want to contribute to the debate, but I want to say a little about the view expressed by the hon. Member for Gloucester (Richard Graham), who did not accept my intervention, that the last Government did not do much for pensioners. The subtext seemed to be that all our views and proposals could therefore be discounted. Hundreds of thousands of pensioners saw a substantial increase in their income, and therefore in their well-being and health, because of provisions such as pension credit that were introduced by the last Government. That is not to say that there were not problems with those provisions, or that they would have been needed in an ideal world.

Much of the debate at that time focused on restoring the earnings link because, unlike now, earnings were outstripping prices. Everybody who was campaigning on the issue focused on that. However, restoring the earnings link and letting things move up gradually would not have helped the many pensioners who had a very quick increase in their income and well-being. Many of those people were women, because women often end up being the poorest in retirement. Those people would tell us very clearly how important that was for them. It is not fair—indeed, it is quite wrong—to rewrite history and suggest that it was not helpful.

As I have said in previous debates, the fact that that expenditure was in place made the job of introducing the single-tier pension easier for the Minister. We will discuss the single-tier pension in due course. That expenditure is one of the underpinnings that has allowed him to introduce the single-tier pension, apparently without increasing the overall expenditure on state pensions. Indeed, it is predicted that the overall expenditure will decrease in the long term. I hope that everyone will accept that the Labour Government did a great amount of thinking and work on pensions.

We must remember that many people were paying into pension schemes of various kinds long before auto-enrolment, perhaps with the assistance of an employer or perhaps because they chose to do so themselves. We must ensure that we protect those people; otherwise they will lose out. The same is true of how we carry forward small pots for different individuals. There are still serious concerns among people who are knowledgeable about the industry that the Minister’s pot follows member proposal may lead to some people having to transfer savings that they already have into a scheme that has higher charges and, therefore, a less good outcome for them than the scheme that the savings are currently in or a scheme that they would have chosen to transfer their pension into.

I must respond to the general comments made by the hon. Member for Gloucester, who is no longer in his place, about the previous Government wanting to introduce change or reform. He referred specifically to pension credit and, inadvertently perhaps, he misquoted my right hon. Friend the Member for Edinburgh South West (Mr Darling)—he is my parliamentary neighbour; our constituencies touch at one point within Edinburgh—who said not only that the previous Government looked at the possibility of a system like universal credit, but that the overwhelming advice was that it was too difficult and would be extremely expensive to implement. The cost-effectiveness of such a system, and its benefit to claimants, was therefore put in some doubt.

It ill befits anyone to suggest that the current Government have solved the problem of universal credit. As we are seeing at the moment, all the predictions made by those who have previous experience suggest that such a system is proving extremely difficult, extremely slow, and no doubt extremely expensive. Whether it will benefit people receiving benefits we have yet to see. One must therefore be cautious in suggesting that the previous Government were wrong in not going ahead with such a scheme. We will see what transpires over the next few years although experience to date has not been all that healthy. I urge the Minister to consider annuities in a great deal more detail, as they are crucial for people’s retirement income and well-being during those years of retirement.

--- Later in debate ---

Brought up, and read the First time.

[Sheila Gilmore]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 6—State pension entitlement for women born between 6 April 1951 and 5 April 1953

‘(1) Women born between 6 April 1951 and 5 April 1953 have the right to choose to receive their state pension and associated benefits under the new state pension system, set out in Part 1, from its introduction.

(2) The Government must ensure information about the full range of entitlements under the old state pension rules and the new state pension is available to allow women in subsection (1) to make a comparison of total weekly income.

(3) The responsibility for making a choice under subsection (1) lies fully with the individual.’.

New clause 8—Review in relation to women born on or after 6 April 1951

‘(1) The Secretary of State shall conduct a review to determine whether all women born on or after 6 April 1951 should be included within the scope of the new state pension arrangements established by this Act.

(2) The Secretary of State must prepare and publish a report on the review within six months of Royal Assent of this Act and must lay a copy of the report before Parliament.’.

New clause 13—Pensionable age: differential effect in England, Wales and Scotland

‘Part 2 of this Act shall not come into force until the Secretary of State has laid a report before both Houses of Parliament containing an assessment of the differential effect and impact of the pensionable age in England, Wales and Scotland due to varying levels of life expectancy and gross value added.’.

Amendment 1, page 10, line 1, leave out clause 20.

