Welfare and Pensions Update
Thérèse Coffey Excerpts(4 years, 5 months ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
I am announcing the proposed social security benefit and pension rates for 2020/21.
More than 10 million people in receipt of working-age benefits will see their payments increase at the rate of inflation next year.
Some 2.5 million people on universal credit and claimants on legacy benefits will receive a 1.7% rise in April. This includes people receiving jobseeker’s allowance (JSA), employment and support allowance (ESA), income support, housing benefit and universal credit.
The basic and new state pensions will increase at the highest rate for 8 years, by 3.9%, boosting the retirement incomes of 13 million people. Pensioners receiving the full new state pension will get an extra £344 a year. The basic state pension will increase by £263 a year.
The pension credit standard minimum guarantee for a couple will be £265.20 a week, the basic state pension will be £134.25 per week, the full rate of the new state pension will be £175.20 per week, and the universal credit standard allowance couple one or both over 25 will be £507.37 a month.
The annual up-rating of benefits will take place for state pensions and most other benefits in the first full week of the tax year. In 2020, this will be the week beginning 6 April.
A corresponding provision will be made in Northern Ireland and the Scottish Government will lay its own statutory instrument in respect of increases to carer’s allowance in Scotland.
The annual up-rating process takes into account a variety of measures:
The basic and new state pensions will be increased by the Government’s “triple lock” commitment, meaning that they will be up-rated in line with the highest of prices (CPI), earnings or 2.5%. Consequently, they will be up-rated by 3.9% (the May-July average weekly earnings figure).
The pension credit minimum guarantee will also be increased by earnings in line with legislation. The pension credit savings credit maximum amount will be increased in line with CPI (1.7%).
Benefits linked to the additional costs of disability, and for carers, are increased by the annual rise in prices (1.7%). A number of other elements—including non-dependent deductions—will also be up-rated in line with prices.
Working age benefits will be increased by CPI (1.7%) from April 2020. Those linked to child tax and working tax credits will be up-rated in line with those benefits.
Universal credit work allowances will be increased in line with CPI (1.7%) from April 2020.
The full list of proposed benefit and pension rates will be placed in the Libraries of both Houses in due course.
This will increase expenditure on social security benefit and pension rates by £5 billion. This includes £3.9 billion more to be spent on pensioner benefits. From April 2020 the yearly basic state pension will be worth over £1900 more in cash terms than in 2010. £1 billion more will also be spent on working-age benefits, ensuring that we continue to support the most vulnerable in society.
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Work of the Department
Thérèse Coffey Excerpts(4 years, 5 months ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
The Department for Work and Pensions is the UK’s biggest public service Department, supporting people into work and administering the state pension and a range of working age, disability and ill health benefits to around 20 million claimants and customers. The Department is carrying out a world-leading transformative welfare agenda, and has had great success in recent years, while the Health and Safety Executive continues to make the workplace safer.
Universal credit is the biggest change programme in Europe, and the UK is seen as a world leader in welfare. The roll out of universal credit is now complete and it is available in every Jobcentre across the country, with 94% of all claims paid in full and on time to 2.5 million people. This financial year we will spend over £95 billion on working age benefits and over £120 billion on benefits for pensioners, bringing the total welfare spending across Government this year up to £220 billion.
The Government believe that work is a pillar of a strong economy, and that work should always pay— according to the 2018 universal credit full claimant service survey, 85% of claimants believe getting and keeping a job is their number one priority—with 75% feeling that having almost any job is better than being on benefits. Overall satisfaction among claimants has remained consistently high over the last three years, with four out of five people satisfied with the support they have received when claiming universal credit.
The next phase of universal credit, “Move to UC”, will open up work, allowing people to increase their hours without the penalties they would normally be subject to under tax credits. As of 26 September 2019 we have made over 13,800 severe disability premium transitional payments, worth on average £2,280. This represents over 90% of expected backdated payments, totalling over £37.2 million.
Universal credit introduced a single taper system so payments reduce in a transparent and predictable way as earnings increase, making sure we support claimants in their transition into work. Additionally, when we complete moving legacy benefit claimants over to universal credit, an estimated 700,000 more people will get paid their full entitlement because of universal credit—getting on average an extra £285 per month.
As universal credit was rolled out, we made the taper more generous, reducing it to 63%, which means claimants can work more hours and keep more of their benefits. And again, in April this year, we increased the universal credit work allowance by £1,000 per year. This means that 2.4 million households will keep an extra £630 of income each year.
To support our claimants, we have introduced additional dedicated specialist work coaches, with training covering domestic abuse support, mental health, support for those with disabilities and health conditions, through to specialised local employment support.
Furthermore, we have made changes to support the most vulnerable, such as reducing the length of the maximum single sanction from three years to six months.
From October this year we reduced the normal maximum level of deductions in universal credit from 40% to 30% of the standard allowance; lowering this rate could see a couple keep up to an extra £600 over 12 months.
To support families and households, we announced the policy to support a maximum of two children would no longer be extended to apply to children born before 6 April 2017 in new claims to universal credit. We have also introduced more flexible childcare cost arrangements, as well increasing their worth from up to 70% to up to 85%.
Additionally, we provide alternative payment arrangements such as more frequent payment options and managed payments to landlords—we have created an online system for landlords to facilitate this. We also encourage payments to go to the main carer.
