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Oral Answers to Questions

Volume 552: debated on Monday 5 November 2012

Work and Pensions

The Secretary of State was asked—

UK Pension-holders

1. What steps he is taking to ensure that foreign conglomerates carry out their responsibilities to UK pension-holders. (126298)

As this is the first session of DWP questions since the announcement of the untimely death of Malcolm Wicks, I hope that you will allow me, Mr. Speaker, to place on record, on behalf of the whole ministerial team, our appreciation of Malcolm and all that he contributed to our debates on pensions and welfare.

The Pensions Regulator has “anti-avoidance” powers to take action against employers when they have acted to avoid supporting the scheme. That includes taking action in foreign jurisdictions when necessary. For example, four financial support directions were issued last year against companies in north America in the Nortel case.

I thank the Minister for his response, and for meeting my constituent Alan Hunton and me to discuss the matter. He is aware of my concern about foreign companies that have purchased and asset-stripped businesses in the United Kingdom. In some cases, those firms have discarded their pension responsibilities in such a way as to endanger the pensions to which their employees are entitled. Will the Minister explain how he is working with the Pensions Regulator, and with his colleagues in the Government, to curtail such predatory behaviour?

This is indeed an important issue. I can assure the hon. Gentleman that the Pensions Regulator has engaged during the last 12 months, and continues to engage, with more than 1,100 schemes that are linked to overseas employers. Between April 2010 and August 2012, it has exercised its powers on at least 10 occasions in relation to such schemes.

The Minister is aware of a case in my constituency in which the BMI pension fund was placed in a pension protection fund by Lufthansa. In this case, Lufthansa voluntarily paid over £84 million in compensation to the fundholders. However, under current HMRC rules the money is being treated as income, and the lifetime and annual allowance rules are being applied to the compensation. Does my hon. Friend agree that the position is unfair and should be reviewed by HMRC?

I am grateful to my hon. Friend for raising that case. I have corresponded with Treasury colleagues about the issue, and, subject to their consent, I shall be happy to share with him the reply that I have just received.

Disability Strategy

Fulfilling Potential, our disability strategy, is being co-produced with disabled people. We published “Fulfilling Potential—The Discussions So Far” and “Fulfilling Potential—Next Steps” on 17 September. Our key themes, which we intend to make a real difference, are early intervention, choice and control, and inclusive communities.

Can the Minister explain what the role of the disabled people’s user-led organisations will be in the strategy?

I can indeed. User-led groups will be a key element in everything that we do. It is essential for disabled people and their organisations to be at the heart of that. We have also created a £3 million fund, and I was delighted to be in Redbridge last week when we delivered £1 million of it.

An important part of the disability strategy is to get people into work. Can the Minister tell us what proportion of the people in the work-related activity group who have been mandated to join the Work programme have actually found work?

The figures have not been published yet, but as soon as they are published, I will give the hon. Lady the information.

There are many excellent disability organisations in the Bradford district, notably the Bradford and Airedale mental health advocacy group. Can such groups join the disability action alliance to help with the Government’s strategy, or will they be excluded from it?

We are trying to reach out to as many user-led groups as possible. Those who want to become part of the alliance should visit fulfilling.potential@dwp.gsi.gov.uk. Everyone is welcome: we want the strategy to be embedded in all our local communities.

Given the cumulative impact of welfare reform on disabled people and the criticism of the Joint Committee on Human Rights, can the Minister explain how the disability strategy will comply with the United Nations convention on the rights of persons with disabilities?

It fully conforms with the UN rights. In fact, we are a world leader in that regard. It has been noted that we are—as I have said—reaching out to all disability groups and disabled people, and I have given the House the address of the website.

New Enterprise Allowance

Because self-employment is the right option for many unemployed people, on 22 October we expanded the new enterprise allowance so that additional jobseekers could take part. We have also extended it so that jobseekers can take part from the first day on which they claim jobseeker’s allowance, rather than having to wait for six months.

In Redditch, more than 40 people have taken up the opportunity to be mentored under the enterprise allowance scheme. What else can be done to encourage more jobseekers to start their own businesses?

My hon. Friend has made a good point. I think that we should try to give good examples to jobseekers about where they can start businesses. Under Get Britain Working, we can set up job clubs to encourage people to see self-employment as an option for the future. I think that that is a good route out for many people with great skills.

Self-employed people in my constituency are experiencing increasing difficulty in finding work because of the Government’s austerity measures. Does the Minister accept that the bureaucratic requirement for self-employed people to produce two forms of evidence relating to their income is making it very hard for them to claim benefits and to find a way back into work?

We try to do as much as we can to reduce the burden of red tape on businesses. That is why the Government set the red tape challenge and introduced the one in, one out rule. All those measures lift the red tape burden from businesses to help them to focus on what they should be focusing on—creating jobs and wealth.

22. One great barrier for people in work and indeed for people not in work is the cost of child care. Would the Minister look at allowing people on the new enterprise allowance to deduct the cost of child care from their tax bill? That could be taken out of the profits of their company when it was up and running. Will he meet me to discuss the idea further? (126319)

I know that my hon. Friend is a great champion of the importance of child care when it comes to helping people into work. I would be happy to meet her to discuss that option.

