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House of Commons Hansard
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Commons Chamber
13 June 2011
Volume 529

House of Commons

Monday 13 June 2011

The House met at half-past Two o’clock

Prayers

[Mr Speaker in the Chair]

Business before Questions

Ninetieth Birthday of HRH the Duke of Edinburgh (Answer to Address)

The Vice-Chamberlain of the Household reported to the House, That Her Majesty, having been attended with its Address of 8 June, was pleased to receive the same very graciously and give the following Answer:

I have received your address concerning the ninetieth birthday of His Royal Highness the Duke of Edinburgh. It gives me great pleasure to hear of the loyal affection and regard of the House, the nation and the Commonwealth on this special occasion, and I welcome your intention to send a message to His Royal Highness.

Oral Answers to Questions

Work and Pensions

The Secretary of State was asked—

Employment (Young People)

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1. What steps his Department is taking to support young people into work. [58781]

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14. What steps his Department is taking to support young people into work. [58795]

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Work experience and apprenticeships are central to improving the prospects of young unemployed people. In this year’s Budget the Chancellor announced funding for an additional 80,000 work experience placements, with eligibility widened to cover the 18 to 24 age group. In addition, we have announced tens of thousands of new apprenticeships. We will also be providing early access to the Work programme for young people from the most challenged backgrounds.

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I am grateful to the Minister for that answer. When the previous Government left office, apart from the record deficit, they left an extra 270,000 young unemployed. How are the Government working with business to ensure that new apprenticeships are what our economy needs to tackle youth unemployment and that we do not repeat the mistakes of the previous Government?

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The Government have a very proactive campaign to engage employers, working with them to identify work experience places for young unemployed people. We have already located many thousands of opportunities for young people to gain their first foothold of experience in the workplace. In addition, my colleagues at the Department for Business, Innovation and Skills are working hard to engage employers in providing apprenticeship opportunities. So far they are being particularly successful in doing so and have met their targets for apprenticeships.

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I welcome what my right hon. Friend has said about the importance of apprenticeships. There are 615 unemployed young people in my constituency. What other measures will he put in place to ensure that those young people have the skills they need to compete in the workplace?

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The other policy that we will be introducing later in the summer is work academies, which will provide a mix of a short-term segment of training and a period of work experience, again designed to provide young people with a first foothold in the workplace and to give opportunities to those who do not have previous qualifications with a view to trying to get them into employment and build a lasting career.

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May I congratulate the Minister on his statement today and on his announcement that the new Work programme comes into force around now? Does he accept, however, that at a time when there is a shortage of jobs, the new providers might well be placing in jobs those who find it easiest to get jobs anyway, and that we need a back-up scheme to ensure the involvement of those who find it most difficult to get jobs or who do not want to work? Will he keep his mind open about reintroducing at some stage the future jobs fund—not that he will do so under that name, but under a Tory name?

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I am very grateful to the right hon. Gentleman for his comments. I do accept that there is a challenge in placing some people into work, which is why we have created a differential pricing structure to reflect the challenge of getting them into the workplace. The problem with the future jobs fund was the cost relative even to the outcome costs of other programmes run by the previous Government. Of course, in straitened financial times we have to seek not only what works in employment terms but what is affordable.

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Will the Government reinstate Labour’s jobs guarantee to ensure that young people are offered a job or training place after six months out of work?

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What the hon. Lady does not understand is that Governments do not create jobs. Governments have to create an environment in which jobs are created by the private sector. Our job is to ensure that unemployed people are in the best possible position to take advantage of jobs when they are created by employers. It has been encouraging over the past few months to see the private sector creating far more full-time jobs, and I hope that that continues.

Universal Credit (Child Care)

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2. Whether his plans for universal credit will ensure that people are better off in work after payment of child care costs. [58782]

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We recognise the vital role that child care plays in supporting parents into work. As the hon. Gentleman is aware, we have set out a consultative process with some options for child care within universal credit, as I said we would. Alongside that, we have committed to spend all the money available in the current system for child care. It remains our intention that everyone moving into work will be better off when child care is included. People who transition into work will certainly be better off than under the current system.

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Will the Secretary of State ensure that parents who work more than 16 hours a week will continue to get child care support to allow them to continue in work?

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If the hon. Gentleman looks at our consultation, he will see that our plan is to spread the money to ensure that parents who choose to work for any number of hours—not just 16 hours, but across the board—can go into work and get the necessary support. I therefore think that the answer to the question is yes, and we are also keen to support parents who work fewer hours.

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Will the Secretary of State tell the House what effect universal credit will have on child poverty and wider forms of poverty?

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We estimate that universal credit as a static system, not even taking into account any dynamic effect, will lift 900,000 people out of poverty, about 350,000 of whom will be children. It is worth remembering that under the present child care systems that people have spoken about, at least 100,000 people do not get the child care for which they are eligible. Under universal credit, the take-up will be higher, so it will have a better effect.

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The Secretary of State is right to recognise that support for child care is key to whether parents are better off in work or out of work. However, he promised the Welfare Reform Public Bill Committee that the Government’s proposals on child care support would be available before the Bill left Committee. That promise has been broken; he has simply been able to provide only a discussion of the options. When will he get a grip and come up with a policy?

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I will get a grip the moment the right hon. Gentleman’s team decide whether they are in favour of the Bill or against it. I gather that the Leader of the Opposition has today moved like a wriggly worm and decided that he is both for and against it, which is really not surprising. The point of bringing forward our proposals is that the right hon. Gentleman and everybody else will have a chance to look at them and decide whether they agree with them. After the consultation, we will make it clear what our final proposals are. I think that that is fair. Last time, he complained that we did not consult him—he ought to make his mind up.

Workplace Health and Safety

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4. What estimate the Health and Safety Executive has made of the annual cost to the economy of inadequate workplace health and safety. [58784]

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The Health and Safety Executive estimates that the annual cost to Great Britain of workplace injuries and work-related ill health is currently in the order of £20 billion.

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Last year, there were 152 fatalities and 26,000 major injuries in the workplace and more than 800,000 people suffered a work-related illness. As a consequence of the cuts, the HSE has withdrawn a large number of workplace inspections. How will the Government ensure that those figures do not increase year on year?

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As a former union official, the hon. Gentleman will know that the biggest challenge we face is employers who cut corners and break the rules. I would have thought that he would welcome a change in policy that focuses health and safety inspections not on low-risk, good employer sites, which have taken up so much resource in the past, but on employers who are not playing by the book and who endanger their employees and the public. That is where I want our regulatory effort to focus.

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As my right hon. Friend has said, we all agree that health and safety legislation, when applied correctly, is very useful and important, but does he also agree that when it is applied inappropriately and gold-plated, it can cost jobs and damage the economy?

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I absolutely agree. Let me be clear that I believe it is extremely important to get health and safety right. As the hon. Member for Wansbeck (Ian Lavery) suggested, we need to protect people against real dangers in the workplace. However, we have to understand that if the system is over-bureaucratic, it will lead to the closure of businesses and cost jobs, and that does nobody any favours. The job of Government is to find the right balance, and that is what we seek to do.

Universal Credit (Transitional Payments)

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5. What arrangements he plans to put in place for transitional payments for those who will be affected by the introduction of universal credit. [58785]

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A package of transitional protection is being developed to ensure that there will be no cash losers as a direct result of the move to universal credit where circumstances remain the same.

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I note the Secretary of State’s reply, but has he not taken into account the criticisms made of the policy by Family Action? They are, first, that it will not apply to new recipients; secondly, that changes in circumstances leading to the loss of cash protection have not been sufficiently defined; and most importantly, that the failure to give a commitment to uprating cash protection in line with inflation could mean up to 400,000 people losing out in real terms as a result of the policy.

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I hear what the hon. Gentleman says, but I would have thought he would welcome the idea that as we move to the new benefit, we are planning to cash-protect those who are already in receipt of other benefits. I do not think I really need to take too many lessons from his party, because when it scrapped the 10p tax band, it did not cash-protect anybody.

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Will the Secretary of State accept that in ensuring that the transition means that people are cash-protected, he is managing to introduce the universal benefit, which would otherwise be almost impossible to do? That universal benefit will be of benefit to the work incentives of people up and down the country.

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I am glad that my hon. Friend is more welcoming of the policy than the hon. Member for Glasgow North East (Mr Bain). Cash protection is there to protect those whose circumstances mean that they may have lost out slightly in the change to universal credit. They will not, because we will ensure that they are smoothed into the universal credit system unless there is a significant change in their circumstances. That is a positive gesture from the Government, and as I said, we do not need any lessons from Labour Members, who did not cash-protect people who were damaged when they scrapped the 10p starting rate.

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Notwithstanding the fact that, as we have heard, the Government intend to provide transitional protection, will the Secretary of State explain why, for new claimants, their plans to abolish the disability element of child tax credit and replace it with a disability addition will mean a cut of 50% for families with disabled children? According not to Labour Members but to Family Action, that means that families with one disabled child, who are people in great need, are in line to lose £1,400 per annum. Why are disabled children bearing the costs of the Government’s welfare reforms?

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I must say to the hon. Lady that they are not. Actually, our adjustments have been welcomed because they mean that more disabled people in difficult family circumstances will find themselves benefiting to a higher degree. Our changes will work well with universal credit. Also, the whole idea of bringing more disabled people into the work force has to be a good thing, or perhaps she disagrees with that.

Pensioner Poverty

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6. What steps he is taking to improve the measurement of pensioner poverty. [58786]

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We recognise that poverty is about more than income and have introduced a new pensioner material deprivation indicator. It takes into consideration both financial and non-financial elements of poverty, such as ill health and social isolation. It offers a more direct measure of living standards and, used alongside low income measurements, will provide a greater understanding of pensioners’ experiences of poverty.

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I am very proud that many people choose my constituency to retire to, and I am extremely grateful for all the measures that the Government have taken so far to address the horrific levels of pensioner poverty bequeathed by the previous Government. However, the proposed almost double-digit price rises by energy companies threaten to undermine those measures. What more can be done to address that problem?

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My hon. Friend is right that keeping a home adequately warm is an important part of the standard of living of pensioners. That is why it is included in the broader measure of poverty that we will introduce. I echo the words of my right hon. Friend the Energy Secretary, who said at the weekend that faced with double-digit price rises, we would encourage as many people as possible to shop around so that they do not have to pay those prices and can use the market to their advantage.

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The previous Government tackled pensioner poverty with great rigour and success. How can we be assured that in changing the measures of pensioner poverty, the current Government are not simply trying to cover up a failure of their own policies? What assurances can the Minister give the House about the changes?

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I am grateful to the hon. Gentleman for his question. The idea of measuring pensioner poverty in terms of material deprivation is supplementary to the income measures, and we will continue to publish both. I am sure he would accept that being just a penny or two above an arbitrary income level does not mean that people have a good standard of living if they are isolated or lonely. We aim to address all facets of pensioners’ quality of life.

Health and Safety Legislation

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8. What recent progress he has made on reform of health and safety legislation. [58788]

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On 21 March, I announced an immediate review of health and safety regulation with a view to finding ways to simplify the regulatory burden on business. That review is being chaired by Ragnar Löfstedt, the professor of risk management at King’s College, London. He published a call for evidence on 20 May, the closing date for which is 29 July. We hope to publish the findings of the review later this year.

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Some of the most inappropriate and burdensome health and safety recommendations on business come from unqualified, cowboy consultants. My right hon. Friend the Home Secretary is getting rid of cowboy wheel clampers; what are the Government doing to tackle those cowboy health and safety consultants?

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I very much agree with my hon. Friend. At the beginning of April, we launched a new online register of qualified health and safety consultants, precisely with a view to stamping out the cowboys. I want businesses and other bodies that need consultancy advice to work with qualified people who are capable of advising on what the law actually says, rather than working with people who would like to argue that the law does something they claim it says.

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While the Minister is considering what reform to health and safety legislation might be necessary, I hope he will take into account the problems that the Health and Safety Executive has had at Sonae in my constituency. A major fire incident over the last few days has covered much of the industrial area as well as residential areas in acrid black smoke. Will he assure me that the HSE will work with the local authority, Knowsley council, the fire service and everybody else in the town, because we have reached the conclusion that this place should be closed down?

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I am aware of the very unfortunate incident in the right hon. Gentleman’s constituency. I cannot comment specifically on that investigation, but I can assure him that the HSE is investigating carefully what happened. Clearly, lessons must be learned. However, that underlines my view that the HSE should concentrate its resources on dealing with genuinely serious incidents and problems, and not on trivial matters.

Couple Penalty

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9. What his policy is on the couple penalty in the benefit system. [58790]

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The Government are committed to reducing disincentives in the benefit system. The universal credit provides an enhanced earnings disregard for couples which, along with the taper, will help low-income couples to keep more of their earnings in work. Obviously, over time, it is our intention to work further to reduce the penalty.

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A widow and a widower each with two children who form a new couple relationship and decide to live together could be £9,000 worse off as a result of the proposed benefits cap. Given reports over the weekend of confusion among Ministers on the fate of the benefits cap, will the Secretary of State assure us that such a couple would not face a couple penalty?

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Clearly, we do not, as the hon. Lady makes out, want to make anybody face any further induced couple penalties. Our plan is to ensure—over a period of time, but particularly in this Parliament—that we work to erode the couple penalty. However, it is worth reminding her specifically what happened under the previous Government, because the baseline that we have accepted is important. The OECD pointed out that a couple needed about 75% of the income of two single people, but the previous Government left them only 60% of those earnings. In other words, the previous Government took far more from couples than most other countries did. That is why we are in difficulty. She should reflect on that when she asks such questions.

Work Programme

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10. What recent progress he has made on the contracting arrangements for the Work programme. [58791]

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I am pleased to tell the House that as of today, all bar four of the contract package areas for the Work programme are fully operational; that many thousands of claimants have already been referred to the programme; and that the first two job outcomes have been achieved in one contract package area, where the provider was particularly quick off the ground.

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Will my right hon. Friend join me in congratulating the providers that are participating in the Work programme? Does he agree that by involving that diverse range of providers, we can tackle the culture of welfare dependency and worklessness that grew under Labour, and ensure that work pays?

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I absolutely agree with my hon. Friend. One encouraging thing about the Work programme is the vast diversity of organisations taking part—from big international organisations to small businesses; and from some of our bigger more prestigious charities, such as the Prince’s Trust, down to individual charities—even a walled garden project is involved in Yorkshire—and many of our local colleges. Together, they can make a huge difference in what is a revolutionary approach to the problem of long-term unemployment in this country.

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The Minister will remember an exchange of correspondence that he had with the Select Committee about TUPE cover. Now that the Work programme has gone live, the confusion over which posts will enjoy TUPE protection has continued. Of two contractors in the same area, one says that TUPE does apply and the other says that it does not—in some cases, to the same workers in some of the subcontracting companies. I urge the Minister to clarify this issue and ensure that his Department sets out clear advice about which positions have TUPE protection and the rules regarding people working in the Work programme.

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The hon. Lady needs to remember that in many cases the programmes that we are replacing are very different to the Work programme. Pathways to work, for example, was simply six work-focused interviews. There will be cases in which TUPE does not apply. We have been very clear in saying to the providers that it is a matter between the providers themselves, the individuals and the former employers to resolve when and where it applies. It is not for the Department to offer legal advice to providers.

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I welcome the speed with which the Work programme’s contracts have been put together, but some small voluntary organisations in my constituency who took an interest in it were not successful. Will the Minister reassure them that there will continue to be opportunities for them to play a role in getting people back into work more informally?

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I can indeed. First, there will be further opportunities to contract to provide support for the Department. In addition, we do not believe that the supply chains to the Work programme providers are fixed in stone in perpetuity. The whole nature of the Work programme makes it desirable for the prime contractors to look for the best in the business at getting people into work. If any organisation is excellent, I am sure that it will find its way into the programme, even if it has not done so yet.

Youth Unemployment

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11. What recent assessment he has made of future trends in youth unemployment. [58792]

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The independent Office for Budget Responsibility forecasts that unemployment will fall from its current level of 2.5 million to around 2 million by 2015. There is no separate forecast for youth unemployment, but over the medium term this would be expected to follow a broadly similar trend.

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Fewer than 14% of my constituents are aged between 18 and 24, but this age group accounts for 35% of people looking for work. What is the Minister doing to ensure that private contractors in the new Work programme will not simply cherry-pick those areas of the country where it is easier to get young people into work and ignore areas performing less well economically, such as my constituency?

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I would like to reassure the hon. Gentleman. One of the things that we wondered as we went in to the contracting process was whether we would see a difference in the level of interest between different areas of the country, depending on the nature of the local labour market. That was not the case: the competition was equally intense across all areas. I hope that the presence of the Work programme, offering young people support after nine months—and in some cases after three months—of unemployment, combined with the additional support that we are providing though Jobcentre Plus to provide work experience opportunities for young people, will make a significant difference to their prospects as the months go by.

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Does my right hon. Friend agree that the best way to deal with youth unemployment is not just through the 250,000 apprenticeships, but the roll-out of the 24 university technical pre-apprenticeship schools around the country?

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I do indeed agree. Those schools, the increased numbers of apprenticeships, the work experience scheme, the support being provided through the Work programme and the additional measures we have announced recently to support 16 to 18-year olds all show that we have a Government who recognise the problem of youth unemployment, understand its severity and are doing something about it.

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Does the Minister think that the record level of youth unemployment has been made worse by the botched ending of the Connexions career service, which was withdrawn with no replacement put in place? No transition plan has yet been put into place.

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The hon. Gentleman talks about the causes of youth unemployment. He should look back to when the current increase started in 2003-04, in the good years under the previous Government. He should ask why their policies failed so badly.

Disability Living Allowance

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12. What recent meetings he has had on reform of disability living allowance. [58793]

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Throughout the development of the new personal independence payment, which will replace disability living allowance, we have had extensive discussions and consultation with disabled people, their families and organisations representing them. The insight of organisations such as RADAR, Mencap, Scope, the United Kingdom Disabled People’s Council and People First into how disability living allowance can fail to support disabled people is immensely valuable. We will continue to work closely with disabled people and their organisations as the detail of the assessment criteria is developed and tested.

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On the recent “Hardest Hit” march, I met constituents who had the impression that disability living allowance was to end altogether and would not be replaced by the personal independence payment. Does the Minister agree that in representing these disabled constituents, organisations have to ensure that they communicate clearly with those who might be affected, who are some of the most vulnerable in our society?

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My hon. Friend is absolutely right. It is important that the organisations working with us in the development of the new personal independence payment use that opportunity to ensure that the people whom they represent are well informed. We need a new approach to disability living allowance. The Labour party has already agreed with that, although we are still waiting to hear exactly what the Opposition’s plan would be.

