Child Maintenance Service
Steve Webb Excerpts(9 years, 11 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
Today the Government reach a key milestone in their progress towards reforming the child maintenance system in Great Britain, by first bringing into force the regulations allowing the Department for Work and Pensions to end child maintenance arrangements in the 1993 and 2003 child maintenance schemes and, secondly, introducing a range of fees for using the 2012 child maintenance scheme, managed by the Child Maintenance Service.
The Government want to help parents to reduce levels of conflict after a separation and work together more effectively. After a relationship breakdown most parents still want what is best for their children and we want to support them to achieve this. Wherever possible we want to encourage more parents to consider arranging maintenance directly between themselves, rather than viewing statutory child maintenance arrangements as the default option.
Both parents will be offered free information and support to help them make the right choices for them about their child maintenance arrangements through the Child Maintenance Options service.
For those unable to make their own arrangements, there is a new more efficient and effective child maintenance scheme, managed by the Child Maintenance Service.
The introduction of fees is designed to act as an incentive for parents to collaborate following a separation, encouraging them to think again before defaulting to the Child Maintenance Service. The fees are also about people making a small contribution to the cost of an expensive service that will continue to be heavily subsidised by the taxpayer. The Government do, however, recognise that the collection charges for paying parents should be higher as they have greater control over whether or not maintenance is paid. The charges are encouraging not just compliance but also a shift towards collaboration, which is in the best interests of the children involved.
DWP: Performance
Steve Webb Excerpts(9 years, 11 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
We have heard 41 speeches in a very worthwhile debate, including some particularly thoughtful contributions. We have heard from many members of the Select Committee, including its Chair, the hon. Member for Aberdeen South (Dame Anne Begg), and I will respond to her comments in a moment. Let me start, however, by discussing the clue in the title—it is the Department for Work and Pensions. From listening to the debate people would think that nobody is getting jobs these days and that pensions had been left alone in the state in which we inherited them. They would not realise that we have record levels of employment and they would not know that we have had falls in youth unemployment, female unemployment and long-term unemployment month after month after month, Even in the hardest-to-help groups, such as young people not in education, employment or training, the numbers are coming down. The Opposition motion had nothing to say about getting people back to work, yet that is the centre of our welfare reform and our strategy is working.
This is not all just about making work pay, although my hon. Friend the Member for Fareham (Mr Hoban), a former ministerial colleague, made a powerful contribution in which he mentioned sitting in a jobcentre and trying to work out whether or not someone would be better off in work. We are dealing with that situation through the universal credit reform, which will make work pay. As my hon. Friend the Member for Gloucester (Richard Graham) said, not only are we making work pay, but we are making saving pay. In the pensions space, we have seen state pension reform; effective automatic enrolment, with 3.6 million people auto-enrolled; charge caps, which are new to reform; and new models of workplace pension. Whether we are talking about work or pensions, this Department is working.
Before I move on to deal with the substance of some of the operational issues that have been rightly raised, I want to address the allegation the shadow Secretary of State made and to give her the chance to retract it. She said—I quote from the transcript—that “when we write to the Department with our constituents’ problems we only ever get replies from the correspondence unit.” She made the even more outrageous comment, “Well, maybe there is one rule for Tory Back Benchers and another rule for Labour party MPs”. So we checked our records and we found that she obviously does not read her own correspondence, as since 2010 DWP Ministers—[Interruption.] I hope I do not get in the way of her tweeting—it is #Igotitwrong. Since 2010 DWP Ministers have sent 46 letters directly to her, 33 to the hon. Member for Rhondda (Chris Bryant), 86 to the hon. Member for Stretford and Urmston (Kate Green), 93 to the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) and 98 to the right hon. Member for East Ham (Stephen Timms). So much for not replying to their letters!
Rachel Reeves
I thank the Minister for giving me a chance to reply, as I have checked the letters I have written to the Secretary of State. I have had a reply from him to a letter regarding a constituent of mine called Latimer Saunders and the reply came from Gabriella Monk. I wrote a letter to the Secretary of State regarding a constituent called Mark Norris and I have received no response at all, despite the fact that my letter was sent last year. I have never received a letter from the Secretary of State for Work and Pensions in response to any of the letters I have sent to him.
Steve Webb
It is a good job I have the transcript of what the hon. Lady said, which was “when we write to the Department…we only ever get replies from the correspondence unit.” When the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Hemel Hempstead (Mike Penning), who has responsibility for disabled people, rose to intervene, she said “I will give way; I haven’t had any letters from this one either.” We waved a letter that she had received, so I hope she will withdraw that remark.
Moving on to the substance of reform, we talked about the record of the two Governments on reform. Let us take the case of child maintenance. I want to read out what was said about child maintenance reform by the National Audit Office, which was quoted by the hon. Member for Stretford and Urmston. It said:
“So far, the reforms had cost £539 million for a scheme that had performed no better than its predecessor”.
Unfortunately, that is not our reform; that is Labour’s reform in 2006. That is what happened when Labour reformed child maintenance. The NAO said the scheme was no better than the one that went before, despite costing half a billion pounds. That is why we have to replace it with a new scheme. The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) said that no doubt this one will go wrong. Actually, we have been running it quietly since 2012, phasing it in, learning the lessons from the other party and, as a result, the scheme is being highly effective. We already have record numbers of people being paid directly under the new scheme. Alongside major reform, we are getting more maintenance paid to more children than ever before. In other words, we are reforming, but not taking our eyes off the day job.
A number of Members mentioned the performance of Atos. As several of my hon. Friends pointed out, there is a bit of collective amnesia regarding who, in 2005, gave Atos a seven-year contract with a three-year option to renew. By last autumn, Labour was saying, “Let’s get rid of Atos; let’s sack it”, but that would have cost the taxpayer millions of pounds. Instead, we have terminated Atos’s contract in a managed way. My right hon. Friend the Minister with responsibility for disabled people has done that, as a result of which the taxpayer gets money and Atos begins to clear the backlog of the work that it has been doing.
As well as the changes that we are making to bring down the backlog on employment and support allowance—it has been said that it has come down significantly in the past couple of months—it is worth remembering that every one of the people in that backlog is getting benefit. It is sometimes made out that they are waiting for money, but they are currently receiving the assessment rate of ESA and incapacity benefit. Those figures relate to people who are getting benefit and are awaiting assessment.
Let me give the House some further examples of how we have been improving the service we deliver to the people who depend on our help. A year ago, the number of jobseeker’s allowance new claims dealt with in 10 days was 66%; now it is 90%. The number of ESA new claims dealt with in 10 days was 66%; now it is 80%. The number of appeals outstanding a year ago was 150,000; now it is 4,000. As my right hon. Friend the Secretary of State said, this is at a time when we are taking running costs out to make central Government more efficient.