Jobseekers (Barriers to Work)

5. What recent assessment he has made of the barriers that prevent jobseekers getting back into work. (126302)

Jobseekers can face a number of barriers to work, about which my hon. Friend has spoken to me on a number of occasions. Those include a lack of work experience, a lack of essential computer skills, an incomplete education, which leaves them ill qualified, or coming from a family where worklessness is entrenched across generations. We are taking cross-Government action to tackle all those barriers, and reforming the benefit system so that it more closely resembles life in work, rather than people having to face those huge barriers.

Since 2011, the Department has through procurement encouraged its private suppliers to hire apprentices, and 2,000 apprenticeships have been created as a result. Will the Secretary of State share his success with other Departments, so that we can roll out this programme across Whitehall and remove barriers to work?

I take this opportunity to congratulate my hon. Friend on the huge work that he has done in encouraging apprenticeship starts. I know that he is particularly keen on that and I take a real steer from him. I also remind him and the House that, since we brought in our changes, over the past two academic years more than 950,000 apprenticeships have been offered by over 100,000 different employers. On top of that, the youth contract offers 160,000 wage incentives for those who wish to start apprenticeships. Therefore, the scheme has been a major success for this Government. The coalition has done far more than the previous Government.

Will the Secretary of State concede that the greatest barrier to returning to work is the lack of jobs locally and that that is particularly the case for people with long-term sickness and disability?

The hon. Gentleman is right—those people face particular difficulties. The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Wirral West (Esther McVey), referred to those earlier. Our job is to ensure that we help all those people to overcome those difficulties. Organisations such as Work Choice and Remploy, which are helping to get people back to work, are hugely important. We are making big strides in that regard. The simple answer is that still not enough people with disabilities are back in work, although the situation is improving. I take the hon. Gentleman’s point. We all want to ensure that disabled people join mainstream work and get a full life out of it.

In welcoming my right hon. Friend's last answer, may I particularly urge him to look at organisations such as the Shaw Trust when trying to assist disabled people into work, rather than having focus desks in jobcentres?

I absolutely agree. It is important to extend the net as widely as possible. My hon. Friend is a huge campaigner for public sector organisations and he is right about the Shaw Trust, which I have visited. It is a phenomenal organisation. We will use the trust and every other organisation we can. In fact we set up desks in jobcentres, which were manned by the Prince's Trust on behalf of all other charities, so that we could extend that net to enable anyone who needed it to get support, not just from the Government but from other organisations.

The unemployed former Remploy workers in my constituency have seen little or no help from the DWP or Remploy since they lost their jobs. What will the Secretary of State do about that?

I am very happy to take any particulars from the hon. Lady and to hear more detail from her, but the really successful part of Remploy is the part of the organisation that works to get people back to work. It has had a very successful record. We have put extra money into that organisation. We have made more money and more support available to try to get people who were working in the factories at Remploy back to work. However, I must say that during the period that the Government she supported were in office, next to no support was given to people who left Remploy when it closed up to 29 factories.

Harrington Report

6. What assessment he has made of the recommendations in the Harrington report that have not been implemented; and which such recommendations he plans to implement. (126303)

The work capability assessment was introduced by the previous Government through the Welfare Reform Act 2007, for which the hon. Lady will doubtless have voted. There have been two independent reviews by Professor Harrington. We implemented, or are implementing, all his recommendations on how to improve the WCA.

It is impossible to convey the distress, heartache and anxiety caused by this Government’s failure to get a grip on Atos. Whatever the Minister might say about the spirit of the Harrington recommendations, it is essential that he get back to me with clear details on the availability of audio-recording equipment, the recruitment of mental health champions in all offices around the UK, how we will ensure judges give full feedback to DWP decision makers, and advising sick and disabled claimants that they can submit evidence.

We are implementing the Harrington recommendations, so the things that the hon. Lady mentions are happening in assessment centres across the country. For example, audio recordings are available if people request them. Progress is being made, therefore, but the hon. Lady needs to recognise that it was the previous Government who set up the WCA and recruited Atos. We are trying to make the system work better and be fairer so as to get the right outcome for all claimants.

Does the Minister welcome Professor Harrington’s comment in his latest assessment that things have noticeably changed for the better? I have heard it said that 40% of appeals are successful. Is that right, or is the proportion lower than that?

Professor Harrington has done a very good job. He will produce his third review shortly. The reality is that the DWP makes about 1 million decisions about entry into work, and only 9% of them have been successfully overturned.

19. On the “World at One” on 11 October the Minister claimed that one of the reasons for so many successful appeals and wrong decisions was claimants withholding medical evidence. Given that the average time for assessment and appeal is 31 weeks—almost eight months—will he explain exactly what evidence he has for that assertion? (126316)

There are situations in which new evidence is brought forward by claimants. We all should recognise the importance of getting people into work, to give them the hope and the improvements in their well-being that work brings. We should also, therefore, all recognise the importance of finding ways to improve the system, and I would hope that the hon. Gentleman would welcome our efforts to improve it.

Last week in Scotland, the Daily Record ran a story about Kieran McArdle and the death of his father, Brian. Brian was paralysed down his left side, blind in one eye and unable to speak properly, and yet was declared fit to work. Atos said in response that

“our trained doctors, nurses and physiotherapists strictly follow the guidelines given to them by the Government”.

Given the crescendo of complaints about the implementation of the work capability assessment, should the Minister not abandon his mantra that progress has been made and instead accept his responsibility and undertake a fast and fundamental review of the test, as called for by the shadow Secretary of State, my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne)?

