House of Commons
Monday 27 March 2017
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Work and Pensions
The Secretary of State was asked—
The Government are committed to providing free and impartial guidance through Pension Wise to help people make informed and confident decisions about how they use their defined contribution pension savings in retirement.
I am grateful for that answer. Will my hon. Friend reassure me that the Government are taking steps to protect people from being scammed out of their savings as well as ensuring that people have access to information to help them to decide how to draw down their pension savings?
My hon. Friend is absolutely right to ask that question. The Government take the threat posed by scams very seriously indeed. We run campaigns to highlight the risk posed by scams to savers, and we have established a cross-government taskforce to gather and share intelligence, and to co-ordinate enforcement action. We have also consulted on further measures to tackle scammers, including a proposal to ban cold calling in relation to pensions. Our next step will be announced very soon.
Well, that is the point I was going to ask the Minister about. Will he tell us when he will crack down on cold calling? These people are trying to scam others out of their hard-earned life savings, taking advantage of the notion that there are these freedoms, but potentially putting pensioners at great risk. When will the legislation be brought forward?
Preying on elderly people in order to take advantage of their pension pots by giving them bad advice is a despicable crime. Is the Minister satisfied that the number of prosecutions of those who do this frankly evil activity is nearly enough?
I would like to be able say that it is enough, but I do not think it is. The steps we intend to take should make prosecutions for scam cold calling much easier. If I am asked the question again in the future, I hope to be able to answer in the affirmative.
On the issue of accurate and clear information, the Cridland report, published last week, stated:
“An increase of the State Pension age every ten years—and by only one year per decade—represents an appropriate pace of change”.
Does the Minister agree with that statement? If so, will he revisit the issue of the WASPI women, who face an increase in the state pensionable age of more than five years this decade?
I know that the hon. Gentleman has read the Cridland report in detail, and I thank him for doing so. It will suffice to say that the Government’s response will be published at the end of May and will be comprehensive. As far as the WASPI women are concerned, he knows—I have said this many times at this Dispatch Box and elsewhere—that the Government have made the concession that they are going to make in terms of transitional arrangements from the Pensions Act 1995. I have no further news. That is it.
The Government missed an opportunity this year to tackle a wide range of issues in the pensions industry, but they chose to ignore most of them, instead bringing forward the narrow Pension Schemes Bill. The Secretary of State then failed to further his own agenda by instructing his Ministers to resist any attempt to introduce transparency, member engagement and greater clarity on costs. Why does he choose to protect the industry instead of savers? What will the Government do to correct this failure and help us all to build trust in our pensions industry?
I thank the shadow Minister for voting for the Bill on Second Reading, and for his generally constructive approach to it. As the hon. Gentleman well knows, the transparency agenda is part of a much broader agenda, and the Government will make a proposal very soon.
I am currently dealing with two constituency cases in which old people have been robbed of their life savings. In both cases, they have been disappointed with the police response. Will the Minister’s cross-departmental work include contact with the Home Office and individual police forces to ensure that more work is done to address this?
This Government support those who aspire to be their own boss. Self-employment grew by 148,000—3.2%—in the last year to reach a record level of 4.8 million. Self-employment has contributed 30% of the rise in employment since 2010 to the current record levels.
It seems that not a week goes by without another story emerging of the outrageous treatment of the self-employed. This is exploitation. The Deane review of self-employment reported back to the Government over a year ago, and one recommendation it made was that there should be equal treatment for the self-employed, but all we have is yet another review from the Government. When will they actually take some action?
As the hon. Gentleman knows, the Government have commissioned Matthew Taylor to review the rights and protections available to self-employed workers. He asked what we have already done. The self-employed now have access to the new state pension, worth an extra £1,800 a year in retirement. We have doubled the amount of free childcare, which is particularly useful for the self-employed and worth up to £5,000 per child per year. We have also increased the personal allowance, worth £1,000, to the typical basic rate taxpayer.
The Secretary of State is right: we have definitely helped the self-employed. However, it was put to me at my listening campaign this weekend by self-employed people that they actually want the Government out of their business. They do not want to pay higher taxes, and they do not want more benefits; they just want to get on with their business. Is that something the Secretary of State could support?
I do, and the Government, of course, support that more widely. We are looking all the time at regulations that might hinder the growth of entrepreneurship and self-employment. The actions taken by my Department—for instance, the new enterprise allowance—actively encourage people into self-employment. Some 96,000 new businesses have been set up as a result of the NEA.
The Government’s proposed increase to national insurance contributions for self-employed workers in this month’s Budget showed a scandalous detachment from the reality of the majority of self-employed workers’ lives, a failure to understand the boom in self-employment and a lack of the will to address the issues self-employed workers face, including the fact that one in three is concerned about becoming sick or being injured during their work. What discussions did the Secretary of State have with the Chancellor on this before the Budget, and is he concerned about the reliability of the minimum income floor calculation, given the Office for Budget Responsibility’s comment?
I am confident in the minimum income floor calculation. As the hon. Lady would expect, we have discussions all the time with the Treasury on a wide range of matters. My right hon. Friend the Chancellor said in his letter subsequent to the Budget:
“It is very important…that we are compliant not just with the letter, but also the spirit, of the commitments that were made.”
That is why he decided not to proceed with the class 4 NIC measures set out in the Budget. Also—this is important—all the spending measures set out in the Budget, including on social care, technical education and new schools, will be delivered in full.
My right hon. Friend is right to note that 96,000 new businesses have been started by jobseekers, but many jobseekers still do not know what help is provided under the universal credit system and the new enterprise allowance. Will he say what his Department is doing to increase awareness of these measures?
My hon. Friend makes a good point. Obviously, universal credit is still a relatively new benefit, and many of the self-employed may not be fully aware of the many benefits that arise from it for them specifically. Under UC, self-employed claimants will, for the first time, be offered help to increase their earnings. We will be testing the offer of work coach support to self-employed tax credit claimants. Also, there is an assured level of earnings, but new self-employed claimants will be exempt from this for up to 12 months following their application, which people thinking of setting up their own business will find extremely helpful.
Personal Independence Payments
The Department robustly monitors provider performance and independently audits assessments. Assessment reports deemed unacceptable are returned for rework. A range of measures, including contractual remedies, are used to address performance falling below those standards.
