Oral Answers to Questions
Debate between Stephen Timms and Mark Hoban(10 years, 10 months ago)
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Stephen Timms (East Ham) (Lab)
A key step for jobcentres will be the introduction of universal credit. A press release from the Secretary of State in May last year claimed that
“all new applications for existing benefits and credits will be entirely phased out by April 2014.”
Will the Minister acknowledge that jobcentres will still be handling new applications for existing benefits long after next April?
Mr Hoban
The right hon. Gentleman never ceases to amaze me with the number of questions he asks about universal credit. He knows exactly what the time scale is. We have said when the national roll-out will be completed and I thought he would have been delighted today that we have extended the roll-out to Wigan.
Jobseekers (Back to Work Schemes) Bill
Debate between Stephen Timms and Mark Hoban(11 years, 1 month ago)
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Mr Hoban
I beg to move amendment 1, page 3, line 11, at end insert—
‘() Subsection (12) does not affect a person’s ability to apply for a revision or supersession of, or to appeal against, a decision to impose a penalty by reference to other grounds.’.
We tabled the amendment as a result of discussions we had with the right hon. Members for Birmingham, Hodge Hill (Mr Byrne) and for East Ham (Stephen Timms), who expressed concern that existing appeal rights might be brought into doubt. The Bill as introduced to the House is clear in its intent. Its provisions refer solely to the consequences of the Court of Appeal and High Court judgments. The amendment, therefore, will have no effect on the overall purpose or intent of the Bill. However, after constructive discussions with the right hon. Gentlemen, we decided to include something in the Bill to put it beyond doubt that a claimant’s appeal rights against a decision to sanction their benefit will remain unchanged in all other matters.
The clause sets out that any decision to sanction a claimant for failure to comply with the employment support allowance regulations or the mandatory work activity regulations cannot be challenged on the ground that the regulations are invalid or that the notices given under them are inadequate, notwithstanding the Court of Appeal’s judgment. In practice, claimants will retain full appeal rights on matters where a sanction has been imposed but they feel that they had good reason not to comply with the requirements of the scheme—for example, if they failed to attend training because of illness of a family member or one of the other standard reasons set out in either regulation or guidance around good cause. However, claimants will not be able to appeal against a sanction decision on the ground of the High Court or Court of Appeal judgment.
I hope that the amendment meets the concerns of the right hon. Member for East Ham and that there is support for it on both sides of the Committee.
Stephen Timms (East Ham) (Lab)
The Government have got themselves into a terrible mess. As we heard, they ignored the advice of the Social Security Advisory Committee—that appears to be a significant part of what went wrong—but I welcome the amendment, because a straightforward reading of the Bill might, and indeed does, suggest that if one is hit, perhaps in particular by one of those stockpiled sanctions, that will be it.
I am grateful to the Minister and the Secretary of State for tabling the amendment, which helpfully clarifies—puts in the Bill—the fact that normal opportunities for reconsideration and appeal apply, but I want to ask the Minister about two points. I would be grateful for his comments on them during his winding-up speech for what I imagine will be a brief debate.
Some of the stockpiled sanctions, which we read about in the impact assessment, relate to events of quite a long time ago—up to eight months, which could be the beginning of August. I would like to know, because it is not entirely clear to us, whether all the 63,000 people affected by stockpiled sanctions already know that they have a sanction on the way. If, for example, they enter work straight after receiving a sanction that is in the stockpile, and so receive little benefit after the sanction is imposed, presumably the amount to be reclaimed from them will be very small. I ask for clarity. Is the intention, in taking the sanction out of the stockpile and applying it, that people’s benefits will be stopped for the appropriate period, or is it— [Interruption.]
Stephen Timms
My hon. Friend asks a good question, and the answer is in the impact assessment that the Government have produced, which distinguishes between the amount that would be incurred because of people who were sanctioned before 6 August 2012 and the amount incurred in respect of people sanctioned since the court case, because those sanctions have been stockpiled.
The part of the impact assessment that contains those figures says that, by the look of it—to take the upper valuation—£24 million out of £130 million relates to sanctions that have been stockpiled. The CPAG view would be that of the £130 million, £106 million or £107 million would not apply, because of the Social Security Act 1998, whereas £24 million—the stockpiled sanctions—would. As I said, I am sure that the Department’s advice is different from the advice given to us by the CPAG, but it would be helpful if the Minister provided clarification so that we know the basis on which the measure has been introduced.
I would say again to the Minister that this is a helpful amendment. I do not think that it changes the position substantively, but it helps to clarify it, and to make it clear that anyone who will be presented with a stockpiled sanction will, as usual, have the opportunity to ask for a reconsideration and perhaps subsequently to appeal. That is a welcome clarification, and I am grateful to the Minister for providing it, but I would be grateful, too, if he commented on the two specific matters that I have raised.
Mr Hoban
The right hon. Gentleman has made a couple of points. In respect of payments where decisions have been stockpiled, when we received the High Court judgment, we did not proceed to make any further sanctions decisions, but claimants who were subject to a stockpiled decision are aware of that: we made it clear at the time, so they know what to expect. However, he asked whether we would recover sanctions from those who are in work now. The answer is no, we would not. That is a policy that we adopt elsewhere. We want to encourage people to do the right thing, and doing the right thing in this case is getting back into work.