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The organisations that the hon. Lady read out quite quickly sounded like organisations representing people whose conditions do not vary hugely. There are people on disability living allowance who have conditions, such as multiple sclerosis, that can get hugely better and hugely worse. How much conversation has she had with organisations representing people with fluctuating conditions as well as those with progressive conditions?

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The only reason I read the list out quickly was not to incur the wrath of Mr Speaker.

I would like to reassure the hon. Lady that I absolutely understand her point. Indeed, I am meeting organisations representing many people with fluctuating conditions. Importantly, we are also considering the findings of the work capability assessment to see how we can build into the new personal independence payment a way of ensuring that people with fluctuating conditions are well served.

State Pension Age (Women)

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13. What assessment he has made of the effects on women born between 6 March and 5 April 1954 of his proposals to increase the state pension age. [58794]

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Our proposed changes will equalise women’s pension age with men’s more rapidly than previously planned. Under the Government’s proposals, women born on 6 March 1954 will have a pension age of 66 and those born between 7 March and 5 April 1954 will have a pension age of up to a month less.

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I highlight the plight of 33,000 women born in one month in 1954 who will be the worst affected under the pension retirement rules. In total, 500,000 women will be affected by one year or more than expected. When they get their pensions, they will be a lot better off than they would have ever been under the Labour party, but what can we do for women in this particular group, who will have to wait an additional two years for their pension?

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My hon. Friend raised this important issue, I think, in last Wednesday’s debate when we were startled when she declared an interest in the question. Were we to address the concerns of that group of 33,000 women, we would find that women born one month before or after—who might be affected by a few months less, but still significantly—would ask for a change as well. The short answer is that to delay the whole thing till 2020, as some have suggested, would require an additional £10 billion to be found. She will understand why that is not possible.

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The early-day motion calling on the Government to rethink these unfair changes to the pension system has been signed by 180 hon. Members, including 23 Liberal Democrats and three Conservatives. More than 10,000 people have presented a petition to Downing street asking the Government to think again, and the campaign is backed by Age UK and Saga. If the Government can U-turn on forests and, just last week, announce a U-turn on sentencing, surely they can listen and act upon the concerns of women now approaching retirement with fear and trepidation.

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To the extent that we know what the hon. Lady’s policy is, it appears to be: to put it off for a decade. Unfortunately, one of the problems with the previous Government’s approach on so many difficult issues was to put them off and assume that somebody else would pay. On pensions, that would require another £10 billion to be paid by tomorrow’s national insurance payers. Does she think that that is a fair burden, given that the people retiring shortly will benefit from the greater longevity?

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I am much obliged to the Minister.

Costs of Disability

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15. What estimate he has made of the costs incurred by a disabled person in the three months following diagnosis of their disability. [58796]

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No such estimate has been made. Perhaps I should gently remind the hon. Lady that disability living allowance generally, and personal independence payments absolutely, are not related to a medical diagnosis. They are about considering people as individuals and looking at the impact of their disabilities on their ability to live independent lives. Circumstances, needs and costs will vary from individual to individual, and do not necessarily correlate to a diagnosis.

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In Committee, the Under-Secretary said that the reason for the proposal was not savings and that she did not expect to make any savings from it. Yet people who fall ill with sudden onset conditions incur additional costs. They are not long-term unemployed or welfare dependent. Why is she making the change if not to make savings?

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I think what I said in Committee was that there would be some savings but that they were modest. The principle of a six-month qualifying period was not intended to deny disabled people help in the short term. That help currently comes mainly but not exclusively from means-tested support, with the personal independence payment starting when costs become a burden to people, regardless of their income. That is why it is not means-tested.

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Will the six-month qualifying period allow for special cases, such as people with a terminal illness, who might not survive six months?

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I can absolutely assure my hon. Friend that that will be the case and that we will carry forward that provision from disability living allowance.

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I am sure that it is not the Government’s intention in time-limiting employment and support allowance—the other disability-related benefit—to leave nearly 7,000 cancer patients potentially up to £94 a week worse off. Today, Macmillan Cancer Support and others warn that that is exactly the consequence of the Government’s policy. Will the Under-Secretary take the opportunity of the Report stage of the Welfare Reform Bill to modify that damaging policy?

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The hon. Lady has asked about employment and support allowance. We will obviously ensure that people in the most difficult circumstances continue to receive the support they require through the support group. For disability living allowance, it is absolutely vital that we do not analyse people on their condition, but examine the problems that they encounter in living independent lives. I think that she would expect us to do that.

0845 Numbers

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16. What recent representations he has received on his Department’s use of 0845 numbers; and if he will make a statement. [58797]

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The Department—and, indeed, I myself—has received several communications from customers and their representatives asking about our policy on the use of 0845 numbers and whether we have considered changing to 0300 and/or geographical numbers. In the wake of those representations, I have asked the Department to undertake an internal review about our use of 0845 numbers and see what other options might be available to us.

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I thank the Minister for that response, but given that benefit clients normally have no access to a landline, that calls from mobiles can cost as much as 40p and that they could be kept waiting for information on crisis loans and disability, should we not do more and consider talking to the Telephone Helplines Association about that to make faster progress than we are currently achieving with 0300 numbers?

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I agree with the hon. Gentleman. We offer a ring-back service to anybody who is concerned about the cost of the call that they are making. None the less, there is a genuine problem and I have asked the Department to consider it and ascertain whether better options are available, particularly given the number of claimants who use mobile phones.

State Pension Age (Women)

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17. What recent representations he has received on his policy on the date at which the state pension age for women will start to rise. [58798]

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Several stakeholder groups, as well as individuals, have expressed concern about the changes we propose, although the majority of commentators agree that we need to increase the state pension age more quickly.

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I wonder whether the Minister knows that some 1,200 women in my constituency will lose out. Does he understand that they are angry and feel cheated that pension payments, which they had every reason to believe they had paid for and were due will now not be paid to them? What does he say to those 1,200 women?

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Perhaps a generation ago, those very women would have expected to draw a state pension for about six years less—that is a significant change that they have seen in their working life. They will still get the state pension for exactly the same time as someone a generation ago would have expected. We are trying to be fair between the generations and not load all the cost on the next generation.

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The coalition agreement talks about equalising the state pension in 2020. Bringing forward the date to 2018 will not help to meet the Government’s target of getting the public finances in balance by 2015, but it will adversely impact a large number of women at very short notice. Will the Government think again and revert to the coalition agreement?

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My hon. Friend has raised this issue with me before in debate, and although he is correct that the savings do not fall in the comprehensive spending review period, I would draw his attention to one number. Under previous projections, the national debt at the end of this Parliament was £1.4 trillion. If we were to delay the change, we would have to add another £10 billion. Someone has to get a grip on the national debt.

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What notice does the Minister believe is required of changes to the state pension age?

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I am grateful to the hon. Gentleman for raising that question; indeed, we asked that very question in our Green Paper. We are looking at future changes to the state pension age, to 67 and 68, which are already legislated for. We believe that that needs to happen sooner. We are currently consulting and reflecting on the right balance between taking account of changes in longevity and giving people fair notice, and we would welcome the hon. Gentleman’s input on that point.

Housing Benefit (Shared Accommodation)

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18. If he will assess the potential effect on the level of homelessness of the extension of the shared accommodation rate for housing benefit to single people aged under 35 years. [58799]

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19. If he will assess the potential effect on the level of homelessness of the extension of the shared accommodation rate for housing benefit to single people aged under 35 years. [58800]

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An equality impact assessment on this measure was published on the DWP website on 9 May 2011, but it does not contain a specific estimate of the impact on homelessness, because we cannot anticipate the behaviours of tenants or their landlords.

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One of the big problems across the board for people aged under 35 is that, because of where they live geographically, or because of medical reasons or their lifestyle, they might simply be unable to reduce their housing costs and share, and therefore could face eviction. That would put more pressure on local authority housing departments, which are already under pressure because of the lack of affordable housing. Do the Government have any plan to help those local authorities meet those increased pressures?

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We do indeed, and my hon. Friend, who has a strong track record on housing issues in this House, raises an important point. Over the next four years we will add a total of £190 million to the money going to local authorities, around two thirds of which will be discretionary payments to help just the sort of difficult cases that he mentions, plus other funding for local government to assist them.

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I welcome that answer, but is it not likely that perhaps a third or more of the discretionary housing payments budget will be required for the disabled alone—and that is without considering other vulnerable groups—if local authorities decide to use it to stop them being forced to share? Is there not a case for simply exempting certain groups from the change altogether?

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I can assure my hon. Friend that certain disabled groups have a blanket exemption: those who qualify for the severe disablement premium are automatically exempted from these proposals.

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There is a particular problem in rural areas, where the housing stock is inflexible and where it is difficult to provide rooms for under-25s, let alone under-35s, as the North Wales Housing Association pointed out to me recently. It fears the drift to HMOs—houses in multiple occupation—particularly in seaside towns and urban areas. Can the Government introduce any flexibility on this issue?

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Although HMOs are one response to the problem, young people will have a range of alternatives, which will differ from individual to individual. For example, one third of single people aged 25 to 34 live with their parents. I recognise that this is not an option for some, but it may be an option that others will take up. Some will use the Government’s “Rent a room” scheme—whereby an owner-occupier will rent out a room, from which they can get more than £4,000 tax free—and some may be able to rent a room from a social landlord, which is something that we are looking to explore more.

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I call Tony Lloyd. Not here. I call Mr Gerry Sutcliffe. Not here.

Benefit Payments (EU Nationals)

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22. How many nationals of other EU member states are in receipt of benefits provided by his Department. [58804]

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One of the things that I was surprised to discover in the past few weeks is that the Department does not keep any record—nor, indeed, did it under the previous Government—of the nationality of people who claim benefits. This is something that we are moving to address; indeed, we want to find a way to ensure that we do so.

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It is indeed a scandal that we do not know how many EU nationals are claiming benefits funded by the British taxpayer. Is it not completely wrong for an eastern European citizen to be working in this country, with his family and children back home in Poland or wherever, and to be claiming and receiving child benefit at the British taxpayer’s expense?

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My hon. Friend puts his finger on one of the anomalies of the European system which is causing concern not just in this country, but in other capitals around Europe. I have had many conversations in the last few months with fellow Employment Ministers in other EU countries, and there is a mounting debate about the need for rule changes that will set out exactly when and where benefits should and should not be paid.

Youth Unemployment

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23. What steps his Department is taking to reduce the level of youth unemployment. [58805]

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The issue of youth unemployment is one that the right hon. Gentleman would know, if he had listened to my earlier answer, is of great importance to this Government and the nation. We are taking urgent steps to seek to address it.

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Despite excellent apprenticeship schemes such as the one at Airbus near my constituency, which employs about 100 apprentices a year, youth unemployment in Wales is, sadly, still higher than anywhere else in the UK as a whole. Given what the Minister said earlier about potential jobs being created, in the absence of a strong regional policy and with the scrapping of Labour’s job schemes, how can he guarantee that the jobs for young people will go to where the most young people are unemployed?

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We need two things to solve the problem of youth unemployment. We need a strategy for growth, which was at the heart of the Budget put forward by my right hon. Friend the Chancellor of the Exchequer a few weeks ago. We will continue to seek measures that will encourage business to grow, develop and create jobs in this country. Alongside that, we will continue to pursue measures, through work experience, the Work programme and other arrangements to support young people to make sure that they are as well equipped as possible to take advantage of those vacancies wherever in the United Kingdom they arise and wherever in the United Kingdom they live.

Topical Questions

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T1. If he will make a statement on his departmental responsibilities. [58806]

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Last week, we launched the Work programme—the biggest single such programme that the UK has ever had. It contrasts with the number of confusing and sometimes prescriptive provisions offered previously. We are adopting a personalised and flexible approach, which the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) spoke about earlier. It will involve paying providers by results, which we have explained, and will give them the freedom to innovate. The Work programme will deliver, we believe, effective and cost-effective support to help claimants into sustainable employment.

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Rising fuel costs, 20% VAT, high inflation and cuts to the winter fuel allowance and local government budgets will all hit vital front-line services used by pensioners. I should be grateful if the Minister would explain to the pensioners of West Lancashire why the Government need a new material deprivation indicator to tell them what they already know—that the policies of this Conservative-led Government are hitting them over and over again?

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The hon. Lady is right that we did not reverse Labour’s planned cut in the winter fuel payment. What we did is reverse Labour’s planned cut to the cold weather payment, which pays £25 a week every time the temperature falls below zero—and we ended up paying more than £400 million to cold, vulnerable pensioners, which is money that the Labour party would not have spent.

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T3. In the context of the big society and mindful of the need for a variety of provision, what evidence is there that bidders for the Work programme have come from the voluntary sector and social enterprises? [58809]

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There is a huge amount of evidence. Two of the main providers are voluntary sector based, and getting on for half of all the subcontractors in the programme will be from the voluntary sector. This will be the biggest boost to the idea of the big society. Now that we hear Labour Members are rethinking on welfare, we hope that they will have some good things to say about it.

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The cap on overall benefits in the Welfare Reform Bill is an important part of the legislation, but yesterday the noble Lord Freud said on television that there was going to be a significant U-turn, as there were going to be exemptions. Pressed on the detail, he said:

“Well, it’s where we think that, you know, there’s something happening that is undesirable.”

I do not wish to be pedantic, but that is not a clear plan for reform. The Third Reading of the Welfare Reform Bill is on Wednesday. Will the amendments for this new proposal be on the table by then?

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It is good to see the right hon. Gentleman again—long time, no see. I am glad that he has finally made it to the Dispatch Box. He should not believe everything he reads in the media. The reality is that this policy is not changing because it is a good policy. The reality is that nearly half of those of working age who are working earn less than £26,000 a year, and they pay taxes to see some people on benefits earning much more than that amount. As we proceed through Report and Third Reading, I look forward to seeing the right hon. Gentleman support and vote for the Bill because he believes that those on benefits should not earn more than those who are living and working hard.

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The Secretary of State’s Welfare Reform Bill would be easier to support if we knew what difference it would make in the real world. We still do not know what it will mean for child care or for people with disabilities, and now we do not know what it will mean for the benefit cap either.

Since the Secretary of State took office, the Treasury has forecast that the housing benefit bill will rise by £1 billion. If he cannot tell us what his policy on exemptions is, will he tell us what Lord Freud’s current policy will cost taxpayers?

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As I have said, we are not changing the policy. What my noble Friend Lord Freud was referring to was what we are already doing: making discretionary payments to ensure that the policy is eased in properly. [Interruption.] Hang on a second. The right hon. Gentleman cannot have it both ways. He has just said that we are not cutting housing benefit enough. He ought to talk to those on his Front Bench who think that we are cutting it too much. That is the problem with the Opposition at the moment: they want to have it all ways. Today the Leader of the Opposition made a speech in which he said that Labour would be tough on benefit claimants and that those who were not in work would not receive social housing. I simply say to Labour Members that this whole idea of welfare and change is a lot of wriggly-worm U-turns from the Opposition.

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rose

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Order. I remind the House that if we are to maximise progress, we need pithy questions and, from the Secretary of State and his colleagues, pithy answers.

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T2. Members have already raised the issue of women born in 1954 who must wait an extra two years to receive their pensions, but those who have small occupational pensions paid for and planned for on the basis of the earlier retirement date and who then find themselves out of work before the later date will be adversely affected in terms of jobseeker’s allowance. Will the Minister review the rule and, specifically, the way in which it relates to those disadvantaged women? [58808]

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The hon. Lady is right: there is often an interaction between the rules governing benefits such as JSA, occupational pensions and state pension ages. However, in cases in which people’s state pension age has risen, the rules governing working-age benefits are exactly as they have always been. Provision will be made, whether through employment support allowance, JSA or, in the example given by the hon. Lady, an occupational pension. We are not talking about leaving people with nothing to live on.

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T4. The mental health charity Mind has suggested changes in the work capability assessment to capture better the complexity of the conditions of those suffering from mental illness. What reassurance can the Minister give about how the process can be enhanced to reflect those needs better? [58810]

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We have already introduced mental health champions to the network of health care professionals who carry out the assessments, and we believe that the changes introduced at the beginning of April will bring more people with mental health conditions into the support group. However, we now have on our desks a new set of proposals from the charities which we asked them to supply to us. We are considering them carefully, and hope to respond in the very near future.

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One important purpose of crisis loans is to cover emergencies when claimants have no money and payment of their benefits or tax credits is delayed. Because applications are now limited to three per year, families in my constituency already face the blocking of that route to help, not because they have failed but because of failings in the system. Will Ministers look at the system again and establish whether a more flexible approach could be adopted?

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We recognise that it is nonsense for one part of the benefits system to lend people money to deal with the fact that they have not received benefits from another part of it on time. The whole business of alignment payments has become completely out of control. Under my right hon. Friend the Secretary of State’s universal credit scheme, the matter will be dealt with through advance payments of the credit. Clearly the idea that people can have multiple crises—up to 10 a year—does not produce a rational system, which is the reason for our reform.

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T5. Will my right hon. Friend please update the House on the progress of the work clubs initiative? [58811]

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Let me start by paying tribute to my hon. Friend for his work in establishing a national network of work clubs. Several hundred are now up and running around the country, some with a degree of help from Jobcentre Plus and others with none at all. I hope that this strong network of organisations will make a real difference to people looking for jobs, and that their number will continue to grow.

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I opposed changes to Remploy made by my own party in government which resulted in the closure of my local factory in Woolwich. Before the Government implement any further changes under the Sayce report that may result in more closures of Remploy factories, will the Secretary of State contact the former employees of that Woolwich factory, and write to me telling me how many found jobs and are currently employed?

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I should like to reassure the hon. Gentleman that this Government’s policy is to continue with the modernisation plan, and there have not been further closures of Remploy factories. We will, however, look carefully at the recommendations of the report issued last week, which included recommendations on the future of Remploy. We will fully consult on that before going forward, and I am sure that that could well include what the hon. Gentleman suggested.

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T6. On behalf of Micklefield job club in my constituency, a strictly voluntary effort to help people back into work, and on behalf of GB Job Clubs, a charity that supports a national network of like clubs, may I ask what the Government will do to ensure that the state does not crush such voluntary provision? [58812]

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I should like to reassure my hon. Friend that I have made sure that there are no attempts within Jobcentre Plus and the Department for Work and Pensions to track and monitor and data-manage and performance-manage. This is a grass-roots movement. Our role is to provide a degree of local encouragement, and sometimes some initial funding to clubs to get up and running, but after that it is very much up to them to shape their destiny, and up to us to champion their success, but not to interfere.

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The DWP’s own research on the future jobs fund published last month demonstrated the value of Government subsidy for the employment of young people during an economic crash. Does the Minister agree with his own Department’s research, and will he therefore reconsider the possibility of a work subsidy for young people if their employment levels do not improve in the coming year?