A constituent contacted me after she submitted a claim for personal independence payment and then had to wait 12 weeks for the home assessment appointment she needed. Capita finally telephoned, giving less than 48 hours’ notice of the visit, only to cancel 10 minutes before the appointed time. After three and a half months, she is still no nearer receiving the support she needs. I know from my discussions with the Meadows Advice Group that she is just one of dozens of disabled people being let down by the Minister’s Department. When will the Minister address this catalogue of failure?
If the hon. Lady would let me have sight of that case, I will look into it in particular, because it is unacceptable and falls below the performance and the courtesy, quite frankly, that we would want from our providers. People’s personal experience is very important in getting this process right. I am pleased to be able to say that from April we will commence the user rep panels, with about 300 people initially, across the UK, to whom we will give real-time experience of PIP and ESA—employment and support allowance.
We have all had cases like that, but could it not only be an arrogant Tory Government who ignore legal decisions that override expert medical opinion in order to deprive people with mental health issues of the right to benefits? What level of cuts has the Minister promised the Chancellor in order to get this policy through?
I am afraid that the hon. Gentleman is being very irresponsible in saying that. He knows that there is no change to policy, to budget or to award amounts. I remind him that people with mental health conditions are receiving higher levels of benefit than they did under DLA. This benefit is not about people’s conditions; it is about the impact that those conditions have on the individual’s ability to thrive and live their life as they would wish. It is quite wrong and irresponsible to suggest anything otherwise.
The vast majority of successful appeals are due to late additional submitted evidence. Therefore, to avoid unnecessary appeals, what steps is the Minister taking to automatically access medical reports with the consent of the claimant?
This is one of the key reasons why not only is 3% of the PIP caseload being overturned at appeal, but we are not getting the right decision at mandatory reconsideration stage. We have been doing a number of trials to improve that, including telephoning claimants to ensure that all the healthcare information that is required for a good assessment and a good decision is in place. There are other measures as well. I hope that this will improve the situation.
Any delay in making the PIP award is stressful for the person in need of that support and creates inefficiencies in a very pressed system. A number of cases successful at first tier tribunal are challenged by the Department and then ultimately upheld. Can the Minister assure me that this number is monitored, statistically insignificant, and, in light of improvements in assessment, falling?
I can give my hon. Friend those assurances. In addition to the measure that I have mentioned, there are a number of other trials going on and a number of changes that our providers are making—for example, sitting down with someone and talking about the effects of their condition on their ability to live their lives prior to a medical history being gathered.
One thousand and ninety-nine people currently use the Motability scheme in Inverclyde. It can be over eight weeks before a successful appeal, and during that time claimants are without their car. What is being done to address this specific issue?
As I have reported to this House before, we have been working ever closer with Motability— a great scheme in its 40th year. We are looking at a number of issues, such as appeals; people who may wish to leave the country, whether for study, work experience, or any other reason; and potentially extending the scheme to other groups. We will report on that review as soon as we can.
My hon. Friend is absolutely right that spend will increase, but it is also vital that this Government look at other issues, as we are doing—for example, on the consumer agenda. It is no good our spending money and getting the employment support right if buildings are not accessible and people cannot make use of these opportunities.
Last Thursday, at business questions, the Leader of the House stated that there would be a debate on the Government’s emergency PIP regulations, which will affect the eligibility for PIP of more than 160,000 people, mainly those with mental health conditions. However, he failed to give a date, and the praying against period comes to an end on 3 April. If there is no debate and vote before the House rises for Easter, even if the House votes against the regulations next month they will not automatically be revoked. That represents a huge democratic deficit. Will the Minister now commit to scheduling a debate and vote this week?
The hon. Lady will know that that is not within my gift; it is for the usual channels. It is not correct to say that the regulations will affect 160,000 people. [Interruption.] No, there is no policy change. There is no change to the budget, and there is no change to the guidance that we have issued to our assessment providers. It is quite wrong to raise fear by saying to people that they will be affected. No awards will be affected, and we are operating exactly the same policy and guidance in our assessment practices as we have done before.
Recent changes to the PIP regulations clarify the original criteria used to decide how much benefit a person receives. This is not a policy change or a budget change, and it will not result in any claimants, regardless of their health conditions, seeing a reduction in the amount of PIP they have been awarded.
Former Sergeant William Bradley, who is one of my constituents, developed severe PTSD and depression while serving in the Gulf war, and he was medically discharged from the Army in 2003. He had been on the enhanced PIP rate since 2014, but it was cut to the lower rate last year. Following an appeal, it has now been removed completely. The reply from the PIP hotline was that someone with mental health issues can work, and that this is really a benefit for people with severe physical disabilities. Will the Minister meet me to discuss this awful case, or, if PIP is not the right benefit for those with mental illness, can she explain what is?
What the hon. Lady tells me has happened is truly shocking. I would be incredibly surprised if somebody who was manning that hotline said those things to the hon. Lady. I am not saying that I doubt her story, but I would like to see that and I would like to know, if possible, the exact time that that conversation took place, because that is quite wrong. I would be happy to meet the hon. Lady.
The statistics show that if someone has a mental health condition—if they have PTSD, dementia, a psychological disorder or another mental health condition —they are better served under this benefit. It is important that people know that.
The Committee is within its rights to look at the decision. It did so, and it concluded that it would not formally review that decision. We have used the urgency procedure, as it was within our rights to do, to establish certainty. We do not want there to be a long period of uncertainty around this, and we do not want to be in the position of having to take money off people. What we have done is to restore that certainty. Everyone knows where they are, and people know that there is no change and their awards will not be changing.
It was a constituent of mine whose case led to the recent tribunal ruling that clarified the eligibility criteria for PIP, and to the Government’s subsequent amendments to the regulations. She lives with multiple health problems and was supported by Sheffield Citizens Advice, which is due to publish a report later this week on the wider impact of the shift from DLA to PIP and the particular effect that it is having on the over-65s. Will the Minister agree to meet me and Citizens Advice to discuss its recommendations?
I would be very happy to meet the hon. Gentleman to do so. PIP is a better benefit than DLA—it better serves a wider range of people with a wider range of conditions better—but we can always make improvements to the system, and I would be very happy to meet him.
