Trawlermen’s Pensions

Jim Shannon Excerpts

Wednesday 2nd March 2011 Commons Chamber

[Alan Johnson (Kingston upon Hull West and Hessle) (Lab)]

The purpose of the debate is to bring to the attention of the House and the Minister a scandal involving the maladministration of a pension scheme that has left thousands of distant water trawlermen who reached retirement age up to 30 years ago without a penny of the pension to which they contributed, and thousands more unlikely to receive their pension in future. I am pleased to be joined this evening by hon. Members who represent port constituencies, such as my hon. Friend the Member for Tynemouth (Mr Campbell), the hon. Member for Banff and Buchan (Dr Whiteford) and my hon. Friends the Members for Kingston upon Hull North (Diana Johnson), for Kingston upon Hull East (Karl Turner), for Scunthorpe (Nic Dakin) and for Great Grimsby (Austin Mitchell).

I shall set the context. Distant water trawlermen worked in the most arduous and hazardous occupation imaginable, working 18-hour shifts in Arctic waters where temperatures could fall as low as 40° below freezing. In 150 years of distant water trawling from Hull, which was exclusively a distant water port and the biggest in the world, 900 ships were lost at sea—that is six a year—and 6,000 trawlermen were killed. The mortality rate was 14 times higher than in coal mining.

When the industry collapsed as a result of the agreement between Britain and Iceland that ended the so-called cod wars in 1976, a Government Minister, from the Dispatch Box, promised the men compensation, retraining and redeployment. They received nothing. Classified as casual workers, they were thrown on the scrap heap. While the trawler owners were paid millions of pounds in decommissioning grants, not a brass farthing was paid to the trawlermen themselves. That injustice was belatedly rectified by the compensation scheme that the previous Government introduced in 2000, although one aspect of it is still outstanding, and my hon. Friend the Member for Great Grimsby and I have referred it to the parliamentary ombudsman.

As we worked with the ex-trawlermen to achieve that compensation, a number of them referred to a pension scheme that operated in the industry. Some men over 50 had been allowed to commute their pension to a one-off payment, to alleviate the hardship that they suffered as the industry collapsed, but many men said that they could not remember receiving anything from the scheme, even though they were now well beyond pensionable age.

I ascertained that there was indeed a fishermen’s pension scheme, which had been established on 1 April 1961 by a trust deed made on 19 December 1960 between British Trawlers Federation Ltd and Lowndes Associated Pensions Ltd. The scheme was compulsory for those coming into the industry after the date of its introduction. It was a contributory scheme, with the men originally paying sixpence per sea day and the employer ninepence. I add that that is old pence, as a few Members will not remember the conversion to decimal currency, so those sums were 2.5p and 4p respectively. Contributions to the scheme ceased in 1979, and benefits ceased to accrue. The benefits accrued up to the date of discontinuance were secured by a group deferred annuity contract underwritten by Norwich Union, which is now Aviva. Capital Cranfield became the trustee when it acquired Lowndes in April 2000.

Having established those facts, I wrote to Aviva in 2006 to find out whether any pensions remained unpaid. My impression was that there might be about 100 such cases. By 2007, I had discovered the full horror story of a scheme in which few records had been kept and no efforts had been made to track down the men whose pensions were due. More than 4,500 trawlermen from Hull, Grimsby, Aberdeen, Fleetwood, Milford Haven and North Shields had reached pensionable age from the 1980s onwards without receiving the pension that they were due. About a quarter of them were from Hull.

The reason for that disgraceful maladministration was that the only record kept of members was their surname, initials and date of birth. There was no record of the men’s national insurance numbers, their addresses or any other pertinent information by which they could be traced. There had been no attempt to rectify the situation and nobody in the communities affected was alerted to the problem, least of all the MPs. The unpaid pensions simply remained in the fund while many of the men affected lived out their old age in penury.

Aviva, the insurer, had been paying benefits—or more accurately not paying benefits—without the intervention of the trustees since 1986, at the request of the then trustee, Sedgwick Noble Lowndes, which, as I said, is now part of Capital Cranfield. That in itself seems a strange arrangement and one that neither party should have allowed.

As well as the 4,500 men who had reached pensionable age, there were 8,879 still below 65 with little prospect of receiving their money as they became eligible. Since I wrote to the then Secretary of State for Work and Pensions and the Pensions Regulator in January 2007 to alert them to the scandal, a great deal of effort has gone into finding the missing fishermen.

Aviva has worked with local MPs on the Find the Fisherman campaign, which we agreed should run for two years. At the end of that time, in October 2009, Members of Parliament met Aviva and Capital Cranfield to take stock. Aviva, in its briefing note for this debate, talks about unclaimed assets being “common across the industry” and, after setting out details of the Find the Fisherman campaign, states that “some members remain unpaid”.

For “some”, read 6,837. That is the figure that we were given for the men who had not been—and probably never would be—traced at the end of the campaign. That is more than half the scheme membership. Perhaps the Minister will tell me whether he believes that that level of unclaimed assets is at all “common across the industry”.

