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Oral Answers to Questions

Volume 523: debated on Monday 14 February 2011

Work and Pensions

The Secretary of State was asked—

State Pension Age (Women)

We published a full equality impact assessment as part of the White Paper on our proposals to bring forward the increase of the state pension age to 66, which sets out the effect on women of those changes.

The coalition agreement states that the parties agree to

“hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.”

Will the Minister explain why he saw fit to U-turn on that promise and to start to increase the women’s state pension age to 66 from 2018?

If the hon. Gentleman looks at the process of raising the state pension age to 66, he will find that early in 2020, the age will still be 65 and some months. It will not start to rise to 66 until April of that year.

Although I welcome the equalisation of the pension ages, does the Minister agree that a small group of women born, like me, in the middle months of 1954—a vintage year—will be affected disproportionately by the way in which it is being phased in? Will he look again to see what can be done to help that group of women?

My hon. Friend is right that of the 2.6 million women who are affected, 33,000 were born in the vintage months that he describes. That group will have to delay for up to two years before they receive their state pension. One reassurance I can offer is that those women—and indeed he, should he find himself in that situation—will be eligible to apply for jobseeker’s allowance or employment and support allowance, so they will not be left destitute.

The Turner commission recommended a 15-year lead-in for such changes. Those women who were born in 1954 will not benefit from that. Does the Minister think that fair?

The hon. Lady raises the important point that notice periods are important. The challenge we faced was that the time scale for raising state pension ages that we inherited was staggeringly leisurely. The Conservative party manifesto and the coalition agreement made it clear that we would move faster. The state pension age for men was set at 65 a century ago—I think we need to move faster.

A constituent of mine who has worked all her life and has saved for her own pension falls into the vintage year of 1954. She cannot bring herself to be on jobseeker’s allowance at the end of a hard-working career. It seems a little harsh to suggest that as the only outcome.

I am grateful to my hon. Friend. Jobseeker’s allowance and employment and support allowance are available as safety nets, but I appreciate that that is not what many people will want. The vast majority of the women in this birth cohort are still working. In the world that we are going into, we anticipate that more people will work into their 60s—that is part of the change. Many of them will be able to support themselves, perhaps through a part-time job, to cover the gap in years.

The Minister’s response is inadequate. The Government’s coalition agreement is clear. Under the Government’s plans, the state pension age will start to rise to 66 in 2018, not in 2020 as promised in the coalition agreement. Some 33,000 women, currently aged 56, will have to wait exactly two years longer to get their pension, with little time to prepare. The average retirement savings of those women will provide them with just £11 a week in retirement. They simply do not have the savings to draw on to accommodate these moving goalposts. Does the Minister honestly believe that these changes for women are fair and proportionate?

I have common ground with the hon. Lady on two points. First, I deplore the fact that the pensions policies of the previous Government have left women in this group with so little pensions savings to draw on. Secondly, she is right that we could go more slowly. We could, as she has proposed, delay until 2020 before doing anything, but we would then have to find an additional £10 billion that the present schedule provides for us. I have not yet had the letter or parliamentary question from her suggesting where that £10 billion might come from.

Work Capability Assessment

2. What discussions he has had on changes to the work capability assessment for those with variable conditions. (39801)

We are, as the House knows, committed to improving the work capability assessment so that it is as fair and accurate as possible, including for people with variable conditions. It currently provides for variable conditions, but we are implementing all the recommendations of Professor Malcolm Harrington’s independent review. I have asked Professor Harrington to take forward the next review, which will include a detailed look at how the assessment deals with fluctuating conditions, to see whether we can make further improvements.

The Minister will be aware of the concerns of people who have conditions such as chronic fatigue syndrome, who have good days and bad days. They are anxious to ensure that they receive fair treatment through the work capability assessment, taking account of their ability to complete activities on a regular basis. Can the Minister provide an assurance that the variable nature of such conditions will be fully considered, and that the assessment will identify the appropriate level of support for individuals to enable those who can to get back into work?

I can absolutely give my hon. Friend that assurance. Indeed, I have asked Professor Harrington to work with people who specialise in ME as part of his review. I do not want us to write off everybody with a particular condition. It is important to identify who can potentially work and who cannot, and to provide them with the appropriate support. That is the goal of our policy and what we will seek to do, and I am mindful of the concerns that my hon. Friend raises.

The sharp increase in job losses forecast this morning by the Chartered Institute of Personnel and Development will make it harder still for people with health conditions to find jobs. Last week, the Minister tabled regulations that modify the mental health descriptors in the work capability assessment, but at the same time, following his acceptance of Professor Harrington’s recommendations, to which he has referred, an alternative set of descriptors is being drafted by Mind, Mencap and others. Should he not wait until he has received their advice before he makes changes?

As the right hon. Gentleman knows, we ourselves had one review carried out last year by Professor Harrington, and we also inherited a set of recommendations from an internal review carried out by the previous Government. I considered carefully the recommendations left to us by the right hon. Gentleman and his party, and the internal review recommended changes that would increase the number of people with mental health problems who go into the support group and receive unconditional support. His party was right to make that recommendation, and I am pleased to accept it, but we will take all further steps necessary to ensure that people with mental health problems are treated fairly and properly by the system.