From April 2019, Citizens Advice have been delivering the new “Help to Claim” support service to claimants making a new claim for universal credit.
In 2012, we reformed the child maintenance system with the aim of increasing co-operation between separated parents to meet their financial responsibilities, as this produces the best outcomes for their children. The scheme promotes parental responsibility by encouraging clients to set-up a private family-based arrangement where appropriate—and removing the obligation to join the statutory scheme.
We introduced further enforcement powers at the end of 2018 to enable us to deduct child maintenance directly from a wider range of accounts, target complex earners via a calculation of notional income based on assets and to disqualify non-compliant parents from holding a UK passport.
In June 2019, the child maintenance service was managing 488,300 statutory child maintenance arrangements, covering 706,700 children.
The Government are committed to improving employment outcomes for disabled people and for those with long-term health conditions. We want to support employers to realise the benefits and insight that the huge pool of talented disabled people can bring to the workforce.
That is why we have committed to more than doubling the number of disability employment advisers in our Jobcentres to over 500 to provide specialist expertise to help disabled people enter employment. Alongside this, the Government are spending £55 billion a year on benefits to support disabled people and people with health conditions. That’s a record high and an increase of £10 billion in real terms since 2010.
In November 2017, “Improving Lives: The Future of Work, Health and Disability” set out the Government’s 10-year plan, including an ambition to see 1 million more disabled people in work by 2027.
Over the past six years, we have seen 1.15 million more disabled people in work, reaching a total of 4.1 million in the second quarter of 2019. This includes an increase of 404,000 over the first two years since the Government announced their 2027 goal.
We are working with employers through our disability confident scheme; over 14,000 employers have now signed up and all Government Departments are signed up to this scheme.
The Government have completed a consultation on their proposed reforms to statutory sick pay so that it will be better enforced, more flexible and cover the lowest paid employees for the first time.
The Health and Safety Executive continues to make the workplace safer. It has clarified guidance on health and safety regulations to improve employer understanding of the need to consider mental health alongside physical health when undertaking a first aid needs assessment. The UK continues to rate as one of the safest countries in Europe in terms of fatal injury and to perform well against EU countries on a range of other health and safety indicators
Personal independence payment (PIP) is a more modern, dynamic and fairer benefit than the predecessor, disability living allowance. PIP focuses support on those experiencing the greatest barriers to living independently. The number of working-age people now receiving support from PIP and DLA is up by over 257,000 since PIP was introduced in 2013 and, crucially, a higher proportion of the over 2.2 million people on PIP receive the top rate of benefit than on DLA—31% compared to 15%. Claimants are also receiving their benefits sooner—the average time taken to process claims is down by over 60% since July 2014 for new claimants.
We have reduced the number of assessments for those receiving the highest level of support, where needs will not improve, as well as for people over the state pension age. Up to 325,000 pensioners will benefit from the change to ensure that pensioners will receive ongoing PIP awards with a light touch review at the 10-year point.
The Government’s pensions agenda will provide more security and safety to pensioners in retirement, tackle reckless behaviour from employers on people’s pensions and help more pensioners than ever before to plan for their retirement. In 2019-20 alone, the Government expect to spend over £120 billion on benefits for pensioners—this includes £99 billion of expenditure on the state pension.
Since 2012, 10 million workers have automatically enrolled into a workplace pension thanks to automatic enrolment. This policy alone has helped to reverse a decade of decline in savings and, as of 2019-20, an estimated extra £18.6 billion a year will go into workplace pensions.
We are building on the success of auto-enrolment, looking to make it easier for self-employed people to save. In December 2018 the Government published a report setting out their delivery plan for research and trials to identify the most effective options to increase pension savings among the 4.9 million self-employed workers and we will carry out these trials throughout 2019 to 2021.
The Government introduced the triple lock and, accordingly, the full yearly amount of the basic state pension is around £675 higher than if it had just been up-rated by earnings since April 2010. This is a rise of over £1,600 in cash terms.
Pioneering work has been undertaken to help more people prepare for retirement than ever before. Pensions dashboards—digital interfaces that will allow people to see online what they have in their various pensions, including their state pension—will put individuals in control of their data; they will, for the first time, provide clear and simple information regarding pension savings in one place online and help people reconnect with “lost” pensions pots.
The Government are also tackling reckless behaviour of employers that would strip people of their hard earned retirement funds. In February 2019 we announced measures to reduce irresponsible conduct from employers by extending the pension regulator’s powers, including the power to send business owners to jail.
Recognising that climate change is a defining national and international emergency, we have introduced three key measures to ensure that pension schemes understand their responsibilities in responding to it. Since January 2019, those running single employer occupational pension schemes are required to establish an effective system of governance, including consideration of environmental, social and governance factors related to investment assets in investment decisions; and schemes with 100 or more members must carry out and document a risk assessment of their system of governance including risks relating to climate change.
Furthermore, as of 1 October, trustees of occupational pension schemes must state their policy on how they take account of the financial risks of climate change when developing their investment strategies.
The Government are committed to ensuring that people have access to the information and guidance they need to make effective financial decisions throughout their lives. The Financial Guidance and Claims Act 2018 has brought together the services provided by Pension Wise, the Pensions Advisory Service and the Money Advice Service into a single organisation.
