Oral Answers to Questions

Debate between Steve Webb and Nia Griffith

Monday 1st September 2014 Commons Chamber

[Steve Webb]

I wonder whether the hon. Lady has read the document, given that one of the key groups on which we focus is carers. We specifically state in the document that carers face particular barriers in the labour market and that is why we need more flexible employment, such as our extension of the right to request flexible employment to all workers as of this year.

[Nia Griffith (Llanelli) (Lab)]

6. How many people were awaiting a work capability assessment on the latest date for which figures are available.

Housing Benefit (Wales)

Debate between Steve Webb and Nia Griffith

Thursday 1st May 2014 Westminster Hall

[Nia Griffith]

Absolutely. It is a considerable problem.

The Government state in their response that they will not consider a blanket ban on forcing people in adapted premises to move. When there has been investment to make properties suitable many housing authorities in Wales try to keep them available for disabled people. Not having a blanket ban on hitting disabled people with the bedroom tax is a short-sighted policy. Apart from the tremendous upset for the individual, it is not good use of public funds.

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

Will the hon. Lady say how she would define what “significantly adapted” is in practice?

[Nia Griffith]

I am sure we can all imagine major adaptations such as changes to bathrooms and additional rooms. The only one that might be considered less significant is a stair lift that could be put in or taken out, but any other form of adaptation should be taken into consideration. Further to that, it should be noted that legislation passed by the Welsh Government has enabled local authorities in Wales to desist from selling off some types of properties. They have largely chosen to keep in their stock properties such as those suitable for old people who downsize precisely because adaptations have been made that suit older people as they become less physically active.

Another point in the Government’s response is that the bedroom tax

“may encourage more claimants to move into work”.

That sounds like forcing people to look for work. People are already looking for work. People who have the capabilities are already looking for work. We must take into account the fact that some of them have significant disabilities and there are not many suitable jobs available.

Transport and child care are problems in rural areas, which are multiplied because of trying to fit in transport to work with picking up children and getting home from work. It is not easy to find jobs with hours that fit in.

I have taken issue with the Minister about the fact that the issue is not just a matter of obtaining a few extra hours. We all know that because of the complex way in which housing benefit is worked out people effectively lose around 60% of the benefit for additional earnings. The equation does not involve simply a few extra hours. The matter is much more complex. On tapering or claw back, I am extremely concerned about the proposals for universal credit because 76p in the pound of each tax credit will be clawed back when people take on more hours of work. The Centre for Social Justice suggested that it should be only 55%. That is another enormous hurdle for people taking on more work or going out to find work.

What progress has there been on collecting information and monitoring rental costs? That was promised in the Government’s response.

I turn to discretionary housing payments. The whole point about them is that they are discretionary, but they are imposing an enormous work load on local authorities because everyone on housing benefit is deemed to have insufficient funds to cover their rent. That was our definition of housing benefit. It was provided for people whose residual money after deducting various items was not sufficient to cover their rent, so it is inevitably massively oversubscribed.

The Government have said that they have provided extra money, but let us look at what that really means. I will use the example of Torfaen, which was given £193,000 of additional money for its discretionary housing payments but the shortfall in housing benefit is approximately £1 million, or five times the discretionary amount allocated. Torfaen was then told that it could spend up to £430,000, but that extra money must come from its own funds. In other words, it must make sweeping cuts elsewhere when it is already facing significant cuts.

The Welsh Government have provided £1.3 million of extra money throughout Wales to help with the additional administrative burden, but what a waste of money. If housing benefit was paid, none of that would be necessary. Having gone through the process once, it will have to be repeated because the whole point of discretionary housing payment is that it is supposed to be a temporary measure, as the Government noted, to tide people over. However, if there is nowhere for them to move to, the process will be repeated.

