The latest figures show that despite the previous Government spending huge sums—more than £300 billion—on working age welfare and tax credits, during their latter stages the level of poverty actually rose, and it was clear that the figures for measurement do not work as well as they should.
The Government are committed to eradicating child poverty and to the targets that we set up, but we are also interested in developing better measures through a consultation that will be launched this autumn.
My hon. Friend is absolutely right. One problem with some of the ways in which child poverty is measured is that not enough credence is given to the fact that we need to get beyond the simple point about money, and look into what causes some families to remain persistently in poverty. Although the latest figures show that relative poverty fell by 2% over the past year, I do not try to claim any point of success because levels of absolute poverty remained flat. The reason relative poverty fell is that during the major recession the overall economy fell as well, but that is no way to measure whether people are in poverty or not.
I am sure that in the recent past the Secretary of State has met non-governmental organisations such as Save the Children, the Children’s Society and Barnardo’s. Does he intend to meet those organisations during his consultation period to hear their genuine concerns about the change in the measurement of child poverty, and the difficulties it will cause that may distort outcomes at the end of the process?
I agree with the hon. Gentleman. We are consulting widely with those organisations, and when we introduce the consultation process we want to hear from them all about how best to look at the issue of measurement so that the effect of what we do is felt by those who need it most. We are taking the recommended steps suggested by Save the Children, and we are committed to eradication. Universal credit is critical to the process of taking some 900,000 adults and children out of poverty, which we should all support.
I pay tribute, as my hon. Friend the Member for Wirral West (Esther McVey) has done, to our Paralympic athletes, whose feats we have watched over the past fortnight. They have impressed us all and excited us by the very idea of competition, as well as overcoming their major difficulties. Next week my Department will publish the responses of thousands of disabled people to the “Fulfilling Potential” consultation that was launched earlier this year. Changing perceptions is key to helping disabled people overcome the barriers they face, as is tackling discrimination wherever it occurs.
The principle behind the new guidelines is that we see and meet every individual and help them to overcome the barriers they face, and that is exactly what we will do.
We are seeing that the flow from benefits is continuing at the same level as expected, but payment by results focuses providers’ minds on getting people into sustainable employment, and we will see the first results in November.
May I associate myself and my hon. Friends with the Secretary of State’s words of congratulations to our extraordinary Paralympians, who have simply dazzled us over the past couple of weeks?
I am delighted to see that the Secretary of State has survived the enthusiastic support of his friends in the Treasury, but may I press him on the price of his survival? When universal credit is fully rolled out in 2017, the Office for Budget Responsibility says that the extra costs will be £3.1 billion. The Treasury in its budget says that the price must be no more than £2.5 billion. With whose estimate does the Secretary of State agree?
The OBR agrees with me and I—strangely enough—agree with the Treasury. Our view is that we will roll this programme out at a cost of £2.5 billion per year. as originally estimated. I think the right hon. Gentleman is referring to a partial statement in a document produced before March by the OBR, and for the sake of the House I will read what it actually says. Although the OBR originally looked at this and wondered whether £3.1 billion would be reasonable, it has
“adjusted this down to £2.5 billion as the Government has stated in the Budget that final decisions on policy design”
are essentially now made.
I am afraid the Opposition simply cannot accept a think-tank set up by the Treasury putting the figure at £3.1 billion and the Treasury, in the March Budget, revising it down to £2.5 billion. The Secretary of State must accept, as I am sure many in the House do, that an extra £600 million will have a huge impact on whether people will be better off in work or on benefits. The Treasury clearly believes there is a state of chaos around universal credit, as do the Cabinet Office and No. 10. Surely it is time he tells the House exactly what is going on, and sets before us the business case that he is trying to keep secret from us. Is there something he is trying to hide?
There is absolutely nothing to hide—[Interruption.] No, no. We are committed to the £2.5 billion all the way through and we will deliver universal credit on time, as it is and on budget. Any time he would like, he is welcome to come into the office and look through some of our business matters, as is his colleague, the right hon. Member for East Ham (Stephen Timms). I will show him how we are on time, on target and on budget.
The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) did rather jump the gun. He referred over the weekend to universal credit as a car crash in the making. I need no advice from the man who produced the biggest car crash in British economic history.