The right hon. Gentleman then raised the note circulated to Members of Parliament by the CPAG. I touched on that point in opening the debate. Section 27 of the Social Security Act 1998 applies only when a challenge is brought by way of an appeal to a court or tribunal. The Wilson/Reilly case began with an application for judicial review, and on that basis, section 27 does not apply. With that, I hope that the Committee will approve the amendment.
Amendment 1 agreed to.
Clause 1, as amended, ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
New Clause 1
Report
‘(1) The Secretary of State must appoint an independent person to prepare a report on the operation of the provisions relating to the imposition of a penalty during the period of a year beginning with the day on which this Act comes into force, so far as that operation relates to relevant penalties.
(2) The person must complete the preparation of the report and send it to the Secretary of State as soon as reasonably practicable after the end of the period mentioned in subsection (1).
(3) On receiving the report, the Secretary of State must lay a copy of it before Parliament.
(4) In this section—
“penalty” means a penalty that may be imposed for—
(a) failing to participate in a scheme within section 17A(1) of the Jobseekers Act 1995, or
(b) failing to comply with regulations under section 17 A of that Act;
“relevant penalty” means a penalty that, but for section 1 of this Act, would not be or would not have been lawfully imposed on a person.'.—(Mr Hoban.)
Brought up, and read the First time.
Mr Hoban
The new clause provides for a report on the operation of benefit sanctions affected by the provisions of the Bill. Again, I thank the right hon. Members for East Ham (Stephen Timms) and for Birmingham, Hodge Hill (Mr Byrne) for their constructive approach to the Bill. We discussed this topic with them as we drew up the Bill. After our discussions, we decided to bring forward the new clause to satisfy the concerns of the right hon. Member for East Ham to provide for an independent report on the operation of benefit sanctions subject to the provisions in the Bill.
The new clause requires the Secretary of State to appoint an independent person to prepare a report on the operation of the provisions relating to benefit sanctions during the first year after the Bill has come into force. The report must be prepared as soon as reasonably practicable after the end of that period.
Subsection (3) requires the Secretary of State to lay a copy of the resulting report before Parliament, which meets the right hon. Gentleman’s requests. It is important to say that as a Department, we keep the functioning of sanctions under review. A number of comments on that were made on Second Reading. It is important to ensure that sanctions are applied fairly and consistently across Jobcentre Plus. It is an important part of the regime, so the sanction should be credible, and something that we keep under review.
Let me pre-empt the arguments made by the right hon. Member for Wythenshawe and Sale East (Paul Goggins). I understand the purpose of his two amendments. He is keen to ensure that the review is expedited, and we will try to complete it as quickly as possible. The time period for someone to launch an appeal against the sanction is 13 months. By imposing a six-month deadline, we might miss appeals that are made at a later point. He then requires a report to be laid within three months of the end of the six-month period, so that is nine months. There is a risk that we will miss out on three months’ worth of appeals, so we would not necessarily get a full view of how the sanctions under the Bill have operated. Although I understand his arguments for haste, may I suggest, as a counter argument, that we take things at a slightly more leisurely pace, which will ensure that we get a full year? None the less, I share his view that once we get to the end of that year, we should be moving as quickly as possible to complete the review and to lay the report before Parliament. It is not in any of our interests unduly to delay a measure such as this. I commend new clause 1 to the Committee.
Stephen Timms
I warmly welcome the new clause which, as the Minister has said, was proposed and suggested in the discussions between him and the Secretary of State for Work and Pensions, and me and my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne). It is something genuinely valuable to emerge from this debacle, which has been entirely of the Government’s own making. We do need to know what is going on with sanctions. The independent review, which is required by the new clause to be conducted over the coming year—I will comment in a moment on the further amendments proposed by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins)—could be crucial in getting to the bottom of what is going on. From the standpoint of anyone who is concerned about what is going on in our social security system, as very many people are, this is a valuable initiative.
The scale of the sanctions that are being imposed at the moment is extraordinary. My hon. Friend the Member for Hayes and Harlington (John McDonnell) made that point in the earlier debate. He correctly suggested to the House that the number of sanctions being issued trebled in the two years between the period just before the general election and subsequently to more than half a million per year, and that number is still going up. The impact assessment tells us that the number of sanctions that has been issued under the defective—as we now know them to be—employment, skills and enterprise regulations is “between 221,000 and 259,000”; that those sanctions involved between 136,000 and 159,000 people and that their cumulative value is between £80 million and £99 million.
Mr Hoban
Absolutely, but the hon. Lady repeated that, and by virtue of the quote I think she was supporting their view. Another hon. Member said that people “may be” sanctioned. I think there is a tension here between clarity and disclosure. The more detail there is in the letter—maybe to comply with what is in the law—the harder it can be for people to understand what is in the letter. It is possible to go into lists, as the right hon. Member for Birmingham, Hodge Hill did—to list a whole set of “good cause” reasons in a letter. One could put in a letter every detail of the graduated sanctions regime. We need to ensure that our communications are very clear and legal; sometimes the two do not go as easily together as we would like them to, but we do need to ensure that there is clarity.
The right hon. Member for East Ham talked about what happens if people are sanctioned, and then immediately answered his question by referring to hardship schemes. He and I have debated the revised sanctions regime and discussed hardship at length, as we did on a previous occasion with the right hon. Member for Stirling (Mrs McGuire). There is a hardship scheme in place for people, and it is right that it is there. We do ask people to look to see whether there are any other ways in which they could find financial resources to live off, and that is very carefully set out in the Bill, but those hardship schemes are available. It would be wrong to give anyone the suggestion that there is no hardship scheme in place, but the rules on access are very tight indeed.