The officer in charge of housing benefit for Monmouth and Torfaen, Richard Davies, summed up the situation when he said that administering the huge demand for help has dramatically increased council work load and dealing with discretionary housing payment

“applications is like dealing with a totally separate benefit scheme. It’s shifted everything from statutory to discretionary”

so

“it’s a huge burden of administration.”

--- Later in debate ---

[Nia Griffith]

Will the Minister give way?

[Steve Webb]

No. For example, when the Labour Government introduced the principle that private sector tenants with a spare room should have to pay for it, they did not describe the measure as a bedroom tax, so I do not see why a similar one for a social tenant should be.

Housing Benefit (Under-occupancy Penalty)

Debate between Steve Webb and Nia Griffith

Wednesday 27th February 2013 Commons Chamber

[Steve Webb]

It is astonishing that the hon. Lady should suggest that we are trying to get rid of social housing, given that we have built more affordable housing in the last year than was built, on average, over the preceding 10 years under Labour. That is an absurd suggestion. I entirely understand that the hon. Lady opposes everything—it is a kind of nihilism, which is fair enough—but her suggestion is not a credible option for a credible Government.

The research that we will undertake will include small-scale primary research involving a range of local authorities, social landlords and voluntary organisations in England, Scotland and Wales. The researchers will consider supply issues, rural effects—which were raised by my hon. Friend the Member for Argyll and Bute (Mr Reid)—and people who are unable to share rooms. When possible, they will also consider the effects on vulnerable individuals and their financial circumstances, social networks and family life. That was mentioned earlier as well.

[Nia Griffith (Llanelli) (Lab)]

Will the Minister give way?

[Steve Webb]

I hope to end my speech in a moment, but I shall be happy to give way to the hon. Lady.

[Nia Griffith]

If the Minister is so keen for people to receive discretionary payments, can he explain why the Government are taking to court a case in Wiltshire in which a disabled child is unable to share a room with a sibling? Why are they spending money on taking that case to court if they think that money should be given to such families?

[Steve Webb]

There is a limit to what I can say about cases that are currently in the courts. We have been given permission to appeal to the Supreme Court. We are, of course, applying the current Appeal Court ruling, and we have issued local authority guidance on how such cases should be dealt with. That case is very much in flux at present, and I do not want to say too much about it. However, let me make a general point that sums up what we are trying to achieve.

We are trying to tackle a massive structural deficit. The biggest two items of public spending are public sector pay and benefits. We have taken action on public sector pay, with little or no support from the Opposition. We have also had to take action on benefits. We have concentrated on working-age benefits because we have protected the state pension, and no Opposition Member has suggested that we should not have done that. We were trying to find £12 billion from public spending, and housing benefit is one of the biggest working-age benefits. We had tackled private sector housing benefit, and we had to look at the social sector. The most valuable way in which we can look at social sector housing benefit costs is to look at the million spare bedrooms that we currently subsidise, and to ask whether that subsidy is fair to the people who do not receive it.

These are difficult choices, but we have had to make them because of the mess that the Labour party left to us. I hope that the right hon. Member for Birmingham, Hodge Hill will begin with an apology.

Benefits Uprating

Debate between Steve Webb and Nia Griffith

Tuesday 6th December 2011 Commons Chamber

[Steve Webb]

I am grateful to the hon. Gentleman for welcoming our decisions on the DLA mobility component. Clearly, the decision on CPI was taken in a fiscal context. However, it came after RPI was negative and CPI was positive, so the immediate context was a year in which state earnings-related pension schemes and public sector pensions had all been frozen. I certainly could not believe that there had not been any inflation, and I am yet to meet a pensioner who could.

[Nia Griffith (Llanelli) (Lab)]

As we all understand, with rocketing fuel and food prices these rises are not as generous as they look. Has the Department assessed the impact of the £100 cut in the winter fuel allowance, combined with the fact that those on low incomes spend a lot of money on food and fuel? People will actually be worse off, particularly those with an income that puts them just above the bracket for claiming the cold weather payment.