T10. The Secretary of State will be aware that Bluewater shopping centre in my constituency recently announced a further 1,500 jobs to add to the jobs of 7,500 people who are employed there. Will he accept my invitation to visit Bluewater with me to see first hand the job creation that this Government have helped to make possible? (119847)
I look forward to visiting my hon. Friend and shall definitely come. He gives us a great reminder—the Opposition do not like this very much—of the three-quarters improvement in employment, and of falling unemployment and benefit claimant numbers. More importantly, as a direct result of what the Government have done in our welfare reforms, there is a lower number of economically inactive people than at almost any time since those records began.
T2. As other hon. Members have mentioned, the introduction of universal credit will mean that housing benefit will be paid not directly to landlords but to tenants, and that it will be paid monthly rather than fortnightly, causing tenants to go into substantial arrears. Does the Secretary of State agree that, when assessing whether a claimant is vulnerable enough to be exempted from monthly payments and receiving their housing element directly, it should be standard practice to consider the feedback of third parties such as social services and voluntary sector services as well as claimants? (119839)
I do, yes. We want to pay people directly, and we already pay local housing allowance to such tenants directly, which the hon. Gentleman and all hon. Members should remember. The vast majority cope with that payment—they are very similar. The point is this: we do not intend to cause problems, but the more we continue to treat people in receipt of benefits like children, the less likely they will be able to cope when they go to work. Those who can absolutely must get on to that payment schedule, but we will obviously talk to all the bodies to which he referred to ensure that we identify those who cannot. If people cannot get on to that schedule, we want to surround them with help and support to find out why they cannot manage their payments, and to rectify that rather than just throw money at them.
I thank the Minister for his assurances that the implementation of universal credit is on time. Will he confirm that it is on track to reduce child poverty by 350,000? As hon. Members will recall, child poverty rose sharply in the previous Parliament.
T3. I am contacted every day by vulnerable constituents bruised, battered and sometimes made ill by the Secretary of State’s Department trying to force them off benefits that they desperately need. He knows that huge sums of benefits go unclaimed. What is he doing to ensure that those on benefits understand their full entitlement, particularly in respect of Warm Front payments, on which I understand there will be an underspend this year? (119840)
I agree. The hon. Lady raises an important point about an area of work—I was just talking to my ministerial colleague about it—that universal credit should help to rectify and improve dramatically, because putting everything into one location will allow us to target it correctly on the intended recipients. One of the biggest problems is that the complexity of the system does not allow that to happen, meaning that lots of people fall through the cracks.
Universal credit will be the greatest revolution in the benefits system for more than a generation. Will my right hon. Friend ensure that every Member has the opportunity, between now and the introduction of universal credit, to get to grips with its minutiae, so that we can be confident of ensuring that our constituents understand how it will work?
I will follow through on that very good suggestion. We are already consulting. My hon. Friend might be aware that in July we had a series of consultations in the Committee Rooms with Members of the other place and of this House. We intend to continue that consultation and to set up demonstrations of how it works at the front end and of what they will need to do. We are determined to ensure that Members understand how to claim it—I hope that some of them may have to use it in due course.
T4. We were told that universal credit would ensure that every additional hour that people worked would pay. Is the Secretary of State aware of concerns of the Children’s Society and others that many thousands of families face a cliff edge at the point when eligibility for free school meals kicks in? What is he doing to ensure that families do not lose out or find themselves better off working fewer hours? (119841)
We are discussing that with the Department for Education and others, and consulting the relevant bodies and interest groups outside. We are looking for the best way of integrating the process to eradicate such problems and cliff edges in order to create a seamless process that allows people smoothly to engage and improve the quality of their lives, rather than having to negotiate at the edges of those difficulties.
The Secretary of State knows that I fully support his introduction of a benefits cap and his measures to ensure that people are always better off in work, but does he concede that some people are still better off on benefits than other people in work and that to tackle that issue we need to reduce the cap even further?
It is interesting, of course, because I have had correspondence from people throughout the country saying that we should reduce the cap because it is too high. We have introduced the cap at this level because we think it is fairest—it ensures that average earnings are not exceeded by people who are out of work and that people who pay their taxes do not feel that they are paying them to people who do not work as hard as they do.
