As my right hon. Friend the Secretary of State said earlier, the jobseeker’s allowance count rose last month to 939,900. There are 608,000 vacancies in the economy and 80 per cent. of claimants leave jobseeker’s allowance within six months.
Although we do not predict future levels of employment, we have been planning, quite properly, for the impact of higher levels of jobseeker’s allowance claims in the coming months.
The latest Office for National Statistics figures reveal that the number of Welsh 16 to 17-year-olds who are economically inactive rose by 12,000 in the period between June 2007 and 2008, which equates to an increase of 32 per cent. Does the Minister accept that that is an alarming upward trajectory? What does he think that his Government can do to halt that steep increase?
I thank the hon. Gentleman for his question. It might be that he was showing guarded and rather contorted support for all young people staying on in full-time education until they were 18—I would welcome that. Jobcentre Plus, in Wales and elsewhere, stands ready to help all people, throughout all age cohorts in the labour market, to get into the job market at the earliest opportunity. That includes the very youngest. However, it must be right that the most appropriate way to do so is to get them the skills and training that they need through to and beyond the age of 18.
In April of this year we introduced the local housing allowance, a more straightforward and transparent way of calculating entitlement to housing benefit in the private rental sector. However, an unintended consequence of the changes meant that in a limited number of cases the taxpayer paid out significant sums to private landlords to house people in the sorts of property that they could not afford if they were in work. That was clearly unacceptable and I ordered an urgent inquiry into the local housing allowance rates for properties with more than five bedrooms.
Today, I can announce that LHA rates will be capped at the five-bedroom rate for all new customers. We will lay regulations as soon as possible, to come into effect no later than next April. In the interim, DWP and the Rent Service will monitor such applications carefully and advise on a case-by-case basis. Those currently claiming LHA above the capped rate for a property with more than five bedrooms will have their case reviewed on the first anniversary of their claim. This announcement fits with the wider DWP and Treasury review of housing benefit, which is currently under way. A key outcome of the review will be to ensure fairness for the taxpayer and to ensure that housing benefit provides the right incentives to work.
The Secretary of State will be aware that earlier this year Dame Carol Black published a report entitled “Working for a healthier tomorrow”, which highlighted the fact that sickness accounts for a cost to our economy of up to £1 billion. However, in these economically turbulent times the Government have so far failed to acknowledge the report or to give a proper response. Will the Secretary of State undertake to do so with immediate effect?
The hon. Gentleman needs to get his facts right, I am afraid. We have welcomed the report, attended the launch and are working on our response. We have announced, for example, that we will be replacing the sick note with a fit note and that we will be pursuing “fit for work” pilots. I refer him to the welfare reform Green Paper.
I cannot comment on the individual case, although I am quite happy to look at it for my hon. Friend. I am sure that he will welcome the increased support that we are giving people, such as the fact that they will have an in-work credit of £40 a week, better help with transition costs and in and out-of-work advice. We know that that support works. We believe that ensuring that more people take up work will lift 70,000 children out of poverty. I am sure that my hon. Friend would welcome that.
I am sure that the hon. Gentleman will know that that subject will be debated during proceedings on the Pensions Bill in the other place. Obviously, it is ultimately a matter for Treasury policy, but we should be clear that the vast majority of people buy annuities well before the age of 75. Only about 5 per cent. delay until after that age, and they tend to be the wealthier pensioners. The proposal put down by the Opposition for a temporary suspension has been greeted with some dismay by many in the industry, who feel that it is unworkable. Annuity rates are at a six-year high, and obviously as people get older and move towards the 75 age limit their funds will be moved into more secure funding, such as Government bonds and gilts. Although obviously this is an idea that has been considered—
I thank my hon. Friend for his welcome for the fund which, as he knows, is on top of a range of other support mechanisms for those facing redundancy. We are working through the detail of the mechanisms for the £100 million, and looking at what we can do through other programmes to address precisely his issue about other sectors and I shall be happy to talk to him about that subsequently.
I am extremely happy to meet the hon. Gentleman so that we can look into the question in more detail.
