Food Banks

Stephen Timms Excerpts

Wednesday 18th December 2013 Commons Chamber

[Stephen Mosley]

I shall come on to that point.

The Department for Work and Pensions is the front-line organisation dealing with people in that position and that is why I support wholeheartedly the Government’s decision to allow jobcentres to advertise and refer people to their local food bank. That is also why it was such a big mistake for the previous Government to ban jobcentres from referring people, depriving people of the information they needed to get food at times of emergency.

Let us make no mistake about it: food banks were not created by, for or because of this Government. They predate the Government, they predate recent welfare changes and they reflect deep long-term problems with our benefits system. As the majority of people who need food bank assistance are those who face changes to benefits, the clear long-term solution is a more joined-up benefits system. The solutions proposed by the Opposition in their motion do not tackle the root cause of the problem. They are short-term sticking plasters that merely cover up the cracks in the welfare system. We need a long-term solution to fix the problem once and for all.

[Stephen Timms (East Ham) (Lab)]

I wonder whether the hon. Gentleman can help us with a puzzle. When the Government took office, Ministers perfectly properly made a lot of the announcement that in the future jobcentres would be able to refer people to food banks. However, that appears now to have changed. I received a written answer from the former Minister, the hon. Member for Fareham (Mr Hoban), which states:

“Jobcentre Plus …does not refer people to food banks or issue vouchers.”—[Official Report, 4 September 2013; Vol. 567, c. 373W.]

Can the hon. Member for City of Chester (Stephen Mosley) help us to understand why there has been that change?

[Stephen Mosley]

Jobcentres offer signposting and advice and point people in the right direction. Unlike Opposition Members, I think that the Secretary of State for Work and Pensions knows what the problem is. That is why he is pushing so hard for universal credit, which will transform welfare, solving many of the issues that still haunt our welfare system and that we have heard about today.

As well as the long-term solution of universal credit, there are some short-term actions that we can take. First, we need to find out more about food banks and I back the call from the Trussell Trust and my hon. Friend the Member for South Thanet (Laura Sandys) for an inquiry into their use. We need a clear picture of the role and extent of the banks and we need to know who uses them and why. Then we can have a debate based on the facts. Otherwise, this important debate will always run the risk of being hijacked by politicians hoping to score cheap political points, which does absolutely nothing to help those in need. The university of Warwick has produced a report for DEFRA on household food security and the provision of food aid. I hope that it will be forthcoming.

Secondly, I am a passionate believer in school meals. In my constituency I have seen the real difference that providing a hot, nutritious meal every day can make for children. I therefore congratulate the Government on introducing free school meals for infant pupils. By opening up free school meals to all children, we can put nutrition first.

Finally, we need to give food banks the support they need. Too often people suggest that we should be ashamed of food banks, but I disagree. Food banks play a key role in a caring society. Dozens of people in my constituency volunteer at the Wesley Methodist church and hundreds, if not thousands, donate food. I am proud that so many Chester residents want to help their neighbours and local communities when they are in need. I offer my heartfelt thanks to everyone who helps the West Cheshire food bank. They are doing a truly fantastic job.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 18th November 2013 Commons Chamber

[Esther McVey]

The future jobs fund cost £6,500 per outcome, whereas our work experience outcomes cost £325, which is a 20th of the price for exactly the same outcomes. As always, the coalition Government are delivering value for money.

[Stephen Timms (East Ham) (Lab)]

After more than two years of the Work programme and 18 months of the embarrassing flop of Youth Contract wage incentives, youth unemployment is still nearly 1 million, higher than it was at the general election and higher than when the Work programme began. That is terrible not only for young people, but for the future of the economy. When will Ministers finally get serious about that and back a proper youth jobs guarantee?

[Esther McVey]

Obviously the Opposition like to rewrite history. The 40% increase in youth unemployment that we saw over their years in office was shocking, particularly given that it was during a boom period. We are dealing with the issue most practically. The Youth Contract has been, is and will be a huge success, with wage contracts increasing from a slow start of 1,000 a month to 4,000-plus a month.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 14th October 2013 Commons Chamber

[Esther McVey]

For the first time in history, we are dealing with the people the hon. Lady—the Chair of the Select Committee on Work and Pensions—is talking about. Labour Members shake their heads, but I am afraid that they abandoned those 1.4 million people; we are supporting them. Of those on the Work programme, more than 380,000 are in work, and 168,000 have found lasting work. Ninety per cent. of those have been in employment for nine months or more. We are working on and dealing with that matter, but Labour abandoned it.

[Stephen Timms (East Ham) (Lab)]

I welcome the Minister to her new brief, and the Minister of State, Department for Work and Pensions, the hon. Member for Hemel Hempstead (Mike Penning), to his.

The invitation to tender for the Work programme said that, if there was no programme at all, 15% of people on employment and support allowance, to whom my hon. Friend the Member for Aberdeen South (Dame Anne Begg) has just referred, would be in a sustained job outcome within two years. With the Work programme, the number has been about one third of that. Surely that underperformance is unacceptable.

[Esther McVey]

That is not true at all. We have reached out and supported people who were never supported under the Labour Government. Equally, I would like to separate those on JSA, who have exceeded targets, and those on ESA who must move closer to the workplace, which is what we are statutorily obliged to do, but not to put them in a job. We are doing that. Because of that, we are looking at the programme as a whole and putting further support in for those people. It is successful and, as I have said, Labour failed to do it.

[Stephen Timms]

The Minister should ask her civil servants about pathways to work.

In his spending review on 26 June, the Chancellor of the Exchequer called on the Secretary of State to make a hard-headed assessment of underperforming programmes in his Department. What progress is there with the hard-headed assessment of the Work programme?

[Esther McVey]

The Work programme is not an underperforming programme: 60% of people are off benefits. We continue to modify and improve it, which is only right. We have set up a best practice committee so that people can get even better. There is no underperformance. We are proud of the record. I will tell the right hon. Gentleman one thing: those people who have got jobs, whom he dismisses so discourteously, are very proud of what we have done.

Work Programme

Stephen Timms Excerpts

Thursday 10th October 2013 Westminster Hall

[Guto Bebb]

That is a fair point. When people try to score political points on this issue, it is worth bearing in mind that the performance of the previous programmes was not as good as what we are seeing under the Work programme.

[Stephen Timms (East Ham) (Lab)]

I will have something to say about the performance of previous programmes if I catch you eye later, Mr Walker. However, I want to pick the hon. Gentleman up on his point, which I agree with, about the programme’s performance at the beginning being particularly disappointing. With the benefit of hindsight, would he agree that the cliff-edge approach of shutting down the previous programme and immediately trying to set up the Work programme—inevitably, it took many providers quite a long time to get going—was not a good way to go about things?

[Guto Bebb]

In view of the fact that we were looking to shake up the way we were supporting people into work, I am not sure there was any other way around that. The summary to the Select Committee report highlights the fact that it was an achievement on the part of the Department to deliver the Work programme so soon after the announcement in Parliament and after the legislation was passed. Despite the circumstances, the programme was delivered.

The key problem with the statistics that people originally looked at is that there is a natural delay in the system before we can talk of a positive outcome in terms of generating a job for somebody. That delay has allowed the statistics to be used to try to make a political point about the programme. I know for a fact that the trade body representing Work programme providers has been particularly annoyed and upset at the way in which some of the statistics that have been released, which often have not indicated the time lag in the programme’s performance, have been used to try to make a point about the way the programme is performing.

Another interesting, key point highlighted in the report’s summary is about the importance of the relationship between Work programme providers and jobcentres. That relationship is highlighted as a weakness of the programme, but I have to say—I can speak only from personal experience in the area I represent—that one of the key factors behind the success of the Work programme in north Wales has been the positive relationship between jobcentres and Work programme providers. A key recommendation in the report is that different areas of the country, with different providers, should learn from each other. If providers in other parts of the country are having difficulties co-operating with their local jobcentres, and they want to learn some lessons, they are more than welcome to come to north Wales, where the relationship is working particularly well. That is not to say that the figures in north Wales are particularly good, but I will come to that, because there are problems facing the programme in different parts of the country that are not necessarily of the programme’s making. That is something I need to put on record.

Another point I want briefly to touch on is whether the Work programme can support all user groups. One of the programme’s crucial successes is in supporting young people back into employment. We have a youth unemployment problem, although it is not as bad as in some other European countries, and we should be thankful for that. There is no doubt that the youth contract and the financial support we offer employers to engage with young people looking for a job who are on the Work programme have been a success.

The report also highlights the fact that there is sometimes a lack of publicity, and of appreciation of what is happening and the support available to employers who want to recruit young people and to understand the Work programme. There is an obligation on Members of Parliament to highlight the support that is available. It does not matter what political party a Member represents; they will obviously prefer the Work programme to be a success. I wrote to hundreds of businesses in my constituency about the Youth Contract, highlighting the financial support available for young people on the Work programme who were job-ready, and willing and able to work, and explaining that if there were opportunities in those businesses the Work programme providers were ready and willing to help. I am glad to say that the initiative resulted in at least 20 young people securing jobs; I know that because employers have contacted me. That might be a small contribution, but as well as highlighting failures politicians have an obligation, where there is lack of publicity or understanding, to let employers know what support is available; because they are the ones who create jobs.