Stephen Timms
I take entirely the Minister’s point about the hardship schemes, but I wonder what he thinks has driven the huge increase in the number of people referred to food banks over the past three years—a tenfold increase between the year just before the general election and the current financial year. I wonder whether he can understand why many of us think that the growth of sanctions must have been a big part of the driver.
Mr Hoban
The practice of the Government the right hon. Gentleman was a part of when he was a Minister in this Department differed from that of the present Government. When the Labour party was in power, it refused to have any material in jobcentres about food banks, to try to deny their existence. It did not refer people to food banks. We decided, when we came into office, to reverse that policy—to ensure that people were aware that food banks were in place.
People do go to food banks. They go for a variety of reasons. It is right for there to be a hardship regime in place for sanctions. If people do not choose to apply for that hardship regime, that is their choice, but people know it is there.
Stephen Timms
The Minister is right about the hardship regime, but he is surely not trying to tell us that the number has gone up from 30,000 to 300,000 because there are some leaflets in jobcentres, is he?
Mr Hoban
Well, actually it is not about leaflets. It is about signposting people to food banks. The right hon. Gentleman and his Opposition colleagues forget the way in which they tried to airbrush food banks out of history when they were in government, and to use them now as political pawns is beneath them.
I hope that the Committee will accept new clause 1. As I said in response to amendments (a) and (b) tabled by the right hon. Member for Wythenshawe and Sale East and his colleagues, we want to ensure that the Bill proceeds as quickly as possible; I do not think there is any interest in spinning it out. But we do need to ensure, as the right hon. Member for East Ham said, that it is properly and thoroughly considered. As a consequence of a measure introduced by the previous Government, we have an independent reviewer of work capability assessments. That is a very thorough process and no corners are cut, neither would we want them to be. It is helpful that there is clarity.
Universal Credit
Debate between Stephen Timms and Mark Hoban(11 years, 1 month ago)
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The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
I commend the Chair of the Select Committee, the hon. Member for Aberdeen South (Dame Anne Begg), for the way in which she opened the debate, and for the balanced way she set out the issues in its report. I thank the Committee, too, for its work. Often, people outside the House underestimate the important role that Select Committees play in scrutinising policy development, but the report is a very good example of the excellent work they do to highlight the issues and to get the balance right.
Balance was what was missing from the speech by the right hon. Member for East Ham (Stephen Timms). I think there was a 10-second acceptance at the start that universal credit was a good idea. He then spent the rest of his speech trying to conjure up reasons why it was not a good idea. [Interruption.] No, that is absolutely true. I will give some examples. He and the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) have been touting for some months now the story that people have been walking off the project and that the project is in chaos. We saw it in today’s Guardian—an article that perhaps should be seen in the context of today’s debate—and the right hon. Member for East Ham said just now that he expected contractors to walk off site. What a load of rubbish we have heard! In a statement today, HP, one of the big contractors, said that it remained committed to supporting the DWP, to the universal credit pathfinders going live in April 2013 and to subsequent releases. It also said that it would continue to work with the DWP and our other suppliers on this major programme of welfare reform.
Stephen Timms
I can reassure the Minister that the source of the report came from the companies concerned. But let me ask him this: the initial plan was for all applications for out-of-work benefits to be handled as universal credit applications from October this year. Is there a new date for that milestone, and if so, what is it?
Mr Hoban
Yet again, the right hon. Gentleman needs to get some perspective. We have always made clear our plan for a progressive roll-out of universal credit, for exactly the reason that hon. Members have mentioned, which is that previous Governments have launched unsuccessful big-bang IT projects. We have been clear, therefore, that we need a progressive roll-out—pilots, lessons learned, consolidation and then next-stage roll-out.
That is the best way to ensure that universal credit is rolled out correctly and it is a significant change from how previous Governments have handled IT projects, including the disastrous tax credits system when, of course, the right hon. Gentleman was a Treasury Minister. We have made clear our plan for a gradual roll-out for new claimants from October 2013. We have always said that the progressive roll-out of new claims across the country would begin in October 2013. That is a simple restatement of what we have always intended to do. I respect the right hon. Gentleman, but I think he has overreached himself on this argument.
Mr Hoban
No, all the right hon. Gentleman is doing is scaremongering, which is not the right approach. Someone made the valid point that misinformation undermines claimant confidence in the system. I want to address some of the concerns that people have expressed in this debate and demonstrate how the Government are tackling the issues highlighted in the Select Committee’s report.
Mr Hoban
I am not going to give way. The more often the right hon. Gentleman seeks to intervene, the less time I have to engage with the substantive discussion.
I will remind the House of the aims of universal credit. It is designed to avoid universally recognised problems in the current flawed system, which traps people on benefits and makes them dependent on the welfare state. It will ensure that work remains the best route out of poverty and benefit dependence for those who can work, and is intended to be radically simpler than the complex web of tax credits and benefits it replaces. We made a deliberate choice here. My hon. Friend the Member for Leeds North West (Greg Mulholland) was right to highlight a previous Committee report on the complexity of the welfare system. Rather than replicating the current system, in all its complexity, we are seeking to design a system that is easier for claimants to understand and creates better incentives.
Crucially, universal credit brings together in-work and out-of-work support into a single monthly payment for those out of work or on low earnings. At present, there are separate systems for out-of-work and in-work benefits administered by different national and local agencies. A move into work therefore entails a recalculation of entitlement, multiple communications and possible delays and gaps in payments. As a result, many people are not prepared to take the risk of moving into work.
