Oral Answers to Questions

Rachel Reeves Excerpts

Monday 31st March 2014 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

Just 46% of disabled people are in work, while 40% of disabled people not working report that they want to work. Helping disabled people into work provides them with security and dignity as well as helping control the costs of social security. Will the Secretary of State tell the House what proportion of disabled people referred to the Work programme get a job?

[Mr Duncan Smith]

The Work programme has been successful for those who are furthest from the labour market. The group of people the hon. Lady is talking about who suffer from sickness and disability have, for the first time, been worked with and helped back into work. The figures that we are seeing now are slower than we would have wished, but they are, none the less, improving all the time. Let me remind the hon. Lady that no one has ever attempted to get these people back into work. The Work programme is succeeding in helping into work those who were never in work before.

[Rachel Reeves]

The truth is that just 5% of disabled people on the Work programme end up in work. If that is a success, I would like to know what failure is. It is worse than doing nothing. It is a disgrace to let disabled people down in such a way. In the Budget, spending on employment and support allowance was revised up by a staggering £800 million because of delays, incompetence and the complete failure of the Work programme. Will the Secretary of State now agree to take action to help disabled people and give them the support they need and reform the failing Work programme?

[Mr Duncan Smith]

Let me remind the hon. Lady that, as I said earlier, for these people, and the previous Government made no effort whatsoever to get them back to work—[Interruption.] No, 2.5 million people were written off on sickness benefits under the previous Government. No one worked with them and about 1 million were left without anybody seeing them for nearly 10 years. That is the record of the previous Government. I simply remind the hon. Lady that since we came to power, some 22,000 have started a job for the first time and many thousands more have worked with the Work programme to get ready for work without a requirement to go to work. The programme is succeeding and improving all the time and this is the first time that the thousands who are going back to work have ever had help—they got none from the previous Government.

amendment of the law

Rachel Reeves Excerpts

Tuesday 25th March 2014 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

Wednesday’s Budget was certainly dressed to impress, but at its very heart there was an admission of failure. Let us remember what the Chancellor told us in 2010: that the Government would clear the deficit during this Parliament. They laughed at Labour’s plan to halve the deficit by the end of the Parliament, yet last Wednesday the Chancellor had to admit that he will not meet his targets until 2018—fully four years late.

The Chancellor comes from a wealthy family of wallpaper manufacturers, and this really was the ultimate Osborne and Little wallpaper Budget: paper over the cracks, use a stunning design to mask the underlying structural faults, and repeat patterns from last year’s range. But the truth is that for all the patterns and effects, people are worse off by £1,600 per year under this Government. Energy bills are up by £300, and however he dresses it up, people will be worse off in 2015 than they were in 2010.

This Budget was an opportunity to tackle the cost of living crisis faced by hard-working people across this country, but, again, the Government have failed to do so. They failed to do anything for families struggling with the costs of child care this side of an election. They failed to do anything to address youth unemployment and long-term unemployment with a jobs guarantee. They failed to help those working two or three jobs but still struggling with not enough to live on. They failed to help older people struggling to pay their energy bills, and they failed to help the disabled people so unfairly penalised by their bedroom tax.

[Mr Dominic Raab (Esher and Walton) (Con)]

Before the hon. Lady gets into full flow, will she at least recognise that on elderly poverty, fuel poverty, child poverty and overall inequality, the situation under this Government is better than that left by Labour?

[Rachel Reeves]

The Government’s own figures show that the number of pensioners in poverty is set to rise, not fall, under this Government; that is the Chancellor’s legacy.

The Chancellor called this a Budget for the makers, the doers and the savers. The reality is that for the makers, over the past three years, manufacturing is down by 1.3%, infrastructure investment is down by 11%, and exports are falling, not rising. For the doers, real wages are down by 6% in this Parliament, energy prices are up by £300, and long-term youth unemployment has doubled. As for the savers, what has he done for them? According to the Pensions Minister, the hon. Member for Thornbury and Yate (Steve Webb), he is allowing them to cash in their pensions and buy a Lamborghini. How incredibly out of touch is that? The average pension pot is about £30,000. I checked on the internet this morning, never having looked at this before, and found that the Lamborghini Aventador costs £263,000. The Cabinet might be lucky enough to be able to afford to buy a Lamborghini with their savings, but ordinary people would be lucky to be able to afford the door of a Lamborghini.

[Mark Pritchard]

For the record, it is inaccurate to describe everybody on the Government Benches as having a wealthy background; that is clearly not the case. On helping hard-working families, does the hon. Lady’s party support the overall DWP welfare cap, and the individual welfare cap, given the views not only of Members in this place, including the hon. Member for Rhondda (Chris Bryant), but of 26 bishops in the other place, plus one other bishop who does not sit in the other place—Archbishop, soon to be Cardinal, Vincent Nichols?

[Rachel Reeves]

I am sorry if the hon. Gentleman cannot afford a Lamborghini with his savings. I will come on to the welfare cap. We have been clear that we will be supporting the welfare cap in the vote in Parliament tomorrow.

If the Chancellor really wanted this to be a Budget for the makers, he would have cut business rates, supported a British investment bank to help small businesses, and committed to build more homes—the 200,000 extra homes a year that Labour has promised. If he really wanted it to be a Budget for doers, he would cut taxes for millions of working people with a 10p starting rate of tax, freeze energy bills and reform the broken energy market, and expand child care for parents with three and four-year-olds, as a Labour Government would.

[Mike Thornton (Eastleigh) (LD)]

On cutting taxes for ordinary working people, surely the hon. Lady must concede that putting the tax allowance up so that they are paying nothing on their first £10,000 or £10,500 is better than their paying 10p on that amount?

[Rachel Reeves]

The hon. Gentleman will know that the Institute for Fiscal Studies has counted the costs of what this Government have done. Taking into account all the changes to taxes, including VAT, which he voted to increase from 17.5% to 20% despite what was in his party’s manifesto, changes to tax credits and benefits have cost the average family £891. It is a case of giving with one hand but taking much, much more with the other.

[Andy Sawford (Corby) (Lab/Co-op)]

My hon. Friend talks about a Budget for the doers. Yesterday I met three young people in my constituency aged 22, 24 and 23 who had never had proper long-term jobs because they had worked for agencies and on zero-hours contracts. If the Chancellor cared about doers and young people, his Budget would have addressed those issues.

[Rachel Reeves]

I thank my hon. Friend for that intervention. As he knows, Labour’s compulsory jobs guarantee would benefit people exactly like the young people he met in Corby. It would guarantee a job for every young person who has been out of work for a year, giving them real hope and opportunity and utilising their skills and talents.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

If things are going as swimmingly as the Government wish us to believe, is my hon. Friend as concerned as I am about the numbers of people getting into personal debt trying to make ends meet, and about all the evidence that shows that personal debt will rise, not fall, over the years ahead? Does she think that is a sign of an economy recovering, or of people scraping to make ends meet under this Government?

[Rachel Reeves]

My hon. Friend speaks knowledgably not only of what she sees in her constituency of Walthamstow, but of what she hears when talking to others about the impact of payday lenders and debt on many of our communities.

[Mr Duncan Smith]

The hon. Lady has mentioned her jobs guarantee, which Labour has said will involve the private sector. Which companies have actually signed up to it?

[Rachel Reeves]

The compulsory jobs guarantee, which will last for the full five years of the next Parliament, will be based on what we have seen with the jobs growth Wales programme, whereby 80% of the jobs are in the private sector. A couple of weeks ago, the shadow Minister for employment—my right hon. Friend the Member for East Ham (Stephen Timms)—and I visited a software company in Cardiff that had taken on 12 people through jobs growth Wales. It had made a huge difference to those young people, giving them hope and opportunity. The Government carp at our policies to get young people back to work, yet under them long-term youth unemployment has more than doubled. That is the Secretary of State’s record under this Government.

If the Chancellor really wanted this to be a Budget for savers, he would cap fees and charges on pensions and require insurance companies to provide free independent brokerage, as Labour has called for. Why did the Chancellor not do those things? It is because he is strong when it comes to standing up for the rich, but weak when it comes to standing up for the poor.

[Mr Jim Cunningham (Coventry South) (Lab)]

Does my hon. Friend agree that one of the biggest indictments of this Government and the Budget is the way in which they have adjusted taxation such that women will fund the bulk of the £14 billion the Government have to save? Women will have to save £11 billion—that is an indictment of this Government.

[Rachel Reeves]

My hon. Friend makes an important point: women are disproportionately hit by the changes introduced by this Government and are struggling with the rising cost of living more than anybody in this country. Moreover, the increasing costs of child care under this Government are making it harder for working parents, particularly working mums, to go back to work and make the contribution we need to the economy.

Four years ago, this Government said that debt would fall and that living standards would rise, yet the reverse has happened. They have broken their promise to balance the books by 2015 and they are set to borrow £190 billion more than they had planned. National debt is rising this year and it will rise next year and the year after that. There is more borrowing, more debt and more welfare spending under this Government.