We have identified those under 24 as needing particular support, because of the challenges that they face in getting access to work. As everyone knows, it is easier to get into a job from a job. A young person without experience on their CV needs support to get a position. The Youth Contract has been a significant benefit to many young people, certainly in my part of the world, but perhaps there is a need to extend such support to other hard-to-reach groups. I have been keen to support young people looking for jobs in my constituency, but I am also aware that the average age of my constituents is among the highest in any constituency in the country, and certainly in Wales. A significant problem that we need to re-examine is how proactively to help those over 50 who are desperate to work. They may, despite having skills, have been out of the job market for some time. There is an argument for something similar to the Youth Contract, if funds permit at some point, to support those people. Perhaps we need to persuade employers that there is an advantage in recruiting such people from the Work programme.

[Guto Bebb]

I agree entirely with my hon. Friend. One of the strengths of the Work programme in rural Wales is the fact that providers have been able to vary their targets for attracting people to self-employment. Originally, the significant targets for self-employment were given to providers in south Wales. However, statistics clearly showed that the self-employment option was not doing well in south Wales, but that in rural and north Wales there was considerable interest in taking that route. There is a significant amount of support available from Work programme providers, but, more importantly, there is flexibility in the system to allow the numbers to be switched, and that has benefited many in my part of the world.

[Stephen Timms]

The hon. Member for Newton Abbot (Anne Marie Morris) raised an interesting point. Does the hon. Gentleman agree that it could be useful if eligibility to the new enterprise allowance were to be extended to participants in the Work programme? It is not available to them at the moment.

[Guto Bebb]

That, indeed, is one of the recommendations that I would make to the Department. I have been a key advocate of the new enterprise allowance. A long time ago I was an adviser to people starting out on the old enterprise allowance scheme. There are still businesses in my constituency that were established under that scheme. It is important to provide such joined-up support. I am not making a criticism; Work programme providers are giving valuable support in my constituency to people interested in self-employment. I appreciate the fact that they have developed strong relationships with local enterprise support providers, which is very important; the black box approach is a key issue for Wales. I agree that it would be helpful if the new enterprise allowance were available, especially when there is flexibility in the programme to allow figures and targets to be swapped between different parts of the country. We must not put barriers in the way of people who want self-employment.

Flexibility is a key part of the Work programme. There is no such thing as a standard client. That flexibility is crucial for reaching those who most need support and are most difficult to place. Work programme providers in various parts of the country have sometimes got access to quite specialist support services for individuals, to ready them for the jobs market, and often that support has been partially funded through European funding. For example, the European social fund has enabled some providers to refer Work programme clients to support schemes to make them more work-ready. The Welsh European Funding Office, an arm’s length body fully controlled by the Welsh Government, has decided not to allow Work programme clients access to any programme partially funded by the European social fund. That has been a great barrier to the black box approach. Indeed, Work programme providers in Wales that I have talked to—and certainly the two operating in my constituency—have been unable to get support for their clients that is available elsewhere. That might be support with numeracy, confidence-building or skills, but the providers are not allowed to refer clients to the programmes because of a decision that in Wales if a project is funded by the European social fund the support is not available to Work programme clients.

That is a matter of huge concern. As the report highlights, Welsh performance levels are not as impressive as those in other parts of the country. It could be argued that the economy and employment level in Wales are not as high as elsewhere, but private sector employment growth there, while not spectacular, has been positive since 2010. An extra 69,000 jobs have been generated in the Welsh economy and there is less dependence on the public sector than for a long time. It is bizarre that people who everyone recognises need to be supported into work—and often the ones who most need support—are denied access to programmes provided by further education colleges and specialist providers, just because they are Work programme clients. I am happy to say that evidence from the Welsh Government and the Department for Work and Pensions to the Select Committee on Welsh Affairs, for its report on the Work programme in Wales, will highlight that discrepancy. It is worth pointing out that often the individuals who are worst affected by the decision not to allow Work programme participants to use the schemes may be exactly those who, according to the report we are considering today, are least well served by the Work programme. There is an issue for the DWP, but I also want the message to go out that the Welsh Government should carefully examine the reason why their definition of additionality in European funding differs so markedly from the one used in England.

I have written to small employers in my constituency; and I do not have many large ones. During the general election campaign the present Chancellor of the Exchequer, who was then the shadow Chancellor, wanted to visit my constituency. He asked for a list of employers with more than 500 members of staff, and I could offer him nothing but the local authority. My constituency is very dependent on small businesses; so I have tried to highlight the support available for small businesses from the Work programme. The other thing we have done in my constituency is to undertake a jobs fair, which was a success. We managed to get significant participation and, again, have seen positive outcomes in terms of jobs created. I said clearly to the local newspaper that if one person found a job as a result of the jobs fair, it was my time well spent. Two weeks later, we are up to seven, which is very positive, with another six interviews in the offing.

The key point from that meeting was the fact that a number of small businesses came up to me and said they were confused by the number of organisations telling them that they offered support. This is an important point that we need to get across: we have to ensure that the streamlined level of support and the understanding of what support is available is also part of the way in which we deliver the Work programme. The last thing we want is for employers to feel that it is too difficult to engage with such an important scheme as the Work programme.

My experience of the Work programme has been positive, but I am not somebody who says there is no way in which we can improve the system. We have had two years, and in my view, the programme is delivering well, but there are problems with specific groups who are being supported by it but are not particularly successful, at this point, in getting into employment. We need to look at such things as why there is a delay before somebody can be referred on to the Work programme. In many cases, the delay is because the job centre will be able to support individuals, because, as everybody knows, the opportunity for people to re-engage with the workplace is much higher when they have recently lost a job than it is after several months.

However, there is an issue about identifying individuals who might have specific barriers in terms of getting back into the workplace. Why would it not be possible for such people to be referred immediately on to the Work programme? I am not sure whether there would be a huge additional cost, but we would avoid the period in which somebody loses their confidence for a period because they are in the job centre system and perhaps feeling increasingly dejected as they are unable to get back into the workplace. When identifying someone as needing particular levels of support, it might be worth considering that such individuals could be referred to the Work programme earlier. If we have confidence, as I do, that the Work programme is adapting and meeting the challenges of helping people back into the workplace, the sooner we can refer some people on to it, the better. I would like people to consider that point.

It is also fair to say that the programme was established quickly. The Select Committee recognises that it was an achievement to get the contracts signed and the programme up and running so quickly, but there is always an opportunity to regroup and readdress some issues. I talk to providers in my constituency and yes, they are very enthusiastic about the scheme, yes, they are confident that they will deliver in due course, and yes, they are frustrated with some restrictions in a Welsh context, but one comment that comes out strongly is that the assessment of individuals based on the benefits that they currently claim is a blunt tool, in terms of identifying the required support.

I understand that the reason why that was the way forward initially was that we needed to get the scheme up and running, and obviously, we assess people in terms of what sort of benefits they qualify for. However, as we have more confidence in the providers of the Work programme—and increasingly, we are confident that in most parts of the country we have Work programme providers who know what they are doing—we need to have an increased level of understanding about individual clients’ needs. Ultimately, if there are barriers because of somebody being categorised for a particular benefit, and that barrier is stopping them getting the support they need, we should, at least, try to recognise that and address it in due course. There is an argument for looking carefully at the way in which we assess individuals in terms of the level of support that they need, rather the using the blunt instrument of the benefits that they are receiving.

We also have to look carefully at the fact that we are now coming to the end of the initial two-year period. Clearly, the aim and aspiration is that the vast majority of people in due course will find employment. Current figures show about 56% being returned to job centres and about 41% going into employment, while some have been lost, or have left the system in some way. That is not a bad performance—obviously, I would like to see a majority gaining jobs—but we need to start thinking carefully about what we do now. Do we extend the programme? I have talked to individual Work programme clients—and advisers—and what has been striking is that a number have said that it has taken them a significant period of time simply to rebuild their confidence, and to feel that they can face an employer across a table and try and sell themselves. The coalition Government and, certainly, the DWP need to think carefully about whether there is mileage in extending the Work programme for particular clients for longer than two years. The two-year period is, again, a blunt instrument, because it is one rule for all, despite the fact that we recognise that some individuals need more support than others.

Nobody would deny that we can look at ways to improve the system, but we should be doing so from the point of view of claiming that there are great success stories and significant developments in the Work programme that are helping people get back into employment. As politicians, we need to be constructive friends of the Work programme. Where concerns exist, we need to highlight them, but we need to do so in the context of acknowledging that with a significantly better value-for-money ratio, the programme is delivering support and delivering people back into the workplace. Can it do more? Of course it can. Do we want it to do more? Of course we do. Can the Government look at ideas about changing elements of the programme to be more supportive of those who find it most difficult to find employment? Yes, I think the Government should, but we should also recognise that to date, the programme is a success story. I only hope that that success continues and is enhanced, and if changes result in that enhancement being even greater, no one would be more pleased than me.

--- Later in debate ---

[Stephen Timms (East Ham) (Lab)]

I apologise for missing the first minute or two of the debate. I very much welcome the Select Committee report and the telling observations made by the Chair of the Committee, my hon. Friend the Member for Aberdeen South (Dame Anne Begg), in her opening speech. I also welcome the contributions from the other members of the Committee—my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) and the hon. Member for Eastbourne (Stephen Lloyd); and indeed from the hon. Member for Aberconwy (Guto Bebb).

I share the Chair’s disappointment that the Government’s response was so cursory and did not address many recommendations fully, but we cannot blame the new Minister for that. I warmly welcome her to her new role. I congratulate her on her appointment. I look forward to debating these matters with her in the coming months. I hope that we will get a little hint from her this afternoon that she recognises the extent to which the Work programme is underperforming at the moment and the fact that it needs change, as the hon. Member for Eastbourne said. I am not denying that good things are happening in the Work programme, but it is underperforming and needs change. We need to look for a major change when the current contracts end.