Amendment 35, page 11, line 34, clause 24, leave out ‘An’ and insert

‘With the consent of the trustees, an’.

Government amendments 2 and 3.

Amendment 37, page 11, line 40, clause 24, at end insert—

‘(c) a scheme in respect of any of its terms which relate to persons protected under the terms of—

(i) the Electricity (Protected Persons) (England and Wales) Pension Regulations 1990;

(ii) the Electricity (Protected Persons) (Scotland) Pension Regulations 1990;

(iii) the Electricity (Protected Persons) (Northern Ireland) Pension Regulations 1992;

(iv) the Railway Pensions (Protection and Designation of Schemes) Order 1984;

(v) the London Transport Pensions Arrangements Order 2000;

(vi) the Coal Industry (Protected Persons) Pensions Regulations 1994; or

(vii) the nuclear industry employees protected by Schedule 8 of the Energy Act 2004.’.

Government amendment 4.

Amendment 36, page 12, line 10, clause 24, at end insert—

‘“trustees or managers” has the meaning given in section 178 of the Pension Schemes Act 1993 and regulations made thereunder.’.

Government amendments 14 to 20.

Amendment 34, page 79, line 5, schedule 14, leave out paragraph 11.

Government amendments 21 to 24.

[Sheila Gilmore]

One of the issues that has come up in the course of all the debate about the single-tier pension is the decision that the Government have taken to bring to an abrupt end to the provisions that previously existed for women in particular—I shall talk primarily about women, although men could be in this position—to be able to derive a pension or years towards a pension from the contributions of their spouse. That dates back to a different world. When the state pension system was set up in the post-war period, there was an assumption that the standard pattern for married people was that one person, normally the man, would be the main breadwinner, and the woman would spend considerable periods out of the labour force, and perhaps not even work at all after marriage. Indeed, although they were about to go, there were still marriage bars on certain types of employment, so time out of employment was not just a question of choice; it was sometimes a question of necessity.

Things have changed and, although it can still be a necessity, for many women the amount of time out of employment can be very short. The arrangement in the original proposals was that a woman could receive a derived pension from her husband’s contributions—currently approximately 60% of the full state pension—or receive benefit if she was widowed or divorced. For someone widowed after retirement who was receiving only the 60% pension—sometimes referred to as the married couples pension when both bits are put together—it would be increased to a full single person’s pension, regardless of whether she had made contributions during her working life. For those who are divorced, there is currently provision in the system to inherit and carry over a spouse’s contribution record if it is better than one’s own. That can be beneficial to women, and some men, in building up a pension record.

Other changes that have taken place include crediting certain types of contribution that are not entirely financial. As well as the credits people receive during periods of unemployment when they are claiming benefit, successive Governments have introduced credits for periods of child care and for caring for other relatives, and that can make up some gaps. There are still some people—a decreasing number, without a doubt—who will end up in a position where they do not build up sufficient contributions in their own right. If the right to obtain these so-called derived benefits is taken away, there will be a group of people, primarily women, who, post-2016 when the new arrangements come in, will have less than they would have expected to get before that date. They will be in a worse position than they would have been previously, and that will have all sorts of consequences.

People have reasonable expectations of the rules. Age UK gave an example of someone who had specifically asked the Department for Work and Pensions for advice on whether she should start making contributions relatively late in her working life. She was told not to do so, because she would not be able to work to receive nearly as much as she would be getting in any event. That advice was given in good faith and at the time she accepted it in good faith, but it is now too late for her to make up the difference.

The Government estimate that there are 40,000 women in this position. I am not sure whether there is certainty about that figure, because I do not know whether a full survey has been carried out. However, 40,000 is not a huge number. New clause 5 asks for a full review to ascertain how many women are in this position and what the cost would be of allowing them to continue to benefit from derived rights for a transition period—it would not be for ever.

[Mr John Redwood (Wokingham) (Con)]

Does the hon. Lady have any idea how much money, on average, these ladies might be losing?

[Sheila Gilmore]

I do not know off the top of my head, which is why I am asking for a review. We might be talking about 40,000 women who clearly will not be getting a full pension, but certain of them will have made some contributions; it is not that they will have no contributions. The Work and Pensions Select Committee looked at this and recommended transitional arrangements for those within 15 years of the state pension age when the new arrangements came into force. It is not for ever, it would not go on and on, with a very long tail; but it would provide for those who quite reasonably made plans on the basis of particular expectations.

