Employment and Support Allowance and Universal Credit

Stephen Timms Excerpts

Thursday 17th November 2016 Commons Chamber

[Neil Gray (Airdrie and Shotts) (SNP)]

I beg to move,

That this House notes the Government’s plans to reduce the Employment and Support Allowance work-related activity component and the corresponding limited capability for work component in universal credit in April 2017; further notes that this measure will cut the weekly amount received by recipients with long-term health conditions or disabilities by £30 and that these cuts are due to take place before the promised Work and Health programme Green Paper can be considered or implemented; and therefore calls on the Government to use the upcoming Autumn Statement to postpone the cuts to Employment and Support Allowance work-related activity component and the corresponding limited capability for work component in universal credit until appropriate alternative measures to progress the commitment to halve the disability employment gap have been considered, in order to secure support for current and future claimants so that sick and disabled people are supported adequately when they are unable to work.

I thank the Backbench Business Committee for accepting my application for this urgent debate today. It was brought to the Committee at short notice and with my added time pressures ahead of the autumn statement, so I am grateful to the Committee. I am grateful also to the MPs from nine parties in this Parliament who supported the motion.

From April 2017, new employment and support allowance claimants who are placed in the work-related activity group will receive £29.05 less than do current ESA WRAG claimants. The Welfare Reform and Work Act 2016 legislated for this cut, and the Government promised

“new funding for additional support to help claimants return to work.”—[Official Report, 8 July 2015; Vol. 598, c. 333.]

This afternoon, I intend to set out why the Government should use the opportunity of the autumn statement, a new Prime Minister, a new Chancellor and a new set of Department for Work and Pensions Ministers to pause the cuts to ESA WRAG and the corresponding universal credit work allowance elements, at least until the new system that they are to propose has been scrutinised and implemented.

[Stephen Timms (East Ham) (Lab)]

I agree with the motion. Does the hon. Gentleman recall, as I do, that the Conservative party manifesto said that the target for increasing employment support for disabled people was to halve the disability employment by 2020, and does he share my dismay that that target has been abandoned?

[Neil Gray]

I sincerely hope that it has not been abandoned and that the Government will continue to work towards it. I will come to that later in my speech.

It is clear to me that it is not Opposition politicians but Government Back Benchers who are most influential in changing the minds of Ministers, especially when those Ministers currently have such a narrow majority, so I am pleased to have the support of at least five Conservative Members for this motion. In their actions in supporting this debate, they are indeed honourable, for it is not an easy thing to go against the current thinking of their party. I am aware that a number of other Conservative Members are expressing their concerns in private, and some have made more public statements of concern, such as the right hon. Member for Wokingham (John Redwood) and the former Secretary of State for Work and Pensions, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith). I am not standing here today to lambast the Government. I am here to make a cross-party appeal to the Government: please press pause on these cuts.

Today is about this new set of Government Ministers having an opportunity to look at this issue again—to look at the timetable of events that have led us to this point and to look ahead to the impact that these cuts will have on nearly half a million sick and disabled people who have been found unfit for work. Yesterday, I attended an event in Westminster with Disability Agenda Scotland, which is an organisation of six disability charities north of the border. One of the speakers at the event really highlighted for me, and should highlight for us all, why this issue is so important.

John Clarke from Stirling spoke about his experience of trying to enter the employment market. He volunteered for 10 years in a charity shop. He took on all the responsibilities that an employee would be expected to take on. He did cash handling, was customer facing and turned up for his shifts in a timeous fashion at all times. He has been making a very meaningful attempt to find work. John has been trying to find paid employment, using the significant experience that he gained from his time at the shop to progress that, but has failed to do so.

John just happens to have a learning disability and is in receipt of ESA WRAG. He is not financially incentivised to be out of work because he is on ESA WRAG; he is desperate to get a job. He needs his ESA WRAG, because he has additional costs associated with finding work, but John also needs the Government to come forward with that additional package that the Prime Minister talked about yesterday—such as supporting employers, publicising Access to Work more widely and helping employers see that someone like him would be an asset, not a liability, to their workplace.

What is most concerning for me about John’s story is that he has a new volunteering role after moving on from the charity shop, but the jobcentre wants him to stop that so he can come in to carry out job searches. I put it to those on the Treasury Bench today—what is more beneficial to John, not just for his ability to get a job, but for his emotional wellbeing, his self-worth and his feeling of contributing to society?

This is where we come to the crux of the issue, and John summed it up so well. He said, “Everyone has needs and it is important that these needs are met.” That is the starting point from which the UK Government should be working. We cannot escape the fact that part of that need is financial. It is worth remembering that the rationale for paying some claimants more than others was considered by Richard Berthoud in his 1998 report on disability benefits. He found that the primary reason historically was that those who have to live for a long time on social security could not be expected to survive on the very low income available as a temporary measure for a short-term claimant.

Some people may argue that those who currently receive ESA WRAG, like John, will not be affected by the cut, but as people fall in and out of work, with many of those who receive ESA WRAG the subject of fluctuating conditions, they could well be affected. So if John gets a job after April next year, which I hope will happen sooner for him, and if, unfortunately, it does not work out, although obviously I hope it does, John will reapply for ESA, but will receive £30 per week less than he does now. That is a reduction in income of almost a third between what John receives now and what he would receive next year.

This cut will create two tiers of disability support and create an arbitrary cut-off for people to receive a reduced support rate, purely by virtue of their application date. The Scottish Association for Mental Health agrees. It says that this cut could provide a perverse disincentive to work for people with mental health conditions, who make up 49% of ESA WRAG recipients. It says that people who are currently in receipt of ESA may be affected by the forthcoming change in April 2017 if they have been claiming the benefit and move into work before they are well enough to do so.

Why should John’s peers who apply for ESA WRAG next year get two thirds of the support that John gets now and could continue to receive if, sadly, he does not find a job? John just wants a job. He is not incentivised to be out of work because of ESA WRAG payments. Such a suggestion is an insult to John and to the hundreds of thousands of sick or disabled people like him who want to work but struggle to get noticed in the employment market. The Government will add to that frustration and the feeling of rejection by telling them that the £30 a week lifeline is being pulled away because it somehow holds them back.

The payment of a higher rate of ESA WRAG compared to jobseeker’s allowance was supposed to acknowledge the longer time that someone in that position will take to find employment. It was also supposed to acknowledge the additional costs that someone with a long-term illness or disability incurs as they carry out work-related activity. Scope is particularly concerned at this aspect and says that this cut to disability support will have an impact on the financial wellbeing of sick and disabled people, leaving them further from work, not closer. Its research suggests that 49% of disabled people rely on credit cards or loans to pay for everyday items such as food and clothing.

New figures today from the StepChange Debt Charity show that a third of ESA recipients were running a budget deficit, and that figure could rise to over a half if they had a cut to their income, however small that cut. John’s experience shows us that it is not easy to tell ESA WRAG recipients to find work to make up for that cut. He has done everything he can to do that.

This leads me on to the timing issue before us. During the debates on the Welfare Reform and Work Bill, the Government at the time said that they would find new funding for additional support to help claimants return to work—new money and a new system, which was included in the work and health programme White Paper, now the Green Paper. I argued then and I repeat now, that the Government cannot cut away this lifeline support before the new system of support is in place, otherwise there will be a vacuum of support from April. ESA WRAG will no longer be available for new or returning clients, but the new system, which the Government hope will do a better job, will also be unavailable.

The Government need to get the horse back in front of the cart. They need to put these cuts on pause, at least until we can see what is coming forward. Their new system is still in Green Paper consultation form. The ESA cuts happen in four months. Even if the new system will be better, we have seen nothing more than consultation proposals, and we do not know when the new system will be implemented.

That view is supported by the Disability Benefits Consortium, which represents 60 disability charities. It has published an open letter today, which is signed by 74 disability charities and other organisations, including Action on Hearing Loss, Age UK, the National Autistic Society, Enable Scotland, Action for ME, Carers UK, the MS Society, the Royal College of Psychiatrists, Scope, Mencap, the Royal British Legion, Citizens Advice and dozens of others I wish I had time to mention individually, as they represent health conditions and disabilities that hon. Members’ families, friends and, certainly, constituents will have. Those organisations say that this cut will undermine the Government’s welcome commitment to halve the disability employment gap. Their survey of over 500 disabled people found that seven out of 10 said that ESA cuts will cause their health to suffer. More than a quarter said they sometimes cannot afford to eat on the amount they currently receive from ESA, and nearly half said that this cut will probably mean they will return to work later than they would have done.

The Government predicted that savings of £450 million a year would be realised from these cuts. Just two weeks ago, we saw the welcome publication of the health and work Green Paper, which sets out the options for the Government to create a replacement system. The budget for that for next year is £60 million, rising to £100 million by 2020-21. That does not equate to new money; it does not even match the cuts being made to ESA WRAG—a point echoed by today’s open letter from the charities, which cannot see where the additional support for disabled people to find work will come from, or how it will mitigate the effects of the cut.

There must also be concern on the Treasury Bench after the Supreme Court ruling on the bedroom tax. Letters, which have been published, between the Equality and Human Rights Commission and the hon. Member for Birmingham, Hall Green (Mr Godsiff) highlight the concerns the EHRC has regarding the Government’s impact assessments on these cuts.

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[Jeremy Lefroy (Stafford) (Con)]

I pay tribute to the hon. Member for Airdrie and Shotts (Neil Gray) for introducing this debate and for assembling here a large number of right hon. and hon. Members.

My father became disabled when I was two weeks old, when he was 34. He worked for the rest of his working life until he was 65. It was only after he died that I found that at one point he had had to consider emigrating to Australia in order to get work, but thanks to the foresightedness of a church in Highbury in Islington—he was a vicar—he was able to work in the United Kingdom. Throughout my childhood, as we were growing up, we saw the gradual improvement of the situation for disabled people in this country. I pay tribute to Governments of all colours over the past 50 years for that, because it has been incredibly important. I saw, for instance, the significant improvement that Motability made to his life and his ability to do his work—he benefited from the scheme from its introduction. That is why I believe that the motion should be supported and that the cuts to the work-related component in both ESA and universal credit should be paused and reconsidered.

The Government’s argument, which I understand, is that they wish everybody in the work-related activity group to return to work as soon as possible, and they intend to put in money to support and assist them in that process. Three assumptions underline that argument. The first is that the cost of living for those on ESA is pretty much the same as that for those on jobseeker’s allowance; in other words, it covers basic living costs. The second assumption is that any additional costs relating to sickness or disability can be covered by the personal independence payment. The third is that people will not receive ESA for very long, because they will get back into work.

On the face of it, one can assume that those assumptions are well meaning, but I would challenge all three of them. On the cost of living, those in the WRAG tend to have mental health conditions, cancer or musculoskeletal conditions, and they are often housebound for long periods. That means that they face an additional cost for heating, because they are not able to go out searching for work all the time. Macmillan says that 28% of cancer sufferers say that they cannot keep their homes adequately warm. They also face an additional cost for food: some of the diets involved are expensive and there is no particular help available. There is also the cost of transport, as people go frequently to hospital and doctors’ appointments.

The argument has been put to me that those costs could be covered by PIP, but fewer than half of those in the WRAG are eligible for and claim PIP. In any case, PIP covers mobility and care costs; it does not cover heating or dietary costs.

The final assumption, which is understandable, is that those in the WRAG will be able to return to work relatively soon, but that is not borne out by the facts. People tend to be in the WRAG for an average of two years, while the figure for JSA is six months. JSA is set at a level that assumes that people will be on it for only a few months, and it is very difficult to see how people can continue at that level without in the end getting into considerable debt. It seems to me that the assumptions, understandably made by the Government, do not hold up.

