The Secretary of State was asked—
I am pleased to inform the House that the contracting process for the Work programme is going well. We have had more than 100 expressions of interest from would-be prime contractors. We will announce those who will be on the framework in late November and we will then move on to the next stage of contracting. All is on track to launch the Work programme in the first part of next year.
Is the Minister aware of the work of the Keystone Development Trust in Thetford, particularly the social enterprises it runs such as the green bikes scheme, which helps local people to get into work and gain practical skills? It is setting up a pilot that is due to be launched in November. Is the Minister willing to come and see the pilot in action?
I am delighted to hear about the work that is being done in my hon. Friend’s constituency, and when I am next in Norfolk I shall be delighted to find out more about the work being done there. Her comments underline the very important role that the voluntary sector and social enterprises play in getting people back to work. That is why we stipulated that prime contractors for the Work programme must demonstrate an ability to forge a team of specialist organisations, including social enterprises and voluntary sector bodies, that have the expertise that we need—either on a localised, geographic basis or in dealing with specific groups with a particular need—to ensure that we get people back into work. It will be a requirement of the Work programme that they have a place at the table.
I absolutely assure my hon. Friend that that will be a factor. As we select organisations to fill different geographic parts of the Work programme, bidders’ ability to demonstrate a knowledge, awareness and understanding of the geography they will be dealing with will certainly be a factor for us. In substantially rural areas, it is essential that organisations have the expertise to deal with the particular challenges of the rural economy and not simply with those found in towns and cities.
Does the Minister agree that the best personalised assistance that could be offered to a couple with six children who are facing the £500 benefit cap would be to advise them to split into two single-parent families of three children? As a family, they already consume £500 in benefits plus £250 in housing benefit, but as two separate units they would get £250 each in benefits plus £250 in housing, thereby costing the Exchequer £1,000, using two houses and being a split-up family.
I hope that the hon. Gentleman will recognise how important it is that work pays in our society and how frustrated working people are that it is possible for a family to receive, when the tax equivalent is taken into account, an income comparable to £35,000 a year in benefits. If we are to send the message that work pays, we have to limit the amount that the state supports people when they are outside work.
The Minister will be aware of the pilot scheme operating in Aberdeen and Aberdeenshire. In this extremely rural area, people are being asked to travel significant distances to appointments and the availability of suitable public transport is very limited. Will he consider taking appointments to the rural communities where people are rather than asking them to travel long distances to jobcentres?
One reason we are doing the two pathfinder projects is to understand precisely the issues and challenges that we will face when we roll out the programme nationwide next year. I am very happy to consider any of the lessons that have been learned from the experience in Aberdeen and Aberdeenshire to see whether we can do things better. In the mean time, we have provided additional funding to the two towns and cities involved in the first programmes—Burnley and Aberdeen—so that local needs that arise during the process can be met.
I applaud the payment by results model: it has worked in America and Australia, and it will work here. May I draw my right hon. Friend’s attention to the Department for Work and Pensions website of 19 July, where he makes the point that results have to be delivered before any payment is made? Lots of small charities that I have spoken to up and down the country say that that will mean that they simply do not bid for contracts, even if they are part of a consortium with a big corporate player. What will my right hon. Friend do to design a system to protect the interests of the smaller charities that are so important for the big society?
May I say what a great pleasure it is to have a question from my hon. Friend, and to see him in his place?
We are doing everything we can to ensure that the systems in place are suitable to ensure we have a mix of organisations. We have launched a specific new code of conduct for prime contractors—the Merlin standard—that is designed to ensure that they look after the commercial interests of smaller organisations on the framework, or that are working with framework providers. It is essential that we have a proper mix of organisations involved in the Work programme and we will take all the steps we can to ensure that that is the case.
A great deal will hang on the Work programme. We all remember the damage in our constituencies when unemployment reached 3 million before, and we remember which party was in government at the time. The warning last week from PricewaterhouseCoopers that 500,000 private sector jobs, as well as 500,000 public sector jobs, are under threat makes clear the danger ahead. The Minister will know of the fear of the small providers we have been talking about—social enterprises, rural organisations, community groups and faith groups—that they will be included in bids for marketing purposes, but dropped once the contract is awarded. How will contracting address that danger?
I welcome the right hon. Gentleman to his position. I look forward to working with him, as well as debating the issues, over the months ahead.
PricewaterhouseCoopers’ chief economist said he expected the private sector to be able to take up the slack from changes in the public sector. On smaller providers, the Merlin standard is designed to achieve precisely what he aims for. Under the terms of the Merlin standard, a prime contractor who wins a contract off the back of an attractive-looking consortium of organisations but dumps them all the next day can lose its contract. We shall be assiduous in ensuring that the interests of smaller subcontractors are protected, particularly those with the specialist needs we absolutely need for the Work programme. That is what the Merlin standard is designed to achieve.
I am aware that my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) has a huge interest in job clubs and has done a lot in her local area. I know that is appreciated.