Universal Credit

3. What assessment he has made of the likely effect of the introduction of universal credit on the level of the couple penalty. (39802)

6. What assessment he has made of the likely effect of the introduction of universal credit on the level of the couple penalty. (39808)

The couple penalty is often slightly misunderstood. It is normally created when a higher benefit rate for single people means that couples are materially disadvantaged by living together. It is generally recognised internationally that a saving is made when two people live together, and the figure given by the OECD and others is about 75% at most. In the UK, under the benefit system left by the last Government, workless couples received only 60% of the benefits received by two single workless people, which I believe put us in the bottom four OECD countries. Simultaneously, the proportion of people forming couples is at its lowest at all income levels, about 15% down against other countries. The Institute for Fiscal Studies recognises that the universal credit will start to make inroads into that problem.

I thank my right hon. Friend. Does he agree that it cannot be correct that two people who choose to live together as a couple should be penalised by £30 a week in benefits? Surely it is better for people to stay together as a family and be able to care for their family together.

From the figures that I have just given and those that we have looked at, there is no question but that the disparity between where the last Government left us and where it is generally accepted that couples should be is the real cause of the problem that is making people live apart, particularly those on lower incomes. I draw attention to the right hon. Member for Birkenhead (Mr Field) and his interesting “Panorama” programme. He is to be congratulated on his work in this area, and he has made the very good point that it is madness that the system drives people apart rather than keeping them together.

There is a welcome across the House for the universal credit, not least because of the impact it will have on low-paid couples in my constituency and across the country. Will my right hon. Friend, on this particular day, reaffirm his commitment to supporting and advocating fiscal incentives for the institution of marriage?

My hon. Friend knows very well that the issue of fiscal incentives is one for the Chancellor, and I will certainly pass his comments on to the Chancellor and the Prime Minister. When it comes to the benefits system, Members of all parties should recognise the invidious position that even though we know children and elderly people do better where families with two parents work together for them, the system is driving couples apart. That surely cannot be right, and I hope that the matter will unite Members on both sides of the House, as I am sure the right hon. Member for Birkenhead does.

Does the Secretary of State accept that perhaps the most significant social security reform that he could introduce, if we are concerned with the safe nurturing of children, would be the elimination of the penalty against couples?

I agree that that is an objective that we want to work towards. Clearly, any such change has financial implications, as the right hon. Gentleman knows. As I said, the good thing about universal credit is that it starts the process of eradicating the couple penalty, particularly for people on low incomes. I pay tribute to him, because he has gone on about this for longer than anybody else—perhaps everybody is now listening. He is absolutely right that we must surely not force couples apart, but help them to stay together.

Does the Minister accept the findings from the Institute for Fiscal Studies that the incentives for lone parents to work more than 16 hours per week will be reduced under the universal credit?

I welcome the IFS report, which was a fair one. The IFS was positive about the universal credit—most of all, it said that the universal credit is a progressive measure, because it helps the people who are worst off, many of whom, of course, are lone parents. The answer to the hon. Lady is that, yes, some further up the income scale will see a slight change in their marginal deduction rates, but those down in the lower deciles will see a net benefit to their take-home pay.

Older People (Employment Support)

People are living longer, healthier lives, which is good news. The state pension age, as the hon. Gentleman has heard, is set to increase over the coming years. I believe that older workers bring a wealth of talent and enterprise, which we should welcome. From April, jobcentres will have more flexibility to help older people, but the key thing is that in getting rid of the default retirement age, we will strike a blow for older people, which should be welcomed.

Notwithstanding the excellent work carried out by organisations such as the Shaw Trust in my constituency, which helps people with disabilities into the labour market, the Office for National Statistics has found that the number of retired people aged under 65 increased by 39,000 between September and November on the previous quarter. Does the Secretary of State share the concerns of Ros Altmann, the director-general of the Saga group, who said that the Government risk consigning older people to unemployment benefit by increasing the retirement age in such a tough jobs market?

I believe not that Ros Altmann is materially wrong, but that the jobs market will improve. That improvement will create greater incentives for people. People have a tendency to think that it is a simple fact that older people entering the work force somehow take jobs away from younger people, but there is no evidence internationally that that happens. The reality, in fact, is that older people staying in the work force increases work flexibility and improves the number of jobs that are available, and helps younger people. The Government have done a lot for pensioners, and we will do more, but ending the default retirement age is about giving older people the right to work for longer, and the responsibility to employers to deal with them as human beings and not just figures on a piece of paper.

As part of a back-to-work programme provided by A4e, one of my constituents, who was a senior building site manager, was asked to add £1 to £4.75, which he did not feel was particularly constructive in helping him to get back to work. When will we move away from that one-size-fits-all back-to-work programme?

My right hon. Friend the Minister of State is doing that just now. The Work programme will be tailored to people’s needs and not implemented flatly. If people have a problem, the programme will deal with them. Jobcentres will be given more flexibility to ensure that they match employment to the person as necessary. My hon. Friend should therefore welcome the changes that we are making.

Pensioner Poverty

We have restored the earnings link for the basic state pension and given a triple guarantee that the basic state pension will increase by the highest of earnings, prices or 2.5%. We are also protecting key benefits for older people and working to ensure that older people receive the help to which they are entitled.