We have promoted long-term savings and pensions products, including the lifetime individual savings account, to encourage and incentivise more people to make provision for long-term needs, including a house purchase and retirement. We are encouraging working people to save for a workplace pension by helping to protect their savings and monitoring the products, charges, and processes adopted by pension schemes. We are also giving individuals the confidence to save and access their pension pots by providing more guidance and support on pensions through the establishment of the Money and Pensions Service which is delivering free and impartial money and pension guidance, along with debt advice.
We will continue to engage across Government to ensure that we are aligned with the industrial strategy, supporting the flexible working task force, and the careers strategy and the national retraining scheme—ensuring that skills provision meets the needs of an ageing demographic. We have introduced older claimant champions into all 34 Jobcentre Plus districts. We will also continue to work with employers through our business champion for older workers and the local enterprise partnerships. We will ensure there are provisions for older returners to the workplace by working with Government Equalities Office and HM Treasury, and are engaging with businesses to understand their concerns in line with changes to the ageing demographic of the workforce.
We have also been supporting everyone who can, and wants to work, to continue to work. Initiatives such as the fuller working lives strategy have led to more people aged 50-64 in employment than ever before. In addition to our legislative reforms such as removing the default retirement age and extending the right to request flexible working, we are supporting employers to recruit, re-train and retain older workers.
Our record on employment is strong, and the number of people in work is up by over 3.6 million since 2010—a near-record high. The employment rate, at 75.9%, is also at a near-record high, with 1,000 more people moving into work on average every day since 2010.
Through our new enterprise allowance (NEA) scheme, we have supported 209,000 claimants to create over 130,000 businesses since 2011. On average, we have helped to launch 203 businesses by unemployed benefit claimants, every week since 2017.
UK nationals make up around 90% of all people in work and have accounted for 66% of the rise in employment over the last nine years. Additionally, over 60% of the growth in employment since 2010 has been outside London and the south-east. There are now more than 1 million fewer workless households than in 2010 and 730,000 fewer children living in a household where no one works.
Since 2010, over 75% of the growth in employment has been in full time work and employment, and employment high-skilled occupations has risen by over 2.9 million.
There are over 1.8 million more women in work since 2010, and the female unemployment rate is at 3.7%—a near record low; the black Asian and minority ethnic employment rate has reached 66.2%—a near record high—up 7.4% since 2010; and, the youth unemployment level has almost halved since 2010, to a near record low—falling by more than 130 on average every day. Furthermore, wages have been growing for 19 consecutive months.
We are providing targeted support for young people between the ages of 18 and 24 to get into employment, through the youth obligation support programme (YOSP), as well as other specialised support within Jobcentres for young people.
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Oral Answers to Questions
Thérèse Coffey Excerpts(4 years, 6 months ago)
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Lisa Forbes (Peterborough) (Lab)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
Universal credit payment timeliness continues to improve and is near a record high, with the most recent data showing we paid 83% of new claims in full and on time.
Tom Brake
Can I thank the Secretary of State for saving herself to answer my question? I welcome that. She will know that the five-week delay is still causing huge harm, so could I ask her what effort the DWP is making to ensure that UC recipients are not penalised by other organisations for the five-week gap in their incomes, and what extra support can the Government give to organisations that support universal credit recipients with financial management during this very difficult period?
Dr Coffey
It is important to recognise the help to claim—I think it is £39 million of support—that has been given through the citizens advice bureaux to try to help people who may not always be there with the paperwork that is required, so we are making best efforts so that people can make the right claims so they can be paid on time. As regards other elements, of course the advance is available, which can then be repaid over a 12-month period.
Lisa Forbes
With former Thomas Cook employees being offered food bank vouchers by the Department for Work and Pensions and the Trussell Trust in Peterborough reporting a 50% increase in the number of food parcels given to my constituents in the last year alone, can the Secretary of State tell us what impact she thinks the collapse of Thomas Cook will have on these figures?
Dr Coffey
The hon. Lady was at our first taskforce, and I am sure she will be impressed with the work that we have already been doing together, including the jobs fair that happened last Thursday. It is important, and we have seen this with Thomas Cook ex-employees, that they make a universal credit claim quickly—some of them have —so they can get the support that they need. I welcome, actually, the support that is given through the Trussell Trust in order to help people in this difficult time, but the sooner people come into Jobcentre Plus and start claiming universal credit, the sooner we can help.
Margaret Greenwood (Wirral West) (Lab)
Without giving this House a debate or a vote, as they had promised, the Government have pushed through regulations for the pilot of universal credit managed migration and payments to severely disabled people who lost out in being forced to transfer to universal credit. Will the Government explain why those payments still do not fully reflect the financial loss those disabled people have suffered?
Dr Coffey
There is an extra £600 million of support going to the most vulnerable. I really do want to encourage the Opposition to withdraw their early-day motion, because if they succeed in praying against this, they are hitting the most vulnerable people, and I am sure that is not something that they wish to be remembered for.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
The Department’s resource budget will increase by 1.9% ahead of inflation for the first time since 2011, enabling us to provide excellent customer service, help people move into and progress in work, and provide financial security through timely benefit payments. As part of this, the DWP has been allocated £106 million to support vulnerable people and help to tackle private rented sector housing affordability through additional funding for discretionary housing payments.
