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5 Dec 2007 : Column 911

I shall return to some of those matters in more detail later, but first I refer the House to the third recommendation in the Committee’s report. It is important, because we want the Government to take a wider view of benefits simplification and of the system that they want to have in place, rather than adopting a piecemeal approach that merely involves dealing with individual benefits. We therefore ask whether all existing benefits are necessary, or whether some might be merged. We also urge the Government to examine the way in which the interaction between benefits and qualifying arrangements can differ, and to look at the overall purpose of the benefits system. That last idea sounds easy, but the world of work and society has changed since the system was first introduced. Our approach offers a new perspective, and it is one that I hope the Minister will take into consideration.

Why do we need to simplify the existing benefits system? One answer is that we need to make life easier for both claimants and staff. For instance, how many times have we, as Members of Parliament, had constituents come to us to complain about computer-generated letters? Such people may have received three letters from the same department—very often the Child Support Agency, it must be said—on one day, and another three on another day, but can they always work out what money they should get and when? No, they cannot.

Computers can do wonderful things, but someone has to give them instructions. Sadly, letters that can be generated at the push of a button do not always serve the interests of human beings, and that is a problem that I hope that the Minister will look at.

The point about long telephone delays has already been raised. Not only are such delays expensive for many clients, they are hugely frustrating. By the time the client speaks to the person at the end of the phone they are angry and may raise their voice, so the member of staff has to calm down a frustrated and angry client before they can talk to the client about their benefit entitlement. Furthermore, if the person at the end of the phone rigidly follows their script, they cannot deal with the complexity of people’s lives, especially people who are entitled to a variety of benefits. A script can be of help to staff in contact centres, but they need to be trained to go beyond the script sometimes, so that they do not have to refer the client to many other people for an answer.

How can clients be expected to understand the complex interaction between benefits and tax credits? That complexity leads to non-take-up. As we are all aware, many people do not take up benefits because they do not understand how they work. Complexity leads to both claimant error and official error. The Chairman of the Committee outlined some of the tremendously complex aspects of the benefits system: for example, there are four sets of rules about backdated benefits.

The appeals system shows that the Government’s intention to get things right at first contact with a client does not always work. All too often, the client appeals and their case is upheld. We need to make sure that the right decisions are made at the first contact.

Our report referred to the “better-off” calculations. If we are to convince people to come off benefits and go into work we need to get those calculations right, because people need to know whether they will genuinely be better off in work. It is important that we look at passported benefits such as free school meals and
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prescriptions. If a lone parent with three or four children gets a job, she will have to take into account the fact that in future she will be paying for school meals, which add up to a substantial amount each week, and she will have to pay for prescriptions for herself. If we do not give her full and comprehensive advice she will not be able to make up her mind whether she would be better off, so the calculations must be an honest assessment of all the financial implications of moving off benefit and into work.

Some complexity in the system may be not only necessary but desirable. I agree with the Chairman of the Committee that we cannot make the system so simple that there are only one or two benefits, with no add-ons. If we fail to recognise the complexity of people’s lives we shall let down some vulnerable people. It was put to us that individual claimants and members of staff might have different definitions of complexity.

Miss Begg: My hon. Friend has done a lot of work with the organisation Every Disabled Child Matters, whose evidence to the Committee made it clear that in some cases complexity in the system is a good thing, if it means that vulnerable families or families with disabled children get more money than if the benefit had been universal. Does she agree?

Mrs. Humble: I agree entirely with my hon. Friend, who has anticipated what I am going to say next. The evidence that we received from the Every Disabled Child Matters campaign and the Child Poverty Action Group highlighted the fact that some complexity, to reflect the special circumstances of some people’s lives, is desirable. However, it is undesirable for those people to have to go through a hugely complex system themselves. They ought to be able to access the information easily. I will return to that point in a minute.

The Every Disabled Child Matters submission to the Select Committee listed the many benefits, credits and grants that a family with a disabled child might be claiming at any given time. It is a long list, but I am going to read it out. Such a family might receive

It is not just that such families have to deal with Her Majesty’s Revenue and Customs for the tax credit system and the Department for Work and Pensions for benefits. They may also be dealing with the Department of Health and voluntary organisations that support them. They want a system that makes life easy for them.