My hon. Friend may recall the “Tackling Pensioner Poverty” report produced by the Select Committee on Work and Pensions in the previous Parliament. The Committee was concerned that many pensioners who are entitled to pension credit are simply not claiming it. What measures are the Government taking to ensure that support reaches those who need it most?

One thing we are considering is whether the data we hold about people can be used better. We are therefore undertaking a modest research study, drawing on data that my Department and Her Majesty’s Revenue and Customs hold to see whether we can identify people who look as if they ought to be getting pension credit but who are not doing so. We will then make automatic payments to them, and test how that works over a pilot period, on which we will report in the summer.

Rumour has it that the Minister believes that introducing a universal pension will be a solution to many of the problems in the pension system. If that is the case, why has he not published the Green Paper we were promised in December? Is it because he is facing some resistance from the Treasury?

I am grateful to the hon. Lady for raising that point. I can do no more than quote my right hon. Friend the Chancellor, who told the House in November:

“The Treasury is working with the Department for Work and Pensions on potential pension reform that could simplify pensions and provide a boost to pensioners for many years to come.”—[Official Report, 16 November 2010; Vol. 518, c. 726.]

How right he was.


The Department continues to be actively supportive of the apprenticeship programme and believes that it represents excellent value for taxpayers’ money and helps people progress in their career. There are 316 people currently working towards the qualification in the Department. Last year, we adapted our recruitment processes to target young unemployed people without work experience and created 23 apprenticeships in our corporate IT directorate.

The Minister will be aware of the great work done by the last Government, which led to that programme of bringing young apprentices in, and rescued apprenticeships from withering on the vine. Will he commit the Department to carrying on the work that I undertook as apprenticeships Minister, along with people such as Lord Knight of Weymouth—as he is now—to ensure that young people, and not just those in work, are recruited to the Department and given apprenticeship opportunities?

I very much agree with the hon. Gentleman. One of the sad things about the previous Administration was that they never actually supported the number of apprenticeships that they announced. We intend to make a difference and to deliver more apprenticeships—we have announced an extra 50,000 already this year. I can give a clear commitment that the Department will continue to support the apprenticeship programme, both practically and through our relationship with the Department for Business, Innovation and Skills.

I have been written to by a 16-year-old who has done the right thing by taking an apprenticeship, but having done so, she has found that her family’s benefits have been reduced by £90 a week. Will the universal credit address such discrepancies and this discrimination against those who want to work and take up apprenticeships?

My hon. Friend highlights the chaos that we inherited in the benefits system that can lead to perverse incentives that often mean that work does not pay. The universal credit is designed to ensure that work always pays. I would be interested to meet my hon. Friend to talk about her constituent’s case, so that I may understand more clearly what has gone wrong, but we are clear that work must always pay.

The recession has now been over for a year. Unemployment should now be falling, and the whole House is worried that it is in fact rising, especially among young people. One of the ways in which we tackled that was with the “Backing Young Britain” campaign, which created thousands of job opportunities for young people, including apprenticeships and internships. One of those schemes was a paid internship in the private offices of every Minister in the Department. Is that scheme still in place?

As I have said, we already have 300 apprenticeships throughout the Department and we intend to continue to deliver that support to apprentices. We inherited from the previous Government a collection of programmes that simply were not working. The future jobs fund, for example, cost twice as much as apprenticeships. We believe that expanding the number of apprenticeships—50,000 extra this year and 75,000 extra by the end of the Parliament, plus additional apprenticeships for 16 to 18-year-olds—will move us to the place we should be, and out of the mess that we inherited from the previous Government.

I am grateful for that answer and I will try to decipher it later.

I was interested to hear the Minister talk about how he is now using the Department’s resources wisely. At some point, he will no doubt tell us why in December his Department spent more on stationery than it did on employment zones or access to work programmes. I wonder whether that is part of an innovative new approach that includes getting more people into study by cutting education maintenance allowances and getting more young people into work by cutting the future jobs fund. I see now that the Conservative party is piloting new ways of helping young people get into internships, by auctioning them for £5,000 a time to Tory party donors. Did the right hon. Gentleman choke on his pudding when the auctioneer’s hammer came down, and when will this worthwhile scheme go nationwide?

I will not take any lessons on spending from a previous Administration who spent money like there was no tomorrow. We were shocked to discover how the Department for Work and Pensions under the previous Administration spent money as if there were no limits. This Administration have removed the absurd restrictions on work experience that meant that young people lost their benefits if they did more than two weeks’ work experience. We have changed that and are actively finding experience opportunities for young people, not standing in their way and preventing them from accessing those opportunities.

Universal Credit

The objective of the universal credit is that work should definitely pay for the majority of people—as many as possible—but certainly it should pay most significantly at the highest levels for those on the lowest incomes.

The vast majority of people on benefits do not want to stay there for the rest of their lives. Will my right hon. Friend confirm that the universal credit, with support from the Work programme, will help people in Macclesfield to get back to work, and ensure that it pays for them to go on working?

Absolutely. The interaction between the universal credit and the Work programme is critical. In a sense, one without the other will not work as effectively. The purpose of the universal credit is to ensure that entering the world of work becomes much easier, because people will retain more of their own money: we will be lowering marginal deduction rates. In some cases, on average, those in the bottom two deciles will see an increase in their weekly pay of about £25 a week after they enter work—a significant increase. The Work programme, which my right hon. Friend the Minister of State was talking about, will help with those who are more difficult to place. For the first time, they will get a tailored programme that helps them to deal with their problems, and gets them into work and maintains them there for up to a year, and in some cases more.