A number of Members referred to the PIP. We are ensuring that the contractors, Atos and Capital, recruit more health care professionals to deal with the backlog. The number of appeals we are facing has fallen precipitously. It is an extraordinary fall in the number of people appealing against ESA decisions. Back in the first quarter of last year, we received 109,000 appeals against ESA decisions. In the first quarter of this year, it was 11,000. That is an 89% fall in the number of people claiming ESA who are appealing. The reason for that is that we, unlike Labour, are finding far more people eligible for benefit. Let me give the House the evidence for that claim. In late 2008, when Labour was undertaking work capability assessments, it was finding 64% of people fit for work. In the most recent quarter, we found not 64% but 27% fit for work. Far from it being this Government who are using the work capability assessment to throw sick people off benefit, it was the Labour party that used the WCA for that purpose.
During the debate, a number of Members said that we needed to make changes to the WCA, and that is what we have been doing as part of the Harrington review process. We have accepted about 50 recommendations. One reason why we are getting the number of people we are on to ESA and why we have a bigger proportion of people in the support group than ever before is that we have taken Labour’s failed WCA and reformed it to make it fairer. That is what a good Government does. We want to ensure that the right money goes to the right people.
Ian Paisley
Will the Minister take the opportunity tonight to make it abundantly clear from the Dispatch Box to all Members of this House that any concessions that the Government intend to make on welfare reform will be made as a result of arguments made in this place by Members who take their seats in this place, and that none will be made to a party that refuses to take its seats?
Steve Webb
As the hon. Gentleman will be aware, we believe that our welfare reforms are good for the people of the United Kingdom and should be adopted in all parts of the United Kingdom.
Let me move on to some of the contributions made in the debate. It was a great pleasure to hear from my right hon. Friend the Member for Basingstoke (Maria Miller), who I had the great privilege of working alongside and who laid the foundations for a number of the vital reforms we are making. She pointed out that contrary to the rhetoric we sometimes hear, we are increasing the support for disabled people while also ensuring that more of the money goes to those who are most in need, which is absolutely the right priority.
My hon. Friend the Member for Birmingham, Yardley (John Hemming) pointed out that although we have a motion from the Labour party, we do not appear to have any policy options from the Labour party. Despite the fact that there was, I think, some sort of launch last week, we had hardly any reference to the alternative. Once again, it is like talking into a vacuum—we do not know what is coming back from the other side.
The right hon. Member for Birkenhead (Mr Field) asked about the support given to people waiting for benefit. There are two forms of support. One is the short-term benefit advance, when somebody is entitled but the money has not come through, meaning that they are in financial need, and when somebody has a change of circumstance that results in an increase to their benefit award. The other is a hardship payment, for when people are subject to sanction. We will be happy to respond to the right hon. Gentleman further if he has any further questions.
The hon. Member for East Lothian asked a couple of questions. If I could distract her from her phone for a moment—
Pamela Nash (Airdrie and Shotts) (Lab)
That is not the Member for East Lothian.
Steve Webb
I apologise.
The hon. Member for East Lothian (Fiona O’Donnell) asked two questions. She asked whether carer’s allowance would be backdated—[Interruption.] I have apologised. It is backdated if someone’s claim for PIP comes through. She asked about the definition of terminal illness, and we use the same definition as the previous Government. There is a six-month definition based on our judgment that takes account of and is informed by the advice of a health professional, such as a consultant or a Macmillan nurse. I hope that that makes it clear to her.
Steve Webb
No, I have already given way.
The shadow Secretary of State asked about zero-hours contracts and how many people were on them. The answer is that they make up less than 2% of employment. The Opposition make out that all the new jobs are part time or involve zero-hours contracts, but nothing could be further from the truth: 98% of jobs are not on that basis. It is simply misleading to imply that the economic growth we have seen and the jobs that have been created are part time, insecure or on zero-hours contracts. Nothing could be further from the truth.
The hon. Member for Plymouth, Moor View (Alison Seabeck)—[Interruption.] I am trying to respond to the debate. The hon. Lady asked about a constituent who had had to travel a long distance for a PIP assessment. Clearly, it is unacceptable that someone should have to travel that far. The guidance is that people should not have to travel for more than 90 minutes maximum by public transport. If that has happened, we would like the details and we will seek to address that point.
The heart of the debate is as follows: the Department for Work and Pensions is delivering work and pensions reform for millions of people. It is making sure that month after month, instead of having to rely on benefits people can find jobs and stand on their own two feet. We are reforming through the universal credit and that will be the legacy of my right hon. Friend the Secretary of State in making work pay, in taking children out of poverty, and in helping disabled people to take part-time work and to get back into the labour market. We are making sure that work pays and that welfare is reformed.
The Work programme is working and is ensuring that people who have been failed by Labour’s employment policies get back into work. That is a record of a Department that I am proud to defend, and I ask the House to oppose the Opposition motion.
Question put.
Defined Ambition Pensions
Steve Webb Excerpts(9 years, 11 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
I am pleased to confirm that the Government have published their response to the consultation “Reshaping workplace pensions for future generations”. Later today, we shall publish independent research on defined ambition—or shared risk—pensions, commissioned by DWP, and we intend to introduce the Pension Schemes Bill 2014.
The Bill provides for a new legislative framework for defined ambition pensions that enable employers and their workers to share risks, providing more certainty for savers and controlling costs for employers.
The Bill will also encourage “collective schemes”, which are popular in many countries around the world as the pooled risks can make pension outcomes more stable.
The time is right for a new regulatory framework for future private pension provision; we know that consumers value greater certainty in pensions and over a quarter of employers are interested in offering a pension involving risk sharing.
I shall place a copy of the delegated powers memorandum and impact assessment in the Libraries of both Houses along with a list of the relevant older papers.
Copies of the impact assessment and the delegated powers memorandum will be available in the Vote Office and Printed Paper Office and on the gov.uk website later today.
Oral Answers to Questions
Steve Webb Excerpts(9 years, 11 months ago)
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Julie Elliott (Sunderland Central) (Lab)
8. What estimate he has made of the number of people below the threshold for auto-enrolment in a workplace pension.
The Minister of State, Department for Work and Pensions (Steve Webb)
We estimate that around 2.7 million individuals, aged 22 to pension age, who have earnings below the earnings threshold for auto-enrolment are not saving in a qualifying workplace pension in the private sector. About 1.6 million of those individuals are earning between £5,772 and £10,000 and have the right to opt in. Employers must tell workers about this right.
Julie Elliott
I thank the Minister for that answer, but does he agree that it would be right to extend pension auto-enrolment to all low-paid workers who are missing out at the moment?
Steve Webb
I am grateful to the hon. Lady, but let me explain why I disagree with her. She would enrol people at, for example, £6,000 a year—that is the policy of the Labour Front-Bench team. At current contribution levels, someone earning £6,000 a year would be putting 8.8p a week into a pension. If they did that for 35 years, they would end up with a pension of £1.93 a week. That does not seem a sensible policy to me.
Graham Jones (Hyndburn) (Lab)
21. Does the Minister agree that the Government have stealthily been depriving more low-paid women of pension contributions every year? Is it not time that that was put right?
Steve Webb
No, on the contrary, the people we are excluding from auto-enrolment are those for whom we think the default should be not to save in a pension, because they will get a state pension typically of £7,500. If they are earning £6,000 now, should the Government take money out of their pay packet, when they are earning £6,000, to top up a pension of £7,500? That does not make any sense.
