Work and Pensions Questions

15th October 2013

Speaking in the House of Commons, Iain Duncan Smith answers back bench MPs’ questions on issues including the expansion of the new enterprise allowance and the effectiveness of the benefit cap in encouraging people back to work.Under-occupancy Penalty

2. Alec Shelbrooke (Elmet and Rothwell) (Con): What recent discussions he has had with representatives of the UN on the under-occupancy penalty. [900434]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): Strangely, I was not asked to discuss the removal of the spare room subsidy, or any other matter, with the UN representative.

Alec Shelbrooke: Does my right hon. Friend share my concern that the UN housing expert made no reference to the 250,000 households living in overcrowded accommodation or the efforts that the Government are making to bring fairness and respect to the welfare system after the mess that lot left it in?

Mr Duncan Smith: Mrs Rolnik from the UN appeared over here, seemingly at the invitation of those opposed to all our policies, the Labour, or welfare, party included. I was interested in the notes that came back from the UN after she left. Some of the officials said,

“who is that strange woman; why is she talking about bedrooms and why on earth do we have a UN Housing Rapporteur.”

My thoughts entirely.

Mr Nick Raynsford (Greenwich and Woolwich) (Lab): The statement from the United Nations not only reveals that Mrs Rolnik visited the Department for Communities and Local Government, the Department for Work and Pensions, the Department for Environment, Food and Rural Affairs, the Ministry of Justice, the Homes and Community Agency and Manchester city council, but gives a statement of housing need in this country to which most serious commentators would wholly subscribe. Will the Secretary of State now stop his delusional approach to a scheme that cannot work because there is an inadequate supply of smaller accommodation for people to move into?

Mr Duncan Smith: It was the right hon. Gentleman’s Government who left office with the lowest level of house building since the 1920s—[Interruption.] It is higher now than it was under them—nearly 1.8 million on waiting lists in England and 250,000 tenants in overcrowded accommodation. The Opposition never talk about that. Never do we hear them say they were sorry for the overcrowded mess they left behind them. Instead of little gimmicks with people from Brazil, they would be better off apologising for the mess they left us in in the first place.

Mr Julian Brazier (Canterbury) (Con): I commend my right hon. Friend’s robust approach. Does he agree that it cannot be part of any responsible welfare system to support people in accommodation of a size that they do not need when so many families have no proper accommodation at all?

Mr Duncan Smith: I agree with my hon. Friend. It is also worth reminding the Opposition that they introduced a policy for social tenants in the private sector that does not allow housing benefit recipients to have spare rooms. So they are being hypocritical in saying that they are against one and in favour of the other.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): How can the Secretary of State continue to defend the bedroom tax when there are not enough smaller properties for people to move into, even if it were the right thing to do?

Mr Duncan Smith: I keep reminding the Opposition—and this may be the real reason why they got in such a mess over the economy—that a subsidy is not a tax. They need to understand that a tax is something that the Government take away from people, but this is money that the taxpayers have given to people to subsidise them to have spare rooms. We simply cannot go on like that. I remind the hon. Lady that the Government she was a member of nearly doubled the housing benefit bill in the 10 years they were in power, and that is why we have to take action.

Robert Halfon (Harlow) (Con): Is my hon. Friend aware that there are 4,000 people in Harlow on the council house waiting list, many of whom are not on benefits? Does he agree that the single room supplement will free up housing so that some of those people can get the housing that they rightly deserve?

Mr Duncan Smith: I agree with my hon. Friend. The coalition is concerned about people who have to live in overcrowded accommodation. Never do we hear one single comment from the welfare party about people living desperately in the overcrowded accommodation that they left them in.

Chris Bryant (Rhondda) (Lab): The Secretary of State is so out of touch he is even out of touch with his own Minister, Lloyd Freud—[Hon. Members: “Lloyd?”] Lord Freud. It was a Freudian slip.

Last week, Lord Freud admitted that there are not enough one-bedroom properties in this country. How would the Secretary of State describe a Government who tell the poorest in the land that they have to move into a one-bedroom property or pay a substantial penalty when they know that there are not enough one-bedroom properties? Is that perniciously cruel or utterly incompetent?

Mr Duncan Smith: I am not closely associated with Lloyd George, but I am always ready to read what he has to say. I welcome the hon. Gentleman to his post, but he is completely wrong. My noble Friend Lord Freud chastised housing associations and others for continuing to build houses that are not required when there is a demand for single bedroom accommodation.