This is not just about those who are out of work, however; it is about those who are in work as well. One of the rigidities built into the tax credit system is the 16-hour-a-week rule, which means that people offered work have to ask themselves, “Is it worthwhile my taking on this additional work?” Many people have to go to the jobcentre to make a better-off-in-work calculation. We cannot have barriers in place preventing people from wanting to earn more, take on more hours and look after themselves and their families.
With universal credit, we are aiming above all to achieve a fundamental change in attitudes to work, helping people to see more clearly that they are better off in work and encouraging and supporting people to move into work or to increase their hours.
As I said earlier, too many people are trapped into working 16 hours a week by a system that means there is no point in extending their hours because they would be worse off. I have even heard of people turning down bonuses from their employers because they are concerned about the impact on their benefits. What a tragic situation we are in, when a system of benefits traps people in low incomes. What we need to do—I hope Opposition Members will reflect on this—is find a system that helps people to get back into work. That is one reason why it is important to have in-work conditionality, to help people move up the income scale and find ways to increase their earnings by getting new skills, getting promotions and increasing their hours. In focusing on how we resolve some of the exceptions in the system, Opposition Members are in danger of losing sight of the reason for doing this: to free people from a complex system of benefits that has trapped so many out of work.
Stephen Timms
I am most grateful to the Minister for giving way. He was not able to give a date for the earlier milestone; he is now setting out the advantages, as he sees them, of universal credit for people who are in work. To begin with, all new in-work benefit applications were going to be universal credit applications from April 2014. Can he tell us when that new milestone will be reached?
Mr Hoban
We have always said that there would be a progressive roll-out of the system. I am not going to give a running commentary on the timetable at this moment. We have been very clear—[Hon. Members: “Ah!”] No, we have been very clear that we would have early implementation in April 2013, and we are going to see that in the Greater Manchester and Cheshire area. That will enable us to test the end-to-end process in advance of the progressive national roll-out of universal credit from October. Once a pathfinder has happened, we will continue to adjust the exact timing and sequence of the migration process in the light of experience, including the operation of the pathfinder service in the Greater Manchester area. That will be done exactly to avoid the problems that previous Governments have faced with big-bang system changes falling over.
I would also point out to hon. Members who continue to question the Department’s ability to deliver significant system changes that we have launched the latest generation of the child maintenance system on time and on budget. We have also successfully launched the universal jobmatch service, which is helping more than 1 million jobseekers find work and get into employment more quickly. That we have been able to do those things demonstrates the Department’s capacity and capability to deliver programmes on time.
Mr Hoban
I have about 15 minutes left and am keen to deal with some of the other points that have been raised.
On advice and support, the advice sector is key to ensuring that we deliver universal credit effectively. We work very closely with the stakeholder organisations to ensure that their expertise is utilised. This is a moving picture and several things have happened since the Government published their response to the Committee’s report. On 11 February, we published the local support services framework, which addresses what support UC claimants need, including those with complex needs, and how we will work with the third sector and local authorities to provide that support in the most effective way.
At the heart of the framework is a partnership approach, which emphasises the need for close working between DWP, local authority managers and service providers such as social landlords and charities to agree on the services that will be needed at a local level. By encouraging close partnership-working between agencies, we will provide a more joined-up, holistic service for claimants with complex needs and a single claimant journey towards greater independence and, wherever appropriate, work readiness for claimants.
The hon. Member for Stretford and Urmston (Kate Green) asked about access. We have not decided yet whether there should be specialist advice line for welfare rights advisers, but we will try to bring together all benefits guidance in one place—I think it is a legitimate criticism to say that it has been fragmented in the past—and provide a much more simplified resource for relevant information. I hope that will make life easier for advisers in the third sector. I take on board the hon. Lady’s helpful point.
A number of hon. Members raised the issue of monthly payments, including the Chair of the Committee and my hon. Friend the Member for Amber Valley (Nigel Mills). Universal credit is designed to reflect a world where 75% of employees are paid monthly. Paying universal credit monthly will not only reflect patterns that people who fall out of work are used to, but help smooth the transition into work and encourage claimants to take personal responsibility for their finances. For the first time, we will be able to identify those claimants who struggle to manage on a monthly salary, and will provide support to help them develop the necessary money management skills to remove barriers that prevent some of them from moving into work.
We recognise that a move to a single monthly household payment is a significant change to the way in which many benefits are currently paid and that some claimants will require support to help them manage that change. Money advice will be offered to all claimants when they make a claim, and given to those who have a clear need for it. There will be different levels and types of money advice, based on need. Some claimants will be signposted toward an online service, some might be offered a single session over the phone, and others might be offered an intensive face-to-face session with follow-up calls. We also recognise that some clients might need money advice for only a short period, while others will need it for longer. We are trying to create a service that can be tailored to the needs of individuals, rather than a one-size-fits-all service.
On 11 February, we published guidance giving details of the factors that advisers should consider when discussing alternative payments with claimants. Those factors include drug and alcohol dependency. For most claimants, alternative payment arrangements will be time limited, and offered alongside further budgeting support and help to move towards managing a standard monthly payment. I mentioned that drug and alcohol issues were one of the factors that should be borne in mind. Others include learning difficulties, mental health conditions, those in temporary or supported accommodation, perhaps including people who are homeless, those who have severe debt problems and those who are the victims of domestic violence. So a range of factors will be taken into account to determine whether a monthly payment should be made, or whether an alternative, more frequent payment would be in the claimant’s interest.