[Stephen Timms]

The hon. Gentleman will recall the commitment that was made to increase support for disabled people to get into work as a quid pro quo for the benefit cut. Does he agree, however, that it appears that the Government now propose to spend less on employment support for disabled people than has been spent on the failed Work programme? Surely they should be spending more, not less.

[Jeremy Lefroy]

I am not clear on the figures, but what I do know is that the Government are committed to providing support to people to get into work. That is absolutely vital, but I do not think it is a substitute for the additional financial help that has been given until now.

I welcome the Green Paper and the Government’s work on it. I welcome the work that my hon. Friend the Member for North Swindon (Justin Tomlinson) did on it, and the work of my hon. Friend the Minister for Disabled People, Health and Work, who is in her place, and everyone else at the Department for Work and Pensions. The excellent paper covers joint supporting, the promotion of mental and physical health, and occupational health support. I want all those things to be put in place, because I know that they will be of great benefit to many of my constituents. The Green Paper does not, however, cover the question of costs, and that is why I support the motion.

I want to make some constructive proposals for the Government to consider. I want them to consider modifying or postponing the changes while the proposals are consulted on and put into practice. Let us see them work: let us see people get into work more quickly before we actually remove the additional support. Let us also consider maintaining an element of support above JSA, specifically to cover the particular costs that people face, especially if they have been on the standard rate of ESA, as they will have been for a short period. It should not be indeterminate and indefinite. A discretionary fund has been used in other areas, so let us consider introducing one that is substantial enough to cover those additional costs for people in the WRAG.

I know that the Minister is listening. She has shown that in her responses to me both privately and publicly. I urge her to continue to listen, particularly to the points made by Members in this debate.

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[Justin Tomlinson (North Swindon) (Con)]

It is a pleasure to speak in this debate, although I have a feeling of déjà vu, as I was talking about this subject only yesterday—no wonder “Groundhog Day” is one of my favourite films. I pay tribute to the hon. Member for Airdrie and Shotts (Neil Gray) for his proactive work in this area. When I was a Minister, I enjoyed engaging with him on a number of occasions. He always brought forward real experience and practical suggestions to challenge the Government and hold them to account in this important area. It is also good to see so many Members in the Chamber, on both sides of the House, to engage in this debate—it is a credit to them. That is important, because the Department has excellent Ministers who genuinely do listen, engage, act and influence the direction of policy.

I wish briefly to talk about the background to the current position. Yesterday I talked a lot about universal credit and less about the ESA WRAG, but today I will flip that around. The Government have introduced the national living wage, which has helped 2.75 million of our lowest earners, and we hope that it will rise to more than £9 an hour by 2020. We have increased the personal allowance from £6,495 to £11,000, taking the lowest 3.2 million earners out of paying any income tax. This country has the strongest economic growth of any developed economy, which is delivering record employment, with yesterday’s figures showing another 461,000 people entering work. We have also seen 590,000 more disabled people in work in the past three years—an increase of about 4%—although there is still much further to go.

[Stephen Timms]

I mentioned this yesterday, but let me remind the hon. Gentleman of the press release issued in his name by the Department for Work and Pensions on 29 June last year, which stated:

“The Government…aims to halve the gap between the disabled employment rate and the overall employment rate by 2020.”

Is he dismayed, as I am, that that commitment—he made the promise in good faith, I am sure—to a 2020 deadline has been abandoned by his successor?

[Justin Tomlinson]

I predicted that that intervention was coming, and it is an important point. The pledge was incredibly popular with stakeholders and focused officials’ minds. When I was a Minister, a lot of my work involved lobbying other Departments, so it was helpful when I was able to namecheck the then Prime Minister, as this was his personal pledge. I do not actually recall that press release, as my understanding was that we had not set the date because that was going to be determined in the Green Paper. Personally, I wanted to see significant progress year on year.

One problem with just adopting the approach in the pledge is that the number of disabled people in work could remain static yet in a recession the overall number of people in work could fall, meaning that the gap would close without any more disabled people benefiting. I wanted to set a target such as having 1 million more people in work by a certain date, which would mean that we would know that 1 million more disabled people had benefited. We were due to consult on that as part of the Green Paper process when I was in my ministerial role.

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[Justin Tomlinson]

When I was a Minister, I was challenged on a whole host of issues, and that is what the charities are there to do. I feel that the extra support makes this approach worthwhile because only 1% of people are coming off that benefit. When people on ESA are surveyed, and when we talk to them in our constituencies, we find that the overwhelming majority are desperate to be given an opportunity to work.

[Stephen Timms]

rose—

[Justin Tomlinson]

I am running out of time, so I will try to wrap up. I have only two minutes left.

The Green Paper includes proposals for more personalised and tailored support, as well as quicker assessments. That is particularly important because 50% of people on ESA have a mental health condition, but typically wait nine months for an assessment. The Green Paper will address that by making sure that people are assessed quickly and given support before they navigate often difficult personal challenges when they take the step back into work.

There will be a place on the work and health programme or Work Choice for those who wish to take it—it is a voluntary opportunity. There will be additional places on the very popular specialist employment support programme. There will be job clubs run by peers—people with disabilities who have gone through the system and overcome their fear at the thought of going back into the process. That is often a big fear for people who have been out of work for a long time. There will be 200 new community partners; again, this is about utilising disability expertise. There will be increased access to work for young people with mental health conditions. There are further opportunities through the Disability Confident campaign.

My personal favourite, which I continue to champion, is the small employer offer. Time and time again, employers say to us, “We have skills gaps and we are struggling to find people to fill these roles,” but they have never thought to take on somebody with a disability because they lack the confidence to do so and do not realise that a huge amount of support is provided to help people to come into the workplace. Businesses that take that step benefit, more often than not, and I say that as a former employer who employed disabled people and benefited from doing so. I hope that the current small employer pilot will be expanded and will become a nationwide offer. It is making a significant difference.

The Chancellor was right to increase significantly the funding for Access to Work. On the fit for work scheme, we need to ensure that we provide advice at the beginning of a potential problem for people in work, not just at four weeks, because it is so much easier to keep people in work with suitable support than it is to get them back into work after they have dropped out. We have a fantastic ministerial team who are engaging with charities, with all their experience and knowledge, and the Green Paper represents a real opportunity.

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[Stephen Timms (East Ham) (Lab)]

I am glad to be following the hon. Member for Eastbourne (Caroline Ansell). I agree with her and other Conservative Members that these cuts should at least be paused. On 27 January, Lord Freud said in the other place:

“we are proposing to recycle some of the money currently spent on cash payments…into practical support”.—[Official Report, House of Lords, 27 January 2016; Vol. 768, c. 1316.]

That was the deal offered to us—there would be a shift from cash payments to practical support. The hon. Member for Enfield, Southgate (Mr Burrowes) and others are absolutely right to point out that that practical support will not be in place by next April, so that is a good argument for pausing the cuts.

Not only will the support not be in place next April, but as far as I can see, the Government are not even planning to spend as much on their new programme for supporting ESA claimants into work as they are spending on the Work programme which, as we have heard, has done a hopeless job for people claiming ESA. I thought that the whole point of this benefit cut was to give additional resources to support those people into work, but it appears that the Government are now talking about spending less. The £60 million to £100 million we have heard about is not on top of what is currently being spent; it is instead of what is currently being spent, which seems completely contrary to what we have been assured throughout this process.

In 1998, when I held the Minister’s post, I was responsible for the new deal for disabled people. That was followed by the Pathways to Work programme. On 1 July, the House of Commons Library produced the briefing note “Key Statistics on People with Disabilities in Employment”. It helpfully shows, with a graph, that the disability employment gap fell steadily but substantially from 1998 to 2010. In 2010, the new deal was replaced by the Work programme, and the steady progress on reducing the disability employment gap came to a halt. As the Green Paper candidly acknowledges at paragraph 1.22, there has been no progress in reducing the disability employment gap since 2010. The progress we have heard about from some Conservative Members, particularly the hon. Member for North Swindon (Justin Tomlinson), has not involved any progress at all in reducing the disability employment gap, which reflects the fact that the Work programme has been so disappointing for this particular group.

I think that the Conservative party recognised that it had a problem, so its manifesto for 2015 to 2020 announced a bold target of halving the disability employment gap. Achieving that by 2020 would be ambitious, because progress would have more than caught up with the rate that was steadily delivered between 1998 and 2010. Ministers said that they would achieve that bold ambition by committing the proceeds of the benefit cut that we are debating today. They told us that the details would be set out in a White Paper.

As the former Secretary of State ruefully observed yesterday, there has still been no White Paper. When launching the Green Paper, the current Secretary of State made this astonishing claim:

“The original commitment in the manifesto did not have an end date”—[Official Report, 31 October 2016; Vol. 616, c. 678.]

If one reads a commitment or a promise in a manifesto for 2015 to 2020, one is entitled to believe that what it says will be achieved will actually be achieved by 2020. The commitment was more explicit than that, because during one of the televised election debates, David Cameron—some of us still remember him—said:

“The gap between the disabled unemployment rate and the unemployment rate for the whole country is still too big. I want to see that cut in half over the next five years.”

He was explicit about that. The press release issued by the hon. Member for North Swindon—he told us that he could not remember it—was also clear that this was going to be done by 2020. That was what everyone in the disability organisations understood.

A month or so ago, I attended the launch, which was hosted by the right hon. Member for Chesham and Amersham (Mrs Gillan), of the National Autistic Society document “The autism employment gap”. Let me read what it says:

“The UK Government has made a very welcome pledge to halve the disability employment gap by the end of this Parliament, meaning they have to shift the disability employment rate from 47% to 64%.”

Just last week, the all-party group on multiple sclerosis, which is chaired by the hon. Member for North Dorset (Simon Hoare), published the report “Employment that works”, which referred to

“a 2015 general election manifesto commitment by the Conservative Party to halve the disability employment gap by 2020”.

However, when I asked the new Secretary of State about the timing of the commitment, he replied to me on 31 October, when he launched the Green Paper, that it was “premature” to set a date for achieving this goal. At least the Minister for Disabled People, Health and Work in her winding-up speech in yesterday’s debate did not claim that there never was a 2020 target when there clearly was.

To resume progress on reducing the disability employment gap—that reduction was delivered consistently under the new deal from 1998 to 2010—the Government need to resource the process properly, as they promised to do earlier this year. The point of making this cut in ESA was supposed to be that the proceeds would be used for that purpose. The Government simply need to keep the promise that they made to disabled people.

When a clear promise has been made to disabled people, is it really too much to ask that it is delivered? The problem with the Green Paper is not that the ideas in it are bad, as I understand the U-turn of abandoning the Work programme, but while the Government promise to increase the number of disabled employment advisers, that is only back up to the number there were in 2013 —it is no more than that. A clear promise was made in the Conservative party manifesto. It was understood right across the disability organisations, so I ask the Minister to tell us that she is determined to keep it.

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[The Minister for Disabled People, Health and Work (Penny Mordaunt)]

I, too, congratulate the hon. Member for Airdrie and Shotts (Neil Gray) and the Backbench Business Committee on securing this debate, and all Members on the tone in which it has been conducted. Even the hon. Member for Glasgow North East (Anne McLaughlin) has managed to restrain herself today, and we are grateful for that. On these important issues, the House is often at its best when it takes this tone, and on this issue, for all the reasons outlined by my hon. Friend the Member for Enfield, Southgate (Mr Burrowes), it is important that we have done so.