Will the Secretary of State confirm that the Government intend to save £1.3 billion between now and 2015 by reducing the child care element of the tax credit? Will the universal credit be sufficiently resourced to ensure that no working parent out of the 488,000 households that stand to lose anything up to £30 a week will be any worse off than at present?

We are returning the levels on the child issue that the hon. Lady is talking about to the levels left by the previous Government in 2006. It is all very well for the Opposition to nit-pick and say that they are desperately in tune and on side with all those people who are going to feel the squeeze, but in reality the Labour party now has a leader who was responsible, with his colleagues, for spending money like there was no tomorrow. That has left us with a major deficit, and now we have to get that money back. If she does not like what we are doing, please can she tell us where she would intend the money to come from?

Disability Living Allowance

10. What recent discussions his Department has had with disability organisations on the removal of the mobility component of disability living allowance from those in residential care homes. (39812)

12. What recent discussions his Department has had with disability organisations on the removal of the mobility component of disability living allowance from those in residential care homes. (39814)

13. What recent discussions his Department has had with disability organisations on the removal of the mobility component of disability living allowance from those in residential care homes. (39815)

My officials and I have discussed the proposals with regard to the mobility component of disability living allowance with a wide range of disability organisations, and disabled individuals and their families. This has included visiting and discussing the proposals with care home residents. These discussions have taken place in the context of the wider public consultation on DLA reform that is currently under way.

I thank the Minister for her answer, although I do not think that it will do much to allay my constituents’ fears about the impact on them of the DLA cuts. I am happy that she mentioned that the Government have been in discussion with disabilities charities. More specifically, however, what discussions has she had with those charities about families with children in residential care homes and the impact on them? Those families will no longer be able to take their children out at weekends and in school holidays.

So that we are clear, I should say that the Government are talking about retaining spending on DLA at the same level as last year—that is after a 30% increase in expenditure over the past eight years under the Labour Government. With regard to the implications for children living in residential care settings, we are obviously looking at the details, but I can assure the hon. Lady that the intention behind the policy is very much about removing overlaps, not mobility, in the provision.

Two blind people came to my advice surgery on Saturday who were very concerned about the impact of this proposed change on their independence. Have the Government made an estimate of the number of blind or visually impaired people who will be affected by this change?

I am sure that the hon. Gentleman is aware that, given the way that disability living allowance works currently—and certainly given the way that we are looking to take it forward—we are assessing the barriers that people with a disability face, not the condition itself. Obviously, people who are blind or partially sighted face a range of barriers, but they might also have multiple conditions. That is why it is important to look at all those conditions and why, in putting forward for the first time an objective assessment for DLA or its successor benefit, we will be able to ensure that people really get the support that they need.

Will the Minister not agree to put the proposal on hold until she has carried out a thorough study of the viability of having local authorities step into the breach; or it is only proposals concerning trees that this Government put on hold, not proposals affecting vulnerable people?

I can absolutely assure the hon. Lady that we are looking in great detail at the impact of all our DLA measures. I have been to talk to residents in care homes and their family members, and what I found was an array of ways in which disability living allowance is used. All hon. Members will want to ensure that the most vulnerable members of our society are left not with a benefits system that was designed for people living in family home settings, but with one designed for how people are living now and for their mobility needs.

Many disabled people in residential care use the mobility component of DLA to ensure that they remain part of their local and wider communities. It was quite disappointing to hear a comparison drawn recently between those in residential care and those in hospital, many of whom are totally immobile, albeit for only a short period. Does the Minister agree that that was an unrealistic comparison, and can she say what assessment has been made of the mobility requirements of disabled people in residential care as compared with the requirements of those in hospital?

My hon. Friend is absolutely right: people living in care homes have distinct mobility needs, and having gone out and spoken to residents, I have seen that at first hand. We need to ensure that we have a system that really meets those needs, and is not simply a sticking plaster for lots of other issues that may be forthcoming in the care homes sector. As with so many aspects of DLA, we are dealing with a benefit that is rooted in the past, not in the way people think about disability issues today. I hope that I can work with him on any examples from his constituency of how we can make it work better.

Will my hon. Friend confirm that fairness and reasonableness will be the main considerations when she finalises her reform proposals?

My hon. Friend will know from all the work that we have done and the consultation paper that we have put out that we want disability living allowance to continue to support disabled people to get into work and overcome the barriers that they face in their lives, and to ensure that the system works for today, not for 18 years ago, when it was first put in place.

I sincerely hope that the Minister has been in listening mode during her consultation on the proposals. Constituents of mine have told me that car manufacturers offer discounts to the disabled, who use their DLA mobility component qualification to demonstrate their eligibility for these discounts. What consultation has she had with the industry to ensure that under her proposals, those in care homes do not find themselves having to pay more than the rest?

I know that independent travel can be an important way for care home residents to achieve their objective of living more independently. We need to challenge the way that disability living allowance supports that at the moment, which could well include talking to motor manufacturers.