The hon. Member for Eastbourne talked about those who had left the programme. There were 74,630 people referred to the Work programme in its first month, June 2011, but 53,720 of them returned to Jobcentre Plus after two years without a job. That is a disappointing outcome after two years’ effort. The hon. Member for Aberconwy is right to say that the Work programme got off to a slow start, which was predicted and could have been avoided, but unfortunately was not. I hope that we will see a significantly better performance over the coming months, but of those referred in that first month, more than 50,000 were badly served, with a few of them getting only a couple of face-to-face meetings and a phone call or two, as the hon. Member for Eastbourne described. I am sure that is part of the reason why we saw such a big rise in unemployment at that point.

[Guto Bebb]

According to House of Commons Library figures, 96,000 participants have completed 104 weeks, of which 54,000 have returned, meaning that 40,000 have gone into employment.

[Stephen Timms]

The numbers I have are slightly different, but we can look up the figures. Certainly, 50,000 people spending two years going back to the jobcentre is a disappointing start, but I hope that we will see better figures in future.

I was struck forcefully by something that the Chancellor of the Exchequer said in his spending review statement about the task facing the Secretary of State for Work and Pensions. He said:

“That will require a difficult drive for efficiency, and a hard-headed assessment of underperforming programmes.”—[Official Report, 26 June 2013; Vol. 565, c. 314.]

The Select Committee is right to address key issues underpinning the underperformance of the Work programme identified by the Chancellor. The Centre for Economic and Social Inclusion has been commissioned to carry out the official evaluation of the Work programme, and I think that it will produce an interesting piece of work. In its analysis of the 26 September on the most recent performance data, it points out that two years in, the Work programme is not performing as well as the flexible new deal. The percentage of those over 25 entering the programme who secured a job in two years is 35%; it was 38.9% under the flexible new deal. The Minister’s predecessor but two used to castigate the flexible new deal. It turns out, according to CESI observations, that it was better than the current programme.

One thing that would help, and that the Minister could do quickly, would be to lift the ban on providers publishing data about what is going on in their areas. The ban was introduced—let us be frank—to safeguard the career prospects of the then Minister who introduced it, to whom I recall that the present Minister was Parliamentary Private Secretary, and in that it was successful. The right hon. Gentleman was promoted to his current post in September 2012 and a few weeks later we saw the first Work programme performance data, by which time he was safely off the scene. The ban means that information about what works well has been disseminated much too slowly and the underperformance that concerns the Chancellor, and I suspect all of us, would have been less if providers had been free to publish their performance data, as they were in the past.

The Government’s “Open Public Services” White Paper says:

“To make informed choices and hold services to account people need good information, so we will ensure that key data about public services, user satisfaction and the performance of all providers from all sectors is in the public domain”.

Actually, we had a complete ban on any data at all for the first 18 months of the Work programme. There are still no data, as the Select Committee has pointed out, about subcontractor performance. The “Open Public Services” White Paper, published by the Cabinet Office, uses the phrase

“all providers from all sectors”,

but we have still had nothing at all from the subcontractors. From that quote, I want to pick up the point about user satisfaction, which the Select Committee report also mentions. The Select Committee called, quite rightly, for regular surveys of user satisfaction on the Work programme, which would be valuable information. The “Open Public Services” White Paper had an effusive foreword written by the Prime Minister and the Deputy Prime Minister, in which they signed up to its goals. We should understand the user experience on the Work programme. The Government’s response to that recommendation is simply to tell us that there will be a couple of surveys of people who have been on the Work programme. That is not what the White Paper stated was going to happen. There should be much more information about what people are experiencing. The fact that there is not is one of the reasons for the underperformance that the Chancellor has pointed out.

The hon. Member for Eastbourne was absolutely right to highlight concerns about the performance of the Work programme for people on employment and support allowance. The Work programme invitation to tender stated that if nothing was done, 15% of those people would find a sustained job outcome within two years. The minimum performance standard was set at 10% above that, which is 16.5%. Paragraph 3.18 of the invitation to tender states:

“DWP expects that Providers will significantly exceed these minimum levels.”

They have actually achieved, as the hon. Gentleman stated, 5.8%. The Royal National Institute of Blind People tells me that 690 people with sight impairments were referred to the Work programme in its first 22 months, and 20 of them got sustained job outcomes. St Mungo’s has sent us a briefing for the debate, which tells us that 54% of homeless people surveyed for St Mungo’s, Crisis and Homeless Link reported seeing their Work programme adviser once a month or less frequently. It is not surprising, therefore, that very few of those who face serious hurdles—people with health problems and people who are homeless—have got into work.

I was in Australia last week, where I talked to people about those issues. There are quite a few providers that operate both in Australia and in the UK, and they said that the Work programme model was wrong and that “creaming and parking” was endemic; the hon. Member for Eastbourne has touched on that. I agree with the Select Committee that specialist voluntary sector providers have not been used enough. They have been squeezed out. In Australia, I was told that 50% of provision is from the voluntary sector, and I think in the Work programme it is about 20% and going down. As others have said in this debate, some good resources are not being utilised. St Mungo’s is a very good example. It had a contract with several prime providers in London, which was signed when the Work programme started in June 2011. By April 2012 it had not had a single referral, and it had to pull out and give up.

I agree with the suggestion that we should have a proper jobseeker classification model, which we do not have at the moment. There are many things that should be said, but I will conclude with this. The Chancellor of the Exchequer is right: the programme is underperforming. The Minister, who I welcome once again to her new role, has the opportunity to address that underperformance. Some of it can be addressed quite quickly, and the Select Committee report can be a real help. I wish the Minister well in her new role and I look forward to her reply.

[Mr Charles Walker (in the Chair)]

The Minister may now speak, but I will call Dame Anne Begg at 4.28 pm on the nose.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 1st July 2013 Commons Chamber

[Mr Hoban]

I will join my hon. Friend in congratulating his local Jobcentre Plus on the work it has done. Jobcentre Plus does an excellent job in helping people into work, but of course helped by the private sector, which has created 1.3 million new jobs since May 2010.

[Stephen Timms (East Ham) (Lab)]

A key step for jobcentres will be the introduction of universal credit. A press release from the Secretary of State in May last year claimed that

“all new applications for existing benefits and credits will be entirely phased out by April 2014.”

Will the Minister acknowledge that jobcentres will still be handling new applications for existing benefits long after next April?

[Mr Hoban]

The right hon. Gentleman never ceases to amaze me with the number of questions he asks about universal credit. He knows exactly what the time scale is. We have said when the national roll-out will be completed and I thought he would have been delighted today that we have extended the roll-out to Wigan.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 20th May 2013 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

The Secretary of State will recall that I wrote to him in November 2010 to warn that the IT system could not possibly be delivered in the time scale he was claiming—unfortunately, that has proved to be the case. In November 2011, he announced that 1 million people would be receiving universal credit by April 2014. What is his latest estimate of the number of people who will be receiving universal credit by April 2014?

[Mr Duncan Smith]

Let me remind the right hon. Gentleman of a quote from the Institute for Fiscal Studies about the way we are rolling the system out. It said:

“The level of problems caused to tax credit claimants and employers as the new tax credit systems went live in April 2003 demonstrated that there were undetected gaps in the design of the testing regime for the systems.”

This system is a success. We have four years to roll it out, we are rolling it out now, we will continue the roll-out nationwide and we will have a system that works—and one that works because we have tested it properly.

[Stephen Timms]

In November 2011, 1 million people were going to be claiming by next April: now, the Secretary of State has not the faintest idea how many there will be—so much for this project being on schedule. There were supposed to be four pathfinders, but now there is only one, under which the only people who can get universal credit are those in the most straightforward circumstances. How long will it now realistically be before he has an IT system that can cope with, for example, applicants with children?

[Mr Duncan Smith]

Interestingly enough, I had the right hon. Gentleman and the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) in to see me last year and I told them exactly how we were rolling the system out—[Interruption.] No, no. I told them that the pathfinder would continue first of all with single claimants. As for the idea that somehow things have changed—he knew about that then and the situation is exactly the same now.

Jobseekers (Back to Work Schemes) Bill (Allocation of Time)

Stephen Timms Excerpts

Tuesday 19th March 2013 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

We find ourselves in a deeply unsatisfactory situation with the Bill and, indeed, the programme motion. We do not quite know what happened between the court case and the decision that prompted the measure. My right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) and I were told about the problem a couple of weeks ago; there was a three-week gap when we did not know what was happening. The House of Lords Constitution Committee will, I believe, opine on the measure tomorrow, but equally we do not want to risk an additional £130 million cut to benefit spending over the period ahead, particularly not on a day on which it has emerged that the Government want to cut £2.5 billion from spending across Government, some of it doubtless from the budget of the Minister and his right hon. Friend the Secretary of State. Nor do we want to be in a position in which people who were sanctioned months ago—in many cases, well over a year ago—have to be refunded because of the appalling mess that the Government have got themselves into.

The way forward proposed by the Bill and the programme motion is deeply unsatisfactory, but it is less bad than the alternatives, and for that reason I shall not urge my hon. Friends to oppose it.

[Mr Speaker]

If no one else wishes to contribute, the debate has been pithily concluded.

Question put and agreed to.