With my hon. Friends the Members for Great Grimsby and for Aberdeen North (Mr Doran) and my former hon. Friends the Members for Cleethorpes and for Blackpool, North and Fleetwood, who also attended the meeting with Aviva and Capital Cranfield in October 2009, I put forward proposals that would allow the schemes to be wound up fairly.

First, we would need to agree how to distribute the surplus in the scheme coffers. At that time it was £2 million, although I heard this morning that Capital Cranfield is saying it is £1.3 million. The disparity has yet to be explained to us.

Secondly, provision needs to be made for unidentified beneficiaries who may come forward in future. Thirdly, we sought payment to the 50-odd families for whom payment is disputed. Those are cases in which Aviva says that the money has been paid, usually in the 1980s, but it has no proof of payment and the families are adamant that it was never received.

In that respect, let me explain how the payment system worked as described by the chief executive of Aviva in a letter to one of my constituents:

“When an employer wanted to claim a pension on behalf of one of his employees he would make an application to the Royal National Mission”—

the seaman’s mission—

“who acted as an intermediary and would in turn apply to Norwich Union on behalf of the employer. Norwich Union would verify the details against the policy and authorise a payment to be made to the Mission who would then pay the employer so they are able to pass the money on to the individual fisherman”.

He goes on:

“I appreciate this will appear unnecessarily complex but, rightly or wrongly, this is how payments were settled in the past”.

I think that we would all agree that it was “wrongly”.

A scheme with no national insurance numbers and no addresses relied on trawler owners, who were gradually disappearing as the industry was in terminal decline, to go through the seaman’s mission—which incidentally informed Norwich Union, as it was then, 12 years ago that it did not have the resources to undertake this work—to give cheques to men who in the main did not have bank accounts.

[Jim Shannon (Strangford) (DUP)]

From my knowledge of the fishing industry and how it works, I would say that sometimes fishing organisations that represent the people have a record of their membership. I am sure that that has been checked, but if not, it may be a method, even at this late stage, of getting a wee bit more information.

[Alan Johnson]

I appreciate the hon. Gentleman’s suggestion. He is right—records are kept. We have looked at all those possible avenues, including the DWP’s tracing arrangements and the former Department of Trade and Industry’s records of trawlermen. We have exhausted every avenue to try to find those men.

Perhaps the Minister will understand why we say, given the convoluted way in which the payments were made, that the benefit of considerable doubt in disputed cases should rest with the men and their families.

Our final proposal concerns recompense. We feel strongly that some compensation should be paid to the men and/or their communities for the appalling way in which the scheme has been administered.

The trustees and the insurers had a financial and moral responsibility to scheme members, which they failed to fulfil. The way this scheme operated would have shamed an office sweepstake organiser. The fact that the men whose interests they should have safeguarded did one of the most difficult and dangerous jobs imaginable, and in the main spent their old age scraping for every penny while money that could have eased their plight was never paid to them, adds to the sense of injustice within those proud communities.

Since October 2009, we have been fortunate to have the services of a pensions expert from Thompsons solicitors working pro bono on our behalf to try to bring the arrangements discussed then to a successful conclusion. Seventeen months later, there has been little progress, and no further approaches to the port MPs by Aviva or Capital Cranfield to resolve the outstanding issues.

In the absence of any ex-trawlermen or anyone from the affected communities among the trustees, I believe it is incumbent on Aviva-Capital Cranfield to seek the approval of the port MPs for the final arrangements to wind up these schemes. Perhaps the Minister will tell us to whom those are companies answerable. I understand that they are proposing to agree their own fees for the wind up—the money will come from the scheme. There must surely be some external oversight of those arrangements.

The port MPs wish to meet the Minister to explore the issues surrounding that scheme and smaller associated schemes in more detail, and we think that it would be beneficial to have the Pensions Regulator present. Surely he must have a role in ensuring that the schemes are wound up in an orderly and timely fashion, with the interests of the members properly protected.

We seek from the Minister nothing beyond his understanding of how badly this scheme has been administered and his assistance in bringing this long saga to a conclusion that is acceptable to port MPs, as virtually the only remaining representatives of those fishing communities. We seek no public money and no taxpayer contributions.

Finally, I ask the House to imagine the outcry there would be if thousands of bankers, civil servants, or even former MPs had been treated in such a way. That would be a huge story that we would be following regularly in the national media. This has been an almost silent scandal, but this evening’s debate will, I hope, bring it to the attention of a wider audience in the quest for justice for communities who contributed so much, sacrificed so many and yet were treated so abysmally.

Benefit Entitlements (Joanna Cranfield)

Jim Shannon Excerpts

Tuesday 11th January 2011 Commons Chamber

[Mr David Amess (Southend West) (Con)]

In the Christmas Adjournment debate I raised the case of Joanna Cranfield and I asked the Deputy Leader of the House to bear in mind three specific issues concerning Miss Cranfield’s circumstances. I am delighted that during the period between my raising the case and tonight, one of those issues has already been dealt with satisfactorily.