Alan Brown
The Joseph Rowntree Foundation has highlighted that, with more social housing and lower housing costs, Scotland’s poverty figures are lower than the rest of the UK. The reality is that the biggest poverty factor is still Tory austerity. The Institute for Fiscal Studies has estimated that recent announcements will only mitigate a quarter of the cuts implemented since 2010. It is clear from the Secretary of State’s answer that a 1.9% increase is not enough. If austerity is really ending, when will the other three quarters of the cuts that have been implemented be reversed?
Dr Coffey
The hon. Gentleman will be aware that the Government have lifted 400,000 people out of absolute poverty since 2010 and that income inequality has fallen. I encourage the hon. Gentleman to go back to the Scottish Government and see what more they are doing to increase the number of higher paid jobs, because we all know that the best way out of poverty is to work.
Marion Fellows
On this subject yet again, the spending round did nothing to address the cuts to the local housing allowance and the pressures on private renters, who are £38.49 a week worse off due to the UK Government’s benefits freeze. To ensure affordability and prevent evictions and hardship, will the Secretary of State immediately increase the LHA to the pre-2010 level, and uprate it in line with inflation and rent increases?
Dr Coffey
I have just laid out that we increased the amount of money for discretionary housing payments. I have spoken to Shirley-Anne Somerville, the Scottish Minister, and it is my intention to see her soon, but the hon. Lady knows there are things the Scottish Government can do with the funding they have.
Steve Double (St Austell and Newquay) (Con)
Grahame Morris (Easington) (Lab)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
It is a pleasure to be in the Chamber as Secretary of State for Work and Pensions, leading a fantastic Department that serves people from the Shetlands to the Scilly Isles, with more than 20 million customers across the country. In my short time in this role, I have already witnessed at first hand the inspiring and incredible work of civil servants throughout the country, and they are benefiting as well in seeing our employment rate continuing at a joint record high and an unemployment rate at its lowest since the ’70s. There is more to do, however, and I will keep focusing on improving the payment of universal credit and ensuring that we support everyone in society.
Grahame Morris
I am grateful for the Secretary of State’s sunny disposition in outlining her priorities, but the retirement plans of millions of women born in the 1950s are in ruins because of a decision by the previous Conservative-Lib Dem coalition Government to accelerate the increases in the state pension age. Last week, a decision in the High Court made it clear that only a political decision could deliver a just solution for these women, so will the Government now give the WASPI women dignity in retirement? Some 197 MPs have signed early-day motion 63 calling for justice for the WASPI women and for this historic injustice to be put right.
Dr Coffey
The High Court set out quite clearly that successive Governments had taken a measured approach in recognising the inequality in the state pension age and the need to increase the state pension age. Indeed, it was the Pensions Act 2007 that started the trigger going beyond 65. It is important to recognise that and the efforts made to communicate it, but I can assure the House that, as the hon. Gentleman will be aware, there are record numbers of women in employment. We will continue to support them in fulfilling their careers.
Steve Double (St Austell and Newquay) (Con)
Dr Coffey
My hon. Friend is right to praise the people who work for the DWP in his constituency. We have more than 4,000 civil servants in service centres nationally and we constantly monitor the volume of work as universal credit grows, but I assure him that sufficient resources will be in place to support those workers in his constituency.
Dr Sarah Wollaston (Totnes) (LD)
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Peter Heaton-Jones (North Devon) (Con)
On Friday, I visited the new Barnstaple Work Club, a fantastic initiative giving support to those seeking employment, particularly those with disabilities. Will the Minister join me in welcoming this new initiative and in thanking the volunteers as well as Barnstaple library for hosting it?
Toby Perkins (Chesterfield) (Lab)
Dr Coffey
That is simply not the case. The first time that I became involved with a food bank was in 2006, when people were falling between the gaps. One of the things that make me proudest of the Conservative Government and the coalition is that people are better off in work than out of it unless they cannot work, and we have championed the vulnerable. Universal credit is ensuring that people can have more and more income, and I should have thought that the hon. Gentleman would welcome that.
Kate Green (Stretford and Urmston) (Lab)
Tom Brake (Carshalton and Wallington) (LD)
Dr Coffey
The right hon. Gentleman will know that we are still in the middle of a negotiation for how we leave the European Union at the end of the month. It is important to stress that we have decided on a three-year rise unilaterally. We encourage other European Union countries to do exactly the same and we will continue to support those who have relied on UK pensions.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
People with a terminal illness want the choice of whether to work or not, and they should expect help and support from their employer. Does the Minister support the TUC’s Dying to Work campaign, which asks businesses to sign up and promise not to sack employees who have a terminal illness, and will she encourage more businesses to sign it?
Christine Jardine
Further to the points already raised by other hon. Members, there are 6,500 women in Edinburgh West who were born in the 1950s and who have been affected by last week’s Court judgment. Can the Secretary of State assure me that, in the meeting that she has agreed to with the chairs of the APPG, there will be a meaningful attempt to address the poverty that these women face and not just sweep it under the carpet like an inconvenient problem?
Dr Coffey
I refer the hon. Lady to the judgment that the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), has already raised. She might also wish to speak to her party leader, because she joined me in the Division Lobby when we made the changes that we did in the Pensions Act 2011. [Interruption.] Or rather, at least that the coalition Government did. I wish to make sure that we have a sensible conversation going forward, but the judgment stands. It is open for the ladies to appeal, but I can assure the House that we have made every effort, as did the Labour Government before us, to ensure that people knew about these changes.