Good policy cannot be created in a vacuum; we must think about how something will be delivered, how it will work in practice and how it will affect those concerned. As the hon. Member for Neath (Christina Rees) said, the welfare state is a safety net, but if it works well, it should also be focused on helping someone’s future ambitions as well as their basic needs. Proof that we have listened and understood will be in our actions, and a person’s experience of the system and the support they receive is the only thing that will ensure confidence in that system. So we must deliver and we must deliver well.

We must understand the personal impact of a policy on a person, often someone in a complex situation, under considerable strain and challenge. I refer to the budgeting challenge for those who have suddenly had to stop work or who have lost employment because of their condition or ill health, or who are facing increased costs—or both; the challenge of preparing for employment, while focusing on recovery; the challenge as those new constraints restrict a person’s choices and flexibility just at a time when such flexibility becomes an imperative; the challenges faced by people who, as well as having their own issues to deal with, often have other responsibilities and priorities—carers, parents or people who are both. Even where recovery or the all-clear is achieved, these people will still have concerns about their illness reoccurring, their ongoing relationship with their employer and the possibility of having to go through it all again.

We must ensure a person’s liquidity is in place, so that they can afford the additional costs brought by looking for work, or by being poorly or disabled: higher energy bills; mobile and internet access costs; the cost of getting insurance; the cost of a special diet, in some cases; the extra travel costs that come with unpredictable itineraries; clothing and bedding costs; and the cost of specialised equipment—to name just some of those costs. Someone with a neurological condition will spend almost £200 a week on costs related to their disability. Someone with a physical impairment will spend nearly £300 a week.

When that security and liquidity goes, often so, too, does a person’s dignity and wellbeing. They may face the embarrassment of having to pay for a train fare with a pot of 2p coins because that is all the cash they have left; the stress of having no mobile phone credit; the strain of extra planning and budgeting; the knock-on effects of all that to an already stressful situation; and the pressure of not wanting their kids to be disadvantaged or to miss out on what others are doing or what they used to do—or of not wanting that for their grandkids, as the hon. Member for Glasgow North East mentioned.

Although I can answer the question from the hon. Member for South Down (Ms Ritchie) about benefit levels having a significantly negative association in terms of employment by waving a report by Barr et al. at her,9j I will not be relying on those arguments in my speech. I say that because of the obvious point—it was made by the hon. Member for North Ayrshire and Arran (Patricia Gibson)—that someone is more likely to get into work, make a success of it and recover from ill health if they are able to devote themselves to that. If a person has other worries or concerns, their energy and focus on those objectives will be diluted. Many who find themselves in receipt of universal credit or ESA will already have complex situations to deal with, and the delivery of our services should not add to that.

Yesterday, I outlined in detail how we will deal with those issues, but let me briefly recap. We will use funds to alleviate costs directly related to work, through the flexible support fund. May I just correct my hon. Friend the Member for South Cambridgeshire (Heidi Allen) as the figure is not £15 million—it is an extra £15 million that we have put in because of these changes, and this is currently standing at £83 million? In addition, we will have national and local schemes, such as the Jobcentre Plus travelcard, but I am also negotiating deals with third parties to help with expenditure not directly related to employment: broadband costs, phone charges, energy costs and insurance.

We are extending our hardship fund, as per the announcement yesterday, to new groups. That will be new money from the Treasury over the next four years with immediate effect. For thoroughness, I will mention personal independence payments, which will help to cover costs for 53% of the people we are concerned about today.

[Stephen Timms]

Will the Minister give way?

[Penny Mordaunt]

I am going to make some progress. We offer personal budgeting support for those who are transferring to universal credit. That could include money advice, with a mix of online, telephone and face-to-face support. I am also looking at extending that service and considering what further support I could give.

For the sake of the record, I remind the House that the changes to WRAG due in April next year will not affect those who are already in receipt of ESA and universal credit or the equivalent. Further safeguards mean that they will not lose the extra payment even if they are reassessed after April and placed in the WRAG. I hope that that will reassure the hon. Member for Edinburgh East (Tommy Sheppard), whom I cannot see here, and the two constituents that he mentioned yesterday, Dean and Lauren.

[Penny Mordaunt]

Bear with me. In response to the hon. Lady and my hon. Friend the Member for Eastbourne (Caroline Ansell), we aim to protect existing claimants who temporarily leave the benefit—for example, to try out work—and who then return. We will introduce draft regulations in due course to set out the detail. Nor will the change affect anyone whose ability to work is significantly limited by their health condition or disability. They will be in the support group or the universal credit equivalent.

On that point, let me recognise the concerns that have been expressed about the binary nature of the work capability assessment and how someone’s fitness to undertake a particular type of work is not an indication of how close to the labour market they might be. We need to take into account several other factors, including their skills, in making that assessment. That is why the Green Paper focuses on the work capability assessment and its reform. I hope that that will be welcomed by all Members, particularly the hon. Members for Strangford (Jim Shannon), for Glasgow East (Natalie McGarry) and for East Kilbride, Strathaven and Lesmahagow (Dr Cameron), who mentioned it.

We have sought to get people to fit the system rather than to be part of a system that recognises the importance of personalised support. Everyone’s circumstances will be different, as will their multiple challenges.

[Stephen Timms]

I am grateful to the Minister for giving way on that point on personalised support. We understand that on employment support, she proposes to provide up to £100 million a year. Will she clarify whether that is in addition to the funding currently being provided through the Work programme, or whether it is a replacement for that?

[Penny Mordaunt]

The amount of money and how we spend it will be directed by, and based on, the needs of people who currently need the support. The situation was very different a few years ago, and it will not be like that. The right hon. Gentleman mentioned Labour’s success in this territory, but I gently point out to him that the disability employment gap closed under Labour because unemployment rose. I gently say to him that a consensus on tone has been set this afternoon, and that is important.

I am going to do something unusual and make some asks of this House, although it is usually the other way around. If the Green Paper is to deliver all that it must, we must all play our part, whatever our political hue and on whichever side of the House we sit. All the organisations and experts in our constituencies need to be involved, too, including the patient and peer support groups that we are not currently engaged with, and all the organisations that the hon. Member for Gateshead (Ian Mearns) alluded to in the case of his constituent Simon, who faced a domino effect. I am grateful to the hon. Member for Foyle (Mark Durkan) for alluding to the fact that we have a massive opportunity in the Green Paper, not only in terms of what we do for employers and healthcare, but for our own processes in the DWP.

We have designed the consultation process to facilitate discussion at a very local level, with facilitators’ packs and other support, and I ask all MPs to help to facilitate local meetings, bringing together organisations from across their constituencies. That way, we will get a good result from the Green Paper not just in the policies that will come out of it, but in starting local conversations about how it will work. On 5 December, we will hold an event in Parliament, where there will be a pack for every Member and every constituency to facilitate such dialogue.

Autumn Statement Distributional Analysis, Universal Credit and ESA

Stephen Timms Excerpts

Wednesday 16th November 2016 Commons Chamber

[John McDonnell]

The hon. Gentleman clearly has not been listening. We introduced a fiscal credibility target, which would have built in the flexibility that we need—and actually, which his colleagues would have benefited from as they sought to deliver the goals set out in the manifesto upon which they were elected. That is the critical problem—that this fiscal target has become unworkable. Next week, most probably, we will see that not only will it be reset, but large elements of it will be scrapped; and some of those political disputes within the Government will be seen to have been completely unnecessary if only the Chancellor, at that stage, had listened not just to us, but to some of his own colleagues.

On the Government’s own economic metrics, the fiscal framework has failed. I remind the hon. Member for Horsham (Jeremy Quin) that the former Chancellor’s target was to eliminate the deficit by 2015. The deficit remained at over £45 billion in the first six months of this financial year. I remind the House that his target was to reduce the debt. The debt now stands at £1.7 trillion and has increased over the past six years, according to the latest estimate, by £740 billion. I believe that the biggest failure was to ignore the needs of the real economy and use the fiscal framework to constrain investment. The failure to invest on the scale needed to modernise our economy resulted in stagnating productivity.

In the face of all the evidence that the fiscal framework was not working and not achieving its target, the decision to set a target for the framework not just to eliminate the deficit, but to produce a multibillion-pound surplus by 2019-20 demonstrated to many of us how far the former Chancellor’s politics was overriding sound economics. The result of his setting targets even more removed from reality was that he imposed on his own colleagues the task of scrambling round to find a scale of cuts that, in many instances, undermined what chance they had to implement the policies on which they were elected and their long-standing ambitions, some of which could have secured cross-party support.

That was no more evident than at the Department for Work and Pensions. For the Treasury to demand cuts to universal credit that would take, on average, £2,100 out of the incomes of people who were doing all that was asked of them—working all they could to come off benefits, bringing up their families, contributing to society—flew in the face of all that the universal credit system was meant to be about. The same can be said of the cuts of nearly £30 a week to employment and support allowance. That is an extremely significant cut to the incomes of disabled people who are also doing all that has been asked of them—seeking work to lift them off benefits, and overcoming their disabilities and conditions.

[Stephen Timms (East Ham) (Lab)]

On the ESA cut, does my right hon. Friend recall that at the time it was being taken through the House, we were assured that the Government would introduce an ambitious plan to reduce—indeed, to halve—the disability employment gap by 2020? Does he share my dismay that that goal has been abandoned completely?

[John McDonnell]

I recall my right hon. Friend advising the Government of the unreality of their proposals at the time. What worried us all was that, on the one hand, benefits were being reduced, but the support was not being put in place by which those people could gain work and supplement their incomes.

I understood the motivation of the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) when he resigned. The overriding demands of the Treasury were undermining the policy goals he was seeking to implement. He rightly objected to a further burden being placed on the social security budget, especially at a time when new, long-planned systems were at the early stages of introduction. I understood then his sense of frustration, and I understand now why he and many of his hon. Friends have called on the new Chancellor to look again at the burden that is being placed on the welfare budget and the threat, above all else, that it poses to the successful roll-out of universal credit and the policy of supporting disabled people into work.

The planned cuts are more than a threat to the implementation of policies long advocated and cherished by many Government Members. More importantly, they are a threat to the livelihoods, living standards and quality of life of millions of low earners and some of the poorest and most vulnerable people in our communities. The Government have sought to judge themselves on their own set of economic metrics: eliminating the deficit, reducing the debt and adhering to a cap on welfare spending. On all their own metrics, they have failed. However, there is an alternative and very basic set of metrics on which a Government should be judged—whether they ensure that their population is adequately fed, decently housed and kept warm in winter, and has sufficient income through employment or a support safety net to have a decent quality of life.

--- Later in debate ---

[Damian Hinds]

I was in the middle of talking about how wages have been rising. If the hon. Lady will forgive me, I thought that she was challenging me on that point, so I will continue to make it. According to recent data on earnings from the Office for National Statistics, the lowest 5% of workers saw their wages grow by more than 6% in 2016, the highest growth for that group since that statistical series began nearly 20 years ago. Based on the Office for Budget Responsibility’s forecast at the Budget, almost 3 million low-wage workers are expected to benefit directly by 2020, with many more benefiting from the ripple effect on income distribution.

At the same time, universal credit is transforming the welfare system to ensure that it always pays to work more and to earn more. That is in stark contrast with the pre-2010 system, in which in-work poverty increased by 20% between 1998 and 2010, despite welfare spending on people in work increasing by £28 billion. Evidence is already showing that people move into work faster under universal credit; for every 100 people who found work under the old jobseeker’s allowance system, 113 universal credit claimants have moved into a job. We estimate that universal credit will generate around £7 billion in economic benefit every year and boost employment by up to 300,000 once fully rolled out.