Will the Minister specifically address the comparison with hospitals, which was quite wrong and has been described by the Disability Alliance as “offensive”? The cut would produce a saving equivalent to less than one sixth of the bankers’ bonuses about to be handed out at RBS. Will she think again about this cut, or do we have another lady who’s not for turning?

I thank the hon. Lady for her question—I think. I would reiterate the point that I made earlier, which is that the changes to disability living allowance finances that we are talking about would mean keeping expenditure the same as it was last year, after eight years of a 30% increase. Overall, she has to keep that in mind. What we will do is ensure that we remove any expenditure overlaps, as she would expect us to do, and as I had hoped the previous Government would do.

New Enterprise Allowance

14. How many new businesses he expects to be created as a result of the new enterprise allowance in the first 12 months of its operation. (39816)

Over the first two years of its operation, the new enterprise allowance is due to support the start of around 40,000 new businesses. In its second year, we expect the majority of those start-ups to take place in the first few months, when the new enterprise allowance is being rolled out in those parts of the country that are particularly affected by unemployment.

The best way to deal with unemployment in my constituency is to build businesses, and I therefore welcome the introduction of the new enterprise allowance. Will my right hon. Friend confirm that the allowance will provide unemployed people with mentoring, as well as financial support, to enable them to start their own businesses?

I can indeed confirm that. What makes the new enterprise allowance different from all its predecessor schemes is that it will offer people who are seeking to start new businesses specialist support from people who have been there and experienced enterprise. We want to see voluntary sector groups that already offer mentoring become part of the scheme, and we want experienced business people to come forward and become mentors, perhaps through their chambers of commerce. This could make a huge difference to getting people off benefits and into self-employment.

Jobcentres/Voluntary Organisations (Collaboration)

We were pleased last week to announce the new partnership between Jobcentre Plus and the voluntary sector generally, which will help people to get back to work. Prince’s Trust advisers and other local voluntary organisations will start to have a desk that they man in jobcentres in the next few weeks, and that provision should be available pretty much around the country in April. This will be enormously helpful in tying the voluntary sector in to some of the most difficult people.

Does the Secretary of State agree that voluntary groups can help jobcentres to help jobseekers? The Skipton and Ripon Enterprise Group, a group of leading business men in my constituency, is keen to help mentor jobseekers now. What advice can my right hon. Friend give to its members?

First, what we are doing will really open the door to the voluntary sector’s engagement in the whole process. As my hon. Friend knows, the Work programme that the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) has been working on has the voluntary sector embedded at the heart of how it will deliver its work. The desks in jobcentres that will be manned by representatives of the Prince’s Trust should open up the door to such people being able to see jobseekers as they come in. My hon. Friend should advise people to look at using provisions such as the enterprise allowance and, if necessary, to come and see my right hon. Friend the Minister about any other advice they need.

While the benefit system is undergoing change and reform, what plans does the Secretary of State have to change the delivery mechanism for benefits? Will he ensure that it remains customer focused, local and accessible?

At the moment, the vast majority of people—about 98%, I think—receive their benefit payments directly into their bank accounts. There is a small number of people who are still, for various reasons, in receipt of cash payments. A proposal was left to us by the previous Government on how all this can be delivered in the next few years, but we have not made a final decision on it yet. We will announce our decision very shortly.

I am grateful to the Government for allowing a pilot scheme for local jobcentres to give out food bank vouchers from the food bank charities. Will my right hon. Friend ensure that the scheme that emerges is as simple and unbureaucratic as possible, so that the jobcentres in Harlow can receive food bank vouchers as soon as possible?

I would not dare do otherwise, with my hon. Friend breathing down my neck on this one. It is due to his hard efforts and pressure that we have made this particular change, and I think that it is for the good. Of course, it is important that it does not become a substitute for anything else, but it will certainly be there if people feel that they need that extra assistance, and there is no reason why we should not do it.

Has the Secretary of State made any representations to his colleagues about the proposed closures of voluntary organisations that support and train people to return to work, such as the Diamond centre in my constituency?

We constantly discuss, in Cabinet and other forums, the idea of what we are doing with the voluntary sector and how we can best help and support it. We are putting a lot of money behind the voluntary sector right now, and the Work programme will make a significant amount of money available to the sector through back-to-work programmes. Of course there are difficulties in the sector, as some local councils choose to start with voluntary organisations when they make their reductions. Personally, I often wonder whether local councils too often see the voluntary sector as an add-on, rather than as an incredibly effective and integral way of delivering good services, and I hope that they will think again about some of those changes.

Minimum Wage

16. What account his Department takes of the effects of the level of the minimum wage in its business planning processes. (39818)

Departmental business planning processes take account of the minimum wage in the potential effect on the future pay bill and in departmental contracts. For some years, the Department for Work and Pensions has targeted pay awards towards our lower paid staff, and the lowest level of pay for directly employed DWP staff is currently £7.27 an hour compared with the 2010 national minimum wage of £5.93 an hour.

Does my right hon. Friend agree that one way of making the big society even bigger would be to give freedom to individuals to take employment with charities at below the minimum wage?

I have to say that I do not share my hon. Friend’s view. What I would say to employers up and down the country is that I hope they will take advantage of the increased numbers of apprenticeships that are paid at special apprenticeship rates in order to allow people to develop the skills they need to build future careers.