Joanna Leigh Cranfield is a 17-year-old young lady who is an exceptional swimmer. She is an up-and-coming talent whom I very much hope will represent the United Kingdom in next year’s Paralympics. Joanna was born with her left lower arm and hand missing. Also, her left clavicle is short and twisted, which results in her having a dropped shoulder and a slight curvature of the upper spine. Despite all that, Joanna is, as one might expect, an extremely attractive and glamorous young lady. As a result of the challenges I have mentioned, Joanna suffers from repetitive strain syndrome in her remaining right hand and wrist from overuse. On top of those difficulties, she also suffers from a condition known as pump heel or foot spurs—an abnormal growth of the bone that in turn makes the tendon in her legs short and tight. For that condition, Miss Cranfield has had to undergo an operation to remove part of the deformed bone in her heel. Further to all those conditions, Joanna is under the care of Moorfields eye hospital for light-sensitive eyes and poor 3D vision, which results in her having trouble with depth perception and other abilities that healthy eyes grant, which most of us take for granted.

I am only too well aware that there are hundreds of everyday tasks that Joanna cannot do, but the things she can do she does exceptionally well. Her swimming ability is an example to every one of us and I repeat that I strongly hope she will represent us in next year’s Paralympics. She has achieved British records in the swimming pool at a number of different distances within the S9 category, including the 1,500 metres long course and short course, the 800 metres short course, the 400 metres short course and the 200 metres short course. She is a highly competitive swimmer in breast stroke, butterfly and back stroke. How anyone can do all that with one arm beggars belief, but Joanna can. She is a very talented swimmer, and I strongly hope that the Minister will intervene and have a word with our right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport to see whether there is any way in which Joanna, with her particular talents, can be given some sort of funding. Also, if anyone out there has a little extra money in these challenging times and wants to help a Paralympian to achieve her goals, I hope they will help her.

Joanna has received numerous awards for sporting achievement. This year alone she was given the Paralympic hopeful award from the Essex Disability Sports Academy and was named the disability sports personality of the year 2010 in the Rochford district sports awards. Despite her remarkable sporting success, it is clear that Miss Cranfield has a disability that is a great hindrance to her everyday life. For the past five weeks, I have been able to use only one arm, which has presented all sorts of challenges that I had not anticipated. For a young lady such as Joanna, all sorts of tasks, such as grooming her hair and looking after her personal needs, will be jolly difficult. Having met Joanna and her mother on several occasions, the last thing that she wants to be perceived as is disabled. That said, if there is anything at all that can be done through my hon. Friend’s departmental responsibilities, Joanna and her family would be very grateful. I hope that our welfare system can help someone in Miss Cranfield’s position.

I understand all the arguments about the fact that there has to be a cut-off point, but why, on Joanna’s 16th birthday, were almost all the benefits that she received relating to her disability suddenly stopped? I would hope—again, I understand that there has to be a cut-off point, and when someone is 16, they can get married, fight for their country and all those things—that if under the system that is in place, funding has to stop, there would be other sources of funding to help her with her needs.

I return to my opening point, on which success has been achieved. Joanna had been awarded a blue badge and, without wishing to delay tonight’s debate, for all sorts of reasons she lost it when she turned 16. I had a number of exchanges with the Minister in the Department for Transport, more or less to no avail, but I have received a letter, dated 4 January, from Southend-on-Sea council that says that it has looked carefully at the legislation and has found that there is some leeway. I am delighted that Joanna has been awarded a blue badge, at least for the next three years, which is a cause for celebration. May I tell colleagues in other parts of the House that if Southend can do it, regardless of party politics, I very much hope that other local authorities will use the same leeway.

[Jim Shannon (Strangford) (DUP)]

I acknowledge Joanna’s courage, what she is doing, her energy, ability and drive. It is obvious, however, that Government Departments need to be flexible. Is it the opinion of the hon. Gentleman, and perhaps of the House, that that should be the case? Not everything is black and white—there are in-betweens and grey areas, and this is clearly such a case.

[Mr Amess]

I am a Government supporter, and the hon. Gentleman slightly challenges me. All I would say is that the two letters I received from the Minister in the Department for Transport stuck to a pretty heavy briefing. I will not enlarge on that any further. However, I challenged the local authority on it, and I am delighted that it found a way through. This is not the responsibility of the Minister responding to this debate, so it would be unfair for me to unload it on her, but I am sure that she will pass the message on to the Department for Transport, because it is utterly ridiculous that Joanna should have been denied a blue badge. I pay tribute to Southend-on-Sea council for finding a way through, and now it is up to all other local authorities, if they experience stonewalling from the Department for Transport, to find a way through the guidance.

Since Miss Cranfield was two years old, she had a blue badge, which was suddenly taken away from her at 16, but I am delighted that it has been restored. She also received disability living allowance at the middle rate, amounting to £47.10 a week; mobility allowance at the lower rate, amounting to £18.65; and carer’s allowance, amounting to £53.10 a week. Since she turned 16, all that has changed, and Miss Cranfield now receives only £18.65 a week. The reason given by the Department for Work and Pensions to Miss Cranfield’s mother was that as she was now an adult, she would have to learn to deal with her disability. I do not think for one moment that the Department meant that in an unpleasant way; I think it was saying that she had reached an age at which she basically had to get on with her disability and try to cope with it. It was argued that the condition would no longer be a factor. Her mother seemed to have got the impression that somehow the Department was saying that the disability would go away.

