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House of Commons

Monday 1 July 2013

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—

Innovation Fund for Young People

1. Mark Garnier (Wyre Forest) (Con): What assessment he has made of the effectiveness of his Department's innovation fund projects in helping disadvantaged young people. [162089]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): The innovation fund is a £30 million investment testing cutting-edge projects to improve the employment prospects of our most disadvantaged 14 to 24-year-olds. So far the fund is working well: 6,000 young people are being helped, and recent statistics show 1,800 positive outcomes—each an improvement such as better school attendance, improved skills, qualifications or a move into work—which are being measured for future expansion.

Mark Garnier: I know my right hon. Friend recognises the importance of financial education and financial literacy in schools. Can he repeat his support for financial education to start in primary schools and will he reassure the House that he recognises the need for his Department to work closely with the Department for Education to deliver this important measure?

Mr Duncan Smith: I can confirm that a strong passion of mine—and certainly one of the DWP’s—is to get financial education literacy into the national curriculum. I hope that view would be shared on both sides of the House. Clearly, people coming out of the education system need at some point to understand what interest rates are, for example—otherwise they will get ripped off by unscrupulous lenders. The national curriculum is published in its final form for first teaching in the autumn of September 2014. The Department for Education and ourselves are consulting on including financial education in it, and I believe that we are likely to get that, so I can say an honest “yes” to my hon. Friend.

Gemma Doyle (West Dunbartonshire) (Lab/Co-op): The Daily Recordrecently alleged that Youth Contract wage incentives are being handed out to people already

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in work—just to give the illusion that the funds are being used. What investigation has the right hon. Gentleman made of that report?

Mr Duncan Smith: This is not directly related to the innovation fund, which is about testing programmes so that extra skills, quality and money can eventually be put in. However, I am aware of what the hon. Lady says, as is the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Fareham (Mr Hoban) who is looking into it and will ensure that action is taken. If the allegation is true, we will act; if not, it will simply be a scurrilous report.

Child Support Agency

2. Mark Pawsey (Rugby) (Con): What assessment he has made of the use of electronic correspondence by the Child Support Agency. [162090]

The Minister of State, Department for Work and Pensions (Steve Webb): For the 1993 and 2003 child maintenance schemes, the preferred method of contact is by telephone—simply because of the sensitive nature of the material, which would otherwise have to be e-mailed. However, the ability to provide electronic communication is being embedded into the design of the 2012 scheme.

Mark Pawsey: I was very surprised when my constituent, Louise Cawser, was told by the agency that she could not deal with it by e-mail, because there was no effective tool to provide sufficient security. Given the drive across government as a whole and in various agencies to consult electronically, will the Minister provide some reassurance to clients of the Child Support Agency about how this will develop in the future?

Steve Webb: Yes, I am pleased to say that, starting later this year, clients on the 2012 system will have the equivalent of internet banking, so they will be able to log on, see their account and report changes of circumstances. We will close all existing cases over the next few years, and those who want to remain in the statutory system will move on to the 2012 system and they will have that service available to them.

Work Programme

3. Barbara Keeley (Worsley and Eccles South) (Lab): What assessment he has made of the most recent data on the performance of the Work programme. [162091]

The Minister of State, Department for Work and Pensions (Mr Mark Hoban): Work programme performance has significantly improved; it is working. The numbers of people finding lasting work—at least six months for most people or three months for the hardest to help—has increased significantly from 9,000 in March 2012 to 132,000 in March 2013.

Barbara Keeley: Recent data on the Work programme show that it has failed to meet its minimum performance level in every category, and that the proportion of employment and support allowance claimants achieving a sustained job was less than a third of the minimum. Every week, I hear from unemployed people in my

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constituency who are desperate to find a job, and they are being utterly let down by this programme. What is the Minister going to do about it?

Mr Hoban: I just point out that in the hon. Lady’s area, the Work programme is exceeding its targets for young people aged between 18 and 24. She should get to grip with the facts on what is happening with the Work programme. It is helping people into work, and particularly in her area. On the point about ESA claimants, she should not forget that when her party was in government, it wrote those people off. This is the first time we have had a major programme to get people who have been out of work through sickness or ill health back into employment. More work needs to be done, but what we are doing is a significant improvement on how the Labour Government abandoned those people in the past.

Nigel Mills (Amber Valley) (Con): Will the Minister join me in welcoming the improvements in performance of the Work programme providers that cover my constituency of Amber Valley? Notwithstanding that, there are clearly some areas of concern. Will the Department now use the market shift mechanism to make sure that those who are not succeeding will have more encouragement to improve in the future?

Mr Hoban: My hon. Friend is right. Although performance has improved significantly, more progress is needed. We aim to reward the best providers by shifting more referrals to them, and that will start happening on 1 August. At that time, at least 14 market share shifts will take place to encourage good performers and to send a message to those who are performing badly.

Dame Anne Begg (Aberdeen South) (Lab): The Minister must be disappointed by the figures relating to employment and support allowance. The people concerned were not abandoned by the last Government; there was a programme called Pathways to Work, and the figures were far better then than they have been during the two years of the Work programme. Will the Minister please look into what is happening to this cohort with a sense of urgency? These people are being let down.

Mr Hoban: I disagree with the hon. Lady’s presumption that they are being let down. I have ensured that each provider has an action plan. We have also set up a “best practice group” to share information about what is working well, and to ensure that each provider gives the best possible service to this important group of people.

George Hollingbery (Meon Valley) (Con): A couple of weeks ago I met George Gallop of A4e, who runs the Work programme in Southampton. He introduced me to two young people whose lives had been utterly transformed by the programme. It was truly inspirational. Does the Minister agree that we should be celebrating such successes, and spreading the techniques employed by Mr Gallop more widely around the country?

Mr Hoban: My hon. Friend is right. One important thing that we can all do is visit Work programme providers in order to understand what they are doing. I have been doing that since I took over this job in

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September. It is clear that lives are being transformed, and that people who might otherwise have been out of work for years are gaining employment as a consequence of the programme. We need to learn from what is successful, and spread best practice throughout the country.

Fiona Mactaggart (Slough) (Lab): What does the Minister plan to do with people who come out at the other end of the Work programme? According to a letter that I have received from my local branch of Jobcentre Plus, the programme’s intensive regime will reduce the number of people on benefits, but will not increase the number of those in work. Will the Minister assure us that the activities involved in following up people who have been left without work on the programme will not include bullying them off benefits, and will include getting them into work?

Mr Hoban: It was the hon. Lady’s party, when it was in government, that established targets for sanctions on jobseekers—targets that the present Government scrapped.

A range of measures exist to support those who are leaving the Work programme and bring them closer to employment. However, we are also asking people to go into the jobcentre every day in order to receive one-to-one support, and I think we shall find that that is very effective.

Mr Philip Hollobone (Kettering) (Con): A4e tells me that 38% of its Work programme clients in the east midlands are aged between 18 and 24, and that one of the biggest challenges that they face is the provision of inadequate or irregular transport services in rural areas, and bad bus services in particular. Is the Minister aware of that problem, and what work can he do with the Department for Transport to deal with it?

Mr Hoban: My hon. Friend has raised an issue that applies to a number of areas. Work programme providers, Jobcentre Plus, employers and transport companies have worked together well to improve transport links, and to ensure that as many people as possible can travel to a job that enables them to look after themselves and their families.

Social Investment Market

4. Damian Hinds (East Hampshire) (Con): What contribution his Department has made to strengthening the social investment market. [162092]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): Social investment involves taking a new approach to the tackling of our most entrenched social problems, thus enabling investors to have a positive impact on society and make a return that guarantees more long-term investment. After initiating the scheme, the Government, along with Sir Ronnie Cohen and others, launched Big Society Capital, which is the world’s first institution of its kind, and established the Early Intervention Foundation. My Department has set up 10 social impact bonds, taking the total in the country to 13. We are improving the concept, and we are now a world leader in the field.

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Damian Hinds: Will my right hon. Friend seek to maximise the involvement of retail investors in the social investment market? Does he agree that the new social investment tax relief has great potential to unlock new funding to finance valuable local projects and help to turn lives around?

Mr Duncan Smith: I will certainly try to encourage precisely those people to invest. The aim is eventually to establish a proven project which delivers a social return, thus encouraging both trusts and private sector investors, as well as local authorities, to supply guaranteed funds to organisations that would otherwise have no funding. We think that the potential market is enormous. The Americans, among others, have said that they are grateful for our leadership in this regard, and the G8 was very keen on hearing from us.

Guy Opperman (Hexham) (Con): Does the Secretary of State agree that social investment could be channelled through local regional banks and expanded credit unions, which are surely the best-placed organisations and the closest to their local communities?

Mr Duncan Smith: All those are options. We have put in extra investment in credit unions—some £35 million—to try to increase their scope and to bring them together again. My hon. Friend is right. Local is what this is all about. It is about giving projects in the local area, with local authorities, a chance to obtain reasonable, long-term investment to deliver life-changing results. It is interesting that, at the G8 conference—this is the most important thing—many of the countries said that this is the way for them to go, too. This country has led on this area, thanks to the coalition.

National Insurance Contributions (Northern Ireland)

5. Naomi Long (Belfast East) (Alliance): How many people who worked in Northern Ireland and paid national insurance contributions while aged 14 or 15 between 1947 and 1957, which did not count towards their qualifying years for a full basic state pension, fall two years or less short of the years needed to qualify for such a pension. [162093]

The Minister of State, Department for Work and Pensions (Steve Webb): As the hon. Lady will be aware, state pensions in Northern Ireland are the responsibility of Ministers in the Northern Ireland Executive. Her Majesty’s Revenue and Customs is responsible for national insurance matters. However, I am advised by HMRC that the information that she has requested could be obtained only at disproportionate cost.

Naomi Long: I thank the Minister for his answer, but some of the people who worked during that period, before the school leaving age changed in Northern Ireland, would be resident in other parts of the UK as well as in Northern Ireland. Therefore, will he undertake at least to raise the matter again with HMRC, in order that it can reconsider its response?

Steve Webb: The issue for HMRC is that the records that the hon. Lady is talking about—those of people who left school at 14 and 15 in the 1940s and 1950s—are

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on pieces of cardboard in a cupboard somewhere. That information could only be gathered at disproportionate cost.

Sir Tony Baldry (Banbury) (Con): Does not this question demonstrate the fact that the concept of national insurance has always been a bit of a con in that it is not, and never has been, an insurance scheme? Essentially, those who are in work at any time are paying, out of their taxed income, for the pensions of pensioners of that time, on the understanding that when they reach pensionable age those in work will pay their pensions. Ever since it was introduced, the phrase, “national insurance”, has been misleading.

Mr Speaker: I am sure the reply will be shorter than the treatise.