Will the Minister assure the House that during internal Government discussions he will support the minimum wage that the Labour Government introduced and make sure that for each year over the next four years it rises by at least the level of inflation?

As the right hon. Gentleman knows, Conservative Members have supported the national minimum wage for many years—and will continue to do so.

Housing Benefit Reforms

We have had, and have responded to, many representations on the review of the housing benefit reforms. Most recently, my noble Friend Lord Freud met with Lord Best to discuss the review and our intention to commission a team of independent, external researchers to undertake the task.

The Secretary of State will be well aware of the severe and long-term shortages of housing currently faced in Waltham Forest, as in many London boroughs. Given that there are 1,500 people aged 26 to 35 currently in receipt of housing benefit in Waltham Forest, where does he think they will be living next year if his plans to change the shared room rate go through?

One consequence of the reforms to housing benefit will be that the local housing market will change. We anticipate, for example, that some of the larger properties might find themselves converted into houses in multiple occupation, although we do not know exactly what will happen. One problem is that over many years we have seen inadequate house building taking place under the hon. Lady’s Government.

In the Public Accounts Committee, we heard from civil servants about the impact of housing benefit and other benefits that make for an extremely complex and complicated benefit system. We have also heard about the enthusiasm for having a universal benefit as a way of cutting through that. Talking of representations, would not these changes have been easier had we not had representations on where the money was left?

My hon. Friend is quite right that Labour Members’ answer to most questions is “More money,” but when we asked where the money had gone, we were told that there was none. Housing benefit is probably one of the most complicated benefits in the system; it is at the end of the line when everything else has been worked out. The sooner we can integrate it into universal credit, the better.

On Friday, I met a group of residents at a hostel run by the North Wales Housing Association. Those people have very little prospect of employment in an area of such high unemployment, yet they might face a reduction in their benefits. Does the Minister accept that that sort of cut might threaten the viability of hostels such as the Pendinas hostel that I visited on Friday?

The budget for discretionary housing payments across the country will be trebled over the coming years, so that additional funding will be available for particular difficult cases. One thing we want to do is enable people to get back to work, where jobs are available, and the universal credit process will increase the financial return and people who take low-paid jobs will have a greater ability to afford somewhere to rent.

Work Programme

18. If he will put in place provisions to ensure that the expertise of small employment providers is retained in the transition from existing employment programmes to the Work programme. (39820)

I am pleased to inform the House of two things. First, the Work programme bidding process closed this morning, and we have had a substantial number of bids, which is very encouraging. It looks as if the Work programme is going to go ahead according to plan, which is good news. I would also say to the hon. Lady that, shortly before the start of these parliamentary questions, I placed a written statement before the House, giving details of an extension to the welfare-to-work contracts under existing programmes through to next June. I have also written to the hon. Lady and her Committee, setting out the details of those changes. We believe that we have now put in place all the mechanisms needed to ensure a smooth transition through to the start of the Work programme, which remains very much on track.

I am glad to hear that my letter has had some effect, but will the Minister confirm that the contractors who are currently delivering Pathways to Work and whose contracts are due to expire at the end of March will not have to issue redundancy notices to their staff in the next couple of weeks, because they will be able to continue until they know whether they will be part of the Work programme?

Transitional arrangements will involve the existing providers in all programmes except Pathways to Work. In that instance, we are setting up an interim support programme which will be more substantial than such programmes have been in the past. As the hon. Lady will know, Pathways to Work was severely criticised by the Public Accounts Committee. Our interim arrangements will cover those who would otherwise have received support through Pathways.

Youth Unemployment

Over the past few months there has been a fall in the number of young people claiming jobseeker’s allowance. However, we remain extremely concerned about youth unemployment. We are introducing measures through the Work programme and our work experience plans, and other measures through Jobcentre Plus, in order to provide the best possible support for young people who are struggling to find employment.

Nearly 25,000 18 to 24-year-olds are claiming jobseeker’s allowance in the north-east, and young people account for more than 30% of the unemployed population in the region. Can the Minister assure me that there will be enough funds in the Work programme to guarantee that those young people will be helped into employment?

I share the hon. Lady’s concern. The fact that 600,000 people who left school and college under the last Administration have yet to find work is a huge problem that we must address. We are providing specialist back-to-work support through the Work programme, earlier than has been the case under previous programmes, and after three months for some young people with the most challenged backgrounds. I can assure the hon. Lady that that will remain a priority for the present Administration.

Topical Questions

As I did not do so earlier, let me now welcome my shadow, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), to his post. I hope that we shall have engagements in the future, and I am sure that he will adopt a positive approach to measures that he believes will benefit the estate.

Indeed. I am glad to see that the right hon. Gentleman models himself very much on me, which is also very helpful.

I have had meetings today, and I have more meetings to come. I should also mention that we are getting rid of the default retirement age, which we consider to be a positive move overall for older people which should also help to boost the economy.

What advice or consideration has been given to small and medium-sized enterprises on how they should handle the removal of the statutory retirement age, and what advice can the Secretary of State give businesses on managing employees with physically demanding jobs?