[Mr Harper]

On the subject of debt and future spending—the hon. Lady will probably get to this later in her speech—will she answer the question asked by my right hon. Friend the Secretary of State about her remarks at a meeting last week? She is reported to have said that it would be better if she could reverse all of the changes and make benefits universal. That is a spending commitment of hundreds of billions of pounds. She needs to say whether she said it or not; otherwise no one will believe a word the Opposition say.

[Rachel Reeves]

We are the party who have said that we will cut the winter fuel allowance for the richest pensioners and means-test that benefit to save money, but Government Members do not support that. The reality is that we are the party who are willing to take tough decisions to get the welfare bill down, whereas it is rising, not falling, under this Government.

The truth is that social security spending is £13 billion more than this Government had planned. In last week’s Budget, the Chancellor had to revise up spending on social security by £1 billion more this year and £1 billion more next year than the Government had planned just six months ago. Was that what the Prime Minister meant when he said that he was cutting the cost of welfare? It is going up, not down.

The problem is that without addressing the cost of living crisis, it is not possible to control the costs of social security. Long-term youth unemployment has doubled since 2010, costing taxpayers £330 million a year. The number of people working part-time who want a full-time job is up to 1.4 million, costing £4.6 billion in extra social security. One in five workers are paid less than a living wage—up from 3.9 million in 2009—costing the Treasury an estimated £3.2 billion a year. Housing benefit is increasing and has been revised up again because house building is at a record low. The Secretary of State has also played his part, with his shambolic welfare reforms. Just one in five people who have been on the Work programme for two years have secured a job; £1 billion has been paid out, yet more people are ending up back in the jobcentre than getting a job through the Secretary of State’s failed Work programme.

[Mr Simon Burns (Chelmsford) (Con)]

I think I am grateful to the hon. Lady for giving way. Given that I have been listening for 12 minutes to her critique of my right hon. Friend the Chancellor’s Budget, why is it that her party has come out saying it will support so many of its measures? Why is Labour thrashing around with such difficulty to find what to vote against tonight? Will the hon. Lady share with the House what her party plans to vote against?

[Rachel Reeves]

The right hon. Gentleman will not have to wait too long: at 7 pm, he will find out how we will vote on the different measures. Let us be clear: what matters most of all is what was omitted from last week’s Budget, including a compulsory jobs guarantee, a cap on fees and charges and cancelling the bedroom tax. Those things would make a real difference to the lives of our constituents, but the Chancellor did not even mention them in last week’s Budget statement.

The Secretary of State has not just failed with the Work programme; he is failing with universal credit as well. It is years behind schedule and £130 million has already been wasted on IT, yet the Secretary of State continues to say that his flagship reform is on time and on budget.

[Mr Duncan Smith]

indicated assent.

[Rachel Reeves]

He continues to do so now. If three years later and £130 million down the drain is on time and on budget, that says more about the Secretary of State’s grasp of mathematics than anything else.

The truth is that from Easterhouse—where the Secretary of State had his epiphany—to the Vatican, people are queuing up to tell the realities of this Government’s reforms. Rosemary Dixon, the chief executive of a charity on the Easterhouse estate in Glasgow—the Secretary of State might remember her—has said that the simple truth is that “things are going backwards.” A letter from 27 bishops stated that

“we must, as a society, face up to the fact that over half of people using foodbanks have been put in that situation by cut backs to and failures in the benefit system, whether it be payment delays or punitive sanctions.”

Archbishop Vincent Nichols has said that

“the role of food banks has been crucial to so many people in Britain today and for a country of our affluence, that quite frankly is a disgrace.”

The Secretary of State says that he is on a moral crusade. The people affected by his policies know what sorts of morals he has.

[Nick de Bois]

The hon. Lady may regret bringing the bishops and the moral case they were arguing into this. Perhaps she would like to reflect on what the position was of the bishops, and what Labour’s position was, when her Government kept people on benefits at a 95% marginal tax rate? Those people could not afford to take a job and Labour did nothing but trap them in a life on benefits.

[Rachel Reeves]

The employment rate reached a record high under the previous Labour Government and it has not risen to that level today. I believe that work did pay under the previous Government, and a flagship reform to make work pay under this Government has failed. The national minimum wage did more than anything under the previous Labour Government to make work pay, but that policy was opposed by the hon. Gentleman and his party.

If the Secretary of State really wants to get the welfare bill down, he must tackle the low wages and zero-hours contracts that leave too many people reliant on in-work benefits. If he really wants to get the social security bill down, he needs to build 200,000 extra homes a year to control the cost of the rising housing benefit bill. If he really wants to get a grip on the social security bill, he should introduce a basic skills test to help those who are unemployed to find and stay in work. If he really wants to control the cost of social security, he should introduce a compulsory jobs guarantee to get the young and the long-term unemployed back into work. The Budget failed to do those things. If we did them, however, we would gain control of social security. For those reasons, we will support the Government when we vote on the welfare cap tomorrow.

However, Labour would make different choices. We would get a grip on the failing programmes, such as universal credit and the Work programme, and focus on the cost of living crisis. We would scrap the bedroom tax, which is cruel and costs more money than it saves. We would take tough decisions, such as scrapping winter fuel allowance for the richest pensioners. We would get more people into work on decent wages that they can afford to live on. Different parties, different values, different priorities. Our priority would be to control the cost of social security; under the Tories, it continues to rise.

On pensions, I think that we can all agree that people need more help to save for their retirement. That is why I am pleased that the Labour Government legislated for automatic enrolment and that this Government have taken forward that Labour policy, based on the Turner consensus. We support greater flexibility so that people can get a better deal from the pensions market when they retire. We will continue to support reforms in the annuities market, which we have campaigned for and which the Leader of the Opposition called for in 2012.

The Government should go further than they did last week. Their figures show that savers are losing up to £230,000 from the value of their pension pots because of excessive fees and charges when they save. The Government should bring forward a meaningful cap on fees and charges to ensure that people’s pension pots are not drained by insurance companies. They should ensure that there is full disclosure of fund manager charges alongside that cap. They should ensure that, for those who want to turn a lifetime of savings into a secure and decent stream of income with an annuity, that is not made harder, and that brokerage is not just offered, but is taken up, so that people get the support they need to make the decisions that are right for them. We must not risk another Tory mis-selling crisis like the one that followed the personal pensions revolution of the 1980s.

To ensure that the Government get the reforms right, we will hold them to account with three tests. First, is there robust advice for people who are saving for their retirement? Secondly, is the system fair to those on middle and lower incomes who want a secure retirement income? Thirdly, are the Government sure that the changes will not result in extra costs to the state, either through social care or by increasing housing benefit bills? We will continue to push for the reform of pensions, but it must be reform that works for people who have saved all their lives, who deserve security and confidence in retirement.

We must be clear that the Office for Budget Responsibility has delivered a damning verdict on the Government’s record of getting people saving. The proportion of income that people are saving has fallen from 7.2% in 2012 to 4.1% this year, and it will fall to 3.2% by the end of the forecast period. More needs to be done to ensure that people have the confidence and the ability to save.

To conclude, whether you are a young person looking for work, a couple looking to buy your first home, a mum and dad trying to pay the bills and get decent child care, a pensioner struggling with rising energy bills or a business trying to access finance, you are worse off under the Tories. They have had four years to deal with the cost of living crisis and they have failed. They have had four years to help young people and the long-term unemployed, and they have failed. They have had four years to help those who are disabled and vulnerable, and they have failed.

There is a tax cut for millionaires, and beer and bingo for the working classes. George Orwell wrote of his nightmare vision of the world in 1984 that

“beer, and above all, gambling, filled up the horizon of their minds.”

Thirty years on in 2014, it seems that the Chancellor thinks that all he needs to do is to cut taxes on beer and bingo, and they will be happy. It is them and us, Mr Speaker—how patronising, how out of touch, how very Tory. The Tories cannot deal with the cost of living crisis; only Labour will.

Housing Benefit

Rachel Reeves Excerpts

Wednesday 26th February 2014 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I beg to move,

That an humble Address be presented to Her Majesty, praying that the Housing Benefit (Transitional Provisions) (Amendment) Regulations 2014 (S.I., 2014, No. 212), dated 4 February 2014, a copy of which was laid before this House on 5 February, be annulled.

The motion also stands in the names of my right hon. Friend the Member for Doncaster North (Edward Miliband), the hon. Members for Brighton, Pavilion (Caroline Lucas) and for Carmarthen East and Dinefwr (Jonathan Edwards) and others.

Let me set out our reasons for calling this debate and forcing this vote today, and the circumstances that have brought us to this position. The matter before us takes us to the heart of this Government’s shabby and shameful record. By statutory instrument, the Government are trying to close a loophole in the bedroom tax legislation without even understanding how many people are affected by these changes. Instead of trying to close this loophole, the Government should finally try to do the right thing and scrap the bedroom tax altogether. This Government promised that they would not balance the books on the backs of the poorest and most vulnerable, but that is exactly what they are doing, and in such a careless, clumsy and cack-handed way that we see chaos, confusion and uncounted costs piling up around us as they compound the injustice of their policies with utter incompetence in their delivery.

This Government’s bedroom tax has been a fiasco from the very beginning. More than half a million households have been hit by this mean-minded measure. Two thirds of those affected are disabled and 60,000 are carers. More than 200,000 families with children are affected, many of whom are already below the poverty line and forced, as a result of this tax, to find an average £728 a year extra in rent—equivalent to losing all the child benefit for a second child. So much for the Prime Minister’s moral crusade.

