Sanctioning of Benefit Recipients

Debate between Steve Webb and Julie Hilling

Thursday 3rd April 2014 Commons Chamber

[Steve Webb]

I will not for now, because I only have a short period and I want to respond to all the points that Members have made. [Interruption.] It was a mistake. The hon. Gentleman asks why it was 60%. There was a miscoding. That was not the correct figure.

It is important that the sanctions regime is evaluated. I am grateful to the right hon. Member for East Ham (Stephen Timms) for his positive comments on the work that is being done by Matthew Oakley, which is looking specifically at the sanctions regime. It is considering communications to claimants. A number of hon. Members have stated that for sanctions to be effective we must communicate to people what has happened to them and why. I accept that entirely, and if right hon. and hon. Members have examples—some of which they cited during the debate—the Employment Minister would be pleased to receive details of individual cases where the processes that we want to work are not working.

To return to the evaluation, Matthew Oakley will soon complete his report. It will come to the Department and we will respond positively and constructively. We will then publish not only our response but the independent findings of the reviewers in full. There is no secrecy about that; it will be in the public domain, and rightly so, together with the actions we are taking. That is not the only evaluation. We have published a range of evidence, including the Jobcentre Plus offer evaluation and the universal credit customer survey, which provide information about customer awareness of sanctions and the effectiveness of the regime in encouraging compliance. We also monitor the use of sanctions and publish quarterly statistics. In a sense, we could have a second and third review and all the rest, but the focus is on seeing what the first independent reviewer says and publicly responding constructively to that, making changes, publishing evidence, monitoring and taking action, rather than on starting another review with another reviewer for perhaps six or nine months, or whatever, so that it is Christmas before things change. We want to get on with learning from these reviews.

The Chair of the Work and Pensions Committee, who is not in the Chamber at the moment, asked about sanctions for employment and support allowance, and it is important to stress the low level of ESA sanctions. At any point, fewer than 0.5% of individuals in the work-related activity group are sanctioned, so although volumes have increased because the number of people on ESA has gone up, that rate remains low. It is not the case that people on ESA are being sanctioned all over the place.

My hon. Friend the Member for Birmingham, Yardley (John Hemming) mentioned the link to housing benefit—I felt a certain amount of nostalgia when he explained to the House where Sandwell is, because that is where I was born and went to school. He made the important point that if someone is sanctioned on jobseeker’s allowance, that should not lead to the loss of housing benefit. Although income-related JSA passports to housing benefit, housing benefit is available on the basis of low income and not necessarily on whether someone satisfies the requirements for JSA. We entirely accept that we must ensure that people are not incorrectly thrown off housing benefit because their JSA has been sanctioned in some way, and we are considering that issue as part of the Oakley review. It is not our intention for people to lose their housing benefit.

The hon. Member for Banff and Buchan raised an interesting question of whether, for example, someone who is sanctioned under universal credit risks losing the whole household payment. Funnily enough, that problem is sorted out under universal credit, because instead of having JSA here and housing benefit there, and the JSA computer telling the council that someone is not on JSA any more and their housing benefit stopping, if it is all one payment the sanction is just to the personal allowance bit and housing help remains unaffected. It will be better under universal credit.

I was pleased to hear from a number of hon. Members that the universal sanctions regime is attractive and responds so that when people correct whatever caused the sanction, in many cases that sanction will stop. I will pass to my right hon. Friend the Secretary of State and the Employment Minister the view of a number of Members in this debate that the sooner we move forward with the universal credit sanction regime, the better. I am encouraged by that.

On the proportionality of sanctions, there has not been much discussion about the detail of the higher, middle and lower rates, but since the system was introduced the proportion of claimants sanctioned at the highest level fell markedly after the introduction of the new system. Hardship payments are available—again, that has not been discussed much—at a rate of 60% of the benefit. People may not be aware of that, but where someone has no income it is important to be aware that hardship payments are available at a rate of 60% of benefit.

[Julie Hilling]

Will the Minister give way?

[Steve Webb]

I will not, if the hon. Lady will forgive me, because I want to respond to the points already made.