The default retirement age is unlikely to have been used by many small and medium-sized enterprises; it tended to be used by larger businesses. Once it has been removed, employers should be able to dismiss staff, while obviously using the ordinary fair dismissal rules under the Employment Rights Act 1996. When employers can demonstrate that a retirement age is objectively justified, they can make a case for setting one. The key point, however, is that many large and many small companies have never used the default retirement age. They will argue that working with employees to secure a proper programme as they head towards their general retirement age is a positive move, and that employees should not be left lying there until the employer has to get rid of them.

T4. I recognise that the Secretary of State has made representations about the £1.5 million of bonuses paid to Remploy directors this year. Let me also say, before he mentions it, that that payment was originally agreed under the last Government. However, does he think it insensitive of directors to take £1.5 million in bonuses when in my part of the United Kingdom some 540 staff are potentially at risk of redundancy? (39828)

The honest truth is that I do not think it a good idea for people to do that in the present climate. There is currently a public sector pay freeze, we are imposing limits on bonuses, and I am asking staff in one of the lower-paid areas of Government to forgo some of their future pay rises. My simple answer to the right hon. Gentleman is this: I wish that those who are thinking about acting in that way would think again, and I also wish that I had not been left in such an invidious position by the last Government.

T2. Opposition Members have spent the past 50 minutes calling, in almost every question, for more Government spending, yet just nine months ago we famously heard the shadow Secretary of State say that there was no money left. Given the shadow Secretary of State’s willingness to offer honest advice, might my right hon. Friend reciprocate the favour and offer his own advice to his new opposite number? (39826)

Given my political career, I have given up giving advice to anybody, so the best thing the shadow Secretary of State can do is forge his own way and I will look to see how I can dismantle that.

T5. On Friday, I visited the Reeltime youth and music group in my constituency, where I met three young men who had got their jobs through the future jobs fund. They feel that the FJF is a great success for them, and so did the group. The Scottish Labour party agrees, and has today announced that it will create 10,000 places if it wins in May. Will the Government reconsider scrapping the FJF, or do they still believe youth unemployment is a price worth paying? (39829)

I sometimes think Opposition Members simply do not listen. First, as we have just heard, the Labour party left behind for us the most monumental financial mess, so there are not large amounts of money in the kitty to pay for the best support we could possibly deliver or all the things that we would like to do. The reality is that we have chosen to divert the money that we have into paying for apprenticeships. We have announced tens of thousands of extra apprenticeships, as we believe that they are a much better way of delivering support to young people. There are huge numbers of opportunities for young people to take advantage of an apprenticeship and build a proper career, and there will be more and more such opportunities as the spending review goes by.

T6. It concerns me when I meet constituents who have given away quite sizeable chunks of money to their children just as they approach retirement in the hope that the Government will then support them through their retirement. What steps are the Government taking to encourage people to save more for their retirement? (39830)

We are pressing ahead in the Pensions Bill with measures to make the process of automatically enrolling people into workplace pensions a reality, so from 2012 over a four or five year period, getting on for 10 million people will be enrolled into workplace pensions for the first time with an employer contribution. We believe that that will transform the savings landscape, and we need to make sure it pays to save.

T9. Recently, a constituent contacted me regarding his Atos Healthcare assessment. Three specialists had considered him to be unfit for work, yet it was suggested that he could be a bingo caller or a car park attendant. My local citizens advice bureau has identified many such cases which are resolved in favour of the claimant after an expensive review or appeal. Are there any plans to review Atos Healthcare’s delivery of medical assessments? (39833)

As the hon. Lady will know, soon after taking office we commissioned Professor Harrington to conduct a full review of the work capability assessment and the process around it. He has recommended a number of changes, which we are implementing as quickly as possible. I stand by the view that the assessment is the right way of helping people who have got the potential to get back into work. It is much better for those who can be in work to be so, rather than sitting at home on benefits, but we obviously have to make sure that the process is fair, just and proper and that we get the most accurate results possible.

T7. Given the news that there are more than 150,000 illegal immigrants claiming sickness benefits and maternity pay and that Europe is now threatening legal action under human rights legislation against this Government for planning to restrict those benefits, can Ministers give a clear assurance that the Government will stand up against Europe on this matter? (39831)

I can give my hon. Friend an absolute assurance on that. It is clearly absurd that illegal immigrants can access our benefits system. It is another example of the chaos we inherited from the previous Administration. I am the person who represents the Department for Work and Pensions and the Government in the European Employment Council, and my hon. Friend has my absolute assurance that I am fighting our corner to maintain the integrity of our welfare system, and will continue to do so.

T10. Some 21% of the young people in Erdington are unemployed, the Connexions office in Erdington high street has closed, projects funded by the working neighbourhoods fund and the future jobs fund now face closure, and 13 advice centres also face closure as a consequence of council cuts. There is therefore increasing despair among young people. Some years ago, the Secretary of State made a journey to a housing estate in Glasgow. Will he agree to receive a delegation of the young unemployed from Erdington, so that he can hear from them first hand just how mistaken his Government’s policies are? (39834)

Of course I will be happy to receive any delegation that the hon. Gentleman wishes to bring forward. The Government are absolutely clear about their determination to help get young people back to work. When he made his statement he must have recalled that only a few months ago his Government left us with almost the worst youth unemployment since records began. It is remarkable that under his Government youth unemployment rose during a period of growth. That is not much of a record for him to crow about.

