Universal Credit and Welfare Reform

Jonathan Reynolds Excerpts

Tuesday 11th September 2012 Commons Chamber

[Charlie Elphicke]

The right hon. Gentleman knows, as I do, that the fine tuning of council tax is still under discussion and still under way, and I hope that that will come out in the wash. I represent a coastal constituency, so I watch that situation carefully, as I know my coastal MP colleagues have been doing. They, too, want to ensure that the low paid in our constituencies are not adversely hit. That is an important point, but it is a fine part of the detailing of the implementation of the policy rather than the overall purpose of the policy, which is to encourage work and to give people more money if they work harder, do better, skill up and get a better job. That is a really important thing.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

The hon. Gentleman is talking a lot about how universal credit will make entering the workplace available to everybody. Is he concerned about the absence of the second earning disregard, which means that the second person in a relationship would not really have that work incentive? Is he concerned that perhaps behind some of this there is an assumption of a model where the man goes out to work and the woman stays behind at home?

[Charlie Elphicke]

The hon. Gentleman lives a bit more in the past than I do; I am the second earner in my household, as many men are in theirs. We Conservatives, as the more progressive party, understand that. He should know—[Interruption.] He has had his go. He should know that second earners in households will not lose out under the universal credit.

One thing that I particularly welcome is that universal credit is progressive; the poorest will gain most, according to the Institute for Fiscal Studies. It says that the bottom six tenths on income distribution will gain on average, while the richest four tenths will lose out slightly in the long run. This is therefore a progressive policy, benefiting the poorest most.

Atos Healthcare

Jonathan Reynolds Excerpts

Tuesday 4th September 2012 Westminster Hall

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I am pleased to be called in this debate. I congratulate my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) on securing the debate and on giving a superb speech. I wish to add my voice to those concerned about the operation of the WCA by Atos, and to highlight specific concerns in relation to people with autism.

I accept that we have a problem in the UK with the number of people who are not in the labour market owing to illness or disability. I asked the Library for a comparative analysis across the EU. Although it is hard to make such an analysis given the differences in scope, eligibility and recording of information, the European labour force survey clearly shows that the UK has a much higher proportion of the population aged 20 to 64 outside the work force owing to illness or disability. It is 6.1% in the UK, against an average of 4.3% in the rest of the EU. I think we know why that is. From the Thatcher Government onwards, people were put on the incapacity benefit rolls to hide the true scale of unemployment. There are people who were dumped there in the 1980s who have been there ever since. That is why I do not have a problem with the principle of a medical assessment; otherwise the Government can too easily push people into inappropriate benefits to massage the unemployment figures. Equally, I do not have a problem with three classifications: fit for work, unfit for work; and the possibility of work, but not in the short term, because someone has been out of the labour market for so long.

My concerns and objections relate to the way the Government are allowing Atos to conduct the test. Like other colleagues, my observations are heavily based on the experiences of constituents who have come to see me. It is not sensible, prudent or fair to have a test in which 40% of appeals against decisions are successful. That is a waste of money and it causes unnecessary distress. The Government need to hold Atos to account for an assessment that is clearly not working as it should. Atos is not coping with the complexity of the cases that are seen, and it is clearly struggling to deal with people with complex conditions, particularly those with less visible symptoms. Some specific problems are particularly evident: the Royal National Institute of Blind People has reported that the descriptors against which blind and partially sighted people can score points are primarily those based on navigation and communication, with no account taken of other barriers that blind and partially sighted people might face in obtaining work.

I am one of the vice-chairs of the all-party group on autism, and I remind the House of my declaration of interest in relation to my son. For people with autism, such face-to-face assessment can often be extremely problematic. People with autism face problems with communication that other people would not see. They may misunderstand questions that are asked, find it hard to answer questions, and fail to pick up on inference and assumption. For example, when asked, “Can you travel to work on a bus?”, they may say yes, but not explain that they can use only one bus route, planned with the help of a support worker, provided that the bus is not late or a different colour from usual, or that no other factors have arisen.