Labour Market Update
Thérèse Coffey Excerpts(4 years, 6 months ago)
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The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
Latest data released in September shows UK employment has increased by 3.7 million since 2010. Around three-quarters of that increase in employment has come from full-time, permanent and higher-skilled roles. Youth unemployment has also halved since 2010, meaning more young people are in work and the number of children growing up in in workless households is at an all-time low.
It is important that we continue to build on this progress so I am introducing a £4 million package, including two new initiatives, to help disadvantaged young people into work and use mobile technology to help jobseekers into higher-paid jobs.
Additional funding of up to £1.2 million will provide extra support in Manchester and the west midlands, ensuring extra time and resources for young people facing the biggest hurdles to getting a job, like care leavers and young offenders.
Since 2018 the Department for Work and Pensions has worked with the West Midlands Combined Authority to develop the youth employability coaches concept (previously known as progression coaches). Following this successful pilot, we will be expanding the programme to other parts of the west midlands and Greater Manchester area to reach more disadvantaged young people. Youth employability coaches will continue to support young people for up to six weeks after they start a job, helping them continue to build skills and stay in employment.
A new data service will also be piloted, initially in Manchester, with up to £2.8 million funding. Using the latest data-analysis technology, this service will gather a range of skills and labour market data from a variety of public and commercial sources.
It will provide local areas with high-quality and real-time information on skills supply and demand. Additionally, jobseekers or those seeking to progress in work will be able to search for roles based on their skills and experience. The pilot service will show them what new skills they need to move into higher-paid roles available near them. By providing more tailored local labour market intelligence we can help individuals find jobs, back businesses, grow our economy and help people reach their full potential.
Both pilots have the potential to be rolled out nationally, helping reduce youth unemployment even further after it fell 48% since 2010, and helping more people boost their earnings.
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Quality Workplace Pensions
Thérèse Coffey Excerpts(10 years, 1 month ago)
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Steve Webb
I understand why the hon. Gentleman wants to talk about energy and income tax rather than pensions: he has nothing to say on the pensions announcement.
The hon. Gentleman said that we have adopted Labour’s policy. I thought he might say that, so I thought I would have a little look at what Labour’s policy was. The first evidence we have is their record in office, when they had 13 years to cap charges and did precisely nothing. But we do have more recent evidence—he mentioned the leader of the Labour party and his views on the subject, so I have a done a bit of research. Clearly, The Guardian was briefed by Labour, and the leader of the Labour party called it an “all-out attack” on rip-off pension charges, so that is good. Patrick Wintour said in September 2012:
“Ed Miliband will promise to end rip-offs in the pensions industry”—
that is good, is it not?
—by putting a 1% cap on pension charges”.
I wonder whether he has moved a bit because he saw what we were doing. I get a slight sense that might be the case.
The hon. Gentleman asked about the timetable. Our consultation document made it clear that every scheme would have a cap in place by April 2015. We are today delivering on that timetable. [Interruption.] The hon. Member for Leeds West (Rachel Reeves) says, “What about April 2014?” If they are seriously suggesting that we should apply a charge cap with a few days’ notice, it shows how little they understand about how employers work and how the pensions industry works. Unless they are calling for us to announce a cap at a few days’ notice, which would be pretty irresponsible, we are delivering on the timetable that we set out.
The hon. Gentleman asked me some specific questions. The independent governance committees will have to be in place by April 2015, but the Association of British Insurers and the Office of Fair Trading have agreed that they will put them in place before that date. The legal requirement is April 2015, but we expect to see them in place before that.
The hon. Gentleman asked who the costs have to be revealed to. The trustees or the independent governance committees, who will act on behalf of the members and will have the technical expertise to understand all the detail, get the information, but they will form a judgment about the format in which they pass it on to scheme members. Scheme members need to understand about charges, but probably not in the full gory detail that trustees and governance committees would. The point is that for the first time there will be people in every pension scheme acting on behalf of the scheme member, and that is a radical step forward.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I welcome the statement, which is good news for the savers of Suffolk Coastal. Will my hon. Friend say a little more about how he is tackling the unfair active member discounts in workplace pension schemes?
Steve Webb
I certain will, and it was very much the savers of Suffolk Coastal we had in mind. Active member discounts have been going on far too long. They are one of the hidden charges, and people are ignorant enough already of the charges in their pension schemes, through no fault of their own, even when they are active members, but when they move on to a new firm and a new scheme they probably have no clue what the charges are in the scheme they have left. Therefore, from April 2015 even schemes that retain active member discounts will be unable to go above 0.75%, which will stop many of them, and by April 2016 they will have to have been worked out of the system altogether.
Pensions Strategy
Thérèse Coffey Excerpts(10 years, 1 month ago)
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Steve Webb
As the hon. Lady knows, there are redress mechanisms for people who receive poor quality independent financial advice. It is a regulated process. [Interruption.] I cannot hear what she is shouting at me. When there is a process of regulated advice, there are compensation mechanisms, which is right and as it should be.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I have to thank my hon. Friend because the statement and what was announced in the Budget yesterday take pensions to a whole new level. Now we have the single-tier state pension, we can free people to make their retirement decisions. Frankly, the Opposition do not seem to recognise the issues that people on defined contribution schemes have had or how annuities have fallen, so I really welcome what he has said today. In particular, will he tell us a bit more about when pensioner bonds will come into effect?