There are 741 jobcentres, 35 contact centres and 78 main benefit delivery centres that process claims, investigate fraud and deal with inquiries. A full assessment of Jobcentre Plus services for 2009-10 was included in the annual report and accounts published on 26 July 2010. It was generally very positive. Jobcentre Plus has gone through a lot of difficulties over the past year and a half, but has done so really well. It is worth reminding ourselves that Jobcentre Plus helps 75% of claimants leave jobseeker’s allowance within approximately six months.
A carpenter from my constituency, Mr Pay, was told by Jobcentre Plus that delivering thousands of leaflets and advertising his services in the local media did not constitute actively seeking work and his jobseeker’s allowance was withheld. What assurances can my right hon. Friend give me that that will not happen again?
I understand that the Minister of State, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), has intervened in the case and is busy sorting it out with the jobcentre to make sure that the rules change so that we never see a repeat of it.
My right hon. Friend kindly mentioned the job clubs that I started in South Northamptonshire. They do excellent work, largely through volunteers, with a bit of support from the local council. I should be grateful if my right hon. Friend told us what plans he has to support the work of those job clubs as they make the transition to work clubs.
As my right hon. Friend the Minister has made clear endlessly, it is critical in the whole Work programme process, which includes the element of work clubs, that we work on the basis of our understanding of previous information to bring people together and make sure that their shared experience can help them overcome some of the barriers. That is a critical component. That shared experience, as my hon. Friend and many other hon. Friends in the Chamber will know, can help people through the difficulties, so that they do not repeat the same mistakes. It will be an essential part of their work experience.
The Secretary of State is already aware that there will be a lot of pressure on Jobcentre Plus in Aberdeen and Aberdeenshire over coming months, because the Work programme—even with the best will in the world—will not be in place until next summer, and in the meantime there will be the migration from incapacity benefit to the employment and support allowance. On the Government’s figures, at least 200 people will end up back on jobseeker’s allowance, with perhaps another 400 needing the work-related activity element. The Minister has already announced £50,000, but, apart from that, what extra resources will be put into Aberdeen and Aberdeenshire to make sure that the excellent workers in Jobcentre Plus are able to give the specialist help that my constituents and others round about so richly deserve?
We are, of course, aware of that, and the hon. Lady has, I think, discussed the matter with my right hon. Friend the Minister of State. As things stand, we think that the money that has been made available will be sufficient to cover the gap period, of which we are fully aware, so that nobody suffers a loss until they have gone through the system and had a chance to get on to the Work programme. We will, of course, keep the matter under review, and if there is an issue I guarantee the hon. Lady that we will make sure that it will not mean that people are penalised.
In the same vein, may I ask the Secretary of State what he is doing to measure the adequacy and effectiveness of private job agencies such as FourstaR Employment and Skills Ltd, which has a Government contract to help unemployed people in my constituency to find work?
The greatest form of measurement that we can use is that which will apply to the Work programme, whereby bodies will essentially be paid by results. In other words, if they do not get people back to work, they will not receive the money that will allow them to make any kind of profit at all. The best way of measuring them is to pay them when they are successful, and not, as happened with one scheme under the last Government, before they are successful.
We will make the Work programme available to incapacity benefit claimants who are moved back into the jobseeker stream. They will be eligible for support through the Work programme. We will pay an enhanced price to those providers who work with people coming off incapacity benefit to make sure that they get the tailored support they need.
I am grateful to my right hon. Friend for that reply. Will he make sure that Jobcentre Plus, work clubs, and disability organisations can ensure that no matter where people are—whether they are on incapacity benefit or in Remploy factories that are making losses—they know where they can access support and get the skills training that they need to get back into the world of work?
My hon. Friend is absolutely right. One of the central goals of our work over the next 12 to 18 months is to start a process of ensuring that far more people with long-term health problems and disabilities have the opportunity to get into the workplace. We will take whatever steps are necessary, primarily through Jobcentre Plus, to ensure that those people are handled effectively, and are steered to the right support through the Work programme. The aim is to achieve a goal that we all want, which is to allow as many of them as possible to find jobs.
The Minister is aware that a map of where incapacity benefit is most taken up would look like a map of Britain’s industrial heritage. In former shipbuilding constituencies such as mine, people do genuinely have long-term incapacity, which is associated with the work that they did. He will agree, of course, that that does not mean that they cannot work ever again. Is he absolutely fixed on what the question actually asks? It asks what support the Government can give to help people on incapacity benefit to move to work. I would like to hear him outline that support, rather than talking about the stick of benefit cuts.
The hon. Gentleman is absolutely right. I am sure that he would agree that one of the great failings of the past 13 years has been the fact that we have consistently had 2.5 million people on incapacity benefit, and the previous Government did absolutely nothing to help them to get back into work, which is a terrible tragedy and a huge waste. We intend to change that. The Work programme will deliver tailored, specialised support for those people—support that is relevant to them, and designed not in Whitehall but by the people working with them on the front line. We intend to make a difference to those people in a way that the previous Government did not.
May I report that the pilot scheme in Burnley has now started? We have managed to get the local jobcentre involved with a local recruitment company, Vedas Recruitment and Training. The scheme seems to have started well; my only concern is that funding may run out before we complete it. Will the Minister guarantee that funding will carry on for a short period afterwards, if necessary?