Steve Webb: My hon. Friend is correct: it is an intergenerational pension promise, although we hold to the notion that we pay bigger pensions to those who have made more years of contributions. Therefore, we believe that there is an insurance element to the scheme.

Eligibility for State Pension

6. Graham Jones (Hyndburn) (Lab): What assessment he has made of eligibility for the state pension following the rise in contributions to 35 years from 2016. [162094]

The Minister of State, Department for Work and Pensions (Steve Webb): In the long term around 85% of people will get the full single-tier pension under the Government’s proposals.

Graham Jones: Does the Minister accept that as a result of the changes fewer people overall will qualify for the state pension by 2020? Does he agree that that is particularly unfair to people who, being so close to retirement, will not have time to make up the years?

Steve Webb: We have put in place special provision for the very people to whom the hon. Gentleman refers. When we value their pension rights at 2016, we will do so under the current rules, where 30 years are needed to qualify, and the new rules, where 35 years are needed, and we will use whichever of the two provides the highest number. The 2016 calculation will take whichever set of rules treats people most favourably and they will build upon that.

Mr Julian Brazier (Canterbury) (Con): Does my hon. Friend accept that the proposed arrangements will greatly reduce means-testing in the long run and so restore incentives for people to save?

Steve Webb: My hon. Friend is right. The danger with the current system is that people who save find that the Government come along and say, “You’ve saved some money—we’ll take some money off you.” Our intention is to encourage, not penalise, saving. Paying a single, simple, decent pension just above the level of the basic means test will greatly enhance those incentives.

Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): The Government’s case for the new state pension is that it will increase the incentive to save in private pensions, but does the Minister agree with his hon. Friend the Member for Warrington South

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(David Mowat), a Treasury Parliamentary Private Secretary? He told the House during Second Reading of the Pensions Bill:

“One reason that people are not saving is that there is massive distrust of the industry. I have many colleagues in the private sector who would almost cut their arms off than invest in the pensions market.—[Official Report, 17 June 2013; Vol. 564, c. 712.]

What will the Minister to encourage people to make those savings in private pensions?

Steve Webb: I agree with the hon. Gentleman to the extent that there is mistrust of private pensions, which is why we have taken strong action,: for example, we have banned consultancy charges, which were a source of concern. On savings incentives, if he looks at our analysis, he will find that low earners in particular will have much smaller withdrawal rates when they save. Therefore, the return on savings, particularly for low earners, about whom I am sure he is most concerned, will be enhanced by the proposals.

Charlie Elphicke (Dover) (Con): Does the Minister anticipate making pensions the subject of a cap at any stage?

Steve Webb: I think my hon. Friend might be referring to the idea of a total welfare cap, and while the Chancellor of the Exchequer has explicitly ruled out the idea of capping state pensions, I understand there are others in this House who are prepared to cap state pensions.

Work Programme

7. Richard Fuller (Bedford) (Con): What assessment he has made of the performance of the Work programme in helping young people into work. [162095]

The Minister of State, Department for Work and Pensions (Mr Mark Hoban): Just under half the young people who had been on the Work programme for a year had work, and over 46,000 had had more than six months of work.

Richard Fuller: I do not know whether the Minister is as disappointed as I am at the sniping negativity of Labour MPs towards the Work programme, when what they should be doing is rolling up their sleeves and making it work in their constituencies. In that spirit, will the Minister applaud the 50 small businesses in Bedford which, working in conjunction with the two Work programme providers, will on 11 July be giving 200 young people the equivalent of a day of speed-dating interviews to give them a good restart in their careers?

Mr Hoban: That is a fantastic example of how local employers can work with the Work programme to deliver good outcomes for people and get them into work.

Sheila Gilmore (Edinburgh East) (Lab): From this month, hundreds of jobseekers, including young people, will be returned to jobcentres. The DWP originally said they would be asked to come in weekly, but I think I heard the Secretary of State say they will be coming in daily, and the Chancellor of the Exchequer announced that new jobseekers will be coming in weekly. The problem here is that the National Audit Office has said job advisers are seeing far more jobseekers than ever

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before, that the time they spend with jobseekers is down, and that the DWP budget fell by 9% in last week’s spending review. Is this not just a lot of hot air? Is it not something that is not actually going to happen?

Mr Hoban: I remind the hon. Lady that over the last seven months the number of jobseekers has fallen. She has not welcomed that, but it is good news for her constituents and for people across the country. We want to make sure Jobcentre Plus advisers offer a good quality service. They do that, and I am very disappointed that a member of the Select Committee cannot see fit to thank Jobcentre Plus advisers for their hard work.

Andrew Bridgen (North West Leicestershire) (Con): Will my hon. Friend confirm that job vacancies are at their highest level since 2008?

Mr Hoban: Indeed, they are at their highest level since 2008. That is why we have record numbers of people in work, record numbers of women in work, and a record number of hours worked. It is about time the Opposition welcomed that.

Andrew Gwynne (Denton and Reddish) (Lab): In the invitation to tender for the Work programme, the Minister’s Department said it expected providers significantly to exceed the minimum standards it had set out, but the facts are that they have not even reached the minimum standards, including for young people getting back into work, and that about half the providers have not even met the standards his Department said would be met without a programme in place. Is not the Minister even a tiny bit embarrassed?

Mr Hoban: I am pleased to be able to say that performance is improving. Across the country the performance of Work programme providers has improved, and about half of providers have significantly exceeded the minimum standards. That is why people are getting into work; that is why we are seeing lives transformed. I wish the Opposition would stop carping and congratulate the work the providers are doing to get people into work.

18. [162107] Margot James (Stourbridge) (Con): Until recently, a significant part of the labour market, including young people, was referred to as unemployable. May I congratulate my hon. Friend and the Secretary of State on challenging this deeply negative assumption? To be getting 132,000 previously unemployed people into employment is a considerable achievement. Does my hon. Friend agree that the payment-by-results model has been instrumental in this achievement?

Mr Hoban: Under previous schemes, money was paid upfront to providers without much attention being paid to whether people got jobs and work. Under this scheme, the interests of taxpayers, the unemployed and providers are closely aligned, because providers get paid only if they get people into work for six months.

Work Capability Assessments

8. Heidi Alexander (Lewisham East) (Lab): If he will take steps to ensure that work capability assessments better meet the needs of people with mental health problems. [162096]

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The Minister of State, Department for Work and Pensions (Mr Mark Hoban): We recognise the challenges in accurately assessing people with mental health conditions, and the potential vulnerability of such claimants. The previous Government built safeguards into the work capability assessment. We have introduced further improvements to ensure the process deals with people with mental health conditions fairly and accurately.

Heidi Alexander: In recent months, I have been in contact with a number of constituents with mental health conditions who tell me that the work capability assessment fails to recognise the nature and severity of their problems. In the light of the recent court case in which it was ruled that the current assessment process discriminates against those with mental health problems and autism, will the Minister stop the transfer of people with mental health conditions from incapacity benefit to employment and support allowance until the system is fixed for that group?

Mr Hoban: It is important to ensure that we get the right support in place for people. Not long after ESA was introduced under the previous Government, 33% of people with a mental health condition received the support allowance, but under this Government the figure has increased to 43%, so more people are getting the right support as a consequence of this assessment.

Mrs Anne Main (St Albans) (Con): Will the Minister encourage a scheme that Mind had—the “way to work” campaign—under which people with spasmodic mental health illnesses could work flexibly? It was not taken up as well as it could have been by employers, and it would help people who are assessed as having periods of good health as well as ill health.

Mr Hoban: My hon. Friend rightly says that we need to find ways to help people with mental health conditions, and other conditions, back into employment—the work we do under the Work programme is part of that, but other interventions are also being made—because there is a strong link between work and good health outcomes.

23. [162112] Nic Dakin (Scunthorpe) (Lab): Given today’s launch of Rethink’s Unfair WCA campaign, when will the Minister finally decide whether to implement the changes to the descriptors recommended over a year ago by the mental health charities?

Mr Hoban: Work is going on at the moment to test those descriptors, and we are working closely with the charities. Today also marks the launch of the call for evidence of the fourth independent review of the WCA, which recognises our commitment to improving on the system we inherited from the previous Government.

Simon Hughes (Bermondsey and Old Southwark) (LD): Will the Minister examine the way in which people with mental and physical health problems are assessed before they are placed in their WCA, specifically by Seetec in my part of the world? Will he examine how appropriate the placement is after they have started, because in my experience such placements are often inappropriate and therefore do not benefit anybody at the end of the exercise?

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Mr Hoban: The Work programme does not undertake the assessments; they are undertaken as part of the ESA process. It is in the interests of providers to ensure that they get people placed with the right employer, because that maximises the chance of that person staying in work and, thus, the provider getting paid for the right outcomes.

Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): In May, Dr Greg Wood, an Atos-appointed doctor, made a series of specific allegations about failings in the WCA process as he saw it, as a doctor working for Atos. I asked the Prime Minister to investigate and I received a reply from the Secretary of State for Work and Pensions this week that made absolutely no reference to the specific allegations that have been raised. Does the Minister understand that one reason why there is such a lack of confidence in the Atos test is this complacent, contemptuous disregard for, and head-in-the-sand attitude towards, what is happening in the system?

Mr Hoban: I just point out to the hon. Gentleman that, as I said in response to the hon. Member for Scunthorpe (Nic Dakin), today we have launched a call for evidence for the fourth independent review of the WCA. That demonstrates our commitment to ensuring that we get this right, so that people get the right support, and that we continue to deliver the right outcomes for people going through this process.

James Morris (Halesowen and Rowley Regis) (Con): It is encouraging that over the past three years the number of people with mental health conditions who have been put into the support group has trebled. Does the Minister agree, however, that we need constantly to monitor the effectiveness of the WCA, perhaps by working with mental health charities, to make sure that it is suitable for people with fluctuating mental health conditions?

Mr Hoban: My hon. Friend makes an important point. It is because we are committed to continuing to improve the whole process that we work with mental health charities. Since coming to office, I have had several meetings with charities to talk about what we can do, and this is why we are currently going through the process of assessing alternative descriptors, particularly for those with fluctuating conditions and mental health issues.

Employment (Disabled People)

9. Laura Sandys (South Thanet) (Con): What progress he has made on supporting disabled people back into work. [162097]

The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey): The Department offers a range of support to help disabled people get into work and stay in work, including the Work programme, Work Choice and Access to Work. Although there has been a welcome improvement in the disability employment rate over recent years, much still needs to be done. We will be doing that by launching a new, two-year disability employment campaign in July.

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Laura Sandys: I thank the Minister for that reply. I also thank the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Fareham (Mr Hoban), who is coming to our jobs fair tomorrow morning where there will be information about jobs that local companies have designed around people with certain abilities and disabilities. What can we do to communicate to businesses the value of employing people with elements of disability and to ensure that they play a good part in our work force?

Esther McVey: I congratulate my hon. Friend on the work she is doing. Employers have the jobs and young people want those jobs, so getting them together is key. That is precisely what we will be doing when we launch our new employment strategy: getting together all the FTSE 100 companies, SMEs and young disabled entrepreneurs so that they can employ people and share best practice.

Derek Twigg (Halton) (Lab): The Minister has mentioned programmes that help disabled people get into work, but how many of those people remained in work 12 months after they got a job?

Esther McVey: Of the nearly 13,000 people who have started on Work Choice, a third—30%—have stayed in work. That situation has improved, but we want to do more, so we are starting the “disability confident” campaign, which will, we hope, help to achieve better outcomes.

Jane Ellison (Battersea) (Con): Will the Minister confirm that disabled people can, through Access to Work and as part of the new enterprise allowance, get more equipment that will help them set up their own businesses?

Esther McVey: My hon. Friend is correct. We have extended the new enterprise allowance to help disabled entrepreneurs with support from Access to Work and she will be pleased to know that more than half a million disabled people have now set up their own businesses.

Mrs Anne McGuire (Stirling) (Lab): In spite of the bluff and bluster of the Minister of State for employment, the reality is that Work programme outcomes for new ESA clients show a pathetic performance outcome of only 5.3%, three times worse than doing nothing.

However, I want to turn to another employment support programme for disabled people, Access to Work, which the Under-Secretary has just mentioned. According to the DWP’s most recent statistics, the programme is now supporting 27,000 people compared with 37,290 in the year 2009-10 and 35,000 in 2010-11. Given that many disabled people want to get into work and are constantly told that they need to get into work, can the Minister advise when both the Work programme and Access to Work will start to make a real change to their lives?

Esther McVey: The right hon. Lady is quite right that Access to Work is key in helping people to remain in work, which is why we have extended it to young children who want to do internships and to new people who want to set up in business. It is working well and

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we are continuing to expand it, but we must also ensure that it works as best it possibly can. I am proud of what we are doing and we will build on that good platform.

Sir Bob Russell (Colchester) (LD): Thanks to organ transplants, many lives have been saved, but in some cases despite their outward appearance the person is inwardly still disabled. What advice is given to jobcentres and other Government agencies to draw attention to the special needs of those who have had organ transplants?

Esther McVey: I am not aware of any specific advice that is given about people with organ transplants, but I do know that our disability employment advisers have in-depth knowledge and help people with all disabilities.

Work Capability Assessments

10. Jessica Morden (Newport East) (Lab): What assessment he has made of the operation of work capability assessments; and if he will make a statement. [162098]

The Minister of State, Department for Work and Pensions (Mr Mark Hoban): The work capability assessment is aimed at ensuring people out of work through ill health or disability get the support they need. It is under regular review and today the call for evidence for the fourth review is being launched.

Jessica Morden: In recent weeks, it seems that more of my constituents have been put in the work-related activity group without even having a face-to-face assessment. Will the Minister confirm whether the use of discretionary powers is increasing and will he reassure me that that is not a case of cutting corners to clear a backlog?

Mr Hoban: It depends on the information provided and if claimants are providing good-quality information through the ESA50, they can be referred without a face-to-face assessment. I would also point out that the proportion of people going into the support group has increased in recent times, particularly as a consequence of not using face-to-face assessments.


11. Jesse Norman (Hereford and South Herefordshire) (Con): What steps he is taking to encourage jobcentres to work with local employers and voluntary organisations. [162099]

The Minister of State, Department for Work and Pensions (Mr Mark Hoban): Jobcentre Plus has a national network of employer relationship and partnership staff whose task is to work collaboratively with voluntary organisations to support more people back to work and encourage and support employers to open up their vacancies to the unemployed.

Jesse Norman: I thank the Minister for that reply. Newton Farm community association in my constituency has signed up a number of high-profile local people from both the private and the public sectors to mentor unemployed people in Herefordshire. Will he join me in congratulating the association and commending that

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spirit of self-help and mutual support? Will he also consider ways in which the Government can use jobcentres to offer further support to that and similar mentoring programmes?

Mr Hoban: I can not only join in the congratulations but say that the local jobcentre has a positive relationship with the Newton Farm community association. We want to do more work with local organisations to encourage people into work, and we are keen to support them in any way we can.

Chi Onwurah (Newcastle upon Tyne Central) (Lab): Many smaller voluntary organisations and social enterprises that signed up for the Work programme have had appalling experiences—some not even receiving a single referral—and they complain of being the fig leaf of local engagement for large companies, even though they know the local skills and job market best. What will the Minister do to improve their experience?

Mr Hoban: The Work programme providers argued for freedom and flexibility over who to contract with, but we have introduced the Merlin standard to govern the relationship between Work programme contractors and their subcontractors. If organisations have concerns about the way they have been treated by the Work programme providers, they should refer those concerns to the Merlin committee.

Mr Graham Stuart (Beverley and Holderness) (Con): Will the Minister join me in congratulating Jobcentre Plus in the Beverley and Holderness area on working closely with me in organising a jobs fair, which hundreds of local people attended; on the part it has played in ensuring that Beverley and Holderness has one of the highest figures on apprentice starts in the country; and on the fact that unemployment is now 3.5%? There has been a 20% drop in youth unemployment in my constituency in the past year.

Mr Hoban: I will join my hon. Friend in congratulating his local Jobcentre Plus on the work it has done. Jobcentre Plus does an excellent job in helping people into work, but of course helped by the private sector, which has created 1.3 million new jobs since May 2010.

Stephen Timms (East Ham) (Lab): A key step for jobcentres will be the introduction of universal credit. A press release from the Secretary of State in May last year claimed that

“all new applications for existing benefits and credits will be entirely phased out by April 2014.”

Will the Minister acknowledge that jobcentres will still be handling new applications for existing benefits long after next April?

Mr Hoban: The right hon. Gentleman never ceases to amaze me with the number of questions he asks about universal credit. He knows exactly what the time scale is. We have said when the national roll-out will be completed and I thought he would have been delighted today that we have extended the roll-out to Wigan.

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Child Poverty

12. Mr Barry Sheerman (Huddersfield) (Lab/Co-op): What his plans are for reducing absolute child poverty. [162100]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): The hon. Gentleman asks a really important question about absolute poverty. The threshold has been rebased this year under a new baseline. That changes the way it is reported. Those changes result from a reclassification and do not represent a real change in children’s circumstances. However, low-income and material deprivation is static or marginally improved.

The hon. Gentleman asks about what we are doing. There are a number of programmes through bringing in universal credit to help the poorest to some of the Work programme and the troubled families programme—I will go through more detail with him if he wants—as well as the pupil premium, and early intervention and education. There is a raft of work to try to change the lives of those likely to be on low incomes.

Mr Sheerman: I know the Secretary of State to be thoughtful man, and quite a caring man as well, but is he not concerned that Maggie Atkinson, the Children’s Commissioner, only as recently as last week said that the recent reforms of welfare benefit had put another 600,000 children into real poverty?

Mr Duncan Smith: I like to think that on both sides of the House the objective is to reduce child poverty. That is our stated objective; I think it was the stated objective of the Labour Government.

Mrs Anne McGuire (Stirling) (Lab): It has gone up.

Mr Duncan Smith: I hear from a Labour Front Bencher, “It has gone up.” Actually, relative poverty has fallen by 300,000 since the start of this Parliament. Before Labour Front Benchers intervene again, I should say that while the hon. Gentleman’s question is thoughtful, their interjection is not. The reality is that throughout the past 10 years they talked about relative poverty as the measure, not absolute poverty, so they ought to be slightly careful. It has fallen under this Government.

The real point is that we are in a difficult time; there is no question about it. Just the other day, we saw that the Office for National Statistics has revised its figure on the scale of the collapse in 2009 down to 7%, which is a dramatic fall. We will drive all those programmes that I mentioned to the hon. Gentleman, and the change—we hope—to the measurement is about getting real help to real people.

Nigel Adams (Selby and Ainsty) (Con): Is it not the case that in the past, enormous sums were spent on moving people just over the relative poverty threshold without addressing any of the causes of poverty? Will my right hon. Friend reassure the House that he will change that?

Mr Duncan Smith: Yes. The important point to make is that from 2004 to 2010, the last Government spent £171 billion on tax credits alone, but relative poverty

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rose in that period, and absolute poverty was absolutely static, falling only at the end, when inflation crashed below zero because the economy crashed with it.

Ian Austin (Dudley North) (Lab): This multi-millionaire Secretary of State, with his stately home lifestyle, has never gone hungry in his life, but for some children in poverty, the free school dinner is the only square meal in the day. Ministers still refuse to set out their plans for the future of the free school dinner under universal credit, and there are rumours of a new cut-off for families earning more than £135 a week. Will he end the uncertainty for 168,000 families and tell us when he will set out his plans?

Mr Duncan Smith: We have always said that we stand by the existence of free school meals, and I stand by that now. As we bring in universal credit, we will make it very clear how this will work—and work well. I do not need any lectures from the hon. Gentleman. He may accuse us, but it was not us who crashed the economy and forced lots—thousands—of people into poverty. That was a direct result of his Government’s incompetence. This Government are doing more to get people back to work, more to get them out of poverty, and more to help them through family breakdown than his Government ever did, so I do not need lectures from an empty barrel like him.

Women in Work

13. Pauline Latham (Mid Derbyshire) (Con): What recent estimate he has made of the number of women in work. [162102]

The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey): Women’s participation in the labour force has never been higher. There are 13.8 million women in work—the highest number on record, and 250,000 more than before the recession.

Pauline Latham: I thank the Minister for that answer. Does she agree that although much progress has been made on the issue, it is important that the Government continue to focus on and monitor the number of women in work?

Esther McVey: I absolutely agree with my hon. Friend, and we will do just that. I hope she agrees that the step that the Chancellor took—adding another £200 million to child care support—will be essential in helping mums and dads back into the workplace.

Mr Frank Roy (Motherwell and Wishaw) (Lab): Many women in my constituency lost their job when the Government supported the closure of the Remploy factory. Nearly a year later, they have not found any employment. Why?

Esther McVey: I will tell the hon. Gentleman what has been happening: out of the 1,100 people who came forward from the Remploy factory and wanted support, to date, 400 have work and 328 are in training. When it comes to getting people into work, that is a higher rate than for any regular redundancy. We have provided £8 million in tailored support and have tracked those people—something that the previous Labour Government never did when they closed down 29 factories in 2008.

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Social Security Tribunal Decisions

15. Mr Marcus Jones (Nuneaton) (Con): What progress his Department has made on improving feedback from social security tribunal decisions. [162104]

The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey): From 10 June, judges in four social security and child support tribunals are providing the Department for Work and Pensions with more in-depth information on why they overturn employment and support allowance decisions. That builds on the drop-down list of primary reasons for overturning decisions that was introduced last July.

Mr Jones: I congratulate the Minister on the work that she has done with Her Majesty’s Courts and Tribunals Service to secure this new approach. Does she agree that the information from the tribunals will allow the Department greatly to improve its decision-making process?

Esther McVey: My hon. Friend is correct, and that information is key, because decisions are overturned for many reasons. Most of the time, it is because new information comes into play at the appeal. We need to find out why decisions are overturned, not just for the claimant but for the DWP and everybody involved.

Chris Bryant (Rhondda) (Lab): Is not the truth of the matter that in the vast majority of cases where a decision was overturned, it was because the wrong decision was made in the first place? Would it not make far more sense to make the right decision in the first place, so we did not have to waste time, money and energy on pursuing the matter all over again?

Esther McVey: I do not believe that the hon. Gentleman was listening to what I said. Actually, the majority of overturns are the result of new information being supplied on appeal. To ensure that we get this right first time, there will be mandatory reconsiderations, just like under universal credit and the personal independence payment. That will also be the case for employment and support allowance from the end of October. That will provide a proper administrative route, rather than a judicial one involving extra costs, extra pain and extra stress. We are getting this right, which is something the previous Government never did.

Work Programme

16. Mary Macleod (Brentford and Isleworth) (Con): What assessment he has made of the performance of the Work programme in helping young people into work. [162105]

The Minister of State, Department for Work and Pensions (Mr Mark Hoban): In my hon. Friend’s area, 1,700 young people have had more than six months’ work as a consequence of the Work programme, and two of the three Work programme providers in her area have significantly exceeded their targets.

Mary Macleod: One of the best ways to create and nurture aspiration in our young people is to have better careers advice and guidance in schools and further

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education colleges. What discussions is my hon. Friend having with other Ministers on this, and is there more that we can do to encourage young people to set up their own businesses?

Mr Hoban: My hon. Friend raises an important point. I have regular discussions with ministerial colleagues, particularly the Under-Secretary of State for Skills, on careers guidance and advice. A further education college in my constituency is setting a good example by having an employment adviser in the college who talks to young people about the opportunities that can flow from the courses they are taking. That kind of innovation is really important if we are to ensure that young people make the best of their qualifications.

Kerry McCarthy (Bristol East) (Lab): I hope that Ministers will be aware of the excellent research being carried out by the Single Parent Action Network, which supports young single parents as well as older parents who are trying to get into work. Its recent report on the Work programme found that many barriers still exist to prevent them from getting work, including the lack of affordable child care. May I urge Ministers to look at that report and to acknowledge that getting into work is not so easy for people with child care responsibilities?

Mr Hoban: The hon. Lady raises an important point. We need to work with those organisations that support lone parents to see what more the Work programme can do to help them into employment. The Chancellor announced last week that we will be providing more support to lone parents in the two or three years before their child goes to primary school.

Mr Peter Bone (Wellingborough) (Con): Does the Minister agree that what we really need for young people is jobs in the economy? Will he welcome what is happening at Rushden Lakes, a major new retail and leisure park that is currently going through its planning process? It will create thousands of jobs, many of them for young people, thanks to the leadership of the Conservative-dominated Government.

Mr Hoban: My hon. Friend is absolutely right. Labour did not believe that the private sector would create the necessary jobs to offset public sector job losses, but over the past three years, for every job lost in the public sector, three were created in the private sector. Labour criticises that, but we should congratulate the sector.

Topical Questions

T2. [162114] Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (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 announcement in the spending review that we will reinvest more than £350 million a year in extra support to help people move into work. Through up-front work search, more intensive work preparation, weekly signing on and mandatory English language courses, we are ensuring that those who need the most help get it, giving them the best possible chance of finding work.

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Mr McCann: Judging by the evidence of my constituency surgeries, the testimony of other Members and the number of successful appeals, it appears that Atos cannot tell the difference between someone who is sick and someone who is not. Given that that is the company’s job, when is the Secretary of State going to sack Atos?

The Minister of State, Department for Work and Pensions (Mr Mark Hoban): As I have said in earlier responses, we are continuing to build on the system that we inherited from the previous Government. We have also had the fourth independent review of the work capability assessment and our own independent review, and we are seeing that the proportion of people going into the support group has increased in recent years.

T3. [162115] Andrew Jones (Harrogate and Knaresborough) (Con): What assessment has my hon. Friend made of the number of people who have come off the main unemployment benefits since May 2010?

Mr Hoban: If my hon. Friend looks at the three main benefits—jobseeker’s allowance, employment and support allowance and lone parent income support—he will see that, since the general election, there has been a reduction of 300,000 in the number claiming those benefits. That is a consequence of the measures that we have taken to get people into work, and of welfare reform.

Mr Liam Byrne (Birmingham, Hodge Hill) (Lab): Will the Secretary of State tell the House whether he thinks the bedroom tax is proving a runaway success?

Mr Duncan Smith: It is proving a success, because what it is doing—[Laughter.] No. What it is doing is finally shining a light on the previous Government’s failure to sort out the mess in social housing, with the housing benefit bill doubling in 10 years and set to rise by another £5 billion. I never hear from the right hon. Gentleman, or anyone else on the Labour Benches, about their failure, because they left so many people—a quarter of a million—in overcrowded accommodation and a waiting list that had grown to 1.5 million. When he gets up, perhaps he would like to tell us: is he going to reverse this policy or not?

Mr Byrne: If the Secretary of State thinks that the bedroom tax has been a success, he is living on a different planet. Back in 2011 the pensions Minister told the House that the bedroom tax would solve overcrowding, but this morning we heard on the BBC that there are houses lying empty from Teesside to Merseyside. They are not overcrowded; they are empty. Councils up and down the country are saying that arrears are up by 300%, and military families are saying that they have been lied to and cheated. When is the Secretary of State going to realise that this policy costs more than it saves and that this Government should be taxing mansions, not bedrooms?

Mr Duncan Smith: Let me tell the right hon. Gentleman something about empty homes. The previous Government left a huge amount of empty homes when they left office. There are now around 710,000 empty homes, which is 73,000 below the peak in 2008, which was under them. There are now 259,000 long-term empty homes, which is down 20,000 since they left office. The

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reality is this: the Labour party left a shambles, and never once did the people living in overcrowded accommodation hear anything from the Labour party about them. They are having to suffer while we subsidise to nearly £1 billion people living in houses with spare rooms. Perhaps he can say whether he, if he ever got into office again, would reverse that. Why does he not stop moaning about it?

T4. [162116] Jesse Norman (Hereford and South Herefordshire) (Con): I would like to thank the Under- Secretary of State for Work and Pensions, my hon. Friend the Member for Wirral West (Esther McVey), for her productive meeting last week with representatives from the Royal National College for the Blind in Hereford. Does she share my view that the best way to achieve efficiencies in the residential training programme is to encourage disability employment advisers to make more referrals to that very successful scheme?

The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey): I believe that would be a good way forward. After the meeting, we asked them to put forward all their ideas on how they could really reach out to more disabled people and help more into work.

T5. [162117] Keith Vaz (Leicester East) (Lab): Last year the parents of 47,009 children living abroad received child benefit totalling £55 million. What steps is the Secretary of State taking to fulfil the promise he made on 30 May to fight every step of the way to resolve that issue?

Mr Duncan Smith: As the right hon. Gentleman knows, that is an existing problem. The European Union insists that family benefits are paid at the highest level, depending on which country the recipient is in. Someone coming to the UK to work from, say, Poland would still get their family benefit paid to them, but if it is lower than family benefits over here, the top-up amount will go back to their families. I believe that is iniquitous, and I am not alone. I have had a series of discussions with others from Holland, Denmark and Germany, and there is a genuine consensus—it is growing dramatically—that it is wrong and that we need to change it, so we are engaging with the Commission on a plan to change it.

T6. [162118] Caroline Dinenage (Gosport) (Con): A high percentage of employment and support allowance claims have been won on appeal because the claimant produced evidence that had not previously been made available. What can the Department do to encourage all relevant documents to be provided from the outset to save unnecessary costs and emotional stress?

Mr Hoban: My hon. Friend makes an important point. We ask claimants when we send out ESA50 forms to contact GPs and consultants so that we get the right medical information to help our decision makers reach the right outcome. I encourage GPs and others to take more time to send in the returns quickly so that we have the best information possible to make those decisions.

T7. [162119] Dan Jarvis (Barnsley Central) (Lab): The pensions Minister knows that I have been in regular contact with the Pensions Regulator regarding the

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Carrington Wire pension fund. He also knows that I am grateful for his support in addressing concerns about the ability of some foreign-based multinational companies to renege on their pensions responsibilities to UK pension holders. What progress are the Government making on addressing that important issue?

The Minister of State, Department for Work and Pensions (Steve Webb): I am grateful to the hon. Gentleman and pay tribute to his assiduous work on behalf of his constituents in that case. I hope that this afternoon he was able to have a telephone conversation with the Pensions Regulator to discuss it. In general terms, the Pensions Regulator has powers to act overseas, as in the 2007 Sea Containers case and the 2011 Great Lakes case. I am happy to continue working with the hon. Gentleman on the issue.

T8. [162120] Stephen Phillips (Sleaford and North Hykeham) (Con): What steps is the Department taking to support those who have worked for one company for most of their lives and whose pensions have now gone into the pension protection fund?

Steve Webb: I am pleased to announce that we recognised that the cap in the pension protection fund on those who are early-retired was affecting people particularly adversely if they had long service. We will be tabling amendments to the Pensions Bill so that those who have long service of more than 20 years with a firm will get an enhanced level of protection.

T9. [162121] Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): The number of people accessing emergency food aid from Liverpool’s central food bank in my constituency has jumped by 70% over the past year. The chief cause of this is delays in them receiving their social security support. What assessment has the Secretary of State made of how many more people will be forced to turn to food banks and payday lenders by his Government’s proposal to extend the wait for jobseeker’s allowance?

Mr Duncan Smith: The story that the cause is an increase in waits is not true; in fact, waits have fallen and have improved by 4% since 2009-10. The Trussell Trust’s director of UK food banks has set out the real reason behind most of this:

“The growth in volunteers and awareness about the fact you can get this help if you need it helps explain the growth this year.”

T10. [162122] Mark Garnier (Wyre Forest) (Con): Can the Minister share with the House what steps she has taken to deliver a cross-government disability strategy?

Esther McVey: My hon. Friend asks a timely question, because tomorrow we will publish a detailed, cross-departmental action plan on how to help disabled people in many different respects. That plan has been developed with disabled people, and it ranges from employment to education to transport to social participation.

Ms Karen Buck (Westminster North) (Lab): In 2011 Lord Freud told peers that in theory his housing benefit policy would cause rents to fall, that it is a matter of market forces, and that it was irresponsible to suggest

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that thousands of people would be made homeless as a result. In fact, rents have soared, most new claims for housing benefit are from working families, and in London there has been a 91% increase in homelessness applications from people losing their private sector tenancies. How is that theory going?

Steve Webb: The hon. Lady refers to soaring rents, but I hope she accepts the evidence from the Office for National Statistics, which last week published figures for rents in London in the private rented sector that showed an increase of 2.2% below the rate of inflation.

Duncan Hames (Chippenham) (LD): A constituent of mine on jobseeker’s allowance who is actively seeking work was recently made to give up some of the volunteering he was doing. What good is an arbitrary 16-hour-a-week limit on volunteering by JSA recipients when what really matters is that they do whatever is best to increase their chances of getting a job?

Mr Hoban: There is no 16-hour-a-week limit on voluntary work, so let me slay that myth first. The important thing is that the jobseeker is actively seeking work, and advisers have some flexibility on that, but volunteering should not get in the way of trying to find a job.

Mr William Bain (Glasgow North East) (Lab): The bedroom tax is causing councils enormous financial strain, as it is for hundreds of thousands of vulnerable people across the country. On 11 June the pensions Minister told me that the Government are not making monthly checks on how much discretionary housing payment money councils are spending. What will happen to hundreds of thousands of vulnerable people when the money runs out?

Steve Webb: I am glad that the hon. Gentleman mentions the support we give to local authorities through discretionary housing payments. We constantly hear that it is not enough, so he may be startled to learn that in the year just ended, 2012-13, over 300 local authorities in England, Scotland and Wales sent us back money totalling over £11 million because they could not spend it.

Graham Evans (Weaver Vale) (Con): In the interests of time, Mr Speaker, I should say that I was about to ask that question.

Mr Speaker: Well, that is a first, not just from the hon. Gentleman but more generally.

Jim McGovern (Dundee West) (Lab): The most recent figures suggest that of the people who are on the back-to-work programme in my city of Dundee, 9% have managed to get back to work. I admit that that is an improvement on the farcical 1.4% that we had last year—the lowest in the UK, I believe—but it is not necessary to be an expert in arithmetic to work out that that means that 90% of people on the programme have still not found work. Will the Government admit that with the recent bedroom tax, which has been mentioned, and welfare benefit cuts, they are not just starving families in work but starving them full stop—

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Mr Speaker: Order. We have got it.

Mr Hoban: There was a nugget buried in that question: the hon. Gentleman accepts, unlike those on his party’s Front Bench, that the Work programme is improving and getting more people into work. I am delighted by his support for it.

Mike Crockart (Edinburgh West) (LD): What assistance can my right hon. Friend offer my constituent who, anxious not to be a burden on anyone, took a zero-hours contract? Although he generally works for significantly fewer than 16 hours, on the odd occasion that he does work for more than 16 hours his department suggests that he makes a new claim when cancelling the old one. How can that be right?

Mr Duncan Smith: I recognise that this is an issue. Some 200,000 people are employed on zero-hours contracts, which is just less than 1% of all workers. The current benefit system deals with claimants on zero-hours contracts, but universal credit will mean that they will not have to re-sign on. Personally, I think there should be far fewer zero-hours contracts. We are trying to work with employers and the Department for Business, Innovation and Skills to persuade those who have a genuine long-term job to get off zero-hours contracts and get a proper contract of work.

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): The pensions Minister’s answer a couple of minutes ago on discretionary housing payments was quite frankly absurd, because he knows full well that the bedroom tax was not in operation in the last financial year.

To return to the question of impact, local authorities throughout the country, including my own, now find that arrears are going up because people cannot afford the bedroom tax that is being imposed on them. What does the Minister expect local authorities to do about this, because it is affecting their overall budgets as well?

Steve Webb: Just to be clear, when we made reductions in housing benefit for 2012-13 we were told that the support was not enough, but the hon. Gentleman’s local authority, Edinburgh, returned to us £162,000 of help that it could not spend. We have increased the support to Edinburgh council this year compared with last year.

Mr David Ruffley (Bury St Edmunds) (Con): Benefit tourism can be deterred if greater conditionality is introduced into the UK benefit system. Will the Secretary of State tell us whether or not our European partners will allow us to do that?

Mr Duncan Smith: I believe they will. I think that a large number of countries in the European Union are concerned that, while they want people to travel for work—as do we—through free movement, they do not want people to pick and choose which benefit system they want to be a part of when they are out of work. We have had recent conversations with Germans and others, and we are all moving together towards an eventual proposal to get the European Commission to work with us to change this.

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Dr Eilidh Whiteford (Banff and Buchan) (SNP): Distributional analysis of the Government’s spending review shows that 20% of people on the lowest incomes—namely pensioners, the disabled, the unemployed and those in low-paid work who depend most on DWP support—are paying a disproportionate price as a result of the austerity cuts. Are Ministers not ashamed that they are asking the poorest to pay the highest price?

Mr Duncan Smith: It is this Government who have protected pensioners more than any other Government: we introduced the triple lock and their incomes have risen faster and further than for a long time, particularly compared with when that lot in the Labour party were in office. The reality is that we are protecting pensioners far better than any recent Government.

Philip Davies (Shipley) (Con): Paul Stewart was paralysed from the waist down and told that he would never walk again after a snowboarding accident. Through sheer willpower and determination he has defied the odds and next month he will undertake his IronSpine Challenge of a 2.4 mile swim, a 112 mile cycle, a 26.2 mile walk and a cliff-face climb to raise money for spinal research. Does the Minister agree that Paul is a tremendous inspiration to others who suffer such life-changing disabilities?

Esther McVey: I do indeed agree with my hon. Friend. When I first heard about Paul’s story, I had to read it twice because I could not believe what he intended to

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do. He was paralysed from the waist down; now he is paralysed from the knees down and has learned to walk with aids and adaptations. The Prime Minister has supported him and I will be there at the start of this excellent challenge.

Alison Seabeck (Plymouth, Moor View) (Lab): Have Ministers had any discussions with the Housing Minister about the benefits of switching funding from escalating housing benefit expenditure to new, affordable house building?

Steve Webb: The hon. Lady will have heard in the comprehensive spending review announcement that the Government are committed to a £3 billion investment in building affordable housing. This is a priority for this Government and we agree entirely that previous Governments left far too few affordable houses.

Mr Speaker: Last but not least, I call Oliver Colvile.

Oliver Colvile (Plymouth, Sutton and Devonport) (Con): When the benefit cap, which will develop strong work incentives, is rolled out to Plymouth, will my right hon. Friend be able to tell me how many people will be encouraged to get a job, rather than depend on benefits?

Mr Duncan Smith: Yes.

Mr Speaker: We are grateful for that.

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Points of Order

3.34 pm

Dr Julian Lewis (New Forest East) (Con): On a point of order, Mr Speaker. I am sure that there was not an MP in the House who was not hugely relieved when questions of MPs’ pay and expenses were given out to an independent body. Notwithstanding that, is there any way in which you can convey my concern and, I suspect, that of many other people, that two years or more in advance, it is being proposed that there should be a massive uplift in MPs’ pay, when we cannot know what the economic circumstances will be whenever such a pay increase is awarded? Why on earth does this Pandora’s box have to be opened now? Is not the Independent Parliamentary Standards Authority gripped by some sort of delusional folly if it insists on opening it?

Mr Speaker: In October of this year, I will have known the hon. Gentleman for 30 years. I have always hoped that he might overcome his natural shyness and reticence, and he is making some progress on that front. He knows, and I can confirm, that his words will be recorded in Hansard. I have a suspicion that a copy of that Hansard will, by one means or t’other, wing its way to the desk of the chief executive of IPSA.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): On a point of order, Mr Speaker. Have you had any representations from the Prime Minister about why, yet again, he is not making a statement following a European Council meeting? The last time, he said it was because the meeting was so boring. Given his deep disappointment with his counterparts at this meeting, it clearly was not boring, so do we have a better reason this time?

Mr Speaker: I recall the previous instance. The hon. Lady will recall that the following day, I granted a Member an urgent question to put to the Foreign Secretary because I felt that such matters most definitely did warrant an airing in the House. I have a strong hunch that the hon. Lady’s thirst for interrogation on this matter will soon be satisfied, and I feel sure that she will be in her place when it is.

Alison Seabeck (Plymouth, Moor View) (Lab): On a point of order, Mr Speaker. In my haste and my desire to comply with your signals to keep my question short, I omitted to declare an indirect interest as I should have done.

Mr Speaker: That is extremely courteous of the hon. Lady. Her interest has now been asserted.

Finance Bill (Ways and Means)


That provision may be made about interim remedies in court proceedings relating to taxation matters.—(Mr Gauke.)

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Finance Bill (Programme) (No. 2)


That the following provisions shall apply to the Finance Bill for the purposes of supplementing the Order of 15 April 2013 in the last Session of Parliament (Finance (No. 2) Bill (Programme)):

1. Proceedings on consideration shall be taken on the days shown in the following Table and in the order so shown.

2. Each part of the proceedings shall (so far as not previously concluded) be brought to a conclusion at the time specified in the second column of the Table.

First day


Time for conclusion of proceedings

New Clauses and new Schedules relating to income tax rates

Two and a half hours after commencement of proceedings on the motion for this order

New Clauses and new Schedules relating to a mansion tax

Five hours after the commencement of proceedings on the motion for this order

New Clauses and new Schedules standing in the name of a Minister of the Crown other than New Clause 7; new Clauses and new Schedules relating to the general anti-abuse rule

12 midnight

Second day


Time for conclusion of proceedings

Remaining new Clauses standing in the name of a Minister of the Crown; amendments standing in the name of a Minister of the Crown other than amendments to Schedule 18; new Clauses and new Schedules relating to the impact, on revenue from rates and measures in the Finance Bill, resulting from the Spending Review

Two and a half hours after the commencement of proceedings on consideration on the second day

Amendments to Clause 38 and Schedule 18; remaining new Clauses, and remaining new Schedules, relating to tax measures concerning housing

Four and a half hours after the commencement of proceedings on consideration on the second day

New Clauses and new Schedules relating to the tax treatment of financial services; remaining proceedings on consideration

Six hours after the commencement of proceedings on consideration on the second day.

3. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion one hour after the conclusion of proceedings on consideration.—(Karen Bradley.)

1 July 2013 : Column 611

Finance Bill

Consideration of Bill, not amended in the Committee and as amended in the Public Bill Committee.

New Clause 8

Report on the additional rate of income tax

‘(1) The Chancellor of the Exchequer shall, within three months of the passing of this Act, publish a report on the additional rate of income tax.

(2) This report shall review the impact upon Exchequer receipts of setting the additional rate to 50 per cent. in the tax year 2014-15.

(3) The report shall review what impact reducing the additional rate for 2013-14 will have on the amount of income tax currently paid by those with taxable incomes of—

(a) over £150,000 per year; and

(b) over £1,000,000 per year.

(4) The report shall review what impact reducing the additional rate for 2013-14 will have on the level of bonuses awarded in the financial sector in April 2013.’.—(Cathy Jamieson.)

Brought up, and read the First time.

3.39 pm

Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op): I beg to move, That the clause be read a Second time.

The Government have previously declared that we are “all in this together”, and I want to develop that theme. I am sure the Exchequer Secretary will be listening intently. They have insisted that those with the broadest shoulders should bear the greatest burden, but in Work and Pensions questions earlier, we heard that some Opposition Members are somewhat sceptical about that claim. Although the Government have also consistently told us that their priority is to cut the deficit by what they describe as “fair and reasonable means”, in politics it is actions, not mere words, that show priorities. The same Government, in tough times and against the backdrop of falling living standards—borrowing up last year, growth continuing to flatline and drastic cuts being made to benefits for hard-working families—have decided to give millionaires a tax cut. [Interruption.] I hear the hon. Member for Beverley and Holderness (Mr Stuart) call out that that is nonsense. I am more than willing to take an intervention from him should he wish to justify the tax cut for millionaires.

Mr Graham Stuart (Beverley and Holderness) (Con): I am delighted to intervene on the hon. Lady. She will be aware that the art of taxation is to extract the maximum amount of money with the minimum amount of hissing. Is she aware of the principle that a lower tax rate can often lead to a higher tax take, and does she think it might apply in this case, thus meaning that millionaires pay more, not less?

Cathy Jamieson: It will be no surprise to the hon. Gentleman that I do not agree with his point.

Mr Stuart: Is the hon. Lady aware of that principle?

Cathy Jamieson: I am aware of that point of principle and I will come to it in due course, because it is an issue to consider.

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Stewart Hosie (Dundee East) (SNP): Before the hon. Lady comes to that principle, she will be aware that the 2012 Red Book confirmed that, according to the Government’s own figures, the change would cost £450 million. At the most basic level, whether we agree with that number or think it is too low, if there is £450 million going spare, it would be better to do something socially productive with it than to give it back to people who are already wealthy.

Cathy Jamieson: I thank the hon. Gentleman. He and I do not always agree on every matter that is discussed in the Chamber, but on this occasion I accept what he says.

We have heard disagreement on the Government Benches with the point that I was making, but the reality is that as of this April, 13,000 people earning more than £1 million a year are receiving a tax cut equivalent to £100,000. Another 254,000 people earning more than £150,000 a year are also seeing their income tax bills go down. At the same time, if we take into account the changes that the Tory-led Government have made to tax, tax credits and benefits, households in the UK will be an average of £891 a year worse off. That is the reality that people face. As I have said in a number of previous debates, that may not seem a lot of money to the millionaires who are getting a tax cut from the Government, or to those on the highest wages, but it is a lot of money for my constituents and, I am sure, for the constituents of other hon. Members. I see some heads nodding on the Government Benches. It is a huge amount for constituents throughout the country, who are being ruthlessly squeezed to pay for the Chancellor’s economic failure.

Andrew Gwynne (Denton and Reddish) (Lab): It is indeed a lot of money for many of my constituents and my hon. Friend’s. Is she aware of the figures published by the Institute for Fiscal Studies showing that for a two-earner couple with children, the loss caused by the changes rises to £1,869.09?

Cathy Jamieson: Yes indeed. My hon. Friend makes an important point on which I will comment further in due course.

3.45 pm

Mr Marcus Jones (Nuneaton) (Con) rose

Cathy Jamieson: Let me answer my hon. Friend’s point because it is important to understand the impact that this Government’s policies are having on families across the country. He makes the important point that a couple with children in such circumstances will face difficulties, and in some instances must make choices about how they will pay for things that we or our children perhaps take for granted. Government Members have simply failed to recognise or respond to, or in many instances acknowledge, that point.

Mr Jones: rose

Cathy Jamieson: I hope that the hon. Gentleman will acknowledge that point.

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Mr Jones: Will the hon. Lady say whether Labour would reinstate the 50p tax rate if it were in government, and if that is the case, when would that be? Can she say how much money that move would raise for the Exchequer?

Cathy Jamieson: The hon. Gentleman has probably heard many Opposition Members stand at the Dispatch Box and make our position absolutely clear: if we were in government just now, that is not what we would be doing. There is a whole range of other things—

Mr Jones rose

Cathy Jamieson: I want to finish this point. If the hon. Gentleman can contain his excitement, I am sure he will have the opportunity to develop his arguments at some stage. It is important to recognise that the Government are doing many things that Labour simply would not do. We suggested a whole range of things that the Government could do to get growth back into the economy, and I will mention some of those today. It is important, however—[Interruption.] I hear the Minister from a sedentary position say, “Borrowing more”. Is that an admission that his Government are borrowing more than they set out to do, that they have not got the deficit down as planned, and that they have not brought growth back into the economy as they promised? I would be more than happy if the Minister wished to put something on the record at this point. [Interruption.] He does not, so I will give way to the hon. Member for Nuneaton (Mr Jones).

Mr Jones: The hon. Lady said that if Labour was in power now it would reverse the decision and reinstate the 50p tax rate, but there will not be a general election for the next two years. If the Labour party is in government in two years’ time, would it then reverse that decision and reinstate the 50p tax rate—yes or no?

Cathy Jamieson: I find it astonishing that Government Members never seem to take any responsibility for what is going on under their watch. Under their watch, the deficit has not come down as much as they promised, borrowing is higher than planned, and the Government have failed to get growth back into the economy.

Richard Fuller (Bedford) (Con): The hon. Lady made some important and passionate points about the impact of being worse off every year by £800, which is a big amount of money for many of my constituents. Given that we have just broadly agreed public expenditure figures for the next Parliament, does she feel that if this is a point of principle it is beholden on her to answer the question posed by my hon. Friend the Member for Nuneaton (Mr Jones) about whether a Labour Government would stick to their principles in the next election?

Cathy Jamieson: I can say to the hon. Gentleman that yes, we would stick to principles of fairness and equality, and we would not seek to advantage those who already have the highest incomes at the expense of those on lower incomes. Once again, I repeat what a number of Labour Members have said: at this point we do not know in what shape the economy will be two years from now, and as a responsible Opposition we intend to look in detail at where spend would be best put in the years ahead.

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Jacob Rees-Mogg (North East Somerset) (Con) rose

Cathy Jamieson: I want to make progress but I will, of course, give way to the hon. Gentleman.

Jacob Rees-Mogg: I am extremely grateful to the hon. Lady; she always covers these issues with great interest. Why is the shadow Chancellor able to commit to following our spending plans, yet will not give any indication of tax rates? Surely that is the second side of the coin.

Cathy Jamieson: I always listen with interest to what the hon. Gentleman has to say, and I know from his contributions in the House and in Public Bill Committees that from time to time he scrutinises the Government fairly thoroughly. There is a difference between saying that the overall spending limit put on by the Government will be our starting point, and accepting their approach in full, which is not what the shadow Chancellor has said, of course. He has made it clear that we would look at that overall spend and see how we could allot resources more fairly.

Despite the fact that the Government tried to make much of fairness in the spending review, let us look at the millionaires who will benefit from the tax cut. First, 643 bankers earn more than £1 million and the combined tax cut will be worth £34.6 million to them—[Interruption.] There is a lot of grumbling and other muttering from a sedentary position by Government Members. If they wish to speak, they will be able to do so later.

My constituents want to know how the Government can justify that tax cut for millionaires at a time when those on middle and low incomes are being squeezed so hard. I can understand why the public are angry and why they do not feel that the Government are acting fairly. They see many people on massive salaries that ordinary people can only dream of and working in the very same banks that were bailed out by the taxpayer now receiving a handout from the coalition. People do find that difficult to understand. That is why our amendment would require the Chancellor to consider the effect that the tax cut will have on the level of bonuses in the financial sector. That is what the taxpayer—ordinary people trying to make ends meet when their living standards are being reduced—wants to know.

Richard Fuller: The hon. Lady makes a good point about the impact on bonuses. Does she welcome the recommendation from the Parliamentary Commission on Banking Standards, which the Prime Minister has accepted, which will change from very short-term bonuses to long-term ones? Would not that mitigate some of the very real concerns that she has mentioned?

Cathy Jamieson: I am glad that the hon. Gentleman recognises the points that I have made. He will, of course, be aware of some of the discussion that took place in Committee on the Finance Bill and the Financial Services (Banking Reform) Bill. It is unfortunate that the Government chose not to accept our amendments to those Bills, and so far we have not seen legislation to enact the change that he mentions. I look forward with interest to further debates on that subject at a later date.

Mr Graham Stuart: The hon. Lady is making a powerful speech, but she has mentioned what makes the public angry. I think what makes the public angry is when they see members of a party opposing in principle,

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and expressing great moral outrage about, the bedroom tax—the spare room subsidy—or the 50p tax rate and then refusing to answer a straightforward question about whether they would reverse one or both of them. It is not good enough, and it is no wonder that the public think politicians are slippery and cannot be trusted.

Cathy Jamieson: The hon. Gentleman started by trying to pay me some sort of compliment, saying that I was making a powerful speech, but I simply do not accept his assertion that what outrages the public is politicians standing up to make passionate speeches on their behalf. The points that I am making are the very ones that have been made by my constituents, by the constituents of my hon. Friends and—I am sure—by many of the hon. Gentleman’s own constituents.

It is not good enough for Government Members simply to sit there and say, “What is the Labour party going to do two years from now?” when they are taking no responsibility whatever for what they are doing at the moment. It is a responsible position for us as the Opposition to say, “We understand that there will be an overall spending limit; that will be our starting point, but that does not mean that we have committed to it as an end point, and it does not mean that we are committed to doing exactly what the Government would do.” I am sure that as we move forward, a number of initiatives will be developed and outlined in greater detail.

Sheila Gilmore (Edinburgh East) (Lab): Does my hon. Friend agree that what is going to annoy many of our constituents is that they were told three years ago that all the measures put in place then were for a purpose, that the deficit would be brought down by the end of this Parliament and that we were all in it together, when that has simply not happened?

Cathy Jamieson: Once again, my hon. Friend is absolutely correct. When we heard the spending review announcements last week, many members of the public recognised that this was a spending review brought forward not because it was part of some grand plan by the Government or something that they were always going to do, but because of the Government’s own failures on the economy—their failure to get the deficit down as promised; their failure to deal with borrowing; and, indeed, their failure to get growth back into the economy.

Debbie Abrahams (Oldham East and Saddleworth) (Lab): I congratulate my hon. Friend on her excellent speech. Further to confirm her point so that everybody gets it, did not the Chancellor promise not to introduce another spending review before the next election, and is not the failure of his economic policies the reason why we needed to have that spending review?

Cathy Jamieson: My hon. Friend is absolutely correct. Many members of the public will not look at the Chancellor’s spending review as a success—it is not—and they will recognise that this Government have, as we said at the outset, cut too far and too fast, so that we have had all the pain and none of the gain that the Government promised. [Interruption.] Conservative Members can sit and sigh, make all sorts of side interventions, look at the ceiling, look to their feet or

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whatever else, but the harsh reality is that the constituents we all meet on a day-to-day basis know that their living standards are dropping. They know that the money in their purse does not go as far at the end of the week, because prices are rising at a time when wages have stagnated at best, and are dropping at worst.

To return to the new clause, the bankers earning £1 million or more a year will benefit from the combined tax cut at a cost of at least £34.6 million. As I said earlier, we can understand why the public are angry and why they do not feel that this Government are acting fairly. Given some of today’s comments, I suspect that many of the people watching this debate will gain the impression that the Government are not listening to them, that they have no understanding of the issues they face and that, sadly, in many instances, if not all, they do not actually care.

Our new clause is a relatively mild-mannered amendment—one of the sort that we proposed regularly in the Finance Bill Committee, asking the Government to look at the impact of the policies that they are introducing. In this particular instance, the new clause asks the Chancellor to consider the effect that his tax cut will have on the level of bonuses in the financial sector. There 30 million taxpayers in the UK—30 million people who go out to work every day and have to pay their way—yet they realise that the Chancellor has decided to cut taxes for the richest among them. There is no getting away from that. That tells you everything you need to know, Mr Speaker, about this Tory-led coalition. Never mind the rhetoric of “We’re all in it together”, and never mind the risible attempts to paint themselves as the party of fairness as they tried to do in the spending review, because when it comes down to it, the Tories and the Liberal Democrats are effectively topping up bank bonuses with a further tax cut. That is the reality of what is happening.

Labour Members believe that there is a better way. We have consistently said that we would use a tax on those massive bonuses to fund a jobs guarantee for every young person who has been out of work for a year or more. We would do that because the trends in long-term employment remain extremely worrying.

4 pm

Kwasi Kwarteng (Spelthorne) (Con): How much money does the hon. Lady expect to raise through a tax on bank bonuses, and how does she think it could be spent on the projects on which she wants to spend it?

Cathy Jamieson: We have consistently said that we would seek to use the tax specifically to provide a jobs guarantee for every young person who has been out of work for a year or more. I am sure that the hon. Gentleman, and indeed most Members in all parts of the House, will have met—or received e-mails, letters or telephone calls from—young people who are absolutely desperate to be given that first start, to walk through the doorway, to show what they can do, to use their skills and to learn more. Sadly, as we have heard, the guarantees provided under the Work programme have not met expectations, so it is important for us to think about what we could do. In March this year—

Kwasi Kwarteng: Will the hon. Lady give way?

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Cathy Jamieson: I want to finish what I am saying. In March this year, 167,000 adults had been out of work for more than two years. The figure has increased by 97% since 2012, and by 216% since 2011. We believe that the way to get people back into work is to tax the very richest. I am sure that Members in all parts of the House would agree—

Kwasi Kwarteng: Will the hon. Lady give way?

Cathy Jamieson: I want to finish what I am saying, and I want to make progress. I think that I have been reasonably generous with my time so far.

I am sure that Members in all parts of the House would agree that returning people to work is the best way of reducing the benefits bill and getting the economy moving again. However, the facts speak for themselves, showing that the Government prioritise those at the top and leave everyone else to struggle. Let me return to what my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said earlier.

Kwasi Kwarteng: Will the hon. Lady give way?

Cathy Jamieson: No; I really do want to put this on the record. As my hon. Friend said, a two-earner couple with children are losing an average of £1,869 while a millionaire receives a tax cut. Would the hon. Gentleman care to explain to a two-earner couple with children in his constituency why that is fair?

Kwasi Kwarteng: I am grateful to the hon. Lady for giving way. I did not catch the answer to my earlier question. How much money in a fiscal year does the hon. Lady expect to raise from the bank bonus tax?

Cathy Jamieson: I note that the hon. Gentleman showed no inclination to explain to that two-earner couple with children in his constituency why it is right for a millionaire to receive a tax cut at a time when they are set to lose a significant amount of money.

Barbara Keeley (Worsley and Eccles South) (Lab): I wonder whether my hon. Friend remembers two things. She may remember that, an hour before the beginning of the debate, we witnessed a lamentable performance by Ministers who failed to answer question after question about the Work programme, which is one of the worst and least successful programmes for the unemployed that we have seen for years; and I am sure that she remembers the future jobs fund, which was hugely successful in my constituency and returned hundreds of people to work. I think constantly about the people—nearly 1,000, including 195 young people—who have been unemployed for more than a year, and I fervently wish that we still had the future jobs fund, which was not only a successful programme but returned more than it cost.

Cathy Jamieson: My hon. Friend is right to mention the success of the future jobs fund. I still believe that, as we said at the time, the Government made a huge error in abolishing the future jobs fund. As I know from my own constituency, it gave young people an opportunity to get into the habit of going to work and learning skills, and gave the voluntary sector, the social economy, the third sector, call it what you like, an opportunity—

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Kwasi Kwarteng: Will the hon. Lady give way?

Cathy Jamieson: No. I am going to finish what I am saying, because I want to make clear the extent to which people are losing out. The future jobs fund gave opportunities to many young people and it was short-sighted of the Government to scrap it. It seemed to me that the Government did so simply because it was brought in by the previous Government. However, following questions in the House and elsewhere, we know that the Work programme has not delivered for many young people in our constituencies.

I go back to the fact that individuals and families are losing out in our constituencies. Not only will a two-earner couple with children lose on average £1,869, while a millionaire gets a tax cut, but a single parent who works and has tried to do the right thing in getting into employment and holding down a job, as well as meeting their caring responsibilities, will lose £1,226. At the same time, the millionaire banker about whom we talked earlier will see his tax bill cut. Two earners without children who are a couple will lose £672.

Those are remarkable figures. As I said earlier, they sum up the coalition’s warped sense of priorities. They are looking after those at the top, while making everyone else pay the price for their economic failure.

Jacob Rees-Mogg: Will the hon. Lady give way?

Cathy Jamieson: I will in a moment.

No wonder that people think that there is one rule for the richest and another for the rest. No wonder people are questioning why the Government believe that the way to motivate people on low incomes is to pay them less, and the way to motivate people on high incomes is to pay them more. In these challenging economic times, surely we should focus on supporting those who need it most. New clause 8 asks the Government to look at the issue again. We are asking them to undertake a proper assessment of the impact of the cut, as well as an analysis of how much the Treasury would gain if the additional rate were returned to 50% in 2014-15. That is not an unreasonable request. I hope that, on this occasion, the Government will accept the new clause and report back in due course, although I suspect that that may not be the case.

I outlined earlier why the Opposition think that the Chancellor’s logic is rather odd. He claims to find tax avoidance morally repugnant and to want to crack down on it, but this tax cut simply rewards the wealthiest. He appears to justify it on the ground that the behavioural response to the 50p rate was more avoidance. There seems to be a rather strange logic here. Instead of cracking down on the avoidance, he is rewarding it. Surely those are not the values that we want in the Government: one rule for the richest and another for the rest of us.

It is not what the Government used to say, before their façade of fairness began to slip. The Prime Minister no less said:

“I have been very clear—we have all been very clear—that we have to do this in a way that is fair so that the broadest backs bear the biggest burden.

That is why we haven’t changed… the 50p tax rate.”

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However, the Government are giving those with the broadest backs a tax cut, while people on lower incomes are shouldering the bigger burden. I heard Government Members supporting what the Prime Minister said. It is a pity that they now seem to have gone back on that.

Kwasi Kwarteng: Will the hon. Lady give way?

Cathy Jamieson: If the hon. Gentleman can contain himself for a few more moments, I would like to quote the Chancellor. I am sure he will want to hear what his own Chancellor said. Indeed, he may even have been at his party’s conference when the Chancellor said this:

“We could not even think of abolishing the 50p rate on the rich while at the same time I am asking many of our public sector workers to accept a pay freeze to protect their jobs. I think we can all agree that would be grossly unfair.”

Does the hon. Gentleman agree that would be grossly unfair?

Kwasi Kwarteng: The hon. Lady will know that I have always consistently argued for lower tax rates across the board, so that is my answer to her point. I am also perplexed as to why she will not give an answer to my earlier question about the amount of money she hoped to raise from a bankers bonus tax, given that that is such a key element of her party’s fiscal plans.

Cathy Jamieson: Once again, it is rather strange that the hon. Gentleman does not seek to give any comfort to his own constituents or give any explanation of his own policies. We have put forward the idea of the bankers bonus tax to get young people back into employment, and I also think the general public would like those bonuses to be less than they have been over the past few years.

I want to go back to the point the Chancellor made. He said at his party conference that he would not

“think of abolishing the 50p rate on the rich while at the same time…asking many of our public sector workers to accept a pay freeze”.

I do not often agree with the Chancellor, but I do think he was right then—and that he is absolutely wrong now.

In the interests of balance, however, I should also quote what is perhaps my favourite of these interventions. It was made by the Chief Secretary to the Treasury—the Lib Dem Chief Secretary. He summed things up quite neatly when he said:

“People who think that the priority for this Government should be reducing the tax burden on the very wealthiest are living in cloud cuckoo land.”

So in the words of the Government’s own Chief Secretary to the Treasury, this is a decision from cloud cuckoo land. I think that many members of the public would agree with that.

No doubt Government Members will protest and say that the higher rate was not raising any money—

Kwasi Kwarteng: Will the hon. Lady give way?

Cathy Jamieson: No, I want to move on. I have been very generous in taking interventions, and it is important that I now move on to make the many points I have not yet had the opportunity to put on the record.

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As I have said, no doubt Government Members will protest and say that the higher rate was not raising any money due to tax avoidance, but the Institute for Fiscal Studies has said:

“By giving out £3 billion to well-off people who pay 50p tax…the Government is banking on a very, very uncertain amount of people changing their behaviour and paying more tax as a result of the fact that you’re taxing them—”

Kwasi Kwarteng: Will the hon. Lady give way?

Cathy Jamieson: I want at least to get to the end of that quote—that would be quite nice. I would like other Members to have the opportunity to contribute to the debate; indeed, I am sure the hon. Gentleman is gearing himself up for that as we speak.

Just in case anyone missed that IFS quote, let me make clear what it said:

“By giving out £3 billion to well-off people who pay 50p tax…the Government is banking on a very, very uncertain amount of people changing their behaviour and paying more tax as a result of the fact that you’re taxing them…There is a lot of uncertainty, a lot of risk on this estimate.”

I know that Government Members will from time to time quote the IFS and will, from time to time, doubt its figures. Just in case they do not accept what the IFS has said, let us look at what the Office for Budget Responsibility has said about this issue. It said that any decrease in tax avoidance from the reduced rate would be “highly uncertain”. A written answer from the Exchequer Secretary in the summer of 2012 stated that in 2010-11 70% of people earning over £250,000 were paying more than 40% in tax and 80% of people earning between £500,000 and £10 million were paying the 50p rate. Each and every one of those people is now in line for the tax cut.

4.15 pm

As Government Members know, Her Majesty’s Revenue and Customs estimates of reduced levels of tax avoidance are based on only the first year’s yield, and there is real concern that the cut will incentivise people to bring forward their income. The first years of a new rate are no real basis for estimating the revenue raised by the 50p rate.

Jacob Rees-Mogg rose

Cathy Jamieson: I will give way to the hon. Gentleman, whom I feel sure will explain to me what the Government intend to do about tax avoidance and how they will stop this issue emerging?

Jacob Rees-Mogg: As it happens, I was going to say something different, which will not surprise the House particularly. I was going to say that history tells us that cutting taxes raises more money, and that is probably a better bet to working out what will happen than fishing around for convenient forecasts. In 1979 and 1988 tax rates were cut and revenue went up, and that is a pretty good basis for doing this again.

Cathy Jamieson: I look forward to the hon. Gentleman’s contribution in our future debates about the possibility of a mansion tax and a reduction to a 10p rate. I always listen with interest to what he has to say, but on this

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occasion I have to say to him that the first year of the new rate is not a real basis for estimating the revenue raised, or likely to be raised, by the 50p rate.

The Government should be tackling tax avoidance. We all want to see that, and we will be debating it more when we discuss later clauses.

Richard Fuller rose

Cathy Jamieson: I will give way to the hon. Gentleman, as I know he takes this issue very seriously.

Richard Fuller: I wish to take the hon. Lady back to the impact of the bankers bonus tax on getting young people back to work, because I do not think she had the numbers to hand. May I just indulge you with some statistics, in order to help the Opposition, Mr Speaker? Last year, the bankers’ bonus total was £5.2 billion. There are 61,000 young people who have been out of work for more than a year. Much of that £5.2 billion would have been paid to taxpayers who are not UK-resident—they will work for a UK bank but not be resident here—but let us assume that it is all paid to UK residents. An increase in the rate from 45% to 50%, as the Opposition are proposing, would yield £260 million a year—the equivalent of £4,500 per young person out of work. Is the basis of her argument that £4,500 is enough to employ a young person who has been out of work for more than a year?

Cathy Jamieson: I thank the hon. Gentleman for his information; I gave way to him because I know he takes these issues seriously. As with a range of other issues, we would have to look—if the bankers bonus tax was brought in—at the circumstances at the time and how best to get young people into employment. Other hon. Members will have heard me speak about this issue before, but I can tell the House that we believe young people and those who have been out of work for two years ought to accept that there will be a compulsory jobs guarantee. From speaking to a number of small businesses and some of the larger ones, I know they believe that a range of things could be done to encourage them, as local companies and national companies, to take on young people and get them into employment.

Where the Government have done things that we think are helpful, for example, in relation to national insurance contributions, we have supported them. As has been said, we do not accept that the move away from the future jobs fund was the correct thing to do.

Mark Field (Cities of London and Westminster) (Con): Does the hon. Lady not recognise the fatuousness of her argument that this money could somehow be ring-fenced for the less well-off, which has been exposed by my hon. Friend the Member for Bedford (Richard Fuller)? The same applies to the next set of amendments on the mansion tax and the 10p tax rate—the figures are not well-researched. The proposition might be attractive to the public at large, but the comparison is fatuous and has been ably exposed by my hon. Friend.

Cathy Jamieson: I do not think that my constituents in Kilmarnock and Loudoun who are out of work and desperate to get jobs—including the 400 or so people across East Ayrshire and into neighbouring Lanarkshire

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who lost their jobs as a result of the collapse of Scottish Coal, the people who lost their jobs when Diageo moved out of the town of Kilmarnock and closed the historic bottling plant, which bottled Johnnie Walker whisky, and all the people who are out of work as a result of the squeeze on small local businesses—would believe that it is fatuous to suggest that a tax cut for millionaires is the wrong priority when cuts have also been made to working tax credit and when other things could be done to support people into work.

Barbara Keeley: I want to follow up on the points made by the hon. Member for Bedford (Richard Fuller) about the future jobs fund and to hark back to an impact analysis of the fund done for the Department for Work and Pensions, which found that society gained £7,750 per participant through wages, increased tax receipts and reduced benefit payments. Participants were calculated to have gained £4,000 and employers to have gained £6,850, with the cost to the Exchequer calculated at £3,100 a job. The figures the hon. Gentleman cited would cover the cost. Even better, two years after the start of their time with the fund, those former jobseekers were much less likely to go back to being on benefits. Is that not something we should be re-exploring?

Cathy Jamieson: My hon. Friend has made her point extremely succinctly and has put on the record why we feel that the future jobs fund was not only important but a successful initiative. I say again to Government Members who think that the proposal has no impact on the lives of ordinary people that all those who went through the future jobs fund programmes and who worked on them say that the fund was a valuable way of getting young people back into work. People in my area would certainly have liked it to continue.

Let me come back to the points about the new clause. As I said, the Government should be tackling tax avoidance—we will debate that further later—but that does not mean that we should compensate the wealthiest at the expense of those on middle and low incomes. I would have hoped, in the light of everything the Government proclaimed around the time of the spending review about fairness and ensuring that growth came back into the economy, that even at this stage they might have dropped the plan for a millionaires tax cut. That is a forlorn hope, however.

The decision to create that tax cut goes to the heart of the coalition’s political vision and beliefs—and by that I mean both sides of the coalition. We face a period of national upheaval at a time when resources are stretched. The Government criticise the Opposition when we take responsible decisions to think about the way forward while failing to explain their positions. At a time when resources are stretched, when people up and down the country are working harder and harder than ever before for less in their pockets and when public services are being cut so drastically, it is even more crucial that our Government should be a uniting force rather than a dividing one. In that context, I must ask again why on earth this is the time for a tax cut for the richest.

The Government try to talk a good game, but as I said at the outset, reality does not match their rhetoric. They do not seem to understand the need for a one nation approach to politics and they are not able to encourage

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a sense of national mission, no matter how much they talk about being “all in it together”. This Government will go down in history as the most divisive.

Mr Graham Stuart: I am grateful to the hon. Lady, who is being most generous in giving way. She said earlier that this matter is about action, not words, and has just said that it is about reality, not rhetoric. She is making an impassioned speech, but will she explain why she did not vote against the 50p tax rate and why, in addition, she is not committed to reversing the measure? Why, after the faux outrage over the spare room subsidy, is she not committed to reversing that either? People outside will think that this has a stench of hypocrisy about it.

Cathy Jamieson: The reality for my constituents and those of Labour Members is that they want to know why the Government made the change in the first place. They want to see action taken in the future, but there are two years until the general election—we will lay out how we intend to take things forward in good time for that—and I respectfully suggest to Government Members that we do not know exactly what sort of mess we will be left with. We see no responsibility taken by the Government for the situation that the economy is in at the moment and what has happened on their watch—

Kwasi Kwarteng: You created it.

Cathy Jamieson: I hear yet again that tired mantra from Conservative Members, as if, somehow, Labour created the global financial crisis—

Kwasi Kwarteng: Because it is true.

Cathy Jamieson: I see that we have all sprung to life now.

Sheila Gilmore: We have been asked that question over and over again. Had we been asked it two years ago, and had we based our answers on the projections that we were given by the Government, that answer would be very different from the one we would have to give now. That might well be the case in two years’ time.

Cathy Jamieson: My hon. Friend speaks words of wisdom. I have repeatedly said today, and it has been said by others, that while we have accepted that, come 2015 if we are in government, we will have to take as a starting point the overall spending plans that have been laid out, that does not mean that we would have made the same choices or that we would make the same choices in the future.

Andrew Gwynne: I would not expect my hon. Friend to set out our tax policies two years before a general election, but is it not important to emphasise that there is a question of priorities here? The issue is that the Government have chosen to clobber some of the lowest-paid workers in my constituency and in hers with a council tax increase caused by their changes to council tax benefit?

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Cathy Jamieson: My hon. Friend speaks with great passion on behalf of his constituents and he is correct to identify the fact that we need, in difficult times, to talk the language of priorities. That is why on previous occasions—from the Dispatch Box and elsewhere—I have asked the Government why they believe that it is fair to give the tax cut to the richest and, on top of that, to give those very same people the winter fuel allowance even if they happen to be pensioner millionaires. To me, that does not seem to be fair and reasonable, and I am sure it does not to my hon. Friend either.

Even where a council tax freeze has been put in place, people are seeing local services that they rely on being cut to the bone. They are not able to access educational opportunities, leisure opportunities, support via social services, library services, the arts and culture. It is all very well having a freeze, but in a range of areas people feel that they are not necessarily getting the services in return.

Andrew Gwynne: My hon. Friend is absolutely right, but the situation is even worse than that for 2.4 million low-paid families, who are losing some, if not all, of their council tax benefit. That is an in-work benefit, paid not just to people who are out of work. Those families will, for the first time, be getting a tax increase, because they will have to pay council tax.

4.30 pm

Cathy Jamieson: Once again, my hon. Friend is absolutely right. He is a powerful advocate for his constituents and those on the lowest incomes. He is correct to identify the fact that, despite the rhetoric, the Government have, across the piece, consistently attacked the living standards of those in work and on low incomes. I need only refer again to tax credits, particularly for those working part-time hours. The Government seem to think it fairly straightforward for them simply to get additional hours of work, but we know that in many industries, it is not that easy; it is not possible to get the requisite number of hours. Many people who were, to use the Government’s mantra, doing the right thing—taking up employment, for however few hours and however low the wages, rather than doing nothing or sitting at home on benefits—found their working tax credits cuts. As my hon. Friend correctly says, that was compounded by changes to housing benefit, which mean that many of them are even worse off.

Let us look at the impact. I said that this Government will go down in history as a Government who divided; of the richest who are receiving a tax cut, 85% are estimated to be men, and about 70% of the revenue raised from direct tax and benefit changes will come from women. Some 52% of those benefiting are based in London and the south-east. I do not for a moment mean to suggest that there are not people there on extremely low incomes; of course there are, and many of my hon. Friends will no doubt wish to make that point. However, long-term unemployment, including in the north and Scotland, is on the rise.