In relation to PIP, will the Minister assure me that the DWP is engaging with those with experience of mental health conditions to ensure that our programmes and our frontline staff have a proper understanding of how a mental health condition can have an impact on someone’s life?
I can give my hon. Friend such an assurance. In addition to the user rep panels that we are introducing in April, we have been conducting a trial since mid-March—it will take about six weeks—looking at audio recording, which should involve about 400 claimants. That is a tool not just to guarantee quality, but to provide reassurance to the claimant.
Some of those who are eligible for PIP may well lose entitlement to the work-related activity group element come 1 April. Will the Minister reassure me that whether through the flexible support fund, the hardship fund or indeed third-party deals, there will be full mitigation for the losses they incur from 1 April?
I can give my hon. Friend such an assurance. People are open to apply to the financial channels he mentions if they need further support. We have been doing some work in the Department on social tariffs and budgeting, which will be rolled out across our Jobcentre Plus network, and all the elements of the support offer for that group are already in place.
Last week I had to deal with a constituent whose benefits had been stopped because she missed an appointment to be assessed for PIP. She missed that appointment because she was an in-patient in hospital in Aberdeen. Even after evidence of that had been exhibited to the Minister’s Department, it twice refused to reinstate her benefits because it said that it had done nothing procedurally wrong. Is the Minister content that that is how the system is supposed to work?
The right hon. Gentleman will know that that is not how the system is supposed to work. If there is a reasonable reason why someone has not attended an appointment, missing it should not count against them. I am quite happy to look at the case that he cites, but that should not be happening.
Young People in Work
At the last count, there were 145 jobseeker’s allowance claimants aged 18 to 24 in Kingston, yet when I go to businesses such as New England Seafood, Genuine Solutions and Meeting Point, they tell me that they have vacancies, particularly for young people. What can my hon. Friend do to ensure that young people are matched up with the many opportunities that businesses in my constituency and others have for them?
The number of young people in my hon. Friend’s constituency claiming out-of-work benefits has fallen by more than half in the past four years, and he is right to highlight the large number of vacancies—over three quarters of a million nationwide. Alongside promoting work experience and apprenticeships, the Government will soon be rolling out the youth obligation, providing additional intensive support for young people from day one.
The Minister can highlight what he likes, but long-term youth unemployment in Darlington and the Tees valley is completely stagnant: the situation has not improved at all. What is he going to do to make sure that in six months’ time the picture has improved?
Long-term youth unemployment is down 111,000 overall since 2010, and it is down 30,000 on the year. We put particular resource into and focus on the individual areas around the country that need additional support. I encourage more firms to come forward and join the work experience programme, because we know that the experience of actual work is one of the most fundamental things to help young people to move into a regular job.
Young autistic people have a great contribution to make to our economy and society, yet a recent survey by the National Autistic Society reckons that only 16% are in full-time work, and that trend has not changed during the past 10 years. In World Autism Awareness Week, will the Minister tell us how the Government could help? Not only are our employers missing out on the skills and potential of this group of people, but we are wasting an awful lot of talent. How can the Minister help to highlight their plight?
May I first acknowledge and recognise my right hon. Friend’s particular expertise in this area? I met the National Autistic Society at the party conference, as a number of colleagues did, and some of the statistics she mentions are indeed very striking. The Minister for Disabled People, Health and Work is bringing forward, through the Green Paper process, a particular focus on the talents, abilities and potential of people with autism, which will be key.
Research just published shows that the forthcoming apprenticeship levy will make the north-south divide worse, because investment will be focused on the south-east, not where it is needed in the north. What will the Minister do to address that?
This is a generational shift in investment in the skills base. The levy is an important part of ensuring that all firms of a particular size are incentivised to take part, and the new Institute for Apprenticeships will guarantee the quality of apprenticeships. I think that that will benefit the entire country.
Employment: Mental Health
We are making progress on the independent mental health and employers review, which is led by Lord Stevenson and Paul Farmer. We are also taking forward an internal review of discrimination law in relation to mental health and work. We continue to look at how we can improve employment support for people with mental health conditions, and this approach is reflected in the work and health Green Paper.
I recently trained as a mental health first-aider. Such training helps people to support others with mental health problems, as well as to look after their own mental health. Will my right hon. Friend encourage more employers to take part in initiatives such as mental health first aid to create a culture in which everyone feels able to seek mental health support in the workplace?
I congratulate my hon. Friend on taking that training, which is very important. She is right that more employers should act. We are now providing a range of support to help employers to recruit and retain people with mental health conditions, including the Disability Confident campaign and the mental health support service in the Access to Work scheme, which many firms and those who suffer from mental health conditions find useful.
The Secretary of State should beware of being so enthusiastic that he ignores the real needs of people who cannot go to work. I had an email this morning from one of my constituents saying that her husband had taken his life on Friday. He first came to us in 2016 when his award of employment and support allowance was under review. Despite his doctor’s protest, he was made to have a face-to-face assessment. We sought an extension of the six-month award; that was refused. At that point, he was so stressed that he attempted suicide. The PIP award was reviewed again in January. Will the Secretary of State please ensure that when doctors say that people with mental health conditions should not have face-to-face assessments, they do not have face-to-face assessments?
The case that the hon. Lady raises is clearly dreadful. I am sure that the whole House will want to send condolences to the family and friends of her constituent, particularly his widow. We are, of course, not just investing more in mental health than ever before—£11 billion this year—but succeeding specifically in improving clinical assessments. More clinical expertise is now available to the assessors who look at individual cases. As she will know, we have now ended reassessment for those who have conditions that can only stay the same or get worse. We are taking steps to try to minimise those effects.
My hon. Friend is right. We are taking action through Access to Work and Disability Confident, which I mentioned in response to my hon. Friend the Member for Faversham and Mid Kent (Helen Whately), but this needs to be part of a much wider programme of education specifically for employers. We have set up a Disability Confident business leaders group because I suspect that employers will listen more to other business people than they necessarily will to politicians.
Is not the main issue to make sure that people have good access to occupational health services—particularly so that preventive action can be taken if an individual feels that they are suffering from a mental health problem—meaning that they can get to an occupational health service quickly and easily to get proper advice?
I completely agree with the right hon. Lady. She will have seen that the work and health Green Paper lays great stress on occupational health services. We have more than doubled the number of employment advisers in talking therapies to make sure that we can help people with the necessary support that will enable them to stay in work. We will need to do more of this important job in the future.
