Pensions Bill [Lords]

Jenny Willott Excerpts

Tuesday 18th October 2011 Commons Chamber

[Jenny Willott (Cardiff Central) (LD)]

This is slightly earlier in the debate than I expected to be called. I will speak briefly on the amendments tabled by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) and the Government amendments.

I know that we will have a fuller debate later, but much of the Bill has complete agreement across the House and is extremely welcome. The changes to the state pension age seem to have overshadowed many of the other issues in the Bill. As I said on Second Reading, I and many of my Liberal Democrat colleagues were deeply concerned about the effect of these changes on women who are being asked to work significantly longer at short notice.

The hon. Gentleman who has just spoken—I will not repeat his constituency name, as saying it once was an achievement—said that the state pension age has to rise, and I think that we all accept that. We are all living longer. The gains in life expectancy have been significant and are continuing. In 1970, someone reaching 60 could expect to live for 18 years. Last year, that had risen to 28 years. That puts a significant financial burden on the state. By the time I retire, I fully expect the retirement age to be somewhere north of 70. Goodness knows whether there will even be a state pension by that point.

When we are increasing the state pension age, we need to ensure that it is done as fairly as possible. I and my colleagues, a number of whom are present, have been vocal in our efforts to change the timetable. I know that the Minister and his colleagues in the Department for Work and Pensions have been actively working within Government to ensure that the timetable is fairer and that those who are worst affected by the changes are protected. In my view, the initial draft timetable was not fair to the women who were worst affected. I am pleased that the Government have listened to the concerns that were raised by many people and have tabled today’s amendments. I am sure that the Minister will tell us more about them in his summation.

[Lilian Greenwood]

I hear what the hon. Lady says, but will she explain to the 300,000 women who will have to wait longer than anybody else to receive their state pension—between a year and 18 months longer—why they should have to pay more of the burden than anyone else?

[Jenny Willott]

Later in my speech I will move on to comments that relate to the hon. Lady’s point.

Capping the state pension age increase to a maximum of 18 months will protect 250,000 women, as we have heard, and 250,000 men. Therefore, 500,000 people will be better off as a result of the Government amendments. As we have heard, that is costing more than £1 billion. I am grateful to the Secretary of State and the Minister for managing to get £1 billion out of the Treasury. That is no mean feat. A problem with any change to the state pension is that the costs are in the billions, not the millions.

[Fiona O’Donnell (East Lothian) (Lab)]

Will the hon. Lady give way?

[Jenny Willott]

I will make some progress first.

That problem makes it extremely difficult for small changes to be made. Given the financial circumstances, with the issues of debt and deficit that we have discussed, and the fact that other Departments are asking for money in the millions rather than the billions, convincing Treasury officials to be more generous cannot be easy. I hope that all hon. Members appreciate that the £1 billion going to these 500,000 people is a significant amount of money that has been found by the Government.

[Hywel Williams]

From the tenor of the hon. Lady’s remarks, it sounds as though she is satisfied with the concession that the Minister has achieved. I congratulate him on the distance that he has gone and I do not underestimate the difficulties. However, is the hon. Lady confident that the women in her constituency who will still be affected will be as easily persuaded as her?

[Jenny Willott]

I was just going to move on to the fact that, although I am delighted by the changes, in an ideal world I would have liked us to go further. I would have liked to see the cap closer to 12 months than 18 months, but we are not in an ideal world and the cost associated with that would have been significant. I understand that the cost of capping at 12 months would have been close to £3 billion, which would have been a significant amount of money to find. That would have been an uphill struggle. We have to appreciate the scale of the money that has been found to make things better for the women who are worst affected.

There has been a broad coalition campaigning on this subject, including Age UK, Saga and Members of all parties. Some have been extremely constructive in their campaigning and in the pressure that they have put on the Government, whereas others have been slightly less constructive at times. Some of what the Labour party has proposed today is, I think, unrealistic. It is unhelpful to the attempt to make as much progress as we would like towards helping the women who are most affected.

The Labour amendments tabled in Committee and today on Report that would delay the entire increase by two years are not sensible or realistic. Regardless of what the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East says, £10 billion would be a huge black hole in the public finances, and it would be a significant amount that the Government would have to find. [Interruption.] I am told that it would be closer to £11 billion. I am not going to start the debt versus deficit debate again, but there would be a huge black hole if we accepted a Labour party proposal that would require an unfunded promise of £11 billion.

[Gregg McClymont]

I have a very simple question for the hon. Lady. Why take that money from these women?

[Jenny Willott]

I would be grateful if the hon. Gentleman could clarify to us where the money that he proposes spending would come from. Unless we tackle the financial crisis in this country and the financial circumstances that we face, my child and all our children and grandchildren will be paying off the debt. We have to tackle the debt—it is real money that needs to be found, and a £10 billion black hole would be a significant one to fill.

[Dame Anne Begg]

Can the hon. Lady explain where the Government are finding the £1 billion that is needed to make the change that is being announced today?

[Jenny Willott]

I am really sorry, but I cannot tell the hon. Lady where the Minister has found the money. I am sure that if she asks him the same question later, he will respond.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I am sure we all have great sympathy with the women who have been most adversely affected by the changes, but do you not agree that the Labour party’s argument would be far more credible if it were able to tell us where it would make up the difference? Then we would be able to decide on the matter, as opposed to being told, “It is only £11 billion, we should find it from somewhere else.”

[Jenny Willott]

I completely agree. There is strong feeling throughout the House that in an ideal world, none of us would want to see the problem exist. We all accept that the state pension age will have to increase, because we are living longer and there is a black hole in the finances. I have said that in an ideal world, I would like to see the increase capped at 12 months, but we are not in an ideal world and we have to find a compromise that is workable and affordable. I appreciate that there are women who will be negatively affected by today’s proposals, and I am sure that we all have huge sympathy for them. However, I am glad that the Government have found the resources needed to mitigate the difficulties faced by those who are most severely affected.

[Sheila Gilmore (Edinburgh East) (Lab)]

Does the hon. Lady not agree that in politics, choices are constantly made, and that there are a number of choices that could be made in this case? There are those, for example, who argue that the 50% tax rate should be reduced at an early date, and there are those who argue that the generous tax reliefs given to people on higher rate tax who contribute to pension schemes could be ended, giving substantial savings. Does she agree that there are always choices, and it is not just a question of asking where a particular sum of money will be found?

[Jenny Willott]

I completely accept that political decisions are a matter of priorities and choices—all hon. Members understand that, because we are all involved in political debates and decisions. As I have said, in an ideal world, I would like the cap to be reduced. However, given the financial circumstances, the Government’s proposal is a compromise that I can accept. I understand that some will be negatively affected, but we have made significant progress. Half a million women and half a million men will benefit from the proposals, which I accept as a positive compromise.

[Alok Sharma]

My hon. Friend makes the point that we are not in an ideal world. A large part of the reason why we are not in the world that we would like to be in is that the previous Labour Government left us with a record deficit. Labour Members are now talking about another £10 billion. Does she agree that it is ludicrous for them to talk about unfunded commitments, and that they should instead apologise for the mess that they left the country in?

[Jenny Willott]

We need to focus on what is realistic and affordable. The Bill will affect people’s lives, and we need to ensure that the state pension is affordable and sustainable long into the future. I want to receive the state pension that I have paid into when I come to retire, and I am sure all hon. Members and people out there in the country would want the same thing.

I welcome the fact that Labour Front Benchers are now more positive toward to today’s proposals, and that they are prepared to accept that the Government have moved to the significant benefit of a large number of women, even if a realistic approach is somewhat lacking in their proposed amendments.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Does not the hand-wringing between 12 months and 18 months, and billions here and there, show the utter vanity of the UK spending billions on Trident nuclear weapons, when we are finding difficulty in paying money to old age pensioners?

[Jenny Willott]

The hon. Gentleman tempts me into an area into which I will not follow him. That is an issue for another day, although my position is probably not too dissimilar from his.

Given the financial circumstances and the constraints that the Government face, the deal proposed today is a good one. The Government’s amendments substantially mitigate the worst problems, and we should bear it in mind that £1 billion is a huge amount of money.

I hope the Minister can now concentrate on introducing a flat-rate pension for those whose retirement age is increased. That would make a massive difference to the amount that people get from their basic state pension when they retire, and it will benefit women in particular. Will he confirm that he still plans to introduce a flat-rate pension for 2016, so that women who are affected by the state pension age increase that we are discussing will be the first, or among the first, beneficiaries? In that way, although they retire later, they will do so on a significantly enhanced state pension, which would mitigate some of the financial implications of the Bill.

I commend the Minister and his colleagues in the Department for Work and Pensions for their efforts, and for their achievement of parting £1 billion from the Treasury to make the changes better, so that the effects are mitigated for those who are hardest hit. I hope that he continues to work to improve retirement income for both men and women.

[Malcolm Wicks (Croydon North) (Lab)]

It is a pleasure to follow the hon. Member for Cardiff Central (Jenny Willott). I may touch on some of her themes as I make progress.

The Minister will forgive me for repeating some of the issues that I have raised before, not least in Committee. My main point is this: pension policy in Britain has always been at its best when it goes with the grain of how our society works and of how our people work and live. It is also at its best when we have the courage for long-term planning, with time scales and periods of notice that enable men and women to plan their lives and their retirement properly.

This Parliament first legislated for old age pensions more than 100 years ago, because it started to understand the extraordinary fact that, for the first time in broad numbers, working people were outliving their working lives: hence the need for an income in old age. We then had the great national insurance reforms, which the Liberal party should have much credit for introducing, including particularly those in the great report by the Liberal reformer, William Beveridge.

--- Later in debate ---

[Stephen Timms]

The Bill certainly has some welcome features, as well as some very regrettable, unwelcome features. I shall touch on both aspects in my contribution.

The recommendations of the Pensions Commission chaired by Lord Turner were broadly accepted across the House. As Pensions Minister at the time, I was extremely impressed by the energy and commitment brought to their task by Lord Turner and his fellow commissioners, John Hills and the now Baroness Jeannie Drake. They were successful in putting together an all-party consensus, which has endured. We will continue to work consensually with the Government as far as we can for the strategy that was developed in the review.