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The whole point of that research was to look at how we can get value for money—how many people we can get back to work, and what we can best do to support them. We inherited a terrible situation from the last Government, with youth unemployment having been rising for a number of years. The programmes we are introducing—such as the Work programme and special provision within that, and the innovation fund—will help them much more than lavishing huge amounts of money for very little return, such as through the future jobs fund.

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T7. What are the Government doing to reduce conflict between parents in their dealings with the Child Support Agency? [58813]

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Reducing such conflict by putting in place support for parents to work collaboratively at the time of family breakdown lies at the heart of the reforms that we are looking at. I think Members of all parties can welcome that, and it has certainly been welcomed by organisations in the charitable sector who work with families.

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What were the terms of reference that the DWP gave to the Sayce team, what was cost of the report, and was the main beneficiary Radar?

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I thank the hon. Lady for her question. I apologise for not quite hearing the end of it, but let me say that we commissioned the report to look generally at how employment programmes were supporting severely disabled people, including all the programmes currently run by the Department. It is a very fragmented bunch of programmes, and Liz Sayce has done an excellent job in pulling that together and recommending a strategy and the way forward. Yes, we did remunerate Radar, because it was required to have additional help to support it in the running of its business while Liz Sayce was helping us.

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T8. I welcome my right hon. Friend the Secretary of State’s proposed reform of the benefit system, but how will universal credit help people who have been out of work take up part-time or flexible work if they are unable to take on a full-time job for any reason? [58814]

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I am glad that my hon. Friend has raised this matter. The reality about universal credit is that it is aimed at those who cannot take on full-time work, or those who are transiting back to full-time work having been out of work for a little while. It will help everybody take up work for a number of different hours that suit their own particular conditions. It is particularly good for lone parents, and they will benefit for each hour they take better than they do at present.

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The Government’s benefit cap will force many of my constituents to leave their home of many years, uprooting families, jobs, schools and communities. According to the right hon. Gentleman’s colleague, the hon. Member for Chelsea and Fulham (Greg Hands), on LBC just now, such people are making lifestyle choices. Is that the Government’s view?

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The position on the benefit cap is very straightforward and simple: those who are on benefit should not receive more money than those who are working and paying their taxes. There are exemptions, of course, such as for those who are making the right efforts to get back to work—those on working tax credit, for instance—and those who are disabled, as well as for widows and war widows. They are exempted from this, but for the rest of them the following simple principle holds: “If you can, you should be helped into trying to work”, and £26,000 a year seems a reasonable sum of money to me.

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T9. Many people are being tricked out of money by being offered lump sums, which turn out to be woefully inadequate, instead of their pension scheme. What steps are the Government taking on these incentivised transfers out of defined benefit pension schemes? [58815]

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I am grateful to my hon. Friend for raising that important issue. We are determined to drive out the bad practice whereby, as he says, people are given a bung of cash, sometimes a few weeks before Christmas, and are then given a value for their pension rights which is well below what they are actually worth to them. I met the pensions regulator and other interested groups a few weeks ago, and we are looking very hard at whether regulatory change is needed.

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In the light of earlier questions on the Health and Safety Executive, will there be more workplace inspections next year or fewer?

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We have made it clear that we are seeking to reduce the number of proactive workplace inspections by about a third by removing from proactive inspection low-risk premises that have no record of problems. In that way, the HSE can concentrate its resource on dealing with those employers where there is a problem and fault has been found. Indeed, we are introducing a system of fee for fault to ensure that we recover money from those employers who are breaking the rules.

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Changing from three to six months the period before which a claimant becomes eligible for the new personal independence payment not only means that people with sudden onset conditions, such as cancer or a stroke, have to wait longer for support, but it may affect their family’s access to carer’s allowance. Will the Minister investigate ways to enable those looking after loved ones who suffer sudden onset conditions early access to carer’s allowance?

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It is important that we continue to view the personal independence payment very much as something that relates to an individual and the way in which their condition affects them on an individual basis. We are not intending to look at particular conditions, but we will be carefully examining the way in which the introduction of the personal independence payment affects benefits that are passported, such as carer’s allowance, and we will bear my hon. Friend’s comments in mind.

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The Pensions Minister may recall that he kindly met me, the hon. Member for Chippenham (Duncan Hames) and a representative of the Twins and Multiple Births Association to discuss a modest proposal to amend the Sure Start maternity grant for parents of multiples. He undertook to come back to us on that, so I wonder whether he could update us on when he will be able to do so.

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The hon. Gentleman and my hon. Friend the Member for Chippenham rightly raised some specific issues relating to people who have had twins or other multiple births and the interaction between that situation and our changes to maternity grants, and I hope to be in a position to respond shortly.

Points of Order

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On a point of order, Mr Speaker. Last Thursday, a written statement on the fast-track solar photovoltaic review was quietly laid before the House. By Thursday evening we had been given the response. Gaynor Hartnell of the Renewable Energy Association said:

“The handling of this whole affair has been poor”.

Dave Sowden said:

“This is bad news for…worthwhile projects—schools, communities, public buildings.”

Friends of the Earth said:

“This consultation—

after which nothing changed—

“has been an utter farce—Ministers have completely ignored warnings from community groups”.

To make things worse, by Saturday there was an announcement in the Daily Mail that “Ministers plan an abrupt change of policy to rescue solar power jobs.” It was reported that the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker) had said:

“I am a big fan of solar energy. I believe it can have an important role in breaking the stranglehold of the Big Six energy companies.”

Out of respect to this House, which I know you hold most dear, Mr Speaker, and the necessity for policy announcements to be made in this Chamber, have you had a request for the Minister responsible for solar energy to appear before this House to explain, first, the review that never was, and secondly, the policy review change mooted over the weekend?

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I have not.

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On a point of order, Mr Speaker. You are, of course, aware that there is a major Bill before Parliament proposing huge changes in the national health service. It has been announced in the press today that the Prime Minister and the Deputy Prime Minister are to hold a staged event at 12 noon tomorrow to announce the changes that they intend to make to that Bill. Is it not utterly unacceptable, particularly when a Bill is before the House of Commons, for announcements about what is to be done to that Bill to be made two and a half hours before the House sits? Do you not agree that that statement should be made first to the House of Commons, and that this stunt should be called off?

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I reiterate to the right hon. Gentleman, and to the House, my usual point from the Chair, which is that if Ministers, be they ever so high, have important policy announcements to make, including about any changes in policy, those announcements should be made first to the House of Commons.

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Further to that point of order, Mr Speaker. In the light of the NHS Future Forum report on the listening exercise for the Health and Social Care Bill, have you had any indication from the Secretary of State or the Government business managers when they intend to end the pause in the Bill’s progress, and whether it will be recommitted to a Public Bill Committee of MPs to allow proper scrutiny of the proposed changes and to allow the Labour party, which formed the NHS, to have a say on those important matters?

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Those are important matters, but they are matters for the Government. The point of order raised by the hon. Gentleman, although a matter of great concern to him and to many others, is essentially a business question, and therefore is not a matter for the Chair. Those who are responsible for such matters will have noted, and doubtless taken heed of, the hon. Gentleman’s observations.

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Further to that point of order, Mr Speaker. I am letting your original pronouncement in answer to my right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman) sink in, and I would not want to put any words in your mouth, obviously, but it seemed to me that you might have been suggesting that the Prime Minister and the Deputy Prime Minister would not be right to go ahead with an announcement in another venue before coming to this House.

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If the hon. Gentleman had not made his name as a Member of Parliament, I feel sure that he would have had a very fruitful career at the Bar—

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Downstairs? Behind the bar?

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Not downstairs, but in the law courts.

I simply say to the hon. Gentleman that I am not suggesting anything, and I do not feel the need to add anything to what I have already said in response to the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman). First, I think that what I said was pretty clear, and secondly, the right hon. Gentleman is not in any way slow on the uptake. I hope that is clear.

Royal Assent

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I have to notify the House, in accordance with the Royal Assent Act 1967, that Her Majesty has signified her Royal Assent to the following Act:

Postal Services Act 2011.

Welfare Reform Bill (Programme) (No. 2)

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I beg to move,

That the Order of 9 March 2011 (Welfare Reform Bill (Programme)) be varied as follows:

1. Paragraphs 4 and 5 of the Order shall be omitted.

2. Proceedings on Consideration and Third Reading shall be completed in two days.

3. Proceedings on Consideration shall be taken on the days shown in the first column of the following Table and in the order so shown.

4. The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.

TABLE

Proceedings

Time for conclusion of Proceedings

First day

New Clauses and amendments relating to recovery by deduction from earnings; New Clauses relating to Part 1; new Schedules relating to Part 1; amendments to Clauses 1 to 31; amendments to Schedule 1; amendments to Clause 32; amendments to Schedule 2; amendments to Clauses 33 and 34; amendments to Schedule 3; amendments to Clause 35; amendments to Schedule 4; amendments to Clause 36; amendments to Schedule 5; amendments to Clause 37; amendments to Schedule 6; amendments to Clauses 38 to 43; new Clauses relating to Part 2; new Schedules relating to Part 2; amendments to Clauses 44 to 48; amendments to Schedule 7; amendments to Clauses 49 to 62; new Clauses relating to industrial injuries benefit or housing benefit; new Schedules relating to industrial injuries benefit or housing benefit; amendments to Clauses 63 to 68.

10.00 pm

Second day

New Clauses relating to the social fund or state pension credit; New Schedules relating to the social fund or state pension credit; amendments to Clause 69; amendments to Schedule 8; amendments to Clauses 70 to 74; new Clauses relating to Part 4; new Schedules relating to Part 4; amendments to Clauses 75 to 88; amendments to Schedule 9; amendments to Clauses 89 and 90; amendments to Schedule 10; amendments to Clauses 91 and 92; remaining new Clauses relating to Part 5; new Schedules relating to Part 5; amendments to Clauses 93 to 99; amendments to Schedule 11; amendments to Clause 100; amendments to Schedule 12; amendments to Clauses 101 to 128 (other than those relating to recovery by deduction from earnings); new Clauses relating to Part 6; new Schedules relating to Part 6; amendments to Clauses 129 to 135; amendments to Schedule 13; new Clauses relating to Part 7; new Schedules relating to Part 7; amendments to Clause 136; amendments to Schedule 14 (other than those relating to recovery by deduction from earnings); amendments to Clauses 137 to 140; remaining proceedings on Consideration.

6.00 pm

5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at 7.00 pm on the second day.

Let me speak briefly on the programme motion. As Members will see, we have set out a plan to carry out Report and Third Reading over two days, commencing now until 10 pm tonight and resuming after Prime Minister’s questions and any other business that takes place during the day on Wednesday, with Third Reading, as is normal, taking place an hour before the end of the day.

These two days follow a lengthy and constructive debate in Committee during which, unusually, we managed to cover every clause in the Bill. I fear I cannot offer the Opposition quite the same latitude on Report, although I know they will want to raise a number of issues on this crucial matter. It is welcome to note the intervention about the Government’s position made today—albeit that it was rather confusing—by the shadow Secretary of State, who is no longer in his place, and indeed the intervention made today by the Leader of the Opposition on the Opposition’s position on welfare reform.

I hope that over the next two days we will see some evidence emerge on what line the Opposition will take, whether they will be for us or against us on the benefit cap, and whether they have decided to back us on a number of the other reforms we have proposed. They have been somewhat ambiguous in parts of the debate in Committee about whether they support us, and I hope we will reach the end of the programmed debate on Wednesday and find that they support the Bill on Third Reading. I hope that the two days we have set aside will allow us to debate all the key areas for discussion in the Bill and that it will become a little clearer whether, when it comes down to the final decisions, the Opposition are with us or against us on those key matters. I look forward to two days of lengthy, interesting and perhaps enlightening— in respect of the Opposition’s policies—debate on these matters.

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I take issue somewhat with the Minister. I do not agree that there has been adequate time in Committee to consider the Bill, not least because on more than one occasion Ministers left early, before we had completed our first afternoon discussion. Consequently, a number of key issues, particularly new clauses, were left undebated when the Committee ended, and as a result, some of those are on the Order Paper today.

With that backlog, as well as other key points in the Bill, I am very concerned that the two days now available are likely to be insufficient for the debate that is needed. Given that inadequate time, however, the knife proposed in the Government’s programme motion is in a perfectly sensible place. Because we need to get on with the debate I shall not seek to divide the House on the motion, but I am concerned that, as will become clear during the debate, the House will not have had sufficient time to consider properly the full consequences of the Bill.

Question put and agreed to.

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The Orders of the Day will now be read by the Clerk, Dr Sir Malcolm Jack.

Welfare Reform Bill

[1st Allocated Day]

Consideration of Bill, as amended in the Public Bill Committee

New Clause 1

Deductions from earnings: other cases

‘(1) In section 71 of the Social Security Administration Act 1992 (overpayments - general), after subsection (9) there is inserted—

“(9A) Regulations may provide for amounts recoverable under the provisions mentioned in subsection (8) above to be recovered by deductions from earnings.

(9B) In subsection (9A) above “earnings” has such meaning as may be prescribed.

(9C) Regulations under subsection (9A) above may include provision—

(a) requiring the person from whom an amount is recoverable (“the beneficiary”) to disclose details of their employer, and any change of employer, to the Secretary of State;

(b) requiring the employer, on being served with a notice by the Secretary of State, to make deductions from the earnings of the beneficiary and to pay corresponding amounts to the Secretary of State;

(c) as to the matters to be contained in such a notice and the period for which a notice is to have effect;

(d) as to how payment is to be made to the Secretary of State;

(e) as to a level of earnings below which earnings must not be reduced;

(f) allowing the employer, where the employer makes deductions, to deduct a prescribed sum from the beneficiary’s earnings in respect of the employer’s administrative costs;

(g) requiring the employer to keep records of deductions;

(h) requiring the employer to notify the Secretary of State if the beneficiary is not, or ceases to be, employed by the employer;

(i) creating a criminal offence for non-compliance with the regulations, punishable on summary conviction by a fine not exceeding level 3 on the standard scale;

(j) with respect to the priority as between a requirement to deduct from earnings under this section and—

(i) any other such requirement;

(ii) an order under any other enactment relating to England and Wales which requires deduction from the beneficiary’s earnings;

(iii) any diligence against earnings.”

(2) In section 71ZA of that Act (overpayments out of social fund), before subsection (3) there is inserted—

“(2A) Subsection (9A) of section 71 above as it so applies shall have effect as if the reference to amounts recoverable under the provisions mentioned in subsection (8) of that section were to amounts recoverable under subsections (1) and (4) of that section by virtue of subsection (1) above.”

(3) In section 75 of that Act (overpayments of housing benefit), at the end there is inserted—

“(8) Regulations may provide for amounts recoverable under this section to be recovered by deductions from earnings.

(9) In subsection (8) above “earnings” has such meaning as may be prescribed.

(10) Regulations under subsection (8) above may include provision—

(a) requiring the person from whom an amount is recoverable (“the beneficiary”) to disclose details of their employer, and any change of employer, to the Secretary of State or the authority which paid the benefit;

(b) requiring the employer, on being served with a notice by the Secretary of State or the authority which paid the benefit, to make deductions from the earnings of the beneficiary and to pay corresponding amounts to the Secretary of State or that authority;

(c) as to the matters to be contained in such a notice and the period for which a notice is to have effect;

(d) as to how payment is to be made to the Secretary of State or the authority which paid the benefit;

(e) as to a level of earnings below which earnings must not be reduced;

(f) allowing the employer, where the employer makes deductions, to deduct a prescribed sum from the beneficiary’s earnings in respect of the employer’s administrative costs;

(g) requiring the employer to keep records of deductions;

(h) requiring the employer to notify the Secretary of State or the authority which paid the benefit if the beneficiary is not, or ceases to be, employed by the employer;

(i) creating a criminal offence for non-compliance with the regulations, punishable on summary conviction by a fine not exceeding level 3 on the standard scale;

(j) with respect to the priority as between a requirement to deduct from earnings under this section and—

(i) any other such requirement;

(ii) an order under any other enactment relating to England and Wales which requires deduction from the beneficiary’s earnings;

(iii) any diligence against earnings.”

(4) In section 78 of that Act (recovery of social fund awards), after subsection (3B) there is inserted—

“(3C) Regulations may provide for amounts recoverable under subsection (1) above from a person specified in subsection (3) above to be recovered by deductions from earnings.

(3D) In subsection (3C) above “earnings” has such meaning as may be prescribed.

(3E) Regulations under subsection (3C) above may include provision referred to in section 71(9C) above.”’—(Chris Grayling.)

Brought up, and read the First time.

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I beg to move, That the clause be read a Second time.

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With this it will be convenient to discuss Government amendments 1 to 13.

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Mr Speaker, if you would permit me to go off the subject for a moment, I think it would be appropriate to mark, as you did just now, the recent honour received by the Clerk. I am sure that Members in all parts of the House send him our congratulations and best wishes. [Hon. Members: “Hear, hear.”]

Amendments 1 to 13 and new clause 1 introduce the direct earnings attachment, or DEA, as a method of social security debt recovery. An attachment of earnings is a method by which money will be stopped from a customer’s wages to pay a debt. The debt in question could be an overpayment of benefit, any associated penalty, a recovery of hardship payments or a payment on account. The measure will also be available for use by local authorities for the recovery of housing benefit overpayments. In due course it could also be used for the recovery of council tax benefit overpayment, once the localisation of council tax benefit takes place. A DEA would also be available to recover an administrative penalty for a benefit fraud offence or a civil penalty for failing to take proper care of a benefit award.

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Is there some sort of structure in process so that if EU migrants who work in the country and are eligible for benefits move out of country when they no longer wish to work here, any overpayment of benefits could be clawed back, should those migrants move through other EU countries?

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My hon. Friend makes an important point. Although in theory mechanisms do exist to recover payments, the process is much more difficult than one would wish. I take her point, and my ministerial colleagues and I will continue to seek ways of ensuring that in such an eventuality, we can make recoveries.

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While the Minister considers that issue, will he also consider the case of the many hundreds of thousands of British people who live in Spain, who often rely on support, especially from the national health service and many other services that they receive, from the Spanish Government? The same applies elsewhere in Europe.

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The hon. Gentleman is of course correct, but I am sure that he would also agree that if someone comes to live and work in this country, receives benefit payments and then returns overseas, they carry with them an obligation that they should fulfil. That is the sole point that my hon. Friend the Member for St Albans (Mrs Main) was making, and it is one that I think Members on both sides of the House would see as common sense. There is freedom of movement across Europe, but we must make sure that the mechanisms are in place to ensure that our systems are not abused. The primary purpose of DEA is to enforce recovery where the debtor is in pay-as-you-earn employment and will not make other arrangements for debt repayment. I think that that is a sensible approach to take.