I shall not mention hon. Members’ ridicule of the Minister’s answer, but I want to raise another point about universal credit: the interaction between passported benefits and universal credit, and the progress on this that the Government are making. My constituents tell me that as they get into work and move through universal credit, they lose free school meals, bus passes for their children and entitlement to a free uniform, so they are much worse off in work than they would be if they were not in work.
I thank my right hon. Friend the Secretary of State for coming down to see the successful roll-out of universal credit in Canterbury, where nearly a third of the unemployed now enjoy universal credit. That has not only pushed down the level of unemployment, but resulted in remarkably few cases coming to my surgeries.
Universal credit is a transformational benefit. It converts six benefits into one, which means working with one organisation and not three. It supports people into work and makes sure not only that work pays, but that it is visible to the individual that work pays. It is indeed transformational in our system.
In just a few days’ time, austerity cuts to universal credit come into effect that will further cut the incomes of millions of working families, including families with disabled children, who could lose about £1,600 a year, while single parents in full-time, low-paid work could lose almost £200 a month. Was the intention of universal credit to drive up poverty among disadvantaged children? If not, why will Ministers not accept that the system is failing those whom it was designed to help?
Mounting evidence from the full service roll-out areas exposes the fact that the universal credit system is beset with failure. It is simply not working. Rent arrears are soaring, claimants are waiting up to three months to have their claims processed and some people have even lost their homes. The Government need to get their head out of the sand, so will Ministers call a halt to the full service roll-out while they conduct an immediate review?
We will not call a halt to the roll-out, because it would be unfair and wrong to deprive people in Scotland or elsewhere of the advantages that the universal credit system brings. We continue to work on improving processes and accelerating delivery, including with respect to housing, and a number of improvements have already been made, with more in train.
Last week’s report by the Equality Trust illustrates just how extreme inequality is in the UK, with the average pay of chief executive officers of FTSE 100 companies standing at £5 million a year. From this April, families on low incomes who are claiming tax credits or universal credit will not receive support for the third and subsequent children in a family, except when the child is disabled. In that instance, however, the money will be withdrawn from one of the other children. Will the Government address this injustice and scrap the two-child limit?
The purpose of the limit on support through universal credit or tax credits to the first two children, in the case of new claims and new births, is to reduce our welfare spending and to target it in a particular way—[Interruption.] In some 85% of families that include children, there are one or two children. When it came to determining where necessary reductions must be made, this was the correct way of doing that.
The hon. Lady talks about rising inequality. I simply mention to her that inequality is down, and that household incomes are at a record level.
Jobcentre Plus Closures
The Department has sought to maintain the services that it offers claimants while minimising the impact on claimants as far as possible. These proposals may mean slightly longer and slightly shorter journeys for some individual claimants, and that has been taken into account in the setting of the criteria.
I congratulate my hon. Friend the Member for Sheffield, Heeley (Louise Haigh) on the campaign that she has run with the Public and Commercial Services Union and local residents to keep open the Eastern Avenue jobcentre, which serves both our constituencies. Will the Minister confirm that the only reason for closing Eastern Avenue is to save money, and that if it closes, extra capacity will be needed at Cavendish Court and Woodhouse jobcentres? In the light of that need for extra capacity, will he produce figures showing whether there will actually be any net saving as a result of the closure of Eastern Avenue?
I hope that I can provide the hon. Gentleman with some comfort. First, let me say that saving money is not a bad thing in itself; it is a good thing, and this overall programme will save some £180 million nationwide. That means that we can reinvest in frontline staff, which will have the biggest effect on helping people to return to work. As for the specific case of Sheffield, the changes will increase the utilisation of the entire estate from 51% to 69% when some of the business moves, as the hon. Gentleman rightly said, to the other two sites.
I congratulate the Minister on surviving a recent grilling from young ambassadors at a meeting of the all-party group on youth employment. I welcome the news that fewer young people are unemployed to start with but, at 554,000, the figure is still too high. Will the Minister read the all-party group’s report with a view to ensuring that there are fewer young claimants in the first place?
I look forward very much to reading the report. We know that any day spent unemployed can have a lasting effect on people, especially at the start of their careers when they are young, and it is therefore particularly important for us to redouble our efforts.
It is clear from the Minister’s answer to the question asked by my hon. Friend the Member for Sheffield South East (Mr Betts) that he does not know how much the closure of East Avenue jobcentre will save. We do not know how much rent is being spent there, and we do not know how much needs to be spent on Woodhouse or Cavendish Court to increase capacity for the additional claimants whom they will have to serve. Will the Minister commit himself to giving the House those figures before he makes his final decision and final statement to the House?
All the staff and services from Eastern Avenue will move to Bailey Court in West Street and Cavendish Court in Bank Street. I can reassure the hon. Lady that we have, of course, taken account in our projections and modelling of the exact space that will be required for those people and that level of workload.
The proposed closure of the Jobcentre Plus at Finchley Central, which is a major transport hub, will mean moving the jobcentre to High Barnet, which is on the periphery of London. That will mean a 40-minute journey and a £3 bus ride for my constituents. Will the Minister agree to revisit these proposals?
We have embarked on a programme of change which comes at the end of a 20-year private finance initiative contract. There is both an opportunity and a requirement to review what is needed on the estate. Rents are particularly high in London, and are therefore particularly challenging in the commercial market. We have sought to minimise the effect on claimants, to ensure that there is a good coverage of services within reach, and to run a consultation when a new jobcentre is more than 3 miles away and a journey on public transport takes more than 20 minutes.
Throughout the development of these proposals, we have been mindful at every turn of the impact on staff and customers. Both statistical analysis and local knowledge have informed the proposals, which are still subject to consultation with staff and, when appropriate, with the public.
Nearly a quarter of the jobcentres earmarked for closure are in London, and, as the Minister will know, both the disability and the black and minority ethnic unemployment rates are higher in the capital than elsewhere. Is the reason for the delay in the equality impact assessment the fact that it will show a disproportionate impact on the groups that typically need the most support to gain access to employment?
Following the publication of the Women and Equalities Committee report on Muslim women in the workplace, what work is the Minister doing to ensure that minority groups in which unemployment remains stubbornly high are prioritised at jobcentres across the UK?