My hon. Friend the Member for Enfield North (Nick de Bois) made the point that this is all about boosting aspiration. It is about enabling people to manage their finances and to get into work, and we need to ensure that we have a system that meets mainstream needs but also supports the needs of more complex cases, rather than a scheme that is designed entirely around the needs of the exceptions. It is important to get the balance right.
Mr Hoban
I just want to say something about basic bank accounts. We have set aside £145 million to stimulate new financial products for universal credit claimants, and we are working closely with financial providers across the private, social and third sectors. We are continuing to consult those providers and other stakeholders about the arrangements for those products, and we will announce our detailed approach and requirements in due course.
The hon. Member for Edinburgh East (Sheila Gilmore) referred to the fact that we had discussed basic bank accounts when I was in my previous role. There is a real challenge involved. One of the final pieces of research produced by the financial inclusion taskforce identified that many of the people who did not have a bank account were those who claimed benefit, and that many people who had had bank accounts had ceased to use them. It is important to ensure that we put the right financial products in place, but we must also give people the support they need to manage their money so that they can remain banked, rather than dropping out and becoming unbanked.
Stephen Timms
The Minister mentioned people in supported accommodation. Does he have a response to the concern that I raised about women’s refuges and other supported accommodation, given that the definition in the regulations does not seem to be quite right? Can he give me any reassurance about continued support for people living in such accommodation?
Mr Hoban
The definition in the regulations will be the one that is in the existing regulations, and it has worked well so far. We are talking to women’s refuges and others to try to understand what has changed, and why the existing definition no longer gives the desired results. That is a matter that we want to continue to discuss.
We need to be careful when we talk about the direct payment of rent, because the vast majority of people have no problem paying their rent or their mortgage. My hon. Friend the Member for South Dorset (Richard Drax) has raised this matter. In one of the pilots, 92% of people paid their rent on time. Among the other 8%, some were underpayments and some were mis-payments, but not all were wilful non-payments. We have an obligation to try to move that 8% so that they can pay their rent on time and meet their obligations. Also, this change will encourage social landlords to think about the broader needs of their tenants—how they can find the necessary skills to get work, and get the necessary financial and budgeting support to manage their money more effectively—rather than just thinking about collecting the rent.
We need to ensure that the new system does not remove personal responsibility from everyone, while recognising that we will need to do something for those who are facing the greatest problems. We are working on that, and the pathfinders will help us to gain that knowledge. We want to make sure that the risks are managed and that landlords can request that the housing element is paid to them when the rent arrears trigger has been reached. These arrangements will be in place for some high-risk claimants from the outset until there is improved financial capability. In effect, we will start the shift to direct payments for claimants with the easier cases and then progress to the more difficult cases. The approach that runs through the roll-out of universal credit is to pilot things and understand the lessons to be learned to ensure we avoid mistakes in the future.
I am sure that I have already spoken for far longer than I should have done, but I think our debate has been important. I end by echoing the words of my hon. Friends who have contributed. We are talking about a change in culture. It is not just a benefit replacement exercise; it is about helping people back into work—making sure that they know that it is better to work than not to work, that it is better to work longer to earn more than to work fewer hours and earn less. We need to tackle some of the barriers to getting people into work, not just in respect of the complexities of the benefit system, but by enabling people to manage their money and to take responsibility for their finances and for their future.
Universal credit is a huge step forward in encouraging self-reliance, but we recognise that a number of people—not the vast majority of people—will need more support. The measures we have set out today and the way in which we have developed them, even from when we submitted our response to the Select Committee’s report, demonstrates this Government’s serious commitment to get universal credit right. It is by getting it right that we will have the best chance of getting people out of poverty.
Oral Answers to Questions
Debate between Stephen Timms and Mark Hoban(11 years, 3 months ago)
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Mr Hoban
The hon. Gentleman makes an important point. I was born and brought up in his constituency, so I well understand the challenges that Easington faces. We do want to encourage more people to invest in the area, and that is why I am keen to commend the work that has been done with the East Durham area partnership to encourage more people into work in Easington. We will look at how we can recommence publication of vacancy statistics shortly.
Stephen Timms (East Ham) (Lab)
Ministers often say that they have stopped people on Government schemes appearing in the labour market statistics as “in employment”. But recent analysis shows that of the claimed 500,000 increase in employment over the past 12 months, 214,000 people are in fact on Government schemes and mostly still claiming JSA. What is going on?
Atos Work Capability Assessments
Debate between Stephen Timms and Mark Hoban(11 years, 3 months ago)
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Mr Hoban
I am going to make some progress, as I have only a few minutes left to speak before the next debate starts.
In March 2011, we also implemented the recommendations of a Department-led review of the work capability assessment, which included the expansion of the support group to cover more people with certain communication problems and severe disability due to mental health conditions.
Hon. Members have suggested that the assessment does not take account of fluctuating conditions, but that is not the case. It gives people with a fluctuating condition the opportunity to explain how their condition varies over time. It is not a tick-box assessment, as some have suggested. There is a discussion between the health care professional and the person making the claim for ESA to determine how their condition varies over time. The questionnaire that customers are sent has been redesigned for that purpose, and people are now asked to give more details about how their fluctuating condition affects them as an individual. If a person cannot carry out a function repeatedly and reliably, they will be treated as unable to carry out that function at all. We all recognise that the capacity of people with a fluctuating condition can change, and it is important that proper regard should be given to that fact.