The first element of that was auto-enrolment into a low-cost national scheme. I agree with the Secretary of State about the significance of that change and I welcome his confirmation that the Government will not move away from their commitment to auto-enrolment. The second element was an increase in the state pension age, and re-linking the level of the state pension with earnings was the third.

But it is not fair for the costs of this trinity of measures to be borne disproportionately by any one group in society, whether that group is defined by age, occupation or gender. The Bill would unfortunately affect some groups far more than others. We have just had a debate touching on the fact that young people and agency workers, who move jobs more frequently than average, are likely to lose many months of employers’ contributions because of the changes, as well as the chance of building up a savings habit, because of the introduction of a waiting period in auto-enrolment. Up to a million people on low wages would be left out of auto-enrolment owing to the increase in the level of the earnings threshold. But most significantly of all, and this is what gives us a real problem with the Bill, half a million women aged 56 and 57 will find themselves waiting up to 18 months longer for their state pension, and a third of a million will be waiting a full 18 months extra, with too little time to plan for the change. That is a serious problem.

We welcome the Government’s recognition that the original Bill was wrong, and what we have now is certainly a welcome change. I make no bones about welcoming the change that has been made, the concession in response to the big and entirely proper campaign that took place, but the Bill still leaves half a million women in the lurch. My hon. Friend the Member for Leeds West (Rachel Reeves) led the argument against the original ill thought-out plans, and I welcome the change that has occurred, but, with so many women still affected, Ministers cannot claim that they have solved the problem.

We understand why the state pension age is being increased by one year for many people, because the Secretary of State set out why and our amendments did not oppose the increase, but what has struck me about tonight’s debate is that no Government Member supporting the Bill has provided any justification why it is being increased by more than one year for half a million women—and not for a single man. What is the justification for picking out that group of half a million women and treating them more harshly than everybody else?

Why are those women being picked out for worse treatment? We have been given no justification at all, except that it will save a lot of money. No doubt it will, but the Secretary of State has a responsibility to develop a policy that can be defended, that has some rationale to it, not simply telling us, “Well, this is going to save us a lot of money.” There needs to be some justification for the change that is being made, and no justification—at least none that I can understand—has been made at all for picking out that group of half a million women.

The Pensions Policy Institute recommends that 10 years’ notice be given for people to plan for a change in their pension age, and the Turner report recommended a longer period, but the plans in the Bill still give some women as little as five years, and that is simply not enough. It is just not fair to those affected to impose on them such a big change with so little notice.

Those women have relied on an implicit contract of reasonableness and fairness between government and citizens when planning their retirement, and, if the truth is that government cannot be trusted to keep its side of the bargain, how are people expected to plan for pensions saving at all? Pension saving is inherently long-term in character, but it simply will not happen if the Government make a habit of sudden policy lurches that undermine the assumptions on which people have been encouraged to build in the past, so it is no wonder so many women feel so badly let down by what the Government have done.

We are talking about a 10-year period beginning in 2016. Under the coalition’s plans, unless they are to continue the current effectively zero-growth policy indefinitely, those savings are about the long-term sustainability of the pensions system, and we support, as our amendments tonight supported, the proposal to find further savings, if necessary, by bringing forward the date at which the rise to 67 years old occurs, as long as people have time to organise their affairs and to plan accordingly. The sudden unpredictable lurch, not mentioned by either coalition party in the general election campaign or in the coalition agreement, has caused the problem.

As my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) stated on Report, our objection to this part of the Bill is that it achieves these very large savings solely at the expense of one age cohort of women, apparently on a wholly arbitrary basis. The data are very clear. Women have substantially lower savings than men, yet a group of women—older women who have the least time to plan for the change—are being asked to bear the cost. The Bill simply fails the fairness test, and for that reason, in particular, we cannot support its Third Reading. We understand that Ministers are worried about rapidly plunging popularity among women voters and we are told that they are puzzled about why that is happening. They should just take a careful look at the unfairness in this Bill, and they will find a ready explanation there. We will not support that unfairness in the Lobby tonight, and no one else who values fairness should do so either.

The third of a million women with a wait of an extra 18 months will lose, just in state pension, pension payments averaging £7,800, and if one allows for pension credit and other passported benefits, we are talking about significantly greater sums still. Those women, if they are not working at the moment, will find it hard to find new jobs in the current labour market. Given that 37% of them are currently not in work, how are they supposed to make up that shortfall? We have been given no answers to that question.

As I think we would all agree, the design of the future pensions system should maintain inter-generational fairness. Imposing such large costs on one group of women means that the Bill fails to meet that fairness test. What became of the Burkean compact between generations to which Conservatives once subscribed?

[Jenny Willott]

rose—

[Stephen Timms]

I will gladly give way to a non-Conservative.

[Jenny Willott]

Is the right hon. Gentleman able to answer the question that was posed by several hon. Members earlier in the debate, and then again by the Secretary of State, about whether he and his party would plan to repeal the proposals on women’s pensions and pension age if they were to come into government after the next election, given that the changes would not have taken place by that time and they would have the opportunity to do that were they so minded?

[Stephen Timms]

My hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East answered that question earlier in the debate. Our view is that there have been too many changes and we would not propose yet another. The hon. Lady needs to explain the justification for picking out this particular group of half a million women and treating them more harshly than everyone else whose state pension age is being raised only by one year. For a third of a million women, it is being raised by a year and a half, and for half a million, it is being raised by more than a year. We have had no explanation and no attempt at a justification. Is it an accident or some kind of mishap? It certainly should be put right, and sadly it has not been put right in the changes that the Government have made.

There are other problems in the Bill. It dilutes the plan for auto-enrolment that was supported across the House. The proposals will leave many low-paid and agency workers outside auto-enrolment, and we think that they should not be left behind. Moreover, the gains from these exclusions, in lower costs for employers, will be small. It would be quite wrong to exclude people just because they work for small companies, as the Conservative party donor Adrian Beecroft is apparently arguing. I greatly appreciate the assurances that we have had about that during the debate, and I hope that Ministers will continue stoutly to resist any such moves if they are promoted from elsewhere in the coalition. The Pensions Commission made it clear that extending the benefits of pensions saving to more people who work for small firms is one of the prizes from this reform, and we must not throw it away.

The Secretary of State is absolutely right to argue that this is a pro-growth, not an anti-growth, change in making it possible for more people to save for a decent retirement. Of course it is right to be concerned about the plight of small firms in the zero-growth economy that we seem to have. I commend to the Government the national insurance holiday for small firms that take on additional workers that is proposed by my right hon. Friend the shadow Chancellor. We remain strongly supportive of the policy of auto-enrolment. We are disappointed, however, that the Government are seeking to water down the proposals around which the all-party consensus was hard won.

We welcome the consensus on the basic building blocks for a more sustainable pensions system, but the Government are quite wrong to load the cost of change so disproportionately on one group of half a million women. For a long time, they did not listen to those women at all. When they did, they came forward with a half measure. The sense of grievance that they have instilled in the women affected will not be readily dispelled. We are pleased to have won a concession, but many people will still be deeply disappointed. For that reason in particular, I urge Members to decline to give the Bill a Third Reading.

--- Later in debate ---

[Jenny Willott]

It will not surprise hon. Members to learn that I welcome the Bill. The issue of women’s state pension age has been discussed in full already today, but there is much else in the Bill to be welcomed. Many of the measures have broad support across the House, as we have already heard this evening. Auto-enrolment is, as the hon. Member for Hampstead and Kilburn (Glenda Jackson) said, critical to many people who up to now have had no pension savings and have not been in a position to save for their retirement. It is fundamental, and I support it now as I supported it when it was proposed by the previous Government.

We have to get more people saving for their retirement. Far too many people have no savings at all, and when they retire they depend entirely on the basic state pension. It was not designed to provide an adequate living; it was designed as a safety net. But for an awful lot of people it is their sole retirement income, and that is something that we need to change. For years we have been grappling with how to get more people to save, especially those on the lowest incomes. Auto-enrolment is critical, because we need to make it as easy as possible for people to save. We need to make it as easy as possible for businesses to administer, so that it becomes a no-brainer: people will automatically save for retirement without thinking twice about it, and so put themselves in a better position for their retirement.

Pensions are such an important issue to get right. It is not glamorous, people do not understand it, and it is very complicated. Even when I have conversations with other hon. Members about it, their eyes often glaze over. It is not an issue that people want to discuss, but it is our duty to try to make it as simple as possible for people so that as many as possible have some savings put away for their retirement and can retire in more comfort. That ties in with what my hon. Friend the Minister said earlier about the need to get means-testing out of the system, so that people know that whatever they save while they are working will benefit them in their retirement. We need to ensure that a flat-rate pension is introduced as soon as possible so that people who work, on however low an income, know that whatever they put aside during their working lives will benefit them when they retire, that they will have adequate retirement pensions, and that they will not have to rely on just the basic state pension.

I am saddened that many hon. Members feel unable to support the Bill—

[Ian Murray (Edinburgh South) (Lab)]

I am grateful to the hon. Lady for giving way at this late hour on Third Reading. She is making a very impassioned speech about women who should save for their retirement, and that is right—but what would she say to the 500,000 women who have made savings and thought about what will happen when they retire, but who will now have to wait 18 months longer for the state pension?

[Jenny Willott]

I am sorry that the hon. Gentleman was not able to be in his place earlier when I explained all that. We had a long debate on exactly that point earlier. The whole point of Third Reading is to be able to expand on the issues, and I wish to put on record the fact that I am very supportive of auto-enrolment, as are many other hon. Members, and on the capping of fees, as well as other measures in the Bill that are crucial but have not had as much attention as women’s pensions have. I hope that hon. Members will reconsider and feel able to support the Bill this evening, so that we can ensure that more people save for their retirement and do not have to live in poverty.

Oral Answers to Questions

Jenny Willott Excerpts

Monday 18th July 2011 Commons Chamber

[Maria Miller]

The hon. Lady is right: finances are tough, but she is well aware of the situation that we inherited. The Department for Education is not the only Department to invest in parental relationship support. The Department for Work and Pensions already invests well over £5 million a year in the options service, which does an excellent job, as far as it goes at present, in providing some of the support that I would like to see augmented in the future.