When the Minister replies, she will no doubt say that Joanna’s mother had misunderstood the point being made. However, I should tell my hon. Friend that in her last visit to my surgery, Joanna’s mother asked whether the Department was expecting her daughter’s arm to suddenly grow back; obviously, that would be a ridiculous proposition.

At a tribunal held in January 2010, Miss Cranfield, as was quite proper, was submitted to an intensive interview by a doctor, an occupational therapist and a judge. After the hearing, they decided that Miss Cranfield was not entitled to any further benefits aside from the £18.65 per week that she was already receiving. The main point of contention during the tribunal was that Miss Cranfield does not wear a prosthetic arm.

Joanna cannot have a functioning prosthetic arm as she retains part of an elbow—a floating, pea-sized piece of bone. As a result, doctors are unable to fashion a prosthetic arm with a working elbow. As such, Miss Cranfield can have only an inanimate prosthetic arm with no functioning capabilities. Her mother has brought the arm along to show me. I suppose it is like something that we would see at Madame Tussaud’s; it looks very good, with lovely finger nails and all the rest of it, but it literally does nothing at all.

Miss Cranfield has been advised that if she was prepared to have more of her arm amputated, a more functional prosthetic arm could be made for her. However, I understand that the risks are quite high, with the possibility of infection leading to major complications. The Minister will understand that Joanna wants to represent us at the Paralympic games, so she does not want to risk that sort of operation.

At the tribunal, unfortunately, that point was focused on, with one interviewer—apparently; I was not there—accusing Miss Cranfield of not wanting to help herself as she does not wear a prosthetic arm. Her current prosthetic arm, which does not do anything, cost £2,500. It was also said at the tribunal that she should have the operation, but I am sure that the House will understand why my constituent does not want that.

Miss Cranfield has further problems in her efforts to learn to drive. As she has only one arm, it is essential that she drives an adapted vehicle while learning. That is very expensive and she comes from a humble family that does not have the money. Again, I say to my hon. Friend that this issue is all about aspiration, and here we have a 17-year-old who has great aspirations. She does not receive disability living allowance, and that means that the organisation Motability is unable to help her with the cost of buying an adapted car or to help her find a driving school that can meet her needs. Again, she has been clobbered doubly and her ambition has been frustrated.

It is vital that this young lady is given whatever help we can offer. She will, I hope, represent our country in the Paralympics next year and she deserves our full support because she is a very brave young lady. I ask my hon. Friend the Minister if she will review Joanna Leigh Cranfield’s case again to see if there is some sort of common-sense approach that could be taken—this is not a matter of special pleading—to ensure that Miss Cranfield receives the benefits to which she is rightly entitled. I also ask the Minister to look further at the guidelines, so that we can ensure that all people who have one missing limb are not forced to go through the degrading process that Joanna has experienced. If there are no further benefits to which my hon. Friend can direct Joanna, I would welcome her thoughts on other lines of funding that may be available to Miss Cranfield to help her live as normal a life as possible.

--- Later in debate ---

[Maria Miller]

I thank the hon. Lady for her intervention, which was well timed and well made.

However much we hope that Miss Cranfield will succeed in her sporting ambitions, I hope that hon. Members here this evening will understand that I cannot intervene to ask for any individual to be treated differently. Systems are in place to ensure that support is given fairly, and if an individual disagrees with a decision about the support they are awarded, they are given the opportunity to challenge it and ask for an independent appeal process to be undertaken.

The fact that this debate has been initiated illustrates a key concern about the disability living allowance and the widespread misunderstanding of how it is assessed. DLA is paid on the basis of the particular effects that a disability has on a person’s care or mobility needs in line with the Government’s very real commitment to the social model of disability. DLA is not paid because of a specific health condition. That approach enables decision makers who decide whether awards are made to take account of what can often be a complex set of health conditions that an individual may need to manage; my hon. Friend outlined the very complex set of conditions that his constituent faces.

I would like hon. Members to be aware that very important safeguards are in place to ensure that each case gets treated fairly on its merits. Such safeguards have been available to Miss Cranfield, although I am sure that hon. Members will understand that I cannot comment on the details of her case on the Floor of the House. When an award is made, people who are unhappy with a decision are fully entitled to have their assessment reconsidered by a different decision maker. That provides an opportunity for the case to be looked at afresh. If, after that review, an individual still feels that their case has not been treated in a satisfactory manner, they can ask for the decision to be considered by an independent appeal tribunal consisting of three members: a legally qualified chairman, a doctor and a person who has experience of the issues faced by disabled people, who may indeed themselves be disabled.

[Jim Shannon]

I think that everyone appreciates how DLA works, and the fact that it is based on the needs of the person and the need for help with all the everyday things in their life. Perhaps consideration needs to be given to the information given by the GP, the consultant and the families, which are key factors when it comes to making a decision. As I said earlier, this is not black and white: all the facts connected with an individual person have to be considered.

[Maria Miller]

I thank the hon. Gentleman for his intervention. He is absolutely right that those details need to be taken into consideration. Indeed, as part of the tribunal process an individual, and others, will have the opportunity to attend the tribunal and answer questions so that its members can hear first hand the real impact that a disability or a condition can have on that person’s day-to-day care and mobility needs—just the sort of thing that he outlines. If it is considered that the decision of the first-tier tribunal ignored any material facts, or that there was an error in law, the case can be referred to the upper tier for consideration.