In addition, the testing of some people is too frequent. I have a constituent with a degenerative disease who passed one assessment, but failed another within a year. As his condition was degenerative, it was surely medically impossible that he had got better. It does not make sense. At the extreme end, I have heard accounts of people in the support group being tested again after as little as three months. The worry that that causes is exacerbated by the freak results that an assessment can produce. I have another constituent who was deemed fit for work despite having a broken back.

The Government need to listen to the feedback that is coming in across the country about the very real problems in the operation of the WCA. Crucially, they must begin to hold to account private companies with important Government contracts when they do not deliver for the taxpayer. The quality of life of thousands of people depends on getting this right, and that will soon be even more the case given that Atos has won the contract for the personal independence payment assessment. Let us not get into the usual party political rhetoric and stereotypes that tend to mark welfare debates. Let us focus on meaningful changes that will improve many people’s lives.

Oral Answers to Questions

Jonathan Reynolds Excerpts

Monday 5th March 2012 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

I know that blue badges are incredibly important for disabled people in getting out and about and I understand the hon. Gentleman’s concerns. The Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), is looking into the issues to do with blue badges, and I will make sure that he is aware of the comments that have been made.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

T6. Further to the question asked by my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) from the Front Bench, do Ministers agree that the current restrictions on the National Employment Savings Trust that restrict transfers and limit the amount that can be saved each year diminish the pressure on other established providers to bring down their excess costs and charges? While the Government are reflecting on this, surely they are missing an opportunity to make pensions more affordable for everyone.

[Steve Webb]

The previous Government put those restrictions in place for a good reason—to try to make sure that NEST focused on the bottom end of the market. NEST has had a positive effect and new entrants have come into the market, but we are continuing to look at that issue because we are determined to make sure that people have a choice of good-value, low-cost pension providers.

Pensions Bill [Lords]

Jonathan Reynolds Excerpts

Monday 20th June 2011 Commons Chamber

[Alex Cunningham]

Could I disagree? I most certainly could not. People in my constituency used to build ships and it has one of the biggest chemical industries in the country. It has people who have worked in difficult circumstances in hard jobs. My hon. Friend is correct that such people cannot expect a longer life, so I think we should make it a little easier for them.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

My hon. Friend is making a fantastic speech and it is great to listen to him. Does he agree that the issue is not just health and longevity, but that even people who are in very good health and will live longer simply cannot rearrange their economic affairs in the time that they have—six years’ notice of two additional years in the case of some of our constituents—to cover the loss of pensionable income that they will sustain when this Bill goes through?

[Alex Cunningham]

That is very much the case. I suppose that there will be an additional few years of misery for some people because they will not have the income to enjoy the things that they see other people enjoying. It is therefore even more important that we raise these issues today.

It is the significant effect on women that worries me. The Bill makes it more likely that those on low incomes will not pay into a pension. Many women have contacted me, incensed that they are losing out thanks to the Government’s changes. It is completely unfair. The Government Members who have talked about fairness need to think about women a little more. A total of 177 MPs signed early-day motion 1402 on the state pension age for women. It is time that the Government backed down on this issue. All afternoon and evening, Government Members have teased us by saying that the Government will change their mind. When the Secretary of State was here, he was shaking his head, but I have seen no such indication from the Minister as the teasing has continued.

Age UK’s report “Not Enough Time” makes it clear that women are unhappy with the plans, and it is worth repeating some of the statistics that it gives. The 330,000 women born in Britain between December 1953 and October 1954 will have to wait 18 months or two years for their state pension, and 33,000 will see their state pension age increase by two years at a loss of £10,000.

I suppose I should declare an interest, because just as I would be caught out if I were a woman, my wife Evaline is one of the women affected. Like others, she has fewer than seven years to plan for the changes. People need sufficient time to plan for the increase in the state pension age, and the changes are happening too fast and causing a lot of worry and anger. It will be the poorest women who suffer the most as a result, those who do not have savings to fall back on and are in low-paid jobs.