I want to pick up on a point made by the right hon. Member for East Ham (Stephen Timms). We have committed to a review of the descriptors for fluctuating conditions, and we are working closely with charities on that. We also need to ensure that any new descriptors are as good as, or better than, the existing ones, for the purpose of assessing someone’s condition. That work is going on at the moment.
Mr Hoban
I know that the right hon. Gentleman is keen to find out when that review will be published, but let me just say this. We want to make changes, if there is evidence to support such changes, and we need to ensure that that evidence is gathered and evaluated. I am as keen as he is to ensure that changes are made as quickly as possible, and that we make the right changes and the best changes to improve the process. I am not in any way seeking to delay the process—we want to ensure that it happens—but we have had to work quite hard to get the right descriptors that will provide the evidence on functional ability, and we are now assessing them.
Mr Hoban
I have only four minutes left and I want to address some more questions.
Let me deal with the issue of Atos’s capability. Atos deals with 100,000 cases every month and it consistency meets the quality thresholds. Only 3.6% of assessments are below standard compared with a threshold of 5%. It receives complaints about only 0.6% of assessments. DWP decision makers return to Atos assessments that are inadequate for reaching a decision in only 0.2% of cases.
The hon. Member for North East Derbyshire (Natascha Engel) asked about the appeal rates. Let me be clear about the rate of successful appeals. Of all the fit-for-work decisions taken by the Department, only 15% are overturned on appeal. Only 15% of all the decisions we take, then, are overturned on appeal, which I think demonstrates that while we need to ensure that there is a proper appeals process, we should not be bandying around figures that misrepresent the level of successful appeals.
Fund for European Aid to the Most Deprived
Debate between Stephen Timms and Mark Hoban(11 years, 4 months ago)
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The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
I beg to move,
That this House considers that the draft Regulation of the European Parliament and of the Council on the Fund for European Aid to the Most Deprived (European Union Document No. 15865/12 and Addenda 1 and 2) does not comply with the principle of subsidiarity for the reasons set out in Chapter 3 of the Twenty-second Report of the European Scrutiny Committee (HC 86-xxii); and in accordance with Article 6 of Protocol (No. 2) of the Lisbon Treaty on the application of the principles of subsidiarity and proportionality, instructs the Clerk of the House to forward this reasoned opinion to the presidents of the European institutions.
This is the third time that I have moved a motion on this issue. My hon. Friend the Member for Stone (Mr Cash), the Chairman of the European Scrutiny Committee, is the inspiration behind this motion and I am pleased to support it. I welcome the ESC’s report on the European Commission’s proposal and I am pleased to have the opportunity to discuss it on the Floor of the House.
The Government share the Committee’s view that the Commission’s proposal is not consistent with the principle of subsidiarity. The proposal would establish a new instrument: the fund for European aid for the most deprived. It is intended to replace, from 2014, the European Union’s food distribution programme for the most deprived people. The current programme distributes food stocks such as butter, milk powder, beef, sugar, rice and cereals, and in 2012 the budget has a ceiling of €500 million.
At present, 20 of the 27 member states participate. The main recipients are Italy, Spain, Poland, France and Romania. The UK has not participated since 1998, after which the previous Administration withdrew from the scheme. Both this Government and the previous Administration have opposed Commission proposals since 2008 to extend the programme and expand its social dimension. The UK has consistently set out its concern that the programme does not comply with subsidiarity.
Nothing in the Commission’s proposals changes our position. As the Committee points out eloquently in its report, the Commission has not provided a convincing justification of the need for EU action. Indeed, in many ways the new proposal is even more objectionable than the current programme. It will be used not only to provide food aid, but to purchase and distribute basic consumer goods. Whereas the current scheme is optional, the new scheme will be obligatory on member states and they will be required to provide match funding of at least 15% of the costs.
Stephen Timms (East Ham) (Lab)
I understand the Minister’s case that this could perfectly well be undertaken by national Governments, but do the Government intend to give any help to the network of food banks that is growing at a rate of, I think, three a week up and down the country and for which there is a clear need?
Mr Hoban
Food banks are undertaken by the voluntary sector. I will come on to the ways in which the Government provide support to people on low incomes or who are benefit recipients, in order to demonstrate why we do not believe that this EU programme is right. Our principal objection, of course, is one of subsidiarity, echoing the ESC’s comments, but also reflecting the previous Government’s stance when they withdrew from the scheme.
Mr Hoban
The hon. Lady is a prolific tabler of questions on this matter and I have answered one or two for her today. This initiative is undertaken by the voluntary sector. The previous Government ignored the existence of food banks. Even at the height of the recession, when long-term unemployment doubled, the previous Government simply ignored them and pretended that they were not there. This Government acknowledge the existence of food banks. They play an important role and enable people on low incomes to get food, toiletries and other basic needs, and to use their incomes or benefits for other purposes. We also signpost people to food banks, but what nobody has done yet—this point has been made on a number of occasions—is analyse who uses food banks and why.
Mr Hoban
I want to make progress. This debate is about European proposals to spend taxpayers’ money and, if I remember rightly, the Labour party seems very keen to reduce the EU budget. We look forward to hearing what the right hon. Gentleman has to say. I do not know whether he is suggesting that we should enter this programme and that he supports obligatory participation. Perhaps he will clarify his position now.
Stephen Timms
Does the Minister accept that the number of people using food banks is bound to go up further in the coming 12 months?