I have heard two arguments from the Government. The first was a generalisation about how the world had changed. Yes, of course it has changed, and we are not talking about most or all women doing this for ever. Just saying, “Well, the world’s changed”, is not a good enough answer to the fact that some women will suffer detriment if transitional arrangements are not put in place. The second argument was that apparently—I am not sure any figures have been offered up—an increasing number of these women were living abroad. It conjured up images of women much younger than their husbands and living abroad—I do not know whether the Minister had Filipino brides in mind. Nevertheless, it cannot be beyond the ingenuity of the DWP to ensure that people do not take undue advantage. Like I said, these arrangements would not last for ever.

There are a variety of reasons why somebody might not have contributed. They might have made a positive choice not to contribute or they might have been doing voluntary or care work before credits were allowed or without appreciating that they were allowed—we know that a lot of people are eligible for carer’s credits who have not claimed them. There are a variety of reasons. Others will have been in very low-paid or short-hours part-time work and earning below the level of contribution, and they might have concluded that it did not matter too much because of the derived right.

We debated this matter in Committee and I hope that the Government will this time be prepared to accept my new clause. Then, when we have carried out the review, a decision could be made about whether to proceed with transitional arrangements.

[Sir Peter Bottomley (Worthing West) (Con)]

I hope the hon. Member for Edinburgh East (Sheila Gilmore) will forgive me if I do not follow her line of debate, but we have less than 50 minutes left to deal with something that is complicated, important and a matter of justice.

I pay tribute to my right hon. Friend the Prime Minister for saying in the Commonwealth that the Commonwealth is about fairness and justice, and I am going to argue for a significant review of what we do with overseas pensioners. I hope the House will forgive me for reading out a paragraph from Lord Hoffmann in the Carson case concerning regulation 5 of the Social Security Benefit (Persons Abroad) Regulations 1975:

“The general rule, subject to limited exceptions, has always been that social security benefits are payable only to inhabitants of the United Kingdom. A person ‘absent from Great Britain’ is disqualified: section 113(1) of the Social Security Contributions and Benefits Act 1992. But there is a power to make exceptions by regulation. Regulation 4 of the Social Security Benefit (Persons Abroad) Regulations 1975 (SI 1975/563) (deemed to have been made under the 1992 Act) makes such an exception for retirement pensions. But regulation 5 makes an exception to the exception. In the absence of reciprocal treaty arrangements, persons ordinarily resident abroad continue to be disqualified from receiving the annual increases.”

The House might expect that pensioners abroad who do not get the increases are the exception; were the House to think that, it would be wrong. Some 650,000 overseas pensioners get the increase, and they include pensioners in countries such as the United States and Jamaica. More than 500,000—it could be 530,000 or 570,000—do not. They are predominantly in Australia, Canada, New Zealand, South Africa, India and Pakistan, with Yemen and Japan being two others in the top ten. No one can claim that there is rhyme or reason in that.

--- Later in debate ---

[Steve Webb]

In a short time we covered a wide range of issues, and in the 10 minutes or so remaining, I shall try to respond to as much as I can, although I apologise in advance to hon. Members whose amendments I do not reach. I shall deal with amendments in the order in which they were raised.

New clause 5 was dealt with by the hon. Member for Edinburgh East (Sheila Gilmore) and touched on by her colleague, the Chair of the Work and Pensions Committee, the hon. Member for Aberdeen South (Dame Anne Begg). It addresses the position of the derived rights of people who are shortly coming up to pension age and the fact that we are ending the ability to derive pensions from a spouse. The spirit of the new clause implies transitional protection, but we have included comprehensive transitional protections in the system.

In particular, those who paid the married woman’s stamp and as a result have a poor contribution record will, notwithstanding the fact that we are ending derived rights, continue to be able to receive a 60% spouse’s pension or a 100% widow’s pension, because that was the basis of the deal that they did with the state. They signed the married woman’s stamp, which said, “I’ll pay less NI, but I understand that when I reach state pension age I’ll be able to get a pension based on my husband’s contribution record.” We took the view that because that was the basis of the deal, we could not change the rules. We have made sure that the limited number of women in that position are protected.

The issue is whether we should go further. It is worth bearing in mind that to get a £66 pension, which is the derived pension for a married woman, because of the rate of the single tier pension, such a woman needs 16 or 17 years in the system. For someone who has spent their life in this country, it is very difficult not to have achieved that or thereabouts.