Chris Bryant: He didn’t.

Mr Duncan Smith: He did. I know he said it, because I read it.

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New Enterprise Allowance

3. Lorraine Fullbrook (South Ribble) (Con): What assessment he has made of the effect of the expansion of the new enterprise allowance on young entrepreneurs. [900435]

7. Stephen Mosley (City of Chester) (Con): What assessment he has made of the effect of the expansion of the new enterprise allowance on young entrepreneurs. [900439]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): The new enterprise allowance offers support for people of all ages who want to start a business—to date, more than 1,700 young people have done so. We now have an additional 60,000 mentoring places available, so many more will be helped in the future. This is a very successful programme.

Lorraine Fullbrook: My constituent Paul Williams recently received help from the new enterprise allowance to start up his business, Choc Amor. He has twice moved to larger premises, has recently opened a new tea room and now employs nine people. Does my right hon. Friend agree that Paul Williams is a great example of why we should extend the scheme further, so that other hard-working people with drive and determination can get on in life, start a business and support our recovering economy?

Mr Duncan Smith: My hon. Friend is absolutely right. The example she gives is one of many that prove the programme is working. The scheme was due to end in September 2013, but now, as a result of its success, referrals will extend to 2014. More than 54,000 have taken up the mentoring offer and there is an extra £35 million for an additional 60,000 mentoring places. I hope my hon. Friend, and all hon. Members, will ensure that many more people know about the scheme and have the same opportunity as her constituent.

Stephen Mosley: Last month, I organised a small business fair in Chester. We had the support of the local provider, Blue Orchid, which seems to be doing an excellent job of helping people to start businesses in Cheshire. There are a large number of providers across the country. What assessment has my right hon. Friend made of their effectiveness?

Mr Duncan Smith: For the most part they provide a good service to all constituents and have been successful in all parts of the country. They operate within Jobcentre Plus districts and are monitored locally. If there are concerns, they are raised with the Jobcentre Plus. Their monthly management information flow gives us a very good overview of the scheme. In the north-west, my hon. Friend’s region, 8,000 have started working with a mentor and 4,420 have started claiming the weekly allowance—a big success.

Bill Esterson (Sefton Central) (Lab): Most businesses do not survive beyond the first year, and failing generally leaves their owners significantly out of pocket. Would it not be better to concentrate on boosting the economy to create jobs for young people, rather than recommending self-employment which, sadly, may make matters worse for the vast majority?

Mr Duncan Smith: I am sorry to hear the hon. Gentleman cavil about this programme. The reality is that the two are not mutually exclusive. For those who have a good idea and want to start a business, the scheme provides an opportunity that otherwise would not be there. I remind him that approximately 1,800 18 to 24-year-olds, 18,000 25 to 49-year-olds, 6,000 aged 50-plus, who may well have had difficulty getting a job later on, and 4,800 with disabilities who would have been written off under the old scheme, have now started a business.

Kerry McCarthy (Bristol East) (Lab): Will the Secretary of State look at the problems people are having in making the transition from jobseeker’s allowance to the new enterprise allowance regime, particularly with regard to housing benefit? A constituent, who is keen to set up his own business, came to see me the other day, but immediately found that his housing benefit had been stopped. He is of course still entitled to it in the early stages of claiming NEA.

Mr Duncan Smith: I am grateful to the hon. Lady for raising the issue and I will definitely have it looked into immediately. It is meant to flow easily. If there is a misunderstanding, or people do not know what it is, we must take that on and ensure that they do.

25. [900457] Stephen Metcalfe (South Basildon and East Thurrock) (Con): As Essex has a long and rich tradition of enterprise and entrepreneurial endeavour, I thank the Government for introducing the scheme to support the next generation of business leaders in Basildon and Thurrock. Will the Secretary of State tell the House how many businesses have been started with the support of the allowance in Essex, preferably in south Essex?

Mr Duncan Smith: I will get back to my hon. Friend about the more specific details, if he wants. About 26,000 new businesses have started already and the target is to get 40,000 going by December 2013. There are about 2,000 start-ups every single month under this scheme. Out of the first 3,000 people on it, 85% are still off benefit a year later. That is a successful scheme.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): Is the Secretary of State aware that many Labour Members support this measure, but we are careful about ensuring that the quality of mentoring is good, that the evaluation of the likelihood of success be built on initiatives such as the new scheme of Hertfordshire university and that the scheme leads to long-term sustainable businesses?