I apologise to the Opposition for the fact that we were unable to bring the new clause forward in Committee. It has been very carefully considered and discussed in our regulatory processes. We have brought it forward at this time and hope that they will not find it controversial. One of the reasons why I hope that they will not find it controversial is that there is currently something of an anomaly in the system. If someone incurs a penalty, for whatever reason, and remains in the benefit system, we can recover that money through a deduction from the benefit payments they receive. However, if they move into PAYE employment and basically say, “No way. Go away,” we currently have no mechanism for recovering the debt that is owed. That is the purpose of the measures that we are considering.

The rates of deduction will be determined in the regulations, which will include a safeguard to ensure that deductions do not take the debtor beneath a given level of earnings. That is necessary and common practice in the operation of similar arrangements in other parts of society where deductions are made—for example, with court-related penalties and deductions for child maintenance. It is essential that we do not deduct money at a rate that will tip the person concerned below a given level of earnings. It is, and will be, a basic principle that recovery of overpaid benefits should not cause undue hardship.

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Will the Minister clarify whether any judicial process will be applied to attachments in relation to someone’s earnings? The reason I ask is because, as I am sure all hon. Members know, mistakes happen, sometimes because of errors on a claimant’s part but sometimes because of errors by the bureaucracy, and I am concerned that there may not be enough safeguards to ensure that attachments will not be made erroneously.

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The hon. Lady makes an important point, and I will explain in a moment what rights individuals will have. It would of course be inappropriate to have a system in which a DEA could be applied and there was no comeback at all for the individual. A system that allowed no right of challenge or appeal would be wholly inappropriate, and I will explain in a moment why that will not be the case.

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On that point, would a debt order have any bearing on the assessable income available for child maintenance payments?

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That would depend on the circumstances. It is obviously important that a deduction of earnings takes into account the potential impact on the individual, so we would need to take into account other payments. Ultimately, it is a basic principle that recovery of overpaid benefits should not cause undue hardship, so all circumstances would need to be taken into account. I should clarify that council tax benefit will be deducted from council tax liability, so it will not be administered in quite the same way.

Imposing a DEA is intended to be an administratively simple process that replaces the current practice of obtaining an attachment of earnings order by application to the court. The ability of the Department for Work and Pensions to make DEAs on its own authority sends out a strong signal to potential fraudsters and will prove a useful tool in the fraud and error strategy. I hope, particularly given the comments made today by the Leader of the Opposition, that the Opposition will welcome this as a sensible measure to take against people who defraud the system.

We think that the measures will also encourage claimants in debt to be more aware of the possibility of deduction at source, reducing any expectation that they will avoid repaying debt. There is always a concern that they will think that they can just pile money up and up, and that there will be no day of reckoning. The proposals make it much simpler for us to ensure that there is indeed a day of reckoning.

The measure will make use of an existing process used by the Child Maintenance and Enforcement Commission, with which businesses are already familiar. It is a matter of routine for an employer to make a child maintenance-related deduction from a person’s salary cheque each month, and this measure will use the same process. The provision also allows for the levy of an administration charge against the debtor by the employer administering the deduction, offsetting any increased administrative costs resulting from the increased use of earnings attachment as a recovery method.

Using a DEA to recover debt does not remove a debtor’s rights to challenge any decision relating to the recovery of benefits or the imposition of a civil penalty. This relates to the point just raised by the hon. Member for Banff and Buchan (Dr Whiteford). For example, when an overpayment occurs in relation to an award, an independent decision maker decides whether a recoverable overpayment exists. As I set out in Committee, there are circumstances in which overpayments will be recovered, and circumstances in which they will not. We will focus on offering discretion to our front-line staff in judging what is right and what is wrong. We accept that there will be times when an overpayment results from an administrative error within the Department, and that we should accept the blame for that and not seek recovery of the overpayment. The general position, however, is that if someone receives money that they should not have received, we will expect them to pay it back. If they refuse and have already started work, this mechanism will enable us to recover the money.

In addition, there will be a right of appeal to an independent appeal tribunal, should the person be unhappy with the original decision. So there is still a full judicial process available, similar to the one available when a sanction is imposed that could lead to the withdrawal of benefits. The claimant has the right first to go to the decision maker and then to a tribunal, and those rights will remain in this situation. However, we will not have to go to court to secure the original order to make a deduction of earnings.

Before taking action to impose a DEA, we will ensure that the debtor is aware that we are taking such action. We are also keen to remain mindful of our welfare obligations. We do not, for instance, want to push the debtor into leaving work in order to avoid a repayment under a DEA. This measure must be applied with common sense and care. In certain instances, it might be determined that another method of recovery should be employed, or that arrangements should be made so that the DEA commences only after other commitments have been cleared. This relates to the point that my hon. Friend the Member for Brigg and Goole (Andrew Percy) raised a moment ago: we will take into account other commitments.

The DEA is designed to recover debt from those who currently seek to avoid repayment—those who hope that they can avoid paying the money back. Those who comply with requests for repayment and who either come to a reasonable arrangement to repay or can show that they are currently unable to repay will not have a DEA imposed. I am sure that hon. Members will agree that when someone refuses to meet their obligations to repay benefit debt, such powers should be available to the relevant authorities to make recovery.

That is all that the new clause and the other amendments are designed to do. They are designed to ensure that we treat people fairly and appropriately within the system. When necessary we can recover benefits directly from people who are still on benefits, but we cannot currently do that easily, without going to court, from people who have moved into PAYE employment. These provisions will allow us to change that. I believe that this is a prudent and sensible step. It is very much in keeping with our anti-fraud strategy, and I hope that it will be in keeping with that of the Opposition as well. I hope that the new clause will command support on both sides of the House.

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I welcome this opportunity to respond to this first group of amendments. It is certainly one of the less contentious groups that we shall consider, and the Minister should not imagine that we will be equally amenable throughout the debate today. The new clause aims to amend the Social Security Administration Act 1992 to allow the Government to recover overpayments resulting from mistakes or fraud in out-of-work benefits and housing benefit, as well as in universal credit and the other contributory benefits.

I can well see why the Minister wants to make these changes. In particular, because universal credit will encompass people who are in work as well as those who are out of work, it makes sense for the recovery of overpayments to be extended into earnings received in work, as he has outlined.

However, a number of questions need to be asked about these plans. The Minister has already been pressed about the mechanism for appeals. The changes will certainly require a good deal of co-operation from employers, as those are the organisations on which the Government will be serving notices to deduct from earnings. Employers will bear the burden of the administration of these deductions through having to pay in amounts, keep records of those amounts, and keep the Secretary of State informed if the person concerned leaves their employment.

The Minister has made the perfectly reasonable point that a system already exists for child support payments, but in order to take into account the additional burden that he is imposing, the Government are allowing for the employer to deduct an amount in respect of their administration costs. We need to have some idea of the amount that employers will be permitted to deduct, which should be seen to be fair by the person whose pay is being deducted, while adequately compensating employers. Will the Minister tell us a little more about how that amount will be calculated, and how it relates to the existing arrangements for child support that he touched on?

The amendments allow for a level of earnings below which earnings must not be reduced by the deductions. Again, that seems appropriate, but we need to know how that level of earnings will be prescribed. There could be a significant impact on work incentives, particularly for people who have received overpayments and who may well have been acting entirely innocently, having been confused or having made a mistake—or perhaps the job centre has made a mistake. If the amount is too low, claimants who are out of work could see little gain from moving into work. Additionally, if the deductions are at a flat rate or not a percentage of hourly pay, the work incentives that the universal credit taper mechanism is designed to provide will be compromised. Will the Minister tell us how the minimum level of earnings will be calculated? Will he ensure that people who are repaying overpayments will still be better off if they increase their income through working additional hours?

Subsection (3)(i) of new section 71ZCA of the Social Security Administration Act 1992 creates a criminal offence for non-compliance with the regulations, with a fine of £1,000, which would be a hefty sum for a small business. Small businesses have less time and energy to spend on administration or human resources, so the additional burdens being placed on them could prove a significant disincentive to their recruiting new employees who have overpayments hanging over them. That would result in those people finding it more difficult to get into work. Will the Minister tell us a little more about how he thinks that the new provisions will affect people who are paying back overpayments while trying to find a job? How he will ensure that the provisions do not create a new barrier to those people getting back into work?

The move towards allowing deductions from earnings to repay benefits lost due to error or fraud is sensible, particularly because universal credit will be paid to people in work as well as out of work. The Government are already introducing several penalties for those whom they feel have negligently made incorrect statements. It is important that we do not penalise people who have made mistakes but have done so honestly, by placing new and unnecessary barriers to employment in their way. The minimum level of earnings and the red tape that this will mean for small businesses could have that result if the Government get the judgments wrong. I hope that the Minister will be able to give us some reassurances about how the measures will work in practice.

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It is a pleasure to make my first contribution to this stage of proceedings on the Bill by welcoming an aspect of Government amendment 2. Specifically, it is enormously welcome that the short paragraph (e) will enable regulations to include

“a level of earnings below which earnings must not be reduced”

when overpayments are being recovered. That echoes the practice in Sweden, Germany, the Netherlands, Norway and other nations, which have legally enforceable, attachment-free limits when debts are being enforced, below which claimants must be protected. The limits relate to a national minimum income standard, which is set by a variety of methods. I am grateful to Professor John Veit-Wilson, Professor Elaine Kempson, Damon Gibbons of Debt on our Doorstep and Rev. Paul Nicolson of the Zacchaeus 2000 Trust, who have helped me to prepare for this debate.

I would be pleased to see the principle of irreducible attachment-free minimums extended to all debts and to the unemployed, in particular to safeguard children’s, disability and housing benefits. That would prevent the damage that is done to physical and mental health by the enforcement of debt against poverty incomes, and the damage that that does to the capacity of the poorest adults to find and keep work.

In Sweden, the standards for a reasonable standard of living are uprated for price index changes every year and reset every five years by the National Board for Consumer Affairs. The standards are based on survey data on national household consumption patterns and current prices; statisticians and NBCA policy officials decide what is reasonable in terms of deviations from the averages. For example, for the past four years in the UK, the prices of food and domestic fuel have increased faster than the retail prices index and the consumer prices index. The standards are used by the social service board for setting benefits and by the tax authority for setting the tax threshold. The tax threshold is also used by the court enforcement authority to set its attachment-free sum for debt enforcement. That sum consists of two parts: variable housing costs and a fixed standard normal sum for all other living expenses.

There are clearly other methodologies for setting the minimum acceptable income standard below which incomes should be protected and attachment-free. In Committee, we explored work that is under way in this country at the universities of York and Loughborough, among others, to develop a minimum income standard that can command and be informed by the perceptions of the public. There is a range of options for assessing and setting the minimum standard below which there will not be deductions. There are examples from other nations where such a minimum is enforceable by the courts and related to national minimum income standards. In countries that have legally enforceable limits, the courts, in setting payment plans, can ensure that the debtor is left with a minimum level of income, taking account of family size.

I hope that the small but vital paragraph (e) in Government amendment 2 will begin an era of cross-party support for legally enforceable irreducible and attachment-free minimums when people are repaying debts, which are based on minimum income standards. That would contribute to a reduction in the huge cost of mental illness to the health service and the wider economy, and make a significant contribution to the reduction of poverty in the UK. I hope that we have an ambitious approach to setting that minimum.

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I start by saying that I very much appreciate the comments of the hon. Member for Stretford and Urmston (Kate Green). I listened carefully to her points, a number of which she made in Committee. She has given a great deal of thought to these matters, and although I cannot offer her a guarantee that we will do all the things she wishes, I can say to her that we will take great care, in the regulations attached to the Bill, to ensure that we get the right balance. It has been clear for a long time in this country, and remains absolutely clear under the current Government, that in setting the levels of any deduction we have to be extremely careful not to tip people into hardship. In particular, we must not encourage them to leave work and end up moving them and their families down the poverty scale.

The hon. Lady and the right hon. Member for East Ham (Stephen Timms) asked how we would determine the level of earnings below which deductions for overpayments cannot be made. Of course, there is no one-size-fits-all approach, and the circumstances of different families are very different. There may be a case in which, as my hon. Friend the Member for Brigg and Goole (Andrew Percy) suggested, there is a deduction for child support, or the number of children in a family or a disability may be factors. Great care therefore has to be exercised.

The minimum level that we will pursue will be determined to ensure that the debtor is left with sufficient income to maintain themselves and their family, in line with similar provisions in the Attachment of Earnings Act 1971. We therefore plan to use the same basis that the previous Government used—for example, to determine deductions from benefit payments.

In many cases, however, a direct earnings attachment will be implemented with little negotiation with the debtor. There will be a prescribed minimum level that will not take account of individual circumstances. We will try to create a system whereby we are mindful of the need to reflect the circumstances of the individual, but we cannot go the whole way, and we certainly cannot go quite as far as the hon. Member for Stretford and Urmston would wish.

If a debtor finds that they are unable to cope with the deductions being made from their earnings, they should contact us to discuss an alternative payment rate. Of course, they can avoid being placed in that situation, bearing in mind that we are discussing not people who are struggling to deal with something that they have already agreed but those who have wilfully refused to enter an agreement with us and are basically saying, “I’m not paying the money back”, or who have not even got to the point of saying anything to us at all.

Debtors who are repaying their overpayment by means of a direct earnings attachment will, in line with those repaying by other methods, be able to claim that the repayment rate causes them hardship and ask for it to be reduced. Although we of course have a responsibility to recover overpayments in order to protect public funds, we also take into account an individual’s financial and personal circumstances. The hon. Lady articulated a strong case for her points, but I cannot offer her quite as much as she would wish. However, I can offer her an assurance that we will always take an individual’s circumstances into account, particular where poverty, deprivation and hardship could arise.

The right hon. Member for East Ham made a point about employers. We will, of course, use the same mechanism for the attachment orders in the Bill as is used for child maintenance deductions. That process is well established through the Child Maintenance and Enforcement Commission system, and prior to that through the Child Support Agency, so it should not cause employers to recast their processes and do things very differently. On that basis, I am confident that it should not represent a significant additional burden on employers.

The right hon. Gentleman mentioned the provision for a £1,000 fine. In truth, there is no excuse for a refusal to engage in any part of the process. The orders will arise only because an individual claimant has refused to engage, and there is no real excuse for an employer to refuse to engage either. The matter should not be complicated, and it certainly should not be complex enough to cause an employer to decline an expansion in business or a recruitment to fill a vacancy. The process is established and many employers up and down the country are used to dealing with it, and I do not believe there will be significant extra burden on business.

The right hon. Gentleman asked how much employers could deduct for the administration charge, and the answer is an amount not in excess of £1 for each deduction. He asked for an assurance that the measure will not damage work incentives. The answer to that is that, as with all debt recovery, we must of course be mindful of the Department’s welfare obligations. As I said, recovery of overpaid benefits should not cause undue hardship. In the calculation of a repayment, we certainly would not want to push someone into a position in which they have to leave work to avoid payment under a DEA.

The operation of the DEA does not mean that the debtor will commence the repayment of their debt earlier than they would under another repayment method. The debtor will have had ample opportunity to make other arrangements to pay, or indeed to show that suspension of recovery was applicable in their case. We are not talking about people who have had no chance to engage and discuss.

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Will people who receive pay rises always receive some benefit from it, or could they lose all of that increase in additional repayments required by the Department?

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It is very difficult to give an absolute answer to that question. It is unlikely that we would seek to withdraw an entire pay rise, but clearly, if we had given somebody a lot of slack in making their repayments, and their financial circumstances improved, we would not allow them simply to continue paying at the hardship rate that they had previously paid. We would expect an improvement in the terms based on their improved circumstances.

The right hon. Gentleman, as a former Minister, knows the reality. Well-established hardship considerations are in place. If the customer engages with the Department, their circumstances could suggest that another method of recovery should be employed. Arrangements are made so that the DEA begins only after a period time, but only in exceptional circumstances would we waiver repayment.

Common sense lies at the heart of this measure. It is our job to recover funds that have been overpaid to a claimant when there is not a good reason for waiving the repayment because of departmental error. At the same time, it is not in any of our interests for the system to force people into severe hardship and poverty—the system should reflect the reality of people’s financial situations.

There is a clear obligation to repay. The Leader of the Opposition spoke this morning of responsibility, and he was right to do so. Those who we are talking about have a responsibility to repay the money that is due to us. However, the Department, and indeed the courts, must apply common sense to the process, achieve the right balance and ensure that we recover the money that is due to the taxpayer correctly and sensibly.

I welcome the Opposition spokesman’s positive comments. We are likely to have livelier debates as the hours go by, although I hope, having heard the Leader of the Opposition’s comments this morning, that such debate masks their willingness to support the Bill. It would be disappointing if the Opposition did not support the Bill. If they decline to support it, I will look forward to having a debate in public on who is right and who is wrong, but for now I am delighted that there is cross-party co-operation on this group of amendments and the new clause.

Question put and agreed to.

New clause 1 accordingly read a Second time, and added to the Bill.

Clause 102

Recovery of benefit payments

Amendments made: 1, page 67, line 35, at end insert—

‘() by deduction from earnings (section 71ZCA);’

Amendment 2, page 68, line 17, at end insert—

71ZCA Deduction from earnings

(1) Regulations may provide for amounts recoverable under section 71ZB to be recovered by deductions from earnings.

(2) In this section “earnings” has such meaning as may be prescribed.

(3) Regulations under subsection (1) may include provision—

(a) requiring the person from whom an amount is recoverable (“the beneficiary”) to disclose details of their employer, and any change of employer, to the Secretary of State;

(b) requiring the employer, on being served with a notice by the Secretary of State, to make deductions from the earnings of the beneficiary and to pay corresponding amounts to the Secretary of State;

(c) as to the matters to be contained in such a notice and the period for which a notice is to have effect;

(d) as to how payment is to be made to the Secretary of State;

(e) as to a level of earnings below which earnings must not be reduced;

(f) allowing the employer, where the employer makes deductions, to deduct a prescribed sum from the beneficiary’s earnings in respect of the employer’s administrative costs;

(g) requiring the employer to keep records of deductions;

(h) requiring the employer to notify the Secretary of State if the beneficiary is not, or ceases to be, employed by the employer;

(i) creating a criminal offence for non-compliance with the regulations, punishable on summary conviction by a fine not exceeding level 3 on the standard scale;

(j) with respect to the priority as between a requirement to deduct from earnings under this section and—

(i) any other such requirement;

(ii) an order under any other enactment relating to England and Wales which requires deduction from the beneficiary’s earnings;

(iii) any diligence against earnings.’

Amendment 3, page 69, line 22 , after ‘71ZC’ insert ‘, 71ZCA’

Amendment 4, page 70, line 13 , leave out from ‘etc)’ to end of line 15 and insert—

‘(a) for subsection (4) there is substituted—

(4) If the recipient of a notice under subsection (3) above agrees, in the specified manner, to pay the penalty—

(a) the amount of the penalty shall be recoverable from the recipient by the Secretary of State or authority; and

(b) no criminal proceedings shall be instituted against the recipient in respect of the conduct to which the notice relates.