[Sheila Gilmore]

There is an acceptance that for most people it would be unusual for that circumstance to arise, but according to the Department’s own figures, some women are in that position.

[Steve Webb]

Indeed. The hon. Lady is right. Some women are in that position, but a significant proportion of them have had very limited contact with this country. This is the point that she touched on. Derived rights arise to people who have never even been to the country. They can get a 60% pension or a widow’s pension because their spouse is part of the UK pension system. She is asking us to keep, for another 15 years, an extraordinarily complex bit of the system rolling into the new system. We are trying to deliver a simple and effective new state pension system and we have already introduced transitional protection for the most obvious group, the married woman’s stamp pensioners, which we think needs to be protected. We could have kept the whole of the old system rolling on for another 15 years, but that would have created enormous complexity when we are trying to move to a simpler system.

Were we to follow new clause 5 and the Select Committee’s recommendation and choose 15 years as the cut-off, we could be as sure as anything that we would be under judicial review for someone who was 16 years shy of the line. In other words, if we have a cut-off date, we must have an objective basis for it, and we can find no objective basis for choosing 15 years. I take the point made by the hon. Member for Aberdeen South that because 10 years is the de minimis, 15 years is a bit more than 10. I get that, but so is 16 or 14.

The hon. Member for Edinburgh East said that someone some years ago was told not to buy missing years and now it is too late. I stress that the ability to buy missing years has been substantially relaxed by HMRC so people can buy back as far as 2005-06 on relatively favourable terms. Even by the end of the decade they will still be in a position to buy back missing years. If they have spent the money and they do not have it any more, they cannot do it, but that aside, the ability to buy back missing years still exists. Although buying 10 years costs a lot of money, very few people will be starting from zero. So to reach the 10-year de minimis would not necessarily involve a huge outlay. Many will be over that level already and for those who are not and who have been in this country, the chance to buy one or two missing years will be important.

What we are trying to do is, yes, recognise where we need transitional protection, but we want to avoid such great complexity that we recreate the complex old system for well over a decade in the new one. That is why we reject new clause 5.

Oral Answers to Questions

Sheila Gilmore Excerpts

Monday 14th October 2013 Commons Chamber

[Esther McVey]

What I will say is that we are putting in place support for those housing associations and local authorities that are finding that they cannot come to terms with the issue, although they have had three years to do something and have failed to do so. I would like to talk about the 1.8 million people on housing waiting lists and the 250,000 people in overcrowded accommodation, whom nobody had looked after. We are looking after everybody and supporting them as best we can with discretionary housing payments.

[Sheila Gilmore (Edinburgh East) (Lab)]

Tenants who are not on housing benefits and pensioners are now being affected by the bedroom tax, because councils such as mine are being forced to look at either rent rises or cutting their modernisation programmes because of the impact of the bedroom tax. Will the Minister now look at that again and stop this nonsense, which is not even saving money overall?

[Esther McVey]

There is one point to clarify: pensioners are exempt. If people could get the facts right, it would work better.

Work Capability Assessments

Sheila Gilmore Excerpts

Friday 6th September 2013 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

I welcome this opportunity to raise an important aspect of employment and support allowance and the work capability assessment. This is my fourth Adjournment debate on the subject. In each debate, I have started by highlighting the scale of the problems with the benefit. Although many people who listen to or read this debate will be familiar with the procession of figures, it is important to put them on the record again.

Between the introduction of the assessment in October 2008 and May 2012, 1.47 million new claimants were assessed and 846,800 were declared fit for work. Of those, 332,300 appealed the decision and 123,700 were successful and were awarded employment and support allowance. That means that nearly one in 10 of the assessments has been overturned. Although the proportion of the assessments that are overturned has started to fall a little, the overall number remains very high. Those are the figures for new claims. They do not include the regular reassessments of those who are already on ESA, nor do they cover all the incapacity benefit claimants who are being migrated to ESA—a process that is due to be completed in 2014.

I will briefly summarise the progress, or lack of it, with regard to the other concerns that I have raised in the past 18 months. In May last year, I argued in favour of a new set of mental health descriptors that had been drawn up by Mencap, Mind and the National Autistic Society. An evidence-based review was commissioned to evaluate those descriptors and I understand that the report is due to be published imminently. In December, I highlighted the fact that claimants were regularly being called back for reassessments just months after their previous claims had been granted on appeal. I regret that that is not being properly addressed by Ministers. I continue to meet constituents who are still on that stressful and unnecessary merry-go-round.