[John Hemming (Birmingham, Yardley) (LD)]

In January, the hon. Lady said that she would place a cap on structural social security spending, so what other cuts in welfare would she make to cover this exemption?

[Rachel Reeves]

Specifically on the bedroom tax, we have said that we would cancel it by closing the loophole in the shares-for-rights scheme, the bogus self-employment in the construction sector, and the tax credit that the Chancellor gave to hedge funds in the Budget earlier this year. We have been very clear about how we would pay for this. In the hon. Gentleman’s local authority of Birmingham, 2,100 households are being affected; I wonder whether he might speak for them and their concerns.

The implementation of the bedroom tax has been a shambles. Ministers have been unable to explain whether the policy is supposed to reduce overcrowding or whether, as their costings assume, people are expected to remain in their properties. There has been uncertainty and inconsistency, with mixed messages about who is exempt, whether it be parents with children serving in the armed forces, disabled people or carers. The truth is that none of them is exempt. Courts and tribunals have had to devote days to debating the definition of a bedroom, and as the unintended consequences become clear, the uncalculated costs are mounting.

[Philip Davies (Shipley) (Con)]

If this is causing so many problems—the Labour party in Bradford seems to think it is, too—perhaps the hon. Lady could explain why the Labour-dominated social housing provider has continued to build three-bedroom house after three-bedroom house despite claiming that it is not able to rent them out, and why Bradford council, which received £1.2 million in discretionary housing payments, has spent only £350,000 of it in the first six months and has not even bid for any of the extra funding the Government made available. If this is causing so many problems, why has the Labour council abandoned all these people?

[Rachel Reeves]

Let us see where Bradford is by the end of the financial year, not just six months into it.

Many of those who are moving because of the bedroom tax are ending up in private rented accommodation which, though smaller, is more expensive. Analysis by the university of York suggests that this could mean the Government paying out £160 million more in housing benefit than had been budgeted for.

Ministers have also been forced to admit that 35,000 of the disabled people affected have had their homes specially adapted for them with, for example, wheelchair ramps, wider doors, stair lifts and accessible bathrooms. If they are forced to move, it has been estimated that the costs of repeating those adaptations in new properties could be as much as £234 million.

According to the latest numbers from the National Housing Federation, two thirds of the households hit by the bedroom tax have already fallen into arrears, hitting the finances of the very housing providers we need to be building more homes to deal with overcrowding, and a staggering one in seven of the tenants affected have already received eviction warning letters.

[Lilian Greenwood (Nottingham South) (Lab)]

Does my hon. Friend share my concern that in Nottingham more than 2,000 City Homes tenants are falling into arrears totalling more than £286,000—money that should be spent on refurbishing existing homes and building new ones? The fact that they are in arrears means that even if there were somewhere for them to downsize to, tenancy restrictions would prevent them from doing so.

[Rachel Reeves]

In my hon. Friend’s local authority area—Nottingham city council—200 people have been wrongly paying the bedroom tax because of this Government’s mistakes. She is absolutely right to mention the number of people in her area who are in arrears and the difficulties they will have in moving.

The eviction warning letters that have gone to so many people raise the threat of millions more being wasted in eviction proceedings and the emergency accommodation that will be needed for those who are made homeless. What a shambles.

[Andrea Leadsom (South Northamptonshire) (Con)]

I have great regard for the hon. Lady, but as somebody who used to work at the Bank of England, she will know that this is not a bedroom tax. How does she calculate that saying in effect that people who have a spare bedroom should no longer have it paid for by taxpayers is somehow a tax?

[Rachel Reeves]

But as the hon. Lady well knows, the reality is that for many of these people it is not a spare bedroom. It is the bedroom that their sons and daughters who serve in the armed forces stay in when they come home; it is the bedroom that their sons and daughters stay in when they are home from university; it is the bedroom that is used to store the dialysis equipment; and it is the bedroom that the carer comes to stay in. These are not spare bedrooms; these are rooms that are needed by many people with disabilities or with children. We can debate whether it is a spare room subsidy or a bedroom tax, but what we do not have to debate is the impact it is having on people. In the hon. Lady’s constituency and mine, and in places across the country, people are suffering because of the decisions this Government are making. The Government should instead do the right thing and cancel the bedroom tax.

[Mr Clive Betts (Sheffield South East) (Lab)]

I was talking the other day to Tony Stacey, the chief executive of South Yorkshire housing association, which is a very well run local association in Sheffield and the surrounding areas. He pointed out not only that its arrears are going up, but that it is spending £200,000 more on helping to advise its tenants and on collection. The National Housing Federation says that when those extra costs of arrears and collection are added up nationally, £1.5 billion of development opportunities will be lost as a result of this Government’s welfare reforms.

[Rachel Reeves]

All that money could have been spent on building the houses we need to deal with the overcrowding crisis and other crises of which the Government speak; instead, house building is at its lowest level since the 1920s.

Let me turn to the loophole. Just when we thought that things could not get any worse, the latest shocking turn in this sad and sorry story was the revelation last month that because the Government could not even draft their own legislation and regulations correctly, many of the households that they had told local authorities should be made to pay the bedroom tax—those who had been in continual receipt of housing benefit for the same residence since 1996—were in fact not covered by the legislation.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

The hon. Lady referred to the National Housing Federation report and claimed that it said there was cause and effect with regard to the implementation of this policy and arrears. May I quote something to her and then hear what she has to say about it? The report actually said that it is

“difficult…to attribute any observed rise in outstanding arrears since 31st March 2013 to the introduction”

of the spare room subsidy “alone” and that the situation needs to be monitored. Secondly, it said that the vast majority of housing associations reported no rise in evictions. Would the hon. Lady like to withdraw her previous comments?

[Rachel Reeves]

The facts speak for themselves: two thirds of the households hit by the bedroom tax have fallen into arrears and councils up and down the country are trying hard not to evict people, because they know it is the wrong thing to do. They are trying to help people and we should welcome that and applaud them for doing the right thing, unlike this Government, who are failing to do the right thing.

[Mr John Redwood (Wokingham) (Con)]

Could the hon. Lady explain why Labour in office supported a scheme just like this for private rented sector tenants?

[Rachel Reeves]

The right hon. Gentleman knows full well that this scheme is retrospective in a way that the scheme for the private sector was not. The people affected by this loophole have been living in their properties since 1996. They thought they had a secure and permanent tenancy, but it turns out that they do not, because they cannot afford to live in the home they have lived in for, in some cases, their whole lives.

[Mr Duncan Smith]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. You are both up at the same time. Is the hon. Lady giving way?

[Rachel Reeves]

I have already given way to the Secretary of State.

[Mr Duncan Smith]

On a point of clarification.

[Mr Deputy Speaker]

Order. There can be only one person on their feet at a time. It is up to Rachel Reeves whether she wants to give way to the Secretary of State. She has given way to him once already and it is for her to judge whether she will do so again.

[Rachel Reeves]

I shall not give way to the Secretary of State, because he will have a chance to respond in a few minutes and I look forward to hearing what he has to say.

Let us take a moment to reflect on what this means. The Government have been telling local authorities to take housing benefit away from people who were in fact legally entitled to it all along. Most of these people were already in vulnerable positions and will have been pushed even further into severe hardship as a result of this Government’s errors.

Let us look at a few examples. A widower in Staffordshire suffering from mental health problems told of the sacrifices he had to make to find the extra £14 a week he needed to stay in his home. A 56-year-old woman from Rotherham, who receives support for health-related problems, has had to pay more than £700 in extra rent, which we now know was unlawful. In Greater Manchester, a grandmother who looks after her granddaughter, has been diagnosed with depression and anxiety and who paid £200 in additional rent as a result of the bedroom tax fell into arrears and was threatened with eviction from the home she has lived in for 26 years. These people and many like them are now due a rebate, but nothing will compensate for the distress they have been caused or the time and money that the council will have to spend sorting out the mess this Government have caused. And now the Government want to apply the bedroom tax again to these people and thousands of others like them.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

How does my hon. Friend think people will feel when they have the relief of finding out that they are exempt from the bedroom tax, only to then be told that the Government are breaking their necks to close the loophole?

[Rachel Reeves]

Today is our only opportunity to stop the Government closing the loophole, and to urge them to cancel the bedroom tax altogether. We have a chance this afternoon to walk through the Lobbies and either to stand up for our constituents or to stand against them, as this Government have done repeatedly.

Many of the people who have wrongly paid the bedroom tax have already been forced to move and have fallen into arrears with their rent. Because many local authorities do not have electronic records back to 1996 to allow them easily to identify cases that meet the relevant criteria, they have been forced to spend time and money on manual trawls through paper files to begin to sort out this huge mess. What a waste of time and money, and what a mess caused by this Government’s incompetence. Councils up and down this country have been put in an impossible position, and people in need have been put through needless anxiety and uncertainty. As I have said, money that could have been spent on building houses has been spent on having to sort out this mess. It beggars belief that like universal credit—another of the Government’s flagship welfare reforms—this policy has become mired in chaos, confusion and spiralling costs.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

My hon. Friend is making a magnificent opening speech. Does she agree that we will find that the bedroom tax is costing rather than saving the Exchequer money?