Benefit rules are set out by legislation agreed by Parliament, and decision makers have to comply with legislation when considering an individual’s case. I am sure that Members will appreciate that it is entirely inappropriate for me, or indeed any other Minister or MP, to try to influence or intervene in cases going through those independent review processes.

My hon. Friend referred to the fact that Miss Cranfield was in receipt of DLA until she was 16, and then her case was reassessed. DLA benefit rules are different for children and adults, and the majority of DLA awards are reviewed at the age of 16, because as people move into adulthood they often learn to manage their disability differently. It is not unusual for a person’s care needs to change. Sometimes they significantly reduce, or they may increase, but they often change in some way and we need to take that into account. For children under 16 additional conditions must be met for DLA entitlement, so the conditions to which individuals are subject are different depending on whether they are below the age of 16 or above it. For children under 16, additional conditions will include the need for care, supervision or guidance when out of doors in unfamiliar places, which must be

“substantially in excess of the normal requirements of a child of the same age”,

or it must be the case that

“they have substantial requirements which would be expected of a younger child in normal health, but which wouldn't be expected in a child of their age”.

This case illustrates a number of drawbacks with the current DLA system. That is why we are so committed to reforming what we believe is an outdated benefit and replacing it with the personal independence payment, which is more clearly understood, more objective, and better focused on the disabled people who face the greatest challenges. We also propose to review entitlement more regularly so that disabled people can easily report changes that might affect their benefit entitlement. Currently, 140,000 people on DLA since 1992 have never had their claim looked at since being awarded the benefit. About 20% of all people on DLA have not had any contact with the Department in the past 10 years, during which their care or mobility needs could have changed significantly in either direction. We plan to introduce the new personal independence payment benefit in 2013-14. Crucially, the new scheme will include an objective assessment of individual needs, which is being developed in collaboration with independent health specialists, social care and disability experts, and of course, importantly, disabled people themselves.

My hon. Friend mentioned the blue badge. I am glad to hear that his local authority, which is responsible for assessing eligibility for the blue badge, has granted his constituent a blue badge at this stage, as it will be best placed to judge the local situation. I am pleased that at least that problem has been resolved.

The debate has highlighted a number of issues that affect disabled people, and I am grateful for the opportunity to focus on the positives, as well as the shortcomings, of the current system. The Government are committed to providing the support that disabled people, especially young adults, need to live active independent lives. I believe that we are putting the right support mechanisms in place to ensure that young adults can make a full contribution—not only through DLA reform but through other schemes such as the disabled students allowance, the disability employment adviser network in Jobcentre Plus, the disabled facilities grant, increased personalisation through right to control, and the access to work scheme. Also relevant to this case is the support provided to Paralympic athletes via UK Sport, which is investing nearly £10 million of public funds in Paralympic swimming for London 2012, from the national lottery and the Exchequer. The Government provide a network of assistance to young adults such as Miss Cranfield.

I have met colleagues across Government to ensure that we support disabled athletes as much as possible, particularly in the run-up to the Paralympics. I shall be happy to write, as my hon. Friend requested, to my counterpart at the Department for Culture, Media and Sport—although that is not the Secretary of State—to ensure that Miss Cranfield is aware of the full support available to athletes in her position. I hope that hon. Members will back the Government’s work to enhance the effectiveness of support for disabled people of all ages. Many of us feel strongly that Paralympians can be incredible role models for both disabled and non-disabled young people in our community. It is important that they receive the appropriate support to reach their potential and to do their best, not only in the Paralympics but in other events.

I conclude by wishing Miss Cranfield every success in the coming months leading up to the Paralympics, and by recognising the remarkable support that she has received from her family and the broader community in my hon. Friend’s constituency, which has helped her to achieve her goals. Above all, I hope that we will see her achieve her ambition of representing our country at the 2012 Paralympics. I wish her the best of luck.

Question put and agreed to.

Benefits Uprating

Jim Shannon Excerpts

Wednesday 8th December 2010 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

The hon. Member for Edinburgh East (Sheila Gilmore) asked about pensioners. What pensioners and this House need to know is the difference that is made in monetary terms when pensions are calculated using CPI rather than RPI.

[Steve Webb]

Under the triple lock, the increase will be determined by whichever is highest between earnings, prices and 2.5%. In the long run, the earnings figure is almost invariably higher than the prices figure, so regardless of which measure of prices is used, we will use the earnings figure. As I have said, CPI for additional pensions is about 1% a year lower. The average occupational pension in payment is about £70 a week, 1% of which is 70p a week. Under the triple lock, as I have just announced, the pension is going up by £4.50. That shows the great advantage of the triple lock.

Bill Presented

Armed Forces Bill

Presentation and First Reading (Standing Order No. 57)

Secretary Liam Fox, supported by the Prime Minister, the Deputy Prime Minister, Secretary William Hague, Secretary Kenneth Clarke, Secretary Theresa May, Secretary Vince Cable, Mr Secretary Mitchell, the Attorney-General and Mr Andrew Robathan, presented a Bill to continue the Armed Forces Act 2006; to amend that Act and other enactments relating to the armed forces and the Ministry of Defence Police; to amend the Visiting Forces Act 1952; to enable judge advocates to sit in civilian courts; to repeal the Naval Medical Compassionate Fund Act 1915; and for connected purposes.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 122) with explanatory notes (Bill 122-EN).