(4A) Sections 71ZC, 71ZCA and 71ZD above apply in relation to amounts recoverable under subsection (4)(a) above as to amounts recoverable by the Secretary of State under section 71ZB above (and, where the notice is given by an authority administering housing benefit or council tax benefit, those sections so apply as if references to the Secretary of State were to that authority).’

(b) in subsection (9), the definition of “relevant benefit” is repealed.’—(Chris Grayling.)

Clause 112

Civil penalties for incorrect statements and failures to disclose information

Amendments made: 5, page 75, line 29, after ‘71ZC’ insert ‘, 71ZCA’

Amendment 6, page 75, line 31, at end insert—

‘(and, where the appropriate authority is not the Secretary of State, those sections so apply as if references to the Secretary of State were to that authority)’

Amendment 7, page 76, line 24, leave out ‘Secretary of State’ and insert ‘appropriate authority’

Amendment 8, page 76, line 26, leave out from ‘71ZC’ to end of line 27 and insert—

‘71ZCA and 71ZD apply in relation to amounts recoverable by the appropriate authority under subsection (4) as to amounts recoverable by the Secretary of State under section 71ZB (and, where the appropriate authority is not the Secretary of State, those sections so apply as if references to the Secretary of State were to that authority).’—(Chris Grayling.)

Schedule 14

Repeals

Amendments made: 9, page 155, line 37, at end insert—

‘(ba) in subsection (4)(a) (as substituted by section 102 of this Act), “or authority”;

(bb) in subsection (4A) (as so substituted), the words from “(and, where” to the end.’

Amendment 10, page 155, line 40, leave out from beginning to end of line 42 and insert—

‘In section 115C (as inserted by section 112 of this Act)—

(a) in subsection (5), the words from “(and, where” to the end

(b) in subsection (6), in the definition of “appropriate authority”, paragraph (b) and the preceding “or”.

In section 115D(5) (as inserted by section 112 of this Act), the words from “(and, where” to the end.’

—(Chris Grayling.)

New Clause 2

Childcare

‘(1) The amount in respect of other particular needs or circumstance, under section 12, shall include a childcare element for claimants who are in work, except in prescribed circumstances.

(2) The maximum award of the childcare element shall be a prescribed proportion of childcare costs (not less than 80%, or 90% where the element contributes to care for a disabled child), up to a prescribed maximum value (not less than £175 per week for one child and £300 for two or more children).

(3) “Childcare charges” are charges of a prescribed description incurred in respect of childcare by the claimant or claimants by whom a universal credit claim is made.

(4) “Childcare”, in relation to a person or persons, means care provided for any child up to the last day in the week in which 1 September falls following the child’s 15th birthday or their 16th birthday if they are disabled, for whom the person is responsible, or for whom either or both of the persons is or are responsible; and by a person of a prescribed description.

(5) Except in prescribed circumstances, the childcare element shall not be paid where a claimant is in work for fewer than a prescribed number of hours a week or, in the case of a couple, where one or both of the claimants are in work for fewer than a prescribed number of hours a week.

(6) For the purposes of this section, regulations are to provide for a definition of “work.”’.—(Stephen Timms.)

Brought up, and read the First time.

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I beg to move, That the clause be read a Second time.

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With this it will be convenient to discuss the following:

New clause 3—School meals

‘(1) The amount in respect of other particular needs or circumstances, under section 12, shall include an amount in respect of school meals for any dependents of the claimant.

(2) The maximum award of the amount under this section shall be 100 per cent. of the cost that the claimant would expect to incur in respect of school meals, up to a prescribed maximum value per child.

(3) Regulations shall specify the circumstances under which a claimant shall be entitled to an amount under this section.

(4) Under no circumstances shall any amount payable under this section be included in the “relevant amount” specified in section 93(5) of this Act.’.

New clause 4—Health costs

‘(1) The amount in respect of other needs or circumstances, under section 12 of this Act, shall include an amount in respect of health costs.

(2) The maximum award of the amount under this section shall be 100 per cent. of the cost that the claimant would expect to incur in respect of prescribed health costs such as prescription, dental and optical charges, up to a prescribed maximum value.

(3) Regulations shall specify the circumstances under which a claimant shall be entitled to an amount under this section.

(4) Under no circumstances shall any amount payable under this section be included in the “relevant amount” specified in section 93(5) of this Act.’.

New clause 5—Universal credit printed statements

‘The Secretary of State will provide a record to the claimant detailing the amount and composition of the award, including amounts in respect of each of the elements specified in sections 9 to 12 of this Act and of any appropriate sub-elements as specified in regulations.’.

New clause 6—Payment of housing costs

‘(1) This Section applies to payments of the housing cost element of the universal credit.

(2) Payment of the housing costs element of the universal credit must be made to a person’s landlord where:

(a) that person has requested or consented to such payment;

(b) where sub-paragraph (a) does not apply and the person is in arrears pursuant to the terms of the tenancy agreement between that person and the landlord of an amount equivalent to two weeks or more of the amount he is liable to pay his landlord as rent if in either case the landlord requests or consents to payment to him.

(3) Regulations made by the Secretary of State may prescribe the circumstances in which subsection (2) does not apply.

(4) Regulations made by the Secretary of State shall prescribe the person who is to be treated as the landlord for the purposes of this section and shall make provision as to the discharge of liability consequent upon the making of any payments to the landlord.’.

Amendment 23, page 3, line 7, in clause 5, after ‘it’, insert

‘excluding any amount in an Individual Savings Account, up to a prescribed maximum of no less than £50,000, where the claimant is in work’.

Amendment 24, page 3, line 13, after ‘it’, insert—

‘excluding any amount in an Individual Savings Account, up to a prescribed maximum of no less than £50,000, where one of the claimants is in work’.

Amendment 30, in clause 10, page 4, line 36, at end insert—

‘subject to these amounts being not less than the additional support for disabled children provided through benefits and tax credits prior to the introduction of Universal Credit.’.

Amendment 27, in schedule 1, page 103, line 1, after ‘income,’, insert—

(ba) a person’s earned income from self-employment,’.

Amendment 28, page 103, line 3, at end insert—

‘(1A) Regulations under sub-paragraph (1)(ba) above may include provision for calculating profits and losses of a trade in accordance with generally accepted accounting practice, subject to any adjustments prescribed by regulations.’.

Amendment 29, page 103, line 20, at end insert—

‘(4A) Sub-paragraph (4) does not apply where a person has earned income from self-employment and the business from which the earned income in question is derived (or any larger undertaking of which the business in question forms part) is being carried on upon a commercial basis and with a view to the realisation of profits in the business or larger undertaking.’.

Amendment 68, page 103, line 20, at end insert

‘; and this will include an additional prescribed minimum level for claimants in receipt of the universal credit additional amount for caring responsibilities, and will be paid in addition to any other prescribed minimum level.’.

Amendment 33, in schedule 2, page 114, leave out lines 34 to 39.

Amendment 26, in schedule 6, page 123, line 10, at end insert—

‘(4) No less than six months before the appointed day the Secretary of State shall publish a report on the access to welfare advice, including advice for those unable to use the internet, that will be available at the appointed day, and shall satisfy himself on the basis of that report that provision is adequate to support migration to Universal Credit.’.

Government amendments 14 to 19.

Amendment 61, in clause 97, page 64, line 29, at end insert—

‘(3C) For the purposes of paragraph (3B), any element or sub-element of the universal credit award that is paid in respect of children, including childcare, shall be paid to the designated carer, except in prescribed circumstances. Regulations may provide further circumstances in which a proportion of universal credit may be payable to a particular individual.’.

Government amendments 20 and 21.

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As this Bill returns to the Chamber on Report, it is astonishing how many policy gaps remain. This group of proposals addresses some of the worst holes in the policy on universal credit, and new clause 2 in particular deals with child care.

This is what has happened. Perhaps understandably, Ministers behaved naively, and with beginners’ enthusiasm they boasted that universal credit would solve all the problems in the benefit system: that it would always pay to be in work; that the system would be simpler; that thousands would be better off and nobody worse off; and that the benefits bill would be cut. In truth, one did not have to be Milton Friedman to work out that that did not all add up. That is now the Government’s problem: they cannot stand up their boasts. When it comes to the detail, they have been unable to deliver. Nowhere is that clearer than on child care support in universal credit.

Ministers have rightly recognised—as the Secretary of State did earlier—that support for child care is key to whether parents are better off in work or out of work. But the Secretary of State promised, in his evidence to the Committee in March, that the Government’s proposals on child care support would be available before the Bill left Committee. He promised the Committee on 24 March that

“it will certainly be done within the Committee stage.”––[Official Report, Welfare Reform Public Bill Committee, 24 March 2011; c. 161, Q313.]

As I pointed out in Work and Pensions questions, that promise has been broken. No policy was announced before the end of the Committee stage and now the Bill will leave the House of Commons this week and we still do not have a clue what the Government’s policy is, because Ministers have not been able to work a policy out.

At the beginning of the Committee stage, we told the Government that we were worried by the lack of crucial details, and now the Bill has come back to the House and they are still missing. Ministers have failed to make this fly. We are talking not about minor details, but about whether parents really will be better off in work, as they generally are under the current system. Achieving the whole purpose of these changes hangs on the Government’s decision on child care, but Ministers have failed to reach a decision. That is why Oxfam, Barnardo’s, the Child Poverty Action Group and others wrote recently to the Secretary of State saying that for many families on low or middle incomes “the success of universal credit will stand or fall on the level of child care costs covered.” Those groups are right: the success of this policy stands on the Government’s decision, but Ministers have simply failed to come up with a decision.

At least with the NHS reforms the Government paused to work out a policy: on this Bill, they have not managed to work out a policy, but they are pressing on all the same. No proposals were presented in Committee and we have none in front of us today. Instead, we just had an informal seminar on options. We know that the Government want to extend provision for child care support to people working fewer than 16 hours a week, but they want to do that within the existing budget. That does not add up—it is a mess.

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I thank the right hon. Gentleman for giving way on this extremely important issue. Is his solution the same as that of the groups he mentioned earlier—to put more money into child care?

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No: our solution is the one in new clause 2, which we are debating. The priority should be to maintain the support currently being received by people working more than 16 hours a week. I understand why the Government say that they cannot simply find more money for supporting child care, but what will be disastrous is what appears to be the Government’s intention to give a lot more people support from the same cash-limited sum of money. If that proceeds, a very large number of people for whom work pays at the moment will find that work no longer pays.

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Does the right hon. Gentleman welcome the proposals that would allow people to move into work of up to 16 hours—the mini jobs?

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If that would mean that people who are currently able to work for more than 16 hours had to give up their jobs altogether, I would not welcome it. That would be a seriously retrograde step. I accept that there is a case for supporting the cost of child care for people in mini jobs as well, but if the additional resources are not available to fund that, it would be a terrible mistake to press ahead and claw that money from people who depend on it to make work pay at the moment.

The Secretary of State set out at the seminar, at which I think the hon. Member for West Worcestershire (Harriett Baldwin) was present, some of the possible options. The Children’s Society has analysed some of the options and concluded that under one of them a family could pay out £1.56p for every additional pound earned. Ministers told us that that problem would be eliminated by universal credit, but it now appears that, if they proceed on the basis of that option, the new system will be a great deal worse than the current one, and will introduce a draconian new penalty for working parents. As I said to her, there is a good case for supporting child care for people in mini jobs, but it must not come at the expense of parents being helped at the moment.

The recent report from the Resolution Foundation and Gingerbread also underlined the point that spreading the same budget among a lot more people will mean families losing money for every additional hour they work. The Government are right to express the aspiration that it should always pay to be in work, but in this case, if they pursue the option set out in the seminar, something will be lost in translation, because families will have to pay out in order to work. The current system does a far better job; the new system that is envisaged will be a severely retrograde step, if it has the effect of taking more than £1.50 off people for each extra pound they earn. The Government appear poised, once they have finally worked out what their policy is in this area, to make work far less attractive than at the moment.

The Government have failed to come up with a policy, so our new clause 2 proposes one: it would retain the percentage of child care costs covered and the cash limits in the current system; it would ensure that work continues to pay for those for whom it pays at the moment; and it would allow the retention of the existing 16 hours’ threshold. The Government say that they cannot afford any extra spending on child care at the moment. My case to the House is that support for child care for those in mini jobs would need to wait until there is funding for it in order to ensure that jobs of 16 hours per week actually pay, as they do at the moment.

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Does my right hon. Friend agree that it is disingenuous of the Government to make proposals to fund child care for mini jobs, given that the child care market is simply not designed in that way? Finding short episodes of child care for just a few hours a week is extremely difficult for parents, and could make child care provision even more financially unviable and drive providers out of the market?

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My hon. Friend makes an important point and is absolutely right. People are worried about what the Government’s proposed changes will do to the child care market as a whole. It could make some providers uneconomical. If a large number of people currently using child care for more than 16 hours a week are forced, as a result of these changes, to give up their jobs and to withdraw from their child care places, it would put a huge dampener on, and cloud over, the whole child care market in the way she is right to fear. We feel strongly about this matter—the Government simply have not come up with a policy—so I will seek, if I can, to divide the House on new clause 2.

The Government’s failure to produce a policy on child care before the Bill leaves the House is a particularly abject failure. Ministers have not been able to turn their claims into policies. However, although child care might be the most spectacular and significant hole in the Government’s policy, it certainly is not the only one. In this group of amendments, therefore, we have tabled two further new clauses to fill the policy holes on passported benefits, such as free school meals and free prescriptions.

At the moment, people on out-of-work benefits are passported to those additional benefits, but the out-of-work benefits will be abolished, so who will be entitled to free school meals in future? Again, that is not an obscure, but a basic question and the Government have again failed to give us an answer.

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My right hon. Friend is right to point out the importance of free school meals for many of our constituents whose children are sometimes in desperate need of the basic nutrition that they receive in schools. For the Government to have got to this stage in the Bill’s passage with no clarity about what triggers free school meals entitlement is confusing. Will they introduce a new means test? I am very glad that he has raised the matter.

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I am grateful to my hon. Friend, who is absolutely right about the centrality of free school meals entitlement in the system. The Government have simply failed to work out who, under their proposals, will be entitled to free school meals. It is not that I am disagreeing with the Government’s policy: the problem is that they have no policy. We have no idea whom they believe should be entitled to free school meals. As far as we can tell, they have not got a clue, either.

As my hon. Friend points out, free school meals are an important part of the system. They can be worth more than £350 a year to a family with one child in a primary school and easily more than £1,000 a year to a family with three or more children at school. Clearly, that makes an enormous difference.

Families currently receive free school meals until they work for more than 16 hours, at which point they receive working tax credit so that they are not worse off as they move into additional hours of work. The universal credit White Paper suggested that the Government intend to remove entitlement to free school meals at a fixed income threshold. That may partially answer my hon. Friend’s question. However, if they do that, it creates precisely the sort of cliff edge that we were told the Bill would eradicate. I presume that that difficulty has prevented the Government from setting out their policy and is the reason for the Bill’s silence on the matter and the absence of notes on the regulations to explain the Government’s policy.

If a lone parent with three children lost entitlement to free school meals at some level of earnings—say, £150 a week or more—their net household income would fall unless they earned more than £4,000 extra a year. If the new system works like that, it will be a disaster. It is exactly the sort of disincentive that we have been told all along that universal credit is supposed to remove. If the Government introduced such a policy, universal credit would make the problem of work disincentives far worse than it is in the current system.

Our proposal in new clause 3 is that the value of free school meals should be paid through universal credit and then tapered away gradually as household income rises. I recognise that there is concern among many who follow these matters closely that that could mean that the cash is not used for school meals but other expenses. Given the pressure on household budgets, one can well understand how that might happen. I therefore suggest that the solution is for the cash to be paid on to an electronic card, which could be used only to purchase school meals. An arbitrary cut-off in income, whereby all support for free school meals was withdrawn, would be damaging.

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Does the right hon. Gentleman accept that his proposal flies in face of the admirable position at the moment whereby, in the lunchtime school queue, there is no obvious and visible difference between those who receive free school meals and those who do not? A provision that would effectively give some, but not others, a particular card with money on it would surely stigmatise those kids who get free school meals.

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No, the Minister is mistaken. All pupils in the school would pay for their meals with the card. The difference would be how the money got on to the card. Some would pay cash as currently happens and others would have the money placed on the card through universal credit. The Minister is right to raise the matter, which is important, but my solution would solve the problem.

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rose—

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I gladly give way to the Minister again. Perhaps he will tell us how the Government propose that entitlement to free school meals will be determined.

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If the right hon. Gentleman will forgive me, I will try to catch Mr Speaker’s eye in a moment to answer questions, but for now, perhaps the right hon. Gentleman can answer one for me. As different schools today use different systems—some use fingerprinting, some use an electronic card system and some still use cash—does he envisage his proposal requiring schools up and down the country to scrap their current systems and have a new, harmonised system? If so, has he calculated what the cost of that system would be and how long it would take to introduce?

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I very much hope that the Government are working out the answers to those questions. I would certainly aim to use existing systems, with the addition of payment via universal credit to simplify the transition.

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On the important subject of free school meals, is the right hon. Gentleman suggesting that the taper would begin immediately someone went into work, or would it come into play once the earnings disregard had moved out of the way, and if so, what would be the cost of his proposals?

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The point is that it is a zero-cost proposal; I am simply suggesting that the funding would be provided through the mechanism that I have described. It would be tapered away, along with the rest of universal credit, and would sit naturally on top of existing payments, so that there would be just an additional payment in respect of school meals, where appropriate, which would then be tapered away once the disregard had been exhausted. The budgetary cost would be exactly the same.

We have exactly the same issue with free prescriptions. The current system provides them to people on benefits and to some people with low incomes through the HC2 form, but once again, we have heard nothing from the Government about what will happen under universal credit. Our new clause 4 addresses that.

By the way, it is perhaps worth making the point in passing that the number of pupils receiving free school meals is an important indicator for education policy as well. The pupil premium depends on the number of people receiving free school meals. The fact that we have no idea at all who will be entitled to free school meals under the Government’s proposals will create serious problems with that, too.

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Returning to the right hon. Gentleman’s proposals on prescription charges, is he not concerned about the evidence that we received at the beginning of the Public Bill Committee from a number of witnesses who said that there was a significant difference between school meals and prescription charges? School meals are an ongoing cost every day, whereas prescription charges tend to come in a batch. By tapering the amount of money that somebody received, they still would not be able to afford significant costs—potentially the cost of a number of prescriptions at the same time—because the amount of money concerned would be an ongoing amount, unlike under a system more similar to the current one, where all the prescriptions are paid for when they are needed.