[Steve Webb]

It was entirely right that we went ahead with Labour’s planned cut to the winter fuel payment. We reversed the cold weather payment cut to prioritise the most vulnerable when it is most cold. I make no apology for that. It was important to put the full 5.2% through for people with no wage because of the pressures on household fuel bills and other costs. That is why it was vital that we stood by the most vulnerable even though money was tight.

Post Office Card Account

Debate between Steve Webb and Nia Griffith

Tuesday 24th May 2011 Westminster Hall

[Steve Webb]

Before the hon. Gentleman seeks to intervene, I should say that, when I said the United Kingdom, I thought that I was including Northern Ireland.

There are a lot of common threads. Any community-minded constituency MP will echo much of what has been said this morning. My own constituency is a mixture of market towns and villages, most of which, notwithstanding the series of cuts over the past year, either have sub-post offices or, in some instances, have reopened them as community ventures—community shops, co-operatives and so on. I think that we all share that commitment to the post office network.

My hon. Friend the Member for Gloucester (Richard Graham) is absolutely right to say that, although money is tight, the Government should prioritise spending on the post office network. I encourage him to think about which Government Department identified £1.34 billion for the post office network, and about the other spending issues that that Department faced that raised some political issues. He will recall that there were other calls on the Department’s money, yet it prioritised the post office network, because we are about not just words, but deeds in relation to that. To be clear, in return for that £1.34 billion, Post Office Ltd must maintain a network of at least 11,500 branches and continue to adhere to the strict access criteria that mean that 99% of the population live within three miles of a post office.

[Nia Griffith]

Does the Minister agree that, under the previous Labour Government, it was £150 million per year and that that went up to £180 million per year in the last year in which we were responsible for setting the subsidy? That is half of what the present Government are giving to the post office network, and it was sufficient to keep open those 11,500 post offices. Why on earth has such a large amount of money been given to the Post Office when it would be far better to create the streams of business that make post offices viable and sustainable for good, so that they do not need that type of subsidy? I find it very difficult to understand why doubling the subsidy is the best way forward when making things viable would really be the best way forward.

[Steve Webb]

I could not have written that question better myself. Why is it necessary to double the subsidy to keep the post office network going on a viable basis? Because so little was done over the past 13 years to make the post office network sustainable. That is precisely why we have had to put temporary subsidy in while we get the Post Office back on its feet.

I shall quote from the Department for Business, Innovation and Skills document, “Securing the Post Office Network in the Digital Age.” On the very point that the hon. Lady raises, it states:

“Senior management at Post Office Ltd… estimate that without action and modernisation”—

how much of that happened?—

“keeping the network operating at its current size would result in the annual subsidy required from taxpayers rising from £150 million this year to £400 million by 2016—and would carry on climbing.”

That is the legacy. That is what would have happened had we done nothing. I sense, Mr Hollobone, that you are not a great PowerPoint fan, but it is at such moments I wish we could have a screen and slides because I would simply refer hon. Members to chart 3 of that document.

I will point that document in the direction of Opposition Members because it shows that the long-term gradual decline in the post office network is partly because of demographic trends—sub-postmasters retiring and not being replaced—and partly because, during the 13 years of a Labour Government, the number of post offices has fallen off a cliff. During the two closure programmes between 2003 and 2009, 5,000 branches were closed. People have stood in this place and in this Chamber for the past 13 years pleading loyalty to the post office network, yet those were the people who carried out two massive closure programmes.

[Nia Griffith]

Does the Minister not agree that the fundamental reason for the Post Office’s loss of business is the complete revolution in how we correspond with each other? Personal letters were of immense importance 20 years ago, but the growth of the internet and so on is clearly the main factor in the reduction in the amount of mail business going through post offices. That is the be-all and end-all and the real reason for the existence of many post offices, in addition to what Government business they can do.