I thank my hon. Friend and all those in Burnley, including those in the local authority and other local agencies, who have come together to help make the first stage of the migration from incapacity benefit a reality. I assure him that it is my belief that the money that we have supplied to Burley should be sufficient to see us through to the point when the Work programme starts next year. If there are issues, I will be very happy to talk again, and we will see what can be done about them.
Winter Fuel Allowance
In winter 2010, the winter fuel payment will continue to be paid at the higher rate of £250 or £400, according to family circumstances. Decisions about the rates for future winters will be taken as part of the annual Budget cycle, as normal.
I think the hon. Gentleman is referring to the cold weather payments. The rate of cold weather payment will be announced on Wednesday in the comprehensive spending review. As the House knows, for the first 11 years of the previous Administration, the cold weather payment was frozen at £8.50 and, although it was increased to £25 for two years in the run-up to the election, the previous Administration made no financial provision at all to keep it at £25.
According to the National Pensioners Convention, 36,700 older people died of cold-related illnesses last year. Will my hon. Friend’s Department work with the Department of Health and redouble efforts to reduce that unacceptably high number?
My hon. Friend is right. Excess winter deaths are a scandal. That requires work across Departments, as well as our commitment to the winter fuel payment and the cold weather payment system. We are working with our colleagues not just in the Department of Health, but the Department of Energy and Climate Change, because proper home insulation is a key to tackling excess winter deaths.
Last week the Prime Minister said he stood by the pledge that he made during the election about retaining the winter fuel allowance. I note with interest the answer given by the Minister. Will he confirm, for the avoidance of doubt, that everyone who is today entitled to the winter fuel allowance will still be entitled to it on Thursday?
Work Capability Assessment
We believe that the work capability assessment is effective at identifying a person’s functional capability for work and work-related activity, and very much more so than its predecessor, the personal capability assessment. However, I am clear that we must get this right, particularly with the large-scale migration beginning next year. On taking office we implemented some of the recommendations of a review carried out under the previous Administration. I have commissioned a new review under the chairmanship of Professor Malcolm Harrington of Birmingham university, with input from some of the leading figures among the mental health charities, to try to make sure that we get this right—that we deal with any rough edges that there may be in the system before the migration next year.
There are a number of conditions—for instance, MS—where the health of an individual may vary daily. What consideration has the Minister incorporated in the work capability assessment to ensure that the fluctuations in someone’s daily health do not affect their entitlement?
My hon. Friend is right. This is the central issue that we have to get right. It is one of the reasons I asked Professor Harrington to include Paul Farmer, the chief executive of Mind, in his review, and why I invited mental health charities to make practical suggestions about changing the work capability assessment to identify precisely the issues that my hon. Friend has highlighted. I want to get this right. It is in no one’s interest that people should be given a steer in the direction of work if that should not happen to them. I want to look after those who genuinely need ongoing support. We will do everything we can to get this right.
Many of my constituents complain that too much weight was placed on one chat with one individual on a particular day, as my hon. Friend the Member for City of Chester (Stephen Mosley) stated. That might be a good day for their condition, and the chat with that one individual may not provide a long-term in-depth knowledge of the claimant’s work capability. What help can the Minister give to assure my constituents that proper weight will be placed on the opinions of the claimant’s full medical team?
As I say, we must get this right. I have sat through a work capability assessment, so I understand exactly the issues that people are raising. I have looked carefully at the structure of it and have invited people with expertise to take part in the process. We will do everything we can to get it right. What I will not do is condemn people with mental health challenges to a life on benefits, with little opportunity of getting into employment. That would be the wrong thing to do for them. They deserve better and they will get it from this Government.
The Minister will remember one of his ministerial colleagues describing the Conservative party as the “nasty party”. Given the obvious demonising of unfortunate people who need welfare benefit, should he not just stand up, give it to us straight and say, “Be afraid, be very afraid, the nasty party is back”?
That is precisely the kind of negative politicking that I hope we will not have from the Opposition over the next few months. I believe, and I think that most Members believe, that people with long-term health problems are better off being helped back into the workplace, if possible. They are better off than they would be if they spent a lifetime on benefits, and that is what all the charities that work with them also say to us. I want to do the right thing by those people, and I hope that Members on both sides of the House will unite behind a programme designed to deliver that.
Contrary to the Minister’s earlier assertion that our Government did nothing to deal with incapacity benefit, I must say that that is clearly not the case, because all of us will have heard our constituents’ experience of the work capability test. The hon. Member for Edinburgh West (Mike Crockart) mentioned some of the problems, and one issue that some of my constituents have raised is that written reports from their doctors or other people are not taken into account at all; the assessment is based simply on the test carried out by the company in question. Will the Minister agree to allow written documentation as part of the test?