Our condolences are with Mr McArdle’s family at this time, and I believe that the Secretary of State is writing to his son, Kieran, in response to his letter, which was delivered to the Department late last week. We know that going through the WCA process can be difficult for claimants and their families, but we and Atos go to great lengths to make it as fair as possible. That is why we are undertaking this process of refinement, taking the system left to us by the previous Government through the Harrington reviews and ensuring we improve it so that it is fair. The previous Government set up this system, and Opposition Members should not shirk responsibility for that.

I am getting weary of the charge that this contract is somehow—[Interruption.] No; the reality is that we would not have managed the contract in the way this Government are managing it. Although the work capability assessments have been controversial to say the least, Atos, which delivered that contract, has recently been awarded two out of the three contracts for the personal independence payment. Did the company enhance its bid by naming disability organisations with which it would work, and what due diligence was done to test the authenticity of such assertions before awarding the contracts?

The right hon. Lady might be weary of that charge, but she will have to get used to hearing it. This Government are taking forward the changes that are necessary to get this system to work well. I think all Members on both sides of the House recognise one thing, however: as the evidence demonstrates, it is better for people to be in work where possible so that they can look after their families and provide dignity. That is exactly what we are trying to do in getting this process right. We are making progress, and we await Professor Harrington’s third review, which is due in the near future. Let me just say this to the right hon. Lady: when Atos bid for the PIP contract, it made it very clear that it would look to work with disability organisations to improve outcomes. We should try to work together on these matters, rather than make partisan political points.

Jobseeker’s Allowance

A new sanctions regime for jobseeker’s allowance was introduced on 22 October. The new regime is clearer and tougher. For example, someone who has turned down a reasonable job offer three times in a year will lose their JSA for three years. Those who can work should work.

I thank my hon. Friend for that answer. In my constituency, many low-paid, hard-working people get more than frustrated with this cohort of people who continually refuse to take up work. Will he go into a bit more detail about the sanctions now in place to deal with able-bodied jobseekers who continually refuse to take up work they are able to undertake?

My hon. Friend is right to highlight the frustration among those who are working at seeing people who can work turn down jobs and simply get away with it. That is why we have introduced a new, tougher regime of sanctions, so that someone who turns down a job without good reason for the first time will lose their benefits for 13 weeks. That then escalates so that someone who turns down a job three times in a year will lose their benefits for three years. That is a very clear sanction, it is a very clear deterrent and it sends a very clear message that we expect people who have reasonable job offers to work and pay their own way.

We are talking about sanctions, carrots and sticks, and the Work programme is supposed to help people back into work. A constituent who had been on the Work programme and recently found part-time work has contacted me. He was concerned that the Work programme had been little or no help and that, although his employment was due to his own hard work, the Work programme contractor was paid anyway. What has the Minister done to prevent this deadweight loss?

The hon. Lady should examine some of the schemes that the previous Government introduced, under which people were paid regardless of the outcome—regardless of whether they helped people get back into work. Our Work programme pays people by results; it ensures that contractors are paid only where people get jobs, and sustainable jobs at that.

Pensions

8. What steps he is taking to protect members of pension schemes from being incentivised to transfer their pensions. (126305)

The Government have worked closely with the pensions industry to address concerns regarding incentive exercises. As a result, an industry code of practice was published in June, which we fully support. A monitoring board has been established to evaluate the effectiveness of the code.

I am grateful for that answer. Can my hon. Friend provide evidence on the number of companies that have signed up to the code of practice? Is it achieving its objectives?

I am grateful to my hon. Friend for that. The industry’s response to the code has been very encouraging. Some 49 individual firms and, perhaps more importantly, 14 representative organisations have publicly signed up to support the code, and the figures are growing. The supporters include the major employee benefit consultancies engaged in these exercises and their representative organisations.

Auto-enrolment of pensions is a wise and overdue step forward, especially for low-paid employees. However, with workers changing jobs an average of 11 times in their working lives, does it not make much more sense for them to park their pensions in low-cost aggregator schemes? If not that, what will the Minister do to ensure that fundholders will not have incurred high charges throughout their working lives as a result of numerous transfers?

The issue that the hon. Gentleman rightly raises is one of the many loose ends left for us by the previous Government. When auto-enrolment was set up, they simply left us with a situation where people could accumulate a dozen small pots and leave them fragmented. We propose under auto-enrolment that where people leave behind a small pot it will, by default, transfer to their new employer, so that they will accumulate what I have called, in technical terms, a big fat pot.

Jobcentre Plus

Since May 2010, more than 8.6 million claims for jobseeker’s allowance have ended, of which an estimated 68%—or more than 5.8 million—saw the claimant enter work.

I have good news for the Minister: another 2,000 are coming off jobseeker’s allowance because of a new development in my constituency—well, between my constituency and the Corby constituency. It is supported by Wellingborough council, East Northamptonshire district council, Higham Ferrers council and Rushden council—all Tory councils—but it is opposed by Labour Corby council. Can the Minister explain that?

My hon. Friend makes an important point. When people think about how they should vote in Corby on 15 November, they will see that Labour is wrecking job prospects in that area.

How many unemployed people now go through the fast-signing procedure at Jobcentre Plus and therefore do not get to see an employment adviser?

We must work out how much support jobseekers need to get into work to ensure that those who need the most support get into work quickly. The hon. Gentleman might also want to know that more people came off the unemployment register in Corby last month than in any other constituency in Northamptonshire.