State Pension Age: Women
I give the same answer I gave to the hon. Member for Ross, Skye and Lochaber (Ian Blackford): the Government have been clear that the introduction of further transitional arrangements cannot be justified, given the imperative to focus public resources on helping those who are most in need. There are no plans to go beyond the £1.1 billion concession introduced when Parliament considered the changes.
In response to the Minister’s answer, I ask him whether he will respond to the comments of his Government’s former Pensions Minister Baroness Altmann, who said she regretted the Government’s failure to properly communicate state pension age equalisation, an approach she described as
“a massive failure of public policy”,
and the comments of Steve Webb, another of their former Pensions Ministers, who said that the last Government made a bad decision on changing the state pension age? Will the Minister look at rectifying that?
In the latter case, Steve Webb was Pensions Minister at the time, so I do not think there is much further I can say about that.
There were very extensive communications on the 1995 changes. Millions of people checked their state pension requirements; it was publicised and leaflets were produced. This has been said many times on the Floor of the House, and I simply reiterate it.
It is not good enough for the Minister to say, as he did earlier, that that is it for the WASPI women and that everything has been done that is going to be done. Has he given any consideration to the recommendation from the Work and Pensions Committee talking about allowing the WASPI women the chance to claim their pensions early at a reduced rate, which I believe is cost-neutral and fits with other areas where the Government have allowed pensioners to take their pensions earlier at a reduced rate?
The proposal is not cost-neutral; I must make that clear. It is very impractical and it is impossible to do in the time concerned. I have made it very clear that the transitional arrangements that were made when the Pensions Bill went through Parliament are all that will be provided.
Last week, the John Cridland report indicated that there may well be an increase in the pension age. As life expectancy rises, it is right and proper for any Government to consider increasing the state pension age. However, will my hon. Friend reassure the House that if there are indeed any changes to the state pension age, they will be communicated in a timely and appropriate manner, so that those affected know about them?
There is a lot happening in pensions at the moment. The point the hon. Gentleman mentions in relation to the Chancellor of the Exchequer is something completely different, but there will be no change to the transitional arrangements at £1.1 billion.
Labour will oppose the earlier increase in the state pension age and the end of the triple lock, recommended in last week’s Cridland report, but we welcome the statement from John Cridland that at least 10 years’ notice should be given of any age increase, so there is yet another chance for the Minister. Do the Government agree with Cridland? If they do, will the Minister now admit that they got it badly wrong with the WASPI women and at least back Labour’s proposals to extend pension tax credit?
Leaving the EU: Departmental Policy Implications
Every Government Department is preparing for a smooth and orderly exit from the European Union. We are confident that we will be able to secure a deal that works in the mutual interests of both the UK and the rest of the EU. We are considering various policy options.
Some 472,000 people who have retired to the EU currently get automatic increases in the state pension, but it is unclear whether this Government will strike a deal on that after departure from the EU, if they manage to do so. Can the Minister guarantee today that elderly EU expats will not join the 550,000 retirees whose payments no longer increase in line with the state pension triple lock?
The Prime Minister has been clear that she wants to protect the rights of British citizens currently living in European member states, in the way that we want to protect the status of EU nationals already living here. That will clearly be an important matter for negotiation in the months ahead.
Does the Secretary of State agree that his Government have form on failing to protect workers’ rights? Any illusion about ability to deliver social justice for workers went up in smoke with the Dickensian Trade Union Act 2016. How can we trust his Department to guarantee workers’ rights after article 50 is triggered?
I am glad that the hon. Gentleman has drawn the House’s attention to the fact that the Government have pledged to maintain workers’ rights in the course of the negotiations. I am happy also that he gives me the chance to remind the House that the greatest workers’ right is the right to a job, and that employment is at its highest ever level in this country.
Reports at the weekend suggest that the UK Government intend that EU migrants currently living here will retain access to benefits, but those who arrive after the triggering of article 50 will be denied access. Does the Secretary of State agree that that is actually dependent on the will of the EU member states, and his Government cannot guarantee any of those rights as they press ahead, dragging us into the unknown without any credible plan?
I am sure the hon. Lady knows that no one standing at this Dispatch Box would ever comment on speculative leaks. She will know as well that we are about to enter a negotiation. We are confident that we will get a good result for the people of Britain, and that is what we will be doing.
The evaluation of the previous cap speaks for itself: capped households were 41% more likely to move into work than similar uncapped households, contributing to the record levels of employment we see today. Since 2013, over 26,000 previously capped households have moved into work.
I would like to draw the attention of the House to the more generous universal credit taper rate coming into effect over the Easter recess, on 10 April. It demonstrates our commitment to helping people to gain independence in their own lives by getting on and progressing in work. The new taper rate of 63% will boost the incomes of about 3 million families by £700 million a year; a couple with two children could benefit by as much as £425 a year. When combined with the introduction of the national living wage and increases in the personal tax allowance, those changes equate to the biggest pay rise for the lowest earners in a generation.
Newcastle has paid a high price for being the first city to go full service with universal credit, with claims routinely lost, delayed or repeatedly deleted. However, the six-week wait period is doing the most to drive so many into destitution and cause people to lose their home. With 80% of Newcastle council house tenants on universal credit now in rent arrears, will the Minister end the wait period, or will he explain how they are supposed to keep a roof over their head with no money?
Yes, quite; this has been happening for a long time. The idea that universal credit causes housing arrears is just nonsense.
Secondly, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) will know that my Department is working on a pathfinder arrangement with Newcastle City Council precisely to address the problems that may be there now and have been there for many, many years.
I welcome the news from my hon. Friend’s constituency, which has seen such a strong fall in unemployment. I certainly acknowledge the key role played by third sector organisations. We continue to work with outside organisations and on programmes such as work experience, sector-based work academies, the new youth obligation and, of course, the roll-out of universal credit.
We heard earlier about the cuts to PIP support for people with mental health conditions that were brought in 10 days ago. The Government estimate that they will affect 160,000 people. This time next week, half a million sick or disabled people who have been found not fit for work and have been placed in the employment and support allowance work-related activity group will start to see a cut in support of £1,500 a year. Given that disabled people are twice as likely to live in poverty as non-disabled people and the recent analysis showing that that has increased significantly, how does the Secretary of State justify the cumulative cuts to disabled people?