The hon. Lady is not right, because written evidence can already be submitted to an inquiry. The decision maker in Jobcentre Plus will look at written matters as well, and that is right and proper. I have also asked those taking responsibility for the test to ensure that we maximise the discretion that is available to all the professionals involved, so that we get the assessment right. It is of course proper that we do so, but although the previous Government introduced the assessment for new claimants they left the 2.5 million people on incapacity benefit untouched. That was a mistake, and I hope that we can all work together to put it right.
Total fraud—benefits and tax credits, involving my Department and the Treasury—stands at £5.2 billion. Total welfare fraud stands at £1.5 billion, involving £1 billion in benefits and about £500 million on tax credits. My Department performs about 500,000 data matches per year, and under the new strategy we will use more private sector data matching to try to catch fraudsters and to stop errors. We will recruit more than 200 new anti-fraud officers to sanction about 10,000 fraudsters every year, and there will be a new three strikes regime to ensure that the worst cases, of criminal gangs and larger-scale identity fraudsters are robustly dealt with. It is worth reminding the House that the universal credit system reform will go a very long way to helping to resolve some of the problems concerning errors, which amount to a huge and significant sum each year.
I thank my right hon. Friend for his response. Many of my constituents will be horrified to learn that during the last year of the Labour Government, prosecutions for false benefit claims slumped by 11%. I should therefore be grateful if he confirmed what action he intends to take to reverse that worrying trend.
As I said earlier, we will undertake a major drive on that issue. We think that, taking on board what the previous Government did, we need to take further action. There have been reports about the issue, and I can clarify some matters. The three strikes policy to which I referred consists of, first, essentially the loss of benefit, sanctioned for four weeks, going up to 13 weeks; secondly, the loss of benefit from 12 weeks to 26 weeks; and, on third conviction, the loss of benefit sanctioned for about three years. We will look further at the penalties, particularly when we detect criminal activity by a consortium trying to defraud the state. The reality is that we have to undertake that drive, and to those who moan about it and say that it is wrong, I must say that the main problem that we face is that taxpayers, who are often on low earnings, pay their taxes to support people in difficulty, and they do not want to see their money wasted, going to people who, frankly, set out to defraud the system. I hope that Members on both sides of the House can agree on that.
When Members of Parliament hand on to their local offices allegations of fraud made by their constituents, will the Secretary of State arrange for the MPs concerned to read the fraud report to ensure that the job has been properly done?
The Child Maintenance and Enforcement Commission has a range of enforcement powers that it can deploy to secure payments from parents who refuse to pay. However, non-resident parents are given every chance to pay their child maintenance, and only when they are deliberately non-compliant will the commission use these powers.
I thank the Minister for that reply. All Members of this House will have constituents who are not receiving the child maintenance to which they are entitled because their former partners are giving the Child Support Agency the run-around by changing jobs or the self-employed are hiding their true earnings. The Government rightly do not allow these people to avoid paying tax. Surely, therefore, HMRC data could be used properly to assess child maintenance liability. Alongside the Government getting tough on tax avoidance, will they get tough on child maintenance avoidance?
I thank my hon. Friend for that question. She is absolutely right that this data can help particularly to ensure that individuals pay the money they are due to pay. Indeed, we will consider that under the planned revisions to the CSA’s IT system. I should like to reassure her that the Child Maintenance and Enforcement Commission is already putting in place a number of other measures to ensure that we increase enforcement actions. Indeed, as a result of those measures we have seen a significant increase in enforcement actions in the past 12 months.
Given that a significant cause of childhood deprivation is the failure of so-called absent parents—usually fathers, but sometimes mothers—to pay for their own children, and given that, to be blunt, both previous Governments, despite good efforts, found this a difficult nut to crack, will the Minister consider new measures to ensure that we do not just go after the easy targets, such as those on salaries and in the public services, but find new ways of getting to fathers, some of them serial fathers, who are determined to avoid paying for their own children and expect other mums and dads called taxpayers to do their job for them?
I thank the right hon. Gentleman for his question. As I said to my hon. Friend the Member for East Dunbartonshire (Jo Swinson), a number of measures are in place to crack down on the very people he is talking about. We now have 400 members of staff who are chasing these sorts of historical arrears. It is also about embedding a culture change; that is why we put at the heart of our coalition agreement a commitment to shared parenting that will drive the sort of culture change that he is after.
Beyond the problem of recalcitrant parents, there is also a problem within the system. Last weekend, a constituent of mine said that she has waited two years to have an appeal in her favour sanctioned and moved forward. Every time, she simply gets a letter saying, “You’ll be allocated a number in 20 days’ time”, and it never happens.
I thank my hon. Friend for that case in point. If she wants to raise any issues with me, I will be glad to speak to her separately. She makes a good point about ensuring that there are timely assessments. One in four parents with a liability still do not make a payment. The previous Government did not put in place the necessary measures to change the situation, and we will be doing everything we can to do that.
We have not yet made an assessment of the direct impact of wage levels on benefit dependency, but we firmly believe that work must pay. Within the current system, we have the anomaly that some individuals can keep as little as 4p in an extra pound earned if they move up the income scale, and a small number of individuals receive more than £26,000 a year in benefits—a substantial amount when compared to the incomes of most working households. That cannot be right, and that is why we are bringing forward radical welfare reform proposals to ensure that work pays.