[Jenny Willott (Cardiff Central) (LD)]

Some parents with care had spent years trying to get money out of absent ex-partners with no success before the CSA imposed a deductions of earnings order. The Government propose to close all existing cases when the new scheme is up and running, including those with deduction of earnings orders in place. Although I welcome the Government’s emphasis on parents working together to solve problems, can the Minister reassure me that where there is a long history of non-payment, cases will not be closed and families left with no money at all?

[Maria Miller]

My hon. Friend raises an important point, and that is just the sort of detail we are working through. It is absolutely our intention to ensure that transitional arrangement are in place to help parents in the situation she describes to have continuing payments into the future, and I am certainly making that a priority.

Youth Unemployment

Jenny Willott Excerpts

Wednesday 22nd June 2011 Westminster Hall

[Jenny Willott (Cardiff Central) (LD)]

We have heard a lot today about the statistics, so I will not go into those. The good news is that youth unemployment is dropping, but everyone shares the concern that it is still too high. As I think almost every hon. Member said, we must tackle the implications of long-term unemployment; the issue is not just those who are out of work for short periods. That is where the picture is looking quite good. The number of 18 to 24-year-olds claiming jobseeker’s allowance for more than a year has reduced from more than 26,000 to just under 15,000 in a year. That is good for all our constituencies.

However, research done recently showed up some worrying findings. One finding was that young people are very disillusioned about their prospects of employment. They believe that they will find it very difficult to get work. A very worrying number said that they would like to work but they were not even looking for work because they believed that no jobs were available, so in some ways we have talked ourselves into an even greater problem than we need to have. We therefore need not only to tackle skills levels, as a number of hon. Members mentioned; we also need to increase young people’s motivation to go out and compete for the jobs that exist. There are jobs around. There may not be as many as we would like to see, but there are jobs and young people need to be encouraged and supported to go out and compete for them.

We must not lose sight of the short-term and long-term implications of youth unemployment, both on a personal level and for society as a whole. We have heard about the financial implications of youth unemployment, but there are other implications for the individual and for society in the longer term. The longer someone has spent unemployed, the less opportunity they have to go up the career ladder. They are likely to have lower lifetime earnings, which means that they and their families are more likely to struggle. It also means that they are less likely to save for their retirement, so in the very long term they will end up with low or non-existent pension savings and either are likely to have to work for longer or are likely to be living in poverty as a pensioner. The implications can be very long term for the individual and for society.

This is one of a number of debates that we have had in the past few months on youth unemployment and what can be and is being done about it. Hon. Members are right to say that we need to improve the employability of young people, but I believe that the Government are trying to do that. I am reassured by work that is being done by the Department for Work and Pensions and by the other Departments with a responsibility in this area. The Government have been investing in apprenticeships. The hon. Member for Harlow (Robert Halfon) has explained why that is critical and given very good examples of what can be done not only by Government, but by individuals. I congratulate the hon. Gentleman on the work that he has been doing in this area. He sets an example for all of us—we should be doing more.

I hope that the Minister will tell us more about what the Government are doing with regard to work experience placements, because for many young people that taster of the workplace and the opportunity that it provides for employers to see what young people are like and that they can step up to the mark is important. The Government are also investing in early support in the Work programme for NEETs, which many hon. Members spoke about.

Without wishing to play the blame game, I think that it is important to put it on the record that Labour did not do enough to tackle the trends in youth unemployment when it was in government. In many ways, that contributed to the problem of long-term unemployment among young people that the present Government are trying to resolve. Labour threw money at the problem rather than focusing on what worked. A number of hon. Members mentioned the future jobs fund, but it was created to ease the problem of youth unemployment, not to create long-term sustainable jobs. That was the problem with the programme: at the end of the placement, there was not always a job to go to, so the young person ended up back on working-age benefits. That also knocked their confidence, which takes us back to the problem that I referred to at the beginning of my speech of young people feeling disillusioned. We need to create long-term sustainable jobs and a skilled work force—a cohort of young people who are willing and able to take up those jobs.

I therefore welcome the early access to the Work programme for NEETs. I would be grateful if the Minister told us whether there are any plans to roll that out, if it proves successful, to more young unemployed people who are not necessarily NEETs. I cannot remember which hon. Member mentioned investing in support for young entrepreneurs. A very small proportion of the under-24s are self-employed. That is understandable, but many young people have good ideas, are keen and enthusiastic and will generate wealth and jobs for the future. I would be grateful if the Minister could tell us a little more about the support that is being, or will be, made available to help and encourage those young people, whether that is mentoring support or access to capital to enable them to invest in themselves and in jobs for the future.

I welcome the significant progress that has been made in tackling long-term youth unemployment. We cannot risk another generation facing the same problems as those who left school and university in the 1980s and 1990s. The Government are doing a lot, but there are some areas I would be grateful if the Minister could expand on, and I hope that that work will continue.

Pensions Bill [Lords]

Jenny Willott Excerpts

Monday 20th June 2011 Commons Chamber

[Jenny Willott (Cardiff Central) (LD)]

The Bill has been somewhat hijacked by the women’s pension age issue, but as the hon. Member for Aberdeen South (Dame Anne Begg) has said, there is much in it that is very good and extremely uncontroversial. There are other proposals that are good, but which some people find controversial, such as those on judges’ pensions. Funnily enough, a number of speakers in the other place became extremely worked up about that. As the Secretary of State said, judges currently make no contributions to their pensions. The only thing they contribute to is survivors’ benefit, for which they pay the princely sum of 2.4% or 1.8% of their salary, depending on the scheme, but they get an extremely generous pension at the end of it. I understand that one in six judges draws a pension of more than £67,000 a year, which puts them in the top 0.01% of pensioners, as the employer contribution is around one third of the salaries. The hon. Lady has just said that fairness is all in pensions, but clearly that does not seem fair to an awful lot of people. At a time of great debate on public sector pensions, there is no reason for judges to be exempt from reform. There seems to be a clear consensus in this place, if not in the other place, that that needs to be tackled as soon as possible.

I also welcome much of the rest of the Bill. The introduction and simplification of many of the opt-out arrangements is really important. The hon. Member for Aberdeen South and I were members of the Work and Pensions Committee in the previous Parliament and did a lot of work on the arrangements for the National Employment Savings Trust and how to ensure that people on low incomes are encouraged and supported to save for retirement. Like her, I welcome many of the Bill’s proposals and think that it is really important that the measures are being introduced. Hopefully, the tweaks will overcome some of the problems identified during the passage of the Pensions Act 2007, which most people supported. Many of the concerns that were raised related primarily to small businesses and those on the lowest incomes and are covered by the Bill.

I am also glad that the Bill will set up a system that will make it easier for people on low incomes to save, because that has been a problem for far too long in this country and needs to be tackled. Although the level of means-testing is still an issue and therefore for some of those on the very lowest incomes, as employers will also contribute to pensions, it will be more worth while under the system in the Bill and the previous Act for more people to save.

However, like the hon. Member for Aberdeen South, I am afraid that I will do what I am sure everyone in the debate will do and raise the concerns about the proposals on the women’s state pension age. I am sure that you, Madam Deputy Speaker, will be sick to the back teeth of people complaining about the women’s state pension age by the end of the debate, as I am sure will the Minister. [Interruption.] You are far too charitable, Madam Deputy Speaker.

I agree with the Government that the state pension age needs to rise. In 1970, someone retiring at age 60 could expect to live a further 18 years. Last year, the figure was 28 years. There has clearly been a significant change in demographics in this country, which has to be reflected in our pensions system. We cannot expect people to work until they drop, but the more time they spend in retirement, the more strain that puts on the public purse.

That issue goes hand in hand with pensioner poverty. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who is no longer in his place, talked about the progress he felt the previous Government had made on pensioner poverty. Progress was made, but last year there were still 2 million people of pension age living in poverty, which is unbelievably high for a rich country such as the UK and a disgrace. Unless we seriously overhaul the pensions system, pensioner poverty will continue to be a problem. The longer people live, the less an occupational pension is likely to pay out, for those who are lucky to have them, and the longer they will have to live in poverty after they retire.

We must invest in the state pension in order to tackle pensioner poverty, which is one reason that I welcome the steps that the Government have already taken to bring in the triple lock, which has been a Liberal Democrat policy for a number of years. By linking the basic state pension to earnings and instituting the triple lock, pensioners will hopefully take home £15,000 more over the course of their retirement than they would have done under the previous Government’s policies. That will start to make a difference to levels of pensioner poverty.

What I think will really make a difference is the Pensions Minister’s plan for a flat-rate pension, if and when he is able to introduce that and work it through the House. As has been announced, the plan is for all pensioners with contributions of more than 30 years to receive a flat-rate pension of around £140 a week, uprated by inflation, from 2016. For many people, particularly women in the cohort which has been referred to today, that would be a significantly higher basic state pension than they currently receive. There is particular concern about those women, many of whom do not have private savings and do not necessarily have a full contributions record, as we have discussed in relation to the state second pension. The people who are likely to be penalised by the rising state pension age will benefit significantly from the introduction of a flat-rate pension.

We should not be trying to tackle pensioner poverty simply by increasing the burden on those in society who are working. Wages are flat at the moment and prices are rising, and the Secretary of State has laid out the change in the ratio of pensioners to working people in the population. We need to do something more fundamental. We need to create a sustainable way of managing our ageing population, rather than continually increasing the demands on taxpayers. The Turner commission and the 2007 legislation accepted the premise that, as longevity increases, so the state pension age must rise, but we have now learned from the most recent figures that the situation has changed even more than was understood when the commission carried out its work. We need to take that into account if we are to have a sustainable pension scheme that people can trust for the long term. The Government are right to look at raising the state pension age, and if the flat-rate pension is introduced in 2016, although hundreds of thousands of women will have to work longer, they will get a better pension in the end, which is a trade-off that many will feel is worth it.

As many Members have mentioned today, it is the cohort of women born in 1953 and 1954 who will feel the greatest impact of the change, particularly the 33,000 born in March 1954, who will have to work two years longer. Like other Members, I do not believe that the plans currently laid out are fair for those women. People need time to plan for their retirement, as the hon. Lady for Aberdeen South said. A number of Members have said that those women will have five years’ notice, but my understanding is that it will be seven years before facing the situation, so I would be grateful if the Minister clarified that. Seven years is not a very long time in which to plan whether to work for another two years. In order to keep the public support that we need for such long-term plans, pensions must have full support across this House and among the public as a whole.