Most important of all, universal credit will drive progression, delivering sustainable outcomes for low-income families. Unlike tax credits, with the 16-hour cliff edge, it supports part-time and flexible working—as well as full-time working—adjusting on a month-by-month basis according to household income. The work allowances are just one element of a much wider system of support and incentives. The personalised work coach support, the smooth taper rate and the reimbursement of 85% of childcare costs as soon as someone starts working, even for a small number of hours, are all key to making work pay for universal credit recipients.

In this morning’s employment figures, we saw that the employment of disabled people is up by 590,000 in the past three years. The disability employment rate has gone up by 4.9% in that time, and the gap has been narrowed by two percentage points. We were talking about this earlier, and it is welcome news, but there is much, much more to be done, as only half of people with disabilities are in work, compared with 80% of the non-disabled population.

[Stephen Timms]

I am glad that the Minister has raised the question of the disability employment gap. Former Ministers—two of them, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) and the hon. Member for North Swindon (Justin Tomlinson), are in their places this afternoon—promised that a quid pro quo for the cuts in employment and support allowance would be halving the disability employment gap by 2020. That was in his party’s manifesto, and the former Prime Minister, David Cameron, committed to halving the gap by 2020. Why has that promise now shamefully been abandoned?

[Damian Hinds]

We are committed to working towards halving the disability employment gap. The right hon. Gentleman is reading somewhat more into things than he can or should. We are absolutely committed to doing that, but there is a long way to go, and he will know better than most how hard it will be. But the figures we have announced this morning show that the employment rate for people with disabilities is up by almost 5%. That is welcome news that I had hoped would receive a more positive response from the Opposition.

[Stephen Timms]

I am not reading any more into the promise that was made than what was set out very clearly. In the election campaign David Cameron made it clear that the commitment was to halve the disability employment gap by 2020. There was a press release in the name of former Minister for Disabled People, the hon. Member for North Swindon, saying that it would be by 2020. Why has that promise now been so shamefully abandoned?

[Damian Hinds]

We are working hard on this. When my colleague the Minister for Disabled People, Health and Work sums up at the end of the debate, she will no doubt elaborate on that more. To be able to do everything we can as a Government, we need employers to do more as well, as the right hon. Gentleman will recognise. A whole-society approach is required to address this great challenge. Progress is being made but more is needed. He should have no doubt about the Government’s commitment to doing everything possible to achieve that.

One reason why so much more needs to be done is that we still have that yawning gap despite all the progress that has been made—despite the regulatory reform, the medical advances, the advances in assistive and adaptive technology, and, critically, the fact that we know that so many people with disabilities want to move into work and that so much talent is not currently being fully utilised. We know that being in work can have wider benefits for the individual, beyond the purely financial. There is clear evidence that work is linked to better physical and mental health, and to improved wellbeing. That is a key theme in our recently published Green Paper “Improving Lives”, and a driver behind the changes to the employment and support allowance and universal credit that were announced in last summer’s Budget.

ESA was originally introduced—I am happy to acknowledge the bipartisan parts of this debate—in 2008 by the then Labour Government. The expectation at that time was that the Atos-run assessment process would place the clear majority of claimants into the work-related activity group, leaving a relatively smaller number in the support group. Over time it became clear that that was not the case, with around three times as many people in the support group as in the work-related activity group. At the same time, fewer than 1% of people were leaving that benefit for work each month.

That is why we are introducing changes to encourage and support claimants to take steps back to work and to fulfil their full potential. From next April we will no longer include the work-related activity component for new ESA claims, or the equivalent element for people on universal credit with a health condition or disability. I stress that that is for new claims after April next year; there will be no cash losers among those already in receipt of ESA or its universal credit equivalent, and there will be further safeguards meaning that they will not lose the extra payments even if reassessed after April and placed in the work-related activity group.

--- Later in debate ---

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I shall be as brief as possible and certainly intend to be well under that limit. I shall not follow the hon. Member for Ross, Skye and Lochaber (Ian Blackford) down a memory-lane trip involving independence or leaving the single market. I will say, however, that I am a huge admirer of him. Many of my ancestors are buried in his constituency, so I like to claim a little bit of union with him, even though he would not want to admit it. I shall visit the area as often as possible to ensure that I give the hon. Gentleman the best support I can for him to stay up there as long as possible.

I rise for the first time in, I think, nearly seven years to speak from the Back Benches, and I do so to speak on an issue that is very close to my heart. I want to explain why that is the case to my colleagues. Let me start by welcoming both Ministers to their new roles on the Front Bench, and I congratulate them on continuing to commit to the changes and reforms necessary to improve the quality of life for so many people who would otherwise be left behind.

In passing, let me note one or two figures. The number of children in workless households has fallen to record levels—down to just under 11% from the 20% that we inherited. A child in a workless household is nearly three quarters more likely to be in poverty than a child in an in-work household. That is an important point, because that dynamic is critical—a point to which I shall return. The fall in income inequality has been mentioned, and it is falling because more people at the lower end are going back into work.

There is another important issue about disability. We have committed to, want to commit to and must stay with the position of wanting to see more people with disabilities in work. We want the gap to be at least halved, which I think is feasible. I shall explain in a few moments why I think that it is feasible.

[Stephen Timms]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

In a minute, but let me finish this point first.

A lot of the work of the Green Paper was done when I was in the Department. It was a White Paper at that stage, and I hope it gets speeded up and becomes a White Paper again fairly soon. After five reviews of the inherited employment and support allowance, I would be the first to acknowledge that although we have stabilised it and it is better than it was, it is a very difficult area, as we all know. If every Member was prepared to be reasonable, we would all recognise that these things need to change.

Let me clarify that the main single thing that I wanted to see change and I still want to see changed is this artificial idea that people are either too sick to work or unable to work. There should be a greater nuancing in people’s lives, and universal credit now opens the door to a much more flexible process that allows even those diagnosed and reasonably said to be “not capable of work” to be able to work—and if they wish to work, they should be allowed to do so as far as they possibly can, with the taper used to take benefit money away gradually. I think that might improve the quality of life for many people. I know that this is a submission in the Green Paper, and I hope the Minister will bear it in mind.

Let me return to the point that when universal credit was set up by my noble Friend Lord Freud, who worked very hard on it, and me, the idea was that it was not just about money, but about human interface. The people in jobcentres now stay with individuals as they go into work to help advise them and be with them. This will be a more human interface, so that people can be helped through to gain extra hours, which opens the door for people with limited capabilities to work to be helped in a way that would not have been possible if we had stayed with the original system. All this is very good and very positive.

There are two critical elements. First, when people step into work, the barrier must be reduced by improving the amount of money that can be held from benefit before it is tapered away. The second element is the taper itself, which is the simple process by which people have their income reduced. I say to the Minister that those two elements, notwithstanding all the other stuff such as improved childcare and everything else, are at the heart of what delivers.

The Institute for Fiscal Studies and others recently looked at what the dynamic effect of universal credit might be as it rolls out. The IFS was very clear: it said that the effect was a 13% improvement in all elements—going back to work, staying in work, taking more hours and earning more money. I know from my experience in the Department that every time one benefit has been substituted for another, it has almost always been worse on arrival than the previous benefit before people engage with it and improve it. This is the first time that a benefit being rolled out is a net improvement on a previous benefit.

I therefore make this recommendation. That figure of a 13% improvement was made on the basis of the original work allowances. In the spirit of general collective view and belief, I say that if we really want to see the right thing happen to people out there who try to get into work and stay in work, the allowances are critical. I recommend and hope that my colleagues in government will think very carefully again about the decision to reduce those allowances. I recognise the problem with the deficit, and we of course want to reduce it. I am not asking for more money; I am asking for wiser spending. I wonder whether we could revisit the idea of a tax threshold allowance and look to see whether getting the money to the lower five deciles would be better served by universal credit. Some 70% of those people will be on universal credit, whereas only 25p of a tax threshold allowance will actually go to the bottom five deciles.

I urge the Minister to speak to his right hon. Friends and say, “Look, we have a very good opportunity to do something that is really bold and right for those whose lives we really want to improve—those that the Prime Minister rightly said was her target group.” It is a very Conservative thing to do to help people who are doing the right thing to improve their lives. Even if the Government cannot do it all, they should look at two elements: lone parents and those with limited capability for work. This would answer the problems surrounding the WRAG, too. I urge Ministers to do just that. It is the right thing to do, and it will be the thing to do that changes lives and improves the quality of those lives.

--- Later in debate ---

[The Minister for Disabled People, Health and Work (Penny Mordaunt)]

May I associate myself with the sentiments expressed by the shadow Chancellor about the late Debbie Jolly? She was a noted researcher and sociologist, as well as a tireless campaigner. I am sure that our comments will be just two of the many tributes that will be paid to her.

I thank all right hon. and hon. Members for their contributions to this debate. It has been a lean-but-fit Opposition day debate, and I will try to make my reply lean and fit as well.

Let me answer the question asked by the right hon. Member for East Ham (Stephen Timms) about the disability employment gap. I am sure he is aware of the evidence the Work and Pensions Committee has taken on the complexity involved in measuring and tracking progress on the gap. I am taking a much more low-brow approach. All Members will shortly receive an invite to an event in this place on 5 December, when they will receive information not just about the Green Paper and how they can get involved in the consultation at local level, but about the focus on unmet and existing needs in their local area. We will crack this—getting services to focus on what we need to do not just to halve the gap, but to close it completely—by, for example, looking at exactly how many people with learning difficulties there are in their constituency for whom roles need to be carved out.

[Stephen Timms]

Will the Minister give way?

[Penny Mordaunt]

I am sorry, but I am very short of time.

The welfare state is a safety net, but—done well—it should anticipate, empower, be seamless with other services, be unbureaucratic, have commons sense and compassion at its heart, and be focused on helping someone in their ambitions as well as on their basic needs. In the last quarter, there have been many tweaks to the system, some so dry and small that they have not registered with the House. Others have registered, such as the decision to stop reassessments for those with degenerative conditions, the increase in the number of groups able to access hardship funds, and our concerns—they have been expressed by the Secretary of State for Work and Pensions today—about sanctions on people with mental health conditions.

We will continue to work methodically through the improvement plan: reducing the number of people having to go to appeal to get the right decision; ensuring that our programmes work better and improving them; ensuring we have the reach we need; and building capacity and expertise in our organisations. That will build on the substantial reforms already carried out by my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) and my hon. Friend the Member for North Swindon (Justin Tomlinson). I pay tribute to them for the work they have done.

The proof that we have listened and understood will be seen in our actions. A person’s experience of the system and their support is the only thing that will assure confidence, but I hope this debate will afford me the opportunity to reassure colleagues on both sides of the House about the specifics that have been raised. To deliver well, we must understand the impact of a policy on people who are often in complex situations and under considerable strain and challenge. There is the challenge of budgeting for those who have suddenly had to stop work or have lost employment due to their condition, ill health or accident, or the challenge of facing increased costs, or both.

Hon. Members have pointed to three concerns. First, there is a person’s liquidity—their ability to afford the additional costs of looking for work and being poorly or disabled. Someone with a neurological condition will spend almost £200 a week on costs related to their disability, and hon. Members on both sides of the House have raised concerns about that. Secondly—this is often exacerbated by the first—there is a person’s dignity and mental wellbeing. Thirdly, there is the obvious point that someone is more likely to get into work and make a success of it, as well as to recover from ill health, if they are able to devote themselves to that. If they have other worries or concerns, their energy and focus on their objectives will be diluted. Many who find themselves in receipt of universal credit or ESA will already have complex situations to deal with, and the delivery of our services should not add to that.