Mr Hoban
I am not going to predict that. Perhaps the right hon. Gentleman has missed what has been happening recently. He should recognise that there are record numbers of people in work and that unemployment is falling. The number of people on out-of-work benefits has fallen by 199,000 since May 2010. I am not going to engage in making predictions, but I would have thought that he celebrates the fact that more people can look after their own families and that more people who want to work are getting into work, meeting that basic aspiration that we all want people to share.
The right hon. Gentleman did not say whether his party will sign up to the Commission’s proposal and whether they want to spend more taxpayers’ money in Europe. Hopefully he will mention that in his remarks.
Oral Answers to Questions
Debate between Stephen Timms and Mark Hoban(11 years, 4 months ago)
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Mr Hoban
The evidence from the future jobs fund demonstrated that the taxpayer was never going to recover the money that was spent on it and that it was 20 times more expensive than the work experience scheme, which is similar to it and from which we are getting good outcomes. Taking into account Labour’s fiddled figures, youth unemployment is lower today than it was in May 2010.
Stephen Timms (East Ham) (Lab)
In the invitation to tender for the Work programme, the Minister’s Department said that if there was no programme at all 5% of people would secure job outcomes within 12 months. We now know that, under the programme, the figure was 2%. For people on employment and support allowance, it was 1%. Of the 9,500 people on employment and support allowance who used to be on incapacity benefit and who were referred to the Work programme in its first 14 months, only 30 secured job outcomes. The Minister told The Daily Telegraph that Work programme providers needed to “get their act together”. Why does he think that they are to blame?
Mr Hoban
The Work programme providers are responsible, and they are paid to get people into work. This is a much better value programme than its predecessors, but we need to get providers to raise their game. The figures released at the end of last month showed that job outcomes were rising and that the longer the programme had been functioning, the more people were getting into work. This is a good start, and it is a much more effective programme than the schemes introduced by the previous Labour Government.
Jobs and Social Security
Debate between Stephen Timms and Mark Hoban(11 years, 5 months ago)
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Mr Hoban
My hon. Friend is absolutely right. We need to see programmes of reform to get people off benefit and into work. It is about making sure that we equip people with the skills they need in a 21st-century economy. Programmes such as the Work programme enable that to happen.
I was rather disappointed that we did not hear more from the shadow Minister about Labour’s bank bonus tax. This is a big feature of the motion before us today. Yet again, the Opposition trot out the bank payroll tax as the solution. The problem is that it is their solution for everything. How would they pay for a VAT cut? The bank payroll tax. Higher capital expenditure? The bank payroll tax. Reversing changes to child benefit? The bank payroll tax. At the last count, a tax that they think would raise £2 billion has been used 15 times over to fund tax cuts and spending increases.
Mr Hoban
I have three minutes left, so I am going to continue.
The other thing in the motion that neither the right hon. Gentleman nor the shadow Secretary of State referred to—[Interruption.] No, let me talk about something that they did not refer to in their motion. The right hon. Gentleman talked about the increased benefit bill—£20 billion. Is he actually saying, given that most of that relates to uprating, that he is opposed to uprating pensioners’ benefits? Is he opposed to the triple lock that we introduced? Does he want to see a return to the days when the previous Government increased the state pension by 75p? Is he really saying that that is what he is against? The reality is that that is part of the reason why we have seen the benefit bill rise, and that is also because we are seeing post-dated cheques left by the Opposition who, when they left government, told us there was no money left.
Mr Hoban
I am not going to give way. I want to try to address some of the points that have been raised in the debate.
It is clear that the Work programme is in place. What we saw yesterday was a snapshot—207,000 people have got into work as a consequence of the Work programme. The Opposition should be celebrating that achievement, not criticising it. In the same way that we heard nothing in their speeches to congratulate the private sector on creating 1 million net new jobs, they said nothing about falls in unemployment and nothing about the fact that the previous Government fiddled figures and that youth unemployment is now lower than when we came into office. They have no ideas. They complain about the welfare bill, but oppose measures to bring it down. They fail to acknowledge the doubling of long-term unemployment during the recession and the rise in youth unemployment even when the economy was growing. They fall back on the empty rhetoric of the bank payroll tax and hark back to schemes that were bad for the unemployed and bad for the taxpayer.
The truth is that more people are in work, fewer people are unemployed and youth unemployment is down. One million net new jobs have been created by the private sector since May 2010. We are making work pay by reforming the benefits system and introducing universal credit. There are 190,000 fewer people now on out-of-work benefits than there were in 2010. That is the scale of the welfare reform that we are introducing. Rather than condemning people to a lifetime on benefits, we are providing support to get them into work. We have provided more help for young people, through the £1 billion Youth Contract. The work experience element is cheaper and as effective as the future jobs fund jobs that the Opposition parade.
Oral Answers to Questions
Debate between Stephen Timms and Mark Hoban(11 years, 7 months ago)
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Stephen Timms (East Ham) (Lab)
The Minister’s predecessor made sure that nobody could find out what was really happening on the Work programme, and he has had his reward.
I warmly welcome the new Minister to his position. He can now make a clean breast of all this. I hope that he will heed the CBI’s call, made in July—after the announcement to which he has just referred—for Work programme providers to be allowed to tell local authorities everything about how they are doing. The CBI is right: the Work programme will not fulfil its potential unless that happens.
Mr Hoban
First, I thank the right hon. Gentleman for his congratulations; he and I have worked together from different sides of the Dispatch Box before, during his previous incarnation at the Treasury.