[Stephen Lloyd (Eastbourne) (LD)]

I concur with every single word that my hon. Friend says. Owing to the difficult decisions that the coalition Government are making on the economy, I am confident that, by 2018, 2019, 2020, the challenges will have been met and the Government will be able to listen to Back Benchers from all parts of the House and move the change back to 2020. The difficult decisions that will have been made by then will mean that the economy is ready and able to sustain such a move.

[Jenny Willott]

I thank my hon. Friend for his intervention, and it will be interesting to hear what the Minister says to that when he sums up the debate. I am sure that during the debate several suggestions will be made on how to tackle the issue, and that is one.

The changes have to feel fair, but the current proposals do not. The hon. Member for Aberdeen South said that fairness is extremely important, and as the Pensions Minister has said it is extremely important that the basic state pension, whatever its structure, has to feel fair, because it has to last a long time and be free from arbitrary political intervention. The current proposals, however, do not pass the fairness test.

[Mrs Main]

The hon. Lady, who is making a powerful speech, seems, like me, to agree with an awful lot of the very good that is in the Bill, and it would be a shame to ditch the baby with the bathwater, as Opposition Members plan to do tonight. My hon. Friend the Member for Cardiff North (Jonathan Evans) has come up with an interesting proposal, and her hon. Friend the Member for Eastbourne (Stephen Lloyd) has just come up with one as well. Does she agree that Second Reading is the time to do so and to take such ideas into Committee? Like me, the hon. Lady will, I hope, have been encouraged by the sympathetic noises from Government Front Benchers, who are listening to the sensitive arguments from Government Members.

[Jenny Willott]

I absolutely agree. As the hon. Lady says, the point of Second Reading is that we have the opportunity to air a whole load of different options and concerns about the Bill, and as she says also, there have already been a couple of proposals for tackling the issue. I am sure that we will hear more as the debate goes on.

I completely agree that the Bill contains a huge amount that is valuable and important, so I am concerned about the Opposition saying that they will vote against it as a whole. Our constituents, living in our local communities, will be disappointed that the Opposition have taken that approach to the legislation and are not prepared to give a Second Reading to its positive elements.

[Dame Anne Begg]

I am sure that the hon. Lady received a large number of e-mails and letters from her constituents who are affected by this particular anomaly. Did any one of them say that she should vote for the Bill, or did they all encourage her to vote against it?

[Jenny Willott]

To be honest, I cannot remember whether anybody asked me to vote against the Bill. Most writers of the letters and e-mails that I have received raised concerns about the particular proposal in the Bill, and I agree with them. As I have already said, I share their concerns and have issues with what is proposed, but the whole point of Second Reading is that we have the opportunity to raise our concerns and to send the Bill into Committee, where people will be able to go through it clause by clause, to debate what the alternative may be and to have a chance really to scrutinise it. Today’s debate is not the time just to chuck it away.

[Dame Anne Begg]

If there are no changes in Committee and the Bill returns to the Floor of the House in the same position as it is in today, will the hon. Lady vote against it?

[Jenny Willott]

I cannot possibly say what I will do at that stage, because we do not know what shape the Bill will be in. I put the Bill in the safe hands—I am sure—of the Pensions Minister and of colleagues from all parts of the House, who will be able to look at it, try to refine it and send it back to us in the best possible shape. At that point, like all hon. Members, I will be able to decide whether to support it in its entirety.

[Sheila Gilmore]

If the hon. Lady or other Members table an amendment in Committee on the issues that she says she is concerned about, will she vote for them, as she did not when the Welfare Reform Bill was in Committee?

[Jenny Willott]

We have no idea who will be on the Committee for the Bill before us, so I cannot possibly comment on what amendments might or might not be tabled or on who might or might not support them.

The Government should, however, think again about these plans and find a way to make them fairer for the worst affected women. We have already heard a number of proposals, and I was pleased that the Secretary of State made it clear that he is open-minded and willing to listen to what options there are. It was important for us to hear that this afternoon.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I concur with my hon. Friend. The importance of today is that the strength of feeling about this one aspect of the Bill is aired, that Ministers convey the feeling that there will be a response and, most importantly, that there is a response that makes this part of the Bill fair.

[Jenny Willott]

I agree. My hon. Friend has spoken in the House in recent weeks on the issue and on her concerns about its fairness, and I am sure that Ministers are listening and taking that message on board.

I appreciate that this is a difficult and costly area in which to make any changes. The figures are mind-boggling, and a few months here and there will make a significant difference to the cost, but it cannot be beyond the wit of man to find a way to smooth the process in order to ensure that that small group of women does not end up being so badly affected. I have every faith in the Government and, in particular, in the Pensions Minister, who is generally regarded as one of the UK’s foremost experts on pensions. He has done a huge amount of work in the past on women’s pensions, helping thousands of women to get the money to which they are entitled, so I put him on notice today that I trust him to resolve the issue. I am sure that, if he cannot do it, nobody can.

Welfare Reform Bill

Jenny Willott Excerpts

Wednesday 15th June 2011 Commons Chamber

[Jenny Willott (Cardiff Central) (LD)]

I rise to speak to the amendments tabled in my name, which focus on the mobility component of the disability living allowance for those in care homes. We have already heard a lot about that from the hon. Member for Glasgow East (Margaret Curran). Amendment 74 asks for the regulations on this issue to be dealt with under the affirmative, rather than the negative, procedure. Amendment 73 asks for a report on the impact of the changes after one year.

--- Later in debate ---

[Fiona O'Donnell]

Under the hon. Lady’s definition of overlapping provision for mobility needs, would she settle only for what we would expect anyone living in the wider community to have—namely, complete freedom of choice and access to transport to assist them when it suits them?

[Jenny Willott]

I am about to come to my understanding of that point. Obviously, it is up to the Minister to determine her definition, and I am sure that the hon. Lady will be able to comment on what the Minister has to say later.

I am also glad that the Government have put on hold the plan to introduce this change while comprehensive research is carried out. Any decision needs to be based on solid evidence, and it has become clear that no research has been done in the past, so no such evidence has been available so far.

[Margaret Curran]

To the best of her knowledge, can the hon. Lady identify two examples of where overlap is a problem? Does she think that the review should be widened to involve disabled people? Does she also think that its findings should be published?

[Jenny Willott]

I have just made it clear that no research has been done in the past, so there has been no evidence up to now. I have absolutely no idea what evidence the Minister has found, but I am sure that she will be able to give the House more information on that and answer the hon. Lady’s question. Not being part of the research team, I cannot give the hon. Lady any examples of overlap, but I am sure that the Minister will be able to provide more information about that later.

[Margaret Curran]

May I ask you to address the second part of my question, which was about the review? There are serious concerns that the review is not being made public and that we do not know its terms of reference. I presume that you know its terms of reference, since you support the Government’s proposals. Could you perhaps explain them to the House?

[Jenny Willott]

I think she means “the hon. Lady”, rather than you, Mr Deputy Speaker. This is obviously an issue for the Minister to address later, particularly in regard to the terms of reference. I do not believe that it would have been appropriate for disabled people to take part in the research, because it is my understanding that this is an information-gathering exercise—

[Simon Danczuk (Rochdale) (Lab)]

Shame!

[Jenny Willott]

The hon. Gentleman shouts “Shame”, but this is an information-gathering exercise to obtain evidence on the basis of which a decision can be made. At that point, it will be appropriate for people to be consulted. When we know the evidence base, and what options are open to the Government, it will clearly be appropriate to consult. At the moment, the Government are communicating with local authorities to find out what funding is in place, and disabled people are probably no more aware of that than I am. It would not be appropriate, while gathering that information, to consult. Afterwards, when we have the evidence on which to base a decision, it will become appropriate to consult on the options.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I have to confess that I am astonished to hear the hon. Lady suggest that disabled people would have nothing to add to an information-gathering exercise. Would she support postponing the proposals until we have clarity on what the review will involve, to ensure that everyone with a view is able to put their view forward?

[Jenny Willott]

The hon. Lady completely misrepresents my words. I absolutely did not say that disabled people have nothing to add to this. I said that the Government are undertaking an information-gathering exercise so that we have an evidence base on which to look at the options for the Government to take forward. At that point, people with disabilities and others affected would, I hope, have an opportunity to be consulted and to participate in discussions. At the moment, it is my understanding that the Government are gathering information to provide the evidence that has been lacking. I have to say that I was taken aback to find that the previous Government had never done research to enable us to understand what funding is made available to care homes and what is made available to people through disability living allowance. Providing such evidence is seriously overdue.

[Several hon. Members]

rose—

[Jenny Willott]

I give way first to the hon. Member for North Antrim (Ian Paisley).

[Ian Paisley]

I am grateful to the hon. Lady, who is being very good and lenient with her time. On the issue of overlapping, which was raised at the start of her comments, I want to point out that the disability living allowance as currently constructed is a non-means-tested benefit. Overlapping implies that there should now be a means test. If part or all of someone’s benefit were to be taken away, means-testing would be necessary. Is the hon. Lady saying that she will support a provision that would introduce a new means test by stealth?

[Jenny Willott]

I do not believe that this is about means-testing of benefits. It is about looking for sources of state support or Government funding for the mobility needs of individuals with disability. It is about looking at the different sources of money to ensure that it is provided evenly to people with disabilities so that their mobility needs are covered.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I understand where my hon. Friend is coming from, as she and I are signed up to the same position. Let me confirm that her position and mine is the one agreed at our party conference only a few months ago—[Interruption.] Let me put it on the record that the conference called

“on the Coalition Government not to remove the Mobility Component completely and to ensure sufficient funding for the mobility needs of those who cannot afford to fund their needs themselves”

and

“to ensure that any reductions to the Mobility Component are based on clear evidence that the cost of that support is provided via other funding means.”

That is where we stand, so I ask my hon. Friend to confirm that that is why she is making sure that the Government will end up standing there, too.

[Jenny Willott]

That is exactly the position that I am putting forward. I am concerned, because clause 83 still leaves it open for Ministers to cut the mobility component for those in care homes. As a number of Members have made clear, the concern about that is considerable.