Steve Webb
Certainly. My understanding is that National Savings and Investments will bring forward pensioner bonds next January. The Chancellor has indicated that the gross interest rate will be about 2.8% for a one-year bond and about 4% for a three-year bond, but that will be reviewed later in the year. It depends on market movements between now and then, but it is designed to be a market-leading rate to recognise that people who have worked hard and saved hard should get a decent return on their money.
Oral Answers to Questions
Thérèse Coffey Excerpts(10 years, 2 months ago)
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Mr Vaizey
We are putting £500 million into broadband. As my right hon. Friend the Secretary of State pointed out in her answer to the Opposition spokesman, Labour councillors up and down the country are applauding our fantastic work. I am sure the hon. Gentleman would want to join them in applauding us on how quickly the roll-out programme is going.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
9. Whether she has reviewed the provisions of the National Lottery Act 1993.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
The Government most recently amended the National Lottery Act 1993 in 2010 to restore the lottery shares for arts, sports and heritage good causes to 20%, reversing Labour’s cuts. Together with strong lottery ticket sales, the change has meant that funding for those areas has risen significantly since the beginning of the Parliament.
Dr Coffey
I welcome the 2010 changes, but will the Minister also consider the Culture, Media and Sport Committee report from a couple of years ago? The health lottery effectively markets itself as a national lottery, yet it does not give the same proportion of money to good causes or of tax to the Government. Will he look at the situation again? It desperately needs changing for the benefit of all.
Mr Vaizey
I hear what my hon. Friend says. Hon. Members agree that society lotteries play an important and successful role in raising money for local charities, whereas the national lottery serves a different purpose. The erosion of the distinction between society lotteries and commercial gambling makes it clear that any consultation on society lotteries would need to be more wide ranging. We have therefore asked the Gambling Commission to advise us on how the national lottery, society lotteries and commercial gambling markets interact. We will assess that advice and, if necessary, frame a consultation document.
Mr Vaizey
Statistics can be used in many ways. If one looks at the funding per visitor to visitor attractions, one sees that the funding for London is very low. Manchester and the north-west have many thriving cultural institutions including the Manchester Camerata, which is ably led by its chairman Bob Riley. He is doing so much to promote philanthropy and is getting the Manchester Camerata to work with schools and health services, which I am sure the hon. Lady knows about.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
T5. One of my favourite bands is Muse. When I recently Googled “Muse MP3 download”, nine of the 10 sites listed were illegal. Is there something more that my right hon. Friend can do to encourage companies such as Google and Yahoo to remove those illegal sites from their listings?
Maria Miller
I share my hon. Friend’s concern about sites that contain illegal material, and I raised that directly with Google when I visited it last year. The Government are acting decisively, particularly with the police IP crime unit, to remove payment facilities from illegal sites and to prevent advertising from appearing. We think more can be done and we will continue to press Google to play a full role.
Oral Answers to Questions
Thérèse Coffey Excerpts(10 years, 3 months ago)
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Chris Heaton-Harris (Daventry) (Con)
9. What assessment he has made of recent trends in the award of discretionary housing payments.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
13. What assessment he has made of recent trends in the award of discretionary housing payments.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Figures published in December show that in the first half of the financial year 2013-14 the average committed spend by local authorities was 40% of their allocated budget. Against those who had said that they were overspending, in fact it turns out that the vast majority are not.
Mr Duncan Smith
Yes, I can. The reality, as my hon. Friend says, is that last year about £11 million in underspends was returned to the Department. It is interesting to note the claims made by some in this House. The hon. Member for Manchester Central (Lucy Powell) said that the money in her area was fast running out. It turns out that, at the six-month cut, only 28% of discretionary housing payment has actually been used. In Nottingham South, only 33% has been used. The hon. Member for Birmingham, Erdington (Jack Dromey) said that too much had been spent in Birmingham, Erdington, but only 47% has been used. Discretionary housing payments are there to be used to help those in the most difficult circumstances. Councils should get on and use them.
Dr Thérèse Coffey
My right hon. Friend may not be aware that Suffolk Coastal has used 60% of its budget after nine months and Waveney has used half its budget. Does he agree that that shows that discretionary budgets are working and that it is wrong to try to make political capital out of potentially very difficult human circumstances?
Mr Duncan Smith
It does. The reality is that about 71% have spent less than half of their discretionary budgets by the half-way cut of the year, and politicians should always be careful about using individual cases and making political capital out of what are often human tragedies.
Housing Benefit
Thérèse Coffey Excerpts(10 years, 5 months ago)
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Dr Thérèse Coffey (Suffolk Coastal) (Con)
It is a pleasure to speak in this debate, opposing the main motion but supporting the amendment in the name of my right hon. Friends. It is also a pleasure to follow the hon. Member for Aberdeen South (Dame Anne Begg), the Chairman of the Work and Pensions Committee. We might disagree on elements of the policy, but I appreciate that she holds her opinions very strongly.
