Housing Benefit
Steve Webb Excerpts(14 years ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
This is the first time that I have had the pleasure to serve under your chairmanship, Mr Streeter. I congratulate the hon. Member for Hackney South and Shoreditch (Meg Hillier) on raising this important issue and on giving a number of hon. Members, particularly but not exclusively from the London area, the chance to air their views, which they have done effectively.
I have been advised not to run through a whole history of housing benefit because we do not have enough time. However, I will set out some of the thinking behind the reforms. The housing benefit bill has been rising inexorably: in the past five years, we have seen a 50% real rise in the bill when the numbers have gone up by less than 20%. With £1 billion added each year, it does not take long before we are talking about serious money. The question is this: do we stand by and watch that or do we allow our constituents, who are on low wages and paying tax out of their low wages, to have a voice in this debate? A number of hon. Members said that the taxpayers’ perspective relates not just to the well-off but to low earners as well. As the hon. Member for Brighton, Pavilion (Caroline Lucas) said, if we consider the whole tax burden, the tax impact on low earners is quite substantial.
What we cannot do is to continue to pay out blank cheques to private landlords—this is a blank cheque not to tenants but to private landlords. Rents have been going up and the state has been a passive observer. The housing market has demanded cash from us and we have simply handed it over. Then it has demanded more and we have handed it over again.
Steve Webb
Not at the moment. I will take some interventions, but first I want to set the scene.
If we do not have a blank cheque, what do we do? What is a legitimate way to say that someone who takes a low-paid job typically chooses a rent around the 30th percentile? That number has not been plucked from the sky. If someone takes a low-paid job, they do not have an unlimited choice about where they live. They cannot live in as big a house as they would like. They are constrained in where they live. Why should our constituents who take a low-paid job with all the associated uncertainties and who have to restrict their housing choice be in a worse position than those—I do not use the words “scroungers” or “apartheid”, which have come from the Opposition Benches—who are, for example, unemployed? There is an issue about social justice.
Meg Hillier
The Minister is confusing things. In my constituency, people do not have a choice. To afford anything, they need the housing benefit top-up. That is because rent levels and the demand for property are high. If landlords do not rent to people on benefit, there will be plenty of people in the private sector who do not need benefit who will take those homes.
Steve Webb
Clearly, there is a differential impact in different parts of London; I do not dispute that for a second. Taking London as a whole, just a little under a third of properties will be available within the caps. Obviously, the figure will vary from area to area, and there are particular issues that affect central inner London.
Steve Webb
I will carry on just for now, because I want to respond to as much of the debate as I can.
The question is, how can we appropriately look at this matter? Some of the figures that have been quoted for losers assume that nothing changes and that people will go on living exactly where they are living and making the same choices, but the whole point of the reform is to have an influence on the housing market, and to try to do something about escalating rents.
Steve Webb
I will not. I want to respond to the debate in the short time that is available to me. If we allow rents to go on rising as they are doing, how can we expect people to find the work that will enable them to pay those exorbitant rents? There are not the jobs that will enable people to afford to pay those rents. If we can do something about the rents that landlords charge, more people will find it worth working. At the moment, people get no return for work.
Steve Webb
No, I will not give way. I said that I wanted to respond to the debate. [Interruption.] I am trying to respond. If I give way, I will not have time to do that.
The issue of the discretionary housing benefit was raised. We are tripling the budget; it is £20 million now and it will be £60 million in a couple of years’ time. If we spread that thinly across the country, it will not go far, which is why, when we are allocating discretionary housing benefit we will have particular regard for the places in the country and the local housing markets where the changes will have the most impact. I am sure that the constituents of many hon. Members here today will see a bigger share of the money because of the points that have been raised. That is part of the answer to the question that was raised about transitional measures. Local authorities will consider on a case-by-case basis individuals who have been severely affected by our measures and for whom moving would be most disruptive, and, in those extreme cases, provide assistance.
