Andrew Selous: Local housing allowance needs reform

Work and Pensions questions came around again yesterday.

Shadow Work and Pensions Minister Andrew Selous called for reform of the local housing allowance:

"It is now clear from reports across the country that not only tenants but charities helping the homeless are being very poorly served by the local housing allowance, so will the Minister agree to urgent reform of that allowance, which, frankly, is failing the very people whom it was designed to help?

Kitty Ussher: We always said that we would review the local housing allowance after two years, but the evidence so far does not bear out the hon. Gentleman’s points. In the pathfinder evaluations, it was shown that 96 per cent. of customers had a bank, building society or Post Office account, and a quarter of those had been opened in order for those customers to pay their rent. We are talking about an important policy, giving more choice to tenants. It is an important part of our plans for financial inclusion. We will, of course, listen to all interested parties, but we do not currently have the evidence that the hon. Gentleman needs to make his point."

Shipley MP Philip Davies put the boot into the Equality Bill:

"Does the Secretary of State not agree that the best way to get people from incapacity benefit into work is to make it as easy and least burdensome as possible for employers to take on new people? Would not that be the best approach to take, rather than ridiculous politically correct initiatives such as the Equality Bill, which the British Chambers of Commerce says will discourage job creation in this country?

James Purnell: It is very important for us to provide people with help to get back into work, and to improve the incentives for getting back into work. That is why we are re-testing everybody on incapacity benefit to make sure that they are on the right benefit. That is why we have tightened the gateway to make sure that only the right people get on to the benefit, and that is why we will require everybody for whom it is appropriate to have back-to-work support. The one thing that we will not do is abolish the minimum wage, to which I think he is referring. He is the promoter of a Bill on the issue, which will come before the House on Friday. I hope that everyone, including Conservative Front Benchers, will oppose it, and make it clear that that is not the way that we should go."

Shadow Minister for Disabled People Mark Harper raised the matter of incapacity benefit:

"The Secretary of State referred to existing incapacity benefit claimants and the importance of getting them into work, and he will know that nearly 1.2 million incapacity benefit claimants are over the age of 50. Under his Government’s proposals, those people will be offered only one work-focused interview to help them get back into work, and that is clearly not going to be adequate. Significant numbers have been out of work for more than five years—

The Minister for Pensions and the Ageing Society (Ms Rosie Winterton): The minimum wage?

Mr. Harper: The right hon. Lady says, “The minimum wage”. No Opposition Member has mentioned the minimum wage, so why do we not just stick to the questions and the answers? Will the Secretary of State explain how one work-focused interview for those 1 million people over 50 will help them get back into work?

James Purnell: It is not surprising that the Opposition Front-Bench team do not want people to be reminded of their record on poverty wages. On the hon. Gentleman’s— [ Interruption. ] If he will just calm down for one second, he will hear that, on his question, he is wrong about the facts: people can volunteer for far more than that which he described. We are the first Government to require people to take part in work-focused activity, and that contrasts with the previous recession, when 1 million people went on to incapacity benefit. They were encouraged, sometimes forced, to go on to it by the Opposition, and they were trapped there, because they were offered no help to get back into work or back to health. It is a record that, frankly, he should be extremely embarrassed about, and I am therefore surprised that he wants to contrast his Government’s record with ours."

Shadow Secretary of State Theresa May cited Government figures that predict that unemployment will hit three million next year:

"In his response to my hon. Friend the Member for Blaby (Mr. Robathan), the Minister refused to speculate about this week’s unemployment figures. Today, the Chartered Institute of Personnel and Development has said that the labour market will deteriorate further in the next 12 months and that unemployment will inevitably rise to more than 3 million by spring next year. Does the Minister agree?

Mr. McNulty: As the right hon. Lady will know, under the established statistics arrangements it is not my place to speculate about Wednesday’s figures. The CIPD always brings out its forecast at around this time. I know one thing for certain: unless the right hon. Lady signs up in total to the nearly £5 billion of extra support that we are putting into Jobcentre Plus and assorted other employment interventions, unemployment will be a lot higher than it is otherwise likely to be.

Mrs. May: I suggest that the Minister speaks to his Treasury colleagues; the figures that they put in the Budget—in the Red Book—suggest that unemployment will reach more than 3 million in 2010.

The Minister talks about the steps taken by the Government. The economy has not been growing for a year, yet most of the Government’s measures to help businesses are only just coming into operation. Unemployment has been growing for well over a year, yet contracts for the flexible new deal have been postponed and the guarantee for young people under the future jobs fund will not come into operation until next January. Today the CIPD says that 40 per cent. of organisations have made contingency plans to make more redundancies over the next 12 months. The Government continuously claimed that Britain was well placed to weather the recession. Are we not now paying for their complacency in lost jobs?

Mr. McNulty: Quite the opposite. It has been estimated that many of the macroeconomic interventions made over the past year have saved the best part of half a million jobs. The right hon. Lady is entirely wrong to suggest that the flexible new deal has been postponed in any way, shape or form. The Budget put more money into the flexible new deal, rather than otherwise. I repeat: none of these things would happen under her Government, because she cannot commit to the extra £5 billion that is put in through the rapid response service, at pre-redundancy stage, all the way through to what we are doing for people at 12 months. She should listen to her Conservative colleague, the leader of Bradford council, Margaret Eaton, who welcomed the jobs guarantee fulsomely, to the point of embarrassment. I welcome that. I hope that the right hon. Lady’s local council, as well as that of every other hon. Member, will be bidding for the future jobs fund and the guarantee."

St Albans MP Ann Main reminded the House that the appalling treatment of Equitable Life pensioners has not been remedied:

"Numerous pensioners aged 74 and over caught up in the Equitable Life disaster would wish to have their pensions at a fair and reasonable level. Since Ann Abraham concluded last week that the scheme that the Government have set up is not what she had in mind, will they now consider fairly compensating those pensioners so that they do not find themselves with low incomes?

Ms Winterton: As the hon. Lady will know, the Government have responded to this matter. The most recent announcements were made by the Treasury, and she will know about the ex gratia payments with regard to the Equitable Life pensioners."

Michael Fabricant, an Opposition Whip, stressed the fact that too many people find benefits too complicated, and miss out on what they are entitled to:

"In the round, as the Minister puts it, Help the Aged states that 4.5 million pensioners who are entitled to means-tested benefit are not getting it, simply because it is so complicated to apply for it. What can the Government do to ensure that people who are not entitled to benefits do not get them, while at the same time ensuring that weak, elderly, vulnerable people who are entitled to such benefits can receive them easily and promptly?

Ms Winterton: The hon. Gentleman is quite right. As I said, we are now spending £13 billion more than we would have been spending had we pursued the policies of the previous Administration, and we are particularly targeting that extra spending on the most vulnerable pensioners. Problems with the take-up of benefits apply often not just to pension credit but to housing and council tax benefits, for which people do not necessarily apply, and that is why we have made a key change so that, from October, by making one telephone call pensioners will be able to get not only their basic state pension credit but council tax and housing benefits. That will make things simpler in exactly the way that the hon. Gentleman outlines."

Tom Greeves