Universal Credit

11. When he plans to announce the recipients of universal credit whose children will be eligible for free school meals. (126308)

We are working closely with all the Departments that administer the staggering number of passported benefits—some 25 benefits in England, as well as about 20 in Scotland and Wales. The administration of passported benefits and determining who will receive them is the responsibility of various Departments—in the case of free school meals, it is the Department for Education. With different eligibility criteria all over the place giving rise to the massive complexity that has built up over the past few years, we are looking to simplify the system under universal credit while ensuring that those benefits continue to be available to the families who need them most.

Does the Secretary of State agree with the Church of England’s Children’s Society, which states that all children in families receiving universal credit should be eligible for free school meals? If he does not, why not?

I do not agree, because that would mean a huge increase even on the numbers with which the previous Government left us. If we did that, it would include an extra 2.5 million children and an estimated cost of up to £1 billion. I wonder whether the hon. Lady has talked to her hon. Friends on the Front Bench about whether that is another spending commitment they would like to make.

The previous Labour Government left some 3.9 million children living below the official poverty line, about half of whom did not qualify for free school meals. Is it not time that the children who are most in need got the free school meals that they did not get under the Labour Government?

The introduction of universal credit will hugely help families with the lowest incomes. Something like 80% of the money is transferred to the bottom 40% on the income scale, so that helps hugely straight away. Secondly, it is very important that we have an opportunity for Departments—they will do this in discussion with us—to consider how best they can ensure that those most in need get the money and support they require.

Employment and Support Allowance Appeals

13. If he will make it his policy to begin monitoring the number of people who die as a result of (a) illness and (b) suicide whilst awaiting the result of employment and support allowance appeals. (126310)

My Department publishes information on ESA appeals when they have been heard by Her Majesty’s Courts and Tribunal Service. We have no plans to capture or publish official statistics relevant to the specific circumstances described. In July, we published data on the number of deaths of incapacity benefits recipients. They include claimants awaiting appeal where benefit is still in payment.

With Atos failing on 40% of its work capability assessments, with an estimated 30 to 80 people dying each week between assessment and appeal, and with 6% of doctors surveyed reporting that they have patients who have either attempted or committed suicide as a result of work capability assessments, does the Minister not think that he has a duty to monitor the effect of his policies?

As I said in answer to earlier questions, we are monitoring the effect of our policies. We are ensuring that the work capability assessment is fit for purpose and that is why we asked Professor Harrington to carry out a third review to ensure that the process is right and fair. The hon. Lady should also remember that the work capability assessment is an assessment of people’s ability to work, not a diagnostic test.

Will the Minister confirm that all Atos doctors, nurses and physiotherapists are fully trained and registered with their relevant professional body?

My hon. Friend is absolutely right. All Atos health professionals are properly qualified and they get additional training to help them undertake the work capability assessment.

Auto-enrolment

It is vital that people are enrolled in schemes that offer transparent and value-for-money charges. The National Employment Savings Trust’s low charge structure has set a benchmark, prompting several competitive alternatives in the market, and I have called for providers to guarantee not to enrol people into high-cost legacy schemes.

The Minister will be aware of the recent Cass business school report that says that many older defined-contribution schemes charge 3% or more. That is six times the best practice of newer schemes, and it is costing many tens of thousands of people the chance of having a decent pension. Will he act to ensure that people cannot be auto-enrolled into those schemes—by using either a kitemark or a charges cap?

On the sort of legacy schemes that my hon. Friend refers to, I am pleased to announce that, only today, another provider—Fidelity—has said that fees in its default funds will not exceed 1% and that existing scheme members will have the opportunity to switch out of their current funds. That follows Aviva’s statements that its schemes will have a charge of not more than 1%. It will not allow auto-enrolment into any older-style schemes. I encourage other firms to follow suit.

Auto-enrolment schemes will still be subject to stock market vagaries, the effects of varying interest rates and inefficiencies of scale. Is not what we really need a 100% state system, where we get defined benefits, as well as defined contributions, and efficiencies of scale and best possible value?

Two sorts of risk are associated with pensions: financial risk and political risk. We have had SERPs—the state earnings-related pension scheme—which successive Governments cut and cut again. So that scheme did not provide any guarantee either. I want a balance of risks for people, a state promise and a private sector entitlement as well.

I say to the hon. Member for Harrogate and Knaresborough (Andrew Jones) that the choreography of when to stand up is an important parliamentary skill, which he is now developing.

16. I am developing it as fast as I can, Mr Speaker.

Can the Minister update the House on how employees have responded to auto-enrolment? (126313)

Yes. The first firm to auto-enrol was RBS bank, which did so in July. It had 86% scheme membership before auto-enrolment. That has now risen to 93%. The early signs are encouraging.

We now seem to have a consensus across the House on the need for a charge cap. The leader of the Labour party has called for a charge cap on old-style legacy schemes, and the hon. Member for Warrington South (David Mowat) has just done the same. Can the Minister confirm that, when he refers to Aviva charging no more than 1%, that is an average and does not apply to all schemes?

On the hon. Gentleman’s first point, this is another of the loose ends left by Labour on auto-enrolment. When Labour legislated, it put in practically no quality requirement at all. So Labour required millions of people to auto-enrol but set practically no standards for what they were auto-enrolled into. This is one of the many issues that we are actively tackling.