[Dame Anne Begg]

I appreciate that the hon. Lady is trying to get the Government off the hook by supporting this review, but the original proposal came forward in the coalition Government’s first Budget—almost a year ago. Is she not as surprised as I am—if not shocked—that the work that she now advocates was not done before the proposal was made in the first place?

[Jenny Willott]

To risk the wrath that has been incurred by some colleagues on my side, I have to confess that I was somewhat surprised about that, but I also think it should have been done by the previous Government as well. It is pretty shameful that we have no understanding of where the funding for these costs has come from.

[Several hon. Members]

rose—

--- Later in debate ---

[Jenny Willott]

I am afraid that I am not taking any more interventions, as many Members want to participate in the debate and I do not want to run out of time. I am sure that those who have further comments will attempt to catch your eye, Mr Deputy Speaker.

We must not underestimate how important it is for people to be able to get out and about. I appreciate that those in residential care often do not have as many mobility needs as some people living on their own. For example, they do not need to shop regularly for food as it is usually provided, and they often do not need to make arrangements to get to a doctor’s appointment or the hairdresser’s because those services are often provided in the care home. However, they often need to shop for things other than food—for clothes and personal items—and they need to be able to maintain contact with friends and family. Younger people in residential care may often be in work and need to travel in and out of work as well. They have needs that need to be funded. It depends on the disability, but often public transport is not an option, so people rely on expensive taxis, on Motability scooters or on having access to their own vehicle, all of which add significant costs.

It is important that people have independence, keep up their social lives and live a full and valuable life. That is not possible on the £22 a week that people in residential care would be left with if they did not have the mobility element or any other support for their mobility needs. Although this part of the Bill is about PIPs, which will apply only to those who are over 18, I would be grateful if the Minister clarified the Government’s intention about extending PIPs to the under-18s, too, and whether the provisions will apply to families and young people with disabilities who are under that age.

My amendments would ensure that this important issue is decided by affirmative resolution, enabling proper parliamentary scrutiny, and that its implementation is monitored effectively through the production of a report after enough time has elapsed to show the impact and the effect. It is clear to me from the totality of the Government’s proposals that affect people with disabilities that the Government do not intend to restrict the independence of individuals. The move towards personal independence payments from disability living allowance goes in quite the opposite direction. We had a number of debates in Committee about the increased emphasis on individual needs and independence, and I sometimes found the Minister’s emphasis on taking every person as an individual and assessing their individual needs somewhat frustrating. Sometimes in debate it is easier to consider groups of people, but it is clear that the Minister’s intention is to consider individual needs and to take them into account when making decisions, as well as to ensure that individuals have independence.

[Stephen Timms]

The Minister has said that she does not envisage the results of the review being published. If I understand the hon. Lady correctly—she is making some telling points—she envisages the review being published so that there can be consultation. Will she confirm that she disagrees with the Minister on that point?

[Jenny Willott]

I have no idea whether the review will be published. I was commenting on the fact that the options on PIPs and DLA for the future should be consulted on. The Bill simply states that that will be decided in regulations, which is one reason I tabled an amendment requiring them to be subject to an affirmative resolution. The decisions will be made by regulations, which means that there is a further decision-making point. The Government will be able to publish their regulations and their intentions once they have done the information gathering and considered the funding situation across the board. At that point, I would like to see some broader involvement of people who are affected by these decisions. We will then have the information when we make a decision.

[Fiona O'Donnell]

rose—

[Jenny Willott]

I will give way one more time.

[Fiona O'Donnell]

The hon. Lady is very generous in giving way. How will this review, report and gathering of information apply to the devolved Governments of the country? How can the Minister possibly influence social care policy and NHS policy in the devolved Governments?

[Jenny Willott]

I am afraid that I shall disappoint the hon. Lady, but that is an issue for the Minister. I do not know what discussions the Minister has had with the devolved Administrations. I am a Member of Parliament for a Welsh constituency, so the issue clearly affects my constituents, too. I am sure that some discussion is going on, but the hon. Lady can ask the Minister to respond to that question.

A number of other issues are covered by the amendments before the House and have already been raised by the hon. Member for Glasgow East (Margaret Curran), including how the Government handle fluctuating conditions and the assessment requirements for PIPs. We have had a number of debates about fluctuating conditions, not least in a Delegated Legislation Committee yesterday afternoon which was attended by many Members who are in the Chamber this afternoon. Fluctuating conditions are hard to manage in the benefits system. As has been mentioned, Professor Harrington is doing work on descriptors for the work capability assessment for fluctuating and mental health conditions and on how the assessments can be improved to take them into account. I hope that the Minister can reassure us that the Government are learning the lessons from the mistakes made in the work capability assessment and that we do not replicate them when the new PIP assessment is introduced.

[Jeremy Corbyn]

Will the hon. Lady give way?

[Jenny Willott]

I am afraid that I will not, as I am aware that a lot of people want to speak.

I flagged up my concerns in Committee about whether there are some people for whom face-to-face assessments are not appropriate, and I was reassured by the Minister’s response, as she clearly accepted that they are not appropriate for everybody. She intends to allow Jobcentre Plus advisers discretion to consider individual cases and the Government seem to be thinking about taking the same approach to the need for ongoing face-to-face assessments. As long as there is discretion and an acceptance that such assessments are not appropriate for everybody, I hope that decisions will depend on the discretion and common sense of Jobcentre Plus advisers. Will the Minister reconfirm today that the Government are taking a slightly flexible approach?

The final issue that I want to flag up is that of sudden-onset conditions such as cancer, stroke or accidents, which the hon. Member for Glasgow East has mentioned. Such conditions are very different from conditions that gradually worsen. They do not give people time to adapt mentally, emotionally or financially to their new circumstances and in addition to the trauma of coping with diagnosis there are large up-front costs that start almost immediately. There might be a sudden loss of income and there is the cost of travel to and from hospital for regular treatments, as well as parking charges and new equipment that is needed. Such costs seem to be just the sort of thing that disability living allowance was designed to fund.

The change from three to six months before someone can apply for the new personal independence payment might hit those people the hardest, because they have to pay those costs so immediately up front. I understand that that group of people form a very small proportion of those who are currently on DLA—around 6%, I think—so it would not be expensive to treat them differently. There are knock-on implications for that group, as their carers will not be able to apply for carer’s allowance unless they have DLA, so both the claimant and the carer could lose income. I raised this issue in DWP questions on Monday and the Minister was kind enough to say that the Government are looking into the issue. I hope that they will look at what can be done to ameliorate the situation for that small and distinct group.

I welcome the Government’s moves to take into account concerns about the removal of the DLA mobility component, and although I welcome the decision not to push ahead with the original proposal to remove it entirely, I think the Bill leaves the door open for that to happen in future—perhaps not under this Government but under a future one—so I believe that any changes should pass through the House via affirmative resolution. I also believe that the situation needs to be monitored closely to ensure that we are protecting and enhancing the lives of some of the most vulnerable in society.

[Dame Anne Begg]

I suspect that many hon. Members will want to speak particularly about the removal of the higher-rate mobility allowance from residential care, so I shall not talk about that in any detail, but I think it is merely the top of a very pernicious iceberg, and the proposed amendments attempt to allay our concerns on that. This issue has captured the public imagination because it seems so grossly unfair and because people cannot understand what kind of Government would take away the independence of the, by definition, most disabled people in our community because they happen to live in a residential home or, for those whose families might lose access to an adapted vehicle, because they happen to go to a residential school.

I want to look more widely at the Government’s reasons for seeing fit to wipe away everything that was the DLA and bring in a new benefit called the personal independence payment. Let me address the Government’s analysis, or rather their argument—I should not have said analysis because part of the problem is that there has been no proper analysis and it is very difficult to get any data to suggest that some of what they have said is true; that might be the case for individual cases, but it is not widespread. The fact that the hon. Member for Cardiff Central (Jenny Willott) had to ask for some of those data may show that the Government lumbered into the whole area without knowing the details, and that their proposals were based on some perception of prejudice, or the need to save money, a point to which I shall return.

What were the criticisms that the Government laid at the door of DLA? They said there were no regular reassessments. That is easy to sort. We can put in regular reassessments for certain people. The Government said that too many people were getting DLA for life. Is that too much of a problem? If a person is quadriplegic after a cataclysmic accident, I am not sure they will get better. The reason many people who at present depend on DLA are so frightened by the changes is that they have an award for life; they do not have to worry about more reassessments. They have gone through assessments. They know they are profoundly disabled. Anybody looking at them can tell they are profoundly disabled, so why on earth do they yet again have to go through an assessment?

Another criticism of DLA was that some people were getting it automatically based on their condition. I challenge the Minister to tell us what it is about the condition of people who cannot feed themselves, cannot dress themselves, cannot move from one seated position to another, cannot walk or go to the toilet themselves that means they have to be assessed for their need for extra costs for care and mobility. I cannot think of a reason. Why should there not be an assumption that those individuals have their extra costs for care and mobility covered by DLA? That is what it was all about.

The Government’s main argument was that DLA was not well understood. That is not my experience from talking to people who receive DLA. It was one of the few benefits they did understand. DLA was for the extra mobility and care costs associated with disability. Compare that to the confusing rules for tax credits, or the in-work benefits or disability premiums associated with jobseeker’s allowance, employment and support allowance or incapacity benefit. We could look at contributory ESA as well. Those are confusing. The one benefit for disabled people that was clear—they knew what it was for—was disability living allowance. That is what they tell me and I am sure it is what they have told the Government. The vast majority of responses to the Government’s consultation made exactly that point: people valued DLA so greatly that they were frightened they might lose it.

Another criticism the Government have made of DLA is that the form was too long and complicated. That would be easy to sort. Make it shorter, make it less complicated and maybe put it online. There were solutions.

Those are the main criticisms of DLA that the Government have come up with, but none of them could not have been solved by some changes to the existing allowance. It did not require the sweeping away of DLA and its replacement with a new benefit, with new criteria. If the criteria were out of date, some of them could have been changed, but there was and is no need to change all of them. People who depend on DLA at present as a large part of their income are terrified, because they do not know what lies ahead. If the system is as bad as, according to the Government, it is at the moment, those people are worried that whatever the Government come up with will not be suitable for their needs. I have to tell the hon. Member for Cardiff Central that the previous Government did not collect data on double-funding mobility allowance in care homes, because they were not advocating the removal of DLA from that group of people.