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I agree with the hon. Lady’s point, and to that extent the current system has a lot of attractions. The problem is that we will lose that system with universal credits. The question is: who will be entitled to free prescriptions? I do not imagine that she is arguing—as perhaps the Government will; I do not know—that there should be a cut-off point in income beyond which people suddenly lose all help for prescriptions. If that happens, we will create a serious and damaging cliff edge in the system, which everyone agrees is an undesirable feature. Our new clause 4 therefore proposes to address that problem, although there may be other problems as well. What I would dearly love to extract is a proposal from the Government, so that we can find out exactly what they intend to do, because so far they have been silent on that subject, as on all the others.

We have been told throughout these debates that the main point of the Bill is to ensure that people are always better off in work. Our task in Parliament is to scrutinise whether the Bill lives up to that laudable aim, but without knowing what the Government will do to provide help with child care, school meals or prescription costs, we simply cannot tell.

Frankly, it is an abuse of the parliamentary process not to tell this House what the Government’s policy is before the Bill leaves us. I do not accuse Ministers of withholding information from Parliament; the problem is that they have no more clue about their policy than we do. It is an astonishing and abject failure on their part. They made all these boasts at the beginning—their bragging ran away with them—but now they cannot deliver policies to substantiate those boasts.

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Is it not a bit rich to put the case in that way when under the right hon. Gentleman’s Government, who were in power for many years, these aspects were not covered by a benefit? There was no child care benefit or a school meal benefit as such. They were dealt with outside the benefit system, no doubt in a way that he approves of, as I probably do as well, but why suddenly bring these elements into the benefit system?

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The hon. Gentleman has a good deal more experience in these matters, if I may say so, than some of his Front-Bench colleagues who are dealing with them at the moment. Good provision, particularly for child care support, was of course made through the tax credit system. That strong support for the costs of child care is why there was such a dramatic rise in lone parent employment under the previous Government. I supported that and I suspect from what the hon. Gentleman just hinted at that he supported it and continues to support it today. The problem is that once tax credits are abolished and universal credit takes their place, we have no idea how child care is going to be supported in the future. That is why I am—rather modestly, I think—appealing for the Government to tell us.

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Does my right hon. Friend also agree that one of the real concerns we face as a result of universal credit forcing us to look at lumping all the different strands of financial support for families into a single payment is that all the eggs are in one basket, so if one thing goes wrong, the whole benefit—the whole structure of financial support for that family—could collapse?

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My hon. Friend is absolutely right. For that very reason, the risks are great indeed. When I come on to speak to amendment 24 in a few moments, I will point out that if people go beyond a prescribed level of savings, they will lose all that help under all those headings.

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Will the right hon. Gentleman clear up one point of confusion for me and, I suspect, for my hon. Friends? Over the past two or three months, he has said that he supports the universal credit in principle. However, his remarks and those of his hon. Friend the Member for Stretford and Urmston (Kate Green) imply some distancing from the proposal. Does he intend to support the Bill on Third Reading or not?

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The right hon. Gentleman will find out the answer to that question in due course. We have been consistent in supporting the principle of universal credit. We think that bringing in-work and out-of-work benefits together is a good idea that has a number of attractions. The problem is that the detailed work to make that policy fly has simply not been done by the Minister and his hon. Friends. There are desperate, gaping gaps in the policy and fundamental questions that he is unable to answer or explain about how the arrangements will work. As a result, the Bill, on departing this House, will leave many households, and many working families in particular, in a very precarious position.

Having talked about a lot of things that we do not know about, let me now deal with some things that we do know about. Clause 5, which I touched on a moment ago, will badly undermine the aspirations of people who are in work on modest incomes. Under the current rules—they have been a long-standing feature of the system—people who are out of work but who have above a prescribed capital sum are expected to use it to support themselves before claiming income-related, out-of-work benefits. If somebody has more than £6,000 in savings, the Government assume an income from them, which is then subtracted from the benefit entitlements; someone with more than £16,000 in savings will not receive means-tested, out-of-work benefits at all. Those two figures were increased from £3,000 and £8,000 by the last Government to help people retain some of their savings when they lost work. For people in work, the story has been very different. There is no savings cap at all on tax credits. Clause 5 will change that fundamentally by extending the rules on savings for those who are out of work to people who are in work.

The Conservative party used to tell us that it wanted to encourage people to save. Clause 5 will not just discourage people from saving; it will make it impossible for them to save. Anyone on a modest income who decides to save for a deposit to buy a house in the future, or for the cost of university education, will suffer an extraordinary punishment under the clause. It is impossible to buy a house today, or to obtain a mortgage for shared ownership, with a deposit of less than £16,000. However, if people have savings of £16,000 towards, say, the deposit for a mortgage—if, as Ministers seem to believe, they start to get ideas above their station—they will lose all their universal credit. Typically, that might be £5,000 a year. In addition, they will lose any support that they receive for the costs of child care, and on top of that they will lose any help that they are given with housing costs.

Those measures will add up to an extraordinary punishment for saving. They will make saving literally impossible, because as soon as people have managed to save £16,000 from their earnings, the Government will drain their savings away. The problem will start as soon as they have saved £6,000. The hon. Member for Redcar (Ian Swales)—who, I am pleased to see, is present—said in Committee that the problem would not last very long because people’s savings would soon be gone, and he was absolutely right. These proposals mean that if anyone attempts to start building up a saving that would be enough for, say, a deposit on a house or a contribution towards higher education costs, the Government will take it away by withdrawing their universal credit. The message being sent to people on low incomes who are doing the right thing and working to support themselves could not be clearer: “This Government will not support you.”

Amendments 23 and 24 would change that. They would allow people to save money in an individual savings account—up to £50,000 if they are in work. Ministers have told us that it would cost just £70 million a year to exclude all working households from the savings cap, and this measure is obviously more modest than that.

Surely we should be encouraging people to save, not punishing them for saving. People work to improve their lives and the lives of their families. They are aiming not for a bit more spending money each month, but for the means to buy a house, to help their children through university, to start a business or to pay for a child’s wedding. If they are to achieve such aspirations, people need to be able to save from their earnings, but clause 5 denies them the chance to do that.

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The right hon. Gentleman has stressed the importance of aspiration. New clause 3, which concerns free school meals, is also relevant to that. Does he not find it interesting that, according to an examination of educational attainment among different ethnic groups, the most successful sub-group are Chinese students, and the second most successful are Chinese students receiving free school meals? The issue is not just money, but how Government can encourage aspiration and ambition, which is the ethos of the Bill.

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Certainly the Bill should encourage aspiration, but if it prevents people from saving in the way that I have described, as clause 5 will, it will undermine aspiration. That is the point: we want to change the Bill so that it will allow people, even those on universal credit, to save. We believe that everyone should be encouraged to save, rather than being punished for having saved.

The Secretary of State used to agree with us. In 2008, he said that

“poverty is not just about how little you earn; it’s also about how little you own.”

If we want people to work their way out of poverty in the way in which the hon. Gentleman suggests—and I agree with him about that—we need to offer them the chance to save. I am afraid that if the Government press ahead with making saving on a low income impossible, the phrase “compassionate conservatism” will be revealed as a sham.

For similar reasons, I hope that Government Members will share my concern about the Bill’s discouragement to self-employment. Schedule 1 provides for a minimum income floor when calculating universal credit for self-employed people. Under that provision, Ministers are making the assumption that self-employed people will be earning at least the minimum wage for every hour they work, but anyone with even a passing knowledge of what is involved in starting up in self-employment will know that that is absurd. While establishing their business, many self-employed people work extraordinarily long hours and earn hardly anything at all, and their income fluctuates hugely month by month. It is absurd to assume that they will earn the minimum wage for every hour they work, and that they should therefore have their universal credit reduced accordingly. That is why the Chartered Institute of Taxation has warned that this new system will be much less supportive of self-employment than the current one.

Our amendment 27 therefore seeks to align the universal credit definitions of income for self-employed people with those used in the tax system and in tax credits. The Chartered Institute of Taxation’s low incomes tax reform group has pointed out that allowances are made in the tax credit system for investment in business assets and equipment and for trading losses that can be set against other income or the profits on later periods of trading. Those arrangements reflect the reality of being self-employed. The idea that the self-employed are earning at least the minimum wage for every hour they work in self-employment is a complete illusion, and if the Bill is not amended it will destroy the very effective support that the tax credit system currently offers to self-employment.

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The question of the income levels of the self-employed is not as simple as the right hon. Gentleman makes out. Under the current capital allowance system, a self-employed individual can invest £25,000 in a piece of machinery and immediately wipe off their profits, and it causes deep resentment when they are then able to claim family tax credit. The Government are trying to create a system that supports the self-employed but is fair to other taxpayers.

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The problem is that the proposed system does not support the self-employed in the way that the tax credit system supports them, because it treats the self-employed as if they are earning at least the minimum wage for every hour they put into their business. I know that the hon. Gentleman is genuinely interested in the position of the self-employed and I think he is supportive of self-employment, but he will know that it is absurd to suggest that a person who starts up in self-employment will be earning at least the minimum wage from day one. That will not be the case, of course; there may be weeks, or perhaps months, in which they earn nothing at all. The current tax rate system reflects that, but the new system will not.

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Obviously I support the self-employed and want the universal credit system to support them, but we need to recognise that there are situations such as the following: somebody sets up in business to breed angora rabbits for their wool and manages to make £80 in sales in the year. I have not made that up, and it is absurd that that type of business should be supported by the taxpayer.

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I am sorry to hear the hon. Gentleman belittling self-employment. For many people, including people who have lost their jobs, a move into self-employment can be absolutely the right thing to do, and, over time, they might find that they are able to develop a serious business—not breed rabbits—and earn a living from it. We should be valuing, not ridiculing, such contributions to the economy. I am afraid that there are many problems with the Bill, and one of them is that it so badly weakens and undermines the support that is currently available for self-employment.

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Does my right hon. Friend agree that one of the attractions of supporting self-employment is that it often particularly helps those who find it difficult to access the traditional labour market, such as women, because they need to combine work with caring responsibilities and therefore need more flexible hours, and disabled people, who may not be able to access full-time work in a structured workplace but can do some work on their own at home? We also certainly know that there is a long-standing tradition of some of our ethnic minority communities finding that self-employment is the best way for them to sustain economic independence.

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My hon. Friend is absolutely right to say that self-employment is a crucial element of our economy for many people, including those with caring responsibilities; others who, for other reasons, are not necessarily able to commit to a full-time job; and, indeed, those who simply want the opportunity to build up a business for themselves—it is crucial that the system supports them. Tax credits have done so, but I am afraid that universal credit will not. That is a real worry and the approach being taken flies in the face of Government statements of support for self-employment.

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rose

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I will gladly give way, and I hope that the hon. Gentleman will support self-employment this time.

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I am surprised to hear those comments. I understand that the right hon. Gentleman is talking about supporting businesses and self-employed people perhaps working a day a week or two days a week. How does that fit in with his proposals on supporting child care in respect of micro-jobs and part-time jobs?

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I have made it clear that the priority should be to maintain child care support for those who are currently receiving it. There is a case, with which perhaps the hon. Gentleman agrees, for extending that support to others. If that is to be done—and I can well see the case for it—the funding needs to be provided for it. What we cannot do is take support away from one group, making work impossible for them, in order to support another group. If we only knew the Government’s policy on child care support, we could have a proper debate about it, but that appears to be where they are heading. They simply have not had the ability to put a policy together and tell us what it is. The hon. Gentleman has suggested that perhaps too many self-employed people are either earning a negligible amount or are under-declaring their profits.

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It is important to correct the record. I did not state that self-employed people were under-declaring their profits; I simply stated that the capital allowance system allows the self-employed, completely legally, to reduce their profits to nothing by purchasing an asset. That was the simple point that I was making.

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That is a long-standing feature of the tax system for businesses generally, and we should be encouraging investment. I see it as a strength of the current system that such necessary investment is supported. The hon. Gentleman is right in the sense that universal credit will remove all that completely. I am afraid that, as the Chartered Institute of Taxation has pointed out, it will be a far less supportive system for self-employment than the current one.

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Again, I need to clarify the record. It is important to understand that the capital allowance system has been changed fundamentally in the past two years as a response to the economic crisis that we are facing. Someone could not previously claim 100% allowances, but they can at this point in time. A 100% allowance on the purchase of an asset worth £25,000 results in the net profits of a small business reducing to nothing and therefore they are supported by the tax credits system. It is important that this Government support the self-employed, but not in a way that encourages them to make investment decisions for the purpose of universal credit rather than for the purpose and benefit of their own business.

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I am not clear whether the hon. Gentleman supports the fact that we have had 100% capital allowances recently, although I hope he does. When the downturn hit, they were introduced for a very good reason, which was to encourage enterprise and investment, particularly on the part of small businesses.

One of the problems with the Bill is that in many cases self-employed people will be strongly pressured to lie about the hours they have worked. They are not going to admit to having worked 18 hours a day, as some are doing, because they will then lose pound for pound from their universal credit, as it will be assumed that for every one of those 18 hours they have earned at least the minimum wage. This is a bad policy and it needs to be changed.

Amendment 33 may cause some puzzlement. Many people will not know that the Government intend to remove pension credit from people over pensionable age who have a spouse under pensionable age. That has not been announced anywhere and the Pensions Minister has not stood up to tell us about it. We find it buried in, of all places, the middle of schedule 2, on page 114 of this Bill. If the older person were living alone, they would receive pension credit. Those people will in future be penalised because they have a younger spouse. This is a new couples penalty, but we have been assured that the Conservative party wanted to stamp out such penalties. Indeed, the Secretary of State said, once again, in DWP questions earlier that he wanted to remove couples penalties from the system—but here he is inventing a new one. That will change the pension entitlements for some couples with very little notice and, in some cases, by a substantial sum. If Ministers want to change the arrangements for pension credit, they should set that out openly, the provisions should be made in the Pensions Bill and there should be full discussion of the change. They should certainly not try to sneak it past us in the second schedule to this Bill.

We have now established that of the 610,000 recipients of pension credit with a partner, almost 100,000 have a partner aged under 60. The difference between the couple rate for jobseeker’s allowance and the pension credit rate is more than £100 a week, so for each year that a couple is in receipt of JSA rather than pension credit, those couples stand to lose more than £5,000.

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The right hon. Gentleman will remember that we debated this matter extensively in Committee, so it is not quite the bolt from the blue that he suggests. Is it his party’s policy that people under retirement age who happen to have a partner who is over retirement age should, through that partner, be able to access means-tested support from the state without any obligation to look for work themselves?

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In government, we set out the arrangements for pension credit as they stand. In our view, those arrangements made sense. If the Government want to make a case for changing those arrangements, I simply suggest that they need to announce that change and to stand up openly and say that they have decided that in future people cannot have pension credit if their spouse is under pensionable age. We could then have a debate. I would have thought that such a measure ought to be in the Pensions Bill. The Minister is right that we were able to spot the change in Committee and to discuss it then, but this is certainly not an example of the Government’s being open—far from it. They seem to have hoped that they could slip this measure through and nobody would notice.

For those couples for whom there is a substantial age gap—in 40% of those cases, the partner will be younger than 55, so the gap will be more than five years—this measure could represent an enormous cumulative loss of £5,000 a year for five years or more.

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May I take the right hon. Gentleman back to the key question? We are talking about people of working age whose households would be in receipt of means-tested benefits from the state without being obliged to look for work. Is it his policy that those people should not have an obligation to look for work and that their households should be able to continue to receive means-tested benefits from the state?

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As far as I can see, the arrangements for pension credit have worked perfectly well up to now, presumably with the feature that the Minister is now deprecating. My case is that if the Government want to change the rules for pension credit to discriminate against people who have a spouse under pensionable age, they should do so openly. They should announce the change: it should have been in the Budget, the welfare reform announcement or the Pensions Bill. We have a Pensions Bill going through Parliament at the moment—why was it not included there? Instead, the change was slipped into a schedule to this Bill and no Minister, until asked, said anything about it.

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I am a little unclear about whether the right hon. Gentleman’s position is that this measure is wrong in principle and he disagrees with it, or he agrees with it but thinks it should have been announced with a fanfare. Will he explain which it is?

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I certainly think that the arrangement should have been announced, and our amendment proposes that it be removed. I shall be interested to hear the Government’s response.

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Let me understand fully what the right hon. Gentleman is saying. If a retired man, say, of 66 is married to a spouse who is 45, she should be able not to have to work and they should be able to double-claim pension credit—is that correct?

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No, it is not. Any income to the household from a working spouse will be counted in the household income for pension credit purposes. My argument is that if there is a case to be made for a change to pension credit, it should be made openly, and it should have been in the Pensions Bill, which Parliament is currently considering.

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Forgive me for probing. The right hon. Gentleman has rightly set out his case as an amendment, but I wish to press him on the following point. If a household is receiving elements of pension credit that gives them the wherewithal to survive, is he saying that a 45-year-old should have no obligation to work while the household receives means-tested benefits from the state? It would be helpful to understand that. If that is his party’s policy, will he say so clearly and unequivocally?

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I do not recognise the policy that the Minister describes. We have had a long-standing arrangement for pension credit which appears to work perfectly well. If he has found abuses of pension credit, I shall be eager to hear those examples from him when he responds to the debate. I notice that when asked recently about this by my hon. Friend the Member for Leeds West (Rachel Reeves), the Pensions Minister stated:

“We recognise that it is important not to undermine the stability and outcomes for existing pension credit customers, so there will be no change for couples already in receipt of pension credit at the point of change.—[Official Report, 9 June 2011; Vol. 529, c. 422W.]

That is welcome and helpful. I do not know whether the Minister of State, the right hon. Member for Epsom and Ewell (Chris Grayling) has satisfied himself that the abuse that he has just described is not a problem at present. But even that reassurance from the Pensions Minister is not on the face of the Bill. For many couples who have planned around receiving pension credit and been reasonably able to do so, and who are now approaching retirement, the change will come as a severe shock.

We will support the principle of universal credit, despite the holes in the policy about how it will work and despite the perverse incentives that the Government have added for savers and the self-employed, but this is not, as Ministers have frequently claimed, a panacea for all the problems in the system. It is therefore vital that sufficient welfare advice is available at the point of transition. People will find any transition difficult, even one which, unlike this, is to a simple system. Yet at precisely the moment when the Government are embarking on this massive upheaval to the system, funding for welfare advice is being cut.