David Mowat (Warrington South) (Con)
The Pensions Minister has made some welcome changes to the way in which smaller pots will be managed, with aggregation, pensions following workers and so forth. If that works well, will there be scope in the future to review this limit?
Steve Webb
We are keen to avoid discrediting automatic enrolment with trivially small amounts of money. My hon. Friend can imagine the newspaper headlines if we had required a firm to set up a pension scheme so that the employee and employer combined put 8p a week into a pension. We would have been laughed out of court. We have reformed auto-enrolment, and it is going extremely well. It has a good, strong reputation, and I want to protect it.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
What the Minister does not tell the House, of course, is that Library figures show that someone earning just below the raised threshold for auto-enrolment could save up to £20,000 over a working lifetime—quite a decent nest egg, I am sure that we would all agree. So why have the Government deliberately removed 1.5 million people—the majority of whom are low-paid women—from auto-enrolment? Although that sum is not enough to buy a Lamborghini, does the Minister agree that millions of people are losing out?
Steve Webb
On the contrary, the Pensions Commission—the hon. Gentleman often refers to the Pensions Commission, one of whose members is now a Labour peer—recommended that low earners needed an 80% replacement rate. Someone on the wage that he just gave gets an 80% replacement rate based on the state pension alone, so we are delivering—[Interruption.] That is after tax and national insurance. [Interruption.] They are paying national insurance at £10,000 a year, so they get about an 80% replacement rate without needing to be automatically enrolled. Setting up auto-enrolment for tiny amounts of saving is simply inappropriate.
Mr Stephen Hepburn (Jarrow) (Lab)
10. What assessment he has made of the effect of sanctions on claimants of jobseeker’s allowance.
The Minister of State, Department for Work and Pensions (Steve Webb)
The Department has commissioned an independent review of the changes to local housing allowance, including the extension of the shared accommodation rate. The final report of that review is due to be published this summer.
Dr Huppert
I thank my hon. Friend for that answer. The situation worries many of my constituents, and a recent study by Crisis showed that in many parts of the country such as Cambridge only a tiny fraction of shared houses are available for people to rent. When he considers the review, will he change the broad rental market areas and ensure that people can find somewhere to live if they wish to be in Cambridge, Blackpool or any other location?
Steve Webb
My hon. Friend has made repeated representations about the broad rental market area for his constituency. We have used targeted funding to provide additional local housing allowance rates in areas of pressure, so although the general increase in the LHA rate is 1%, four of the five LHA rates for Cambridge, including that for shared accommodation, increased this April by 4%.
David Wright (Telford) (Lab)
What specific meetings has the Minister had with his colleagues in government with responsibility for housing to discuss schemes such as foyer projects, which link training initiatives with housing and support for young people?
Steve Webb
The hon. Gentleman raises the valuable work of foyer projects. My noble Friend Lord Freud, the Minister for welfare reform, leads on housing benefit for the Department, and I will ensure that he is aware of those projects, if he has not already held specific meetings about them. If the hon. Gentleman would like to give us further details, we will be happy to look at them.
Kerry McCarthy (Bristol East) (Lab)
The under-35 shared accommodation rate is a particular problem for fathers who do not live with the mother of their children, but want their children to stay with them at weekends, when it is simply not suitable for children to be in the sort of accommodation with other young men that people get under the rate. Has the Minister examined that situation?
Steve Webb
The hon. Lady will be aware that, in exceptional cases, housing benefit can be topped up, but she will also know that the same issue could arise under the shared accommodation rate for under-25s. However, if two single people choose accommodation together, the combined total of their shared accommodation rates is larger than one family’s standard rate for a two-bedroom flat, so two people coming together can rent a larger property than a family requiring two bedrooms.
Mr David Ruffley (Bury St Edmunds) (Con)
18. What steps he is taking to introduce stricter criteria on eligibility benefit for applications from foreign workers.
Kelvin Hopkins (Luton North) (Lab)
19. What estimate he has made of the number of people who will receive face-to-face guidance at the point of retirement in 2015-16.
The Minister of State, Department for Work and Pensions (Steve Webb)
From April 2015, we expect over 300,000 individuals who retire each year to be able to take advantage of the new pension flexibilities and access the offer of free guidance. The Government have recently consulted on the delivery framework for the guidance, to ensure that it is designed to give consumers the support they need to make informed choices in the way they choose to access it.
Kelvin Hopkins
How will the Government ensure absolutely that retirees who cash in their annuities are not exploited by private sector financial vultures in the guise of advisers?
Steve Webb
The hon. Gentleman raises an important point. We already hear anecdotal examples of people getting cold-calls that say, “This is your Government guidance offer.” We want to make it clear that that is not based on Government guidance, because that has not started yet. We are trying to make sure that instead of people making retirement choices with no information or advice, which often happens, they will have a right to go to a reputable provider and get information and guidance from someone who does not have a commercial interest in selling them something.
Rehman Chishti (Gillingham and Rainham) (Con)
T1. If he will make a statement on his departmental responsibilities.
“Fuller Working Lives: A Framework for Action”
Steve Webb Excerpts(9 years, 11 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
On Friday 13 June, the Government published “Fuller Working Lives—A Framework for Action”. This follows a commitment set out in the Government response to the House of Lords Select Committee on Public Service and Demographic Change report of Session 2012-13: “Ready for Ageing?”
Around 2.9 million people aged between 50 and state pension age are currently out of work and the effects of early labour market exit can be catastrophic for an individual, particularly in terms of their ultimate retirement income. In addition to the sudden drop in income and possibly finding themselves reliant on working age benefits, individuals also lose the benefits of workplace pension provision. There can also be negative effects for health and wider well-being when an individual leaves the labour market in an unplanned way.
The framework for action sets out the business case for retaining and recruiting older workers at the individual, business and societal-level. It also draws together the important steps that the Government are already taking which will promote fuller working lives.
In addition, we announced:
that DWP is working with local enterprise partnerships to encourage them to focus on the issue of fuller working lives in their local area;
that DWP, alongside Department of Health and Government Equalities Office, are launching a two-year pilot on what works to support carers to remain in employment;
a pilot with Jobcentre Plus on employment support for carers;
that we will develop a new guidance toolkit for employers which will build on the existing Age Positive employer guidance; and
we will also shortly be confirming the appointment of an older workers business champion.
We know that once out of work, older people are more likely to become long-term unemployed or inactive and it is for that reason that Government are particularly focused on what we can do to help older workers retain their jobs in the first place. In particular, carers, disabled people, those with health conditions and those made redundant are at risk of permanently leaving the labour market.
Over the decade to 2022, population projections suggest there will be 700,000 fewer people in the UK aged 16-49, but 3.7 million more aged 50 to state pension age. By 2020 over 50s will comprise almost one third of the working-age population and we simply cannot afford to ignore older workers. We also know that GDP could have been £18 billion higher in 2013 if the employment gap between people in their 40s and those aged 50 to state pension age was halved.