Just before the summer recess, I secured a commitment from the Minister that claimants would be informed that they could have their assessment recorded, and that the time limits that were preventing that from happening would be dropped. I continue to urge the Minister, when assessing whether audio recordings improve the quality of assessments, to consider the rate of successful appeals, rather than just the demand among claimants for audio assessments.

Before I move on to the specific issue that I want to cover today, I must highlight the announcement that the Minister made on 22 July. He admitted that some Atos reports were so poor that staff were being retrained and additional providers brought in. Given that the Government now acknowledge that there are major problems with the assessment process, it is even more important that we ensure that financial support is available to those who are wrongly found fit for work. That is what I want to focus on today.

To put the matter into context, as soon as a claimant contacts the Department for Work and Pensions to claim ESA, they are paid it at what is known as the assessment rate, which is equivalent to jobseeker’s allowance. That lasts until they go through the first assessment and a decision is made on their claim. If they are declared fit for work and believe the decision is wrong, they can ask the decision maker, who is a DWP official, to reconsider it before they lodge a formal written appeal with HM Courts and Tribunals Service. I want to focus on that in-between period, which is referred to as reconsideration but is effectively an informal appeal.

Although claimants are not automatically paid ESA at the assessment rate during that in-between period, they are entitled to it and can apply for it if they know about it. That entitlement continues if the decision remains unchanged and the claimant decides to appeal. However, following the passage of the Welfare Reform Act 2012 and subsequent regulations, that is set to change. Claimants will have to apply for reconsideration before they can lodge an appeal, and they will no longer be entitled to ESA at the assessment rate during that period.

The Minister’s colleague Lord Freud admitted in the other place on 13 February that, as a result of that change, there would be a “gap in payment”. Initially, that might not appear problematic. Claimants will be told that they can simply apply for jobseeker’s allowance instead while their reconsideration request is being considered, then go back to claiming ESA at the assessment rate if they go to formal appeal. Leaving aside all the procedures involved in doing that, there is a serious problem for people in that position in claiming JSA. It comes with a great degree of conditionality. In particular, claimants have to be available for and actively seeking work. They must attend regular work-focused interviews, undertake job searches and make a minimum number of applications every week. That in itself may prove tiring or stressful, and it could exacerbate people’s existing physical or mental conditions. More importantly, those who apply and fail to meet those conditions can be sanctioned or refused benefit altogether. I have encountered situations where Jobcentre Plus has advised claimants that they cannot claim JSA because they are not fit for work, for example because they have a fit note—what used to be called a sick note—from their doctor.

Conditionality is not new, but the new mandatory reconsideration stage will interact with it to have an adverse effect on people who are ill or disabled and have to apply temporarily for JSA while their ESA claim is undergoing reconsideration. The state will effectively be telling those people that they are too fit to claim ESA but too sick or disabled to claim JSA—a veritable trap.

Although mandatory reconsideration has yet to come into full effect, my constituent Ms Rose Burgess already faces that predicament in a related situation. She suffers from arthritis and depression, and she applied for ESA earlier this year. She underwent a face-to-face assessment and was declared fit for work. She appealed, and the judge upheld the DWP’s original decision. However, when she then claimed jobseeker’s allowance, she was told she was ineligible because she had a fit note from her GP. She was not entitled to ESA, and she was told that she was not entitled to JSA either. Her condition has since deteriorated further and she has now reapplied for ESA and is awaiting the application of her fresh application, but her example shows how easy it already is for people to slip into the limbo between ESA and JSA, even without the mandatory reconsideration period.

Similarly, another constituent who suffers from back problems was claiming JSA. His problem flared up when he was due to attend his work-focused interview. When he arrived at his jobcentre and explained that he would be unable to manage to climb up the stairs to where the interview would take place, he was told that his claim would be ended because he was not fit for work. He raised the matter vigorously and the situation was rectified fairly quickly, but that example demonstrates the emphasis placed by jobcentres on JSA claimants being fit and available for work.

For people whose claim to ESA is marginal and whose health problems are not too great—some people might believe that is what I am describing—a brief period on JSA might be just about manageable. However, Camberwell Myalgic Encephalomyelitis Support Group has told me that it currently works with many people who score zero points on their initial assessment, but who, after appeal, are placed in the support group. The appeal shows that they have serious health conditions, but they might find themselves in that position. The Camberwell group says that many of those whom it helps find that they cannot physically get to a jobcentre on certain days, as is required under JSA.