First, when the hon. Lady talks about cuts to 160,000 people, she is of course wrong. Nobody’s original DWP award will receive a cut. She also asked me how I justify the changes to ESA, but disabled people and people with health conditions deserve better than the current system, under which only one in 100 ESA WRAG claimants leave benefit each month. I hope that the hon. Member for Stockton North (Alex Cunningham), who is cheering from a sedentary position, agrees with me that we need to change the system. That is why we are proposing a huge number of different types of help across the board, including financial help and advice, which will help them into work.
I can give my hon. Friend that assurance. There will be no change to award amounts, the budget or the policy. The benefit does not relate to a particular condition, but to how a condition has an impact on someone’s life. It is about the social definition of disability. I assure her constituents that that will continue to be the case.
Universal credit is a massive reform. I know of no other country with a comparable system that stays with people from being out of work to supporting them in work. Are there challenges in implementing that? Yes, of course there are, but the transformational benefits in sight are immense.
I take that point on board, and we are embarking on a number of co-locations as part of the current programme. Co-location can be good both for claimants and for the taxpayer: for claimants because more of the services they need to access are in one place, and, of course, for the taxpayer by making better use of the public estate.
The hon. Lady will of course be aware that tax credits fall within the remit of Her Majesty’s Treasury, and I will be happy to ensure that that is raised with the relevant Minister.
I cannot comment on an individual case, but I can say that, in general, we know that less than 3% of people report that they rely on a zero-hours contract. We know that, on average, those people get 25 hours a week and actually have above-average levels of job satisfaction. Zero-hours contracts are certainly not for everybody, but they do work for some people.
I thank my hon. Friend not only for signing up to be a Disability Confident employer himself but for accepting that challenge, as many Members on both sides of the House have. If every Member of this House accepted the challenge, we would sign up enough employers to reach a quarter of the working population of the UK. I thank him for his leadership in that and wish him well on his visit to his chamber of commerce.
We have female employment at a near record rate, which is to be celebrated. We have seen the gender pay gap come down, but there is more work to do. A number of things have to fall into place for that to happen, but one of the key things happening this year is, of course, the extension of childcare to 30 hours a week for three and four-year-olds. Parents on universal credit get 85% reimbursement, rather than 70%, and we have tax-free childcare, too.
Automatic enrolment was designed specifically to help those who were under-represented in pension savings, including women. With the current rate of £10,000 a year, 70% of the new people coming into the system in 2017-18 will be women.
Six out of 10 people with epilepsy who were migrating from DLA to PIP and were surveyed by Epilepsy Action saw their benefit removed or reduced. That compares with two out of 10 people who are migrating overall. Are Ministers confident that assessors and decision makers properly understand the fluctuating, sporadic and life-limiting condition of epilepsy, so that they can make the right decisions?
We are aware of that. That is one reason why we have increased the clinical support that is available to assessors. They are all healthcare professionals, so they will have that expert advice on hand in the assessment centres. That is something that we brought in recently.
Has the Secretary of State watched or listened to an appeal hearing for PIP applicants? I have received information and representations from a number of constituents who feel intimidated and misrepresented by the process. What steps is he taking to ensure that the people involved in the process are treated with the respect, dignity and compassion that they deserve?
I thank the hon. Lady for her comments. We think about every stage of this process. Clearly, if people appeal and those appeals are upheld, we have not got it right earlier in the process. I have mentioned some things that we are doing to build trust, confidence and support. We are also introducing a video relay service in April, which will be of particular help to those who are deaf or hard of hearing. There are a number of small changes like that that we can make to ensure that we get a good result earlier in the process.
I have a 28-year-old constituent who was injured in the line of duty in 2010. He was awarded a tier 3 military pension, which is reserved only for the most severely injured, but he is due to lose his Motability vehicle and that decision was upheld on mandatory reconsideration. Is that seriously the type of person the Government wish to leave housebound?
I would say two things in response to that question. First, we have been considering particular issues around our armed forces in the Green Paper, which gives opportunities not just for ESA but for PIP. We are also looking at being able to passport information that may be in someone’s war pension record or medical history into our benefits system. I am quite happy to look at the case the hon. Lady raises with regard to Motability.
There is, of course, the facility for rent to be paid directly to landlords where necessary, and we are streamlining the process for doing that. However, we think that the general principle is right that most people in receipt of universal credit should know what their housing liabilities are and pay their rent when they are out of work and when they are in work.
We have been reminded that new claimants of employment and support allowance will get a much lower rate of benefit, starting in about 10 days. Some of those people will find themselves in serious difficulty. Do Ministers have any new proposals to help?
We do. In addition to the support offer, all the elements of which are in place, the Department has been doing a number of things, one of which is a big piece of work on social tariffs, which is about enabling people to have the right tools and information to reduce their household outgoings and giving them budgeting support.
In November last year, my motion calling on the Government to at least pause employment and support allowance cuts until mitigation or Green Paper proposals were brought in was carried unanimously by the House. Given that this is the last parliamentary week before the cuts take place on 3 April, will the Minister confirm whether the mitigations she promised will be laid before the House for scrutiny?
They are already in place. I think this is a misunderstanding that the hon. Gentleman had. The elements that were outlined in the Green Paper were not speculative or things that we would be consulting on; they were things we were going to do. All the elements, including all the recruitment for all the community partners around the country, are in place now.
Let me return to the issue of the DWP estate and travel times. Given that this information has been gathered via Google Maps, which has been shown to be inaccurate as some bus services are no longer operational, will the Minister tell me what tests have been carried out to check the accuracy of the information? If there is a possibility of the ministerial guidance being breached, will any further proposed closures will go to public consultation?
The hon. Gentleman and I, and many of his colleagues and others from across the House, have had a number of opportunities to debate these matters and to go through individual cases, on individual locations, one by one. We used a variety of sources to determine travel times and “reasonableness” of travel. The ministerial criteria say that if somewhere is within 3 miles or 20 minutes by public transport, it is reasonable to ask somebody to make that journey; otherwise, we have a public consultation.
Thank you, Mr Speaker.
A constituent of mine, whom I have spoken of before, lost her job on Christmas eve. She is denied universal credit because she is over 60 and she is denied jobseeker’s allowance because her husband has a small private pension. This couple’s lives have been thrown into financial turmoil. Does the Minister agree that it is time the Government paid some compensation to this constituent, as she has paid in all her life?