Raising the state pension age is necessary, however, to reflect the fact that some people are living longer. We all recognise that, and we need cross-party consensus on it, but we simply cannot afford this unfair treatment of women. It is always worth repeating that the coalition agreement promised that the women’s state pension age would not be raised to 66 before 2020. I do not care about the legal arguments and so on—if the Government are going to do that, they need to explain why. The Bill proposes equalisation of the age by 2018, and then increases to 66 for both men and women by 2020. Moving the goalposts—that cliché again—so late in the day has implications for public trust in the pensions system at a time when it is vital that we encourage more people to save for their retirement.

It is estimated that 7 million people are not saving enough for their retirement, but the Bill would raise the salary level at which someone is automatically enrolled in a pension scheme from about £5,000 to £7,500. That means that 600,000 fewer people will be automatically enrolled in a pension scheme, and again, women will be disproportionately affected. What long-term provision is there in the Bill for that group?

As I said at the start of my speech, I am glad that we are debating these issues today, but I believe that the Government have got the key elements of the Bill wrong. I cannot endorse the way in which a small but significant group of women, including my wife, are being hit by the accelerated pension age rise, nor can I support the changes to auto-enrolment given the problems that I have described. That is why I, too, will vote against the Bill today.

Amendment of the Law

Jonathan Reynolds Excerpts

Tuesday 29th March 2011 Commons Chamber

[Stephen Barclay (North East Cambridgeshire) (Con)]

First, further to a number of the speeches from Labour Members, including the hon. Members for Rochdale (Simon Danczuk) and for Birmingham, Erdington (Jack Dromey), who I am pleased to see are still in the Chamber, I shall first suggest that the difference between the parties is less than is claimed. Secondly, I shall highlight the fact that significant waste remains, and that waste cannot be cut too fast or too deeply. Thirdly, I shall highlight the disconnect between the House’s responsibility for setting a Budget and debating it, and the information available for effective scrutiny.

Is the gap between the parties as wide as Opposition Members claim? All parties would have spent beyond their means in this Parliament. The Office for Budget Responsibility says that under the coalition, national debt will be £1.31 trillion at the end of this Parliament. Had Labour remained in office, national debt would have been £1.38 trillion. A difference of £62 billion is not insignificant, but to put that in context, it is less than we will be spending in a year on debt interest by the end of the Parliament. It is therefore not credible to say, as a number of hon. Members have done, that public services will be put at risk. After all, the Government will spend £700 billion a year, which is 40% of gross domestic product—more, in fact, than Tony Blair was spending when he left office.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Will the hon. Gentleman clarify that point? Does he not recognise that one crucial difference is the configuration of spending under Tony Blair? That spending went mainly on services, but under this Government, the money will be spent on massive unemployment.

[Stephen Barclay]

Had the hon. Gentleman bothered to be here for the whole debate he would have heard some of the points made by my colleagues, including the fact that £42 billion is being spent on debt interest this year alone.

The hon. Gentleman is quite right to ask where the money is going, which brings me to my second point: waste in spending. The focus is often on top salaries in the public sector, but in Cambridgeshire there is one station manager, or a more senior officer, for every four full-time firefighters, one police sergeant for every four constables, one inspector for every three sergeants, and one chief inspector or above for every inspector. There has been huge inflation in management costs.

Opposition Members may chunter, but let us look at what many of those managers do. The Ministry of Justice asked local authority youth offending teams to collect more than 3,000 bits of data on process, and yet outcomes were still not measured, so the YOTs still cannot say which prevention schemes work. There has been an inflation of management salaries, but often the same people are paid for the same performance. The chief fire officer of Cambridge earns £190,000—£60,000 more than the chief constable—and has three deputies on £150,000, £140,000 and £130,000 each. Perhaps Opposition Members were marching on Saturday to protect such salaries, but we need to look at productivity, and at what we get in return for those salaries and that inflation in management spend.

--- Later in debate ---

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I apologise to the House for my brief absence from the debate, which was caused by my attendance at a meeting that I had requested in a previous debate. After I intervened on the hon. Member for North East Cambridgeshire (Stephen Barclay), he said that I had not been here for the duration, so I would like to make that clear for the record.