[Rachel Reeves]

Closing the loophole will indeed cost a huge amount of money—borne by local authorities that will have to do the work to sort out this mess.

Even as they seek to close this loophole, the Government do not have any understanding of the number of people affected by it. We asked Ministers on the Floor of the House to tell us how many people have been unlawfully charged the bedroom tax as a result of the loophole. On 13 January, the Minister of State, Department for Work and Pensions, the hon. Member for Wirral West (Esther McVey), who has responsibility for employment, told us in a written answer:

“This information is not available.”—[Official Report, 13 January 2014; Vol. 573, c. 449W.]

On the very same day, the Secretary of State told us in this House that

“the number is likely to be between 3,000 and 5,000”.—[Official Report, 13 January 2014; Vol. 573, c. 577.]

The next day, Lord Freud, the Minister for welfare reform, said in another place that

“the numbers involved in this anomaly are small and the amounts are modest.”—[Official Report, House of Lords, 14 January 2014; Vol. 751, c. 106.]

At oral questions this week, the Secretary of State told me that

“some 5,000 people may be affected.”—[Official Report, 24 February 2014; Vol. 576, c. 19.]

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

If 5,000 people were affected across the UK, I would expect about 50 people to be affected in Edinburgh. So far, the council has identified at least 113, and others in housing associations may be affected as well. I am sure that the situation is even worse in other places. Does my hon. Friend accept that as well as the extra cost and waste of money caused by the bureaucratic chaos, many people will apply for and get discretionary housing payments, so the savings to the Government, if there are any, are ultimately likely to be minimal? Why do they not just drop the entire tax completely?

[Rachel Reeves]

That is what we are calling on the Government to do today—to scrap the bedroom tax altogether.

We had no idea of the numbers affected and the Government clearly did not have a clue, so we asked the question that they should have asked: we asked local authorities how many people have been affected. Of 378 local authorities, 197 have now responded, including Birmingham city council, where 2,100 households are affected, Cardiff with 220 and Glasgow with 913, as well as Tory local authorities, such as Cheshire West and Chester council, where 275 households are affected, Tory Peterborough with 200 and Tory Wandsworth with 234—the list goes on. In total, our replies so far suggest that 21,655 households have been affected. That is on the basis of responses from barely half the councils, while many of them have said that they cannot give complete answers that include housing association tenants. It is therefore already clear that not only have this Government made a complete mess of their own policy, but they do not even have a clue how many people are affected by the loophole.

The Government have responded to this fiasco by scrambling to cover up their own mistake. They introduced a statutory instrument to close a loophole in their own legislation, without even giving this House an opportunity to scrutinise and debate it; it is only through this Opposition day that we can have a vote, which is why we called this debate today.

The bedroom tax was misconceived from the start, and it has been incompetently executed every step of the way. The chaos, confusion and extra costs are mounting, with the heaviest price being paid by the poorest and most vulnerable. The Government should scrap the bedroom tax today, but instead they are making it apply to an extra 40,000 households. If this Government will not scrap the bedroom tax, the next Labour Government will do so.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I call Mr Peter Lilley to make a six-minute speech.

Oral Answers to Questions

Rachel Reeves Excerpts

Monday 24th February 2014 Commons Chamber

[Mr Duncan Smith]

I am determined, as I have been since I arrived as Secretary of State, to improve the welfare system so that it supports people back into positive lifestyles, and that is what we are doing. More people have moved from economic inactivity, which is now at its lowest levels, back into work. There are now fewer workless households than there were on our arrival. When we came into government, one in 20—a fifth—of all households were without work; that figure has now reduced for the first time in 30 years.

[Rachel Reeves (Leeds West) (Lab)]

On 13 January, the Secretary of State told this House that between 3,000 and 5,000 people were wrongly paying the bedroom tax because of a loophole in the legislation. Since then, councils have been trawling through years of records to find out who has been overpaid. Will the Secretary of State update us on how many people were wrongly paying the bedroom tax?

[Mr Duncan Smith]

On the loophole that I talked about when I made that comment, the estimate we had, which was drawn from local authorities and still stands, in our view, was that some 5,000 people may be affected. That is based on the most up-to-date data that local authorities have given. I know that the hon. Lady and her team have made a freedom of information request, but the key thing is that the information we have is based on all the local authorities’ evidence to us, and I do not believe that her evidence is in any way accurate.

[Rachel Reeves]

Yes, we have put in a freedom of information request, because we did not think that the Secretary of State’s numbers were correct, and, as it turns out, they are not. The FOI request shows that with 194 out of 346 councils having responded so far, a staggering 21,500 people have been wrongly paying the bedroom tax, including 4,198 in Tory local authorities, so perhaps they have got their numbers wrong too. There are 275 in Tory Chester, 200 in Tory Peterborough, 234—

[Mr Speaker]

Order. I am sorry, but the question is too long. I have got Back Benchers to accommodate, so I know that the final sentence, which will be a short one, is on its way.

[Rachel Reeves]

Instead of trying stealthily to close the loophole, will the Secretary of State now do the right thing and scrap the cruel and hated bedroom tax?

Oral Answers to Questions

Rachel Reeves Excerpts

Monday 13th January 2014 Commons Chamber

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

I indeed agree with my hon. Friend that the Post Office card account has played an important part in supporting the post office network and enabling pensioners and benefit recipients to receive their money at a local post office. All of the options under consideration conclude that access to pensions and benefits via the post office will continue beyond March 2015.

[Rachel Reeves (Leeds West) (Lab)]

We already know that 600,000 people are affected by the bedroom tax, two thirds of them are disabled and 60,000 are carers. Will the Secretary of State now tell the House exactly how many long-term residents have been wrongly paying the bedroom tax since April because the Government failed to spot a loophole in the legislation?

[Mr Duncan Smith]

We have already made it clear that the number is likely to be between 3,000 and 5,000, but we will be clearer about that when the local authorities, which are responsible for collecting the data, come forward with the final facts.

[Rachel Reeves]

The fact is that the Secretary of State has not got a clue. It could be 5,000 or it could be as many as 40,000 people, as reported by the experts. What a total shambles! Will the Secretary of State now guarantee that everybody who has been wrongly paying the bedroom tax will be reimbursed, and instead of closing the loophole, will the Government now do the right thing and scrap the bedroom tax?

[Mr Duncan Smith]

Yet again, what we have from the hon. Lady is a moan about a policy that helps people in difficult circumstances. I said earlier that not once has she come to the Dispatch Box and said that she was concerned about those her party left behind living in overcrowded accommodation. Not once has she mentioned the 1 million on the waiting list or apologised for the fact that building levels for social housing fell to their lowest point since the ’20s. Of course we will look after those affected by the policy, but she must make it clear that she supports one of these policies; otherwise, there will be a total cost to the Exchequer. The shambles is on the Opposition’s part.

Food Banks

Rachel Reeves Excerpts

Wednesday 18th December 2013 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

Food banks have become the shameful symbol of Britain under a Tory Government. They have turned us into a country in which, despite being one of the richest in the world, a rapidly rising number of British people, many of them in work, are being forced to turn to charity to feed themselves and their families. But this Government have the affront—we heard it from the Minister—to say that all is well, when for most people things are getting harder, not easier. As my right hon. Friend the Member for Birkenhead (Mr Field) said, the Government just will not admit that they are part of the problem. Ministers are sitting on the independent report that they commissioned, presumably because they are ashamed and embarrassed about what it tells them.

The Trussell Trust states that one in three of those fed by food banks are children, as my hon. Friend the Member for Leicester South (Jonathan Ashworth) noted. Many are disabled, including those hit by the cruel, callous and unworkable bedroom tax, which my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) spoke about. Many are in work but earning less than the living wage. Indeed, the majority of people in poverty today are in work, as my right hon. Friend the Member for Torfaen (Paul Murphy) and my hon. Friend the Member for Aberdeen South (Dame Anne Begg) mentioned.

[Dr Whiteford]

Is the hon. Lady aware that Citizens Advice Scotland published research earlier this week suggesting that the main drivers for the increased use of food banks relate to the benefits system, particularly the increasing use of sanctions and delays and administrative errors?

[Rachel Reeves]

Sanctions, delays and the bedroom tax are all contributing to the increase in the number of people having to turn to food banks. Today we heard the powerful human stories behind the statistics.

[Stephen Doughty]

I have compared the use of food banks in my constituency in the festive period over the past two years. In Cardiff the number has doubled since last year, and Penarth has seen an eightfold increase. Is not the real tragedy that this is also a Christmas crisis for food banks?

[Rachel Reeves]

Yes, and although my hon. Friend refers to the festive period, for many it will not be festive at all.

A fortnight ago a young women with an 18-month-old daughter came to see me in my constituency. She had left her ex-husband to escape domestic violence but was worried sick because the benefits office had cut off her benefits when her ex-husband falsely claimed to have custody of her child. She has been waiting for weeks without any support while it fails to rectify the mistake. Without the food banks in my constituency, run by St George’s Crypt, St Bartholomew’s church in Armley and the Trussell Trust, that woman and her daughter would have gone without food. She has been badly let down by this Government and by their delays and sanctions.