We have said that we will publish information. The first official statistics on Work outcomes will be published in November this year. We are keen to see providers, local authorities and other partners working closely together and using the available data to develop the right response. We are seeing success stories—such as in Barking recently, where there has been that local collaboration.
Mr Hoban
The Secretary of State should pipe down. [Interruption.] The shadow Secretary of State should pipe down.
I say to the right hon. Member for East Ham (Stephen Timms) that there are success stories. We will publish the full data in November and he should wait for that.
Stephen Timms
I am grateful for what the Minister has said. I hope that he will pay very careful attention to what the CBI has called for. I am delighted to hear that we finally have a date for the publication of the first Work programme job outcome data, almost 18 months after the programme started. Will he, unlike his predecessor, accept that needless secrecy holds back public services such as the Work programme?
Mr Hoban
The right hon. Gentleman should remember that this is a two-year programme. Payments are made after six months of sustained work activity based on work outcomes. We need to build up the evidence to see how effective the Work programme is. I am confident that the statistics to be published later this year will demonstrate its effectiveness. It is a vital part of the work that we need to do make sure that we get more people into employment.
Oral Answers to Questions
Debate between Stephen Timms and Mark Hoban(12 years, 6 months ago)
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Stephen Timms (East Ham) (Lab)
When we embarked on the economic course that the Government have set, Ministers told us that because they were tackling the deficit aggressively, there would be a surge of private sector confidence—and, therefore, investment and jobs. Many people agreed with them. Now that we know that expectation was mistaken, surely there must be a change of course.
Mr Hoban
Every reputable international organisation that talks about what is happening in the UK economy now recognises that the Government need to stick to the course, rather than throwing away the valuable credibility that we have gained as a consequence of tackling the mess left behind by the previous Government.
Oral Answers to Questions
Debate between Stephen Timms and Mark Hoban(13 years, 4 months ago)
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Stephen Timms (East Ham) (Lab)
10. What recent discussions he has had with his Irish counterpart on measures to reduce budget deficits.
The Financial Secretary to the Treasury (Mr Mark Hoban)
The Government welcome Ireland’s effort to bring its fiscal deficit under control, and support the international assistance package currently being agreed to deliver stability.
Stephen Timms
The Chancellor used to speak of the Irish miracle as a shining example of economic policy making. Are there not, though, important lessons to learn from the misery that we are seeing in Ireland today? Is it not clear that simply increasing VAT, making large-scale public sector redundancies and cutting welfare does not add up to a successful path out of the global crisis?
Mr Hoban
Let me remind the right hon. Gentleman what he said about Ireland on 8 May 2007:
“The Irish economy has enjoyed a good deal of success over the past few years. The corporation tax regime has contributed to that, but there have been a number of other factors”.––[Official Report, Finance Public Bill Committee, 8 May 2007; c. 19.]
The truth is that the Irish economy, like our economy under the previous Government, had a banking sector that was poorly regulated and out of control. It is because we have tackled the legacy of the Labour Government that we are in a position to help Ireland.
Equitable Life (Payments) Bill
Debate between Stephen Timms and Mark Hoban(13 years, 7 months ago)
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Mr Hoban
My hon. Friend makes an important point about transparency. The actuarial advice gives a clear demonstration of the methodology used by the actuaries, but 30 million premium transactions had to be compared with a basket of comparable companies from 1992 to the end of 2009. The publication of the model at that level of detail would not aid transparency. It would be more likely to confuse, given the complexity of the calculations. However, we have ensured that EMAG and ELTA—Equitable Life Trapped Annuitants—have had an opportunity to meet Towers Watson, the actuaries, to go through the calculations. Towers Watson has provided examples of its calculations so that the mechanics can be understood.
Stephen Timms (East Ham) (Lab)
The ombudsman states in her letter to every hon. Member that because the Government have fully accepted her recommendations Sir John Chadwick’s approach is no longer relevant. Why does the Financial Secretary disagree with her on that point?
Mr Hoban
It goes back to what the previous Government were prepared to accept. Sir John’s report is based on the terms of reference that the right hon. Gentleman’s colleagues gave him, which dealt with the accepted findings. Of course, the previous Government did not accept all the ombudsman’s findings, but that decision was overturned in the courts. It is important to recognise that the first stage—the calculation of external relative loss—is not dependent on the accepted findings because it covers the findings of Equitable Life as a whole across the period. The issue of the accepted findings becomes especially important when Sir John assesses what would have happened if Equitable Life had been regulated properly. The reconstruction of Equitable Life’s financial accounts was based on the accepted findings of the previous Government. The problem is that as we get further and further away from the calculation of external relative loss, what the previous Government accepted and did not accept becomes much more relevant to the calculation of compensation. That is one of the factors that we need to take into account when we assess the final level of loss.
Stephen Timms
Our policy is to proceed in the way we set out before the election—on the basis of what we promised our constituents on this matter—and to take forward what my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) committed to: that when Sir John Chadwick’s report was submitted in May, within two weeks of publication he would publish the Government’s proposed scheme, including a timetable. Where we are now, four months later, is that nobody knows what the scheme is. There is a fundamental inconsistency in what the Financial Secretary is telling the House. Is he with the ombudsman or Sir John Chadwick? Nobody has any idea.
Stephen Timms
My right hon. Friend the Member for Birmingham, Hodge Hill set out before the election the process that we would adopt, which remains our view of the right way forward. What I have no idea about is what the right hon. Gentleman intends to do. We wait with great interest to find out.