I believe that a major focus of the Budget should have been the inclusion of measures that would boost growth, stimulate the economy and increase employment opportunities as a result, but what we have seen yet again from the Government is a set of ideologically driven and politically based measures, rather than anything based on practical economics. Fundamental to the Government’s entire approach is the belief that cutting the deficit deeply and quickly will stimulate growth in our economy. The very cornerstone of this approach is wrong. A year ago a Member of this House responded to the previous Labour Government’s Budget by declaring:

“We must not cut Government spending too soon and risk plunging a fragile recovery back into recession. Cuts without economic growth will not deal with the deficit”.

The Member who said that is now the Secretary of State for Business, Innovation and Skills.

It seems that the Office for Budget Responsibility agrees with the Business Secretary. It has shown that growth is down for this year and next year. This revision of the figures is a sad reflection of the fact that the Government have got it wrong. It appears that the Government do not realise that if the economy is not growing, thousands more people will lose their jobs, fewer people pay tax, more people claim benefits and it becomes harder to get the deficit down. That is what we mean by cutting too fast and too deep, and I think that it is reasonable for us, as the Opposition, to ask the Government what their plan B is if the downward trend continues.

The lack of growth is the central story of the Budget, but the Chancellor did announce some measures aimed at mitigating this and they are worthy of consideration. Enterprise zones look interesting, but we will need more details of their resources. As a Greater Manchester Member, I am willing to give them a cautious welcome, given our inclusion in the initial list of zones, but I heed the comments of my hon. Friends the Members for Rochdale (Simon Danczuk) and for Livingston (Graeme Morrice) about the problems the zones might cause.

I had been hoping to hear more about improved resources for the regional growth funds, which seem to have modest budgets for what is expected of them. I worry that with the loss of the regional development agencies we in the north-west have lost more from this Government than we have so far gained. The Northwest Regional Development Agency was not a perfect institution, but research shows that it brought to the region more than £5 for every £1 it invested. I am not certain that local enterprise partnerships, which have more restricted powers and limited coverage, will be able to match that success.

I also welcome the Chancellor’s comments on manufacturing. I represent a part of the world where manufacturing is still very important and am often frustrated by comments in the House to the effect that there is almost no manufacturing industry left in the UK. Such comments are very misplaced. The UK is a world leader in a number of high-value manufacturing sectors, including pharmaceuticals, life sciences, advanced engineering and aerospace. Although we cannot deny that the number of people employed in manufacturing has been in steady decline for 30 years—people in my area know that only too well—the British Chambers of Commerce states that output and value have risen throughout that time, hitting an all-time high in 2007. Manufacturing will never return to the share of the economy it had in the 1980s, but there is a real potential for growth. There was an excellent meeting of the associate parliamentary manufacturing group this morning, where we looked at finance for small and medium-sized enterprises. I hope that the Government will engage with the group and look at some of its work.

I also note with interest the measures in the Budget that are designed to make the planning process simpler. I welcome any changes that would stimulate economic growth, but the biggest barriers to growth in some areas come from a lack of powers for local authorities to deal with planning blight. I have been working with local businesses in Stalybridge. I am passionate about retaining our town centre and the sense of identity it gives our community. Traders tell me how their businesses are often affected by the number of empty and unsightly properties around them. In some cases, these are large buildings with absentee owners who are unwilling to sell in the present economic climate, yet their very presence deters new investment from coming into the area. In one specific case, a consortium is interested in buying a building that is falling down, but complying with the legislation to use compulsory purchase orders and the powers to force a sale are difficult for local authorities. Piloting the relaxation of some of those regulations would be welcome, and I would be very pleased to see such developments.

I also want to say something about investment in infrastructure. I welcome the £85 million investment that the Government have promised in the Budget for a link between the Victoria and Piccadilly railway stations in Manchester, which will have a positive impact on journey times. I sincerely hope that in due course the Government will support the rest of the northern hub proposals, which would have a significant impact on economic growth in the area. In particular, I think there is a lot of scope to boost growth by improving transport links between the north-west and Yorkshire regions, and with that in mind I hope the Government will reinstate the planned Mottram-to-Tintwistle bypass through my constituency.