A large part of the funding—for example, to Citizens Advice—comes at present through legal aid, and the Government have announced that there will be no legal aid funding for welfare advice at all in future. About a quarter of the current funding for Citizens Advice comes from that source and it is being taken away. Most of the rest of the funding comes from local authorities, and that is also being cut. Demand for welfare advice will rocket and funding will plummet. This is a perfect storm for advice services. Our amendment 26, therefore, requires the Secretary of State to report, before universal credit is introduced, on the availability of welfare advice, and to satisfy himself that it is adequate to support people through the transition that the Government envisage.

New clause 5 aims for clarity about how claimants will be informed about their universal credit. It stipulates that every claimant should be provided with a record of the amount of their award, including details of the separate elements that make it up. I understand that the Government intend to provide each claimant with the equivalent of a payslip. I hope the Minister will be able to confirm that when responding to the debate. Will that payslip be provided on payment, as with payslips for those in work? Will it be provided directly by the Department or through the employer, and will it set out the various elements of the award—child care, housing support, support in respect of children and so on? A full statement would ensure transparency between the Government and claimants and would be a welcome feature.

Amendment 30 addresses support for families with disabled children under universal credit. It amends clause 10 to ensure that the amount that those families receive is not less than under the current tax credit and benefits system. My hon. Friend the Member for Glasgow East (Margaret Curran) raised this important point in Work and Pensions questions earlier this afternoon. Under universal credit, a family receiving the higher rate care element of DLA for a disabled child will receive £74.50 through the severe disability addition. At first glance, that seems broadly in line with the current position, but there are worries, because we are told that the higher level of the disability addition will be uprated in future only as resources allow, so it is very likely that families with severely disabled children will lose out over time.

For families with disabled children not receiving the higher rate care element of DLA the situation looks a great deal worse. The amount available under the universal credit disability addition will be £26.75 a week, compared with the £53.62 available under child tax credit, so support will be halved. The Minister has justified that in terms of aligning the support given to children and adults and easing the transition, but we know that children helped under the disability addition will not automatically be helped under adult universal credit.

Amendment 61 proposes that the elements of universal credit paid in respect of children must be paid to the designated carer of the children, except in prescribed circumstances. That is crucial for safeguarding the interests of children. Let me simply quote from the briefing that Oxfam has sent every Member: “We know from our work on the ground that money in households is often unevenly distributed and that women in poor households can have little or no access to money. As mothers usually take the main responsibility for feeding and clothing children, this affects both women and their children. This sometimes means that women themselves go without eating in order to pay the bills or put a meal on the table for their children. This lack of access to income in their own right leaves women open to the risk of financial abuse and can also reduce their chances of escaping domestic violence. As a crucial first step, the Bill must be amended to allow payments intended for children to be labelled as such and paid to the main carer, who is usually female. This change will make it more likely that this money is spent on children.” That would be the effect of the amendment.

Amendment 68 would provide for a minimum amount to be paid to any claimant who has caring responsibilities. It is vital that people who give up their time and energy to look after the most vulnerable in society, saving the taxpayer considerable sums in the process, are properly supported when they move on to universal credit, in line with the help currently available through carers allowance. I hope that the Minister will make it clear how he will ensure that that happens.

In rehearsing these concerns, I remind the House that the whole project of universal credit will depend on an enormous new IT system, which the Government claim will be ready in an implausibly short period of time. In truth, it will not be ready by October 2013, as claimed, which will give rise to serious problems as that deadline approaches.

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I put it to the right hon. Gentleman, as I did in Committee when he made that point, that this Government’s approach to IT is far more thought through and better planned than the approach taken by the previous Government, who spent vast amounts of money without any consideration for the end, route or purpose of the policy. This Government are being far more direct and should get the IT ready on time and on budget.

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I look forward to reminding the hon. Gentleman of that comment in September 2013.

The intention of universal credit is that work should always pay. Without decisions and policies on child care or passported benefits, we cannot know whether work will always pay, and all the indications are that the Government will in due course, when they finally put a policy together, introduce one that will mean that for many work will no longer pay.

On savings, I am afraid that the Government are heading to crush the hopes of many people in work. On the self-employed, the Government will crush the hopes of many who want to set up their own businesses. As Policy Exchange recently argued in its report, universal credit has been oversold by Ministers. I very much hope that the House will support our amendments so that universal credit can support the aspirations of families across the country.

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I should like to start by making the same point that I made in Committee. I have listened to the right hon. Member for East Ham (Stephen Timms) setting out a vast range of measures and details that he wants us to write into the Bill. He is conveniently forgetting the first fundamental element of a Bill, and the lesson that he taught me 10 years ago, when I was first elected to the House, about the nature of primary legislation. I remember, as a new Member of Parliament, debating an education Bill in Committee and asking why there was not more detail in the Bill. I proposed amendments to provide certain details. I remember the right hon. Gentleman, as a Minister, arguing why that should not happen. He explained that it was a piece of enabling legislation to create a framework for the changes that his Government were seeking to put in place, and that my amendments were all unnecessary. Today the roles are reversed, and the right hon. Gentleman has conveniently forgotten everything that he, as a Minister, taught me all those years ago. Instead, he is telling me that I should put all kinds of new details into the Bill that I have introduced. I am sure that hon. Members will therefore forgive me if I take some of his proposals with a pinch of salt.

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Is the Minister seriously saying that how the cost of child care will be supported is a detail?

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I am saying to him precisely what he said to me all those years ago—that many of the details will be dealt with in secondary legislation. The Bill contains a framework that will include, among other things, provision for a child care element in universal credit. That is fundamental, and we all agree that there should be such an element, just as there should be elements relating to disability and to other aspects of the current benefits system that need to be replicated in universal credit.

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Why does the Minister expect us—and, indeed, the general public—to accept his statements about the impact of this huge reform when so much of the detail in unknown? Is it not reasonable for us to request the details that will tell us whether people are in fact going to be better off?

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I expect it for precisely the same reason that the right hon. Member for East Ham expected me to support his education measures 10 years ago. He asked me to take on trust many of the same kinds of thing that I am asking the House to accept today. We have been completely transparent in setting out the different stages of the formulation of universal credit, and about the consultation processes that we have been through to fill in the details. We have also been clear and transparent in setting out the principles that we are following in trying to fill in those details.

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I went along to one of the meetings about the Government’s proposals for child care to which the Secretary of State was kind enough to invite people. We were presented with three options containing some very selective figures, and it was therefore impossible to tell exactly what the Government were proposing. I am still none the wiser. It is very difficult to vote on a principle when we do not know what the Government are going to do to implement it.

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The point is that we do not write numbers on the face of a Bill. I will speak in detail about the right hon. Gentleman’s amendments in a moment, but the fact is that primary legislation sets out the framework for such things. We have worked with the hon. Lady and her Select Committee members, with other Members on both sides of the House and with people and representative groups outside the House working in child care and other areas. We started a discussion process to determine which was the best of a number of options to fit into the framework that we are creating.

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The Minister is right that often things are not written into a Bill, but usually the regulations have been published before the Bill leaves the House of Commons. I remember Members who are now on the Government Benches criticising regulations for being late—not for not having been published, but merely for being late. Where are the regulations so that there can be parliamentary scrutiny of this important aspect of the Bill?

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I have had this discussion within the Department. We have already brought forward a number of draft regulations—far more, I am told, than was the case under the previous Government, when, I was told, the instruction of Ministers was very much not to bring forward as many regulations. We have produced as much detail, if not more, about this measure than the previous Government did about their measures. They did introduce some sensible measures—for example, their reforms to introduce employment and support allowance, which was the project of the right hon. Member for East Ham himself—but they wrote a framework into their legislation and filled in the detail with secondary legislation.

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One of the concerns raised by children’s organisations in Scotland is that not enough consideration has been given to the different statutory framework that pertains to child care in different parts of the UK. In particular, they are concerned that the existing child care infrastructure may not be able to cope with the increased demand that could arise from the introduction of universal credit. I appreciate that the Minister does not want to be drawn on the detail, but can he assure us that parents who are unable to access good-quality affordable child care will not face sanctions if, through no fault of their own, they are unable to find the child care that they need?

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Of course, we already provide child care universally through our schools system. The truth is that no parent with a youngest child under school age can be subject to any job search-related sanctions. Only once their youngest child reaches school age are they subject to a work-search requirement and can face sanctions. Under the rules that are pursued at the moment, and under the provisions that we have clearly said will exist within universal credit, we will expect lone parents of children at primary school to do a part-time job only if that fits in with the hours of that school.

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I am slightly surprised to hear the Minister describing school as a glorified babysitting service. The real pressure point pertains to older children, and particularly to out-of-school care. That is not covered across the UK by the Childcare Act 2006, which applies only to England and Wales. I urge him to take a closer look at that and to give the House the assurance that parents will not be penalised.

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The point is that we do not penalise parents, particularly lone parents. We do not require them to pursue work; that is out of keeping with the reality of their child care responsibilities. I am not describing school as a giant babysitting service; I am saying that for a goodly part of the year children of school age are at school, and therefore do not need additional child care. The requirements placed on parents by Jobcentre Plus in relation to their job search and whether they take up employment are designed to work around what it is reasonable and what it is not reasonable for them to do. For example, we do not expect lone parents of school-age kids to work night shifts. I can certainly assure the hon. Lady that it is not our intention, nor will it be, to seek to sanction parents in relation to a job requirement that is unreasonable and unrealistic given their child care responsibilities.

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On a matter of principle, does the Minister believe that the regulations should be subject to parliamentary scrutiny in the same way as primary legislation?

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Of course.

As the right hon. Member for East Ham will know, I have tabled several Government amendments to address the concerns that he and other Members raised in Committee. I will deal with those before I talk in detail about his amendments.

Government amendments 14 to 21 will make certain regulation-making provisions for universal credit, employment and support allowance, jobseeker’s allowance and pension credit subject to the affirmative resolution procedure when they are first used. I recognise the hon. Lady’s point, and it is a point that was made well by the right hon. Member for East Ham in Committee. I do not think that it would be sensible to make the provisions subject to the affirmative procedure year in, year out, but it is right and proper that the House should be able to debate them fully when they are first introduced.

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I thank the Minister for his important announcement on the use of the affirmative procedure the first time the regulations go through. The process that the Government have taken of consulting informally and sharing the consultation document so transparently, so that we could all sit down and discuss the options for child care, is a great and important step forward. I would have thought that the Work and Pensions Committee would have stirred itself to take a proper look at the document before the regulations come in, and make constructive comments to add to the process of reforming our benefits system.

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My hon. Friend makes an important point. Some of my colleagues and I have been in the House for longer than he has—and when the Labour party was in government, I do not recall once being called in to discuss the policy-making process for one part of a piece of primary legislation. I was not asked to go in and discuss education or health options; the decisions were always just made. What is different is that we have extended the hand of involvement to the Opposition and said, “Please come and be part of the decision-making process.”

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As another new Member, I ask my right hon. Friend to cast his mind back and consider whether the right hon. Member for East Ham (Stephen Timms), when he was a Minister, ever consulted quite so extensively as this Government have with third sector organisations, charitable organisations and other organisations to inform their work in developing the benefits system.

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I cannot remember the previous Government doing more than we have to engage people in Westminster, people around Parliament, third sector groups and members of the public. We are making a genuine attempt in a number of complex areas to get things right and to involve everyone in the decision-making process, and that will continue. Notwithstanding this afternoon’s amendments, we will continue to be delighted to seek and involve the input of Opposition parties, including the Labour party and the nationalist parties. As the hon. Member for Banff and Buchan (Dr Whiteford) said, it is right and proper that we have full dialogue with the Administrations in Cardiff, Belfast and Edinburgh, and with the Members of Parliament who represent Wales, Northern Ireland and Scotland.

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It is certainly the case that the previous Government never got to this stage in a Bill’s passage with such an enormous hole in the policy as there is in this Bill.

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The technical response to that is, “You wish!” I remember many occasions on which we came to a debate and asked what the Labour Government were planning to do. Did we ever get an answer? Not at all. The right hon. Gentleman and I have different memories of the way things were.

It is important to remember that this Bill creates a structure for universal credit, and that the details will be set out in regulations. The Opposition amendments relate mainly to issues that will be dealt with in regulations, and which do not affect the structure of universal credit as set out in the Bill.

I have accepted certain recommendations from the Opposition. The Bill as introduced provided that the regulations will be subject to the negative procedure. In Committee it was suggested that that would not provide the right level of parliamentary scrutiny and control. The right hon. Member for East Ham identified a number of provisions that he thought should be subject to the affirmative procedure, and I gave a commitment in Committee on 28 April to consider those provisions carefully.

There are two provisions, in clauses 22 and 25, relating to conditionality, for which we do not think the affirmative procedure is appropriate, because they do not introduce new principles. Although we intend that regulations will be much less prescriptive than the current jobseeker’s allowance regulations, the powers in the Bill will be used to create a regime for jobseekers that is broadly similar to the current one. We have therefore formed the view that there is no necessity to subject those two to the affirmative resolution procedure. Of course, it always remains within the gift of Opposition Members to pray against regulations if they want a matter to be debated. They could, of course, do so anyway, but we are making their life a bit easier by providing for the affirmative procedure.

I have thought long and hard, and apart from those two specific provisions I agree with the right hon. Gentleman’s suggestion that regulations should be made under the affirmative procedure in the first instance. I say “in the first instance” because it does not seem sensible to repeat the process year in, year out when the regulations are regularly renewed.

As set out in amendment 14, that principle covers all the key regulation-making powers relating to the universal credit, including the rules on capital, the calculation of income, the treatment of self-employed people’s cases, and the amounts of the elements within an award, including those for disabled children, housing and child care. Opposition Members might say that that is not enough to allay the concerns that they have raised on specific issues, and I shall deal with some of those specific concerns in a moment. However, I made it clear in Committee that we recognised the importance of getting the details of universal credit right. We are working hard to do so in consultation with key stakeholders, and we are listening to their concerns.

The Opposition amendments would pre-empt our considerations and tie the hands of this and any future Government with regard to areas of policy in which it is important to retain flexibility. I believe that it is perfectly reasonable to say that as we reach a final conclusion on what is right, involving Members of all parties, the Work and Pensions Committee, organisations such as the Social Security Advisory Committee, and third-party groups, we will bring regulations to the House by the affirmative procedure. There can then be a full and proper debate in Committee and a vote on Floor of the House.

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Clearly the Minister has moved on this issue, but there is still the problem that the affirmative procedure is “take it or leave it”. The Work and Pensions Committee and other Members have no ability to amend regulations, so it is not the same as the line-by-line scrutiny that primary legislation receives.

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I accept that, but that is precisely why we have extended the hand of involvement to the hon. Lady and her Committee and to Opposition Members, so that they can help us shape the details. This is a big complex project and there are challenging issues to deal with, and we want to work on a bipartisan basis and take views from all parties on how best to shape the system. In the end we will have to take a final decision ourselves, but it is our goal and intention to involve all those who wish to be involved in the thought process.

That brings me on to child care, on which we have been seeking to do precisely that. New clause 2 raises important points about how we intend to support people with formal child care costs within universal credit. Hon. Members will be aware that we recently held two seminars on the topic. Members of both Houses attended, and there were interesting and fruitful discussions. There was a follow-up seminar with a group of key stakeholders. I am aware that Members raised particular queries, and we have undertaken to look into them and provide more information. The seminars were part of an ongoing dialogue about how best to structure child care support under universal credit.

For now, I reiterate the point that I made in Committee. The Bill already allows us to include an additional element for child care within universal credit, under clause 12. We have made a firm commitment to provide such an element, but I make no apology for taking time over the details. We must get them right, and to do so we must listen to those with experience and expertise and consider the options.

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The Minister will be aware of how important the child care tax credit has been in supporting families’ child care. Will he undertake that people will not be worse off in terms of their child care costs, or is the change really just about saving money?

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As the hon. Lady would have known if she had listened to the debate in Committee, we are putting in place transitional protection for the introduction of universal credit, so that no one will lose out in cash terms as a result of the changes. That is right and appropriate. The problem with new clause 2 is, first, the cost, which the right hon. Member for East Ham did not mention.

Had we introduced new clause 2 with the current 16-hour rule, the cost would be around £200 million to £400 million, which would be additional to current expenditure of around £2 billion. The Opposition have therefore made a clear spending commitment, which appears to be a reversal of their policy—I was under the impression that the Leader of the Opposition and the shadow Chancellor had said, “No spending commitments without official sanction.” Perhaps this spending commitment has official sanction, but, if so, they need to say where the money is coming from.

Two or three Opposition proposals that we will debate today require extra spending. It is incumbent on a party that has just presided over the building of the biggest deficit in our peacetime history to say where the money is coming from if it proposes spending commitments that would take away some of the money that we are trying to reinvest to deal with the deficit. Do Labour Members want to borrow more money? If so, that £200 million to £400 million means extra public borrowing. Alternatively, will they increase taxes? They need to explain where the money is coming from.

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Does the Minister understand that many women are frightened by the Bill’s proposals and nervous about their futures—about whether they can continue working and supporting their families? Women who are looking to move into work are not worried about artificial arguments on whether the Labour party has a new spending commitment. They want to know whether the Bill will give them the opportunity to move into work when they are capable of doing so, and whether the Government will give them child care support. In many cases, child care is the only thing stopping them making that step.

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Women and men in this country have realised that the previous Government’s belief that money grows on trees is wrong. They have also realised that the consequence of the previous Government’s policies—they simply threw money at every problem—is that we are faced with the most monumental deficit challenge. If we do not deal with that, we will end up in the same position as a number of other countries. I would not want us to be in that place, because women’s chances of getting back into work would be much diminished by the state of such an economy.

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I appreciate that there is concern about the deficit, but will the Minister assure us that women who are unable to work because the cost of their child care will remove all the benefit of them doing so will not find themselves harassed or pressured by the Department for Work and Pensions to take work that will leave them out of pocket? Will that be taken into account when their capacity to work is reviewed?

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I am not sure whether the hon. Lady was in the Chamber a moment ago when I answered question on child care from the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne), but the former seems to be forgetting the fact that there is no job search obligation for the lone parent of a child who is below school age. A job search requirement is made only when a child is at school, and the requirement is for a willingness to accept a reasonable job offer that fits around school hours. No draconian measure is waiting to hit a lone parent as their child grows older. Our system is pretty supportive, and we have been absolutely clear that child care costs will continue to be paid through universal credit.

The hon. Member for Bridgend (Mrs Moon) must also understand that our nation’s resources are finite. We cannot just turn on the financial taps because we feel like it. We must take pragmatic decisions on what the nation can and cannot afford. We set out very clearly in our announcement last year that there is a £2 billion envelope to fund child care. Parliamentarians now need to agree how best to spend that money.

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As the Minister knows, I have supported the universal credit system for some while, but each of the proposed amendments address vulnerable people—people on free school meals, people living in near poverty or poverty, children with disabilities, and people who are sick and who incur health costs. Those real anxieties about the introduction of the new system need to be assuaged. When the Minister responds on those issues, could he at least give us some sort of time scale on which they will be addressed, so that those people can have more certainty in the run-up to the introduction of the new system?