There was some discussion of targets—this is a bit of a chestnut—and to be categorical, there are no targets for sanctions; that is not the way it works. The point was made that statistics are gathered at jobcentre level and among advisers on their use of the sanctions system, and again the hon. Member for Banff and Buchan—I am wrecking her credibility here—made exactly the right point. We want consistency, and we cannot know that we have that if we do not gather data on what individual advisers are doing. If people go to a jobcentre and talk to adviser A or adviser B, and adviser A sanctions everyone who walks through the door and adviser B never sanctions anyone, the system is not working.

Oral Answers to Questions

Debate between Steve Webb and Julie Hilling

Monday 18th November 2013 Commons Chamber

[Steve Webb]

My hon. Friend will be pleased to know that when we bring all new claims into the 2012 child maintenance system, we will use information from Her Majesty’s Revenue and Customs relating not just to earned income, but to income from all sources. Provided that income is coming into the household and HMRC is aware of it, we shall be able to use that information in assessments.

[Julie Hilling (Bolton West) (Lab)]

Can the Minister tell us how many people have died as a result of illness or suicide between their being declared fit for work and the hearing of their appeals? If he does not know, does he not think that he has a duty to collect those figures?

Pensions Bill

Debate between Steve Webb and Julie Hilling

Tuesday 29th October 2013 Commons Chamber

[Julie Hilling]

Is the Minister saying that those people who fall short of the 35-year rule will receive their £144 a week pension or that, for life, it will be less than that?

[Steve Webb]

To be clear, someone with 30 years and no SERPS under the current system gets 30/30ths of £110, a basic pension. Under our system, they get 30/35ths of £144, which is more. The fact they have not got 35 years does not matter. They get a bigger pension. It does depend on how much SERPS someone has, which is why I say that some will get more. But no one will get less because our starting point for the calculation is the better of the two numbers. The move to 35 years for people already in the system cannot give them less pension than they have already built up but does give them the opportunity to build up more.

The opportunity to talk about the Bill is enticing and I could go on at great length, but the key point is that notwithstanding the differences we have had about the detail, this is a Bill of which the House can be proud. It introduces—for the first time, essentially, in 50 years—a single, simple and decent state pension that provides a firm foundation for auto-enrolment. It rationalises the process of raising state pension ages. It reforms the bereavement support system. It gives us a private pension system that is fit for purpose for the world we are moving into and it is with considerable pride that I commend it to the House.

--- Later in debate ---

[Julie Hilling]

I am grateful for this opportunity to speak briefly in the debate. I want to speak up on behalf of Maureen Davenport and the many other women who have contacted me about what is happening to their pensions. Let me start by quoting Maureen Davenport, a retired head teacher. She says:

“I have worked all my life and paid taxes and other contributions, as required. I also have an occupational pension. I have just turned sixty years of age and I am fully aware of the Pensions Act 1995 which twice deferred the age at which I could access my state pension. What I am currently told is that I am now in the age bracket where I am not able to access the new flat rate higher pension as I was born between 5 April 1952 and July 1953. As is said by many in the media, I am one of many women facing a ‘State Pension Double Whammy’: deferred pension and a potential loss of nearly £40 per week for life. It would seem logical and fair to have grouped all women who have a deferred pension into the higher flat rate pension rather than penalise this age group. I feel very strongly that I have, once again, been penalised at a time when I cannot affect my retirement income and have very little voice and opportunity to affect change.”

Maureen is typical of the many women who have contacted me, and they are just a few of the 720,000 women who will be worse off as a result of the Government’s changes to the state pension.

[Steve Webb]

In the event that the record might suggest that the hon. Lady’s constituent will be worse off, I want to confirm that the only change we have made to her constituent’s pension is to introduce the triple lock, which will give her more generous indexation than she would have had. That is the only change that we have made to that lady’s pension.

[Julie Hilling]

My understanding is that that is not the only change: my constituent will not be able to access £144 a week because the second state pension has been done away with and she will not be entitled to that money. If I am wrong, perhaps the Minister will tell me that my constituent will receive the equivalent of £144 a week. No, she will not receive that, so she is being penalised by this action, because she will not be able to receive her second state pension. [Interruption.]

I will continue to make progress. Like me, these women are angry and upset because they have done the right things all their lives, yet will be disadvantaged in comparison with a man born on exactly the same day as they were.