Jobseekers (Back to Work Schemes) Bill

Stephen Timms Excerpts

Tuesday 19th March 2013 Commons Chamber

[Mr Hoban]

I beg to move amendment 1, page 3, line 11, at end insert—

‘() Subsection (12) does not affect a person’s ability to apply for a revision or supersession of, or to appeal against, a decision to impose a penalty by reference to other grounds.’.

We tabled the amendment as a result of discussions we had with the right hon. Members for Birmingham, Hodge Hill (Mr Byrne) and for East Ham (Stephen Timms), who expressed concern that existing appeal rights might be brought into doubt. The Bill as introduced to the House is clear in its intent. Its provisions refer solely to the consequences of the Court of Appeal and High Court judgments. The amendment, therefore, will have no effect on the overall purpose or intent of the Bill. However, after constructive discussions with the right hon. Gentlemen, we decided to include something in the Bill to put it beyond doubt that a claimant’s appeal rights against a decision to sanction their benefit will remain unchanged in all other matters.

The clause sets out that any decision to sanction a claimant for failure to comply with the employment support allowance regulations or the mandatory work activity regulations cannot be challenged on the ground that the regulations are invalid or that the notices given under them are inadequate, notwithstanding the Court of Appeal’s judgment. In practice, claimants will retain full appeal rights on matters where a sanction has been imposed but they feel that they had good reason not to comply with the requirements of the scheme—for example, if they failed to attend training because of illness of a family member or one of the other standard reasons set out in either regulation or guidance around good cause. However, claimants will not be able to appeal against a sanction decision on the ground of the High Court or Court of Appeal judgment.

I hope that the amendment meets the concerns of the right hon. Member for East Ham and that there is support for it on both sides of the Committee.

[Stephen Timms (East Ham) (Lab)]

The Government have got themselves into a terrible mess. As we heard, they ignored the advice of the Social Security Advisory Committee—that appears to be a significant part of what went wrong—but I welcome the amendment, because a straightforward reading of the Bill might, and indeed does, suggest that if one is hit, perhaps in particular by one of those stockpiled sanctions, that will be it.

I am grateful to the Minister and the Secretary of State for tabling the amendment, which helpfully clarifies—puts in the Bill—the fact that normal opportunities for reconsideration and appeal apply, but I want to ask the Minister about two points. I would be grateful for his comments on them during his winding-up speech for what I imagine will be a brief debate.

Some of the stockpiled sanctions, which we read about in the impact assessment, relate to events of quite a long time ago—up to eight months, which could be the beginning of August. I would like to know, because it is not entirely clear to us, whether all the 63,000 people affected by stockpiled sanctions already know that they have a sanction on the way. If, for example, they enter work straight after receiving a sanction that is in the stockpile, and so receive little benefit after the sanction is imposed, presumably the amount to be reclaimed from them will be very small. I ask for clarity. Is the intention, in taking the sanction out of the stockpile and applying it, that people’s benefits will be stopped for the appropriate period, or is it— [Interruption.]

[The Temporary Chair (Mr Jim Hood)]

Order. I hear ringing. It has now stopped. Carry on, Mr Timms.

[Stephen Timms]

Is it the Government’s intention to reclaim cash? Clearly, we are in a rather different situation from the one that obtains when somebody is sanctioned in the normal course of events, because the events to which the stockpile sanctions relate could have taken place a considerable time ago. How will the Department explain to those affected what is happening and what the effects will be in cases where a lengthy period has elapsed between the events that gave rise to the sanction and the application of the sanction, following the enactment of the Bill?

Will the Minister give us a little more explanation about one of the points raised on Second Reading, for example by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams)? The advice that we all received from the Child Poverty Action Group made this point:

“Contrary to Government claims, it is not obvious that DWP would have to repay sanctioned benefits to all claimants, so the £130 million potential loss stated is inaccurate: the Government already has anti-test case law rules which would prevent it having to repay anything for sanctions served prior to 6 August 2012.”

Will the Minister clarify the advice that he has received, which I have no doubt is different? If that view had been taken, the Bill would not be necessary.

I can well understand why the Child Poverty Action Group has reached its view. Section 27(3) of the Social Security Act 1998 relates to court decisions like the one reached in the case that gave rise to the Bill, and it reads as follows:

“In so far as the decision relates to a person’s entitlement to a benefit in respect of a period before the date of the relevant determination”—

in this case, the Appeal Court’s determination—

“it shall be made as if the adjudicating authority’s decision had been found by the Commissioner or court not to have been erroneous in point of law.”

A natural and straightforward reading of that paragraph could well lead to the conclusion reached by the Child Poverty Action Group, which is that anti-test case law rules prevent the Department from having to repay anything for sanctions scored before the court determination. I presume, as I said, that the Minister has received contrary advice on that measure, and it would be helpful if he explained what the advice was and therefore why the Bill is before the House.

[Mr David Anderson (Blaydon) (Lab)]

If the CPAG advice is correct, does my right hon. Friend have any idea by how much the £130 million could be reduced?

[Stephen Timms]

My hon. Friend asks a good question, and the answer is in the impact assessment that the Government have produced, which distinguishes between the amount that would be incurred because of people who were sanctioned before 6 August 2012 and the amount incurred in respect of people sanctioned since the court case, because those sanctions have been stockpiled.

The part of the impact assessment that contains those figures says that, by the look of it—to take the upper valuation—£24 million out of £130 million relates to sanctions that have been stockpiled. The CPAG view would be that of the £130 million, £106 million or £107 million would not apply, because of the Social Security Act 1998, whereas £24 million—the stockpiled sanctions—would. As I said, I am sure that the Department’s advice is different from the advice given to us by the CPAG, but it would be helpful if the Minister provided clarification so that we know the basis on which the measure has been introduced.

I would say again to the Minister that this is a helpful amendment. I do not think that it changes the position substantively, but it helps to clarify it, and to make it clear that anyone who will be presented with a stockpiled sanction will, as usual, have the opportunity to ask for a reconsideration and perhaps subsequently to appeal. That is a welcome clarification, and I am grateful to the Minister for providing it, but I would be grateful, too, if he commented on the two specific matters that I have raised.

[Mr Hoban]

The right hon. Gentleman has made a couple of points. In respect of payments where decisions have been stockpiled, when we received the High Court judgment, we did not proceed to make any further sanctions decisions, but claimants who were subject to a stockpiled decision are aware of that: we made it clear at the time, so they know what to expect. However, he asked whether we would recover sanctions from those who are in work now. The answer is no, we would not. That is a policy that we adopt elsewhere. We want to encourage people to do the right thing, and doing the right thing in this case is getting back into work.

The right hon. Gentleman then raised the note circulated to Members of Parliament by the CPAG. I touched on that point in opening the debate. Section 27 of the Social Security Act 1998 applies only when a challenge is brought by way of an appeal to a court or tribunal. The Wilson/Reilly case began with an application for judicial review, and on that basis, section 27 does not apply. With that, I hope that the Committee will approve the amendment.

Amendment 1 agreed to.

Clause 1, as amended, ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

New Clause 1

Report

‘(1) The Secretary of State must appoint an independent person to prepare a report on the operation of the provisions relating to the imposition of a penalty during the period of a year beginning with the day on which this Act comes into force, so far as that operation relates to relevant penalties.

(2) The person must complete the preparation of the report and send it to the Secretary of State as soon as reasonably practicable after the end of the period mentioned in subsection (1).

(3) On receiving the report, the Secretary of State must lay a copy of it before Parliament.

(4) In this section—

“penalty” means a penalty that may be imposed for—

(a) failing to participate in a scheme within section 17A(1) of the Jobseekers Act 1995, or

(b) failing to comply with regulations under section 17 A of that Act;

“relevant penalty” means a penalty that, but for section 1 of this Act, would not be or would not have been lawfully imposed on a person.'.—(Mr Hoban.)

Brought up, and read the First time.

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[Mr Hoban]

The new clause provides for a report on the operation of benefit sanctions affected by the provisions of the Bill. Again, I thank the right hon. Members for East Ham (Stephen Timms) and for Birmingham, Hodge Hill (Mr Byrne) for their constructive approach to the Bill. We discussed this topic with them as we drew up the Bill. After our discussions, we decided to bring forward the new clause to satisfy the concerns of the right hon. Member for East Ham to provide for an independent report on the operation of benefit sanctions subject to the provisions in the Bill.

The new clause requires the Secretary of State to appoint an independent person to prepare a report on the operation of the provisions relating to benefit sanctions during the first year after the Bill has come into force. The report must be prepared as soon as reasonably practicable after the end of that period.

Subsection (3) requires the Secretary of State to lay a copy of the resulting report before Parliament, which meets the right hon. Gentleman’s requests. It is important to say that as a Department, we keep the functioning of sanctions under review. A number of comments on that were made on Second Reading. It is important to ensure that sanctions are applied fairly and consistently across Jobcentre Plus. It is an important part of the regime, so the sanction should be credible, and something that we keep under review.

Let me pre-empt the arguments made by the right hon. Member for Wythenshawe and Sale East (Paul Goggins). I understand the purpose of his two amendments. He is keen to ensure that the review is expedited, and we will try to complete it as quickly as possible. The time period for someone to launch an appeal against the sanction is 13 months. By imposing a six-month deadline, we might miss appeals that are made at a later point. He then requires a report to be laid within three months of the end of the six-month period, so that is nine months. There is a risk that we will miss out on three months’ worth of appeals, so we would not necessarily get a full view of how the sanctions under the Bill have operated. Although I understand his arguments for haste, may I suggest, as a counter argument, that we take things at a slightly more leisurely pace, which will ensure that we get a full year? None the less, I share his view that once we get to the end of that year, we should be moving as quickly as possible to complete the review and to lay the report before Parliament. It is not in any of our interests unduly to delay a measure such as this. I commend new clause 1 to the Committee.