[Steve Webb]

The reasons for the decline of the post office network are many and varied. When I go to my local village post office, I am told that eBay is keeping it going. The fact that people buy postage for parcels and so on brings a whole range of different customers into the post office network. One of the biggest trends, which was accelerated by the previous Government through direct payments, was people being paid via their bank accounts, rather than by traditional giros at post offices. That was one of the single biggest changes that accelerated the demise of the post office network. Opposition Members ought to take just a tiny bit of responsibility for the trends that we have seen.

On the Post Office card account specifically, the perspective of POCA users has been missing from the debate. The Post Office has recently published some startling research that it undertook on what POCA holders wanted from the account. The Post Office talked to 930 people and asked the following about the POCA:

“is there anything you would change about it, for instance any additional services you would like it to provide?”

Some 80% of respondents said “nothing.” I will return to that significant point. Some 80% of respondents did not want any changes to the account and they valued POCA for its particular characteristics, which we should think carefully about changing. The next most popular answer to that question had a 4% response rate. I shall read down the list of things people would change about POCA, which have a response rate of between 4% to 2%:

“deposit/cash cheques into it; more cashpoints; use any ATM; comments relating to PO service in general; more flexible like a debit card; interest on account balance; online account access.”

Hon. Members will have noticed that direct debit is not on that list. Some of these issues are counter-intuitive. I will not say that I like nothing better than to go online to use my bank account—which, I should just add, I access at the post office—but the folk who use POCA value it for what it is. As a number of hon. Members have said, we need to ensure that the people who have POCAs can benefit from things such as direct debit. However, that may not imply sticking things on to POCA.

Why might it be a good thing to provide access to those services but not to do so through changing the POCA? It is striking that many hon. Members have said that 30% of people with a POCA do not have another bank account. However, I tend to think of it the other way around. Some 70% of people with a POCA have a bank account or some other sort of account. So why do they have two? If they have a bank account with direct debits and all the rest of it, why do they bother having a POCA? Because people like to budget in different ways and they like a simple account that cannot go overdrawn.

Some of the evidence on charges is startling and worth repeating. I have been known occasionally to go overdrawn without planning to and I am shocked when I see the charges. The evidence of what happens shows that most people do not simply face one charge in a year. Once things have gone wrong, the charge is debited. People are then more overdrawn, they perhaps do not notice it and so another charge goes on. Just to give a feel of the situation, in 2008, out of 12.6 million active bank accounts, about a quarter incurred at least one penalty charge and the average charge was £205. Of that 2008 sample, a quarter of people had one charge, 15% had two charges and 39% had at least six charges.

Hon. Members can start to see why such an overdraft facility—there might also be a situation where someone had a POCA that could not go overdrawn but a direct debit bounced and somebody somewhere had to pay a charge for that—is not necessarily what people are asking for. People do not want to pay more because they are on a low income, so we need to find ways of giving them access to the best prices. However, grafting the ability to use direct debit on to an account that people like because of its simplicity may not necessarily be the best answer.

I absolutely stand by our coalition agreement commitment. The coalition programme for Government includes a pledge to give POCA holders the chance to benefit from direct debit discounts, but that should not necessarily be done by grafting direct debit on to POCA. We have listened to what the account holders are saying to us and our impression is, yes, people want the best prices they can have, but not necessarily by taking a product they value and turning it into something else.

That brings me on to the point my hon. Friend the Member for Truro and Falmouth made about the fully transactional account. One of the problems with the fully transactional POCA is that it would be so different from the product that was originally tendered, we would have to retender. The postcards will probably go to the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), but I have a feeling we might be going through it all over again. The comment rightly made by the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) was that there is uncertainty about the future. There always is. If we said that we need a full transactional POCA, so we are going to retender for it, I suspect that there would be riots on the streets of Kilmarnock.