Housing Benefit

Jim Shannon Excerpts

Tuesday 9th November 2010 Commons Chamber

[Bridget Phillipson]

I respectfully suggest to the hon. Gentleman that had he been here earlier, he would have heard some of the arguments articulated by my right hon. Friend the shadow Secretary of State. I also respectfully suggest that I am not referring to the cap. That is not the issue that I am discussing in relation to Sunderland; I am discussing the changes in respect of the 10% and the 30th percentile. That is my concern, and that is why this debate has to be on issues broader than London. I understand the concerns of my hon. Friends with London constituencies about the impact there, but the impact it will have in Sunderland will be different.

On average, claimants of local housing allowance in the north-east will see a cut of about 10% a week, or £468 a year, in what they receive. That will have a massive effect in the region, and in Sunderland it will affect more than 4,500 households. Furthermore, those out of work on jobseeker’s allowance for more than one year will be hit particularly hard, with a cut of 10% in their housing benefit. Currently, 2,500 of my constituents are claiming jobseeker’s allowance in an area of ongoing deprivation, where jobs are increasingly hard to come by. That will simply drive people into further poverty and drive up homelessness at a time when, no matter how hard people try, it is often difficult to find a job.

Sunderland city council prevented homelessness for 157 households in 2009-10, helping people to find accommodation, often in the private sector. Overall, the changes made in the comprehensive spending review will make it even harder for Sunderland city council to prevent homelessness. In the long term, the use of temporary bed-and-breakfast accommodation will inevitably drive up housing costs for local councils and have massive social consequences.

Changes in the calculation of housing benefit—pegging it to the consumer prices index—will lead to a dramatic rise in rent arrears, contributing to increased use of temporary accommodation and increased homelessness. It is not yet clear to me whether those who fall into arrears because of the cuts will be deemed to have made themselves intentionally homeless, which would mean that councils would not have a duty to house them. I would be grateful for some clarity from the Government on that issue.

Before I was elected, I managed a refuge for women and children fleeing domestic violence, and the city council supported these homeless families and got them rehoused, often in the private sector. The women would often pay a small top-up to their housing benefit, often to be near supportive family who could help with child care so that they could undertake training or return to the workplace. Such women will be doubly hit, and at the point when they are trying to get their lives back on track.

It is clear that the Government have failed to come up with an acceptable plan for housing benefit. They fail to recognise the long-term solutions to the underlying causes, and they are certainly not progressive.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Lady agree that for a great many people the purpose of housing benefit is to get them out of low-income housing? The changes that the coalition Government are proposing will keep those people in poverty and low-income housing for the rest of their lives. That is my concern. Does the hon. Lady share it?

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

I want to make some constructive comments, and I hope that the Minister will take on board some of the issues I raise. I will ask some questions from a Northern Ireland perspective, because the housing benefit changes will affect us as well—we cannot divorce ourselves or walk away from them.

I should set the scene, because Northern Ireland has some very particular circumstances: the Department for Social Development has responsibility for social security benefits, and the Department for Employment and Learning has responsibility for training and employment programmes, in contrast with the rest of the United Kingdom and the Department for Work and Pensions. DEL has significant differences with its steps to work programme, as against the job guarantee fund here. There are issues to be clarified, therefore, and I want to ensure that the changes in benefits will not impact adversely on the people of Northern Ireland.

Northern Ireland has had the local housing allowance since 2008, but it has not been formally assessed. I had hoped that it would be, because it would have given us an idea of how successful it has been. I am concerned, however, that the proposed changes to the allowance lack a firm evidential base. Will the Minister comment on that? I think that the proposals will adversely affect recipients in Northern Ireland.

I am gravely concerned about the Budget plans to reduce the initial award of the benefit by 10% in April 2013 to those claimants who have been receiving jobseeker’s allowance for longer than 12 months. I make that comment because the unemployment rate in Northern Ireland between April and June was 6.6%. Worse still, the working-age employment rate remained well below the UK average, and was the lowest of all the 12 UK regions. The changes put forward tonight will adversely affect the people of Northern Ireland because of our position in relation to benefits.

I have concerns about the introduction of a measure that utilises sanctions that are neither helpful nor beneficial. The proposal appears to be based on the assumption that a reduction in housing benefit will motivate working-age claimants to find work, but it is clear that even if every working-age claimant was so motivated, there would still be significant numbers of long-term unemployed people in Northern Ireland beyond 2013. Perhaps the Minister will comment on that. We have to find a balance. How do we distinguish between those who are genuinely seeking employment and those who perhaps are not?

I mentioned earlier that the focus of housing benefit has to be on providing low-income families with access to good-quality housing. The housing benefit cap rates may have a knock-on effect on the social housing sector, as private rented accommodation becomes harder to access for those on low incomes and the demand for social housing increases. A great many people are in a Catch-22 situation: they do not have enough money to rent a house privately, yet there is not enough social housing for them.