A fuller working life is about giving individuals the chance to increase their financial security in later life. Sometimes this might mean a change of job or a different working pattern that is more suitable to their lifestyle needs, or support to manage a health condition or disability. To help people to continue working the Government have abolished the default retirement age meaning most people can now retire when the time is right for them. Enabling older people who can work to stay in work is not only critical to the economy and pensions sustainability, but also to the financial, health and social well-being of individuals.
The “Fuller Working Lives—Framework for Action” can be found at: www.gov.uk/government/publications/fuller-working-lives-a-framework-for-action.
The supporting “Background Evidence” document which sets out the analysis that has informed the development of the framework for action can be found at: www.gov.uk/government/publications/fuller- working-lives-background-evidence.
I have placed a copy of “Fuller Working Lives—A Framework for Action” and “Fuller Working Lives—Background Evidence” in the House Libraries.
Housing Benefit (Wales)
Steve Webb Excerpts(10 years, 1 month ago)
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Nia Griffith
Absolutely. It is a considerable problem.
The Government state in their response that they will not consider a blanket ban on forcing people in adapted premises to move. When there has been investment to make properties suitable many housing authorities in Wales try to keep them available for disabled people. Not having a blanket ban on hitting disabled people with the bedroom tax is a short-sighted policy. Apart from the tremendous upset for the individual, it is not good use of public funds.
The Minister of State, Department for Work and Pensions (Steve Webb)
Will the hon. Lady say how she would define what “significantly adapted” is in practice?
Nia Griffith
I am sure we can all imagine major adaptations such as changes to bathrooms and additional rooms. The only one that might be considered less significant is a stair lift that could be put in or taken out, but any other form of adaptation should be taken into consideration. Further to that, it should be noted that legislation passed by the Welsh Government has enabled local authorities in Wales to desist from selling off some types of properties. They have largely chosen to keep in their stock properties such as those suitable for old people who downsize precisely because adaptations have been made that suit older people as they become less physically active.
Another point in the Government’s response is that the bedroom tax
“may encourage more claimants to move into work”.
That sounds like forcing people to look for work. People are already looking for work. People who have the capabilities are already looking for work. We must take into account the fact that some of them have significant disabilities and there are not many suitable jobs available.
Transport and child care are problems in rural areas, which are multiplied because of trying to fit in transport to work with picking up children and getting home from work. It is not easy to find jobs with hours that fit in.
I have taken issue with the Minister about the fact that the issue is not just a matter of obtaining a few extra hours. We all know that because of the complex way in which housing benefit is worked out people effectively lose around 60% of the benefit for additional earnings. The equation does not involve simply a few extra hours. The matter is much more complex. On tapering or claw back, I am extremely concerned about the proposals for universal credit because 76p in the pound of each tax credit will be clawed back when people take on more hours of work. The Centre for Social Justice suggested that it should be only 55%. That is another enormous hurdle for people taking on more work or going out to find work.
What progress has there been on collecting information and monitoring rental costs? That was promised in the Government’s response.
I turn to discretionary housing payments. The whole point about them is that they are discretionary, but they are imposing an enormous work load on local authorities because everyone on housing benefit is deemed to have insufficient funds to cover their rent. That was our definition of housing benefit. It was provided for people whose residual money after deducting various items was not sufficient to cover their rent, so it is inevitably massively oversubscribed.
The Government have said that they have provided extra money, but let us look at what that really means. I will use the example of Torfaen, which was given £193,000 of additional money for its discretionary housing payments but the shortfall in housing benefit is approximately £1 million, or five times the discretionary amount allocated. Torfaen was then told that it could spend up to £430,000, but that extra money must come from its own funds. In other words, it must make sweeping cuts elsewhere when it is already facing significant cuts.
The Welsh Government have provided £1.3 million of extra money throughout Wales to help with the additional administrative burden, but what a waste of money. If housing benefit was paid, none of that would be necessary. Having gone through the process once, it will have to be repeated because the whole point of discretionary housing payment is that it is supposed to be a temporary measure, as the Government noted, to tide people over. However, if there is nowhere for them to move to, the process will be repeated.
The officer in charge of housing benefit for Monmouth and Torfaen, Richard Davies, summed up the situation when he said that administering the huge demand for help has dramatically increased council work load and dealing with discretionary housing payment
“applications is like dealing with a totally separate benefit scheme. It’s shifted everything from statutory to discretionary”
so
“it’s a huge burden of administration.”
The Minister of State, Department for Work and Pensions (Steve Webb)
It is a pleasure to serve under your chairmanship, Mr Betts. I join in the congratulations to the Chairman of the Welsh Affairs Committee, the hon. Member for Monmouth (David T. C. Davies). I congratulate him on enabling the Committee to come up with a unanimous report. All of us who believe in the Select Committee system agree that Committees are at their strongest when they can be unanimous. He asked some specific questions for factual information, but in 10 minutes I will be trying to respond to two hours of contributions, so I apologise in advance if I miss one or two points.
I will concentrate on the spare room issue, but one or two hon. Members mentioned direct payment. As the Chairman of the Select Committee said, the philosophy of universal credit is to mirror in out-of-work benefits what happens when people are in work, so that if they make a transition from being out of work to in work, they will not have the sudden shock of having to budget from a wage and pay all of their bills, because they have been used to budgeting from the whole of their income for all of their outgoings. We want to improve that transition from out of work to in work.
The Government accept that direct payment will be difficult or not appropriate for a minority of people—that is not in dispute. Instead of having a system geared around the assumption that most people cannot cope, however, we are twisting that around and saying, “No, actually most people can.” Indeed, we pay housing benefit in the private rented sector direct to tenants, and most people cope. We should not patronise social tenants with the presumption that they cannot cope; we should presume that they can, but then identify the most vulnerable, who will have problems.
Steve Webb
No, I will not give way, because I have a whole lot of questions which have already been asked that I want to answer.
In response to the question of whether we simply let eight weeks go by, let two months of arrears accumulate and only then start thinking about doing something, the answer is no, we do not. The alternative payment arrangements of universal credit include an assessment of the likelihood that someone will struggle at the outset; we do not simply wait until eight weeks of arrears have arisen. Eight weeks of arrears may be a trigger in a case where we thought someone could cope, but things did not work. If someone is assessed as likely to struggle right at the beginning, however, we can go straight to direct payment to the landlord, if necessary.
The House wants me to focus my remarks on the spare room issue, which is what I will now do. On a matter of fact and numbers, and because the Chair of the Committee asked me for an update, our estimate in May 2013 of the number of Welsh claimants with a spare room with a reduction was 36,000; our most recent estimate is that that figure had fallen to around 32,000 in November 2013. At this stage, we are not able to identify how far that was due to trading down or taking a job and not needing benefit, and so on. Those figures, however, give an order of magnitude.
The issue of what the thing is called is not simply semantics. Whether it is a reduction in a subsidy or a tax gets to the heart of what the thing is. I want to compare three people: a person who is buying a house; a person who is renting on benefit from a private landlord; and a person who is renting on benefit from a social landlord. Two of those three people pay for the size of the house that they live in; the third does not.