Mr Duncan Smith: As the hon. Gentleman knows, I have great deal of respect for him, and he is right that much depends on the quality of the mentoring; we are doing our level best to make sure that it is as good it could possibly be. If he has any suggestions about how to improve it further, the door is open and I am always happy to see him and discuss them with him. I would revisit any project he would like to nominate if he wanted us to look at any difficulties and I would consider looking at any improvements that might be worth making.

22. [900454] Jeremy Lefroy (Stafford) (Con): I welcome the extension of this excellent scheme to 2014. What discussions has my right hon. Friend had with the Chancellor about extending it further, should it continue to be successful?

Mr Duncan Smith: The Chancellor and I of course discuss these matters quite regularly, and the reality is that he is very interested in this scheme. The truth is that a successful economy relies on new business start-ups.

This plays exactly into the right arena. In comparison with competitors all over the world, new business start-ups and new businesses are providing the way for us to be successful. I am sure that the Chancellor will readily take my hon. Friend’s suggestions.

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Benefit Cap

6. Margot James (Stourbridge) (Con): What assessment he has made of the effectiveness of the benefit cap in encouraging people back to work. [900438]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): It is my strong belief that there is a connection between what is happening with the benefit cap and getting people into work. The findings of polls we conducted show that of those notified or aware that they would be affected by the cap, three in 10 then took action to find work. To date, Jobcentre Plus has helped some 16,500 potentially capped claimants back into work.

Margot James: Some of the few families in my constituency affected by the benefit cap have particular issues in accessing employment. Does my right hon. Friend feel that the Work programme has the specialist knowledge required to deal with some of the difficulties that this group sometimes encounter in accessing employment?

Mr Duncan Smith: It does, which is the whole point of the Work programme—to get more individuals to involve themselves and to help such people find the right courses, the right application and then the right skilling. The Work programme is able to do that in a more intense way than Jobcentre Plus is, so it should provide enormous help. The reality is that the benefit cap is enormously popular, which may account for why the welfare party opposite has come and gone on this issue from the beginning. First, Labour Members say they are opposed to it; then they say they are for it: we have no idea what they will do about it.

Glenda Jackson (Hampstead and Kilburn) (Lab): A new report by the New Policy Institute and Trust for London shows that 57% of working-age adults and children living in poverty in London are in households that work. That work is almost inevitably low paid and increasingly part time. Will the Secretary of State drop this mantra of making work pay and begin perhaps to discuss with his colleagues the possibility of encouraging a living wage?

Mr Duncan Smith: I am always very willing to discuss issues relating to the living wage with the hon. Lady or with anyone else. However, I hope that when the hon. Lady talks to her constituents she is honest enough to tell them that the reason they find themselves in so much difficulty is that the last Government made such a mess of the economy, and caused so many people to collapse into low incomes and very poor jobs. It was the Labour party that caused that. We are changing it, and restoring the previous position.

Mr David Ruffley (Bury St Edmunds) (Con): The European Commission said this morning that more than 600,000 EU migrants live in this country without working. Does my right hon. Friend agree that we could cap the benefits paid to those individuals by introducing a more stringent residence requirement, and by insisting that they have a longer social security contribution record?

Mr Duncan Smith: I have not read the report in any detail, but I do know that the 600,000 figure does not necessarily refer to people of working age who could be working. There is a big question mark over the number of people to whom it relates. I do not want to find myself in the middle of a debate between some of the media and the European Union, so let me simply say that our own assessment—our habitual residency test—currently prevents people who could be working and not on benefits from claiming those benefits. It is the Commission that is trying to get us to change that, and I am utterly refusing to do so.

Alex Cunningham (Stockton North) (Lab): The unemployment rate in my constituency is nearly 9%. One mother whose benefits have been capped has little opportunity of getting a job, especially as she has several small children to look after. She is putting feeding and clothing them and paying bills ahead of paying her rent, so her landlord, Miguel Contreres, is receiving just £30 a week. Can the Secretary of State provide a fair alternative to the landlord’s throwing that mother and her children out on to the street?