Let me briefly touch on each of those three concerns. To inform our view of the income needed by the range of people we are considering, we have relied heavily on the work of third parties, most notably Macmillan and Scope. Personal independence payments will be able to help some people with some of those costs, but not with them all. More is therefore needed, and more will be provided.

First, there is the flexible support fund, a discretionary fund that is used by work coaches to provide local support for the costs related to getting into work, such as travel to and from training and travel costs when in work. As part of the enhanced offer, we have committed an additional £15 million to that fund over the next two years. The partners we work with are aware of the fund and signpost people to our work coaches, so that they can access it.

Secondly, we have schemes such as the travel discount scheme for those on ESA, universal credit and jobseeker’s allowance. Thirdly, we are continuing our work that focuses on sectors such as energy costs and insurance. In relation to April’s changes, we are doing new work with key providers, such as mobile and broadband providers, to see whether they can offer further help. Where there is existing help, we must ensure that our clients know about it. We are building on the excellent work that Scope has done through the Extra Costs Commission to drive down costs and utilise the consumer power of this group of people.

In the context of this debate, I am working to provide a greater number of ways to reduce a person’s personal outgoings by next spring by using funds to alleviate the costs directly related to work, negotiating better deals on expenditure not directly related to employment and extending the hardship fund with immediate effect. That will use new money from the Treasury over the next four years.

Happily, my hon. Friend the Member for North Swindon helpfully outlined the measures in the Green Paper, which will be key to supporting those who are in the WRAG. That support may not seem relevant to some hon. Members, who understandably have focused purely on liquidity, but we have a duty to do more than provide what can only be limited financial support. We must also provide a way through to the workplace for the many who want to be there. No Government support can ever compensate for a pay cheque and the financial resilience, health and wellbeing that come with it. That is why, in the last Parliament, we increased the benefits that contribute to the additional costs of disability and care and the elements of ESA that are paid to people with the most severe work-limiting conditions and disabilities.

The changes that we deliver in April will provide more support to those people—something that I hope all will welcome. Alongside that, we will ensure that the focus on personal liquidity, dignity and the ability to focus on one’s health and work ambitions is maintained. We will invest in helping a person out of their situation, rather than helping them endure it. We will support people’s ambitions as well as their basic needs. We will enable them to build their future, as well as helping them in the here and now.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

Under-occupancy Charge

Stephen Timms Excerpts

Monday 14th November 2016 Commons Chamber

[Mr Speaker]

The hon. Member for Hexham (Guy Opperman) is also a proud product of the University of Buckingham in my own constituency, which is another consideration to boot.

[Stephen Timms (East Ham) (Lab)]

The bedroom tax has always hit disabled people especially hard. More than any other single measure, it has driven the increase in food bank use and in penury that we are seeing in communities up and down the country. Surely it is now time, finally, to abandon this hated measure.

[Damian Green]

I just do not agree with the underlying analysis of the right hon. Gentleman. I know that he has considerable expertise in this area, but the fact is that, across the social rented sector as a whole, approximately two thirds of claimants are disabled. It was initially estimated that under two-thirds of those potentially affected by this measure could be considered disabled. That fact shows that there is no disproportionate impact of the type he claimed.

Improving Lives: Work, Health and Disability Green Paper

Stephen Timms Excerpts

Monday 31st October 2016 Commons Chamber

[Damian Green]

I do. On a day-to-day basis in our constituency work we will all have seen people who are frustrated by the bureaucracy. When my hon. Friend and other Members read the Green Paper they will see an emphasis on making the systems more human and more personal, so that people do not feel that they are being ground down by a very difficult bureaucracy. Bureaucracy always takes a long time to change, but we absolutely want to change it.

[Stephen Timms (East Ham) (Lab)]

It is true that the Work programme has been hopeless for people claiming employment and support allowance, with a pitifully small number of people getting into jobs, as the Secretary of State acknowledged in his statement. By how much does he expect the proposals to increase the proportion of ESA claimants getting into work, and how long will it take to halve the disability employment gap?

[Damian Green]

It would be premature of me to try to set targets on either of those. The sensible thing is to take practical steps. For example, we are more than doubling the number of disability employment advisers to help with specialist and local expertise for disabled people. Along with everything else I have announced, that will be a significant step forward in halving the disability employment gap. Of course, doing so depends on both ends of it, as the halving of the gap will depend on what the total employment level is, and we are in good shape on that, as 80% of working-age people who do not have a disability are in work. But as the right hon. Gentleman knows, only 48% of those with a disability are in work. I want to make steady progress towards halving the gap, but it may take some time.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 17th October 2016 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I, too, welcome the Secretary of State’s announcement. Which conditions will the exemption cover, and when does he expect the change to be introduced?

[Damian Green]

It is not so much the conditions as the individuals. We apply the exemption on an individual basis, as there are clearly conditions where at some stages people will be able to work and at other stages they will not be able to work, so the exemption covers conditions that can only deteriorate as well as conditions that may stay the same. On timing, we will be consulting on a wide range of measures in the work and health Green Paper, which my predecessor promised would be with us by the end of the year, and I am happy to repeat that promise today.

Disability Employment Gap

Stephen Timms Excerpts

Wednesday 8th June 2016 Commons Chamber

[The Secretary of State for Work and Pensions (Stephen Crabb)]

It is a pleasure to follow the hon. Member for Pontypridd (Owen Smith).

This House is at its best when it seeks to speak with one voice. There have been times in the past when the House has sought to speak with one voice, and no more so than in the area of disability. That is when we get the best response from organisations that represent disabled people and disabled people themselves, because they respect that. The tone that the hon. Gentleman has struck this afternoon is entirely the opposite approach. I regret the way in which he has gone about his business this afternoon and his partisan tone. I know he thinks that this style of opposition works for him, especially on Twitter, but organisations that represent disabled people and disabled people themselves will be very disappointed with the tone that he has struck.

Under this Government, our country has seen the highest levels of employment ever, with more than 2.5 million more people in work than six years ago. However, for many disabled people who want to work and who could work, the unquestionable improvement in our labour market and historic levels of employment over recent years do not ring true when it comes to their own circumstances and outlook for the future.

That is partly a legacy of the system that we inherited as a Government. It dates back to the days of one of my predecessors, John Hutton, who said that under his reforms, he wanted to see 1 million sick or disabled people get back to work. The truth is that that never happened. Instead, far too many sick and disabled people were parked on benefits without the correct support from the health service or the jobcentres. That is what happened under Labour and what has been happening over the last six years.

I made it clear in my first statement to the House following my appointment in March that I am ambitious for disabled people and for the support that they receive. I am ambitious for Britain to become the best country in the world for disabled people to live: a country that provides the right kind of support to help them lead as full and active a life as possible; a country that is a world leader in assistive technologies that transform their independence at home and their working environments; a country where employers embrace and embed disability awareness as a core component of their business; a country where disabled people have the same opportunities as anybody else to get a job and share in the prosperity of our growing economy.

[Stephen Timms (East Ham) (Lab)]

The Secretary of State chided my hon. Friend the Member for Pontypridd (Owen Smith) for the tone of his opening remarks, but does he not recognise that the organisations that represent disabled people are unanimously opposed to the scale of the cuts to support that his Government have introduced?

[Stephen Crabb]

I have huge respect for the right hon. Gentleman. The truth is that in real terms, we are increasing the support that we give to disabled people. By the end of the Parliament, we will still be spending about £50 billion to support people with long-term health conditions and disabilities.

--- Later in debate ---

[Stephen Crabb]

It is exactly that kind of incentive that I hope the Green Paper process will explore. Those are exactly the kinds of ideas that we need to examine. My colleagues in the Treasury will obviously take an interest, but we have to think differently right across Government if we are to have any hope of closing the disability employment gap. I am particularly keen to know what small businesses think about what they can do to employ more people with disabilities.

[Stephen Timms]

I applaud the aspiration for consensus, which the Secretary of State has now set out a couple of times in his speech. Does he not recognise, however, that he will not achieve a consensus against a backdrop of such huge cuts in support for disabled people? The Chancellor tried that again in the most recent Budget. While the Government are cutting support so much, the Secretary of State will not find the consensus that he rightly wants to achieve.

[Stephen Crabb]

I hear the right hon. Gentleman’s point. When it was made earlier, I said that by the end of this Parliament we will still be spending more in real terms on supporting people with disabilities. My aspiration for the end of the Parliament is that we will be spending in a much more effective way to help to transform lives.

This new approach is not just about changing the way disabled people are supported to move into work, but how they are helped to stay in work. A disabled person may make the breakthrough into work only to permanently fall out of work and on to sickness benefits soon after. Tens of thousands of disabled people do so every few months. I completely agree with the Resolution Foundation’s report this week, which highlighted the need for more focus on supporting disabled people in work, as well as those moving into work. Prevention and early support will be key to that, which is why we are supporting people to stay in work and trying to prevent them from becoming ill in the first place. That is why we are investing an extra £1 billion a year for mental health care in the NHS to support 1 million more people to access high-quality timely care.

Our Green Paper has the potential to be an historic opportunity to harness and build on the positive changes we have seen for disabled people. It is only through this approach—working with employers, disabled people themselves, the NHS and the welfare system, and local authorities—that we can build a strategy that will work to make a difference to people’s lives, keeping them in work as well as helping to support many, many more into employment.

Universal Credit (Children)

Stephen Timms Excerpts

Tuesday 10th May 2016 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

I beg to move,

That this House notes that, while some aspects of the universal credit system are likely better to support families with children, some groups of children and families are particularly likely to lose out, and many may struggle with elements of the new approaches to payment and administration; further notes that there has been no revised impact assessment to take account of significant cuts to the work allowance; and calls on the Government to re-assess the effect of its policy on universal credit in light of those cuts and to ensure that the number of children in poverty, and particularly those in working families, falls as a result of the introduction of the new universal credit system.

I am extremely grateful to the Backbench Business Committee for giving us the opportunity to debate this subject. Once universal credit is in place, it is estimated that about half of all the children in the UK will be in households that are entitled to it at any given time, so it will have a huge impact on children and one that it is important for us to scrutinise.

I am pleased to see my hon. Friend the Member for Torfaen (Nick Thomas-Symonds) and the Minister for Employment in their places. I have always enjoyed debating these matters with the Minister, but I often wish she felt as willing to disagree with her right hon. and hon. Friends on her ministerial brief as she is free to disagree with the Prime Minister about Europe. However, I fear I may be disappointed when we come to the end of the debate. I hope that the debate can shed some light on the impact of universal credit on child poverty around the UK.

The Opposition have always recognised that there are significant potential benefits from universal credit: simplifying the system, merging six different benefits into one and, in particular, making it much easier for people to work out the effect on their financial position if they were to move into work—that is difficult at the moment but under universal credit should be simpler. The former Secretary of State for Work and Pensions, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), who of course resigned from the Government after the Budget fiasco on disability benefits, is entitled to a good deal of credit for coming up with the original idea and driving it through while he was in the Government.

Unfortunately, however, the right hon. Gentleman is not entitled to very much credit for the way that he implemented universal credit—the Department got itself into a terrible mess, and the Cabinet Office had to step in to sort out a looming IT disaster. The result is that universal credit is now running extremely late. On the original timetable, set out in 2010, transition from the old benefits system to universal credit would now be almost finished, and the whole thing would be complete by next year. In fact, implementation of universal credit is really only just beginning. According to the most recent figures, from March, 225,000 people are receiving universal credit, of whom almost 88,000 are in work.