The Minister has not answered the second part of the question, so I will ask it again. He just told the House that Aviva—I do not single out Aviva, as this is a broader issue—is charging no more than 1% on its schemes. My understanding is that that is an average of 1%, so a scheme could charge 0.4% and another could charge much more. The hon. Member for Warrington South, the leader of the Labour party and I are calling for a cap on old-style legacy schemes. Why does the Minister not get on with this, so that everyone can have a decent retirement scheme?

Let me clarify the specific point. The statement by Aviva is that

“its schemes for automatic enrolment will have an average total product charge of less than 1%... It will not allow auto-enrolment into…older-style schemes.”

On the charge cap, the danger of the hon. Gentleman’s idea of having, say, a 1% across-the-board cap is that someone can tick the box with 0.99%. Actually, many in the market will offer below that. There is a danger that people will be misled if they are just below the cap, when many lower prices are available in the market.

Employment Level

In my constituency, unemployment is down by nearly 10% since its peak in February this year. We clearly need to do better still. Does my hon. Friend agree that, contrary to some suggestions, the evidence shows that that is not down to an Olympic blip, but that we are seeing welcome progress month on month, with more and more people finding work?

My hon. Friend makes a good point. We have seen employment levels rise. Even if we exclude London in its entirety, we have seen the number of people in work increase by 500,000 since the general election.

The most recent unemployment figures indicated that 80% of people who work part time actually want to work part time. Many find that part-time work meets their needs in terms of flexible working and returning to the labour market. We need to find more full-time jobs, but we should recognise that 80% of people want to work part time and the labour market is able to accommodate them.

Separated Families

The Government have already announced a £20 million investment in the development of support for separated families in the current spending review period. This will include provision of an online distributable web application to be launched later in the autumn, and up to £14 million for the new innovation fund to support separated families.

I thank the Minister for that answer. Will he reassure the House that the £14 million innovation fund will be spent on projects that will ultimately benefit children, and will he explain how that will be achieved?

Yes. We have had 100 expressions of interest from voluntary groups and charities, and we have whittled that down to about 30. All are trying to build on existing work that enables parents, when they are separating, to deal with each other in a mature way in the interests of the children. That is the central aspect of our new strategy.

When family breakdowns occur, grandparents, aunts, uncles or other relatives often have to step into the breach and a kinship care situation arises. Will the Minister assure me that he is talking to his colleagues in other Departments to make sure that when that situation happens, particularly in an emergency, support is given to those who step up to the plate?

I agree that we need to support kinship carers, such as grandparents. One change that our Department has made is that, for example, where a mother is going out to work and is not using the national insurance credits that she would have gained for receiving child benefit, they can be passed to a grandparent, who may not be of pension age, to make sure that they are not financially disadvantaged. That is just one of the things we are doing to support that important group.

Auto-enrolment

18. What steps his Department is taking to ensure that older workers with little private pension provision are not disadvantaged by the introduction of auto-enrolment. (126315)

Our research shows that even under the current rules 99% of savers will get back at least as much as they put in under auto-enrolment, and around 70% will get back twice as much. In addition, our state pension reforms will support planning and saving for retirement by delivering a simpler, single, flat-rate pension set above the basic level of the means test.

I accept that those were the calculations made in 2010 as part of the auto-enrolment review, but since that time we have seen investment returns fall so much that the Financial Services Authority is ordering the industry to downscale its forecasts and we have also seen annuity rates fall. Have the Government recalculated their figures to take account of that?

The short answer to the hon. Gentleman’s question is no. However, one important point I would raise is that if someone only builds up a very small pension pot, they have a legal right to take it, in most circumstances, as a cash lump sum with a quarter tax-free. Even someone later in life can get an employer contribution tax relief—a lump sum taken with a tax-free contribution. That will be attractive, even in later life.

Social Breakdown

Last week we published the social justice outcomes framework, which has a set of indicators that highlight our priorities: to eradicate family breakdown, educational failure, worklessness, addiction and crime, and to grow the social investment market—a big area for us. The framework will measure our progress towards achieving these aims, shifting the policy focus and spending towards outcomes rather than inputs.

Can my right hon. Friend tell the House how projects supported by the innovation fund will tackle social breakdown?

Indeed I can. The innovation fund was set up by me when I came into the Department. It consists of approximately £30 million of seedcorn funding to enable voluntary groups, charities and organisations—beyond the normal organisations that one comes across in the work process—to show that their programmes, which help people to deal with drug addiction, family breakdown or gang violence, actually work, to prove that concept, and to set them up to be able to run those programmes. At least 11 social impact bonds have come out of this and we have just launched a second round.

Does the Secretary of State agree that much social breakdown stems from intergenerational worklessness? Is he as enthusiastic as many Opposition Members are about the Heseltine review, “No Stone Unturned”? Will he ensure that he takes a positive role in bringing some—indeed, most—of those recommendations to fruition?

When one of the big beasts from the past roars, it is always difficult not to be incredibly enthusiastic about what they are roaring about, so I accept the hon. Gentleman’s invitation to express my interest and support for the report. Obviously there are details in it, but he makes the vital point that in too many communities there are families of two and three generations that have been beyond the work cycle. This is about getting them back into the idea of work not just for the money but because their whole lives disintegrate without it. I agree with him and will certainly make sure I tell Lord Heseltine how supported he is.