[Sammy Wilson (East Antrim) (DUP)]

My hon. Friend makes an important point, but does he accept that in the absence of cap rates—or, sometimes, where the rates are fairly generous—private sector rents become inflated? Landlords simply look at what the rate is, and if it goes up they put their rents up. It is almost like a perpetual cycle: the rates go up, so rents go up, and then the rates are pushed up again, and the only people who gain are the landlords.

[Jim Shannon]

I thank my hon. Friend for his information, which is helpful in focusing attention on what we are trying to aim for.

Members have mentioned fuel poverty. One of the spin-offs of losing housing benefit will be fuel poverty. In my former position, I sat as a Member of the Northern Ireland Assembly. One of the inquiries that we undertook was on child poverty. Fuel poverty and housing benefit both came up in that inquiry into child poverty, but all those things were part of the jigsaw of how people survive. Take away one part of it and we have a problem. I have some concern about that.

One Member mentioned the discretionary housing payment, and I would certainly be keen to find out from the Minister what he intends to do if the pool of funding that is set aside runs out. He said that it was impossible to separate housing benefit from housing and social development policy in general, and there are some examples of that in Northern Ireland where housing has been designed to bring mixed communities together, such as in Loughbrickland in County Down and Ballynafeigh in south Belfast, which are also examples of how we have moved forward. I would like to express some concern over the removal of housing benefit from people where it will drive them towards poorer areas. For some people who are already in poorer areas, they will not move beyond them, and I have concerns about that.

I am conscious of the time, but another concern of mine relates to applications by carers for disabled people—I do not think that the issue has been mentioned fully yet, although some Members may have partially touched on it. A carer for a disabled person might want to apply, but the only person who can do so is the claimant’s spouse or partner. Would it not be more beneficial to ensure that the rest of the family members, who are perhaps those who are more affected, may also apply? I look forward to hearing the Minister’s response to that. I also believe that some consideration needs to be given to single parents who have shared custody of children. I am not sure whether that issue has been addressed, so I would ask the Minister to look at that, too. Where custody is established, benefit entitlements should be granted to the parent to support the family unit. I do not believe that the proposals do that. Again, I ask the Minister to consider that point.

Other Members have touched on the issue of large families. It would not apply so much in the area that I represent, but I believe that it none the less applies right across the United Kingdom. Has particular consideration been given to ethnic families in other parts of the United Kingdom, where larger, multi-generational households are perhaps more common? I ask the Minister to consider that as well. There should be more innovative and positive incentives, which are far more preferable in making housing benefit entitlement reflect family size in the social rented sector from 2013. The Government position is bereft of detail, and I ask the Minister to consider my points.

Work Capability Assessments

Jim Shannon Excerpts

Wednesday 27th October 2010 Westminster Hall

[Natascha Engel]

I might have used that example, but I thank my constituency neighbour for his contribution. It is a serious matter, and errors are a fundamental problem. The system must be right if we are to move huge numbers from incapacity benefit.

[Jim Shannon (Strangford) (DUP)]

rose—

[Natascha Engel]

I shall give way briefly, but I must make some headway.

[Jim Shannon]

I thank the hon. Lady for giving way. Does she agree that it is not a tick-box exercise, although it seems like one at the present time, with people being asked whether they can stretch, bend or kneel? There are two parts to the assessment. One of them concerns emotional matters, such as depression and mental health; the other is physical. Perhaps the best way to do that would be to make contact with the person’s GP or physician, who would have better knowledge of the claimant. It would certainly help.

[Natascha Engel]

Yes, I agree.

Jobs and the Unemployed

Jim Shannon Excerpts

Wednesday 7th July 2010 Commons Chamber

[Gordon Banks]

My hon. Friend is right, and it is not just about the environmental or green side; it is also about quality of life. The quality of a property has a knock-on effect on children’s ability to grow up and learn, so there will be a negative effect all round. I am not sure that he, as a former Minister with responsibility for construction, will enjoy what I am about to say, but I think there is a strong argument for reducing VAT to stimulate the economy, just as the last Government did, but in a more targeted way. Reducing VAT to 5% on the labour element of home maintenance repair and improvement work could, as argued by Experian, create an extra 55,000 jobs this year alone. What the Government are doing will cost jobs. The views we have heard today about job growth are not shared by the Federation of Master Builders, which argues that 7,500 jobs will be lost in small and medium-sized enterprises in the construction sector this year alone as a result of the VAT increase. When the multiplier effect is taken into account, the effect on small and medium-sized construction companies in this year alone could be the loss of between 23,000 and 25,000 jobs.

There is another cause for concern. If firms go bust, close down and lay off workers, they will be in no position to train apprentices for the future.

[Jim Shannon (Strangford) (DUP)]

The hon. Gentleman mentions the construction industry, which I think is relevant to all hon. Members in the Chamber; it is certainly relevant to the area I represent. Does he agree that the Government should try in particular to help those aged 50 and over who have worked in the construction industry all their lives? They cannot get jobs anywhere else and find it hard to retrain.

[Gordon Banks]

I do agree, but I would much rather see them retained in the construction sector. There is a strong argument that the construction sector can drive economic growth in this country, and I would like the Government to take that forward.