As people move towards the age of 75, their funds will be moved into more secure funding streams anyway. That is why the proposal to move further will not solve the problems of the majority of pensioners. It is a short-term measure, aimed at a few people who, as I said, tend to have been able to delay taking an annuity until 75. Other options are still open to people at that age, such as alternatively secured pensions.
Can my right hon. Friend the Secretary of State look at what seems to be the Child Support Agency’s approach of making people with arrears repay them over one or two years? Whatever the rights or wrongs of their being in arrears that means that they have to pay large amounts of money, which tips them and their new families into real hardship.
The No. 1 priority of the Child Support Agency and its successor body has to be to contribute towards alleviating child poverty and I am sure my hon. Friend agrees. In some circumstances, flexibility can be shown about the rate of time over which arrears can be paid and if she has specific examples where she feels that is not working, we shall of course be happy to look into them.
Both our Department and colleagues in the Treasury, working with the Council of Mortgage Lenders and other lending bodies, have made it entirely clear that in these times we expect lenders to use repossession as an absolute last resort. The hon. Gentleman will be aware of recent statements to that effect, following the emergency measures that my right hon. Friend the Chancellor took to inject more capital into the banks. Suffice it to say that it is very important, at this time, that all families and others realise the punitive interest rates that some people knocking on their doors can offer. I urge them to seek affordable credit, if it is indeed credit that they require.
May I welcome my right hon. and hon. Friends to their new roles? I recently met my constituent, Katy Watt, who has returned after spending four years as a youth worker on the Isle of Man. She put the entire proceeds of the sale of her home into the collapsed Icelandic bank, Kaupthing Singer & Friedlander. I have advised her to claim pension credit, but I wondered whether Ministers could give my constituent and me advice on whether the notional sum tied up in the bank counts as savings towards her entitlement to pension credit. If they have not done so, will they issue guidance on the subject as soon as possible?
Does the Secretary of State accept that those of us who support the exceptional measures that the Government have taken in recent days would think it entirely perverse if he were to sign the death warrant of 3,000 post offices?
We will make an announcement on that in due course; the hon. Gentleman may have heard me bore on about that earlier in Question Time. We completely recognise the importance of the post office network for communities around the country, and that is why we will take the decision carefully and properly.
I return to the subject of housing benefit. What does the Secretary of State have to say to the 800 people in my constituency whose housing benefit is being cut, or is threatened with being cut, because of the new absurd way in which the broad market rental areas are being calculated? I understand that he has already undertaken to review the policy, but in light of its illegality, as declared by the House of Lords, will he make sure that all those people who have wrongfully lost out will be fully compensated when the policy changes, as it must?
The hon. Gentleman must accept that the Jobcentre Plus network is now far better placed for any slow-down than it was. When it comes to employment, in the Department for Work and Pensions and the Jobcentre Plus network there is a shift to the front line to help the people whom he describes.
According to figures released by the House of Commons Library, unemployment in my constituency was up 17 per cent. in the year to July 2008. Does the Minister agree that perhaps the time has come for the local economy, rather than the Stalinist housing targets imposed from Whitehall, to be the driver of the expansion of Milton Keynes?
I do not accept the point about Stalinist housing targets. There has been a lot of consultation on those targets across the growth area. The hon. Gentleman would do well to understand that Milton Keynes has a lot to offer, in terms of growth for the entire east midlands area. I am not sure whether he should knock that in the way that he does.
I am pretty sure the rate has fallen in the hon. Gentleman’s area. There are 3 million people more in work than there were in 1997. We have reduced the number of people on jobseeker’s allowance from 1.6 million to 900,000. That is in clear contrast to unemployment reaching 3 million under the Government whom he supported.
May I refer the Secretary of State back to the Post Office card account? Surely a time of banking crisis, when more and more of our constituents are looking to safe deposits and the Post Office and National Savings, is not the time to threaten the future of the Post Office card account. Will he give a better answer than he gave earlier?
I am sorry if the hon. Gentleman did not like the answer I gave earlier. I recognise that it was not a very interesting answer, but it is right that we should take the decision properly, with due process, and we will announce it to him and everyone else at the right time.