Government Members are keen to create a fair housing market. It is astonishing to hear Opposition Members talk of the criteria, given that they voted for them with the introduction of the local housing allowance. The hon. Member for Stoke-on-Trent South (Robert Flello) talked about divorced families, but that situation happened before and still happens now. Why should those in the private sector or people who own their own homes be treated differently? I recognise the point about the retrospective nature of the policy, but the Government are trying to fix problems left unfixed by the last Government, and although some of these necessary changes might seem difficult, overall fairness is what truly matters.
Wayne David (Caerphilly) (Lab)
What would the hon. Lady say to Mr and Mrs Goodwin of Caerphilly borough, both of whom are registered blind, yet have to pay the bedroom tax? Where is the fairness there?
Dr Coffey
I do not know the details of the hon. Gentleman’s case, but I am sure that he is taking it up with his local council. Rather than responding to individual cases, however, I would prefer to stick to the principle of why we believe this to be fair and right. I will come to my reasons in a moment.
On social housing, as the Minister said, it would be wrong to expect thousands of homes to sit empty waiting for people to move in. I took up such a case in my own constituency recently. The local council said that it was not getting as much new homes bonus as it had expected, and I wondered whether that was because Suffolk, thought to be prosperous, was missing out. We looked into it and discovered that 120 of the homes sitting empty belonged to the local housing association. I found that extraordinary. So we brought the association in to find out what was being done to maximise the use of those houses—whether they were one, two or three-bedroom homes. Not only will Flagship have to pay more money council tax, if those homes are not used, because we have allowed councils to charge 100% for empty homes after a certain time, but maximising their use would help the council to keep more of its new homes bonus.
Of course, the market can operate in social housing, as has been eloquently explained, via house swapping. I understand that 392 house swaps have been arranged in north Kensington, compared to only nine in Doncaster. It is incumbent on Members to work with their councils to understand what they are doing to facilitate house swapping. From what I learned this morning, my own area is not doing enough, and I will pursue that matter in the future.
Sheila Gilmore
The problem is that the hon. Lady and her Front-Bench team do not seem to know what the policy is for. We hear that it might be about making savings, but if everyone slots into the right-sized house—according to the Government’s criteria, which I do not necessarily accept—there will be no saving. Is it about making savings or making better use of properties? If it is about making better use of properties, there are lots of better ways to do it.
Dr Coffey
The beauty of Government Members is that we think we can achieve both. We believe we can save the taxpayer money and put it towards the affordable homes programme. Our estimate—I appreciate that it is only an estimate and that we will have to wait and see—is that it will save £500 million a year. Meanwhile, we have set aside £4.5 billion for the affordable homes programme to build houses in this Parliament and are already arranging the programme for the next Parliament.
Dr Coffey
I will not give way. I have given way already and lots of people want to speak.
With this policy, we are trying to achieve multiple aims, by making better use of the housing stock and working to get more housing built. It is worth noting that Labour voted against the Growth and Infrastructure Act 2013, which is one of the things that we introduced to unblock housing developments.
The hon. Member for Aberdeen South and the Minister mentioned adaptations for disabled people. More than a quarter of my constituents are over 65, so hon. Members will not be surprised to learn that my constituency has a fair number of adapted houses and flats. It is appropriate that local councils should make an assessment and decide whether it is better for someone to stay in their home, rather than having to redo the adaptation somewhere else. I understand the point that the Minister made about this. If a wet room needed to be recreated, for example, there might well be merit in deciding that instead of someone having a three-bedroom house with a wet room, they should move to a one or two-bedroom apartment, as appropriate. We are saying to councils and housing associations that, instead of Whitehall setting those criteria, they should look after their housing stock together and ensure that people’s needs are met.
Listening to the stories that have come out today—I appreciate that they are personal stories about what people are experiencing—anyone would think that we in government had done nothing about this. However, we have allowed councils to retain the underspend in discretionary housing payments from previous years, and we have put in extra money for those payments. It is not as though we are sitting on our hands and doing nothing.
The last sentence of the Labour motion talks about using
“the funding set aside for discretionary housing payments to deal with under-occupation by funding local authorities so that they are better able to help people with the cost of moving to suitable accommodation.”
In an answer to a parliamentary question, the Minister has told me that a £20 million fund was set aside for new ideas for councils working together. At that time, only five councils had applied for that funding, and I would encourage our colleagues to speak to their councillors about that.
The hon. Member for Islington South and Finsbury (Emily Thornberry) talked about pensioners. There might be some people who can work an extra three hours to capture that extra £14 a week. [Hon. Members: “What?”] The Government are fixing the problems of the past. This debate reinforces the fact that we in government want to fix the problems, and that Labour remains the party of welfare.
Mr David Crausby (Bolton North East) (Lab)
I intend to use the term “bedroom tax” today and not “under-occupancy penalty” or “single room subsidy”. If that offends anyone, I can assure them they will not be anywhere near as offended as thousands of my constituents have been by this repulsive Government attack on disadvantaged and disabled people. The conflict surrounding the description of this despicable act reminds me of Margaret Thatcher’s attempt to force the term “community charge” down the throats of the British people. Not surprisingly, she failed, and history damned it as the poll tax. The same fate awaits the single room subsidy.