T8. I want to raise the issue of family breakdown. My constituents often tell me that family breakdown involves not only the emotional turmoil of dealing with it, but the complexities of sorting out the financial arrangements and the accompanying delays. I would be grateful if the Minister would set out for the House the steps that the Government are taking to create a structure to ensure that parents can take financial responsibility for their children. (39832)

I thank my hon. Friend for her question. I refer her to the consultation paper on the future of the child maintenance system in this country, which we have been consulting on in recent weeks and through which the coalition Government are looking to provide more choice and support for parents, so that they can take responsibility on reaching maintenance agreements. We are also offering further services, such as a calculation-only service, and a new and improved statutory scheme, which will be stronger. Overall, we are trying to ask parents to take more responsibility. I remind the House that the previous Labour Government endorsed this approach and I remind Labour Front Benchers that Lord Hutton said that he was

“convinced that in general and in principle”—


“should form part and parcel of”—

the Child Maintenance and Enforcement Commission’s—


Indeed, we are following his advice—

Given that transport facilities offered by residential care establishments normally relate to social and care needs, not independent choice, could the Minister explain how the removal of disability living allowance from those in residential care is consistent with article 20 of the United Nations convention on the rights of persons with disabilities, to which this country is a signatory? Has she assessed her policy against the commitment to the convention?

I can assure the right hon. Lady that we have assessed our policies in the right ways. I reiterate what I have said to her before, which is that the policy is trying to remove overlaps, not mobility.

In my advice surgery on Friday, a young couple came to see me in Darwen to say that they were £30 a week worse off for living together. It is a shameful legacy of the previous Government that people are worse off for living in couples and worse off when they go back to work. What this couple, and everyone else in Darwen, wants to know is: when will the universal credit end this situation?

My hon. Friend is right to say that this is one of the most invidious unintended effects of a benefits system, and this country found itself in a worse situation on the couple penalty that most others did because of the interplay and complexity of that benefits system. The universal credit will not immediately end all that, but it will make the situation much better for couples. When couples want to stay together, the Government should never be the thing that forces them apart. The right hon. Member for Birkenhead (Mr Field) has made that clear and I back him up on it completely.

Block contracts with care homes often leave individual care plans unclear on what mobility costs are to be met by the home. What guarantees can Ministers give that no disabled person in residential accommodation will find their ability to leave their own home reduced as a result of the removal of the mobility component of disability living allowance?

Again, I reiterate that we are looking to remove overlaps, not mobility. The local authority contracts contain clearly articulated requirements for care homes to cover activities involved in daily living, which include providing access to doctors, dentists and local services, such as libraries and banks. In addition, in order to become registered, a care home provider has to undertake to promote the independence of the disabled people living in the homes that it is providing. We know, as do care home providers, that mobility is an important part of that independence.

This morning I met the BBC—the business breakfast club—in Hastings, which is a group of local employers. It raised with me its concern that when offering additional work to part-time employees of 16 hours, those employees often do not want to take it up because they find themselves worse off. Will the Secretary of State advise what will be done to even that out and make sure that work does pay after 16 hours?

The objective of the universal credit is that, all the way up the part-time process, whatever the number of hours worked, work should pay. That is particularly so for those who take jobs with low hours and low pay, paying them extra. They will be the greatest beneficiaries of the system. It is invidious that there are only two points in the cycle at which people are able to take up work and make any money. In future, work should pay: that is the incentive and we should get people back to work by enduring that it does.

The Minister mentioned the consultation on the Child Support Agency, which includes the suggestion that both parents should have to pay for use of that agency. Many parents on low incomes need to go to the CSA. Will not such charges, if they are made, simply be a tax on their children and mean that there is even less money to bring those children up properly?

Let me make it absolutely clear that there will be very clear ways in which such families can come to their own arrangements without incurring charges. If they feel that that is not possible, the statutory system will be there. Just to reassure the hon. Lady—the charges being put in place are only a fraction of the costs incurred in running the system. Indeed, the up-front charge that we are proposing for individuals on benefits is just one tenth of the cost of processing an initial application.

The Minister has made much of her proposal to remove the mobility component from residents of care homes as one that will reduce overlaps, but there is one group of people for whom there is no overlap at all—children who are in boarding schools because they have special needs. Will she drop that proposal in relation to such children?

I reiterate that we are still in consultation on this proposal and are listening carefully to all the issues that people raise. It is vital for children to stay in contact with their parents. The provisions for schools to do that are very clear and we will make sure that when school facilities are not available, there remains an ability to be eligible for disability living allowance, because children would not necessarily be resident in the home.

Despite all these fine words, have Ministers seen the complaints that have been much publicised in the past few days that the people being targeted are those with multiple sclerosis and other very acute disabilities? Some of those people have said that if their allowances and benefits are taken away, so severe is their illness that they wonder whether life will be worth living. It is a disgraceful state of affairs that people with the most severe illnesses are being targeted in the current campaign.

I would say this to the hon. Gentleman: our goal is to do the right thing by people who can make more of their lives. This is not about taking support from people who need indefinite support. We will make sure that people on incapacity benefit who need support and cannot work will continue to be in the support group and will receive a higher level of benefit payment than at present. For those who have the potential to work, we will give them the specialist help they need to do so.