In many of the speeches made in the response to the Budget, Members have highlighted the impact of the Government’s agenda on the poorest and most vulnerable people in our society. I will never abrogate my responsibilities to speak for these people and I endorse what has been said, but I also want to speak for the thousands of my constituents who may not be the most vulnerable but who are still struggling to get by. These working and middle-class people are the backbone of Britain, and right now they are finding life hard. Rising fuel prices, the increase in VAT and changes to tax thresholds, particularly the changes to indexation, will increase the pressure. Next year, families with incomes as low as £26,000 will lose their tax credits entirely, and the year after l.5 million families will lose all their child benefit, which will be deeply felt.

For many of my constituents, the decisions taken by this Government are really hurting. With revised figures pointing to lower growth, higher borrowing and higher unemployment, there is no evidence that their approach is working. Is the Budget so ideological that the Government cannot see the danger signs staring us in the face? What we really need instead is practical and pragmatic economic leadership.

Welfare Reform Bill

Jonathan Reynolds Excerpts

Wednesday 9th March 2011 Commons Chamber

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

These debates about our welfare system or, as I should say, heeding the comments of my right hon. Friend the Member for Croydon North (Malcolm Wicks), our social security system—whether in the House, the media or the pubs and living rooms of our constituencies—often become a magnet for two opposing arguments. The first is that everyone on welfare is somehow undeserving and all the money is spent incorrectly; the second is that every penny spent is 100% effective and should be beyond question. We have heard those views today, but both are extreme and neither is true.

I will always support our welfare state, and I want to live in a country where we accept collective responsibility for the people who are most in need. We would all be much poorer if we did not enable the most vulnerable members of our society to live with dignity, and it would be a far more daunting society without the support that we currently offer to people who are searching for work. I admit, however, that our system is not without its shortcomings, and it could benefit from some reforms. Unfortunately, those are not the reforms suggested in this Bill.

Our welfare system can be daunting and is too complex, and universal credit could be a positive step forward if it simplifies the system, but simplicity and transparency, welcome objectives that they are, are not enough on their own; the welfare system must also be fair and effective and, above all, enable the transition from welfare to work. The proposals in the Bill fall short of those measures, and as a result, despite being a supporter in principle of welfare reform, I cannot support them today.

The Government need to realise that we can support the welfare system and make it stronger only if we are also willing to support the labour market. Helping the transition from welfare to work will be successful only if there is work to take up, yet the scale and pace of the cuts that we currently see threaten to send unemployment soaring, just as happened under the previous Conservative Government, when it topped 3 million on two separate occasions.

Government Members tell us that the welfare bill is expensive, but so is mass unemployment. I believe enormously in the power of work. Employment brings dignity, respect and decency to life, and getting more people into work should always be one of the prime objectives of the Government. In my constituency there are 16 people chasing every advertised job, and, with some of our major employers, such as the council and the police force, axing hundreds of jobs, that will only become worse. Residents are concerned about their jobs, and with youth unemployment at record levels they are worried that there will be no work for their children.

The Labour Government took deliberate and positive steps to reduce youth unemployment by introducing measures such as the future jobs fund. By September, almost 700 young people in my borough had completed placements funded by the scheme. The scheme was an opportunity for participants to learn new skills, to develop confidence, and to learn about the things that might be holding them back in the jobs market. Many of the people who completed it went on to further education or training. Where was the sense in axing such a scheme, which was already proving successful in stemming the increase in youth unemployment?

It seems to me that schemes such as the future jobs fund were cancelled not for economic reasons but for political ones. The Government appear intent on spinning the myth—

[Stephen Lloyd]

Will the hon. Gentleman give way?

[Jonathan Reynolds]

I will, because I believe that I could not give way to the hon. Gentleman on Second Reading of the Health and Social Care Bill, and I do not want to be discourteous a second time.