[Lyn Brown]

The food banks in my constituency, which currently number at least six, tell me that people go without food for three months before turning up to ask for help. Is that not an indictment of the Conservative party?

[Rachel Reeves]

That is a really important point, but some Government Members and Ministers have suggested that people go to food banks because the food is free. The welfare reform Minister, Lord Freud, says that there is an almost infinite demand for that but, as my hon. Friend points out, people have real pride and are ashamed to go to food banks. As my hon. Friend the Member for Newport East (Jessica Morden) said, those are sad stories and real lives.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

First, I would like a Government inquiry into food poverty. Secondly, can the hon. Lady tell me whether she believes that unmet need for emergency food relief is currently increasing or decreasing?

[Rachel Reeves]

The number of people going to food banks is increasing. The demand is there because they are not getting the support they need from the welfare state. The Red Cross, FoodCycle and the Trussell Trust are all saying the same. It would be useful if the Government published the report that they commissioned on the growing use of food banks.

What is the Government’s response to this crisis? The Secretary of State for Work and Pensions—it is nice to see him here—said on the radio this morning:

“There has been a growth in food banks, as they grow people attend them.”

In the world of the Secretary of State, the rise in food bank use to half a million people reflects an increase in supply, even though people need to be referred to a food bank—they cannot just turn up. The logic of this Government is like blaming the number of house fires on the number of fire engines. I say shame on the Secretary of State and shame on this Government. We have to ask how many children will have to go hungry this Christmas before the Government take action—before the Secretaries of State for Environment, Food and Rural Affairs and for Work and Pensions acknowledge that there is a problem and then finally do something about it.

The charities, churches, community groups and volunteers who run the food banks show us Britain at its best—a country of generosity and solidarity, of one nation where people pull together to do what they can for the least fortunate among us. We should, and we do, applaud them, as many hon. Members have said, particularly my hon. Friends the Members for Copeland (Mr Reed) and for Newport East (Jessica Morden), and, most recently, my hon. Friend the Member for Birmingham, Hall Green (Mr Godsiff), who spoke about the kindness of strangers. When the Prime Minister promised us the big society, is this really what he had in mind—homelessness rising, a boom in payday lending, more and more lives scarred by long-term unemployment, and half a million people relying on food banks to feed themselves and their families?

It is downright Dickensian, a tale of two nations: tax cuts for the rich and food banks for the poor. As my right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman) said, as we in this Chamber look forward to Christmas, we must spare a thought for those who are not going to have any sort of Christmas at all.

[Ann McKechin (Glasgow North) (Lab)]

Does my hon. Friend agree that it is a basic human right that people should have sufficient food that they do not need to go hungry, and that in this country they should not have to rely on charity?

[Rachel Reeves]

My hon. Friend makes an incredibly important point. While we all applaud and thank the food banks, the volunteers and the people who donate food, that is not how our basic needs should be met. The basic need for food should be met through wages and a social safety net when it is needed. The basic need for housing should be met by our wages or by a social safety net when it is needed. The basic need to be able to heat one’s home and turn on the lights should be met by having a decent wage or a social safety net when it is needed.

[Mr William Bain (Glasgow North East) (Lab)]

Has my hon. Friend seen, as I have, the study by the Children’s Society showing that under this Government the real value of the adult national minimum wage is 50p an hour less than it was when Labour was in office? Is this low pay crisis not one of the key drivers of the explosion in the use of food banks?

[Rachel Reeves]

I thank my hon. Friend for that intervention. The national minimum wage was one of the proudest achievements of the previous Labour Government. It lifted millions of people out of poverty pay, the majority of them women, and employment increased when Conservative Members said that unemployment would increase as a result. We also know today that the real value of the national minimum wage has not kept pace with average earnings or with the rising costs of energy, food prices and everything else, and so people who are in work are increasingly having to turn to food banks to be able to make ends meet.

Although we welcome today’s unemployment numbers, we know that a record number of people are working part time who want to work full time, and that for 41 of the 42 months that this Prime Minister has been in office, prices have risen at a faster rate than earnings. For all those reasons, my hon. Friend is right to point to the problems with the minimum wage, which has not kept pace with the rising cost of living and is not even being enforced. With more than 5 million people being paid less than a living wage, we know that we need to redouble our efforts to ensure that more people can support themselves and their families, rather than having to turn to food aid.

Seventy years ago, William Beveridge spoke of the five giants that he said a civilised country must overcome: squalor, ignorance, want, idleness and disease. Under this Tory-led Government, those giants are rearing their ugly heads again. We need a Labour Government to slay them.

Universal Credit

Rachel Reeves Excerpts

Tuesday 10th December 2013 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

(Urgent Question): To ask the Secretary of State for Work and Pensions if he will make a statement on universal credit.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

This is a major and challenging reform which will transform the welfare state in Britain for the better, ultimately accounting for some £70 billion of benefit spending each year, with 3 million people better off.

Rightly for a programme of this scale, the Government’s priority has been, and continues to be, its safe and secure delivery. This has been demonstrated throughout our approach to date, which started with the successful launch of the pathfinder in April 2013 and has continued with the controlled expansion of universal credit, starting as planned in October 2013 and running through to spring 2014. What is more, we are already pushing ahead with the cultural and business change required as part of universal credit. We are retraining 25,000 Jobcentre Plus advisers while implementing digital jobcentres and rolling out the new claimant commitment, which is now on track to be in place in half of all jobcentres by the end of the year, and across the country by the spring.

Yesterday I announced and discussed at length with the Work and Pensions Committee our plans for the next stage of implementing universal credit, following my Department’s work over recent months with the Government Digital Service to assess delivery options. That work has explored the use of the latest digital technologies and assessed the utility of the work we have done to date—[Interruption.]

[Mr Duncan Smith]

The conclusions of this work were set out yesterday. First, as part of the wider transformation in developing digital services, the Department will further develop the work started by the GDS to test and implement an enhanced digital service. This will be capable of delivering the full scope of universal credit and make provision for all claimant types.

Meanwhile, we will expand our current service and develop functionality so that from next summer we progressively start to take claims for universal credit from couples and, in the autumn, from families. Once safely tested in the 10 live universal credit areas, we will expand the roll-out to cover the north-west of England. This will enable us to learn from the live running of universal credit at scale and for more claimant types, including the more vulnerable and the more complex, while extending to more people the positive benefits of universal credit.

It is important to note that the information that we are getting back from the pathfinder tells that 90%—I stress, 90%—of people are claiming universal credit online and that 78% are confident about their ability to budget with monthly payments. It also tells us— [Interruption.] I know that Labour Members do not want to hear about this, because they have been wrong on welfare reform from day one. The majority of people who are on the programme tell us that it pays to work, with 65% to 70% reporting that universal credit offers better work incentives than jobseeker’s allowance and is less complex—upheld by the 65% who agreed that it was easier to understand their obligations as a result.

As we progress with the future delivery of this flagship programme, we will continue the same careful approach—test, learn, implement—as it is rolled out through the regions. On this basis—[Interruption.] Actually, I am going to pick this point up. The shadow Chancellor is sitting on the Opposition Front Bench. I will tell you, Mr Speaker, what we will not do: we will not take any lessons from the party that rolled out tax credits early. It rushed the delivery of tax credits, which cost £5 billion immediately and 400,000 people suffered directly as a result.

Once we have closed down the new claims, we will test, learn and implement—unlike Labour when it rolled out its information technology programmes. The new claims to the legacy benefits that universal credit replaced have been closed down, with the vast majority of the remaining legacy case load moving to universal credit during 2016 and into 2017. Final decisions on these elements of the programme will be informed by the development of the enhanced digital solution.

[Rachel Reeves]

On 5 September, the Secretary of State told the House:

“We will deliver this in time and in budget”.—[Official Report, 5 September 2013; Vol. 567, c. 472.]

On 14 October, he said:

“Universal credit will roll out very well and it will be on time and within budget.”—[Official Report, 14 October 2013; Vol. 568, c. 429.]

And just last month, on 18 November, he said that

“universal credit will roll out and deliver exactly as we said it would.”—[Official Report, 18 November 2013; Vol. 570, c. 947.]

The Secretary of State must answer these questions. How on earth can this be on time when in November 2011 he said that

“all new applications for existing benefits and credits will be entirely phased out by April 2014”,

but we now learn that this milestone will be reached only in 2016? Will the Secretary of State confirm that this is a delay of two years? Will he also confirm that, even by 2017, 700,000 people will not be on universal credit?

How can the Secretary of State say that universal credit will be on budget when, even by his own admission, £40.1 million is being written off on IT costs? What budget heading was that under? The Secretary of State also revealed yesterday that another £90 million will be written off by 2018. Does this mean an additional IT system is having to be built?

The reset exercise began in February. On 18 November, the Secretary of State still claimed that there would be no delay to universal credit. At what point did he learn that there would be a delay of two years?

The underlying problem is surely that the Secretary of State has not resolved key policy decisions before spending hundreds of millions of pounds of taxpayers’ money on an IT system.