The initial plan was hopelessly unrealistic, as was pointed out by the Opposition at the time. Unfortunately the Government ignored those warnings. We were told at one stage that 1 million people would be claiming universal credit by April 2014; two years later, we still have not reached a quarter of that number. Things are a little unclear, but it now looks as though the current plan has transition complete by 2022, which is five years later than originally announced.

[Christina Rees (Neath) (Lab)]

Does my right hon. Friend think it right and fair that, as a result of the piecemeal roll-out of universal credit, along with the cuts to work allowances, some families could be more than £3,000 a year worse off than they would be if they were in exactly the same financial circumstances but lived in an area where tax credits were still available?

[Stephen Timms]

No, I do not think that that is fair. There is now a large and growing group of people who are significantly worse off than they would have been because they have the misfortune of being in an area where universal credit is paid instead of tax credits. My hon. Friend is absolutely right to draw attention to that.

When the universal credit project started in 2011, we were told that it would be completed in six years. Today, five years later, we are being told that it will be completed in another six years, by 2022. Five years into this initiative, its expected completion has been delayed by five years. We are no nearer the end now than we were told we were five years ago.

[Jeremy Quin (Horsham) (Con)]

The right hon. Gentleman was generous in his support of the principle of the scheme. Surely he must accept that it is better to get it right. A steady, phased implementation is the right way to ensure that the benefits to which he referred are properly implemented across the country.

[Stephen Timms]

Of course that is right. There should have been a sensible timetable and plan from the start. It was pointed out to Ministers that the original plan was unrealistic, but unfortunately they took no notice of that.

It is not just the timetable that has changed, however, but the substance. What is being implemented is now significantly different from what it was originally going to be. A report published last week by the Resolution Foundation has made that very clear; I will refer to that report a number of times in my speech, but at this point I will quote one observation from its executive summary, which says that

“the latest series of cuts—announced at last year’s Summer Budget—risk leaving UC as little more than a vehicle for rationalising benefit administration and cutting costs to the Exchequer.”

That is at the heart of this debate. Universal credit is now set to be a pale shadow of what Ministers initially announced. The losers, both from the cuts made to the original proposals and from flaws in the original design that have never satisfactorily been addressed, will above all be the nation’s children.

The Resolution Foundation has explained the impact of the £3 billion cut announced last summer:

“As initially designed, UC gave broad parity with the current tax credit system…Now, UC will…be less generous than the tax credit system for working families.”

That is what gives rise to the anomaly and unfairness to which my hon. Friend the Member for Neath (Christina Rees) drew our attention.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

Is my right hon. Friend as shocked as I was to hear that a recent report from the Children’s Society has shown that disabled children will get considerably less money under universal credit, and many will receive only around half of what they currently get under tax credits?

[Stephen Timms]

My hon. Friend is absolutely right. That is a shocking aspect of what has always been proposed with universal credit—the support for disabled children is being drastically reduced. I hope we will have time to discuss that.

Will the Minister publish an updated version of the impact report for universal credit that was published alongside the 2011 Welfare Reform Bill, which introduced it? I will come back to that, because what is now being introduced is certainly not what the previous Secretary of State had in mind when he launched the universal credit initiative six years ago.

Throughout the last Parliament, Ministers repeatedly said that they were committed to eliminating child poverty, and they cited the introduction of universal credit as key to helping to achieve that. The 2011 impact assessment, which I hope the Minister will update, said that universal credit would reduce child poverty by 300,000. A written answer in January 2013 gave the lower figure of 150,000, half the initial figure of 300,000. We have not had an update since the really big cuts to universal credit announced last summer. That is what I am hoping the Minister will give us.

All of us will recall the furore when the Chancellor announced swingeing tax credit cuts last summer. I pay tribute to those Government Members who, unlike the Chancellor, grasped what those cuts would mean to many hard-working families struggling to make ends meet, such as the family of an ambulance driver earning £20,000 a year, who stood to lose a full £2,000 from the cuts. Thankfully, the Chancellor was forced to abandon those plans. But the equivalent cuts to universal credit—at that time, claimed by hardly anyone in work—went ahead, so the Chancellor’s cuts to tax credits will, over time, be implemented by stealth. Working families on universal credit rather than tax credits saw a big income cut last month, as my hon. Friend the Member for Neath has already pointed out.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My right hon. Friend is making a strong point about the value of the cuts and the wider impact of the changes. Does he agree that there is a significant challenge with the move from weekly or fortnightly payments to monthly payments? With a week’s processing time for claims, and payments in arrears, that could leave five weeks before people receive claims under universal credit. We are told that there is an advance payment system but Citizens Advice has said that six in 10 clients coming to a citizens advice bureau about universal credit have not been told about it. We could see many people out of pocket and really struggling to get by, through no fault of their own. That can have a huge impact on children.

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[Stephen Timms]

I am grateful to my hon. Friend for raising that point, and Citizens Advice points out that this is the biggest practical problem that arises where universal credit has already been introduced. The assumption with universal credit is that people have a monthly pay cheque that will see them through the first month, and that they will receive universal credit at the end of that. However, Citizens Advice suggests that more than half of those claiming are paid weekly, not monthly, and therefore do not have a month’s pay cheque to keep them going for those five weeks. That is causing serious problems.

Will the Minister update the House on what the Government now believe the effect of universal credit will be on child poverty? Given the drastic cuts that we have seen, I believe that implementing universal credit will increase child poverty, rather than decrease it as we were told it would, and as—I have no doubt—was the intention of the former Secretary of State for Work and Pensions in introducing this radical change.

Some information on that question has been provided by the Institute for Fiscal Studies in its February report, “Living Standards, Poverty and Inequality in the UK: 2015–16 to 2020–21”, which shows relative poverty rates from 1997-98 to 2020-21. It points out that in 1997-98 relative child poverty—which was inherited by the incoming Labour Government— stood at 27%. By 2010-11 when that Government were replaced, that figure was down to between 17% and 18%. The statutory target enshrined in the Child Poverty Act 2010—which I took through the House with all-party support—was 10% by 2020, but after 2010 the level of child poverty flatlined for a number of years, and it is now starting to rise. Under the IFS projection, by 2020 it will be virtually back up to the catastrophic level inherited by the Blair Government in 1997. As the IFS states in its report

“the projected increases over the next few years simply reverse the large falls seen under Labour.”

It is interesting to contrast that with what the IFS says about pensioner poverty. Like child poverty, pensioner poverty in 1997 was at a high level—around 27%—but the policies of the Labour Government reduced that to around 17%, and that level remained fairly stable throughout the previous Parliament from 2010 to 2015. The future trajectory for pensioner poverty suggests that it will not rise and will carry on at around 17%. By contrast, child poverty will rocket back up to the levels of 1997. Under the IFS projection, the rate of child poverty in families with more than three children will be more than 30% by 2020.

The huge cuts announced to universal credit will come about by reducing the income of working families with children—a lot of families will be much worse off not only compared with what they would have received under the tax credit system, but in comparison with what they would have received if the original universal credit proposals had gone ahead. The Child Poverty Action Group highlights problems for lone parents and states that

“lone parents will be hit particularly hard, and stand to lose…around £554 per year if renting, or over £2,600 per year if not…The children of single parents are already at twice the risk of living in poverty as those in couple families, and this will exacerbate their disadvantage”.

Cuts to universal credit will drastically reduce the income of working families, and just as big a worry is that incentives for unemployed parents to get into work will be much weaker under current proposals for universal credit than originally intended. That was spelt out by the Resolution Foundation in its report, which states:

“These cuts don’t just affect incomes, they also undermine the scheme’s incentives structure… Returns to entering work are much lower than anticipated under the earlier design of UC.”

It warns that parents—particularly lone parents—will find the incentives to work more hours very weak, and many will reduce their hours for a very small income drop.

[Christina Rees]

Does my right hon. Friend agree that guidance from the DWP that instructs people to work an extra 200 hours a year for no extra money, to make up the thousands of pounds a year that families are set to lose as a result of cuts to universal credit, is unacceptable?

[Stephen Timms]

Yes, the suggestion that people can make up those losses simply by working more hours is unrealistic in many circumstances. The Resolution Foundation also points out:

“For second earners in couples the situation may be worse still, with increasing numbers potentially deciding not to enter work at all.”

The whole point of universal credit was supposed to give people incentives to be in employment—indeed, yesterday the Secretary of State reiterated that point at questions to the DWP. The problem is that as currently proposed, those incentives will not be in place when universal credit is rolled out.

Let me draw the Minister’s attention to an article that was published last month and written by Deven Ghelani, who was one of the original architects of universal credit at the Centre for Social Justice. He describes the cuts to universal credit work allowances that were introduced on 11 April as

“undermining the original intent of Universal Credit—to make work pay…The Government should maintain support for work incentives within Universal Credit…these cuts to work allowances will not help to make work pay for low earners.”

That is a deep problem with what is now proposed.

The Minister will argue that calculations of child poverty—the reduction in child poverty of 300,000 that was announced by the Government in the original impact assessment for the legislation, and the subsequent written answer estimate of 150,000—do not allow for the dynamic effects of universal credit and of encouraging people into jobs. In his article, Deven Ghelani addresses exactly that point and states:

“Lower work allowances will limit the dynamic effect of Universal Credit and…will make it harder for households to make up their shortfall by working additional hours.”

That point was also raised by my hon. Friend the Member for Neath.

[Stephen Doughty]

I am sure that my right hon. Friend has had the experience of meeting many constituents who have to make agonising decisions when making up shortfalls in their income, particularly when it comes to children, whether for basics such as food and school clothes, or modest birthday presents. Sometimes that will force people down the route of getting into further debt, which further compounds their situation. We have seen the horrors of payday loan companies, and others, and many families will find themselves in difficult situations, particularly during that transition period, and they may end up getting further into debt.

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[Stephen Timms]

My hon. Friend is right, and Citizens Advice made exactly that point about the change to support for disabled children that my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) referred to. A large proportion of those affected say that they will have to cut back on food, and are likely to get into debt as a result of the cuts.

Deven Ghelani refers to

“the challenges that arise from weakening work incentives within this Government’s flagship welfare reform.”

The Minister will understand why that is a problem, given what the Government have been telling us for years about what universal credit was going to do.

The IFS’s projections for dramatically rising levels of child poverty over the next few years are not only about universal credit; other factors also have an impact. As far as I can see, however, the projections are consistent not with universal credit reducing child poverty—we were originally told it would reduce child poverty—but with universal credit increasing child poverty. It is low-income families and children who will bear the brunt of the cuts, while older and better off people will not be affected at all. I press the Minister to tell us the Government’s current estimate of the effect of the implementation of universal credit on the child poverty figures.



That is the big picture impact of universal credit, but there are a number of other aspects of its design that I want to touch on. I will try to do so very briefly. The first aspect is the eligibility of universal credit claimants to free school meals. At the moment, entitlement to so-called “passported benefits” is dependent on receiving means-tested, out-of-work benefits. That simple test is no longer available in universal credit, because the benefit does not indicate whether the claimant is working or not—indeed, that is one of the advantages of universal credit. The Government therefore have to devise a new eligibility test.

There has been discussion about how, instead of free school meals, claimants could be given cash which could be tapered away with the rest of their universal credit payment. The problem, however, is that we know much of the cash would not be spent on school meals but on something else. There is a real danger of the school meal system collapsing. The Government have rightly rejected that option. We could envisage an electronic system, where claimants are given credits that could be used only to buy school meals. Those, too, could be tapered, but currently there is no IT system in place to do that. The Welfare Reform and Work Bill Committee asked about this during pre-legislative scrutiny in 2011. The Secretary of State at the time told us we would have an answer before the Bill gained Royal Assent in summer 2011. Five years later, we still have not had an answer. Ministers often tell us it is a matter for the Department for Education. The problem is this: the way this question is answered is crucial to whether universal credit will achieve its goal.