The scale of the problem that people are likely to face is exacerbated because there is less discretion on sanctions than previously. A leaked memo from Walthamstow Jobcentre Plus showed earlier this year that a targets culture appears to have emerged on sanctioning, whether or not Ministers have explicitly sanctioned it. At the very least, we must consider reintroducing a degree of flexibility in the sanctions regime when we are dealing with people who have health problems.

In the other place, Lord Freud referred to other sources of income that people could access during that period, but I am not clear what he meant by that. I expect that most claimants are similarly at a loss. I would be grateful to the Minister if he could explain what other sources of income people could access.

One way to limit the impact of the gap in payment would be for the Government to set a statutory time limit on how long the Department for Work and Pensions can take to complete a reconsideration. However, they have deliberately omitted to do so. On 13 February, Lord Freud stated that “a number of respondents” to the Government’s consultation

“suggested that there should be a time limit on the reconsideration process…we are not making any statutory provision for this. Some cases are more complex and require additional time—particularly, for example, where extra medical evidence needs to be sought. However, we recognise the concern here and are considering the scope for internal targets.”—[Official Report, House of Lords, 13 February 2013; Vol. 743, c. 744-45.]

I fear that non-binding and non-public internal targets simply will not be adequate, especially given the pressure that the much-reduced Department for Work and Pensions staff are under. As a result, it is possible that people who will eventually be deemed entitled to support will be left without income for a protracted period.

I raised the issue with the Minister at the Select Committee on Work and Pensions on 21 November 2012, and asked about it again at Work and Pensions questions on both 11 March and 20 May 2013. On the last occasion, he emphasised that, if people do not claim JSA, their ESA claim would be backdated should they appeal and have their fit-for-work decision overturned. However, in many cases, the damage will have been done. With no income during that period, people run the risk of becoming destitute. Many will have to rely on already stretched food banks. Some will be driven into the hands of payday lenders, amassing debts they will struggle to repay even if benefits are subsequently reinstated.

The Minister can do a number of things to address the problem. At a minimum, it would be helpful if he provided the House with information, first to confirm exactly when the new system of mandatory reconsiderations will begin. Secondly, he could give the House information on what alternative sources of income people have if they cannot claim either ESA or JSA. Thirdly, he could tell us what internal targets he will introduce on the time taken for mandatory reconsiderations.

Several changes would help at least to alleviate the worst effects of this policy. One example would be to reintroduce a degree of flexibility into the sanctions system, so that ESA claimants declared fit for work and having their claim reconsidered are not subject to normal JSA sanctions. Alternatively, the Minister could put a statutory limit on the time DWP can take to conclude the reconsideration process. But the one thing that would resolve this issue entirely would be to amend the regulations to allow ESA claimants to continue to receive ESA at the assessment rate during the reconsideration period. Otherwise many people who the state will later conclude should not be available for work will be required to claim a benefit that explicitly requires that they should be. Many people will end up without any support from the state, being too fit for ESA, but too sick or disabled for JSA.

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

I thank the hon. Member for Edinburgh East (Sheila Gilmore) for raising the issue of the reconsideration of work capability assessments and for letting me see a copy of her speech in advance, which I hope will enable me to answer the points that she has raised. She may not be satisfied, and doubtless she will come back again if that is the case.

The hon. Lady is interested in how the new mandatory reconsideration process will affect ESA claimants who are found fit for work. In this regard, I intend to address her main concerns on the length of time a mandatory reconsideration will take and the availability of JSA to those people who are found fit for work. Before I consider those concerns, it is important to give the issue some context and explain why we have introduced mandatory reconsideration.

To put the matter at its simplest, the current disputes process does not work for benefits in general or ESA in particular. The introduction of the ESA in 2008, and particularly the conversion of incapacity benefit awards to ESA, has—as the House will know—resulted in a high volume of appeals, with more than 500,000 last year.

The Government have taken a series of steps to improve the WCA process but we accept that people will appeal. The Government do not believe that it is acceptable to write people off to a lifetime on benefits because they have a health condition or impairment. Many people with health conditions are able to sustain and progress in employment. Evidence points to the negative impacts of being without work and suggests that work is generally good for people regardless of whether they are disabled or not.