The things that are particularly good but often forgotten about DLA include the fact that it is an in-work and out-of-work benefit. That element will become increasingly important as the Government proceed with their welfare reforms to put work obligations on people with profound disabilities. Anyone who is not assessed as being in the support group for ESA will have a work obligation. However, if those who end up in the work-related activity group find that they no longer qualify for DLA, it will be all the harder for them to find a job or to do the work-related activity that the Government expect them to do, because the extra financing to make that possible will have been removed.

The best thing about DLA was that we had for the first time in this country a benefit that followed the social model of disability, rather than the medical model. There is a worry that the clock will be turned back. The Government call their new benefit the personal independence payment, but DLA was a personal independence payment, so they did not need to change the benefit. DLA is personalised and represents what the Government say they want the benefit system to be because it is a dynamic benefit, which means that it helps people to lead an independent life by going out to work, visiting friends and doing all the things that everyone else takes for granted. Such independence includes the ability to live in the community, which can be achieved if a person can buy in care and get someone to come in to look after their care needs. All those things exist under DLA, so why is there a need to make a fundamental change to something that was not broken? Why fix something that was working reasonably well? No one would have complained if the Government had done a bit of tweaking, but such a fundamental change makes people especially worried.

The Red Book states that the Government want to cut 20% from the DLA budget. That means that the pot will be 20% smaller, but given the cost of reassessing everyone, about which we have heard today, the reduction in payments will be more than 20%, because some of the money that would have gone to disabled people so that they could live their lives will be invested into the private company that will carry out the reassessments. Given the difficulties of the ESA, there is suspicion about the accuracy of the reassessments. Even though Professor Harrington has made recommendations, there are still fears and worries about the way in which the work capability assessment is working, and disabled people’s experience of that assessment makes them especially worried about what will happen under PIP.

--- Later in debate ---

[Fiona O'Donnell]

I agree and I thank my hon. Friend for her contribution. I listened with interest to the speech the hon. Member for Cardiff Central (Jenny Willott) made about her amendment. [Interruption.] She is thanking me now, but she may not thank me when I have made my comments, although I shall again try to be careful. It is extraordinary that a member of the Government should support legislation and an amendment, yet time and again blatantly admit that she did not know what the Government were proposing. The hon. Lady kept pointing us in the direction of the Minister, saying that she would answer our questions. She was not in the Chamber for the whole of the Minister’s speech, so I have to tell her that the Minister did not answer the questions.

[Jenny Willott]

I want to make it very clear that I was here for the whole of the Minister’s contribution. The questions I referred to the Minister were about what she was doing. Clearly, as a Back-Bench Government Member, I am not privy to that.

[Fiona O'Donnell]

In that case, I suggest that the hon. Lady holds back her support for the Government until she knows what they are going to do. She spoke to us about the review, but when she looks at the record she will see that she thought it entirely appropriate for disabled people not to play a part in it. The Government ask us to have confidence in this information-gathering review, but its findings will be secret, disabled people will not be part of it and there will be no consultation on it. The hon. Lady thinks those are reasons for us to have confidence. I see Members on the Government Back Benches putting their heads into their hands, and well they may. These are the facts. What is being presented to the House is clearly unacceptable.

Welfare Reform Bill

Jenny Willott Excerpts

Monday 13th June 2011 Commons Chamber

[Stephen Timms]

The point is that it is a zero-cost proposal; I am simply suggesting that the funding would be provided through the mechanism that I have described. It would be tapered away, along with the rest of universal credit, and would sit naturally on top of existing payments, so that there would be just an additional payment in respect of school meals, where appropriate, which would then be tapered away once the disregard had been exhausted. The budgetary cost would be exactly the same.

We have exactly the same issue with free prescriptions. The current system provides them to people on benefits and to some people with low incomes through the HC2 form, but once again, we have heard nothing from the Government about what will happen under universal credit. Our new clause 4 addresses that.

By the way, it is perhaps worth making the point in passing that the number of pupils receiving free school meals is an important indicator for education policy as well. The pupil premium depends on the number of people receiving free school meals. The fact that we have no idea at all who will be entitled to free school meals under the Government’s proposals will create serious problems with that, too.

[Jenny Willott (Cardiff Central) (LD)]

Returning to the right hon. Gentleman’s proposals on prescription charges, is he not concerned about the evidence that we received at the beginning of the Public Bill Committee from a number of witnesses who said that there was a significant difference between school meals and prescription charges? School meals are an ongoing cost every day, whereas prescription charges tend to come in a batch. By tapering the amount of money that somebody received, they still would not be able to afford significant costs—potentially the cost of a number of prescriptions at the same time—because the amount of money concerned would be an ongoing amount, unlike under a system more similar to the current one, where all the prescriptions are paid for when they are needed.

[Stephen Timms]

I agree with the hon. Lady’s point, and to that extent the current system has a lot of attractions. The problem is that we will lose that system with universal credits. The question is: who will be entitled to free prescriptions? I do not imagine that she is arguing—as perhaps the Government will; I do not know—that there should be a cut-off point in income beyond which people suddenly lose all help for prescriptions. If that happens, we will create a serious and damaging cliff edge in the system, which everyone agrees is an undesirable feature. Our new clause 4 therefore proposes to address that problem, although there may be other problems as well. What I would dearly love to extract is a proposal from the Government, so that we can find out exactly what they intend to do, because so far they have been silent on that subject, as on all the others.

We have been told throughout these debates that the main point of the Bill is to ensure that people are always better off in work. Our task in Parliament is to scrutinise whether the Bill lives up to that laudable aim, but without knowing what the Government will do to provide help with child care, school meals or prescription costs, we simply cannot tell.

Frankly, it is an abuse of the parliamentary process not to tell this House what the Government’s policy is before the Bill leaves us. I do not accuse Ministers of withholding information from Parliament; the problem is that they have no more clue about their policy than we do. It is an astonishing and abject failure on their part. They made all these boasts at the beginning—their bragging ran away with them—but now they cannot deliver policies to substantiate those boasts.

--- Later in debate ---

[Ms Buck]

I am not confusing anybody. It is a cut in housing benefit of up to 23% for 670,000 households, of which, according to the Government’s own impact assessment, 400,000 include a disabled person and 108,000 are in adapted properties. Most of those people will have no means of avoiding the cut in their housing benefit, because there is nowhere for them to go. Even if there were, the Government do not want some of them to go there, because then they would not meet their own savings targets.

[Jenny Willott]

The hon. Lady said that she thought that there was no earthly chance of somebody with a similar level of disability needing a property that had become available. I am sure that, like me, she must have an awful lot of people coming to her constituency surgery who have disabilities and have been waiting a very long time for adapted homes. [Interruption.] Disregarding the rest of the debate, and the Labour Members who are hollering at me, the chances are that there will be somebody who wants those properties. That is not a reason to go ahead with moving people, but it is not true to say that there will not be people waiting who need those properties.

--- Later in debate ---

[Maria Miller]

My hon. Friend is right to be incredulous about the Labour party’s position. She should also express incredulity at the fact that the Labour Members do not seem to have a policy—apart from opposition to the proposals.

I remind hon. Members that the restriction will apply only in areas where local market rent increases at the 30th percentile exceed the annual rate of increase in the CPI. We have said that we are committed to making savings from that measure, but if it becomes apparent that the LHA rates and rents are out of step, that can be reconsidered, as I said in Committee.

Let me briefly consider amendment 72, which raises an important issue for us all. We want to ensure proper and accurate monitoring of the impact of the introduction of our policies. Indeed, we have put that in place for the work capability assessment and our reform of DLA. My hon. Friends the Members for Cardiff Central and for Redcar (Ian Swales) are right to highlight the importance of having an accurate method of assessing the impact of our policies. That is an important and prudent part of Government policy. I hope that my hon. Friends will be reassured that we have already commissioned independent external research to evaluate the impact of the housing benefit reforms that we announced in June 2010 in the Budget and in the spending review. The review will be comprehensive and thorough and presented to both Houses, together with a ministerial statement. We intend to make final findings available in 2013, with initial findings available in 2012.

[Jenny Willott]

There is a huge range of issues that we clearly cannot cover this evening in the time available to us. However, I would be grateful if the Under-Secretary ascertained whether one matter in particular could be included in the review: how foster children are covered. As I understand it, foster children are not counted in the allocation of bedrooms. The way in which the measure is implemented could have a significant impact on local authorities’ ability to recruit foster carers, and on the care that can be provided for foster children. That has not been covered in the debate so far.

[Maria Miller]

My hon. Friend makes an important point, which has been raised with me on a couple of occasions. I remind her that currently there is no additional allocation of housing for families with foster children. There is an accrual within the payments that are made to cover additional housing costs. However, she makes the important point that, whatever our housing policies, we should not disincentivise or put unnecessary barriers in the way of foster carers who do so much to give children who cannot live with their own families the sort of start in life that they need.

Oral Answers to Questions

Jenny Willott Excerpts

Monday 13th June 2011 Commons Chamber

[Chris Grayling]

We have made it clear that we are seeking to reduce the number of proactive workplace inspections by about a third by removing from proactive inspection low-risk premises that have no record of problems. In that way, the HSE can concentrate its resource on dealing with those employers where there is a problem and fault has been found. Indeed, we are introducing a system of fee for fault to ensure that we recover money from those employers who are breaking the rules.

[Jenny Willott (Cardiff Central) (LD)]

Changing from three to six months the period before which a claimant becomes eligible for the new personal independence payment not only means that people with sudden onset conditions, such as cancer or a stroke, have to wait longer for support, but it may affect their family’s access to carer’s allowance. Will the Minister investigate ways to enable those looking after loved ones who suffer sudden onset conditions early access to carer’s allowance?

[Maria Miller]

It is important that we continue to view the personal independence payment very much as something that relates to an individual and the way in which their condition affects them on an individual basis. We are not intending to look at particular conditions, but we will be carefully examining the way in which the introduction of the personal independence payment affects benefits that are passported, such as carer’s allowance, and we will bear my hon. Friend’s comments in mind.