As I said earlier when I intervened on my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), if we do not deliver skills learning for apprentices today, we will have a skills shortage in future and that will have an economic impact. That should not be tolerated, but we have to understand that struggling businesses do not take on apprentices; they survive day to day and fight day to day. The last thing they are thinking about is having an apprentice, because they are thinking about getting through the day without the bank phoning them.

When the construction industry loses jobs, there is a lack of focus on the resulting suffering because it does not affect 2,000 or 3,000 people all under one roof. They are in different places around the United Kingdom, and when jobs are lost, it is 20 jobs here and 40, 50 or 100 there. That makes it very difficult for the construction sector to show the impact of policies and to get through to the Government and people in general the impact of decisions. It is very easy to see what is happening when a car plant or a big manufacturing location is threatened with closure, but it is very difficult to take on board everything that is happening in the construction sector because it is so disparate and is spread throughout the UK.

Before I discuss my constituency, I make one last plea for the construction sector. It is vital for training, revenue and business growth, and it is vital for improving public services, which I want to improve. It is also vital for improving the quality of life of UK citizens. I strongly urge the Government to recognise that and to invest in it accordingly.

My constituency is quite large and varied, with a rural aspect to much of it. We have industry, of which we are very proud. Some of it is excellent. There are businesses such as Highland Spring, Vector Aerospace, Owens-Illinois and Diageo, and I want to focus on two of those, their interdependence and the impact of the VAT increase. Diageo has long had an interest and a presence in Clackmannanshire. The county is very proud of that business, as it is of Owens-Illinois—or the Glassworks as it is called locally. The interdependence is that one of the companies produces the packaging for the product that the other produces.

My concern is that the VAT increase will impact negatively on product sales, which will impact negatively on the requirement for packaging. If that occurs, the safety valve will be jobs. It is not rocket science—it is simple and straightforward. In my opinion, and as we heard yesterday, the recent reduction in the budget deficit is a result of increased tax take arising from businesses getting back on their feet, from people being in work and from a return to growth. The VAT increase puts all that at risk. It is regressive, hits the poorest hardest and will result in job losses. It will not deliver the revenue necessary for the Treasury, and it could have a negative effect that might deliver a downward spiral. The VAT increase coupled with the axing of the future jobs fund makes the outlook anything but secure.

We have discussed today why the future jobs fund has been cut, and I am afraid that I and my Opposition colleagues do not understand why it has been cut. We also do not understand why the Prime Minister, who thinks it is a good idea, has decided to cut it. It is interesting to see some Liberal Democrats in the House this afternoon, because they think that the future jobs fund is a good thing, too, but have played their part in cutting it. In fact, the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), said:

“We have no plans to change or reduce existing government commitments to the Future Jobs Fund. We believe that more help is needed for young people, not less”.

In Scotland, some 11,000 young people will be discarded as a result of the Prime Minister and the Lib Dems going back on their word. Much more can be said about the Government’s support for jobs—or lack of it—but I will end by saying this. The VAT increase will cost jobs, axing the future jobs fund will cost jobs, and failing to recognise the importance of the construction and housing sectors will cost jobs. They will all cost revenue, ruin lives and put the recovery at risk. None of them are a chance worth taking.

--- Later in debate ---

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I am delighted to follow the interesting speech of the hon. Member for South West Norfolk (Elizabeth Truss) on the need for an economic benefit analysis of every decision that is taken by Government. That is one of the factors that led to the devastation of many of the regions, because some things cannot be measured in pure economic benefit alone. There is also the social value of projects. That is why I want to address the House today on the disproportionate and unfair impact of Government spending cuts on the north-east of England—and, I am sure, on many other regions, but I speak for my own today.

In Newcastle upon Tyne North, we have many public sector workers, but we also have several major private employers, including Sage, Nestlé and Sanofi Aventis. Projects in recent years, such as Newcastle airport industrial estate, Newcastle Great Park developments and the development of many retail outlets, have diversified the local jobs market in Newcastle. None the less, many of my constituents are long-serving and dedicated public servants who stand to be directly and swiftly hit by the Lib-Con austerity drive.

In Newcastle upon Tyne North, the current situation has come as no surprise, because during the election campaign the now Prime Minister publicly identified the north-east as a region where spending was unsustainable and where public sector employment was simply too high. The first wave of public cuts were announced on 24 May, and now we have the ideologically motivated cuts laid down in the Budget.

[Jim Shannon]

It was not only Newcastle that was mentioned; it was also Northern Ireland. The Prime Minister was quick off the mark there. However, the level of public sector economic activity in Northern Ireland is almost 27%—5.2% above the UK average—and the dependence on public sector jobs is perhaps greater there than in other parts of the UK. I say to Government Members that it is important that the private sector is increased before anything happens to the public sector. I want everyone to be aware that the impact will be great, as the hon. Lady has said.

[Catherine McKinnell]

I thank the hon. Gentleman for his intervention. He is absolutely correct that those two regions were identified by the Prime Minister as specific targets for cuts. Recent announcements have made it clear that the future is particularly distressing for regions such as mine and that of the hon. Gentleman.