One of the issues that has a fundamental impact on whether people are better off in work is free school meals; so which recipients of universal credit will get free school meals—some, none or all?

The Secretary of State is in denial. Doubtless, he will deny that he is in denial in a moment’s time. But we all know that until he fesses up, no one will have any confidence in his management of this programme. It is no surprise that a source close to the Chancellor says:

“There are some ministers who improve in office and others, like IDS, who show that they are just not up to it”.

[Mr Duncan Smith]

Let me deal with a couple of the points raised by the hon. Lady. I said all along, and I repeat, that this programme essentially is going to be on time. By 2017, some 6.5 million people will be on the programme, receiving the benefits.

Let me deal with the hon. Lady’s comments about what is written down and what is written off. For somebody who was supposed to have been working for the Bank at one point, she does not seem to know the difference between equipment of no use that is being written off and equipment—this is the case in any company over a period of time—that is written down each year. That is exactly right. If she drives a motor car, I wonder whether she has noticed that, over a period of years, its value actually depreciates. Perhaps she has not; perhaps she is still trying to sell the car for the same value she bought it for.

The reality is very simple. Let us take the legacy systems right now. The legacy computer systems that are working were written down years ago, but they are still delivering value to the Government by delivering benefits. Maybe the hon. Lady needs a teach-in about the difference between written-off equipment and written-down equipment.

I want to deal with one other point that is quite clear and is the reality. We have been clear—[Interruption.]

Oral Answers to Questions

Rachel Reeves Excerpts

Monday 18th November 2013 Commons Chamber

[Mr Duncan Smith]

I congratulate my hon. Friend and his area on having an unemployment rate of 2.6%, which is testimony to the efforts this Government are making. Schools obviously have a legal duty to secure independent careers guidance for their pupils, and employers have to work with them, but it is also a fact that Jobcentre Plus has a careers guidance programme. We are now in talks with the schools to ensure that somehow we can connect would-be school leavers, long before they leave school, with companies and businesses, to tell them exactly what they need to have and what skills they will need to obtain.

[Rachel Reeves (Leeds West) (Lab)]

This weekend it was reported that Atos had pulled out of a DWP contract providing specialist disability advice. What was the Department’s response? An internal memo instructing staff deciding whether people are disabled enough to receive disability living allowance to “google it”. Is this not the biggest indication yet of the sheer contempt in which the Department for Work and Pensions holds disabled people?

[Mr Duncan Smith]

The hon. Lady is completely wrong. First of all, it was not an internal memo; it was guidance that goes out to the Department in the normal way. [Interruption.] The hon. Member for Rhondda (Chris Bryant) needs to keep quiet for a while and listen a bit more. This man has travelled so far in his political career that we never know what he is talking about. He has gone from being a Tory to being a Blairite and then a Brownite, and now he is a socialist on his website, so I wonder whether he needs to keep quiet and listen a little more.

The answer to the hon. Member for Leeds West (Rachel Reeves) is that Atos Healthcare has not withdrawn from the contract. Normal procedures to update guidance in the process of DLA reform are going through. Under DLA, only 6% had face-to-face assessments; the majority have face-to-face assessments now, under the personal independence payment. Therefore, decision makers have much more objective information than they ever had before, so there is no change to the quality of the service. This is a simple contract adjustment to reflect and meet the corresponding business needs. The hon. Lady should really not listen to jobbing journalists who come to her to tell her they have an issue.

[Rachel Reeves]

I am not sure whether the Secretary of State has even bothered to read the memo from his own Department. As the right hon. Gentleman knows, because of the failure of his Department to deliver the reform, the personal independence payment is going out only to a third of country. After the chaos of the universal credit, the work capability assessment, the PIP, the Work programme and the Youth Contract, DLA is now in chaos as well. Is there any part of the Department for Work and Pensions that is actually working?

[Mr Duncan Smith]

The thing that is wonderful about the hon. Lady is that she never listens; she just reads what is on her script that she prepared before, and it does not matter what question was answered. I have already told her—[Interruption.] The hon. Member for Rhondda should keep quiet; otherwise he will jump out of his underpants if he carries on like that—

Housing Benefit

Rachel Reeves Excerpts

Tuesday 12th November 2013 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I beg to move,

That this House regrets the pernicious effect on vulnerable and in many cases disabled people of deductions being made from housing benefit paid to working age tenants in the social housing sector deemed to have an excess number of bedrooms in their homes; calls on the Government to end these deductions with immediate effect; furthermore calls for any cost of ending them to be covered by reversing tax cuts which will benefit the wealthiest and promote avoidance, and addressing the tax loss from disguised employment in construction; and further calls on the Government to use the funding set aside for discretionary housing payments to deal with under-occupation by funding local authorities so that they are better able to help people with the cost of moving to suitable accommodation.

This is an important debate, which is why it is so good to see so many Opposition Members on the Benches behind me and so disappointing to see so few Government Members on the Benches opposite. I am also sorry that we will not be joined today by the Secretary of State for Work and Pensions, who apparently has more urgent and important business at an intergovernmental conference in Paris. Some might welcome the fact that one of Parliament’s more dedicated Eurosceptics has suddenly developed such a passion for discussing his problems with our European partners—perhaps he has had a second epiphany—but those affected by his policy will be disappointed that he has chosen not to be here today to answer for the distress and disruption his policy is causing up and down the country and to explain himself to his victims, the more than 400,000 disabled people, as well as their families and carers, as many as 375,000 children forced out of their homes or pushed deeper into poverty and debt, and the foster carers and families of those serving in our armed forces who have also been hit. Those people are at the sharp end of the Prime Minister’s cost of living crisis. They are already struggling to survive and to do their best for their loved ones, yet they have been treated with callous disregard by this out-of-touch Government.

[Mrs Anne Main (St Albans) (Con)]

Before the hon. Lady moves on from her remarks about the Secretary of State, is she really suggesting that he should not be discussing youth unemployment with other Heads of State? Is that what she will say the next time we discuss youth unemployment?

[Rachel Reeves]

Rather than going to a conference to discuss youth unemployment, he should be doing something about it in this country.

I hope that hon. Members on both sides of the House will have a chance to meet some of the people who have come to Parliament today, many of whom have travelled across the country, to tell their story and hear the debate. But even as they got off their trains and coaches in London this morning, the Secretary of State was already scuttling across the channel on the Eurostar.

[Lisa Nandy (Wigan) (Lab)]

One of my constituents who could not be here today has a terminal illness. I wrote to the Minister about his case but was told that there could be no guarantee that he would not be affected by the bedroom tax. Does my hon. Friend agree that the Secretary of State has shown the same callous indifference by not being here to try to defend this indefensible policy?

[Rachel Reeves]

It is the same callous disregard that has been shown to over 400,000 disabled people in all our constituencies across the country. It is incredibly disappointing that the Secretary of State is not here to hear those stories today.

[Caroline Lucas (Brighton, Pavilion) (Green)]

In Brighton and Hove there are now 300 council tenants in arrears who were not in arrears before the bedroom tax was introduced, and 205 of them have disabilities. Does the hon. Lady agree that this is a despicable policy brought in by a Government who simply do not care and that it is having a disproportionate effect on people with disabilities?

[Rachel Reeves]

The hon. Lady is absolutely right. That is the story we are hearing in all our constituencies from people who are being hit by this policy and have nowhere to turn. Is not the truth that the Secretary of State does not want to answer for the waste and chaos in his Department, his failure to deliver the great welfare reform he promised, his failure to get more people into work and his failure to get the benefits bill down? He does not want to answer to this House, or to the British people, for the distress and damage he is causing, with desperate measures designed not to control costs or build a fairer system, but merely to distract from his own incompetence.

[Philip Davies (Shipley) (Con)]

The shadow Secretary of State promised that she would be tougher on welfare than this Government. Given that it was the previous Labour Government who introduced this policy in the first place, it seems that she is going to be not only not tougher than this Government on welfare, but not tougher than the previous Labour Government.

[Rachel Reeves]

We have been very clear about how we would pay for this policy, if indeed it costs as much as the Government have said it will: we would crack down on bogus self-employment in the construction industry, reverse the tax cut for hedge funds introduced in the Budget earlier this year and cancel the Chancellor’s failed “shares for rights” scheme. We have called this debate to bring the Government to their senses and to ask Members on both sides of the House to consult their consciences and their constituents and call a halt to the havoc this heartless policy has unleashed.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Is not the essence of that heartlessness the extent to which the policy affects carers? Carers UK has said that three quarters of the affected carers it surveyed were cutting back on food and electricity as a result, and one in six face eviction. How do the Government justify that?

[Rachel Reeves]

My hon. Friend is absolutely right, because many of the spare bedrooms are used by carers supporting some of the most vulnerable people in our constituencies. We think that the time is now right for each and every Member of this House to show where they stand, because we know the facts. Stories of the hardship and heartache that the Secretary of State is causing are streaming in from every part of the country and every constituency.

[Andrew Gwynne (Denton and Reddish) (Lab)]

I commend my hon. Friend for bringing this motion before the House today. In Tameside, New Charter Housing has seen the number of people in arrears rise by two thirds as a result of being clobbered by this pernicious bedroom tax, yet Tameside council’s discretionary housing payments go nowhere near tackling the real problems families are facing. This is not creating new capacity in housing; it is clobbering the poorest the hardest.