We do not want more disruption and uncertainty. What we want—and as a Government what we are trying to do—is to work in partnership with the Post Office far more. Rather than those involved with running post offices being people to whom we do something, they should be in here as people we do something with. That is a profoundly different approach. The hon. Member for Leeds West (Rachel Reeves) talked about joined-up government and different Departments not damaging the Post Office. The Department that springs to mind is the Department for Transport. I renew my car tax each year at my village post office because, having talked to the sub-postmistress, I know it is one of the biggest transaction charges it gets. The Department for Transport would rather I did not do so. It sends me letters that say, “Do it online—you don’t have to go to your post office.” One year, it had a prize draw—or a raffle or lottery—in which I could win a free car.

The fact that Departments are not working in a co-ordinated way on the Post Office is not new. I work closely with the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton, and the Financial Secretary to the Treasury. The three of us have discussed financial inclusion issues, particularly credit unions. The post office network and credit unions could work together. There are exciting possibilities on that. One of the challenges is that, although credit unions are often very good and strong in a localised way, there are some very small credit unions and, in large parts of the country, if we asked someone on the high street where their nearest credit union is, they would not know what we were talking about. The potential for linking post offices and credit unions and access is very exciting, but it is also very expensive. That is the trade-off and the challenge.

We do not want credit union accounts with hefty charges because that would defeat the object of the exercise. We are wrestling with how to bring those two things together, but there are real opportunities for the post office network to build closer links with credit unions. In recent years, credit unions have made great progress in bringing affordable, financial services to people who would not otherwise be able to access them. I want credit unions, in partnership with the Post Office, to provide more services more efficiently to more people. That is what we want to see.

I was asked about the Post Office as the front office for Government. A number of Government Departments are looking at ways to do that, and I want to share briefly with the Chamber some measures that the DWP is taking. The hon. Member for Llanelli (Nia Griffith) mentioned George Thomson at the National Federation of Sub-Postmasters, who wrote to the Secretary of State. I am delighted to say that, in response to that letter, the Secretary of State had a face-to-face meeting with George Thomson. Several points that she read out, and which were on his list, are now being piloted in Government.

For example, a pilot for document verification started last week. The Pension Service, for which I am responsible, is piloting a check-and-send style service. That is for applicants who claim state pension or pension credit, and who are required to submit additional documents in support of their claims, such as birth or marriage certificates. Many people do not like sending their marriage or birth certificate in the post, so why not go into a post office and let post office staff check the documents, as they do when people renew their car tax? Post office staff could say, “Yes, that is fine; I have seen it. I am authorised to say that.” That would be quicker, and would give the Post Office revenue and footfall—everybody would be happy. That is not a—I do not think the word “piddling” is parliamentary—little pilot. Some 106 post office branches in the north-east of England are involved—a big pilot. It started last week and will run for three months in the Seaham pension centre catchment area. It will include a mix of Crown branches in urban, urban deprived and rural locations.

That is one concrete example; let me give the Chamber another. Later this year, we will be looking at a national insurance number pilot, which will investigate whether applications from what we call low-risk groups—EU citizens in states that are already members of the EU, not including the accession countries—could be directed to the Post Office for the evidence-gathering interview to get a national insurance number. Although the Post Office currently carries out document checking for the Driver and Vehicle Licensing Agency and the Identity and Passport Service, the DWP requires something qualitatively different. We are working closely with the Post Office to see if we can have an efficient but secure service, and hope to go live with the project later this year.

We want business in post offices, but we do not want dirty great queues. In other words, if I am queuing up to buy a stamp, I do not want someone in front of me trying to verify a national insurance number. We have to try to think of what post offices are good and efficient at, and harness that without disrupting the core business of the post office. That is why we are conducting these pilots.

The hon. Member for Llanelli mentioned signing on. In rural areas, getting to a jobcentre can be quite a trek, so why not sign on at the post office? At the moment, I was surprised to learn that customers in rural areas, intriguingly, sign on by post. The pilot will test whether there are benefits in requiring customers to attend and sign on in a local post office instead. We will evaluate that approach across a wide geographical spread and range of labour markets. We have identified test locations in Essex and in the highlands and islands—a range of areas.