In the evidence to the Committee, there was reference to the one-stop shop, which in many ways has been the holy grail of the benefits system for many years. In recommendation 23, we ask the Government to look at the feasibility of Jobcentre Plus offices becoming one-stop shops for a range of Government agencies, and we say that in the meantime, the DWP should ensure that its links with other agencies are strengthened. That will help not only those with very complex family circumstances,
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but those with far less complex circumstances, because they too will avoid having to go to a variety of agencies to get the answers that they want.

The Committee identified some areas of good practice. I do not want the Minister to think that we are here simply to criticise. We received a lot of evidence about complexity and how it affects people’s lives, but we were heartened by the fact that the Government have—through various pilots and through joint working, especially with HMRC and local authorities—delivered more integrated patterns of working. I hope that they will spread those examples of good practice so that the needy and vulnerable people whom the system is designed to look after will get the support that they need. The Government have set up a simplification unit in the Department, and I know that the disability and carers service is looking at its computer-generated letters.

Finally—because I know that colleagues want to speak—I want to make a point in support of the Chairman’s remarks about the importance of our role in Westminster. In 1998, I spoke in a debate in the Chamber on the then Social Security Committee report on what was called the benefits integrity project. BIP was set up in the last few weeks of the Conservative Administration, and the Labour Government inherited it. If any scheme caused more chaos than BIP— [ Interruption. ] Well, perhaps the Child Support Agency did. However, BIP certainly caused administrative chaos and chaos among claimants.

In that debate, one or two Members of Parliament said, “It’s disgraceful that decision makers for disability living allowance are causing so much panic among DLA recipients by their implementation of the benefits integrity project.” I pointed out to Members on both sides of the House that the decision makers dealing with BIP were my constituents in Warbreck house in Blackpool. I said that we Members of Parliament had given them that job; we had determined the rules. They were working hard to implement the rules that we had set. If they were failing, it had to do with the task that we set them.

We in the House have a responsibility to make sure that benefits are as simple as possible to administer, and are complex only where that is vital to meet the special needs of the most vulnerable groups. We have to ensure that there are sufficient well-trained staff to deliver that service. Above all, we must put the claimant first and make the system as simple as possible for them. I know from my visits to Warbreck house and the disability living allowance headquarters that our staff do their best. They work very hard, but sadly, the benefits arrangements system is still too complex. Work still needs to be done, and I look forward to further progress.

5.55 pm

John Penrose (Weston-super-Mare) (Con): It is a pleasure to follow the Chairman of the Select Committee on Work and Pensions, and my fellow Committee colleague, the hon. Member for Blackpool, North and Fleetwood (Mrs. Humble), on this particularly important subject. I agree with both speakers’ initial comments: we have one of the most overcomplicated benefit systems in the world. That point was also made by the hon. Member
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for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander). We have an unacceptably complicated system. One need only look at the extent to which the advisory guidelines for the benefit experts have multiplied to understand that we are well past the point of being helpful, and well into the territory of nightmares. I think that the Chairman mentioned that one book has gone from 250 pages to 1,600, and the other has gone from one volume to 32.

Hon. Members on both sides of the House have given facts and figures from a technical point of view. It might help if I illustrated the problems that the complexity causes with a couple of real-life examples. The first example was first given to the House by my hon. Friend the Member for South-West Surrey (Mr. Hunt) in debate on a ten-minute Bill that he presented in the Chamber on 20 June this year, which I had the honour to co-sponsor. He mentioned a gentlemen who had been hit by a runaway car while walking along the road. My hon. Friend said that

That is the human cost of what we are trying to deal with. It is small wonder that we all agree that the situation is unacceptably complex.

The second example is in the written evidence given to the Select Committee inquiry by Hertfordshire county council, which is quoted on page 16 of the Committee’s report. The council gave the example of two clients, a disabled pensioner and their partner. The written evidence states:

This is where it gets horrible:

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I hope the House is following this carefully. The written evidence continues:

Hertfordshire county council goes on to say:

Bill Wiggin (Leominster) (Con): In his correspondence with the Government on the subject, has my hon. Friend noticed that clients, as our constituents are called, are supposed to understand these systems and take some sort of responsibility for something that it is almost impossible to explain to them?