Magnox: Early Contract Terminations
This morning, I informed the House that the NDA has terminated its contract with the Cavendish Fluor Partnership for the decommissioning of 12 redundant Magnox sites. The NDA ran a £6.1 billion tender process from April 2012, which resulted in a 14-year contract being awarded in September 2014 to the partnership, which is a joint venture between the British firm, Cavendish Nuclear, and Fluor Inc.
CFP started work on the estate on 1 September 2014 and there then started a consolidation process to ensure that the scope of the 2012 tender matched the actual status of decommissioning. It became clear to the NDA that there is a significant mismatch between the work that was tendered for and the actual scale of the work that is required to be carried out. The NDA board concluded that it should terminate the contract on two years’ notice. Termination is made with the agreement of CFP and is no reflection whatsoever on its performance.
Dealing safely with the UK’s nuclear legacy is fundamental and non-negotiable. Decommissioning work will continue under CFP for a further two and a half years. The NDA will establish arrangements for a replacement contracting structure to be put in place for when the current contract ends. The NDA has also settled outstanding claims against it by Energy Solutions and Bechtel in relation to the 2014 Magnox contract. The NDA was found by the High Court to have wrongly decided the outcome of the procurement process. It is clear that the 2012 tender process was deeply flawed. The NDA has agreed settlement payments with Energy Solutions of £76.5 million, plus £8.5 million of costs, and with Bechtel of $14.8 million, plus costs of about £462,000—approximately £12.5 million in total.
Those are very substantial costs, which could have risen further if the case had proceeded. Taxpayers must be able to be confident that public bodies are operating effectively and securing value for money. Where that has not been achieved, such bodies should be subject to rigorous scrutiny. I have therefore established an independent inquiry into the original procurement process and why the 2014 contract proved unsustainable. Those are separate issues, but they need to be examined thoroughly. I have asked Mr Steve Holliday, the former chief executive of National Grid plc, to lead this inquiry. It will take a cradle-to-grave approach, beginning with the NDA’s procurement and ending with the contract termination. The inquiry will set out the lessons learned and recommend any further actions it sees fit, including any disciplinary investigations or proceedings that may be appropriate. The inquiry will report jointly to me and to the Cabinet Secretary, and his report will be available to this House and to the Select Committee.
This was a defective procurement with significant financial consequences, and I am determined that the lessons to be learned should be exposed and understood; that those responsible should be properly held to account; and that this should never happen again.
The NDA has withdrawn its appeal against the judgment that was handed down in late July last year, so will the Secretary of State explain why this decision has been taken now, why the matter was brought to appeal in the first instance, and whether both actions were sanctioned by him or his predecessor?
The judgment confirmed that the NDA had not acted properly in the tender process, and that it was
“acutely aware that an unsuccessful bidder might challenge the outcome of the competition.”
The court stated that the NDA had fudged the evaluation to achieve a particular outcome. More worryingly, the judge also confirmed that the NDA attempted to get rid of information that might have been detrimental to its case, and there was reference to the shredding of notes. Given the serious nature of the judgment, will the Secretary of State assure the House that there will be full public disclosure of the investigations, and a public hearing? Does he agree that this case has called into question the future operation of the NDA? Will he explain what structural changes are necessary, and when? Can he offer any assurances to Magnox workers?
Finally, the Secretary of State’s written statement confirms:
“It has become clear to the NDA…that there is a significant mismatch between the work that was specified in the contract as tendered in 2012”.
Will he tell the House when he or his predecessor was first aware of that mismatch and whether it would have been apparent from the work that had already been carried out by previous contractors?
The hon. Lady is quite right to ask her questions, and I hope she will agree that the written ministerial statement I have made today is thorough and comprehensive. I am very happy to have conversations with her and the Select Committee over the weeks and months ahead.
The hon. Lady asked some specific questions about the termination of the contract and the litigation. On the latter, there was indeed a Court hearing and judgment in July last year, and there was another one in December on which the NDA has reflected. On 1 March this year—a few weeks ago—a new chief executive and chair of the NDA took office. It seemed to me appropriate that a new set of eyes should consider these matters and the course of action, rather than those people who were responsible for and involved in the procurement exercise looking into it. In answer to the hon. Lady’s question, it was a decision for the NDA board—that is how it is constitutionally established—but its decision required ratification by me, the Chief Secretary to the Treasury and the accounting officer in my Department.
The hon. Lady asked some very important questions about the conduct of the original procurement process and its management. That is exactly why we need to have an independent figure—independent of Government and of the NDA—to make a report available to the House, to me and to the Cabinet Secretary, not only so that we can learn the lessons and ensure that things cannot happen again, but so that, if there is fault and an error has been made, the recommendation of disciplinary action can follow.
The hon. Lady rightly asked about the Magnox workforce, for whom this will be a difficult day. I am happy to confirm to the House that there is no question about the operational good performance of the contract; it was a question of the terms of the letting of the contract. Good progress has been made, and the workforce employed on the decommissioning contract will continue as planned. When the report is made available, lessons will be learned about the NDA’s structure, as well as any particular procedural aspects.
Will my right hon. Friend join me in paying tribute to the workforce at Bradwell-on-Sea in my constituency? They are doing a magnificent job in decommissioning the power station there. Will he confirm that nothing in his statement will prevent that work from continuing? Will he also listen to their concerns about the effect on their pension entitlements of certain changes that have been made regarding the cap on exit payments?
I join my right hon. Friend in paying tribute to the workforce. As he will be aware, good progress has been made in decommissioning the site in Bradwell, with the underground waste vaults containing intermediate level waste having been cleared and decontaminated. That is a reflection of the hard work. There is a separate set of discussions and consultations going on with regard to the pension arrangements, which is not related to today’s announcement.
I thank the Secretary of State for his response and the shadow Secretary of State for securing this urgent question. This debacle shows that the UK Government cannot even manage their current nuclear project, which comes at great cost to the taxpayer, leaving their case for a nuclear energy future more threadbare than ever. Given the bizarre and illogical decision to leave Euratom, the trade union Prospect is right to be concerned and to seek reassurances that uncertainty over the future of decommissioning will not lead to a deterioration in standards. What assurance can the Secretary of State give today?