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The answer is that we will do it as quickly as we possibly can. We are not in the business of delaying these things. We are doing the consultation on child care now, and I hope that we will reach a resolution in a relatively short space of time. However, I want to take the time to get it right. I do not want to rush through under an artificial timetable something that is not necessary right now. We are still two and a half years away from the introduction of new claims for universal credit. We have got time to get these things right and we are trying to work with a fixed envelope of money for child care—we will talk about some of the other issues shortly. We want to take the time to look at the real costs of child care, the requirements and how we can best deploy the £2 billion available.

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I am not trying to catch the Minister out—I am trying to secure clarity on each of these issues. What is an indicative time scale for addressing those anxieties, so that people can have some prospect of being able to calculate their futures in those areas?

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I will endeavour to answer that. On the child care issue, we are in consultation at the moment. I would hope that we will get all the responses that we are going to get by the summer and be able to take decisions quickly after that. That would be my first answer to the hon. Gentleman’s question.

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Does my right hon. Friend agree that it is unhelpful for the hon. Member for Bridgend (Mrs Moon) to talk about the Department for Work and Pensions “harassing” women who are considering going back to work? All these measures are an attempt to be mindful of the public purse and to encourage people to go back to work and do the best they can for their families—because being in work is good for their families.

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My hon. Friend makes an important point. The whole purpose of universal credit is to provide assistance to people who are trying to get back to work and to ensure that work always pays. I hope that the women of Bridgend will benefit, like those across the country, from the introduction of universal credit and the extra support that it will provide to ensure that they are better off in work.

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I noted the Minister’s reminder a few moments ago that transitional protection would also be available in respect of child care costs. Can he confirm that one change in circumstances that can be predicted is that child care costs will vary between term time and school holidays and that that will not trigger a change in circumstances that would lead to the cancellation of transitional protection?

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It is not our intention that routine or minor changes in circumstances would lead to the loss of transitional protection. The requirement for child care clearly fluctuates during the course of the year, but follows a set pattern. It is not our intention for a moment to remove transitional protection in that situation, nor is it our intention to remove it in an environment in which there is an annual increase—RPI or CPI—in the rate of child care. We are looking at material changes in circumstances, and I certainly would not envisage the change from term time to holidays as a material change.

The other issue that I have with the Opposition’s proposals is that they would remove the ability for people to take up mini jobs. For women re-entering the workplace after a lengthy time out of it, there is a bigger barrier than needs to be the case. One of the strengths of the universal credit system is the flexibility for people to take on mini jobs. The level of prescription set out in the Opposition’s proposals would set up unnecessary and inappropriate barriers to getting people back to work.

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In Committee, we heard a great deal about these mini jobs. We have just heard the Minister say that we should not be worried about the effect on parents of children of school age because a job could be encompassed within school hours. Why is it so necessary to take money away from people who are trying to improve their families’ prospects of getting out of poverty in order to help people in mini jobs—although I do not fully understand the concept—because surely those would be covered by school hours even more?

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The changes we made last year—the reduction from 80% to 70% support—merely returned us to the situation that applied before 2006. On the mini jobs, I want us to spend the money we have on supporting people from deprived backgrounds and in the most deprived situations into the work place so that they can make the most of their lives. The mini job is a perfectly reasonable way of doing that. I also happen to think that for many lone parents, a mini job during schools hours is a perfectly reasonable alternative that might mean that the need for child care is not great. None the less, the option should be there. We should not be writing—this is the key point about some of the Opposition amendments—into primary legislation rules that cannot be undone for two or three years, while we wait for a parliamentary slot. Instead, we need to set out straightforwardly a situation in regulations that can be amended if the situation requires. I could not possibly accept an amendment from the right hon. Member for East Ham that would write into primary legislation actual amounts of benefits that should be paid. The Labour party would never have done that while in government. It would not have happened, and I am not going to tolerate the idea now.

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The detailed and comprehensive information that the Minister and the Department for Work and Pensions shared with members of the Bill Committee and the Work and Pensions Committee sets out clearly that joint working is the norm for couples in this country. In most families, mine included, with young children, both spouses or partners work. I, for one, resent the idea among some older people that mothers just sit at home and have primary responsibility for child care. Society has changed, and it is time people moved on from being old-fashioned and out-of-date and accepted that the reality of modern Britain is that both parents play a key role in bringing up children.

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My hon. Friend makes his point in his usual forceful and inimitable way. He highlighted how Labour Members struggle to move on from traditional ways of things. Listening to the right hon. Member for East Ham, I am still not sure on which side of the argument he falls. Does he think that we are doing the right thing, but want to fine-tune it a bit, or is he trying to distance himself from the Bill, so that on Wednesday the Opposition can vote against it and so say to the pressure and lobby groups, “We are on your side”? I am genuinely not sure which is the case, although if they do vote against it, I will love it. I will look forward to arguing up and down the land that this Government have got it right on welfare reform, and that the Opposition have not. I wait with interest and enthusiasm to discover how they vote.

New clauses 3 and 4 provide an amount for school meals and health costs in universal credit. It is absolutely our objective to ensure that people on universal credit will continue to receive appropriate support for school meals and health costs, and that this support is withdrawn gradually to avoid damaging the incentives to work. However, entitlements to passported benefits are the responsibility of other Departments and devolved Administrations. We have been working closely with those responsible to consider the options, and we have commissioned the Social Security Advisory Committee to review passported benefits and how they interact with universal credit. The review was announced in a written statement on 23 May, and a copy of its terms of reference has been placed in the Library. To answer a question put to me earlier, I should say that the Committee will produce its interim report in September and a final report by January. The Committee provides a good way of considering this challenging and important cross-governmental issue. We are certainly well aware of the potential for a large cliff-edge reduction in a person’s income, if support for school meals is withdrawn completely when they reach a certain level of earnings, and we are working closely with other Departments on the matter, as well as on the review.

On health, we aim to ensure that passported benefits are awarded to broadly the same number of people as now. However, passporting is not the only source of help with health costs. Income-related help is also available through the NHS low-income scheme, which can be claimed by anyone on a low income who has capital of less than £16,000. For people on medication, pre-payment options can also significantly reduce the cost of recurring prescription charges. With a 12-month pre-payment certificate, the maximum cost of a prescription is £2 a week, although of course that is an issue only for England; for those with constituencies in Scotland, there are no prescription charges.

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The Minister made an important point a moment ago. He said that he agreed that support for free school meals and prescriptions should be tapered away. That is different from the proposal in the White Paper to have an income threshold and no support. Is that a change in Government thinking?

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That is precisely what we have asked the Social Security Advisory Committee to examine for us: how best we deal with that cliff edge. We accept that it is there. How do we tackle it to maximise the likelihood of people moving into work?

In most cases, health charges will be one-off or occasional costs that are unlikely to weigh heavily in people’s perception of the financial gains from working. However, for some disabled people in particular, there may be a more significant factor. The current passport from working tax credit together with the separate NHS scheme for people on low incomes should mean that health costs are not, in theory, a disincentive to work, but we know that the reality is often dictated by perceptions and issues about access. We will work to get that right for universal credit. However, we await the Social Security Advisory Committee’s recommendations with interest and we believe that it will be necessary to consider them with other Departments. We need to find a way in which to address the matter that maintains support without creating insuperable barriers to returning to work. It is a complex subject, which falls beyond simply decision making by our Department because we are not responsible for much of it.

New clause 5 would ensure that claimants understand how the amount of universal credit that they receive is calculated. I share that goal, but we do not need primary legislation to achieve it. We are designing universal credit to ensure from the outset that people have the information that they need in an accessible form that is clearly set out. We intend to provide a clear record of any award when it is first made and of subsequent changes, ensuring that claimants are always up to date with the latest position.

Universal credit will be a digital service by default that claimants will predominantly access online. However, we recognise that not all universal credit claimants have access to the internet and we will continue to provide notification through other channels. We are also working with the Government Digital Service—as well as other partners—to help people get and stay online by providing more reliable internet access and training in communities. Of course, we put in place some of the measures to increase digital access when we debated the appropriate regulations last week.

The hon. Member for Stretford and Urmston (Kate Green) was concerned that one part of the benefits system going wrong would bring down the whole deck of cards for a family. She is wrong in thinking that, simply because we have multiple channels, the system somehow works well at the moment and will be much more vulnerable under universal credit. The current system does not often provide that security. Outstanding questions can affect a wide range of existing benefits, particularly at key points of transition, such as moving into work. Many people do not even claim everything to which they are entitled. Rather than a patchwork of provision, with people thinking, “Have I got everything I’m entitled to? If I don’t know a particular answer, everything gets delayed”, a single point of entry, a single point of access and a single system of paying benefits makes it less likely that somebody will get into difficulties and not receive all the money to which they are entitled. I do not therefore believe that the hon. Lady has got that right. We are confident that universal credit will not have the effect that she suggests—it will make it easier to access benefits. Of course, we intend to introduce a system of payment on account, which will allow some payments to be made even if all the details of the claim cannot be sorted out straight away.

Amendment 26 on reporting would make it a legal requirement that we assess and report on access to welfare advice, including advice for those unable to use the internet, before we introduce universal credit. Universal credit will be a simpler system than we have today. It will be easier for potential and existing claimants to find out relevant information online, and easier for advisers to understand and advise.

Welfare advice is already provided by Jobcentre Plus, Her Majesty’s Revenue and Customs and local authorities through a variety of means—over the internet and via other routes.

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Even if universal credit fulfils what the Minister describes—he says that it will be simpler, and although it will certainly be simpler superficially, in practice it may be more difficult—with any move from an old system, it takes time for people such as advisers to become familiar with the new system. Advice will be crucial at that pinch point. Will the Minister ensure that the organisations that provide advice are properly funded in that transitional period?

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My view is that our partner organisations, such as Citizens Advice, need to be involved and informed of all the changes. We need to continue to be able to offer the valuable advice that they give to individuals. We provide quite substantial blocks of Government funding to Citizens Advice and similar organisations, and it will be for them to decide how best to use that financial support. In what are straitened financial times, I would hope that those organisations would see their priority as sending as much of that money as possible to front-line advice services, and spending as little as possible on central administration, central marketing activities and other head office functions. I would like those organisations to focus on providing every spare bit of cash that they can for front-line advice services—as well as finding ways of generating more spare cash for that purpose—because after all, that is where the money is most effectively and valuably spent.

We will seek to provide guidance, training and advice for advisers on the universal credit and the implications thereof. There is always a willingness on our part to talk to groups of advisers, including at some of the big conferences that Citizens Advice organises. I have not been able to do so yet—I have offered to do so on other matters—but we are always willing to provide such input to those organisations.

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Does the Minister accept that the money currently given to Citizens Advice is spent centrally on vital services such as training advisers, the information system and support for those agencies? In fact, none of the money goes to local bureaux, which are extremely concerned about the effects of the cuts in 2013.

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Every organisation has to look at how it operates in tougher times financially, and at how best to spend the money that it has available. I am sure that Citizens Advice will be no different in that respect.

Amendments 23 and 24 deal with the capital limit and propose that for claimants who work, the universal credit assessment should ignore savings that they hold in individual savings accounts up to a prescribed maximum of no less than £50,000. We fully understand the importance of saving. Working families should seek to provide for their future needs and larger purchases. However, families with substantial savings should draw on those reserves when their incomes fall, not look to the taxpayer for support. Our analysis suggests that in 2014-15, there will be up to 100,000 households on tax credits with savings over £16,000 who could be affected by the capital rules in universal credit. However, transitional protection will ensure that there are no cash losers at the point of the transition to universal credit where circumstances remain the same.

However, it is important to be fair to the taxpayer. Although nearly one in three pensioner households have savings in excess of £16,000, only 13% of households with a working-age adult in them have that much in savings. A typical working-age household has only £300 in savings. It cannot be right that people with significantly greater savings than the average family can claim universal credit. A maximum limit of at least £50,000 in ISA savings, as proposed by the right hon. Member for East Ham, is a large sum to be excluded from the capital ceiling. We are striking the right balance between protecting people with modest savings and placing responsibility for their own support on those with substantial resources. Once again, we are talking about an uncosted spending commitment. The right hon. Gentleman said that it would cost £70 million a year to uncap totally, but not that many people on universal credit would have savings of more than £50,000, so the majority of that £70 million would be spent on his measure. The reality is that this is a multi-tens-of-millions-of-pounds spending commitment. Once again, we have not heard from the right hon. Gentleman where the money would come from.

Amendment 30 to clause 10 would mean paying at least as much in the additional elements for disabled children as we did in benefits and child tax credit prior to the introduction of universal credit. As we announced in policy briefing note 1, “Additions for longer durations on Universal Credit”, we will retain two levels of payment for disabled children in universal credit. The higher element will be payable to more severely disabled children receiving the highest rate of the care component of disability living allowance. The lower rate will be payable to children receiving the other rates of the disability living allowance care component. The higher rate will be increased by £52 a year, with eligibility extended to children who are severely visually impaired, who currently receive only the lower entitlement.

The key change is that we propose to align the elements for disabled children and disabled adults. That means that the lower rate would be around £26.75 and the upper rate £74.50 a week in current figures. The lower rate for a less severely disabled child in universal credit would be less than now, but we have pledged that where universal credit entitlement is less, transitional protections will be put in place. Our aim is to simplify and align the additional elements for disabled children with those for adults. We do not think it right that when a young person claims benefits in their own right, the extra amounts payable for disability are different. We also want to focus resources on the most severely disabled children and adults. Savings from abolishing the adult disability premiums and changes in the child rate are not going back to the Exchequer. This is not a cutting exercise; it is about recycling that money into higher payments for more severely disabled people.

Amendments 27, 28 and 29 to schedule 1 relate to the regime for self-employment in universal credit. As I told the right hon. Gentleman many times in Committee, we are committed to ensuring that people in self-employment have the financial support that they need. Amendments 27 and 28 would take a power to allow “accruals accounting” of profits and losses from a trade to be used in the reporting of earnings from self-employment. Strictly speaking, that is unnecessary, as the power taken by paragraph 4(1)(b) of schedule 1 already permits such a regulation. Amendment 29 would limit the application of the power taken at paragraph 4(4), which allows for a minimum level of earned income from self-employment to be set. It proposes that the minimum level would not apply where the claimant’s business was conducted on a commercial basis with a view to the realisation of profits.

We recognise that self-employment is a vital element of the economy and will be an important contributor to the sustained recovery from recession that we all want. It is also an important route into work for many people. We are therefore giving careful consideration to the conditions that we set for people claiming universal credit who seek to make their living from self-employment. The enabling framework provided by the Bill allows the treatment of income from self-employment, including the definition of earnings to be taken into account, to be set in regulations. We therefore do not need to decide this question today; we can work to get it right. However, as I have said to the right hon. Gentleman previously, we have to deal with the issue carefully. It is not the intention to make it impossible for people to get into self-employment, particularly in the first few months, when they have difficulties and money does not come easily. However, in the current system, people can report no or very low income from their business activity and continue to receive the bulk of their benefit or tax credits entitlement. We want people to become progressively less reliant on benefits and universal credit. At the end of the day, we cannot have the taxpayer funding someone who is notionally self-employed—and on whom there is no job search requirement—but who generates little or perhaps no income at all from that self-employment. We have to apply a threshold to determine whether someone is credibly in self-employment or whether they are using self-employment as a reason for not looking for other job alternatives. We have to get this right.

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My right hon. Friend makes a valid point about people who are considered self-employed. Does he have any view about those who are considered self-employed who sell magazines such as The Big Issue?

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My hon. Friend makes an important point. That is something that we need to address, because the current situation is not right. We need to ensure that the system is fair and justifiable in the eyes of taxpayers and other individuals. I share some of her anxieties, and although it is not in my remit to pursue the issue, I am sure that she will make her representations elsewhere in Government. It is not that we want to do anything that undermines that publication or others in a similar position; rather, we want to ensure that the position is not only fair and equitable, but defensible and justifiable.

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My right hon. Friend knows that I have expressed some concerns about this issue in the past. Can he give us an assurance that self-employed income will be based on actual income, rather than deemed income? Linking self-employed income with an assumption that people are earning the minimum wage would effectively put most farmers in this country the wrong side of the line, because probably most of them earn less per annum than they would if they were paid the minimum wage for the hours they work. The same goes for young barristers, lots of people in the carpentry and building trade, and others building up businesses. Surely the system should be based either on actual earnings or on something else. If it is based on something else, that surely needs to be spelt out clearly, because there are rumours circulating that we are effectively imposing a minimum wage by the back door on self-employed people.

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My hon. Friend makes a good point, underlining the complexity of these issues and why I believe it inappropriate to set hard-and-fast rules in primary legislation. If we find that we have not got it right the first time around, or if things need to be done to remove anomalies, which they might well be, it makes no sense to have written the fine print into the detail of primary legislation, therefore making it more difficult to adjust accordingly. This is one reason why it is important to maintain as much flexibility as possible.

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The hon. Member for Christchurch (Mr Chope) referred to rumour, but the White Paper said that self-employed people would be deemed to have earned at least the minimum wage for each hour of employment. Can we take it from what the Minister is saying that the Government are reconsidering that White Paper decision?

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As I said to the right hon. Gentleman in Committee, we are looking at the best way of doing this. We cannot have a situation in which people who are receiving an entitlement to the universal credit while generating no income at all over long periods of time still say that they are self-employed. We must ensure that that does not happen, and we are looking for the best way of doing it. If we wrote the rules into primary legislation, we would not be able to take decisions and fine-tune on the basis of experience, as we would have to come back to primary legislation every time. That is why I think it inappropriate to accept the right hon. Gentleman’s amendments.

Let me make some further progress. Amendment 33 seeks to remove the restriction on eligibility for pension credit for couples where one member is below and the other is above the pension credit qualifying age. Suffice it to say that although someone over the retirement age should be able to receive benefits for the household under the pension credit system, someone under the retirement age being able to receive the benefits of a means-tested system without having to go out and look for a job is just plain wrong. I am afraid we disagree on that, and I am comfortable with the changes. They are set out in legislation, which is where one would expect them to be set out. I am disappointed at the right hon. Gentleman’s disappointment that we have not issued a press release on the subject, but I do not think that this is the kind of change that would command the front pages of any newspaper. It seems perfectly reasonable to set out proposed changes in legislation, given that it is legislation that is laid before the House with accompanying explanatory notes that Members can read and discuss and into which they have an input.

Amendment 68 would add additional provisions for carers to paragraph 4(4) of schedule 1. It is not necessary to set a minimum level of payments to carers. The risk is that the incentives for carers to get into work are blurred by the automatic payment of an amount that does not relate to their personal circumstances. We all agree that wo