Welfare Reform Bill (Instruction)

Jenny Willott Excerpts

Monday 9th May 2011 Commons Chamber

[Jenny Willott (Cardiff Central) (LD)]

I am not as cynical as the hon. Member for Stretford and Urmston (Kate Green)—I am sure that she does not mind my saying that—although I appreciate that the motion before us is limited and should not be broadened into a big debate about child poverty. There is a great deal of cross-party agreement that tackling child poverty and social mobility is extremely important. There is also cross-party agreement that child poverty levels in the UK are still worrying and that much work remains to be done to improve the situation. Those are areas about which I am sure we will have much more extended arguments in the Welfare Reform Bill Committee. I look forward to having those debates in the next few weeks.

We have learned that if we are really to tackle child poverty, we need to tackle social mobility at the same time. The two are so completely interrelated that working in silos will not be effective in the long term. It is not enough just to tackle the income coming into families; we also need to look much more broadly, including at the education and work opportunities available to the parents. The hon. Lady made the point about income levels in families, but we know that if children and their families really are to be lifted out of poverty, we need to talk about a lot more than that. I therefore welcome the fact that the Government plan to look at the issues in the round, combining the two areas together.

[Guto Bebb (Aberconwy) (Con)]

I agree entirely that bringing child poverty and social issues together is important. However, the Child Poverty Act 2010 does not apply in Wales, so we also need certainty that the social mobility elements will be looked at carefully in the Welsh context.

[Jenny Willott]

There are issues with child poverty in Wales. The hon. Gentleman and I represent Welsh constituencies. Child poverty levels in Wales are, I believe, higher than in other parts of the UK, just as incomes are much lower. If we are going to tackle the issue in Wales, just as in England and in Scotland, we need to look not just at welfare packages but more broadly at the opportunities available to children and young people, as well as their parents, so that they get the best opportunities. I hope that the Minister will say what she is doing with the Welsh Assembly Government and the Scottish Parliament. We need a lot of co-ordination with the devolved Administrations, because many issues affecting social mobility are devolved matters such as education. If we are to take the issue seriously, we need to ensure good communication and liaison between the devolved Administrations and Departments in Whitehall.

I look forward to debating the issue further in Committee, but I would be grateful if the Minister responded to a couple of issues this evening. First, can she let us know more about why she feels that combining the expansion of the commission with the proposed change in its remit will increase accountability or ensure that the Government achieve their objectives? For many years Governments have talked the talk, but they have not necessarily walked the walk. I would like the Minister to say more about why she thinks the change will make a difference by delivering good progress on tackling child poverty. I would also be grateful if she gave more detail about the timing of the child poverty and social mobility strategies, how they will interact with the establishment of the new commission and how the process will work.

I welcome today’s proposal and look forward to debating it in Committee in the coming weeks, in what I am sure will be significantly more depth.

[Mr Frank Field (Birkenhead) (Lab)]

Let me add two brief comments to our debate today. The first is directed towards the Liberal Democrats, as I read in the papers that social mobility is an issue that the Deputy Prime Minister is going to take under his wing. I feel in a good mood, so may I offer them some advice? We in this House might know what social mobility means, but if my constituents are anything to go by, nobody out there knows what the hell the Government or the Liberal Democrats are going on about when they talk about social mobility. My constituents all understand the phrase “life chances” and whether the Government have a strategy in place to ensure that every child in this country has a chance to get a better job than their parents, but if we continue to talk about social mobility, they turn the volume down or switch off. Although I do not mind facing the electorate in such circumstances, the policy is too important to allow the Government or the Liberal Democrats to continue to go over the top, shouting language that neither supporters nor enemies can understand.

[Jenny Willott]

I completely understand what the right hon. Gentleman is saying. We would all agree that the phrase does not mean very much to most people, but given that it is the jargon that has been used for many years by Governments of all colours, can he suggest a phrase that would be more helpful and productive and that people would understand?

[Mr Field]

Quite honestly, when we resume debate on the Bill, I would favour the phrase “life chances and poverty” or calling the commission the poverty and life chances commission, because poverty is the aspect that we are trying to break.

That brings me to the second, perhaps slightly more substantial point that I would like to contribute to today’s debate. When the Prime Minister asked me to conduct and submit a report to him about the foundation years, there was concern on the Opposition Benches that the huge intellectual and political efforts and the resources that the Labour Government had put into trying to tackle and finally abolish child poverty might somehow be dissipated, as though that report would be used as some terrible smokescreen. What is so good about today’s debate is that the discussion has moved on from there. I cannot emphasise enough how much I welcome that. However, I want to suggest that building up the foundation years should become a goal, so that a first building block in any strategy would be for many more children to start their first day of education better able to benefit from that education, rather than have primary schools spending most of their efforts doing rescue work. That has not occurred before. If the Government are concerned with that objective, and also with Labour’s commitment to abolishing child poverty by 2020, initially, in the short run, there is no conflict.

I draw the House’s attention to a report commissioned by the Joseph Rowntree Foundation that was published a couple of years ago. It looked at what ways are open to the Government if they are serious about reducing the number of children in child poverty as Labour defined that in the 2010 Act. There is a medley of ways, but the one that held the greatest prospect for the quickest advances was building up high-quality child care. As my hon. Friend the Member for Stretford and Urmston (Kate Green) said, if that were in place, many more parents would make the effort to take themselves out of poverty.

In a not-so-recent letter to the Chancellor, I asked him whether he will make a decision soon on the recommendation in my report. I asked him not to increase automatically benefit rates for children, but to see whether some of that money, in some years, could be better spent on building up the foundation years, as we call them in my report. Clearly, if some of that money were transferred from future years into building up high-quality child care, and if we avoided cutting such provision, as my hon. Friend the Member for Stretford and Urmston said, more children might be ready to benefit from their full-time education from their first day of school onwards. That is the best move the Government can make to reduce the number of children in poverty, year by year.

I rose to welcome the measure, which takes the debate forward. Hon. Members can get excited about it, but if the Government are serious about talking to our voters, they need to drop the term “social mobility” and come up with a phrase that we can all understand.

Oral Answers to Questions

Jenny Willott Excerpts

Monday 28th March 2011 Commons Chamber

[Chris Grayling]

The hon. Lady makes an important point. That was clearly one of the flaws in the system we inherited. We have retrained decision makers, instructing them to take into account a broader range of evidence than simply the assessment so that claimants now have the opportunity to submit proper evidence from their own medical practitioners, and we have made it absolutely clear to decision makers that they are in charge. We have also introduced a process of reconsideration within Jobcentre Plus to reinforce that process.

[Jenny Willott (Cardiff Central) (LD)]

The Harrington review contained some very welcome and important recommendations that the Government are implementing, including on increasing the discretion of Jobcentre Plus staff. In contrast, the Department recently introduced regulations making the descriptors for work capability assessments more prescriptive. As Professor Harrington will now be reviewing the descriptors as well, can the Minister assure the House that the Government will take into account Professor Harrington’s recommendations in that area, and look in general at the descriptors being applied to work capability assessments?

[Chris Grayling]

I can absolutely give that assurance. We want to get this right, and we have introduced these changes because we think they improve the process. For example, we expect more mental health patients to end up in the support group as a result of the changes we have introduced. I have made it very clear to everyone involved that if there are further ways of improving the process, as a result either of recommendations from Professor Harrington or of the experience of the national roll-out, we will move quickly to make the necessary changes.

Housing Benefit

Jenny Willott Excerpts

Thursday 10th March 2011 Westminster Hall

[Dame Anne Begg]

Very often, partly because of the publicity and the tabloid headlines, the assumption is that people on housing benefit are always out of work, when that is certainly not the case. In fact, in London it is particularly important that if low-paid people are to get work and to have work incentives, housing benefit must be set at the right level. The danger is that the gap between what they can get in housing benefit and what they can afford is too great; they end up not being able to get accommodation in the area in which they are working, which is even more important.

[Jenny Willott (Cardiff Central) (LD)]

Is one of the problems not the fact that local housing allowances have driven up rents for everybody in the private rented sector, including people who are working? That has had a knock-on impact on both those who are receiving the LHA and on those paying all their rent. Even where the difference between those who are not receiving LHA and are paying the rent themselves is 90% of LHA rates, that is higher than it would have been had the rents not been driven up in the first place. It has a much broader knock-on impact across society.

[Dame Anne Begg]

Earlier in my contribution, I said that I do not believe that is the case in Aberdeen. Wherever the housing supply is less than the housing demand, it is the lack of supply and the ability of those in work to pay higher rents that drives up rents, not the level set for the local housing allowance. It is a chicken and egg situation. Why was the local housing allowance set at that level for that broad rental market area? It was because of the average house rental price in that area.

The hon. Member for Cardiff Central (Jenny Willott) will have constituents in the private rented sector who will already, without any changes, be supplementing the local housing allowance out of their other benefits, in order to be able to afford the house. If rents were being driven up to local housing allowance levels, we would have seen a much smoother curve in the cost of all housing. All housing would cost the local housing allowance, but very often it still costs a lot more. That has been the problem that many are facing. It may be true in some areas, but that is what one hopes the research will find: that in the odd area a large number of people in the private rented sector are also on housing benefit. I understand that Blackpool is one of those areas. In such areas it may be the case that private rents have gone up to the LHA.

However, I do not believe that would be the case in more affluent areas. Unfortunately, in areas where that has happened, unless landlords reduce rents, we are still in a cycle of people not being able to afford the housing or to get other housing that they can afford, because of the changes. I have not said anything about the changes from the 50th to the 30th percentile: that also comes into play in a different area.

I was going to say something about the importance of housing benefit to work incentives. Perhaps that is something the Minister could answer. We know that housing benefit is to be in the universal credit, but we do not know the details of how it will be treated. One fear is that if housing benefit comes in as a flat level rather than the actual cost of the housing occupied, there might be a disconnect between what someone has to pay out and the effective withdrawal rates, so universal credit would not operate as it is meant to and ensure that works pays in all cases.

I am coming to the end of my comments, and I appreciate that I have not covered everything in the document. I mentioned that I held a housing summit—predominantly for housing associations but including those in the social rented sector in my constituency. The reason for that was that it became apparent that not only were there knock-on effects from the private rented sector that would result in higher demand for their properties, but there are also Government proposals that would affect them directly.