The right hon. Member for Torfaen (Paul Murphy) said, “Hang on, we are introducing this new divide between people who rent and people who buy,” but in actual fact we are treating people in those different tenancies in a parallel manner. If people are thinking of buying a house in Wales and want an extra bedroom, they can have an extra bedroom and pay for it. If people rent from a private landlord, are on benefit and want an extra bedroom, they can have an extra bedroom and pay for it. Until now, however, people who were social tenants in Wales and had an extra bedroom did not pay for it. That is why our measure is the removal of a subsidy; it is not a tax.
Steve Webb
No. For example, when the Labour Government introduced the principle that private sector tenants with a spare room should have to pay for it, they did not describe the measure as a bedroom tax, so I do not see why a similar one for a social tenant should be.
Steve Webb
No, I will not, because I have two hours of questions to answer, and I want to answer them.
On the role of discretionary housing payments, several speakers, including the hon. Members for Newport East (Jessica Morden), for Llanelli (Nia Griffith) and for Swansea East (Mrs James), mentioned the pressures in their area on the DHP budget. Let us go through the facts, because people might be thinking, “This is terrible. The Government have been withholding funds for local authorities.” Let me make it clear what has happened.
At the start of 2013-14, the figure for DHPs in Wales was £6.9 million; at the start of 2014-15, it was £7.9 million. All of us accept that those are substantial sums of money. We did not leave it at that, however, and one of the themes of the debate is whether we are monitoring and listening and then refining the policy. We listened in two important areas.
We first listened to the position of Welsh and Scottish—mainly—local authorities. We accepted the point also made by my hon. Friends the Members for Ceredigion (Mr Williams) and for Montgomeryshire (Glyn Davies) and others that remote rural areas have particular issues. We therefore allocated additional funding. In Wales, that was £143,000 to Ceredigion, £449,000 to Gwynedd and £387,000 to Powys. Interestingly, my hon. Friend the Member for Montgomeryshire said what a good job Powys had done as a local authority—I pay tribute to it—and one of the reasons it could do so is because the Government had recognised the additional pressures on remote rural areas and come up with the funding. He can therefore report back to the House that it was not largely an issue in his area, because we had monitored what was happening, responded and dealt with it.
We did not leave matters there. We had a national or GB-wide allocation and a remote rural areas allocation, but there might still be acute local circumstances requiring still more funding, so we came up with an additional £20 million pot and invited bids for funding from it. Three Welsh local authorities applied and were given money: Cardiff, Conwy and Caerphilly. No other local authority in Wales asked us for a penny. We cannot simultaneously say that there is unmet need in Newport, Swansea and other areas, and that local authorities are having to turn needy people away, when those authorities did not ask us for the money to top up their DHP budget to such an extent that central Government had unspent additional DHP pot still available for local authorities to claim.
What are those authorities doing? I have no reason to doubt the hon. Members who spoke, but if it is the case that they have constituents for whom the impact of the change has been inappropriate, harsh or unfair—many words have been used—what were their local authorities doing not drawing down the additional money that was available and that was not contingent on matched funding? We did not say to local authorities, “Ask us for more money—but only if you put more in”; we simply said, “Do you need more money?”, and only three Welsh local authorities asked for it.
A number of other issues were raised during the debate and I will respond to one or two. We are being told that allocations are now not based on need. Why is it appropriate to say to private tenants, “Your housing benefit may only cover a house of the size you need,” but not to say the same to social tenants? Why should we not say it to both? When I have challenged the Opposition about when Labour introduced what they now describe as a bedroom tax, but for private tenancies, they say it was for future tenancies and so it was fine. When we intervene on them and ask whether the policy would be fine for future social tenants, Labour Members mumble and go quiet, because they have no answer.
Steve Webb
No, I will not. Labour cannot explain why it is right to say that private tenants have to pay for the size of the house that they live in, but that social tenants should not have to. Some suggestions were made about our views on excluding pensioners from the measure. They are generally excluded because, for example, expecting them to take work would be unrealistic. We have excluded pensioners for that reason, but it is pretty obvious why the Labour party wants to exclude social tenants, but not private tenants.
Someone said during the debate that we cannot both save money and make better use of the housing stock, but we are doing both of those things. The original estimated savings from the measure for the whole country of some £0.5 billion remains our expected order of magnitude. In addition, some people are moving to more suitable accommodation and freeing up accommodation for the people whose voice never gets heard—as has been said in the debate.
Steve Webb
No—I have only one and a quarter minutes left. Why did we not hear about the 13,000 people in Wales living in overcrowded social sector accommodation? Where was their voice in the debate? What about the people living in overcrowded private sector accommodation, or the 90,000 people on housing waiting lists?
There is a whole set of unmet housing need while we have people under-occupying social rented accommodation —through no fault of their own, so it is not a criticism of them, but it is a fact. The hon. Member for Swansea West (Geraint Davies) said that when people’s kids grow up, they should go on being able to live in a big family house, but what about the people who would love a big family house, but cannot get it because it is under-occupied? We have to help people with the transition, but that is why substantial additional DHPs have been found.
Finally, on the specific issue of adapted accommodation. We would have loved it had we been able to write a law in Whitehall that said, “This is adapted; this isn’t. Here is how we define it in an Act of Parliament or a statutory instrument. We will have a blanket exemption.” That would have been great. We looked hard, but we could not think of a national and consistent way of defining what it was. We therefore found the money instead—£25 million across Great Britain, which was our estimate of the cost of buying out the impact on substantially adapted properties. No one in the country living in a substantially adapted property who goes to a local authority should be turned away because there is not the money for DHP. We have given the local authorities the money, and that should not need to happen.
There is lots more that I would love to say, but I am constrained by time. I hope that I have been able to give some responses to the questions asked by the Chairman of the Committee.
Mr Clive Betts (in the Chair)
I will ask the Chairman of the Select Committee to respond briefly to this debate and then to introduce the second debate, which is on the Work programme in Wales. While that is happening, will hon. Members who want to speak in that debate indicate that to me? It will be helpful in apportioning the time.
Single-tier Pension (Contingencies Fund Advance)
Steve Webb Excerpts(10 years, 1 month ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
The Department for Work and Pensions has obtained approval for a further advance from the Contingencies Fund of £549,000 for the continued development of IT for the single-tier pension before Royal Assent. This advance is necessitated by the lead-in time for delivery in April 2016 which requires IT work to be undertaken prior to Royal Assent of the Pensions Bill.
Parliamentary approval for additional resource of £549,000 for this new service has been sought in the main supply estimate 2014-15 for the Department for Work and Pensions. Pending that approval, urgent expenditure estimated at £549,000 will be met by repayable cash advances from the Contingencies Fund. The repayment is expected to be made in the financial year 2014-15.
This advance will allow the single-tier programme to continue to work to meet the timetable of April 2016 to implement the single-tier new service.