The Department therefore needs to ensure that people currently receiving incapacity benefit and ESA are supported in preparing for a return to work where some form of employment is a possibility. Claimants are being reassessed using the WCA. This is based on the principle that a health condition or impairment should not automatically be regarded as a barrier to work. It has been designed to be a more accurate reflection of an individual’s capability for work, taking account of modern workplaces, health care and legislation.

The volumes of appeals are placing some strain on the appeals system. We also recognise that the process can put pressure on claimants too. That is why a claimant can ask for a decision to be reconsidered. It was intended that people would ask for this reconsideration in the first instance if they felt their decision was wrong. In practice, however, many people do not do so and instead make an appeal from the outset. This is more costly for the taxpayer; more time consuming and more stressful for claimants and their families; and, for a significant number of appellants, unnecessary. I say unnecessary because a significant number of decisions are overturned on appeal because of new evidence presented at the tribunal—more than 55% in recent months. This is mainly oral evidence, which accounts for 70%, but also includes written evidence that has not been considered by the decision maker.

I hope that hon. Members will agree that we need a process that enables this evidence to be seen or heard by the decision maker at the earliest opportunity. Mandatory reconsideration does just that. Another decision maker will review the original decision, requesting extra information or evidence as required via a telephone discussion. If this means a decision can be revised, there is no reason for an appeal—an outcome that is better for the individual, the Department and the Tribunals Service. We hope that, because of the robust nature of the reconsideration and the improved communication, the process will result in either decisions being changed or claimants making an informed decision not to escalate their dispute to an appeal tribunal.

[Sheila Gilmore]

The Minister’s argument about the appeals process often relates to whether evidence is available in the first place. However, a number of my constituents and those of a lot of my colleagues say that such information is not requested in the first instance, at the time of the WCA, more and more of which are done through paper-based applications, as I am sure he is aware. If people were asked for that information, it would not have to be looked at later.

[Mr Hoban]

The hon. Lady has looked into this matter in detail, and I am sure she will recollect my comments about where we seek further medical information from health care professionals, as nominated by the appellants themselves. The problem is straightforward. Too often, either the information is not supplied by the health care professionals from whom we have sought additional medical evidence or it is supplied too late to be taken into account. Where we seek medical evidence, there is a broader responsibility on those from whom we seek it to respond in a timely manner. That, too, would help the process.

Let me turn to the concerns raised by the hon. Lady. The first was the time it will take for a reconsideration. Although we are not introducing a statutory time limit for decision makers, I assure the House that we will have a process geared to timely decision making. Anything less would be frankly unacceptable. We owe it to claimants not to delay their right to exercise their right of appeal. However, the time taken will depend on whether the claimant intends to provide new evidence—obtaining it could take some time, as I said in connection with the first request for further medical evidence—and whether the decision maker needs to seek further advice on that evidence from Atos. If there is nothing new for the decision maker to consider, he or she can get on and make that decision.

However, the key is quality, not speed. There would be no benefit to anyone in rushing the process, effectively forcing an appeal and then having it allowed at a hearing some time later. The new process is aimed at getting decisions right, not simply passing disputes to the tribunal to resolve. Equally, however, it is in no one’s interest for this to be an open-ended procedure. We will monitor the introduction of the change for the first six months. In April 2014, we will look at the times taken and consider whether we have enough information to introduce realistic internal targets.

During the mandatory reconsideration phase, when someone is fit for work and not in work, they will be entitled to jobseeker’s allowance. I accept that someone seeking a reconsideration is likely to protest to the jobcentre that they are not fit for work. However, that does not rule out entitlement to jobseeker’s allowance. That is the case even where the claimant presents a fit note. Disability employment advisers, trained by specialist staff from the Department, will work with those who identify themselves as having a health condition or disability. They will take into account individual circumstances, including any advice given by the claimant’s doctor, and will consider placing limitations on a client’s availability or modifying their conditionality. There is nothing new about this.

The hon. Lady also expressed concerns about claimants being sanctioned while on JSA. Let me address that point. To reiterate, the modified conditionality militates against a sanction being imposed. If the adviser has agreed to modify conditionality, it would be perverse if they then took a heavy-handed approach. As I have previously informed the House—let me take the opportunity to repeat this—there are no sanction targets. It was this Government who removed the sanction targets—they were in place under the previous Government. We continue to monitor to ensure that sanctions are applied consistently and only where appropriate. The hon. Lady asked what would happen if a claimant were subject to a sanction. She will know—I think she might have served on the Delegated Legislation Committee that dealt with this—that a claimant can still apply for hardship payments.