[Stephen Timms]

I warmly welcome the new clause which, as the Minister has said, was proposed and suggested in the discussions between him and the Secretary of State for Work and Pensions, and me and my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne). It is something genuinely valuable to emerge from this debacle, which has been entirely of the Government’s own making. We do need to know what is going on with sanctions. The independent review, which is required by the new clause to be conducted over the coming year—I will comment in a moment on the further amendments proposed by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins)—could be crucial in getting to the bottom of what is going on. From the standpoint of anyone who is concerned about what is going on in our social security system, as very many people are, this is a valuable initiative.

The scale of the sanctions that are being imposed at the moment is extraordinary. My hon. Friend the Member for Hayes and Harlington (John McDonnell) made that point in the earlier debate. He correctly suggested to the House that the number of sanctions being issued trebled in the two years between the period just before the general election and subsequently to more than half a million per year, and that number is still going up. The impact assessment tells us that the number of sanctions that has been issued under the defective—as we now know them to be—employment, skills and enterprise regulations is “between 221,000 and 259,000”; that those sanctions involved between 136,000 and 159,000 people and that their cumulative value is between £80 million and £99 million.

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[Bob Stewart (Beckenham) (Con)]

I am slightly confused. The right hon. Gentleman said that when people get sanctioned, they have no idea why, but I would have thought the first thing they would do, if they did not get a letter or a warning about this, would be to go straight to Jobcentre Plus and ask, “Why is this happening to me?” Why does that not happen?

[Stephen Timms]

The hon. Gentleman raises an interesting and telling point. Why, indeed, do people not go to jobcentres to get an explanation? The reason is that it is very difficult for them to get through on the telephone, and if they do go and speak to somebody, they probably do not get a clear explanation.

The Minister said in one of our recent statutory instrument Committees that Jobcentre Plus will now inform people in writing of the reason for their sanction. When the Minister responds, he will, perhaps, give us a little more information. I am not sure whether that has already started or whether it is still due to happen, but it will certainly be a welcome step. The hon. Member for Beckenham (Bob Stewart) will be very familiar with the experience that I have often come across, however, which is that people do receive a letter from Jobcentre Plus, but, frankly, making sense of it is very difficult. I hope that the written explanations people receive will make more sense than some of the other communications they bring to our surgeries, sent to them by jobcentres and the Department.

I want to set out 10 questions that I think the independent review should answer. Other Members may have other questions, of course, but I consider these 10 to be important, and putting them on the record will serve to give some terms of reference from the House for the independent reviewer.

First, we need to know the precise figures. It is not good enough for us to be told that the Department has issued between 221,000 and 259,000 sanctions. We need to know precisely how many have been imposed. We also need to know what exactly they are for. Is it that people are failing to turn up to appointments, or that they are failing to do the work-related activity they are required to do? We need to be given some clear categories of the grounds for sanction, and then to be told how many of the sanctions imposed fall into each of those categories. How tough are those sanctions? How many maximum three-year sanctions for the basic element of jobseeker’s allowance have been imposed so far? In the recent debate on JSA regulations, a colleague rightly reaffirmed our opposition to the three-year sanction introduced by the Government. It would be useful to know how many people have so far been denied benefit for a full three years, which the Government’s legislative change now makes possible.

Secondly, we need to know how many people on whom the sanctions are imposed request reconsiderations —the kind of people who, as the hon. Member for Beckenham suggests, might go along to the jobcentre and ask what the sanction arises from. How many people have asked for reconsideration, and when it has been refused, how many subsequently appealed? What are the outcomes when reconsiderations are requested and appeals made?

Thirdly, we need the independent reviewer’s opinion on whether the reconsideration and appeal process is working correctly and properly. When people have a sanction imposed on them, do they know that they can apply for reconsideration and, if they are not happy with the outcome, submit an appeal? Is that whole process working correctly?

Fourthly, how many of those being sanctioned are on employment and support allowance—and perhaps other benefits as well—rather than JSA? Ministers have given commitments during debates in this House and the other place that they will not normally issue sanctions to somebody on ESA—somebody who is out of work on health grounds, for example—other than after a face-to-face discussion with the applicant and, if necessary, a home visit. We need to know from the independent reviewer whether those assurances are being honoured in practice. It does not require much imagination on the part of Members to realise that it may well be wholly inappropriate to impose a sanction on someone who is on ESA as a result of a serious mental health problem or a fluctuating health problem of the kind we have often debated in the past couple of years, thereby removing their benefit for the potentially very long periods that are now permissible, unless they have had a proper face-to-face discussion with an appropriate Jobcentre Plus official. It would be helpful if the independent reviewer answered that question.

Fifthly, it would be useful to know how many of the large number of sanctions being imposed are being initiated by a Work programme provider rather than Jobcentre Plus. As I understand it, the initial step can be taken by either, or by another kind of provider on one of the other schemes. It would be useful to know what the split is.

I appreciate that it is not going to be easy for the independent reviewer to find the answer to my sixth question—it relates to the point the hon. Member for Beckenham made a few minutes ago—but we need to know it. To what extent do people understand the reasons for the sanctions being imposed on them? As I mentioned earlier, food banks are reporting that people who turn up, having been sanctioned—who therefore do not have any money and cannot buy food for themselves and their families—commonly do not know why the sanction has been imposed. I hope that the independent reviewer can establish how widespread a problem that is. If it is widespread, as anecdotal evidence suggests it may well be, that is a serious difficulty with the system.

The seventh question concerns the extent to which managers are promoting sanctions. In answering an intervention from my right hon. Friend the Member for Birmingham, Hodge Hill on Second Reading, the Minister gave a very clear assurance that there are no targets for sanctions and that Ministers and managers do not require specific targets to be fulfilled.

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[Mr Hoban]

Absolutely, but the hon. Lady repeated that, and by virtue of the quote I think she was supporting their view. Another hon. Member said that people “may be” sanctioned. I think there is a tension here between clarity and disclosure. The more detail there is in the letter—maybe to comply with what is in the law—the harder it can be for people to understand what is in the letter. It is possible to go into lists, as the right hon. Member for Birmingham, Hodge Hill did—to list a whole set of “good cause” reasons in a letter. One could put in a letter every detail of the graduated sanctions regime. We need to ensure that our communications are very clear and legal; sometimes the two do not go as easily together as we would like them to, but we do need to ensure that there is clarity.

The right hon. Member for East Ham talked about what happens if people are sanctioned, and then immediately answered his question by referring to hardship schemes. He and I have debated the revised sanctions regime and discussed hardship at length, as we did on a previous occasion with the right hon. Member for Stirling (Mrs McGuire). There is a hardship scheme in place for people, and it is right that it is there. We do ask people to look to see whether there are any other ways in which they could find financial resources to live off, and that is very carefully set out in the Bill, but those hardship schemes are available. It would be wrong to give anyone the suggestion that there is no hardship scheme in place, but the rules on access are very tight indeed.

[Stephen Timms]

I take entirely the Minister’s point about the hardship schemes, but I wonder what he thinks has driven the huge increase in the number of people referred to food banks over the past three years—a tenfold increase between the year just before the general election and the current financial year. I wonder whether he can understand why many of us think that the growth of sanctions must have been a big part of the driver.

[Mr Hoban]

The practice of the Government the right hon. Gentleman was a part of when he was a Minister in this Department differed from that of the present Government. When the Labour party was in power, it refused to have any material in jobcentres about food banks, to try to deny their existence. It did not refer people to food banks. We decided, when we came into office, to reverse that policy—to ensure that people were aware that food banks were in place.

People do go to food banks. They go for a variety of reasons. It is right for there to be a hardship regime in place for sanctions. If people do not choose to apply for that hardship regime, that is their choice, but people know it is there.

[Stephen Timms]

The Minister is right about the hardship regime, but he is surely not trying to tell us that the number has gone up from 30,000 to 300,000 because there are some leaflets in jobcentres, is he?

[Mr Hoban]

Well, actually it is not about leaflets. It is about signposting people to food banks. The right hon. Gentleman and his Opposition colleagues forget the way in which they tried to airbrush food banks out of history when they were in government, and to use them now as political pawns is beneath them.

I hope that the Committee will accept new clause 1. As I said in response to amendments (a) and (b) tabled by the right hon. Member for Wythenshawe and Sale East and his colleagues, we want to ensure that the Bill proceeds as quickly as possible; I do not think there is any interest in spinning it out. But we do need to ensure, as the right hon. Member for East Ham said, that it is properly and thoroughly considered. As a consequence of a measure introduced by the previous Government, we have an independent reviewer of work capability assessments. That is a very thorough process and no corners are cut, neither would we want them to be. It is helpful that there is clarity.

--- Later in debate ---

[Stephen Timms]

This Bill has been an extraordinary fiasco. It is here because the Government made basic errors in drafting regulations. The danger was highlighted by their own Social Security Advisory Committee, which Ministers ignored. They were wrong to do so, and the consequence is the necessity for this unseemly piece of legislation. The question facing the House this evening is: what do we do? The alternatives to the Government’s proposals are pretty unappealing.