This is not the only issue that hurts women. Raising the number of necessary years for national insurance contributions to 35 again disproportionately hits women. We know that women are the ones who normally take time off to look after children and, indeed, to look after ageing parents and ageing parents-in-law. This Government will undo the good work done by the last Labour Government to improve the lot of women’s pensions, with a further 100,000 fewer qualifying for a full pension. This is particularly unfair to those who are close to retirement age, who will not have the opportunity to make up the extra years—unless they work well into their 70s.

I wrote to the Minister about Maureen and my other constituents. The letter I received back was illuminating and, frankly, complacent. Let me quote some of it:

“It is important to note that we are not proposing simply to increase the pension from £110 per week for today’s pensioners to around £144 week for new pensioners…Future pensioners will simply build up towards a flat rate pension of around £144—there will be no additional State Pension on top of this figure, so the maximum State Pension attainable under the new system will be significantly lower than under the current system. I should also add that in some ways the new system will be less generous for those who retire after April 2016.”

The letter went on to say:

“While women born shortly after your constituent may receive a single-tier pension, they will have to wait several months longer than your constituent before they can start to draw a pension. Furthermore, the average entitlement for women reaching State Pension age shortly after the new system’s introduction is projected to be £131 per week and not the illustrative single-tier full rate of £144 per week. In comparison, women reaching State Pension age shortly before the new system is introduced will receive an average of £125 per week under the current system, made up from a combination of basic and additional State Pension.”

It seems clear to me that women born in that age bracket will be disadvantaged, yet the Government announced their proposed changes with a grand fanfare about how much better off all pensioners would be under the new system. They have failed to tell people, particularly women, that some of them would be worse off. I just wonder why everything this Government do seems to make things worse for women, who are hit by so many things—hit twice as hard, for example, by the Budget and three times as hard by other Government actions.

Jobs and Business

Debate between Steve Webb and Julie Hilling

Friday 10th May 2013 Commons Chamber

[Julie Hilling (Bolton West) (Lab)]

A few weeks ago I sat in the Chamber listening to the Budget debate. My overwhelming memory is of the Chancellor sitting on the Front Bench looking like a little boy lost, with no idea what to do about a flatlining economy, the loss of our triple A status or the level of borrowing, and no idea how to balance the books. So he delivered a Budget that did none of that, sitting on his hands, hoping that things would just happen.

After that disappointment, one might think that I would learn, but sadly not. I listened to the Queen deliver the Gracious Speech, hoping that she would tell us about the action Her Government would take to improve life for my constituents. It seemed to start pretty well:

“My Government’s legislative programme will continue to focus on building a stronger economy”.

I frowned a little at the word “continue”, because after three years they seem to have failed to build anything, but still I sat in hope. She continued:

“It will also work to promote a fairer society that rewards people who work hard.”

Well, we all agree with that. She went on:

“My Government is committed to building an economy where people who work hard are properly rewarded. It will therefore continue to reform the benefits system, helping people move from welfare to work.”

I frowned a little at that, too. As I see it, their reforms of the benefits system are not helping people to move from welfare to work; they are making them move to food banks and to skip meals so that family members can eat. If they are even more unfortunate, they might be one of the families who have been made homeless.

Even so, I waited to hear what the Government would actually do to build our economy. I waited and waited—I did not have to wait long, because in less than 10 minutes the speech was over—but there were no answers and no relief for my constituents. There was a little tinkering, but it was yet another wasted opportunity from this failing Government. They are out of touch and out of ideas.

How much evidence do the Government need that their policies are failing? The International Monetary Fund says that growth in the UK is slower than in 23 of the 33 advanced economies it monitors. Olivier Blanchard, its chief economist, warned the Chancellor that he is “playing with fire” by refusing to change course. However, there was nothing in the speech to address the IMF’s call to boost growth and rethink the speed of the deficit reduction. Starting to build HS2 in a few years, welcome though that is in Bolton West, will do nothing to build the economy now.

On the same day that the Queen delivered that terribly thin speech, the Institute for Fiscal Studies said that 1 million more children will descend into poverty as a direct result of benefit policies. Simply saying that people should work hard and blaming the poor for the situation they find themselves in is an insult. The Joseph Rowntree Foundation says that 6.1 million people living in poverty are in working households, 6.4 million people lack the paid work they want and 1.4 million part-time workers want full-time work, the highest figure in 20 years.