Youth Contract

21. What assessment he has made of the effectiveness of the youth contract; and if he will make a statement. (126318)

The youth contract was introduced in April 2012 to provide additional support worth almost £1 billion to unemployed young people over the next three years. Although it is too early to make any judgments of its effectiveness, we have commissioned an external evaluation of the youth contract to examine delivery and outcomes, and the first report will be available early next year.

I notice that the Minister gives a cautious response. Is it true that millions of pounds that we should be using to get young people into work are sitting unallocated and helping no one, because the Government cannot get employers on board with the youth contract?

A number of young people have been helped by various aspects of the youth contract. Twenty young people in the hon. Lady’s constituency have had work experience as a consequence of it, and another group has been helped into work as a result of the sector-based work academies. I hope that she is doing all she can in her constituency to champion the youth contract and to get more young people into work.

Housing Benefit

The demonstration projects are testing direct payment of housing benefit to social rented sector tenants in six areas across England, Scotland and Wales. Their purpose is primarily to help people manage their rent in advance of a move into work and the introduction of universal credit. We have commissioned an independent action research-based evaluation of the projects, and the results of initial research will be published in early December.

I thank my right hon. Friend for his answer. Will he elucidate on some early learning that has come from the second learning report, which was recently published via the learning network?

That is a lot of learnings, but I will do my level best to help my hon. Friend. I shall tell him what we know so far. Some of these are early figures, but interestingly, after all the scaremongering about how people would be unable to cope, which, as we know from the local housing allowance, is not the case, the centre at Sheffield Hallam university has found so far that only 2%—less than people thought—of claimants moved because of eviction or a landlord refusing housing to housing benefit tenants, and few claimants gave financial reasons for actually moving. So we are making some good discoveries. We are on the right track and heading in the right direction.

Universal Credit

24. What discussions his Department has had with Baroness Grey-Thompson following the publication of her report on the effect on disabled people of the introduction of universal credit. (126321)

Since Baroness Grey-Thompson’s report was released, I have attended meetings with her twice where the contents of her report have been discussed.

“Holes in the Safety Net”, the report just mentioned, indicated that about 450,000 disabled people lose out under the universal credit rules. This number was also raised by my hon. Friend the Member for Aberdeen South (Dame Anne Begg), the Chair of the Work and Pensions Committee, in a recent Westminster Hall debate that the Minister attended. Will she listen to these two highly respected women and amend her plans?

We have been listening very much. We found some of the reports to be highly selective and quite skewed. They did not take into consideration how much extra support was going to people with disabilities, but we are listening, there is transitional protection and we will be releasing the assessment criteria later in the year.

The Minister has no doubt read today’s copy of Bradford’s The Telegraph and Argos and the letter from Mr Barry Thorne about his son. He felt compelled to write the letter following the comments from Dame Tanni Grey-Thompson. The fear is that those with clearly defined medical concerns, such as his son Stephen, will feel threatened and fearful at the prospect of reapplying and being interviewed. Are those fears unfounded?

I believe that those fears are unfounded. Everybody tries to put information into the public arena that is meant to help, but frequently they do not, and instead raise fears. The whole reason for having a face-to-face interview is so that the claimant can explain clearly why they might need the benefit.

Housing Benefit

My right hon. Friend the Chancellor of the Exchequer will announce the Government’s expenditure plans in the autumn statement in a few weeks. Until then all discussion about further reform remains, as it always will do, somewhat speculative.

Would not removing entitlement to housing benefit from people aged under 25 increase youth homelessness and youth unemployment?

As I said, we are happy to look at all these proposals. We are discussing them right now, as has been made clear by my right hon. Friend the Prime Minister and by the Chancellor. But it is worth putting a few features in the public domain. The key issue is that young people who are not eligible for benefits do all sorts of things such as sharing flats and working hard. They use much of their expenditure, on low pay sometimes, to get themselves accommodation. What we are looking to do is make sure there is parity—fairness—in the system so that those who are in a slightly different situation do not get an advantage which is not necessary. It is worth telling the hon. Lady something about that group. About 400,000 claimants who are under 25 are receiving around £2 billion a year, and shared accommodation rates extend to under-35s. That is a lot of money and it is worth looking at.

The Department’s own family resources survey shows that only 10% of under-25s live independently. When we take out all the essential exemptions for people who cannot live with family, the number covered would be very small, so why are we talking about a policy that does not add up economically?

As I said previously, we are looking at all this. Anyway, entitlement would never be removed from those who are already on housing benefit. The review is about flow and about re-establishing fairness in a system which many think has become unfair and does not help those who are not eligible for such benefits. I accept that there would be people who would be ineligible. That is the point of examining the system and figuring out how the policy would go, but like all policy reports, it is worth looking at. It deals with an element of unfairness and the thing about the benefits system is that if it is unfair, people who should support it will not support it, such as taxpayers.

Topical Questions

We have been rolling out the innovation fund, which has so far been very successful, as I said in answer to an earlier question. About 11 social impact bonds have now been launched. The successful bidders in the second round, Prevista, Social Finance and 3SC, will deliver support for our most disadvantaged 14 and 15-year-olds, restoring hope and aspiration to young people in care who are disengaged from school and involved in gangs, crime and drugs. It is a very, very good project.

Dr Sue Atkinson, a mental health professional in my constituency, recently told me about the appalling misjudgments that she and her colleagues have witnessed, when their clients’ needs and capabilities have been completely ignored in the work capability assessment process. Why will the Secretary of State not act now to review and revise a system which is clearly failing?