[Stephen Lloyd]

I thank the hon. Gentleman. On the future jobs fund, does he agree that the percentage of people who went into paid work afterwards was incredibly low? One of the reasons why the Government have decided to focus more on apprenticeships, where they have invested much more money, is that with apprenticeships the jobs that people get tend to stick.

[Jonathan Reynolds]

When I looked into this, anticipating such an intervention, I found that it is difficult to get precise figures on a constituency basis, but the information that my local authority could give me shows that two thirds of the people who were employed through the future jobs fund in my borough went on to paid employment or training. I appreciate that that is not quite the answer to the hon. Gentleman’s question, but it is the best one I can give him.

The Government seem to want to create a year zero and pretend that no reform went on over the past 13 years, in order to create a benchmark by which they can measure their own progress. However, it is a false benchmark because it fails to recognise the progress that was made. Returning people to employment was an integral part of the last Labour Government’s policy, and many advances were made. The Benefits Agency-Jobcentre Plus merger, which is always identified as best practice, allowed people to look for work at the same time as claiming as benefits. We launched the new deal, under which, for the first time, people were told that they could not refuse help to find work, and it was the Labour Government who toughened sanctions against those who could work but refused to do so. Some of the measures now being proposed dilute the sanctions imposed by the last Labour Government.

[Mel Stride (Central Devon) (Con)]

Will the hon. Gentleman explain what progress was made under the last Government, given that the numbers claiming incapacity benefits increased from 700,000 to over 2.5 million?

[Jonathan Reynolds]

The benefits changed, so I am afraid that the hon. Gentleman is not comparing like with like. If he goes to the Library, he will see that the overwhelming rise in sickness benefits occurred in the 1980s, when take-up doubled. That is because when we went through the process of deindustrialisation the Conservative Government threw people on to the scrapheap, encouraged them to take that benefit until they retired, and did not care one bit about them. That is where he should look if he wants to find a reason behind these figures.

[Ian Paisley (North Antrim) (DUP)]

Does the hon. Gentleman acknowledge that in Northern Ireland there is over £700 million in unclaimed benefit that people should be claiming and have not claimed? If that is the case in Northern Ireland, the same must be true across the rest of the United Kingdom.

[Jonathan Reynolds]

I thank the hon. Gentleman for his point; I am pleased that he has been able to put it on the record.

I am proud of the Labour Government’s record on welfare reform, which stands in stark contrast to what occurred in the 1980s and 1990s, when there was no such reform at all until the end of the Conservative Government. Only now are the Conservatives coming back to it, but against the backdrop of public sector cuts and deficit reduction. The question that people will ask is whether the Bill is really aimed at getting people back into work or, once again, merely pursues the Government’s ideological goal of reducing the size of the state.

In principle, I welcome the move towards a single, simplified universal credit; few would not do so. That has the potential to ensure that people are clear about the income they will have if their circumstances change, and in principle I wish that we had done it. However, only through scrutiny of the detail of the Bill will we determine whether the reality of these reforms matches the promise, or whether they are really a cruel camouflage to hide savage cuts targeted at the most needy members of our communities. The measures in the Bill will penalise savers. Estimates suggest that nearly half a million families could lose all eligibility for financial support. Some reforms, such as the removal of the mobility element of DLA, are simply cruel and unfair. The Bill leaves many questions unanswered, such as how some benefits—crisis loans and council tax benefit, for example—will maintain any consistency if eligibility is decided locally.

Furthermore, we still know far too little about the Government’s plans for the most important area of all—child care. For all the good that any reform might do, unless the Government continue to provide support for childcare, we will not make anything like the progress that could be made.

I believe that the principles behind the Bill are right, but there is too much in the proposals that is ill thought through, and will be detrimental to many vulnerable people. The Bill is not ready in its present form, and the Government should recognise that. Welfare reform has a great many supporters in all parts of this House. The Government should have built on that consensus in creating the Bill, but they did not. That is why I will not support the Bill today, but will vote for the reasoned amendment moved by my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne).