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House of Commons
Monday 13 June 2011
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Business before Questions
The Vice-Chamberlain of the Household reported to the House, That Her Majesty, having been attended with its Address of 8 June, was pleased to receive the same very graciously and give the following Answer:
I have received your address concerning the ninetie th birthday of His Royal Highness the Duke of Edinburgh. It gives me great pleasure to hear of the loyal affection and regard of the House, the nation and the Commonwealth on this special occasion, and I welcome your intention to send a message to H is Royal Highness.
Oral Answers to Questions
Work and Pensions
The Secretary of State was asked—
Employment (Young People)
The Minister of State, Department for Work and Pensions (Chris Grayling): Work experience and apprenticeships are central to improving the prospects of young unemployed people. In this year’s Budget the Chancellor announced funding for an additional 80,000 work experience placements, with eligibility widened to cover the 18 to 24 age group. In addition, we have announced tens of thousands of new apprenticeships. We will also be providing early access to the Work programme for young people from the most challenged backgrounds.
Stuart Andrew: I am grateful to the Minister for that answer. When the previous Government left office, apart from the record deficit, they left an extra 270,000 young unemployed. How are the Government working with business to ensure that new apprenticeships are what our economy needs to tackle youth unemployment and that we do not repeat the mistakes of the previous Government?
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Chris Grayling: The Government have a very proactive campaign to engage employers, working with them to identify work experience places for young unemployed people. We have already located many thousands of opportunities for young people to gain their first foothold of experience in the workplace. In addition, my colleagues at the Department for Business, Innovation and Skills are working hard to engage employers in providing apprenticeship opportunities. So far they are being particularly successful in doing so and have met their targets for apprenticeships.
Andrew Stephenson: I welcome what my right hon. Friend has said about the importance of apprenticeships. There are 615 unemployed young people in my constituency. What other measures will he put in place to ensure that those young people have the skills they need to compete in the workplace?
Chris Grayling: The other policy that we will be introducing later in the summer is work academies, which will provide a mix of a short-term segment of training and a period of work experience, again designed to provide young people with a first foothold in the workplace and to give opportunities to those who do not have previous qualifications with a view to trying to get them into employment and build a lasting career.
Mr Frank Field (Birkenhead) (Lab): May I congratulate the Minister on his statement today and on his announcement that the new Work programme comes into force around now? Does he accept, however, that at a time when there is a shortage of jobs, the new providers might well be placing in jobs those who find it easiest to get jobs anyway, and that we need a back-up scheme to ensure the involvement of those who find it most difficult to get jobs or who do not want to work? Will he keep his mind open about reintroducing at some stage the future jobs fund—not that he will do so under that name, but under a Tory name?
Chris Grayling: I am very grateful to the right hon. Gentleman for his comments. I do accept that there is a challenge in placing some people into work, which is why we have created a differential pricing structure to reflect the challenge of getting them into the workplace. The problem with the future jobs fund was the cost relative even to the outcome costs of other programmes run by the previous Government. Of course, in straitened financial times we have to seek not only what works in employment terms but what is affordable.
Chris Grayling: What the hon. Lady does not understand is that Governments do not create jobs. Governments have to create an environment in which jobs are created by the private sector. Our job is to ensure that unemployed people are in the best possible position to take advantage of jobs when they are created by employers. It has been encouraging over the past few months to see the private sector creating far more full-time jobs, and I hope that that continues.
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Universal Credit (Child Care)
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): We recognise the vital role that child care plays in supporting parents into work. As the hon. Gentleman is aware, we have set out a consultative process with some options for child care within universal credit, as I said we would. Alongside that, we have committed to spend all the money available in the current system for child care. It remains our intention that everyone moving into work will be better off when child care is included. People who transition into work will certainly be better off than under the current system.
Mr Duncan Smith: If the hon. Gentleman looks at our consultation, he will see that our plan is to spread the money to ensure that parents who choose to work for any number of hours—not just 16 hours, but across the board—can go into work and get the necessary support. I therefore think that the answer to the question is yes, and we are also keen to support parents who work fewer hours.
Mr Duncan Smith: We estimate that universal credit as a static system, not even taking into account any dynamic effect, will lift 900,000 people out of poverty, about 350,000 of whom will be children. It is worth remembering that under the present child care systems that people have spoken about, at least 100,000 people do not get the child care for which they are eligible. Under universal credit, the take-up will be higher, so it will have a better effect.
Stephen Timms (East Ham) (Lab): The Secretary of State is right to recognise that support for child care is key to whether parents are better off in work or out of work. However, he promised the Welfare Reform Public Bill Committee that the Government’s proposals on child care support would be available before the Bill left Committee. That promise has been broken; he has simply been able to provide only a discussion of the options. When will he get a grip and come up with a policy?
Mr Duncan Smith:
I will get a grip the moment the right hon. Gentleman’s team decide whether they are in favour of the Bill or against it. I gather that the Leader of the Opposition has today moved like a wriggly worm and decided that he is both for and against it, which is really not surprising. The point of bringing forward our proposals is that the right hon. Gentleman and everybody else will have a chance to look at them and decide whether they agree with them. After the consultation,
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we will make it clear what our final proposals are. I think that that is fair. Last time, he complained that we did not consult him—he ought to make his mind up.
Workplace Health and Safety
The Minister of State, Department for Work and Pensions (Chris Grayling): The Health and Safety Executive estimates that the annual cost to Great Britain of workplace injuries and work-related ill health is currently in the order of £20 billion.
Ian Lavery: Last year, there were 152 fatalities and 26,000 major injuries in the workplace and more than 800,000 people suffered a work-related illness. As a consequence of the cuts, the HSE has withdrawn a large number of workplace inspections. How will the Government ensure that those figures do not increase year on year?
Chris Grayling: As a former union official, the hon. Gentleman will know that the biggest challenge we face is employers who cut corners and break the rules. I would have thought that he would welcome a change in policy that focuses health and safety inspections not on low-risk, good employer sites, which have taken up so much resource in the past, but on employers who are not playing by the book and who endanger their employees and the public. That is where I want our regulatory effort to focus.
Stephen Metcalfe (South Basildon and East Thurrock) (Con): As my right hon. Friend has said, we all agree that health and safety legislation, when applied correctly, is very useful and important, but does he also agree that when it is applied inappropriately and gold-plated, it can cost jobs and damage the economy?
Chris Grayling: I absolutely agree. Let me be clear that I believe it is extremely important to get health and safety right. As the hon. Member for Wansbeck (Ian Lavery) suggested, we need to protect people against real dangers in the workplace. However, we have to understand that if the system is over-bureaucratic, it will lead to the closure of businesses and cost jobs, and that does nobody any favours. The job of Government is to find the right balance, and that is what we seek to do.
Universal Credit (Transitional Payments)
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): A package of transitional protection is being developed to ensure that there will be no cash losers as a direct result of the move to universal credit where circumstances remain the same.
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Mr Bain: I note the Secretary of State’s reply, but has he not taken into account the criticisms made of the policy by Family Action? They are, first, that it will not apply to new recipients; secondly, that changes in circumstances leading to the loss of cash protection have not been sufficiently defined; and most importantly, that the failure to give a commitment to uprating cash protection in line with inflation could mean up to 400,000 people losing out in real terms as a result of the policy.
Mr Duncan Smith: I hear what the hon. Gentleman says, but I would have thought he would welcome the idea that as we move to the new benefit, we are planning to cash-protect those who are already in receipt of other benefits. I do not think I really need to take too many lessons from his party, because when it scrapped the 10p tax band, it did not cash-protect anybody.
Matthew Hancock (West Suffolk) (Con): Will the Secretary of State accept that in ensuring that the transition means that people are cash-protected, he is managing to introduce the universal benefit, which would otherwise be almost impossible to do? That universal benefit will be of benefit to the work incentives of people up and down the country.
Mr Duncan Smith: I am glad that my hon. Friend is more welcoming of the policy than the hon. Member for Glasgow North East (Mr Bain). Cash protection is there to protect those whose circumstances mean that they may have lost out slightly in the change to universal credit. They will not, because we will ensure that they are smoothed into the universal credit system unless there is a significant change in their circumstances. That is a positive gesture from the Government, and as I said, we do not need any lessons from Labour Members, who did not cash-protect people who were damaged when they scrapped the 10p starting rate.
Margaret Curran (Glasgow East) (Lab): Notwithstanding the fact that, as we have heard, the Government intend to provide transitional protection, will the Secretary of State explain why, for new claimants, their plans to abolish the disability element of child tax credit and replace it with a disability addition will mean a cut of 50% for families with disabled children? According not to Labour Members but to Family Action, that means that families with one disabled child, who are people in great need, are in line to lose £1,400 per annum. Why are disabled children bearing the costs of the Government’s welfare reforms?
Mr Duncan Smith: I must say to the hon. Lady that they are not. Actually, our adjustments have been welcomed because they mean that more disabled people in difficult family circumstances will find themselves benefiting to a higher degree. Our changes will work well with universal credit. Also, the whole idea of bringing more disabled people into the work force has to be a good thing, or perhaps she disagrees with that.
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The Minister of State, Department for Work and Pensions (Steve Webb): We recognise that poverty is about more than income and have introduced a new pensioner material deprivation indicator. It takes into consideration both financial and non-financial elements of poverty, such as ill health and social isolation. It offers a more direct measure of living standards and, used alongside low income measurements, will provide a greater understanding of pensioners’ experiences of poverty.
Caroline Dinenage: I am very proud that many people choose my constituency to retire to, and I am extremely grateful for all the measures that the Government have taken so far to address the horrific levels of pensioner poverty bequeathed by the previous Government. However, the proposed almost double-digit price rises by energy companies threaten to undermine those measures. What more can be done to address that problem?
Steve Webb: My hon. Friend is right that keeping a home adequately warm is an important part of the standard of living of pensioners. That is why it is included in the broader measure of poverty that we will introduce. I echo the words of my right hon. Friend the Energy Secretary, who said at the weekend that faced with double-digit price rises, we would encourage as many people as possible to shop around so that they do not have to pay those prices and can use the market to their advantage.
Kevin Brennan (Cardiff West) (Lab): The previous Government tackled pensioner poverty with great rigour and success. How can we be assured that in changing the measures of pensioner poverty, the current Government are not simply trying to cover up a failure of their own policies? What assurances can the Minister give the House about the changes?
Steve Webb: I am grateful to the hon. Gentleman for his question. The idea of measuring pensioner poverty in terms of material deprivation is supplementary to the income measures, and we will continue to publish both. I am sure he would accept that being just a penny or two above an arbitrary income level does not mean that people have a good standard of living if they are isolated or lonely. We aim to address all facets of pensioners’ quality of life.
Health and Safety Legislation
The Minister of State, Department for Work and Pensions (Chris Grayling): On 21 March, I announced an immediate review of health and safety regulation with a view to finding ways to simplify the regulatory burden on business. That review is being chaired by Ragnar Löfstedt, the professor of risk management at King’s College, London. He published a call for evidence on 20 May, the closing date for which is 29 July. We hope to publish the findings of the review later this year.
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Michael Ellis: Some of the most inappropriate and burdensome health and safety recommendations on business come from unqualified, cowboy consultants. My right hon. Friend the Home Secretary is getting rid of cowboy wheel clampers; what are the Government doing to tackle those cowboy health and safety consultants?
Chris Grayling: I very much agree with my hon. Friend. At the beginning of April, we launched a new online register of qualified health and safety consultants, precisely with a view to stamping out the cowboys. I want businesses and other bodies that need consultancy advice to work with qualified people who are capable of advising on what the law actually says, rather than working with people who would like to argue that the law does something they claim it says.
Mr George Howarth (Knowsley) (Lab): While the Minister is considering what reform to health and safety legislation might be necessary, I hope he will take into account the problems that the Health and Safety Executive has had at Sonae in my constituency. A major fire incident over the last few days has covered much of the industrial area as well as residential areas in acrid black smoke. Will he assure me that the HSE will work with the local authority, Knowsley council, the fire service and everybody else in the town, because we have reached the conclusion that this place should be closed down?
Chris Grayling: I am aware of the very unfortunate incident in the right hon. Gentleman’s constituency. I cannot comment specifically on that investigation, but I can assure him that the HSE is investigating carefully what happened. Clearly, lessons must be learned. However, that underlines my view that the HSE should concentrate its resources on dealing with genuinely serious incidents and problems, and not on trivial matters.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): The Government are committed to reducing disincentives in the benefit system. The universal credit provides an enhanced earnings disregard for couples which, along with the taper, will help low-income couples to keep more of their earnings in work. Obviously, over time, it is our intention to work further to reduce the penalty.
Kate Green: A widow and a widower each with two children who form a new couple relationship and decide to live together could be £9,000 worse off as a result of the proposed benefits cap. Given reports over the weekend of confusion among Ministers on the fate of the benefits cap, will the Secretary of State assure us that such a couple would not face a couple penalty?
Mr Duncan Smith:
Clearly, we do not, as the hon. Lady makes out, want to make anybody face any further induced couple penalties. Our plan is to ensure—over a period of time, but particularly in this Parliament—that we work to erode the couple penalty. However, it is worth reminding her specifically what happened under
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the previous Government, because the baseline that we have accepted is important. The OECD pointed out that a couple needed about 75% of the income of two single people, but the previous Government left them only 60% of those earnings. In other words, the previous Government took far more from couples than most other countries did. That is why we are in difficulty. She should reflect on that when she asks such questions.
The Minister of State, Department for Work and Pensions (Chris Grayling): I am pleased to tell the House that as of today, all bar four of the contract package areas for the Work programme are fully operational; that many thousands of claimants have already been referred to the programme; and that the first two job outcomes have been achieved in one contract package area, where the provider was particularly quick off the ground.
Priti Patel: Will my right hon. Friend join me in congratulating the providers that are participating in the Work programme? Does he agree that by involving that diverse range of providers, we can tackle the culture of welfare dependency and worklessness that grew under Labour, and ensure that work pays?
Chris Grayling: I absolutely agree with my hon. Friend. One encouraging thing about the Work programme is the vast diversity of organisations taking part—from big international organisations to small businesses; and from some of our bigger more prestigious charities, such as the Prince’s Trust, down to individual charities—even a walled garden project is involved in Yorkshire—and many of our local colleges. Together, they can make a huge difference in what is a revolutionary approach to the problem of long-term unemployment in this country.
Dame Anne Begg (Aberdeen South) (Lab): The Minister will remember an exchange of correspondence that he had with the Select Committee about TUPE cover. Now that the Work programme has gone live, the confusion over which posts will enjoy TUPE protection has continued. Of two contractors in the same area, one says that TUPE does apply and the other says that it does not—in some cases, to the same workers in some of the subcontracting companies. I urge the Minister to clarify this issue and ensure that his Department sets out clear advice about which positions have TUPE protection and the rules regarding people working in the Work programme.
Chris Grayling: The hon. Lady needs to remember that in many cases the programmes that we are replacing are very different to the Work programme. Pathways to work, for example, was simply six work-focused interviews. There will be cases in which TUPE does not apply. We have been very clear in saying to the providers that it is a matter between the providers themselves, the individuals and the former employers to resolve when and where it applies. It is not for the Department to offer legal advice to providers.
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James Morris (Halesowen and Rowley Regis) (Con): I welcome the speed with which the Work programme’s contracts have been put together, but some small voluntary organisations in my constituency who took an interest in it were not successful. Will the Minister reassure them that there will continue to be opportunities for them to play a role in getting people back into work more informally?
Chris Grayling: I can indeed. First, there will be further opportunities to contract to provide support for the Department. In addition, we do not believe that the supply chains to the Work programme providers are fixed in stone in perpetuity. The whole nature of the Work programme makes it desirable for the prime contractors to look for the best in the business at getting people into work. If any organisation is excellent, I am sure that it will find its way into the programme, even if it has not done so yet.
The Minister of State, Department for Work and Pensions (Chris Grayling): The independent Office for Budget Responsibility forecasts that unemployment will fall from its current level of 2.5 million to around 2 million by 2015. There is no separate forecast for youth unemployment, but over the medium term this would be expected to follow a broadly similar trend.
Michael Dugher: Fewer than 14% of my constituents are aged between 18 and 24, but this age group accounts for 35% of people looking for work. What is the Minister doing to ensure that private contractors in the new Work programme will not simply cherry-pick those areas of the country where it is easier to get young people into work and ignore areas performing less well economically, such as my constituency?
Chris Grayling: I would like to reassure the hon. Gentleman. One of the things that we wondered as we went in to the contracting process was whether we would see a difference in the level of interest between different areas of the country, depending on the nature of the local labour market. That was not the case: the competition was equally intense across all areas. I hope that the presence of the Work programme, offering young people support after nine months—and in some cases after three months—of unemployment, combined with the additional support that we are providing though Jobcentre Plus to provide work experience opportunities for young people, will make a significant difference to their prospects as the months go by.
Robert Halfon (Harlow) (Con): Does my right hon. Friend agree that the best way to deal with youth unemployment is not just through the 250,000 apprenticeships, but the roll-out of the 24 university technical pre-apprenticeship schools around the country?
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programme and the additional measures we have announced recently to support 16 to 18-year olds all show that we have a Government who recognise the problem of youth unemployment, understand its severity and are doing something about it.
Mr Iain Wright (Hartlepool) (Lab): Does the Minister think that the record level of youth unemployment has been made worse by the botched ending of the Connexions career service, which was withdrawn with no replacement put in place? No transition plan has yet been put into place.
Chris Grayling: The hon. Gentleman talks about the causes of youth unemployment. He should look back to when the current increase started in 2003-04, in the good years under the previous Government. He should ask why their policies failed so badly.
Disability Living Allowance
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): Throughout the development of the new personal independence payment, which will replace disability living allowance, we have had extensive discussions and consultation with disabled people, their families and organisations representing them. The insight of organisations such as RADAR, Mencap, Scope, the United Kingdom Disabled People’s Council and People First into how disability living allowance can fail to support disabled people is immensely valuable. We will continue to work closely with disabled people and their organisations as the detail of the assessment criteria is developed and tested.
Harriett Baldwin: On the recent “Hardest Hit” march, I met constituents who had the impression that disability living allowance was to end altogether and would not be replaced by the personal independence payment. Does the Minister agree that in representing these disabled constituents, organisations have to ensure that they communicate clearly with those who might be affected, who are some of the most vulnerable in our society?
Maria Miller: My hon. Friend is absolutely right. It is important that the organisations working with us in the development of the new personal independence payment use that opportunity to ensure that the people whom they represent are well informed. We need a new approach to disability living allowance. The Labour party has already agreed with that, although we are still waiting to hear exactly what the Opposition’s plan would be.
Fiona Mactaggart (Slough) (Lab): The organisations that the hon. Lady read out quite quickly sounded like organisations representing people whose conditions do not vary hugely. There are people on disability living allowance who have conditions, such as multiple sclerosis, that can get hugely better and hugely worse. How much conversation has she had with organisations representing people with fluctuating conditions as well as those with progressive conditions?
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I would like to reassure the hon. Lady that I absolutely understand her point. Indeed, I am meeting organisations representing many people with fluctuating conditions. Importantly, we are also considering the findings of the work capability assessment to see how we can build into the new personal independence payment a way of ensuring that people with fluctuating conditions are well served.
State Pension Age (Women)
The Minister of State, Department for Work and Pensions (Steve Webb): Our proposed changes will equalise women’s pension age with men’s more rapidly than previously planned. Under the Government’s proposals, women born on 6 March 1954 will have a pension age of 66 and those born between 7 March and 5 April 1954 will have a pension age of up to a month less.
Lorely Burt: I highlight the plight of 33,000 women born in one month in 1954 who will be the worst affected under the pension retirement rules. In total, 500,000 women will be affected by one year or more than expected. When they get their pensions, they will be a lot better off than they would have ever been under the Labour party, but what can we do for women in this particular group, who will have to wait an additional two years for their pension?
Steve Webb: My hon. Friend raised this important issue, I think, in last Wednesday’s debate when we were startled when she declared an interest in the question. Were we to address the concerns of that group of 33,000 women, we would find that women born one month before or after—who might be affected by a few months less, but still significantly—would ask for a change as well. The short answer is that to delay the whole thing till 2020, as some have suggested, would require an additional £10 billion to be found. She will understand why that is not possible.
Rachel Reeves (Leeds West) (Lab): The early-day motion calling on the Government to rethink these unfair changes to the pension system has been signed by 180 hon. Members, including 23 Liberal Democrats and three Conservatives. More than 10,000 people have presented a petition to Downing street asking the Government to think again, and the campaign is backed by Age UK and Saga. If the Government can U-turn on forests and, just last week, announce a U-turn on sentencing, surely they can listen and act upon the concerns of women now approaching retirement with fear and trepidation.
To the extent that we know what the hon. Lady’s policy is, it appears to be: to put it off for a decade. Unfortunately, one of the problems with the previous Government’s approach on so many difficult issues was to put them off and assume that somebody else would pay. On pensions, that would require another £10 billion to be paid by tomorrow’s national insurance
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payers. Does she think that that is a fair burden, given that the people retiring shortly will benefit from the greater longevity?
Costs of Disability
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): No such estimate has been made. Perhaps I should gently remind the hon. Lady that disability living allowance generally, and personal independence payments absolutely, are not related to a medical diagnosis. They are about considering people as individuals and looking at the impact of their disabilities on their ability to live independent lives. Circumstances, needs and costs will vary from individual to individual, and do not necessarily correlate to a diagnosis.
Sheila Gilmore: In Committee, the Under-Secretary said that the reason for the proposal was not savings and that she did not expect to make any savings from it. Yet people who fall ill with sudden onset conditions incur additional costs. They are not long-term unemployed or welfare dependent. Why is she making the change if not to make savings?
Maria Miller: I think what I said in Committee was that there would be some savings but that they were modest. The principle of a six-month qualifying period was not intended to deny disabled people help in the short term. That help currently comes mainly but not exclusively from means-tested support, with the personal independence payment starting when costs become a burden to people, regardless of their income. That is why it is not means-tested.
Ms Karen Buck (Westminster North) (Lab): I am sure that it is not the Government’s intention in time-limiting employment and support allowance—the other disability-related benefit—to leave nearly 7,000 cancer patients potentially up to £94 a week worse off. Today, Macmillan Cancer Support and others warn that that is exactly the consequence of the Government’s policy. Will the Under-Secretary take the opportunity of the Report stage of the Welfare Reform Bill to modify that damaging policy?
Maria Miller: The hon. Lady has asked about employment and support allowance. We will obviously ensure that people in the most difficult circumstances continue to receive the support they require through the support group. For disability living allowance, it is absolutely vital that we do not analyse people on their condition, but examine the problems that they encounter in living independent lives. I think that she would expect us to do that.
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The Minister of State, Department for Work and Pensions (Chris Grayling): The Department—and, indeed, I myself—has received several communications from customers and their representatives asking about our policy on the use of 0845 numbers and whether we have considered changing to 0300 and/or geographical numbers. In the wake of those representations, I have asked the Department to undertake an internal review about our use of 0845 numbers and see what other options might be available to us.
John Pugh: I thank the Minister for that response, but given that benefit clients normally have no access to a landline, that calls from mobiles can cost as much as 40p and that they could be kept waiting for information on crisis loans and disability, should we not do more and consider talking to the Telephone Helplines Association about that to make faster progress than we are currently achieving with 0300 numbers?
Chris Grayling: I agree with the hon. Gentleman. We offer a ring-back service to anybody who is concerned about the cost of the call that they are making. None the less, there is a genuine problem and I have asked the Department to consider it and ascertain whether better options are available, particularly given the number of claimants who use mobile phones.
State Pension Age (Women)
The Minister of State, Department for Work and Pensions (Steve Webb): Several stakeholder groups, as well as individuals, have expressed concern about the changes we propose, although the majority of commentators agree that we need to increase the state pension age more quickly.
Cathy Jamieson: I wonder whether the Minister knows that some 1,200 women in my constituency will lose out. Does he understand that they are angry and feel cheated that pension payments, which they had every reason to believe they had paid for and were due will now not be paid to them? What does he say to those 1,200 women?
Steve Webb: Perhaps a generation ago, those very women would have expected to draw a state pension for about six years less—that is a significant change that they have seen in their working life. They will still get the state pension for exactly the same time as someone a generation ago would have expected. We are trying to be fair between the generations and not load all the cost on the next generation.
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Mr Alan Reid (Argyll and Bute) (LD): The coalition agreement talks about equalising the state pension in 2020. Bringing forward the date to 2018 will not help to meet the Government’s target of getting the public finances in balance by 2015, but it will adversely impact a large number of women at very short notice. Will the Government think again and revert to the coalition agreement?
Steve Webb: My hon. Friend has raised this issue with me before in debate, and although he is correct that the savings do not fall in the comprehensive spending review period, I would draw his attention to one number. Under previous projections, the national debt at the end of this Parliament was £1.4 trillion. If we were to delay the change, we would have to add another £10 billion. Someone has to get a grip on the national debt.
Steve Webb: I am grateful to the hon. Gentleman for raising that question; indeed, we asked that very question in our Green Paper. We are looking at future changes to the state pension age, to 67 and 68, which are already legislated for. We believe that that needs to happen sooner. We are currently consulting and reflecting on the right balance between taking account of changes in longevity and giving people fair notice, and we would welcome the hon. Gentleman’s input on that point.
Housing Benefit (Shared Accommodation)
18. Mr Adrian Sanders (Torbay) (LD): If he will assess the potential effect on the level of homelessness of the extension of the shared accommodation rate for housing benefit to single people aged under 35 years. 
19. Mr David Ward (Bradford East) (LD): If he will assess the potential effect on the level of homelessness of the extension of the shared accommodation rate for housing benefit to single people aged under 35 years. 
The Minister of State, Department for Work and Pensions (Steve Webb): An equality impact assessment on this measure was published on the DWP website on 9 May 2011, but it does not contain a specific estimate of the impact on homelessness, because we cannot anticipate the behaviours of tenants or their landlords.
Mr Sanders: One of the big problems across the board for people aged under 35 is that, because of where they live geographically, or because of medical reasons or their lifestyle, they might simply be unable to reduce their housing costs and share, and therefore could face eviction. That would put more pressure on local authority housing departments, which are already under pressure because of the lack of affordable housing. Do the Government have any plan to help those local authorities meet those increased pressures?
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years we will add a total of £190 million to the money going to local authorities, around two thirds of which will be discretionary payments to help just the sort of difficult cases that he mentions, plus other funding for local government to assist them.
Mr Ward: I welcome that answer, but is it not likely that perhaps a third or more of the discretionary housing payments budget will be required for the disabled alone—and that is without considering other vulnerable groups—if local authorities decide to use it to stop them being forced to share? Is there not a case for simply exempting certain groups from the change altogether?
Hywel Williams (Arfon) (PC): There is a particular problem in rural areas, where the housing stock is inflexible and where it is difficult to provide rooms for under-25s, let alone under-35s, as the North Wales Housing Association pointed out to me recently. It fears the drift to HMOs—houses in multiple occupation—particularly in seaside towns and urban areas. Can the Government introduce any flexibility on this issue?
Steve Webb: Although HMOs are one response to the problem, young people will have a range of alternatives, which will differ from individual to individual. For example, one third of single people aged 25 to 34 live with their parents. I recognise that this is not an option for some, but it may be an option that others will take up. Some will use the Government’s “Rent a room” scheme—whereby an owner-occupier will rent out a room, from which they can get more than £4,000 tax free—and some may be able to rent a room from a social landlord, which is something that we are looking to explore more.
Benefit Payments (EU Nationals)
The Minister of State, Department for Work and Pensions (Chris Grayling): One of the things that I was surprised to discover in the past few weeks is that the Department does not keep any record—nor, indeed, did it under the previous Government—of the nationality of people who claim benefits. This is something that we are moving to address; indeed, we want to find a way to ensure that we do so.
Mr Hollobone: It is indeed a scandal that we do not know how many EU nationals are claiming benefits funded by the British taxpayer. Is it not completely wrong for an eastern European citizen to be working in this country, with his family and children back home in Poland or wherever, and to be claiming and receiving child benefit at the British taxpayer’s expense?
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Chris Grayling: My hon. Friend puts his finger on one of the anomalies of the European system which is causing concern not just in this country, but in other capitals around Europe. I have had many conversations in the last few months with fellow Employment Ministers in other EU countries, and there is a mounting debate about the need for rule changes that will set out exactly when and where benefits should and should not be paid.
The Minister of State, Department for Work and Pensions (Chris Grayling): The issue of youth unemployment is one that the right hon. Gentleman would know, if he had listened to my earlier answer, is of great importance to this Government and the nation. We are taking urgent steps to seek to address it.
Mr Hanson: Despite excellent apprenticeship schemes such as the one at Airbus near my constituency, which employs about 100 apprentices a year, youth unemployment in Wales is, sadly, still higher than anywhere else in the UK as a whole. Given what the Minister said earlier about potential jobs being created, in the absence of a strong regional policy and with the scrapping of Labour’s job schemes, how can he guarantee that the jobs for young people will go to where the most young people are unemployed?
Chris Grayling: We need two things to solve the problem of youth unemployment. We need a strategy for growth, which was at the heart of the Budget put forward by my right hon. Friend the Chancellor of the Exchequer a few weeks ago. We will continue to seek measures that will encourage business to grow, develop and create jobs in this country. Alongside that, we will continue to pursue measures, through work experience, the Work programme and other arrangements to support young people to make sure that they are as well equipped as possible to take advantage of those vacancies wherever in the United Kingdom they arise and wherever in the United Kingdom they live.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): Last week, we launched the Work programme—the biggest single such programme that the UK has ever had. It contrasts with the number of confusing and sometimes prescriptive provisions offered previously. We are adopting a personalised and flexible approach, which the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) spoke about earlier. It will involve paying providers by results, which we have explained, and will give them the freedom to innovate. The Work programme will deliver, we believe, effective and cost-effective support to help claimants into sustainable employment.
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Rosie Cooper: Rising fuel costs, 20% VAT, high inflation and cuts to the winter fuel allowance and local government budgets will all hit vital front-line services used by pensioners. I should be grateful if the Minister would explain to the pensioners of West Lancashire why the Government need a new material deprivation indicator to tell them what they already know—that the policies of this Conservative-led Government are hitting them over and over again?
The Minister of State, Department for Work and Pensions (Steve Webb): The hon. Lady is right that we did not reverse Labour’s planned cut in the winter fuel payment. What we did is reverse Labour’s planned cut to the cold weather payment, which pays £25 a week every time the temperature falls below zero—and we ended up paying more than £400 million to cold, vulnerable pensioners, which is money that the Labour party would not have spent.
T3.  Neil Carmichael (Stroud) (Con): In the context of the big society and mindful of the need for a variety of provision, what evidence is there that bidders for the Work programme have come from the voluntary sector and social enterprises?
Mr Duncan Smith: There is a huge amount of evidence. Two of the main providers are voluntary sector based, and getting on for half of all the subcontractors in the programme will be from the voluntary sector. This will be the biggest boost to the idea of the big society. Now that we hear Labour Members are rethinking on welfare, we hope that they will have some good things to say about it.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab): The cap on overall benefits in the Welfare Reform Bill is an important part of the legislation, but yesterday the noble Lord Freud said on television that there was going to be a significant U-turn, as there were going to be exemptions. Pressed on the detail, he said:
“Well, it’s where we think that, you know, there’s something happening that is undesirable.”
Mr Duncan Smith: It is good to see the right hon. Gentleman again—long time, no see. I am glad that he has finally made it to the Dispatch Box. He should not believe everything he reads in the media. The reality is that this policy is not changing because it is a good policy. The reality is that nearly half of those of working age who are working earn less than £26,000 a year, and they pay taxes to see some people on benefits earning much more than that amount. As we proceed through Report and Third Reading, I look forward to seeing the right hon. Gentleman support and vote for the Bill because he believes that those on benefits should not earn more than those who are living and working hard.
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what it will mean for child care or for people with disabilities, and now we do not know what it will mean for the benefit cap either.
Since the Secretary of State took office, the Treasury has forecast that the housing benefit bill will rise by £1 billion. If he cannot tell us what his policy on exemptions is, will he tell us what Lord Freud’s current policy will cost taxpayers?
Mr Duncan Smith: As I have said, we are not changing the policy. What my noble Friend Lord Freud was referring to was what we are already doing: making discretionary payments to ensure that the policy is eased in properly. [Interruption.] Hang on a second. The right hon. Gentleman cannot have it both ways. He has just said that we are not cutting housing benefit enough. He ought to talk to those on his Front Bench who think that we are cutting it too much. That is the problem with the Opposition at the moment: they want to have it all ways. Today the Leader of the Opposition made a speech in which he said that Labour would be tough on benefit claimants and that those who were not in work would not receive social housing. I simply say to Labour Members that this whole idea of welfare and change is a lot of wriggly-worm U-turns from the Opposition.
T2.  Teresa Pearce (Erith and Thamesmead) (Lab): Members have already raised the issue of women born in 1954 who must wait an extra two years to receive their pensions, but those who have small occupational pensions paid for and planned for on the basis of the earlier retirement date and who then find themselves out of work before the later date will be adversely affected in terms of jobseeker’s allowance. Will the Minister review the rule and, specifically, the way in which it relates to those disadvantaged women?
Steve Webb: The hon. Lady is right: there is often an interaction between the rules governing benefits such as JSA, occupational pensions and state pension ages. However, in cases in which people’s state pension age has risen, the rules governing working-age benefits are exactly as they have always been. Provision will be made, whether through employment support allowance, JSA or, in the example given by the hon. Lady, an occupational pension. We are not talking about leaving people with nothing to live on.
T4.  Alun Cairns (Vale of Glamorgan) (Con): The mental health charity Mind has suggested changes in the work capability assessment to capture better the complexity of the conditions of those suffering from mental illness. What reassurance can the Minister give about how the process can be enhanced to reflect those needs better?
The Minister of State, Department for Work and Pensions (Chris Grayling):
We have already introduced mental health champions to the network of health care professionals who carry out the assessments, and we
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believe that the changes introduced at the beginning of April will bring more people with mental health conditions into the support group. However, we now have on our desks a new set of proposals from the charities which we asked them to supply to us. We are considering them carefully, and hope to respond in the very near future.
Paul Goggins (Wythenshawe and Sale East) (Lab): One important purpose of crisis loans is to cover emergencies when claimants have no money and payment of their benefits or tax credits is delayed. Because applications are now limited to three per year, families in my constituency already face the blocking of that route to help, not because they have failed but because of failings in the system. Will Ministers look at the system again and establish whether a more flexible approach could be adopted?
Steve Webb: We recognise that it is nonsense for one part of the benefits system to lend people money to deal with the fact that they have not received benefits from another part of it on time. The whole business of alignment payments has become completely out of control. Under my right hon. Friend the Secretary of State’s universal credit scheme, the matter will be dealt with through advance payments of the credit. Clearly the idea that people can have multiple crises—up to 10 a year—does not produce a rational system, which is the reason for our reform.
Chris Grayling: Let me start by paying tribute to my hon. Friend for his work in establishing a national network of work clubs. Several hundred are now up and running around the country, some with a degree of help from Jobcentre Plus and others with none at all. I hope that this strong network of organisations will make a real difference to people looking for jobs, and that their number will continue to grow.
Clive Efford (Eltham) (Lab): I opposed changes to Remploy made by my own party in government which resulted in the closure of my local factory in Woolwich. Before the Government implement any further changes under the Sayce report that may result in more closures of Remploy factories, will the Secretary of State contact the former employees of that Woolwich factory, and write to me telling me how many found jobs and are currently employed?
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): I should like to reassure the hon. Gentleman that this Government’s policy is to continue with the modernisation plan, and there have not been further closures of Remploy factories. We will, however, look carefully at the recommendations of the report issued last week, which included recommendations on the future of Remploy. We will fully consult on that before going forward, and I am sure that that could well include what the hon. Gentleman suggested.
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behalf of GB Job Clubs, a charity that supports a national network of like clubs, may I ask what the Government will do to ensure that the state does not crush such voluntary provision?
Chris Grayling: I should like to reassure my hon. Friend that I have made sure that there are no attempts within Jobcentre Plus and the Department for Work and Pensions to track and monitor and data-manage and performance-manage. This is a grass-roots movement. Our role is to provide a degree of local encouragement, and sometimes some initial funding to clubs to get up and running, but after that it is very much up to them to shape their destiny, and up to us to champion their success, but not to interfere.
Alison McGovern (Wirral South) (Lab): The DWP’s own research on the future jobs fund published last month demonstrated the value of Government subsidy for the employment of young people during an economic crash. Does the Minister agree with his own Department’s research, and will he therefore reconsider the possibility of a work subsidy for young people if their employment levels do not improve in the coming year?
Mr Duncan Smith: The whole point of that research was to look at how we can get value for money—how many people we can get back to work, and what we can best do to support them. We inherited a terrible situation from the last Government, with youth unemployment having been rising for a number of years. The programmes we are introducing—such as the Work programme and special provision within that, and the innovation fund—will help them much more than lavishing huge amounts of money for very little return, such as through the future jobs fund.
Maria Miller: Reducing such conflict by putting in place support for parents to work collaboratively at the time of family breakdown lies at the heart of the reforms that we are looking at. I think Members of all parties can welcome that, and it has certainly been welcomed by organisations in the charitable sector who work with families.
Maria Miller: I thank the hon. Lady for her question. I apologise for not quite hearing the end of it, but let me say that we commissioned the report to look generally at how employment programmes were supporting severely disabled people, including all the programmes currently run by the Department. It is a very fragmented bunch of programmes, and Liz Sayce has done an excellent job in pulling that together and recommending a strategy and the way forward. Yes, we did remunerate Radar, because it was required to have additional help to support it in the running of its business while Liz Sayce was helping us.
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T8.  Mr David Evennett (Bexleyheath and Crayford) (Con): I welcome my right hon. Friend the Secretary of State’s proposed reform of the benefit system, but how will universal credit help people who have been out of work take up part-time or flexible work if they are unable to take on a full-time job for any reason?
Mr Duncan Smith: I am glad that my hon. Friend has raised this matter. The reality about universal credit is that it is aimed at those who cannot take on full-time work, or those who are transiting back to full-time work having been out of work for a little while. It will help everybody take up work for a number of different hours that suit their own particular conditions. It is particularly good for lone parents, and they will benefit for each hour they take better than they do at present.
Mr Andy Slaughter (Hammersmith) (Lab): The Government’s benefit cap will force many of my constituents to leave their home of many years, uprooting families, jobs, schools and communities. According to the right hon. Gentleman’s colleague, the hon. Member for Chelsea and Fulham (Greg Hands), on LBC just now, such people are making lifestyle choices. Is that the Government’s view?
Mr Duncan Smith: The position on the benefit cap is very straightforward and simple: those who are on benefit should not receive more money than those who are working and paying their taxes. There are exemptions, of course, such as for those who are making the right efforts to get back to work—those on working tax credit, for instance—and those who are disabled, as well as for widows and war widows. They are exempted from this, but for the rest of them the following simple principle holds: “If you can, you should be helped into trying to work”, and £26,000 a year seems a reasonable sum of money to me.
T9.  Graham Evans (Weaver Vale) (Con): Many people are being tricked out of money by being offered lump sums, which turn out to be woefully inadequate, instead of their pension scheme. What steps are the Government taking on these incentivised transfers out of defined benefit pension schemes?
I am grateful to my hon. Friend for raising that important issue. We are determined to drive out the bad practice whereby, as he says, people are given a bung of cash, sometimes a few weeks before Christmas, and are then given a value for their pension rights which is well below what they are actually worth to them. I met the pensions regulator and other interested
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groups a few weeks ago, and we are looking very hard at whether regulatory change is needed.
Chris Grayling: We have made it clear that we are seeking to reduce the number of proactive workplace inspections by about a third by removing from proactive inspection low-risk premises that have no record of problems. In that way, the HSE can concentrate its resource on dealing with those employers where there is a problem and fault has been found. Indeed, we are introducing a system of fee for fault to ensure that we recover money from those employers who are breaking the rules.
Jenny Willott (Cardiff Central) (LD): Changing from three to six months the period before which a claimant becomes eligible for the new personal independence payment not only means that people with sudden onset conditions, such as cancer or a stroke, have to wait longer for support, but it may affect their family’s access to carer’s allowance. Will the Minister investigate ways to enable those looking after loved ones who suffer sudden onset conditions early access to carer’s allowance?
Maria Miller: It is important that we continue to view the personal independence payment very much as something that relates to an individual and the way in which their condition affects them on an individual basis. We are not intending to look at particular conditions, but we will be carefully examining the way in which the introduction of the personal independence payment affects benefits that are passported, such as carer’s allowance, and we will bear my hon. Friend’s comments in mind.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): The Pensions Minister may recall that he kindly met me, the hon. Member for Chippenham (Duncan Hames) and a representative of the Twins and Multiple Births Association to discuss a modest proposal to amend the Sure Start maternity grant for parents of multiples. He undertook to come back to us on that, so I wonder whether he could update us on when he will be able to do so.
Steve Webb: The hon. Gentleman and my hon. Friend the Member for Chippenham rightly raised some specific issues relating to people who have had twins or other multiple births and the interaction between that situation and our changes to maternity grants, and I hope to be in a position to respond shortly.
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Points of Order
Huw Irranca-Davies (Ogmore) (Lab): On a point of order, Mr Speaker. Last Thursday, a written statement on the fast-track solar photovoltaic review was quietly laid before the House. By Thursday evening we had been given the response. Gaynor Hartnell of the Renewable Energy Association said:
“The handling of this whole affair has been poor”.
“This is bad news for…worthwhile projects—schools, communities, public buildings.”
“has been an utter farce—Ministers have completely ignored warnings from community groups”.
To make things worse, by Saturday there was an announcement in the Daily Mail that “Ministers plan an abrupt change of policy to rescue solar power jobs.” It was reported that the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker) had said:
“I am a big fan of solar energy. I believe it can have an important role in breaking the stranglehold of the Big Six energy companies.”
Out of respect to this House, which I know you hold most dear, Mr Speaker, and the necessity for policy announcements to be made in this Chamber, have you had a request for the Minister responsible for solar energy to appear before this House to explain, first, the review that never was, and secondly, the policy review change mooted over the weekend?
Sir Gerald Kaufman (Manchester, Gorton) (Lab): On a point of order, Mr Speaker. You are, of course, aware that there is a major Bill before Parliament proposing huge changes in the national health service. It has been announced in the press today that the Prime Minister and the Deputy Prime Minister are to hold a staged event at 12 noon tomorrow to announce the changes that they intend to make to that Bill. Is it not utterly unacceptable, particularly when a Bill is before the House of Commons, for announcements about what is to be done to that Bill to be made two and a half hours before the House sits? Do you not agree that that statement should be made first to the House of Commons, and that this stunt should be called off?
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policy announcements to make, including about any changes in policy, those announcements should be made first to the House of Commons.
Grahame M. Morris (Easington) (Lab): Further to that point of order, Mr Speaker. In the light of the NHS Future Forum report on the listening exercise for the Health and Social Care Bill, have you had any indication from the Secretary of State or the Government business managers when they intend to end the pause in the Bill’s progress, and whether it will be recommitted to a Public Bill Committee of MPs to allow proper scrutiny of the proposed changes and to allow the Labour party, which formed the NHS, to have a say on those important matters?