The biggest one that worried housing associations and the social rented sector is the under-occupancy rule, as it will affect all social rented housing as well as the private rented sector. The fear is that there will not be enough accommodation of the appropriate size for people to move. Consider the case of parents in their late-50s occupying a three-bedroom house, because it was the family home in which the family grew up before leaving. They have fallen out of work, which might be exacerbated by the increase in the state retirement age to 66. In their late 50s or early 60s, for the first time in their lives, they are now dependent on housing benefit in order to pay the rent, but they will only get housing benefit for a one-bedroom property, because that is all they will qualify for. Can the Minister say how the amount they get will be calculated? It could be, in an area such as Aberdeen, that what they pay for their three-bedroom council house is less than they would get in local housing allowance, even after the changes, for a one-bedroom flat in the private rented sector. There is a false economy if they are being forced to move into something more expensive, which they will get because it is in the private rented sector.

I could be flippant and say that there will be plenty of one-bedroom flats available because all the 25 to 35-year-olds will have had to move out of them to go into shared accommodation. However, I do not think that the 60-year-old mum and dad are going to move into the equivalent of a one-bedroom student flat, which a younger person has moved out of. This will cause great anxiety and worry. A lot of people will probably stay where they are, but they will be very short on the rent.

I know that the Minister is particularly concerned about pensioner poverty, but a large group of people who have fallen out of work towards the end of their working lives and who cannot get their state pensions until they are 66 will get caught up in this issue; it will not affect people who are over pension age, but it will affect those who are just below it, whose last years before they get the state pension will be spent living in poverty. They could become the group with the highest levels of poverty. The issue really must be considered. The social rented sector is particularly worried, because a lot of those people are already in the sector, and there is simply not enough stock to allow people to be moved around and housed according to the new occupancy rules.

When Labour was in government, many Opposition Members said it would be unfair for older people to have to sell their houses to pay for their care. They also said that it would be unreasonable for them to have to sell their houses because the council tax was too expensive. However, the Conservative coalition Government are saying that it is perfectly acceptable for those living in the social rented sector to have to move at a time in their lives when they should be settling down and moving towards retirement. The issue is a great concern, and people are very exercised by it. In rural areas, of course, there may not be houses of the appropriate size because they do not exist. People will therefore face an enormous shortfall between their rent and what they can get under the occupancy rules because of where they live.

I could say a lot more, but I am conscious that I have taken up a lot of time.

--- Later in debate ---

[Jenny Willott (Cardiff Central) (LD)]

A number of hon. Members have mentioned that the Government’s proposals have been driven by the portrayal, in the right-wing media, of scroungers and so on. While I agree with hon. Members who say that that media portrayal is inaccurate and unfair, we should also make it clear that the Government’s proposals are not driven by that portrayal.

Today, the Liberal Democrats have been called the nasty party. Although the hon. Member for Brighton, Pavilion (Caroline Lucas) was not a Member of this place prior to the general election, the principle was established in the previous Parliament that there should be a cap on housing benefit on local housing allowance. The hon. Member for Aberdeen South (Dame Anne Begg) will remember, when we were both members of the Work and Pensions Committee in the previous Parliament, that the principle that nobody should be entitled to a house of more than five bedrooms was introduced by the previous Government on the basis that it was not fair that people should have an endless capacity to have houses that were costing taxpayers a significant amount of money. We can therefore argue about where the cap should be set, but the principle was set, and hon. Members in all parts of the House agreed that there should be a cap of some sort to ensure that there is fairness for those working on low incomes and to ensure that they do not feel at a disadvantage in their communities in comparison with those who are not working and are receiving LHA.

As I have said, I was a member of the Work and Pensions Committee in the previous Parliament. One recommendation that the Committee made, in one of the final reports that we published in the previous Parliament, was that there should be additional rooms available on LHA for people who need carers. I would like to put on record that I am really glad that the Government have now introduced that. When we took evidence prior to the election, that situation seemed to be very unfair, and the evidence we took included some upsetting stories about how that had affected people’s lives. I am glad, therefore, that that has been put right.

I want to flag up a number of issues about which I have concerns, and I would be grateful if the Minister were to respond to them in his summation. One concern relates to the broad rental market areas, which have been an issue for a period of time. The Committee looked at that issue in the previous Parliament and raised it as a concern. However, the Government are proposing to change the centile, so that LHA will be based on the 30th centile. Whether the BRMAs are working effectively becomes an even more important issue, because it has an even more noticeable impact on the amount of LHA that claimants can receive as a maximum.

Some BRMAs have serious internal problems within an area, which then create barriers to the labour market. The most often quoted example is the city of Cambridge. The area covered by the BRMA includes the city centre, which has very expensive properties, and a significant rural hinterland, where the properties are very cheap. That means that the centile is skewed by the large rural areas. If people then end up living in those areas, the jobs are not there and it makes it difficult for people to access the labour market. The opposite effect, as the hon. Member for Aberdeen South has said, has been seen in Blackpool, where the cheap areas are in the town centre and the rents there have been driven up by a significant amount. That has effectively priced working families on low incomes out of the town centre and made it difficult, particularly in a job market that is heavily reliant on seasonal work, for people to keep their accommodation.

As well as the well-known examples of Cambridge, Blackpool and others, there is a significant problem in London, where the BRMAs are enormous. People moving from one area of a BRMA to another are not moving within a small area. It may be that there are entire boroughs within a BRMA where there is almost no affordable accommodation for people receiving LHA. I know that a number of London MPs are concerned about how exactly that might work. The principle, therefore, of changing the centile from the 50th to the 30th, if the BRMAs work properly and effectively, might not be too problematic. Where BRMAs are not working, however, where they are too big or where they have internal problems, those issues will be exacerbated by the move from the 50th to the 30th centile. I hope that the review of the housing benefit proposals, which was mentioned in the other place by Lord Freud, the Minister with responsibility for housing benefit, will look at BRMAs, which have not been examined properly, have been a problem for a number of years and have not been taken seriously.

In Wales, BRMAs are coterminous with local authorities, which seems to be more effective because it tends to involve a smaller area. People tend to have their community, and, as the hon. Member for Brighton, Pavilion has said, their support network—their friends and family—that they need to be able to stay in work, and they tend to be in the same local authority area. By reducing BRMAs to a more practical size, we may be able to overcome a lot of problems that might otherwise arise with the change to the centiles.

On the shared accommodation rate—I shall probably call it the wrong thing as well in this debate—I share the concerns raised by other hon. Members. I completely understand the rationale behind it of ensuring that people who are receiving LHA are not at an advantage over people who are working and not receiving benefit. My personal view, however, is that it seems to be based on a London-centric view of the world. In London, a lot of young people under the age of 35 live in shared accommodation. For those working in London, it is difficult to afford a one-bedroom property. Outside London and outside of the expensive parts of the UK, in a lot of areas young working people under the age of 35 are perfectly able to rent a one-bedroom flat. That is certainly the case in my city, Cardiff. We may find that we are putting young people up to the age of 35—I would like to think that that is young—at a potential disadvantage, in comparison with other people.

[Dame Anne Begg]

I agree wholeheartedly with what the hon. Lady is saying, but it is actually much harder for those who are dependent on housing benefit to lead the kind of shared life that I think the Government envisage. Students sharing flats are not dependent on housing benefit and are therefore not hidebound by the rules of housing benefit and what can be rented as a result of housing benefit, and neither are groups of young professionals who might be sharing a house or a flat. They are not hidebound by the rules of tenancy agreements and what is legal and what is not illegal. Part of the problem is the lack of houses in multiple occupancy to which people on housing benefit can have access.

[Jenny Willott]

The hon. Lady makes a valid point. In areas of my constituency, a large number of students live in shared accommodation. If they are in a house in multiple occupancy, most students are not going to want to share with somebody who is on housing benefit, partly because it makes it difficult for council tax exemption and things like that. As soon as there are different people with different exemptions and different rules, as the hon. Lady has said, the financial arrangements for a household may become complicated.

Finally, the other issue about which I have some concerns is the move to uprating rents in line with the consumer prices index, rather than with average rents. The issue is a difficult one to resolve, and I completely understand why the Government have decided to propose the change. Increasing the local housing allowance in line with rents has, in large parts of the country, driven up rents significantly. As the hon. Lady has mentioned, if we set the LHA at the median rent, and if all the landlords currently charging less than that bring their rent up to the median, then the median rises. Rents inevitably go on an upward bend, which has happened in significant parts of the country.

I appreciate that the Government are tackling that issue to ensure that it does not happen and that people have a fair crack of the whip. No only are there implications for the vast amount of money that the Government are spending through the LHA, but there is a knock-on impact on those who are not receiving the LHA in a local area and are renting privately. It can make it even more difficult for those on low incomes to afford appropriate accommodation.

I have some concerns, however, about uprating rents in line with the CPI. The index reflects inflationary increases, but it is not designed to reflect changes in the housing market. I am glad that the Government will be reviewing the decision in a couple of years—2014, I think—after seeing the impact. If the LHA is not keeping track with what is happening in the rental market, we could end up with a big gap separating those on the housing allowance and those paying rent. That might have a serious impact on those people’s ability to get into work, as well as all the other positive things the Government are driving forward.

A number of hon. Members have mentioned that the whole situation is driven by our not having enough social housing in the UK. It is crucial that we build more social housing, if we are to tackle any of the issues.

To get in my party political pop for the afternoon, both the previous Labour and Tory Governments sold off more than they built, which is why we are in such a mess in the first place. After the Thatcher-Major Government, by 1997 there were 1.1 million fewer social homes, which is a huge number. Then, after 13 years of Labour in power in this country, there was still a drop of another 250,000 in social housing. By the time Labour left power last year, there were 1.7 million families on housing waiting lists, which is such a vast number that it will take much greater changes than those to the housing benefit rules if we are to do anything about it.

I am glad that the Lib-Dems in government are ensuring that something will happen. The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell), announced that more than 150,000 affordable homes will be built over the next four years. That is a start, although clearly not enough when we have such a massive deficit of social housing in this country. At least it is progress in the right direction, rather than going backwards. I hope that, whatever we think about the changes, people will fall in behind the building programme to ensure that it happens, so that we can make some progress and people can afford homes to live in.