The hon. Member for Hackney South and Shoreditch asked about timing. It is important that I place it on the record that I need to make some corrections. Nothing happens this autumn; nothing will change until next April. We have to put regulations through the Social Security Advisory Committee, so there will be a process of consultation on the regulations. The regulations will be laid before Parliament in October or November. There will then be a further six months before anything changes. As she rightly said, those are the changes that will go through secondary legislation. Some of the longer-term changes will require primary legislation, so there will be a further process of scrutiny and consultation.
I want to address some of the specific issues raised. The hon. Lady raised the issue of the rent levels relevant to the cap in her constituency. I understand that the broad rental market for inner east London is significant. I have looked at the figures for one-bed, two-bed, three-bed and four-bed properties at the 30th percentile in her constituency, and they are all at or below the cap. I am happy to supply her with the figures.
We have had many contributions to the debate. The extraordinary word “apartheid” was used and we heard about vast numbers of people criss-crossing London. There has been an awful lot of overstatement about the actual impact of the changes, particularly given that three out of 10 private rented properties will still be available after the change within the cap.
The issue of pensioners was raised. There was some suggestion that elderly people would be particularly adversely affected. I hope that the Chamber will recall that the local housing allowance that we have been talking about today, which is used in the private rented sector, applies only to 80,000 pensioners the length and breadth of Britain. [Interruption.] There was some implication that millions of pensioners would be affected by our measures. We are talking about only a tiny number of pensioners across Britain, and many of them live in regulated tenancies, which will be protected in any case.
Steve Webb
No, I will not. Hon. Members have asked about the impact assessment, statistics and parliamentary questions. The impact assessment will be published on 23 July. There was some suggestion that that had something to do with the timing of this debate. We do not control the timing of these debates.
Steve Webb
We are publishing on 23 July to give us time to prepare the detailed statistics that the House wants to see. We know the aggregate impact, but the House wants some fine detail. I can tell the Chamber that the impact assessment will include the impact on groups at a national level, broad rental market areas, bedroom category, the availability of accommodation by broad rental market area, the households affected by caps by local authority and by Government office region, the households affected by moving to the 30th percentile and the distribution of local housing allowance and housing benefit award by case load and by housing benefit award intervals. Rather than drip-feed incomplete information, we want to give the Chamber comprehensive detailed information before the House rises for the summer recess.
One thing that is usually said in such debates is that people on housing benefit will not be able to find anywhere to rent. We have all come across anecdotal examples of that. Occasionally, landlords will not rent to people on housing benefit. [Interruption.] I hate to bring the facts to bear in this debate, but since November 2008 the number of private sector tenants on housing benefit has not fallen. It has risen by 400,000. If private landlords are not willing to rent to people on housing benefit, how come there are 400,000 more of them doing it?
Ms Buck
I refer back to my first question, which the Minister has not had time to answer. The majority of increase, according to the Department for Communities and Local Government, is in households that are placed in private rented accommodation by local authorities. That is why they have been able to access it, and they will no longer be able to access it in whole swathes of the country including London.
Steve Webb
As the hon. Lady knows—she is exceptionally knowledgeable about such matters—what is important is how the market responds to these changed incentives. If everything carries on as it is now, the reforms will have failed. We want an impact on the rental market so that we can end the situation in which people have huge rents paid for by the taxpayer that they cannot afford from the jobs they get.
Mr Gary Streeter (in the Chair)
Order. Our time for this debate has gone. We now move on to the less controversial subject of the construction of nuclear power stations. [Laughter.] Will Members leaving Westminster Hall please do so quietly?
Ageing Well Programme
Steve Webb Excerpts(14 years ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
I am pleased to announce Ageing Well, a new programme designed to support local authorities to improve their services for older people. The key aim of the programme is to provide a better quality of life for older people through local services that are designed to meet their needs, and which recognise the huge contribution that people in later life make to their local communities. The programme consolidates current best practice from local authorities and the lessons learned from earlier pilot activities and will be delivered by Local Government Improvement and Development. An essential aspect of the programme is to help authorities to improve efficiency while still delivering quality services.
Ageing Well recognises that local concerns need local solutions and will encourage authorities to take the lead to work in partnership with other local organisations to develop imaginative approaches to the issues faced by their particular communities. We want to help local authorities to use their resources effectively, to promote well-being in later life, to ensure that older people can live independently for longer, to engage older people in civic life and to tackle social isolation by recognising older people’s potential. The programme is driven by this Government’s view that older people in our society deserve every opportunity to age well, in communities that value their experience.