There is an awful lot of lost memory among Opposition Members. It was they, when they were in government, who set the process up. It is this Government who have made all the alterations, thanks to Professor Harrington, that have improved the situation. We are doing exactly what the hon. Lady requests. I wish she would speak to members of her Front-Bench team and avail them of that information.

T2. Disability Cornwall has expressed concern to me that its good name has been used by the company Atos when bidding to undertake the personal independence payment assessments, when in fact no such discussion regarding a potential local partnership has ever taken place between Atos and Disability Cornwall. Does the Minister agree that this may have resulted in Ministers being misled? Will the matter, therefore, please be investigated? (126324)

To correct my hon. Friend, what the contract said was, “Should we win the contract, the sort of people we would look to negotiate with would be Disability Cornwall”—[Interruption.] The right hon. Member for Stirling (Mrs McGuire) is passing comments from a sedentary position; she may be thinking of a different matter altogether. In regard to Disability Cornwall, Atos’s position was that should it win the contract, it would look to negotiate with Disability Cornwall.

May I first associate everyone on the Opposition Benches with the words of commemoration for our much treasured colleague, Malcolm Wicks, who is sorely missed?

Will the Secretary of State confirm that the introduction of universal credit is proceeding according to its original timetable?

I can indeed. As we have said, we will start the process nationwide in October, although we have introduced an earlier start for a pilot programme, as the right hon. Gentleman is aware, because he came into the office to talk to me about it. He knows very well that, as I explained then, the four-year process will be completed exactly as we have intended, on time and on budget.

That is curious, because last year the Secretary of State told us that every new claim for out-of-work support would be treated as a claim for universal credit from next October, but the Minister of State, the hon. Member for Fareham (Mr Hoban), told Parliament on 26 October that the rules for universal credit from 2013 onward are still “under development.” What on earth is going on? On Atos, on caps on pension charges and now on universal credit, it does not appear that the Secretary of State has got a grip.

If the right hon. Gentleman does not mind, I must say that that is a rather pathetic question. The reality, as he knows very well—he came into my office to discuss these matters and we showed him exactly what we are doing—is that there is no change. The reality is that over the four years we will bring universal credit completely online—it will be completed by 2017. I wish he would spend more time working on his brief, rather than writing books on China.

T3. Like all hard-working taxpayers, I support the Government’s attempts to reduce benefit fraud. However, I have recently received correspondence from a terminally ill constituent whose support has been wrongly withdrawn. Will the Minister assure me that those who truly deserve support, such as my constituent, will benefit from our introduction of a fairer welfare system? (126325)

My hon. Friend makes an important point. That is exactly why we have been working with Professor Harrington to implement the findings set out in his report. One of his findings relates to cancer sufferers, which is why we published new guidance last month on how they should be treated under the work capability assessment.

T6. Many of my constituents who devote a great deal of effort to providing Atos with detailed medical supporting evidence will be deeply disappointed with the Minister’s earlier answer. What steps is he taking to ensure that Atos takes full account of medical evidence when determining work capability assessments— (126328)

I appreciate that the Minister is eager to answer and look forward to hearing from him. I ask that because at the moment Atos is simply ignoring that evidence.

What the work capability assessment does is assess people’s ability to work. It is a review of their capability and functionality, not a diagnostic assessment. That is why the assessment takes place. Of course, it is right that claimants bring along medical evidence, but it must be read in conjunction with the Atos assessment. Decisions about eligibility for employment and support allowance are made by DWP staff, not Atos.

T4. The Government have made it clear that although they are keen that most people should be able to deal with the direct payment of housing benefit, that will not be appropriate for all. Will my right hon. Friend reassure the House, and those outside who are concerned about women’s refuges and their futures, that direct payment may be waived in those circumstances? (126326)

My hon. Friend raises a very important issue. We are already in discussions with such groups and have made it clear that anybody suffering domestic violence will immediately be taken through the system and the money will be paid directly. The refuges, as we have already said, will get their money and there will be no hesitation. That is an absolutely critical area and it will be provided for completely by universal credit.

T9. My local citizens advice bureau is getting 30 new work capability assessment cases every week, and 80% of them are won on appeal. That is because the Government are forcing sick people who have cancer or brain damage or who are dying back into work. It is a disgrace. When will this barbarity end? (126331)

As I have said a few times today—I will continue to say it—this process was put in place by the previous Government, a Government the hon. Gentleman supported. What we are looking to do is ensure that those people who can work get the support they need to get into work, rather than abandoning them to a lifetime on incapacity benefit, which he seems to think is the better option.

T5. Is the disabilities Minister satisfied that the proposed descriptors for the personal independence payments adequately recognise the impact of Crohn’s disease, colitis and irritable bowel syndrome on the daily lives of our constituents who live with those conditions and the invisible disabilities that they endure? (126327)

I am indeed. As my hon. Friend will know, it is not about the condition, but about how each individual person copes with the condition; and yes, I am happy with the criteria.

T10. The Fair Pensions report, “Whose Duty? Ensuring effective stewardship in contract-based pensions”, highlights the relative lack of quality standards being applied to UK schemes, as opposed to other jurisdictions such as Australia. The Minister referred to active steps being taken in relation to auto-enrolment. Do those steps extend to re-visiting actively the qualifying criteria and the default fund guidance? (126332)

The hon. Gentleman is right to raise the important issue of governance. We do not think that we have a significant problem with the early stages of automatic enrolment for the biggest firms. They are coming in at a low cost and are well governed. The issue will arise further through the process and we are indeed looking at the quality of schemes into which people are auto-enrolled, including charges and governance.