Mr Speaker: Those are important matters, but they are matters for the Government. The point of order raised by the hon. Gentleman, although a matter of great concern to him and to many others, is essentially a business question, and therefore is not a matter for the Chair. Those who are responsible for such matters will have noted, and doubtless taken heed of, the hon. Gentleman’s observations.
Chris Bryant (Rhondda) (Lab): Further to that point of order, Mr Speaker. I am letting your original pronouncement in answer to my right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman) sink in, and I would not want to put any words in your mouth, obviously, but it seemed to me that you might have been suggesting that the Prime Minister and the Deputy Prime Minister would not be right to go ahead with an announcement in another venue before coming to this House.
I simply say to the hon. Gentleman that I am not suggesting anything, and I do not feel the need to add anything to what I have already said in response to the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman). First, I think that what I said was pretty clear, and secondly, the right hon. Gentleman is not in any way slow on the uptake. I hope that is clear.
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Welfare Reform Bill (Programme) (No. 2)
That the Order of 9 March 2011 (Welfare Reform Bill (Programme)) be varied as follows:
1. Paragraphs 4 and 5 of the Order shall be omitted.
2. Proceedings on Consideration and Third Reading shall be completed in two days.
3. Proceedings on Consideration shall be taken on the days shown in the first column of the following Table and in the order so shown.
4. The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.
5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at 7.00 pm on the second day.
Let me speak briefly on the programme motion. As Members will see, we have set out a plan to carry out Report and Third Reading over two days, commencing now until 10 pm tonight and resuming after Prime
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Minister’s questions and any other business that takes place during the day on Wednesday, with Third Reading, as is normal, taking place an hour before the end of the day.
These two days follow a lengthy and constructive debate in Committee during which, unusually, we managed to cover every clause in the Bill. I fear I cannot offer the Opposition quite the same latitude on Report, although I know they will want to raise a number of issues on this crucial matter. It is welcome to note the intervention about the Government’s position made today—albeit that it was rather confusing—by the shadow Secretary of State, who is no longer in his place, and indeed the intervention made today by the Leader of the Opposition on the Opposition’s position on welfare reform.
I hope that over the next two days we will see some evidence emerge on what line the Opposition will take, whether they will be for us or against us on the benefit cap, and whether they have decided to back us on a number of the other reforms we have proposed. They have been somewhat ambiguous in parts of the debate in Committee about whether they support us, and I hope we will reach the end of the programmed debate on Wednesday and find that they support the Bill on Third Reading. I hope that the two days we have set aside will allow us to debate all the key areas for discussion in the Bill and that it will become a little clearer whether, when it comes down to the final decisions, the Opposition are with us or against us on those key matters. I look forward to two days of lengthy, interesting and perhaps enlightening— in respect of the Opposition’s policies—debate on these matters.
Stephen Timms (East Ham) (Lab): I take issue somewhat with the Minister. I do not agree that there has been adequate time in Committee to consider the Bill, not least because on more than one occasion Ministers left early, before we had completed our first afternoon discussion. Consequently, a number of key issues, particularly new clauses, were left undebated when the Committee ended, and as a result, some of those are on the Order Paper today.
With that backlog, as well as other key points in the Bill, I am very concerned that the two days now available are likely to be insufficient for the debate that is needed. Given that inadequate time, however, the knife proposed in the Government’s programme motion is in a perfectly sensible place. Because we need to get on with the debate I shall not seek to divide the House on the motion, but I am concerned that, as will become clear during the debate, the House will not have had sufficient time to consider properly the full consequences of the Bill.
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Welfare Reform Bill
(b) requiring the employer, on being served with a notice by the Secretary of State, to make deductions from the earnings of the beneficiary and to pay corresponding amounts to the Secretary of State;
“(2A) Subsection (9A) of section 71 above as it so applies shall have effect as if the reference to amounts recoverable under the provisions mentioned in subsection (8) of that section were to amounts recoverable under subsections (1) and (4) of that section by virtue of subsection (1) above.”
(a) requiring the person from whom an amount is recoverable (“the beneficiary”) to disclose details of their employer, and any change of employer, to the Secretary of State or the authority which paid the benefit;
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(b) requiring the employer, on being served with a notice by the Secretary of State or the authority which paid the benefit, to make deductions from the earnings of the beneficiary and to pay corresponding amounts to the Secretary of State or that authority;
Chris Grayling: Mr Speaker, if you would permit me to go off the subject for a moment, I think it would be appropriate to mark, as you did just now, the recent honour received by the Clerk. I am sure that Members in all parts of the House send him our congratulations and best wishes. [Hon. Members: “Hear, hear.”]
Amendments 1 to 13 and new clause 1 introduce the direct earnings attachment, or DEA, as a method of social security debt recovery. An attachment of earnings is a method by which money will be stopped from a customer’s wages to pay a debt. The debt in question could be an overpayment of benefit, any associated penalty, a recovery of hardship payments or a payment on account. The measure will also be available for use by local authorities for the recovery of housing benefit overpayments. In due course it could also be used for the recovery of council tax benefit overpayment, once the localisation of council tax benefit takes place. A DEA would also be available to recover an administrative penalty for a benefit fraud offence or a civil penalty for failing to take proper care of a benefit award.
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Mrs Anne Main (St Albans) (Con): Is there some sort of structure in process so that if EU migrants who work in the country and are eligible for benefits move out of country when they no longer wish to work here, any overpayment of benefits could be clawed back, should those migrants move through other EU countries?
Chris Grayling: My hon. Friend makes an important point. Although in theory mechanisms do exist to recover payments, the process is much more difficult than one would wish. I take her point, and my ministerial colleagues and I will continue to seek ways of ensuring that in such an eventuality, we can make recoveries.
Chris Bryant (Rhondda) (Lab): While the Minister considers that issue, will he also consider the case of the many hundreds of thousands of British people who live in Spain, who often rely on support, especially from the national health service and many other services that they receive, from the Spanish Government? The same applies elsewhere in Europe.
Chris Grayling: The hon. Gentleman is of course correct, but I am sure that he would also agree that if someone comes to live and work in this country, receives benefit payments and then returns overseas, they carry with them an obligation that they should fulfil. That is the sole point that my hon. Friend the Member for St Albans (Mrs Main) was making, and it is one that I think Members on both sides of the House would see as common sense. There is freedom of movement across Europe, but we must make sure that the mechanisms are in place to ensure that our systems are not abused. The primary purpose of DEA is to enforce recovery where the debtor is in pay-as-you-earn employment and will not make other arrangements for debt repayment. I think that that is a sensible approach to take.
I apologise to the Opposition for the fact that we were unable to bring the new clause forward in Committee. It has been very carefully considered and discussed in our regulatory processes. We have brought it forward at this time and hope that they will not find it controversial. One of the reasons why I hope that they will not find it controversial is that there is currently something of an anomaly in the system. If someone incurs a penalty, for whatever reason, and remains in the benefit system, we can recover that money through a deduction from the benefit payments they receive. However, if they move into PAYE employment and basically say, “No way. Go away,” we currently have no mechanism for recovering the debt that is owed. That is the purpose of the measures that we are considering.
The rates of deduction will be determined in the regulations, which will include a safeguard to ensure that deductions do not take the debtor beneath a given level of earnings. That is necessary and common practice in the operation of similar arrangements in other parts of society where deductions are made—for example, with court-related penalties and deductions for child maintenance. It is essential that we do not deduct money at a rate that will tip the person concerned below a given level of earnings. It is, and will be, a basic principle that recovery of overpaid benefits should not cause undue hardship.
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The reason I ask is because, as I am sure all hon. Members know, mistakes happen, sometimes because of errors on a claimant’s part but sometimes because of errors by the bureaucracy, and I am concerned that there may not be enough safeguards to ensure that attachments will not be made erroneously.
Chris Grayling: The hon. Lady makes an important point, and I will explain in a moment what rights individuals will have. It would of course be inappropriate to have a system in which a DEA could be applied and there was no comeback at all for the individual. A system that allowed no right of challenge or appeal would be wholly inappropriate, and I will explain in a moment why that will not be the case.
Chris Grayling: That would depend on the circumstances. It is obviously important that a deduction of earnings takes into account the potential impact on the individual, so we would need to take into account other payments. Ultimately, it is a basic principle that recovery of overpaid benefits should not cause undue hardship, so all circumstances would need to be taken into account. I should clarify that council tax benefit will be deducted from council tax liability, so it will not be administered in quite the same way.
Imposing a DEA is intended to be an administratively simple process that replaces the current practice of obtaining an attachment of earnings order by application to the court. The ability of the Department for Work and Pensions to make DEAs on its own authority sends out a strong signal to potential fraudsters and will prove a useful tool in the fraud and error strategy. I hope, particularly given the comments made today by the Leader of the Opposition, that the Opposition will welcome this as a sensible measure to take against people who defraud the system.
We think that the measures will also encourage claimants in debt to be more aware of the possibility of deduction at source, reducing any expectation that they will avoid repaying debt. There is always a concern that they will think that they can just pile money up and up, and that there will be no day of reckoning. The proposals make it much simpler for us to ensure that there is indeed a day of reckoning.
The measure will make use of an existing process used by the Child Maintenance and Enforcement Commission, with which businesses are already familiar. It is a matter of routine for an employer to make a child maintenance-related deduction from a person’s salary cheque each month, and this measure will use the same process. The provision also allows for the levy of an administration charge against the debtor by the employer administering the deduction, offsetting any increased administrative costs resulting from the increased use of earnings attachment as a recovery method.
Using a DEA to recover debt does not remove a debtor’s rights to challenge any decision relating to the recovery of benefits or the imposition of a civil penalty. This relates to the point just raised by the hon. Member for Banff and Buchan (Dr Whiteford). For example, when an overpayment occurs in relation to an award, an
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independent decision maker decides whether a recoverable overpayment exists. As I set out in Committee, there are circumstances in which overpayments will be recovered, and circumstances in which they will not. We will focus on offering discretion to our front-line staff in judging what is right and what is wrong. We accept that there will be times when an overpayment results from an administrative error within the Department, and that we should accept the blame for that and not seek recovery of the overpayment. The general position, however, is that if someone receives money that they should not have received, we will expect them to pay it back. If they refuse and have already started work, this mechanism will enable us to recover the money.
In addition, there will be a right of appeal to an independent appeal tribunal, should the person be unhappy with the original decision. So there is still a full judicial process available, similar to the one available when a sanction is imposed that could lead to the withdrawal of benefits. The claimant has the right first to go to the decision maker and then to a tribunal, and those rights will remain in this situation. However, we will not have to go to court to secure the original order to make a deduction of earnings.
Before taking action to impose a DEA, we will ensure that the debtor is aware that we are taking such action. We are also keen to remain mindful of our welfare obligations. We do not, for instance, want to push the debtor into leaving work in order to avoid a repayment under a DEA. This measure must be applied with common sense and care. In certain instances, it might be determined that another method of recovery should be employed, or that arrangements should be made so that the DEA commences only after other commitments have been cleared. This relates to the point that my hon. Friend the Member for Brigg and Goole (Andrew Percy) raised a moment ago: we will take into account other commitments.
The DEA is designed to recover debt from those who currently seek to avoid repayment—those who hope that they can avoid paying the money back. Those who comply with requests for repayment and who either come to a reasonable arrangement to repay or can show that they are currently unable to repay will not have a DEA imposed. I am sure that hon. Members will agree that when someone refuses to meet their obligations to repay benefit debt, such powers should be available to the relevant authorities to make recovery.
That is all that the new clause and the other amendments are designed to do. They are designed to ensure that we treat people fairly and appropriately within the system. When necessary we can recover benefits directly from people who are still on benefits, but we cannot currently do that easily, without going to court, from people who have moved into PAYE employment. These provisions will allow us to change that. I believe that this is a prudent and sensible step. It is very much in keeping with our anti-fraud strategy, and I hope that it will be in keeping with that of the Opposition as well. I hope that the new clause will command support on both sides of the House.
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shall consider, and the Minister should not imagine that we will be equally amenable throughout the debate today. The new clause aims to amend the Social Security Administration Act 1992 to allow the Government to recover overpayments resulting from mistakes or fraud in out-of-work benefits and housing benefit, as well as in universal credit and the other contributory benefits.
I can well see why the Minister wants to make these changes. In particular, because universal credit will encompass people who are in work as well as those who are out of work, it makes sense for the recovery of overpayments to be extended into earnings received in work, as he has outlined.
However, a number of questions need to be asked about these plans. The Minister has already been pressed about the mechanism for appeals. The changes will certainly require a good deal of co-operation from employers, as those are the organisations on which the Government will be serving notices to deduct from earnings. Employers will bear the burden of the administration of these deductions through having to pay in amounts, keep records of those amounts, and keep the Secretary of State informed if the person concerned leaves their employment.
The Minister has made the perfectly reasonable point that a system already exists for child support payments, but in order to take into account the additional burden that he is imposing, the Government are allowing for the employer to deduct an amount in respect of their administration costs. We need to have some idea of the amount that employers will be permitted to deduct, which should be seen to be fair by the person whose pay is being deducted, while adequately compensating employers. Will the Minister tell us a little more about how that amount will be calculated, and how it relates to the existing arrangements for child support that he touched on?
The amendments allow for a level of earnings below which earnings must not be reduced by the deductions. Again, that seems appropriate, but we need to know how that level of earnings will be prescribed. There could be a significant impact on work incentives, particularly for people who have received overpayments and who may well have been acting entirely innocently, having been confused or having made a mistake—or perhaps the job centre has made a mistake. If the amount is too low, claimants who are out of work could see little gain from moving into work. Additionally, if the deductions are at a flat rate or not a percentage of hourly pay, the work incentives that the universal credit taper mechanism is designed to provide will be compromised. Will the Minister tell us how the minimum level of earnings will be calculated? Will he ensure that people who are repaying overpayments will still be better off if they increase their income through working additional hours?
Subsection (3)(i) of new section 71ZCA of the Social Security Administration Act 1992 creates a criminal offence for non-compliance with the regulations, with a fine of £1,000, which would be a hefty sum for a small business. Small businesses have less time and energy to spend on administration or human resources, so the additional burdens being placed on them could prove a significant disincentive to their recruiting new employees who have overpayments hanging over them. That would result in those people finding it more difficult to get into work. Will the Minister tell us a little more about how
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he thinks that the new provisions will affect people who are paying back overpayments while trying to find a job? How he will ensure that the provisions do not create a new barrier to those people getting back into work?
The move towards allowing deductions from earnings to repay benefits lost due to error or fraud is sensible, particularly because universal credit will be paid to people in work as well as out of work. The Government are already introducing several penalties for those whom they feel have negligently made incorrect statements. It is important that we do not penalise people who have made mistakes but have done so honestly, by placing new and unnecessary barriers to employment in their way. The minimum level of earnings and the red tape that this will mean for small businesses could have that result if the Government get the judgments wrong. I hope that the Minister will be able to give us some reassurances about how the measures will work in practice.
Kate Green (Stretford and Urmston) (Lab): It is a pleasure to make my first contribution to this stage of proceedings on the Bill by welcoming an aspect of Government amendment 2. Specifically, it is enormously welcome that the short paragraph (e) will enable regulations to include
“a level of earnings below which earnings must not be reduced”
when overpayments are being recovered. That echoes the practice in Sweden, Germany, the Netherlands, Norway and other nations, which have legally enforceable, attachment-free limits when debts are being enforced, below which claimants must be protected. The limits relate to a national minimum income standard, which is set by a variety of methods. I am grateful to Professor John Veit-Wilson, Professor Elaine Kempson, Damon Gibbons of Debt on our Doorstep and Rev. Paul Nicolson of the Zacchaeus 2000 Trust, who have helped me to prepare for this debate.
I would be pleased to see the principle of irreducible attachment-free minimums extended to all debts and to the unemployed, in particular to safeguard children’s, disability and housing benefits. That would prevent the damage that is done to physical and mental health by the enforcement of debt against poverty incomes, and the damage that that does to the capacity of the poorest adults to find and keep work.
In Sweden, the standards for a reasonable standard of living are uprated for price index changes every year and reset every five years by the National Board for Consumer Affairs. The standards are based on survey data on national household consumption patterns and current prices; statisticians and NBCA policy officials decide what is reasonable in terms of deviations from the averages. For example, for the past four years in the UK, the prices of food and domestic fuel have increased faster than the retail prices index and the consumer prices index. The standards are used by the social service board for setting benefits and by the tax authority for setting the tax threshold. The tax threshold is also used by the court enforcement authority to set its attachment-free sum for debt enforcement. That sum consists of two parts: variable housing costs and a fixed standard normal sum for all other living expenses.
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should be protected and attachment-free. In Committee, we explored work that is under way in this country at the universities of York and Loughborough, among others, to develop a minimum income standard that can command and be informed by the perceptions of the public. There is a range of options for assessing and setting the minimum standard below which there will not be deductions. There are examples from other nations where such a minimum is enforceable by the courts and related to national minimum income standards. In countries that have legally enforceable limits, the courts, in setting payment plans, can ensure that the debtor is left with a minimum level of income, taking account of family size.
I hope that the small but vital paragraph (e) in Government amendment 2 will begin an era of cross-party support for legally enforceable irreducible and attachment-free minimums when people are repaying debts, which are based on minimum income standards. That would contribute to a reduction in the huge cost of mental illness to the health service and the wider economy, and make a significant contribution to the reduction of poverty in the UK. I hope that we have an ambitious approach to setting that minimum.
Chris Grayling: I start by saying that I very much appreciate the comments of the hon. Member for Stretford and Urmston (Kate Green). I listened carefully to her points, a number of which she made in Committee. She has given a great deal of thought to these matters, and although I cannot offer her a guarantee that we will do all the things she wishes, I can say to her that we will take great care, in the regulations attached to the Bill, to ensure that we get the right balance. It has been clear for a long time in this country, and remains absolutely clear under the current Government, that in setting the levels of any deduction we have to be extremely careful not to tip people into hardship. In particular, we must not encourage them to leave work and end up moving them and their families down the poverty scale.
The hon. Lady and the right hon. Member for East Ham (Stephen Timms) asked how we would determine the level of earnings below which deductions for overpayments cannot be made. Of course, there is no one-size-fits-all approach, and the circumstances of different families are very different. There may be a case in which, as my hon. Friend the Member for Brigg and Goole (Andrew Percy) suggested, there is a deduction for child support, or the number of children in a family or a disability may be factors. Great care therefore has to be exercised.
The minimum level that we will pursue will be determined to ensure that the debtor is left with sufficient income to maintain themselves and their family, in line with similar provisions in the Attachment of Earnings Act 1971. We therefore plan to use the same basis that the previous Government used—for example, to determine deductions from benefit payments.
In many cases, however, a direct earnings attachment will be implemented with little negotiation with the debtor. There will be a prescribed minimum level that will not take account of individual circumstances. We will try to create a system whereby we are mindful of the need to reflect the circumstances of the individual, but we cannot go the whole way, and we certainly cannot go quite as far as the hon. Member for Stretford and Urmston would wish.
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If a debtor finds that they are unable to cope with the deductions being made from their earnings, they should contact us to discuss an alternative payment rate. Of course, they can avoid being placed in that situation, bearing in mind that we are discussing not people who are struggling to deal with something that they have already agreed but those who have wilfully refused to enter an agreement with us and are basically saying, “I’m not paying the money back”, or who have not even got to the point of saying anything to us at all.
Debtors who are repaying their overpayment by means of a direct earnings attachment will, in line with those repaying by other methods, be able to claim that the repayment rate causes them hardship and ask for it to be reduced. Although we of course have a responsibility to recover overpayments in order to protect public funds, we also take into account an individual’s financial and personal circumstances. The hon. Lady articulated a strong case for her points, but I cannot offer her quite as much as she would wish. However, I can offer her an assurance that we will always take an individual’s circumstances into account, particular where poverty, deprivation and hardship could arise.
The right hon. Member for East Ham made a point about employers. We will, of course, use the same mechanism for the attachment orders in the Bill as is used for child maintenance deductions. That process is well established through the Child Maintenance and Enforcement Commission system, and prior to that through the Child Support Agency, so it should not cause employers to recast their processes and do things very differently. On that basis, I am confident that it should not represent a significant additional burden on employers.
The right hon. Gentleman mentioned the provision for a £1,000 fine. In truth, there is no excuse for a refusal to engage in any part of the process. The orders will arise only because an individual claimant has refused to engage, and there is no real excuse for an employer to refuse to engage either. The matter should not be complicated, and it certainly should not be complex enough to cause an employer to decline an expansion in business or a recruitment to fill a vacancy. The process is established and many employers up and down the country are used to dealing with it, and I do not believe there will be significant extra burden on business.
The right hon. Gentleman asked how much employers could deduct for the administration charge, and the answer is an amount not in excess of £1 for each deduction. He asked for an assurance that the measure will not damage work incentives. The answer to that is that, as with all debt recovery, we must of course be mindful of the Department’s welfare obligations. As I said, recovery of overpaid benefits should not cause undue hardship. In the calculation of a repayment, we certainly would not want to push someone into a position in which they have to leave work to avoid payment under a DEA.
The operation of the DEA does not mean that the debtor will commence the repayment of their debt earlier than they would under another repayment method. The debtor will have had ample opportunity to make other arrangements to pay, or indeed to show that
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suspension of recovery was applicable in their case. We are not talking about people who have had no chance to engage and discuss.
Chris Grayling: It is very difficult to give an absolute answer to that question. It is unlikely that we would seek to withdraw an entire pay rise, but clearly, if we had given somebody a lot of slack in making their repayments, and their financial circumstances improved, we would not allow them simply to continue paying at the hardship rate that they had previously paid. We would expect an improvement in the terms based on their improved circumstances.
The right hon. Gentleman, as a former Minister, knows the reality. Well-established hardship considerations are in place. If the customer engages with the Department, their circumstances could suggest that another method of recovery should be employed. Arrangements are made so that the DEA begins only after a period time, but only in exceptional circumstances would we waiver repayment.
Common sense lies at the heart of this measure. It is our job to recover funds that have been overpaid to a claimant when there is not a good reason for waiving the repayment because of departmental error. At the same time, it is not in any of our interests for the system to force people into severe hardship and poverty—the system should reflect the reality of people’s financial situations.
There is a clear obligation to repay. The Leader of the Opposition spoke this morning of responsibility, and he was right to do so. Those who we are talking about have a responsibility to repay the money that is due to us. However, the Department, and indeed the courts, must apply common sense to the process, achieve the right balance and ensure that we recover the money that is due to the taxpayer correctly and sensibly.
I welcome the Opposition spokesman’s positive comments. We are likely to have livelier debates as the hours go by, although I hope, having heard the Leader of the Opposition’s comments this morning, that such debate masks their willingness to support the Bill. It would be disappointing if the Opposition did not support the Bill. If they decline to support it, I will look forward to having a debate in public on who is right and who is wrong, but for now I am delighted that there is cross-party co-operation on this group of amendments and the new clause.
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(b) requiring the employer, on being served with a notice by the Secretary of State, to make deductions from the earnings of the beneficiary and to pay corresponding amounts to the Secretary of State;
(4A) Sections 71ZC, 71ZCA and 71ZD above apply in relation to amounts recoverable under subsection (4)(a) above as to amounts recoverable by the Secretary of State under section 71ZB above (and, where the notice is given by an authority administering housing benefit or council tax benefit, those sections so apply as if references to the Secretary of State were to that authority).’
‘(and, where the appropriate authority is not the Secretary of State, those sections so apply as if references to the Secretary of State were to that authority)’
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‘71ZCA and 71ZD apply in relation to amounts recoverable by the appropriate authority under subsection (4) as to amounts recoverable by the Secretary of State under section 71ZB (and, where the appropriate authority is not the Secretary of State, those sections so apply as if references to the Secretary of State were to that authority).’—(Chris Grayling.)
(2) The maximum award of the childcare element shall be a prescribed proportion of childcare costs (not less than 80%, or 90% where the element contributes to care for a disabled child), up to a prescribed maximum value (not less than £175 per week for one child and £300 for two or more children).
(4) “Childcare”, in relation to a person or persons, means care provided for any child up to the last day in the week in which 1 September falls following the child’s 15th birthday or their 16th birthday if they are disabled, for whom the person is responsible, or for whom either or both of the persons is or are responsible; and by a person of a prescribed description.
(5) Except in prescribed circumstances, the childcare element shall not be paid where a claimant is in work for fewer than a prescribed number of hours a week or, in the case of a couple, where one or both of the claimants are in work for fewer than a prescribed number of hours a week.
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(2) The maximum award of the amount under this section shall be 100 per cent. of the cost that the claimant would expect to incur in respect of school meals, up to a prescribed maximum value per child.
(2) The maximum award of the amount under this section shall be 100 per cent. of the cost that the claimant would expect to incur in respect of prescribed health costs such as prescription, dental and optical charges, up to a prescribed maximum value.
‘The Secretary of State will provide a record to the claimant detailing the amount and composition of the award, including amounts in respect of each of the elements specified in sections 9 to 12 of this Act and of any appropriate sub-elements as specified in regulations.’.
(b) where sub-paragraph (a) does not apply and the person is in arrears pursuant to the terms of the tenancy agreement between that person and the landlord of an amount equivalent to two weeks or more of the amount he is liable to pay his landlord as rent if in either case the landlord requests or consents to payment to him.
(4) Regulations made by the Secretary of State shall prescribe the person who is to be treated as the landlord for the purposes of this section and shall make provision as to the discharge of liability consequent upon the making of any payments to the landlord.’.
‘excluding any amount in an Individual Savings Account, up to a prescribed maximum of no less than £50,000, where the claimant is in work’.
‘excluding any amount in an Individual Savings Account, up to a prescribed maximum of no less than £50,000, where one of the claimants is in work’.
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‘subject to these amounts being not less than the additional support for disabled children provided through benefits and tax credits prior to the introduction of Universal Credit.’.
‘(1A) Regulations under sub-paragraph (1)(ba) above may include provision for calculating profits and losses of a trade in accordance with generally accepted accounting practice, subject to any adjustments prescribed by regulations.’.
‘(4A) Sub-paragraph (4) does not apply where a person has earned income from self-employment and the business from which the earned income in question is derived (or any larger undertaking of which the business in question forms part) is being carried on upon a commercial basis and with a view to the realisation of profits in the business or larger undertaking.’.