The danger of having to take £130 million from another part of the Department’s budget is that the cost will fall on people whose income is already very low. I was very grateful for what the Minister said a few moments ago to explain the necessity for the Bill and why the so-called test case rules do not apply in this case. The alternative is unappealing for that reason. In addition, if the correction were not made, there would be quite a fundamental breach of the jobseeking system, which was used so effectively by the previous Government to achieve—before the global crisis—the highest rate of employment in the UK since the 1970s. That is a rate of employment we are still some way short of today. That system involves sanctions. As my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) pointed out, the system has done so since 1911, and it is right that it should continue to do so.

I shall certainly not urge my hon. Friends to oppose the Bill, but we have argued for a fundamentally different approach to supporting people into employment from that taken by the Government—one based on job guarantees—but it requires an effective system, which not passing the Bill would put at risk. We think that the guarantees approach is the right one, and the recent evaluation of the future jobs fund has strengthened our convictions in that respect, but we need a proper system in place to be able to introduce that arrangement quickly. Following a general election, it is our intention very quickly so to do, and for that reason I shall not urge my hon. Friends to oppose Third Reading.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 11th March 2013 Commons Chamber

[Mr Duncan Smith]

Yes, I would be very happy to meet my hon. Friend and any group of people, such as the YMCA, he wishes to bring to me. I simply say this: we have a significant problem, because we inherited a welfare budget approaching £200 billion that had risen out of control under the previous Government. He is fully aware that we have to reform it both to get people back to work and to ensure that we get the cost under control. Those are all areas we have looked at, but in those discussions we decided that, in the round, it was not a priority.

[Stephen Timms (East Ham) (Lab)]

On Friday morning I met a 19-year-old autistic young women whose family home, which is rented from the council, with housing benefit, has been adapted at public expense, but now they are very worried because they are deemed to have one bedroom too many. Surely the bedroom tax should not apply when a council house has been specifically adapted for the occupants at public expense.

[Mr Duncan Smith]

The right hon. Gentleman knows very well that that is the point of discretionary housing payments—[Interruption.] Opposition Members can groan, but we have put more money into discretionary payments to sort these things out than they ever did when they brought these in. The reality is that there is money for them to do just that. I remind him that the National Housing Federation has estimated that in his area of Newham some 3,000 people are under-occupying and some 5,000 are overcrowded. Perhaps he would like to take his own side to task for never doing a thing for those struggling in overcrowded accommodation.

Universal Credit

Stephen Timms Excerpts

Wednesday 6th March 2013 Commons Chamber

[Ms Ritchie]

I thank the Minister for his intervention.

[Stephen Timms (East Ham) (Lab)]

The hon. Lady is absolutely right: the project has been delayed. Ministers told us for a long time after the announcement of universal credit that all new applications for out-of-work benefits would be treated as universal credit applications from October this year. It is now absolutely clear that that date will not be achieved. It might be a year later, or even some time after that, but the project has certainly been delayed.

[Ms Ritchie]

I thank the shadow Minister for his intervention; I absolutely agree with him. The Minister will not be surprised to hear that I disagreed with him, because experience has taught us these things.

I seek clarification and an update from the Minister on the implementation of a computer system for the social security system in Northern Ireland to administer universal credit in line with the flexibilities that will be implemented there, notwithstanding—because of our special circumstances—the other flexibilities that I hope will be introduced. I understand that these are currently subject to negotiation and discussion between the Minister for Social Development and the appropriate DWP Ministers. What feedback will there be and what facility will be employed to use the lessons from the initial pathfinder areas in England to inform subsequent roll-out in Northern Ireland?

Governments do not have a great track record on implementing new IT systems, as seen with the Child Support Agency, the e-Border programme and the health service. The new universal credit system will likely require an even more complex system, incorporating real-time processing from pay-as-you-earn records. The Committee’s report makes it clear that there are significant concerns about the system’s capacity to operate between local and central Government. I fear that this will be even more challenging in the devolved Administrations. How satisfied is the Minister that there will be no more significant delays or cost overruns for the new universal credit payment system? Can he say with certainty that he will not be back before the House a year from now, explaining away delays and expensive setbacks?

Added to that, universal credit is to use digital self-service by default. That might sound good, but I have had little reassurance about the fact that the most vulnerable in society—particularly the elderly—are less likely to have access to computers or to be as proficient with newer technology. Reference has already been made to that issue in this debate, as well as to access to the internet and broadband, so I will not dwell on it further. However, notwithstanding our position on welfare reform and universal credit, I say to the Minister that it is important that the delivery of this benefit does not impact further on the vulnerable and disadvantaged in our community. It is important that the right systems are in place to ensure delivery is enabled, so that the most vulnerable can live a good life with some degree of benefit.

--- Later in debate ---

[Richard Drax (South Dorset) (Con)]

I am grateful to have an opportunity to speak in this debate. From what I have heard, there appears to be a general consensus, with which I agree, that there is room for the universal credit system. Its aims are laudable; our welfare bill is too big and we have to tackle this problem. I think all Members across the House will agree that this bill cannot continue to grow. It is simply unsustainable. My view, which I am sure many share, is that for too long the poor and vulnerable have been trapped in a welfare mire. How often have we heard our constituents say, “There is no point working a bit longer because if I do that I will lose my benefits”? So clearly we have to examine the system and make it fairer, encouraging those in this trap to put in the extra hours as that will be beneficial for them.

I support the universal credit in principle; it will reward effort and will be responsive to changes in circumstances—if it works. Many hon. Members from both sides of the House have highlighted the word “if”, and I hope that my adding to the ifs will not be to the Minister’s chagrin. I have listened at great length to Mr Kevin Hodder, the chief executive of the East Boro Housing Trust; we debated this for a couple of hours. He has been in this business for many years and has shared with me, for some time now, his extensive knowledge and understanding of the benefits system. He has done so for my benefit, so that I can understand my constituents’ concerns. One or two of them—I suspect there will be many more—have come to me with their worries about the introduction of this new system.

The first risk, which has already been highlighted, is the reliance on one computer system. There are 8 million or 8.5 million claimants—we have heard the latter figure cited—so if the system goes wrong, the risks are obvious. There is no room for error or delay because we are talking about the most vulnerable in our society, and if the money does not arrive on the day they expect it, they will face serious problems. As far as I know, no Government national computer system has worked; I remind Members of the armed forces payments system, the NHS single patient record system, the tax credit errors and the collapse of the Child Support Agency—all of us get many constituents complaining about that. The problems were, in the main, the result of computer glitches. The risk of relying on one gigantic system is that failure would be catastrophic. Mr Hodder’s wise suggestion is that universal credit software could be circulated to the local authority housing benefit departments so that consistent rules are applied.

[Stephen Timms]

I am listening with great interest to the important argument the hon. Gentleman is making. Does he agree that the situation is rather worse than he says, because this involves not one great big computer system but two? The parallel real-time information, pay-as-you-earn system in Her Majesty’s Revenue and Customs is also involved, and the two systems have to interlock perfectly for universal credit to work.

[Richard Drax]

I agree with the shadow Minister. When I was a soldier, the great cry was, “Hope for the best and prepare for the worst.” I am a little concerned that, on this policy, the worst has perhaps not been prepared for. Will the Minister, when he sums up, reassure us that there is a system in place that will cope?

In dealing with the inevitable snags, community care grants and crisis loans could be administered by the local departments if this computer system were rolled out to them. The local housing benefit departments in my constituency are already running down their offices, yet their local knowledge could be invaluable in administering universal credit. In the world of IT and computers, how often have our constituents rung a telephone number and got a disembodied voice saying, “If you want flowers, press 1. If you want somebody else, press 2. If you want to go to heaven, press 3. And if you don’t want to bother us at all, press 4.”? At that stage the person wishes they had slammed the phone down and they give up the will to live. Although I welcome IT—I am not a luddite in that sense—I am a great believer in the human touch. Nothing beats eye-to-eye contact with constituents, including, as in this case, the many who need help. If people lose that contact with human beings—leaving aside the distress that will be caused if the computer system goes down—there will be an awful lot of concern, particularly among the elderly, many of whom do not understand the system in any case.

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[Stephen Timms (East Ham) (Lab)]

We have had an interesting debate and I congratulate the Work and Pensions Committee, and its Chair, on the report. I share the Committee’s support in principle for universal credit, as well as its frustration that in responding to the report, Ministers gave so few answers to the telling questions that it raises.

The Committee raised the timetable for implementation, and as the hon. Members for South Dorset (Richard Drax) and for Enfield North (Nick de Bois) pointed out, it was always clear that there would be a problem with the IT. We warned the Secretary of State about that simply on the basis of how long it took the same officials to implement much more straightforward changes under the previous Government. The Secretary of State was good enough to meet me in November 2010, and I wrote to him on 16 November 2010—well over two years ago—and warned of

“a serious risk that it will not be ready for new applicants by 2013”.

He replied on 31 January 2011:

“I am confident that I can offer reassurance on each of the points that you raised.”

On 18 April I wrote back to the Secretary of State:

“I remain deeply sceptical of the feasibility of the current implementation timetable…the Department should recognise that the timescale will slip”,

and he replied on 11 May 2011:

“I recognise that we may not share the same overall assessment of the issues”,

which indeed we did not.

In the Welfare Reform Bill Committee, I said to the Minister’s predecessor that

“the system will not be ready by October 2013”––[Official Report, Welfare Reform Public Bill Committee, 28 April 2011; c. 596.]

but the Minister replied that I was “wrong to be pessimistic.” I warned about the problem again in another debate in Committee on 8 June 2011.