Mr Duncan Smith: Can we please return to reality? [Interruption.] I love the fact that my new shadow, the hon. Member for Leeds West (Rachel Reeves)—whom I welcome to her position—was out over the weekend saying “We are going to get really tough on benefits”, and at the first opportunity Labour Members are carping about the cap and the spare room subsidy. The truth is that the cap applies to people with average earnings. May I ask the hon. Gentleman what he might like to say to those who are trying and working hard, and who wonder why people on benefits are earning more than they are?

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Departmental Programmes (Performance)

16. Fiona O'Donnell (East Lothian) (Lab): What plans he has to improve the performance of his Department’s programmes referred to by the Chancellor of the Exchequer in his spending review statement on 26 June 2013. [900448]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): I am cutting the running costs of my Department from what I inherited from the last Government of £9 billion in 2009-10 to less than £6 billion by the end of this Parliament. What is more, by 2016-17 spending on out-of-work benefits will be back at 2008-09 levels. Working with the Treasury, we are always looking to drive down costs further still, and we will make further announcements.

Fiona O'Donnell: I thank the Secretary of State for that answer. The Chancellor of the Exchequer called in his spending review statement for a hard-hearted assessment of underperforming programmes in the DWP. Does the Secretary of State accept this review, and what steps is he taking to tackle underperformance in his Department?

Mr Duncan Smith: The No. 1 thing we could do was to get rid of Labour—a great move to get more performance and not underperformance, and judging by the performance of its Front-Bench team, that is one of the areas where we ought to start straight away—but I must say to the hon. Lady that we are driving costs down and making savings in every programme. I would love to know this: out of the £80 billion plus we will save as a result of our welfare changes, which the Chancellor welcomes, which ones does she welcome?

Mr Frank Field (Birkenhead) (Lab): How many permanent secretaries does the Secretary of State think he will get through before universal credit is rolled out nationally?

Mr Duncan Smith: Universal credit will roll out very well and it will be on time and within budget. We should consider the reality of the record of the right hon. Gentleman’s Government on Departments and the mess they got into. They left us with IT blunders of over £26 billion. With respect to him, as he was not always involved, but the others were, I therefore think they should apologise first.

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Topical Questions

Paul Blomfield (Sheffield Central) (Lab): If he will make a statement on his departmental responsibilities.

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): Today I welcomed the national roll-out of the claimant commitment across around 100 jobcentres a month from now, mirroring a contract of employment. These contracts are about a cultural shift making it easier for claimants to understand what they must do in return for benefits and that they are in work now to find work. During the pathfinder both claimants and staff have found this helps enormously in focusing people on their requirements and the consequences if they do not meet them. This now marks the next stage of delivery.

Paul Blomfield: One of my constituents who is still without a job after his involvement in the Work programme came to one of the public consultation meetings I organised during the recess because he was angered by his experience of the programme. Bright and articulate with a postgraduate degree from Oxford, he had been sent on an eight-week employability course that included the completion of questions by ticking boxes with smiley faces or sad faces. Does the Secretary of State understand why he and others on the course angrily felt it was a waste of time, and does his experience explain why the Work programme has failed the overwhelming majority of people who have been sent on it?

Mr Duncan Smith: I just do not agree with that because the reality is that the Work programme figures show that it is performing incredibly well and it will just get better: some 72% of the first tranche or cohort are off benefits; 380,000 people who before were written off by the last Government are now in work; 168,000 are now in sustained employment; and we now know that 90% of those who are in sustained employment go on to another year at least of employment, which is better than any of the last Government’s programmes—cheaper, more effective and better for those trying to get into work.

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Rachel Reeves (Leeds West) (Lab): Labour Members support the principle of universal credit, but we have repeatedly raised concerns about the Secretary of State’s ability to deliver it. Since 2011 he has consistently promised that 1 million people will be claiming universal credit by April 2014. Will he now tell the House how many people he expects actually to be claiming universal credit by then, and whether he will proceed with the previously announced plans to close down new claims for tax credits by that date?

Mr Duncan Smith: May I start by welcoming the hon. Lady to her position? As I told the Committee and have said consistently, universal credit will be rolled out within the time scales we set, and we are planning very clearly to enrol as many people in it as possible. This will be a success. As she says she is favour of universal credit, perhaps she can explain why Labour Members voted against it at the start and continue to do so.