I thank the Minister for his response. I hope that he agrees that the national minimum wage gave a massive lift to many working people throughout the UK, and it is now time to move on and progress to a decent living wage. When wages are low, it is no surprise that benefits are often worth more than work. In my view, that is not a problem for benefits, but whatever the problem I hope he agrees that the solution is a fair day’s pay for a fair day’s work.
Clearly, as an Administration we would like employers to move people up the income scale, and for there to be wealth in the country to enable our businesses to do that. Of course, they have big challenges to overcome after the past few years and all the economic problems that were created under the previous Government, but I share the hon. Gentleman’s aspiration. I would like people to move up the income scale, but above all else, we want to ensure that, in all circumstances, work pays. That is why we are introducing the universal credit and the changes that we are making. There should never be a point at which somebody says, “It’s not worth my while going back to work.”
Equality (Disabled People)
The Government are committed to equality for disabled people and to implementing the UN convention on the rights of disabled people. There is a full programme of work in my Department—and right across government—to deliver on that commitment. We have commenced the majority of the Equality Act 2010 this month, we are improving support for disabled people to enter and stay in employment through the Work programme, Access to Work and Work Choice, and we are piloting the right to control from the end of this year.
I thank the Under-Secretary for that reply. I recently visited the Newlife Foundation, a national charity based in my constituency, and was told about the huge problems faced by families with children with disabilities and terminal conditions. I was concerned to hear that children under three are not entitled to DLA mobility allowance, and about the impact of that on their families. Will the Under-Secretary confirm whether that is the policy and, if so, whether the Department has any plans to reconsider it for the most vulnerable groups?
I join my hon. Friend in paying tribute to the Newlife Foundation, particularly the work of Sheila Brown in setting up that important local charity. My hon. Friend is right to identify the complexities of the benefit system, particularly the way it can affect children and families. He will know that, in the emergency Budget, the Chancellor announced a review, and I would like to offer to meet the Newlife Foundation and Sheila Brown with my hon. Friend to discuss that matter further.
Will the Under-Secretary confirm that an equality impact assessment will be published following the comprehensive spending review? Are the Government prepared to publish all the analysis that was undertaken of the implications of the spending review, particularly its impact on disabled people? In the light of that, are the Government willing to make a statement to the House on the full implications for disabled people?
I welcome the hon. Lady to her position—I believe that this is her first time at the Dispatch Box. I would like to reassure her that we already have the processes in place to undertake an equality impact assessment of all the measures that affect disabled people. We have said that we will make it publicly available.
I have been contacted by Employ-Ability, a charity in my constituency that helps people with mental health difficulties and disabilities to get back into work. Those people are concerned that, if they are no longer eligible for incapacity benefit or employment and support allowance because they recover, they will lose the working tax credit at 16 hours and also their return-to-work bonus at £40 a week for a year. Will the Under-Secretary ensure that it is financially worth while for those people to get back into work?
I thank my hon. Friend for his question, in which he outlines some of the complexities that disabled people face when they try to get back into the workplace. As my right hon. Friend the Secretary of State said earlier, we want to ensure that work pays for everybody who wants and is able to get back into the workplace. That principle underpins all the work that we are undertaking.
13. Whether carer’s allowance payments will be included in the proposed cap on benefit payments. (17493)
We expect the benefit cap to apply to the combined income from all main out-of-work benefits. However, we will exempt all households with someone entitled to disability living allowance, many of which will contain claimants receiving carer’s allowance.
I thank the hon. Gentleman for his question. We obviously want to ensure that the policy works for everybody involved. The benefit system is designed to maintain a basic income for carers when caring responsibilities prevent them from working full time. It is right that carer’s allowance is paid with reference to what families could expect to earn if they were in fully paid work, but we will keep the policy under review and ensure that it works for carers.
Mortgage Interest Payments
We are in discussions with mortgage lenders about the scope for them to freeze benefit claimants’ mortgage accounts and apply a standard interest rate for a fixed period. In return for lenders receiving up-front interest payments from the Government, claimants getting help with their payments would not accrue any arrears or face the threat of repossession.
I thank my hon. Friend for that answer. Does he agree that, in these times, when perhaps there will be a lag in finding jobs, speed is of the essence, particularly for vulnerable people in our society, when making decisions about future support for mortgage interest?
We will certainly move as fast as we can on this issue. My hon. Friend may be aware that had we done nothing the higher rate of 6% was due to expire at the end of this year and revert, under the previous formula, to just over 2%. We felt that that was unfair, and we will pay 3.6%, which is the average mortgage rate.
The Council of Mortgage Lenders indicated that financial support from the Government for home owners who got into trouble was one of the key reasons fewer repossessions occurred in recent years than in other recessions. Given the impact of the reduced levels of support for mortgage interest relief and the cuts in housing benefit, does the Minister think that the number of people requiring financial support because they are homeless will be higher or lower than now at the end of next year?