Fairness in Pension Provision
Steve Webb Excerpts(10 years, 1 month ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing the debate. We have a common interest in quality pension provision, fairness and making things simpler for people. I entirely accept the premise that we have allowed the pension system to become bafflingly complicated. I entirely accept his point—not only do not all of our colleagues understand the pension system, but why should a member of the public understand contracting out, guaranteed minimum pensions and all the rest of it? A central drive of the state pension reform—I am grateful to him for his positive comments on that—is to sweep a great deal of that away and to have a single, simple, decent state pension set at a rate that people know. They will get that pension for 35 years in the system, contributions or credits, with no contracting out and no differences if they have been in a company scheme. That is the world that we are moving to.
Clearly, the hon. Gentleman’s constituents have spent their working life in a very different world. I want to say a word about one of the reasons why some of them—without full details it is difficult to comment on individual cases—might be getting less state pension than their neighbour. They might think that that is unfair, but it may not be unfair, because there is something else going on that they are not really aware of, namely the whole business of contracting out, which is about to be abolished. A number of his constituents, whom he mentioned by name, worked for firms that had a workplace pension scheme.
Under the principle of contracting out, the operators of the scheme, not the individual, decided that the scheme would be contracted out of the state earnings-related pension scheme. As a result, the scheme would pay less national insurance and, crucially, the hon. Gentleman’s constituents would pay less national insurance than their neighbours who worked at a factory that was not contracted out. Imagine there are two factories side by side, one of which has a company pension scheme and the other of which does not. At the factory with the company pension scheme that chooses to contract out of SERPS, all the employees in the scheme pay less national insurance than the employees at the factory that does not have a workplace pension scheme.
Mr Donohoe
I am not talking about the person who is in another scheme; I am talking about the person who is in those schemes and who has everything coming their way, but who has never contributed anything to it. It is important to stress that I am not saying that we have to reduce the amount that they live on. I would not live on £130 a week, and I doubt whether the Minister would. The fact is that the situation is seen as unfair. If the new scheme will overcome that problem, it is a great idea.
Steve Webb
It will to some extent, for reasons that I will explain. When an individual is contracted out, they will receive a smaller state pension than they would have done, because they are building up only a basic state pension, not SERPS. However, they will not get a smaller pension than they would have done, because the company promises to match the SERPS pension that they would otherwise have received. When somebody retires and says, “I am only getting 16 quid of SERPS”, what matters is not the SERPS figure—in a sense, they might be getting zero SERPS—but the SERPS figure plus the occupational pension promise together.
Steve Webb
They have paid for it, but they have also saved by paying less national insurance. I take the hon. Gentleman’s point about people who have not worked, and I will come on to them. In a world of contracting out, if person A pays less national insurance but still gets the same pension as their neighbour who was not contracted out, that would not be fair either. Fairness has a number of dimensions. The fact that someone has a £16 SERPS pension does not tell us anything in isolation; it depends on whether they paid less national insurance than their neighbour for years and years, which is why they have got a lower SERPS pension, but they have got something else instead. That is part of the system.
The hon. Gentleman asked about the position of people who have done nothing, and I often hear from pensioners who say, “Why did I bother saving? If I had done nothing, I would have got everything.” Part of the point of the single-tier pension is to set the value of the state pension above the basic means test, not 30-odd quid below, where it is now. Automatic enrolment then takes people further above that figure. As a result, because they have saved, they are clear of the means test and they are better off than someone who has done nothing. That is a new feature of the new system, because we are trying to address that point.
The hon. Gentleman has said that people who do nothing get stuff for free. He is not saying that poor people should not get stuff for free, but we cannot have it both ways. If we think we have to look after people who have got nothing, and they get free prescriptions because they have no money to pay for them, we cannot then say, “But that is not fair to people who work, because they do not get them for free.”
Steve Webb
Well, temporarily they do. Unless we give everybody everything free, we must recognise that we sometimes do things for poor people because it is right to. Inevitably there will be an element of people who work and think, “It is not fair; I do not get that free.” However, as part of a civilised society I do not want people who have no income to be unable to afford medicines. That is just the way it is. If we give everyone free prescriptions and free everything, we will just tax everyone to the hilt. I understand what the hon. Gentleman says, and the new state pension system will start to address that point by setting levels of pension above the basic means test.
Automatic enrolment will be a huge step towards pensions for the millions of people who may never understand them, because the firm chooses it for people, puts them in for it, and puts money in. We put tax relief in, and people are free to opt out. Nine out of 10 are staying in, which is fantastic. Just as the hon. Gentleman got the pension scheme extended to shipyard workers, as I think he said, we are extending pensions to 10 million people, many of whom are low paid or part-time—many will be women or people on the edge of the labour market, and they are just the sort of people who would not otherwise have had a pension. That is a huge step forward in the spirit of what the hon. Gentleman achieved for his constituents all those years ago, and it will bring millions more in.
The hon. Gentleman asked about the scope of auto-enrolment. It is about employment and an employment relationship. There must be an employer to pay the employer contribution. The self-employed are not in auto-enrolment, but they do well out of the new state pension scheme, because at the moment the self-employed class 2 national insurance builds up only the basic pension, not the SERPS bit. In our new world, there is no distinction—there is just the pension; so every year in which a self-employed person puts in, in future, will be more valuable than now. That person will be building up 35ths of the whole pension, not 30ths of the basic state pension. So the self-employed will get better provision.
Carers, unless they are in a contract of employment, will not be auto-enrolled, because there will be no employer to put them in a scheme. However, they will be credited into the 35 years of full single-tier pension, so a carer will build up, every year, a 35th of the £144 pension—or whatever it will end up as. There is provision for carers in the new system.
Most people on zero-hours contracts work 20-odd hours a week, and as long as, at some point, they trigger auto-enrolment—as long as they earn above the threshold, ever—they will be put in. If I am on a zero-hours contract and work zero, zero, zero, zero, and then 20 hours over a pay period and go above the trigger, my employer has a legal duty to put me in. There are complexities about waiting periods and the rest, but the basic principle is that I must be put in once I am over the trigger. Once I am in, if there is a week when I have no earnings, of course no money goes in; but if there is a week when I do have earnings, money goes in. I do not fall out of the pension. Once I am in, I am in. Auto-enrolment happens once. It is triggered by earning above the threshold once in a pay period.
Mr Jim Cunningham
My problem with what the Minister has said about zero-hours contracts is that surely a situation is possible in which someone falls below the threshold because there is not continuity of employment. That is a “suck it and see” situation. How would the Minister deal with that, 40 years down the road?
Steve Webb
A zero-hours contract is a contract. If someone has a contract of employment, in the weeks or months—whatever the period is—when they are above the earnings threshold, money goes into the pension. We will not insist on pension contributions being made in weeks when people do not earn any money. How would they put money in?
I think the zero-hours contract argument is greatly overdone, in the sense that the typical person on a zero-hours contract does 20 hours a week, on average. It may vary—when they earn a lot in a good week, they will put a lot into the pension; when they earn less, in a bad week, less will go in. As long as they get work through the contract they will be in a pension, possibly for the first time. I think that many people on zero-hours contracts will do better, because employers would not generally have put them in a pension at all. We are making that happen.
As to people with multiple jobs, a small number of people have jobs that, taken together, would put them into the system, but, taken separately, do not. Sometimes they will have children, and if they do they are credited in the state system anyway. Only 35 years of contributions are needed for a full pension, so someone might not make contributions for a number of years and still get a full pension.