T7. What progress is being made to ensure that work capability assessments are sensitive to fluctuating medical conditions such as stroke care? (126329)

My hon. Friend makes a useful point. Professor Harrington highlighted in his second review the issue of fluctuating conditions. We are working on an evidence base to look at descriptors for fluctuating conditions, to make sure that they are taken properly into account in the work capability assessment.

When the Government started to move people from incapacity benefit to employment support allowance, provision was made for those who were particularly or very disabled so that they would not have to go through the work capability assessment and would go straight into the support group. However, a number of my constituents have been moved from incapacity benefit and on to the work-related activity group of ESA without first going through a work capability assessment. How widespread is this, how many people is it happening to, and why is it happening?

I would be grateful if the hon. Lady supplied me with the evidence she mentions. There are clearly situations in which people go straight into the support group without undergoing a work capability assessment. It depends on the information supplied when they originally make the application.

T8. The scandalously high rate of youth unemployment was perhaps one of the previous Government’s worst legacies, and my constituents warmly welcome the creation of 1 million new jobs and 600,000 apprenticeships. Does the Secretary of State agree that in rural areas young jobseekers face particular challenges in accessing small, fast-growing companies in the rural economy, and will he join me in supporting the local voluntary big society initiative launched by The Norfolk Way—it started a work club and enterprise bursary in which local entrepreneurs support jobseekers—in Mid Norfolk last week? (126330)

I pay tribute to the work that my hon. Friend does in his area. I absolutely agree with and support what he says. It is really interesting that youth unemployment was rising in the previous Government’s last six years, even in a time of growth. They fiddled with the figures so that anybody who was unemployed for more than 10 months went on a course; most of them ended up returning to unemployment, where they started from zero again. The then Government deliberately and falsely capped the figure. We are honest about it and tell the truth.

We have been told that Professor Harrington’s recommendations on the introduction of mental health champions to improve work capability assessments have been implemented, yet only two mental health champions cover the whole of Scotland and both of them are based in the central belt. What steps have Ministers put in place to measure the effectiveness of mental health champions?

We have introduced a mental health champion in every single assessment centre throughout the country. We have asked Professor Harrington not only to look at new changes, but to review changes that have already been proposed and to monitor their effectiveness. We will continue to follow that process.

On the housing benefit demonstration projects, what assessment has been made of potential budgeting accounts—so-called jam-jar accounts—to help people manage all their finances and build up a savings pot?

My noble friend Lord Freud has already discussed with all the financial institutions how to construct systems that support people who may have budgeting issues. The phrase “jam-jar accounts” is an unsophisticated term for such systems, but by and large they help people apportion the money necessary for their rent, food and so on, so that they can see that money flow in and then take it out. On housing benefit, a key area of the local housing allowance will be that we will not allow people to build up arrears of debt. We will intervene early to make sure that that does not happen, which should help landlords understand that we will support them.

Ministers assured us that the flexibilities introduced for lone parents on jobseeker’s allowance under Labour would continue, yet the number of lone parents who have been sanctioned has risen dramatically. In a written answer on 24 October the Minister said that the reasons for sanctions were exactly the same as those for other jobseekers. Can the Secretary of State explain exactly how those flexibilities are being properly applied and what training is being delivered to personal advisers in Jobcentre Plus?

I think we all believe that it is important that where lone parents can work, they should work, because that helps to boost their income and that of their family. Guidance is given to personal advisers on jobseeker’s allowance to ensure that the sanctions regime is applied appropriately to lone parents, as in the case of all jobseekers.

It would be pretty negligible because it is paid to everybody, and it would therefore be impossible to figure it out. Across the board in the Department for Work and Pensions, we are beginning to see a downward pressure on fraud and error. My hon. Friend will be pleased to see that over the next few years we will be saving considerable amounts of money.

How many people who have been medically retired from their jobs with severe conditions are being put through the work capability assessment and having their benefits attacked?

I do not have the precise figures to hand, but I will look into them and write to the hon. Gentleman. It is important to remember—I think there is agreement on both sides of the House about this—that working helps many people’s medical conditions; there is very strong evidence to support that. That is at the heart of the work capability assessment that Labour introduced when in government, and we are trying to sort out the problems with it.

With 70% of social housing tenants having no access to the internet, will the Secretary of State update the House on what progress he is making for a low or no-cost social housing tariff to be overlaid on the existing BT Basic package to enable social housing tenants to access universal credit online?

In fact, many more people access the internet daily than a lot of people think. Some 78% of all benefit recipients access the internet, and about 48% do so on a daily basis. Obviously it is our job to try to get that figure up, because if people cannot access the internet that affects their employment prospects given that 92% of all jobs require some computer skills. This is an opportunity and, yes, we are looking at that passported benefit to make sure that those who need the money get the money directly.

Universal credit is due to be up and running in less than a year. Surely by now the Secretary of State should be able to give us some detail about who will be eligible for free school meals.

We are talking to the Departments involved about how best they want to make this work. They will make it work, and we will come forward very soon with some very clear indication of how it is going to work. The hon. Lady should rest assured that the purpose of this is to make sure that those who need and deserve the money get the money, and I can guarantee that that will be the case.