The hon. Lady is very knowledgeable about housing matters and I welcome her to her new role. She may not be aware that we will spend more money in the next two years on support for mortgage interest for people who are out of work than the previous Government planned to do. They planned to cut support to 2%, which would have led to many more homelessness cases.
This is a matter for my right hon. Friend the Chancellor of the Exchequer, but the main purpose of child benefit is to support families resident in the UK. However, child benefit is classed as a “family benefit” under EC social security co-ordinating regulations. When an EEA national works and pays compulsory national insurance contributions in the UK, that person is entitled to UK family benefits, even if their family remains in another EEC country.
I note the Minister’s reply, although at the 2003 European meeting agreeing the eligibility for child benefits, the British Government were represented by the Secretary of State for Work and Pensions, which suggests that the Department has an interest in this matter.
Would the Minister, together with colleagues, agree to set out in the Library within the next month her proposals for reforming a system under which the British taxpayer not only pays child benefit to non-UK European families who do not work and whose children live abroad, but pays up to four times as much in benefit as the children get from their own Government?
I can understand my hon. Friend’s frustration about this matter, but I reiterate that it is a policy area for the Treasury and it is also an issue that we have inherited. Many other nations are as concerned as he is about this issue and I am sure that my colleagues in the Treasury will be looking at it in detail.
Does the Minister agree that her own Department has indicated that enlargement of the European Union has benefited the economy of this country? If people who come from the EU pay their taxes, they should be entitled to get child benefit.
As my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay) said, it is the inconsistency and the difference between benefits payable in this country and in the home country that rightly causes concern. It is right that the Treasury should look at this issue in detail.
Workplace Pensions (Automatic Enrolment)
The Government remain committed to the introduction of automatic enrolment. We have now received the conclusions of the review that we set up, and we will make an announcement to the House shortly. I am pleased to confirm that we will go ahead with auto-enrolment according to the previously intended timetable.
Saving for old age is often not viewed as a pressing concern for the young. Given the likely pressures on graduate funding following Lord Browne’s review, it is likely to fall even lower. What steps will my hon. Friend take to encourage a savings culture among the young, and will he please ensure that the future needs of the young are taken into consideration when setting the age limit for automatic enrolment in workplace pensions?
We have asked our review group to look at the age limits for auto-enrolment, but my hon. Friend is right to say that getting young people interested in pensions is a challenge. We think that automatic enrolment will be part of the answer to that because, for the first time, they will have to decide whether to stay in a workplace pension. We also have to ensure that it always pays to save.
The beauty of auto-enrolment, as set out by the Labour Government, was that it would benefit all workers. Will this Government honour that commitment, which will support those on low incomes most of all, as well as temporary and agency workers, who often have the worst pension provision? Or will the Government water down those plans, storing up problems of pensioner poverty for the future?
I welcome the hon. Lady to the Dispatch Box for the first time, and I look forward to working with her to establish cross-party consensus on pension reform wherever possible. She mentioned the actions of the last Labour Government, which I think she will recall were taken on an all-party basis. Our review was not meant to undermine automatic enrolment but simply to make it work, and work effectively—and that we will do.
Work Capability Assessment
As I indicated in my earlier remarks, I hope that the Harrington review will enable us to make the work capability assessment as appropriate as possible for the months ahead and the start of the migration from incapacity benefit to employment and support allowance. However, we will continue to review the work capability assessment on an ongoing basis, and if any opportunities arise to improve it, we will take advantage of them.
I have been approached in my constituency by many carers of people with severe mental health difficulties who have expressed concern about the work capability assessment. Does the Minister agree that we need to see how it can be adapted and refined to meet the requirements of severely mentally ill people?
I absolutely agree with my hon. Friend. That is why I have said to leading mental health charities that I actively seek their input on how we can improve, in particular, the wording of the different elements of the assessment. Equally, however, I stand by my view that, where we can, it is better to help people with mental health challenges into work than to leave them on benefits long term, doing nothing.
I draw the House’s attention to the fact that today, as I referenced earlier, the Department for Work and Pensions and Her Majesty’s Revenue and Customs published a joint strategy to tackle fraud and error in the benefits system, which we believe should save £5 billion each year. The proposals in the fraud and error strategy, which together represent an additional £425 million of funding over the next four years, will, we believe, deliver a £1.4 billion reduction in fraud and error by 2014-15.
Can the Secretary of State explain to a large number of my constituents why he reduced the support for mortgage interest payments before his Department ensured that mortgage lenders would average out rates? Why did he communicate this only a few days before it was reduced, and is it not true that lenders are fighting this reform tooth and nail?
I do not know whether the hon. Gentleman was listening to the Minister of State, my hon. Friend the Member for Thornbury and Yate (Steve Webb), when he pointed out that the last Government left plans to slash that support. It is we who have actually brought it to the average, which means that people will do better under us than they ever would have done under the last Government—so an apology would do very nicely thank you.