The House of Lords, in about half an hour, I think, is going to talk about the issue in the debate on the Pensions Bill. We will gather more data on it. We think the issue is small, but clearly we need to ensure that we know what is going on. The number of women, for example, doing multiple part-time jobs went down in the past 12 months, so we do not think that the assumption that the numbers are all going up and that it will all get worse is borne out by the data. However, it is a serious point and we will look into it.
The hon. Gentleman is right that people often do not have a clue. It would be lovely to think that one letter from Downing street would fix things. I have two views on the matter. We need to make sure that pensions work for people who do not get it and never will, because with the best will in the world, expecting tens of millions of people to understand all this stuff is a heck of an ask. For me, we have to make sure that the system works for people who do not understand it and do not make active choices. That is where the state pension reforms come in.
Steve Webb
We look at lots of different ways of communicating with people. The thing that we know most of all is that if we opt people in to pensions and they have to opt out, they stay in. We could have hand-printed 1 million booklets—I could have delivered them and sat down for half an hour with each person, and I would not have persuaded them. We have used the power of inertia and what we know about how people behave to get them in as 1 million Government advertising campaigns would never have done.
We are going to include financial education in the national curriculum. That is a good thing. Under the Budget measures that the hon. Gentleman referred to, people will have a guidance guarantee, so before they make their choices, they will have the right to a face-to-face conversation with somebody who is not trying to sell them anything, as he said. It is not independent financial advice—they can pay for that separately if they want; it is just a conversation that they have never had a right to before that will enable them to make informed choices. If they want to spend some of their pension money up-front, it is their money to spend, but we are making sure that there is a state pension system in place, so that even if they underestimate how long they will live—blow the lot, or whatever—they will have that floor of the state pension above the means test that they do not currently have.
I want to mention something else that may be of interest to the hon. Gentleman’s constituents who reach state pension age under the current system. We are allowing people to top up their state pension if they want to. If someone has a bit of savings and they want to pay voluntary national insurance, under a new category of national insurance for people who have already retired, or who will do shortly—we are calling it class 3A or the additional state pension top-up—they can pay national insurance and get an extra pension for the rest of their life. That will be index-linked. There will be survivors’ benefits if they die. We think that will appeal to a set of people who perhaps have very low interest on their savings currently and are getting nothing in the bank. From October 2015—there are helplines, websites and all the rest of it—they can make additional contributions and enhance their pension if they wish. That is another option that we have created for today’s pensioners.
The hon. Gentleman mentioned the guarantee credit. The constituent that he mentioned, if I understood him correctly, is above women’s state pension age, so qualifies for pension credit, but has not reached men’s state pension age. Clearly, in that period, we are saying to people who have no other income, “Here is an income that we think you need to live on, but if all you have is half of it, we will top you up to the full amount.” In theory, people could have nothing at all and get the full amount, which I think was the point that he made.
However, bear in mind conditionality on benefits. We do not allow people just to get jobseeker’s allowance for doing nothing all day. In a different debate, his colleagues might be saying to me, “We are far too strict with these folk. We are sanctioning them when we should not be”—and all the rest of it. The rules are pretty tight, so the option of sitting at home all day and doing nothing, and getting credits for a state pension, is one that we are essentially eliminating. People get credits for their state pension and so on only if they are actively seeking work, applying for jobs and doing the things we expect them to do. We do not have the system whereby people can just do nothing and then cash in. There are an awful lot of conditions and requirements on people receiving benefits.
We have tried to recognise that the system has been fiendishly complicated in the past—we accept that—and to simplify it so that it is simpler and fairer, particularly to older women, many of whom have done very badly out of the system. We have tried to ensure that everyone is in a workplace pension as far as possible and that that is good quality and good value, and to put new freedoms and guidance alongside that. I hope that, as a result, we will have a much fairer system in the future than we have had in the past.
Sanctioning of Benefit Recipients
Steve Webb Excerpts(10 years, 2 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
I congratulate the right hon. Member for Oldham West and Royton (Mr Meacher) and the Members who supported him on securing this debate. This has been a worthwhile discussion and a number of important issues have been raised to which I will try to respond in the brief time available to me.
I think that there might be more common ground between the Government and the Opposition than has been apparent. It is also the Government’s position, as a number of right hon. and hon. Members said, that we want a sanctions system that works and that is effective, proportionate and well communicated to claimants. We are united on that. I was struck during the debate by the overwhelming view—although not the unanimous view, because there was at least one exception—that sanctions have a part to play in the system. Those who sign on and claim benefit take on responsibilities. If those responsibilities are to mean anything, there have to be consequences for not adhering to them.
At the outset, it might be worth my setting out the claimant commitment, which is now central to the benefit system and to the process of rights and responsibilities. People who sign on for jobseeker’s allowance now go through the claimant commitment. When they have a first interview with a work coach, the coach reviews their circumstances and capabilities—that relates to the point that was made by the hon. Member for Banff and Buchan (Dr Whiteford)—and completes the “My Jobseekers Profile” to capture key information. Reflecting on that, the coach sets out the requirements that the claimant must meet to be entitled to JSA, ensuring that those are right for the individual. That is how the system is intended to work. The work coach must take account of any health conditions, disabilities or caring responsibilities. Those requirements are recorded in the claimant commitment, together with a clear explanation of the consequences of any failure to comply. The commitment must be agreed by the claimant.
The coach then works with the individual to help them construct a detailed plan that sets out what they will do each week to meet their requirements. The process is designed to ensure that our expectations and requirements are reasonable, and that the claimant understands them. It is intended to provide claimants with the support that they need to establish an effective plan of action that, if followed, will ensure that they comply and that they never face a sanction. That is what the Government are trying to achieve. We do not want to sanction anybody. Clearly, there are times when people do not fulfil their requirements. When sanctions are imposed, there are mechanisms in place for challenging them. They can be overturned when people have a good reason why they should be.
I want to clarify some of the points that were raised in the debate. First, Members asked whether 60% of JSA sanctions were overturned. As has been said, the figures appeared, but there was an error in them and they were withdrawn. Revised figures are being prepared, in line with the code of practice for official statistics. Those will be presented as soon as possible. To give the House an order of magnitude, the latest official statistics, which have been published separately by the Ministry of Justice, which deals with the appeals, show that in the third quarter of 2012-13 not 60% but 17% of JSA disputes heard by the tribunal service resulted in a decision in favour of the claimant. That provides a slightly different perspective.
Steve Webb
I will not for now, because I only have a short period and I want to respond to all the points that Members have made. [Interruption.] It was a mistake. The hon. Gentleman asks why it was 60%. There was a miscoding. That was not the correct figure.
It is important that the sanctions regime is evaluated. I am grateful to the right hon. Member for East Ham (Stephen Timms) for his positive comments on the work that is being done by Matthew Oakley, which is looking specifically at the sanctions regime. It is considering communications to claimants. A number of hon. Members have stated that for sanctions to be effective we must communicate to people what has happened to them and why. I accept that entirely, and if right hon. and hon. Members have examples—some of which they cited during the debate—the Employment Minister would be pleased to receive details of individual cases where the processes that we want to work are not working.