The Government like to boast that they have created over 1 million new jobs, but they do not tell us how many of those jobs are a direct transfer from the public sector or how many are unpaid. Unbelievably, workfare jobs, where people work for their dole, are counted as jobs created. Despite the Secretary of State’s denial, according to the Office for Budget Responsibility unpaid work experience and work placements make up 14% of those so-called new jobs. The Government do not tell us how many of those jobs are on are zero-hour contracts or how many are part time, and they do not tell us how many of them no longer exist because the business has failed or downsized.

The Government like to peddle the myth that the 2.5 million people who are out of work and the 1 million young people who do not have jobs are skivers and shirkers. The reality is that millions of people are desperate for work and there is a substantial churn of people in poverty or out of work. Although 18% of people are on a low income at any one time, one in three of us experience at least one period on a low income in a four-year period, and 11% of people are on a low income for more than half of those four years. More people are out of work under this Government than were when they took office, and the flagship Work programme gets only two in every 100 people into work—fewer than if the Government had done nothing at all.

Tax credits have been cut so hard that a previous Work and Pensions Minister revealed that some families with children could be £728 a year better off if they were out of work. The Department for Work and Pensions impact assessment reveals that universal credit will fail to make work pay for 2.1 million workers and that real wages are down by £1,700 since the election. The welfare bill has continued to go up since the financial crash and is increasing in real terms by 2% each year. Borrowing is going up and unemployment is set to rise even higher.

Of course, the Government like to blame Labour for everything. According to them, the Labour Government caused the global economic crash—a crash that started in America and spread to the rest of the world. They like to say that we did not fix the roof while the sun was shining, but they forget that the Labour Government paid off the second world war debt, built hundreds of new schools and hospitals, and invested more in the railways than the so-called record spending that this Government currently claim. At the time of the general election we had growth of 0.7%, unemployment was falling, and the deficit was coming down.

The Government need to start to take responsibility for a double-dip recession, for soaring borrowing, and for failing to meet every one of their predictions on growth, borrowing and deficit reduction, yet they carry on with their failed policies. Have they never heard the old adage, “You can’t cut your way out of a recession”? They need to take action to grow the economy. Building homes would be a good place to start, as would ensuring that businesses get the finance they need with a British investment bank.

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

I do not know whether the hon. Lady is aware that when she stood for election in 2010 her party set out spending plans for this Parliament that involved substantial spending cuts.

[Julie Hilling]

Absolutely; I am well aware of that. In fact, we said that we would halve the deficit over this four-year period. The Government said that they were going to cut it completely in one term, but they are not even three quarters of the way there yet. They told my local council that it would have to find £20 million-worth of cuts over the course of the Parliament. It has already had to find £100 million-worth of cuts. That is the difference between a planned deficit reduction and planned action for growth and a Government who sit there saying, “If we cut, something miraculous will happen to grow our economy.”

Under-occupancy Penalty (Nottingham)

Debate between Steve Webb and Julie Hilling

Monday 18th March 2013 Commons Chamber

[Steve Webb]

I am sure that the hon. Gentleman will forgive me if I continue to respond to the points raised by the hon. Member for Nottingham South.

Why is it acceptable to restrict private sector tenants on a low income, but okay to allow social tenants to have a spare room?

[Julie Hilling (Bolton West) (Lab)]

Will the Minister give way?

[Steve Webb]

I hope that the House will forgive me, but I want to respond to the points raised by the hon. Member for Nottingham South and have limited time to do so.

There is an issue of fairness as between private sector tenants on a low income and social tenants on a low income, but there is also a second issue of fairness. Our estimates for Nottingham are ballpark figures—the hon. Lady is right to say that we do not have exact figures for her constituency, but we do have regional figures and we can estimate overcrowding—but we estimate that of the order of 2,000 or so households there are overcrowded.

Oral Answers to Questions

Debate between Steve Webb and Julie Hilling

Monday 10th September 2012 Commons Chamber

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

I congratulate my hon. Friend on his tireless work in support of credit unions. As he knows, as part of the universal credit roll-out, we are piloting different sorts of budgeting accounts, including jam jar accounts, and we would be delighted if credit unions were to play a full part in that process.

[Julie Hilling (Bolton West) (Lab)]

T7. As we all know, the Atos work capability assessment is deeply flawed. How many people have died from their illness or disability since losing their disability benefits, and how many of them committed suicide?