T2. I know that the Secretary of State is aware of conversations I have been having in my constituency with youth leaders about how we can communicate changes in the welfare programme to young people who do not watch the Parliament Channel and sometimes do not read the papers. Do we have a campaign plan to try to communicate the changes to them, perhaps through texting or facebooking and the internet? (17507)
We do indeed. My hon. Friend is right to draw the matter to the House’s attention. Using new media, it is important that we ensure that young people are brought fully into the net, particularly through voluntary sector organisations, which are much better at using the new media. However, I must also draw her attention to the Department’s commitment—a commitment that I have made—to ensure that older people approaching retirement should not retire without the ability to use the net and the web. That is a big commitment but one that we will stand by.
Last week, PricewaterhouseCoopers suggested that 1 million jobs could be lost over the next year. Given the answer we just heard from the Secretary of State and the present uncertainty in the labour market, will he confirm again that people affected by the change he just discussed will do very nicely—as he said—and assure the House that the reduction in the interest rate used for the support for mortgage interest programme will not lead to a rise in the number of repossessions among the approximately 255,000 people affected?
I welcome the right hon. Gentleman to his position, although it would have been nice if he had risen at the Dispatch Box and first apologised for being part of a Government who left plans to cut the support to mortgage holders—[Interruption.] Yes, as the Minister of State, my hon. Friend the Member for Thornbury and Yate implies, they planned to slash the rate. So when the right hon. Member for Paisley and Renfrewshire South (Mr Alexander) next gets to the Dispatch Box, perhaps he will tell the world that he was going to do that, and apologise. We will give the support necessary and reform the system. As he knows, organisations and individuals, including a lot of very senior businessmen today, have said that our economy will grow, that they will provide the jobs and that therefore this Government will be right.
I am delighted to tell my hon. Friend that we are looking to expand the support available to people in parts of the country that are particularly affected by unemployment and that have a small local private sector economy. We will provide enhanced support from early next year, including through more money than is currently on offer to help the self-employed and—this is particularly important—through mentoring for small businesses, to ensure that people have practical advice and guidance so that they not only set up small businesses, but those businesses survive, grow and flourish.
T5. Will the Secretary of State join me in recognising the great contribution that the 54 supported employment Remploy factories make to our country? Even at this late hour, will he agree to lobby the Treasury on their behalf? It would be entirely unfair and unacceptable for 3,000 of the most vulnerable disabled workers to be handed their P45s by the Chancellor on Wednesday. (17510)
I thank the hon. Gentleman for his question, and I agree that Remploy plays an important part in providing employment services for disabled people. As he would expect, we have been looking at the contribution that Remploy makes as part of the spending review process. I would just urge him perhaps not to believe everything that he reads in the newspaper, and say that he will get further details on Wednesday when the Chancellor speaks.
T4. Following a succession of soundbites from the previous Government, who promised to be tough on benefit fraud but delivered, as usual, very little, can my right hon. Friend the Secretary of State explain to the House why he thinks the new initiatives that he has proposed today will succeed where those of other Governments have failed? (17509)
Yes, I can. One thing that it is important for everybody to understand is that not only will we have the three-strikes policy, but we will try to disincentivise people in what I call the low-level area of fraud, which is when they knowingly fail to report changes in their circumstances. In those cases, there will be the ability to fine them £50 on the spot, which will have a big effect on people saying, “Well, I forgot and I didn’t do it.” Providing that we think they knew, it is time they realised that they have, in fact, defrauded the state as well.
T6. Does the Secretary of State accept that the result of changing indexation from the retail prices index to the consumer prices index is that pension increases in 2012 will be cut from 4.6 to 3.1%? Is that what he regards as fairness? (17511)
The right hon. Gentleman is probably not aware that the planned increase in 2012 under the Labour spending plans was 2.4%, which was what the previous Government thought earnings would be. Whatever the pension rises, we have guaranteed that the increase will be at least 2.5%, so whatever we do, it will be more than he had planned.
T7. Before the election, one of the policies that resonated most with my constituents was the Conservative plan to eliminate the couple penalty—the absurdity whereby people can be better off splitting up as a family than staying together. Can my right hon. Friend assure me that that penalty will be erased completely in the next few years, and that there will be no unintended consequences of any other policies that we might be putting forward? (17512)
I must say that this remains a target for us, which is—[Interruption.] It is all very well for the Opposition to laugh: they are the ones who created the couple penalty. They could not care less whether people had to split up because of their benefits bills; the disincentives were all there and they created them. We will do our level best to eradicate them.
On the Secretary of State’s announced crackdown on people fraudulently claiming benefits, the latest figures from his Department for fraud and error in the benefits system show that £1 billion is due to fraud, but that another £1 billion is due to official error. How will he ensure that his campaign against fraud is as high profile as any campaign against official error in his Department?
I thank the hon. Lady for her question. The reality is that going after error—and not just fraud—is a critical component. As I said earlier, one of the big changes that we are making is the reform of the benefits system, which is so incredibly complex that many of my officials say that often they simply cannot quite figure it out until 45 minutes or an hour of serious study for each case. Simplifying the system will reduce the scope for error, which will be in the interests of all her constituents and members of my Department.