To return to the evaluation, Matthew Oakley will soon complete his report. It will come to the Department and we will respond positively and constructively. We will then publish not only our response but the independent findings of the reviewers in full. There is no secrecy about that; it will be in the public domain, and rightly so, together with the actions we are taking. That is not the only evaluation. We have published a range of evidence, including the Jobcentre Plus offer evaluation and the universal credit customer survey, which provide information about customer awareness of sanctions and the effectiveness of the regime in encouraging compliance. We also monitor the use of sanctions and publish quarterly statistics. In a sense, we could have a second and third review and all the rest, but the focus is on seeing what the first independent reviewer says and publicly responding constructively to that, making changes, publishing evidence, monitoring and taking action, rather than on starting another review with another reviewer for perhaps six or nine months, or whatever, so that it is Christmas before things change. We want to get on with learning from these reviews.
The Chair of the Work and Pensions Committee, who is not in the Chamber at the moment, asked about sanctions for employment and support allowance, and it is important to stress the low level of ESA sanctions. At any point, fewer than 0.5% of individuals in the work-related activity group are sanctioned, so although volumes have increased because the number of people on ESA has gone up, that rate remains low. It is not the case that people on ESA are being sanctioned all over the place.
My hon. Friend the Member for Birmingham, Yardley (John Hemming) mentioned the link to housing benefit—I felt a certain amount of nostalgia when he explained to the House where Sandwell is, because that is where I was born and went to school. He made the important point that if someone is sanctioned on jobseeker’s allowance, that should not lead to the loss of housing benefit. Although income-related JSA passports to housing benefit, housing benefit is available on the basis of low income and not necessarily on whether someone satisfies the requirements for JSA. We entirely accept that we must ensure that people are not incorrectly thrown off housing benefit because their JSA has been sanctioned in some way, and we are considering that issue as part of the Oakley review. It is not our intention for people to lose their housing benefit.
The hon. Member for Banff and Buchan raised an interesting question of whether, for example, someone who is sanctioned under universal credit risks losing the whole household payment. Funnily enough, that problem is sorted out under universal credit, because instead of having JSA here and housing benefit there, and the JSA computer telling the council that someone is not on JSA any more and their housing benefit stopping, if it is all one payment the sanction is just to the personal allowance bit and housing help remains unaffected. It will be better under universal credit.
I was pleased to hear from a number of hon. Members that the universal sanctions regime is attractive and responds so that when people correct whatever caused the sanction, in many cases that sanction will stop. I will pass to my right hon. Friend the Secretary of State and the Employment Minister the view of a number of Members in this debate that the sooner we move forward with the universal credit sanction regime, the better. I am encouraged by that.
On the proportionality of sanctions, there has not been much discussion about the detail of the higher, middle and lower rates, but since the system was introduced the proportion of claimants sanctioned at the highest level fell markedly after the introduction of the new system. Hardship payments are available—again, that has not been discussed much—at a rate of 60% of the benefit. People may not be aware of that, but where someone has no income it is important to be aware that hardship payments are available at a rate of 60% of benefit.
Steve Webb
I will not, if the hon. Lady will forgive me, because I want to respond to the points already made.
There was some discussion of targets—this is a bit of a chestnut—and to be categorical, there are no targets for sanctions; that is not the way it works. The point was made that statistics are gathered at jobcentre level and among advisers on their use of the sanctions system, and again the hon. Member for Banff and Buchan—I am wrecking her credibility here—made exactly the right point. We want consistency, and we cannot know that we have that if we do not gather data on what individual advisers are doing. If people go to a jobcentre and talk to adviser A or adviser B, and adviser A sanctions everyone who walks through the door and adviser B never sanctions anyone, the system is not working.
Steve Webb
No, I will not.
It is not that individual advisers are expected to hit a target or number; we are monitoring because we expect both distribution and consistency. That is what we are trying to do. It should not be interpreted as a target; it is simply about us monitoring what is going on.
A couple of hon. Members suggested that sanctions are about trying to massage the unemployment numbers, which is complete nonsense. Somebody who is looking for work is still counted in the unemployment figures. The figures published every month and headlined on the BBC are the labour force survey numbers, and if people are looking for work, they count as unemployed.
Steve Webb
Perhaps the right hon. Gentleman will allow me to continue.
A further point missed by a lot of hon. Members is that two thirds of sanctions are not disallowances. Someone’s JSA might be reduced because of a sanction, but they do not come off JSA and still count in the claimant count numbers. Of all the sanction numbers, only a third are disallowances. On the unemployment figures, the JSA numbers have been coming down because of reduced inflows, not because we have been sanctioning people off benefit.
Steve Webb
I wonder if the right hon. Gentleman will allow me to continue. I have not given way to anybody else, and I hope he will forgive me if I am consistent. [Interruption.] If the House would like me to take the intervention, I will happily do so.
Stephen Timms
I am very grateful to the Minister. Will he confirm, as my right hon. Friend the Member for Oldham West and Royton said, that sanctions contribute to the benefit off-flow figures, which are the key to incentivising jobcentres and advisers?
Steve Webb
As I say, in two thirds of cases where people are sanctioned, they do not actually flow off JSA. Their JSA claim is regarded as continuing, so only a fraction of those numbers count as coming off benefit. Most people are still on JSA, even though they are sanctioned. It is clearly not the case that this is anything to do with the claim—it patently is not.
I have sought to be as consensual as I can. The right hon. Member for Oldham West and Royton made extraordinary remarks about the Chancellor’s approach to the macro-economy. Given that we have record numbers of people in work and record rates of employment, the idea that that is somehow mishandling the economy is extraordinary.
The key point is that we recognise that the sanctions regime needs to be kept under constant review. An independent review is under way. We will publish that and respond to it positively. If right hon. and hon. Members have individual cases they wish to draw to our attention, we are very happy to look at them. I think the House is united in saying: yes people have responsibilities, and yes there are consequences when they do not meet those responsibilities, but we all want to see a sanctions regime that is fair and proportionate. That remains the position of the Government.
Private Pensions
Steve Webb Excerpts(10 years, 2 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
I intend to lay the Pensions Act 2011 (Transitional and Consequential Provisions) Regulations 2014 before Parliament in due course to come into effect in July 2014. These regulations make a range of provisions for benefits that were treated as money purchase, but that do not fall within the clarified definition in section 29 of the Pensions Act 2011. At the same time the Government’s response to the public consultation on the regulations will be published. The consultation received wide-ranging and detailed responses and we have taken the time to consider them fully.
Following the consultation I have assessed the implications of the retrospective application of the legislation very carefully. I can now confirm that in most cases transitional protection will be provided in respect of events occurring between 1 January 1997—the date from which section 29 of the Pensions Act 2011 is effective—and the date these regulations come into force in July 2014. This means that schemes will not need to revisit past decisions in almost all cases, but will ensure that in the future members are protected if their schemes are unable to pay benefits that have been promised.
Full information about other changes made to these regulations in response to the consultation will be included in our formal response when it is published.