T5. A constituent has written to me stating that she has had terrible trouble finding work because she has a daughter under the age of six and has child care needs. She has visited Jobcentre Plus but has been told that jobs in term time are few and far between. She asks whether the Government have studied the situation in France, where 65% of women with children under the age of six are in work. (119842)
We have sought to create flexibility in Jobcentre Plus, particularly in respect of lone parents—I do not know whether the hon. Gentleman’s constituent is a lone parent—so that it recognises the need for flexibility around term times and some of the challenges around child care. If he wishes to write to me with the details of his case, I will look into it.
Jam jar accounts can help families’ budgets, protect housing associations and promote a savings culture. As credit unions can offer these at a much lower cost than existing commercial offers, will my hon. Friend do all he can to encourage them?
I congratulate my hon. Friend on his tireless work in support of credit unions. As he knows, as part of the universal credit roll-out, we are piloting different sorts of budgeting accounts, including jam jar accounts, and we would be delighted if credit unions were to play a full part in that process.
We inherited the work capability assessment from the previous Government. Through the work of Professor Harrington, we have sought to introduce a series of reviews to improve the assessment’s functioning, and we will announce further changes shortly. We want to get this right, and are prepared to listen and learn from the work of Professor Harrington and not leave the system unchanged.
There is concern among visually impaired people that they might be treated differently according to whether they use a long cane or a support dog, rather than being assessed on the level of their disability. Will the Minister reassure me that such discrimination will not exist in the final criteria for personal independence payments?
I assure my hon. Friend that assessments will fully reflect the changes that are required for blind and partially sighted people, and that there will not be any discrimination like that. We have not finished consulting; it is an ongoing process. We have listened to people’s concerns and altered the assessment as it goes, and we will be taking all of this into account.
In response to the question from my right hon. Friend the Member for Cynon Valley (Ann Clwyd) about the high tax being paid by sacked Remploy staff on their redundancy payments, the Minister gave an encouraging reply and said that the matter would be dealt with as soon as possible. Will the Secretary of State confirm that that means the money will be returned to those sacked staff in the current tax year?
I fully support the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Wirral West (Esther McVey), and I really welcome her arrival. She said that the matter was being looked into right now, and she will receive my full support while that happens.
The Government are piloting a scheme in my constituency in which the young unemployed who have never worked will be required to do voluntary work in return for their benefits. Does my hon. Friend agree that that will be good for the long-term job prospects of the young people concerned, and good for confidence in the benefits system, in showing that people will not get something for nothing?
My hon. Friend is absolutely right. We are implementing that scheme in conjunction with the Greater London authority, and it will provide an important way of getting more young people into work. That will be to their benefit and to the benefit of society and taxpayers generally.
Further to the Minister for Work’s answer to my question on 6 December on the International Labour Organisation’s meeting at which the crisis of youth unemployment was discussed, will the Minister tell me what briefing he has received from the UK representatives, given the damage that the eurozone crisis is doing to manufacturing in my constituency and to the possibilities for young people who want to enter industry?
I am sure that the hon. Lady will welcome the youth contract and the work we are doing to ensure that young people come off benefit and get into work. She should also recognise that youth unemployment is lower now than it was in 2010, once we take into account policy changes. We are tackling the issues, but we do recognise the impact of the eurozone on our economy.
I am delighted that the Secretary of State has announced that advice will be given to vulnerable claimants on how to spend universal credit. Who will provide such advice in deeply rural areas in which there are no jobcentres and no access to citizens advice bureaux?
I can assure my hon. Friend that we will work closely with local councils—whom we are consulting right now—and all those involved, including those distributing the social fund, at local level. We will also talk to local groups involved in credit advice and local poverty groups, as well as ensuring, ourselves, through the jobcentres, that those claimants get that advice. They will get that advice. We will work with them, identify them and ensure that they improve the situation they are in.
Will the Secretary of State explain why, when disabled people are justifiably being applauded the length and breadth of this land, he has chosen this time to close Remploy factories that employ thousands of disabled people? Will he withdraw those closures and put an end to that hypocrisy?
May I say to the hon. Gentleman that the process was started by his Government? It was they who closed 29 centres. The difference is that they never put in place any support measures for unemployed Remploy factory workers. We, however, are spending £320 million and adding another £15 million to that to ensure that, with the new programme, we try to get them back into mainstream work. It was the lobby groups that wanted us to do this, because they do not like segregated employment.