T8. A constituent with bowel cancer has been found fit for work, despite having his colostomy bag changed 16 times a day. He is now going through appeal. How will my right hon. Friend ensure that those who are genuinely and obviously not fit for work are dealt with more humanely? (17513)
The point about cancer patients is a particularly apposite one. One thing I was astonished to discover on taking office was that we still had tough return-to-work requirements for those going through chemotherapy. Anybody who knows someone who has been through that knows it is a time when people cannot possibly return to work. We have sought to change that and we will make a number of other changes through the Harrington review. As I said earlier, our goal is, above all, to get this right. I do not want to do the wrong thing by those people who need support; I do want to do the right thing by the people with the potential to get back into work and make a better lot of their lives.
Does the Minister agree that we want to minimise the number of people claiming mortgage interest payments by keeping them in work? Does he agree that the best way of keeping my constituents in work is to ensure that the aircraft carrier goes ahead?
T9. My right hon. Friend would no doubt agree with me that the last Labour Administration presided over a system of welfare that trapped people in poverty and ignored devastatingly high levels of workless families in our country. Will he tell the House what he is going to do about it? (17514)
My hon. Friend will know that we are planning to bring forward a White Paper on reform of the benefits system soon. As I alluded to earlier, one of the biggest problems is that the existing benefit system has become so complex, with so many different withdrawal rates and different tapers—some at gross, some at net levels—done through different Departments. By bringing all that together and simplifying the system by giving people basically one withdrawal rate, we should be able to allow them to understand what they will retain, while also ensuring that work always pays. That, I think, is in the interest of everyone in the House.
I welcome what the Minister of State, the right hon. Member for Epsom and Ewell (Chris Grayling), said previously about looking into the work capability assessment. I met a delegation from Chesterfield and north Derbyshire on Thursday, although they were due to have a meeting with him. One in the group was told that she was fit to work four days before a cancer operation, while another who had a plaster cast the whole length of his arm was told that he was fit to work. Unfortunately, the Minister cancelled his appointment to see them on the day before they came down to London. Will he commit to seeing them? If he really wants to learn about the work capability assessment, he should meet some of the people who have been affected by it.
I did not cancel any appointment, and I had a meeting with the TUC official who organised the rally on that day. What I cannot do is get into discussion of every individual case. My goal remains to do the right thing by those people who are on incapacity benefit in the long term. We need to modify and refine the work capability assessment based on the best information available to us. What we face today is what we inherited from the previous Government. What I am doing right now is trying to improve it so that it is as foolproof as possible when we come to the national roll-out next spring. I will do my best to get that right and I hope there will be cross-party support for doing so.
It is always very difficult to know what keeps auditors happy—or if they are among that breed of people who are never happy—but the reality is that we are in discussions with them about the need to be a little more realistic between the two groups to make sure that the accounts are signed off in future. After all, this Department has made huge strides—both under the last Government and this one—to be more efficient. That has been acknowledged by the auditors, so perhaps it is time for us to come to a conclusion.
The Government have said that the June Budget will have no impact on child poverty up to 2012. Will the Minister confirm that the new benefits cap will not change that fact? Will he publish the figures to demonstrate the effect of the cap on all categories?
I thank the hon. Lady for her question. As she knows, we will produce our child poverty strategy in full by March next year. We will shortly go into consultation on it and I hope that she will contribute. On the effect of the cap on families living in poverty, as the Minister of State, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), said earlier, this is about people earning the equivalent of a gross income of £35,000 a year; the majority of families earning that would not fall into poverty.
How will the Minister ensure that lessons are learned from the review of the new work capability assessment, including, as discussed earlier, from the use of more medical information from claimants’ doctors, and how will those lessons inform the design of the medical assessment process for disability living allowance claimants when that is introduced?
I thank my hon. Friend for her question. I should like to set the record straight on that. There is no intention to introduce a medical assessment for DLA. The work capability assessment, which, after all, tests people’s ability to get into work, is very different. DLA is a benefit that is paid to disabled people to make up the additional costs that they incur for being disabled; it is not linked to their ability to work.
I welcome the earlier remarks of the Under-Secretary on achieving equality for disabled people by helping them back into work. Does she recognise the excellent work done by the RNIB college in my constituency to help those who are blind or visually impaired back into work? Will she visit the college with me at some point?
I thank my hon. Friend for her question. We have many different strategies for supporting disabled people back into work, and I know that the college in her constituency has done a great deal of work in that respect. I believe that there are plans to meet officials from her college in the not-too-distant future.
Many people in Sefton who work in the private sector rely for their livelihoods on customers who work in the public sector. What action will the Minister take to ensure that as a result of the comprehensive spending review, there is adequate provision in jobcentres around the country for both private and public sector workers?
Where we have issues in the labour market, whether public or private sector, we have a rapid response team within Jobcentre Plus that is available and able to provide advice to those who have lost their jobs. If the hon. Gentleman had read the letter that appeared in this morning’s media from some of our leading business people, whose businesses have a presence all around the country—we are also advised of this by the Office for Budget Responsibility—he would know that the private sector, in the right environment, with the deficit dealt with, can more than make up for any job losses that result of our dealing with the deficit, which we inherited from the previous Government.