The policy itself will also fail because, like the poll tax, it is based on mean-mindedness and political dogma. It will be also rejected by Conservative and Liberal leaderships yet to come, and once it has gone—as it will do after the next election—it will be disowned. Even as Margaret Thatcher was being driven away from Downing street in tears, John Major was planning to ditch the poll tax. He had remembered what Mrs Thatcher had clearly forgotten: that, regardless of how big someone gets for their boots, if they want to win elections and stay in power they should keep in touch with public opinion. They should also bear in mind that our electorate are, I am proud to say, for the most part decent and fair-minded people who know a pig in a poke when they see one. John Major understood that, which is why he went on to win the next election in 1992.
Prime Ministers have their albatrosses, however: John Major’s was the exchange rate mechanism; Margaret Thatcher’s was the poll tax; Tony Blair’s was Iraq; and Jim Callaghan’s was the winter of discontent. The bedroom tax will belong to the present incumbent. As with the ancient mariner, it will hang round his neck in shame.
Dr Coffey
The hon. Gentleman might wish to check the recent opinion polls. We would appreciate it if he were more consistent about changing the rules for people on local housing allowance. If they were so bad for private sector rented flats, why is the situation so different for the public sector?
Mr Crausby
I do not think that my political principles have changed, to be perfectly honest. I would have put forward these same arguments prior to the election as well.
On a more serious point, nearly 2,500 people back home in Bolton have been affected, and more than 75% of them have fallen into arrears since April—so much for this being a money-saving measure.
Ms Buck
My hon. Friend is right. We are already seeing some of the impacts of this and other housing and welfare policies impacting detrimentally on seaside towns, in the same way as happened in the 1980s and 1990s. But the fact is that this policy simply cannot achieve the objective of tackling overcrowding because the larger properties are in the wrong place, and the numbers demonstrate that. It will work only if people do something that they do not want to do, which is to leave their homes, communities, networks, grandchildren, and families—to leave the people for whom they provide care.
That is also why those Government Members who have repeatedly made the argument that the Labour Government introduced a local housing allowance that applied a restriction on bedrooms in the private sector are so fundamentally wrong. A third of all private tenants across the country have lived in their homes for less than a year. Whether we like it or not, and whatever changes we might want to make to it, the private rented sector is highly mobile. Some 40% of all social tenants have lived in their homes for 10 years or more.
People went into a social property believing that it was a home for life. They believed that they would be able to bring up children, look after elderly relatives, care for people, live in their communities and contribute to them because they had a home there. That has now been removed, and it has been removed—this is the absolute cruelty of the bedroom tax—retrospectively. The situation simply cannot be compared with the private rented sector, because people in that sector move around much more and they are not impacted retrospectively.
Dr Coffey
I agree with the hon. Lady that this is retrospective, unlike her point about local housing allowance, but the principle is the same, although it might not have been applied retrospectively when it was introduced by the previous Government. On her point about private mobility, it is we on the Government Benches who are trying to help people buy their homes.
Ms Buck
There is no attempt to do anything of the kind, otherwise people would be looking at longer-term tenancies and introducing that. The fact is that there is no principle in this. The principle of a tax being retrospective, as it is in this case, is the only principle that matters.
Even within the Conservative-led London borough of Westminster, which has a serious overcrowding problem, people are still unable to move. They are unable to move within the borough, let alone to Liverpool or Wales. Of the 405 families affected—it is a small number, because London is not the most affected by the bedroom tax—only 40 have been able to move. Half of them are in arrears and half of them are disabled.
I will conclude my remarks by referring to one of the many difficult cases that have been brought to my attention. A gentleman e-mailed me at the weekend. He wrote:
“I’m a 50-year-old single man living in a two-bedroom flat and have been hit by the so-called Bedroom Tax. I’m on employment support allowance and have been suffering from Chronic Depression and Anxiety for several years now and I’m now finding these latest attacks on the weakest and most vulnerable in society very difficult to deal with. I have little money and now find my rent arrears total nearly £800 as a result of the Bedroom Tax. I’m continuing to pay the previous level of rent, but the council have now sent me a letter saying that the next step will be to serve me with a Notice of Seeking Possession if I don’t pay the arrears in full. I simply can’t do this.
I’m loth to downsize for several reasons. My main reason is that I’ve lived at my present address for over 29 years and there is a lot of sentimentality connected with my home… because I lived here with my brother, who sadly passed away… This is my last link to him and I really couldn’t envisage living anywhere else. I’m feeling increasingly fatalistic and helpless and my thoughts are turning more and more to ending my life, which is something I’ve successfully avoided since my brother’s death. This latest setback just seems so insurmountable and there really doesn’t seem to be any sympathy or understanding… I no longer have anywhere to turn.”
He asked me to vote against the bedroom tax this afternoon, and I will be very proud to honour an obligation to him by doing so.
Remploy
Thérèse Coffey Excerpts(10 years, 9 months ago)
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Esther McVey
The hon. Gentleman makes a good point. We are looking at that, at what we can do and at the best way forward. That is why we have a brand new, two-year specialist disability employment strategy, which will start later in July, to see what is the best support we can give to those people.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Could my hon. Friend confirm for people in Norwich what kind of support package they will have? She mentioned something about access to personal budgets and similar support.
Esther McVey
My hon. Friend asks a good question: what support do we offer and how do we provide that support? It is tailored to what the person needs, whether it is help with CVs or extra training, or support into the workplace. Therefore, it is dictated not by me but by the person who is coming forward who needs that help.