Today it is reported that contractors have been told to down tools. The Department has denied it, as has the Minister, but I have no doubt that the reports are accurate. They come from people who have received these instructions, and I have no doubt that before long the position will become clear. The Secretary of State claimed yesterday, and the Minister has repeated today, that

“the implementation of universal credit…is proceeding exactly in accordance with plans”.

The hon. Member for South Down (Ms Ritchie) was right to say that it is certainly not proceeding according to plans. It is genuinely a mystery to me why Ministers deny what is clearly the case.

The Government’s initial timetable for universal credit had all new applications for out-of-work benefits being treated as universal credit applications from October this year. We now know that hardly any new applications will be treated as universal credit applications in October this year and everybody else will be treated as applying for existing benefits. As I understand it—the Minister will correct me if I am wrong—only applications submitted in one jobcentre in each region will be deemed to be universal credit applications, so that is only nine jobcentres. Even then, it will only include people with the most straightforward applications, because the IT will not be ready to handle the rest.

I want to ask the Minister a specific question. For two years, Ministers said that all new out-of-work benefit applications would be handled as universal credit applications from October 2013, and all new in-work benefit applications from April 2014. What is his current estimate of those two crucial dates? Just how far have those milestones slipped? Does he have any dates now that he is confident enough to give the House for when those milestones will be reached?

It is not just I who am worried. The Minister has bigger problems than that. Four times at the regular press conference this morning the Prime Minister’s spokesman was asked to express confidence that universal credit would be delivered on time and on budget. Four times he refused to give that assurance.

It is not just the IT that is in trouble, but the policy too. Ministers have failed to make crucial decisions, as set out in the Committee’s report. The Secretary of State told the Welfare Reform Bill Committee in February 2011 that he would have proposals for entitlement to free school meals before the Bill left the Commons. He did not deliver, and two years later we are still waiting for those proposals. As the Select Committee politely pointed out, the Government

“now needs to make decisions”.

Actually, they should have made decisions a very long time ago, but we certainly need them now. As my hon. Friend the Chair of the Committee pointed out earlier, the pupil premium is also dependent on this, as well as whether universal credit will deliver. The Government’s response assures us that the Department

“has committed to working with other Government departments and Devolved Administrations to ensure that the issue of passported benefits both in the short and long term is approached from a wide perspective and any changes are simple, fair and easy to understand.”

It burbles on in that vein for a page or so, but the Minister must now decide. What is the policy? He cannot keep ducking the issue. It is all supposed to start in October. When will he tell us?

It is not a minor issue. The solution adopted on free school meals will have a fundamental impact on whether universal credit has the intended effect of making it worth people’s while to be in work. If—as is widely suggested—the Minister and his colleagues introduce a crude income threshold for eligibility for free school meals and other passported benefits, they will create the most enormous disincentive for people to get jobs and increase their income—far worse than any of the cliff edges in the current system of which they have been so critical. He really cannot delay these fundamental decisions any longer. He cannot keep putting them off.

The Committee also raises the crucial issue of supporting and funding exempt accommodation. It makes this point:

“DWP must urgently finalise and publish the details of the revised arrangements so that providers have the certainty they need to plan ahead and maintain their service provision.”

I raised this with the Minister in Committee when we debated the regulations on 11 February. I pointed out that Women’s Aid estimates that more than half the domestic violence refuges in the country are not covered by the exemptions in his regulations. The problem is that the regulations use an out-of-date definition. I am absolutely sure that the Minister does want such accommodation to be exempt, but it will not be achieved by his regulations. What is he going to do about that? His response to the Committee does not give an answer. The National Housing Federation makes this point:

“It is vital that the Government ensures the regulations exempt the full range of supported housing by using a definition of supported housing that reflects the set up of refuges, hostels and specialist schemes for disabled people.”

My hon. Friend the Member for Edinburgh East (Sheila Gilmore) was absolutely right to ask the question that was also raised by the Committee: what is going to happen to people who do not have a bank account? How are they going to be paid universal credit? We still do not know. In the pathfinders starting next month in four local authority areas in the north-west, people without a bank account will not be able to claim universal credit. How long will it be before the system is able to cope with people who do not have a bank account? The Committee’s report states:

“The DWP has been unable to present us with any clear plans for how the Universal Credit service will be delivered to those people who cannot make an online claim.”

The response from the Government does not give us that clear plan.

Unison is right to draw attention to a host of basic issues to which we still do not know the answer. The hon. Member for South Dorset (Richard Drax) raised some of those issues, too. How will somebody apply locally for universal credit? The response to the Committee reassures us that

“we will offer claimants the option to claim…in person”.

What does that mean? Where will they apply? Will they go to the town hall, or to the jobcentre? What documents will they need? How does somebody get face-to-face advice if they have a problem? This is all supposed to be up and running from October and we do not know who is going to do this. We do not even know what the online application process will look like in the pathfinders that are supposed to start next month.

One of the Government’s worst errors in the whole project—the Chair of the Select Committee has already drawn attention to it—was leaving council tax benefit out of universal credit and devolving it with a 10% cut. The Committee’s report was right to point out the problems that that will cause. It works against simplification, it undermines work incentives, and it makes it much harder for people to know whether they will be better off in work. It has, as the Committee stated,

“the potential seriously to undermine the objectives of Universal Credit.”

We have heard about a lot of other problems in the debate. Problems relating to digital access were highlighted by my hon. Friend the Member for Bishop Auckland (Helen Goodman). The hon. Member for Leeds North West (Greg Mulholland) was right to draw attention to the problems emerging in the direct payment demonstration projects: the National Housing Federation tells us that rent arrears in the demonstration project areas are up by 60%.

It is, I am afraid, universal chaos: fundamental policy decisions have not been made; obvious gaps have not been plugged; where precise answers are needed we just get vague flim-flam; key milestones have gone back by a year or more; IT contractors are reported to have been told to stop work; and the Minister blithely assures us that it is all proceeding exactly in accordance with plans. It is too late for flim-flam. These crucial decisions cannot be delayed any longer. It is time now for the Minister finally to give us some answers.

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

I commend the Chair of the Select Committee, the hon. Member for Aberdeen South (Dame Anne Begg), for the way in which she opened the debate, and for the balanced way she set out the issues in its report. I thank the Committee, too, for its work. Often, people outside the House underestimate the important role that Select Committees play in scrutinising policy development, but the report is a very good example of the excellent work they do to highlight the issues and to get the balance right.

Balance was what was missing from the speech by the right hon. Member for East Ham (Stephen Timms). I think there was a 10-second acceptance at the start that universal credit was a good idea. He then spent the rest of his speech trying to conjure up reasons why it was not a good idea. [Interruption.] No, that is absolutely true. I will give some examples. He and the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) have been touting for some months now the story that people have been walking off the project and that the project is in chaos. We saw it in today’s Guardian—an article that perhaps should be seen in the context of today’s debate—and the right hon. Member for East Ham said just now that he expected contractors to walk off site. What a load of rubbish we have heard! In a statement today, HP, one of the big contractors, said that it remained committed to supporting the DWP, to the universal credit pathfinders going live in April 2013 and to subsequent releases. It also said that it would continue to work with the DWP and our other suppliers on this major programme of welfare reform.

[Stephen Timms]

rose—

[Mr Hoban]

Perhaps the right hon. Gentleman wishes to apologise for scaremongering.

[Stephen Timms]

I can reassure the Minister that the source of the report came from the companies concerned. But let me ask him this: the initial plan was for all applications for out-of-work benefits to be handled as universal credit applications from October this year. Is there a new date for that milestone, and if so, what is it?

[Mr Hoban]

Yet again, the right hon. Gentleman needs to get some perspective. We have always made clear our plan for a progressive roll-out of universal credit, for exactly the reason that hon. Members have mentioned, which is that previous Governments have launched unsuccessful big-bang IT projects. We have been clear, therefore, that we need a progressive roll-out—pilots, lessons learned, consolidation and then next-stage roll-out.

That is the best way to ensure that universal credit is rolled out correctly and it is a significant change from how previous Governments have handled IT projects, including the disastrous tax credits system when, of course, the right hon. Gentleman was a Treasury Minister. We have made clear our plan for a gradual roll-out for new claimants from October 2013. We have always said that the progressive roll-out of new claims across the country would begin in October 2013. That is a simple restatement of what we have always intended to do. I respect the right hon. Gentleman, but I think he has overreached himself on this argument.

[Stephen Timms]

Will the Minister give way?

[Mr Hoban]

No, I only have a relatively short amount of time in which to respond to quite detailed questions from hon. Members. [Hon. Members: “Give way!”] No, I want to make some progress.

[Stephen Timms]

rose—

[Mr Hoban]

No, all the right hon. Gentleman is doing is scaremongering, which is not the right approach. Someone made the valid point that misinformation undermines claimant confidence in the system. I want to address some of the concerns that people have expressed in this debate and demonstrate how the Government are tackling the issues highlighted in the Select Committee’s report.

[Stephen Timms]

rose—

[Mr Hoban]

I am not going to give way. The more often the right hon. Gentleman seeks to intervene, the less time I have to engage with the substantive discussion.

I will remind the House of the aims of universal credit. It is designed to avoid universally recognised problems in the current flawed system, which traps people on benefits and makes them dependent on the welfare state. It will ensure that work remains the best route out of poverty and benefit dependence for those who can work, and is intended to be radically simpler than the complex web of tax credits and benefits it replaces. We made a deliberate choice here. My hon. Friend the Member for Leeds North West (Greg Mulholland) was right to highlight a previous Committee report on the complexity of the welfare system. Rather than replicating the current system, in all its complexity, we are seeking to design a system that is easier for claimants to understand and creates better incentives.