[Rachel Reeves]

As in Tameside, two thirds of the budget for discretionary housing payment in my constituency has already been used, despite the council adding £250,000 to the budget.

I have heard heart-rending testimony about the tax. I have heard about a man who received worrying letters about rent arrears while in hospital for a triple heart bypass because he suddenly had to find another £18 a week to keep the specially adapted home he had lived in for most of his life. I have heard about a woman with young children who had found another flat with a family and wanted to swap, but she was in a Catch-22 situation because she could not move until she had paid off the arrears she had built up as a result of the bedroom tax. I have heard about a family with a disabled son who have discovered that the room that carers stay in is now designated as a spare bedroom with a charge of £14 a week.

In so many cases, local authorities and housing associations are put in impossible situations, trying to minimise the impact of this badly designed policy on local people. Decent people in tough situations who are doing their best and trying to survive are being trapped by an absurd policy that makes no sense. They are terrified of losing their homes or sinking deeper into poverty and unmanageable debt.

[Bill Esterson (Sefton Central) (Lab)]

My hon. Friend is demonstrating through individual cases just how unfair this appalling policy is, but does she agree that it is also unworkable? Only last month in the borough of Sefton there were 4,963 people registered for a one-bedroom property, but just 10 such properties were available. Does that not demonstrate just how wrong the policy is?

[Rachel Reeves]

My hon. Friend is absolutely right. As well as being cruel, the policy is unworkable. I know that hon. Friends have heard many such stories, as many have already testified today, about people in their constituencies. I know that we will hear more this afternoon. We know that around 660,000 households across the country have been hit by this punitive tax. All the people affected are in this country, rather than in Paris, where the Secretary of State is today. Many of them have conditions that mean they need to sleep separately or accommodate carers or special equipment. A large number are families with children and they are already at or below the poverty line.

[Robert Flello (Stoke-on-Trent South) (Lab)]

I join my colleagues in commending my hon. Friend for securing the debate. She is listing the people affected. A constituent came to see me the other day, a father whose children stay with him at weekends. It is the only chance he gets to see them. One of the conditions is that they have a separate bedroom. He will be stopped having his children to stay as a result of these cruel measures.

[Rachel Reeves]

It is an anti-family policy as well as an anti-disabled people policy.

The average hit per household is £14 a week, or £720 a year. It might not sound much to members of the Cabinet, but it is more than the cost of a daily school meal. It is almost the entire cost of feeding a growing child for a year, or equivalent to someone losing all their child benefit for a second child.

[Stephen Mosley (City of Chester) (Con)]

Does the hon. Lady honestly think that the founders of the welfare state intended it to be used by single people to live in two, three or four-bedroom houses while families are living in overcrowded flats?

[Rachel Reeves]

When a Labour Government introduced the welfare state it was a safety net for some of the most vulnerable people. The 400,000 disabled people who are going to be hit by the bedroom tax are exactly the people who Beveridge’s and Clement Attlee’s welfare state were designed to protect—and shame on you for taking that safety net away.

Many of the people affected by the bedroom tax have nowhere else to go and no choice but to take the financial hit, making impossible choices between feeding their children, paying the gas and electricity bills, and paying the rent.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

The hon. Lady talks about affected families. What does she say to the almost 400,000 families who are living in overcrowded situations when they look over their shoulders at the almost 1 million spare bedrooms in Britain?

[Rachel Reeves]

I say that instead of presiding over the lowest rate of house building since the 1920s, this Government should get on and build some houses.

No wonder the Trussell Trust—[Interruption.] Government Members do not want to hear about food banks, and nor does the Prime Minister, but they will hear about food banks. The Trussell Trust cites the bedroom tax as the key driver behind a threefold increase in the use of food banks since April this year. No wonder more people are turning to payday lenders and to food banks. No wonder the Samaritans are training up staff to help people left desperate and distraught by the Secretary of State’s bedroom tax. Those who do not move may end up in less suitable housing—homes without adaptations for people with disabilities, or where children have to change school or live further away from family or support networks.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Is my hon. Friend aware that people who have dialysis at home, who have moved into homes with a spare bedroom specifically so that having the dialysis equipment in a sterile environment will allow them not to use hospitals, are being expected to pay bedroom tax for a room that is actually a hospital at home? This is an appalling waste of public money, because hospital care costs more.

[Rachel Reeves]

My hon. Friend is absolutely right. Hospital care costs more, but so does making adaptations to a new property, which is what will have to happen if people are moved.

People up and down the country are asking why. Why are we putting vulnerable families through this? Why are we hitting some of the hardest-pressed households in our country? Why are we hitting disabled people like this? Why did the Prime Minister introduce this policy on exactly the same day as cutting taxes for millionaires? It shows how out of touch this Prime Minister and his Government are.

The Government would like us to believe that the bedroom tax is cutting the benefits bill and dealing with under-occupancy in social housing, but it simply does not add up.

[Margot James (Stourbridge) (Con)]

The shadow Secretary of State is providing a litany of cases, half of which are exempt under the legislation while many others will be beneficiaries of the discretionary housing payment, which this Government have trebled to £190 million per year. Did not her party in government introduce the local housing allowance to cover tenants in the private sector? Why is it one rule for them and one rule for others?

[Rachel Reeves]

First, as the hon. Lady knows, the Government’s policy is retrospective whereas in the private sector it is not. Also, the discretionary housing payments are not nearly enough to cover this. In my constituency in Leeds—[Interruption.] The hon. Lady has asked the question; perhaps she will listen to —[Interruption.]

[Mr Speaker]

Order. There is far too much noise—a complete cacophony of noise—on both sides of the Chamber, such that the Chair cannot even hear what is being said. I recognise the strength of feeling on both sides, but I appeal to Members, as I have said many times before, to have some regard for the way in which our proceedings are viewed by people outside this place, who would hope for some seemly conduct.

[Rachel Reeves]

Thank you, Mr Speaker.

In Leeds, where I am a Member of Parliament, two thirds of the budget has been used with less than half the year gone, despite the fact that the council has topped up the discretionary housing payment pot to help as many people as possible, so that money is not nearly sufficient to help all those who are hit, particularly disabled people.

[Huw Irranca-Davies (Ogmore) (Lab)]

Does my hon. Friend agree that this is not just a callous policy but a downright stupid one, because in my constituency we now have two and three-bedroom properties lying empty and unable to be modified, while housing associations throughout south Wales have rising levels of bad debts on their books that are jeopardising their financial security?

[Rachel Reeves]

I could not agree more. It is putting housing associations and local authorities in impossible situations where they potentially have to condemn housing that is perfectly fit for people to live in because people cannot afford the rent.

[Andy McDonald (Middlesbrough) (Lab)]

Can we nail the issue of dialysis, because these situations do happen? In my constituency, David Holdsworth is in renal failure and attached to tubes. He cannot occupy the same bedroom as his wife, and the other bedroom is occupied by their adult disabled daughter. They do not qualify for DHP—they have been denied it. This is more evidence of how pernicious this tax is and how out of touch this Government are with the most vulnerable in our society. [Interruption.]

[Rachel Reeves]

I thank my hon. Friend. It is a shame that of instead of just shouting that he is wrong, no Conservative or Liberal Democrat MPs came to visit today’s lobby of Parliament by people who are affected by these policies. It is also a shame that the Secretary of State is in Paris rather than listening to these stories and hearing about the impact of his policy.

[John Hemming (Birmingham, Yardley) (LD)]

Obviously it was the Labour party in government that introduced the bedroom tax—in the private sector. On 19 January 2004, Labour Ministers said:

“We hope to implement a flat rate housing benefit system in the social sector, similar to that anticipated in the private rented sector”.—[Official Report, 19 January 2004; Vol. 416, c. 1075W.]

The question for the shadow Secretary of State is, “When did you change your policy?”

[Rachel Reeves]

It will be interesting to see which way the hon. Gentleman votes this evening given that his own party conference has said that this is an unfair tax. Will he vote with the Conservatives or with his own party? Let me be very clear: if I am Secretary of State in 2015, the first thing I will do is reverse this unfair and pernicious tax. It is a shame that his party and his Minister will not do likewise.

There is a contradiction at the heart of this policy that shows how disingenuous the Government’s justifications are for it. On the one hand, they say that it is necessary to deal with under-occupation and overcrowding, yet on the other that the benefit savings they are claiming assume that nobody moves. So which is it to be, because it cannot be both? Is this a policy to cut costs by getting social housing tenants to pay more, or is it a policy to move people out of their housing to avoid paying the tax, in which case it does not raise any money? It just does not add up.

[Ms Karen Buck (Westminster North) (Lab)]

Government Members have been calling out that this is a legitimate policy response to help with overcrowding, but the Government’s own impact assessment says that

“the highest rates of overcrowding are also those with the lowest percentage of under occupiers…this mechanism for encouraging the more efficient use of social housing may make less of an impact in those regions most affected.”

So the Government’s own impact assessment states that this policy is a nonsensical response to dealing with overcrowding.