Occupational Pensions
Steve Webb Excerpts(14 years ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
The Chancellor of the Exchequer announced in the Budget statement on 22 June that, with some exceptions, consumer prices rather than retail prices will be the basis for uprating most benefits and public sector pensions.
The Government believe the CPI provides a more appropriate measure of pension recipients’ inflation experiences and is also consistent with the measure of inflation used by the Bank of England. We believe, therefore, it is right to use the same index in determining increases for all occupational pensions and payments made by the Pension Protection Fund (PPF) and Financial Assistance Scheme (FAS).
Consequently we intend to use the CPI as the basis for determining the percentage increase in the general level of prices for the 12 months ending 30 September 2010 when preparing the order required under paragraph 2(1) of schedule 3 to the Pension Schemes Act 1993 in relation to revaluation and indexation of pension rights in defined benefit pension schemes, and the order made under section 109 of that Act in relation to increases in guaranteed minimum pensions paid by contracted-out defined benefit schemes in respect of pensionable service between 1988 and 1997; and to amend legislation to enable CPI to be used for relevant increases in respect of the PPF and FAS.
Using CPI will mean making some small changes to primary legislation to ensure we can apply it fully in every circumstance. We will bring these before Parliament at the earliest opportunity.
Capital Gains Tax (Rates)
Steve Webb Excerpts(14 years ago)
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Yvette Cooper
As the hon. Gentleman knows, the level of child poverty is some 600,000 lower than it was in 1997 as a result of the action that the Labour Government took. He also knows that we deliberately made the measures of poverty by which we were judged relative measures. Of course, that makes matters harder as the economy grows, and of course there is always more to do. That is why we believed it was right to do more to help the poorest and those who were struggling—in contrast with this Budget, which does the opposite. Pensioners do not get the income tax cut, but they have to pay more in VAT. Those on the lowest incomes do not get the income tax cut, but they have to pay more in VAT.
The Ministers are like fraudsters in the fairy tale, telling gullible Liberal Democrat MPs about the beautiful progressive clothes that the emperor is wearing, if only they are clever enough and loyal enough to see them. Liberal Democrats are clinging desperately to shreds of invisible cloth, reaching deep into their Liberal and Conservative history to pretend that they can be progressive now. They are claiming that Keynes might have backed the Budget. They are calling on Beveridge for support, kidding themselves that they can call on their history and that they are following in the footsteps of great liberal Conservatives like Winston Churchill, who supported the minimum wage, but the truth is that the emperor has no clothes.
The truth is that if we look at the detail, the Budget is nastier than any brought in by Margaret Thatcher. Instead of Churchill, Keynes or the founders of the welfare state, the Liberal Democrats have signed up, with the Secretary of State for Work and Pensions and his Chancellor, to cut support for the poor. It is perhaps apt that in this week of World cup disappointments, it was a footballer who got it right. In 2002, after England were defeated in the World cup by Brazil, Gareth Southgate reflected ruefully on England’s performance and said:
“We were expecting Winston Churchill and instead got Iain Duncan Smith.”
That is the reality for the Liberal Democrats now. With all their high hopes, they have betrayed the poor and the vulnerable, whom they stood up to defend.
Yvette Cooper
I will give way to the hon. Gentleman because I know he has a history of supporting people on low incomes. I do not know why he is betraying it now.
Steve Webb
I am grateful to the right hon. Lady. Will she confirm a fact for us about the pension rise that she pencilled in for 2012? Whereas we have guaranteed a minimum of 2.5%, can she confirm that her spending plans proposed a pension rise below 2.5%?
Yvette Cooper
As the hon. Gentleman knows, the old uprating rules are that the pension should go up by either RPI or 2.5%. If he had stuck to those old rules, pensioners would be better off in 2012, 2013 and 2014. As he also knows, all parties supported restoring the link with earnings in the next Parliament, but his proposals cut the support for the additional pension for 6 million women and 4 million men by £100 a year, as a result of his upratings by CPI, rather than RPI.
Steve Webb
As a new Minister, I have had to reply to many letters complaining about what the previous Government did. One of things that people complain about is the freezing of the additional pension by the right hon. Lady’s Government in April 2010. Can she confirm that under our CPI policy, the pension would have gone up in April 2010? Can she confirm that she froze that pension for millions of people?
Yvette Cooper
The hon. Gentleman will struggle to defend his progressive history if he quotes selectively from the figures. He knows that the Budget sets out the additional cuts and savings that he will make from benefits, tax credits and public service pensions from the switch to CPI indexation from 2011-12, which includes, as he well knows, the additional pension and much additional support for pensioners—and which he hid from pensioners on Budget day. That will lead to cuts of £1.17 billion in 2011, £2.2 billion in 2012, and £3.9 billion in 2013.
Perhaps the hon. Gentleman should also consider this: he had his negotiations with the Conservatives about the personal allowance that they were so keen on, yet they failed to consider extending that personal allowance increase to pensioners. They left pensioners out. If he really cared about pensioners, he might have increased the personal allowance for pensioners. As a result, all the pensioners across the country do not benefit from the increase in personal allowance, but they will pay hundreds of pounds extra every year in VAT—an increase that members of his party opposed, campaigned against and shouted about in the run-up to the election. Where are their principles now? Now they are ditching all those commitments and all those principles because they are happy for pensioners to pay hundreds of pounds a year more in VAT.
Reinvigorating Retirement
Steve Webb Excerpts(14 years ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
The Government are announcing today two key reviews as part of their strategy to reinvigorate retirement.
As set out in the coalition agreement, we have established a review into the timing of the increase in state pension age to 66.
Ensuring an equitable state pension is a key priority for this Government. We are protecting the future value of the basic state pension through the triple guarantee. However life expectancy at age 65 is increasing at a faster rate than was previously projected and we must make sure our pensions system is sustainable. The current fiscal position means it is right to consider the timing of the rise in state pension age to 66.
To support this review I have published today a call for evidence to inform an internal review. This provides an opportunity for people and organisations to submit evidence to help us reach our decision. This call for evidence will close on 6 August and we will publish our response in the autumn. This is to ensure that we are in a position to give as much notice as possible to those who might be affected by an earlier rise in the state pension age than expected.
To help ensure sustainability of the system over the long term the Government will also consider future increases to the state pension age and how best to manage the ongoing challenges of longevity.
As part of our strategy to encourage greater private pension saving we are also reviewing how best we can support the implementation of automatic enrolment into workplace pensions.
The coalition agreement confirms our intention to introduce automatic enrolment, which evidence shows is an effective means of increasing pension saving. However, circumstances have changed since the Pensions Commission published its recommendations in 2005. It is right that we consider whether the approach inherited from the previous Administration strikes the right balance between cost and benefits to individuals, employers and for the taxpayer, particularly in the light of current economic and fiscal conditions.
The review will be conducted by an independent team, led by Paul Johnson, Frontier Economics, David Yeandle OBE, Engineering Employers Federation and Adrian Boulding, Legal and General Group plc.
The terms of reference for the review and the call for evidence are available on the Department’s website at: www.dwp.gov.uk/policy/pensions-reform/latest-news. They are also available in the Vote Office and the Printed Paper Office.
Social Fund Consultation Closes
Steve Webb Excerpts(14 years, 1 month ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
The consultation on the proposals set out in the Green Paper “Social Fund Reform: debt, credit and low income households” (Cm 7750) closed on 7 June 2010. I would like to thank those who took the time to respond. Sixty-eight responses were received in total; 64 from organisations and four from individuals. The Government will now consider the responses as they develop proposals for wider welfare reform.
Oral Answers to Questions
Steve Webb Excerpts(14 years, 1 month ago)
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Lisa Nandy (Wigan) (Lab)
6. If he will bring forward proposals to ensure that all staff of his Department are paid at a rate of at least £7.60 per hour.
The Minister of State, Department for Work and Pensions (Steve Webb)
The figure of £7.60 per hour to which the hon. Lady refers was the London living wage until last week, and I can confirm that all directly employed DWP staff in London are paid £7.60 or above and, indeed, are paid more than the new London living wage of £7.85 announced by the Mayor of London on 9 June.
Lisa Nandy
I am sure the Minister is aware of the economic as well as the moral case for the living wage that was most recently advanced by the Mayor of London. In the light of that, will the hon. Gentleman confirm that as well as the directly employed staff, contracted-out staff in his Department, such as cleaners, will also be employed on the living wage because they do such important work for the people of this country?
Steve Webb
The hon. Lady is right to point to the position of contracted staff. She will be aware that long-term private finance initiative contracts were entered into by the Labour Government which involve paying people less than the living wage. We have inherited that practice. However, I understand that Telereal Trillium, with which we have our principal contract, including for cleaners, has an agreement with the relevant trade unions to pay higher rates on new tenders.
Stephen Mosley (City of Chester) (Con)
7. What steps he plans to take to reduce child poverty.
Simon Kirby (Brighton, Kemptown) (Con)
10. What his policy is on measures to encourage people into work in areas of long-term deprivation.
The Minister of State, Department for Work and Pensions (Steve Webb)
Many people in areas of long-term deprivation are also long-term benefit recipients. We will introduce the Work programme to give those benefit recipients access to tailored back-to-work support through an integrated system. Within that, we are actively considering how best to support those with complex barriers to work.
Simon Kirby
I thank the Minister for that answer. Does he agree that many of Labour’s top-down schemes, such as the new deal for communities in the areas of Moulsecoomb and Whitehawk in my constituency, have failed to deliver any real difference to people’s lives, despite having cost tens of millions of pounds? Does he also agree that this new Government’s empowerment of individuals and communities is a much more sensible way forward?
Steve Webb
Yes, the hon. Gentleman is right. We want to see an end to top-down, “Whitehall knows best” government. We want to see local communities and voluntary groups empowered and enabled to provide tailored solutions for individuals and local communities.
Kerry McCarthy (Bristol East) (Lab)
Labour in government had planned and funded 50,000 jobs for older people in areas of high unemployment and high deprivation under the future jobs fund. Will the Minister confirm how many of those jobs will be scrapped and what, if anything, will be put in their place?
Steve Webb
As the hon. Lady knows, jobs that are already contractually bound will go ahead. However, she falls foul of the old new Labour fallacy—that just because the Government temporarily fund a job, that makes it into a real, lasting job. I am afraid that life is not like that; the Government’s payment of a temporary subsidy does not make a permanent job. We will be investing in long-term, sustainable employment, which will benefit older people far more.
Gordon Birtwistle (Burnley) (LD)
My constituents in Burnley suffer more deprivation than most, with areas of high unemployment left to rot by the previous Government. Will the Minister ensure that the Department managing the apprenticeships scheme looks into areas such as Burnley to ensure that they are given a fair chance of providing apprentices for the future?
Steve Webb
My hon. Friend makes a powerful point. Part of the reason why he is here in this House, apart from his highly effective campaigning, is the record left by the Labour Government in Burnley and similar constituencies. The new apprenticeships will indeed go to areas such as my hon. Friend’s constituency, where they will provide training that leads to lasting jobs, which are what we want to be provided.
Jon Trickett (Hemsworth) (Lab)
11. What steps he plans to take to reduce levels of youth unemployment.
Annette Brooke (Mid Dorset and North Poole) (LD)
16. What steps he plans to take to reduce the level of pensioner poverty.
The Minister of State, Department for Work and Pensions (Steve Webb)
The Government want to see all pensioners have a decent and secure income in retirement. We will restore the earnings link for the basic state pension from April 2011, with a triple guarantee that pensions are raised by the highest of earnings, prices or 2.5%. We will also protect key benefits for older people.
Annette Brooke
I thank my hon. Friend for his answer. What action, if any, is he able to take on a problem he himself identified, namely, the cliff-edge situation of women who have completed 30 years employment and who have made the necessary national insurance contributions, but who were born one or two days too early to get the pension that they deserve?