Crucially, universal credit brings together in-work and out-of-work support into a single monthly payment for those out of work or on low earnings. At present, there are separate systems for out-of-work and in-work benefits administered by different national and local agencies. A move into work therefore entails a recalculation of entitlement, multiple communications and possible delays and gaps in payments. As a result, many people are not prepared to take the risk of moving into work.

This is not just about those who are out of work, however; it is about those who are in work as well. One of the rigidities built into the tax credit system is the 16-hour-a-week rule, which means that people offered work have to ask themselves, “Is it worthwhile my taking on this additional work?” Many people have to go to the jobcentre to make a better-off-in-work calculation. We cannot have barriers in place preventing people from wanting to earn more, take on more hours and look after themselves and their families.

With universal credit, we are aiming above all to achieve a fundamental change in attitudes to work, helping people to see more clearly that they are better off in work and encouraging and supporting people to move into work or to increase their hours.

As I said earlier, too many people are trapped into working 16 hours a week by a system that means there is no point in extending their hours because they would be worse off. I have even heard of people turning down bonuses from their employers because they are concerned about the impact on their benefits. What a tragic situation we are in, when a system of benefits traps people in low incomes. What we need to do—I hope Opposition Members will reflect on this—is find a system that helps people to get back into work. That is one reason why it is important to have in-work conditionality, to help people move up the income scale and find ways to increase their earnings by getting new skills, getting promotions and increasing their hours. In focusing on how we resolve some of the exceptions in the system, Opposition Members are in danger of losing sight of the reason for doing this: to free people from a complex system of benefits that has trapped so many out of work.

[Stephen Timms]

I am most grateful to the Minister for giving way. He was not able to give a date for the earlier milestone; he is now setting out the advantages, as he sees them, of universal credit for people who are in work. To begin with, all new in-work benefit applications were going to be universal credit applications from April 2014. Can he tell us when that new milestone will be reached?

[Mr Hoban]

We have always said that there would be a progressive roll-out of the system. I am not going to give a running commentary on the timetable at this moment. We have been very clear—[Hon. Members: “Ah!”] No, we have been very clear that we would have early implementation in April 2013, and we are going to see that in the Greater Manchester and Cheshire area. That will enable us to test the end-to-end process in advance of the progressive national roll-out of universal credit from October. Once a pathfinder has happened, we will continue to adjust the exact timing and sequence of the migration process in the light of experience, including the operation of the pathfinder service in the Greater Manchester area. That will be done exactly to avoid the problems that previous Governments have faced with big-bang system changes falling over.

I would also point out to hon. Members who continue to question the Department’s ability to deliver significant system changes that we have launched the latest generation of the child maintenance system on time and on budget. We have also successfully launched the universal jobmatch service, which is helping more than 1 million jobseekers find work and get into employment more quickly. That we have been able to do those things demonstrates the Department’s capacity and capability to deliver programmes on time.

--- Later in debate ---

[Mr Hoban]

I have about 15 minutes left and am keen to deal with some of the other points that have been raised.

On advice and support, the advice sector is key to ensuring that we deliver universal credit effectively. We work very closely with the stakeholder organisations to ensure that their expertise is utilised. This is a moving picture and several things have happened since the Government published their response to the Committee’s report. On 11 February, we published the local support services framework, which addresses what support UC claimants need, including those with complex needs, and how we will work with the third sector and local authorities to provide that support in the most effective way.

At the heart of the framework is a partnership approach, which emphasises the need for close working between DWP, local authority managers and service providers such as social landlords and charities to agree on the services that will be needed at a local level. By encouraging close partnership-working between agencies, we will provide a more joined-up, holistic service for claimants with complex needs and a single claimant journey towards greater independence and, wherever appropriate, work readiness for claimants.

The hon. Member for Stretford and Urmston (Kate Green) asked about access. We have not decided yet whether there should be specialist advice line for welfare rights advisers, but we will try to bring together all benefits guidance in one place—I think it is a legitimate criticism to say that it has been fragmented in the past—and provide a much more simplified resource for relevant information. I hope that will make life easier for advisers in the third sector. I take on board the hon. Lady’s helpful point.

A number of hon. Members raised the issue of monthly payments, including the Chair of the Committee and my hon. Friend the Member for Amber Valley (Nigel Mills). Universal credit is designed to reflect a world where 75% of employees are paid monthly. Paying universal credit monthly will not only reflect patterns that people who fall out of work are used to, but help smooth the transition into work and encourage claimants to take personal responsibility for their finances. For the first time, we will be able to identify those claimants who struggle to manage on a monthly salary, and will provide support to help them develop the necessary money management skills to remove barriers that prevent some of them from moving into work.

We recognise that a move to a single monthly household payment is a significant change to the way in which many benefits are currently paid and that some claimants will require support to help them manage that change. Money advice will be offered to all claimants when they make a claim, and given to those who have a clear need for it. There will be different levels and types of money advice, based on need. Some claimants will be signposted toward an online service, some might be offered a single session over the phone, and others might be offered an intensive face-to-face session with follow-up calls. We also recognise that some clients might need money advice for only a short period, while others will need it for longer. We are trying to create a service that can be tailored to the needs of individuals, rather than a one-size-fits-all service.

On 11 February, we published guidance giving details of the factors that advisers should consider when discussing alternative payments with claimants. Those factors include drug and alcohol dependency. For most claimants, alternative payment arrangements will be time limited, and offered alongside further budgeting support and help to move towards managing a standard monthly payment. I mentioned that drug and alcohol issues were one of the factors that should be borne in mind. Others include learning difficulties, mental health conditions, those in temporary or supported accommodation, perhaps including people who are homeless, those who have severe debt problems and those who are the victims of domestic violence. So a range of factors will be taken into account to determine whether a monthly payment should be made, or whether an alternative, more frequent payment would be in the claimant’s interest.

My hon. Friend the Member for Enfield North (Nick de Bois) made the point that this is all about boosting aspiration. It is about enabling people to manage their finances and to get into work, and we need to ensure that we have a system that meets mainstream needs but also supports the needs of more complex cases, rather than a scheme that is designed entirely around the needs of the exceptions. It is important to get the balance right.

[Stephen Timms]

Will the Minister give way?

[Mr Hoban]

I just want to say something about basic bank accounts. We have set aside £145 million to stimulate new financial products for universal credit claimants, and we are working closely with financial providers across the private, social and third sectors. We are continuing to consult those providers and other stakeholders about the arrangements for those products, and we will announce our detailed approach and requirements in due course.

The hon. Member for Edinburgh East (Sheila Gilmore) referred to the fact that we had discussed basic bank accounts when I was in my previous role. There is a real challenge involved. One of the final pieces of research produced by the financial inclusion taskforce identified that many of the people who did not have a bank account were those who claimed benefit, and that many people who had had bank accounts had ceased to use them. It is important to ensure that we put the right financial products in place, but we must also give people the support they need to manage their money so that they can remain banked, rather than dropping out and becoming unbanked.

[Stephen Timms]

The Minister mentioned people in supported accommodation. Does he have a response to the concern that I raised about women’s refuges and other supported accommodation, given that the definition in the regulations does not seem to be quite right? Can he give me any reassurance about continued support for people living in such accommodation?

[Mr Hoban]

The definition in the regulations will be the one that is in the existing regulations, and it has worked well so far. We are talking to women’s refuges and others to try to understand what has changed, and why the existing definition no longer gives the desired results. That is a matter that we want to continue to discuss.

We need to be careful when we talk about the direct payment of rent, because the vast majority of people have no problem paying their rent or their mortgage. My hon. Friend the Member for South Dorset (Richard Drax) has raised this matter. In one of the pilots, 92% of people paid their rent on time. Among the other 8%, some were underpayments and some were mis-payments, but not all were wilful non-payments. We have an obligation to try to move that 8% so that they can pay their rent on time and meet their obligations. Also, this change will encourage social landlords to think about the broader needs of their tenants—how they can find the necessary skills to get work, and get the necessary financial and budgeting support to manage their money more effectively—rather than just thinking about collecting the rent.

We need to ensure that the new system does not remove personal responsibility from everyone, while recognising that we will need to do something for those who are facing the greatest problems. We are working on that, and the pathfinders will help us to gain that knowledge. We want to make sure that the risks are managed and that landlords can request that the housing element is paid to them when the rent arrears trigger has been reached. These arrangements will be in place for some high-risk claimants from the outset until there is improved financial capability. In effect, we will start the shift to direct payments for claimants with the easier cases and then progress to the more difficult cases. The approach that runs through the roll-out of universal credit is to pilot things and understand the lessons to be learned to ensure we avoid mistakes in the future.

I am sure that I have already spoken for far longer than I should have done, but I think our debate has been important. I end by echoing the words of my hon. Friends who have contributed. We are talking about a change in culture. It is not just a benefit replacement exercise; it is about helping people back into work—making sure that they know that it is better to work than not to work, that it is better to work longer to earn more than to work fewer hours and earn less. We need to tackle some of the barriers to getting people into work, not just in respect of the complexities of the benefit system, but by enabling people to manage their money and to take responsibility for their finances and for their future.

Universal credit is a huge step forward in encouraging self-reliance, but we recognise that a number of people—not the vast majority of people—will need more support. The measures we have set out today and the way in which we have developed them, even from when we submitted our response to the Select Committee’s report, demonstrates this Government’s serious commitment to get universal credit right. It is by getting it right that we will have the best chance of getting people out of poverty.