[Rachel Reeves]

I thank my hon. Friend for that intervention. The justifications for this do not stack up. People are not moving but they are not paying either. More and more people are falling into arrears. As many as 50% of them, hit by the tax, are now behind with their rent. The loss to local authorities and housing associations is already running into tens of millions of pounds, and the cost of evicting all those who have not paid their rent and then dealing with the resulting homelessness could cost many times more. While the Government preside over the lowest level of new home building since the 1920s, their answer is to make the housing crisis even worse by making it harder for housing providers to meet local housing need by blowing another hole in their budget and destabilising their fragile finances further.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

My hon. Friend will be aware of the research done by the centre for housing policy at York university on the lack of any financial benefits accrued from this policy. Does she agree that it is almost unheard of for such a policy to inflict so much misery on some of the most vulnerable in our society for so little financial benefit to the rest of the country?

[Rachel Reeves]

I thank my hon. Friend for that intervention. Indeed, analysis by York university’s centre for housing policy suggests that this will cost £160 million, because the Department for Work Pensions has underestimated the impact on the housing benefit bill of people moving to the private rented sector.

According to the National Housing Federation, 100,000 disabled people—some of whom we have already heard about—live in properties specially adapted for their disability, but the average grant issued by local authorities for adaptations to homes stands at £6,000. The total cost of doing the adaptations all over again could run into tens of millions of pounds.

[Heather Wheeler (South Derbyshire) (Con)]

They’re exempt.

[Rachel Reeves]

Would the hon. Lady like to stand up and say they are exempt, because that is not Government policy?

[Heather Wheeler]

What I would really like the hon. Lady to explain is how, out of the 77,000-odd properties in Leeds, only 36 have been swapped. What this is about is making sure that people who are in overcrowded accommodation can live somewhere decent. Would the hon. Lady like to address that?

[Rachel Reeves]

The hon. Lady said from a sedentary position that disabled people are exempt, but she would not say it when she was on her feet because she knows it is not true.

Many of those who move will end up in the private rented sector, meaning that the housing benefit bill may be much higher. The National Housing Federation says that families removed from a two-bedroom home in the social sector to a one-bedroom home in the private rented sector would end up claiming an average £1,500 more in housing benefit. How can that make sense? How do the sums stack up? They do not.

To cap it all, we have learned of the absurdity—the complete and utter travesty—of housing associations looking to demolish homes that the Government now refuse to house people in, while the families being forced out by this policy are left to the private sector, where rents are higher and conditions are poorer.

[Stephen Pound (Ealing North) (Lab)]

A young man who lives in Earls Court has total renal failure. His spare bedroom is a dialysis unit, but he has been told that he now has to pay the bedroom tax. He is very happy with the efforts of his Member of Parliament—who is not of my political persuasion—to attempt to free him from the chains of the bedroom tax, but my brother faces losing his home of 20 years for being a kidney patient. Does my hon. Friend not agree that this is beyond disgraceful?

[Rachel Reeves]

I thank my hon. Friend for that moving intervention. So many of us can give examples from our constituency surgeries. If Government Members were honest, they would say that they hear the same sorts of stories at their surgeries. They know that these people are not exempt.

This is not a housing policy or a way to get the benefits bill down. It is an attempt to victimise some of the most vulnerable families and most vulnerable people in our country, and it is making the housing crisis worse.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

My hon. Friend is making an excellent speech. May I make a small plea? Traditional families and communities where people lived by their grandchildren, looked after one another and had mutual concern are being broken up throughout this country.

[Rachel Reeves]

I can think of another example from my constituency, where a gentleman has lived in his house for 30 years. He brought up his family there, but the estate he lives on is made up of three-bedroom properties and if he is forced to move he will be moving away from the people with whom he went to primary school and secondary school, and from his children and grandchildren. How can that be fair and right, and how will it help foster the big society that we used to hear so much about?

[Alison McGovern (Wirral South) (Lab)]

I pay tribute to the contribution my hon. Friend is making. Before she moves on from talking about personal cases, I think we should pay tribute to all those people who came and told us their personal stories. That is a hard thing for some people to do. They are the people who have really fought this campaign and we support them in this House today. Does my hon. Friend agree that we must pay tribute to the bravery and courage of people such as my constituent, Ms Davis from Bebington, who came forward and told their story?

[Rachel Reeves]

I thank my hon. Friend for that contribution. Surgeries can be difficult when we discuss these issues with constituents and they break down in tears. It is people who have done the right thing, gone out to work and tried to support their families, but who have fallen on difficult times, done nothing wrong and whose children have left home or gone to university who will be saddled with this tax. I pay tribute to them for sharing their stories and to those who came to London this morning to tell us their heart-breaking stories.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Is my hon. Friend aware that, in Islington borough, 3,100 families will be affected by the bedroom tax? The local authority is making a stupendous effort to build as much social housing as possible—the joke is that if someone moves their car, they will return to find that a flat has been built in its place—but even it has been able to let only 1,600 flats in the last year and it cannot keep up with the demand of people who need to move because of the bedroom tax, let alone because of the general housing crisis.

[Rachel Reeves]

I thank my hon. Friend for that intervention.

We say that it is time to stop this cruel and mad policy. It is time for Members on both sides of the House to take a stand. It is time to stand with the desperate families who are being forced out of their homes or forced into debt, and time to stand with anyone who knows anything about housing or homelessness, the plight of disabled people or the lives of children in poverty, who are all warning that this policy is fast becoming a fiasco. Indeed, it is time to stand with the father of the Chief Secretary to the Treasury and chair of the Lochaber housing association, Mr Di Alexander, who says that the policy is

“particularly unfair in that it penalises both our tenants and ourselves for not being able to magic up a supply of smaller properties.”

It is a shame that the Chief Secretary listens to the Prime Minister instead of to his father.

It is also a shame that the pensions Minister does not listen to his own party, which only last month, at the Liberal Democrat party conference, voted overwhelmingly against the bedroom tax, saying that it is

“discriminating against the most vulnerable in society”,

and noting that the Government have shown

“a lack of appreciation of the housing requirements of children and adults with disabilities and care needs”.

I am afraid that that is what we get with the Liberal Democrats: they say one thing at their conference and when they are out on the doorsteps, but they vote another way here when it really counts. When they could make a difference, they turn the other way. While the Secretary of State scuttles off to Paris, he gets his Liberal Democrat pensions Minister to defend a policy that is not even part of his brief and that is in contradiction with his own party’s policy. I say shame on him and shame on his party.

We know that tough decisions are needed to build a social security system that is fair for all and to bring the benefits bill down, but this policy does neither. It may well cost more than it saves, but to be absolutely certain that its reversal will require no extra borrowing we have identified the funds that could more than cover the costs. They will be raised by cracking down on bogus self-employment in the construction sector, reversing the tax cut for hedge funds announced in this year’s Budget and cancelling the Chancellor’s failed shares for rights scheme, which according to the Office for Budget Responsibility has opened up a tax loophole of up to £1 billion.

The Labour party is committed to reversing the bedroom tax, if elected in 2015, but we know that for many families that is too long to wait, so I hope that Members on both sides of the House will vote with us tonight. If the Government stick their heads in the sand, let no one be in any doubt that this will be the beginning, not the end, of our campaign to cancel this unjust and unworkable tax. If this Government do not repeal it, the next Labour Government will.

[Several hon. Members]

rose—

Oral Answers to Questions

Rachel Reeves Excerpts

Monday 14th October 2013 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

Labour Members support the principle of universal credit, but we have repeatedly raised concerns about the Secretary of State’s ability to deliver it. Since 2011 he has consistently promised that 1 million people will be claiming universal credit by April 2014. Will he now tell the House how many people he expects actually to be claiming universal credit by then, and whether he will proceed with the previously announced plans to close down new claims for tax credits by that date?

[Mr Duncan Smith]

May I start by welcoming the hon. Lady to her position? As I told the Committee and have said consistently, universal credit will be rolled out within the time scales we set, and we are planning very clearly to enrol as many people in it as possible. This will be a success. As she says she is in favour of universal credit, perhaps she can explain why Labour Members voted against it at the start and continue to do so.

[Rachel Reeves]

Despite what the Secretary of State says, the truth is that by April next year it will be possible to claim universal credit at just 10 jobcentres out of a total of 772. Meanwhile, the National Audit Office says that £34 million has already had to be written off, £303 million is now at risk, and Ministers have failed to set out how the policy will work. It is a catalogue of errors. Will the Secretary of State tell us how much money spent on the project will be money down the drain? Instead of blaming everybody but himself, would it not be better for him to turn down the volume on off-the-record briefings against his own permanent secretary and start taking responsibility for his own failed policy?

[Mr Duncan Smith]

Just in case the hon. Lady does not realise it, I should point out that this is not a failed policy: it will roll out successfully on time and within budget. Where does the word “failure” apply to that? She is part of a party whose time in office saw more than £28 billion wasted on IT programmes, with complete chaos most of the time it was there. This will roll out on time and within budget. At any time when we announce the new reset, she can, if she would like, come and talk to us about it. Perhaps for once, instead of voting against stuff and then saying she supports it, she might tell us how many of the benefit cuts Labour Members voted against they are now in favour of.