Steve Webb
My hon. Friend raises an important point—in fact, it sounds vaguely familiar—and she is quite right that introducing changes in a cliff-edge manner, as the previous Government did, creates unfairnesses of the sort that she identifies. As she will know, when women are short of the necessary number of years, they can buy voluntary contributions, under a fairly restricted set of circumstances. That will allow some women to get closer to the full pension than they would otherwise have been able to get. However, she is absolutely right that the way in which the scheme was implemented by the previous Government creates an unfair cliff edge.
Mr Kevan Jones (North Durham) (Lab)
Many elderly people rely on services from local councils. Can the hon. Gentleman tell the House how the cuts imposed on Durham county council last week will affect, and reduce poverty for, pensioners in the county of Durham?
Steve Webb
The hon. Gentleman is quite right to point out that when public finances are tight, all sectors of society risk having services threatened in the way that he describes. One of the incoming Government’s concerns was the huge hole in the public finances, which a Labour Government would also have had to fill. It would be interesting to know which cuts he thinks should be made, because there has been a silence from the Labour party on that very subject.
Mr Edward Timpson (Crewe and Nantwich) (Con)
T1. If he will make a statement on his departmental responsibilities.
Mr Rob Wilson (Reading East) (Con)
T3. What action can the Government take to bring the ballooning public sector pension debt under control?
The Minister of State, Department for Work and Pensions (Steve Webb)
Our colleagues in the Treasury are establishing a commission to look at public sector pensions, and we have already had a meeting with our colleagues to try to ensure a fair deal both for the hard-working people who work in the public sector and for the taxpayers who are making a very large contribution to those pensions. It is important that the true cost is made transparent, which it clearly is not at present.
Mr Andrew Love (Edmonton) (Lab/Co-op)
T5. At a time when unemployment is forecast to increase to 3 million, this so-called coalition Government have decided to cut 100,000 jobs from the future jobs fund, but will not replace them until next summer. Is that just another example of unemployment being a price worth paying for this Government?
David Tredinnick (Bosworth) (Con)
T6. Will my hon. Friend be reviewing the rule on annuities? Many people with occupational pensions resent the fact that they have to invest 75% of their accumulated funds in that way and would prefer to put some in other places.
Steve Webb
The coalition Government are sympathetic to the idea of giving people greater choice over annuities. We already have a commitment to scrapping the rule that forces people to annuitise at 75. We also want to look at how people can achieve better value for money from the annuities that they buy, and possibly also have earlier access to accrued pension funds. We take the view that it is their money, not the Government’s money.
Mr Jim Cunningham (Coventry South) (Lab)
T10. Has the Minister had any discussions with the Treasury regarding the pay-out for Equitable Life, bearing in mind that when they were in opposition, that crowd over there on the Government Benches hounded us week in and week out about a pay-out? Now can they deliver?
Steve Webb
The hon. Gentleman will know that Sir John Chadwick will produce his report in July. I understand from discussions with the Treasury that a compensation package will be produced on the basis of that, and legislation to bring that forward was included in the Queen’s Speech.
Andrew George (St Ives) (LD)
T8. As Ministers are no doubt aware, the withdrawal rate of housing benefit and council tax benefit combined can be up to 85p in every pound earned, thereby contributing significantly to the poverty trap. Do the Government have any plans to review the withdrawal rate and the tapers?
Steve Webb
My hon. Friend puts his finger on a crucial point. We both believe that work needs to pay, but one of the crucial problems at the moment is that as people improve themselves, work harder, train and do overtime, too much of that money is clawed back through the benefit tapers and tax rates that he has described. My right hon. and hon. Friends will be bringing forward quite radical proposals for benefit reform that are designed to tackle precisely the point that he has raised.
Natascha Engel (North East Derbyshire) (Lab)
I know that this will surprise everyone, but I want to return to the future jobs fund and the answer that the Minister of State, the right hon. Member for Epsom and Ewell (Chris Grayling) gave earlier about not having received any representations on it. Has he at least made the effort to consult, for example, some of the voluntary and charitable sector organisations that represent young people and support them into work on the effect that cutting the future jobs fund will have on their work? If so, what have they said to him?