Rachel Reeves: Despite what the Secretary of State says, the truth is that by April next year it will be possible to claim universal credit at just 10 jobcentres out of a total of 772. Meanwhile, the National Audit Office says that £34 million has already had to be written off, £303 million is now at risk, and Ministers have failed to set out how the policy will work. It is a catalogue of errors. Will the Secretary of State tell us how much money spent on the project will be money down the drain? Instead of blaming everybody but himself, would it not be better for him to turn down the volume on off-the-record briefings against his own permanent secretary and start taking responsibility for his own failed policy?

Mr Duncan Smith: Just in case the hon. Lady does not realise it, I should point out that this is not a failed policy: it will roll out successfully on time and within budget. Where does the word “failure” apply to that? She is part of a party whose time in office saw more than £28 billion wasted on IT programmes, with complete chaos most of the time it was there. This will roll out on time and within budget. At any time when we announce the new reset, she can, if she would like, come and talk to us about it. Perhaps for once, instead of voting against stuff and then saying she supports it, she might tell us how many of the benefit cuts Labour Members voted against they are now in favour of.

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Julie Hilling (Bolton West) (Lab): With well over 1 million unemployment benefit claimants being sanctioned since 2010, rumours abounding that targets are in place for sanctioning, and all of us facing many desperate people in our surgeries, will the Secretary of State tell us when we will see the results of his investigation into sanctioning?

Mr Duncan Smith: It is obvious and clear that Labour Members do not support sanctioning. The reality is that they spend their whole time saying that they are in favour of benefit changes and at every single turn they oppose them. People who deserve sanctions deserve sanctions, and we impose them on those who do not play a part in the system.

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Andy Sawford (Corby) (Lab/Co-op): Will the Secretary of State confirm whether benefits officers been have told not to sanction people when the only job offered is on a zero-hours contract? Do Ministers recognise that the new claimant commitments mean that people will not actually be able to sign zero-hours contracts without risking losing their in-work benefits?

Mr Duncan Smith: The claimant commitment is about people’s obligations under the existing terms. They will have to seek work, attend interviews and try to get a job, and once they are offered a job they must take it. Those are the sanctions coming up under universal credit. People will lose benefits for three months for a first offence, six months for a second offence and three years for a third offence. Right now, zero-hours contracts are legal. If Labour wants to change the law, we want to hear that from the hon. Gentleman.

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Kerry McCarthy (Bristol East) (Lab): The Government continue to disregard warnings from the likes of Oxfam and Church Action on Poverty that many of the 500,000 people being forced to use food banks are doing so because of delayed, reduced or withdrawn benefits. The Department seems not to be interested in collecting any statistics behind the reasons for that referral. Will the Secretary of State look into this to see what impact his benefit changes are having on people who simply cannot afford to feed themselves?

Mr Duncan Smith: We do spend our time looking carefully to see whether the effects of our policies are negative on some families and how we can best support them. We have localised to local authorities the support for things such as crisis loans. Local authorities are now much better at focusing on what people really need. Our general view is that there are people in some difficulty, but lots of people are taking some of this food because it is available and it makes sense to do so. We are working with local authorities to ensure that those in real need get support.

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Greg Mulholland (Leeds North West) (LD): The roll-out of universal credit will be complete by 2017, yet the contract for the Post Office card account will be up for renewal in 18 months. What assurance can the Secretary of State give that people will still be able to access their benefits through their post offices?

Mr Duncan Smith: I have looked at this matter carefully. The Post Office contract is due to expire in 2015, but there is the option to extend it and we will keep the matter under review. The Post Office is piloting a new current account and we hope that many people will transfer on to that. I assure the hon. Gentleman that we will ensure that those who are in the circumstances that he describes will always be properly supported.

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Graham Evans (Weaver Vale) (Con): Will the Secretary of State confirm that since the benefit cap was introduced, his Department has helped more than 16,000 people who would have been affected by it into work? Does that not show that those who voted against the benefit cap cannot be trusted on welfare reform?

Mr Duncan Smith: My hon. Friend is right that the benefit cap is popular and effective. Although the new shadow Secretary of State said that Labour would be tougher on welfare, we have all noticed throughout questions that the only thing we have heard from Labour is opposition to every single spending reduction and welfare reform. That party is not fit for government.


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