John Penrose: I thank my hon. Friend for that intervention. I shall come to the problems of unintentional error by claimants, caused by precisely the situation that he describes.

We have had a series of examples and analyses of the kinds of complexity that we are dealing with. The causes of that complexity can be boiled down to six pathologies—six underlying problems that we must address—which I shall deal with in no particular order of importance. First, there is means-testing, up front or once a benefit has been granted and we are into the territory of benefit withdrawal rates.

Secondly, anything that requires people to fill out a long and complicated form to explain their financial situation, and then to fill out yet more forms every time their finances change, is a huge layer of complexity—problems arising from changes of circumstances. Anything that requires people to update bureaucrats about changes of circumstances, such as changes in family circumstances caused because they have got divorced, left their partner or got married, as well as the financial alterations that I have just described, creates horrendous layers of complexity.

The best example, perhaps, is people who are likely to take temporary jobs and cycle in and out of work frequently during the year. They have to go on and off benefits, and on and off tax credits. By and large, the delays in processing those applications mean that they are always behind and out of date, and just as the administrative arrangements are becoming organised for a person’s current situation, life changes again and they have to go back to square one. Small wonder, therefore, that getting a job is not only difficult for those people, but discouraging.

Thirdly, we have far too many tightly drawn small-scale benefits. We have already heard two different figures during the debate. One was 51 different benefits, but the Chairman of the Committee counted 40. I suspect that if we included all the passported benefits, we could probably come up with a third figure. All those narrowly drawn benefits have narrowly drawn eligibility rules, which are all different. That means that if people have to apply for multiple benefits or move off one benefit and on to another,
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there are yet more forms to fill in. The first example that I gave of the gentleman who could have applied for eight different incapacity benefits illustrated that nicely.

Fourthly, the linking rules are probably more complicated than the benefits. Every time people move off one benefit and on to another, then back again on to a third, there are linking rules about backdating and the interacting effects. If claimants thought they were confused when they looked at the benefits, the linking rules would drive them to drink when they tried to understand them.

Fifthly, as the Chairman of the Select Committee mentioned, Members of the House have a propensity to introduce regular amendments and initiatives. We all think that we can improve things and make the system better, but every time we lay yet another bright idea on top of the already toppling complex system, it just makes things worse. We need to understand that if we are to introduce amendments, they must reduce the total amount of legislation and the total complexity, rather than add to them.

Finally, another area of terrible complexity is straightforward administrative inefficiency; we have heard examples of that from both sides of the House. The hon. Member for Inverness, Nairn, Badenoch and Strathspey mentioned someone who had to turn up three times, roughly a week apart, to the same centre to have the same medical assessment for three different benefits. That is a classic example of administrative inefficiency, and I am sure that Members on both sides could come up with dozens and dozens more.

Those are the underlying causes of the symptoms, examples of which we have all been exchanging, but we also need to bear in mind that making things tidier is not just an academic exercise; there are also serious and vital advantages to having a simplified benefits system, and it is worth reminding ourselves about them because they are the prize at which this debate is aiming. They are simple, and there are far fewer of them than the causes of complexity—there are three or four at most.

First, we can reduce error. We can do that on behalf of staff. They need a PhD to understand most of what is going on in the system at the moment; it is therefore understandable that mistakes are made—and that is before we move on to the problems caused by computer systems, which my Committee colleague, the hon. Member for Blackpool, North and Fleetwood, mentioned. The complexity is also a problem for claimants, because as we have just heard, they cannot be expected to understand the entire system. They are even less likely to understand it than the people who work as benefits experts within the system. Inevitably, claimants will make mistakes. That makes life hard for them and potentially exposes them to accusations of fraud even if they make a mistake in good faith.

The second advantage to simplification is that we can improve take-up. It is striking that child benefit, one of the simplest benefits, has one of the highest levels of take-up of any of them. It is one of the most successful, and the impact on poverty and on reaching the Government’s stated objectives for the benefits system would be profound if we could improve the take-up of other benefits in the same way. That might cost more, but I understand that the Government have reserves in their financial estimates.

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