A health condition or impairment should not automatically be regarded as a barrier to work; in fact, there are many people who juggle work and a health condition. Such claimants might be disputing their decision, but at that time they have been through an assessment process and are, in the eyes of the law, fit for work. The appropriate benefit is jobseeker’s allowance, and it is appropriate that we apply conditionality that is tailored to claimants’ needs so that we can move them closer to the labour market and, we hope, back to work.

It has been suggested that we should pay employment and support allowance during that period because of the standard of decision making on ESA, as evidenced by the number of decisions overturned on appeal. Let me just remind the hon. Lady of the statistics that demonstrate the quality of the decisions made. Between October 2008 and February 2012, around 800,000—about 15%—of those decisions that found the claimant fit for work were overturned on appeal. She will know, having looked into this, that a significant proportion of decisions are overturned at tribunal because of oral or written evidence being presented at the tribunal that has not been discussed with or seen by the decision maker. It is that new evidence that is the reason for the overturning of a decision. As I stated earlier, we hope that mandatory reconsideration will allow that new evidence to be discussed at an earlier stage, leading to a decision being revised if necessary. We need to try to accelerate the process so that we can get the decision right first time and as soon as possible.

[Sheila Gilmore]

Given that the Minister has conceded that there were substantial failings in the initial WCA process, and that steps have been taken to retrain staff, to bring in outside staff to give further advice and to bring in other providers, surely this is not simply a problem of new evidence being presented to the tribunal. Is there not a flaw in the system?

[Mr Hoban]

No, I do not agree with that. If the hon. Lady goes back to the statement that my noble Friend Lord Freud made in the other place in July, she will see that that is not the case. There was an issue with the quality of the recording of the assessments, but not necessarily with the quality of the assessments themselves. That is a very different matter.

We are not complacent. That is demonstrated by the tough way in which we have responded to Atos’s failings. There is always room for improvement, and much is happening. The hon. Lady will be familiar with the recommendations made by Professor Harrington in his three reports. They included proposals for improving the ESA forms to encourage claimants to provide their own evidence, for better contact between decision makers and claimants at the decision-making stage, and for enhanced training and guidance for decision makers. There was also a proposal for a simpler and more empathetic process to be adopted for the assessment of cancer sufferers, with more claimants being placed in the support group, the better to reflect their difficult circumstances. We are also learning from the tribunal decisions made as part of our summary reasons pilot. I am confident that accuracy will continue to improve and that the proportion of decisions overturned will continue to be reduced.

[Sheila Gilmore]

Will the Minister give way?

[Mr Hoban]

I was about to conclude my speech, but I will give way once more as I am a generous man.

[Sheila Gilmore]

I understand the Minister’s concern about information and about ensuring that the process is carried out timeously. One suggestion that has emerged from the discussions is that the time for submitting the ESA50 could be extended from four to six weeks, which would give people more chance to get the necessary information together.

[Mr Hoban]

I thought that the hon. Lady’s motivation was to accelerate the process, to ensure that the right decisions were made as quickly as possible. Now she seems to be advocating delay by adding an extra two weeks to the process. I am not sure that that would be in the interests of claimants, as they would face a longer assessment phase that would take them further away from the market if they were fit for work. I question whether it is the right approach to lengthen the process rather than to improve it by making it shorter and more effective, where possible. As I was saying, getting the decision right first time has always been our priority.

In conclusion, the aim of the modifications that we have introduced is to get the decision right first time, but if claimants believe that we have not done that in their case, we need a step to put things right before we end up at a tribunal. Mandatory reconsideration will offer claimants that opportunity. It seeks to address two concerns: the length of the appeals process and the fact that new evidence can be brought forward which has an impact on a decision. It is in the best interests of claimants to introduce that new step. Mandatory reconsideration will help to ensure that the right decision is reached as quickly as possible.

The Government are committed to supporting those who are unable to work owing to health conditions or disability, but we believe that those who are able to work should receive help into employment to enable them to realise their aspiration to independence and to support themselves and their families. We also believe that those who are unable to work should receive the support to which they are entitled, and it will be in the best interests of everyone involved in the process if we can reach decisions in those cases more quickly, without compromising their quality.

Question put and agreed to.