It has been hinted that free school meals eligibility will depend on a family’s income being below a particular threshold. The huge problem with that is that it would introduce an enormous new cliff edge into the benefit system, which is exactly the kind of perverse incentive that universal credit is intended to remove. In fact, it would be far worse than any of the perverse incentives currently in the system. If one’s income is just below the threshold—whatever it may be—the last thing you would want is any kind of pay rise or hours increase that would cause you to lose, overnight, the benefit of free school meals for your children. With three children, well over £1,000 a year could be lost.

What is the answer? I recognise that this is a genuinely difficult issue. I do not criticise Ministers for the fact that it is difficult, but I do criticise Ministers for the fact that five years later we still do not have an answer. Increasingly, it seems to me that the viable solution, albeit quite a costly one, will be to extend the current temporary solution that free school meals should be made available to everyone who claims universal credit whether they are in work or not. I ask the Minister when it is likely that we will get a decision on this issue.

My hon. Friend the Member for Salford and Eccles drew attention to the severity of the proposed cuts to the incomes of disabled children through universal credit. The tax credit support of about £60 a week will be cut to £29 a week. I think all of us can see that for an estimated 100,000 families with disabled children that will be a dramatic reduction in their income. My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) drew attention to the problems with the long delay between someone making a claim for universal credit and receiving the money. The assumption that people will have a month’s pay cheque in the bank to keep them going in the meantime is proving to be unfounded. The Trussell Trust published its annual statistics last month, which show another increase in food bank demand in the past year. It notes:

“In some areas food banks report increased referrals due to delays and arrears in Universal Credit payments.”

Will the Minister look again at the administrative arrangements for universal credit, as it seems the current arrangements will be a serious problem for many families with children?

The final point I want to raise is that at the moment local authorities pay housing benefit. They can see which claimants will be hit by cuts to benefits of various kinds and provide additional help and tailored support. That is what we have seen in practice. Under universal credit, however, the payment will be made by the DWP. Local authorities will no longer have the data about people’s circumstances. Will the Department provide that data, which it will have instead of local authorities, to local authorities so they will be in a position to continue to provide the kind of tailored support we have seen in the past couple of years?

My fear is that the implementation of universal credit may well have a deeply damaging impact on Britain’s children. In particular, I would like the Minister to give us an update on the Department’s estimates, published in 2011 and updated in 2013, for the impact of universal credit on the number of children living in poverty.

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[Peter Heaton-Jones]

That is what the statistics show. It is important to remember that the Government are having some success.

I want to touch on the Government’s announcement of the introduction of the new and significantly strengthened approach to the life chances of Britain’s most disadvantaged children. I sat last autumn through 17 sittings of the Bill Committee for the Welfare Reform and Work Act 2016, along with the Minister and other hon. Members I can see today on both sides of the House. For those who were not there, this was a very important part of what the Committee discussed. The Act seeks to ensure that the life chances of the most disadvantaged children are front and centre in all the welfare reforms we seek to introduce. That will be central to our one nation approach over the next five years. Ministers are committed—I have heard them say it several times—to this much more effective measure focused on the real causes of poverty.

I repeat, however, that we need to look at this as a whole. I am not saying that this debate is not worthwhile, but I question the wording of the motion and the fact that it merely isolates universal credit. We need to look in the round at all the measures and welfare reforms that the Government have introduced and which amount to a significant and beneficial package of reforms.

[Stephen Timms]

rose—

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[Stephen Timms]

The hon. Gentleman has got slightly the wrong end of the stick in relation to what I was saying. The problem with universal credit is that the five-week delay is built into the design of the benefit. That is not a fault; it is how it is supposed to work. The assumption is that someone who has last month’s pay cheque in the bank can cope for a month. That is the problem that the Trussell Trust is starting to identify, and Citizens Advice is saying that, in practice, it is proving to be a very serious problem for many claimants of the new benefit.

[Richard Graham]

I do not think that I have grasped the wrong end of the stick, but I may have grasped a different part of the stick, and I think it is important for all parts of the stick to be considered in this context. I will, however, respond directly to the point that the right hon. Gentleman has made.

I have sought permission from the Department for Work and Pensions and my local Jobcentre Plus to install a DWP adviser in the George Whitefield Centre—appropriately, as the right hon. Gentleman will know, named after the founder of Methodism—where there is both a food bank and a health service for the homeless. I hope that, should I be fortunate enough to receive approval from the Department and the Jobcentre Plus, the adviser, with access to a computer, will be able to see precisely where the problems are, and I hope that if, as the right hon. Gentleman suggests, the inbuilt delay is a real issue, that fact will be revealed. I put it to him gently, however, that there are a number of alternative scenarios, one of which is—to put it bluntly—that when people go to a food bank and are asked why they have done so, it is very easy for them to say, “I have had problems getting my benefits.” I hope that one of the advantages of the presence of a DWP adviser will be the ability to establish the extent to which that claim is correct, or possibly slightly exaggerated. The reality of life, I think, is that people get into financial difficulties—through no particular fault of their own—in a series of different ways, and I think that that is an aspect of the Trussell Trust feedback that has not been explored in enough detail so far.

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[Priti Patel]

The hon. Gentleman is talking about the risk register that was published many years ago. Let me explain agile delivery. This is a system that is adapting. It has adapted following feedback from work coaches. The delivery is the test of the system. All Front-Bench Members will be familiar with this, as we have been very public about it. We have taken the insights from the delivery so that we are supporting people. The reality is that universal credit is out there and is supporting people in work, and we are seeing positive benefits as well.

I am very conscious that a number of points have been made about child poverty, which, of course, was subject to much debate in the Welfare Reform and Work Act 2016. For the first time, the Government have a statutory obligation to report annually on worklessness and educational attainment, because they are two factors that have the biggest impact on child poverty and children’s life chances. Previous debates on poverty have focused purely on the symptoms of poverty, rather than on the root causes. We now believe that, through our commitment to ending child poverty and improve life chances, our two measures will ensure that there is real action in the areas that will make the biggest difference to poor children, both now and in the future.

We have also committed to publishing a life chances strategy, and it will set out a comprehensive plan to fight disadvantage and extend opportunity. It will include a wider set of non-statutory measures on the root causes of child poverty, including family breakdown, problem debt and drug and alcohol addiction.

When the strategy is published, I will be working not just with my colleagues on the Conservative Benches, but with all Members of the House, as this is such an important issue. The hon. Member for Edmonton talked about it, and I am alarmed to hear how high her constituency is ranked in terms of child poverty. We will need to develop the right ways to tackle these deep-rooted social problems and work collectively to transform children’s lives so that ultimately they too can reach their full potential. It is important that all Members work constructively towards that aim.

[Stephen Timms]

What is the Government’s current estimate of the impact on the number of children growing up in poverty of the implementation of universal credit?

[Priti Patel]

I do not have information or data to hand on the current estimate, but the Government previously published figures on UC and child poverty. As other Members have commented on this, I will be very happy to write to them and to the right hon. Gentleman to update them on those numbers.

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[Stephen Timms]

I reiterate my thanks to the Backbench Business Committee and I thank everyone who has contributed, both in speeches and interventions, to what has been a concise debate, as the hon. Member for Banff and Buchan (Dr Whiteford) called it, but a valuable one.

I would like to make a couple of points in conclusion. I appreciated the Minister’s telling us that everything was now going to be fine with the universal credit IT system because it is going to be—or because it is—agile. She will remember, as I do, that in the 2011 Bill Committee we were told that that system was agile and that everything was going to be fine—because the Department had discovered “agile”. A couple of years into that system, the Government realised that it was running into the sand so they started up a new system and told us, “Don’t worry, this one is agile.” We will certainly look forward to seeing how that works out.

I am grateful to everybody who has pressed the Minister for an update on the impact of universal credit on the number of children growing up in poverty, including the hon. Member for Airdrie and Shotts (Neil Gray), colleagues on the Labour Benches and my hon. Friend the Member for Torfaen (Nick Thomas-Symonds) on the Front Bench. I am disappointed that the Minister was not able to give us a figure, but I am grateful to her for committing to write to us to set out the Government’s current estimate.

My worry is that universal credit has been so watered down and cut that it will no longer get anywhere near the objectives that the Government set for it. We will return to the subject, but the specific estimate that the Minister has committed to providing will be a helpful piece of information for us to continue to assess the impact of universal credit on children.

Question put.

There being no voices for either the Ayes or the Noes, Mr Deputy Speaker declared the Question negatived.

Oral Answers to Questions

Stephen Timms Excerpts

Monday 9th May 2016 Commons Chamber

[Stephen Crabb]

My hon. Friend makes an important point, and I am not interested in playing politics. I am encouraging more than 700 jobcentres around the UK to explore fully how they work in partnership with local community initiatives, so that the third sector, working with work coaches, can provide the best possible support and advice to those who need it.

[Stephen Timms (East Ham) (Lab)]

When the Trussell Trust published the figures last month showing record food bank demand over the past year, it stated:

“In some areas foodbanks report increased referrals due to delays and arrears in Universal Credit payments.”

What steps is the Secretary of State taking to ensure that the introduction of universal credit does not drive food bank demand even higher?

[Stephen Crabb]

That is one reason why we are using such a careful and controlled timetable for rolling out universal credit. I am much more interested in it being rolled out safely and in a secure way, so as to avoid the kinds of problems that we had under the previous Labour Government, when tax credits were blasted out and huge numbers of people received overpayments and were required to pay back thousands of pounds.

Welfare Reform and Work Bill

Stephen Timms Excerpts

Wednesday 2nd March 2016 Commons Chamber

[Priti Patel]

I will not give way. We are pressed for time, so I want to make some progress.

As the Secretary of State said last summer, the purpose of the reforms is to ensure that we give people with disabilities and health conditions all the appropriate and necessary support that they need to move them closer to the labour market and to support them into work. We are basing all that we do around what works for them. Importantly, as applies to the other amendments, we are focused particularly on life chances.

I will, if I may, move on to the debate in the other place. I can report that, since we last met, the other place has chosen not to insist on its amendments 8 and 9, which removed the changes to the ESA WRAG and the UC LCW element. However, it has agreed what is in effect a wrecking amendment, because it could in practice prevent the provisions from coming into force, despite the fact that my noble Friend and colleague Lord Freud committed to several additional measures to help those affected by the change, which addressed a number of the specific requests raised in the Lords.

Let me set out the extra measures we have committed to in the other place. First, the additional measures include an additional £15 million in 2017-18, when the changes to the ESA WRAG and the UC LCW element come into force, to increase the local Jobcentre flexible support fund. The money, which will be set aside specifically for those with limited capability for work, represents a 22% increase in the overall fund.

Secondly, in response to the concerns that were raised about claimants with progressive conditions, we have committed to improving the awareness of the reassessment process and the guidance for claimants and disability charities about reassessments. We will provide additional support and training to jobcentre staff to ensure that they are aware that they may need to talk about requests for reassessments with claimants with deteriorating conditions.

Finally, we will improve the work incentives for those who continue to receive ESA even further by removing the 52-week limit that applies to permitted work for those in the ESA WRAG. That will allow claimants to gain skills and experience and to build their confidence, while still receiving the benefit over a longer period. We will support these individuals to get back into work.