This should be a wake-up call. The UK Government’s nuclear obsession will do nothing to lower energy bills and will only burden the next generation with unprecedented economic, environmental and security instability and risk. The Tories should do the responsible thing and scrap their nuclear obsession in favour of investment and renewable energy in carbon-capture technology. Scottish Renewables recently reported that one in six renewable energy jobs in Scotland will be under threat in the next year. Will the Government acknowledge that their energy policies need to be reviewed to allow the Scottish Government to continue with their competent and ambitious vision of a prosperous green future? Finally, when can we expect full details of the timetable of the investigation into this matter?
A little humility might be appropriate here, because the Scottish Government provided oversight of this procurement as part of the NDA competition programme board. I am sure that the lessons to be learned from 2012 to 2014 also apply to the Government in Scotland. I am sure that, whatever the view on future new nuclear power, the people of Scotland, as well as those of the whole of the United Kingdom, would want the existing nuclear power stations to be decommissioned safely and to have arrangements in place to ensure that that can be done reliably. On the independent review, which I hope the hon. Lady welcomes, I have asked Mr Holliday to give some interim findings by October, so that they can inform the further decisions about the re-letting of the contract.
I am sure that my right hon. Friend will pay no attention whatsoever to the bizarre asseverations of the Scottish National party spokesman. In asking Steve Holliday, in whom we have considerable confidence, to do this review, I hope that my right hon. Friend will seek to bring the review to a final conclusion reasonably soon after the interim report in October so that we can get to the bottom of this matter and ensure that it does not repeat itself in future years.
May I thank the Secretary of State for his courtesy call on this matter this morning and for his subsequent letter? The Business, Energy and Industrial Strategy Committee will challenge hard, but work constructively with him and with Steve Holliday on this important issue. Will he clarify whether the inquiry will be confined to the procurement process, which led to this specific contract? Will it consider other contracts such as the one to decommission Dounreay, which was awarded to essentially the same consortium that won the Magnox contract? I think that he has already confirmed this, but will he say whether the inquiry will be broad enough to consider whether the governance and management arrangements of the NDA have always been, and will continue to be, fit for purpose?
I am grateful to the Chairman of the Select Committee for what he said. I can confirm that the governance and the management arrangements of the NDA are very much in scope. I put the terms of reference in the Library of both Houses of Parliament this morning. It is open to Mr Holliday to go where the evidence takes him—to use that phrase on this. The particular concern is over this contract, but if he feels that he needs to look at other aspects of the NDA’s management, he is absolutely free to do so.
I welcome the characteristic candour and openness with which the Secretary of State has approached the issue. Will he reassure me and the House that the scope of the inquiry will look not only at the NDA, but—as I think he just alluded to—at the role, if any, of UK Government Departments and the Scottish Government in the process?
I will, indeed. The terms of reference that were published with my written statement this morning make it very clear that, as is absolutely right and proper, the inquiry applies to the NDA and Government Departments, from the beginning of the procurement in 2012 to the conclusion of the litigation and the termination of the contract.
Under current plans, Trawsfynydd power station will lose most of its jobs in less than 10 years. The Government are now in a position to commit to a programme of continuous decommissioning, as recommended by the Select Committee on Welsh Affairs. When will the Secretary of State publish revised plans following today’s announcement, and will he agree to meet me to discuss the future of the Trawsfynydd site?
I will certainly meet the hon. Lady. I am glad that she has given me the opportunity to emphasise that the work will continue as planned at all the sites. As she will know, work is ahead of schedule in the plant she mentioned. In the light of that, I will meet her to update her on the latest timings.
This was clearly a defective procurement with quite serious financial consequences. I welcome the Secretary of State’s determination that the reasons will be exposed, but will he assure the House that people found to be responsible or at fault will be brought to account?
The NDA settlement payments are very substantial. Will my right hon. Friend confirm that although the payments were made without accepting liability, the cost had the potential to rise much further were the matter taken to court?
My hon. Friend is absolutely right. We have a duty to consider the further risks to public money, which is why my accounting officer, the Chief Secretary to the Treasury and I accepted on advice that, however painful it is—these are significant sums of money, as my hon. Friend the Member for Finchley and Golders Green (Mike Freer) said—we should prevent the sums of money from being even greater.
Given the cost problems with the NDA’s Magnox decommissioning contract, how can the Secretary of State have any confidence whatever in the cost figures for Hinkley Point C, which will itself need decommissioning, especially given the farce of the massive cost overruns and huge time delays in building the EDF sister reactors in Finland and Normandy, neither of which has yet opened and each of which is years late?
All public sector organisations can learn much from procurement processes and public-private initiatives, as the £3,700 a minute spent by the NHS on private finance initiatives would attest. Will the Secretary of State assure me that all public sector organisations will be given the opportunity to learn best practice from the Holliday review?
One reason I have asked Mr Holliday to make a report by October is so that that can happen. I will meet him in the coming days, as he sets out the scope and timetable, but that is one of the key reasons for the report, and I am sure he will want to make his recommendations available for the new process.
Declarations of Interest
On a point of order, Mr Speaker. Following a report made on 14 February by the Parliamentary Commissioner for Standards, I would like to apologise to the House for the failure to disclose a financial interest in a Westminster Hall debate on High Speed 2 on 25 March 2015. I should have declared that, owing to a court order caused by my divorce, I was in the final act of selling my house to HS2 under the extreme hardship scheme. I point out to the House that I did declare an interest in the previous HS2 debates on 28 January 2013, 26 June 2013 and 28 April 2014.
In addition, I should, on reflection, have declared an interest when I submitted a written question to the Transport Secretary on 9 October 2013 and when I spoke in the High Speed Rail (Preparation) Bill debate on 31 October 2013. I also attended meetings with HS2 and responded to the consultation, when, with hindsight, for purposes of clarity, I should have declared an interest.
I have sought to co-operate with the Commissioner for Standards throughout this inquiry. I have never made any secret of how close HS2 was running to my then property in North West Leicestershire. That in no way clouded my view of the HS2 project, which I opposed before the route was announced, during my interest and afterwards. I thank you for the opportunity to put this all on the record, and I apologise to the House profusely for any omissions I may have made.
Points of Order