As I said earlier, despite those additional measures, the other place proceeded with amendments that ignore the clear voice of this democratically elected House, which has supported the changes to the ESA WRAG and the UC LCW element, and the fact that we have voted on this measure five times. Although, on the face of it, the amendments may appear to be reasonable, let me set out how they are, in effect, potentially wrecking amendments.

[Stephen Timms (East Ham) (Lab)]

Will the Minister give way?

[Priti Patel]

I will proceed, because we have very little time. The right hon. Gentleman will get the chance to speak once all the introductory speeches have been made.

First, the amendments would require the Secretary of State to publish a report on the impact of the changes prior to the changes being made, and not to introduce the reform until the report had been published. Specifically, the report would be about the impacts on a person’s health, finances and ability to return to work. In line with normal practice, we of course intend to evaluate this change.

My noble Friend Lord Freud has confirmed in the other place that we will monitor the impact through regular national statistics. However, it will be impossible to provide the majority of the information requested in the amendments through our analysis prior to implementation, because the data that are currently available do not allow us to make any meaningful estimate. That means that the amendments would delay the implementation of the measure by four years and cost more than £1 billion of the savings for which this democratically elected House has voted.

The amendments would not only impact on the savings associated with this change, but would hinder the Government in their commitment to do the right thing by providing the right incentives and supporting people with health conditions and disabilities to allow them to improve their life chances, fulfil their potential and get the vital support that they need to enable them to get back to work.

Secondly, the amendments are unacceptable because they seek to require that the commencement regulations be made under the affirmative resolution procedure. At best, that is a delaying tactic that runs contrary to usual parliamentary process. In practice, it would allow the Lords to block the legislation by the back door. I am sure that I am not alone in thinking that the Lords has overstepped the mark on this.

This House voted convincingly for the changes on 23 February. That was the fifth time this House had voted overwhelmingly for this reform—a reform that is financially privileged and that is a key part of our efforts to reform the welfare system by supporting more people into work.

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[Simon Hoare (North Dorset) (Con)]

Playing ping-pong with the other place, or receiving a Lords message, sounds rather genteel and polite, doesn’t it? However, I ask all Members almost to divorce their thinking from the issue on which we shall be voting later. Dare I say to my right hon. Friend the Minister, and indeed to the shadow Minister, that virtually everything they said was an irrelevance? The House has already debated the point, and, as my right hon. Friend the Minister noted, we have voted on it on five occasions and have voted in the affirmative. We are now concerned with a much bigger issue, which should, in my judgment, unite all quarters of the House: the issue of the supremacy of this place as the elected House of Commons. As we know, in the last century the House had exactly the same debate on the people’s Budget.

The Minister was right. The Lords amendments are wrecking amendments, and the unelectable seem to be relying on the unelected to try to frustrate the policies and the position of Her Majesty’s Government, which was well articulated during the general election campaign and has been debated incredibly thoroughly in the House and elsewhere. Last night the House of Lords played a very dangerous game. It said to the democratically accountable House of Parliament in this country, “We know better than you, the electorate; we know better than you, the elected Government.” We are on the cusp—issue apart—of a constitutional conundrum which will not end easily for the upper House. The authority of this place is now under significant and serious challenge. It is time for parties to unite, and for us to exercise and exert our supremacy in a democratic Parliament.

[Stephen Timms]

I think that the hon. Member for North Dorset (Simon Hoare) must be rather inexperienced in the procedures of Parliament, because ping-pong is a well-established feature of our proceedings.

I welcome the change of heart on the publication of child poverty indicators, but I am very disappointed by the position that the Minister has taken on the Lords amendments on the employment and support allowance. It is a shame that the Secretary of State is not here tonight. As we have heard, he has written to Back-Bench Conservative Members to tell them that it is “impossible to provide” the information that is required. However, that is not what the Equality and Human Rights Commission says, as my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) pointed out in her excellent speech. A letter from the commission’s chief executive dated 16 September last year made this point:

“Assessments need to include sufficient detail and analysis to demonstrate that the draft proposals have been adequately considered for their potential impact on equality. We have considerable expertise in this area”.

However, the Secretary of State rejected its offer of help and now says that it is impossible to provide the information. It is perfectly possible to provide that information, but Ministers do not wish to provide it because the House would then be able to see what the effects would be.

An attempt has been made to present these changes as in the interests of disabled people, but they are not supported by a single one of the organisations representing disabled people. Parkinson’s UK has made its position very clear:

“The policy is likely to have a significant, harmful impact on the health and wellbeing of people with Parkinson’s.”

Macmillan Cancer Support states:

“Macmillan strongly opposes the proposed reductions because of the negative impact they will have on people affected by cancer and other long-term conditions.”

The judgment that the House has to make tonight is whether Ministers are speaking for disabled people or whether the organisations representing disabled people are speaking for them. I hope that the House will choose in favour of the latter.

[Graham Evans (Weaver Vale) (Con)]

This is a very important debate. It is important to note that these changes relating to the provision of the employment and support allowance work-related activity component will have no impact on existing claimants. They will apply only to new claimants and to claims made after April next year.

Additionally, the Government have said that they will publish a White Paper this spring detailing how they plan to improve support for people with health conditions and disabilities. I look forward to seeing what is in that White Paper, particularly on the role of employers in reducing the disability employment gap. I carried out my fifth jobs and apprenticeships fair in my constituency recently, and the 40 employers I spoke to all agreed that they would commit to a Disability Confident-aware fair, which is what I will hold this year. I am going to play my part, and everybody in this House has a role to play in helping people who wish to get into work.

There is an overwhelming body of evidence that work is generally good for physical and mental wellbeing, and 61% of those in work-related activity groups say that they want to work. The existing policy set up by Labour in 2008 is failing those claimants. Despite £2.7 billion being spent this year supporting those in the ESA work-related activity group, just 1% of the WRAG claimants moved off ESA each month. The policy is clearly not working, and we need a better system than this.

Welfare Reform and Work Bill

Stephen Timms Excerpts

Tuesday 23rd February 2016 Commons Chamber

[Priti Patel]

The Bill is a vital part of the Government’s reforms that are moving this country to a high wage, low tax, low welfare economy. It is fundamental to our commitment to end child poverty and improve children’s life chances, and to ensure that work always pays more than a life on benefits and that support is focused on the most vulnerable.

As is right and proper, the Bill’s provisions have been carefully scrutinised by both this House and the other place. Where appropriate the Government have tabled amendments to bring clarity or to remove unintended consequences, and they have made important commitments on supported housing and the social rents measure, on kinship carers and sibling adoptions under clauses 11 and 12, and on guardian’s allowance and carer’s allowance in relation to the benefit cap. The Government remain firmly committed to the aims and principles of the Bill as it left this House, and for that reason we wish to resist the non-Government Lords amendments.

Before I address each area in detail, allow me to set out the key principles that underpin our disagreement with the Lords. Our view is that the addition of child poverty income measures is unnecessary because we have already committed to publishing statistics on children in low-income families through the “Households below average income”—HBAI—publication. Lords amendment 1 would also reintroduce a failed approach to child poverty that is focused on tackling its symptoms rather than its root cause, and it would drive perverse behaviour focused on lifting people just above the poverty line, rather than on a life chances strategy that could transform children’s lives.

[Stephen Timms (East Ham) (Lab)]

Does the Minister accept that income has a huge impact on life chances?

[Priti Patel]

Income is one of many factors that impact on life chances and poverty, which is why the Government are very much focused on tackling the root causes of child poverty. I will come on to discuss that issue even further—[Interruption.] I know that Labour Members disagree with that, and they will soon have their chance to comment.

On the change to the work-related activity component of employment and support allowance, and to the limited capability for work element of universal credit, I stress that the Government are fully focused on helping people who can work into work. We want to end a broken system that is patently failing those it should be helping, and ensure that a good proportion of the savings are recycled into long-term practical support that will have a transformative effect on people’s lives.

--- Later in debate ---

[Priti Patel]

My hon. Friend is right. It is absolutely clear that when children are the future of our country, it is right to focus on delivering better life chances for them. When we publish the life chances strategy in spring, we will make the biggest difference to children’s life chances now and in the future. We must seek to rescue a generation from poverty by extending life chances right across our country. We must build a country where opportunity is more equal, with stronger communities and young people who can face the world with a background of experiences and characteristics that we know are vital for their success. As my right hon. Friend the Prime Minister said, we must seek to

“transform the life chances of the poorest in our country and offer every child who has had a difficult start the promise of a brighter future.”

[Stephen Timms]

Did the Minister see the report published by the Centre for Social Justice last month, which set out a way of combining the life chances indicators—interesting information will be provided in them—with income indicators, so that we do not ignore income, which is so clearly a key aspect of the whole issue?

[Priti Patel]

I thank the right hon. Gentleman for his intervention and his comment. We will publish the life chances strategy in the spring, and I think it will give us every opportunity to consider holistically all the factors that can lead to better outcomes for children and families. I recognise the right hon. Gentleman’s point. On the back of the remarks I have made, I urge hon. Members to support the Government motion and reject Lords amendment 1.

Let me deal now with Lords amendments 8 and 9, which as you indicated, Mr Deputy Speaker, impinge on the financial privileges of the House. These amendments would simply delete clauses 13 and 14 from the Bill. This would reverse the plan, announced in the summer Budget and endorsed by this House, to align the amount paid to ESA claimants in the work-related activity group to that which is paid to JSA claimants, and to align the amount paid to universal credit limited-capability-for-work claimants to that of the UC basic rate. Let me take this opportunity to stress the Government’s strong belief that this reform is the right thing to do. It is part of our efforts not just to improve people’s life chances but importantly to support them going into work so that they can reach their full potential. Let me explain why.

Record employment levels and strong jobs growth in recent years have benefited many, but those benefits have yet to reach those on ESA. While one in every five JSA claimant moves off benefit each month, this is true of just one in 100 ESA claimants in the work-related activity group. This Government believe that people with health conditions and disabilities deserve better and deserve more support. [Interruption.] I appreciate that Labour Members have no solutions for tackling the wider issues surrounding welfare and would rather simply continue to spend public money in an unsustainable way. We have listened to charities and campaigning organisations who say that improved employment support is key to helping people with health conditions and disabilities to move closer to the labour market and, when they are ready, into work.

[Priti Patel]

I rather think the hon. Gentleman makes my point for me in the sense that those in the work-related activity group need more support. Currently, they have been getting too little support. That is exactly the purpose of our reforms. We believe that we must tackle this issue, and provide—yes—the right financial security for individuals, but at the same time also look at the most effective ways to improve the wellbeing of those individuals by giving them support to get back to work. Almost half a million people in the work-related activity group get too little support to move back into work. We currently disincentivise them from doing so. As I say, they deserve better than that, and the Government are determined to take the necessary steps to transform their life chances by supporting them into work.

The Government are committed to ensuring that disabled people are able to participate fully in society, and we have set out our ambition to halve the disability employment gap. It is a duty of Government to support those who want to work to do so, and most people with disabilities and health conditions, including the majority of ESA claimants, tell us that they want to work. Some 61% of those in the work-related activity group tell us that they want to work, and we mean to put those people’s ambitions at the centre of what we do.

[Stephen Timms]

We have established that Macmillan Cancer Support disagrees with the Minister on this issue. Parkinson’s UK, Mind, and Rethink Mental Illness, whose chief executive wrote to all of us, say that they strongly disagree. So can the Minister tell us the name of any organisation representing disabled people that agrees with the position that the Government have taken?

[Priti Patel]

What I would say to the right hon. Gentleman is that we have been working with organisations and disability groups, and we have actually been listening to them. [Interruption.] Rather than making generalised comments from a sedentary position, Labour Members should realise that we are working with those organisations as we move forward with our White Paper—